What changed in this filing

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Item 9A. Controls and Procedures

2023-09-28 compared with 2022-09-27 · 1917 added, 1776 removed, 1175 unchanged (76% of the section changed)

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Disclosure Controls and Procedures

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.

As of June 30, 2023, 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, 2023 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.

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, 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

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, 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

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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.

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 below.

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

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

On June 23, 2023, an officer of the Company

with personal accounts with Signature Bank was hacked and $75,000 was transferred from the Company’s accounts at Signature Bank

to the officer’s personal accounts.

The bank was notified and all Company accounts were placed on hold.

Subsequently, the funds

were released and transferred back to the Company prior to June 30, 2023 the end of the fiscal year and there were no losses incurred.

The Company has reviewed the authorized individuals

on all accounts and further limited access to its bank accounts after the hacking incident.

OTHER INFORMATION

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Secretary and Director

Executive Officer

William O’Neill

Chief Executive Officer

Dominic Bassani

Chief Operating Officer

Salvatore Zizza

Smith (73) currently serves

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Since mid-February 2003, Mr.

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.

Smith has served

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

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 of Bion.

Smith served as a director

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

in senior positions with Bion on a consulting basis.

Smith served 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 since 1980.

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

In addition, Mr.

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

LoTayLingKyur, Inc.

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

(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 (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:

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 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.

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.

Jon Northrop (80) has served as our

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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

through 2015 he held marketing and executive positions with a varity 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 a

in economics.

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and their financial sponsors.

(Bill) Rupp (62) has served as a director of the company since ___, 2023.He is a ‘meat industry leader’ who served

as President of JBS Beef from 2010-2016 with responsilibity for the leadership of JBS’s North American Beef business.

of Meyer Natural Foods from 2009-2010.

Rupp served in various management roles for Cargill Beef from 1983 until 2009 where he was

President from 1998-2008 with responsibility for Cargill’s global beef business with operations in US, Canada, Argentina, and Australia.

He graduated from the University of South Dakota with a B.S.

in Business Administration in 1983.

Mr Rupp salso serves on the boards of

Sustainable Beef, DecisionNext, Superior Lamb and Lumachain.

Zizza (77) Salvatore Zizza

has served as a director of Bion since 2023.

He is presently President of Zizza & Associates

a private holding company which invests in various industries and retired Chairman of BAM (Bethlehem Advanced Materials), which

designs and manufactures high-temperature furnaces for sale and for its own use in the processing of specialty carbon, graphite and ceramic

materials for semiconductor and aerospace applications, and Chairman of Bergen Cove Realty Inc., with substantial holdings in residential

Zizza serves as Director & Chairman of Trans-Lux Corporation, a full service provider of integrated multimedia systems

for today’s communications environments (since 2018) and served on board since 2009.

Zizza bought NICO Construction Company,

Inc., in 1978 and was President and CFO until 1985 when NICO merged with The LVI Group Inc., a (NYSE), listed company.

Prior to joining

The LVI Group Inc., Mr.

Zizza was an independent financial consultant and had been a lending officer of Chemical Bank.

Zizza is also

an investor in numerous private companies and real estate holdings.

Zizza currently holds directorship positions at nineteen

(19) Gabelli/GAMCO funds and trusts.

He has been associated with this family of investment funds for over thirty (30) years.

a Baccalaureate/Political Science, St.

John’s University (1967) and a Master of Business Administration, St.

John’s University

Zizza received a Doctor of Commercial Sciences (Honorary) from St.

Schafer (77) 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 Ingredients.

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.

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).

Since 2019 Mr.

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 is an adjunct professor 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 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.

Family Relationships

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

(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.

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;

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

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;

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

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EXECUTIVE COMPENSATION.

The Company does not have a compensation committee due to its small size

and limited resources.

The Company does not have a compensation committee

due to its small size and limited resources.

The Board of Directors directly reviews and authorizes all compensation matters.

2 unchanged sentences

to, or accrued for, each of our current executive officers during each of our last two fiscal years.

Summary Compensation

Name and Principal Position

Option Awards (2)

Non-Equity Incentive Plan

Compen- sation

Deferred Compensation Earnings

Other Compen -sation

Name and Principal

President and Chief

6 unchanged sentences

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 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 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.

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 (which date was extended to July 1, 2024).

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.

February 10, 2015, Mr.

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.

Bassani's annual salary will remain at $372,000 and 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% exercise price adjustment and the options

may be extended for an additional 5 years at $0.01 per share per extension year.

On May 1, 2022 William O'Neill joined the Company with an annual salary of $420,000 which includes $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.

Terms of the contract are thirty-seven months.

William O'Neill was previously paid as a contractor through Identifoods.

Total payments for the years ended June 30, 2023 and June 2022, respectively were $318,000 and $165,000.

Employment Agreements:

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.

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.

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, 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

temporarily reduced salary of $14,000 per month.

On February 10, 2015, the Company executed an Extension Agreement with Smith pursuant

to which Smith extended his employment with the Company to December 31, 2015 (with the Company having an option to extend his employment

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

principal amount of $760,519 with terms that 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 (which maturity date was subsequently extended to July 1, 2019).

Additionally, pursuant to the Extension Agreement, Smith:

i) continued to defer his cash compensation ($18,000 per month) until the Board of Directors re-instates cash payments to all employees

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

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,

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 temporarily reduced salary of $14,000 per month.

On February 10, 2015, the Company executed an Extension Agreement

with Smith pursuant to which Smith extended his employment with the Company to December 31, 2015 (with the Company having an option to

extend his employment 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 principal amount of $760,519 with terms that 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 (which maturity date was subsequently extended to July 1, 2019).

Additionally, pursuant to

the Extension Agreement, Smith:

i) continued to defer his cash compensation ($18,000 per month) until the Board of Directors re-instates

cash payments to all employees and consultants who are deferring their compensation, ii) cancelled 150,000 contingent stock bonuses

previously granted to him by 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, Mr.

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.

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

The Board appointed Bassani as the Company's CEO effective May 13, 2011 in which position he served until May 2022.

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, 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.

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 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).

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 15, 2015.

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.

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

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.

In consideration of these agreements, Bassani and Smith:

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.

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.

Effective July 15, 2012, the Company entered into a

deferral/employment/ compensation agreement with Schafer pursuant to which Schafer provided senior management services to the Company

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

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

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 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.

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.

a) have been granted 50% ‘execution/exercise’ price

adjustment (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 extended);

and c) other modifications were

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

William O’Neill

(“O’Neill”) joined 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

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.

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 were cancellable until O’Neill’s agreement was re-affirmed at 13 months and/or fails to serve the

entire contract term thereafter.

These warrants each have a 75% exercise price adjustment if the terms set forth therein are

As 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 have each agreed (multiple

times) to extend the maturity date of the outstanding 2020 Convertible Obligations and 2015 Convertible Notes (“CVObligations”)

set forth in the paragraphs above from December 31, 2017 (initial maturity date) to July 1, 2024 (current maturity date) which is also

the maturity date of all CV Obligations after adjustment.

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.

after conversion date with exercise price adjustment provision effective two years after the date on which the converted portion of the

CVObligations (as adjusted, if applicable) was accrued.

Other Agreements

37 unchanged sentences

Edward Schafer (1)

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

notice of intent to exercise.

(2) Options are subject to a 90% execution/exercise bonus upon

notice of intent to exercise.

(3) Options are subject to a 50% execution/exercise bonus upon

notice of intent to exercise.

William O’Neill (3)

Options are subject to a 75% execution/exercise price adjustment upon notice of intent to exercise under certain conditions.

Options are subject to a 90% execution/exercise price adjustment upon notice of intent to exercise under certain conditions.

Options are subject to a 50% execution/exercise price adjustment upon notice of intent to exercise under certain conditions.

Director Compensation

8 unchanged sentences

Director Compensation

Fees earned or paid in Cash ($)

Stock Awards ($)

Option Awards ($)(1)

Non-equity incentive plan compensation ($)

earned or paid in Cash ($)

Awards ($)(1)

incentive plan compensation ($)

Nonqualified deferred

compensation earnings ($)

All other compensation ($)

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.

Salvatore Zizza

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

CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

As of August 1, 2022, the Registrant had 44,120,320 shares of

common stock issued and 43,416,001 shares of common stock outstanding.

(the balance of 704,309 shares are owned by Centerpoint, the Company's

As of August 1, 2023, the Registrant had 49,408,214 shares

of common stock issued and 48,703,905 shares of common stock outstanding.

(balance of 704,309 shares are owned by Centerpoint, the Company's

majority-owned subsidiary).

5 unchanged sentences

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,

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, 2023.

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,

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 ‘Entitled to Vote’ is based upon 48,703,905 shares outstanding as of

August 1, 2023.

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.

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

18 unchanged sentences

Old Bethpage, NY 11804

Anthony Orphanos (7)

c/o Blacksmith Advisors, LLC

320 Park Avenue 18th Floor

New York, NY 10022

William O’Neill (8)

1 unchanged sentence

Petersburg, FL 3371

Craig Scott (9)

3131 North Daffodil Dr.

2 unchanged sentences

59 Chestnut Street

Westfield, New York 14787

Blacksmith Advisors, LLC

Park Avenue 18th Floor

York, NY 10022

Westfield, NY 14787

Salvatore Zizza (11)

641 Lexington Avenue, 20th Floor

New York, NY 10022

William Rupp (12)

Loveland, CO 80539

All executive officers and directors as a group (8 persons)

(1) Centerpoint Corporation is currently majority owned by the

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.

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.

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.

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

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

Includes 70,577 shares, 3,025,000 shares underlying options and 965,000 shares underlying warrants held directly by Mr.

464,644 shares and 250,000 shares underlying warrants held by Mr.

2 unchanged sentences

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.

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.

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) $459,277.02 principal amount of the Company’s Adjusted 2020 Convertible Obligation (“CVObligation”) which is convertible @ $.0953 into 4,819,277 shares and 3,214,458 warrants and, as a result, Danielle Lominy is the beneficial owner of 2,409,639 shares underlying conversion of the Adjusted CVObligation and 1,607,229 shares underlying the warrants issuable on conversion of the Adjusted CVObligation.

The total also includes:

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.

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

2,425,000 shares underlying options held directly by 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

a) 724,754 shares of common stock and 483,411 underlying warrants that could be issued on the conversion (at the election of Bassani) by Mr.

Bassani of a convertible note in the amount of $362,376, (convertible @ $0.50 price) and b) 265,693 shares of common stock that could be issued on the conversion (at the election of Bassani) by Mr.

Bassani of a convertible note in the amount of $159,416 (convertible @ $0.60 price) and c) 222,962 shares of common stock that could be issued on the conversion (at the election of Bassani) of Adjusted Convertible Note in the amount of $25,641 (convertible @$.115 price) and d) 627,577 shares of common stock that could be issued on the conversion (at the election of Bassani) of deferred compensation in the amount of $548,057.

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.

Includes 752,268 shares, 2,425,000 shares underlying options, 1,806,987 warrants held directly by Mr.

Smith, and 62,535 shares held by Mr.

Smith in an IRA.

Also includes 575,000 shares and 370,948 underlying warrants held by Mr.

Smith’s wife and 53,756 shares held in his wife’s IRA.

Also includes 12,681 shares of common stock held by 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.

Smith and his wife.

Also includes 971,492 shares and 971,492 warrants underlying units that could be issued on the conversion (at the election of Mr.

Smith) by 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 his Adjusted 2020 Convertible Obligation in the aggregate amount of $91,903.05.

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 $.0946 per unit.

Also includes 72,858 shares and 72,858 warrants underlying units that could be issued on the conversion (at the election of Mr.

Smith) by Mr.

Smith of his 2020 Convertible Obligation in the aggregate amount of $36,428.77.

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 $.50 per unit.

Also includes 53,556 shares of common stock that could be issued on the conversion (at the election of Mr.

Smith) of deferred compensation in the amount of $40,167.

Does not include shares and warrants owned by various family members

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

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.

(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.

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.

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

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 $2,255,500 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.

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 $459,277.02 principal amount of the Company’s Adjusted 2020 Convertible Obligations (“CVObligation”) which is convertible @$.0953 into 4,819,277 shares and 3,214,458 warrants.

As a result, Christopher Parlow is the beneficial owner of 2,409,639 shares underlying conversion of the CVObligation and 1,607,229 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, 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 $459,277.02 principal amount of the Company’s Adjusted 2020 Convertible Obligation (“CVObligation”) which is convertible @ $.0953 into 4,819,277 shares and 3,214,458 warrants.

As a result, Danielle Lominy is the beneficial owner of 2,409,639 shares underlying conversion of the CVObligation and 1,607,229 shares underlying the warrants issuable on conversion of the CVObligation.

Includes 158,254 shares held directly by Mr.

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

Also includes 1,070,021 shares and 535,011 warrants underlying units that could be issued on the conversion by Mr.

Schafer of his Adjusted Convertible Obligation in the amount of $101,973.

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 $.0953 per unit.

Also includes 36,918 shares of common stock that could be issued on the conversion (at the election of Mr.

Schafer) by Mr.

Schafer of his Adjusted September 2015 convertible note in the amount of $4,245.47.

The conversion price will be $.115 per share.

Includes 94,927 shares held directly by Mr.

156,750 shares underlying warrants held directly by Mr.

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

945 shares held jointly with his wife;

1,262,774 shares held in IRA accounts;

and 770,222 shares of common stock that could be issued on conversion of $462,133 convertible notes ($.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:

Not included are 1,021,303 common shares owned by certain clients of Blacksmith Advisors, over which Mr.

Orphanos exercises discretionary authority (which shares include:

68,000 shares owned by Danielle Lominy (formerly Danielle Bassani).

Orphanos disclaims beneficial

ownership of the shares listed in the preceding sentences because he has no pecuniary interest in the shares.

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

conversion price will be $0.60 per share.

Orphanos disclaims beneficial ownership of the shares listed in the preceding sentences because he has no pecuniary interest in the shares.

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, 500,000 shares underlying options held directly by Mr.

O’Neill and 10,888 shares held by Mr.

O’Neill’s wife, and 1,000,000 shares 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.

Includes 504,894 shares, 1,545,000 shares underlying options and 573,747 shares underlying warrants held directly by Mr.

The total also includes 40,011 shares of common stock that could be issued on the conversion (at the election of Mr.

Scott) of deferred compensation in the amount of $43,612.11.

Does not include

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

Includes 120,635 shares held directly by Mr.

Northrop and options to purchase 515,500 shares held by Mr.

Does not include shares or options owned by the adult children of Mr.

Northrop nor his former wife.

Includes 105,112 shares of common stock and 50,000 shares of common stock underlying options held directly by Mr.

Includes 50,000 shares of common stock underlying options and 75,000 shares of common stock underlying warrants held directly by Mr.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,

2 unchanged sentences

compensation arrangements and conversions of debt described above in Item 1 Business and Item 11 Executive Compensation, there are no

related party transactions except that:

No directors of the Company are considered to be independent

related party transactions.

Four directors of the Company (Jon Northrop, Ed Schaefer,

Salvatore Zizza and William Rupp) are considered to be independent directors.

PRINCIPAL ACCOUNTING FEES AND SERVICES.

1 unchanged sentence

as its independent registered public accounting firm.

The aggregate fees billed for the fiscal years ended June 30, 2022 and June

30, 2021 by Eide Bailly LLP for professional services rendered for the audit of the Company's annual financial statements and reviews

of interim financial statements included in the Company's quarterly reports on Form 10-Q (and related matters) were $74,000 and $56,800,

The aggregate fees billed for the fiscal year ended June 30, 2022 and June 30,

2023 by Eide Bailly LLP for professional services rendered for the audit of the Company's annual financial statements and reviews of

interim financial statements included in the Company's quarterly reports on Form 10-Q (and related matters) were $10,600 and $54,325,

respectively.

In December 2022 the Company engaged Haynie &

Company as its independent registered public accounting firm.

The aggregate fees billed for the fiscal year ended June 30, 2023 by Haynie

& Company for professional services rendered for the audit of the Company’s annual financial statements and reviews of the interim

financial statements included in the Company’s quarterly reports on Form 10-Q (and related matters) were $71, 000.

Audit Related Fees

1 unchanged sentence

fees in each of the last two fiscal years ended June 30, 2022 and June 30, 2021.

There were no fees billed by Haynie & Company

for audit-related fees in the last fiscal year ended June 30, 2023.

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, 2023 and June 30, 2022 were nil and nil, respectively.

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, 2022 and June 30, 2021 were nil and

$3,600, respectively.

by Haynie & Company for tax compliance and related services for the year ended June 30, 2023 were nil.

All Other Fees

8 unchanged sentences

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 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).

(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

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).

and Centerpoint Corporation 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).

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 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).

8 unchanged sentences

and Bright Capital, Ltd.

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

related to deferred compensation (Incorporated by reference to Exhibit 10.22 filed with Form 10SB12G on November 14, 2006).

Employment agreement with Mark A.

3 unchanged sentences

Employment agreement with Jeff Kapell (Incorporated by reference to Exhibit 10.26 filed with Form 10SB12G on November 14, 2006).

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,

Employment agreement with Jeremy Rowland (Incorporated by reference to Exhibit 10.27 filed with Form 10SB12G on November 14, 2006).

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).

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

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).

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)

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, 2006).

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).

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.

2 unchanged sentences

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)

(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)

(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).

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).

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).

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).

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).

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).

(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).

(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).

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).

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)

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).

(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).

(Incorporated by reference to Exhibit 10.1 filed with Form 8-K filed on May 3, 2022).

of Intent with Ribbonwire Ranch (July 20, 2022).

(Incorporated by reference to Exhibit 10.1 filed with Form 8-K filed on July 27,

Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 - Filed herewith electronically.

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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 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

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Inline XBRL Taxonomy Extension Presentation Linkbase Document

Cover Page Interactive Data File (formatted as Inline XBRL and contained

in Exhibit 101)

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

Our consolidated financial statements being filed

as part of this Form 10-K are filed on Item 8 of this Form 10-K.

All other schedules for which provision is made in the applicable

accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable,

and therefore have been omitted.

Report of Independent Registered Public Accounting Firm ( Eide Baily

Independent Registered Public Accounting Firm (Haynie & Company, PCAOB ID:

Report of Independent Registered Public Accounting Firm ( Eide Baily LLP ;

Denver, CO, PCAOB ID:

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

To the Board of Directors and

Stockholders of Bion Environmental Technologies, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance

sheet of Bion Environmental Technologies, Inc.

(the Company) as of June 30, 2023 and the related consolidated statements of operations,

changes in stockholders’ equity (deficit), and cash flow for the year then ended June 30, 2023, and the related notes (collectively

referred to as the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the financial

position of the Company as of June 30, 2023 and the results of its operations and its cash flow for the year then ended June 30, 2023,

in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying financial statements have been prepared

assuming that the Company will continue as a going concern.

As discussed in Note 1 to the financial statements, the Company has yet to

generate any revenue and has suffered recurring losses from operations.

These factors raise substantial doubt about its ability to continue

as a going concern.

Management’s plans in regard to these matters are also discussed in Note 1.

The financial statements do not

include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility

of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are

required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and

regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards

of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements

are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform,

an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding of internal

control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal

control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess

the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond

to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating

the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit 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 our especially

challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the

financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions

on the critical audit matter or on the accounts or disclosures to which they relate.

Equity Transactions

As discussed in Note 6 and Note 7 to the financial

statements, the Company has numerous equity-based agreements, including stock options and warrants issued for services and debt convertible

into units (which include common stock and warrants).

These agreements require management to estimate the value of options and warrants

issued for services on the measurement date or include complicated calculations when debt is converted to equity.

During the year ended

June 30, 2023, the Company recorded stock-based compensation expense of $249,744, warrants issued for services of $62,563, warrant modifications

of $154,932, and a $186,462 of debt converted to common stock.

Our audit procedures required a significant amount

of time performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial

Those procedures included gaining an overall understanding of the Company’s process for estimating fair value and the

related calculations.

We read the related equity-based agreements verifying the terms of each agreement to the Company’s calculations

and ensuring the mathematical accuracy.

We evaluated the assumptions used by management to develop their estimates and considered the

relevant accounting guidance.

/s/ Haynie & Company

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

Salt Lake City, Utah

September 28, 2023

Report of Independent Registered Public Accounting

To the Board of Directors and Stockholders

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(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”).

and the related consolidated statements of operations , changes in stockholders’ equity

(deficit), and cash flows, for the year 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

as of June 30, 2022, 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.

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Our responsibility is to express an opinion on these financial statements

based on our audits.

based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB")

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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.

audit 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 audit 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.

Our audits included

Our audit included

performing procedures to assess the risk of material misstatement of the financial statements, whether due to error or fraud, and performing

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in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management,

Our audit 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

We believe that our audit provides a reasonable basis for

Critical Audit Matter

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September 27, 2022

BION ENVIRONMENTAL TECHNOLOGIES,

BION ENVIRONMENTAL TECHNOLOGIES, INC.

AND SUBSIDIARIES

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Accounts payable and accrued expenses

Series B Redeemable

Convertible Preferred stock, $ 0.01

par value, 50,000

shares authorized;

shares issued and outstanding, liquidation preference of $ 0

and $ 40,000 ,

respectively (Note 7)

Deferred compensation (Note 4)

Loan payable and accrued interest (Note 5)

Operating lease liability, current (Note 9)

Total current liabilities

Operating lease liability

Operating lease liability, long term (Note 9)

Convertible notes payable - affiliates (Note 6)

Total liabilities

Bion's stockholders' equity (deficit):

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, 250,000,000 and 100,000,000 shares authorized respectively, 43,758,820 and 41,315,986 shares issued, respectively;

Equity (deficit):

Common stock, no

par value, 250,000,000

shares authorized, 48,044,790

and 43,758,820

shares issued, respectively;

and 43,054,511

shares outstanding, respectively

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( 124,047,548 )

Total Bion's stockholders’ deficit

( 11,445,456 )

Total Bion's stockholders’ equity (deficit)

Noncontrolling interest

Total deficit

( 11,406,339 )

Total equity (deficit)

Total liabilities and deficit

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Operating expenses:

General and administrative (including stock-based compensation (Note

Research and development (including stock-based compensation (Note 7))

General and administrative (including stock-based compensation)

Research and development (including stock-based compensation)

Total operating expenses

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Other (income) expense:

Forgiveness of debt

Interest income

Interest expense

Gain on sale of domain (Note 9)

Gain on legal dissolution of subsidiary (Note 5)

Gain on sale of domain

Gain on legal dissolution of subsidiary

( 10,234,501 )

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See notes to consolidated financial statements

BION ENVIRONMENTAL TECHNOLOGIES,

BION ENVIRONMENTAL TECHNOLOGIES, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF

CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

YEARS ENDED JUNE 30, 2022

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS'

EQUITY (DEFICIT)

YEARS ENDED JUNE 30, 2022 AND 2021

Bion's Stockholders'

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Series C Preferred Stock

Additional paid-in

Subscription Rec-

-eivables for

Noncontrolling

paid-in capital

-eivables for Shares

equity/(deficit)

Balances, July 1, 2021

( 132,339,873

$ ( 128,891,893 )

$ ( 15,087,958 )

Sale of units

Commissions on sale of units

Vesting of options for services

Modification of options

Modification of warrants

Issuance of warrants

Warrants exercised for common shares

Sale of common shares

Issuance of units for services

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

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( 124,047,548

$ ( 504,650 )

$ ( 124,047,548 )

Sale of units

Sales of common stock

Warrants exercised for common shares

Issuance of units for services

Issuance of warrants for services

Conversion of debt and liabilities

Vesting of options for employees and services

Commissions on sale of units

Modification of warrants - non-cash comp

Modification of warrants - interest

Debt modification

Balances, June 30, 2023

( 127,236,663

See notes to consolidated financial statements

BION ENVIRONMENTAL TECHNOLOGIES,

BION ENVIRONMENTAL TECHNOLOGIES, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF

YEARS ENDED JUNE 30, 2022

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED JUNE 30, 2023 AND 2022

CASH FLOWS FROM OPERATING ACTIVITIES

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$ ( 3,189,115 )

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Adjustments to reconcile net loss to net cash used in operating activities:

Gain on legal dissolution of subsidiary

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Depreciation expense

Forgiveness of debt

Accrued interest on loans payable, deferred compensation and other

Stock- based compensation

Stock-based compensation for services

Modification of warrants

Warrants issued for compensation for services

Decrease (increase) in prepaid expenses

Increase (decrease) in deposits in other assets

Increase (decrease) in accounts payable and accrued expenses

Decrease in operating lease assets and liabilities

Decrease (increase) in operating lease assets and liabilities

Increase in deferred compensation

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( 3,557,059 )

( 2,062,155 )

Net cash used in investing activities

( 3,557,059 )

( 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

Proceeds from sale of warrants

Commissions on sale of warrants

Commissions on sale of units

Proceeds from sale of common shares

Redemption of Preferred Series B shares and interest

Net cash provided by financing activities

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( 2,534,478 )

( 1,055,879 )

Cash at beginning of year

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Non-cash investing and financing transactions:

Adjustment for debt modification

Conversion of debt and liabilities into common units

Warrants issued for unit commissions

Shares issued for warrant exercise commissions

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 debt and liabilities into notes payable

Conversion of deferred compensation to notes payable

Capitalized interest in property and equipment

Shares issued for warrant exercise commissions

Purchase of property and equipment for accounts payable

See notes to consolidated financial statements

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YEARS ENDED JUNE 30, 2023 AND 2022

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.

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

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”) utilizing a joint venture/strategic partner

We believe our approach will improve the well-being of farmers, ranchers, feeders, etc.

we work with and create value for our shareholders

while improving the environment.

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.

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

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.

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).

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 .

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 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).

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”).

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.

Our business plan is focused on executing

multiple agreements and letters of intent related to additional sustainable beef JV projects over the next twenty-four (24) months while

moving forward with the Initial Project (see below) and commencing development of one or more of the Dalhart/Olson/DVG Projects (“LOI

Projects”)(and/or other Gen3Tech beef JV projects) while pursuing other opportunities in the livestock industry enabled by our Gen3Tech

business model.

The LOI announcements have generated significant interest within the livestock industry (among ranchers, feedlot

operators, farmers and other AG industry parties) and has led to and assisted our discussions with many major of the larger agriculture/livestock

industry companies (including those involved with distribution and/or sales of meat products) in the country which are ongoing at this

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 at a rapid pace.

During the past nine months, the Company has constructed

(construction is largely completed) our 3GTech Ammonia Recovery System (‘ARS’) located near Fair Oaks, Indiana and begun operations

of phase 1 of our Initial Project (our commercial scale demonstration facility) located near Fair Oaks, Indiana.

We recently announced

that announced the ARS has achieved and maintained controlled steady-state operations under a variety of conditions.

When operated at

steady state, the system produces an ammonium distillate (solution), the base of Bion’s nitrogen fertilizer products.

Bion has begun

optimizing the ARS’s operating parameters with the goal of meeting and/or exceeding the results needed for Bion’s economic

models for large-scale commercial projects.

The Company expects the current optimization phase will continue during the next quarter (or

longer) and provide data required to support final design/engineering for commercial project modules.

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).

The patented ARS is the core of Bion’s Gen3Tech

It recovers and upcycles problem ammonia contained in the effluent from anaerobic digestion (where methane is captured

and more ammonia is released) of the livestock manure waste stream.

The ARS captures the ammonia, minimizing its environmental impacts

and creating low-carbon and/or organic nitrogen fertilizer products with it.

Over during the next quarter, the Company intends to produce

ammonium distillate at Fair Oaks in several concentrations and initiate the application process for organic certification for each concentration

of liquid fertilizer product.

Bion will produce a solid/granular nitrogen fertilizer product at the Initial Project (when the

crystalizer module is ready for operation) which we believe will be both ‘Climate-Smart’ and ‘Water-Smart’ –

a pure nitrogen fertilizer with a low carbon footprint, that is water soluble and readily available to plants.

Samples of the granular

product will also be utilized to support organic certification applications.

See Fertilizer---Organic and ‘ClimateSmart’

During the next three - 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) development/construction

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

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 plan 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

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

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

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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:

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.

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

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Meat and Impossible Burger (and many others) being marketed as “sustainable” alternatives for this growing consumer segment

of the market.

of the market (despite the lack of verifiably sustainable attributes).

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, 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).

Each of these two distinct market segments (which the Company intends to pursue in parallel) presents a large

production/marketing opportunity for Bion.

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).

conventional 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).

Each of these two distinct market segments (which the Company intends to pursue in parallel)

presents a production/marketing opportunity for Bion (but the former is far larger).

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 2022-23, the Company entered into 3 LOIs setting

forth the parties’ intention to negotiate joint venture agreement (“JVA”) and enter into joint ventures (“JV”)

to develop and operate 15,000 head integrated, sustainable beef facilities (with future expansion under consideration) including:

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,

‘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,

a Bion Gen3Tech module (which will utilize the recycled CO2 to increase ammonia nitrogen/ammonium bicarbonate recovery) for the production of ammonia nitrogen fertilizer for use in organic and/or ‘ClimateSmart’ low carbon crop production (plus residual organic solids and clean water),

which will produce verifiably sustainable beef products with USDA certified branding.

The opportunity presented by the LOIs 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 a reality as soon as possible.

To place the LOI Projects in the context of Company’s

business plan (and our prior public disclosure), if the contemplated ventures moves forward on the timelines currently contemplated, active

development of the the initial LOI Project will commence during 2024.

Prior to such activity, the Company has constructed

and commenced operate of the initial phase of our previously discussed Gen3Tech demonstration project near Fair Oaks, Indiana (“Initial

i) to validate our existing data and modeling at commercial scale and ii) to optimize the Bion Gen3Tech module for finalization

of design parameters and fabrication details of our planned 15,000 head commercial facilities (including the LOIProjects).

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).

of this initial phase, the Company, in order to accelerate the data acquisition phase, is utilizing anaerobic digester effluent from the

nearby/contiguous Fair Oaks dairy.

Thereafter, the Company will evaluate what, if any, additional facilities and testing will take place

at that location.

The Initial Project is not being developed at economic

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all being critical steps that must be accomplished before developing large projects with JV partners.

Specifically, the Initial Project is being developed

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 design work.

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

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 is large enough to demonstrate engineering capabilities of

Bion’s Gen3Tech at commercial scale, but small enough that it can be constructed and commissioned relatively quickly.

construction and onsite assembly operations were targeted to commence sometime late in 2022, however, supply chain backlogs (many pandemic-associated)

delayed delivery dates for core modules of the Bion system to the site until during January 2023.

Construction has been substantially

completed related to Phase 1 of the Initial Project, shakedown operations undertaken and the operation is now focused on optimization

of operation parameters.

See Note 3 “Property and Equipment” and Note 12 “Subsequent Events” (for activities since

the start of the first quarter of the 2024 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 was designed/developed

to provide and/or accomplish the following:

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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”) in liquid and solid forms for commercial testing by potential joint venture partners and/or purchasers, for university growth trials and to provide samples (and related documentation) to support applications for organic and/or ‘ClimateSmart’ certifications.

Produce sustainable beef products for initial test marketing efforts.

On January 28, 2022 Bion

Environmental Technologies, Inc.

(‘Bion’), on behalf of Bion 3G1 LLC (‘3G1’), a wholly-owned subsidiary, entered

into a Purchase Order Agreement with Buflovak and Hebeler Process Solutions (collectively ‘Buflovak’) in the amount of $ 2,665,500

(and made the initial 25 % payment ($ 666,375 ) for the core of the ‘Bion System’ portion (without the crystallization

modules which will be ordered and fabricated pursuant to subsequent agreements) of the previously announced 3G Tech Initial Project.

Purchase Order encompasses the core of Bion’s 3G Technology.

Subsequent agreements were executed with engineering firms, contractors

and other entities related to the construction of the Initial Project.

The Company received progress billing in March 2022 and June 2022

for the second and third 25 % installments, both of which have been paid as of the filing date.

On January 17, 2023 the Company received

an invoice from Buflovak for $ 533,100 which was paid on March 1, 2023 and on April 24,203 for $ 83,275 which was paid on May 2, 2023 bringing

the aggregate payments to $ 2,615,500 as of the date of this filing.

There remaining $ 50,000 open on the Purchase Order has been billed

on July 26,2023.

In addition to the Purchase Order, the Company has incurred additional costs of $ 4,182,260 on the Initial Project for

capitalized interest and costs, non-cash compensation and consulting fees.

$ 3,962,207 has been paid and $ 220,053 has been billed and not

yet been paid.

The Initial Project will be carried out in stages

with phase one focused on portions of items i.

with phase one focused largely 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.

Initial Project (coupled with obtaining organic certifications(s) for our liquid and/or solid ammonium bicarbonate fertilizer product

lines), Bion expects to be ready to move forward with its plans for development of much larger facilities including the LOI Projects,

including final design of its Gen3Tech modules.

The Company anticipates that discussions and negotiations it has begun (together with

additional opportunities that will be generated over the next 12-24 months) regarding potential JVs with strategic partners in the financial,

livestock and food distribution industries to develop large scale projects will continue during the optimization operations of the Initial

Project with a 2024 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.

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 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.

Company will determine whether to complete the entire Initial Project as originally designed at that location or the relocate the core

modules to an alternative permanent location.

The Company has engaged in discussion with the University of Nebraska-Lincoln to jointly

develop an integrated beef facility based on Bion’s Gen3Tech and business model at its Klosterman Feedyard Innovation Center (“KFIC”)

(or other mutually agreed upon location) which facility would 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

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 will also evaluate 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 and/or

other locations.

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 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 “ Fertilizer– Organic and ‘ClimateSmart’ ” below.

Additionally, the Company believes there will also

be opportunities to proceed with selected ‘retrofit projects’ of existing facilities (see ‘ Gen3Tech Kreider 2

Poultry Project’ below as an example) in the swine, dairy and poultry industries utilizing our Gen3Tech.

Bion believes that substantial unmet demand currently

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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.

Foods, etc.) have shown that a large, but apparently limited, segment of consumers is choosing seemingly sustainable offering, and are

also willing to pay a premium for it.

Tyson Foods, in the context of launching its Brazen beef initiative, recently said, “consumers

would be willing to pay at least 24 percent more for environmentally friendly, sustainable options at retail.” 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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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’ products

that can participate in the growth and premium pricing that appears to be readily available for the ‘right’ products.

platform, along with its business model, will enable the cleanup of one of the ‘dirtiest’ parts of the food supply chain:

animal protein 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’

Bion believes that at least a premium segment of the

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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.

terms, beef was 63% more expensive in 2021, while pork and chicken, which are now primarily raised in covered barns at CAFOs with highly

integrated supply chains, were 12% and 62% cheaper, respectively.

In recent years, the beef industry has come under increasing fire

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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 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, 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.

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 also recently entered the plant protein space.

While meat alternatives, especially plant-based protein producers

like Beyond Meat and Impossible Foods, have been heavily promoted (by themselves and the media) and enjoyed remarkable initial sales growth,

recently, sales have flattened and/or declined over the past 18 months.

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---and market growth rates have substantially slowed

and may have already plateaued and/or peaked.

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.

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).

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.

Sustainability initiatives have been launched

by large US livestock producers (including Tyson’s very recent ‘Brazen’ program), but it is not yet possible to determine

the extent the attributes of such products will be substantive and verifiable rather than completely ‘modeled’ and largely

public relations ‘greenwashing’.

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.

there is a potentially very large opportunity to supply premium sustainable beef products that satisfy 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 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.

Sustainable Beef

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.

Bion’s goal is to be one of the ‘first

to market’ with meaningfully verified sustainable beef products that can be produced at sufficient scale to service national market

The cattle produced at Bion facilities will have a substantially lower carbon footprint, dramatically reduced nutrient impacts

to water, 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 will be comprised

of covered barns with slotted floors (allowing the waste to pass through) which will reduce ammonia and greenhouse gas volatilization

and loss, as well as odors, thereby improving animal health and human working conditions while preventing air/soil pollution.

will be collected and moved directly to 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 geographical locations

with adequate sunshine and appropriate ‘tariffs’) 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

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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.

livestock chain) in procurement by major beef processing companies (including Tyson’s very recent ‘Brazen’ program),

but a closer look finds that many have consisted 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.

Sustainable Organic Beef

Bion believes it has a unique opportunity to produce,

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 Gen3Tech platform.

Bion believes its meat products will meet consumer demands with respect to sustainability and safety (organic)

and provide the tenderness and taste American consumers have come to expect from premium conventional American beef.

Such products are

largely unavailable in the market today.

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

Bion also believes it may also have a unique opportunity

to produce, 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 Gen3Tech platform.

Bion believes its meat products will meet consumer demands with respect to sustainability and safety

(organic) and provide the tenderness and taste American consumers have come to expect from premium conventional American beef.

Such products

are largely unavailable in the market today.

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

This organic opportunity is dependent on successfully establishing Bion’s fertilizer products as acceptable for use

in organic grain production.

Today, organic beef demand is limited and mostly supplied

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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

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 and ‘Climate Smart’

The Company has focused a large portion of its activities

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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

form of low carbon and/or organically certified soluble nitrogen fertilizer products.

The Company’s low concentration ammonium bicarbonate

liquid product successfully completed its Organic Materials Review Institute (“OMRI”) application and review process with

listing approval during May 2020.

During the next 3-4 months the Company intends to file applications with OMRI and the California Department

of Food & Agriculture (“CDFA”) for a line of higher concentration liquid ammonium nitrogen products ( ranging from 6%

up to 16% (or higher)) based on production of liquid samples during operation of the Initial Project over the next 2 months.

anticipates applying for and obtaining one or more listings/certifications for higher concentration products in our liquid ammonium nitrogen

fertilizer line well prior to operational dates for the Company’s initial large scale JV Gen3Tech Sustainable Beef Projects.

Additionally, the Company intends to explore the market

potential for its fertilizer (in liquid and/or solid forms) to be a verifiably ‘ClimateSmart’ product (potentially a much

larger market than the organic market) with focus on higher value specialty crops.

This will require working with industry and academic

entities to develop appropriate metrics and producing a ‘life cycle assessment’ (LCA) for Bion’s ammonium nitrogen fertilizer

product which can be compared to conventional nitrogen fertilizer products.

Bion’s processes will capture and utilize CO2 in the

waste stream (including CO2 produced with the renewable natural gas (RNG) by anaerobic digestion that is usually vented to the atmosphere)

as stabilizing agent thereby potentially creating carbon offsets compared to natural gas utilized as feedstock in chemical ammonia production

which reduction will be reflected in the LCA.

This LCA will assess environmental impacts associated with fertilizer production in support

of the beef cattle supply chain for both the existing conventional approach (primarily fossil fuel-based Haber-Bosch production methods)

and the largely decarbonized Bion production approach.

We believe a series of coincident yet significant LCA benefits accrue from Bion’s

patented fertilizer production approach including the reduced loss of ammonia to the environment via air (volatilized) and water (nitrate

in groundwater) pathways, recycled/reused water, elimination of pathogens, the production of renewable natural gas, the production solar

energy from photovoltaic panels on barn roofs, enhanced animal welfare practices and reduced animal husbandry risks from extreme weather

Bion believes that current evaluations of the carbon impact from feedlot operations materially underestimate the negative impacts

because existing models do not properly include significant ‘downstream’ carbon impacts of required energy intensive waste

water treatment for re-deposited ammonia nitrogen.

If the Company determines there is a significant ‘ClimateSmart’ opportunity

for our fertilizer products, such an LCA can be completed (based in part on data from the Initial Project) and support marketing efforts

well prior to operational dates for the Company’s initial large scale JV Gen3Tech projects.

Ammonium bicarbonate, manufactured using thermal and

mechanical processes, has a long history of use as a fertilizer.

In addition to liquid ammonium nitrogen fertilizer, Bion’s Gen3Tech

is capable of recovering nitrogen in the form of solid ammonium bicarbonate products containing up to 18%-22% (or higher) nitrogen in

a crystalline form that is easily transported (while producing liquids with various percentages of ammonium bicarbonate nitrogen during

interim stages of the process).

This solid product is water soluble and provides a readily available nitrogen source for crops.

contain virtually none of the other salt, iron and mineral constituents of the livestock waste stream that often accompany other organic

This product is being developed to fertilizer industry standards so that it that can be precision-applied to crops using

existing equipment.

Bion believes that this product will potentially have broad applications in the production of organic and/or ClimateSmart

grains for livestock feed, row crops, horticulture, greenhouse and hydroponic production, and potentially retail lawn and garden products.

The ammonium bicarbonate products (liquid and solid)

produced by Bion’s Gen3Tech platform will enjoy a dramatically lower carbon footprint than synthetic nitrogen fertilizers.

of the reactive nitrogen captured and upcycled into our fertilizer products was going to be lost through volatilization and runoff, and

that loss would generally need to be offset with a synthetic nitrogen fertilizer, such as anhydrous ammonia or urea.

These synthetic nitrogen

products are produced through the Haber-Bosch (and other) synthetic processes, which converts hydrogen and atmospheric nitrogen to ammonia,

with methane from fossil fuels as the energy source.

It is an extremely energy-intensive process with a carbon footprint that, while not

yet fully understood, is widely accepted to by very large.

While a complete Life Cycle Assessment (LCA) of carbon impacts from synthetic

fertilizer production is not yet available, according to the Institute for Industrial Productivity, its production alone is responsible

for approximately 1 percent of total global CO2 emissions.

To the extent that Bion can capture and repurpose the nitrogen traditionally

lost from livestock waste, that carbon cost will no longer need to be paid by the environment/climate.

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.

ammonia, soluble nitrogen fertilizer product line were filed with OMRI (filed during May 2021) and CDFA (filed during May 2022) without

success to date.

After an extended review processes (which was largely opaque), the OMRI application proceeded through multiple stages

without receiving a positive result.

We have initiated an informal dialogue with CDFA regarding the basis for and re-consideration of

its initial determination and anticipate submitting additional supporting materials to CDFA during the next 30 days.

The Company’s

solid product line is novel (in the context of organic certification) in part due to the fact that no formal listing category currently

in the organic space 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 produces it.

There is also no clear guidance at present

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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.

representatives, along with a number of other organic fertilizer stakeholders, are involved in discussions regarding resolution of these

matters at all three levels.

The Company intends to continue efforts to obtain listing/certification for its solid nitrogen fertilizer

line over the course of this fiscal year.

Gen3Tech 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.

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 (“PA2”).

Now that development of the Company’s Gen3Tech is being deployed, the Company has commenced discussions with KF regarding updating

and amending the JV agreement and anticipates executing an amended joint venture agreement during 2023.

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

The Company anticipates that if and when new designs are finalized utilizing our Gen3Tech, 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).

Note 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 anticipates if and when PA2 re-commences work on the Kreider 2 Project, it will submit a

new application based on our Gen3Tech.

Site 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.

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.

Note that while 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:

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’,

the Covid-19 pandemic has delayed legislative efforts needed to commence its development.

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 Gen3Tech Kreider2

Project (and other potential projects) to enable Pennsylvania to move forward toward meeting its Chesapeake Bay clean-up goals.

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,

and the sustainability it enables, is largely dependent upon generating sufficient additional revenues to offset the capital and operating

costs associated with technology adoption.

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.

In the absence of firm regulatory mandates, widespread

deployment of waste treatment technology, and the sustainability it enables, is largely dependent upon generating sufficient additional

revenues to offset the capital and operating costs associated with technology adoption.

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 and/or certified as

‘ClimateSmart’.

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 above and 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.

The Company has additional applications pending and/or planned.

Bion’s business model and technology platform

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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.

segment of the livestock industry to bring animal protein production in line with 21 st Century consumer demands for meaningful

sustainability.

(according to the USDA’s 2017 agricultural

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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 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

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.

More than half of the nitrogen impacts from livestock

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back to the ground through atmospheric deposition — it ‘rains’ everywhere.

While some of this nitrogen is captured and used

by plants, most of it runs off and enters surface waters or percolates down to groundwater.

It is now well-established that most of the

voluntary conservation practices, such as vegetated buffers that ‘filter’ runoff (often referred to as “BMPs”

While some of this nitrogen is captured and

used by plants, most of it runs off and enters surface waters or percolates down to groundwater.

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

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Whether airborne or dissolved in water, ammonia can only

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.

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.

High phosphorus concentrations in soils fertilized

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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

The Company’s audited financial statements

have been prepared assuming the Company will continue as a going concern.

The Company has not generated significant revenues and

generated/incurred a net income of $ 8,292,000

for the year ended June 30, 2022 and a net loss of approximately $ 3,189,000

during the year ended June 30, 2023.

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.

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 net income for the year ended June 30, 2022 was largely due to a one-time, non-cash event

of the dissolution of PA-1 resulting in a gain of approximately $ 10,235,000

as well as a one-time gain of $ 902,000

from the sale of the Company’s ‘biontech.com’ domain pursuant to a purchase agreement during the period.

30, 2023, the Company has a working deficit and a stockholders’ equity of approximately $ 968,000

and $4,194,000, respectively.

During the year ended June 30, 2023 the Company had debt modifications that resulted in a reduction of

debt of $ 3,522,000

and an increase in equity in the same amount.

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.

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

operating and capital expenditure requirements as it is not currently generating any significant revenues.

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 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 continues to explore sources of additional 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, 2023 and 2022, the Company received

gross proceeds of approximately $ 4,038,000 and $ 1,737,000 , respectively, from the sale of its debt and equity securities.

paid commissions on the exercise of warrants in the amount of $ 86,000 and $ 19,000 in 2023 and 2022, respectively.

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.

As set forth 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 Projects (including operations at the Initial Project, JV Projects

(including the Dalhart/Olson/DVG Projects), and the Kreider 2 facility) and CAFO Retrofit waste remediation systems.

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 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

personnel cuts) and 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 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, 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.

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, 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:

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.

The Company faces many risks and uncertainties

and factors beyond our control that have been 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.

ACCOUNTING POLICIES

10 unchanged sentences

maturity of three months or less to be cash and cash equivalents.

As of June 30, 2022 and 2021 there are no cash equivalents.

As of June 30, 2023 and June 30, 2022 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 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)

Property and equipment are stated at cost and are

depreciated, when placed into service, using the straight-line method over the estimated useful lives of the related assets, generally

three to twenty years.

The Company capitalizes all direct costs and all indirect incrementally identifiable costs related to the design

and construction of its Integrated Projects such as consulting fees, internal salaries and benefits and interest.

The Company reviews

its property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may

not be recoverable.

An impairment loss would be recognized based on the amount by which the carrying value of the assets or asset group

exceeds its estimated fair value, and is recognized as a loss from operations.

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

11 unchanged sentences

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

6 unchanged sentences

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 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

63 unchanged sentences

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.

11 unchanged sentences

with Customers”.

Income taxes :

The Company recognizes deferred

tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts

of existing assets and liabilities and their tax bases, as well as net operating losses.

Deferred tax assets and liabilities

are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected

to be recovered or settled.

The effect on deferred tax assets or liabilities of a change in tax rates is recognized in the period in which

the tax change occurs.

A valuation allowance is provided to reduce the deferred tax assets by 100%, since the Company believes that at

this time it is more likely than not that the deferred tax asset will not be realized.

The Company is no longer subject to U.S.

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.

The Company's policy is to recognize interest

and penalties accrued on any unrecognized tax benefits as a component of income tax expense.

As of June 30, 2022, there were no penalties

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.

Income (Loss) per share :

19 unchanged sentences

during the period

Basic and diluted weighted

average shares –

Diluted weighted average shares –

end of period

10 unchanged sentences

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.

financial reporting, the Company undertakes a study to determine the consequences of the change to its consolidated financial statements

and assures that there are proper controls in place to ascertain that the Company’s consolidated financial statements properly reflect

PROPERTY AND EQUIPMENT :

1 unchanged sentence

Schedule of property and equipment

Machinery and equipment

Buildings and structures

Computers and office equipment

3G project construction in process

Initial Project:

construction in process

Property and equipment, gross

Less accumulated depreciation

( 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).

The 3G1 project (“Initial 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.

The balance for the Initial Project construction in process includes $ 211,984 for capitalized interest and $ 135,648 in non-cash compensation

as of June 30, 2023.

Management has reviewed the remaining property and

equipment for impairment as of June 30, 2023 and believes that no impairment exists.

Depreciation expense was $ 1,161 and $ 827 for the years

ended June 30, 2022 and 2021, respectively.

Depreciation expense was $ 1,645 and $ 1,161 for the

years ended June 30, 2023 and 2022, respectively.

COMPENSATION :

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 owes deferred compensation to various

employees, former employees and consultants totaling $ 864,781 and $ 594,798 as of June 30, 2023 and 2022, respectively.

Included in the

deferred compensation balances as of June 30, 2023, are $ 527,058 and $ 20,167 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, 2022 was $ 437,508 and $ 10,000 , respectively.

The Company also owes various consultants and an employee, pursuant to various agreements,

for deferred compensation of $ 105,056 and $ 74,790 as of June 30, 2023 and 2022, respectively, with similar conversion terms as those described

above for Bassani and Smith, with the exception that the interest accrues at 0 % to 3 % per annum.

The Company also owes a former employee

$ 72,500 , which is not convertible and is non-interest bearing.

Bassani and Smith have each been granted the right

to convert up to $ 300,000 of deferred compensation balances at a price of $ 0.75 per share until 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.

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 June 30, 2024 into common shares (to be issued pursuant to the 2006

Smith also has the right to convert all or part of his deferred compensation balance into the Company’s securities (to be

issued pursuant to the 2006 Plan) “at market” and/or on the same terms as the Company is selling or has sold its securities

in its then current (or most recent if there is no current) private placement.

Smith also received the right to transfer future deferred

compensation to his 2020 Convertible Obligation at his election but such right is no longer in force.

Bill O’Neill has a balance of $ 140,000 and $ 20,000 at June 30, 2023

and 2022, respectively.

There is no interest or conversions on the deferred balance.

During the year ended June 30, 2023, Smith elected

to add $ 90,000 of deferred compensation to his 2020 Convertible Note.

The Company recorded interest expense of $ 19,983

($ 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.

($ 17,716 with related parties) and $ 16,390 ($ 15,537 with related parties) for the years ended June 30, 2023 and 2022, respectively.

LOANS PAYABLE :

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, 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 sheet.

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 sheet in its Form 10-Q for the quarter ended September 30, 2021.

Subsequent to the

dissolution of PA1, its assets and liabilities are no longer consolidated and included in the Company’s balance sheet.

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.

The 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 that date.

Note, however,

the Company’s consolidated balance sheet 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 24, 2014.

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.

PA1 made 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.

We recommend 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 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.

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 of 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 and Kreider Farms, the remaining unsold assets have been transferred to Kreider

Farms 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.

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

- AFFILIATES :

Adjusted 2020 Convertible Obligations and Adjusted

September 2015 Convertible Notes

Effective February 1, 2023, three (3) directors/officers

of the Company agreed to adjust the provisions of long term convertible obligations (including most of the 2020 Convertible Obligations

and September 2015 Convertible Notes --- see below) owed to them by the Company in a manner which reduced the indebtedness of the Company

by 80% (approximately $ 3.47 million,

in aggregate –See Note 7 below, ‘Debt Modification to Additional Paid in Capital’) while equitably maintaining

existing conversion rights.

The debt modification was treated as an equity transaction because the modifications were with affiliates

that are related parties.

Smith (the Company’s

President)(“Smith”), Dominic Bassani (the Company’s Chief Operating Officer)(“Bassani”) and Ed Schafer

(Director)(“Schafer”), adjusted/reduced the principal owed to them by $ 1,109,649 ,

$ 1,939,670 and

respectively.

Subsequent to the adjustment, the adjusted portion of the 2020 Convertible Obligations were renamed Adjusted 2020

Convertible Obligations and the adjusted portion of the September 2015 Convertible Notes were renamed Adjusted September 2015

Convertible Notes.

The Adjusted 2020 Convertible Obligations of Smith, Bassani and Schafer are convertible into Units (consisting of

1 share and from one half (1/2) to one (1) warrant) at prices of $ .0946 ,

and $ .0953 ,

respectively, and the Adjusted September 2015 Convertible Notes may be converted at the sole election of the noteholders into

restricted common shares of the Company at a conversion price of $ 0.115 per

The adjusted conversion prices slightly reduce the securities to be issued on conversion of each instrument from the amount

receivable under the unadjusted instruments.

The Adjusted 2020 Convertible Obligations and Adjusted September 2015 Convertible Notes

do not accrue any interest until their maturity date (July 1, 2024).

After the adjustment, the Company owed Smith, Bassani (and

trust) and Schafer $ 262,154 ,

$ 434,016 and

respectively, of Adjusted 2020 Convertible Obligations and Bassani and Schafer, respectively, $ 24,230 and

Adjusted September 2015 Convertible Notes.

During the year ended June 30, 2023, Smith elected

to convert $ 136,462 , in aggregate, of his Adjusted 2020 Convertible Obligation into 1,442,514 units at $ 0.0946 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 March 2026.

In more detail, effective:

a) March 8, 2023, Smith converted $ 70,000 of his Adjusted

2020 Convertible Obligation into 739,958 Units (each Unit consisting one share and one warrant);

b) March 31, 2023, Smith converted $ 29,888

of his Adjusted Convertible Obligation into 315,948 Units (each Unit consisting one share of common stock and one warrant);

4, 2023, Smith converted $ 36,573 of his Adjusted Convertible Obligation into 386,608 Units (each Unit consisting one share of common stock

and one warrant).

Smith donated to charitable organizations and/or gifted to family members and others a large portion of these securities

( 700,000 common shares and 955,000 warrants, in aggregate) while retaining direct ownership of 292,514 common shares and 116,566 warrants

and indirect ownership of 450,000 common shares and 370,948 warrants (owned by his wife).

The warrants are exercisable for three years

from conversion dates.

Subsequent to June 30, 2023, Smith converted additional portions of his Adjusted Convertible Obligation.

As of June 30 2023, the Adjusted 2020 Convertible

Obligation balances, including accrued interest, owed Bassani (and his donees), Smith and Edward Schafer were $ 441,446 , $ 130,180 and $ 98,014 ,

respectively.

As of June 30, 2023 the Adjusted September 2015 Convertible

Notes balances, including accrued interest, owed Bassani Family Trusts and Schafer were $ 24,645 and $ 4,081 , respectively.

2020 Convertible Obligations

The 2020 Convertible Obligations, which accrue interest

at either 4 % per annum or 4 % compounded quarterly and effective January 1, 2020 are due and payable on July 1, 2024.

The 2020 Convertible

Obligations (including accrued interest, plus all future deferred compensation added subsequently), are convertible, at the sole election

of the holder, into Units consisting of one share of the Company’s common stock and one half to one warrant to purchase a share

of the Company’s common stock, at a price of $ 0.50 per Unit until July 1, 2024.

The original conversion price of $ 0.50 per Unit

approximated the fair value of the Units at the date of the agreements;

The 2020 Convertible Obligations (which combined/replaced

prior convertible instruments dating to 2017 (or earlier), which accrue interest at either 4 % per annum or 4 % compounded quarterly and

effective January 1, 2020 are due and payable on July 1, 2024.

The 2020 Convertible Obligations (including accrued interest, plus all

future deferred compensation added subsequently), are convertible, at the sole election of the holder, into Units consisting of one share

of the Company’s common stock and one half to one warrant to purchase a share of the Company’s common stock, at a price of

$ 0.50 per Unit until July 1, 2024.

The 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.

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 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.

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

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

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”.

February 1, 2023, a large portion of the 2020 Convertible Obligations were adjusted as set forth herein.

As of June 30, 2023, the remaining unadjusted portion

of the 2020 Convertible Obligation balances, including accrued interest, owed Bassani Family Trusts (and his donees) and Smith, were $ 361,321

and $ 36,432 , respectively.

As of June 30, 2022, the 2020 Convertible Obligation balances, including accrued interest, owed Bassani Family

Trusts, Smith and Schafer were $ 2,597,329 , $ 1,328,040 and $ 499,274 , respectively.

During the year ended June 30, 2023 (on dates prior

to the adjustment on February 1, 2023), Smith elected to add $ 90,000 of his accrued unpaid compensation/un-reimbursed expenses to his

2020 Convertible Obligations.

During the year ended June 30, 2023 (on dates prior

to the adjustment on February 1, 2023), Smith elected to convert $ 30,000 in principal of the 2020 Convertible Obligation to 60,000 units

( 60,000 common shares and 60,000 warrants), and $ 20,000 of accrued interest of the 2020 Convertible Obligation to 40,000 units ( 40,000

common shares and 40,000 warrants).

The warrants are exercisable for three years from conversion date.

During the year ended June 30, 2023 (on dates after

the adjustment on February 1, 2023), Smith elected to convert $ 136,462 in principal of the Adjusted 2020 Convertible Obligation to 1,442,514

units ( 1,442,514 common shares and 1,442,514 warrants).

The warrants are exercisable for three years from conversion dates.

The Company recorded interest expense of $ 102,478

and $ 131,718 for the year ended June 30, 2023 and 2022, respectively.

The Company capitalized $ 179,981 and $ 32,000 related to the Initial

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

Effective February 1, 2023, three (3) directors/officers

of the Company agreed to adjust the provisions of long-term convertible obligations (including most of the 2020 Convertible Obligations

and September 2015 Convertible Notes) owed to them by the Company in a manner which reduced the indebtedness of the Company by 80% (approximately

$ 3.47 million, in aggregate) while

equitably maintaining existing conversion rights.

Because the modifications where with affiliates that are related parties, the

debt modification was treated as an equity transaction.

The Company recorded a deemed dividend for the reductions.

Smith (the Company’s President)(“Smith”),

Dominic Bassani (the Company’s Chief Operating Officer)(“Bassani”) and Ed Schafer (Director)(“Schafer”),

adjusted/reduced the principal owed to them by $ 1,109,649 ,

and $ 424,873 ,

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.

respectively.

Subsequent to the adjustment, the adjusted portion of the 2020 Convertible Obligations were renamed Adjusted 2020 Convertible

Obligations (see above and Note 7.).

The debt modification was treated as an equity transaction because the modifications were with affiliates

that are related parties.

September 2015 Convertible Notes

During the year ended June 30, 2016, the Company entered

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.

into September 2015 Convertible Notes with Bassani, Schafer and a Shareholder which replaced previously issued promissory notes.

The September

2015 Convertible Notes bear interest at 4 % per annum, have maturity dates of July 1, 2024, and may be converted at the sole election of

the noteholders into restricted common shares of the Company at a conversion price of $ 0.60 per share.

As the conversion price of $0.60

approximated the fair value of the common shares at the date of the September 2015 Convertible Notes, no beneficial conversion feature

The balances of the September 2015 Convertible Notes

as of June 30, 2022, including accrued interest owed Bassani Family Trusts, Schafer and Shareholder, are $ 279,366 , $ 20,845 and $ 445,756 ,

as of June 30, 2023, including accrued interest owed Bassani, Schafer and Shareholder, are $ 183,628 , $ 4,081 and $ 460,873 , respectively.

balances of the September 2015 Convertible Notes as of June 30, 2022, including accrued interest, were $ 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 $ 23,318 and

$ 21,462 for the years ended June 30, 2022 and 2021, respectively, on the September 2015 Convertible Notes.

$ 23,796 for the year ended June 30, 2023 and 2022, respectively.

Effective February 1, 2023, three (3) directors/officers

of the Company agreed to adjust the provisions of long term convertible obligations (including the September 2015 Convertible Notes owned

by Bassani and Schafer) owed to them by the Company in a manner which reduced the indebtedness of the Company by 80% (approximately $ 3.52

million, in aggregate) while equitably maintaining existing conversion rights.

Smith (the Company’s President), Dominic

Bassani (the Company’s Chief Operating Officer)(and a family Trust) and Ed Schafer (Director), adjusted/reduced the principal owed

to them by $ 1,109,649 , $ 1,939,670 and $ 424,873 , respectively.

Subsequent to the adjustment, the adjusted portion of the were renamed Adjusted

September 2015 Convertible Notes.

The Adjusted September 2015 Convertible Notes may be converted at the sole election of the noteholders

into restricted common shares of the Company at a conversion price of $ 0.115 per share.

As of June 30, 2023 the Adjusted September 2015

Convertible Notes balances, including accrued interest, owed Bassani Family Trusts and Schafer were $ 24,645 and $ 4,081 , respectively.

The debt modification was treated as an equity transaction because

the modifications were with affiliates that are related parties.

STOCKHOLDERS'

Debt Modification to Additional paid in capital

Effective February 1, 2023, three (3) directors/officers

of the Company agreed to adjust the provisions of long term convertible obligations (including most of the 2020 Convertible Obligations

and September 2015 Convertible Notes --- see below) owed to them by the Company in a manner which reduced the indebtedness of the Company

by 80% (approximately $ 3.47 million,

in aggregate ) while equitably maintaining existing conversion rights.

Because the modifications where with affiliates that

are related parties, the debt modification was treated as an equity transaction.

The Company recorded a deemed dividend for the reductions.

Smith (the Company’s President)(“Smith”),

Dominic Bassani (the Company’s Chief Operating Officer)(“Bassani”) and Ed Schafer (Director)(“Schafer”),

adjusted/reduced the principal owed to them by $ 1,109,649 ,

and $ 424,873 ,

respectively.

Subsequent to the adjustment, the adjusted portion of the 2020 Convertible Obligations were renamed Adjusted 2020 Convertible

Obligations and the adjusted portion of the September 2015 Convertible Notes were renamed Adjusted September 2015 Convertible Notes.

The Adjusted 2020 Convertible Obligations of Smith, Bassani and Schafer are convertible into Units at prices of $ .0946 ,

and $ .0953 ,

respectively, and the Adjusted September 2015 Convertible Notes may be converted at the sole election of the noteholders into restricted

common shares of the Company at a conversion price of $ 0.115

The adjusted conversion prices slightly reduce the securities to be issued on conversion of each instrument from the

amount receivable under the unadjusted instruments.

The Adjusted 2020 Convertible Obligations and Adjusted September 2015 Convertible

Notes do not accrue any interest until their maturity date (July 1, 2024).

After the adjustment, the Company owed Smith, Bassani (and

trust) and Schafer $ 262,154 ,

and $ 96,364 ,

respectively, of Adjusted 2020 Convertible Obligations and Bassani and Schafer, respectively, $ 24,230

of Adjusted September 2015 Convertible Notes.

The debt modification was treated as an equity transaction because the modifications

were with affiliates that are related parties.

The Adjusted 2020 Convertible Obligations and Adjusted

September 2015 Convertible Notes do not accrue any interest until their maturity date (July 1, 2024).

The Company treated this as an equity

transaction and recorded the reduction of debt through additional paid in capital at the net present value of the modified debt agreements.

This resulted in an increase to Additional Paid in Capital of $ 3,522,000 at the modification date and a reduction of additional paid in

capital of $ 14,051 for the year ended June 30, 2023 for the adjustment to the net present value of the modified debt agreements.

Series B Preferred stock:

6 unchanged sentences

redemption date and the Company approved the redemption of the Series B preferred stock during the year ended June 30, 2022.

The 200 shares

of Series B redeemable convertible Preferred stock were redeemed for $ 41,000 , which included the $ 21,000 in accrued dividend payable.

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, 2023, and 2022, the

Company declared dividends of $ 1,000 and $ 2,000 respectively.

The dividends are classified as a component of operations as the Series

B Preferred stock is presented as a liability in these financial statements.

Company declared dividends of nil and $ 1,000 respectively.

The dividends are classified as a component of operations as the Series B Preferred

stock is presented as a liability in these financial statements.

There is no liability at June 30, 2023.

Common stock:

8 unchanged sentences

stock or any series of preferred stock the Company may designate in the future.

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

2 unchanged sentences

beneficial interest.

During the year ended June 30, 2022, Smith elected

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, 2023, 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, 300,000 share

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.

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 31,

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

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

2023 $ 2,000,000 .

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

into subscription agreements to sell 975,000 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 975,000 units for total proceeds of $ 1,560,000 , in aggregate.

The Company paid commissions of $ 86,400 on the sale of units.

During the year ended June 30, 2023, 175,114 warrants

were exercised to purchase 175,114 shares of the Company’s common stock at $ 0.75 per share for total proceeds of $ 131,335 .

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, 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

issued 50,000 shares of the Company’s common stock to a consultant for services.

The shares were issued at $ 1.60 per share for a

total value of $ 80,000 .

During the year ended June 30, 2023, the Company

issued 32,259 shares of the Company’s common stock to a consultant for services.

The shares were issued at $ 1.55 per share for a

total value of $ 50,000 .

During the year ended June 30, 2023, Smith elected

to convert $ 30,000 in principal and $ 20,000 in accrued interest from the 2020 Convertible Obligation to 100,000 units at $ .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, 2023, Smith elected

to convert $ 136,462 in principal of his Adjusted 2020 Convertible Obligation into 1,442,514 units at $ 0.0946 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 March 2026.

See above and Note 6 for more detail.

As of June 30, 2023, the Company had approximately

20.8 million warrants outstanding, with exercise prices from $ 0.60 to $ 1.50 and expiring on various dates through April 31, 2026.

22.5 million warrants outstanding, with exercise prices from $ 0.60 to $ 2.40 and expiring on various dates through November 9, 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.

warrants is $ 0.80 , and the weighted-average remaining contractual life as of March 31, 2023 is 1.6 years.

During the year ended June 30, 2023, Smith elected

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

approved the modification of existing warrants held by one former consultant and four investors, which extended certain expiration dates.

to convert $ 30,000 in principal and $ 20,000 in accrued interest from the 2020 Convertible Obligation to 100,000 units at $ .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 three years after the date of conversion.

During the year ended June 30, 2023, Smith elected

to convert $ 136,462 , in aggregate, of his Adjusted 2020 Convertible Obligation into 1,442,514 units at $ 0.0946 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 March 2026.

In more detail:

a) effective March 8, 2023, Smith converted $ 70,000 of his Adjusted

2020 Convertible Obligation into 739,958 Units (each Unit consisting one share and one warrant);

b) effective March 31, 2023, Smith converted

$ 29,888 of his Adjusted Convertible Obligation into 315,948 Units (each Unit consisting one share of common stock and one warrant);

c) effective June 4, 2023, Smith converted $ 36,573 of his Adjusted Convertible Obligation into 386,608 Units (each Unit consisting one

share of common stock and one warrant).

Smith donated to charitable organizations and/or gifted to family members and others a large portion

of these securities ( 700,000 common shares and 955,000 warrants, in aggregate) while retaining direct ownership of 292,514 common shares

and 116,566 warrants and indirect ownership of 450,000 common shares and 370,948 warrants (owned by his wife).

The warrants are exercisable

for three years from conversion dates.

Subsequent to June 30, 2023, Smith converted additional portions of his Adjusted Convertible Obligation.

During the twelve months ended June 30, 2023, the

Company approved the issuance of 210,000 warrants, in aggregate, to three new members of its Advisory Group for advisory and/or consulting

services of $ 21,000 , in aggregate.

The warrants are exercisable at $ 1.50 to $ 1.60 and expire in August 2025.

During the twelve months ended June 30, 2023,

the Company approved the modification of existing warrants held by one former consultant and investors, which extended certain expiration

The modifications resulted in incremental non-cash compensation of $ 154,932 and interest expenses of $ 72,589 .

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 twelve months ended June 30, 2023, 175,114 warrants were exercised

to purchase 175,114 shares of the Company’s common stock at $ 0.75 per share for total proceeds of $ 131,335 .

Effective May 1, 2022, an entity affiliated with William

2 unchanged sentences

contract term thereafter.

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

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

of the warrants are vesting through May 1, 2023 and 2024.

The vesting resulted in non-cash compensation of $ 41,653 during the year ended

June 30, 2023.

Stock options:

15 unchanged sentences

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.

On March 15, 2023, the Company granted 30,000 options

under the 2006 Plan to two consultants.

The options vest equally in thirds on March 20, 2023, June 20, 2023 and September 30, 2023.

On February 7, 2023, the Company granted an aggregate

of 275,000 options under the 2006 Plan to five employees/consultants/directors including:

i) 25,000 options to Jon Northrop for service

as director, ii) 100,000 to two consultants and iii) 150,000 to employees.

On May 9, 2023, the Company granted 500,000 options

under the 2006 Plan to Bill O’Neill.

250,000 of these options vest on June 1, 2024 and 250,000 options vest on June 1, 2025;

options expire on June 30, 2026.

The Company recorded compensation expense related

1 unchanged sentence

The Company granted 805,000

and 960,000 fully vested options during the years ended June 30, 2022 and 2021, respectively.

and 730,000 options for the year ended June 30, 2023 and 2022, respectively.

The fair value of the options granted during the years

ended June 30, 2023 and 2022 were estimated on the grant date using the Black-Scholes option-pricing model with the following assumptions:

Fair value of options assumptions

Schedule of assumptions

Dividend yield

Risk-free interest rate

1.71 % – 3.01 %

0.47 %- 0.82 %

Expected term (years)

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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:

A summary of option activity under the 2006 Plan for year ended

June 30, 2023 is as follows:

Schedule of option activity

1 unchanged sentence

Outstanding at June 30, 2023

Outstanding at June 30, 2022

The following table presents information relating

to nonvested stock options as of June 30, 2022:

Schedule of non vested stock options

Weighted Average

Grant-Date Fair

Nonvested at July 1, 2021

Nonvested at June 30, 2022

The total fair value of stock options that vested

during the years ended June 30, 2022 and 2021 was $ 419,370 and $ 1,017,700 , respectively.

during both the year ended June 30, 2023 and 2022 was $249,744 and $419,370, respectively.

As of June 30, 2023, the Company had no unrecognized

compensation cost related to stock options.

Stock-based employee compensation charges in operating expenses

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

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 :

2 unchanged sentences

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.

stock, which warrants have an exercise price of $ 0.75 (with a 75% exercise price adjustment provision) and have expiry dates ranging from

December 31, 2024 to December 31, 2025 (subject to extension rights) secured by portions of Bassani Family Trust’s 2020 Convertible

Obligation and Bassani Family Trust’s September 2015 Convertible Notes.

The secured promissory notes are payable July 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, 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, 2023, the Company has an interest

bearing, secured promissory note for $ 30,000 ($ 35,884 including interest) from Smith as consideration to purchase warrants to purchase

300,000 shares of the Company’s restricted common stock, which warrants are exercisable at $ 0.60 (with a 75% exercise price adjustment

provision) and have expiry dates of December 31, 2024 (subject to extension rights) The promissory note bears interest at 4 % per annum,

and is secured by $ 30,000 ($ 35,885 including interest) of Smith’s 2020 Convertible Obligations.

The secured promissory note is payable

on July 1, 2024.

As of June 30, 2023 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.

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 are payable on July 1, 2024.

bearing, secured promissory notes with an aggregate principal amount of $ 46,400 ($ 56,860 including interest) from two employee/consultants

as consideration to acquire warrants to purchase 928,000 shares of the Company’s restricted common stock, which warrants are exercisable

at $ 0.75 (with a 90% exercise price adjustment provision) and have expiry dates of December 31, 2024.

(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.

These secured promissory notes are recorded as

“Subscription receivable—affiliates” on the Company’s balance sheet pending payment.

AND CONTINGENCIES:

Employment and consulting agreements:

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

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

On October 10, 2016, the Company approved a month-to-month contract extension with Smith which included provisions for i) a monthly

salary of $ 18,000 ( deferred until the Board of Directors re-instated cash payments to all employees and consultants who are deferring

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

31, 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.

31, 2024, and iii) the right to convert his deferred compensation in whole or in part, at his sole election, at any time in any amount

at “market” or into securities sold in the Company’s current/most recent private offering at the price of such offering

to third parties.

Smith agreed effective July 29, 2018 to continue to serve the Company under the same basic terms on a month-to-month

On May 1, 2022 Smith’s compensation was increased to $ 25,000 per month of which $5,000 per month is deferred.

Smith is deferring all but $ 5000 of his monthly compensation to help the Company conserve cash.

For the years ended June 30, 2023 and

2022, Smith was paid $ 200,000 and $ 130,000 , respectively, of cash compensation.

Since March 31, 2005, the Company has had

various agreements with Bassani (and/or Brightcap which provided his services during some of the years), now the Company’s

Chief Operating Officer (‘COO’) and formerly the Company’s Chief Executive Officer (‘CEO’)(any

reference to Brightcap or Bassani for all purposes are referring to the same individual).

The Board appointed Bassani as the

Company's CEO effective May 13, 2011.

On February 10, 2015, the Company executed an Extension Agreement with Bassani pursuant to

which Bassani extended the term of his service to the Company to December 31, 2017 (with the Company having an option to extend the

term an additional six months.) Pursuant to the Extension Agreement, Bassani continued to defer his cash compensation ($ 31,000

per month) until the Board of Directors re-instated cash payments to all employees and consultants who were deferring their

compensation.

During October 2016 Bassani was granted the right to convert up to $ 125,000

of his deferred compensation, at his sole election, at $ 0.75

per share, until March 15, 2018 (which was expanded on April 27, 2017 to the right to convert up to $ 300,000

of his deferred compensation, at his sole election, at $ 0.75

per share, until June 30, 2024 (including extensions).

During February 2018, the Company agreed to the material terms for a

binding two-year extension agreement for Bassani’s services as CEO.

Bassani’s salary remained $ 31,000

$ 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 .

per month, which will continue to be accrued in part during periods when the Board determines there is not adequate cash available.

Additionally, the Company agreed to pay or accrue $ 2,000

per month to be applied to life insurance premiums (which sums 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,

The promissory note is secured by a portion of Bassani’s 2020 Convertible Obligations and as of June 30, 2023, the

principal and accrued interest was $ 361,321 .

Currently Bassani is deferring all but $ 5000

of his monthly compensation to help the Company conserve cash.

For the years ended June 30, 2023 and 2022, Brightcap was paid $ 300,000

and $ 155,000 , respectively, of cash compensation earned during the period.

and $ 250,000 ,

respectively, of cash compensation.

William O’Neill (“O’Neill”)

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

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

O’Neill had previously

1 unchanged sentence

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:

Company since 2011, assumed the position of COO while retaining existing operational management responsibilities and working with O’Neill

on ‘commercialization’ of the Company’s technology and work related to JVs (and other transactions) based on the Company’s

Gen3 Technology and related matters.

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

the change of positions.

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

$ 25,000 cash and $ 10,000 deferred compensation per month.

The cash payment is paid $ 12,500 to O’Neill and $12,500 to an entity affiliated

with O’Neill.

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

75 % exercise price adjustment provision if the terms set forth therein are met) until April 30, 2026 of which up to 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.

O’Neill is deferring all but $ 5000 of his monthly compensation to help the Company conserve cash.

For the years ended June 30, 2023

and 2022, O’Neill and the entity affiliated with O’Neill was paid $ 150,000 and $ 25,000 , respectively, of cash compensation.

Exercise Price Adjustments/Extension Rights:

As part of agreements the Company entered into with

Bassani and Smith effective May 15, 2013, they were each granted the following:

a) a 50% execution/exercise bonus which shall be applied

upon the effective date of the notice of intent to exercise (for options and warrants) or issuance event, as applicable, of any currently

outstanding and/or subsequently acquired options, warrants and/or contingent stock bonuses owned by each (and/or their donees) as follows:

i) in the case of exercise by payment of cash, the bonus shall take the form of reduction of the exercise price;

ii) in the case of cashless

exercise, the bonus shall be applied to reduce the exercise price prior to the cashless exercise calculations;

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;

and b) the right to extend the exercise period of all or part of the applicable options and warrants for up to five years

(one year at a time) by annual payments of $.05 per option or warrant to the Company on or before a date during the three months prior

to expiration of the exercise period at least three business days before the end of the expiration period.

Effective January 1, 2016 such

annual payments to extend warrant exercise periods have been reduced to $.01 per option or warrant.

These exercise bonuses were subsequently

increased to 75%.

a) a 50% execution/exercise price adjustment provision

(exercise bonus in the context of options) which shall be applied upon the effective date of the notice of intent to exercise (for options

and warrants) or issuance event, as applicable, of any currently outstanding and/or subsequently acquired options, warrants and/or contingent

stock bonuses owned by each (and/or their donees) as follows:

i) in the case of exercise by payment of cash, the bonus shall take the

form of reduction of the exercise price;

ii) in the case of cashless exercise, the adjustment shall be applied to reduce the exercise

price prior to the cashless exercise calculations;

and iii) with regard to contingent stock adjustments, issuance shall be triggered upon

the Company’s common stock reaching a closing price equal to 50% of currently specified price;

and b) the right to extend the exercise

period of all or part of the applicable options and warrants for up to five years (one year at a time) by annual payments of $.05 per

option or warrant to the Company on or before a date during the three months prior to expiration of the exercise period at least three

business days before the end of the expiration period.

Effective January 1, 2016 such annual payments to extend warrant exercise periods

were reduced to $.01 per option or warrant.

These exercise adjustments 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

a 75 % exercise price adjustment to the terms of 3,000,000 warrants held by a trust owned by Bassani.

As of June 30, 2023, exercise price adjustment provisions

ranging from 50 - 90 % were applicable to 11,771,600 of the Company’s outstanding options and 18,438,339 of the Company’s outstanding

1 unchanged sentence

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 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.

were cancellable if O’Neill was not renewed at 13 months (renewal has happened) and/or fails to serve the entire contract term thereafter.

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

Initial Project:

On January 28, 2022 Bion Environmental Technologies,

(‘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.

The Company received progress billing in March 2022 and June 2022 for the second and third 25 %

installments, both of which have been paid as of the filing date.

On January 17, 2023 the Company received an invoice from Buflovak for

$ 533,100 which was paid on March 1, 2023 and on April 24, 2023 the Company received an invoice from Buflovak for $ 83,275 which was paid

on May 2, 2023 bringing the aggregate payments to $ 2,615,500 as of the date of this filing.

There remains $ 50,000 open on the Purchase

Order has been billed on July 26, 2023.

In addition to the Purchase Order, through June 30, 2023 the Company has incurred additional costs

of $ 4,182,260 on the Initial Project for capitalized interest and costs, non-cash compensation and consulting fees.

$ 3,962,207 has been

paid and $ 220,053 has been billed and not yet paid.

See Note 12 “Subsequent Events” for expenditure after June 30, 2023.

Buflovak 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, fabrication and delivery

of equipment from Bufflovak from the Purchase Order Agreement has been largely completed and assembly/construction is in process.

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 site.

Additional agreements have been entered into various professional services

providers (engineers, surveyors, utilities, etc.) for work related to the Initial Project.

The Company has incurred costs of $ 6,103,693

on the Initial Project, not including capitalized labor and interest.

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.

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

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

to steal the website.

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.

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’

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

1:21-cv-01034).

1 unchanged sentence

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’

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 were

subjected to 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:

5 unchanged sentences

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’).

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.

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 sheet.

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 sheet in its Form 10-Q for the quarter ended September 30, 2021.

Subsequent to the

dissolution of PA1, its assets and liabilities are no longer consolidated and included in the Company’s consolidated balance sheet.

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.

The 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.

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 that date.

Note, however,

the Company’s consolidated balance sheet 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 24, 2014.

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.

PA1 made 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.

We recommend 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 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 of 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 and Kreider Farms, the remaining unsold assets have been transferred to Kreider

Farms 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 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.

Bank Account Hacking

On June 23, 2023, an officer of the Company with personal

accounts with Signature Bank was hacked and $ 75,000 was transferred from the Company’s accounts at Signature Bank to the officer’s

personal accounts.

The bank was notified and all Company accounts were placed on hold.

Subsequently, the funds were released and transferred

back to the Company prior to June 30, 2023 the end of the fiscal year and there were no losses incurred.

The Company has reviewed

the authorized individuals on all accounts and further limited access after the hacking incident.

The Company currently is not involved in any other material litigation

2 unchanged sentences

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

1 unchanged sentence

Schedule Of Future Minimum Lease Payment

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.

Less current portion

Long term 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.

The reconciliation between the expected federal

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:

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, 2023 and 2022 is as follows:

Schedule of effective income tax rate reconciliation

Expected income tax expense (benefit) at statutory

Expected income tax benefit at statutory rate

$ ( 670,000 )

State taxes, net of federal benefit

RTP – Excess Business Interest

Permanent differences and other

2 unchanged sentences

( 3,281,000 )

Income tax expense (benefit)

Income tax benefit

The Company has net operating loss carry-forwards

3 unchanged sentences

Section 382 of the Internal Revenue Code.

The Company’s deferred tax assets as of

June 30, 2022 and 2021 are estimated as follows:

The Company’s deferred tax assets for the

years ended June 30, 2023 and 2022 are estimated as follows:

Schedule of deferred tax assets and liabilities

3 unchanged sentences

Deferred compensation

Capitalized research and development

Gross deferred tax assets

4 unchanged sentences

The Company has provided a valuation allowance of

100 % of its net deferred tax assets due to the uncertainty of generating future profits that would allow for the realization of such deferred

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, Inc.

4 unchanged sentences

to June 30, 2023 for recognition and disclosure in the financial statements and notes to the financial statements.

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.

From July 1, 2023

through September 28, 2023, the Company has incurred costs of $ 583,870 for

an aggregate of $ 7,431,630 for

the Initial Project.

From July 1, 2023 through September 28, 2023, 38,000 warrants were exercised

to purchase 38,000 shares of the Company’s common stock at $ 0.75 per share for total proceeds of $ 28,500 .

On July 7, 2023, the Company issued 7,500 shares

of the Company’s common stock to a consultant for services.

The shares were issued at $ 1.20 per share for a total value of $ 9,000 .

On July 21, 2023, Mr.

Smith converted $ 49,048 of principal

from his Adjusted 2020 Convertible note into 518,477 Units at a conversion rate of $ .0946 ;

each unit consisting of one share and one warrant

with the exercise price of $ .75 until 7/21/2026.

Each of these warrants carry an exercise price adjustment provision of 75 %.

On August 16, 2023, the Company issued 10,753

shares of the Company’s common stock to a consultant for services.

The shares were issued at $ 1.55 per share for a total value of

On August 28, 2023, the Company sold 28,589 units

at a price of $ 1.60 for a total of $ 45,742 .

Pursuant to the requirements of Section 13 or 15(d)

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September 28, 2023

/s/ Edward Schafer

September 28, 2023

Edward Schafer

September 28, 2023

/s/ Salvatore

September 28, 2023

Salvatore Zizza

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