What changed in this filing

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Item 7. Management’s Discussion and Analysis

2023-09-28 compared with 2022-09-27 · 341 added, 416 removed, 157 unchanged (83% of the section changed)

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prove to be incorrect.

“The Company's actual results of operations, most of which are beyond the Company's control, could differ

We wish to caution readers not to place undue reliance on any such forward looking statements, which speak only as of the

Any forward-looking statements represent management's best judgment as to what may occur in the future.

However, forward looking

statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to

differ materially from historical results of operations and events and those presently anticipated or projected.

The Company's actual results of operations, most of which are beyond the Company's control, could differ materially.

We wish to caution readers not to place undue reliance on any such forward looking statements, which speak only as of the date made.

forward-looking statements represent management's best judgment as to what may occur in the future.

However, forward looking statements

are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially

from historical results of operations and events and those presently anticipated or projected.

These factors include adverse economic conditions,

entry of new and stronger competitors, inadequate capital and limited ability to obtain financing, needed personnel and equipment, unexpected

costs, failure (or delay) to gain product certifications and/or regulatory approvals in the United States (or particular states) or foreign

countries, loss (permanently or for any extended period of time) of the services of members of the Company’s small core management

team (many of whom are age 70 or older) and failure to capitalize upon access to new markets.

Additional risks and uncertainties that

may affect forward looking statements about Bion's business and prospects include:

i) the possibility that markets for nutrient reduction

credits (discussed below) and/or other ways to monetize nutrient reductions and other environmental benefits will be slow to develop (or

not develop at all), ii) PA1’s dissolution and its effect on how the Company is viewed, (if any), iii) the possibility that competitors

will develop more comprehensive and/or less expensive environmental solutions, iv) delays in market awareness of Bion and our Systems,

v) uncertainties and costs increases related to research and development efforts to update and improve Bion’s technologies and applications

thereof, and/or vi) delays and/or costs exceeding expectations relating to Bion's development of the Initial Project, JVs and/or Projects

and vii) failure of marketing strategies, each of which could have both immediate and long term material adverse effects by placing us

behind our competitors and requiring expenditures of our limited resources.

entry of new and stronger competitors, inadequate capital and limited ability to obtain financing, needed personnel (including entire

team related to project development and project operations in coming years) and equipment, unexpected costs, failure (or delay) to gain

product certifications and/or regulatory approvals in the United States (or particular states) or foreign countries, loss (permanently

or for any extended period of time) of the services of members of the Company’s small core management team (many of whom are age

70 or older) and failure to capitalize upon access to new markets.

Additional risks and uncertainties that may affect forward looking

statements about Bion's business and prospects include:

i) the possibility that markets for nutrient reduction credits (discussed below)

and/or other ways to monetize nutrient reductions and other environmental benefits will be slow to develop (or not develop at all), ii)

PA1’s dissolution and its effect on how the Company is viewed, (if any), iii) the possibility that competitors will develop more

comprehensive and/or less expensive environmental solutions, iv) delays in market awareness of Bion and our Systems, v) uncertainties

and costs increases related to research and development efforts to update and improve Bion’s technologies and applications thereof,

and/or vi) delays and/or costs exceeding expectations relating to Bion's development of the Initial Project, JVs and/or Projects and vii)

failure of marketing strategies, each of which could have both immediate and long term material adverse effects by placing us behind our

competitors and requiring expenditures of our limited resources.

THESE RISKS, UNCERTAINTIES AND FACTORS BEYOND OUR

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in conjunction with the Consolidated Financial Statements and Notes to Consolidated Financial Statements filed with this Report.

BUSINESS OVERVIEW

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

BUSINESS OVERVIEW AND PLAN

Bion Environmental Technologies, Inc.'s ("Bion," "Company,"

"We," "Us," or "Our") was incorporated in 1987 in the State of Colorado.

Bion’s mission is to make

livestock production more sustainable, profitable and transparent.

We intend to accomplish this by deploying our Gen3Tech platform/business

model (discussed below) in ventures focused on the ‘feeder’ space of the livestock production/value chain to provide the consumer

with verifiably sustainable premium meat products (together with environmentally friendly, sustainable and/or organic co-products from

the production process).

Bion believes this approach can create extraordinary value for our shareholders and employees (all of whom

own securities in the Company) and for livestock/agriculture industry ‘partners’ who join us in our ventures.

We anticipate

pursuing the opportunity created by our third generation technology (“Gen3Tech”) and business/technology platform in conjunction

with other industry practices (“Gen3Tech Platform” or “Platform”).

Our patented and proprietary technology provides advanced

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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 s (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.

Application of our Gen3Tech can largely mitigate these environmental

problems, while simultaneously improving operational/ resource efficiencies by recovering high-value co-products from the CAFOs’

waste stream.

These waste ‘assets’ – nutrients and methane – have traditionally been wasted or underutilized and

are the same ‘pollutants’ that today fuel harmful algae blooms, contaminate surface groundwater, and exacerbate climate change.

We anticipate this will result in substantial long-term

value for Bion.

In the context of such JVs, we believe that the verifiable sustainable branding opportunities (conventional and organic)

in meat will represent one of the largest enhanced revenue contributors provided by Bion to the JVs (and Bion licensees).

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 was designed to capture and

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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 opportunity to retailers, food service distributors and the meat industry in the U.S.

In general, the response

has been favorable.

During July 2022, Bion announced a letter of intent (“Ribbonwire LOI”) to develop its first large-scale

All steps and stages in the animal raising and waste treatment process will be third-party verified, providing

the basis for additional revenues, including carbon and/or renewable energy-related credits and, eventually, payment for a range of ecosystem

services, including nutrient credits as described below.

The same verified data will be used to substantiate the claims of a USDA-certified

sustainable brand that will support premium pricing for the meat/ animal protein products that are produced in Bion facilities.

During the first half of 2022 Bion

began pre-marketing our sustainable beef to retailers, food service distributors and the meat industry in the U.S.

In general, the

response has been favorable.

During July 2022, Bion announced a letter of intent (“Ribbonwire LOI”) to develop a 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 agreement with Ribbonwire

Ranch and creating distribution agreements with key retailers and food service distributors during the current fiscal year.

Bion’s business model and technology platform

can create the opportunity for joint ventures s (in various contractual forms)(“JVs”) between the Company and large livestock/food/fertilizer

During January 2023 Bion announced a letter of intent (“Olson

LOI”) to develop a large-scale commercial project - a 15,000-head sustainable beef cattle feeding operation together with the Olson

Feeders and TD Angus, near North Platte, Nebraska (with a provision to expand to 45,000 head or more) (“Olson Project”).

April 2023 Bion announced a letter of intent (“DVG LOI”) to develop a large-scale commercial project - a 15,000-head sustainable

beef cattle feeding operation together with Dakota Valley Growers near Bathgate, North Dakota (“DVG Project”).

experience to date, we believe we will not have difficulty in securing participation in our Projects from additional feeders/cattlemen.

The Olson, Dalhart and DVG Projects (and subsequent Projects) will be developed to produce blockchain-verified, sustainable beef in customized

covered barns (resulting in reduced stress on cattle caused by extreme weather and temperatures and resulting higher feed/weight gain

efficiency) with ongoing manure transfer (through slatted floors) to anaerobic digesters (AD) to capture nitrogen from the manure stream

before loss to the atmosphere and generate renewable natural gas (RNG) for sale while remediating the environmental/carbon impacts usually

associated with cattle feedlots and CAFOs.

Bion’s patented Gen3Tech platform will refine the waste stream into valuable coproducts

that include clean water, RNG, photovoltaic solar electricity and fertilizer (‘climate smart’ and/or organic) products.

anticipate converting these LOIs into definitive JV agreements and creating related distribution agreements with key retailers and food

service distributors during the current fiscal year.

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

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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, in some cases, Bion

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 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.

Our business plan is focused on executing multiple

agreements and letters of intent related to the “Bion Beef Opportunity” and commencing development of multiple sustainable

beef joint venture projects over the next twelve-eighteen (12-18) months while moving forward with the Initial Project (see below) and

the Dalhart Project.

Bion also intends to pursue other opportunities in the livestock industry enabled by our Gen3Tech 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

the growing enthusiasm among some livestock industry parties for environmental/sustainable/regenerative practices, provides 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 fiscal 2023 which will support development of the Dalhart Project (and other projects) during fiscal 2023 and

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).

is now focused primarily on:

i) development/construction of the Initial Project, our initial commercial-scale Gen3Tech installation (see

discussion herein below and Notes to Financial Statements ,

ii) development/construction of the Dalhart Project, iii) developing applications and markets for its sustainable (conventional and organic)

animal protein products and its low carbon organic fertilizer products , 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

See discussion at Item 1 above.

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 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’).

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.

PA1 believes that 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 Consolidated Financial Statements included therein.

To accomplish Bion’s goals, we anticipate the we will ‘partner’ with other technology companies

who provide solutions for different links of the beef (and other livestock) value chain and with strategic partners up and down the supply

chain.In the context of such JVs, we believe that the verifiable sustainable branding opportunities (conventional and organic) in meat

will represent one of the single largest enhanced revenue contributor provided by Bion to the JVs (and, in some cases, 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.

