What changed in this filing

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Item 9A. Controls and Procedures

2022-09-27 compared with 2021-09-29 · 2152 added, 1665 removed, 799 unchanged (83% of the section changed)

1 unchanged sentence

Disclosure Controls and Procedures

As of June 30, 2021, under the supervision and with

the participation of the Company's President and Principal Financial Officer (the same person), management has evaluated the effectiveness

of the design and operations of the Company's disclosure controls and procedures.

Based on that evaluation, the President and Principal

Financial Officer concluded that the Company's disclosure controls and procedures were not effective as of June 30, 2021 as a result of

the material weakness in internal control over financial reporting discussed below.

As of June 30, 2022, under the supervision and with the participation of

the Company’s President and Principal Financial Officer (the same person), management has evaluated the effectiveness of the design

and operations of the Company’s disclosure controls and procedures.

Based on that evaluation, the President and Principal Financial

Office concluded that the Company’s disclosure controls and procedures were not effective as of June 30, 2022 as a result of the

material weakness in internal control over financial reporting discussed below.

Changes in Internal Control over Financial Reporting

There were no changes in internal control over financial

reporting that occurred during the last fiscal quarter covered by this report 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

Our management is responsible for establishing and

maintaining adequate internal control over financial reporting, as such term is defined in the Securities Exchange Act of 1934 Rule 13a-15(f).

Our Chief Executive Officer and Principal Financial Officer (the same person) conducted an evaluation of the effectiveness of our internal

control over financial reporting based on the framework in Internal Control - Integrated Framework, issued by the Committee of Sponsoring

Organizations of the Treadway Commission ("COSO Framework") and the related guidance provided in Internal Control Over Financial

Reporting –

There were no changes in internal control over financial reporting that

occurred during the last fiscal quarter covered by this report 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

Our management is responsible for establishing and maintaining adequate

internal control over financial reporting, as such term is defined in the Securities Exchange Act of 1934 Rule 13a-15(f).

Our Chief Executive

Officer and Principal Financial Officer (the same person) conducted an evaluation of the effectiveness of our internal control over financial

reporting based on the framework in Internal Control – Integrated Framework, issued by the Committee of Sponsoring Organizations

of the Treadway Commission (“COSO Framework”) and the related guidance provided in Internal Control Over Financial Reporting

– Guidance for Smaller Public Companies, also issued by the Committee of Sponsoring Organizations.

Based on this evaluation, management has concluded

that our internal control over financial reporting was not effective as of June 30, 2021.

Our President and Principal Financial Officer

concluded we have a material weakness due to our control environment, and one condition caused by this is an inadequate of segregation

of duties as well as a lack of timely review and approval of related party transactions.

Our size has prevented us from being able to

employ sufficient resources to enable us to have an adequate level of supervision and segregation of duties within our internal control

There is one person involved in the processing of the Company's accounting and banking transactions and a single person with overall

supervision and review of the cash disbursements and receipts and the overall accounting process.

Therefore, while there are some compensating

controls in place, it is difficult to ensure effective segregation of accounting duties.

While we strive to segregate duties as much as

practicable, there is an insufficient volume of transactions to justify additional full time staff.

As a result of this material weakness,

we have implemented remediation procedures whereby in May 2006 we engaged an outside accounting and consulting firm with SEC and US GAAP

experience to assist us with the preparation of our financial statements, evaluation of complex accounting issues and the implementation

of systems to improve controls and review procedures over all financial statement and account balances.

We believe that this outside consultant's

review improved our disclosure controls and procedures.

If this review is effective throughout a period of time, we believe it will help

remediate the segregation of duties material weakness.

However, we may not be able to fully remediate the material weakness unless we

hire more staff.

We will continue to monitor and assess the costs and benefits of additional staffing.

Based on this evaluation, management has

concluded that our internal control over financial reporting was not effective as of June 30, 2022.

Our President and Principal Financial

Officer concluded we have a material weakness due to our control environment, and one condition caused by this is an inadequate of segregation

of duties as well as a lack of timely review and approval of related party transactions and a second condition is the a lack of timely

review and approval of capitalized internal costs and interest.

Our size has prevented us from being able to employ sufficient resources

to enable us to have an adequate level of supervision and segregation of duties within our internal control system.

There is one person

involved in the processing of the Company's accounting and banking transactions and a single person with overall supervision and review

of the cash disbursements and receipts and the overall accounting process.

Therefore, while there are some compensating controls in place,

it is difficult to ensure effective segregation of accounting duties.

While we strive to segregate duties as much as practicable, there

is an insufficient volume of transactions to justify additional full time staff.

As a result of this material weakness, we have implemented

remediation procedures whereby in May 2006 we engaged an outside accounting and consulting firm with SEC and US GAAP experience to assist

us with the preparation of our financial statements, evaluation of complex accounting issues and the implementation of systems to improve

controls and review procedures over all financial statement and account balances.

In December of 2021, there was a change made to a new

outside accounting and consulting firm.

We believe that this outside consultant's review improved our disclosure controls and procedures.

If this review is effective throughout a period of time, we believe it will help remediate the segregation of duties material weakness.

However, we may not be able to fully remediate the material weakness unless we hire more staff.

We will continue to monitor and assess

the costs and benefits of additional staffing.

This annual report does not include an attestation

report of the Company’s independent registered public accounting firm regarding internal control over financial reporting.

report was not subject to attestation by the Company's independent registered public accounting firm pursuant to rules of the SEC that

permit the Company to provide only management's report on internal control in this annual report.

Hacking/Theft

On Saturday morning, July 17, 2021, our historical website domain –

biontech.com –

and email services were compromised and disabled.

Research indicated that an unknown party had ‘hijacked’

the domain in a theft attempt.

report was not subject to attestation by the Company’s independent registered public accounting firm pursuant to rules of the SEC

that permit the Company to provide only management’s report on internal control in this annual report.

Domain Sale/Resolved Litigation/Hacking/Theft

On March 23, 2022 the Company entered

into an agreement to sell domain name <biontech.com> and other related assets to BioNTech SE (“BNTX”) for the sum of

$950,000 (before expenses related to the transaction) which sale was closed/completed on April 2, 2022 with a one-time gain of $902,490.

The Company has been using www.bionenviro.com as its primary website (and domain) since July 2021 due to the events described

The Company has not been using biontech.com as its primary website since July 2021 so domain name <biontech.com>

no longer represented a core asset of the Company.

As previously reported, on Saturday morning, July

17, 2021, our historical website domain – biontech.com – and email services were compromised and disabled.

indicated that an unknown party had ‘hijacked’ the domain in a theft attempt.

On September 10, 2021, the Company filed a federal

lawsuit ‘in rem’

to recover the <biontech.com> domain and the unknown ‘John Doe’

who hacked and attempted

lawsuit ‘in rem’ to recover the <biontech.com> domain and the unknown ‘John Doe’ who hacked and attempted

to steal the website.

The litigation has been filed in the United States District Court for the Eastern District of Virginia, Alexandria

Division under the heading ‘Bion Environmental Technologies, Inc., Plaintiff, vs John Doe and <biontech.com>, Defendants’

The litigation was filed in the United States District Court for the Eastern District of Virginia, Alexandria Division

under the heading ‘Bion Environmental Technologies, Inc., Plaintiff, vs John Doe and <biontech.com>, Defendants’ (Case

1:21-cv-01034), seeking recovery of the domain name and other relief as set forth therein.

On November 19, 2021, the United States District Court

for the Eastern District of Virginia, Alexandria Division issued an order stating that “… ORDERED, ADJUDGED and Decreed that

plaintiff Bion Environmental Technologies, Inc.

(‘plaintiff) Is the lawful owner of domain name <biontech.com> ….”

under the heading ‘Bion Environmental Technologies, Inc., Plaintiff, vs John Doe and <biontech.com>, Defendants’ (Case

1:21-cv-01034).

The Company has moved the domain name <biontech.com> to a new registrar and reactivated it for the Company’s

use (paired currently with its current bionenviro.com website).

No shareholder, sensitive or confidential information

was available to be breached which has limited damages from the hack/theft to date.

However, the Company’s email operations have

been subject disruption and expenses have been incurred related to the matter including legal fees.

The Company has had to create ‘work-arounds’

While these issues are being resolved, Bion Environmental Technologies, Inc.

has moved our website (and email) to a new domain:

However, the Company’s email operations were

subject disruption and expenses were incurred related to the matter including legal fees.

The Company created ‘work-arounds’ as

These issues have been resolved and the Company has moved our website (and email) to a new domain:

bionenviro.com.

Website access is now www.bionenviro.com .

To send emails to Bion personnel, one uses the same name identifier

previously used, but in the address, substitute ‘bionenviro.com’

for ‘biontech.com’:

For example, cscott@biontech.com

(no longer functional) will now be cscott@bionenviro.com and mas@biontech.com (no longer functional) will now be mas@bionenviro.com.

access is now www.bionenviro.com.

To send emails to Bion personnel, one uses the same name identifier previously used, but in the

address, substitute ‘bionenviro.com’ for “biontech.com’:

For example cscott@biontech.com (no longer functional)

is cscott@bionenviro.com and mas@biontech.com (no longer functional) is now mas@bionenviro.com.

OTHER INFORMATION

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Executive Chairman, President, General Counsel, Chief Financial Officer and Director

Vice Chairman and Director

Secretary and Director

Executive Officer

Dominic Bassani

Chief Executive Officer

Chief Operating Officer

Smith (72) currently serves

5 unchanged sentences

Since mid-February 2003, Mr.

Smith has served

as sole director and President and General Counsel of Bion's majority-owned subsidiary, Centerpoint Corporation.

Smith also serves

as Manager of Bion PA1, LLC and Bion PA2, LLC.

served as sole director and President and General Counsel of Bion’s majority-owned subsidiary, Centerpoint Corporation.

also serves as Manager of Bion PA1, LLC and Bion PA2, LLC.

Previously, from May 21, 1999 through January 31, 2002, Mr.

Smith served as a director

Smith served as

a director of Bion.

From July 23, 1999, when he became President of Bion, until mid-2001 when he ceased to be Chairman, Mr.

Smith served in senior

positions with Bion on a consulting basis.

in senior positions with Bion on a consulting basis.

Additionally, Mr.

Smith was the president of RSTS Corporation prior to its acquisition of Bion

Technologies, Inc.

Smith received a Juris Doctor Degree from the University of Colorado School of Law, Boulder, Colorado

(1980) and a BS from Amherst College, Amherst, Massachusetts (1971).

Smith has engaged in the private practice of law in Colorado

Smith was the president of RSTS Corporation prior to its acquisition

of Bion Technologies, Inc.

Smith received a Juris Doctor Degree from the University of Colorado School of Law, Boulder,

Colorado (1980) and a BS from Amherst College, Amherst, Massachusetts (1971).

Smith has engaged in the private practice of law in

Colorado since 1980.

In addition, Mr.

Smith has been active in running private family companies, Stonehenge Corporation (until 1994), LoTayLingKyur,

Smith has been active in running private family companies, Stonehenge Corporation (until 1994),

LoTayLingKyur, Inc.

(1994-2002) and LoTayLingKyur, LLC (2007-present).

Until returning to Bion during March 2003, Mr.

Smith had been in retirement with

focus on charitable work and spiritual retreat.

Smith had been

in retirement with focus on charitable work and spiritual retreat.

From July 2018 to March 2020 Mr.

Smith served as a senior executive and director at Grow-Ray

Technologies, Inc., a private LED lighting company based in Boulder, Colorado, on a consulting basis.

Schafer (74) Edward Schafer

previously served the Company's senior management team as Executive Vice Chairman and has been a member of the Company's Board of Directors

since January 1, 2011.

Schafer has served as a consultant to Bion since July 2010.

Schafer served as a director of Continental

Resources (NYSE-CLR) 2011-2016.

He also chairs the Board of Directors of Dynamic Food Ingredients and the Theodore Roosevelt Medora Foundation.

In addition he has served on the Board of Governors of Amity Technology LLP since 2009, the Board of Directors of AGCO-Amity JV since

it was formed in 2011.

Schafer served as a trustee of the Investors Real Estate Trust (NASDAQGS-IRET) from September 2009 to October

He also served as a trustee of the IRET from September 2006 through December 2007, when he resigned from the IRET's Board to serve

as Secretary of the U.S.

Department of Agriculture under President George W.

Schafer, a private investor, is a two-term

former Governor of North Dakota.

He served as Chief Executive Officer of Extend America, a telecommunications company, from 2001 to 2006,

and he has been a member of the Boards of RDO Equipment Co., a privately-owned agricultural and construction equipment company (August

2001 to July 2003) and the University of North Dakota Foundation (June 2005 to December 2007).

Smith served as a senior executive

and director at Grow-Ray Technologies, Inc., a private LED lighting company based in Boulder, Colorado, on a consulting basis.

Schafer (76) Edward

Schafer previously served the Company’s senior management team as Executive Vice Chairman and has been a member of the

Company’s Board of Directors since January 1, 2011.

Schafer had served as a consultant to Bion since July 2010.

Schafer served as a director of Continental Resources (NYSE-CLR) 2011-2016.

He also chairs the Board of Directors of Dynamic Food

In addition he has served on the Board of Governors of Amity Technology LLP since 2009.

Schafer served as a trustee

of the Investors Real Estate Trust (NASDAQGS-IRET) from September 2009 to October 2011.

He also served as a trustee of the IRET from

September 2006 through December 2007, when he resigned from the IRET’s Board to serve as Secretary of the U.S.

Department of

Agriculture under President George W.

Schafer, a private investor, is a two-term former Governor of North Dakota.

served as Chief Executive Officer of Extend America, a telecommunications company, from 2001 to 2006, and he has been a member of

the Boards of RDO Equipment Co., a privately-owned agricultural and construction equipment company (August 2001 to July 2003) and

the University of North Dakota Foundation (June 2005 to December 2007).

Since 2019 Mr.

Schafer has served on the

Board of Directors of Cellular Biomedicine Group (NASDAQ:

Schafer has served on the Board of Directors

of Cellular Biomedicine Group (NASDAQ:

CBMG) and is Chairman of its Audit Committee.

Schafer serves as a board

member of the Center for Innovation at the University of North Dakota and teaches a leadership class at North Dakota State University.

Schafer is a past chair of the Republican Governors Association, the Midwestern Governors’

Association, the Interstate Oil and

Gas Compact, the Western Governors’

Association and served as the 29th United States Secretary of Agricultural from 2008 to 2009.

Schafer holds a Master’s degree in Business Administration from the University of Denver.

Schafer brings the following experience,

qualifications, attributes and skills to the Company:

general business management, budgeting and strategic planning experience from his

service as Chief Executive Officer of Extend America and extensive government, regulatory, strategic planning, budgeting administrative

and public affairs experience from his service as Governor of North Dakota and Secretary of the US Department of Agriculture.

Schafer serves as a board member of the

Center for Innovation at the University of North Dakota and is an adjunct professor at North Dakota State University.

a past chair of the Republican Governors Association, the Midwestern Governors’ Association, the Interstate Oil and Gas

Compact, the Western Governors’ Association and served as the 29 th United States Secretary of Agricultural from

2008 to 2009.

Schafer holds a Master’s degree in Business Administration from the University of Denver.

Schafer brings

the following experience, qualifications, attributes and skills to the Company:

general business management, budgeting and strategic

planning experience from his service as Chief Executive Officer of Extend America and extensive government, regulatory, strategic

planning, budgeting administrative and public affairs experience from his service as Governor of North Dakota and Secretary of the

US Department of Agriculture.

Jon Northrop (79) has served as our

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He was the Executive Director of Davis, Graham & Stubbs, one of Denver’s largest law firms, from 1981 to 1989.

his law firm experience, Mr.

to his law firm experience, Mr.

Northrop worked at Samsonite Corporation’s Luggage Division in Denver, Colorado, for over 12 years.

His experience

was in all aspects of manufacturing, systems design and implementation, and planning and finance, ending with three years as the Division's

Vice President, Finance.

Northrop has a bachelor's degree in Physics from Amherst College, Amherst, Massachusetts (1965), an MBA in

Finance from the University of Chicago, Chicago, Illinois (1969), and spent several years conducting post graduate research in low energy

particle physics at Case Institute of Technology, Cleveland.

His experience was in all aspects of manufacturing, systems design and implementation, and planning and finance, ending with three years

as the Division’s Vice President, Finance.

Northrop has a bachelor’s degree in Physics from Amherst College, Amherst,

Massachusetts (1965), an MBA in Finance from the University of Chicago, Chicago, Illinois (1969), and spent several years conducting post

graduate research in low energy particle physics at Case Institute of Technology, Cleveland.

William O’Neill (63) has served

as Chief Executive officer since May 1, 2022 (he previously held the same position for the period from November 2010 through May 2011).

O’Neill currently also serves as a director of Wise Up Food, LLC, a privately-held company that provides a transparent supply

chain and real sustainability information for food retailers (including restaurants) enabling consumers to make informed purchase decisions.

He founded Wise Up Food during 2020 and served as its President until May 1, 2022 when his wife assumed that position.

From February

2018 through May 2020 he was employed as Vice President Retail & Value-Added Business Teys, USA, as subsidiary of Teys, a large Australian

From April 2015 through February 2018 Mr.

O’Neill served as Vice President Retail of Colorado Premium Foods.

1990 through 2015 he held marketing and executive epositions with a variey of companies in the agriculture and food service businesses

with an emphasis on developing/marketing products in the meat industry.

O’Neill graduated from Gettysburg College in 1981 with

in economics.

Dominic Bassani (75) has served as Chief

Executive Officer of Bion Environmental Technologies, Inc.

since April 2011.

Previously he was a full-time consultant to the Company and

served as the General Manager of Bion's Projects Group subsidiary from April 2003 through September 2006.

From September 15, 2008 he has

served as Director-Special Projects and Strategic Planning of the Company and our Projects Group subsidiary.

He has been an investor in

and consultant to Bion since December 1999.

He is an independent investor and since 1990 has owned and operated Brightcap, a management

consulting company that provides management services to early stage technology companies.

He was a founding investor in 1993 in Initial

Acquisition Corp.

Operating Officer of Bion Environmental Technologies, Inc.

since May 1, 2022 and served as Chief Executive Officer from April 2011.

he was a full-time consultant to the Company and served as the General Manager of Bion's Projects Group subsidiary from April 2003 through

September 2006.

From September 15, 2008 he has served as Director-Special Projects and Strategic Planning of the Company and our Projects

Group subsidiary.

He has been an investor in and consultant to Bion since December 1999.

He is an independent investor and since 1990

has owned and operated Brightcap, a management consulting company that provides management services to early stage technology companies.

He was a founding investor in 1993 in Initial Acquisition Corp.

that subsequently merged in 1995 with Hollis Eden Corp.

(HEPH), a biotech company specializing in immune response drugs.

(HEPH), a biotech

company specializing in immune response drugs.

From early 1998 until June 1999 he was a consultant to Internet Commerce Corp.

(re-named EasyLink Services International Corporation)

(ESIC), a leader in business-to-business transactions using the Internet.

He is presently an investor in numerous private and public companies

primarily in technology related businesses.

EasyLink Services International Corporation) (ESIC), a leader in business-to-business transactions using the Internet.

He is presently

an investor in numerous private and public companies primarily in technology related businesses.

From 1980 until 1986, Mr.

Bassani focused primarily on providing management reorganization

services to manufacturing companies and in particular to generic pharmaceutical manufacturers and their financial sponsors.

Bassani focused

primarily on providing management reorganization services to manufacturing companies and in particular to generic pharmaceutical manufacturers

and their financial sponsors.

Family Relationships

10 unchanged sentences

years, none of the following occurred with respect to our directors or executive officers:

bankruptcy petition filed by or against any business of which one of them was a general partner or executive officer either at the time

of the bankruptcy or within two years prior to that time;

conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

subject to any order, judgment or decree of any court of competent jurisdiction, permanently or temporarily inquiring, barring, suspending

or otherwise limiting involvement in any type of business, securities or banking activities;

found by a court of competent jurisdiction, the SEC or the CFTC to have violated Federal or state securities or commodities laws.

(1) any bankruptcy petition filed by or against any business of which one of them was a general

partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

(2) any conviction in a criminal proceeding or being subject to a pending criminal proceeding

(excluding traffic violations and other minor offenses);

(3) being subject to any order, judgment or decree of any court of competent jurisdiction, permanently

or temporarily inquiring, barring, suspending or otherwise limiting involvement in any type of business, securities or banking activities;

(4) being found by a court of competent jurisdiction, the SEC or the CFTC to have violated Federal

or state securities or commodities laws.

Audit Committee

4 unchanged sentences

conduct and ethics applicable to its officers, directors or accounting officer.

Advisory Group

The Company, which has only 7 full-time employees/consultants

(all of whom are effectively ‘department heads’), has utilized many outside parties as consultants and contract workers for

various roles to augment our management capabilities and expertise.

Over the last year the Company has begun to establish a more formal

‘advisory’ relationship with some of these people to insure their availability for consultation by our senior management (separate

from specific consulting engagements).

At present, a) William Rupp (meat and beef industry), b) Matthew Lamb (agriculture/animal husbandry/dairy),

c) Stanley Rapp (government affairs), d) Dennis Tristao (agricultural tech, engineering and agricultural/environmental policy) and e)

Dennis Bracht (organic seed, corn/feed grain cultivation and related matters) have accepted roles as members of our Advisory Group.

Company anticipates that additional persons will be added to this group over time.

EXECUTIVE COMPENSATION.

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VP–Special Projects & Strategic

Planning and Chief Executive Officer

Edward Schafer (5)

Executive Vice Chairman and Director

Planning and Chief Operating Officer

William O’Neill

Chief Executive Officer (5)

Includes compensation paid by Bion Environmental Technologies, Inc.

and our wholly owned subsidiaries.

Reflects the dollar amount expensed by the Company during the applicable fiscal year for financial statement

reporting purposes pursuant to ASC 718.

Since October 2016, the Company approved a month to month contract extension with Smith which included

a monthly deferred salary of $18,000 and the right to convert up to $300,000 of deferred compensation, at his a monthly deferred salary

of $18,000 and the right to convert up to $300,000 of deferred compensation, at his sole election, at $0.75 per share until December 31,

Smith also has the right to convert his deferred compensation in whole or in part, at this sole election, at any time in an amount

at "market"

or into securities sold in the Company's most current/recent private offering.

During fiscal year 2021 the Company

paid Smith $13,460 for payroll taxes on his deferred compensation conversions which was treated as salary.

On February 10, 2015, Mr.

Bassani agreed to an extension to continue his employment through December 31,

and our wholly owned

subsidiaries.

Reflects the dollar amount expensed by the Company during the applicable fiscal year for

financial statement reporting purposes pursuant to ASC 718.

Since October 2016, the Company approved a month-to-month contract extension with Smith which

included a monthly deferred salary of $18,000 and the right to convert up to $300,000 of deferred compensation, at his sole election,

at $0.75 per share until December 31, 2022.

On May 1, 2022 Smith’s salary was changed to $25,000 a month with cash portion of $20,000

and $5,000 deferred compensation.

Smith also has the right to convert his deferred compensation in whole or in part, at this sole election,

at any time in an amount at "market" or into securities sold in the Company’s most current/recent private offering.

fiscal year 2021 the Company paid Smith $13,460 for payroll taxes on his deferred compensation conversions which was treated as salary.

On February 10, 2015, Bassani agreed to an extension to continue his employment through December

31, 2017 at an annual salary of $372,000 effective January 1, 2015.

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 which was expanded on April 27, 2017 to the right to convert up

to $300,000).

During February 2018, the Company agreed to the material terms of a binding two-year extension agreement, while a fully

executed agreement is still being negotiated.

Bassani's annual salary will remain at $372,000 and the Company agreed to pay him $2,000

per month to be applied to life insurance premiums.

The Company granted Bassani 2,000,000 fully vested options at $0.75 per share with

an expiry date of December 31, 2024 which contain a 90% execution bonus and the options may be extended for an additional 5 years at $0.01

per share per extension year.

On August 1, 2018, his agreement was extended to provide services to the Company on a full-time basis through

December 31, 2022 plus two years after that on a part-time basis.

Schafer's compensation is determined periodically based on evaluation by the board of directors.

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 which was expanded on April 27, 2017 to the right

to convert up to $300,000).

During February 2018, the Company agreed to the material terms of a binding two-year extension agreement,

while a fully executed agreement is still being negotiated.

Bassani’s annual salary will remain at $372,000 and the Company agreed to

pay him $2,000 per month to be applied to life insurance premiums.

The Company granted Bassani 2,000,000 fully vested options at $0.75

per share with an expiry date of December 31, 2024 which contain a 90% execution bonus and the options may be extended for an additional

5 years at $0.01 per share per extension year.

On August 1, 2018, his agreement was extended and he agreed to provide services to the

Company on a full-time basis through December 31, 2022 plus two years after that on a part-time basis.

Currently Bassani receives $25,000

per month in cash and $6,000 per month is deferred.

On May 1, 2022 Bill O’Neill

joined the Company with an annual salary of $420,000 which include $10,000 monthly deferred compensation to be paid at the discretion

of the Board.

There is an additional $1,500 per month health insurance allowance.

Terms of the contract are thirty-seven months, with

a re-evaluation after thirteen months.

Bill O’Neil was previously paid as a contractor through Identifoods.

Total payments to Identifoods

for the years ended June 30, 2022 and June 2021, respectively, were $165,000 and $5,000.

Schafer's was moved to the Director’s Compensation table below as he no longer

holds an executive position with the Company.

Employment Agreements:

Smith (“Smith”) has held the positions

of Director, President and General Counsel of Company and its subsidiaries under various agreements and terms since March 2003 (details

regard earlier years and periods between 2003 and 2011 may be found in the Company’s prior Forms 10-K and other SEC filings).

July 2011, the Company entered into an extension agreement pursuant to which Smith continued to hold his current positions in the Company

through a date no later than December 31, 2012.

Commencing January 1, 2012, Smith’s monthly salary was $20,000, which has been accrued

and deferred.

In addition, Smith has been issued 90,000 shares of the Company’s common stock in two tranches of 45,000 shares on

each of January 15, 2013 and 2014, respectively.

As part of the extension agreement, Mr.

Smith was also granted 200,000 options, which

vested immediately, to purchase common shares of the Company at a price of $3.00 per share and which options expire on December 31, 2019.

Smith (“Smith”) has held the positions of Executive Chairman, Director, President

and General Counsel of Company and its subsidiaries under various agreements and terms since March 2003 (details regard earlier years

and periods between 2003 and 2011 may be found in the Company’s prior Forms 10-K and other SEC filings).

During July 2011, the Company

entered into an extension agreement pursuant to which Smith continued to hold his current positions in the Company through a date no later

than December 31, 2012.

Commencing January 1, 2012, Smith’s monthly salary was $20,000, which has been accrued and deferred.

addition, Smith has been issued 90,000 shares of the Company’s common stock in two tranches of 45,000 shares on each of January

15, 2013 and 2014, respectively.

As part of the extension agreement, Smith was also granted 200,000 options, which vested immediately,

to purchase common shares of the Company at a price of $3.00 per share and which options were originally to expire on December 31, 2019.

Effective July 15, 2012, the Company entered into an extension agreement pursuant to which Smith will continue to hold his current positions

in the Company through a date no later than June 30, 2014.

Effective September 2012, Smith’s monthly salary became $21,000 (which

is currently being deferred).

In addition, Smith was issued 150,000 shares of the Company’s common stock in two tranches of 75,000

shares on each of January 15, 2014 and 2015, which shares vested immediately.

As part of the extension agreement, Smith was also granted

a bonus of $25,000 paid in warrants, which vested immediately, to purchase 250,000 shares of the Company’s common stock at a price

of $2.10 per share and which warrants expire on December 31, 2018 and a contingent stock bonus of 100,000 shares payable on the date on

which the Company’s stock price first reaches $10.00 per share (regardless of whether Smith is still providing services to the Company

on such date).

Smith has voluntarily reduced his monthly deferred salary accrual to $14,000 due to the Company’s financial situation.

During September 2014, Smith agreed to continue his employment agreement through April 15, 2015 and also agreed to continue to defer his

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an additional six months).

As part of the Extension Agreement, the balance of Smith’s existing convertible note payable of

$854,316 as of December 31, 2014, adjusted for conversions subsequent to that date, was replaced with a new convertible note with an initial

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and consultants who are deferring their compensation, ii) cancelled 150,000 contingent stock bonuses previously granted to him by

the Company, iii) has been granted 150,000 new options which vested immediately and iv) outstanding options and warrants owned by Smith

(and his donees) have been extended and had the exercise prices reduced to $1.50 (if above that price).

Due to expiration of his most

recent extension, Mr.

Smith is currently serving the Company on a month-to –month basis.

Dominic Bassani (“Bassani”) has served

in senior management positions with the Company (as a full-time consultant) since 2001 (see prior Forms 10-K for earlier years and other

filings with the SEC).

Since March 31, 2005, the Company has had various agreements with Brightcap, Bassani’s family consulting

company, through which the services of Bassani were provided through 2011.

