What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-09-29 compared with 2024-09-30 · 282 added, 549 removed, 99 unchanged (89% of the section changed)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Statements made in this Form 10-K that are not historical

or current facts, which represent the Company's expectations or beliefs including, but not limited to, statements concerning the Company's

operations, performance, financial condition, business strategies, and other information, involve substantial risks and uncertainties.

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

These statements

often can be identified by the use of terms such as "may," "will," "expect," "believe," anticipate,"

"estimate," or "continue" or the negative thereof.

We wish to caution readers not to place undue reliance on any such

forward-looking statements, which speak only as of the date made.

Any forward-looking statements represent management's best judgment

as to what may occur in the future.

However, forward looking statements are subject to risks, uncertainties and important factors beyond

our control that could cause actual results and events to differ materially from historical results of operations and events and those

presently anticipated or projected.

Bion disclaims any obligation subsequently to revise

any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated

or unanticipated events.

The following discussion and analysis should be read

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

MANAGEMENT'S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Statements made in this Form 10-K that are not historical or current

facts, which represent the Company's expectations or beliefs including, but not limited to, statements concerning the Company's operations,

performance, financial condition, business strategies, and other information, involve substantial risks and uncertainties.

The Company's

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

These statements often can be identified

by the use of terms such as "may," "will," "expect," "believe," anticipate," "estimate,"

or "continue" or the negative thereof.

We wish to caution readers not to place undue reliance on any such forward-looking statements,

which speak only as of the date made.

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

However, forward looking statements are subject to risks, uncertainties and important factors beyond our control that could cause

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

These factors include potential

conflicts of interest related to the BLG loan group, its control by two of Bion’s Directors and key management, and its security

position in the Company’s IP (see below, Item K), adverse economic conditions, entry of new and stronger competitors, inadequate

capital and limited ability to obtain financing, needed personnel and equipment, unexpected costs, failure (or delay) to gain product

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

any extended period of time) of the services of members of the Company’s small core management team and failure to obtain access

to new markets.

Additional risks and uncertainties that may affect forward looking statements about Bion's business and prospects include:

i) the possibility that markets for eco-friendly/sustainable beef, organic and low-carbon fertilizer products, and clean fuels will be

slow to develop (or not develop at all), ii) the possibility that competitors will develop more comprehensive and/or less expensive environmental

solutions, viii) delays in market awareness of Bion and our Systems, iv) uncertainties and

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

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

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

competitors and requiring expenditures of our limited resources.

Bion disclaims any obligation subsequently to revise any forward-looking

statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated

The following discussion and analysis should be read in conjunction

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

BUSINESS OVERVIEW AND PLAN

The Company has been under substantial financial and

management stress over the past eighteen (18) months.

Covid-related delays during technology pilot development at Buflovak in New York,

followed by post-Covid supply chain disruptions during construction of our demonstration facility at Fair Oaks, have led to extreme difficulties

in raising needed funds.

These delays prevented us from meeting our project development and related capital timelines, and were further

compounded by the death (following extended illness) of Dominic Bassani, who most recently served as our COO from May 2022 after serving

as our CEO for the prior decade, the subsequent resignation of Bill O’Neill, Dominic’s replacement at the CEO position, effective

May 31, 2024, followed by the anticipated retirement of Mark A.

Smith, the Company’s President, General Counsel and Chief Financial

Officer, effective July 31, 2024.

Since the end of May 2024, a new core leadership team

has been installed (see H and I, below) and a short-term funding facility has been implemented (see J, below) while longer term capital

solutions are evaluated.

Our new leadership team believes the financial and management difficulties Bion has faced are outweighed by the

success of our technology demonstration and optimization initiatives at our Fair Oaks facility.

This success coincides with clear and

growing trends in both sustainable agriculture and clean fuels technology and policy that favor Bion’s technology and business opportunities.

Bion leadership believes this confluence of events positions the Company, assuming it aligns with appropriate strategic partners and obtains

sufficient financing, to exploit a unique opportunity to participate in transformational change at the intersection of agriculture, renewable

energy and clean fuels, clean air and water, and evolving consumer demand.

The Company is not currently generating

any significant revenues.

Further, the Company’s anticipated revenues, if any, from existing Projects, JVs and proposed Projects

will not be sufficient to meet the Company’s anticipated operational and capital expenditure needs for many years.

Current liabilities

were approximately $5.8 million at June 30, 2024 which represents an increase of approximately $4.2 million from June 30, 2023 (largely

due to an increase in ‘accounts payable and accrued expenses’ totaling approximately $2.1 million and an increase in ‘current

debt’ of approximately $2.1 million as a result of the Company’s limited success in raising new financing (equity and/or debt)

and existing debt terms becoming current during the recent period combined with continued expenses (including those related to the Initial

Similarly, the Company’s cash on hand decreased from approximately $626,000 to approximately $52,000 over the same period.

The Company extreme difficulty is obtaining needed funds during the entire 2023 fiscal year has continued throughout the first quarter

of the current fiscal year to date.

Going Concern and Management’s Plans, Plan of Operations and Outlook and ITEM 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations and Note 11 Subsequent Events (below).

Previous management believed that

the Initial Project had reached the point where it could be appropriately deemed ‘placed in service’ at January 1, 2024.

discussions with the key technical and engineering personnel involved at the Initial Project during the recently concluded quarter convinced

management that such a characterization was premature as some key modules had not yet been completed and/or fully tested at that date.

Additionally, due to some equipment break-downs, the Initial Project was in maintenance mode rather than conducting operations, while

the Company awaited required replacement parts and subsequent repairs.

This process was slowed by the Company’s ongoing difficulties

in raising needed funds for its activities.

The Company’s Board of Directors re-evaluated the classification/status of the Initial

Project as part of the Company’s annual review process and determined that the Initial Project should have been ‘placed in

service’ at the June 30, 2024, fiscal year end.

Further, after extensive discussion between previous

management and the Board, it was determined that the ‘carrying value’ of the Initial Project, as of that date, be reduced

to $0 on the Company balance sheet, in order to conform with accepted accounting practices.

Bion’s technology demonstration system

was always planned as a small scale integrated Gen3Tech beef project.

Due to covid-related delays and increased capital constraints, it

was decided to move quickly to initially construct Phase 1, which was the standalone ARS at Fair Oaks.

As matters progressed, including

cost overruns, management and financial crises, etc., Bion was unable to proceed further at Fair Oaks.

