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ITEM 1A. RISK FACTORS.

Not applicable.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

Not applicable.

ITEM 2. PROPERTIES.

The Company maintains its corporate offices at 9 East

Park Court, Old Bethpage, New York 11804, the home of its office manager/bookkeeper, and its main corporate telephone number is (516)

586-5643.

We are the sole owner of five United States patents.

Additionally, Bion has two United States patent applications pending and has three International patent applications currently pending.

(See Item 1, “Patents” above).

ITEM 3. LEGAL PROCEEDINGS.

The Company is currently involved in no litigation

matters except:

A: Website: Domain Sale/Resolved

Litigation/Hacking/Theft

On March 23,

2022 the Company entered into an agreement to sell domain name <biontech.com> and other related assets to BioNTech SE (“BNTX”)

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

gain of $902,490. The Company has been using www.bionenviro.com as its primary website (and domain) since July 2021 due to the

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

no longer represented a core asset of the Company.

As previously reported, on

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

and disabled. Research indicated that an unknown party had ‘hijacked’ the domain in a theft attempt. On September 10, 2021,

the Company filed a federal lawsuit ‘in rem’ to recover the <biontech.com> domain and the unknown ‘John Doe’

who hacked and attempted to steal the website. The litigation was filed in the United States District Court for the Eastern District of

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

Defendants’ (Case No. 1:21-cv-01034), seeking recovery of the domain name and other relief as set forth therein.

On November 19, 2021, the

United States District Court for the Eastern District of Virginia, Alexandria Division issued an order stating that “... ORDERED,

ADJUDGED and Decreed that plaintiff Bion Environmental Technologies, Inc. (‘plaintiff) Is the lawful owner of domain name <biontech.com>

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

(Case No. 1:21-cv-01034). The Company has moved the domain name <biontech.com> to a new registrar and reactivated it for the Company’s

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

No shareholder, sensitive

or confidential information was available to be breached which has limited damages from the hack/theft to date. However, the Company’s

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

The Company created ‘work-arounds’

as a result. These issues have been resolved and the Company has moved our website (and email) to a new domain: bionenviro.com. Website

access is now www.bionenviro.com. To send emails to Bion personnel, one uses the same name identifier previously used, but in the

address, substitute ‘bionenviro.com’ for “biontech.com’: For example cscott@biontech.com (no longer functional)

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

B: Pennvest Loan and Dissolution

of Bion PA1, LLC (“PA1”)

PA1, the Company’s

wholly-owned subsidiary, was dissolved on December 29, 2021 on which date it owed approximately $10,010,000 under the terms of the Pennvest

Loan related to the construction of the Kreider 1 System including accrued interest and late charges totaling $2,255,802 as of that date.

Through the date of the dissolution, PA1 was a wholly-owned subsidiary of the Company and its assets and liabilities were included on

the Company’s consolidated balance sheets. At September 30, 2021, PA1’s total assets were $297 and its total liabilities were

$10,154,334 (including the Pennvest Loan in the aggregate amount of $9,939,148, accounts payable of $214,235 and accrued liabilities of

$950) which sums were included in the Company’s consolidated balance sheets in its Form 10-Q for the quarter ended September 30,

2021. Subsequent to the dissolution of PA1, its assets and liabilities are no longer consolidated and included in the Company’s

balance sheets. As of December 29, 2021, PA1’s total assets were nil and its total liabilities were $10,234,501 (including the Pennvest

Loan in the aggregate amount of $10,009,802, accounts payable of $212,263 and accrued liabilities of $12,436. The net amount of $10,234,501

was recognized as a gain on the legal dissolution of a subsidiary in other (income) expense.

As background, the terms

of the Pennvest Loan provided for funding of up to $7,754,000 which was to be repaid by interest-only payments for three years, followed

by an additional ten-year amortization of principal. The Pennvest Loan accrued interest at 2.547% per annum for years 1 through 5 and

3.184% per annum for years 6 through maturity. The Pennvest Loan required minimum annual principal payments of approximately $5,886,000

in fiscal years 2013 through 2021, and $846,000 in fiscal year 2022, $873,000 in fiscal year 2023 and $149,000 in fiscal year 2024. The

Pennvest Loan was collateralized by PA1’s Kreider 1 System and by a pledge of all revenues generated from Kreider 1 including, but

not limited to, revenues generated from nutrient reduction credit sales and by-product sales. In addition, in consideration for the excess

credit risk associated with the project, Pennvest was entitled to participate in the profits from Kreider 1 calculated on a net cash flow

basis, as defined. The Company has incurred interest expense related to the Pennvest Loan of $123,444 and $246,887 for the years

ended June 30, 2022 and 2021, respectively. Based on the limited development of the depth and breadth of the Pennsylvania nutrient

reduction credit market, PA1 commenced discussions and negotiations with Pennvest related to forbearance and/or re-structuring the obligations

under the Pennvest Loan during 2013. In the context of such negotiations, PA1 elected not to make interest payments to Pennvest on the

Pennvest Loan since January 2013. Additionally, the PA1 did not make any principal payments, which were to begin in fiscal 2013, and,

therefore, the Company classified the Pennvest Loan as a current liability through the dissolution of PA1 on December 29, 2021.

During August 2012, the Company

provided Pennvest (and the PADEP) with data demonstrating that the Kreider 1 system met the ‘technology guaranty’ standards

which were incorporated in the Pennvest financing documents and, as a result, the Pennvest Loan has been solely an obligation of PA1 since

that date. Note, however, the Company’s consolidated balance sheets as of June 30, 2021 reflects the Pennvest Loan as a liability

of $9,868,495 despite the fact that the obligation (if any) was solely an obligation of PA1.

On September 25, 2014, the

Pennsylvania Infrastructure Investment Authority (“Pennvest”) exercised its right to declare the PA1’s Pennvest Loan

in default, accelerated the Pennvest Loan and demanded that PA1 pay $8,137,117 (principal, interest plus late charges) on or before October

24, 2014. PA1 did not make the payment and did/does not have the resources to make the payments demanded by Pennvest. PA1 commenced discussions

and negotiations with Pennvest concerning this matter but Pennvest rejected PA1’s proposal made during the fall of 2014. PA1 made

a final proposal to Pennvest during September 2021 which proposal was also rejected by Pennvest. PA1 provided Pennvest with its financial

statements (which include a description of system status) annually. During the 2021 fiscal year, Pennvest’s auditors requested a

‘corrective action plan’ and PA1 informed Pennvest that “... there is no viable corrective action plan for the

Pennvest Loan (‘Loan’). The facility funded by the Loan has been shut down for many years (which has been disclosed in the

annual financial reports to Pennvest and in public filings by the parent of Bion PA 1, LLC) and the technology utilized in the facility

is now obsolete. The facility has not been commercially operated for approximately six years and has generated zero income. We recommend

that Pennvest take appropriate steps to remove and sell the equipment.” Pennvest responded favorably to the approach of selling

the equipment.

On December 29, 2021, the

Company approved and executed a ‘Consent of the Sole Member of Bion PA 1’ (the “Consent to Dissolution”) that

authorized the complete liquidation and dissolution of PA1. A Statement of Dissolution was filed by PA1 with the Colorado Secretary of

State on December 29, 2021. The Company is of the understanding that the liquidation value of Bion PA 1’s property is substantially

below the current amount outstanding under the Funding Agreement dated October 27, 2010 by and between PA1 and Pennvest, the only known

secured creditor of PA1. Post-dissolution, PA1’s activities will be limited entirely to activities required to properly distribute

its net assets to creditors and wind down its business.

PA1 and Pennvest agreed to

have the equipment sold by a third party auctioneer who arranged for the sale of its property and delivery of all proceeds (net of

commissions and customary costs of sale) to Pennvest. The auction took place during the period between May 13-18, 2022. The Company’s

personnel assisted PA1 with this process as needed at no cost to PA1. The net sum of $104,725 was realized from the asset sale, which

sum was delivered to Pennvest on June 15, 2022. The remaining unsold assets will be transferred to Kreider Farms during the next quarter

in order to complete the winding up of the Kreider 1 project.

Upon the complete distribution

of all assets of PA1, whether by transfer or sale and distribution of net proceeds as provided above, PA1 will use commercially reasonable

efforts to cause the cessation of all activities. No distributions of PA1’s assets will be made to the Company or its affiliates.

The Consent to Dissolution authorized Mark A. Smith, the Company’s President and the sole manager of PA1, to cause to be delivered

for filing the Statement of Dissolution, to give notice of the dissolution, and to take any other act necessary to wind up and liquidate

the business.

PA1 has made no payments

to vendors or other creditors in connection with the dissolution. No distributions or payments of any kind have ever been made to the

Company, the sole member of PA1 since inception and no payment will be made to the Company or any affiliate in connection with the dissolution.

For more information regarding

the history and background of the Pennvest Loan and PA1, please review our Form’s 10-K for the years from 2008 through 2021 including

the Notes to the Financial Statements included therein.

The Company currently is not involved in any other material litigation

or similar events.

ITEM 4. MINE SAFETY DISCLOSURES.

None.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY,

RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

(a) Market Information

Our common stock is quoted on the Over-The-Counter

Electronic Bulletin Board under the symbol "BNET." The following quotations reflect inter dealer prices, without

retail mark up, markdown or commissions and may not represent actual transactions.

Fiscal Year Ended June 30, High Low High Low

(b) Holders

The number of holders of record of our common stock

at September 1, 2022 was approximately 1,400. Many of our shares of common stock are held by brokers and other institutions on behalf

of stockholders, so we are unable to estimate the number of stockholders represented by these record holders.

The transfer agent for our common stock is Equiniti,

3200 Cherry Creek Drive South, Suite 430, Denver, Colorado 80209.

We have never paid any cash dividends on our common

stock. Our board of directors does not intend to declare any cash dividends in the foreseeable future, but instead intends to retain earnings,

if any, for use in our business operations. The payment of dividends, if any, in the future is within the discretion of the board of directors

and will depend on our future earnings, if any, our capital requirements and financial condition, and other relevant factors.

No preferred shares are outstanding at this time.

During fiscal year 2022 the Company paid an aggregate dividend of $0 cash, respectively, on shares of Series B Preferred Stock and Series

C Preferred Stock which were outstanding during the year. A dividend of $1,000 was accrued on Series B Preferred Stock during the 2022

fiscal year. From July 1, 2014, the Company had 200 shares of Series B redeemable convertible Preferred stock outstanding with a par value

of $0.01 per share, convertible at the option of the holder at $2.00 per share, with dividends accrued and payable at 2.5% per quarter.

The Series B Preferred stock was mandatorily redeemable at $100 per share by the Company three years after issuance and accordingly was

classified as a liability. The 200 shares have reached their maturity date and the Company approved the redemption of the Series B preferred

stock during the quarter ended December 31, 2021 and the final 200 shares of Series B redeemable convertible Preferred stock were redeemed

for $41,000, which included the $21,000 in accrued dividend payable.

(d) Securities Authorized for Issuance

Under Equity Compensation Plans

In June 2006 the Company adopted its 2006 Consolidated

Incentive Plan, as amended ("Plan"), which terminated all prior plans and merged them into the Plan. The Plan was ratified

by the Company's shareholders in October 2006 (and has been amended multiple times since initial ratification). Under the Plan,

Directors may grant Shares, Options, Stand Alone Stock Appreciation Rights ("SAR's"), shares of Restricted Stock, shares of

Phantom Stock and Stock Bonuses and other items with respect to a number of Common Shares that in the aggregate does not exceed 36,000,000

shares. The maximum number of Common Shares for which Incentive Awards, including Incentive Stock Options, may be granted to any one Participant

shall not exceed 2,000,000 shares in any one calendar year; and the total of all cash payments to any one participant pursuant to the

Plan in any calendar year shall not exceed $1,500,000. As of June 30, 2022 11,201,600 options have been granted and outstanding under

the Plan (as amended), including all options granted under prior merged plans, and were merged into the 2021 Equity Incentive Plan. As

of June 30, 2021, the Company had no outstanding contingent Stock Bonuses.

In December 2021 the Company adopted its 2021 Equity

Incentive Plan, as amended ("2021 Equity Plan"). The 2021 Equity Plan was ratified by the Company's shareholders in April

2022. Under the 2021 Equity Plan, Directors may grant Shares, Options, Stand Alone Stock Appreciation Rights ("SAR's"),

shares of Restricted Stock, shares of Phantom Stock and Stock Bonuses and other items with respect to a number of Common Shares that in

the aggregate does not exceed 30,000,000 shares. The maximum number of Common Shares for which Incentive Awards, including Incentive Stock

Options, may be granted to any one Participant shall not exceed 2,500,000 shares in any one calendar year. As of June 30, 2022 nil options

have been granted and outstanding under the 2021 Equity Plan. As of June 30, 2022, the Company had no outstanding contingent Stock

Bonuses.

Equity Compensation Plan Information

The following table summarizes share and exercise

price information about the Company’s 2006 equity compensation plans as of June 30, 2022:

2006 Equity Compensation Plan table

Equity compensation plans not approved by security holders — — —

(e) Recent Sales of Unregister Securities

During the year ended June 30, 2022, 2,315,550 warrants

were exercised to purchase 2,315,550 shares of the Company’s common stock at $0.75 per share for total proceeds of $1,736,662, net

proceeds of $1,718,061 after commissions of $18,601.

During the year ended June

30, 2022, 66,860 shares of its unregistered common stock were issued as commissions.

During the year ended June 30, 2022, Mark Smith elected

to convert accounts payable of $17,711 into an aggregate of 35,424 units at $0.50 per unit, pursuant to the 2006 Consolidated Incentive

Plan with each unit consisting of one share of the common stock and one warrant to purchase one share of the Company’s stock for

$0.75 per share until December 31, 2024.

During the year ended June 30, 2022, the Company issued

25,000 units at $1.10 per until for services of $27,500.

During the year ended June

30, 2021, the Company entered into subscription agreements, under three different offerings, to sell units for $0.50 per unit, with each

unit consisting of one share of the Company’s restricted common stock and one warrant to purchase one share of the Company’s

restricted common stock for $0.75 per share with an expiry date of December 31, 2021 and pursuant thereto, the Company issued 3,720,000

units for total proceeds of $1,860,000, net proceeds of $1,699,000 after commissions of $161,000.

During the year ended June

30, 2021 300,000 shares of the Company’s restricted company stock were sold to an investor for $300,000.

During the year ended June

30, 2021, 129,364 shares of its unregistered common stock were issued as commissions.

During the year ended June

30, 2021, the company issued 1,186,824 units to various employees/consultants upon the conversion of debt pursuant to the 2006 Consolidated

Incentive Plan with each unit consisting of one share of the common stock and one warrant to purchase one share of the Company’s

stock for $0.75 per share until June 30, 2023.

During the year ended June

30, 2021, Mark Smith elected to convert deferred compensation, accrued interest and accounts payable of $124,698, $3,342 and $52,360 respectively

into an aggregate of 360,805 units at $0.50 per unit, pursuant to the 2006 Consolidated Incentive Plan with each unit consisting of one

share of the common stock and one warrant to purchase one share of the Company’s stock for $0.75 per share until December 31, 2024.

During the year ended June

30, 2021, the Company issued 144,000 units to Mr. Smith for salary of $72,000, pursuant to the 2006 Consolidated Incentive Plan with each

unit consisting of one share of the common stock and one warrant to purchase one share of the Company’s stock for $0.75 per share

until December 31, 2024.

During the year ended June

30, 2021, 4,065,988 warrants were exercised to purchase 4,065,988 shares of the Company’s common stock at $0.75 per share for total

proceeds of $3,049,491.

ITEM 6. SELECTED FINANCIAL DATA.

N/A

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

This Annual Report on Form 10-K (and the documents

incorporated herein by reference) contain forward-looking statements, within the meaning of Section 27A of the Securities Act and Section

21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), that involve substantial risks and uncertainties.

Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may," "will,"

"expect," "intend," "estimate," "anticipate," "project," "predict," "plan,"

"believe," or "continue," or the negative thereof or variations thereon and/or references to “goals”,

“targets”, “projections” or similar terminology. The expectations reflected in forward-looking statements may

prove to be incorrect. “The Company's actual results of operations, most of which are beyond the Company's control, could differ

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

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

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

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

These factors include adverse economic conditions,

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

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

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

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

may affect forward looking statements about Bion's business and prospects include: i) the possibility that markets for nutrient reduction

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

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

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

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

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

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

behind our competitors and requiring expenditures of our limited resources.

THESE RISKS, UNCERTAINTIES AND FACTORS BEYOND OUR

CONTROL ARE MAGNIFIED DURING THE CURRENT UNCERTAIN PERIOD RELATED TO THE COVID-19 PANDEMIC AND THE UNIQUE ECONOMIC, FINANCIAL, GOVERNMENTAL

AND HEALTH-RELATED CONDITIONS IN WHICH THE COMPANY, THE ENTIRE COUNTRY AND THE ENTIRE WORLD NOW RESIDE. TO DATE THE COMPANY HAS

EXPERIENCED DIRECT IMPACTS IN VARIOUS AREAS INCLUDING WITHOUT LIMITATION: I) GOVERNMENT-ORDERED SHUTDOWNS WHICH HAVE SLOWED

THE COMPANY’S RESEARCH AND DEVELOPMENT PROJECTS AND OTHER INITIATIVES, II) SHIFTED FOCUS OF STATE AND FEDERAL GOVERNMENT WHICH IS

LIKELY TO NEGATIVELY IMPACT THE COMPANY’S LEGISLATIVE INITIATIVES IN PENNSYLVANIA AND WASHINGTON DC, III) STRAINS AND UNCERTAINTIES

IN BOTH THE EQUITY AND DEBT MARKETS HAVE MADE DISCUSSION AND PLANNING OF FUNDING OF THE COMPANY AND ITS INITIATIVES AND PROJECTS WITH

INVESTMENT BANKERS, BANKS AND POTENTIAL STRATEGIC PARTNERS MORE TENUOUS, IV) STRAINS AND UNCERTAINTIES IN THE AGRICULTURAL SECTOR AND

MARKETS HAVE MADE DISCUSSION AND PLANNING OF FUNDING OF THE COMPANY AND ITS INITIATIVES AND PROJECTS MORE DIFFICULT AS FUTURE INDUSTRY

CONDITIONS ARE NOW MORE DIFFICULT TO ASSESS/PREDICT, V) CONSTRAINTS DUE TO PROBLEMS EXPERIENCED IN THE GLOBAL INDUSTRIAL SUPPLY CHAIN

WHICH HAVE INCREASED ANTICIPATED PROJECT DEVELOPMENT COSTS, VI) DUE TO THE AGE AND HEALTH OF OUR CORE MANAGEMENT TEAM, MOST OF WHOM ARE

AGE 70 OR OLDER AND HAVE HAD ONE OR MORE EXISTING HEALTH ISSUES, THE COVID-19 PANDEMIC PLACES THE COMPANY AT GREATER RISK THAN WAS PREVIOUSLY

THE CASE (TO A HIGHER DEGREE THAN WOULD BE THE CASE IF THE COMPANY HAD A LARGER, DEEPER AND/OR YOUNGER CORE MANAGEMENT TEAM), AND VII)

THERE ALMOST CERTAINLY WILL BE OTHER UNANTICIPATED CONSEQUENCES FOR THE COMPANY AS A RESULT OF THE CURRENT PANDEMIC EMERGENCY AND ITS

AFTERMATH.

Bion disclaims any obligation subsequently to revise

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

or unanticipated events.

The following discussion and analysis should be read

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

BUSINESS 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 products to our customers through ventures developing profitable, transparent, and sustainable solutions for livestock

agriculture.

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. today. Application of our third generation technology and business/technology

platform (“Gen3Tech”) can largely mitigate these environmental problems, while simultaneously improving operational/ resource

efficiencies by recovering high-value co-products from the CAFOs’ waste stream. These waste stream ‘assets’ –

nutrients and methane – have traditionally been wasted or underutilized and are the same ‘pollutants’ that today fuel

harmful algae blooms, contaminate groundwater, and exacerbate climate change.

Bion’s business model and technology platform

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

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

will support the costs of technology implementation (including servicing related debt). We anticipate this will result in substantial

long term value for Bion. In the context of such JVs, we believe that the verifiable sustainable branding opportunities (conventional

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

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

and or other approaches.

Bion’s Gen3 Tech 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

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

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

During the first half of 2022 Bion began marketing

our sustainable beef opportunity to retailers, food service distributors and the meat industry in the U.S. In general, the response

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

commercial project, a 15,000-head sustainable beef cattle feeding operation together with the Ribbonwire Ranch, in Dalhart, Texas (with

a provision to expand to 60,000 head) (“Dalhart Project”). The Dalhart Project will be developed to produce blockchain-verified,

sustainable beef (with reduced the stress on cattle caused by extreme weather and temperatures and resulting higher feed/weight gain efficiency)

while remediating the environmental impacts associated usually associated with cattle CAFOs. Bion’s patented technology will treat

the waste stream and recover/refine valuable coproducts that include clean water, renewable natural gas (RNG), photovoltaic solar electricity,

organic fertilizer and potentially other products. We anticipate converting the Ribbonwire LOI into a definitive agreement with Ribbonwire

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

Bion’s business model and technology platform

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

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

will support the costs of technology implementation (including servicing related debt). We anticipate this will result in substantial

long-term value for Bion. In the context of such JVs, we believe that the verifiable sustainable branding opportunities (conventional

and organic) in meat will represent the single largest enhanced revenue contributor provided by Bion to the JVs (and, in some cases, Bion

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

involve licensing and or other approaches.

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

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

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

Our business plan is focused on executing multiple

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

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

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

The Ribbonwire LOI announcement has generated significant interest within the livestock industry (among ranchers, feedlot operators, farmers

and other AG industry parties). We believe that this interest, combined with consumer interest in ‘sustainable products’ and

the growing enthusiasm among some livestock industry parties for environmental/sustainable/regenerative practices, provides Bion (and

its partners/venturers) with an opportunity to move forward with a truly sustainable solution in this industry segment.

During the next six months, the Company intends

to construct and begin operations of phase 1 of our Initial Project located near Fair Oaks, Indiana. Bion expects the Initial

Project to provide data that illustrates the effectiveness of our Gen3Tech in a commercial setting by the end of the 2nd

quarter in fiscal 2023 which will support development of the Dalhart Project (and other projects) during fiscal 2023 and

thereafter. We believe this data will also provide additional potential stakeholders (cattle producers, cattle feeders,

packers, distributors, retailers and financial institutions) with the information they need to proceed with confidence in

collaborating with Bion on multiple new projects (see below).

Bion

is now focused primarily on: i) development/construction of the Initial Project, our initial commercial-scale Gen3Tech installation (see

discussion herein below and Notes to Financial Statements,

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

animal protein products and its low carbon organic fertilizer products , iv) discussions regarding initiation and development of agreements

and joint ventures (“JVs” as discussed below) (and related projects) based on the augmented capabilities of our Gen3Tech

business platform (in the sustainable beef and other livestock segments), while (v) continuing to pursue business opportunities related

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

HISTORY, BACKGROUND AND CURRENT ACTIVITIES

See discussion at Item 1 above.

Pennvest Loan and Bion PA1 LLC (“PA1”)

Dissolution