On September 30, 2009 the Company entered into an extension

agreement with Brightcap pursuant to which Bassani provided services to the Company through September 30, 2012 for $312,000 annually (currently

The Board appointed Bassani as the Company's CEO effective May 13, 2011.

On July 15, 2011, Bassani, Brightcap and the Company

agreed to an extension/amendment of the existing agreement with Brightcap which provided that Bassani serve as CEO through June 30, 2013

and would continue to provide full-time services to the Company in other capacities through June 30, 2014 at a salary of $26,000 per month.

In addition Bassani was to be issued 300,000 shares of the Company’s common stock issuable in three tranches of 100,000 shares on

each of January 15, 2015, 2016 and 2017, respectively.

Bassani was also granted 725,000 options, which vested immediately, to purchase

shares of the Company’s common stock at $3.00 per share which options expired on December 31, 2019.

Effective July 15, 2012, Bassani,

Brightcap and the Company agreed to a further extension/amendment of the existing agreement with Brightcap which provided that Bassani

would continue to provide the services of CEO through June 30, 2014.

Bassani continued to provide full-time services to the Company at

a cash salary of $26,000 per month (which has been deferred) and Bassani would be issued 300,000 shares of the Company’s common

stock issuable in two tranches of 150,000 shares on each of January 15, 2015 and 2016, respectively, which shares would be immediately

vested upon issuance.

As part of the extension agreement, Bassani was also granted a bonus of $5,000 paid in warrants, which vested immediately,

to purchase 50,000 shares of the Company’s common stock at a price of $2.10 per share and which warrants expired on December 31,

During September 2014, Bassani agreed to extend his employment agreement until April 15, 2015 and that previously issued and expensed

share grants of 100,000 and 150,000 shares that were to be issued on January 15, 2015, would be deferred until January 15, 2016.

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.) As part of

the agreement, the Company’s existing loan payable, deferred compensation and convertible note payable to Bassani, were restructured

into two promissory notes as follows:

a) The of sum of the cash loaned by Bassani to the Company of $279,000 together with $116,277 of

unreimbursed expenses through December 31, 2014 were placed into a new promissory note with initial principal of $395,277 which was due

and payable on December 31, 2015.

In connection with these sums and the new promissory note, Bassani was issued warrants to purchase

592,916 shares of the Company’s common stock at a price of $1.00 until December 31, 2020;

and b) the remaining balances of the Company’s

accrued obligations to Bassani ($1,464,545) were replaced with a new convertible promissory note with terms that compared with the largest

prior convertible note obligation to Bassani:

i) materially reduced the interest rate by 50% (from 8% to 4%), ii) increased the

conversion price by 11% (from $0.45 to $0.50), iii) set the conversion price at a fixed price so there can be no further reductions, iv)

reduced the number of warrants received on conversion by 75% (from 1 warrant per unit to 1/4 per unit) and v) extended the maturity date

to December 31, 2017 (See Note 6 to Financial Statements) (which maturity date was subsequently extended to July 1, 2019.

Additionally,

pursuant to the Extension Agreement, Bassani i) will continue to defer his cash compensation ($31,000 per month) until the Board

of Directors re-instates cash payments to all employees and consultants who are deferring their compensation, ii) cancelled 250,000 contingent

stock bonuses previously granted to him by the Company, iii) has been granted 450,000 new options which vested immediately and iv) outstanding

options and warrants owned by Bassani (and his donees) have been extended and had the exercise prices reduced to $1.50(if above that price).

On May 5, 2013, the Board of Directors approved agreements with Bassani and Smith, with effective date of May 15, 2013, in which Bassani

and Smith agreed to continue to defer their respective cash compensation through April 30, 2014 (unless the Board of Directors elected

to re-commence cash payment on an earlier date) and extended the due dates of their respective deferred cash compensation until January

The Company provided Bassani and Smith with convertible promissory notes which reflected all the terms of these agreements to

which future accruals were added as additional principal.

These convertible promissory notes were altered as set forth in the paragraphs

As part of the agreements, Bassani and Smith also forgave any possible obligations that Bion may have owed each of them in relation

to unused vacation time for periods (over 10 years) prior to June 30, 2012.

the Company, iii) was granted 150,000 new options which vested immediately and iv) outstanding options and warrants owned by Smith (and

his donees) were extended and had the exercise prices reduced to $1.50 (if above that price).

Due to expiration of his most recent extension,

Smith is currently serving the Company on a month-to –month basis.

On April 29, 2022, Smith’s monthly salary was increased

to $25,000, of which $5,000 is deferred each month

Dominic Bassani (“Bassani”) has served in senior management positions with the Company (as a full-time

consultant) since 2001 (see prior Forms 10-K for earlier years and other filings with the SEC).

Since March 31, 2005, the Company has

had various agreements with Brightcap, Bassani’s family consulting company, through which the services of Bassani were provided

through 2011.

On September 30, 2009 the Company entered into an extension agreement with Brightcap pursuant to which Bassani provided

services to the Company through September 30, 2012 for $312,000 annually (currently deferred).

The Board appointed Bassani as the Company's

CEO effective May 13, 2011 in which position he served until May 2022.

On July 15, 2011, Bassani, Brightcap and the Company agreed to

an extension/amendment of the existing agreement with Brightcap which provided that Bassani serve as CEO through June 30, 2013 and would

continue to provide full-time services to the Company in other capacities through June 30, 2014 at a salary of $26,000 per month.

Bassani was to be issued 300,000 shares of the Company’s common stock issuable in three tranches of 100,000 shares on each of January

15, 2015, 2016 and 2017, respectively.

Bassani was also granted 725,000 options, which vested immediately, to purchase shares of the Company’s

common stock at $3.00 per share which options expired on December 31, 2019.

Effective July 15, 2012, Bassani, Brightcap and the Company

agreed to a further extension/amendment of the existing agreement with Brightcap which provided that Bassani would continue to provide

the services of CEO through June 30, 2014.

Bassani continued to provide full-time services to the Company at a cash salary of $26,000

per month (which has been deferred) and Bassani would be issued 300,000 shares of the Company’s common stock issuable in two tranches

of 150,000 shares on each of January 15, 2015 and 2016, respectively, which shares would be immediately vested upon issuance.

of the extension agreement, Bassani was also granted a bonus of $5,000 paid in warrants, which vested immediately, to purchase 50,000

shares of the Company’s common stock at a price of $2.10 per share and which warrants expired on December 31, 2018.

During September

2014, Bassani agreed to extend his employment agreement until April 15, 2015 and that previously issued and expensed share grants of 100,000

and 150,000 shares that were to be issued on January 15, 2015, would be deferred until January 15, 2016.

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.) As part of the agreement, the Company’s

existing loan payable, deferred compensation and convertible note payable to Bassani, were restructured into two promissory notes as follows:

a) The of sum of the cash loaned by Bassani to the Company of $279,000 together with $116,277 of unreimbursed expenses through December

31, 2014 were placed into a new promissory note with initial principal of $395,277 which was due and payable on December 31, 2015.

connection with these sums and the new promissory note, Bassani was issued warrants to purchase 592,916 shares of the Company’s

common stock at a price of $1.00 until December 31, 2020;

and b) the remaining balances of the Company’s accrued obligations to

Bassani ($1,464,545) were replaced with a new convertible promissory note with terms that compared with the largest prior convertible

note obligation to Bassani:

i) materially reduced the interest rate by 50% (from 8% to 4%), ii) increased the conversion price by

11% (from $0.45 to $0.50), iii) set the conversion price at a fixed price so there can be no further reductions, iv) reduced the number

of warrants received on conversion by 75% (from 1 warrant per unit to 1/4 per unit) and v) extended the maturity date to December 31,

2017 (See Notes to Financial Statements) (which maturity date was subsequently extended to July 1, 2019.

Additionally, pursuant

to the Extension Agreement, Bassani i) will continue to defer his cash compensation ($31,000 per month) until the Board of Directors re-instates

cash payments to all employees and consultants who are deferring their compensation, ii) cancelled 250,000 contingent stock bonuses previously

granted to him by the Company, iii) was granted 450,000 new options which vested immediately and iv) outstanding options and warrants

owned by Bassani (and his donees) have been extended and had the exercise prices were reduced to $1.50 (if above that price).

2013, the Board of Directors approved agreements with Bassani and Smith, with effective date of May 15, 2013, in which Bassani and Smith

agreed to continue to defer their respective cash compensation through April 30, 2014 (unless the Board of Directors elected to re-commence

cash payment on an earlier date) and extended the due dates of their respective deferred cash compensation until January 15, 2015.

Company provided Bassani and Smith with convertible promissory notes which reflected all the terms of these agreements to which future

accruals were added as additional principal.

These convertible promissory notes were altered as set forth in the paragraphs below.

part of the agreements, Bassani and Smith also forgave any possible obligations that Bion may have owed each of them in relation to unused

vacation time for periods (over 10 years) prior to June 30, 2012.

In consideration of these agreements, Bassani and Smith:

have been granted 50% ‘execution/exercise’

bonuses to be effective upon future exercise of outstanding (or subsequently acquired)

options and warrants owned by Bassani and Smith (and their respective donees) and in relation to contingent stock bonuses;

b) their warrants

and options, if due to expire prior to December 31, 2018, were extended to that date (and later further extended);

and c) other modifications

granted 50% ‘execution/exercise’ bonuses (subsequently increased to 75%) to be effective upon future exercise of outstanding

(or subsequently acquired) options and warrants owned by Bassani and Smith (and their respective donees) and in relation to contingent

stock bonuses;

b) their warrants and options, if due to expire prior to December 31, 2018, were extended to that date (and later further

and c) other modifications were made.

Currently Bassani receives $25,000 per month in cash and $6,000 per month of deferred

compensation.

Effective January 1, 2011, the Company entered into

an employment agreement with Edward Schafer (“Schafer”) pursuant to which for a period of three years, Schafer provided senior

management services to the Company on an approximately 75% full time basis, initially as Executive Vice Chairman and as a director.

for Schafer’s services were initially set at an annual rate of $250,000, which was to consist of $150,000 in cash compensation and

$100,000 payable in the Company’s common stock.

for Schafer’s services were initially set at an annual rate of $250,000, which was to consist of $150,000 in cash compensation and

$100,000 payable in the Company’s common stock.

Commencing the month following the first calendar month-end after the Company has

completed an equity financing in excess of $3,000,000 (net of commissions and other offering expenses), Schafer’s compensation was

to be at an annual rate of $225,000, all of which would have been payable in cash.

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on an approximately 75% full time basis, as Executive Vice Chairman and as a director.

Basic compensation for Schafer’s services

remained unchanged and Schafer was issued 100,000 options to purchase shares of the Company’s common stock at $2.10 per share until

Basic compensation for Schafer’s services

remained unchanged and Schafer was issued 100,000 options to purchase shares of the Company’s common stock at $2.10 per share until

December 31, 2018, which options immediately vested and a contingent stock bonus of 25,000 shares payable on January 1 of the first year

after the Company’s stock price first reaches $10.00 per share (regardless of whether Schafer is still providing services to the

Company on such date).

Since May 15, 2012 Schafer has deferred the cash portion of the compensation due him from the Company, in consideration

of which he has been granted a 50% ‘execution/exercise’

bonus to be effective upon future exercise of outstanding (or subsequently

of which he has been granted a 50% ‘execution/exercise’ bonus to be effective upon future exercise of outstanding (or subsequently

acquired) options and warrants owned by Schafer (and his donees) and in relation to contingent stock bonuses.

Effective January 1, 2014,

Schafer agreed to continue his services to the Company as Director and Executive Vice-Chairman without periodic compensation in light

of the Company’s financial situation.

Schafer agreed not to receive any periodic compensation (cash or deferred) commencing

January 1, 2014 and agreed to be compensated with bonuses from time-to-time as determined to be appropriate by the Board of Directors.

No such bonuses have been declared to date.

On February 10, 2015, the Company entered into an agreement with Schafer pursuant to which

Schafer continued to provide services to the Company through December 31, 2015.

As part of the agreement, unreimbursed expenses

of $15,956 due to Schafer at December 31, 2014 were replaced with a new promissory note with initial principal of $15,956 which was due

and payable on December 31, 2015 and Schafer was issued warrants to purchase 7,978 shares of the Company’s common stock at a price

of $1.00 until December 31, 2020.

Schaefer’s deferred compensation for 2014 (and prior years) in the amount of $394,246 (including

a sum of $120,000 for calendar year 2014) was placed in a convertible promissory note (See Note 6 to Financial Statements).

Additionally,

pursuant to the agreement, i) the exercise period of outstanding options and warrants owned by Schafer have been extended, ii) certain

of Schafer’s outstanding options and warrants had the exercise prices reduced to $1.50 (if above that price), and iii) 25,000 contingent

stock bonuses previously granted to Schafer have been cancelled by the Company.

Effective June 30, 2016, Schafer and the Company determined

that due to other obligations Schafer’s involvement with the Company during the 2016 fiscal year was less than anticipated and reduced

his fiscal year 2016 compensation (all of which had been deferred) by $160,000 and agreed that future compensation will be determined

periodically based on evaluation by the board of directors.

Bassani, Smith and Schafer each agreed, effective

June 30, 2017, to extend the maturity date of the outstanding convertible promissory notes set forth in the paragraphs above from December

31, 2017 to July 1, 2019 which maturity date was subsequently extended to July 1, 2021.

On February 6, 2020 Bassani, Smith and Schafer

(and a shareholder) each agreed to extend the maturity dates of their 2020 Convertible Obligations (“CVObligations”)(formerly

Schafer agreed to continue his services to the Company as Director without periodic compensation in light of the Company’s financial

Schafer agreed not to receive any periodic compensation (cash or deferred) commencing January 1, 2014 and agreed to be

compensated with bonuses from time-to-time as determined to be appropriate by the Board of Directors.

No such bonuses have been declared

On February 10, 2015, the Company entered into an agreement with Schafer pursuant to which Schafer continued to provide services

to the Company through December 31, 2015.

As part of the agreement, unreimbursed expenses of $15,956 due to Schafer at December

31, 2014 were replaced with a new promissory note with initial principal of $15,956 which was due and payable on December 31, 2015 and

Schafer was issued warrants to purchase 7,978 shares of the Company’s common stock at a price of $1.00 until December 31, 2020.

Schaefer’s deferred compensation for 2014 (and prior years) in the amount of $394,246 (including a sum of $120,000 for calendar

year 2014) was placed in a convertible promissory note (See Notes to Financial Statements).

Additionally, pursuant to the agreement,

i) the exercise period of outstanding options and warrants owned by Schafer were extended, ii) certain of Schafer’s outstanding

options and warrants had the exercise prices reduced to $1.50 (if above that price), and iii) 25,000 contingent stock bonuses previously

granted to Schafer have been cancelled by the Company.

Effective June 30, 2016, Schafer and the Company determined that due to other obligations

Schafer’s involvement with the Company during the 2016 fiscal year was less than anticipated and reduced his fiscal year 2016 compensation

(all of which had been deferred) by $160,000 and agreed that future compensation will be determined periodically based on evaluation by

the board of directors.

Since 2018 Schaefer has no longer held any executive positions with the Company.

William O’Neill (“O’Neill”)

has been hired as the Company’s Chief Executive Officer (“CEO”) effective May 1, 2022.

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.

Bassani, CEO of the

Company since 2011, has 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 Gen3Technology and related matters.

Bassani’s compensation arrangements with the Company have not been altered

in the context of the change of positions.

The Company and O’Neill have entered into a thirty-seven (37) month employment agreement

(subject to Board renewal for the final two (2) years during the 13th month) with compensation of $25,000 cash and $10,000 deferred

compensation per month.

An entity affiliated with O’Neill was issued 1,000,000 Incentive Warrants exercisable at $1.00 per share

until April 30, 2026 of which up to 700,000 Incentive Warrants may be cancelled if O’Neill is not renewed at 13 months and/or fails

to serve the entire contract term thereafter.

These warrants each have a 75% exercise bonus if the terms set forth therein are met.

set forth in the Employment Agreement, the Company and Wise Up Foods LLC (an entity founded by O’Neill with which he continues to

serve as a Director and of which O’Neill and his family members are majority owners) sets forth the intent to form “… a

strategic alliance and committed to collaborate on projects each company has in their respective pipelines.

WUF and Bion will work

together to use/create technology that will deliver the consumer verified sustainable results produced by Bion’s technology and

technology platform.

The key to the strategic relationship is each company’s commitment to deliver real and verified results

to the consumer – free of marketing hype and greenwashing…”.

Bassani, Smith and Schafer each agreed,

effective June 30, 2017, to extend the maturity date of the outstanding convertible promissory notes set forth in the paragraphs

above from December 31, 2017 to July 1, 2024 the last of which took place on February 6, 2020 when Bassani, Smith and Schafer (and a

shareholder) each agreed to extend the maturity dates of their 2020 Convertible Obligations (“CVObligations”) (formerly

convertible promissory notes) to July 1, 2024.

If any of the CVObligations are converted, the warrants in units received will be exercisable

through a date 3 years after conversion date.

Effective May 4, 2020 the Company agreed that all options and warrants

owned (or subsequently acquired by conversion of CvObligations) by its officers, directors and key employees and consultants (including

Jon Northrop (director), Bassani, Smith and Schafer) and their donees be amended to:

a) lower the exercise price to $0.75 for any options/warrants

with higher exercise prices and b) extend the expiration dates to December 31, 2024.

Effective May 4, 2020 the Company agreed that all

options and warrants owned (or subsequently acquired by conversion of CvObligations) by its officers, directors and key employees and

consultants (including Jon Northrop (director), Bassani, Smith and Schafer) and their donees be amended to:

a) lower the exercise price

to $0.75 for any options/warrants with higher exercise prices and b) extend the expiration dates to December 31, 2024.

Subsequently,

it was agreed that if any of the CVObligations are converted, the warrants in units received will be exercisable through a date 3 years

after conversion date.

Other Agreements

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stock bonuses to its key employees and consultants at various times throughout the years.

The stock bonuses were contingent upon the Company’s

stock price exceeding a certain target price per share, and the grantees still being employed by or providing services to the Company

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Outstanding Equity Awards at Fiscal Year-End

Option Awards

Underlying Unexercised

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Brightcap/ Dominic Bassani (1)

Edward Schafer (3)

3 unchanged sentences

Edward Schafer (1)

(1) Options are subject to a 75% execution/exercise bonus upon

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meetings of the Board.

However, it is the Company's intention to begin to pay cash compensation to Board members at some future date.

However, it is the Company's intention to begin to pay cash compensation to Board members at some future date (probably

during the current fiscal year).

DIRECTOR COMPENSATION

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Director Compensation

(1) Reflects the dollar amount expensed by the Company during the applicable fiscal year for financial statement reporting purposes pursuant

Fees earned or paid in Cash ($)

Stock Awards ($)

Option Awards ($)(1)

Non-equity incentive plan compensation ($)

Nonqualified deferred

compensation earnings ($)

All other compensation ($)

Edward Schafer

(1) Reflects the dollar amount expensed by the Company during the applicable fiscal year for financial statement

reporting purposes pursuant to ASC 718.

SECURITY OWNERSHIP OF

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all our executive officers, directors and significant employees as a group.

Under the rules of the Securities and Exchange Commission, beneficial ownership

includes voting or investment power with respect to securities and includes the shares issuable under stock options, warrants and convertible

securities that are exercisable/convertible within sixty (60) days of August1, 2021.

Those shares issuable under stock options,

warrants and/or convertible securities are deemed outstanding for computing the percentage of each person holding options, warrants and/or

convertible securities but are not deemed outstanding for computing the percentage of any other person.

The percentage of beneficial

ownership schedule is based upon 40,727,677 shares outstanding as of August 1, 2021.

The address for those individuals for

which an address is not otherwise provided is c/o Bion Environmental Technologies, c/o PO Box 323, Old Bethpage, NY 11804.

knowledge, except as indicated in the footnotes to this table and pursuant to applicable community property laws, the persons named in

the table have sole voting power and investment power with respect to all shares of common stock listed as owned by them.

Under the rules of the Securities and Exchange Commission, beneficial

ownership includes voting or investment power with respect to securities and includes the shares issuable under stock options,

warrants and convertible securities that are exercisable/convertible within sixty (60) days of August 1, 2021.

issuable under stock options, warrants and/or convertible securities are deemed outstanding for computing the percentage of each

person holding options, warrants and/or convertible securities but are not deemed outstanding for computing the percentage of any

other person.

The percentage of beneficial ownership schedule is based upon 43,416,001 shares outstanding as of August 1,

The address for those individuals for which an address is not otherwise provided is c/o Bion Environmental Technologies,

c/o PO Box 323, Old Bethpage, NY 11804.

To our knowledge, except as indicated in the footnotes to this table and pursuant to

applicable community property laws, the persons named in the table have sole voting power and investment power with respect to all

shares of common stock listed as owned by them.

Name and Address

Percent of Class Outstanding

Entitled To Vote

Centerpoint Corporation (1)

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Dix Hills, NY 11746

Riverside Drive, Unit 408

Riverside Beach #408

Pompano Beach, FL 33062

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Dix Hills, NY 11746

Anthony Orphanos (6)

c/o Blacksmith Advisors, LLC

320 Park Avenue 18 th floor

New York, NY 10022

Edward Schafer (6)

c/o PO Box 323

Old Bethpage, NY 11804

William O’Neill (8)

107 12th Street E

Petersburg, FL 3371

3131 North Daffodil Dr.

Billings, MT 59102

Jon Northrop (9)

59 Chestnut Street

Westfield, New York 14787

Blacksmith Advisors, LLC

Park Avenue 18th Floor

York, NY 10022

All executive officers and directors as a group (6 persons)

___________________________

Centerpoint Corporation is currently majority owned by the Company.

Under Colorado law, Centerpoint Corporation is not entitled

to vote these shares unless otherwise ordered by a court.

These shares of common stock may be distributed to the shareholders of Centerpoint

Corporation at a future date pursuant to a dividend declared during July 2004.

The shares distributed to Bion, if any, will be cancelled

immediately upon receipt

Includes 62,201 shares, 2,825,000 shares underlying options and 965,000 shares underlying warrants held directly by Mr.

(1) Centerpoint Corporation is currently majority owned by the

Under Colorado law, Centerpoint Corporation is not entitled to vote these shares unless otherwise ordered by a court.

shares of common stock may be distributed to the shareholders of Centerpoint Corporation at a future date pursuant to a dividend declared

during July 2004.

The shares distributed to Bion, if any, will be cancelled immediately upon receipt.

(2) Includes 62,201 shares, 3,025,000 shares underlying options

and 965,000 shares underlying warrants held directly by Mr.

354,342 shares and 250,000 shares underlying warrants held by Mr.

Bassani’s wife;

and, 839,933 shares held in IRA accounts of Mr.

Bassani and his wife.

Also included are the shares set forth below owned (directly and indirectly) by Mr.

Bassani’s daughter, Danielle

Lominy (formerly Danielle Bassani) who resides within his residence and are included in Mr.

Bassani’s beneficial ownership for purposes

of the calculation including:

a) 570,000 shares directly b) 646,458 shares underlying warrants owned directly;

and c) Danielle Lominy

is the 50% beneficiary of the Dominic Bassani 2019 Irrevocable Trust (“2019Trust”) which owns:

i) 3,000,000 warrants and 1,000,000

options to purchase shares of the Company’s common stock and, as a result, Danielle Lominy is the beneficial owner of 1,500,000

shares underlying warrants and 500,000 shares underlying options and ii) $2,173,729.57 principal amount of the Company’s 2020 Convertible

Obligation (“CVObligation”) which is convertible into 4,347,459 shares and 2,899,756 warrants and, as a result, Danielle Lominy

is the beneficial owner of 2,173,730 shares underlying conversion of the CVObligation and 1,449,878 shares underlying the warrants issuable

on conversion of the CVObligation.

Also included are the shares set forth below

owned (directly and indirectly) by Mr.

Bassani’s daughter, Danielle Lominy (formerly Danielle Bassani) who resides within his residence

and are included in Mr.

Bassani’s beneficial ownership for purposes of the calculation including:

a) 570,000 shares directly

b) 646,458 shares underlying warrants owned directly;

and c) Danielle Lominy is the 50% beneficiary of the Dominic Bassani 2019

Irrevocable Trust (“2019Trust”) which owns:

i) 3,000,000 warrants and 1,000,000 options to purchase shares of the Company’s

common stock and, as a result, Danielle Lominy is the beneficial owner of 1,500,000 shares underlying warrants and 500,000 shares underlying

options and ii) $2,255,500 principal amount of the Company’s 2020 Convertible Obligation (“CVObligation”) which

is convertible into 4,511,000 shares and 3,008,837 warrants and, as a result, Danielle Lominy is the beneficial owner of

2,255,500 shares underlying conversion of the CVObligation and 1,504,419 shares underlying the warrants issuable on conversion

of the CVObligation.

The total also includes:

a) 674,043 shares of common stock that could be issued on the conversion (at

the election of Bassani) by Mr.

Bassani of convertible notes in the amount of $337,021.32, (@ $0.50 price) and b) 619,695 shares of common

stock that could be issued on the conversion (at the election of Bassani) by Mr.

Bassani of convertible notes in the amount of $371,817

(@ $0.60 price) and c) 508,375 shares of common stock that could be issued on the conversion (at the election of Bassani) of deferred

compensation in the amount of $441,970.73.

Bassani disclaims ownership of 1,511,477 shares underlying warrants held by the Danielle

Christine Bassani Trust, which is separately itemized herein.

Bassani’s adult daughter Danielle Lominy (formerly Danielle Bassani),

who resides within his residence, is the beneficiary of the Danielle Christine Bassani Trust and Mr.

Bassani is not one of the trustees

of the trust.

Bassani further disclaims beneficial ownership of shares and warrants owned by various other family members (including

Christopher Parlow who is itemized separately), none of whom live with him or are his dependents, and such shares are not included in

this calculation.

a) 699,398 and 466,499 underlying warrants that could be issued on the conversion (at the

election of Bassani) by Mr.

Bassani of convertible notes in the amount of $349,699, (@ $0.50 price) and b) 466,957 shares

of common stock that could be issued on the conversion (at the election of Bassani) by Mr.

Bassani of convertible notes in the amount

of $280,174 (@ $0.60 price) and c) 386,885 shares of common stock that could be issued on the conversion (at the election of Bassani)

of deferred compensation in the amount of $413,966.

Bassani disclaims ownership of 1,511,477 shares underlying warrants held by the

Danielle Christine Bassani Trust, which is separately itemized herein.

Bassani’s adult daughter Danielle Lominy (formerly Danielle

Bassani), who resides within his residence, is the beneficiary of the Danielle Christine Bassani Trust and Mr.

Bassani is not one of

the trustees of the trust.

Bassani further disclaims beneficial ownership of shares and warrants owned by various other family members

(including Christopher Parlow who is itemized separately), none of whom live with him or are his dependents, and such shares are not

included in this calculation.

(3) Includes 324,077 shares held jointly by Mark A.

Smith with his wife, 62,535 shares held by Mark Smith

his wife, 62,535 shares held by Mark Smith in an IRA;

2,425,000 shares underlying options held directly by Mr.

Smith, 1,536,520 shares underlying warrants held directly by Mr.

53,756 shares held by his wife in her IRA, 12,681 shares of common stock held by LoTayLingKyur Foundation and 153,432 shares of common

stock and 100,001 underlying warrants held by LoTayLingKyur LLC which is controlled by Mr.

Smith and his wife.

Also includes 2,813,686

shares and 2,813,686 warrants underlying units that could be issued on the conversion (at the election of Mr.

Smith, 1,271,944 shares

underlying warrants held directly by Mr.

53,756 shares held by his wife in her IRA, 12,681 shares of common stock held by LoTayLingKyur

Foundation and 100,001 shares of common stock and 100,001 underlying warrants held by LoTayLingKyur LLC which is controlled by Mr.

and his wife.

Also includes 2,664,726 shares and 2,664,726 warrants underlying units that could be issued on the conversion (at the election

Smith) by Mr.

2020 Convertible Obligations in the aggregate amount of $1,406,843.

Smith has the option to convert this amount into units with each

unit consisting of 1 share of common stock and 1 warrant exercisable at $0.75 per share.

The conversion price will be $0.50 per unit.

Does not include shares and warrants owned by various family members of which Mr.

Smith of his 2020 Convertible Obligations in the aggregate amount of $1,332,363.

Smith has the option to convert

this amount into units with each unit consisting of 1 share of common stock and 1 warrant exercisable at $0.75 per share.

The conversion

price will be $0.50 per unit.

Also includes 20,000 shares of common stock that could be issued on the conversion (at the election

Smith) of deferred compensation in the amount of $10,000.

Does not include shares and warrants owned by various family members

Smith disclaims beneficial ownership.

Smith is also

the President of Centerpoint, although shares owned by Centerpoint are not entitled to a vote while held by Centerpoint.

Includes 2,005 shares held directly by Christopher Parlow, 65,000 shares held jointly with wife, 250,000 shares owned by the Christopher

Parlow Trust and 50,000 shares owned by Christopher Parlow’s minor daughters.