It was anticipated that the ARS

would be relocated to another site (potential locations included Ribbonwire Ranch or University of Nebraska-Lincoln) after providing the

final design data, where it would be integrated with a small scale Gen3Tech beef facility as originally planned.

We recently learned it

would not be economically feasible to decommission and disassemble the ARS, then transport, reassemble, and recommission it at another

Therefore, since the Initial Project is now:

i) largely a research & development facility and ii) is located on land subject

to a short-term lease, it no longer has commercial value and was written down to $0.

As a result, a large ‘one time/non-recurring’

‘non-cash’ charge of $9,460,425 has been taken by the Company, at that date, which charge reduced the Company shareholders’

equity to ($5,808,501) and resulted in a loss of $11,691,115 for the 2024 fiscal year.

On September 28, 2023, in order to partially

mitigate the problems discussed above, the Company entered into an agreement for a $1,500,000 bridge loan and executed documents including

a convertible promissory note (“Note”) and a binding subscription agreement (“Subscription”) (collectively the

Note and the Subscription are the “Bridge Loan Agreements”) with SEB LLC, a non-affiliated party (“Lender”).

Bridge Loan Agreements require the Lender to loan the Company $1,500,000 in six monthly tranches of $250,000 commencing October 2023.

All sums advanced under the Bridge Loan Agreements (and accrued interest thereon) would be due and payable (with interest accrued at 9%

per annum) on October 1, 2024, if not previously converted into securities of the Company.

The Note is convertible at $1.00 per unit,

at the sole election of the Lender, into units consisting of one share of the Company’s common stock and a warrant to purchase one

The initial $250,000 tranche was received by the Company on October 5, 2023.

However, no further funds were received by the

Company from the Lender.

During early November 2023 the Lender informed the Company verbally that it did not intend to fulfill its obligations

pursuant to the Bridge Loan Agreements and since such time the Lender has been in default (“Default”).

On May 10, 2024, the

Company received $150,000 from affiliates of the Bridge Loan Lender on terms not yet finalized and included in an agreement.

were received in the context of negotiations/discussions regarding a potential larger investment by affiliates and/or associates of the

Lender, but no further funds were received, and the larger transaction was never completed.

The funds were used primarily to re-initiate

operations at the Initial Project.

The Default (which is continuing) has created substantial problems for and materially damaged the Company

and rendered the Company unable to meet its current creditor obligations on a timely basis.

The Company is currently evaluating its rights

regarding the Default by the Lender.

See Notes 5 and 8 re Convertible Bridge Loan/Default and Note 11, Subsequent Events.

This situation

has contributed to the substantial increase in the Company’s ‘Current Liabilities’ including ‘accounts payable’

over recent periods.

See Consolidated Financial Statements and ‘Management’s Discussion and Analysis’.

The Company has

engaged in discussion/negotiation with its larger creditors (including its largest creditor--- the primary contractor on the Initial Project)

but has been unable to reach agreements regarding payments due to the uncertainty as to if, when and how much funding the Company will

be able to raise in future periods.

As a result, the Company’s largest creditor---the general contractor for the Initial Project

--- has filed a mechanics lien in Indiana (and its largest sub-contractor has sent notices related to its intention to file a mechanics

lien) and other creditors are threatening to commence litigation and/or repossess/remove leased equipment).

At the end of December 2023, Bion achieved

key objectives in the optimization of the Ammonia Recovery System at our commercial-scale demonstration facility in Fair Oaks, Indiana.

delayed by supply chain issues, the demonstration at Fair Oaks confirmed the system's state-of-the-art capabilities.

In managements’

opinion, the wide applicability of the ARS and its environmental benefits cannot be overstated, as livestock-related and other nutrient

issues continue to grow, both in the U.S.

and globally.

On January 2, 2024, Bion received a new

(continuation) patent that broadened the claims related to its Ammonia Recovery System (ARS) to include industrial and municipal wastewater

sources, in addition to animal waste streams that were previously covered.

Since that time, Bion has focused a portion of its limited

resources on understanding and evaluating opportunities to apply its ARS as a ‘standalone’ ammonia control solution in these

In such cases, the ARS would be deployed as a bolt-on ammonia solution (vs integrated into a Bion Gen3Tech livestock platform)

for facilities that produce biogas from organic waste streams, such as food, food processing, and livestock packing/slaughter, that are

subject to EPA-mandated discharge limits that require ammonia control.

We believe at this time there is potentially a robust opportunity

to provide ammonia control solutions to others and we intend to pursue this opportunity in the coming year.

Effective April 1, 2024, the Company entered

into two material definitive agreements regarding voluntary surrender for cancellation of securities of the Company (and related matters)

a) members of the family of Dominic Bassani, recently deceased former Chief Executive Officer and (with his family) the Company’s

largest shareholder (collectively “Bassani Family”), and b) Mark A.

Smith, President of the Company and a director (“MAS”).

The Bassani Family and MAS entered into these agreements with the intention of mitigating dilution to shareholders as new, successor management

is added to the Company’s management team.

The Bassani Family has agreed to surrender not less than approximately 20% of its Company

holdings (as of December 2023) which surrender will increase to approximately 30% based on certain financing performances (see Form 8-K

dated April 3, 2024, Exhibit 10.1).

The Bassani Family will elect exactly which Company securities it will surrender for cancellation

on or before June 30, 2024, the Company’s fiscal year end.

The Bassani Family Agreement also sets forth requirements regarding conversion

of convertible notes held by members of the Bassani Family after the security surrender.

See Exhibit 10.1 for the material terms of the

contemplated transactions.

MAS has agreed to surrender approximately 30% of his Company holdings (as of December 2023).

Immediately upon

the effectiveness of the MAS Agreement, he cancelled all Company options held by him (2,425,000, in aggregate) and waived $56,250 of accrued

deferred compensation (convertible into 75,000 shares of the Company’s common stock).

The MAS Agreement also sets forth requirements

regarding conversion of convertible notes held by MAS after the security surrender and references the planned retirement of MAS on or

before May 15, 2024.

See Exhibit 10.2 for the material terms of the contemplated transactions.

Subsequently, and effective June 27, 2024,

the Board of Directors of the Company agreed to amend the terms of the agreements dated April 1, 2024.

The amendments solely extend any

dates of certain required conversions and/or exercises (and related promissory note maturity dates and warrant expiration dates), if any,

that were earlier than January 15, 2025, to said date.

No changes were made regarding any ‘givebacks’ of securities of the

On June 30, 2024, the Bassani Family provided the Company with their list regarding surrender of 20% of its Company holdings

(as of December 2023) (See Exhibit 10.1).

As previously reported, MAS has previously completed 100% of his ‘give backs’.

On May 13, 2024, the Board of Directors

commenced a Board-led review of potential strategic alternatives to ensure the Company’s survival and to enhance Bion’s potential

growth and maximize shareholder value.

The review will include assessing approaches to optimize the Company’s multiple business

opportunities through alternative capital return strategies, potential strategic or financial transactions, and developing strategic initiatives

best applicable to each opportunity created by our technology in order to consider all possible paths towards maximizing value creation.

No timetable has been established for the conclusion of this review and no decisions related to any further actions or potential strategic

alternatives have been made at this time.

There can be no assurance that the review will result in any transaction or other strategic

change or outcome.

Effective May 31, 2024, Bion accepted the

resignation of Bill O’Neill, both as CEO and Director.

O’Neill had previously informed the Board that he believed he was

not being adequately compensated or incentivized and the job was too difficult.

On May 21, 204, Bion received a letter from Mr.

that expressed his dissatisfaction with the Board’s refusal to address his demands and stated he was resigning to pursue other opportunities,

despite the fact he had not yet completed the last year+ of a three-year agreement.

Bion chose to accept his resignation in the belief

the Company needed a change in leadership and approach.

On June 1, 2024, Craig Scott joined the

Company's Board of Directors.

Scott has served Bion in several senior positions, dating back to 1996.

Scott also agreed to assume

a broader management role for Bion and subsequently accepted the role of interim Chief Executive Officer.

Also in June, Greg Schoener

assumed the role of Chief Operating Officer on an interim basis.

He also joined Bion's Board of Directors.

Schoener is a successful

business owner and operator, serving the construction industry in Houston, Texas.

He brings broad business management experience, with

an emphasis on mission-focused execution and accountability.

He has been a Bion shareholder since late-2020.

Bob Weerts, another Bion

shareholder and a successful serial entrepreneur from Winnebago, Minnesota, also accepted a position on Bion’s Board of Directors.

On June 18, 2024, Bion formed a strategic

relationship with Turk Stovall and Stovall Ranching Companies with the goal of developing a 15,000-head sustainable beef project at Stovall’s

Yellowstone Cattle Feeders (YCF) location in Shepherd, Montana.

The YCF feedyard is a traditional outdoor dirt feedlot that today is permitted

to feed up to 25,000 head.

Stovall also agreed to join Bion's Board of Directors and lead a joint venture between Stovall Ranching

Companies and Bion to develop the project.

The facility is envisioned to produce premium quality Montana beef that we believe will be

the 'cleanest', most eco-friendly finished beef in the marketplace.

On August 23, 2024, Bion announced that

three affiliates of the Company (Greg Schoener, Interim COO & Director;

Turk Stovall, Director;

Bob Weerts, Director) and two shareholders

(one of whom is the brother of Greg Schoener) have agreed to advance to the Company, through a newly formed LLC, up to $500,000 in consideration

of a secured convertible promissory note.

It is anticipated that others will join the LLC, although there can be no assurance they will.

The note instrument and agreements have not been executed at this time because terms and other details have not been finalized yet;

the group has begun advancing money to the Company.

As of the date of the filing of this report, the aggregate sum of $201,564 has been

advanced to the Company, together with express directions on what items were to be paid with such funds.

When a final agreement is executed,

it will be attached as an exhibit to a Form 8-K.

Change in Approach

Through the end of calendar 2022, Bion’s strategy

to exploit the beef opportunity was focused on developing an initial sustainable beef project as ‘proof of concept’.

beginning of 2023, under the guidance of our last CEO, Bion’s strategy shifted to executing multiple letters of intent and agreements

for sustainable beef JV projects and moving forward with development of those projects in quick succession.

During our 2023 fiscal year,

Bion entered into three (3) letters of intent (“LOIs”):

a) July 2022 letter of intent to develop a large-scale commercial

project - a 15,000-head sustainable beef cattle feeding operation together with the Ribbonwire Ranch (“Ribbonwire LOI”), in

Dalhart, Texas (with a provision to expand to 60,000 head) (“Dalhart Project”), b) January 2023 letter of intent to develop

a large-scale commercial project - a 15,000-head sustainable beef cattle feeding operation together with the Olson Feeders and TD Angus

(“Olson LOI”), near North Platte, Nebraska (with a provision to expand to 45,000 head or more) (“Olson Project”),

c) April 2023 letter of intent to develop a large-scale commercial project - a 15,000-head sustainable beef cattle feeding operation together

with Dakota Valley Growers (“DVG LOI”) near Bathgate, North Dakota (“DVG Project”).

Based on our experience, we

believe it will not be difficult to secure participation in our Projects from additional feeders/cattlemen, especially once project financing

and offtake agreements for both protein and co-products, are in place.

Bion’s new leadership team has returned the

company to its earlier approach, focusing on building a ‘flagship’ first project to prove concept feasibility and to provide

a development and finance model for future projects.

Leadership made this decision after determining that a) a large addressable market

for sustainable beef does exist and consumers have demonstrated a ‘willingness to pay’ a premium for sustainable food products;

however, since such products cannot be supplied today at scale, it is not a ‘ready’ market and will take time to develop),

b) an entrenched industry is never eager for change and it will only occur through enlightened/ proven self-interest, and c) investment

capital of the magnitude needed for large scale conversion to sustainable production will first require proof of concept.

Leadership believes for several reasons that the best

opportunity for the Company to prove its sustainable beef concept at this time is with the Stovall Ranch JV in Montana.

In June 2024,

Bion formed a strategic relationship with Turk Stovall and Stovall Ranching Companies.

Turk Stovall is a fifth-generation Montana cattleman,

with an extensive graduate-level education in cattle husbandry and an MBA in agribusiness, and he is the largest custom cattle feeder

He also has broad experience and relationships with both the U.S.

and Montana’s beef industry and important state leaders,

resources, and agencies.

Bion and Stovall have agreed to establish a JV, to be led by Mr.

Stovall, with the goal of developing a 15,000-head

sustainable beef project at Stovall’s Yellowstone Cattle Feeders (‘YCF’) location in Shepherd, Montana.

We anticipate

establishing the Stovall-Bion JV and creating related distribution agreements with key value chain partners during the current calendar

year, with the intent to begin construction before the end of 2024.

____________________________________

The Company’s on-going difficulties raising

needed funds over the past two years have rendered the Company unable to meet its current creditor obligations on a timely basis.

Company has engaged in discussion/negotiation with its larger creditors (including its largest creditor--- the primary contractor on the

Initial Project) but has been unable to reach agreements regarding payments due to the uncertainty as to if, when, and how much funding

the Company will be able to raise in future periods.

As a result, the Company’s largest creditor---the general contractor for the

Initial Project --- has filed a mechanics in Indiana (and its largest sub-contractor has sent notices related to its intention to file

a mechanics lien), other creditors are threatening to commence litigation and/or repossess/remove leased equipment and the Company is

behind on its Lease payments related to the site of the Initial Project.

On September 5, 2024, three members of the LLC (Subsequent Events,

Aug 23, 2024, below) met with representatives of two of the largest creditors:

the primary contractor and the property lessor.

and ultimate resolution are ongoing and subject to Bion’s ability to raise capital in a timely manner.

We have implemented extreme

cost savings measures:

maintaining only mission-critical operations and funding, on a weekly basis, only those expenses needed to maintain

those operations.

These measures will continue until we can execute a larger financing or obtain other sources of capital, such as a potential

strategic investor/partner or license agreement.

Bion is currently (and has been for some time) in

discussions with several companies related to potential strategic partnerships in renewable energy – RNG and solar – and clean

fuels, as well as reducing the carbon footprint of livestock production, especially beef.

With today’s U.S, and global emphasis

on decarbonizing energy and the food supply chain, the sectors have become closely intertwined, they are evolving quickly, and integrated

solutions have become increasingly desired, but complex.

Bion is now evaluating both European and U.S.

renewable energy developers, operators,

and investors to determine the best fit for moving forward with AD/RNG development for its own beef project(s), animal waste treatment

for others, both here and in the EU, as well as a development partner in industrial and municipal opportunities.

Bion believes that such

a relationship would entail a direct investment in Bion, licensing fee, or some other ‘up front’ financial benefit to Bion.

Bion’s new leadership team is strongly committed

to Bion’s continuation, its future success, and its shareholders.

We have returned the company to its earlier approach of focusing

on building a ‘flagship’ first project to prove the concept and markets and provide a development and finance model for future

projects, instead of attempting to move forward on multiple projects simultaneously or in rapid succession.

We believe this will put us

on a more achievable path.

Further, this strategy will substantially reduce our need for capital, and we believe that a more reasonable

and credible objective will make it easier to raise that capital.

We also believe that the recent changes in leadership, including the

addition of Turk Stovall to that leadership team, will lend validation and credibility to Bion and its business plan, making it easier

to raise capital from potential strategic, institutional, and retail investors.

For several reasons, we think that the best opportunity

to finance a project, and to prove the sustainable beef concept, is with the Stovall Ranch JV in Montana and we are exploring a wide range

of alternatives related to funding both the JV and Bion.

THERE IS NO ASSURANCE THAT THE COMPANY WILL REACH

OR APPROACH THE GOALS/TARGETS SET FORTH ABOVE.

REACHING SUCH GOALS/TARGETS WILL REQUIRE RESOLUTION OF THE COMPANY’S EXISTING FINANCIAL

DIFFICULTIES AND ACCESS TO VERY LARGE AMOUNTS OF CAPITAL (EQUITY AND DEBT) AS EACH BEEF PROJECT MODULE IS PROJECTED TO COST IN EXCESS

OF $50 MILLION (DEBT/EQUITY/GRANTS) TO CONSTRUCT AND WILL REQUIRE MOBILIZATION OF SUBSTANTIAL PERSONNEL, TECHNICAL RESOURCES AND MANAGEMENT

THE COMPANY DOES NOT POSSESS EITHER THE FINANCIAL OR PERSONNEL RESOURCES INTERNALLY AND WILL NEED TO SOURCE SUCH RESOURCES FROM

OUTSIDE ITSELF.

The Company has been under substantial financial

and management stress over the past eighteen (18) months.

Covid-related delays during technology pilot development at Buflovak in New

York, followed by post-Covid supply chain disruptions during construction of our demonstration facility at Fair Oaks, have led to extreme

difficulties in raising needed funds.

These delays prevented us from meeting our project development and related capital timelines, and

were further compounded by the death (following extended illness) of Dominic Bassani, who most recently served as our COO from May 2022

after serving as our CEO for the prior decade, the subsequent resignation of Bill O’Neill, Dominic’s replacement at the CEO

position, effective May 31, 2024, followed by the retirement of Mark A.

Smith, the Company’s President, General Counsel

and Chief Financial Officer, effective July 31, 2024.

At the end of May 2024, a new core leadership

team was installed (see H and I, above) and a short-term funding strategy was implemented (see K, above) while longer term capital solutions

were pursued.

These efforts are ongoing.

Our new leadership team believes the difficulties Bion has faced are outweighed by our recent

successes that include the technology demonstration and optimization at our Fair Oaks facility and the initial responses from our fertilizer

This is coupled with strong recent interest in our ammonia control solution from the biogas operators and developers that will

be needed to ensure a supply of feedstock for our fertilizer products.

These successes coincide with growing trends in sustainable agriculture

and clean fuels technology and policy that favor Bion’s business opportunities.

Bion leadership believes this confluence of events

positions the Company, assuming it aligns with appropriate strategic partners and obtains sufficient financing, to exploit a unique opportunity

at the intersection of agriculture, renewable energy, the environment, and consumer demand.

See Part 1, Item 1 – General for detailed

business overview

THERE IS NO ASSURANCE THAT THE COMPANY WILL

REACH OR APPROACH THE GOALS/TARGETS SET FORTH ABOVE.

REACHING SUCH GOALS/TARGETS WILL REQUIRE RESOLUTION OF THE COMPANY’S EXISTING

FINANCIAL DIFFICULTIES AND ACCESS TO VERY LARGE AMOUNTS OF CAPITAL (EQUITY AND DEBT) AS EACH BOLT-ON PROJECT IS PROJECTED TO COST BETWEEN

$10 AND $40 MILLION, AND EACH BEEF PROJECT MODULE IS PROJECTED TO COST IN EXCESS OF $50 MILLION (DEBT/EQUITY/GRANTS) TO CONSTRUCT AND

WILL REQUIRE MOBILIZATION OF SUBSTANTIAL PERSONNEL, TECHNICAL RESOURCES AND MANAGEMENT SKILLS.

THE COMPANY DOES NOT POSSESS EITHER THE

FINANCIAL OR PERSONNEL RESOURCES INTERNALLY AND WILL NEED TO SOURCE SUCH RESOURCES FROM OUTSIDE ITSELF.

For expanded information regarding our ‘ HISTORY,

8 unchanged sentences

The Company follows the provisions of ASC

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

their grant date fair values.

Pursuant to ASC Topic 815 “Derivatives and Hedging”

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

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

Once determined, the Company assesses these instruments as derivative

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

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

As of June 30, 2024

and 2023, there are no derivative financial instruments.

The Company has issued options to employees and consultants

under its 2006 Plan to purchase common shares of the Company.

Options are valued on the grant date using the Black-Scholes option-pricing

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

upon their grant date fair values.

Pursuant to ASC Topic 815 “Derivatives and

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

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

Once determined, the Company assesses these

instruments as derivative liabilities.

The fair value of these instruments is adjusted to reflect the fair value at each reporting period

end, with any increase or decrease in the fair value being recorded in results of operations as an adjustment to fair value of derivatives.

As of June 30, 2025 and 2024, there are no derivative financial instruments.

The Company has issued options to employees and

consultants under its 2006 Plan to purchase common shares of the Company.

Options are valued on the grant date using the Black-Scholes

option-pricing model.

The expected volatility is based on the historical price volatility of the Company’s common stock.

The dividend yield represents

the Company’s anticipated cash dividend on common stock over the expected term of the stock options.

Treasury bill rate

for the expected term of the stock options was utilized to determine the risk-free interest rate.

The expected term of stock options represents

the period of time the stock options granted are expected to be outstanding based upon management’s estimates.

yield represents the Company’s anticipated cash dividend on common stock over the expected term of the stock options.

bill rate for the expected term of the stock options was utilized to determine the risk-free interest rate.

The expected term of stock

options represents the period of time the stock options granted are expected to be outstanding based upon management’s estimates.

The Company has issued warrants to purchase common

17 unchanged sentences

reflected in the consolidated statements of operations over the lease term.

For leases with a term exceeding 12 months,

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

its fixed minimum payment obligations over the lease term.

A corresponding right-of-use (“ROU”) asset equal to the initial

lease liability is also recorded, adjusted for any prepaid rent and/or initial direct costs incurred in connection with execution of the

lease and reduced by any lease incentives received.

For purposes of measuring the present value of its fixed payment obligations for a

given lease, the Company uses its incremental borrowing rate, determined based on information available at lease commencement, as rates

implicit in its leasing arrangements are typically not readily determinable.

The Company's incremental borrowing rate reflects the rate

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

YEAR ENDED JUNE 30, 2024 COMPARED TO THE

YEAR ENDED JUNE 30, 2023

Total revenues were nil for both the years

ended June 30, 2024 and 2023.

For leases with a term exceeding 12 months, 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.

A corresponding right-of-use (“ROU”) asset equal to the initial lease

liability is also recorded, adjusted for any prepaid rent and/or initial direct costs incurred in connection with execution of the lease

and reduced by any lease incentives received.

For purposes of measuring the present value of its fixed payment obligations for a given

lease, the Company uses its incremental borrowing rate, determined based on information available at lease commencement, as rates implicit

in its leasing arrangements are typically not readily determinable.

The Company's incremental borrowing rate reflects the rate it would

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

ENDED JUNE 30, 2025 COMPARED TO THE YEAR ENDED JUNE 30, 2024

Total revenues were nil for both the years ended

June 30, 2025 and 2024.

General and Administrative

5 unchanged sentences

ended June 30, 2025 and 2024, respectively.

The $130,000 decrease in salary costs is due to Bill O’Neill resigning, Dominic Bassani

passing away and the Company not replacing the position and a reduction in salary for Mark Smith.

Investor relations expenses were $328,000

and $697,000 for the years ended June 30, 2024 and 2023, respectively, and the $367,000 decrease was due to less investor related activity

The $232,000 decrease in salary costs is due to Bill O’Neill resigning, Mark Smith retirement

and Dominic Bassani passing away and the Company not replacing the position.

The $290,000 decrease in consulting costs is due to Bill

O’Neill resigning and the reduction of contracts related to capital raise efforts.

Investor relations expenses were $136,000 and

$328,000 for the years ended June 30, 2025 and 2024, respectively, and the $192,000 decrease was due to less investor related activity

during the fiscal year in order to conserve cash.

Legal costs were $1,000 and $34,000 for the years ended June 30, 2025 and 2024, respectively.

Stock-based compensation for the years ended

June 30, 2024 and 2023 were ($16,000) and $442,000, respectively.

The $458,000 variance is due to less stock-based compensation issued

in 2024 and the reversal of stock options expense for unvested options for Bill O’Neill.

Stock-based compensation for the years ended June

30, 2025 and 2024 were $844,000 and ($16,000) respectively.

The $860,000 variance is due to warrants exercise dates extended in 2025.

Total depreciation expense was $695 and $1,582

2 unchanged sentences

Total research and development expenses were $22,000

$23,000 and $83,000 for the years ended June 30, 2024 and 2023, respectively, representing an $60,000 decrease due to less consulting

and other expenses being allocated to research and development.

and $23,000 for the years ended June 30, 2025 and 2024, respectively.

Salaries and related payroll tax expenses were

$6,000 and $6,000 for the years ended June 30, 2025 and 2024, respectively.

Consulting costs were $4,000 and $43,000 for the years ended

June 30, 2024 and 2023, respectively.

The decrease of $39,000 was due to none of Brightcap’s consulting cost being allocated to

research and development.

Consulting costs were nil and $4,000 for the years ended June

30, 2025 and 2024, respectively.

Legal expenses were $15,000 and $11,000 for the years ended June 30, 2025 and 2024, respectively.

Loss from Operations

As a result of the factors described above,

the loss from operations was $2,071,000 and $3,157,000 for the years ended June 30, 2024 and 2023 respectively.

As a result of the factors described above, the

loss from operations was $2,168,000 and $2,071,000 for the years ended June 30, 2025 and 2024 respectively.

Other (Income)/Expense

8 unchanged sentences

interest was nil and nil for the years ended June 30, 2025 and 2024, respectively.

Net Loss Attributable to Bion’s

Common Stockholders

As a result of the factors described above,

the net loss attributable to Bion’s stockholders was $11,691,000 and $3,189,000 for the years ended June 30, 2024 and 2023, respectively,

Net Loss Attributable to Bion’s Common

As a result of the factors described above, the

net loss attributable to Bion’s stockholders was $2,380,000 and $11,691,000 for the years ended June 30, 2025 and 2024, respectively,

and the net loss per basic common share was $.04 and $.22 for the years ended June 30, 2025 and 2024, respectively.

LIQUIDITY AND CAPITAL RESOURCES

The Company's consolidated financial statements for

the year ended June 30, 2024 have been prepared on a going concern basis, which contemplates the realization of assets and the settlement

The Company's consolidated financial statements

for the year ended June 30, 2025 have been prepared on a going concern basis, which contemplates the realization of assets and the settlement

of liabilities and commitments in the normal course of business.

9 unchanged sentences

Cash expenditures were offset in part by proceeds from

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

As previously noted, the Company is currently not

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

The Company does not anticipate generating

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

While there are no assurances that the Company

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

substantial funding from external sources.

As stated in multiple places in this report, over the last 12 months the Company has had only

very limited success in raising needed funds which lack of success has had material negative effects on the Company and its business.

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

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

financing activities, primarily in debt funding.

As previously noted, the Company

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

The Company does not anticipate

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

While there are no assurances

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

Company will require substantial funding from external sources.

As stated in multiple places in this report, over the last fiscal year

the Company has had only very limited success in raising needed funds which lack of success has had material negative effects on the Company

and its business.

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

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

Investing Activities

During the year ended June 30, 2025, the Company

invested $869,000 in the purchase of property and equipment, primarily related to the Initial Project construction in process.

invested nil in the purchase of property and equipment or other investing activities.

Financing Activities

During the year ended June 30, 2025, the Company

received net cash proceeds of $400,000 from a note payable and $426,00 in convertible loans less commissions of $5,300.

During the year ended June 30, 2024, the Company

received net cash proceeds of $590,000 from the sale of units for $611,000 less commissions of $20,000.

During the year ended June 30, 2024, the Company received

gross cash proceeds of $400,000 from a convertible bridge loan and $125,000 from a convertible loan.

As of June 30, 2025, the Company has debt obligations

consisting of:

a) deferred compensation of $890,000, b) convertible notes payable – affiliates of $1,709,000, c) current note payable

including accrued interest of $419,000 and d) notes payable including accrued interest of $125,600.

As of June 30, 2023, the Company had

debt obligations of a) deferred compensation of $865,000, b) convertible notes payable – affiliates of $1,716,000, and c) current

note payable including accrued interest of nil.

a) deferred compensation of $1,173,000, b) convertible notes payable – affiliates of $1,742,000, c) current note

payable including accrued interest of $423,000 and d) convertible bridge note payable of $1,023,000.

As of June 30, 2024, the Company

had debt obligations of a) deferred compensation of $890,000, b) convertible notes payable – affiliates of $1,709,000, c) current

note payable including accrued interest of $419,000 and d) note payable including accrued interest of $125,600.

Plan of Operations and Outlook

6 unchanged sentences

However, this positive trend

did not continue during the last quarter of the 2023 fiscal year and the entirety of fiscal year 2024 (and the first quarter of 2025 through

the date of this report).

The Company raised very limited equity funds during such periods to meet some of its immediate needs, and therefore,

the Company needs to raise substantial additional funds in the upcoming periods.

The Company has faced substantial demand for capital

and operating expenditures for the fiscal year 2024 that we anticipate will continue (or increase) during the 2025 fiscal year and periods

thereafter as it moves toward commercial implementation of its 3G Tech and development of JVs (including costs associated with additions

of personnel to carry out the business activities of the Company) and, therefore, is likely to continue to face, significant cash flow

management issues due to limited capital resources and working capital constraints which had only begun to be alleviated during 2022 and

As a result, the Company has faced, and continues to face, significant cash flow management challenges due to material working capital

To partially mitigate these working capital constraints, the Company's core senior management and some key employees and

consultants have been deferring most of their cash compensation and/or are accepting compensation in the form of securities of the Company

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

did not continue during the 2025 fiscal year (and the first quarter of 2026 through the date of this report).

The Company raised very

limited equity funds during such periods to meet some of its immediate needs, and therefore, the Company needs to raise substantial additional

funds in the upcoming periods.

The Company has faced substantial demand for capital and operating expenditures for the fiscal year 2025

that we anticipate will continue (or increase) during the 2026 fiscal year and periods thereafter as it moves toward commercial implementation

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

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

working capital constraints which had only begun to be alleviated during 2024 and 2023.

As a result, the Company has faced, and continues

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

To partially mitigate these working

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

compensation and/or are accepting compensation in the form of securities of the Company and members of the Company's senior management

have from time-to-time made loans to the Company in the past and may do so in future periods.

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.

Bion’s leadership team’s

new approach, developing a single proof-of-concept project vs multiple projects developed simultaneously, will substantially reduce the

company’s need to raise capital.

Further, leadership believes this approach represents a more achievable goal, which coupled with

the addition of new leadership, including Turk Stovall to lead Bion’s beef efforts, will reinspire confidence in our own shareholders,

as well as assure potential new strategic and institutional investors, and make it easier to raise funds.

During the years ended June 30, 2024 and 2023, the

Company received gross proceeds of approximately $1,140,000 and $4,038,000, respectively, from the sale of its debt and equity securities.

The Company raised gross proceeds of approximately $639,000 and $4,038,000, respectively, from the sale of equity securities and warrant

The Company paid commissions on the exercise of warrants in the amount of $20,000 and $86,000 in 2024 and 2023, respectively.

During the year ended June 30, 2024 the Company received proceeds of $400,000 from a convertible bridge loan but the provider of the bridge

loan during November 2023 (and on an ongoing basis since such time) breached its contractual obligation/binding subscription agreement

to fund an additional $1,100,000 to the Company, which breach (combined with management stresses related to the final illness and passing

of Dominic Bassani, Bion’s then COO and former CEO, and required management transitions) has created substantial cash flow difficulties

for the Company which are ongoing.

During the year ended June 30, 2024 the Company received proceeds of $125,000 from a convertible note.

financing (including potential agreements with strategic partners – both financial, renewable energy- and ag-industry) to satisfy

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

leadership team’s new approach, focusing on the bolt-on opportunity and developing a single proof-of-concept project vs multiple

projects developed simultaneously, will substantially reduce the company’s need to raise capital.

Further, leadership believes this

approach represents a more achievable goal that will reinspire confidence in our own shareholders, as well as assure potential new strategic

and institutional investors, and make it easier to raise funds.

Going Concern and Management’s Plans:

The Company’s consolidated financial statements have been prepared

assuming the Company will continue as a going concern.

The Company is not currently generating any significant revenues.

the Company’s anticipated revenues, if any, from existing JVs and proposed projects will not be sufficient to offset operating and

capital costs (for Projects) for a minimum of two to five years.

Further, there are no assurances that the Company will ultimately be

successful in its efforts to develop and construct its Projects and market its Systems;

but, it is certain that the Company will require

substantial funding from external sources.

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

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

The aggregate effect of these factors

raises substantial doubt about the Company’s ability to continue as a going concern.

During the year ended June 30, 2024, a one-time, non-recurring, non-cash

charge of $9,460,425 was incurred by the Company in connection with a write-down of the capitalized carrying value of the Initial Project

(at Fair Oaks, Indiana) in order to conform to the applicable accounting practices, because the Initial Project was recently reclassified

as largely a research & development facility and is located on land subject to a short term lease (as described above in Item 7, Management’s

The Company’s consolidated financial statements have

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

The Company is not currently

generating any significant revenues.

Further, the Company’s anticipated revenues, if any, from existing JVs and proposed projects

will not be sufficient to offset operating and capital costs (for Projects) for a minimum of two to five years.

Further, there are no

assurances that the Company will ultimately be successful in its efforts to develop and construct its Projects and market its Systems;

but it is certain that the Company will require substantial funding from external sources.

Given the unsettled state of the current credit

and capital markets for companies such as Bion, there is no assurance the Company will be able to raise the funds it needs on reasonable

The aggregate effect of these factors raises substantial doubt about the Company’s ability to continue as a going concern.

During the fiscal year ended

June 30, 2025, the Company had a loss of $2,380,000 including $844,000 non-cash compensation expenses related to extension of warrants

During the year ended June

30, 2024, a one-time, non-recurring, non-cash charge of $9,460,425 was incurred by the Company in connection with a write-down of the

capitalized carrying value of the Initial Project (at Fair Oaks, Indiana) because the Initial Project was recently reclassified as largely

a research & development facility and is located on land subject to a short term lease (as described below in Item 2, Management’s

Discussion and Analysis).

1 unchanged sentence

for the 2024 fiscal year.

Current liabilities were approximately $5.8 million and $1.6 million at June 30, 2024 and 2023, respectively,

the increase of approximately $4.2 million was largely due to an increase in ‘accounts payable and accrued expenses’ and debt

moving from long term to current liabilities.

Similarly, the Company’s cash on hand decreased from approximately $626,000 to approximately

$52,000 over the same period.

The Company’s extreme difficulty in obtaining needed funds during the entire 2024 fiscal year has

continued throughout the first quarter of the current fiscal year to date.

Going Concern and Management’s Plans, Plan

of Operations and Outlook and ITEM 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations and Note 11

Subsequent Events.

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

negative effects on the pace and scope of the Company’s efforts to operate and develop its business.

The Company has had to delay

payment of trade obligations and has had to economize in many ways that have potentially negative consequences.

If the Company is able

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

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

and development activities.

The Company will need to obtain additional capital to fund its operations and technology development, to satisfy

existing creditors, to develop Projects.

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 pre-revenue

companies like us, that the Company will be able to obtain the funds that it needs to stay in business, complete its technology development

or to successfully develop its business and Projects.

Ultimately, in the event the Company cannot secure additional financial resources,

or complete a strategic transaction in the longer term, the Company may need to curtail or suspend its operational plans or current initiatives,

or potentially liquidate its business interests, and investors may lose all or part of their investment.

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 constraints on available

resources have had, and continue to have, negative effects on the pace and scope of the Company’s efforts to operate and develop

its business.

The Company has had to delay payment of trade obligations and has had to economize in many ways that have potentially negative

consequences.

If the Company is able to raise needed funds during the remainder of the current fiscal year (and subsequent periods), of

which there is no assurance, management will not need to consider deeper cuts (including additional personnel cuts) and/or curtailment

of ongoing activities including research and development activities.

The Company will need to obtain additional capital to fund its operations

and technology development, to satisfy existing creditors, and to develop Projects.

The Company anticipates that it will seek to raise

from $3,000,000 to $10,000,000 or more debt and/or equity through sale of its equity securities (common, preferred and/or hybrid) and/or

debt (including convertible) securities, and/or through use of ‘rights’ and/or warrants (new and/or existing) and/or license

payments and/or through other means during the next twelve months.

Further, Bion will be required to raise $15 million (or more) to fund

its initial project, in a combination of debt financing and equity investment.

However, as discussed above, there is no assurance, especially

in light of the difficulties the Company has experienced in many recent years and the extremely unsettled capital markets that presently

exist for small pre-revenue companies like us, that the Company will be able to obtain the funds that it needs to stay in business, complete

its technology development or to successfully develop its business and Projects.

Ultimately, in the event the Company cannot secure additional

financial resources, or complete a strategic transaction in the longer term, the Company may need to curtail or suspend its operational

plans or current initiatives, or potentially liquidate its business interests, and investors may lose all or part of their investment.

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.

Management’s Plan

To help alleviate short-term cash needs and continue current operations,

three affiliates of the Company (Greg Schoener, Interim COO & Director;

Turk Stovall, Director;

Bob Weerts, Director) and two shareholders

(one of whom is the brother of Greg Schoener) have agreed to advance to the Company, through a newly formed LLC, up to $500,000 in consideration

of a secured convertible promissory note.

It is anticipated that additional investors will join the LLC, and that the funds available

to Bion will increase, although there can be no assurance they will.

The note instrument and agreements have not been executed at this

time because terms and other details have not been finalized yet;

however, the group has begun advancing money to the Company.

the date of the filing of this report, the aggregate sum of $201,564 has been advanced to the Company, together with express directions

on what items were to be paid with such funds.

When a final agreement is executed, it will be attached as an exhibit to a Form 8-K.

To date, the Company has primarily raised funds through private placements

with accredited investors, often conducted through FINRA-registered broker/dealers.

However, the Company anticipates, moving forward,

it will need to raise capital using a combination of financial instruments and sources, that could also include strategic and/or institutional

investors, including family offices and private equity, brokered equity or debt offerings with both public and private investors, and

banks and other ag lending institutions, among others, although there can be no assurance it will be successful.

Many of these financing

options may involve dilution, potentially substantial, for current shareholders.

Management intends to augment its access to capital by

adding one or more staff members (or consultants) with experience in the capital markets, as well as utilizing its current contacts and

relationships in the capital markets.

Bion is currently in discussions with several potential strategic partners

in renewable energy – RNG and solar – and clean fuels, as well as reducing the carbon footprint of livestock production, especially

Some of these candidates have expressed an interest in investing in Bion and JV projects, and management believes that Bion will

receive an investment from such a partner (as well as from other strategic partners from other parts of the value chain), although there

can be no assurance that it will.

Bion is now evaluating both European and U.S.

renewable energy/ clean fuels developers, operators, and

investors to determine the best fit for moving forward with AD/RNG development for its own beef project(s), access to clean fuels value

chains for its low-carbon fertilizers, animal waste treatment for others, both here and in the EU, as well as a development partner in

industrial and municipal opportunities.

Bion believes that such a relationship would entail a direct investment in Bion, licensing fee,

or some other ‘up front’ financial benefit to Bion.

To help alleviate short-term cash needs for continued

operations, three affiliates of the Company (Greg Schoener, Interim COO & Director;

Turk Stovall, Director;

Bob Weerts, Director)

and two shareholders (one of whom is the brother of Greg Schoener) have agreed to advance to the Company, through a newly formed LLC,

up to $500,000 in consideration of a secured convertible promissory note.

It is anticipated that others will join the LLC, although there

can be no assurance they will.

The note instrument and agreements have not been executed at this time because terms and other details

have not been finalized yet;

however, the group has begun advancing money to the Company.

As of the date of the filing of this report,

the aggregate sum of $201,564 has been advanced to the Company, together with express directions on what items were to be paid with such

When a final agreement is executed, it will be attached as an exhibit to a Form 8-K.

The Company continues to explore sources of financing

to satisfy its current operating requirements and future growth needs.

The Company has faced substantial demand for capital and operating

expenditures for the fiscal year 2025 that we anticipate will increase during the 2026 fiscal year and periods thereafter as we move toward

commercial implementation of our 3G Tech and development of JVs (including costs associated with additions of personnel to carry out the

business activities of the Company).

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

material working capital constraints.

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

some key employees and consultants have been deferring most of their cash compensation and/or are accepting compensation in the form of

securities of the Company and members of the Company's senior management have from time-to-time made loans to the Company in the past

and may do so in future periods.

help alleviate short-term cash needs for continued operations, in August, three affiliates of the Company (Greg Schoener, Interim COO

Turk Stovall, Director (at that time);

Bob Weerts, Director) and two shareholders (one of whom is the brother of Greg

Schoener) began advancing money to Bion to cover critical payables.

They subsequently formed a loan group, BION BLG, LLC (“BLG”),

and have continued to provide short-term funding for Bion in a secured promissory note of up to $500,000.

Schoener, Weerts, and the two

non-affiliate members were also large Bion shareholders, prior to the formation of BLG.

As a group, Schoener, Stovall, and Weerts own

60% of BLG, which has a security interest in the Company’s Intellectual Property.

The BLG note will bear interest at a rate of 7.5%

per annum and the maturity date is April 15, 2025.

As of the filing date, BLG has advanced $407,734 .

The BLG note will convert into Units (shares and/or warrants) in the Company at the terms of a later capital raise, in which Bion crosses

the threshold of $3 (three) million in aggregate capital raised (or other source of funding, and other terms as defined in the note).

If the Company is unable to complete such funding within six (6) months, it will be in default of the BLG note, which is secured by the

Company’s Intellectual Property (“IP” “Collateral”).

BLG will share the Collateral on a pro rata basis with

investors in a Note with similar terms being offered to previous Bion investors.

The BLG note and security agreements contain other terms

set forth therein and are included as exhibits to this filing.

November, the Company launched a secured promissory note offering to previous investors/shareholders (and certain others)(Shareholder

Notes) with similar terms to the BLG note.

Based on feedback from shareholders and registered representatives with which the Company has

long standing relationships, management believed at that time that sufficient capital could be raised with this group to 1) continue to

cover critical payables to maintain operations that will allow the Company to finish the engineering report and technology demonstration

at Fair Oaks, 2) move forward with pre-development work on the Stovall project, 3) continue discussions with potential strategic partners,

and 4) position ourselves for the larger offering/ funding that will be required.

As of the filing date, Bion has raised $611,000

in the Shareholder Note offerings.

Further, Bion has changed its focus from pre-development work on the

Stovall project, to an initial bolt-on project at an existing facility.

To date, the Company has primarily

raised funds through private placements with accredited investors, often conducted through FINRA-registered broker/dealers.

Company anticipates moving forward, it will need to raise capital using a combination of financial instruments and sources, that could

also include strategic and/or institutional investors, including family offices and private equity, brokered equity or debt offerings

with both public and private investors, and banks and other ag lending institutions, among others, although there can be no assurance

it will be successful.

Many of these financing options may involve dilution, potentially substantial, for current shareholders.

intends to augment its access to capital by adding one or more staff members (or consultants) with experience in the capital markets,

as well as utilizing its current contacts and relationships in the capital markets.

Bion is in discussions with several potential

strategic partners in engineering, renewable energy (biogas/RNG) and clean fuels, organic fertilizer distribution, and others involved

in reducing the environmental footprint of biogas, agriculture, and livestock production.

Bion is now evaluating a number of these as

potential development and finance partners for project opportunities.

Further, with the recent OMRI Listing for its commercial fertilizer,

the Company has initiated discussions with several large U.S.

fertilizer manufacturers and distributors that have demonstrated interest

in the product.

Bion believes that these industry relationships could entail a direct investment in Bion, licensing fee, or some other

‘up front’ financial benefit to Bion, although there is no assurance that they will.

CONTRACTUAL OBLIGATIONS

We have the following material contractual obligations

(in addition to employment and consulting agreements with management and employees):

We have the following material contractual

obligations (in addition to employment and consulting agreements with management and employees):

The Company entered into an agreement on September

23, 2021, to lease approximately four acres of land near Fair Oaks, Indiana, for the development site of its Initial Project.

The future minimum lease payment under noncancelable

operating lease with terms greater than one year as of June 30, 2024:

From July 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, 2024 were 0.5 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.

ended December 31, 2024 and there is an agreement to extend month to month at the same rate.

The Company has not made consistent lease payments

since October 16, 2023 and has made no payments since February 24, 2025.

The Company owes $106,250 in lease payments at June 30, 2025.

OFF-BALANCE SHEET ARRANGEMENTS

The Company does not have any off-balance sheet arrangements

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

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

The Company does not have any off-balance sheet

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

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

Quantitative and Qualitative Disclosures About Market Risk.

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis