What changed in this filing

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Item 1. Business

2024-09-30 compared with 2023-09-28 · 1268 added, 1703 removed, 520 unchanged (85% of the section changed)

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 Notes5 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, 2024, 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.

Summary and Overview

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 create

extraordinary value for our shareholders and employees (all of whom own securities in the Company) while delivering premium, sustainable

meat products to our customers (and other stakeholders) through ventures developing profitable, transparent, and environmentally sustainable

solutions for livestock agriculture.

Bion’s third generation technology-based platform (“Gen3Tech Platform” or

“Platform”) provides comprehensive environmental treatment for large-scale livestock waste streams (and other organic waste

streams), while simultaneously recovering resources that have traditionally been wasted or underutilized.

Bion’s platform performs

the dual benefits of improving profitability of production by upcycling those resources into value-added byproducts, while preventing

their release to the environment, where they contribute to surface- and groundwater and air pollution, climate change, and other air quality

Bion has identified three distinct market

opportunities for the Gen3Tech platform and its core Ammonia Recovery System (“ARS”) technology that captures,

stabilizes, and upcycles ammonia into low-carbon and/or organic pure nitrogen fertilizers.

Bion intends to pursue:

opportunity to ‘reimagine’ beef production ( within the existing industry supply chain) to produce premium and

sustainable grain-finished beef, with minimal impacts to water, soil, and air, and better economics to its producers;

2) technology

licensing and/or joint venture opportunities internationally and in the U.S.

for post-anaerobic digester use of our ARS:

applications, and b) treatment of organic waste streams from food waste, food processing waste, biofuels, and other organic waste

streams whose processes include anaerobic digestion to produce renewable energy;

and 3) retrofit of existing large-scale livestock

facilities, of which there are hundreds of operations in the U.S.

alone (if not thousands – the exact number is not

Currently, Bion’s efforts are primarily focused on the sustainable

beef production opportunity.

We believe there is tremendous room for improvement in the beef production in this country.

The beef industry

today faces a wide range of challenges, from a fragmented commodity-producing industry with narrow margins to antiquated and inefficient

production practices.

Beef production and consumption is a primary target of the global ‘anti-meat’ messaging campaign from

consumer, investor, and environmental advocacy groups (and the industry’s competitors in the alternative plant-based and cellular

protein spaces).

Bion intends to produce truly sustainable beef, certified by USDA, with dramatic, third-party verified reductions in

the negative environmental effects by mitigating nutrient, greenhouse gas, and other environmental impacts.

To accomplish Bion’s

goal, we will partner with producers and other technology companies who provide solutions for different links of the beef value chain.

Our joint venture/strategic partner-focused business model is designed to deliver a premium sustainable product to the consumer and increased

profitability up and down the supply chain.

During September 2023, Bion successfully

completed the initial startup of its patented Ammonia Recovery System (“ARS)” at its commercial-scale demonstration and

optimization facility near Fair Oaks, Indiana.

The facility has now commenced an operational ‘optimization’ phase during

which modules will be tested/stressed to determine their operational characteristics and establish the best parameters (and related

control systems) for long term operation.

We have begun varying 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.

The ARS is the core of the Gen3Tech platform.

Once its operations have been

optimized, Bion will be able to begin final design to support permitting, and financing of its first commercial beef project.

To Bion’s knowledge, there is no comprehensive treatment solution

for beef manure waste other than our Gen3Tech Platform.

Further, Bion’s business model, which addresses the entire supply chain,

creates additional opportunities to improve on both environmental impacts and production efficiencies.

Bion has 30 years of experience

in livestock waste management and is building a world class team, focused on beef.

We believe we have a significant advantage as the $66

beef industry contends with its environmental impacts, inherent inefficiencies, and a changing consumer demographic.

Our patented and proprietary technology provides advanced

waste treatment and resource recovery for large-scale livestock production facilities (also known as “Concentrated Animal Feeding

Operations” or “CAFOs").

Livestock production and its waste, particularly from CAFOs, has been identified as one of the

greatest soil, air, and water quality problems in the U.S.

Application of our third generation technology (“Gen3Tech”)

and business/technology platform in conjunction with other industry practices (“Gen3Tech Platform” or “Platform”)

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’ – including primarily nutrients and methane

– have traditionally been wasted or underutilized and are the same ‘pollutants’ that today fuel harmful algae blooms,

contaminate groundwater, pollute the air and exacerbate climate change.

During the first half of 2022 Bion began

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

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 great difficulty in securing participation from additional feeders/cattlemen in our Projects.

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/ammonia from the manure

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

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

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

long term mission has been to make livestock production more sustainable, profitable and transparent by deploying our Gen3Tech platform/business

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

The Gen3Tech will

allow us to supply verifiably sustainable premium meat products, together with environmentally friendly, sustainable and/or organic co-products

from the production process.

Bion primarily focused on the beef industry because we believe it faces the most challenges of all the livestock

sectors and can benefit the most from the application of Bion’s technology and business strategy.

We believe the Stovall-Bion JV

represents the best opportunity to prove our strategy and plan to supply sustainable beef at scale.

It is our primary focus.

Our patented and proprietary technology was developed

specifically to provide advanced waste treatment and resource recovery for large-scale livestock production facilities (also known as

“Concentrated Animal Feeding Operations” or “CAFOs").

Livestock production and its waste, particularly from CAFOs,

is a primary source of excess nutrients, that have been identified as the greatest water quality problem in the U.S.

also under increasing scrutiny for their impacts on air pollution and soil health.

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, including renewable energy and nutrients.

These ‘assets’ have traditionally been wasted or underutilized

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

Bion’s technology captures and upcycles these polluting waste emissions and discharges to produce renewable energy, organic fertilizers,

and/or low carbon fertilizers for corn used in the production of clean fuels.

Many associated with the livestock industry, Bion’s

leadership included, believe that within a few years, reducing CAFO impacts – especially ammonia/nutrient control – will be

required or incentivized/ subsidized in the U.S., as it is now in the EU.

Implementing a new regulatory framework in the livestock industry

would create a very large business opportunity for Bion and others to provide ‘retrofit’ solutions to CAFOs to mitigate their

environmental impacts.

While it has been slow to develop, it was this expectation of regulation (or an incentive-driven, industry-wide

transition to cleaner practices) that originally sparked Bion’s commitment to provide technology solutions to the problem.

the recent and growing attention to the environmental impacts from CAFOs, especially impacts related to human health, such as PM2.5 formation

and groundwater nitrates, we believe that the demand for change in how CAFOs are regulated (or cleanup is otherwise incentivized) is accelerating

and will provide us with a robust retrofit opportunity in the not-too-distant future.

The ARS has also demonstrated that it has applications

in the industrial and municipal wastewater sectors, as described below, and we are currently evaluating those capabilities and economics

and the business opportunities they present.

During the second half of calendar 2023, the Company completed construction of our Ammonia

Recovery System (ARS or Initial Project), our commercial scale demonstration facility located near Fair Oaks, Indiana.

Through the end

of 2023, and 2024 to date, Bion has executed a series of testing protocols designed to optimize the ARS’s performance, prepare for

final design of a full-scale commercial system, and support the economic models for sustainable beef production.

The ARS has exceeded

expectations for performance related to both ammonia recovery and efficiencies.

Based on the expanded capabilities of the ARS, and

resulting from our January 2024 patent, the Company’s focus now also includes standalone ‘bolt-on’ ammonia control solutions

for industrial and municipal facilities that use anaerobic digestion (“AD”) to produce biogas.

Unlike CAFOs that are regulated

under a ‘nutrient management plan’, industrial and municipal facilities are ‘point sources’ under the Clean Air

and Water Acts.

Their emissions and discharges are strictly regulated by US EPA, and they are required to control nutrients in their waste

stream discharge.

With the January 2024 patent that extended our IP to include these sources, we believe additional (and potentially robust)

opportunities exist (in addition to animal waste) for our ARS as a standalone ‘bolt-on’ ammonia control solution for those

facilities that produce biogas from organic waste streams.

We also believe that the standalone opportunity, especially if a retrofit of

an existing biogas facility, could represent a much shorter project development timeline and path to revenues, compared to a new beef

facility We intend to pursue this opportunity with a strategic partner with specific expertise and an operating footprint in the biogas/

renewable natural gas (RNG) and/or clean fuels spaces, including sustainable aviation fuel (SAF).

We are evaluating several such potential

partners at this time.

Bion believes these opportunities can create extraordinary

value for our shareholders and employees (all of whom own securities in the Company) and both agriculture and clean fuels ‘partners’

who join us in our ventures and/or utilize our technology.

We anticipate pursuing the opportunities created by our patented Ammonia Recovery

System (ARS) and the third-generation technology (“Gen3Tech”) it supports, utilizing a joint venture/strategic partner model

and/or through sales/licensing transactions.

We believe our technology and our strategic partner model will improve the well-being of

those enterprises utilizing our technology, create value for our shareholders, and improve the planet.

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 former 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.

The pivot in strategy to a faster development timeline

was based on several basic assumptions that proved incorrect (or, at least, premature):

a) that there was a large, ready market for sustainable

beef, waiting to be filled, b) that the beef industry status quo was eager for change and would be supportive of a transition to sustainable

beef, and c) that the substantial investment that would be required to retool production at scale was readily available.

It also relied

on Bion establishing strategic partnerships and relationships related to i) clean fuels/ renewable energy, ii) fertilizer, iii) beef retail/food

service distribution, iv) corporate and project finance, and v) others, that would allow us to ‘plug in’ feeders into an existing

value chain that included distribution/ offtake agreements for protein and byproducts.

Multiple factors have contributed to our inability

(to date) to secure these relationships:

covid-related delays and cost increases with our technology pilot;

additional delays in the construction,

optimization, and demonstration of the ARS technology at commercial scale at Fair Oaks that prevented us from proving the technology’s

effectiveness;

compounded by the extended illness and death of our former CEO and other management issues.

These factors also made it

increasingly difficult for us to raise capital.

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.

Bion will focus almost exclusively on moving that

project forward over the current year.

Upon completion of the first facility at YCF, the JV intends to immediately begin development of

a second set of barns and process equipment for additional capacity.

Ultimately, the JV envisions bringing a robust cattle feeding industry

to Montana, with additional feedyards in the eastern part of the state, which it currently lacks, along with sufficient corn production

and packing/ slaughter capacity.

We believe that our Gen3Tech platform and barns will mitigate the extreme weather that has limited outdoor

cattle feeding in the northern states.

Currently, Montana ships approximately 1.2 million feeder calves south to Colorado, Kansas, Nebraska

and other Midwest states to be fed.

Bion and Stovall Ranching Companies believe that indoor feeding, with its enhanced efficiencies, will

support the development of infrastructure that will allow premium Eco-friendly beef to be produced wholly in Montana, from calving to

We also believe that the State of Montana, like many states in the northern Midwest, will support such development that will

bring generational change and benefits to the state and its agricultural communities.

The Stovall-Bion JV (and future beef projects) will

be developed to produce blockchain-verified, sustainable beef in customized covered barns (resulting in reduced stress on cattle caused

by extreme weather, higher feed/weight gain efficiency, and shortened finishing times) with ongoing manure transfer (through slatted floors)

to anaerobic digesters (AD) that harvest biogas/ renewable natural gas (RNG) for sale.

After the digester, Bion’s ARS will capture

and stabilize the ammonia, to recover its nutrient value that is now being lost, as well as to remediate 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.

We 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 and the balance of 2024.

Bion’s business model and technology platform

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

industry participants based upon the supplemental cash flow generated by implementation of our Gen3Tech business model, which cash flows

will support the costs of technology implementation (including servicing related debt).

We anticipate this will result in substantial

long-term value for Bion.

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

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

The Company believes that the largest portion of its business with be conducted through such JVs, but a material portion may involve licensing

and or other approaches.

Bion’s Gen3Tech was designed to capture and

stabilize these assets and produce renewable energy, fertilizer products, and clean water as part of the process of raising verifiably

sustainable livestock.

All steps and stages in the treatment process will be third-party verified, providing the basis for additional

revenues, including renewable energy-related credits and, eventually, payment for ecosystem services, such as nutrient credits as described

The same verified data will be used to substantiate the claims of a USDA-certified sustainable brand that will support premium

pricing for the meat/ animal protein products that are produced in Bion facilities.

Our business plan is focused on executing

multiple agreements and letters of intent related to 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 s’---large

national and regional agriculture/livestock industry companies (including those involved with distribution and/or sales of meat products)

in the country which are ongoing at this date.

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.

Based on our endeavors in executing multiple

agreements and letters of intent related to the “Bion Beef Opportunity”, we intend to commence development of multiple sustainable

beef JV projects over the next twelve-eighteen (12-18) months while moving forward with the Initial Project (see below) and one or more

of the LOI Projects.

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

During the past nine months, the Company has constructed

(construction is largely completed) our 3GTech Ammonia Recovery System (‘ARS’) at our Initial Project (our commercial scale

demonstration facility) located near Fair Oaks, Indiana and begun operations of phase 1 of our Initial Project .

We recently announced

that 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 platform.

The ARS 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 also produce a solid/granular nitrogen fertilizer product at the Initial Project (when the crystalizer module

is ready for operation during the next quarter) which we believe will be both ‘ClimateSmart’ 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).

intends to focus primarily on:

i) completion of development/construction and operation of the Initial Project, our initial commercial-scale

Gen3Tech installation (see below and Notes to Financial Statements ) ,

and optimization of its operational parameters, ii) pre-development planning of the Dalhart, Olson and DVG Projects (and/or other Gen3Tech

beef JV projects) including steps toward distribution agreements, iii) developing applications and markets for its low carbon ‘ClimateSmart’

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

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

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

beef and other livestock segments), while (v) continuing to pursue :

A) licensing opportunities and B) business opportunities related

to large retrofit projects (such as the Kreider poultry project JV described below) and vi) ongoing R&D activities.

coproducts that include clean water, RNG, and fertilizer products, both ‘Climate- and Water-Smart’ and/or organic.

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 potentially

nutrient credits.

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.

Once Bion’s technology and production platform,

business model, and consumer demand have been proven, it may create the opportunity for joint ventures between the Company and larger

livestock/food/fertilizer industry participants.

To accomplish Bion’s goals in this sector, we anticipate that we will ‘partner’

with other technology and service 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 larger enhanced revenue contributors provided by Bion to the JVs (and Bion licensees).

The Company believes that

a large portion of its business will be conducted through such JVs, but a material portion may involve licensing and or other approaches.

Renewable Energy/ Clean Fuels Strategic Partner

Bion is currently (and has been) in discussions with

several companies related to strategic partnerships in renewable energy production – 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 complex.

While Bion has over 30 years of experience in capturing and recycling nutrients, the Company needs to build

on its ability to fully understand the overlapping opportunities in the two spaces, and how to exploit them to their fullest potential.

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.

After its IP was extended to industrial and municipal waste streams in

January 2024, Bion announced its intention to establish strategic partnerships and to market the ARS as a standalone ’bolt-on’

ammonia control solution for anaerobic digestion (“AD”) of both animal manure waste (non-Bion livestock waste treatment facilities),

as well as industrial and municipal wastewater, both in the U.S.

and in Europe (See Standalone Opportunity below).

Bion is now focused primarily on:

and final testing at the Initial Project, our commercial-scale ARS installation at Fair Oaks, IN, for support of final design, feasibility

studies and/or engineering reports related to our initial JV Project (and further optimization of its operational parameters), ii) pre-development

planning of the Montana Stovall-Bion JV beef project, including distribution agreements for beef and co-products, iii) identifying a biogas/

clean fuels partner(s) for both livestock and industrial projects, iv) developing applications and markets for its low carbon ‘Climate-Smart’

and organic fertilizer products (including life-cycle analysis (LCA) to determine Carbon Intensity (CI) Score for both liquid and solid

products, and organic listings/certifications for multiple liquid products) and its sustainable (conventional and organic) animal protein

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

based on the augmented capabilities of our Gen3Tech platform (in the sustainable beef and other livestock segments), (vi) exploring opportunities

related to stand-alone ARS markets, and vii) ongoing R&D activities.

Each of the initiatives/activities referenced above are subject

to resolution of the financial constraints facing the Company that are described in multiple places in this document.

Technology Platform and Development

Bion has invested decades of work and substantial

capital in the development of our technology and technology platform since 1989.

The predecessors to Bion’s Gen3Tech platform, our

patented first- and second-generation technologies (“1G and 2G Tech”), were proven at commercial scale.

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

The 2G Tech was reviewed and qualified for federal loan guarantees under USDA’s Technical Assessment program.

2G Tech dairy project (“Kreider 1” or “KF1”), located at Kreider Farms in Pennsylvania (“PA”) received

the first verified /measurable nutrient reduction credits from a non-point source livestock facility in the U.S.

and its nutrient reductions

were verified by the Pennsylvania Department of Environmental Protection (“DEP”) during 2012.

For more information on Bion’s

2G Tech, please see Bion’s Form 10-K, for the year ended June 30, 2023.

(and prior years).

A key attribute of Bion’s 2G Tech, now our Gen3Tech,

was that nutrient and other pollution reductions could be measured, providing a level of verification on par with a municipal wastewater

treatment plant, which created the opportunity for the nutrient reductions to be used as “qualified offsets” to EPA-mandated

requirements.

However, while it was an engineering success, the 2G Tech failed financially because the platform was dependent on either

regulation or revenues from an anticipated incentive program under the Chesapeake Bay Strategy, that did not materialize.

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.

The Gen3Tech platform was developed to maximize value from resource recovery and co-products, by using AD to produce biogas

and our ARS to produce fertilizer products.

By verifying these processes to the consumer, we would achieve premium pricing from USDA PVP-certified

‘environmentally sustainable’ retail branding of the animal protein products it supports.

Further, the third-generation platform

provides enhanced nutrient control, compared to prior versions, and will also generate verified water quality trading credits (or some

other form of payment for ecosystem services that we believe is inevitable for nutrient impaired watersheds).

The core technology that supports the Gen3Tech platform

is Bion’s patented and proprietary Ammonia Recovery System (ARS), which utilizes existing commercial evaporation and distillation

process equipment (with decades of reliability and service history) that is customized for Bion’s specific applications.

patent on the ARS was filed in 2015, for an ammonia recovery process that produces ammonium bicarbonate (a commercial fertilizer) without

external chemical additives, thereby providing the basis for organic certification.

A Notice of Allowance from the US Patent and Trademark

Office (“USPTO”) was received during August 2018 related to this patent application and the patent was subsequently issued.

Since July 2017 Bion has filed for continuations of this patent to provide broadened protections and to cover improvements to the process

developed in the interim.

During August 2020 the Company received a ‘Notice of Allowance’ for our third patent related to

our Gen3Tech and additional related applications are pending and/or planned (See “Patents”).

In January 2024, the ARS claims

were extended to industrial and municipal wastewater streams, in addition to the animal manure waste streams, previously covered.

Ammonia Recovery System

The patented ARS is the core of Bion’s Gen3Tech

It recovers and upcycles more than 90 percent of the volatile ammonia that is available in the livestock manure (or other

organic) waste stream effluent after biogas/methane is produced through anaerobic digestion (AD).

The technology has applications in various

industrial organic waste streams, including food processing, slaughter/packing plants, and municipal facilities that utilize AD to produce

The ARS utilizes the CO2 that is also in the organic waste stream to stabilize the ammonia, forming ammonium carbonate/bicarbonate

in either a liquid or solid form.

Ammonium bicarbonate has a long history of use as a water-soluble nitrogen fertilizer, that was commonly

used before the advent of low-cost synthetic fertilizers, such as urea.

Ammonia nitrogen enters the environment through volatilization

(evaporation) from the AD effluent, before and after it is applied to croplands as fertilizer, or it enters the water supply directly

in runoff from fields where it has been spread.

Approximately 80 percent of the ammonia in livestock manure is lost in this manner.

the ammonia has escaped to the environment, it is highly mobile, water soluble, and difficult to recapture and treat (it is the primary

cost-driver in municipal wastewater treatment).

Airborne ammonia can contribute to the formation of PM2.5, small inhalable particulate

matter that causes respiratory distress and is regulated under the Clean Air Act.

In runoff, ammonia in the form of nitrate contaminates

groundwater and fuels algae blooms in coastal waters that are becoming increasingly toxic.

Ammonia nitrogen is the primary driver of nutrient

runoff that US EPA calls the most expensive and difficult to treat water quality problem in the U.S.

Capturing and stabilizing

the ammonia both minimizes its environmental impacts and allows us to produce our low-carbon and/or organic ‘pure’ nitrogen

fertilizer products that can be transported to where they are needed and applied when they are needed.

Operating results at the Initial Project demonstrate

ARS performance exceeds initial expectations for ammonia recovery and related economics.

The Company has achieved multiple key technical

objectives in the optimization of the ARS, which will support the final design process for full-scale systems, based on results to date

and testing anticipated to be completed by the end of September 2024.

The ARS has achieved and maintained controlled operations under

a variety of conditions, producing both liquid and crystal ammonium carbonate/bicarbonate, Bion’s commercial nitrogen fertilizer

Bion has largely optimized the ARS’s operating parameters and has demonstrated that it meets and/or exceeds the results

needed for Bion’s economic models for large-scale commercial projects.

The Company expects final optimization to continue through

the end of September 2024 and provide the data required to support final design/engineering for commercial project modules.

Bion received an OMRI (Organic Materials Review Institute)

Listing on its first commercial nitrogen fertilizer product, a 10-0-0 ammonium bicarbonate solution, in August 2024, which provides assurance

to organic growers and their certifiers that the fertilizer can be used in organic production.

Fertilizers that can be used in organic

production command substantially higher prices than synthetic (chemically-produced) commercial fertilizers, such as urea.

Bion will initially

focus on several markets for its OMRI Listed fertilizers, including production of high-value specialty crop fruits & vegetables, organic

corn side dressing, and hydroponic and greenhouse applications.

Bion also expects demand in regions where nitrogen inputs are required

to maximize the benefits of cover crops that store carbon and improve soil and microbial health.

Further, Bion is also evaluating opportunities

in regenerative practices that include fertilized pastures to graze cattle.

At this time, Bion intends to continue producing liquid and

crystal fertilizer products at the Initial Project to support testing and life-cycle analysis, product trials, and ongoing organic and

low-carbon fertilizer initiatives.

Bion has produced and will continue to produce a solid/granular nitrogen fertilizer product at the

Initial Project 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.

Final economic and energy efficiency models will be

validated during the final design process.

The Company intends to engage Hebeler Process Solutions/ Buflovak, our technology development-engineering

firm, during the upcoming quarter to prepare an evaluation and report of the ARS and its economics, while also moving forward on final

commercial design for the Stovall JV project.

Bion anticipates it will also engage a nationally-recognized and unrelated engineering firm

to produce a third-party engineering report, describing the processes and economics of its Ammonia Recovery System, which is a requirement

for USDA loan guarantees.

We believe this data will also provide potential stakeholders, including a) cattle producers and feeders, packers,

distributors, retailers in the agricultural segment, b) biogas and clean fuels developers and producers, c) operators of industrial and/or

municipal facilities utilizing ADs and d) financial institutions with the information they need to proceed with confidence in collaborating

with Bion on projects.

Each of the initiatives/activities referenced above are subject to resolution of the financial constraints facing

the Company that are described in multiple places in this document.

Gen3Tech Platform

Our Gen3Tech platform provides comprehensive waste

treatment and resource recovery that is unmatched in the industry today.

The platform consists of manure handling and conditioning,

anaerobic digestion (AD) and biogas upgrading, coupled with our Ammonia Recovery System (ARS) and fertilizer processing, handling and

The Gen3Tech platform is the basis for a JV business model with four primary distinct revenue streams:

1) pipeline quality renewable

natural gas and related carbon and other environmental credits, 2) premium fertilizer product and related credits s:

organic and ‘low-carbon’,

3) premium pricing/revenues for USDA PVP-certified (or otherwise verified) ‘Environmentally Sustainable’ or ‘Eco-friendly’

branded meat at the retail level, and potentially 4) nutrient reduction credits in certain watersheds.

Carbon and nutrient credit revenues

will be supported by third-party verification of the waste treatment processes with relatively limited incremental cost to Bion.

verified data will also provide the backbone for the USDA PVP-certified sustainable brand, with limited incremental cost.

Renewable energy and renewable energy- and carbon-related credits:

Bion’s Gen3Tech platform utilizes

anaerobic digestion (“AD”), customized to maximize both recovery of biogas (methane) and ammonia nitrogen from the waste stream.

At sufficient scale, methane produced from AD can be cost-effectively conditioned/cleaned, compressed and injected into a pipeline or

used onsite, depending on project needs and economics.

The US Renewable Fuel Standard (“RFS”) program and state programs,

like the LCFS in California and elsewhere, provide ongoing renewable energy credits for the production of biogas and its subsequent use

as a renewable fuel.

The CO2 recovered in the gas cleaning process will be recycled for use in the production of organic fertilizer products

along with the ammonia-rich digestate, instead of venting it to atmosphere.

Gen3Tech facilities will also generate photovoltaic (solar)

electricity from modules placed on the roofs of the barns (approximately 12 acres of rooftop per 15,000 head of cattle module) to supply

onsite needs and/or export to the grid, depending on project requirements.

Additional renewable energy-related credit programs are being

developed that Bion believes will impact these revenues, including a Carbon Intensity (CI) score that measures the amount of carbon produced

per unit of energy produced.

Organic and ‘Low Carbon’ :

The Company has focused a large portion of its activities on developing, testing, and demonstrating the 3rd generation of its technology

and technology platform, with emphasis on increasing the efficiency of production of valuable co-products from the waste treatment process,

including ammonia nitrogen in the form of low carbon and/or organically certified soluble nitrogen fertilizer products.

The ammonium bicarbonate

products (liquid and solid) produced by Bion’s Gen3Tech platform require the use of no outside compounds or chemicals and will enjoy

a dramatically lower carbon footprint than synthetic nitrogen fertilizers.

Much 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 in the form of urea, with methane from fossil

fuels as the energy source.

It is an extremely energy-intensive process with a very large carbon footprint that accounts for much of agriculture’s

overall carbon footprint.

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.

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.

In March 2024, Bion applied for an OMRI (Organic Materials Review Institute) Listing on its first commercial

nitrogen fertilizer product, a 10-0-0 ammonium bicarbonate solution.

Bion was granted the Listing in August, which provides assurance

to organic growers and their certifiers that the fertilizer can be used in organic production.

Ammonium bicarbonate, manufactured using

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

Fertilizers that can be used in organic production command

substantially higher prices than synthetic (chemically-produced) commercial fertilizers, such as urea.

Based on preliminary market surveys

to date, we believe that existing competing organic fertilizer products are being sold presently at price points significantly greater

than Bion’s projected cost and projected pricing.

Bion will initially focus on several markets for its OMRI Listed fertilizers,

including production of high-value specialty crop fruits & vegetables, organic corn side dressing, and hydroponic and greenhouse applications.

Bion also expects demand in regions where nitrogen inputs are required to maximize the benefits of cover crops that store carbon and improve

soil and microbial health.

Further, Bion is also evaluating opportunities in regenerative practices that include fertilized pastures to

graze cattle.

We also believe that livestock products from animals raised with feed grains grown using Bion’s organic ammonium bicarbonate

fertilizer products (and that otherwise qualify) will receive organic approvals.

In addition to liquid ammonium nitrogen fertilizer,

Bion’s ARS 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.

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

organic fertilizers.

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

existing equipment.

Applications for our first solid form

of concentrated 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.

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 from either the NOP or the National Organic Standards Board (“NOSB”)

(which is currently involved in a related review and recommendations process regarding ‘high nitrogen liquid fertilizers’

derived from ammonia from manure).

The Company and its representatives, along with a number of other 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.

The overarching standard of organic

production, per NOP guidelines, is that a “product shall have been produced and handled without the use of synthetic chemicals…”

That is rule Number One.

At NOP, the term "synthetic" means “a substance that is formulated or manufactured by a chemical

process or by a process that chemically changes a substance extracted from naturally occurring plant, animal, or mineral sources, except

that such term shall not apply to substances created by naturally occurring biological processes.” In evaluating and approving Bion’s

liquid ammonia for OMRI listing, Bion’s patented ammonia recovery system was not deemed synthetic.

That is an important distinction

for future Bion product filings based upon the same patented process.

Irrespective of an organic certification,

Bion believes that its crystalline ammonium bicarbonate will have use in another, potentially large, fertilizer market:

production of

corn grown for ethanol that is then upgraded to sustainable aviation fuel (SAF).

The Company is exploring the market potential for its

fertilizer (in liquid and/or solid forms) as a verifiably low carbon/ ‘Climate Smart’ product (potentially a much larger market

than the organic market) with focus on producing corn used for biofuels.

The carbon footprint (Carbon Intensity) of clean fuels (and therefore

the tax credits available for their use) is determined by a ‘life cycle analysis’ (LCA) that considers all the energy inputs

to the fuel and its production processes, compared to a fossil-fuels baseline.

In the case of corn ethanol that can be upgraded to SAF,

one of the largest inputs is the fertilizer used to grow the corn.

The baseline for that fertilizer is urea.

We believe Bion’s ability

to substantially reduce the carbon footprint of the fertilizer, and therefore that of the entire chain, will create significant value

for our partners and customers.

This will require working with industry and academic entities to develop

appropriate metrics and produce an independent ‘life cycle assessment’ (LCA) for Bion’s

ammonium nitrogen fertilizer product, which can be compared to conventional nitrogen fertilizer products, like urea.

Because Bion’s

ARS recovers both nitrogen and CO2 from the waste stream (including using CO2 usually vented to the atmosphere as a stabilizing agent),

it creates added 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 that will lead to a very low carbon footprint.

Further, 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 wastewater treatment for re-deposited ammonia nitrogen.

The Company believes there is a significant

‘Climate Smart’ 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.

Bion has conducted a preliminary LCA – while it is not considered ‘independent’, it used the internationally-accepted

GREET model – and it demonstrates our ammonium bicarbonate has a dramatically lower carbon footprint compared to the urea baseline.

Sustainable Brand Premium:

Consumers have demonstrated a willingness

to pay a premium for safe and sustainable food choices.

Based on Bion’s recognition of the potential opportunities created by such

willingness, beginning in 2015, Bion worked with the USDA’s Process Verified Program (“PVP”) – the ‘gold

standard’ in food verification and branding – to establish a USDA PVP-certified sustainable brand.

Bion received conditional

approval from the PVP related to its Kreider 1 project (utilizing 2G Tech).

It is our intention to submit an application for the Gen3Tech

platform when the initial Gen3Tech Project is operational and seek an approval for certification based on third-party-verified reductions

in nutrient impacts, greenhouse gases and pathogens in the waste stream (and other attributes), based on our Gen3Tech platform.

PVP certification

incorporated as part of a recognizable brand (together with point-of-sale information) will provide consumers with products and brands

that can be trusted.

Bion believes that such a brand and livestock product line will command a pricing premium for Bion’s livestock

JVs and their customers.

Food safety and sustainability are

issues of growing importance in the U.S.

and worldwide.

Bion’s branding initiative reflects trends already underway in the livestock

Driven by growing consumer demand, large food retailers (such as Walmart and Costco) and restaurant chains (including Chipotle

and McDonalds) are increasingly demanding greater responsibility and improved sustainability in food production practices from their suppliers.

The Global Roundtable for Sustainable Beef (“Roundtable”) was created to advance a sustainable global beef value chain that

is “environmentally sound, socially responsible and economically viable”.

The Roundtable represents members from across the

supply chain, including U.S., Canadian and Australian cattlemen’s associations, Cargill, JBS, Elanco, McDonalds and A&W.

Large institutional investors have

begun to pressure the livestock industry.

Ceres and several other large activist institutional investors have already expressed concerns

about carbon footprint, water quality, antibiotic usage and animal welfare in letters to management of their investment holdings in the

food production industry.

The Collier Farm Animal Investment Risk & Return (“FAIRR”) Initiative was recently launched

to highlight the environmental, social, and governance (“ESG”) risks associated with large-scale livestock production.

In past years, the UN FAO has issued

several highly critical reports of the livestock industry, more recently focused on its impacts on climate change.

While some of their

early reports were based on incomplete data and faulty methodologies and have since been somewhat quietly ‘retracted’, a wide

array of activist groups, including climate, animal rights, and anti-factory farming advocates, have seized on them to create a global

“anti-meat” messaging campaign.

Their messaging is predicated on the (incorrect) notion that agriculture, and the livestock

sector specifically, is the largest contributor to climate change, greater than the energy and transportation sectors.

While this fact

has been publicly ‘debunked’, the anti-meat campaign has been joined and amplified by various other stakeholders, governments,

and more recently, competitors in the alternative protein space, such as plant-based and cellular meats.

Over the last few years, most large

meat and dairy product retailers have announced ‘sustainability’ initiatives, although the definition of sustainability is

often unclear.

Based on recent statements from the industry regarding sustainability policy, many that identify goals that are 10 to 30

years in the future, Bion believes that sustainability on the production side will look a lot like what the Company’s Gen3Tech

platform can provide today.

The Gen3Tech platform can deliver verifiable metrics that demonstrate meaningful improvements in sustainability

for livestock production that are unmatched in the industry today, including a dramatically reduced carbon and nutrient footprint;

negative impacts to water, soil and air;

increased pathogen destruction;

and other environmental and public health impacts.

pandemic has further heightened consumer awareness and concerns related to a) environmental sustainability, b) food safety, c) sourcing

and traceability and d) humane treatment of both animals and workers.

The more the livestock industry’s supply chain practices

become transparent and known by consumers, the more consumers are seeking alternatives.

Bion’s ‘Sustainable’ branding

program is designed to address a wide array of consumer concerns including:

a) ‘where does your food come from?’ (animal heritage

information);

b) climate change (carbon) and other key environmental impacts (air/water/soil);

c) antibiotic use/ standards;

welfare/ humane treatment;

e) laborer welfare/ working conditions.

These issues can be addressed with the consumer through general advertising

and/or at the point of sale with a QR code on the packaging that links back to product-specific data.

The verification processes that

will be employed by Bion’s Gen3Tech platform support block chain traceability, providing accountability throughout that part of

the supply chain addressed by Bion’s platform and enabling any quality issues to be quickly identified by lot and location, minimizing

risk to its consumers.

In essence, Bion’s comprehensive technology platform will enable its livestock JVs and other adopters to

be not only the provider of the product the consumer wants, but also the businesses that shares their consumers’ values.

Water Quality Trading/ Nutrient Credits:

In parallel with technology development,

Bion has worked (which work continues) to implement market-driven strategies designed to stimulate private-sector participation in the

nutrient and carbon reduction strategy.

These market-driven strategies can generate “payment for ecosystem services”,

in which farmers or landowners are rewarded for managing their land and operations to provide environmental benefits that will generate

additional revenues.

Existing renewable energy credits for the production and use of biogas are an example of payment for ecosystem services.

Another such strategy is nutrient trading (or water quality trading), which will potentially create markets (in Pennsylvania and other

states) that will utilize taxpayer funding for the purchase of verified pollution reductions from agriculture (“nutrient credits”)

by the state (or others) through competitively-bid procurement programs.

Such credits then can be used as a ‘qualified offset’

by an individual state (or municipality) to meet its federal clean water mandates at significantly lower cost to the taxpayer.

Market-driven

strategies, including competitive procurement of verified credits, are supported by U.S.

EPA, the Chesapeake Bay Commission, national

livestock interests, and other key stakeholders.

Legislation in Pennsylvania to establish the first such state competitive procurement

program passed the Pennsylvania Senate by a bi-partisan majority during March 2019 but has not yet crossed other hurdles required for

actual adoption.

Bion believes that nutrient reduction (and

other similar) credits and/or other methods of monetizing environmental benefits from the capture and re-purposing of the nutrients (largely

nitrogen and phosphorus) from the livestock waste stream, will become available in multiple states over the next several years.

in the Pennsylvania (“PA”) Senate of key legislation – SB 575 – in June 2019 that would have established a competitively-bid

market for nutrient credits in PA, is indicative of the trends.

Despite the fact that the bill was not considered in the House, due to

the Covid-19 pandemic (a re-introduced bill will have to be considered again in the current and/or future sessions, Bion anticipates that

after passage of a similar bill in the future, PA will establish a competitively-bid market for nutrient credits within twelve months

after legislative passage and being signed into law by the Governor.

See “Policy Change is Coming” and “Kreider Poultry

Joint Venture and Pennsylvania and Chesapeake Bay Initiatives” below for discussion of the history and status of matters in PA.

Political pressures, coupled with resistance from the entrenched interests of the cleanwater ‘status quo’, make it impossible

to reasonably project a timetable for adoption of the policy changes needed to establish a nutrient trading program (or similar program

that would allow agriculture to monetize low-cost nutrient reductions).

Initial Project

The Initial Project is our commercial-scale Ammonia

Recovery System designed to demonstrate and optimize our core technology in preparation for development of a full-scale commercial project.

During September 2021, Bion entered into a lease for the development site of the Initial Project, located on approximately four (4) acres

of leased land near Fair Oaks, Indiana, and a related agreement regarding disposal of manure effluent with the Curtis Creek Dairy unit

of Fair Oaks Farms (“FOF”).

Design and pre-development work commenced during August 2021 and construction was largely completed

in September 2023, several months behind schedule.

The facility utilizes effluent from the anaerobic digesters that process the waste

from the dairy.

The ARS demonstration facility has exceeded expectations for both treatment performance and economic efficiencies.

The project was not developed at economic commercial

scale or with an expectation of profitability due to its limited scale.

The facility is large enough to demonstrate engineering capabilities

of Bion’s ARS at commercial scale, but small enough that it could be constructed and commissioned relatively quickly.

It was designed

so that successful installation, commissioning, and operations could 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.

The Initial Project produced a 10-0-0 commercial nitrogen liquid fertilizer that received an OMRI Listing as

described above.

Originally, 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 and optimization completed, and the operation is now focused on final optimization of operation parameters

for final design of full-scale systems.

See Note 3 “Property and Equipment” and Note 11 “Subsequent Events” (for

activities since the start of the first quarter of the 2024 fiscal year).

Upon completing the primary goals of phase 1 of the

Initial Project (only final optimization and design remain), the Company will determine whether to continue to operate the Initial Project

at that location or 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 ARS 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.

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 to other locations.

Business Opportunities

Bion’s core ARS technology and the Gen3Tech

platform and business model it supports, create three distinct, but related, opportunities for Bion and its strategic partners to exploit:

1) the transition to sustainable and sustainable-organic beef, 2) standalone ammonia control for biogas production, and 3) retrofit of

existing CAFOs to mitigate environmental impacts.

Bion leadership believes the sustainable beef opportunity is unique at this time, as

we are not aware of any other comprehensive system or process that offers treatment for or recovery of ammonia from beef waste.

still evaluating the ARS’s capabilities in the industrial and municipal sectors;

however, early indications are that there will

be a ‘sweet spot’ (a combination of source, concentration, and solids content) where the ARS can provide cost-effective solutions,

especially livestock packing/ slaughter waste, which waste stream is quite similar to manure waste.

While the retrofit opportunity will

require policy change, when cleanup of the $175B livestock industry is mandated, it represents an opportunity for Bion and others that

is very large.

Sustainable Beef

Bion’s efforts are primarily focused on exploiting

our sustainable beef opportunity through the Stovall-Bion JV.

We believe that the beef industry represents the ‘best use’

of Bion’s system capabilities and attributes, and its strategic partner model, The beef industry today faces a wide range of challenges,

from a fragmented commodity-producing industry with narrow margins to antiquated and inefficient production practices that start with

outdoor feedyards.

Beef production and consumption is a primary target of the global ‘anti-meat’ messaging campaign from consumer,

investor, and environmental advocacy groups (and the industry’s competitors in the alternative plant-based and cellular protein

Bion intends to produce truly sustainable beef, certified by USDA, with dramatic, third-party verified reductions in the negative

environmental effects by mitigating nutrient, greenhouse gas, and other environmental impacts.

To accomplish Bion’s goal, we will

partner with producers and other technology companies who provide solutions for different links of the beef value chain.

Our joint venture/strategic

partner-focused business model is designed to deliver a premium sustainable product to the consumer and increased profitability up and

down the supply chain.

At present, there is essentially no traceable and

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

these attributes in their products.

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

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

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

Many companies have announced

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

than substantive undertakings at this date.

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

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

Bion predicts that within approximately five

years, consumers will be able to track and verify claims including sustainability on 25% (or more) of the products merchandised in the

meat department.

Bion believes that the retail market share of verifiably sustainable beef in the US will approach 7-10 % within three

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

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

utilizing Bion’s Gen3Tech platform will supply one-third (1/3) or more of that of the premium market segment (and a higher portion

of meat that is actually traceable and verifiably sustainable).

Our goal is to have multiple sustainable beef projects under development

(within 3-5 distinct JVs) by the end of our 2025 fiscal year.

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

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

Our current target

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

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

Further expansion in the number

of distinct JVs is projected through 2026-7 aiming at 5-10 JVs in process --- each of which JVs will be pursuing development of multiple

Modules with targets of 12-15 populated Modules by the end of 2026 (approximately 2%-3% of the US beef market) and 30-45 Modules constructed

and being populated by 2029 (approximately 6%-8% of the US beef market) with further expansion thereafter.

Bion’s current goal is

that its Gen3Tech platform will be utilized to produce 33% of the verifiable “sustainable beef” category at the end of the

period (which will equal approximately 2 million cattle annually)(45 Modules).

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 five (5) year period, the Company also

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

In parallel with the business activities outlined

above, during the current fiscal year the Company intends to proceed with adding to its senior management personnel, while strengthening

its corporate governance (including environmental/social/governance steps (‘ESG’)) and seeking to ‘uplist’ its

common stock on a national securities exchange improve both liquidity and ability to access capital markets.

HISTORY, BACKGROUND AND CURRENT ACTIVITIES

Since the Company’s inception, Bion has

designed and developed advanced waste treatment systems for livestock.

The first and second generations of Bion’s technology platform

were biological systems, primarily focused on nutrient control.

Over 30 of these systems were deployed at New York dairies, Florida food

processing facilities and dairies, North Carolina hog farms, a Texas dairy and a Pennsylvania dairy (“Kreider 1 Project”).

The systems were highly effective at their intended purpose:

capturing nitrogen and phosphorus.

They produced BionSoil as a byproduct,

which was a remarkably effective soil amendment/ fertilizer product, but whose value was not enough to support a viable business model.

As such, these early technology iterations were entirely dependent on either implementation of new regulations requiring waste treatment,

or subsidy/ incentive programs that would provide ‘payment for ecosystem services’.

By the mid-2010’s, it became apparent

that neither of these options were imminent or even assured, so the Company initiated the steps to reimagine and redesign its technology.

From 2016 to 2021 fiscal years, the Company focused

most of its activities and resources on developing, testing and demonstrating the third generation of its technology and technology platform

(“Gen3Tech”) that was developed with an emphasis producing more valuable co-products from the waste treatment process, including

renewable natural gas and ammonium bicarbonate, a low-carbon, organic ’pure’ nitrogen fertilizer product, while raising sustainable

The $175 billion U.S.

livestock industry is under

intense scrutiny for its environmental and public health impacts – its ‘environmental sustainability’-- at the same

time it is struggling with declining revenues and margins (derived in part from clinging to its historic practices and resulting limitations

and impacts) which threaten its ‘economic sustainability’.

Its failure to adequately respond to consumer concerns including

food safety, environmental impacts, and inhumane treatment of animals have provided impetus for plant-based alternatives such as Beyond

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

of the market (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

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 initial LOI Project will commence during 2024.

Prior to such activity, the Company has constructed

and commenced operation 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 LOI Projects).

For the purposes

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

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.

During 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.

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 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.

Originally, 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

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:

Proof of Gen3Tech platform scalability

Document system efficiency and environmental benefits and enable final engineering modifications to optimize each unit process within the Bion Gen3Technology platform.

Environmental benefits will include (without limitation) renewable energy production (natural gas recovery from AD and solar electric from integrated roof top photovoltaic generation);

nutrient recovery and conversion to stable organic fertilizer;

pathogen destruction;

water recovery and reuse;

air emission reductions.

Use Bion’s data collection system to support 3 rd party verified system efficiency requirement to qualify for USDA Process-Verified-Program (PVP):

certification of sustainable branded beef (and potentially pork) product metrics.

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.

This Purchase Order encompasses the core of Bion’s 3G

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, 2023 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.

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

The Initial Project will be carried out in stages

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 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 such as the LOI Projects, by

moving toward 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

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

to other locations.

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.

Gen3Tech Beef Business Model

As one of the largest contributors to some of the

greatest air and water quality problems in America, it is clear that livestock waste cleanup, at scale, represents one of the greatest

opportunities we have to reduce negative environmental impacts of the food supply chain on air and water quality.

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.

these attributes.

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

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

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

Many companies have announced ‘sustainability’

initiatives, but most appear to consist largely of ‘greenwashing’ marketing commitments rather than substantive undertakings

at this date.

Note, however, that Tyson’s Brazen beef initiative (which was announced during March 2023) may develop into a substantive

competitive factor in the sustainable beef marketplace, although the meaningfulness of its claims is now being challenged too.

Bion believes that substantial unmet demand currently

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demonstrate the U.S.

consumers’ preferences for sustainability.

For example, 2019 NYU Stern’s Center for Sustainable Business

study found that ‘products marketed as sustainable grew 5.6 times faster than those that were not…’ and that ‘…in

more than 90 percent of consumer-packaged-goods (CPG) categories, sustainability-marketed products grew faster than their conventional

counterparts.’ Sales growth of plant-based alternatives, including both dairy and more recently ground meat (Beyond Meat, Impossible

Foods, etc.) have shown that a large, but apparently limited, segment of consumers is choosing a 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.

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 support in 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’.

Advocacy groups targeting livestock and the beef industry

have recently been joined by competitors that produce animal protein alternatives in seeking to exploit the industry’s environmental

and economic weaknesses.

Their global anti-meat messaging has had a substantial chilling effect on the relationships the beef industry

has with its institutional investors;

retail distributors, such as fast-food restaurants;

and mostly, its consumers.

Led by the United

Nations Food and Agriculture Organization, a coordinated anti-meat messaging campaign has targeted consumers worldwide, primarily focused

on the industry’s impacts on climate change.

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.

However, 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 until 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

While facing myriad challenges and further out on the development timeline, some people believe cellular agriculture (aka

cultured, clean, lab-grown, cultivated) meat may have the potential to service a much larger percentage of the market than plant-based

protein, including cuts like steaks, chops and roasts, but the likely cost remains very uncertain at this point.

Each of these items supports Bion’s belief that

there is a potentially very large opportunity to supply premium 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.

the beef industry has largely continued historic practices, the dairy industry has housed milk cows in barns and has been processing cow

waste through anaerobic digesters (ADs) to generate energy for years.

In recent years the renewable biogas (RNG) from the dairy ADs

has become increasingly lucrative due to related environmental

consumers’ preferences for sustainability and their ‘willingness to pay’ (WTP) for it.

goal is to be first (or at least early) to market with meaningful and verified sustainable beef products that can be produced at sufficient

scale to service national market demand at an affordable price.

The cattle produced at Bion facilities 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.

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.

To Bion’s knowledge, there is no comprehensive

treatment solution for beef manure waste other than our Gen3Tech Platform.

Further, Bion’s business model, which addresses the entire

supply chain, creates additional opportunities to improve on both environmental impacts and production efficiencies.

Bion has 30 years

of experience in livestock waste management and is building a world class team, focused on beef.

We believe we have a significant advantage

as the $66 billion U.S.

beef industry contends with its environmental impacts, inherent inefficiencies, and a changing consumer demographic.

Bion‘s sustainable beef business model, based

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The diagram below depicts a simplified facility schematic/flow chart:

This overall business model unites several interrelated

businesses driven by Bion’s technology and augments and aggregates multiple revenue streams as described below.

See “ Technology

and Technology Platform ” below for descriptions of the 4 major categories of products/revenue streams which Bion anticipates

from its Gen3Tech beef facilities:

a) premium ‘sustainable branded’ beef, b) renewable energy and energy/environmental/carbon-related

credits, c) fertilizer products (organic and/or ‘ClimateSmart’) and d) nutrient credits.

Sustainable Beef

Bion’s goal is to be first (or at least early)

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

The cattle produced at Bion facilities 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.

This overall business model unites several

interrelated businesses driven by Bion’s technology and augments and aggregates multiple revenue streams as described below.

“ Technology and Technology Platform ” above for descriptions of the 4 major categories of products/revenue streams

which Bion anticipates from its Gen3Tech beef facilities:

a) premium ‘sustainable branded’ beef, b) renewable energy and

energy/environmental/carbon-related credits, c) fertilizer products (organic and/or low carbon) and, potentially d) nutrient credits.

A Bion sustainable beef facility (see diagram above)

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date, the reach and extent of such efforts is limited, and it is difficult to determine their effectiveness.

Additionally, there have

been public announcements of initiatives related to beef sustainability (largely focused on the ‘cow-calf’ segment of the

livestock chain) in procurement by major beef processing companies, but a closer look finds that most consist largely of ‘green

Additionally, there

have been public announcements of initiatives related to beef sustainability (largely focused on the ‘cow-calf’ segment of

the livestock chain) in procurement by major beef processing companies, but a closer look finds that most consist largely of ‘green

washing’ public proclamations in the wake of environmental and social criticism that re-package prior initiatives and lack any significant

new substance (excepting Tyson’s ‘Brazen’ announcement this past Spring which appears to have some substance).

new substance.

At present, there is essentially no traceable and

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