Also includes 1,614,000 shares underlying warrants

held by the Christopher Parlow Trust, 147,154 shares underlying warrants held jointly with wife, 150,000 warrants held directly by Mr.

Smith is also the President of Centerpoint, although shares owned by Centerpoint

are not entitled to a vote while held by Centerpoint.

(4) Includes 2,005 shares held directly by Christopher Parlow,

65,000 shares held jointly with wife, 250,000 shares owned by the Christopher Parlow Trust and 50,000 shares owned by Christopher Parlow’s

minor daughters.

Also includes 1,614,000 shares underlying warrants held by the Christopher Parlow Trust, 147,154 shares underlying warrants

held jointly with wife, 150,000 warrants held directly by Mr.

Parlow and 459,780 shares underlying warrants held by Mr.

Parlow’s minor daughters.

In addition, Christopher is the 50% beneficial

owner of the Dominic Bassani 2019 Irrevocable Trust (“2019 Trust”) which owns 3,000,000 warrants to purchase shares of the

Company’s common stock and 1,000,000 options and as a result, Christopher Parlow is the beneficial owner of 1,500,000 shares underlying

exercise of the warrants and 500,000 shares underlying exercise of the options.

Additionally, the 2019 Trust owns $2,173,729.57 principal

amount of the Company’s 2020 Convertible Obligation (“CVObligation”) which is convertible @$0.50 into 4,347,459 shares

and 2,899,756 warrants.

As a result, Christopher Parlow is the beneficial owner of 2,173,730 shares underlying conversion of the CVObligation

and 1,449,878 shares underlying the warrants issuable on conversion of the CVObligation.

Includes 170,000 shares held directly by Danielle Lominy (formerly Danielle Bassani), 1,511,477 shares underlying warrants held

by The Danielle Christine Bassani Trust, Anthony Orphanos and Donald Codignotto, trustees;

400,000 shares owned by the Danielle Bassani

Trust, 311,458 shares underlying warrants, 105,000 shares underlying warrants owned jointly with husband and 230,000 shares underlying

warrants owned by Danielle Lominy’s daughter.

minor daughters.

In addition, Christopher is the 50% beneficial owner of the Dominic Bassani 2019 Irrevocable Trust (“2019 Trust”)

which owns 3,000,000 warrants to purchase shares of the Company’s common stock and 1,000,000 options and as a result, Christopher

Parlow is the beneficial owner of 1,500,000 shares underlying exercise of the warrants and 500,000 shares underlying exercise of the

Additionally, the 2019 Trust owns $2,255,500 principal amount of the Company’s 2020 Convertible Obligation (“CVObligation”)

which is convertible @$0.50 into 4,511,000 shares and 3,008,837 warrants.

As a result, Christopher Parlow is the beneficial owner of

2,255,500 shares underlying conversion of the CVObligation and 1,504,418 shares underlying the warrants issuable on conversion of the

CVObligation.

(5) Includes 170,000 shares held directly by Danielle Lominy (formerly

Danielle Bassani), 1,511,477 shares underlying warrants held by The Danielle Christine Bassani Trust, 400,000 shares owned by the Danielle

Bassani Trust, 311,458 shares underlying warrants, 105,000 shares underlying warrants owned jointly with husband and 230,000 shares underlying

warrants owned by Danielle Lominy’s daughter.

In addition, Danielle is the 50% beneficial owner of the Dominic Bassani 2019 Irrevocable

Trust (“2019 Trust”) which owns 3,000,000 warrants to purchase shares of the Company’s common stock and 1,000,000 options

and, as a result Danielle Lominy is the beneficial owner of 1,500,000 shares underlying exercise of the warrants and 500,000 shares underlying

exercise of the options.

Additionally, the 2019 Trust owns $2,173,729.57 principal amount of the Company’s 2020 Convertible Obligation

(“CVObligation”) which is convertible @ $0.50 into 4,347,459 shares and 2,899,756 warrants.

As a result, Danielle Lominy is

the beneficial owner of 2,173,730 shares underlying conversion of the CVObligation and 1,449,878 shares underlying the warrants issuable

Additionally, the 2019 Trust owns $2,255,500 principal amount of the Company’s 2020 Convertible Obligation

(“CVObligation”) which is convertible @ $0.50 into 4,511,000 shares and 3,008,837 warrants.

As a result, Danielle Lominy

is the beneficial owner of 2,255,500 shares underlying conversion of the CVObligation and 1,504,419 shares underlying the warrants issuable

on conversion of the CVObligation.

(6) Includes 319,589 shares held directly by Mr.

156,750 shares underlying warrants held directly

shares underlying warrants held directly by Mr.

Orphanos;120,263 shares held jointly with his wife;

1,425,374 shares held in IRA accounts;

and 719,832 shares of common stock that

could be issued on conversion of $431,898.97 convertible notes (.60 conversion price).

Not included are 400,000 shares and 1,511,477 shares

underlying warrants held by the Danielle Christine Bassani Trust, of which Mr.

Orphanos is a co-trustee, and 2,921,777 common shares owned

by certain clients of Blacksmith Advisors, over which Mr.

Orphanos exercises discretionary authority (which shares include:

shares held in IRA accounts for Mr.

Bassani and his wife;

b) 354,342 shares held by Mr.

Bassani’s wife;

c) 5,624 shares held by

Bassani personally;

and d) 170,000 shares owned by Danielle Lominy (formerly Danielle Bassani).

and 745,027 shares of common stock that could be issued on conversion of $447,016 convertible notes (.60 conversion price).

included are 1,450,878 common shares owned by certain clients of Blacksmith Advisors, over which Mr.

Orphanos exercises discretionary

authority (which shares include:

98,000 shares owned by Danielle Lominy (formerly Danielle Bassani).

Orphanos disclaims beneficial

1 unchanged sentence

(7) Includes 158,254 shares held directly by Mr.

Schafer, options to purchase 1,165,000 shares and warrants to purchase 23,934 shares.

Also includes 965,264 shares and 482,632 warrants underlying units that could be issued on the conversion by Mr.

Schafer of a deferred

compensation promissory note in the amount of $482,631.93.

Schafer has the option to convert this amount into units with each unit

consisting of 1 share of common stock and ½

warrant exercisable at $0.75 per share until December 31, 2024.

The conversion price

is $0.50 per unit.

Also includes 33,741 shares of common stock that could be issued on the conversion (at the election of Mr.

Schafer, options

to purchase 1,215,000 shares and warrants to purchase 23,934 shares.

Also includes 1,001,574 shares and 500,787 warrants underlying units

that could be issued on the conversion by Mr.

Schafer of a deferred compensation promissory note in the amount of $500,787 Mr.

has the option to convert this amount into units with each unit consisting of 1 share of common stock and ½ warrant exercisable

at $0.75 per share until December 31, 2024.

The conversion price is $0.50 per unit.

Also includes 34,834 shares of common stock that

could be issued on the conversion (at the election of Mr.

Schafer) by Mr.

Schafer of a convertible note in the amount of $20,900.

The conversion price will be $0.60 per share.

Includes 120,635 shares held directly by Jon Northrop and options to purchase 442,500 shares held by Jon Northrop.

conversion price will be $0.60 per share.

(8) Includes 50,000 underlying warrants held directly by Mr.

1,125 shares held by Mr.

O’Neill’s wife, and 1,000,000 underlying warrants held by Identifoods, LLC which is owned by Mr.

O’Neill and his wife.

(9) Includes 504,894 shares, 1,470,000 shares underlying options

and 573,747 shares underlying warrants held directly by Mr.

The total also includes 30,324 shares of common stock that could

be issued on the conversion (at the election of Mr.

Scott) of deferred compensation in the amount of $32,445.81.

Does not include

shares or options owned by the adult children of Jon Northrop nor his former wife.

shares and warrants owned by various family members of which Mr.

Scott disclaims beneficial ownership.

(10) Includes 120,635 shares held directly by Jon Northrop and options

to purchase 492,500 shares held by Jon Northrop.

Does not include shares or options owned by the adult children of Jon Northrop nor his

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,

15 unchanged sentences

The aggregate fees billed for tax services rendered

by Eide Bailly LLP for tax compliance and related services for the two fiscal years ended June 30, 2021 and June 30, 2020 were $3,600

and $12,300, respectively.

by Eide Bailly LLP for tax compliance and related services for the two fiscal years ended June 30, 2022 and June 30, 2021 were nil and

$3,600, respectively.

All Other Fees

7 unchanged sentences

EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

Number Description and Location

of Incorporation.

10.1 Subscription

Agreement dated January 10, 2002 between Bion Environmental Technologies, Inc.

and Centerpoint

Corporation regarding issuance of stock in exchange for cash and claims regarding Aprilia.

10.2 Agreement

dated March 15, 2002 and effective January 15, 2002 between Bion Environmental Technologies,

and Centerpoint Corporation regarding purchase of warrant and management agreement.

10.3 Agreement

dated February 12, 2003 between Bion Environmental Technologies, Inc.

and Centerpoint Corporation

canceling provisions of the Subscription Agreement by and between Bion Environmental Technologies,

Description and Location

Amended and Restated Articles of Incorporation of Bion Environmental Technologies, Inc., filed with the Secretary of State of the State

of Colorado on April 11, 2022.

(Incorporated by reference to Exhibit 3.1 filed

with Form 8-K filed on April 12, 2022).

Amended and Restated Bylaws.

(Incorporated by reference to Exhibit 3.2 filed

with Form 8-K filed on January 4, 2022).

Subscription Agreement dated January 10, 2002 between Bion Environmental Technologies, Inc.

and Centerpoint Corporation

10.4 Promissory

Note and Security Agreement between Bion Environmental Technologies, Inc.

and Bright Capital,

Amendment to Lease between Bion Environmental Technologies, Inc.

and Pan Am Equities Corp.

10.6 Agreement

between Bion Environmental Technologies, Inc.

and Bergen Cove.

10.7 Agreement

between Bion Environmental Technologies, Inc.

and David Mitchell dated April 7, 2003.

Agreement with Bright Capital, Ltd.

10.9 Agreement

with OAM, S.p.A.

dated May 2003.

10.10 Amended

Agreement with Centerpoint Corporation dated April 23, 2003.

of Series A Secured Convertible Notes issued in August 2003.

10.12 Financing

Documents for Bion Dairy Corporation.

of Class SV/DB Warrant.

of Class SV/DM Warrant.

of Series A* Secured Convertible Notes issued in April 2004.

of Series B Secured Convertible Notes issued in Spring 2004.

of Series B* Secured Convertible Notes issued in June 2004.

of Series C Notes issued in September 2005.

of 2006 Series A Convertible Promissory Notes issued in September 2006.

of Non-Disclosure Agreement used by the Company.

10.21 Promissory

Note and Conversion Agreement between Bion Environmental Technologies, Inc.

related to deferred compensation.

10.22 Promissory

Note and Conversion Agreement between Bion Environmental Technologies, Inc.

and Bright Capital,

related to deferred compensation.

10.23 Employment

agreement with Mark A.

10.24 Employment

agreement with Salvatore Zizza.

10.25 Employment

agreement with Bright Capital, Ltd.

10.26 Employment

agreement with Jeff Kapell.

10.27 Employment

agreement with Jeremy Rowland.

lease at 641 Lexington Avenue, 17th Floor, New York.

Consolidated Incentive Plan.

to Dominic Bassani & Bright Capital, Ltd.

dated October 16, 2006 regarding Change in

Title/Status of DB/Amendment to Brightcap Agreement.

Agreement between Bion Dairy Corporation and Fair Oaks Dairy Farms dated June 19, 2006.

and Release Agreement with Ardour Capital Investments, LLC.

10.33 Promissory

Note and Conversion Agreement for Mark Smith, dated January 1, 2007.

10.34 Promissory

Note and Conversion Agreement for Salvatore Zizza, dated January 1, 2007.

10.35 Promissory

Note and Conversion Agreement for Bright Capital, Ltd., dated January 1, 2007.

10.36 Extension

Agreement dated March 31, 2007 between the Company and Mark A Smith.

of Note dated March 31, 2007 in the amount of $151,645.89 in favor of Mark A.

of Note dated March 31, 2007 in the amount of $379,389.04 in favor of Salvatore Zizza.

of Note dated March 31, 2007 in the amount of $455.486.30 in favor of Bright Capital, Ltd.

10.40 Stipulation

and Agreement of Compromise and Release dated May 21, 2007 between Centerpoint Corporation,

Bion Environmental Technologies, Richard Anderson and Joseph Foglia, as Plaintiffs, and Comtech

Group, Inc., OAM S.p.A., Invested Ernst & Company and others as Defendants.

10.41 Stipulation

and Agreement of Compromise, Settlement and Release dated May 15, 2007 between TCMP3 Partners,

LLP as Plaintiff and Bion Environmental Technologies, Inc.

and Bion Dairy Corporation, among

others, as Defendants.

10.42 Stipulation

and Agreement of Compromise, Settlement and Release as to Certain Defendants dated May 15,

2007 between TCMP3 Partners, LLP as Plaintiff and certain defendants other than Bion Environmental

Technologies, Inc.

and Bion Dairy Corporation.

of Intent dated August 18, 2007 between Bion Environmental Technologies, Inc.

and Evergreen

10.44 Memorandum

of Understanding with Kreider Farms.

10.45 Subscription

Agreement from Bright Capital, Ltd.

10.46 Amendment

to 2006 Consolidated Incentive Plan.

10.47 Agreement

between the Company and Mark A.

Smith dated May 31, 2008.

Series AB Convertible Promissory Note.

10.49 Promissory

Note between Bion Environmental Technologies, Inc.

and Salvatore Zizza.

10.50 Promissory

Note between Bion Environmental Technologies, Inc.

and Dominic Bassani.

10.51 Agreement

between Jeff Kapell and Bion dated November 1, 2008.

10.52 Agreement

between David Mager and Bion dated November 1, 2008.

10.53 Promissory

Note between Anthony Orphanos and Bion dated October 30, 2008, Guaranteed by Dominic Bassani.

10.54 Addendum

to Settlement Agreement and Release Stipulation from Bion, Bion Dairy and Mark Smith dated

October 31, 2008.

10.55 Kreider

Farms Agreement (September 25, 2008):

10.56 Agreement

between Salvatore Zizza and Bion effective December 31, 2008.

10.57 Amendment

#3 to 2006 Consolidated Incentive Plan.

10.58 Agreement

between Bright Capital, Ltd.

and Dominic Bassani and Bion effective January 11, 2009.

10.59 Agreement

between Mark A.

Smith and Bion effective January 12, 2009.

10.60 Orphanos

Extension Agreement dated January 13, 2009.

10.61 Articles

of Amendment including Statement of Designation and Determination of Preferences of Series

B Convertible Preferred Stock.

Agreement between Ronald Kreider and Kreider Farms and Bion PA 1 LLC dated June 26, 2009.

10.63 Capitalization

Agreement between Bion Companies and Bion PA 1 LLC dated June 30, 2009.

Notice re Master Sublease Option Exercise (November 20, 2009).

of Schroeppel resolution (December 10, 2009).

10.66 Articles

of Amendment including Statement of Designation and Determination of Preferences of Series

C Convertible Preferred Stock.

10.67 Extension

Agreement with Mark A.

10.68 Agreement

with Edward Schafer.

10.69 Accepted

Funding Offer (base loan agreement) (without exhibits) with PENNVEST for Kreider Farms Project

Loan -- effective November 3, 2010.

Form Agreement.

of William O’Neill.

& Security Agreement with Milestone Bank.

10.73 O'Neill

Employment Agreement (dated December 22, 2010).

10.74 Schafer

Employment Agreement (dated December 21, 2010).

10.75 Biography

Morris Employment Agreement.

Grabowski Employment Agreement.

10.78 Kreider

Farms Clarification Agreement.

10.79 Resignation

of William O’Neill (effective May 13, 2011).

Certification of Kreider Poultry Credits.

10.81 Bassani/Bright

Capital Extension Agreement (executed August 31, 2011) (26)

Extension Agreement (executed August 31, 2011) (26)

Employment Agreement (executed September 30, 2011) (27)

10.84 Extension/Conversion

Agreement with Smith and Bassani (dated March 31, 2012) (28)

10.85 Memorialization

of extension of Maturity of Bassani convertible deferred compensation (dated July 31, 2012)

10.86 Kreider

Permit (dated August 1, 2012) (29)

10.87 Memorialization

of Smith Extension Agreement (dated August 14, 2012) (30)

10.88 Memorialization

of Bassani Extension Agreement (dated August 14, 2012) (30)

10.89 Memorialization

of Schafer Agreement (dated August 21, 2012) (30)

Ratification dated May 5, 2013 (31)

Promissory Note dated May 13, 2013 (31)

10.92 Pennvest

Demand Letter (dated September 25, 2014) (32)

10.93 Extension

Agreement with Mark A.

Smith (w/o exhibits) (February 10, 2015) (33)

10.94 Extension

Agreement with Dominic Bassani (w/o exhibits) (February 10, 2015) (33)

10.95 Agreement

with Edward Schafer (w/o exhibits) (February 10, 2015) (33)

10.96 Convertible

Promissory Note between the Company and Dominic Bassani dated September 8, 2015 (34)

10.97 Convertible

Promissory Note between the Company and Edward Schafer dated September 8, 2015 (34)

10.98 Convertible

Promissory Note between the Company and Anthony Orphanos dated September 8, 2015 (34)

10.99 Kreider

Poultry Joint Venture Agreement (May 5, 2016) (35)

10.100 Bassani

Warrant Purchase effective August 1, 2018 (36)

Warrant Purchase effecitve August 1, 2018 (36)

10.102 Amendment

#9 to 2006 Consolidated Incentive Plan, as amended (36)

10.103 Lease (executed September 23, 2021) (37)

21 Subsidiaries

of the Registrant.

31.1 Certification

of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 - Filed

herewith electronically.

31.2 Certification

of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

- Filed herewith electronically.

32.1 Certification

of Chief Executive Officer Pursuant to Section 18 U.S.C.

Section 1350 - Filed herewith electronically.

32.2 Certification

of Principal Financial Officer Pursuant to Section 18 U.S.C.

Section 1350 - Filed herewith

electronically.

_______________

with Form 10SB12G on November 14, 2006.

regarding issuance of stock in exchange for cash and claims regarding Aprilia (Incorporated by reference to Exhibit 10.1 filed with Form 10SB12G on November 14, 2006).

Agreement dated March 15, 2002 and effective January 15, 2002 between Bion Environmental Technologies, Inc.

and Centerpoint

Corporation regarding purchase of warrant and management agreement (Incorporated by reference to Exhibit 10.2 filed with Form 10SB12G on November 14, 2006).

Agreement dated February 12, 2003 between Bion Environmental Technologies, Inc.

and Centerpoint Corporation canceling provisions

of the Subscription Agreement by and between Bion Environmental Technologies, Inc.

and Centerpoint Corporation (Incorporated by reference to Exhibit 10.3 filed with Form 10SB12G on November 14, 2006).

Promissory Note and Security Agreement between Bion Environmental Technologies, Inc.

and Bright Capital, LLC (Incorporated by reference to Exhibit 10.4 filed with Form 10SB12G on November 14, 2006).

Letter Agreement with Bright Capital, Ltd.

(Incorporated by reference to Exhibit 10.8 filed with Form 10SB12G on November 14, 2006).

Amended Agreement with Centerpoint Corporation dated April 23, 2003 (Incorporated by reference to Exhibit 10.10 filed with Form 10SB12G on November 14, 2006).

Promissory Note and Conversion Agreement between Bion Environmental Technologies, Inc.

Smith related to deferred compensation (Incorporated by reference to Exhibit 10.21 filed with Form 10SB12G on November 14,

Promissory Note and Conversion Agreement between Bion Environmental Technologies, Inc.

and Bright Capital, Ltd.

deferred compensation (Incorporated by reference to Exhibit 10.22 filed with Form 10SB12G on November 14,

Employment agreement with Mark A.

Smith (Incorporated by reference to Exhibit 10.23 filed with Form 10SB12G on November 14,

Employment agreement with Bright Capital, Ltd.

(Incorporated by reference to Exhibit 10.25 filed with Form 10SB12G on November 14,

Employment agreement with Jeff Kapell (Incorporated by reference to Exhibit 10.26 filed with Form 10SB12G on November 14,

Employment agreement with Jeremy

Rowland (Incorporated by reference to Exhibit 10.27 filed with Form 10SB12G on November 14,

Office lease at 641 Lexington Avenue,

17th Floor, New York (Incorporated by reference to Exhibit 10.28 filed with Form 10SB12G on November 14,

2006 Consolidated Incentive Plan (Incorporated by reference to Exhibit 10.29 filed with Form 10SB12G on November 14,

Memo to Dominic Bassani & Bright Capital, Ltd.

dated October 16, 2006 regarding Change in Title/Status of DB/Amendment to

Brightcap Agreement (Incorporated by reference to Exhibit 10.30 filed with Form 10SB12G on November 14,

Promissory Note and Conversion Agreement for Mark Smith, dated January 1, 2007 (Incorporated by reference to Exhibit 10.31 filed

with Form 10SB12G/A on February 1, 2007).

with Form 8-K on April 3, 2007.

with Form 8-K on August 13, 2007.

with Form 8-K on August 22, 2007.

with Form 8-K on February 27, 2008.

with Form 8-K on June 3, 2008.

with Form 8-K on June 19, 2008.

with Form 8-K on September 30, 2008.

with Form 8-K on November 13, 2008.

with September 30, 2008 Form 10-Q on November 14, 2008.

with Form 8-K on January 6, 2009.

with Form 8-K on January 15, 2009.

with March 31, 2009 Form 10-Q on May 14, 2009.

with Form 8-K on July 2, 2009.

with Form 8-K on December 15, 2009.

with December 31, 2009 Form 10-Q on February 9, 2010.

with Form 8-K on August 18, 2010.

with Form 8-K on November 3, 2010.

with Form 8-K on November 22, 2010.

with Form 8-K on December 6, 2010.

with Form 8-K on December 28, 2010.

with Form 8-K on March 16, 2011.

with Form 8-K on May 13, 2011.

with Form 8-K on June 1, 2011.

with Form 8-K on September 2, 2011.

with Form 8-K on October 4, 2011.

with Form 8-K on April 4, 2012.

with Form 8-K on August 3, 2012

with Form 8-K on August 21, 2012.

with March 31, 2013 Form 10-Q on May 14, 2013.

with June 30, 2014 10-K on September 26, 2014.

with December 31, 2014 Form 10-Q on February 11, 2015

with June 30, 2015 Form 10-K on September 22, 2016

with March 31, 2016 Form 10-Q on May 9, 2016

with June 30, 2019 Form 10-K on September 24, 2019

with Form 8-K on September 29, 2021

Promissory Note and Conversion Agreement for Bright Capital, Ltd., dated January 1, 2007 (Incorporated by reference to Exhibit 10.35 filed

with Form 10SB12G/A on February 1, 2007).

Extension Agreement dated March 31, 2007 between the Company and Mark A Smith (Incorporated by reference to Exhibit 10.1 filed

with Form 8-K filed on April 3, 2007)

Form of Note dated March 31, 2007 in the amount of $151,645.89 in favor of Mark A.

Smith (Incorporated by reference to Exhibit

2 filed with Form 8-K filed on April 3, 2007)

Form of Note dated March 31, 2007 in the amount of $455.486.30 in favor of Bright Capital, Ltd.

(Incorporated by reference to Exhibit 10.4 filed

with Form 8-K filed on April 3, 2007)

Memorandum of Understanding with Kreider Farms (Incorporated by reference to Exhibit 99.1 filed

with Form 8-K filed on February 27, 2008)

Subscription Agreement from Bright Capital, Ltd.

(Incorporated by reference to Exhibit 99.1 filed

with Form 8-K filed on June 3, 2008)

Amendment to 2006 Consolidated Incentive Plan (Incorporated by reference to Exhibit 99.2 filed

with Form 8-K filed on June 3, 2008)

Agreement between the Company and Mark A.

Smith dated May 31, 2008 (Incorporated by reference to Exhibit 99.3 filed

with Form 8-K filed on June 3, 2008).

2007 Series AB Convertible Promissory Note (Incorporated by reference to Exhibit 99.1 filed

with Form 8-K filed on June 19, 2008).

Promissory Note between Bion Environmental Technologies, Inc.

and Dominic Bassani (Incorporated by reference to Exhibit 10.2 filed

with Form 8-K filed on September 30, 2008).

Promissory Note between Anthony Orphanos and Bion dated October 30, 2008, Guaranteed by Dominic

Bassani (Incorporated by reference to Exhibit 10.3 filed

with Form 8-K filed on November 13, 2008).

Addendum to Settlement Agreement and Release Stipulation from Bion, Bion Dairy and Mark Smith dated October 31, 2008 (Incorporated by reference to Exhibit 10.4 filed

with Form 8-K filed on November 13, 2008).

Kreider Farms Agreement (September 25, 2008):

REDACTED (Incorporated by reference to Exhibit 10.1 filed

with Form 10-Q filed on November 14, 2008).

Amendment #3 to 2006 Consolidated Incentive Plan (Incorporated by reference to Exhibit 10.2 filed

with Form 8-K filed on January 6, 2009).

Agreement between Bright Capital, Ltd.

and Dominic Bassani and Bion effective January 11, 2009 (Incorporated by reference to Exhibit 10.1 filed

with Form 8-K filed on January 15, 2009).

Agreement between Mark A.

Smith and Bion effective January 12, 2009 (Incorporated by reference to Exhibit 10.2 filed

with Form 8-K filed on January 15, 2009).

Orphanos Extension Agreement dated January 13, 2009 (Incorporated by reference to Exhibit 10.3 filed

with Form 8-K filed on January 15, 2009).

Lease Agreement between Ronald Kreider and Kreider Farms and Bion PA 1 LLC dated June 26, 2009 (Incorporated by reference to Exhibit 10.1 filed

with Form 8-K filed on July 2, 2009).

Capitalization

Agreement between Bion Companies and Bion PA 1 LLC dated June 30, 2009 (Incorporated by reference to Exhibit 10.2 filed with Form

8-K filed on July 2, 2009).

Extension Agreement with Mark A.

(Incorporated by reference to Exhibit 10.1 filed

with Form 8-K filed on August 18, 2010).

Agreement with Edward Schafer (Incorporated by reference to Exhibit 10.2 filed

with Form 8-K filed on August 18, 2010).

Accepted Funding Offer (base loan agreement) (without exhibits) with PENNVEST for Kreider Farms Project Loan -- effective

November 3, 2010 (Incorporated by reference to Exhibit 10.1 filed

with Form 8-K filed on November 3, 2010).

Short Form Agreement (Incorporated by reference to Exhibit 10.1 filed

with Form 8-K filed on November 22, 2010).

Resume of William O’Neill.

(Incorporated by reference to Exhibit 10.2 filed

with Form 8-K filed on November 22, 2010).

Loan & Security Agreement with Milestone Bank (Incorporated by reference to Exhibit 10.2 filed

with Form 8-K filed on December 6, 2010).

O'Neill Employment Agreement (dated December 22, 2010) (Incorporated by reference to Exhibit 10.1 filed

with Form 8-K filed on December 6, 2010).

Schafer Employment Agreement (dated December 21, 2010) (Incorporated by reference to Exhibit 10.2 filed

with Form 8-K filed on December 6, 2010).

Biography of Edward T.

Schafer (Incorporated by reference to Exhibit 10.3 filed

with Form 8-K filed on December 6, 2010).

Kreider Farms Clarification Agreement (Incorporated by reference to Exhibit 10.3 filed

with Form 8-K filed on March 16, 2011).

Resignation of William O’Neill (effective May 13, 2011) (Incorporated by reference to Exhibit 10.1 filed

with Form 8-K filed on May 13, 2011).

PADEP Certification of Kreider Poultry Credits (Incorporated by reference to Exhibit 10.1 filed

with Form 8-K filed on June 1, 2011).

Bassani/Bright Capital Extension Agreement (executed August 31, 2011) (Incorporated by reference to Exhibit 10.2 filed

with Form 8-K filed on September 2, 2011).

Smith Extension Agreement (executed August 31, 2011) (Incorporated by reference to Exhibit 10.1 filed

with Form 8-K filed on September 2, 2011).

Bloom Employment Agreement (executed September 30, 2011) (Incorporated by reference to Exhibit 10.1 filed

with Form 8-K filed on October 4, 2011).

Extension/Conversion Agreement with Smith and Bassani (dated March 31, 2012) (Incorporated by reference to Exhibit 10.1 filed

with Form 8-K filed on April 4, 2012).

Memorialization of extension of Maturity of Bassani convertible deferred compensation (dated July

31, 2012) (Incorporated by reference to Exhibit 10.1 filed

with Form 8-K filed on August 3, 2012).

Memorialization of Smith Extension Agreement (dated August 14, 2012) (Incorporated by reference to Exhibit 10.1 filed

with Form 8-K filed on August 21, 2012).

Memorialization of Bassani Extension Agreement (dated August 14, 2012) (Incorporated by reference to Exhibit 10.2 filed

with Form 8-K filed on August 21, 2012).