During the next three to six months, the Company intends

to fully complete construction of the Initial Project’s phase 1 (including the crystalizer module) and continue the optimization

Bion expects the Initial Project data will document the effectiveness of our Gen3Tech in a commercial-scale setting during

the current fiscal year and support development of the LOI Projects (and/or other Gen3Tech beef JV projects) commencing later this fiscal

We do not presently know the order in which these JV Projects will be developed as that decision will be made based on many

factors not yet in place.

We believe the Initial Project data will also provide additional potential stakeholders (cattle producers, cattle

feeders, packers, food distributors and 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) completion of

development/construction and operation of the Initial Project, our initial commercial-scale Gen3Tech installation, and optimization of

its operational parameters, ii) pre-development planning of the LOI Projects (and/or other Gen3Tech beef JV projects) including steps

toward distribution agreements, iii) developing applications and markets for its low carbon ‘ClimateSmart’ and organic fertilizer

products (including listings/certifications of multiple liquid and solid products) and its sustainable (conventional and organic) animal

protein products, and iv) discussions regarding initiation and development of agreements and joint ventures (“JVs” as discussed

herein) (and related Projects) based on the augmented capabilities of our Gen3Tech business platform (in the sustainable beef and other

livestock segments), 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.

At present, there is essentially no traceable and

verifiable ‘sustainable beef’ available to the US market except for niche products.

In response to consumer demand for transparency

and sustainability, Bion expects the meat industry in general, and beef specifically, to evolve towards using new technologies to deliver

these attributes in their products.

While we anticipate a faster adoption of tracking, verification and sustainability technologies in

other perishable food categories like produce and dairy due to their shorter product cycles (and related harvest and production techniques),

meat industry leaders have also announced their willingness to move forward with initiatives in this area.

Many companies have announced

‘sustainability’ initiatives but most appear to consist largely of ‘greenwashing’ marketing commitments rather

than substantive undertakings at this date.

Note, however, that Tyson’s Brazen beef initiative (which was announced during March

2023) may develop into a substantive competitive factor in the sustainable beef marketplace.

Bion 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 2026) and 25% in five (5) years (end of 2028) (approximately 6-7,000,000 cattle annually) (and more thereafter).

can successfully execute on its sustainable beef business plan (which is subject to many contingencies), we believe that JV facilities

utilizing Bion’s Gen3Tech platform will supply 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 our 2025 fiscal year.

Our first commercial project is likely to be one of our current LOI Projects

but we anticipate commencing development of additional sustainable beef projects during the current fiscal year as well.

Our current target

is to have at least three (3) facility modules (15,000 head per module)(“Modules”) in development and/or under construction

during 2024 in three (3) different JVs with the initial barns being populated with livestock during 2025.

Further expansion in the number

of distinct JVs is projected through 2026-7 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 2026 (approximately 2%-3% of the US beef market) and 30-45 Modules constructed

and being populated by 2029 (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).

During this five (5) year period, the Company also

anticipates having additional Gen3Tech projects underway in the pork/dairy/egg sectors of the US animal protein market.

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 (debt/equity/grants) 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.

For additional information regarding our ‘HISTORY,

BACKGROUND AND CURRENT ACTIVITIES’, see discussion in Part I, Item 1 above and Notes to the Financial Statements (particularly

Notes 1, 3, 5 and 9) included in this report .

COVID-19 PANDEMIC RELATED MATTERS:

The Company faces risks and uncertainties and

factors beyond our control that are magnified during the current Covid-19 pandemic and the unique economic, financial, governmental and

health-related conditions in which the Company, the country and the entire world now reside.

To date the Company has experienced direct

impacts in various areas including but without limitation:

i) government ordered shutdowns which have slowed the Company’s research

and development projects and other initiatives, ii) shifted focus of state and federal governments which is likely to negatively impact

the Company’s legislative initiatives in Pennsylvania and Washington D.

C., iii) strains and uncertainties in both the equity and

debt markets which have made discussion and planning of funding of the Company and its initiatives and projects with investment bankers,

banks and potential strategic partners more tenuous, iv) strains and uncertainties in the agricultural sector and markets have made discussion

and planning more difficult as future industry conditions are now more difficult to assess and predict, v) constraints due to problems

experienced in the global industrial supply chain since the onset of the Covid-19 pandemic, which have delayed certain research and development

testing and have delayed and/or increased the cost of construction of the Company’s initial 3G Tech installation as equipment/services

remain difficult to acquire in a timely manner, vi) due to the age and health of our core management team, many of whom are age 70 or

older and have had one or more existing health issues (including brief periods of Covid-19 infection), the Covid-19 pandemic places the

Company at greater risk than was previously the case (to a higher degree than would be the case if the Company had a larger, deeper and/or

younger core management team), and vii) there almost certainly will be other unanticipated

The Company faces risks and uncertainties and factors

beyond our control that are magnified during the current Covid-19 pandemic and the unique economic, financial, governmental and health-related

conditions in which the Company, the country and the entire world now reside.

To date the Company has experienced direct impacts in various

areas including but without limitation:

i) government ordered shutdowns which have slowed the Company’s research and development

projects and other initiatives, ii) shifted focus of state and federal governments which is likely to negatively impact the Company’s

legislative initiatives in Pennsylvania and Washington D.

C., iii) strains and uncertainties in both the equity and debt markets which

have made discussion and planning of funding of the Company and its initiatives and projects with investment bankers, banks and potential

strategic partners more tenuous, iv) strains and uncertainties in the agricultural sector and markets have made discussion and planning

more difficult as future industry conditions are now more difficult to assess and predict, v) constraints due to problems experienced

in the global industrial supply chain since the onset of the Covid-19 pandemic, which have delayed certain research and development testing

and have delayed and/or increased the cost of construction of the Company’s initial 3G Tech installation as equipment/services remain

difficult to acquire in a timely manner, vi) due to the age and health of our core management team, many of whom are age 70 or older and

have had one or more existing health issues (including brief periods of Covid-19 infection), the Covid-19 pandemic places the Company

at greater risk than was previously the case (to a higher degree than would be the case if the Company had a larger, deeper and/or younger

core management team), and vii) there almost certainly will be other unanticipated consequences for the Company as a result of the current

pandemic emergency and its aftermath.

CRITICAL ACCOUNTING POLICIES

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The Company follows the provisions of ASC 718,

718, which generally requires that share-based compensation transactions be accounted and recognized in the consolidated statement

of operations based upon their grant date fair values.

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.

determined, the Company assesses these instruments as derivative liabilities.

The fair value of these instruments is adjusted to reflect

the fair value at each reporting period end, with any increase or decrease in the fair value being recorded in results of operations

as an adjustment to fair value of derivatives.

As of June 30, 2022 and 2021, there are no derivative financial instruments.

Company has issued options to employees and consultants under the 2006 Plan to purchase common shares of the Company.

Options are valued

on the grant date using the Black-Scholes option-pricing model.

The expected volatility is based on the historical price volatility of

the Company’s common stock.

The dividend yield represents the Company’s anticipated cash dividend on common stock over the

expected term of the stock options.

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.

which generally requires that share-based compensation transactions be accounted and recognized in the statement of income based upon

their grant date fair values.

Pursuant to ASC Topic 815 “Derivatives and Hedging”

(“Topic 815”), the Company reviews all financial instruments for the existence of features which may require fair value accounting

and a related mark-to-market adjustment at each reporting period end.

Once determined, the Company assesses these instruments as derivative

The fair value of these instruments is adjusted to reflect the fair value at each reporting period end, with any increase

or decrease in the fair value being recorded in results of operations as an adjustment to fair value of derivatives.

As of March 31, 2023

and 2022, there are no derivative financial instruments.

The Company has issued options to employees and consultants

under its 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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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

a lease liability is recorded on the Company’s consolidated balance sheet at lease commencement reflecting the present value of

its fixed minimum payment obligations over the lease term.

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the rate it would pay to borrow on a secured basis and incorporates the term and economic environment of the associated lease.

YEAR ENDED JUNE 30, 2022 COMPARED TO

THE YEAR ENDED JUNE 30, 2021

Total revenues were nil for both the years

ended June 30, 2022 and 2021, respectively.

YEAR ENDED JUNE 30, 2023 COMPARED TO THE

YEAR ENDED JUNE 30, 2022

Total revenues were nil for both the years ended June 30, 2023 and 2022.

General and Administrative

Total general and administrative expenses

were $2,348,000 and $2,078,000 for the years ended June 30, 2022 and 2021, respectively.

General and administrative expenses, excluding

stock-based compensation charges of $269,000 and $850,000, were $2,079,000 and $1,228,000 for the years ended June 30, 2022 and 2021,

respectively, representing an $851,000 increase.

Salaries and related payroll tax expenses were $340,000 and $319,000, for the years ended

June 30, 2022 and 2021, respectively, representing a $21,000 increase.

Consulting costs were $561,000 and $391,000 for the years ended

June 30, 2022 and 2021, respectively.

The $170,000 increase in consulting costs is due to a general increase in the levels of Company’s

business activity without a large increase in the Company’s personnel including the consulting engagement with William O’Neill,

who is now the Company’s CEO, during the periods from July 1, 2021 through April 30, 2022 during which the Company paid $160,000

to secure his services ($25,000 was capitalized to the 3G project).

Investor relations expenses were $395,000 and $149,000 for the years

ended June 30, 2022 and 2021, respectively, and the $246,000 increase is due to the 2022 shareholder meeting and new contract with an

investor relations firm and increased activity during the year ended June 30, 2022 due to the resumption of investor conferences.

costs were $291,000 and $8,000 for the years ended June 30, 2022 and 2021, respectively, due to the hiring of a law firm to represent

the Company in a lawsuit for the hack and attempt to steal the Company’s domain, engaging a law firm on the dissolution of PA-1,

legal work in relation to corporate structure matters and preparation for the 2022 shareholder meeting and other matters.

General and administrative stock-based employee

compensation for the years ended June 30, 2022 and 2021 consists of the following:

General and administrative:

Change in fair value from modification of option terms

Change in fair value from modification of warrant terms

Fair value of stock options expensed under ASC 718

Stock-based compensation charges were $269,000

and $850,000 for the years ended June 30, 2022 and 2021, respectively.

The fair value of stock options expensed for the years ended June

30, 2022 and 2021 was $261,000 and $816,000, respectively.

The Company capitalized $136,000 in stock-based compensation to the 3G project

as of June 30, 2022.

The Company granted 730,000 options during the year ended June 30, 2022 which were fully vested at grant date, and

960,000 options during the period ended June 30, 2021, which were fully vested at grant date.

were $3,072,000 and $2,348,000 for the year ended June 30, 2023 and 2022, respectively.

Salaries and related payroll tax expenses were

$730,000 and $340,000 for the years ended June 30, 2023 and 2022, respectively, representing a $390,000 increase.

The increase is largely

due to the addition of Bill O’Neill (and administrative initiatives he has commenced), pay increases, and lower percentage of total

salaries capitalized to the Initial Project.

Consulting costs were $485,000 and $561,000 for the years ended June 30, 2023 and 2022, respectively.

The $76,000 decrease in consulting costs is due to the capitalization of a larger portion of Brightcap’s consulting expense to the

Initial Project in fiscal year 2023.

Investor relations expenses were $697,000 and $395,000 for the years ended June 30, 2023 and 2022,

respectively, and the $302,000 increase is due to a new contract with an investor relations firm and increased activity during the year

ended June 30, 2023 due to the resumption of investor conferences and other matters.

Legal costs were $83,000 and $291,000 for the years

ended June 30, 2023 and 2022, respectively, and the $208,000 decrease is due to less outside legal activities in the year 2023 compared

to the year 2022 in which legal fees surrounding the hack and theft of the Company’s domain name and the dissolution of PA-1 were

Stock-based compensation for the years ended June

30, 2023 and 2022 were $442,000 and $269,000, respectively.

Total depreciation expense was $1,645 and $1,161

$827 for the years ended June 30, 2022 and 2021, respectively.

for the year ended June 30, 2023 and 2022, respectively.

Research and Development

Total research and development expenses were $83,000

$201,000 and $749,000 for the years ended June 30, 2022 and 2021, respectively.

Research and development expenses, excluding stock-based

compensation charges of $22,000 and $202,000, were $179,000 and $547,000 for the years ended June 30, 2022 and 2021, respectively, representing

a $368,000 decrease largely resulting from completion of the bulk of the research and development work on our Gen3Tech as we shifted our

efforts to work on the Initial Project.

Salaries and related payroll tax expenses were $32,000 and $94,000 for the years ended June 30,

2022 and 2021, respectively, as more salary expense was allocated to administrative expense for the year ended June 30, 2022.

costs were $80,000 and $214,000 for the years ended June 30, 2022 and 2021, respectively.

The decrease in consulting is due to capitalizing

costs on the 3G project in 2022.

and $201,000 for the years ended June 30, 2023 and 2022, respectively, representing a $118,000 decrease due to less legal and salary expense

allocated to research and development and greater allocation to the Initial Project.

Salaries and related payroll tax expenses were

$9,000 and $32,000 for the years ended June 30, 2023 and 2022, respectively, as more salary expense was allocated to administrative expense

than research and development expense for the year ended June 30, 2023.

Consulting costs were $43,000 and $80,000 for the years ended

June 30, 2023 and 2022, respectively.

The Company also incurred $14,000 and $55,000 for the years ended June 30, 2023 and 2022, respectively

in legal costs related to patent applications and renewals.

The Company incurred $6,000 and $144,000 for the years ended June 30, 2022

and 2021, respectively in the development of new technologies for its anaerobic digestate process.

Research and development stock-based employee

compensation for the years ended June 30, 2022 and 2021 consists of the following:

Research and Development:

Fair value of stock options expensed under ASC 718

Stock-based compensation charges were $22,000 and

$202,000 for the years ended June 30, 2022 and 2021, respectively.

The Company granted 730,000 and 960,000 fully vested options during

the years ended June 30, 2022 and 2021, a portion of which were allocated to research and development.

Stock-based compensation allocated to research

and development for the years ended June 30, 2023 and 2022 were $4,000 and $22,000, respectively.

Loss from Operations

As a result of the factors described above,

the loss from operations was $2,550,000 and $2,828,000 for the years ended June 30, 2022 and 2021, respectively.

As a result of the factors described above, the

loss from operations was $3,157,000 and $2,550,000 for the years ended June 30, 2023 and 2022 respectively.

Other Income/(Expense)

Other (income) expense was ($10,841,000) and $623,000 for the years ended

June 30, 2022 and 2021, respectively.

The Company recognized a gain on the dissolution of PA1 of $10,235,000 and a gain of $902,000 for

the sale of a domain name.

Total interest expense of $302,000 and $658,000 was recorded during the years ended June 30, 2022 and 2021,

respectively.

Interest of $32,000 and nil was capitalized as part of the 3G project in property and equipment during the years ended June

30, 2022 and 2021, respectively.

Interest expense related to deferred

compensation, loan payable and convertible notes prior to capitalization of $32,000 to the 3G project was $334,000 and $472,000 for

years ended June 30, 2022 and 2021, respectively.

The $138,000 decrease is due the dissolution of PA-1 and no interest related to

the Pennvest loan during the last six months ended June 30, 2022.

Interest expense related to investor warrant modifications was nil

and $187,000 for year end June 30, 2022 and 2021.

Other income/(expense) was $(33,000) and $10,841,000

for the years ended June 30, 2023 and 2022, respectively.

The difference was due to the gains recognized in 2022 consisting of $10,200,000

on the dissolution of PA1 and $902,000 from the sale of a domain name.

Interest expense related to deferred compensation,

loan payable and convertible notes for the year ended June 30, 2023 was $218,000 prior to capitalization of $180,000.

Interest expense

related to deferred compensation, loan payable and convertible notes for the year ended June 30, 2022 was $334,000 prior to capitalization

The decrease is due to more interest being capitalized to the 3G1 project.

Net Loss Attributable to the Noncontrolling

The net loss attributable to the noncontrolling

interest was $1,500 and $2,800 for the years ended June 30, 2022 and 2021, respectively.

interest was nil and $1,500 for the years ended June 30, 2023 and 2022, respectively.

Net Income/(Loss) Attributable to Bion’s

Common Stockholders

As a result of the factors described above,

the net income (loss) attributable to Bion’s stockholders was $8,292,000 and ($3,448,000) for the years ended June 30, 2022 and

2021, respectively, and the net income (loss) per basic common share was $.20 and ($.10) for the years ended June 30, 2022 and 2021, respectively.

As a result of the factors described above, the

net income/loss attributable to Bion’s stockholders was $(3,189,000) and $8,292,000 for the years ended June 30, 2023 and 2022, respectively,

and the net income/(loss) per basic common share was $(.07) and $.20 for the years ended June 30, 2023 and 2022, respectively.

LIQUIDITY AND CAPITAL RESOURCES

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Cash expenditures were offset by proceeds from financing

activities, primarily the exercise of warrants.

As previously noted, the Company is currently not generating significant revenue and

accordingly has not generated cash flows from operations.

The Company does not anticipate generating sufficient revenues to offset operating

and capital costs for a minimum of two to five years.

While there are no assurances that the Company will be successful in its efforts

to develop and construct its Projects and market its Systems, it is certain that the Company will require substantial funding from external

Given the unsettled state of the current credit and capital markets for companies such as Bion, there is no assurance the Company

will be able to raise the funds it needs on reasonable terms.

activities, primarily the exercise of warrants and sale of common shares.

As previously noted, the Company is currently not generating

significant revenue and accordingly has not generated cash flows from operations.

The Company does not anticipate generating sufficient

revenues to offset operating and capital costs for a minimum of two to five years.

While there are no assurances that the Company will

be successful in its efforts to develop and construct its Projects and market its Systems, it is certain that the Company will require

substantial funding from external sources.

Given the unsettled state of the current credit and capital markets for companies such as Bion,

there is no assurance the Company will be able to raise the funds it needs on reasonable terms.

Investing Activities

During the year ended June 30, 2023, the Company

invested $2,062,000 in the purchase of property and equipment, primarily related to project construction in process.

During the year ended

June 30, 2022, the Company invested $666,375 in a non-cash purchase of equipment for accounts payable related to the June 6, 2022 notice

of completion of certain work in process and an invoice from Buflovak for the next 25% payment on the January 28, 2022 purchase order

related to the Initial Project.

The $666,375 was included in construction in process and accounts payable at June 30, 2022 and was paid

on July 5, 2022 bringing the aggregate payments to $1,999,125 as of the date of

invested $3,557,000 in the purchase of property and equipment, primarily related to the Initial Project construction in process.

Financing Activities

During the year ended June 30, 2023, the Company

received gross cash proceeds of $1,737,000 from the exercise of 2,315,550 warrants into shares of the Company’s common stock and

paid approximately $19,000 in cash commissions related to the exercise of warrants.

received gross cash proceeds of $131,335 from the exercise of 175,114 warrants into shares of the Company’s common stock.

During the year ended June 30, 2023, the Company entered into subscription

agreements to sell units for $1.00 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,

2024, and pursuant thereto, the Company issued 346,230 units for total proceeds of $346,230.

During the year ended June 30, 2023, the Company entered

into a subscription agreement to sell 2,000,000 shares of restricted common stock of which 1,800,000 shares were purchased

on January 10, 2023 (the other 200,000 shares were purchased on December 31, 2022) for total proceeds during year ending June 30, 2023

of $2,000,000.

During the year ended June 30, 2023, the Company entered

into subscription agreements to sell 575,000 units at a price of $1.60, with each unit consisting of one share of the Company’s

restricted common stock and one half warrant to purchase one share of the Company’s restricted common stock for $2.40 per share

with an expiry date of June 30, 2024, and, pursuant thereto, the Company issued 575,000 units for total proceeds of $920,000, in aggregate.

The Company paid commissions of $86,000 on the sale of units.

As of June 30, 2023, the Company has debt obligations

3 unchanged sentences

As of June 30, 2023, the Company had cash of approximately

The Company continues to explore sources of additional

financing to satisfy its current operating requirements as it is not currently generating any significant revenues.

During fiscal years

2022 and 2021, the Company has faced progressively less difficulty in raising equity funding (but substantial equity dilution has resulted

from 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 alleviated.

As a result, the Company has faced, and continues to face, significant cash flow management

challenges due to material working capital constraints.

To partially mitigate these working capital constraints, the Company's core senior

management and some key employees and consultants have been deferring all or part of their cash compensation and/or are accepting compensation

in the form of securities of the Company (Notes 5 and 7 to Financial Statements) and members of the Company's senior management have

from time to time made loans to the Company.

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.

As of June 30 2022, such

deferrals/loans totaled approximately $5,765,000 (including accrued interest and deferred compensation converted into convertible obligations

and convertible promissory notes but excluding conversions of deferred compensation into the Company's common stock by officers, employees

and consultants that have already been completed).

The extended constraints on available resources have had, and continue to have, negative

effects on the pace and scope of the Company's effort to develop its business.

The Company made reductions in its personnel during the

years ended June 30, 2014 and 2015 and again in 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 fiscal year (and subsequent periods), of which there

is no assurance, management will not need to consider deeper cuts (including additional personnel cuts) and curtailment of ongoing activities

including research and development activities.

The Company continues to explore sources of additional financing

to satisfy its current operating requirements as it is not currently generating any significant revenues.

During fiscal years 2023 and 2022, the Company faced less difficulty

in raising equity funding (but was subject to substantial equity dilution from the larger amounts of equity financing during the periods)

than was experienced in the prior 3 years.

However, this positive trend did not continue during the last quarter of the 2023 fiscal

year and first quarter of the current fiscal year (to date).

The Company raised only raised very limited equity funds during such periods

to meet its some of its immediate needs, therefore, the Company needs to raise additional funds in the upcoming periods.

The Company currently

faces substantial increases in demand for capital and operating expenditures for the fiscal year 2024 to date (and we anticipate such

increased demands will continue during the remainder of the 2024 fiscal year and periods thereafter) as it moves toward commercial implementation

of its 3G Tech and development of JVs (including costs associated with additions of personnel to carry out the business activities of

the Company) and, therefore, is likely to continue to face, significant cash flow management issues due to limited capital resources and

working capital constraints which had only recently begun to be alleviated.

As a result, the Company has faced, and continues to face,

significant cash flow management challenges due to material working capital constraints.

To partially mitigate these working capital

constraints, the Company's core senior management and some key employees and consultants have been deferring most of their cash compensation

and/or are accepting compensation in the form of securities of the Company (Notes 5 and 7 to Financial Statements) and members of the

Company's senior management have from time to time made loans to the Company and may need to do so in future periods.

Note that, to deal

with earlier capital constraints, 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.

in detail elsewhere herein, during the year ended June 30, 2023 senior management (and family members) who held convertible obligations

of the Company adjusted the terms of their outstanding notes and agreed to debt modifications that reduced of the Company’s debt

by $3,522,000 and increased shareholders equity by the same amount.

The constraints on available resources have had, and continue 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 raise

needed funds during the remainder of the current fiscal year (and subsequent periods), of which there is no assurance, management will

not need to consider deeper cuts (including additional personnel cuts) and/or curtailment of ongoing activities including research and

development activities.

The Company will need to obtain additional capital

to fund its operations and technology development, to satisfy existing creditors, to develop the Initial Project, JVs, Projects (including

Integrated Projects) and CAFO Retrofit waste remediation systems (potentially including the Kreider 2 facility.

The Company anticipates

that it will seek to raise from $20,000,000 to $80,000,000 or more (debt and equity) during the next twelve months.

However, as discussed

above, there is no guarantee that we will be able to raise sufficient funds or further capital for the operations planned in the near

to fund its operations and technology development, to satisfy existing creditors, to develop the Initial Project, JVs, Projects and CAFO

Retrofit waste remediation systems (potentially including the Kreider 2 facility.

The Company anticipates that it will seek to raise from

$20,000,000 to $80,000,000 or more (debt and equity) during the next twelve months.

However, as discussed above, there is no guarantee

that we will be able to raise sufficient funds or further capital for the operations planned in the near future.

The Company is not currently generating any significant

3 unchanged sentences

the Company raised gross proceeds of approximately $4,038,000 through the sale of its securities and paid commissions of approximately

$165,000, and anticipates raising additional funds from such sales and transactions.

During the year ended June 30, 2022 the Company

raised gross proceeds for approximately $1,737,000 and paid commissions of approximately $18,600.

However, there is no guarantee that

we will be able to raise sufficient funds or further capital for the operations planned in the near future.

Because the Company is not currently generating significant

revenues, the Company will need to obtain additional capital to fund its operations and technology development, to satisfy existing creditors,

to develop the Initial Project and subsequent Projects.

As indicated above, the Company anticipates that

it will seek to raise from $20,000,000 to $80,000,000 or more (from debt, equity, joint venture, strategic partnering, etc.) during the

next twelve months, some of which may be in the context of joint ventures for the development of one or more large scale projects.

reiterate that there is no assurance, especially in the extremely unsettled capital markets that presently exist for companies such as

Bion, that the Company will be able to obtain the funds that it needs to stay in business, finance its Projects and other activities,

continue its technology development and/or to successfully develop its business.

See “ Pennvest Loan and Bion PA1 LLC

(“PA1”) Dissolution ” above and the Company’s Forms 10-K for the year 2009-2021 for discussion and more

details related to the dissolution of PA1, the Pennvest Loan and the Kreider 1 project.

During the year ended June 30, 2022 the Company raised gross proceeds for approximately $1,737,000 and paid commissions of approximately

The Company anticipates raising additional funds from such sales and transactions in the coming periods.

However, there is

no guarantee that we will be able to raise sufficient funds or further capital for the operations planned in the near future.

Because the Company is not currently generating

significant revenues, the Company will need to obtain additional capital to fund its operations and technology development, to satisfy

existing creditors, to develop the Initial Project and subsequent Projects.

As indicated above, the Company anticipates that it

will seek to raise from $20,000,000 to $80,000,000 or more (from debt, equity, joint venture, strategic partnering, etc.) during the next

twelve months, some of which may be in the context of joint ventures for the development of one or more large scale projects.

that there is no assurance, especially in the extremely unsettled capital markets that presently exist for companies such as Bion, that

the Company will be able to obtain the funds that it needs to stay in business, finance its Projects and other activities, continue its

technology development and/or to successfully develop its business.

See Item 2 below and Note 5 (“Pennvest Loan and Bion PA1 LLC (“PA1”)

Dissolution”) to the Financial Statements included in this report and the Company’s Forms 10-K for the year ended June

30, 2022 (and the years 2009-2021) for discussion and more details related to the dissolution of PA1, the Pennvest Loan and the

Kreider 1 project.

There is extremely limited likelihood that funds

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The lack of 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.

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 companies such as Bion.

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 companies such as Bion.

Covid-19 pandemic related matters:

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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.

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.

CONTRACTUAL OBLIGATIONS

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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:

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, 2023:

Year ended June 30, 2023

Year ended June 30, 2024

Year ended June 30, 2025

Year ended June 30, 2023 to June 2024

Year ended June 30, 2024 to December 2024

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.

Through 3G1 the Company is in the process of developing

the Initial Project.

See discussion above and in the Notes to our Financial Statements.

OFF-BALANCE SHEETS ARRANGEMENTS

The Company does not have any off-balance sheets arrangements (as that term

is defined in Item 303 of Regulation S-K) that are reasonably likely to have a current or future material effect on our financial condition,

revenue or expenses, results of operations, liquidity, capital expenditures or capital resources.

Less current portion

Long tern lease liability

The weighted average remaining lease term and discounted

rate related to the Company’s lease liability as of June 30, 2023 were 1.58 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.

OFF-BALANCE SHEET ARRANGEMENTS

The Company does not have any off-balance sheet arrangements

(as that term is defined in Item 303 of Regulation S-K) that are reasonably likely to have a current or future material effect on our

financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources.

Quantitative and Qualitative Disclosures About Market Risk.

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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 7. Management’s Discussion and Analysis