Memorialization of Schafer Agreement (dated August 21, 2012) (Incorporated by reference to Exhibit 10.3 filed

with Form 8-K filed on August 21, 2012).

Board Ratification dated May 5, 2013 (Incorporated by reference to Exhibit 10.1 filed

with Form 10-Q filed on May 14, 2013).

Demand Promissory Note dated May 13, 2013 (Incorporated by reference to Exhibit 10.2 filed

with Form 10-Q filed on May 14, 2013).

Pennvest Demand Letter (dated September 25, 2014) (Incorporated by reference to Exhibit 10.92 filed

with Form 10-K filed on September 26, 2014).

Extension Agreement with Mark A.

Smith (w/o exhibits) (February 10, 2015) (Incorporated by reference to Exhibit 10.1 filed

with Form 10-Q filed on February 11, 2015).

Extension Agreement with Dominic Bassani (w/o exhibits) (February 10, 2015) (Incorporated by reference to Exhibit 10.2 filed

with Form 10-Q filed on February 11, 2015).

Agreement with Edward Schafer (w/o exhibits) (February 10, 2015) (Incorporated by reference to Exhibit 10.3 filed

with Form 10-Q filed on February 11, 2015).

Convertible Promissory Note between the Company and Dominic Bassani dated September 8, 2015 (Incorporated by reference to Exhibit 10.96 filed

with Form 10-K filed on September 22, 2015).

Convertible Promissory Note between the Company and Edward Schafer dated September 8, 2015 (Incorporated by reference to Exhibit 10.97 filed

with Form 10-K filed on September 22, 2015).

Convertible Promissory Note between the Company and Anthony Orphanos dated September 8, 2015 (Incorporated by reference to Exhibit 10.98 filed

with Form 10-K filed on September 22, 2015).

Kreider Poultry Joint Venture Agreement (May 5, 2016) (Incorporated by reference to Exhibit 10.1 filed

with Form 10-Q filed on May 9, 2016).

Bassani Warrant Purchase effective August 1, 2018 (Incorporated by reference to Exhibit 10.100 filed

with Form 10-K filed on September 24, 2019).

Smith Warrant Purchase effective August 1, 2018 (Incorporated by reference to Exhibit 10.101 filed

with Form 10-K filed on September 24, 2019).

Amendment #9 to 2006 Consolidated Incentive Plan, as amended (Incorporated by reference to Exhibit 10.102 filed

with Form 10-K filed on September 24, 2019).

Lease (executed September 23, 2021) (Incorporated by reference to Exhibit 10.1 filed

with Form 8-K filed on September 29, 2021).

Subsidiaries of the Registrant (Incorporated by reference to Exhibit 21 filed with Form 10SB12G on November 14, 2006).

Buflovak/Hebeler Purchase Order (January 28, 2022)(without Technical Details and Standard Terms and Conditions) (Incorporated by reference to Exhibit 10.1 filed

with Form 8-K filed on February 1, 2022)

Agreement with BioNTech SE re sale/purchase of domain name

<biontech.com> (Incorporated by reference to Exhibit 10.1 filed

with Form 8-K filed on March 25, 2022)

Bion Environmental Technologies, Inc.

2021 Equity Incentive Award Plan.

(Incorporated by reference to Exhibit 10.1 filed

with Form 8-K filed on January 4, 2022).

William O’Neill Employment Agreement (effective May 1, 2022) (without exhibits).

(Incorporated by reference to Exhibit 10.1 filed

with Form 8-K filed on May 3, 2022).

Letter of Intent with Ribbonwire Ranch (July 20, 2022).

(Incorporated by reference to Exhibit 10.1 filed

with Form 8-K filed on July 272, 2022).

Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 - Filed herewith electronically.

Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 - Filed herewith electronically.

Certification of Chief Executive Officer Pursuant to Section 18 U.S.C.

Section 1350.

Certification of Principal Financial Officer Pursuant to Section 18 U.S.C.

Section 1350.

Inline XBRL Instance Document (the instance document does not appear in

the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)

Inline XBRL Taxonomy Extension Schema Document

Inline XBRL Taxonomy Extension Calculation Linkbase Document

Inline XBRL Taxonomy Extension Definition Linkbase Document

Inline XBRL Taxonomy Extension Label Linkbase Document

Inline XBRL Taxonomy Extension Presentation Linkbase Document

Cover Page Interactive Data File (formatted as Inline XBRL and contained

in Exhibit 101)

*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.

(b) Financial Statement Schedules

4 unchanged sentences

and therefore have been omitted.

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm ( Eide Baily

Denver, CO, PCAOB ID:

Consolidated balance sheets

Consolidated statements of operations

Consolidated statements of changes in stockholders’

equity (deficit)

Consolidated statements of changes in stockholders’ equity (deficit)

Consolidated statements of cash flows

Notes to consolidated financial statements

of Independent Registered Public Accounting Firm

of Directors and Stockholders

Report of Independent Registered Public Accounting

To the Board of Directors and Stockholders

Bion Environmental Technologies, Inc.

Old Bethpage,

on the Financial Statements

have audited the accompanying consolidated balance sheets of Bion Environmental Technologies, Inc.

(the “Company”) as of

June 30, 2021 and 2020, and the related consolidated statements of operations ,

changes in stockholders’

equity (deficit), and cash flows, for the years then ended, 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 Bion Environmental Technologies, Inc.

as of June 30, 2021 and 2020, and the results of its operations and its cash

flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

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 not generated significant revenue and has suffered recurring losses from operations.

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.

Old Bethpage, New York

Opinion on the

Financial Statements

We have audited

the accompanying consolidated balance sheets of Bion Environmental Technologies, Inc.

(the “Company”) as of June 30, 2022

and 2021, and the related consolidated statements of operations , changes in stockholders’

equity (deficit), and cash flows, for the years then ended, 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 Bion Environmental Technologies,

as of June 30, 2022 and 2021, and the results of its operations and its cash flows for the years then ended, 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 not generated significant 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

The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on these 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.

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.

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 entity’s internal control over financial reporting.

Basis for Opinion

These financial

statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on these 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 entity’s internal control over financial reporting.

Accordingly, we express no such opinion.

audits included performing procedures to assess the risk 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 matter communicated below is a matter arising from the current period audit of the financial statements that was 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 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 a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

in Note 7 to the financial statements, the Company has entered into various equity-based compensation agreements.

These agreements include

transactions, including the original issuance and subsequent modifications of warrants and stock options, that are required to be measured

and accounted for at estimated fair value.

These transactions resulted in recording of stock-based compensation expense of $1,107,700,

modification of options of $8,775, warrant issuances of $2,500, and warrant modifications of $212,645 for the year ended June 30, 2021.

Company’s determination of the estimated fair values involves the identification of related financial instruments and a clear understanding

of the terms of the agreements.

Auditing management’s estimates of fair value requires a high degree of auditor judgment and an

increased extent of effort, including the need to carefully examine to understand the true nature of the related agreements.

primary procedures we performed to address this critical audit matter included:

gained an understanding of management's process and methodology to develop the estimates

examined agreements and agreed terms utilized in calculations

evaluated the reasonableness of the inputs and assumptions used by management in developing

the estimates

recalculated the amounts and compared to management’s calculation

Our audits included

performing procedures to assess the risk 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

Critical Audit Matter

The critical audit matter communicated below is a matter

arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved 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 a separate opinion on the critical audit

matter or on the accounts or disclosures to which it relates.

Equity Transactions

As discussed in Note 7 to the financial statements, the Company has entered

into various equity-based compensation agreements.

These agreements include transactions, including the original issuance and subsequent

modifications of warrants and stock options, that are required to be measured and accounted for at estimated fair value.

These transactions

resulted in recording of stock-based compensation expense of $419,370, modification of options of $-0-, warrant issuances of $30,000,

and warrant modifications of $8,337 for the year ended June 30, 2022.

The Company’s determination of the estimated fair

values involves the identification of related financial instruments and a clear understanding of the terms of the agreements.

management’s estimates of fair value requires a high degree of auditor judgment and an increased extent of effort, including the

need to carefully examine to understand the true nature of the related agreements.

The primary procedures we performed to address this critical

audit matter included:

· We gained an understanding of management's process

and methodology to develop the estimates

· We examined agreements and agreed terms utilized

in calculations

· We evaluated the reasonableness of the inputs and

assumptions used by management in developing the estimates

· We recalculated the amounts and compared to management’s

evaluated the adequacy of the disclosures related to these fair value measurements.

Eide Bailly LLP

have served as Bion Environmental Technologies, Inc.

We have served as Bion

Environmental Technologies, Inc.

auditor since 2017.

BION ENVIRONMENTAL TECHNOLOGIES, INC.

Denver, Colorado

September 27, 2022

BION ENVIRONMENTAL TECHNOLOGIES,

AND SUBSIDIARIES

2 unchanged sentences

Prepaid expenses

Deposits and other assets

Total current assets

Operating lease right-of-use asset

Property and equipment, net (Note 3)

2 unchanged sentences

Accounts payable and accrued expenses

Series B Redeemable Convertible Preferred stock, $0.01 par value,

Series B Redeemable

Convertible Preferred stock, $ 0.01

par value, 50,000

shares authorized;

200 shares issued and outstanding,

liquidation preference of $40,000 and $38,000, respectively (Note 7)

Paycheck Protection Program loan (Note 5)

shares issued and outstanding, liquidation preference of $ 0

and $ 40,000 ,

respectively (Note 7)

Deferred compensation (Note 4)

1 unchanged sentence

Total current liabilities

Paycheck Protection Program loan (Note 5)

Operating lease liability

Convertible notes payable - affiliates (Note 6)

1 unchanged sentence

Bion's stockholders' equity (deficit):

Series A Preferred stock, $0.01 par value, 50,000 shares authorized,

no shares issued and outstanding

Series C Convertible Preferred stock, $0.01 par value,

60,000 shares authorized;

Series A Preferred stock, $ 0.01 par

value, 10,000,000 and 50,000 shares authorized respectively, no shares issued and outstanding

Series C Convertible Preferred stock, $ 0.01 par value, 60,000 shares authorized;

no shares issued and outstanding

Common stock, no par value, 100,000,000 shares authorized, 41,315,986

and 31,409,005 shares issued, respectively;

and 30,704,696 shares outstanding, respectively

Common stock, no par value, 250,000,000 and 100,000,000 shares authorized respectively, 43,758,820 and 41,315,986 shares issued, respectively;

43,054,511 and

40,611,677 shares outstanding, respectively

Additional paid-in capital

3 unchanged sentences

( 132,339,873 )

Total Bion's stockholders’

(11,445,456 )

Total Bion's stockholders’ deficit

( 11,445,456 )

2 unchanged sentences

( 11,406,339 )

(15,087,958 )

Total liabilities and deficit

5 unchanged sentences

Operating expenses:

General and administrative (including stock-based

compensation (Note 7))

Research and development (including stock-based

compensation (Note 7))

General and administrative (including stock-based compensation (Note

Research and development (including stock-based compensation (Note 7))

Total operating expenses

Loss from operations

( 2,550,176 )

( 2,827,620 )

Other (income) expense:

Gain on extinguishment of liabilities

Forgiveness of debt

Interest income

Interest expense

Gain on sale of domain (Note 9)

Gain on legal dissolution of subsidiary (Note 5)

( 10,234,501 )

Total other expense

Net loss attributable to the noncontrolling interest

Net loss applicable to Bion's common stockholders

( 10,840,957 )

Net income (loss)

( 3,450,765 )

Net loss applicable to Bion's common stockholders

Net loss attributable to the noncontrolling interest

Net income (loss) applicable to Bion's common stockholders

$ ( 3,447,980 )

Net income (loss) applicable to Bion's common stockholders

per basic and diluted common share

2 unchanged sentences

See notes to consolidated financial statements

BION ENVIRONMENTAL TECHNOLOGIES, INC.

BION ENVIRONMENTAL TECHNOLOGIES,

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS'

EQUITY (DEFICIT)

YEARS ENDED JUNE 30, 2021 AND 2020

Bion's Shareholders'

CONSOLIDATED STATEMENTS OF

CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

YEARS ENDED JUNE 30, 2022

Bion's Stockholders'

Series A Preferred Stock

Series C Preferred Stock

Additional paid-in

Subscription Recivables for

Subscription Rec-

Noncontrolling

equity/(deficit)

paid-in capital

-eivables for Shares

Balances, July 1, 2020

Issuance of common stock for services

Vesting of options for services

$ ( 504,650 )

$ ( 128,891,893 )

$ ( 15,087,958 )

Sale of units

Commissions on sale of units

Modification of options

Modification of warrants

Issuance of warrants

Conversion of debt and liabilities

Balances, June 30, 2020

Sale of units

Commissions on sale of units and warrant exercises

Vesting of options for services

6 unchanged sentences

Conversion of debt and liabilities

( 3,447,980 )

( 3,450,765 )

Balances, June 30, 2021

$ 121,399,067

$ ( 504,650 )

$ ( 132,339,873 )

$ ( 11,406,339 )

Warrants exercised for common shares

Commissions on warrant exercises

Conversion of debt and liabilities

Issuance of units for services

Modification of warrants

Issuance of warrants

Vesting of options for services

Net income (loss)

Balances, June 30, 2022

$ 123,620,046

$ ( 504,650 )

$ ( 124,047,548 )

$ ( 894,579 )

See notes to consolidated financial statements

BION ENVIRONMENTAL TECHNOLOGIES, INC.

BION ENVIRONMENTAL TECHNOLOGIES,

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED JUNE 30, 2021 AND 2020

CONSOLIDATED STATEMENTS OF

YEARS ENDED JUNE 30, 2022

CASH FLOWS FROM OPERATING ACTIVITIES

Net income (loss)

$ ( 3,450,765 )

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Gain on legal dissolution of subsidiary

( 10,234,501 )

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation expense

Forgiveness of debt

Gain on extinguishment of liabilities

Accrued interest on loans payable, deferred compensation and other

Stock-based compensation

(Increase) decrease in prepaid expenses

(Decrease) increase in accounts payable and accrued expenses

Decrease (increase) in prepaid expenses

Increase (decrease) in accounts payable and accrued expenses

Decrease in operating lease assets and liabilities

Increase in deferred compensation

Net cash used in operating activities

( 1,389,460 )

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of property and equipment

( 2,062,155 )

Net cash used in investing activities

( 2,062,155 )

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from exercise of warrants

Commissions on exercise of warrants

Redemption of Preferred Series B shares and interest

Proceeds from sale of units

1 unchanged sentence

Proceeds from sale of common shares

Proceeds from exercise of warrants

Commissions on exercise of warrants

Proceeds from Paycheck Protection Program loan

Proceeds from loans payable - affiliates

Repayment of loans payable - affiliates

Net cash provided by financing activities

Net increase in cash

Cash at beginning of period

Cash at end of period

Net increase (decrease) in cash

( 1,055,879 )

Cash at beginning of year

Cash at end of year

Supplemental disclosure of cash flow information:

2 unchanged sentences

Conversion of debt and liabilities into common units

Conversion of deferred compensation into notes payable - related party

Warrants issued for unit commissions

Shares issued for warrant exercise commissions

Shares issued for accounts payable and accrued expenses

Purchase of property and equipment in accounts payable and accrued expenses

Non-cash compensation in property and equipment

Capitalized interest in property and equipment

Conversion of deferred compensation to notes payable

See notes to consolidated financial statements

3 unchanged sentences

YEARS ENDED JUNE 30, 2022 AND 2021

ORGANIZATION,

NATURE OF BUSINESS, GOING CONCERN AND MANAGEMENT’S PLANS:

ORGANIZATION, NATURE OF BUSINESS, GOING CONCERN AND MANAGEMENT’S PLANS :

Organization and nature of business:

Bion Environmental Technologies, Inc.'s ("Bion,"

"Company,"

"We,"

"Us,"

or "Our") was incorporated in 1987 in the State of Colorado.

and proprietary technology provides comprehensive environmental solutions to one of the greatest water air and water quality problems

pollution from large-scale livestock production facilities (also known as “Concentrated Animal Feeding Operations”

or “CAFOs").

Application of our technology and technology platform can simultaneously remediate environmental problems

and improve operational/resource efficiencies by recovering value high-value co-products from the CAFOs’

waste stream that have

traditionally been wasted or underutilized, including renewable energy, nutrients (including ammonia nitrogen) and water.

From 2016 to 2021 fiscal years, the Company has focused

a large portion of its activities on developing, testing and demonstrating the 3rd generation of its technology and technology platform

(“3G Tech”) with emphasis on increasing the efficiency of production of valuable co-products from the waste treatment process,

including ammonia nitrogen in the form of organic ammonium bicarbonate products.

The Company’s initial ammonium bicarbonate liquid

product completed its Organic Materials Review Institute (“OMRI”) application and review process with approval during May

An application for our first solid ammonium bicarbonate product –

AD Nitrogen –

has been filed and is in the review

Bion Environmental Technologies, Inc.'s ("Bion,"

"Company," "We," "Us," or "Our") was incorporated in 1987 in the State of Colorado.

mission is to create extraordinary value for our shareholders and employees (all of whom own securities in the Company) while delivering

premium, sustainable products to our customers through ventures developing profitable, transparent, and sustainable solutions for livestock

Our patented and proprietary technology provides advanced

waste treatment and resource recovery for large-scale livestock production facilities (also known as “Concentrated Animal Feeding

Operations” or “CAFOs").

Livestock production and its waste, particularly from CAFOs, has been identified as one of the

greatest soil, air, and water quality problems in the U.S.

Application of our third generation technology and business/technology

platform (“Gen3Tech”) can largely mitigate these environmental problems, while simultaneously improving operational/ resource

efficiencies by recovering high-value co-products from the CAFOs’ waste stream.

These waste stream ‘assets’ –

nutrients and methane – have traditionally been wasted or underutilized and are the same ‘pollutants’ that today fuel

harmful algae blooms, contaminate groundwater, and exacerbate climate change.

Bion’s business model and technology

platform can create the opportunity for joint ventures (in various contractual forms)(“JVs”) between the Company and

large livestock/food/fertilizer industry participants based upon the supplemental cash flow generated by implementation of our

Gen3Tech business model, which cash flows will support the costs of technology implementation (including servicing related debt).

anticipate this will result in substantial long term value for Bion.

In the context of such JVs, we believe that the verifiable

sustainable branding opportunities (conventional and organic) in meat will represent the single largest enhanced revenue contributor

provided by Bion to the JVs (and Bion licensees).

The Company believes that the largest portion of its business will be conducted

through such JVs, but a material portion may involve licensing and or other approaches.

Bion’s Gen3Tech was designed to capture and

stabilize these assets and produce renewable energy, fertilizer products, and clean water as part of the process of raising verifiably

sustainable livestock.

All steps and stages in the treatment process will be third-party verified, providing the basis for additional

revenues, including renewable energy-related credits and, eventually, payment for ecosystem services, such as nutrient credits as described

The same verified data will be used to substantiate the claims of a USDA-certified sustainable brand that will support premium

pricing for the meat/ animal protein products that are produced in Bion facilities.

During the first half of 2022 Bion began marketing

our sustainable beef to retailers, food service distributors and the meat industry in the U.S.

In general, the response has been

During July 2022 Bion announced a letter of intent (“Ribbonwire LOI”) to develop its first large-scale commercial

project, a 15,000-head sustainable beef cattle feeding operation together with the Ribbonwire Ranch, in Dalhart, Texas (with a provision

to expand to 60,000 head) (“Dalhart Project”).

The Dalhart Project will be developed to produce blockchain-verified, sustainable

beef (with reduced the stress on cattle caused by extreme weather and temperatures and resulting higher feed/weight gain efficiency) while

remediating the environmental impacts associated usually associated with cattle CAFOs.

Bion’s patented technology will treat the

waste stream and recover/refine valuable coproducts that include clean water, renewable natural gas (RNG), photovoltaic solar electricity,

organic fertilizer and potentially other products.

We anticipate converting the Ribbonwire LOI into a definitive joint venture agreement

with Ribbonwire Ranch and creating distribution agreements with key retailers and food service distributors before the end of calendar

Our business plan is focused on executing multiple agreements

and letters of intent related to additional sustainable beef joint venture projects over the next twelve months while moving forward with

the Initial Project (see below) and the Dalhart Project and pursuing other opportunities in the livestock industry enabled by our Gen3

Tech business model.

The Ribbonwire LOI announcement has generated significant interest within the livestock industry (among ranchers,

feedlot operators, farmers and other AG industry parties).

We believe that this interest, combined with consumer interest in ‘sustainable

products’ and growing enthusiasm among some livestock industry parties for environmental/sustainable/regenerative practices, may

provide Bion (and its partners/venturers) with an opportunity to move forward with a truly sustainable solution in this industry segment.

During the next six months, the Company intends to

construct and begin operations of phase 1 of our Initial Project located near Fair Oaks, Indiana.

Bion expects the Initial Project to

provide data that illustrates the effectiveness of our Gen3Tech in a commercial setting by the end of the 2 nd quarter in 2023

and supports development of the Dalhart Project during 2023.

We believe this data will also provide additional potential stakeholders

(cattle producers, cattle feeders, packers, distributors, retailers and financial institutions) with the information they need to proceed

with confidence in collaborating with Bion on multiple new projects (see below).

Bion is now focused primarily on:

i) development/construction

of its initial commercial-scale 3G Tech installation, ii) developing applications and markets for its organic fertilizer products and

its sustainable (conventional and organic) animal protein products, and iii) initiation and development of joint ventures (“JVs”

as discussed below) (and related projects) based on the augmented capabilities of our 3G Tech, while (iv) continuing to pursue development

opportunities related to large retrofit projects (such as the Kreider poultry project JV described below) and ongoing R&D activities.

of the Initial Project, our initial commercial-scale Gen3Tech installation, ii) development/construction of the Dalhart Project, iii)

developing applications and markets for its low carbon organic fertilizer products and its sustainable (conventional and organic) animal

protein products, and iv) discussions regarding initiation and development of agreements and joint ventures (“JVs” as discussed

below) (and related projects) based on the augmented capabilities of our Gen3Tech business platform (in the sustainable beef and other

livestock segments), while (v) continuing to pursue business opportunities related to large retrofit projects (such as the Kreider poultry

project JV described below) and vi) ongoing R&D activities.

HISTORY, BACKGROUND AND CURRENT ACTIVITIES

Since the Company’s inception, Bion has designed and developed

advanced waste treatment systems for livestock.

The first and second generations of Bion’s technology platform were biological systems,

primarily focused on nutrient control.

Over 30 of these systems were deployed at New York dairies, Florida food processing facilities

and dairies, North Carolina hog farms, a Texas dairy and a Pennsylvania dairy (“Kreider 1 Project”).

The systems were highly

effective at their intended purpose:

capturing nitrogen and phosphorus.

They produced BionSoil as a byproduct, which was a remarkably

effective soil amendment/ fertilizer product, but whose value was not enough to support a viable business model.

As such, these early

technology iterations were entirely dependent on either implementation of new regulations requiring waste treatment, or subsidy/ incentive

programs that would provide ‘payment for ecosystem services’.

By the mid-2010’s, it became apparent that neither of

these options were imminent or even assured, so the Company initiated the steps to reimagine and redesign its technology.

From 2016 to 2021 fiscal years, the Company focused

most of its activities and resources on developing, testing and demonstrating the third generation of its technology and technology platform

(“Gen3Tech”) that was developed with an emphasis producing more valuable co-products from the waste treatment process, including

renewable natural gas and ammonium bicarbonate, a low-carbon, organic ’pure’ nitrogen fertilizer product while raising sustainable

The $175 billion U.S.

livestock industry is under

intense scrutiny for its environmental and public health impacts –

its ‘environmental sustainability’-- at the same

intense scrutiny for its environmental and public health impacts – its ‘environmental sustainability’-- at the same

time it is struggling with declining revenues and margins (derived in part from clinging to its historic practices and resulting limitations

and impacts) which threaten its ‘economic sustainability’.

Its failure to adequately respond to consumer concerns ranging

including food safety, environmental impacts, and humane treatment of animals have provided impetus for plant-based alternatives such

as Beyond Meat and Impossible Burger (and many others) being marketed as “sustainable”

alternatives for this growing consumer

segment of the market.

The Company believes that its 3G Tech, in addition

and impacts) which threaten its ‘economic sustainability’.

Its failure to adequately respond to consumer concerns including

food safety, environmental impacts, and inhumane treatment of animals have provided impetus for plant-based alternatives such as Beyond

Meat and Impossible Burger (and many others) being marketed as “sustainable” alternatives for this growing consumer segment

of the market.

The Company believes that its Gen3Tech, in addition

to providing superior environmental remediation, creates opportunities for large scale production of i) verifiably sustainable-branded

livestock products and ii) verifiably sustainable organic-branded livestock products that will command premium pricing (in part due to

ongoing monitoring and third-party verification of environmental performance which will provide meaningful assurances to both consumers

livestock products and ii) verifiably sustainable organic-branded livestock products, both of which will command premium pricing (in part

due to ongoing monitoring and third-party verification of environmental performance which will provide meaningful assurances to both consumers

and regulatory agencies).

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production/marketing opportunity for Bion.

Our 3G Tech will also produce (as co-products) biogas and valuable organic fertilizer products,

which can be utilized in the production of organic grains for use as feed for raising organic livestock (some of which may be utilized

in the Company’s JV projects) and/or marketed to the growing organic fertilizer market.

During late September 2021, Bion entered into a lease

for the development site of its initial commercial scale 3G Tech project in September 2021(“Initial Project”), which Initial

Project will be located on approximately four (4) acres of leased land near Fair Oaks, Indiana (see Note 14 below).

Terms for an additional

related agreement regarding disposal of certain manure effluent have been agreed upon with the Curtis Creek Dairy unit of Fair Oaks Farms

(“FOF”) and the Company expects the agreement to be finalized by the end of the first full week of October 2021.

pre-development work commenced during August 2021 and preparation for active surveying, site engineering and other work is now underway.

The Initial Project will be an environmentally sustainable beef cattle feeding facility, equipped with state-of-the-art housing and Bion’s

3G-Tech platform to provide waste treatment and resource recovery.

Bion has designed the project to house and feed approximately 300 head

of beef cattle.

The facility will include Bion’s 3G Tech platform including:

i) covered barns with solar photovoltaic generation,

ii) anaerobic digestion for renewable energy recovery;

iii) livestock waste treatment and resource recovery technology;

iv) Bion’s

ammonium bicarbonate recovery and crystallization technology and iv) data collection software to document system efficiencies and environmental

benefits (with the Bion 3G Tech facilities capable of treating the waste from approximately 1,500 head).

The facility will be large enough

to demonstrate engineering capabilities of Bion’s 3G Tech at commercial scale, but small enough that it can be constructed and commissioned

quickly, with operations targeted to commence sometime during the Spring of 2022.

This project is not being developed at economic commercial

scale or with an expectation of profitability due to its limited scale.

However, successful installation, commissioning, and operations

will demonstrate scalability, determine operating parameters at scale, and provide ongoing production and engineering capabilities, all

being critical steps that must be accomplished before developing large projects with JV partners.

Our Gen3Tech will also produce (as co-products) biogas, solar photovoltaic electricity in appropriate

locations, and valuable low carbon organic fertilizer products, which can be utilized in the production of organic grains for use as feed

for raising organic livestock (some of which may be utilized in the Company’s JV projects) and/or marketed to the growing organic

fertilizer market.

During July 2022, the Company entered into a letter

of intent with Ribbonwire Ranch (Dalhart, Texas) (“Ribbonwire LOI”) setting forth the parties’ intention to negotiate

a joint venture agreement and enter into a joint venture to develop and operate an initial 15,000 head integrated, sustainable beef facility

on RWR property (“Dalhart Project”) including:

a) innovative cattle barns (with slatted floors to facilitate movement of manure to the anaerobic digester

and potentially solar PV generation on the rooftops which barns will improve the living conditions of the animals while increasing feeding/weight

gain efficiency,

b) ‘customized’ anaerobic digestion systems (including pretreatment to increase renewable natural

gas (‘RNG’) production and an RNG cleaning system (which will include capture/recycling of the CO2) to allow pipeline sales

and monetization of related environmental credits,

c) a Bion GEN3 Tech module (which will utilize the recycled CO2 to increase ammonium bicarbonate recovery)

for the production of ammonium bicarbonate fertilizer for use in organic crop production (plus residual organic solids and clean water),

d) which will produce verifiably sustainable beef products with USDA certified branding.

The Dalhart Project will include expansion capability up to

60,000 head of cattle, in aggregate, located at/around/contiguous to the initial facilities on Ribbonwire property.

The opportunity presented by the Ribbonwire LOI to commercialize the Company’s

Gen3Tech and business model matured more quickly than anticipated (reflecting strong industry and public momentum in favor of verifiably

sustainable food ventures).

As a result, we have shifted our plans to focus resources and make our initial 15,000 head operation in Dalhart,

TX a reality as soon as possible.

To place the Ribbonwire LOI and the Dalhart Project in the context of Company’s

business plan (and our prior public disclosure), if the contemplated venture moves forward on the timelines set forth in the Ribbonwire

LOI, active development of the Dalhart Project will commence early in the second quarter of 2023.

Prior to such activity, the Company intends to construct and operate the

initial phase of the previously announced Gen3 Tech demonstration project near Fair Oaks, Indiana (“Initial Project”):

to validate our existing data and modeling at commercial scale and ii) to optimize the Bion 3G Tech module for finalization of design

parameters and fabrication details of our planned 15,000 head commercial facilities (including the Dalhart Project).

For the purposes

of this initial phase, the Company, in order to accelerate the data acquisition phase, intends to utilize anaerobic digester effluent

from the nearby/contiguous Fair Oaks dairy.

Construction and related activities of this demonstration project have commenced with main

module assembly on site targeted to commence during January 2023 (somewhat delayed due to supply chain constraints) followed by operations

through the first half of 2023 to generate the required information.

Thereafter, the Company will evaluate what, if any, additional facilities

and testing will take place at that location.

The Company anticipates that it will negotiate additional letters of intent

and enter into additional joint ventures related to the development of further commercial-scale sustainable beef projects over the next

6-18 months in addition to the Dalhart Project.

As previously disclosed, during late September 2021,

Bion entered into a lease for the development site of the Initial Project, our initial commercial scale Gen3Tech project, which Initial

Project will be located on approximately four (4) acres of leased land near Fair Oaks, Indiana, and a related agreement regarding disposal

of certain manure effluent with the Curtis Creek Dairy unit of Fair Oaks Farms (“FOF”).

Design and pre-development work commenced

during August 2021 and preliminary surveying, site engineering and other work is now underway along with site-specific engineering and

The Initial Project was initially planned to be an environmentally sustainable beef cattle feeding facility, equipped with

state-of-the-art housing and Bion’s 3G-Tech platform to provide waste treatment and resource recovery.

Bion has designed the project

to house and feed approximately 300 head of beef cattle.

If all phases of the Initial Project are constructed, the facility will include

Bion’s Gen3Tech platform including:

i) covered barns (possibly including roof top solar photovoltaic generation), ii) anaerobic

digestion for renewable energy recovery, iii) livestock waste treatment and resource recovery technology, iv) Bion’s ammonium bicarbonate

recovery and crystallization technology and iv) data collection software to document system efficiencies and environmental benefits (with

the Bion Gen3Tech facilities capable of treating the waste from approximately 1,500 head).

The facility will be large enough to demonstrate

engineering capabilities of Bion’s Gen3Tech at commercial scale, but small enough that it can be constructed and commissioned relatively

Originally, construction and onsite assembly operations were targeted to commence sometime late in 2022, however, supply chain

backlogs have delayed likely delivery dates for core modules of the Bion system to the site until sometime during January 2023.

been moving forward with the development process of the Initial Project.

See Note 3 “Property and Equipment” and Note 12 “Subsequent

Events” (for activities since the start of the first quarter of the 2023 fiscal year).

The Initial Project is not being developed at economic

commercial scale or with an expectation of profitability due to its limited scale.

However, successful installation, commissioning, and

operations will demonstrate scalability, determine operating parameters at scale, and provide ongoing production and engineering capabilities,

all being critical steps that must be accomplished before developing large projects with JV partners.

Specifically, the Initial Project is being developed

to provide and/or accomplish the following:

Proof of 3G Tech platform scalability

- Document system efficiency and environmental

benefits and enable final engineering modifications to optimize each unit process within the Bion 3G technology platform.

- Environmental benefits will include (without

limitation) renewable energy production (natural gas recovery from AD and solar electric from integrated roof top photovoltaic generation);

Proof of Gen3Tech platform scalability

Document system efficiency and environmental benefits and enable final engineering modifications to optimize each unit process within the Bion Gen3technology platform.

Environmental benefits will include (without limitation) renewable energy production (natural gas recovery from AD and solar electric from integrated roof top photovoltaic generation);

nutrient recovery and conversion to stable organic fertilizer;

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air emission reductions.

Use Bion’s data collection system to support 3 rd party verified system efficiency requirement to qualify for USDA

Process-Verified-Program (PVP):

Use Bion’s data collection system to support 3rd party verified system efficiency requirement to qualify for USDA Process-Verified-Program (PVP):

certification of sustainable branded beef (and potentially pork) product metrics.

Produce sufficient ammonium bicarbonate nitrogen fertilizer (“AD Nitrogen”) for commercial testing by potential joint

venture partners and/or purchasers and for university growth trials.

Produce sufficient ammonium bicarbonate nitrogen fertilizer (“AD Nitrogen”) for commercial testing by potential joint venture partners and/or purchasers and for university growth trials.

Produce sustainable beef products for initial test marketing efforts.

Upon achieving optimized and steady-state operations

at the Initial Project during 2022, coupled with obtaining an OMRI listing for its AD Nitrogen product, Bion expects to be ready to move

forward with its plans for development of much larger facilities.

The Company anticipates that discussions and negotiations regarding

potential JVs with strategic partners in the financial and livestock industries to develop large scale projects will commence during the

construction of the Initial Project.

Additionally, the Company believes there will also be opportunities to proceed with selected ‘retrofit

projects’

of existing facilities (see ‘Retrofit 3G Tech Project:

Kreider Poultry JV below as an example).

Bion intends to move forward on its one of its primary

commercial goals:

establishing JV’s for large scale projects that will produce both sustainable and sustainable-organic corn-fed

The products will be supported by a USDA PVP-certified sustainable brand that will, initially, highlight reductions in carbon and

nutrient footprint, as well as pathogen reductions associated with foodborne illness and antibiotic resistance, along with the organic

designation where appropriate.

Bion has successfully navigated the USDA PVP application process previously, having received conditional

approval of its 2G Tech platform, pending resubmission and final site audits, and is confident it will be successful in qualifying its

3G Tech platform.

The Initial Project will be carried out in stages

with phase one focused on portions of items i.

set forth above.

Upon completing the primary goals of phase 1 of the

Initial Project, (coupled with obtaining organic certifications(s) for our for our solid ammonium bicarbonate fertilizer product line),

Bion expects to be ready to move forward with its plans for development of much larger facilities including the Dalhart Project.

anticipates that discussions and negotiations it has begun (together with additional opportunities that will be generated over the next

6-12 months) regarding potential JVs with strategic partners in the financial, livestock and food distribution industries to develop large

scale projects will continue during the development/construction of the Initial Project with a 2023 goal of establishing multiple JV’s

for large scale projects that will produce sustainable and/or sustainable-organic corn-fed beef.

These products will be supported by a

USDA PVP-certified sustainable brand that will, initially, highlight reductions in carbon and nutrient footprint, as well as pathogen

reductions associated with foodborne illness and antibiotic resistance, along with the organic designation where appropriate.

successfully navigated the USDA PVP application process previously, having received conditional approval of its 2G Tech platform (pending

resubmission and final site audits), and is confident it will be successful in qualifying its Gen3Tech platform.

After the basic technology start-up milestones of

the Initial Project (primarily optimization and steady-state operations of the core modules of our Gen3Tech platform) have been met, the

core modules may be re-located to a subsequent more permanent location to be determined at a later date.

The Company is in discussion

with the University of Nebraska-Lincoln to jointly develop an integrated beef facility based on Bion’s Gen3 Tech and business model

at its Klosterman Feedyard Innovation Center (“KFIC”) (or other mutually agreed upon location) which facility will include

innovative barns, an anaerobic digester and a Bion Gen3Tech system to conduct ongoing research and development related thereto and the

KFIC is a possible site for the long term re-location of the core modules.

This venture, if it moves forward, is anticipated to include

joint preparation of applications for grants and other funding from the USDA (‘climate smart’ program, rural development,

etc.) and other sources.

The Company is also considering re-locating the core module of the Initial Project to Dalhart, Texas, where it

might be integrated into the first phases of the Dalhart Project.

The Company’s initial ammonium bicarbonate

liquid product completed its Organic Materials Review Institute (“OMRI”) application and review process with approval during

Applications for our first solid ammonium bicarbonate product line have been filed with OMRI, the California Department of

Food & Agriculture (“CDFA”) and the Iowa Organic Program (“IOP”) and are in the review processes (which is

likely to require an extended period of time and multiple procedural steps, in part due to the novel nature of our Gen3Tech in the context

of organic certifications).

See “ Organic Fertilizer Listing/Certification Process ” below.

Additionally, the Company believes there will

also be opportunities to proceed with selected ‘retrofit projects’ of existing facilities (see ‘ Gen3Tech Kreider

2 Poultry Projec t’ below as an example) in the swine, dairy and poultry industries utilizing our Gen3 Tech.

Bion believes that substantial unmet demand currently

exists–

potentially very large –

for ‘real’

meat/ dairy/ egg products that offer the verifiable/believable sustainability

exists– potentially very large – for ‘real’ meat/ dairy/ egg products that offer the verifiable/believable sustainability

consumers seek, but with the taste and texture they have come to expect from American beef and pork, dairy and poultry.

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demonstrate the U.S.

consumers’

preferences for sustainability.

For example, 2019 NYU Stern’s Center for Sustainable Business

study found that ‘products marketed as sustainable grew 5.6 times faster than those that were not…’

and that ‘…in

consumers’ preferences for sustainability.

For example, 2019 NYU Stern’s Center for Sustainable Business

study found that ‘products marketed as sustainable grew 5.6 times faster than those that were not…’ and that ‘…in

more than 90 percent of consumer-packaged-goods (CPG) categories, sustainability-marketed products grew faster than their conventional

counterparts.’

Sales growth of plant-based alternatives, including both dairy and more recently ground meat (Beyond Meat, Impossible

Foods, etc.) have shown that a certain segment of consumers are choosing seemingly sustainable offering, and are also willing to pay a

premium for it.

Numerous studies also support the consumers’

‘willingness-to-pay’

(WTP) for sustainable choices, including

a recent meta-analysis of 80 worldwide studies with results that calculate the overall WTP premium for sustainability is 29.5 percent

counterparts.’ Sales growth of plant-based alternatives, including both dairy and more recently ground meat (Beyond Meat, Impossible

Foods, etc.) have shown that a certain segment of consumers is choosing food marketed as ‘sustainable’ and are also willing

to pay a premium for it.

Numerous studies also support the consumers’ ‘willingness-to-pay’ (WTP) for sustainable choices,

including a recent meta-analysis of 80 worldwide studies with results that calculate the overall WTP premium for sustainability is 29.5

percent on average.

As one of the largest contributors to some of the

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opportunities we have to reduce negative environmental impacts of the food supply chain on air and water quality.

Bion’s 3G Tech

platform, along with its business model, enables the cleanup of the ‘dirtiest’

part of the food supply chain:

Bion’s Gen3Tech

platform, along with its business model, enables the cleanup of the ‘dirtiest’ part of the food supply chain:

animal protein

production and creates the opportunity to produce and market verifiably sustainable organic and conventional ‘real meat’

that can participate in the growth and premium pricing that appears to be readily available for the ‘right’

Bion believes the at least a premium segment of the

US beef industry (and potentially other livestock industry groups) is at the doorstep of a transformative opportunity to address the growing

demand for sustainable food product offerings, while pushing back against today’s anti-meat messaging.

production and creates the opportunity to produce and market verifiably sustainable organic and conventional ‘real meat’ products

that can participate in the growth and premium pricing that appears to be readily available for the ‘right’ products.

Bion believes that at least a premium segment of the

beef industry (and potentially other livestock industry groups) is at the doorstep of a transformative opportunity to address the

growing demand for sustainable food product offerings, while pushing back against today’s anti-meat messaging.

At $66 billion/year

retail value), the beef industry is a fragmented, commodity industry whose practices date back decades.

In 1935 inflation-adjusted terms,

beef is 63% more expensive today, while pork and chicken, which are now primarily raised in covered barns, at CAFOs with highly integrated

supply chains, are 12% and 62% cheaper, respectively.

In recent years, the beef industry has come under increasing fire from advocacy

groups, regulatory agencies, institutional investors, and ultimately, their own consumers, over concerns that include climate change,

water pollution, food safety, and the treatment of animals and workers.

(2021 wholesale/farmgate value), the beef industry is a fragmented, commodity industry whose practices date back decades.

In 1935 inflation-adjusted

terms, beef is 63% more expensive today, while pork and chicken, which are now primarily raised in covered barns, at CAFOs with highly

integrated supply chains, are 12% and 62% cheaper, respectively.

In recent years, the beef industry has come under increasing fire

from advocacy groups, regulatory agencies, institutional investors, and ultimately, their own consumers, over concerns that include climate

change, water pollution, food safety, and the treatment of animals and workers.

Advocacy groups targeting livestock and the beef industry

have recently been joined by competitors that produce animal protein alternatives in seeking to exploit the industry’s environmental

and economic weaknesses.

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Nations Food and Agriculture Organization, a coordinated anti-meat messaging campaign has targeted consumers worldwide, primarily focused

on the industry’s impacts on climate change.

Meat alternatives, especially plant-based protein producers like Beyond Meat and Impossible

Foods, are being heavily promoted by themselves and the media, and have enjoyed steady sales growth.

A 2018 NielsenIQ Homescan survey

last year found that 39% of Americans are actively trying to eat more plant-based foods.

Some of the recent growth in plant-based proteins

results from increasing lactose intolerance and other health concerns;

however, most of that growth is attributed to consumers’

growing concerns for the environmental impacts of real meat and dairy.

Several large US companies that have traditionally focused on livestock

production, including Cargill, ADM, Perdue Foods, and Tyson, have recently entered the plant protein space.

In terms of changing customer

preferences, ‘saving the planet’

has proven to be a more compelling argument than the traditional animal activism/ welfare

To date, the only ‘industry response’

to this has been grass-fed beef, which is regarded as a generally more sustainable

offering than grain-fed.

However grass-fed beef has had only limited acceptance in U.S.

markets, because it is less flavorful and tougher

than the traditional corn-fed beef consumers have grown to enjoy.

Foods, are being heavily promoted by themselves and the media, and initially enjoyed steady sales growth until sales began flattening

over the past 12-18 months.

A 2018 NielsenIQ Homescan survey last year found that 39% of Americans are actively trying to eat more plant-based

Some of the recent growth in plant-based proteins results from increasing lactose intolerance and other health concerns;

most of that growth is attributed to consumers’ growing concerns for the environmental impacts of real meat and dairy.

Several large

US companies that have traditionally focused on livestock production, including Cargill, ADM, Perdue Foods, and Tyson, have recently entered

the plant protein space.

In terms of changing customer preferences, ‘saving the planet’ has proven to be a more compelling

argument than the traditional animal activism/ welfare pitch.

To date, the primary beef ‘industry response’ to this has been

grass-fed beef, which is regarded as a generally more sustainable offering than grain-fed (largely without empirical evidence) plus a

patina of initiatiatives invoking the vague term ‘regenerative’ agriculture.

However grass-fed beef has had only limited acceptance

markets, because it is less flavorful and tougher than the traditional corn-fed beef consumers have grown to enjoy.

It should be noted that these plant-based protein

producers are primarily expected to be able to serve the ground/ processed meat market, which represents only about 10 percent of the

overall animal protein market.

Further, there has recently been pushback to these plant-based products, focusing on their highly processed

nature and unproven health benefits, scalability/ pricing, and their uncertain carbon footprint.

There have also been several companies

recently enter the cellular and 3D-printed meat arena.

While facing myriad challenges and further out on the development timeline, some

people believe cellular agriculture (aka cultured, clean, lab-grown, cultivated) meat may have the potential to service a much larger

percentage of the market than plant-based protein, including cuts like steaks, chops and roasts, but the likely cost remains very uncertain

at this point.

Each of these items supports Bion’s belief that

there is a potentially very large opportunity to supply premium sustainable beef products that satisfy these concerns.

We believe that

the real meat/beef products that can be cost-effectively produced today using our 3G Tech platform, both sustainable and/or organic, can

provide an affordable product that satisfies the consumer’s desire for sustainability, but with the superior taste and texture those

consumers have grown to prefer.

producers are primarily expected to be able to serve the ground/ processed meat market, segment which represents only about 10 percent

of the overall animal protein market.

Further, there has recently been pushback to these plant-based products, focusing on their highly

processed nature and unproven health benefits, scalability/ pricing, and their uncertain carbon footprint.

There have also been several

companies recently enter the cellular and 3D-printed meat arena.

While facing myriad technical and economic challenges and further out

on the development timeline, some people believe cellular agriculture (aka cultured, clean, lab-grown, cultivated) meat may have the potential

to service a much larger percentage of the market than plant-based protein, including cuts like steaks, chops and roasts, but the likely

cost and timeline for availability remain very uncertain at this point.

Each of these items supports Bion’s belief that

there is a potentially very large opportunity to supply premium verifiably sustainable beef products that address these consumer concerns.

We believe that the real meat/beef products that can be cost-effectively produced today using our Gen3Tech platform, both sustainable

and/or sustainable organic, can provide an affordable product that satisfies the consumer’s desire for sustainability, while providing

the superior taste and texture those consumers have grown to prefer.

Sustainable Beef

Bion’s goal is to be first to market with meaningfully

sustainable, and verified, beef products that can be produced at sufficient scale to service national market demand.

The cattle produced

at a Bion facility will enjoy a substantially lower carbon footprint, dramatically reduced nutrient impacts to water, and an almost total

pathogen kill in the waste stream.

A Bion sustainable beef facility will be comprised of covered barns with slotted floors, which allow

the waste to pass through and be collected quickly and frequently to reduce ammonia volatilization and loss, as well as odors.

barns will reduce weather impacts on the livestock and have been demonstrated to promote improved general health and weight gain in the

cattle housed in them.

The barns represent a very large roof surface area, which will be utilized in appropriate geographical locations

for the installation of photovoltaic solar generation systems to produce electricity for the facility, as well as export to the grid.

Waste treatment and resource recovery will be provided by Bion’s advanced 3G Tech platform, which Bion believes offers the most

comprehensive solution for livestock waste available today.

In addition to direct environmental benefits every pound of nitrogen that

is captured, upcycled, and returned to the agricultural nitrogen cycle as high-quality fertilizer (vs lost to contaminate downstream waters),

is also a pound of nitrogen that will not have to be produced as synthetic urea or anhydrous ammonia, with their tremendous carbon cost.

System performance and environmental benefits will be monitored and verified through third parties, with USDA PVP certification of the

sustainable brand that Bion also believes will be the most comprehensive available in the market.

Bion’s goal is to be first to market with meaningfully

verified sustainable beef products that can be produced at sufficient scale to service national market demand.

The cattle produced at

a Bion facility will have a substantially lower carbon footprint, dramatically reduced nutrient impacts to water and air, and an almost

total pathogen kill in the waste stream.

Further, the economics of producing these cattle (including the cost of the facility/technology

upgrade) will be greatly enhanced by the revenue realized from the recovery of valuable resources, including renewable energy, high-value

fertilizer products, and clean water.

A Bion sustainable beef facility (see diagram above)

will be comprised of covered barns with slotted floors (allowing the waste to pass through) which will reduce ammonia volatilization and

loss to the atmosphere, as well as odors, thereby improving animal health and human working conditions while preventing air/soil/water

The manure will be collected and moved directly to customized anaerobic digestion facilities which will produce renewable natural

gas (and re-cycle CO2 from the gas cleaning process).

Covered barns will reduce weather impacts on the livestock and have been demonstrated

to promote improved general health and weight gain in the cattle housed in them.

The barns’ very large roof surface area will be

utilized (in appropriate geographical locations) for the installation of photovoltaic solar generation systems to produce electricity

for the facility, as well as export to the grid.

The barn roofs will also be configured to capture rainwater, which, coupled with the

water recovered from the treatment process, will reduce the projects’ reliance on current water supplies.

Waste treatment and resource recovery will be provided

by Bion’s advanced Gen3Tech platform, which Bion believes offers the most comprehensive solution for livestock waste available today.

In addition to direct environmental benefits, every pound of nitrogen that is captured, upcycled, and returned to the agricultural nitrogen

cycle as high-quality fertilizer (vs lost to contaminate downstream waters), is also a pound of nitrogen that will not have to be produced

as synthetic urea or anhydrous ammonia, with their tremendous carbon cost.

System performance and environmental benefits will be monitored

and verified through third parties, with USDA PVP certification of the sustainable brand that Bion also believes will be the most comprehensive

available in the market.

Recently there have been efforts to establish sustainable

brands (including USDA PVP certification) for a number of small-scale livestock producers (largely in the grass fed beef category).

date, the reach and extent of such efforts is limited and it is difficult to determine their effectiveness.

Additionally, there have

been public announcements of initiatives related to beef sustainability (largely focused on the ‘cow-calf’ segment of the

livestock chain) in procurement by major beef processing companies, but a closer look finds that most consist largely of ‘green

washing’ public proclamations in the wake of environmental and social criticism that re-package prior initiatives and lack any significant

new substance.

At present, there is essentially no traceable and

verifiable ‘sustainable beef’ available to the US market except for niche products.

In response to consumer demand for transparency

and sustainability, Bion expects the meat industry in general, and beef specifically, to evolve towards using new technologies to deliver

these attributes in their products.

While we anticipate a faster adoption of tracking, verification and sustainability technologies in

other perishable food categories like produce and dairy due to their harvest and production techniques, meat industry leaders have also

announced their willingness to move forward with initiatives in this area.

Bion predicts that within approximately five years, consumers

will be able to track and verify claims including sustainability on 25% (or more) of the products merchandised in the meat department.

Bion believes that the retail market share of verifiably sustainable beef in the US will approach 7-10 % within three (3) years (end of

2025) and 25% in five (5) years (end of 2027) (approximately 2,000,000 cattle annually).

If Bion can successfully execute on its sustainable

beef business plan, facilities utilizing Bion’s Gen3Tech platform will provide one-third (1/3) or more of that of the premium market

segment (and a higher portion of meat that is actually traceable and verifiably sustainable).

Our goal is to have multiple sustainable

beef projects under development (within 3-5 distinct JVs) by the end of 2023.

Our first commercial project is likely to be the Dalhart

Project but we anticipate commencing additional sustainable beef projects during 2023 as well.

Our current target is to have at least

three (3) facility modules (15,000 head per module)(“Modules”) in development/under construction during 2023 in three (3)

different JVs with the initial barns being populated with livestock by fall/winter 2024-25.

Further expansion in the number of distinct

JVs is projected through 2025 aiming at 5-10 JVs in process --- each of which JVs will be pursuing development of multiple Modules with

targets of 12-15 populated Modules by the end of 2025 (approximately 2%-3% of the US beef market) and 30-45 Modules constructed and populated

by 2027-28 (approximately 6%-8% of the US beef market) with further expansion thereafter.

Bion’s current goal is that its Gen3Tech

platform will be utilized to produce 33% of the verifiable “sustainable beef” category at the end of the period (which will

equal approximately 2 million cattle annually)(45 Modules).

There is no assurance that the Company will reach

or approach the goals/targets set forth above.

Reaching such goals/targets will require access to very large amounts of capital (equity

and debt) as each module is projected to cost in excess of $ 50 million to construct and require mobilization of substantial personnel,

technical resources and management skills.

The Company does not possess either the financial or personnel resources required internally

and will need to source such resources from outside itself.

During this period, the Company also anticipates having

Gen3Tech projects underway in the pork/dairy/egg sectors of the US animal protein market.

Sustainable Organic Beef

Bion believes it has a unique opportunity to produce,

at scale, affordable corn-fed organic beef that is certified as sustainable.

at scale, affordable corn-fed organic beef that is also certified as sustainable.

In addition to the sustainable practices described above,

organic-sourced beef cows would be finished on organic corn, which would be produced using the ammonium bicarbonate fertilizer captured

by the 3G Tech platform.

by the Gen3Tech platform.

Bion believes its meat products will meet consumer demands with respect to sustainability and safety (organic)

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largely unavailable in the market today.

We believe Bion’s unique ability to produce the fertilizer needed to grow a supply of low-cost

organic corn, and the resulting opportunity to produce organic beef, will dramatically differentiate us from potential competitors.

organic opportunity is dependent on successfully establishing Bion’s fertilizer products as acceptable for use in organic grain

We believe Bion’s unique ability to produce the fertilizer needed to grow a supply of relatively

low-cost organic corn, and the resulting opportunity to produce organic beef, will dramatically differentiate us from potential competitors.

This organic opportunity is dependent on successfully establishing Bion’s fertilizer products as acceptable for use in organic grain

Today, organic beef demand is limited and mostly supplied

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mostly resulting from consumer issues with taste and texture.

In other words, it’s tough.

Regardless, such steaks sell for a significant

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costs of producing organic corn and grain.

The exception is offerings that are very expensive from small ‘boutique’

beef producers.

The exception is offerings that are very expensive from small ‘boutique’ beef producers.

Like all plants, corn requires nitrogen to grow.

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However, the cost for suitable nitrogen fertilizer that can be applied late-season in organic

corn production is so high that the late-season application becomes uneconomical, resulting in substantially lower yields –

recognized phenomena known as the ‘yield gap’

in organic production.

corn production is so high that the late-season application becomes uneconomical, resulting in substantially lower yields – a widely

recognized phenomena known as the ‘yield gap’ in organic production.

The yield gap results in higher costs for organic corn

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consumers have come to expect from American beef.

Bion’s ability to produce the low-cost nitrogen fertilizer that can close the

organic yield (and affordability) gap puts the company in a unique, if not exclusive at this time, position to participate in JV’s

Bion’s ability to produce the low-cost nitrogen fertilizer that can close the

organic yield (and affordability) gap puts the Company in a unique, if not exclusive at this time, position to participate in JV’s

that will benefit from this opportunity starting next year.

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The consumer demand for sustainability appears to be a real and lasting

trend, but consumers remain skeptical of generalized claims of ‘sustainability’.

To date, a large portion of the industry

responses have been at a superficial level or consist of ‘green washing’, a deceptive marketing practice where companies promote

non-substantive initiatives.

Real sustainability for the livestock industry will require implementation of advanced waste treatment technology

at or near the livestock production facilities (“Concentrated Animal Feeding Operations”

or “CAFOs”) –

most of the negative environmental impacts take place.

responses to this trend have been at a superficial level or consist of ‘green washing’, a deceptive marketing practice where

companies promote non-substantive initiatives.

Real sustainability for

the livestock industry will require implementation

of advanced waste treatment technology at or near the CAFOs – where most of the negative environmental impacts take place.

Organic Fertilizer Listing/Certification Process

The Company has focused a large portion of its activities

on developing, testing and demonstrating the 3rd generation of its technology and technology platform (“Gen3Tech”) with emphasis

on increasing the efficiency of production of valuable co-products from the waste treatment process, including ammonia nitrogen in the

form of low carbon and/or organically certified ammonium bicarbonate products.

The Company’s initial ammonium bicarbonate liquid

product completed its Organic Materials Review Institute (“OMRI”) application and review process with approval during May

Applications for our first solid form of concentrated

ammonia, soluble nitrogen fertilizer product line have been filed with OMRI (filed during May 2021), the Iowa Organic Program (“IOP”)(filed

during March 2022) and the California Department of Food & Agriculture (“CDFA”)(filed during May 2022) and are each in

the review process.

The review processes are requiring extended periods of time and multiple procedural steps with each entity in part

due to the novel nature of Bion’s Gen3Tech and our solid ammonium bicarbonate product in the context of organic certifications.

The OMRI application has proceeded through multiple stages of review and rebuttal/appeal without receiving a positive result to date.

The Company anticipates has recently filed a new appeal to the most recent determinations.

The Company’s CDFA has received initial

comments regarding our solid ammonium bicarbonate product line and we anticipate providing CDFA with the requested updated information

and clarifications during the next 60 days.

The Company’s product line is novel in part due to the fact that there is not a formal

listing category for a solid form of concentrated ammonia, soluble nitrogen fertilizers and there is no clear guidance at present from

internal policy manuals on how to categorize this product and the process that produced it.

There is also no clear guidance at present

from either the NOP or the National Organic Standards Board (“NOSB”) (which is currently involved in a related review and

recommendations process regarding ‘high nitrogen liquid fertilizers’ derived from ammonia from manure).

The Company and its

representatives, along with a number of other stakeholders, are involved in discussions regarding resolution of these matters at all three

The Company anticipates positive resolution of this matter with one or more listings/certifications of this product line well

prior to operational dates for the Company’s initial large scale JV Gen3Tech projects.

Gen3 Tech Kreider 2 Poultry Project

has done extensive pre-development work related to a waste treatment/renewable energy production facility to treat the waste from

KF’s approximately 6+ million chickens (planned to expand to approximately 9-10 million) (and potentially other poultry

operations and/or other waste streams) ('Kreider Renewable Energy Facility' or ‘Kreider 2 Project’).

On May 5, 2016, the

Company executed a stand-alone joint venture agreement (“JVA”) with Kreider Farms covering all matters related to

development and operation of Kreider 2 system to treat the waste streams from Kreider’s poultry facilities in Bion PA2 LLC

During May 2011 the PADEP certified a smaller version of the Kreider 2 Project (utilizing our 2 nd

generation technology) under the old EPA’s Chesapeake Bay model.

The Company anticipates that if and when new designs are

finalized utilizing our Gen3 Tech, a larger Kreider 2 Project will be re-certified for a far larger number of credits

(management’s current estimates are between 2-4 million (or more) nutrient reduction credits for treatment of the waste stream

from Kreider’s poultry pursuant to the amended EPA Chesapeake Bay model and agreements between the EPA and PA).

that this Project may also be expanded in the future to treat wastes from other local and regional CAFOs (poultry and/or

dairy---including the Kreider Dairy) and/or additional Kreider poultry expansion (some of which may not qualify for nutrient

reduction credits).

The Company has commenced discussions with Kreider Farms regarding updating the JVA to reflect the capabilities

of our Gen3 Tech platform and anticipates executing an amended (or new) JVA during the current fiscal year.

The Company anticipates

that if and when PA2 re-commences work on the Kreider 2 Project, it will submit a new application based on our Gen3Tech.

specific design and engineering work for this facility have not commenced, and the Company does not yet have financing in place for

the Kreider 2 Project.

This opportunity is being pursued through PA2.

If there are positive developments related to the market for

nutrient reductions in Pennsylvania, of which there is no assurance, the Company intends to pursue development, design and

construction of the Kreider 2 Project with a goal of achieving operational status for its initial modules during the following

calendar year.

The economics (potential revenues and profitability) of the Kreider 2 Project, despite its proposed use of

Bion’s Gen3Tech for increased recovery of marketable by-products and sustainable branding, are based in material part the

long-term sale of nutrient (nitrogen and/or phosphorus) reduction credits to meet the requirements of the Chesapeake Bay

environmental clean-up.

However, liquidity in the Pennsylvania nutrient credit market has not yet developed significant breadth and

depth, which lack of liquidity has negatively impacted Bion’s business plans and will most likely delay PA2’s Kreider 2

Project and other proposed projects in Pennsylvania.

Bion believes that the Kreider 2 Project and/or subsequent

Bion Projects in PA and the Chesapeake Bay Watershed will eventually generate revenue from the sale of:

a) nutrient reductions (credits

or in other form), b) renewable energy (and related credits), c) sales of fertilizer products, and/or d) potentially, in time, credits

for the reduction of greenhouse gas emissions, plus e) license fees/premiums related to a ‘sustainable brand’.

pandemic has delayed legislative efforts needed to commence its development in Pennsylvania.

However, the Company is currently engaged

in dialogue with the regional EPA office and the Chesapeake Bay Program Office regarding the potential of the Company’s Gen3 Tech

Kreider2 Project (and other potential projects) to enable Pennsylvania to move forward toward meeting its Chesapeake Bay clean-up goals.

We believe that the potential market is very large, but it is not possible to predict the exact timing and/or magnitude of these potential

markets at this time.

Technology Deployment:

Bion Gen3Tech

Widespread deployment of waste treatment technology,

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costs associated with technology adoption.

Bion’s 3G Tech has been developed to create opportunities for such augmented revenue

streams, while providing third party verification of sustainability claims.

The 3G Tech platform has been designed to maximize the value

of co-products produced during the waste treatment/recovery processes, including pipeline-quality renewable natural gas (biogas) and commercial

fertilizer products approved for organic production.

All processes will be verifiable by third parties (including regulatory authorities

and certifying boards) to comply with environmental regulations and trading programs and meet the requirements for:

a) renewable energy

and carbon credits, b) organic certification of the fertilizer coproducts and c) USDA PVP certification of an ‘Environmentally Sustainable’

brand (see discussion below), and d) payment for verified ecosystem services.

The Company’s first patent on its 3G Tech was issued

In August 2020, the Company received a Notice of Allowance on its third patent which significantly expands the breadth and

depth of the Company’s 3G Tech coverage, and the Company has additional applications pending and/or planned.

Bion’s business model and technology platform

can create the opportunity for JVs (in various contractual forms) between the Company and large livestock/food/fertilizer industry participants,

based upon the supplemental cash flow generated by implementation of our 3G Tech business model, which will support the costs of technology

implementation (including related debt).

We anticipate this will result in long term value for Bion.

In the context of such JVs, we believe

that the verifiable sustainable branding opportunities (conventional and organic) may expand to represent the single largest enhanced

revenue contributor provided by Bion to the JVs (and Bion licensees).

The Company believes that the largest portion of its business with

be conducted through such JVs, but a material portion may involve licensing and or other approaches.

Bion’s Gen3Tech business platform has been developed to create opportunities for such

augmented revenue streams, while providing third party verification of sustainability claims.

The Gen3Tech platform has been designed

to maximize the value of co-products produced during the waste treatment/recovery processes, including pipeline-quality renewable natural

gas (biogas) and commercial fertilizer products approved for organic production.

All processes will be verifiable by third parties (including

regulatory authorities and certifying boards) to comply with environmental regulations and trading programs and meet the requirements

a) renewable energy and carbon credits, b) organic certification of the fertilizer coproducts and c) USDA PVP certification of an

‘Environmentally Sustainable’ brand (see discussion below), and d) payment for verified ecosystem services.

The Company’s

first patent on its Gen3Tech was issued during 2018.

In August 2020, the Company received a Notice of Allowance on its third patent which

significantly expands the breadth and depth of the Company’s Gen3Tech coverage, and the Company has additional applications pending

and/or planned.

Bion’s business model and technology platform

can create the opportunity for joint ventures (in various contractual forms)(“JVs”) between the Company and large livestock/food/fertilizer

industry participants based upon the supplemental cash flow generated by implementation of our Gen3Tech business model, which cash flows

will support the costs of technology implementation (including servicing related debt).

We anticipate this will result in substantial

long term value for Bion.

In the context of such JVs, we believe that the verifiable sustainable branding opportunities (conventional

and organic) in meat will represent the single largest enhanced revenue contributor provided by Bion to the JVs (and Bion licensees).

The Company believes that the largest portion of its business with be conducted through such JVs, but a material portion may involve licensing

and or other approaches.

In parallel with technology development, Bion has

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nutrient and carbon reduction strategy.

These market-driven strategies can generate “payment for ecosystem services”,

in which farmers or landowners are rewarded for managing their land and operations to provide environmental benefits that will generate

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Another such strategy is nutrient trading (or water quality trading), which will potentially create markets (in Pennsylvania and other

states) that will utilize taxpayer funding for the purchase of verified pollution reductions from agriculture (“nutrient credits”)

by the state (or others) through competitively-bid procurement programs.

Such credits can then be used as a ‘qualified offset’

by an individual state (or municipality) to meet its federal clean water mandates at significantly lower cost to the taxpayer.

Market-driven

strategies, including competitive procurement of verified credits, is supported by US EPA, the Chesapeake Bay Commission, national livestock

strategies, including competitive procurement of verified credits, is supported by U.S.

EPA, the Chesapeake Bay Commission, national livestock

interests, and other key stakeholders.

Legislation in PA to establish the first such state competitive procurement program passed the

Pennsylvania Senate by a bi-partisan majority during March 2019.

However, the Covid-19 pandemic and related financial/budgetary crises

have slowed progress for this and other policy initiatives and, as a result, it is not currently possible to project the timeline for

completion (or meaningful progress) of this and other similar initiatives (see discussion below).

Legislation in Pennsylvania to establish the first such state competitive procurement program passed

the Pennsylvania Senate by a bi-partisan majority during March 2019 but has not yet crossed the hurdles required for actual adoption.

The Covid-19 pandemic and related financial/budgetary crises have slowed progress for this and other policy initiatives and, as a result,

it is not currently possible to project the timeline for completion (or meaningful progress) of this and other similar initiatives (see

discussion below).

The livestock industry and its markets are already

with a commercial-ready technology and business model, Bion believes it has a ‘first-mover advantage’

that will seek to exploit the opportunities that will arise from the industry’s inevitable transformation.

With our commercial-ready technology and business model, Bion believes it has a ‘first-mover advantage’ over others

that will seek to exploit the opportunities that will arise from the industry’s inevitable transformation.

Bion anticipates moving

forward with the development process of its initial commercial installations utilizing its 3G Tech, during the current 2022 fiscal year.

We believe that Bion’s 3G Tech platform and business model can provide a pathway to true economic and environmental sustainability

with ‘win-win’

benefits for at least a premium sector of the livestock industry, the environment, and the consumer, an opportunity

forward with the development process of its initial commercial installations utilizing its Gen3Tech, during the current 2023 fiscal year.

We believe that Bion’s Gen3Tech platform and business model can provide a pathway to true economic and environmental sustainability

with ‘win-win’ benefits for at least a premium sector of the livestock industry, the environment, and the consumer, an opportunity

which the Company intends to pursue.

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The livestock industry is under tremendous pressure

from regulatory agencies, a wide range of advocacy groups, institutional investors and the industry’s own consumers, to adopt sustainable

Environmental cleanup is inevitable and has already begun - and policies have already begun to change, as well.

3G Tech was developed for implementation on large scale livestock production facilities, where scale drives both lower treatment costs

Gen3Tech was developed for implementation on large scale livestock production facilities, where scale drives both lower treatment costs

and efficient co-products production, as well as dramatic environmental improvements.

We believe that scale, coupled with Bion’s

verifiable treatment technology platform, will create a transformational opportunity to integrate clean production practices at (or close

to) the point of production—the primary source of the industry’s environmental impacts.

Bion intends to assist the forward-looking

segment of the livestock industry to bring animal protein production in line with 21st Century consumer demands for meaningful sustainability.

(according to the USDA’s 2017 agricultural

census) there are over 9M dairy cows, 90M beef cattle, 60M swine and more than 2 billion poultry which provides an indication of both

the scope of the problem addressed by Bion’s technology, as well as the size of Bion’s opportunity.

Environmental impacts

from livestock production include surface and groundwater pollution, greenhouse gas emissions, ammonia, and other air pollution, excess

water use, and pathogens related to foodborne illnesses and antibiotic resistance.

While the most visible and immediate problems are related

to nutrient runoff and its effects on water quality, the industry has recently been targeted by various stakeholder groups for its impacts

on climate change.

(according to the USDA’s 2017 agricultural

census) there are over 9 million dairy cows, 90 million beef cattle, 60 million swine and more than 2 billion poultry which provides an

indication of both the scope of the problem addressed by Bion’s technology, as well as the size of Bion’s opportunity.

Environmental

impacts from livestock production include surface and groundwater pollution, greenhouse gas emissions, ammonia, and other air pollution,

excess water use, and pathogens related to foodborne illnesses and antibiotic resistance.

While the most visible and immediate problems

are related to nutrient runoff and its effects on water quality, the industry has recently been targeted by various stakeholder groups

for its impacts on climate change.

Estimates of total annual U.S.

livestock manure waste

vary widely, but start around a billion tons, between 100 and 130 times greater than human waste.

However, while human waste is generally

treated by septic or municipal wastewater plants, livestock waste –

raw manure –

is spread on our nation’s croplands

for its fertilizer value.

livestock manure

waste vary widely, but start around a billion tons, between 100 and 130 times greater than human waste.

However, while human waste is

generally treated by septic or municipal wastewater plants, livestock waste – raw manure – is spread on our nation’s

croplands for its fertilizer value.

Large portions of U.S.

feed crop production (and most organic crop production) are fertilized, in part, in this

Under current manure management practices, 80% or more of total nitrogen from manure, much of it in the form of ammonia, escapes

during storage, transportation, and during and after soil application, representing both substantial lost value and environmental costs.

feed crop production (and most organic crop production) are fertilized, in

part, in this manner.

Under current manure management practices, 80% or more of total nitrogen from manure, much of it in the form of

ammonia, escapes during storage, transportation, and during and after soil application, representing both substantial lost value and environmental

More than half of the nitrogen impacts from livestock

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Airborne ammonia nitrogen eventually settles

back to the ground through atmospheric deposition - it ‘rains’

back to the ground through atmospheric deposition - it ‘rains’ everywhere.

While some of this nitrogen is captured and used

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It is now well-established that most of the

voluntary conservation practices, such as vegetated buffers that ‘filter’

runoff (often referred to as “BMPs”

or “Best Management Practices”

that have traditionally been implemented to attempt to mitigate nutrient runoff), are considerably

voluntary conservation practices, such as vegetated buffers that ‘filter’ runoff (often referred to as “BMPs”

or “Best Management Practices” that have traditionally been implemented to attempt to mitigate nutrient runoff), are considerably

less effective than was previously believed to be the case.

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When the nutrient runoff subsides,

it leaves the algae blooms with no more ‘food’

and the blooms die.

The algae’s decomposition takes oxygen from the water,

leading to ‘dead zones’

in local ponds, lakes, and ultimately, the Great Lakes, as well as the Chesapeake Bay, Gulf of Mexico,

it leaves the algae blooms with no more ‘food’ and the blooms die.

The algae’s decomposition takes oxygen from the water,

leading to ‘dead zones’ in local ponds, lakes, and ultimately, the Great Lakes, as well as the Chesapeake Bay, Gulf of Mexico,

and other estuary waters.

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higher mammals, including dolphins and manatees.

US EPA already considers excess nutrients “one of America’s most widespread,

costly and challenging environmental problems”.

EPA already considers excess nutrients “one of America’s most widespread,

costly and challenging environmental problems”.

Nutrient runoff is expected to worsen dramatically in the coming decades due to

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however, private drinking water

wells are not regulated, and it is the owners’

responsibility to test and treat their wells.

wells are not regulated, and it is the owners’ responsibility to test and treat their wells.

Additionally, groundwater flows also

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be cost-effectively controlled and treated at the source-- before it has a chance to escape into the environment where it becomes extremely

expensive to ‘chase’, capture and treat.

expensive to ‘chase’, capture, and treat.

High phosphorus concentrations in soils fertilized

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share to plant-based protein and other alternative products.

Bion’s 3G Tech platform was designed to resolve these environmental

Bion’s Gen3Tech platform was designed to resolve these environmental

issues and bring the industry in line with twenty-first century consumer expectations.

Going concern and management’s plans:

The consolidated financial statements have been prepared

assuming the Company will continue as a going concern.

The Company has not generated significant revenues and has incurred net losses

(including significant non-cash expenses) of approximately $3,451,000 and $4,553,000 during the years ended June 30, 2021 and 2020, respectively.

At June 30, 2021, the Company has a working capital deficit and a stockholders’

deficit of approximately $6,614,000 and $11,445,000,

Going concern and management’s plans:

The consolidated financial statements have been

prepared assuming the Company will continue as a going concern.

The Company has not generated significant revenues and has incurred

net losses of approximately $ 3,451,000

during the year ended June 30, 2021.

The Company has net income of $ 8,292,000

for the year ended June 30, 2022.

The net income for the year is largely due to a one-time, non-cash event of the dissolution of

PA-1 for a gain of approximately $ 10,235,000

Additionally, the Company realized a one-time gain of $ 902,490

from the sale of the Company’s ‘biontech.com’ domain pursuant to a purchase agreement during the period (Note 9).

There was an operating loss of approximately $ 2,550,000

for the year ended June 30, 2022.

At June 30, 2022, the Company has working capital and a stockholders’ deficit of

approximately $ 1,364,000 and $ 932,152 932,000,

respectively.

These factors raise substantial doubt about the Company’s ability to continue as a going concern.

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.

These factors raise substantial doubt about the Company’s ability to continue as a going concern.

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.

The Company continues to explore sources of additional

financing (including potential agreements with strategic partners –

both financial and ag-industry) to satisfy its current and future

financing (including potential agreements with strategic partners – both financial and ag-industry) to satisfy its current and future

operating and capital expenditure requirements as it is not currently generating any significant revenues.

During the years ended June 30, 2021 and 2020, the

Company received gross proceeds of approximately $5,209,000 and $1,584,000, respectively, from the sale of its debt and equity securities.

During the year ended June 30, 2021, the Company received

gross proceeds of approximately $ 5,209,000 , respectively, from the sale of its debt and equity securities.

During the year ended June 30, 2022, the Company received total proceeds

of approximately $ 1,737,000 from the sale of its equity securities and paid approximately $ 19,000 in cash commissions.

During fiscal years 2022 and 2021, the Company has

faced progressively less difficulty in raising equity funding (but substantial equity dilution has gone along with the larger amounts

of equity financing during the periods).

However, the Company anticipates substantial increases in demands for capital and operating expenditures

as it moves toward commercial implementation of its 3G Tech and development of JVs and, therefore, is likely to continue to face, significant

cash flow management challenges due to limited capital resources and working capital constraints which have only recently begun to be

To partially mitigate these working capital constraints, the Company’s core senior management and several key employees

and consultants have been deferring (and continue to defer) all or part of their cash compensation and/or are accepting compensation in

the form of securities of the Company (Notes 4 and 6) and members of the Company’s senior management have made loans to the Company

from time to time.

During the year ended June 30, 2018, senior management and certain core employees and consultants agreed to a one-time

extinguishment of liabilities owed by the Company which in aggregate totaled $2,404,000.

Additionally, the Company made reductions in

its personnel during the years ended June 30, 2014 and 2015 and again during the year ended June 30, 2018.

faced less difficulty in raising equity funding (but substantial equity dilution has gone along with the larger amounts of equity financing

during the periods) than was experienced in the prior 3 years except that during the first three months of the current fiscal year, the

Company has raised equity funds at a rate materially lower than the average rate during fiscal years 2021 and 2022.

The Company anticipates

substantial increases in demands for capital and operating expenditures 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 challenges due to limited capital resources and working capital constraints

which have only recently begun to be alleviated.

To partially mitigate these working capital constraints, the Company’s core senior

management and several key employees and consultants have been deferring (and continue to defer) portions of their cash compensation and/or

are accepting compensation in part in the form of securities of the Company and/or converting portions of their compensation and deferred

compensation to securities of the Company (Notes 5 and 7) and members of the Company’s senior management have made loans to the

Company from time to time.

During the year ended June 30, 2018, senior management and certain core employees and consultants agreed to

a one-time extinguishment of liabilities owed by the Company which in aggregate totaled $ 2,404,000 .

Additionally, the Company made reductions

in its personnel during the years ended June 30, 2014 and 2015 and again during the year ended June 30, 2018.

The constraint on available

resources has had, and continues to have, negative effects on the pace and scope of the Company’s efforts to 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 continue its recent increased success in its efforts to raise needed funds during the remainder of the current

If the Company is able to continue its recent relative success in its efforts 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

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The Company will need to obtain additional capital

to fund its operations and technology development, to satisfy existing creditors, to develop Projects (including JV Projects, Integrated

Projects and the Kreider 2 facility) and CAFO Retrofit waste remediation systems.

The Company anticipates that it will seek to raise from

$5,000,000 to $50,000,000 or more debt and/or equity through joint ventures, strategic partnerships and/or 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) during the next twelve months.

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 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.

to fund its operations and technology development, to satisfy existing creditors, to develop Projects (including the Initial Project,

JV Projects (including the Dalhart Project), Integrated Projects and the Kreider 2 facility) and CAFO Retrofit waste remediation systems.

The Company anticipates that it will seek to raise from $ 20,000,000 to $ 80,000,000 or more debt and/or equity through joint ventures,

strategic partnerships and/or 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 through other means during the next twelve months.

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 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.

There is no realistic likelihood that funds required

during the next twelve months (or in the periods immediately thereafter) for the Company’s basic operations and/or proposed JVs

and/or Projects will be generated from operations.

Therefore, the Company will need to raise sufficient funds from external sources such

as debt or equity financings or other potential sources.

The lack of sufficient additional capital resulting from the inability to generate

cash flow from operations and/or to raise capital from external sources would force the Company to substantially curtail or cease operations

and would, therefore, have a material adverse effect on its business.

Further, there can be no assurance that any such required funds,

if available, will be available on attractive terms or that they will not have a significantly dilutive effect on the Company’s

existing shareholders.

All of these factors have been exacerbated by the extremely limited and unsettled credit and capital markets presently

existing for small companies like Bion.

during the next twelve months (or in the periods immediately thereafter) for the Company’s basic operations, the Initial Project

and/or proposed JVs and/or Projects will be generated from operations.

Therefore, the Company will need to raise sufficient funds from

external sources such as debt or equity financings or other potential sources.

The lack of sufficient additional capital resulting from

the inability to generate cash flow from operations and/or to raise capital from external sources would force the Company to substantially

curtail or cease operations and would, therefore, have a material adverse effect on its business.

Further, there can be no assurance that

any such required funds, if available, will be available on attractive terms or that they will not have a significantly dilutive effect

on the Company’s existing shareholders.

All of these factors have been exacerbated by the extremely limited and unsettled credit

and capital markets presently existing for small companies like Bion.

Covid-19 pandemic related matters:

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areas including but without limitation:

i) government ordered shutdowns which have slowed the Company’s research and development

projects and other initiatives, ii) shifted focus of state and federal governments which is likely to negatively impact the Company’s

i) government ordered shutdowns which have slowed the Company’s research and development

projects and other initiatives, ii) shifted focus of state and federal governments which is likely to negatively impact the Company’s

legislative initiatives in Pennsylvania and Washington D.

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more difficult as future industry conditions are now more difficult to assess and predict, v) constraints due to problems experienced

in the global industrial supply chain which have delayed certain research and development testing and may delay construction of the initial

3G Tech installation if equipment remains difficult to acquire in a timely manner, vi) due to the age and health of our core management

team, all of whom are age 70 or older and have had one or more existing health issues, the Covid-19 pandemic places the Company at greater

risk than was previously the case (to a higher degree than would be the case if the Company had a larger, deeper and/or younger core management

team), and vii) there almost certainly will be other unanticipated consequences for the Company as a result of the current pandemic emergency

and its aftermath.

in the global industrial supply chain since the onset of the Covid-19 pandemic, which have delayed certain research and development testing

and have delayed and/or increased the cost of construction of the Company’s initial 3G Tech installation as equipment/services remain

difficult to acquire in a timely manner, vi) due to the age and health of our core management team, many of whom are age 70 or older and

have had one or more existing health issues (including brief periods of Covid-19 infection), the Covid-19 pandemic places the Company

at greater risk than was previously the case (to a higher degree than would be the case if the Company had a larger, deeper and/or younger

core management team), and vii) there almost certainly will be other unanticipated consequences for the Company as a result of the current

pandemic emergency and its aftermath.

ACCOUNTING POLICIES

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The consolidated financial statements include the

accounts of the Company and its wholly-owned subsidiaries, Bion Integrated Projects Group, Inc.

(“Projects Group”), Bion Technologies,

Inc., BionSoil, Inc., Bion Services, PA1, and PA2;

and its 58.9% owned subsidiary, Centerpoint Corporation (“Centerpoint”).

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.

Bion PA1 LLC was dissolved on December 29, 2021 (See

Its operating losses are included in the consolidation through December 29, 2021.

Cash and cash equivalents :

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maturity of three months or less to be cash and cash equivalents.

As of June 30, 2022 and 2021 there are no 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.

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

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 Projects such as consulting fees, internal salaries, benefits and interest.

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.

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.

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

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.

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or decrease in the fair value being recorded in results of operations as an adjustment to fair value of derivatives.

As of June 30, 2022

and 2021, there are no derivative financial instruments.

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

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.

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.

The Company has issued warrants to purchase common

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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.

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

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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.

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.

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 :

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with use of the lowest possible level of input to determine fair value.

Level 1 –

quoted prices (unadjusted) in active

Level 1 – quoted prices (unadjusted) in active

markets for identical assets or liabilities;

Level 2 –

observable inputs other than Level

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;

Level 3 –

assets and liabilities whose significant

Level 3 – assets and liabilities whose significant

value drivers are unobservable.

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

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of the underlying transactions.

Lease Accounting :

The Company accounts for leases under ASC 842, Leases (“ASC

Accordingly, the Company will determine whether an arrangement contains a lease at the inception of the arrangement.

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 sheets 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”.

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 taxes :

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and state tax examinations for fiscal years before 2009.

Management does not believe there will be any material changes in the Company’s

unrecognized tax positions over the next 12 months.

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As of June 30, 2022, there were no penalties

or accrued interest amounts associated with any unrecognized tax benefits, nor was any interest expense recognized during the years ended

or accrued interest amounts associated with any unrecognized tax benefits, no r was any interest expense recognized during the years ended

June 30, 2022 and 2021.

Loss per share:

Basic loss per share amounts are calculated using

the weighted average number of shares of common stock outstanding during the period.

Diluted 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 loss per share

or increase the earnings per share.

During the years ended June 30, 2021 and 2020, the basic and diluted loss per share was the same,

as the impact of potential dilutive common shares was anti-dilutive.

The following table represents the warrants, options

and convertible securities excluded from the calculation of basic loss per share:

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, 2022 and 2021, 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

Schedule of anti dilutive securities

Convertible debt

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The following is a reconciliation of the denominators

of the basic and diluted loss per share computations for the years ended June 30, 2021 and 2020:

issued –

beginning of period

held by subsidiaries (Note 7)

Shares outstanding

beginning of period

average shares issued

of the basic and diluted income (loss) per share computations for the years ended June 30, 2022 and 2021:

Schedule of earnings per share, basic and diluted

Shares issued – beginning of period

Shares held by subsidiaries (Note

Shares outstanding – beginning of period

Weighted average shares issued

during the period

weighted average shares –

Basic and diluted weighted

average shares –

end of period

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

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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 financial statements and assures

that there are proper controls in place to ascertain that the Company’s financial statements properly reflect the change.

In June 2018, the FASB issued ASU No.

2018-07 “Compensation

Stock Compensation –

Improvements to Nonemployee Share-Based Payment Accounting”

to simplify the accounting for share

based payments granted to nonemployees and was adopted by the Company effective July 1, 2019.

Under this guidance, payments to nonemployees

are aligned with the requirements for share based payments granted to employees.

The adoption of this guidance did not have a material

impact on the Company’s financial statements as previously issued share-based payments to nonemployees had already reached a measurement

that there are proper controls in place to ascertain that the Company’s financial statements properly reflect the change.

PROPERTY AND EQUIPMENT :

Property and equipment consist of the following:

Schedule of property and equipment

Machinery and equipment

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Computers and office equipment

3G project construction in process

Property and equipment, gross

Less accumulated depreciation

As of June 30, 2021, the net book value of Kreider

Management has reviewed the remaining property and equipment for impairment as of June 30, 2021 and believes that no impairment

( 2,795,084 )

Property and equipment, net

The 3G project began in July of 2021, with a lease

signed on land October 1, 2021 (Note 9).

Once the lease commenced the Company moved into construction phase.

The balance for 3G construction

in process includes $ 32,000 for capitalized interest and $ 135,648 in non-cash compensation as of June 30, 2022.

Management has reviewed the remaining property and

equipment for impairment as of June 30, 2022 and believes that no impairment exists.

Depreciation expense was $ 1,161 and $ 827 for the years

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COMPENSATION :

Company owes deferred compensation to various employees, former employees and consultants totaling $479,208 and $778,217 as of June 30,

2021 and 2020, respectively.

Included in the deferred compensation balances as of June 30, 2021, are $399,971 and nil owed Dominic Bassani

(“Bassani”), the Company’s Chief Executive Officer, and Mark A.

Smith (“Smith”), the Company’s President ,

respectively, 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, 2020 was $172,103 and $54,659, respectively.

The Company also owes various consultants and an employee,

pursuant to various agreements, for deferred compensation of $6,738 and $478,955 as of June 30, 2021 and 2020, respectively, with similar

conversion terms as those described above for Bassani and Smith, with the exception that the interest accrues at 3% per annum.

also owes a former employee $72,500, which is not convertible and is non-interest bearing.

The Company owes deferred compensation to

various employees, former employees and consultants totaling $ 594,798

and $ 479,208

as of June 30, 2022 and 2021, respectively.

Included in the deferred compensation balances as of June 30, 2022, are $ 437,508

owed Dominic Bassani (“Bassani”), the Company’s Chief Operating Officer (who was Chief Executive Officer until

through April 30, 2022), and Mark A.

Smith (“Smith”), the Company’s President, respectively, 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, 2021 was $ 399,971

and 0 nil, respectively.

The Company also owes various consultants and an employee, pursuant to various agreements, for deferred

compensation of $ 74,790 and $ 6,738 as of June 30, 2022 and 2021, respectively, with similar conversion terms as those described

above for Bassani and Smith, with the exception that the interest accrues at 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 December 31, 2022 (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.

During the year ended June 30, 2020, Smith elected

to convert $3,828 of deferred compensation into units of the Company at its $0.50 per unit offering price (Note 7).

Bassani and Smith

also elected to transfer $436,508 and $199,573, respectively, of their respective deferred compensation into their 2020 Convertible Obligations

(formerly the January 2015 Convertible Notes) (Note 6).

In connection with the agreements related to Smith’s December 31, 2019 transfer,

Smith received the right to transfer future deferred compensation to his 2020 Convertible Obligation at his election.

During the year ended June 30, 2021, Smith elected

to convert $128,039 of deferred compensation into units of the Company at its $0.50 per unit offering price (Note 7).

During the year ended June 30, 2021, the Board

of Directors approved elections by two consultants to convert $593,411, in aggregate, of deferred compensation into units of the Company’s

securities at its $0.50 per unit offering price (Note 7).

to convert up to $ 300,000 of deferred compensation balances at a price of $ 0.75 per share until December 31, 2022 (which date has subsequently

been extended to June 30, 2024) 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.

During the year ended June 30, 2022, Smith elected to convert $ 90,000 of

deferred compensation into the 2020 Convertible Note.

The Company recorded interest expense of $ 16,390

($12,249 with related parties) and $23,439 ($11,937 with related parties) for the years ended June 30, 2021 and 2020, respectively.

($ 15,537 with related parties) and $ 25,838 ($ 12,249 with related parties) for the years ended June 30, 2022 and 2021, respectively, related

to deferred compensation.

LOANS PAYABLE :

PA1, the Company’s wholly-owned subsidiary,

owes $9,868,495 as of June 30, 2021 under the terms of the Pennvest Loan related to the construction of the Kreider 1 System including

accrued interest and late charges totaling $2,114,495 as of June 30, 2021.

The terms of the Pennvest Loan provided for funding of up to

$7,754,000 which was to be repaid by interest-only payments for three years, followed by an additional ten-year amortization of principal.

The Pennvest Loan accrues interest at 2.547% per annum for years 1 through 5 and 3.184% per annum for years 6 through maturity.

Loan required minimum annual principal payments of approximately $5,886,000 in fiscal years 2013 through 2021, and $846,000 in fiscal

year 2022, $873,000 in fiscal year 2023 and $149,000 in fiscal year 2024.

The Pennvest Loan is collateralized by the Kreider 1 System

and by a pledge of all revenues generated from Kreider 1 including, but not limited to, revenues generated from nutrient reduction credit

sales and by-product sales.

In addition, in consideration for the excess credit risk associated with the project, Pennvest is entitled

to participate in the profits from Kreider 1 calculated on a net cash flow basis, as defined.

The Company has incurred interest expense

related to the Pennvest Loan of $246,887 and $246,887 for the years ended June 30, 2021 and 2020, respectively.

Based on the limited development

of the depth and breadth of the Pennsylvania nutrient reduction credit market to date, PA1 commenced negotiations with Pennvest related

to forbearance and/or re-structuring the obligations under the Pennvest Loan.

In the context of such negotiations, PA1 elected not to

make interest payments to Pennvest on the Pennvest Loan since January 2013.

Additionally, the Company has not made any principal payments,

which were to begin in fiscal 2013, and, therefore, the Company has classified the Pennvest Loan as a current liability as of June 30,

On September 25, 2014, Pennvest exercised its right

to declare the Pennvest Loan in default and accelerated the Pennvest Loan and demanded that PA1 pay $8,137,117 (principal, interest plus

late charges) on or before October 24, 2014.

PA1 did not make the payment and does not have the resources to make the payments demanded

PA1 commenced discussions and negotiations with Pennvest concerning this matter but Pennvest rejected PA1’s proposal

made during the fall of 2014.

PA1 made a new proposal to Pennvest during September 2021 which proposal is presently under consideration

PA1 provides Pennvest with its financial statements (which include a description of system status) annually.

During the 2021

fiscal year, Pennvest’s auditors requested a ‘corrective action plan’

and PA1 informed Pennvest that “…

there is no viable corrective action plan for the Pennvest Loan (‘Loan’).

The facility funded by the Loan has been shut down

for many years (which has been disclosed in the annual financial reports to Pennvest and in public filings by the parent of Bion PA 1,

LLC) and the technology utilized in the facility is now obsolete.

The facility has not been commercially operated for approximately six

years and has generated zero income.

We recommend that Pennvest take appropriate steps to remove and sell the equipment.”

responded favorably to the approach of selling the equipment but no actions have yet taken place.

PA1 and the Company are currently discussing

proposals with Pennvest seeking full resolution of these matters.

The Company anticipates additional communication with Pennvest on this

matter during the current year.

It is not possible at this date to predict the final outcome of this matter, but the Company believes

it is likely that that the equipment will be sold with the proceeds delivered to Pennvest during the 2022 fiscal year.

However, the resolution

of these matters including the manner and means of such equipment sale has not been agreed upon as of this date.

PA1 will evaluate the

appropriate manner to resolve/wrap-up its business over the balance of the current fiscal year.

In connection with the Pennvest Loan financing

documents, the Company provided a ‘technology guaranty’

regarding nutrient reduction performance of Kreider 1 which was structured

to expire when Kreider 1’s nutrient reduction performance had been demonstrated.

During August 2012 the Company provided Pennvest

(and the PADEP) with data demonstrating that the Kreider 1 System had surpassed the requisite performance criteria and that the Company’s

‘technology guaranty’

As a result, the Pennvest Loan is solely an obligation of PA1.

Paycheck Protection Program

During the year ended June 30, 2020, the Company

received proceeds from a loan in the amount of $34,800 from Covenant Bank as the lender, pursuant to the Small Business Administration

(“SBA”) Paycheck Protection Program (“PPP”) under the Coronavirus Aid, Relief, and Economic Security (“CARES”)

The loan was uncollateralized, had a fixed interest rate of one percent, a term of two years and the first payment is deferred for

Under the CARES Act, borrowers were eligible for forgiveness of principal and interest on PPP loans to the extent that the

proceeds were used to cover eligible payroll costs, rent and utility costs over either an 8 or 24-week period after the loan was made.

As of June 30, 2021, the total PPP loan and accrued interest was fully forgiven by the SBA.

Pennvest Loan and Bion PA1 LLC (“PA1”)

PA1, the Company’s wholly-owned

subsidiary, was dissolved on December 29, 2021 on which date it owed approximately $ 10,010,000

under the terms of the Pennvest Loan related to the construction of the Kreider 1 System including accrued interest and late charges

totaling $ 2,255,802

as of that date.

Through the date of the dissolution, PA1 was a wholly-owned subsidiary of the Company and its assets and

liabilities were included on the Company’s consolidated balance sheets.

At September 30, 2021, PA1’s total assets were

$ 297 and its total liabilities were

$ 10,154,334 (including the

Pennvest Loan in the aggregate amount of $ 9,939,148 ,

accounts payable of $ 214,235

and accrued liabilities of $ 950 )

which sums were included in the Company’s consolidated balance sheets in its Form 10-Q for the quarter ended September 30,

Subsequent to the dissolution of PA1, its assets and liabilities are no longer consolidated and included in the

Company’s balance sheets.

As of December 29, 2021, PA1’s total assets were nil 0 and its total liabilities were $ 10,234,501

(including the Pennvest Loan in the aggregate amount of $ 10,009,802 , accounts payable of $ 212,263 and accrued liabilities of

The net amount of $ 10,234,501 was recognized as a gain on the legal dissolution of a subsidiary in other (income)

As background, the terms

of the Pennvest Loan provided for funding of up to $ 7,754,000 which was to be repaid by interest-only payments for three years, followed

by an additional ten-year amortization of principal.

The Pennvest Loan accrued interest at 2.547 % per annum for years 1 through 5 and

3.184 % per annum for years 6 through maturity.

The Pennvest Loan required minimum annual principal payments of approximately $ 5,886,000

in fiscal years 2013 through 2021, and $ 846,000 in fiscal year 2022, $ 873,000 in fiscal year 2023 and $ 149,000 in fiscal year 2024.

Pennvest Loan was collateralized by PA1’s Kreider 1 System and by a pledge of all revenues generated from Kreider 1 including, but

not limited to, revenues generated from nutrient reduction credit sales and by-product sales.

In addition, in consideration for the excess

credit risk associated with the project, Pennvest was entitled to participate in the profits from Kreider 1 calculated on a net cash flow

basis, as defined.

The Company has incurred interest expense related to the Pennvest Loan of $ 123,444 and $ 246,887 for the years ended

June 30, 2022 and 2021, respectively.

Based on the limited development of the depth and breadth of the Pennsylvania nutrient reduction

credit market, PA1 commenced discussions and negotiations with Pennvest related to forbearance and/or re-structuring the obligations under

the Pennvest Loan during 2013.

In the context of such negotiations, PA1 elected not to make interest payments to Pennvest on the Pennvest

Loan since January 2013.

Additionally, the PA1 did not make any principal payments, which were to begin in fiscal 2013, and, therefore,

the Company classified the Pennvest Loan as a current liability through the dissolution of PA1 on December 29, 2021.

During August 2012, the Company

provided Pennvest (and the PADEP) with data demonstrating that the Kreider 1 system met the ‘technology guaranty’ standards

which were incorporated in the Pennvest financing documents and, as a result, the Pennvest Loan has been solely an obligation of PA1 since

Note, however, the Company’s consolidated balance sheets as of June 30, 2021 reflects the Pennvest Loan as a liability

of $ 9,868,495 despite the fact that the obligation (if any) was solely an obligation of PA1 .

On September 25, 2014, the

Pennsylvania Infrastructure Investment Authority (“Pennvest”) exercised its right to declare the PA1’s Pennvest Loan

in default, accelerated the Pennvest Loan and demanded that PA1 pay $ 8,137,117 (principal, interest plus late charges) on or before October

PA1 did not make the payment and did/does not have the resources to make the payments demanded by Pennvest.

PA1 commenced discussions

and negotiations with Pennvest concerning this matter but Pennvest rejected PA1’s proposal made during the fall of 2014.

a final proposal to Pennvest during September 2021 which proposal was also rejected by Pennvest.

PA1 provided Pennvest with its financial

statements (which include a description of system status) annually.

During the 2021 fiscal year, Pennvest’s auditors requested a

‘corrective action plan’ and PA1 informed Pennvest that “… there is no viable corrective action plan for the

Pennvest Loan (‘Loan’).

The facility funded by the Loan has been shut down for many years (which has been disclosed in the

annual financial reports to Pennvest and in public filings by the parent of Bion PA 1, LLC) and the technology utilized in the facility

is now obsolete.

The facility has not been commercially operated for approximately six years and has generated zero income.

that Pennvest take appropriate steps to remove and sell the equipment.” Pennvest responded favorably to the approach of selling

the equipment.

On December 29, 2021, the

Company approved and executed a ‘Consent of the Sole Member of Bion PA 1’ (the “Consent to Dissolution”) that

authorized the complete liquidation and dissolution of PA1.

A Statement of Dissolution was filed by PA1 with the Colorado Secretary of

State on December 29, 2021.

The Company is of the understanding that the liquidation value of Bion PA 1’s property is substantially

below the current amount outstanding under the Funding Agreement dated October 27, 2010 by and between PA1 and Pennvest, the only known

secured creditor of PA1.

Post-dissolution, PA1’s activities will be limited entirely to activities required to properly distribute

its net assets to creditors and wind down its business.

PA1 and Pennvest agreed to have the equipment sold

by a third party auctioneer who arranged for the sale of its property and delivery of all proceeds (net of commissions and customary

costs of sale) to Pennvest.

The auction took place during the period between May 13-18, 2022.

The Company’s personnel assisted

PA1 with this process as needed at no cost to PA1.

The net sum of $ 104,725 was realized from the asset sale, which sum was delivered

to Pennvest on June 15, 2022.

Pursuant to agreement with Pennvest, the remaining unsold assets will be transferred to Kreider Farms during

the next quarter in order to complete the winding up of the Kreider 1 project.

Upon the complete distribution

of all assets of PA1, whether by transfer or sale and distribution of net proceeds as provided above, PA1 will use commercially reasonable

efforts to cause the cessation of all activities.

No distributions of PA1’s assets will be made to the Company or its affiliates.

The Consent to Dissolution authorized Mark A.

Smith, the Company’s President and the sole manager of PA1, to cause to be delivered

for filing the Statement of Dissolution, to give notice of the dissolution, and to take any other act necessary to wind up and liquidate

the business.

PA1 has made no payments

to vendors or other creditors in connection with the dissolution other than the payment to Pennvest described above.

No distributions

or payments of any kind have ever been made to the Company, the sole member of PA1 since inception and no payment will be made to the

Company or any affiliate in connection with the dissolution.

For more information regarding

the history and background of the Pennvest Loan and PA1, please review our Form’s 10-K for the years from 2008 through 2021 including

the Notes to the Financial Statements included therein.

CONVERTIBLE NOTES PAYABLE

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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 warrant contained in the Unit was originally

exercisable at $1.00 per unit but was modified to $0.75 during the year ended June 30, 2020 and is exercisable until a date three years

after the date of the conversion.

During the year ended June 30, 2021, the Company approved the increase of warrants by one-third to be

received by the noteholder if a conversion takes place.

The original conversion price of $0.50 per Unit approximated the fair value of

the Units at the date of the agreements;

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 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”.

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”.

As of June 30, 2022, the 2020 Convertible Obligation

balances, including accrued interest, owed Bassani (and his donees), Smith and Edward Schafer (“Schafer”), the Company’s

Vice Chairman, were $2,502,880, $1,186,926 and $481,119, respectively.

As of June 30, 2020, the 2020 Convertible Obligation balances,

including accrued interest, owed Bassani, Smith and Schafer were $2,408,432, $1,123,736 and $462,963, respectively.

During the year ended

June 30, 2020, Bassani and Smith elected to transfer $436,508 and $199,573, respectively, from deferred compensation owed them to their

2020 Convertible Obligations.

balances, including accrued interest, owed Bassani Family Trusts (and his donees), Smith and Edward Schafer (“Schafer”), a

director of the Company, were $ 2,597,329 , $ 1,328,040 and $ 499,274 , respectively.

As of June 30, 2021, the 2020 Convertible Obligation

balances, including accrued interest, owed Bassani Family Trusts, Smith and Schafer were $ 2,502,880 , $ 1,186,926 and $ 481,119 , respectively.

During the year ended June 30, 2022, Smith elected

to add $ 90,000 of his salary to his 2020 Convertible Obligations.

The Company recorded interest expense of $ 131,718

and $137,130 for the years ended June 30, 2021 and 2020, respectively.

and $ 175,794

for the years ended June 30, 2022 and 2021, respectively.

The Company capitalized $ 32,000

and nil 0 related to the 3G project for the years ended June 30, 2022 and 2021, respectively.

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, originally had maturity dates of December 31, 2017 but during the year ended June

30, 2019 the maturity dates were extended to July 1, 2021, 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.

During the year ended June 30, 2020, the maturity dates of the

September 2015 Convertible Notes were further extended until July 1, 2024.

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.

into September 2015 Convertible Notes with Bassani (now owned by Bassani Family Trusts), 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

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 balances of the September 2015 Convertible Notes

as of June 30, 2021, including accrued interest owed Bassani, Schafer and Shareholder, are $171,343, $20,190 and $430,639, respectively.

The balances of the September 2015 Convertible Notes as of June 30, 2020, including accrued interest, were $165,653, $19,535 and $415,522,

as of June 30, 2022, including accrued interest owed Bassani Family Trusts, Schafer and Shareholder, are $ 279,366 , $ 20,845 and $ 445,756 ,

respectively.

The balances of the September 2015 Convertible Notes as of June 30, 2021, including accrued interest, were $ 171,343 , $ 20,190

and $ 430,639 , respectively.

During the year ended June 30, 2022, Bassani elected

to transfer $ 100,000 from deferred compensation to the 2015 convertible note.

The Company recorded interest expense of $ 23,796 and

$21,462 for the years ended June 30, 2021 and 2020, respectively.

STOCKHOLDERS' EQUITY:

$ 21,462 for the years ended June 30, 2022 and 2021, respectively, on the September 2015 Convertible Notes.

STOCKHOLDERS'

Series B Preferred stock:

Since July 1, 2014, the Company has 200 shares of

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

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$ 100 per share by the Company three years after issuance and accordingly was classified as a liability.

The 200 shares have reached their

maturity date, but due to the cash constraints of the Company have not been redeemed.

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.

of Series B redeemable convertible Preferred stock were redeemed for $ 41,000 , which included the $ 21,000 in accrued dividend payable.

In April 2023, the Company amended the number of preferred

stock shares from 50,000 to 10,000,000 , having a $ 0.01 par value per share.

During the years ended June 30, 2022, and 2021, the

Company declared dividends of $ 1,000 and $ 2,000 respectively.

At June 30, 2021, accrued dividends payable are $20,000.

The dividends are

classified as a component of operations as the Series B Preferred stock is presented as a liability in these financial statements.

The dividends are classified as a component of operations as the Series

B Preferred stock is presented as a liability in these financial statements.

Common stock:

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stock or any series of preferred stock the Company may designate in the future.

Centerpoint holds 704,309 shares of the Company’s

During April 2022, the Company amended the number of common

stock shares from 100,000,000

to 250,000,000 .

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, 2020, the Company issued

29,000 shares of the Company’s common stock at prices ranging from $0.48 to $0.75 per share for services valued at $16,350 in the

aggregate, to two consultants.

During the year ended June 30, 2020, the Company entered

into a subscription agreement to sell units for $0.50 per unit, with each unit consisting of one share of the Company’s restricted

common stock and one warrant to purchase one half of a share of the Company’s restricted common stock for $0.75 per share with an

expiry date of December 31, 2020, and pursuant thereto, the Company issued 18,000 units for total proceeds of $9,000, net proceeds of

$8,100 after commissions of $900.

The Company allocated the proceeds from the 18,000 shares and the 9,000 warrants based upon their relative

fair values, using the share price on the day each of the subscription agreements were entered into and the fair value of the warrants,

which was determined to be $0.05 per warrant.

As a result, $333 was allocated to the warrants and $8,667 was allocated to the shares,

and both were recorded as additional paid in capital.

During the year ended June 30, 2020, the Company entered

into subscription agreements to sell units for $0.50 per unit, with each unit consisting of one share of the Company’s restricted

common stock and one warrant to purchase one share of the Company’s restricted common stock for $0.75 per share with an expiry date

of December 31, 2020, and pursuant thereto, the Company issued 2,000,001 units for total proceeds of $1,000,000, net proceeds of $910,500

after commissions of $89,500.

The Company allocated the proceeds from the 2,000,001 shares and the 2,000,001 warrants based upon their

relative fair values, using the share price on the day each of the subscription agreements were entered into and the fair value of the

warrants, which was determined to be $0.05 per warrant.

As a result, $48,604 was allocated to the warrants and $951,396 was allocated

to the shares, and both were recorded as additional paid in capital.

During the year ended June 30, 2020, the Company entered

into subscription agreements to sell units for $0.50 per unit, with each unit consisting of one share of the Company’s restricted

common stock and one warrant to purchase one share of the Company’s restricted common stock for $0.75 per share with an expiry date

of December 31, 2021, and pursuant thereto, the Company issued 1,150,000 units for total proceeds of $575,000, net proceeds of $517,500

after commissions of $57,500.

The Company allocated the proceeds from the 1,150,000 shares and the 1,150,000 warrants based upon their

relative fair values, using the share price on the day each of the subscription agreements were entered into and the fair value of the

warrants, which was determined to be $0.05 per warrant.

As a result, $25,041 was allocated to the warrants and $549,959 was allocated

to the shares, and both were recorded as additional paid in capital.

During the year ended June 30, 2022, Smith elected

to convert deferred compensation, loan payable - affiliates and accounts payable of $3,828, $15,000 and $52,830, respectively, into an

aggregate 143,316 units at $0.50 per unit, with each unit consisting of one share of the Company’s restricted common stock and one

warrant to purchase one share of the Company’s restricted common stock for $0.75 per share until December 31, 2020, which were subsequently

extended to December 31, 2024.

to convert accounts payable (based on his unreimbursed expenses) of $ 17,711 into 35,424 units at $ 0.50 per unit, with each unit consisting

of one share of the Company’s restricted common stock and one warrant to purchase one share of the Company’s restricted common

stock for $ 0.75 per share until December 31, 2024.

During the year ended June 30, 2022, 2,315,550

warrants were exercised to purchase 2,315,550 shares of the Company’s common stock at $ 0.75 per share for total proceeds of $ 1,736,662 .

During the year ended June 30, 2022, the Company

issued 66,860 shares of the Company’s common stock to three brokers as commissions for the warrant exercises.

As the issuance was

both a reduction and addition to additional paid in capital there was no impact to the financial statements.

The Company also paid a broker

$ 18,601 in commissions for the warrant exercises.

During the year ended June 30, 2022, the Company

issued 25,000 shares of the Company’s common stock to a marketing firm for services provided.

During the year ended June 30, 2021, the Company entered

into subscription agreements, under three different offerings, to sell units for $ 0.50 per unit, with each unit consisting of one share

of the Company’s restricted common stock and one warrant to purchase one share of the Company’s restricted common stock for

$ 0.75 per share with an expiry date of December 31, 2021 , and pursuant thereto, the Company issued 3,720,000 units for total proceeds

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During the year ended June 30, 2021, 300,000 share

of the Company’s restricted company stock were sold to an investor for $300,000.

of the Company’s restricted company stock were sold to an investor for $ 300,000 .

During the year ended June 30, 2021, Smith elected

to convert deferred compensation and accounts payable of $ 128,039 and $ 52,361 , respectively, into an aggregate 360,805 units at $ 0.50

per unit, with each unit consisting of one share of the Company’s restricted common stock and one warrant to purchase one share

of the Company’s restricted common stock for $0.75 per share until December 31, 2024.

per unit, with each unit consisting of one share of the Company’s restricted common stock and one warrant to purchase one share

of the Company’s restricted common stock for $ 0.75 per share until December 31, 2024.

During the year ended June 30, 2021, two consultants

elected to convert deferred compensation of $ 593,411 , into an aggregate 1,186,824 units at $ 0.50 per unit, with each unit consisting of

one share of the Company’s restricted common stock and one warrant to purchase one share of the Company’s restricted common

stock for $ 0.75 per share until December 31, 2023.

During the year ended June 30, 2021, the Company

issued 144,000 units to Smith for salary of $72,000, with each unit consisting of one share of the Company’s restricted common stock

and one warrant to purchase one share of the Company’s restricted common stock for $0.75 per share with an expiry date of December

During the year ended June 30, 2021, 4,065,988

warrants were exercised to purchase 4,065,988 shares of the Company’s common stock at $0.75 per share for total proceeds of $3,049,490.

During the year ended June 30, 2021, the Company

issued 129,364 shares of the Company’s common stock to a broker as commissions for the warrant exercises.

As the issuance was both

a reduction and addition to additional paid in capital there was no impact to the financial statements.

The company also paid a broker

$3,537 in commissions for the warrant exercises.

During the year ended June 30, 2021, the Company issued

144,000 units to Smith for salary of $ 72,000 , with each unit consisting of one share of the Company’s restricted common stock and

one warrant to purchase one share of the Company’s restricted common stock for $ 0.75 per share with an expiry date of December 31,

During the year ended June 30, 2021, 4,065,988 warrants

were exercised to purchase 4,065,988 shares of the Company’s common stock at $ 0.75 per share for total proceeds of $ 3,049,490 .

During the year ended June 30, 2021, the Company issued

129,364 shares of the Company’s common stock to a broker as commissions for the warrant exercises.

As the issuance was both a reduction

and addition to additional paid in capital there was no impact to the financial statements.

The company also paid a broker $ 3,537 in commissions

for the warrant exercises.

As of June 30, 2022, the Company had approximately

21.9 million warrants outstanding, with exercise prices from $0.60 to $1.50 and expiring on various dates through June 30, 2025.

20.8 million warrants outstanding, with exercise prices from $ 0.60 to $ 1.50 and expiring on various dates through April 31, 2026.

The weighted-average exercise price for the outstanding

warrants is $ 0.75 , and the weighted-average remaining contractual life as of June 30, 2022 is 2.6 years.

During the year ended June 30, 2021, the Company entered

into subscription agreements, under three different offerings, to sell units for $0.50 per unit, with each unit consisting of one share

of the Company’s restricted common stock and one warrant to purchase one share of the Company’s restricted common stock for

$0.75 per share with an expiry date of December 31, 2021, and pursuant thereto, the Company issued 3,720,000 units for total proceeds

of $1,860,000, net proceeds of $1,699,000 after commissions of $161,000.

The Company allocated the proceeds from the 3,720,000 shares

and the 3,720,000 warrants based upon their relative fair values, using the share price on the day each of the subscription agreements

were entered into and the fair value of the warrants, which was determined to be $0.05 per warrant.

As a result, $114,148 was allocated

to the warrants and $1,745,852 was allocated to the shares, and both were recorded as additional paid in capital.

During the year ended June 30, 2021, the Company issued

50,000 warrants to a consultant to purchase 50,000 shares of the Company’s restricted common stock at an exercise price of $0.90

per share and an expiration date of December 31, 2021.

The warrants were in exchange for services expensed at $2,500.

During the year ended June 30, 2022, Smith elected

to convert deferred compensation and accounts payable of $128,039 and $52,361, respectively, into an aggregate 360,805 units at $0.50

per unit, with each unit consisting of one share of the Company’s restricted common stock and one warrant to purchase one share

of the Company’s restricted common stock for $0.75 per share until December 31, 2024.

to convert accounts payable (for unreimbursed expenses) of $ 17,711 into 35,424 units at $ 0.50 per unit, with each unit consisting of one

share of the Company’s restricted common stock and one warrant to purchase one share of the Company’s restricted common stock

for $ 0.75 per share until December 31, 2024.

During the year ended June 30, 2022, the Company approved the issuance

of 75,000 warrants for two consultants for consulting services of $ 7,500 .

The warrants are exercisable at $ 1.50 and expire in November

During the year ended June 30, 2022, the Company

agreed to extend the expiration dates of 4,497,924 warrants owned by certain individuals which were scheduled to expire at various dates

from December 31, 2020 through December 31, 2021.

The Company recorded non-cash compensation of $25,506 and interest expense of $187,139

related to the modification of the warrants.

During the year ended June 30, 2021, warrants

to purchase 164,251 shares of the Company’s common stock at prices ranging from $0.75 to $2.00 expired.

approved the modification of existing warrants held by one former consultant and four investors, which extended certain expiration dates.

The modifications resulted in incremental non-cash compensation of $ 5,624 and interest expenses of $ 2,713 .

During the year ended June 30, 2022, 2,315,550

warrants were exercised to purchase 4,065,988 shares of the Company’s common stock at $0.75 per share for total proceeds of $3,049,490.

During the year ended June 30, 2021, the Company

issued warrants to brokers as commissions to purchase 322,000 shares of the Company’s common stock at an exercise price of $0.75

per share and an expiration of December 31, 2022.

As the issuance was both a reduction and addition to additional paid in capital there

was no impact to the financial statements.

During the year ended June 30, 2021, the Company

issued 144,000 units to Smith for salary of $72,000, with each unit consisting of one share of the Company’s restricted common stock

and one warrant to purchase one share of the Company’s restricted common stock for $0.75 per share with an expiry date of December

warrants were exercised to purchase 2,315,550 shares of the Company’s common stock at $0.75 per share for total proceeds of $ 1,736,662 .

During the year ended June 30, 2022, the Company issued 66,860 shares of

the Company’s common stock to three brokers as commissions for the warrant exercises.

As the issuance was both a reduction and addition

to additional paid in capital there was no impact to the financial statements.

The company also paid a broker $ 18,601 in commissions for

the warrant exercises.

Effective May 1, 2022, an entity affiliated with William

O’Neill (“O’Neill”) was issued 1,000,000 Incentive Warrants exercisable at $ 1.00 per share until April 30, 2026

of which up to 700,000 Incentive Warrants may be cancelled if O’Neill is not renewed at 13 months and/or fails to serve the entire

contract term thereafter.

These warrants each have a 75 % exercise bonus if the terms set forth therein are met.

Stock options:

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.

On April 7, 2022 the Company’s shareholders

approved the Bion Environmental Technologies, Inc.

2021 Equity Incentive Award Plan (the “ Equity Plan ”).

Plan provides for the issuance of options (and/or other securities) to purchase up to 30,000,000 shares of the Company’s common

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

During the year ended June 30, 2020, the Company

approved the modification of existing stock options held by certain employees, directors and consultants, which extended certain expiration

dates and reduced certain exercise prices.

The modifications resulted in incremental non-cash compensation of $626,058 (including $184,550,

$110,625, $116,970 and $32,700 for Bassani, Smith, Schafer and Jon Northrop (“Northrop”), the Company’s other board

member, respectively).

During the year ended June 30, 2021, the Company

approved the modification of existing stock options held by two former consultants, which extended certain expiration dates.

The modifications

resulted in incremental non-cash compensation of $8,775.

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,

On February 11, 2022, the Company granted 10,000 options

under the 2006 Plan to one consultant.

On April 29, 2022, the Company granted an aggregate

of 720,000 options under the 2006 Plan to seven employees/consultants/directors including:

i) 50,000 options each to Schafer and Northrop

for service as directors, ii) 200,000 options to Bassani (now COO of the Company and formerly CEO) and iii) 200,000 options to Smith,

the Company’s President, which new option grants are included in the presentation below.

The Company recorded compensation expense related

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The Company granted 730,000

and 2,210,000 options during the years ended June 30, 2021 and 2020, respectively.

During the year ended June 30, 2021 the Company issued

250,000, 250,000, 50,000 and 25,000 options to Bassani, Smith, Schafer and Northrop, respectively and recorded compensation expense of

$277,500, $277,500, $55,500 and $27,500 for Bassani, Smith, Schafer and Northrop, respectively.

During the year ended June 30, 2020 the

Company issued 500,000, 600,000, 175,000 and 150,000 options to Bassani, Smith, Schafer and Northrop, respectively and recorded compensation

expense of $90,000, $115,000, $33,250 and $28,750 for Bassani, Smith, Schafer and Northrop, respectively.

and 960,000 fully vested options during the years ended June 30, 2022 and 2021, respectively.

The fair value of the options granted during the years

ended June 30, 2022 and 2021 were estimated on the grant date using the Black-Scholes option-pricing model with the following assumptions:

Fair value of options assumptions

Dividend yield

Risk-free interest rate

0.47% –

1.71 % – 3.01 %

0.47 %- 0.82 %

Expected term (years)

The expected volatility was based on the historical

price volatility of the Company’s common stock.

The dividend yield represents the Company’s anticipated cash dividend on common

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.

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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.

A summary of option activity under the 2006 Plan for the years

ended June 30, 2022 and 2021 is as follows:

Schedule of option activity

Outstanding at July 1, 2020

1 unchanged sentence

Outstanding at June 30, 2022

Exercisable at June 30, 2021

The following table presents information relating

to nonvested stock options as of June 30, 2022:

Schedule of non vested stock options

Weighted Average

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Stock-based employee compensation charges in operating expenses

in the Company’s financial statements for the years ended June 30, 2021 and 2020 are as follows:

and administrative:

in fair value from modification of

warrant terms

value of stock options expensed

and development:

in fair value from modification of

in the Company’s consolidated financial statements for the years ended June 30, 2022 and 2021 are as follows:

Condensed Financial Statement

General and administrative:

Change in fair value from modification of

warrant terms

value of stock options expensed

Fair value of stock options expensed

Research and development:

Fair value of stock options expensed

The Company capitalized $ 135,648

and nil 0 in non-cash compensation related to the 3G project in June 30, 2022 and 2021, respectively.

RECEIVABLE - AFFILIATES :

As of June 30, 2022, the Company has three interest

bearing, secured promissory notes with an aggregate principal amount of $428,250 ($483,387, including interest), from Bassani as consideration

to purchase warrants to purchase 5,565,000 shares of the Company’s restricted common stock, which warrants have exercise prices

ranging from $0.60 to $1.00 and have expiry dates ranging from December 31, 2020 to December 31, 2025.

The promissory notes bear interest

at 4% per annum, and are secured by portions of Bassani’s 2020 Convertible Obligation and Bassani’s September 2015 Convertible

The secured promissory notes were payable July 1, 2020 but were extended to July 1, 2024 during the year ended June 30, 2020.

during the year ended June 30, 2020, warrants with exercise prices greater than $0.75 were reduced to $0.75 and warrants with expiry dates

prior to December 31, 2024 were extended to December 31, 2024.

bearing, secured promissory notes with an aggregate principal amount of $ 428,250 ($ 504,650 , 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 and have expiry dates ranging from December 31, 2024 to December 31, 2025.

The promissory

notes bear interest at 4% per annum and are 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 1, 2024.

As of June 30, 2022, the Company has an interest bearing,

secured promissory note for $ 30,000 ($ 34,688 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 and have expiry dates of December 31, 2023.

During the year ended June 30, 2020, the expiry dates of the warrants were extended to December 31, 2024.

The warrants have a 75% exercise

bonus and the promissory note bears interest at 4% per annum, and is secured by $30,000 of Smith’s 2020 Convertible Obligations.

The secured promissory note was payable on July 1, 2020 but was extended to July 1, 2024 during the year ended June 30, 2020.

shares of the Company’s restricted common stock, which warrants are exercisable at $ 0.60 and have expiry dates of December 31, 2024.

The warrants have a 75% exercise bonus and the promissory note bears interest at 4 % per annum, and is secured by $ 30,000 ($ 35,011 , including

interest) of Smith’s 2020 Convertible Obligations.

The secured promissory note is payable on July 1, 2024.

As of June 30, 2022 the Company has two interest

bearing, secured promissory notes with an aggregate principal amount of $ 46,400 ($ 55,009 including interest) from two former employees

as consideration to purchase warrants to purchase 928,000 shares of the Company’s restricted common stock, which warrants are exercisable

at $ 0.75 and have expiry dates of December 31, 2024.

During the year ended June 30, 2020, the expiry dates of the warrants were extended

to December 31, 2024.

These warrants have a 90% exercise bonus.

The promissory notes bear interest at 4% per annum, are secured by a perfected

security interest in the warrants, and were payable on July 1, 2020 but were extended to July 1, 2024 during the year ended June 30, 2020.

The promissory notes bear interest at

4 % per annum, are secured by a perfected security interest in the warrants, and are payable on July 1, 2024.

AND CONTINGENCIES :

Employment and consulting agreements:

Smith has held the positions of Director, President

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 includes provisions for i) a monthly deferred salary

of $18,000 until the Board of Directors re-instates 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, 2022),

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.

agreed effective July 29, 2018 to continue to serve the Company under the same basic terms.

Since March 31, 2005, the Company has had various

agreements with Brightcap and/or Bassani, through which the services of Bassani are provided (any reference to Brightcap or Bassani for

all purposes are 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-instates cash payments to all employees

and consultants who are 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, and subsequently extended until December

During February 2018, the Company agreed to the material terms for a binding two-year extension agreement for Bassani’s

services as CEO, while a detailed, fully executed agreement is still being negotiated and will be finalized in the future.

Bassani’s

salary will remain $372,000 per year, which will continue to be accrued until there is adequate cash available while negotiations proceed

toward the re-instatement of a least a partial cash payment.

Additionally, the Company has agreed to pay him $2,000 per month to be applied

to life insurance premiums.

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 June 30, 2025.

The promissory note is secured by a portion of

Bassani’s 2020 Convertible Obligations and as of June 30, 2021, the principal and accrued interest was $335,965.

For the years ended

June 30, 2021 and 2020, Brightcap was paid $155,000 and $135,000, respectively.

Smith has held the positions

of Director, Executive Chairman, President 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 includes provisions

for i) a monthly salary of $ 18,000 until the Board of Directors re-instates 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, 2022)(check with Kathy whether this was extended), 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 a month is deferred.

For the years ended June 30, 2022 and 2021, Smith was paid $ 130,000 and $ 139,460 , respectively, of

cash compensation.

Since March 31, 2005, the

Company has had various agreements with Brightcap and/or Bassani (now the Company’s Chief Operating Officer (‘COO’)

and formerly the Company’s Chief Executive Officer (‘CEO’), through which the services of Bassani are provided (any

reference to Brightcap or Bassani for all purposes are 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-instates

cash payments to all employees and consultants who are 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, and subsequently

extended until December 31, 2022 (which date has subsequently been extended to June 30, 2024).

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 will continue to be accrued in part until there is adequate cash available.

Additionally, the Company has agreed

to pay him $ 2,000 per month to be applied to life insurance premiums (which sums have been 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 June 30, 2025.

The promissory note is secured by a portion of Bassani’s 2020 Convertible Obligations and

as of June 30, 2022, the principal and accrued interest was $ 348,643 .

For the years ended June 30, 2022 and 2021, Brightcap was paid $ 250,000

and $ 155,000 , respectively, of cash compensation earned during the period.

William O’Neill (“O’Neill”)

has been hired as the Company’s Chief Executive Officer (“CEO”) effective May 1, 2022.

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.

Bassani, CEO of the

Company since 2011, has 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.

Bassani’s compensation arrangements with the Company have not been altered

in the context of the change of positions.

The Company and O’Neill have entered into a thirty-seven (37) month employment agreement

(subject to Board renewal for the final two (2) years during the 13th month) with compensation of $ 25,000 cash and $ 10,000 deferred

compensation per month.

An entity affiliated with O’Neill was issued 1,000,000 Incentive Warrants exercisable at $1.00 per share

until April 30, 2026 of which up to 700,000 Incentive Warrants may be cancelled if O’Neill is not renewed at 13 months and/or fails

to serve the entire contract term thereafter.

These warrants each have a 75% exercise bonus if the terms set forth therein are met.

Execution/exercise bonuses:

8 unchanged sentences

and iii) with regard to

contingent stock bonuses, issuance shall be triggered upon the Company’s common stock reaching a closing price equal to 50% of currently

specified price;

4 unchanged sentences

annual payments to extend warrant exercise periods have been reduced to $.01 per option or warrant.

During the year ended June 30, 2021, the Company applied

a 75% execution/exercise bonus on 3,000,000 warrants held by a trust owned by Bassani.

These exercise bonuses were subsequently

increased to 75%.

During the year ended June 30, 2021, the Company added

a 75 % execution/exercise bonus to the terms of 3,000,000 warrants held by a trust owned by Bassani.

As of June 30, 2022, the execution/exercise bonuses

ranging from 50-90% were applicable to 10,326,600 of the Company’s outstanding options and 16,742,789 of the Company’s outstanding

On September 10, 2021, the Company filed a federal lawsuit ‘in rem’

to recover the <biontech.com> domain and the unknown ‘John Doe’

ranging from 50 - 90 % were applicable to 17,778,213 of the Company’s outstanding options and 17,778,213 of the Company’s outstanding

Effective May 1, 2022, an entity affiliated with O’Neill

was issued 1,000,000 Incentive Warrants exercisable at $ 1.00 per share until April 30, 2026 of which up to 700,000 Incentive Warrants

may be cancelled if O’Neill is not renewed at 13 months and/or fails to serve the entire contract term thereafter.

These warrants

each have a 75 % exercise bonus if the terms set forth therein are met.

Purchase Order Agreement:

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 encompasses the core of Bion’s 3G Technology.

On March 21, 2022 the Company received

progress notice re:

completion of certain work in process and an invoice from Buflovak for the next 25 % payment ($ 666,375 ).

June 6, 2022 the Company received progress notice re:

completion of certain work in process and an invoice from Buflovak for the next

25% payment ($666,375) which was paid on July 5, 2022 bringing the aggregate payments to $ 1,996,125 as of the date of this report.

has worked with the Company on design and testing of its 3G Tech over several years.

The basic design for the Initial Project’s

Bion System is complete and procurement/fabrication has now been initiated.

3G1 is working 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

Additional agreements have been entered into various professional services providers (engineers, surveyors, etc.) for work related

to the Initial Project.

Domain Sale/Resolved

Litigation/Hacking/Theft

2022 the Company entered into an agreement to sell domain name <biontech.com> and other related assets to BioNTech SE (“BNTX”)

for the sum of $950,000 (before expenses related to the transaction) which sale was closed/completed on April 2, 2022 with a one-time

gain of $902,490.

The Company has been using www.bionenviro.com as its primary website (and domain) since July 2021 due to the

events described below.

The Company has not been using biontech.com as its primary website since July 2021 so domain name <biontech.com>

no longer represented a core asset of the Company.

As previously reported, on

Saturday morning, July 17, 2021, our historical website domain – biontech.com – and email services were compromised

and disabled.

Research indicated that an unknown party had ‘hijacked’ the domain in a theft attempt.

On September 10, 2021,

the Company filed a federal lawsuit ‘in rem’ to recover the <biontech.com> domain and the unknown ‘John Doe’

who hacked and attempted to steal the website.

The litigation

has been filed in the United States District Court for the Eastern District of Virginia, Alexandria Division under the heading ‘Bion

Environmental Technologies, Inc., Plaintiff, vs John Doe and <biontech.com>, Defendants’

1:21-cv-01034), seeking

recovery of the domain name and other relief as set forth therein.

On September 25, 2014, the Pennsylvania Infrastructure

Investment Authority (“Pennvest”) exercised its right to declare the PA1’s Pennvest Loan in default, accelerated the

Pennvest Loan and demanded that PA1 pay $8,137,117 (principal, interest plus late charges) on or before October 24, 2014.

make the payment and does not have the resources to make the payments demanded by Pennvest.

PA1 commenced discussions and negotiations

with Pennvest concerning this matter but Pennvest rejected PA1’s proposal made during the fall of 2014.

PA1 made a new proposal

to Pennvest during September 2021 which proposal is presently under consideration by Pennvest.

PA1 provides Pennvest with its financial

The litigation was filed in the United States District Court for the Eastern District of

Virginia, Alexandria Division under the heading ‘Bion Environmental Technologies, Inc., Plaintiff, vs John Doe and <biontech.com>,

Defendants’ (Case No.

1:21-cv-01034), seeking recovery of the domain name and other relief as set forth therein.

On November 19, 2021, the

United States District Court for the Eastern District of Virginia, Alexandria Division issued an order stating that “… ORDERED,

ADJUDGED and Decreed that plaintiff Bion Environmental Technologies, Inc.

(‘plaintiff) Is the lawful owner of domain name <biontech.com>

….” under the heading ‘Bion Environmental Technologies, Inc., Plaintiff, vs John Doe and <biontech.com>, Defendants’

1:21-cv-01034).

The Company has moved the domain name <biontech.com> to a new registrar and reactivated it for the Company’s

use (paired currently with its current bionenviro.com website).

No shareholder, sensitive

or confidential information was available to be breached which has limited damages from the hack/theft to date.

However, the Company’s

email operations werebeen subject disruption and expenses were incurred related to the matter including legal fees.

The Company created ‘work-arounds’

These issues have been resolved and the Company has moved our website (and email) to a new domain:

bionenviro.com.

access is now www.bionenviro.com.

To send emails to Bion personnel, one uses the same name identifier previously used, but in the

address, substitute ‘bionenviro.com’ for “biontech.com’:

For example cscott@biontech.com (no longer functional)

is cscott@bionenviro.com and mas@biontech.com (no longer functional) is now mas@bionenviro.com.

Pennvest Loan and Dissolution

of Bion PA1, LLC (“PA1”)

PA1, the Company’s

wholly-owned subsidiary, was dissolved on December 29, 2021 on which date it owed approximately $ 10,010,000 under the terms of the Pennvest

Loan related to the construction of the Kreider 1 System including accrued interest and late charges totaling $ 2,255,802 as of that date.

Through the date of the dissolution, PA1 was a wholly-owned subsidiary of the Company and its assets and liabilities were included on

the Company’s consolidated balance sheets.

At September 30, 2021, PA1’s total assets were $ 297 and its total liabilities were

$ 10,154,334 (including the Pennvest Loan in the aggregate amount of $ 9,939,148 , accounts payable of $ 214,235 and accrued liabilities of

$ 950 ) which sums were included in the Company’s consolidated balance sheets in its Form 10-Q for the quarter ended September 30,

Subsequent to the dissolution of PA1, its assets and liabilities are no longer consolidated and included in the Company’s

balance sheets.

As of December 29, 2021, PA1’s total assets were nil and its total liabilities were $ 10,234,501 (including the Pennvest

Loan in the aggregate amount of $ 10,009,802 , accounts payable of $ 212,263 and accrued liabilities of $ 12,436 .

The net amount of $ 10,234,501

was recognized as a gain on the legal dissolution of a subsidiary in other (income) expense.

As background, the terms

of the Pennvest Loan provided for funding of up to $ 7,754,000 which was to be repaid by interest-only payments for three years, followed

by an additional ten-year amortization of principal.

The Pennvest Loan accrued interest at 2.547 % per annum for years 1 through 5 and

3.184 % per annum for years 6 through maturity.

The Pennvest Loan required minimum annual principal payments of approximately $ 5,886,000

in fiscal years 2013 through 2021, and $ 846,000 in fiscal year 2022, $ 873,000 in fiscal year 2023 and $ 149,000 in fiscal year 2024.

Pennvest Loan was collateralized by PA1’s Kreider 1 System and by a pledge of all revenues generated from Kreider 1 including, but

not limited to, revenues generated from nutrient reduction credit sales and by-product sales.

In addition, in consideration for the excess

credit risk associated with the project, Pennvest was entitled to participate in the profits from Kreider 1 calculated on a net cash flow

basis, as defined.

The Company has incurred interest expense related to the Pennvest Loan of $ 123,444 and $ 246,887 for the years

ended June 30, 2022 and 2021, respectively.

Based on the limited development of the depth and breadth of the Pennsylvania nutrient

reduction credit market, PA1 commenced discussions and negotiations with Pennvest related to forbearance and/or re-structuring the obligations

under the Pennvest Loan during 2013.

In the context of such negotiations, PA1 elected not to make interest payments to Pennvest on the

Pennvest Loan since January 2013.

Additionally, the PA1 did not make any principal payments, which were to begin in fiscal 2013, and,

therefore, the Company classified the Pennvest Loan as a current liability through the dissolution of PA1 on December 29, 2021.

During August 2012, the Company

provided Pennvest (and the PADEP) with data demonstrating that the Kreider 1 system met the ‘technology guaranty’ standards

which were incorporated in the Pennvest financing documents and, as a result, the Pennvest Loan has been solely an obligation of PA1 since

Note, however, the Company’s consolidated balance sheets as of June 30, 2021 reflects the Pennvest Loan as a liability

of $ 9,868,495 despite the fact that the obligation (if any) was solely an obligation of PA1 .

On September 25, 2014, the

Pennsylvania Infrastructure Investment Authority (“Pennvest”) exercised its right to declare the PA1’s Pennvest Loan

in default, accelerated the Pennvest Loan and demanded that PA1 pay $ 8,137,117 (principal, interest plus late charges) on or before October

PA1 did not make the payment and did/does not have the resources to make the payments demanded by Pennvest.

PA1 commenced discussions

and negotiations with Pennvest concerning this matter but Pennvest rejected PA1’s proposal made during the fall of 2014.

a final proposal to Pennvest during September 2021 which proposal was also rejected by Pennvest.

PA1 provided Pennvest with its financial

statements (which include a description of system status) annually.

During the 2021 fiscal year, Pennvest’s auditors requested a

‘corrective action plan’

and PA1 informed Pennvest that “…

there is no viable corrective action plan for the

Pennvest Loan (‘Loan’).

During the 2021 fiscal year, Pennvest’s auditors requested a

‘corrective action plan’ and PA1 informed Pennvest that “… there is no viable corrective action plan for the

Pennvest Loan (‘Loan’).

The facility funded by the Loan has been shut down for many years (which has been disclosed in the

2 unchanged sentences

The facility has not been commercially operated for approximately six years and has generated zero income.

that Pennvest take appropriate steps to remove and sell the equipment.”

Pennvest responded favorably to the approach of selling

the equipment but no actions have yet taken place.

PA1 and the Company are currently discussing proposals with Pennvest seeking full resolution

of these matters.

The Company anticipates additional communication with Pennvest on this matter during the current year.

It is not possible

at this date to predict the final outcome of this matter, but the Company believes it is likely that that the equipment will be sold with

the proceeds delivered to Pennvest during the 2022 fiscal year.

However, the resolution of these matters including manner and means of

such equipment sale has not been agreed upon as of this date.

PA1 will evaluate the appropriate manner to resolve/wrap-up its business

over the balance of the current fiscal year.

During August 2012, the Company provided Pennvest

(and the PADEP) with data demonstrating that the Kreider 1 system met the ‘technology guaranty’

standards which were incorporated

in the Pennvest financing documents and, as a result, the Pennvest Loan is now solely an obligation of PA1.

No litigation has commenced

related to this matter but such litigation is likely if negotiations do not produce a resolution (Note 1 and Note 5).

that Pennvest take appropriate steps to remove and sell the equipment.” Pennvest responded favorably to the approach of selling

the equipment.

On December 29, 2021, the

Company approved and executed a ‘Consent of the Sole Member of Bion PA 1’ (the “Consent to Dissolution”) that

authorized the complete liquidation and dissolution of PA1.

A Statement of Dissolution was filed by PA1 with the Colorado Secretary of

State on December 29, 2021.

The Company is of the understanding that the liquidation value of Bion PA 1’s property is substantially

below the current amount outstanding under the Funding Agreement dated October 27, 2010 by and between PA1 and Pennvest, the only known

secured creditor of PA1.

Post-dissolution, PA1’s activities will be limited entirely to activities required to properly distribute

its net assets to creditors and wind down its business.

PA1 and Pennvest agreed to

have the equipment sold by a third party auctioneer who arranged for the sale of its property and delivery of all proceeds (net of

commissions and customary costs of sale) to Pennvest.

The auction took place during the period between May 13-18, 2022.

The Company’s

personnel assisted PA1 with this process as needed at no cost to PA1.

The net sum of $ 104,725 was realized from the asset sale, which

sum was delivered to Pennvest on June 15, 2022.

Pursuant to agreement with Pennvest, the remaining unsold assets will be transferred to Kreider Farms during the next quarter

in order to complete the winding up of the Kreider 1 project.

Upon the complete distribution

of all assets of PA1, whether by transfer or sale and distribution of net proceeds as provided above, PA1 will use commercially reasonable

efforts to cause the cessation of all activities.

No distributions of PA1’s assets will be made to the Company or its affiliates.

The Consent to Dissolution authorized Mark A.

Smith, the Company’s President and the sole manager of PA1, to cause to be delivered

for filing the Statement of Dissolution, to give notice of the dissolution, and to take any other act necessary to wind up and liquidate

the business.

PA1 has made no payments

to vendors or other creditors in connection with the dissolution other than the payment to Pennvest set forth above.

No distributions

or payments of any kind have ever been made to the Company, the sole member of PA1 since inception, and no payment will be made to the

Company or any affiliate in connection with the dissolution.

For more information regarding

the history and background of the Pennvest Loan and PA1, please review our Form’s 10-K for the years from 2008 through 2021 including

the Notes to the Financial Statements included therein.

The Company currently is not involved in any other material litigation

PARTY TRANSACTIONS:

The Coalition for Affordable Bay Solutions (“CABS”),

a not-for-profit organization that engages in political and legislative lobbying and educational activities regarding the competitive

bidding procurement and nutrient credit trading program in Pennsylvania (and elsewhere), shares certain key management members with the

During the years ended June 30, 2021 and 2020, the

Company received nil and nil for expense reimbursements from CABS, respectively.

During the years ended June 30, 2021 and 2020, the Company

paid CABS nil and $52,540, respectively for consulting expenses.

GAIN ON EXTINGUISHMENT OF LIABILITIES:

During the year ended June 30, 2020, the Company

recognized other income due to the extinguishment of liabilities of $122,423, resulting from the legal release of certain accounts payable.

These accounts payable were outstanding for over 6 years and the vendors had not made attempts to collect these amounts from the Company

over the past several years.

The extinguishment of liabilities was recorded after a review of the statute of limitations in the state

in which the original liability was incurred and in which the Company operates it business, as applicable.

or similar events.

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 following table summarized the supplemental cash flow information for

the year ended June 30, 2022:

Schedule Of Cash Flow Supplemental Disclosure

Cash paid for noncancelable operating lease included in the operating cash flows

Right of use assets obtained in exchange for operating lease liabilities

The future minimum lease payment under noncancelable operating lease with

terms greater than one year as of June 30, 2022:

Schedule Of Future Minimum Lease Payment

Year ended June 30, 2023

Year ended June 30, 2024

Year ended June 30, 2025

Undiscounted cash flow

Less imputed interest

The weighted average remaining lease term and discounted rate related to

the Company’s lease liability as of June 30, 2022 were 3 years and 10%, respectively.

The Company’s lease discount rate is

generally based on the estimates of its incremental borrowing rate as the discount rates implicit in the Company’s lease cannot

be readily determined.

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, 2021 and 2020 is as follows:

income tax benefit at statutory rate

taxes, net of federal benefit

Excess Business Interest

differences and other

of net operating allowances

in valuation allowance

income tax expense (benefit) c omputed by applying the Federal

statutory rate to income (loss) before income taxes and the actual expense (benefit) for

taxes on income (loss) for the years ended June 30, 2022

and 2021 is as follows:

Schedule of effective income tax rate reconciliation

Expected income tax expense (benefit) at statutory

$ ( 724,000 )

State taxes, net of federal benefit

RTP – Excess Business Interest

Permanent differences and other

Expiration of net operating allowances

Change in valuation allowance

( 3,281,000 )

Income tax expense (benefit)

The Company has net operating loss carry-forwards

(“NOLs”) for tax purposes of approximately $47,321,000 as of June 30, 2021.

(“NOLs”) for tax purposes of approximately $ 8,274,000 as of June 30, 2022.

These NOLs expire on various dates through 2041.

1 unchanged sentence

Section 382 of the Internal Revenue Code.

The Company’s deferred tax assets for the

years ended June 30, 2021 and 2020 are estimated as follows:

Carryforwards (Federal and State)

deferred tax assets

The Company’s deferred tax assets as of

June 30, 2022 and 2021 are estimated as follows:

Schedule of deferred tax assets and liabilities

NOL carryforwards (Federal and State)

Stock-based compensation

Business interest

Deferred compensation

Gross deferred tax assets

Valuation allowance

( 16,443,000 )

( 19,724,000 )

deferred tax assets

Net deferred tax assets

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

The Company has adopted the Bion Technologies,

401(k) Profit Sharing Plan and Trust (the “401(k) Plan”), a defined contribution retirement plan for the benefit of its

100 % of its net deferred tax assets due to the uncertainty of generating future profits that would allow for the realization of such deferred

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.

is open to all employees over 21 years of age and no service requirement is necessary.

The Company has evaluated events that occurred subsequent

to June 30, 2022 for recognition and disclosure in the financial statements and notes to the financial statements.

From July 1, 2021 through September 27, 2021,

139,334 warrants were exercised to purchase 139,334 shares of the Company’s common stock at $0.75 per share for total proceeds of

approximately $104,500.

From July 1, 2021 through September 27, 2021,

the Company issued 10,000 warrants to a broker as commissions to purchase 10,000 shares of the Company’s common stock at an exercise

price of $0.75 per share and an expiration of December 31, 2022.

From July 1, 2021 through September 27, 2021,

Smith elected to convert accounts payable of $5,126 into an aggregate 10,253 units at $0.50 per unit, with each unit consisting of one

share of the Company’s restricted common stock and one warrant to purchase one share of the Company’s restricted common stock

for $0.75 per share until December 31, 2024.

On September 16, 2021, PA1 made a new proposal

to Pennvest which proposal is presently under consideration by Pennvest.

See Notes 5 and 9 above for related information.

On September 23, 2021 the Company executed an

agreement to lease land near Fair Oaks, Indiana to construct its initial 3G Tech commercial scale installation which will include customized

covered barns for up to 300 head of cattle, an anaerobic digester and a Bion 3G Tech waste treatment/recovery system (“Lease”).

Pursuant to the Lease, an initial $60,000 rent payment is due on October 10, 2021 and, commencing on the earlier of December 31, 2022

or the date on which the barns are populated (“Start Date”), monthly rent of $7,250 will be payable.

The Lease has an initial

2-year term from the Start Date.

The impact of ASC 842 has not been determined for the lease.

Terms for an additional related agreement

regarding disposal of certain manure effluent have been agreed upon with the Curtis Creek Dairy unit of Fair Oaks Farms and the Company

expects the agreement to be finalized by the end of the first full week of October 2021.

Pre-development work commenced during August

2021 and preparation for active surveying, site engineering and other work is now underway.

Note 1 for more information.

June 6, 2022 the Company received progress notice regarding completion of certain work in process on the core modules of the 3G1 core

modules and an invoice from Buflovak for the third 25 % payment ($ 666,375 ) which was paid on July 5, 2022 bringing the aggregate payments

to $ 1,996,125 as of the date of this report.

July 2022 the Company sold 320,000 Units containing 320,000 shares of the Company’s Common Stock and 320,000 warrants to purchase

320,000 restricted and legended shares of the Company’s Common stock exercisable at $ 1.25 until December 31, 2023 for the sum of

$ 320,000 to two non-affiliated purchasers.

July 1, 2022 through September 27, 2022 74,834 warrants were exercised for $ 56,126 and the Company issued 74,834 restricted common shares.

the period from July 1, 2022 through September 27, 2022, Smith transferred $ 23,943

of unreimbursed expenses and $ 20,000

of deferred compensation to his 2020 Convertible Obligation and converted 50,000

of the initial principalbalance of his 2020 Convertible Obligation to 100,000

shares (60,000 of which were donated/gifted upon acquisition) and 100,000 warrants (all of which were donated/gifted upon acquisition).

August 8, 2022 the Company extended the expiration of 300,000 warrants owned by a consultant until December 31, 2023.

August 8, 2022, the Company extended the expiration of 1,286,824 warrants for three employees and contractors to December 31, 2024.

September 9, 2022, the Company issued 50,000 shares to non-affiliated consultant for services.

August and September 2022 the Company issued 150,000

warrants, in aggregate, to three (3) new members of its Advisory Group in connection with their commitment to the advisory role

and/or for consulting services.

Pursuant to the requirements of Section 13 or 15(d)

11 unchanged sentences

President, Chief Financial Officer

/s/ Dominic Bassani

/s/ William O’Neill

Chief Executive Officer

September 27, 2022

Dominic Bassani

William O’Neill

/s/ Jon Northrop

1 unchanged sentence

September 27, 2022

/s/ Edward Schafer

Vice Chairman

September 27, 2022

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures