Bion Environmental Ends FY2026 With $3,700 Cash
At June 30, 2026, Bion had approximately $3,700 in cash, and its auditor cited substantial doubt about its ability to continue as a going concern.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Rhea-AI Filing Summary
Bion Environmental Technologies, Inc. (BNET) is concentrating on its Ammonia Recovery System (ARS) as a bolt-on solution for existing biogas facilities, rather than developing integrated livestock projects. Bion says its demonstration ARS is ready for final design of a full-scale commercial system, subject to project-specific details, location, and feedstock characteristics. Three initial offtakes represent 250,000 gallons of AB10 fertilizer; two are described as non-binding. A memorandum of understanding with Kimmeridge provides for evaluating ARS at a potential renewable natural gas facility and evaluating and negotiating a joint venture.
BNET reported nil revenue in fiscal 2026 and 2025 and net losses attributable to common stockholders of $1.958 million and $2.380 million, respectively. At June 30, 2026, cash was approximately $3,700; operating activities used $806,000 during the year. The auditor cited substantial doubt about Bion’s ability to continue as a going concern, and management said substantial external funding is required. Management also reported ineffective disclosure controls and a material weakness in financial reporting controls, citing inadequate segregation of duties and lack of timely review and approval of related-party transactions.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointNet loss attributable to common stockholders fell to $1.958 million from $2.380 million.
Negative
- Major pointAuditor cited substantial doubt about Bion’s ability to continue as a going concern.
- Major pointA material weakness left controls ineffective as of June 30, 2026.
Key Figures
Key Terms
Ammonia Recovery System (ARS) technical
Anaerobic Digestion (AD) technical
ammonium bicarbonate technical
going concern financial
Right of First Refusal financial
FAQ
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What revenue and net loss did BNET report for fiscal 2026?
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||
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For the Fiscal Year Ended: | ||
| OR | ||
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||
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For the transition period from: __________ to __________
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Commission File No.
(Exact Name of Registrant as Specified in its Charter)
| (State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification Number) |
(Address of Principal Executive Offices, Including Zip Code)
Registrant’s Telephone Number, including
area code: (
Securities Registered Pursuant to Section 12(b) of the Act:
| Title of Each Class | Name of Exchange on Which Registered | |
| None | N/A |
Securities Registered Pursuant to Section 12(g) of the Act:
Common Stock, No Par Value
(Title of Class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
☐ YES
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Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
☐ YES
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
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Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit).
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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ | |
| ☐ | Smaller reporting company | |||
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of
its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public
accounting firm that prepared or issued its audit report.
If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by
check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐
The aggregate market value of the approximately 49,000,000
shares of voting stock held by non-affiliates of the Registrant as of June 30, 2026 approximated $
DOCUMENTS INCORPORATED BY REFERENCE
FORWARD-LOOKING STATEMENTS
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. These forward-looking statements include, but are not limited to, predictions regarding:
| · | our business plan; |
| · | the commercial viability of our technology and products produced by our technology; |
| · | the effects of competitive factors on our technology and products produced by our technology; |
| · | expenses we will incur in operating our business; |
| · | our liquidity and sufficiency of existing cash; |
| · | the success of our financing plans; and |
| · | the outcome of pending or threatened litigation. |
We have based these forward-looking statements on our current expectations and projections about future events. Although we believe that the expectations underlying our forward-looking statements are reasonable, these expectations may prove to be incorrect, and all of these statements are subject to risks and uncertainties. Therefore, you should not place undue reliance on our forward-looking statements. We have included important risks and uncertainties in the cautionary statements included in this Annual Report; particularly, the section titled “Risk Factors” incorporated in Item 1.A of this report. These risks and uncertainties could cause actual results or events to differ materially from the forward-looking statements that we make. Should one or more of these risks and uncertainties materialize, or should underlying assumptions, projections or expectations prove incorrect, actual results, performance or financial condition may vary materially and adversely from those anticipated, estimated or expected.
Our forward-looking statements do not reflect the potential impact of future acquisitions, mergers, dispositions, joint ventures or investments that we may make. We do not assume any obligation to update any of the forward-looking statements contained herein, whether as a result of new information, future events or otherwise, except as required by law.
i
PART I
ITEM 1. BUSINESS.
GENERAL
The Company has been under substantial financial and management stress over the past six (6) years. 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, 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 Chief Operating Officer from May 2022 after serving as our Chief Executive Officer (CEO) for the prior decade, the subsequent resignation of Bill O’Neill, Dominic’s replacement at the CEO position, effective May 31, 2024, followed by the retirement of Mark A. Smith, the Company’s President, General Counsel and Chief Financial Officer, effective July 31, 2024.
Until May 2024 (prior to Mr. O’Neill’s departure), Bion was focused on building multiple integrated beef projects as described below.
At the end of May 2024, a new core leadership team was installed (see Item 10) that pivoted Bion away from large integrated livestock projects to devote almost all its resources on the bolt-on business opportunity: using the ARS as a standalone ammonia control solution for others’ biogas production facilities that simultaneously supply us with feedstock from which to produce our unique fertilizer products. A short-term funding strategy was implemented (see Note 5 BLG and Shareholder Note Group) while longer term capital solutions were pursued; these efforts are ongoing. We have implemented extreme cost savings measures: maintaining only mission-critical operations and funding. These measures will continue until we can execute a larger financing or obtain other sources of capital, such as a potential strategic investor/partner or license agreement.
Our leadership team believes, despite the difficulties Bion has faced, the Company is now ready for successful commercial launch, having accomplished the following:
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Capital structure cleanup and significant debt settled Settlement agreements were executed with legacy principals that substantially simplified the capital structure and reduced potential dilution (see Notes 6 & 8, Giveback and Settlement Agreements); Settlement agreements were executed with creditors related to the Fair Oaks demonstration facility (see Notes 8, 11, Item 3, Hamstra and North Prairie Holdings Settlements). |
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Technology now commercial-ready Completed optimization; value proposition proven; ready for final design (see Platform and Development below) |
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Strong fertilizer demand demonstrated Several non-binding offtake commitments for AB10 nitrogen fertilizer have been executed. Letters of support for a federal grant application were received that exceed the anticipated initial commercial project’s production capacity (see below: Gen3Tech Platform, 2. Fertilizers: Organic and ‘Low Carbon’). |
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Demonstrated developers/operators demand for ammonia control solutions There is tremendous uncertainty over RNG policy and pricing. Optimizing existing facilities has become a key focus for the biogas/RNG industry that is actively seeking comprehensive resource recovery. Bion believes its ARS and AB10 represent the best ammonia recovery value proposition available today. |
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Built a strong core team to execute a commercial strategy Bion has added key talent in engineering, agronomy, project management, and marketing. |
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Built key relationships: engineering, finance, fertilizer distribution Bion has proven to be a serious and respected solutions provider that has attracted the attention of a wide range of stakeholders in engineering, finance, agriculture, and fertilizer. |
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During the past two years, Bion has worked to establish itself as a credible and capable participant in the livestock waste treatment, renewable energy, and sustainable agriculture markets. Management believes its ARS technology has the potential to fundamentally change the economics of manure and digestate management by recovering nitrogen as a high-value organic fertilizer rather than treating it as waste. These successes coincide with long term trends in sustainable agriculture, renewable fuels, and the circular economy that favor Bion’s business opportunities. Bion leadership believes this confluence of events positions the Company, assuming it continues to align with appropriate strategic partners and obtains sufficient financing, to exploit a unique and growing opportunity at the intersection of agriculture, renewable energy, the environment, U.S. food security and public health, and consumer demand.
Summary and Overview
Bion Environmental Technologies, Inc.("Bion," "Company," "We," "Us," or "Our") was incorporated in 1987 in the State of Colorado. Bion’s long term mission has been to make livestock production more sustainable, profitable and transparent. Bion developed its Gen3Tech platform and business model (discussed below) to clean up existing Concentrated Animal Feeding Operations (CAFOs) or build new state-of-the-art facilities that have minimal environmental impacts, produce premium-branded sustainable meat and dairy products, and recover renewable energy, premium fertilizers, and clean water. The Gen3Tech is anchored by Bion’s patented Ammonia Recovery System (ARS), which captures and stabilizes the problematic ammonia and CO2 released when biogas is produced from organic waste and upcycles them into high value advanced organic fertilizers.
For the 10 years up until the end of 2024, Bion was focused on developing large integrated sustainable beef projects centered on our Gen3Tech platform, because we believed the beef industry was the most challenged of all the livestock sectors and would therefore benefit the most from the application of Bion’s technology and business strategy. However, it became apparent to new management that neither the industry nor the markets were ready to embrace sustainable beef; and moreover, Bion did not have the capital and other resources necessary to successfully navigate the long timelines needed to develop such projects. Management shifted the Company’s focus away from developing its own integrated beef (or other livestock) projects to using its core ARS as a standalone/bolt-on ammonia control solution to benefit others’ CAFO and industrial biogas facilities.
During the second half of calendar 2023, the Company completed construction of our Ammonia Recovery System at our commercial scale demonstration facility located near Fair Oaks, Indiana. Through 2025, Bion optimized the ARS to prepare for final design of a full-scale commercial system. The ARS exceeded expectations for performance related to both ammonia recovery and economic efficiencies. The ARS can recover and upcycle ammonia and CO2 from any organic waste stream, provided Anaerobic Digestion (AD) is first used to recover biogas. In 2024 our patents were expanded to include organic waste streams from industrial sources, such as food (scrap), food and beverage processing, slaughter/packing, and municipal wastewater, as described below. Over the last two years, we have optimized our technology and its economics, demonstrated its capabilities to key stakeholders, and we have been pursuing the business opportunities they represent.
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 very robust) opportunities exist (in addition to animal manure 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 strategic partners with specific expertise and an operating footprint in the biogas/ renewable natural gas (RNG). We are evaluating several such potential partners at this time.
Livestock production and its waste, particularly from CAFOs, is one of the largest sources of excess nutrients, including ammonia (nitrogen), that have been identified as the greatest water quality problem in the U.S. today; CAFOs are 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. 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 ARS technology captures and upcycles these polluting waste emissions and discharges to produce advanced organic fertilizers that will have a significant and positive impact on organic food production.
Many associated with the livestock industry, Bion’s leadership included, believe that within a few years, CAFOs will have to better manage their waste – especially ammonia/nutrients – and it 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. With 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.
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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 enhance the businesses of those enterprises utilizing our technology, create value for our shareholders, and improve the planet.
Changes in Approach
Prior to the departure of Bill O’Neill, our previous CEO, Bion’s strategy was the execution of multiple letters of intent for sustainable beef JV projects in order to demonstrate availability of scaled supply (that would stimulate retail grocers to commit to offtakes), and then moving forward with development of those projects in quick succession. Mr. O’Neill at that time believed it would not be difficult to secure additional participation in our Projects from additional feeders/cattlemen, especially once project financing and offtake agreements for both protein and co-products, were in place. As described above, Mr. O’Neill departed Bion in May 2024 when it became apparent he was unable to execute such a strategy.
Bion’s new leadership team returned the company to its earlier approach, focusing on building an initial ‘flagship’ project to prove the ARS technology and the Gen3Tech platform it supports at full commercial scale. 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.
New leadership continued to focus on beef, for several reasons, and believed the best opportunity for the Company to prove its sustainable beef concept was 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 in Montana. 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 agreed to establish a JV, that was to be led by Mr. Stovall, with the goal of developing a 16,000-head sustainable beef project at Stovall’s Yellowstone Cattle Feeders (‘YCF’) location in Shepherd, Montana. Over the following months, Bion’s leadership came to understand that, even for a single integrated beef project, a) Bion did not have the requisite resources needed to develop these large integrated projects, b) that project development timelines would be even longer than anticipated, and c) it was unlikely Bion would be able to raise sufficient capital to execute such a plan.
Bion correspondingly pivoted to devote almost all of its resources to the bolt-on business opportunity: using the ARS as a standalone ammonia control solution for others’ biogas production facilities. We are currently focused on existing large-scale livestock with digesters in place, since they have waste streams for which the ARS has been optimized. Further, we have and will continue to add resources to pursue opportunities in the industrial wastewater sector, to exploit the patent Bion received in 2024, that broadened the claims related to its Ammonia Recovery System (ARS) to include industrial, such as food, food processing, and livestock packing/slaughter, and municipal wastewater sources, in addition to animal waste streams that were previously covered. These facilities are subject to EPA-mandated discharge limits that require ammonia control or face other limitations on ammonia/nitrogen in the effluent from biogas production. We believe there is a robust opportunity to provide bolt-on ammonia control solutions to others in the industrial and animal waste sectors. During fiscal 2026, and continuing, we are devoting almost all of our resources to pursuing the bolt-on opportunity in both of these sectors.
In August 2025, Bion engaged Josh Rapport, MS, PhD, to serve as Bion’s lead engineer and to find projects and strategic partners. He brings over 20 years' experience in researching, designing, building and operating anaerobic digesters for heat, power, and renewable natural gas (RNG), as well as in digestate treatment and utilization. He was VP Engineering for Brightmark, one of the largest RNG companies in the U.S. In less than four years, Brightmark launched 30 RNG projects worth over $500 million under his guidance, before he left the company in 2023 to start an independent consulting business. Josh joined Bion as a consultant with a success-based compensation package and it is anticipated he will join Bion as an employee if/when Bion initiates its first commercial project. Josh introduced Bion to Kimmeridge Energy Management, LLC, (New York, New York), which is an energy-focused (LNG, RNG) private equity fund with approximately $7 billion assets under management.
On December 5, 2025, the Company entered into an MOU (Memorandum of Understanding) with Kimmeridge outlining a preliminary framework to explore the use of Bion’s ammonia recovery technology at a large Renewable Natural Gas (RNG) facility. Under the MOU, the Company and Kimmeridge together will share costs and collaborate on engineering work, fertilizer sample production, testing, and agronomic validation, life-cycle analysis (including CI scoring), and commercial planning. They will also evaluate and negotiate a joint Venture to develop an Ammonia Recovery System (ARS) to produce premium organic fertilizers at a potential RNG facility operated by an affiliate of Kimmeridge.
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As part of the MOU, the Company granted Kimmeridge a limited Right of First Refusal (“ROFR”) on a 10 million share equity investment in the Company during the evaluation period, at a price that is a premium to the current market price. Kimmeridge recently pivoted Bion to a different project than the one originally contemplated. This caused a delay of approximately four months, which led to an extension of the MOU and ROFR for an additional six months (see 8-k dated June 11, 2026). To place the MOU in the context of the Company’s business plan (and its existing public disclosure), if the contemplated JV moves forward on the timelines anticipated, active development of a potential RNG facility could commence in the third or fourth quarter of calendar 2026.
Bion participated in a federal grant application in August related to the Kimmeridge project. During, and as part of that process, the Company worked with a new engineering company that produced the equivalent of a Front-End Loading Level 1 for the grant application (“FEL-1” initial engineering study addressing the integration of its ammonium bicarbonate technology with digestate produced by an RNG Facility). The new engineering company has been engaged by Bion and Kimmeridge to conduct project pilot testing and produce a FEL-3 study that will include process design, mass and energy balances, equipment configuration and specifications, utilities requirements, site-integration, along with fixed cost capital requirements and plus or minus 10% operating cost estimates for an Ammonium Bicarbonate fertilizer production facility. The Company will dedicate Ammonium Bicarbonate production, as directed by Kimmeridge, to mutually agreed partners and universities for product validation, agronomic testing, and market-development activities.
Bion is currently in discussions with several other potential strategic partners in engineering, renewable energy (biogas/RNG) and clean fuels, organic fertilizer distribution, and others involved in reducing the environmental footprint of biogas, agriculture, and livestock production. We are now evaluating a number of these as potential development and finance partners for project opportunities, including Kimmeridge Energy Management as described above. Bion believes that some of these industry relationships could entail a direct investment in Bion, licensing fee, or some other ‘up front’ financial benefit to Bion, although there is no assurance that they will.
Bion’s new leadership team is strongly committed to Bion’s continuation, its future success, and its shareholders. We have refocused the Company’s efforts to the bolt-on opportunity, to prove the technology at full scale and reach revenues more quickly. We believe this puts us on a more achievable path. Further, this strategy will substantially reduce our need for capital, and we believe that a more reasonable and credible objective will make it easier to raise that capital. We also believe that the changes in leadership will lend validation and credibility to Bion and its business plan, making it easier to execute needed strategic alliances and raise capital from potential strategic, institutional, and retail investors.
Renewable Energy/ Clean Fuels Strategic Partner
Bion is currently (and has been) in discussions with several companies related to strategic partnerships in renewable energy – RNG – and fertilizer production. With today’s U.S. and global emphasis on decarbonizing energy and the food supply chain, as well as a growing focus on water, 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 own abilities by affiliating with strategic partners to fully address 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 in the U.S. 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 of both animal manure waste, as well as industrial wastewater in the U.S. (See Standalone Opportunity below).
Bion is now focused primarily on: i) operation and production of fertilizer samples at our commercial-scale ARS installation at Fair Oaks, IN, ii) identifying biogas/ clean fuels partners for both livestock and industrial projects, iii) developing applications and markets for its organic fertilizer products (including life-cycle analysis (LCA) to determine Carbon Intensity (CI) Score for products, and organic listings/certifications for multiple liquid products), iv) exploring opportunities related to stand-alone ARS markets, (v), discussions regarding initiation and development of agreements and joint ventures (“JVs” as discussed herein), and vi) ongoing R&D activities. Each of the initiatives/activities mentioned 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 dairy. The 2G Tech was reviewed and qualified for federal loan guarantees under USDA’s Technical Assessment program. Bion’s 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).
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The 2G Tech was an engineering success but 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.
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. The ARS uses evaporation to first isolate the ammonia from the solids in the waste stream, by evaporating most of the ammonia and a certain amount of water; that ‘clean’ stream is then condensed, concentrated, and stabilized with CO2 from the waste stream, the key step in Bion’s patented process to produce its organic nitrogen fertilizer. The first patent on the ARS was filed in 2015. 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.
In June 2025, Bion completed and released its Technology-Optimization Report, that details the development and 18-month optimization of the ARS at our demonstration facility in Fair Oaks, Indiana. The optimized ARS demonstrated it is stable and can maintain continuous steady-state operations, reliable, and scalable. The ARS also showed it can achieve its ammonia reduction targets by evaporating one-third less water than was anticipated and modeled. That translates to significantly better economics, including lower fertilizer production costs. The platform is now ready for the final design process of a full-scale commercial system, which is subject to project-specific details, location, and feedstock characteristics.
Over the past few years, Bion has continued its R&D efforts and is now ready to move forward with its fourth generation of technology, an ARS that does not use the large evaporators to isolate the ammonia (the evaporators use a considerable amount of fossil natural gas). Instead, the platform will utilize alternative solids separation, such as a filter press, centrifuge, membranes or other technique, to first remove solids, prior to distillation to the desired concentration. This fourth-generation technology will reduce capex somewhat but will have a dramatic impact on operating costs by no longer having to drive an energy-intensive evaporation process with natural gas.
Ammonia Recovery System
The patented ARS is the core of Bion’s Gen3Tech platform. 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. The technology has applications in various industrial organic waste streams, including food processing, slaughter/packing plants, and municipal facilities that utilize AD to produce biogas. 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 (although only the liquid has been certified organic). 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. Once 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. today. 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 exceeded 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, both for third- and fourth-generation platforms. The ARS has achieved and maintained controlled operations under a variety of conditions, producing both liquid and crystal ammonium carbonate/bicarbonate. Bion has 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.
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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 (8x to 10x) 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 and Controlled Environment Agriculture (hydroponic, aeroponic, and greenhouse applications). Bion also expects demand for row crops, such as corn, cover crops and other regenerative practices. Bion is also evaluating non-agriculture markets, including retail home lawn and garden, golf courses, city parks, schools, and youth sports fields, which are all experiencing trends toward natural and safe products. At this time, Bion intends to continue producing fertilizer products at the Initial Project to support testing and life-cycle analysis, product trials, and ongoing organic and low-carbon fertilizer initiatives.
Final economic and energy efficiency models will be validated during the final design process. The Company has prepared an evaluation and technology optimization report on the ARS and its economics, under guidance from Buflovak. We believe this data will also provide potential stakeholders, including a) livestock producers, 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 can provide 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 is anchored by our Ammonia Recovery System (ARS) and fertilizer processing, handling and storage. Additional components can be added, such as solids handling, clean water polishing, gas upgrading to RNG, etc, up to a complete ‘zero discharge’ system. The Gen3Tech platform provides the cornerstone for sustainable livestock production, with four distinct benefits/ revenue streams: 1) biogas revenues, including pipeline quality RNG and related carbon and other environmental credits, 2) premium fertilizer product revenues, 3) premium pricing for USDA PVP-certified (or otherwise verified) ‘Environmentally Sustainable’ or ‘Eco-friendly’ brand, and potentially 4) nutrient reduction credits in certain watersheds. Carbon and nutrient credit revenues can be supported by third-party verification of the waste treatment processes with relatively limited incremental cost to Bion. The same verified data will also provide the backbone for the USDA PVP-certified sustainable brand, with limited incremental cost.
| 1) | 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 (RNG) 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 freed up in the AD 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 can also generate photovoltaic (solar) electricity from modules placed on the roofs of the barns 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.
| 2) | Fertilizers: Organic and ‘Low Carbon’: |
The Company has focused a large portion of its activities on developing, testing, and demonstrating the third 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 organically certified soluble nitrogen fertilizer products. The ARS captures the ammonia-nitrogen and CO₂ released during RNG production, then converts these two environmental challenges into Ammonium Bicarbonate. Bion’s AB is a high-value organic fertilizer that belongs to a new class of organic nitrogen products that command prices significantly higher than conventional nitrogen fertilizers. The ammonium bicarbonate products produced by Bion’s ARS and Gen3Tech platform require the use of no outside compounds or chemicals and will enjoy a dramatically lower carbon footprint than synthetic nitrogen fertilizers.
In May 2025, Bion secured its first non-binding offtake commitments for its AB10 nitrogen fertilizer. The agreements were with Perfect Blend and Yield RNG, large West Coast organic fertilizer distributors. The agreements are attached as exhibits to Bion’s 8-k, dated May 30, 2025. Bion subsequently executed a similar offtake with a large integrated U.S. agribusiness concern that requested confidentiality. These three initial offtakes represent 250,000 gallons of Bion’s liquid AB10. In a recent grant application, Bion received Letters of Support from one of the largest distributors of organic fertilizers in the U.S., as well as one of the largest suppliers of consumer retail (home lawn and garden) products in the U.S.
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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 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 2024, 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 row crops, and hydroponic, aeroponic, and greenhouse applications. 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. Bion is also evaluating non-agriculture markets, including retail home lawn and garden, golf courses, city parks, schools, and youth sports fields, which are all experiencing trends to natural and safe products
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. 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. The Company intends to continue efforts to obtain listing/certification for its solid nitrogen fertilizer line. 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.
Bion will also work with industry and academic entities to develop appropriate metrics and produce an independent carbon footprint, a ‘life cycle assessment’ (LCA), for Bion’s ammonium nitrogen fertilizer product. Because Bion’s ARS recovers both nitrogen and CO2 from the waste stream (including using CO2 as a stabilizing agent that is usually vented to the atmosphere), 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 and other livestock supply chains 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. 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 that is 96 percent less compared to the urea baseline.
| 3) | Sustainable Brand Premium: |
The positive environmental impacts of Bion’s processes are all third-party verifiable, providing a valuable benefit to the food supply chain. Independent verification will allow improvements to air, water, and soil quality to be quantified for the purposes of a sustainable brand. 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). 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 protein products produced at CAFO’s with Bion’s treatment platform.
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Food safety and sustainability are issues of growing importance in the U.S. and worldwide. 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 more the livestock industry’s supply chain practices become transparent and known by consumers, the more consumers are seeking alternatives. Bion’s verifiable sustainability metrics 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; d) animal welfare/ humane treatment; e) laborer welfare/ working conditions. The verification processes that can 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.
| 4) | 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 overall U.S. 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 certain impaired watersheds 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.
Bion believes that nutrient reduction (and other similar) credits and/or other methods of monetizing environmental benefits from the capture and re-purposing of nutrients (largely nitrogen and phosphorus) from the livestock waste stream, will become available in multiple states over the next several years. 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).
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Initial Project
The Initial Project is our commercial-scale Ammonia Recovery System at Fair Oaks, Indiana, that was designed and built to 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.
Although envisioned as a small commercial facility, due to several constraints, the project was not developed at economic commercial scale or with an expectation of profitability. 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 produces a 10-0-0 commercial nitrogen liquid fertilizer that received an OMRI Listing as described above. Upon completing the Initial Project’s mission—only final design of the first commercial project remains—the Company will determine whether to continue to operate it at that location or relocate the core modules to an alternative permanent location.
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) standalone ammonia control for industrial or livestock waste biogas production, and 2) retrofit/cleanup of existing CAFOs to mitigate environmental impacts, 3) the transition to sustainable and sustainable-organic beef. The first opportunity – standalone ammonia control – is here today and what Bion is focused on at this time. We have determined that the ARS has many applications in the industrial sector, in addition to agriculture. There is a ‘sweet spot’ (a combination of source, concentration, and solids content) where the ARS can provide cost-effective solutions, especially for food waste and food processing waste, including livestock packing/ slaughter waste. Once Bion is sufficiently funded and staffed to adequately address the standalone opportunity, the Company will decide how best to proceed with both the CAFO cleanup and sustainable beef opportunities.
Bion leadership believes the political will needed to force CAFO cleanup is already beginning to manifest. While there is no Federal mandate yet, certain states are moving toward increased regulation. Some of the larger stakeholders in the animal protein industry have recognized the inevitable and are proactively seeking solutions. Bion is now positioned for this opportunity. While the CAFO cleanup/retrofit opportunity will require policy change, if/when cleanup of the $200B livestock industry becomes mandated, it represents an opportunity for Bion and others that is very large. The sustainable beef opportunity is still developing, in management’s opinion, with a first-of-its-kind large integrated project being planned that is similar in concept to Bion’s modeled project. Bion will need significantly more resources and strategic relationships to develop such projects, although it could participate in one (or more) on a standalone basis, to provide ammonia control and recovery.
Standalone Opportunity
Based on the positive results with our ARS at the Fair Oaks facility, coupled with the extension of our IP to industrial and municipal waste streams in January 2024, we have begun to establish strategic partnerships in the biogas/RNG sector 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:
| A) | INDUSTRIAL WASTEWATER represents our best opportunity in the US, because these types of facilities are already regulated by point source water discharge standards. AD is now used at more than 1,240 water resource recovery facilities in the U.S., along with 121 stand-alone systems that digest food waste. The American Biogas Council estimates that more than 5,100 additional such sites have development potential. Germany, by comparison, has nearly 10,000 operating AD sites, indicating the potential for substantial growth in biogas production here in the U.S. |
In an industrial application, ammonia control is an anticipated cost – Bion anticipates it could be paid a tolling fee to remove the ammonia nitrogen from the discharge stream. As a service provider, Bion will need to be the ‘low-cost solution’ compared to other ammonia removal technologies, although higher treatment costs could be mitigated by byproduct values as described below. This is a new application of our technology, in a sector that is evolving quickly with the increasing focus in the U.S. on biogas production from organic waste. With our expertise and experience limited to animal waste, it is critical that we identify a strategic partner in this space as soon as possible.
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Bion’s technical and economic advantage in this space is the value proposition represented by our ammonium bicarbonate fertilizer and our operational expertise. Technology/ process competitors, such as ammonia stripping, may not produce a saleable product at the end of their treatment process or it may recover a low-value saleable product. Further, in the organic fertilizer markets, our competitors are also able to capture ammonia but not stabilize it inexpensively with CO2 as Bion is able to do, leading to higher production costs than we anticipate for our own product. As a result of this ‘double dip’ (being paid both to remove the ammonia, then to sell it as a fertilizer), we think this space should be a good fit for Bion.
We believe food waste, food and beverage processing waste, and meat and poultry slaughter/processing waste may be the best fit for our technology. Their wastewater streams are concentrated and have similar characteristics to the animal waste stream our technology was developed to treat. Municipal wastewater treatment is much more complex, owing to the wide variety of components/ contaminants in the waste stream, including PFAS (dissolved from plastics), siloxane (chemical material from makeup and other personal products), pharmaceuticals, etc. Bion would need to conduct extensive pilots and trials prior to entering the municipal space. For this reason, Bion has chosen at this time not to pursue ammonia control for municipal wastewater as a source of feedstock for its fertilizers.
| B) | ANIMAL WASTE. According to the American Biogas Council, there are more than 630 farms with biogas capture systems operating in the U.S. today, most of them on dairy operations. The American Biogas Council, drawing on data from USDA and EPA's AgSTAR program, estimates that more than 11,000 additional dairy, poultry, and swine farms have development potential. Bion's ARS was designed specifically for this market: to control ammonia from manure waste and convert it into high-value byproducts. |
In the U.S., post-AD animal waste digestate is treated like raw animal manure and can be land-applied under a nutrient management plan. Absent a regulatory driver, there is no tolling fee opportunity in the U.S., yet. While animal waste AD is not required to comply with point source discharge permits, in certain areas like California, nutrient management budgets are stretched, and it is becoming increasingly difficult to find enough land to apply the digestate. Many producers are proactively searching for alternative solutions to land application in anticipation of developing regulation. Identifying those areas will be the key to success in this market.
We expect regulatory drivers to develop in the U.S. on a regional basis initially, based on groundwater contamination and PM2.5 levels (see earlier discussion). The CA central valley is one of the first places where PM2.5 levels could drive ammonia regulations and create that regulatory driver. More than a dozen states have severe groundwater concerns, mostly related to agriculture. Groundwater contamination with nitrates is now viewed as a health issue and is coming under increasing scrutiny. Recent trends in Michigan and California indicate they may soon begin to regulate animal waste digestate in the same manner as any other industrial source, subject to groundwater permitting requirements.
CAFO Retrofit Opportunity
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 represents one of the greatest opportunities to achieve wholesale and meaningful improvements in U.S. air and water quality and to dramatically reduce the negative environmental impacts from the food supply chain. Bion’s Gen3Tech platform can largely eliminate the environmental impacts of CAFOs. Bion’s technology, coupled with its unique business model, enables the cleanup of the ‘dirtiest’ parts of the food supply chain: animal protein production and generates value to help offset the costs of that cleanup. Cleaning up the livestock supply chain will be expensive and will require subsidies and pathways to revenues from resource recovery. Bion’s management believes that CAFO cleanup, driven by either regulation or incentive, is inevitable and that our technology, which was ‘purpose built’ for this challenge, will play an important role in that cleanup.
The livestock industry and its markets are already changing. With our commercial-ready technology and business model, Bion believes it has a first-mover advantage over others that will seek to exploit the opportunities that will arise from the industry’s inevitable transformation. Bion anticipates moving forward with the development of its initial commercial installation utilizing its ARS with the large Kimmeridge RNG Project, during the current 2026 calendar year. We believe that the success of this project will demonstrate not only the capabilities of Bion’s technology, but the business model and value proposition that will support the cost of cleanup, as well. CAFO cleanup can be achieved and can provide a pathway to true economic and environmental sustainability, with ‘win-win’ benefits for the livestock industry, the environment, and the consumer. Bion intends to pursue the opportunity of CAFO cleanup and advocate for its implementation on a broad scale.
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Sustainable Beef
Bion believes there is an evolving opportunity to provide sustainable production solutions to the cattle feeding industry. We believe we were too ‘early’ in our efforts to establish integrated sustainable beef projects, but that the beef industry represents the best use of Bion’s system capabilities and attributes. 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 spaces). Bion believes there is an opportunity 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 have to partner with producers and other technology companies who provide solutions for different links of the beef value chain. A joint venture/strategic partner-focused business model will be needed 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 verifiable ‘sustainable beef’ available to the US market, except for niche products. In response to consumer demand for transparency and sustainability, Bion expects the meat industry in general, and beef specifically, to evolve towards new technologies and husbandry practices to deliver 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. Bion believes that substantial unmet demand currently exists – potentially very large – for ‘real’ meat/dairy/egg products that offer the verifiable/believable sustainability consumers seek, but with the taste and texture they have come to expect from American beef and pork, dairy and poultry. Numerous studies demonstrate the U.S. consumers’ preferences for sustainability and their ‘willingness to pay’ (WTP).
Bion‘s sustainable beef business model, based on our Gen3Tech platform, can develop and operate large scale facilities that: a) utilize custom designed barns (which enable a more controlled and monitored husbandry environment) and photovoltaic solar electricity generation utilizing the rooftops (where climate conditions permit), b) with continual manure transfer to anaerobic digesters (“ADs”), c) which produce RNG and related environmental revenues, and d) then channel the AD waste (including ammonia and CO2) through a series of processes to refine the waste into its various components.
This overall business model unites several interrelated businesses unlocked by Bion’s technology that augments and aggregates multiple revenue streams as described below. See “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.
Recently there have been efforts to establish sustainable brands (including USDA PVP certification) for a number of small-scale livestock producers (largely in the grass-fed beef category). At present, there is essentially no traceable and verifiable ‘sustainable beef’ available to the US market except for niche products. In response to consumer demand for transparency and sustainability, Bion expects the meat industry in general, and beef specifically, to evolve towards using new technologies to deliver these attributes in their products. While we anticipate a faster adoption of tracking, verification and sustainability technologies in other perishable food categories like produce and dairy, due to their shorter product cycles (and related harvest and production techniques), meat industry leaders have also announced their willingness to move forward with initiatives in this area. Many companies have announced meaningful ‘sustainability’ initiatives, but most appear to consist largely of ‘greenwashing’ marketing commitments rather than substantive undertakings at this date.
Some portion of sustainable beef will likely be organic (see below).
Sustainable Organic Beef
Bion believes it has a unique opportunity to produce, at scale, affordable corn-fed/finished organic beef that is also certified as sustainable. In addition to the sustainable practices described above, organic-sourced beef cows would be finished on organic corn, which would be produced using the ammonia nitrogen fertilizer captured by the ARS. Bion believes organic finished beef will meet consumer demands with respect to sustainability and safety (organic) and also provide the tenderness and taste American consumers have come to expect from premium conventional American beef that has been missing in current organic beef products. Such products are largely unavailable in the market today. We believe Bion’s unique ability to produce the fertilizer needed to grow a supply of relatively low-cost organic corn, and the resulting opportunity to produce organic beef, will differentiate us from potential competitors.
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Today, organic beef demand is limited and mostly supplied with grass-fed cattle. While organic ground/ chopped meat has enjoyed success in U.S. markets, grass-fed steaks have seen limited acceptance, mostly resulting from consumer issues with taste and texture. In other words, it’s tough. Regardless, such steaks sell for a significant premium over conventional beef. A grain-finished organic beef product is largely unavailable in the marketplace today due to the higher costs of producing organic corn and grain. Bion believes there is a potentially large unmet demand for affordable beef products that are both sustainable AND organic, but with the taste and texture consumers have come to expect from American beef. Bion’s ability to produce the low-cost nitrogen fertilizer that can close the organic yield (and affordability) gap puts the Company in a unique, if not exclusive, position to participate in JV’s that will benefit from this opportunity starting next year.
The Livestock CAFO Problem
The livestock CAFO industry is under tremendous pressure from regulatory agencies, a wide range of advocacy groups, institutional investors and the industry’s own consumers, to adopt sustainable practices. Environmental cleanup is inevitable and has already begun. Bion’s Gen3Tech was developed for implementation on large scale livestock production facilities, where scale drives both lower treatment costs and efficient co-products production, as well as dramatic environmental improvements. We believe that scale, coupled with Bion’s verifiable treatment technology platform, will create a transformational opportunity to integrate clean production practices at (or close to) the point of production—the primary source of the industry’s environmental impacts. Bion intends to assist the forward-looking segment of the livestock industry to bring animal protein production in line with 21st Century consumer demands for meaningful sustainability.
In the U.S. (according to the USDA's 2022 Census of Agriculture), there are more than 9.3 million dairy cows, approximately 88 million total cattle and calves, nearly 74 million hogs and pigs, more than 9 billion broilers produced annually, and over 400 million layers, which provides an indication of both the scope of the problem addressed by Bion’s technology, as well as the size of Bion’s opportunity in this space. Environmental impacts from livestock production include surface and groundwater pollution, greenhouse gas emissions, ammonia, PM2.5, and other air pollution, excess water use, and pathogens related to foodborne illnesses and antibiotic resistance. While the most visible and immediate problems are related to nutrient runoff and its effects on water quality, the industry has recently been targeted by various stakeholder groups for its impacts on climate change.
Estimates of total annual U.S. livestock manure waste vary widely, but start around a billion tons, between 100 and 130 times greater than human waste. However, while human waste is generally treated by septic or municipal wastewater plants, livestock waste – raw manure – is spread on our nation’s croplands for its fertilizer value. Large portions of U.S. feed crop production (and most organic crop production) are fertilized, in part, in this manner. Under current manure management practices, 80% or more of total nitrogen from manure, much of it in the form of ammonia, escapes during storage, transportation, and during and after land application, representing both substantial lost value and socialized environmental costs.
More than half of the nitrogen impacts from livestock waste come from airborne ammonia emissions, which are extremely volatile, reactive and mobile. Airborne ammonia nitrogen eventually settles back to the ground through atmospheric deposition - it ‘rains’ everywhere. While some of this nitrogen is captured and used by plants, most of it runs off and enters surface waters or percolates down to groundwater. It is now well-established that most of the voluntary conservation practices, such as vegetated buffers that ‘filter’ runoff (often referred to as “BMPs” or “Best Management Practices” that have traditionally been implemented to attempt to mitigate nutrient runoff), are considerably less effective than was previously believed to be the case. This is especially true with regard to addressing the volatile and mobile nitrogen from ammonia emissions, because BMPs are primarily focused on surface water runoff, directly from farm fields in current production, versus the re-deposition that takes place everywhere or groundwater flow.
Runoff from livestock waste has been identified in most of our major watersheds as a primary source of excess nutrients that fuel algae blooms in both fresh and saltwater. Over the last several years, algae blooms have become increasingly toxic to both humans and animals, such as the Red Tides on the Florida and California coasts, and the Lake Erie algae bloom that cut off the water supply to Toledo, Ohio, residents in 2014. When the nutrient runoff subsides, it leaves the algae blooms with no more ‘food’ and the blooms die. The algae’s decomposition takes oxygen from the water, leading to ‘dead zones’ in local ponds, lakes, and ultimately, the Great Lakes, as well as the Chesapeake Bay, Gulf of Mexico, and other estuary waters. Both the toxic algae blooms and the low/no-oxygen dead zones devastate marine life, from shrimp and fish to higher mammals, including dolphins and manatees. U.S. EPA already considers excess nutrients “one of America’s most widespread, costly and challenging environmental problems”. Nutrient runoff is expected to worsen dramatically in the coming decades due to rising temperatures and increasing rainstorm intensity as a result of climate change.
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Nitrate-contaminated groundwater is of growing concern in agricultural regions nationwide, where it has been directly correlated with nutrient runoff from upstream agricultural operations using raw manure as fertilizer. Pennsylvania, Wisconsin, California and Washington, and others, now have regions where groundwater nitrate levels exceed EPA standards for safe drinking water. High levels of nitrate can cause blue baby syndrome (methemoglobinemia) in infants and affect women who are or may become pregnant, and it has been linked to thyroid disease and colon cancer. EPA has set an enforceable standard called a maximum contaminant level (MCL) in water for nitrates at 10 parts per million (ppm) (10 mg/L) and for nitrites at 1 ppm (1 mg/L). Federal regulations require expensive pretreatment for community water sources that exceed the MCL; however, private drinking water wells are not regulated, and it is the owners’ responsibility to test and treat their wells. Additionally, groundwater flows also transport this volatile nitrogen downstream where, along its way, it intermixes with surface water, further exacerbating the runoff problem. Like atmospheric deposition, the current conservation practices relied on to reduce agricultural runoff are largely bypassed by this subsurface flow.
Additionally, in arid climates such as California, airborne ammonia emissions from livestock manure contribute to air pollution as a precursor to PM2.5 formation, small inhalable particulate matter that is a regulated air pollutant with significant public health risks. Whether airborne or dissolved in water, ammonia can only be cost-effectively controlled and treated at the source-- before it has a chance to escape into the environment where it becomes extremely expensive to ‘chase’, capture and treat. While not regulated yet, there have been ongoing discussions between the US EPA and the California Air Resources Board (CARB) about what potential ammonia regulations might encompass. However, as above, California is moving forward with changes to how it deals with nitrates.
The livestock industry has recently come under heavy fire for its impacts on climate change, which has become a rallying cry for the anti-meat campaigners. Estimates of the magnitude of those impacts vary widely, but the general consensus is that globally, livestock account for 14.5 percent of greenhouse emissions. In the U.S. however, that number drops to 4.2 percent, due to the increased efficiencies of American beef production. The greatest impacts come from direct emissions of methane from enteric fermentation (belches), methane and nitrous oxide emissions from the manure, with arguably the largest being the massive carbon footprint of the synthetic nitrogen fertilizers used to grow the grains to feed the livestock.
Chronic droughts in the west have also impacted the long-term sustainability of some beef herds. Relocation of some beef cattle feeding locations may be required. Access to clean water is an issue of concern that is rising in the world of risks on the ranch.
For decades the livestock industry has overlooked and/or socialized its environmental problems and costs. Today, the impacts of livestock production on public health and the environment can no longer be ignored and are coming under increasing scrutiny from environmental groups and health organizations, regulatory agencies and the courts, the media, consumers, and activist institutional investors. The result has been a significant and alarming loss of market share to plant-based protein and other alternative products. Bion’s Gen3Tech platform was designed to resolve these environmental issues and bring the industry in line with twenty-first century consumer expectations.
Policy Change is Coming
Bion believes that policy change is coming. There are many states that face livestock waste-related pollution issues, and they will be forced to adopt new strategies, as well. In the face of a growing problem that will only be exacerbated by climate change, it will be necessary to go beyond status quo solutions or risk losing the ecosystems that comprise many of our watersheds and estuaries. When regulation or competitively-bid markets for nutrient reductions (and/or other forms of payment for ecosystem services that will allow us to monetize environmental benefits) become fully established, Bion anticipates a robust opportunity to use its Gen3Tech-based platforms to retrofit both existing CAFOs and equip new large-scale livestock facilities (“Projects”) which will generate the supplemental revenue needed to profitably afford technology implementation from sales of verified nutrient reduction credits.
Bion's Gen3Tech can provide a solution to a significant portion of the livestock problem discussed above, because it stabilizes and upcycles the nitrogen, providing a pathway to export and precision apply it when and where needed, and preventing its uncontrolled release to the environment. Treatment costs are offset by recovering a substantial portion of those nutrients for value-added commercial utilization. In contrast, the current clean water strategy being utilized in the U.S. is clearly failing, because it doesn’t adequately address waste from agriculture. A lot of U.S. crops are now fertilized with raw, untreated manure. However, approximately 80 percent of the nitrogen in that manure is not utilized by the plants being fertilized but rather ‘escapes’ to contaminate the environment through various pathways.
Because livestock waste is one of the largest contributors to nutrient problems in certain watersheds, livestock waste treatment can be the source of the low-cost solution for such problems – if the waste is treated upstream at (or close to) the source of production. Manure control technologies, applied to large scale facilities where concentration and scale enable cost-effective cleanup, can potentially offer the lowest cost nutrient solutions available in most watersheds today. More than 80 percent of U.S. livestock production takes place on large-scale facilities, where cost-effective treatment can be implemented. There is no longer any real question regarding whether such facilities need to be cleaned up. The actual question for public policy concerns is developing sources of new revenues which will enable the livestock industry to offset the implementation costs for the cleanup.
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Despite trends toward consolidation in segments over the last several decades, the U.S. animal-protein industry, particularly beef, remains (in large part) a fragmented, low-margin commodity business without effective integrated efforts toward either environmentally or economically sustainable production. Cleaning it up will have to be orderly and contain a path to sustainability that does not cause U.S. food costs to spike or bankrupt the industry. This will require treatment sufficient to remove the volume of nutrients in excess of crop requirements. Because the global export market represents a significant part of the U.S. livestock production industry, direct increases in federal regulation without offsetting revenues would likely create costs that could not be absorbed by the industry in a manner that would allow it to remain competitive in international markets. Selective state regulation would have a similar chilling effect within the U.S., since regulated producers in one state would be unable to compete with unregulated producers in adjoining states. Subsidies and/or new revenue sources are required.
Bion believes that reallocating some part of the more than $175 billion in existing U.S. taxpayer-funded clean water spending to lower-cost alternative solutions in agriculture (including competitively-bid nutrient reduction procurement) is inevitable. It will provide the taxpayer with accelerated and substantially lower-cost (and verified) air and water quality solutions compared to current strategies. If Bion’s technology is implemented in appropriate situations, it will provide the livestock industry with the recurring revenues that are needed to offset the costs of technology adoption without major disruption to the industry. To date, a wide range of entrenched interests have opposed and fought policy change that might reallocate clean water spending to more cost-effective alternatives; but this common-sense approach is being accepted by a widening group of stakeholders.
Bion spent many years pursuing these opportunities in Pennsylvania, including developing and demonstrating its technology as part of the efforts to clean up the Chesapeake Bay Watershed. Bion’s activities in PA commenced with the Kreider 1 2G Tech dairy system in the Chesapeake Bay watershed in 2008 and continued through 2019. For more information on Bion’s activities related to Pennsylvania, the Chesapeake Bay, and nutrient credits and trading, please see Bion’s Form 10-K, for the year ended June 30, 2023. (and prior years).
Going Concern:
The Company’s consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company incurred a net loss of $1,958,000 and $2,380,000 for the years ended June 30, 2026, and 2025, respectively. At June 30, 2026, the Company has a working deficit and a stockholders’ equity of approximately $7,264,000 and $7,192,000, respectively. The Company’s lack of revenue and/or operating profits, together with the low likelihood of generating positive cash flow and/or net income during the next 12-24 months, raise substantial doubt about the Company’s ability to continue as a going concern.
For more detail regarding Going Concern, including Management’s Plans, see Note 1 of Notes to Financial Statements below.
PRINCIPAL PRODUCTS AND SERVICES
The Company’s focus is on implementing its Gen3Tech in JVs (as described above). Therefore, the category ‘PRINCIPAL PRODUCTS AND SERVICES’ is not applicable for the Company’s business. While the Company may implement some ARS or Gen3Tech systems on a contractual basis, and may, in the future, license or otherwise deploy our ARS as a standalone ammonia control solution, at this time our business does not involve the sale of our systems (or equipment) or long term direct operations/management of our systems (or equipment).
CORPORATE BACKGROUND
The Company is a Colorado corporation organized on December 31, 1987. Our principal executive offices are located in the home offices of our senior executives. Our primary administrative office is now located at the residence of our Office Manager at 9 East Park Court, Old Bethpage, New York 11804, at which location most of the Company’s physical records and central computer reside. Our primary telephone number is 406-839-0816. We have no additional offices at this time as all employees and primary consultants work from their home offices.
HISTORY AND DEVELOPMENT OF OUR BUSINESS
Substantially all of our business and operations to date has been conducted through wholly-owned subsidiaries, Bion Technologies, Inc. (a Colorado corporation organized September 20, 1989), Bion Integrated Projects Group, Inc. ("Projects Group") (formerly Bion Dairy Corporation through August 2008 and originally Bion Municipal, Inc., a Colorado corporation organized July 23, 1999) and Bion Services Group, Inc. ("Services Group") (formerly Bion International, Inc., a Colorado corporation organized July 23, 1999) and BionSoil, Inc. (a currently inactive Colorado corporation organized June 3, 1996). Bion is also the parent of Bion PA 2 LLC (a Colorado entity organized June 24, 2010) (“PA2”) and Bion 3G-1, LLC (a Colorado entity organized on September 23, 2021). In January 2002, Bion entered into a series of transactions whereby the Company became a 57.7% (now 58.9%) owner of Centerpoint Corporation (a Delaware corporation organized August 9, 1995) ("Centerpoint"). Bion was formerly the parent of Bion PA 1 LLC (a Colorado entity organized August 14, 2008) (“PA1”) which was dissolved on December 29, 2021.
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We have conducted business in the livestock manure and organic waste treatment arena since 1989; we are finalizing our fourth generation of technology. Our original systems were wastewater treatment systems for dairy farms and food processing plants. The basic design was modified in late 1994 to create our first generation Nutrient Management Systems ("NMS") that produced organic soil amendment products as a byproduct of remediation of the waste stream when installed on large dairy or swine farms. Through June 30, 2002, we sold and subsequently installed approximately 30 of these systems in 7 states. While they achieved their nutrient management objectives, there was no mandate to force CAFO clean up and the byproducts did not produce enough value to drive a business opportunity.
Bion’s second-generation technology was developed over the next several years and largely completed by 2008. It allowed real-time digital control and process monitoring and created higher value products. While the second-generation platform was never placed in commercial service, it ultimately led to the conception and development of the third-generation Ammonia Recovery System, beginning in 2015. Pilot testing began in Buffalo, NY, in 2019; construction of the small commercial scale Initial Project at Fair Oaks, IN, was completed in 2023; optimization was completed in 2025 after 1,500 hours of operation.
For more information on the history of Bion’s evolving business opportunity and technology development, please see Bion’s Form 10-K, for the year ended June 30, 2025. (and prior years).
Up until 2025, Bion was largely focused on implementing its technology in the beef cattle industry, where it would be required to change consumer habits, supply chain structure, and manage and finance complex projects with long lead times. In 2025, management put that aside to focus on what it believed to be more achievable goals. 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) standalone ammonia control for industrial or livestock waste biogas production, and 2) retrofit/cleanup of existing CAFOs to mitigate environmental impacts, 3) the transition to sustainable and sustainable-organic beef.
The first opportunity – standalone ammonia control – is here today and what Bion is focused on at this time. We have determined that the ARS has many applications in the industrial sector, in addition to agriculture. There is a ‘sweet spot’ (a combination of source, concentration, and solids content) where the ARS can provide cost-effective solutions, especially for food waste and food processing waste, including livestock packing/ slaughter waste. Once Bion is sufficiently funded and staffed to adequately address the standalone opportunity, the Company will decide how best to proceed with both the CAFO cleanup and sustainable beef opportunities.
COMPETITION:
There are a significant number of potential competitors in the industries in which Bion is working: livestock and industrial waste treatment, renewable energy production, and fertilizer manufacturing. There is a small, but increasing number of visionary companies, like Bion, that seek to develop integrated projects that exploit the synergies of these industries, with circular solutions such as integrated sustainable and/or organic beef production and comprehensive CAFO treatment that includes resource recovery and upcycling.
Bion has further differentiated itself from these companies with its Intellectual Property (IP) that protects its ability to stabilize the ammonia in organic waste with CO2, allowing us to produce an OMRI listed ammoniacal nitrogen fertilizer product that is 8 to 10 times more valuable than conventional (non-organic) ammoniacal nitrogen. While the ability to produce ammoniacal nitrogen is not unique, there are very few ways it can be done and maintain that organic designation. Bion believes its process to be the lowest cost, which has been confirmed by third parties. Bion also believes its process to be the most reliable, since others depend on either complex biological processes or rely on outside acids to stabilize the ammonia – those acids are subject to commodity pricing. Reliability is an important distinction as the organic fertilizer industry has grown skeptical of promises of supply that have been made by a number of technology companies that ultimately failed to deliver. Between Bion’s value proposition to biogas producers, coupled with its low cost and reliability for growers, Bion is confident it is well positioned to compete in these evolving market opportunities and, subject to the availability of project financing, will be able to choose the most attractive potential projects.
There is a tremendous amount of competition in the space to generate biogas or RNG from industrial and municipal waste streams. In some cases with challenging economics, overall project feasibility will rely on the value of the recovered ammonia. Bion is focused on the evolving opportunities to provide ammonia control for these projects, especially food waste and food and beverage processing waste, including slaughter waste. As a bolt-on ammonia control solution that is unique and presents a strong value proposition to the biogas operator, we believe some of our competitors will become customers.
Because Bion systems offer a unique and meaningful value proposition, it has the ability to be competitive in each of the spaces it intends to exploit its opportunities.
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DEPENDENCE ON ONE OR A FEW MAJOR CUSTOMERS
In our JVs/Projects (including Integrated Projects) business segment, we will most likely be dependent upon one or a few major customers/partners/joint venturers since a relatively limited number of JVs and/or Projects (including Integrated Projects) will be developed by the Company. We anticipate initially developing, owning interests in, and operating only one or a small number of Projects commencing during 2026 and, thereafter, developing a limited number of Projects at a time. Thus, at least for the near future, our revenues will be dependent on a relatively small number of major Projects, participants and/or customers.
PATENTS
We are the sole owner of six United States patents. Additionally, Bion has one United States patent applications pending and has two international patent applications currently pending.
Patent Numbers and date of issue:
United States Currently Issued:
| (1) | 8,287,734: Method for Treating Nitrogen in Waste Streams: (OCN) Jere Northrop & James W. Morris (Exp 3/20/31) |
| (2) | 10,106,447: Process to Recover Ammonium Bicarbonate from Wastewater: Morton Orentlicher & Mark M. Simon. (Exp. 9/14/2035) |
| (3) | 10,604,432: Process to Recover Ammonium Bicarbonate from Wastewater; Dominic Bassani, Steve Pagano, Morton Orentlicher & Mark M. Simon. (Exp 6/29/2037) |
| (4) | 10,793,458: Process to Recover Ammonium Bicarbonate from Wastewater; Dominic Bassani, Steve Pagano, Morton Orentlicher & Mark M. Simon. (Exp 9/14/2035) |
| (5) | 11,254,581: Process to Recover Ammonium Bicarbonate from Wastewater; Dominic Bassani, Morton Orentlicher, Mark M. Simon & Steve Pagano. (Exp 9/14/2035) |
| (6) | 11,858,823: Process to Recover Ammonium Bicarbonate from Wastewater; Dominic Bassani, Morton Orentlicher, Mark M. Simon & Steve Pagano. (Exp 9/14/2035) |
We are also the sole owner of, or possess the contractual right to acquire exclusive patent rights to, a pending United States provisional patent application, a pending United States utility patent application and three international applications as set forth below:
United States Currently Pending:
| (1) | 18/390,274: Process to Recover Ammonium Bicarbonate from Wastewater; Dominic Bassani, Steve Pagano, Morton Orentlicher & Mark M. Simon |
International Applications Currently Pending:
| (1) | EP 18943551.4: Process to recover ammonium bicarbonate from wastewater; Dominic Bassani, Steve Pagano, Morton Orentlicher & Mark M. Simon. |
| (2) | MX/a/2021/007358: Process to recover ammonium bicarbonate from wastewater; Dominic Bassani, Steve Pagano, Morton Orentlicher & Mark M. Simon |
In addition to such factors as innovation, technological expertise and experienced personnel, we believe that a strong patent position is critically important to compete effectively in the businesses on which we are focused. It is likely that we will file applications for additional patents in the future. There is, however, no assurance that any such patents will be granted.
The Company has elected to expense all costs and filing fees related to obtaining patents (resulting in no related asset being recognized in the Company’s consolidated balance sheets) because the Company believes such costs and fees are immaterial (in the context of the Company’s total costs/expenses) and have no direct relationship to the value of the Company’s patents.
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It may become necessary or desirable in the future for us to obtain patent and technology licenses from other companies relating to technologies that may be employed in future products or processes. To date, we have not received notices of claimed infringement of patents based on our existing processes or products, but due to the nature of the industry, we may receive such claims in the future.
We generally require all of our employees and consultants, including our management, to sign a non-disclosure and invention assignment agreements upon employment with us.
RESEARCH AND DEVELOPMENT
Current research and development work is focused on ongoing improvement of our ARS (the initial version of which is ready for implementation in an appropriate Project) and Gen3Tech, with emphasis on increased recovery of valuable co-products (including nutrients in organic and/or non-organic forms, production of renewable energy, with related renewable energy and/or environmental credits). Bion believes its Gen3Tech will produce significantly greater value from the CAFO waste stream through the recovery of a concentrated natural nitrogen fertilizer and pipeline-quality natural gas. Bion is focused on development of a fourth-generation ARS to provide standalone ammonia control solutions at facilities that recover biogas from organic waste streams. The 4G system will enjoy dramatically lower costs, both in capex and opex.
During the years ended June 30, 2026, and June 30, 2025, respectively, we expended approximately $27,000 and $22,000 excluding non-cash stock-based compensation) on research and development activities related to our technology platform applications in support of large-scale, economically and environmentally sustainable Projects and Retrofits. Since the 2018 fiscal year, Bion’s research and development has been primarily focused on development work to complete and further refine development of our Gen3Tech which will have the capacity to process dry, poultry CAFO waste streams in addition to wet dairy/beef/swine CAFO waste streams and increase our ability to recover marketable by-products from the waste stream remediation including renewable natural gas and nitrogen products (organic and non-organic). Some work has also involved modifying and adding unit processes to our Gen3Tech platform with the objective of reducing capital costs and operating costs, while generating commercial equivalent by-products (and therefore, potential revenue streams) and significantly increasing environmental efficiency. As a result of these efforts (including their continuation during the current period), Bion made new (and supplemental) patent filing(s) during the 2019-2021 fiscal years related to our ARS.
Our current research and development efforts have been focused on developments that will minimize water removal requirements, thereby significantly reducing the associated energy costs of operating the ARS. In addition, current efforts are focused on fertilizer and soil amendment products (organic and inorganic), water reuse, environmental and reduction credits (including but not limited to nutrient, carbon, sediment, water and pathogen reduction) while reducing capital costs and operating costs. Bion continues to focus on “normalizing” its technology platform for use on multiple species. This effort has required significant work and resource allocation on research regarding balancing the activities of each unit process so that its output enables the subsequent unit processes to maximize efficiency and discharge to the subsequent unit process in order to produce a feedstock cost effectively. The by-products of this series of unit processes (which include certain Bion proprietary elements) are then “reassembled” into products to maximize their economic value. To date, research and development results have supported our objectives.
Environmental Protection/Regulation and Public Policy
In regard to Retrofits and development of Projects, we will be subject to extensive environmental (and other) regulations related to CAFO's, biofuel production and end product (e.g. fertilizer) producers. To the extent that we are a provider of systems and services to others that result in the reduction of pollution, we are not under direct enforcement or regulatory pressure. However, we are involved in the business of CAFO and industrial waste treatment and are impacted by environmental regulations in at least four different ways:
| • | Our marketing and sales success is partly reliant on the pollution clean-up requirements of various governmental agencies, from the Environmental Protection Agency (EPA) at the federal level to state and local agencies; |
| • | Our System design and performance criteria must be responsive to the changes in federal, state and local environmental agencies' effluent and emission standards and other requirements; |
| • | Our System installations and operations require governmental permits and/or other approvals in many jurisdictions; and |
| • | To the extent we own or operate Projects (including Integrated Projects with CAFO facilities and ethanol plants), those facilities will be subject to environmental regulations. |
Additionally, our activities are affected by many public policies and regulations (federal, state and local) related to other industries such as agriculture, food, energy, municipal waste and storm water treatment, watershed-wide mandates, and others. For example, the existing differences in the regulatory requirements for agriculture versus municipal wastewater clean-up currently in place have negatively impaired the development of viable markets for nutrient reduction credits.
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Bion system installations and operations may require verification and compliance with an assortment of voluntary regulatory programs, such as the USDA Organic and USDA Process Verified branding programs. Each of these programs has a series of compliance verification steps that need to be met in order to maintain proper standing for use of the USDA shield on packaging.
EMPLOYEES
As of September 1, 2026, we had six employees and primary consultants, all of whom are performing services for the Company on a full-time basis. The Company utilizes another half-dozen key consultants and professionals on an ‘as needed’ or part-time basis for now, but we expect most of them to join Bion as employees as we enter commercialization. Our future success depends significantly on the continued service of our key personnel and the ability to hire additional qualified personnel. The competition for highly qualified personnel is intense, and there can be no assurance that we will be able to retain our key managerial and technical employees or that we will be able to attract and retain additional highly qualified technical and managerial personnel in the future. None of our employees is represented by a labor union, and we consider our relations with our employees to be good. None of our employees is covered by "key person" life insurance.
ITEM 1A. RISK FACTORS.
Our future results of operations, financial condition and liquidity and the market price for our securities are subject to numerous risks, many of which are driven by factors that we cannot control. The following cautionary risks, uncertainties and assumptions relevant to our business include factors we believe could cause our actual results to differ materially from expected and historical results. Other factors beyond those listed below, including factors unknown to us and factors known to us which we have not currently determined to be material, could also adversely affect our business, results of operations, financial condition, prospects and cash flows. Also see “Forward-looking Statements” above.
| · | the Company's extremely limited financial and management resources which need to be augmented and the Company’s limited ability to raise additional needed funds and/or hire needed personnel; |
| · | potential conflicts of interest related to the BLG loan group, its partial ownership by one of Bion’s Directors and their relationships/influence with other BLG owners, and its security position in the Company’s IP; |
| · | we depend on a limited number of prospective projects, and the loss or delay of any of them could materially harm our business. |
| · | the possibility that markets for organic and low-carbon fertilizer products, clean fuels and energy, and eco-friendly/ sustainable beef, will be slow to develop (or not develop at all); |
| · | changes in political administrations, both at the federal, state, and local levels, and their impact on policies related to project development, renewable energy and clean fuels tax and other credits, and advanced low-carbon and organic fertilizers; |
| · | failure to attract strategic partners that can supply needed expertise and resources in the various sectors we ‘touch’, such as renewable energy/clean fuels, fertilizers, agriculture and livestock; |
| · | the substantial capital expenditures required for the Company’s proposed JV (and future JVs) and development/construction of the Company's proposed Projects and facilities and the related need to fund such capital requirements through commercial banks and/or public or private securities markets; |
| · | changes in political administration, especially at the federal level, and their impact on availability of capital for projects; |
| · | potential delays in constructing the Company’s initial beef Project and other Gen3Tech and ARS system installations; |
| · | the possibility that competitors will develop more comprehensive and/or less expensive production platforms; |
| · | delays and/or costs exceeding expectations relating to Bion's development of the Initial Project, JVs and/or Projects; |
| · | delays in anticipated permit approval and/or start-up dates; |
| · | uncertainties and cost increases related to research and development efforts to update and improve Bion’s technologies and applications thereof; |
| · | delays in market awareness of Bion and our Systems; |
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| · | the limited liquidity of the Company's equity securities; limited availability of capital on acceptable terms for small public companies like Bion in the current financial markets; |
| · | dependence upon key personnel and the ability of the Company to keep its existing personnel and their accumulated expertise including the substantial risk of illness or death of one or more key personnel; |
| · | seasonal and climatic conditions; |
| · | increased cost of material and equipment (including those caused by the COVID-19 pandemic and supply chain challenges); |
| · | the strength and financial resources of the Company's potential competitors; |
| · | cybercrimes/hacking (actual and potential) of the Company’s online presence and limited operational computer systems; |
| · | general economic and capital market conditions; |
| · | industry risks, including environmental related problems; |
| · | operating hazards attendant to the environmental clean-up, CAFO and renewable energy production, fertilizer and/or food retailing and biofuel industries; |
| · | failure of the political, legal, regulatory and economic climate to support funding of environmental clean-up and enforcement of environmental rules and regulations; |
| · | changes in the public's perceptions of large scale livestock agriculture/CAFOs, consumption of meat and dairy, environmental protection and other related issues; and |
| · | continued delays in (and/or failure of) development of markets (or other means of monetization) for nutrient reductions and other environmental benefits from agriculture and CAFOs and related waste treatment facilities; including failure of markets for nutrient (nitrogen and phosphorus) reductions to develop sufficient breadth and depth. |
Risks Relating to our Common Stock
| · | Our common stock is thinly traded on the OTC Markets QB exchange and largely illiquid; |
| · | The market price of our stock is subject to volatility; |
| · | You may have difficulty selling our stock because it is deemed a “penny stock” and not quoted on a national exchange; |
| · | Because our shares are deemed a “penny stock,” rules enacted by FINRA make it difficult to sell previously restricted stock; |
| · | Because we will not pay dividends in the foreseeable future, stockholders will only benefit from owning common stock if it appreciates; |
| · | We regularly issue stock, or stock options, instead of cash, to pay some of our operating expenses. These issuances are dilutive to our existing stockholders; |
| · | Our stockholders face further potential dilution in any new financing. |
ITEM 1B. UNRESOLVED STAFF COMMENTS.
Not applicable.
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ITEM 1C. CYBERSECURITY.
We use the Microsoft 365 Business platform to protect corporate data through multiple layers of security. User access is secured with multifactor authentication and identity-based controls, while company laptops and mobile devices can be centrally managed and monitored through Microsoft Intune to ensure they meet security requirements before accessing company resources. Shared files stored in OneDrive and SharePoint, as well as Teams meeting recordings and documents, are protected by Microsoft's cloud security, access controls, encryption, and threat-detection capabilities, allowing access to be restricted to authorized users and reducing the risk of unauthorized sharing. In addition, Microsoft Defender for Business helps detect and respond to malware, ransomware, phishing attacks, and other cybersecurity threats across company devices, supporting our overall cybersecurity governance and compliance objectives.
At the recommendation of BCS, Bion recently upgraded to the Microsoft 365 Business Premium platform, with a more robust integrated security solution. The added security and device management includes the following features:
| • | Mandatory MFA for all users |
| • | Conditional Access |
| ○ | Blocks legacy authentication |
| ○ | Requires compliant devices |
| • | Intune-managed laptops |
| • | Microsoft Defender for Business |
| ○ | Endpoint detection and response |
| ○ | Automated remediation |
| • | BitLocker encryption enforcement |
| • | Security baselines and patch management |
| • | Monthly Secure Score review |
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Cybersecurity threats are constantly evolving, increasing the difficulty of successfully defending against them or implementing adequate preventative measures. While we seek to detect and investigate unauthorized attempts and attacks against our network and to prevent their occurrence where practicable, we remain potentially vulnerable to known or unknown threats. In some instances, we may be unaware of a threat or incident or its magnitude and effects for some time. Further, there is increasing regulation regarding responses to cybersecurity incidents, including reporting to regulators, which could subject us to additional liability and reputational harm. See “Item 1A. Risk Factors” of this Annual Report for more information on our cybersecurity risks and product vulnerability risks.
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 (406) 839-0816.
We are the sole owner of six 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 (Litigation and related matters).
1) Convertible Bridge Loan/Default
On September 28, 2023, the Company entered into an agreement for a $1,500,000 bridge loan with SEB LLC, a non-affiliated party (the "Lender"), and executed a convertible promissory note (the "Note") and a binding subscription agreement (together, the "Bridge Loan Agreements"). The Bridge Loan Agreements required the Lender to loan the Company $1,500,000 in six monthly tranches of $250,000 beginning in October 2023. All amounts advanced, together with interest accrued at 9% per annum, were due and payable on October 1, 2024, if not previously converted. The Note is convertible at the sole election of the Lender at $1.00 per unit, each unit consisting of one share of the Company's common stock and a warrant to purchase one-half share. The Company received the initial $250,000 tranche on October 5, 2023. In early November 2023, the Lender informed the Company verbally that it did not intend to fund the remaining tranches, and no further tranches were received.
On May 10, 2024, the Company received an additional $150,000 from affiliates of the Lender, in connection with discussions regarding a potential larger investment by affiliates and/or associates of the Lender. The larger transaction was never completed. The Company has included the $150,000 in the convertible bridge note balance and accrues interest on it at 9% per annum, consistent with the terms of the Note. The funds were used primarily to restart operations at the Initial Project.
The Note matured on October 1, 2024 and has not been repaid or converted. As a result, the Company has been in default under the Note since that date. The balance of the Note, including accrued interest, was $491,256 as of June 30, 2026. The Company is in discussions with representatives of the Lender in an effort to reach a mutually satisfactory resolution. The Lender's failure to fund the remaining tranches materially damaged the Company and contributed to the substantial increase in its current liabilities, including accounts payable, over recent periods. See Note 5 to the consolidated financial statements and Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations."
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2) Creditor Matters
Hamstra Builders and Dilling Group. On March 31, 2025, Dilling Group, Inc., a subcontractor on the Company's Ammonia Recovery System demonstration facility at Fair Oaks, Indiana, filed suit to recover unpaid invoices, as disclosed in the Company's Form 8-K dated April 7, 2025. On April 16, 2025, the Company was served a summons by Hamstra Builders, Inc. ("Hamstra"), the general contractor of the project, which named as defendants the Company, Bion Technologies, Inc. and Bion 3G-1, LLC (both subsidiaries of the Company), and North Prairie Holdings, LLC, the property lessor. The Hamstra suit related to a Notice of Intent to file a Mechanic's Lien filed April 16, 2024. Together, the two suits sought to recover $1,494,513 in unpaid invoices.
On July 14, 2026, the Company executed a Settlement Agreement with Hamstra, which, together with a separate agreement between Hamstra and Dilling Group, resulted in the dismissal of all mechanic's liens and litigation related to the construction of the Fair Oaks facility. Under the Settlement Agreement, the Company issued Hamstra a convertible promissory note of $1,774,512, which bears interest at 10% per annum and matures December 31, 2026. The note requires a cash payment of $653,915 at the closing of a future Company financing, with the remaining balance convertible into the Company's common stock at the price of that financing. The amounts due to Hamstra, including $284,828 of interest accrued in connection with the settlement, are included in accounts payable and accrued expenses as of June 30, 2026. See Notes 8 and 11 to the consolidated financial statements.
North Prairie Holdings. On August 25, 2026, the Company executed a Settlement and Mutual Release Agreement with North Prairie Holdings, LLC, the landlord of the property in Newton County, Indiana on which the Fair Oaks facility is located, resolving amounts owed under the lease. In connection with the settlement, the Company issued North Prairie Holdings a convertible promissory note in the initial principal amount of $162,500. The Settlement Agreement and note are filed as exhibits to the Company's Form 8-K dated August 27, 2026. See Notes 8 and 11 to the consolidated financial statements.
The Company currently is not involved in any other material litigation or similar events.
ITEM 4. MINE SAFETY DISCLOSURES.
None.
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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 OTC Markets tier under the symbol "BNET." The following quotations reflect inter dealer prices, without retail mark up, markdown or commissions and may not represent actual transactions.
| 2026 | 2025 | |||||||||||||||
| Fiscal Year Ended June 30, | High | Low | High | Low | ||||||||||||
| First Fiscal Quarter | $ | 0.18 | $ | 0.17 | $ | 0.54 | $ | 0.15 | ||||||||
| Second Fiscal Quarter | $ | 0.18 | $ | 0.17 | $ | 0.30 | $ | 0.15 | ||||||||
| Third Fiscal Quarter | $ | 0.24 | $ | 0.23 | $ | 0.22 | $ | 0.07 | ||||||||
| Fourth Fiscal Quarter | $ | 0.21 | $ | 0.21 | $ | 0.30 | $ | 0.04 | ||||||||
(b) Holders
The number of holders of record of our common stock at September 1, 2026 was approximately 1,420. 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 Trust Company, 1110 Centre Pointe Curve, Ste # 101, Mendota Heights, MN 55120.
(c) Dividends
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 as of June 30, 2026 and 2025.
(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, 2026 3,651,600 options have been granted and outstanding under the Plan (as amended), including all options granted under prior merged plans.
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, 2026 nil options have been granted and outstanding under the 2021 Equity Plan. As of June 30, 2026, the Company had no outstanding contingent Stock Bonuses.
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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, 2026:
2006 Equity Compensation Plan table
| Plan category |
Number of securities to be issued upon the exercise of outstanding options, warrants and rights |
Weighted average exercise price of outstanding options, warrants and rights | Number of Securities remaining available for future issuance under equity compensation plans | |||||||||
| Equity compensation plans approved by security holders | 32,003,284 | $ | 0.36 | 33,996,716 | ||||||||
| Equity compensation plans not approved by security holders | — | — | — | |||||||||
| Total | 32,003,284 | $ | 0.36 | 33,996,716 | ||||||||
ITEM 6. Reserved.
N/A
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Statements made in this Form 10-K that are not historical or current facts, which represent the Company's expectations or beliefs including, but not limited to, statements concerning the Company's operations, performance, financial condition, business strategies, and other information, involve substantial risks and uncertainties. The Company's actual results of operations, most of which are beyond the Company's control, could differ materially. These statements often can be identified by the use of terms such as "may," "will," "expect," "believe," anticipate," "estimate," or "continue" or the negative thereof. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management's best judgment as to what may occur in the future. However, forward looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected.
These factors include potential conflicts of interest related to the BLG loan group, its control by one of Bion’s Directors and key management, and its security position in the Company’s IP (see Note 5 Note payable – related party (BLG)), adverse economic conditions, entry of new and stronger competitors, inadequate capital and limited ability to obtain financing, needed personnel and equipment, unexpected costs, failure (or delay) to gain product certifications and/or regulatory approvals in the United States (or particular states) or foreign countries, loss (permanently or for any extended period of time) of the services of members of the Company’s small core management team and failure to obtain access to new markets. Additional risks and uncertainties that may affect forward looking statements about Bion's business and prospects include: i) the possibility that markets for eco-friendly/sustainable beef, organic and low-carbon fertilizer products, and clean fuels will be slow to develop (or not develop at all), ii) the possibility that competitors will develop more comprehensive and/or less expensive environmental solutions, viii) delays in market awareness of Bion and our Systems, iv) uncertainties and costs increases related to research and development efforts to update and improve Bion’s technologies and applications thereof, and/or v) delays and/or costs exceeding expectations relating to Bion's development of Projects and vi) failure of marketing strategies, each of which could have both immediate and long term material adverse effects by placing us behind our competitors and requiring expenditures of our limited resources.
Bion disclaims any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated 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.
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BUSINESS OVERVIEW AND PLAN
The Company has been under substantial financial and management stress over the past six (6) years. 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, led to extreme difficulties in raising needed funds. These delays prevented us from meeting our project development and related capital timelines, and were further compounded by the death (following extended illness) of Dominic Bassani, who most recently served as our COO from May 2022 after serving as our CEO for the prior decade, the subsequent resignation of Bill O’Neill, Dominic’s replacement at the CEO position, effective May 31, 2024, followed by the retirement of Mark A. Smith, the Company’s President, General Counsel and Chief Financial Officer, effective July 31, 2024.
Until May 2024 (prior to Mr. O’Neill’s departure), Bion was focused on building multiple integrated beef projects as described below.
At the end of May 2024, a new core leadership team was installed (see Item 10) that pivoted Bion away from large integrated livestock projects to devote almost all its resources on the bolt-on business opportunity: using the ARS as a standalone ammonia control solution for others’ biogas production facilities that simultaneously supply us with feedstock from which to produce our unique fertilizer products. A short-term funding strategy was implemented (see Note 5 BLG and Shareholder Note Group) while longer term capital solutions were pursued; these efforts are ongoing. We have implemented extreme cost savings measures: maintaining only mission-critical operations and funding. These measures will continue until we can execute a larger financing or obtain other sources of capital, such as a potential strategic investor/partner or license agreement.
Our leadership team believes, despite the difficulties Bion has faced, the Company is now ready for successful commercial launch, having accomplished the following:
| - | Capital structure cleanup and significant debt settled |
Settlement agreements were executed with legacy principals that substantially simplified the capital structure and reduced potential dilution (see Notes 6 & 8, Giveback and Settlement Agreements);
Settlement agreements were executed with creditors related to the Fair Oaks demonstration facility (see Notes 8, 11, Item 3, Hamstra and North Prairie Holdings Settlements).
| - | Technology now commercial-ready |
Completed optimization; value proposition proven; ready for final design (see Platform and Development below).
| - | Strong fertilizer demand demonstrated |
Several non-binding offtake commitments for AB10 nitrogen fertilizer have been executed. Letters of support for a federal grant application were received that exceed the anticipated initial commercial project’s production capacity (see below: Gen3Tech Platform, 2. Fertilizers: Organic and ‘Low Carbon’).
| - | Demonstrated developers/operators demand for ammonia control solutions |
There is tremendous uncertainty over RNG policy and pricing. Optimizing existing facilities has become a key focus for the biogas/RNG industry that is actively seeking comprehensive resource recovery. Bion believes its ARS and AB10 represent the best ammonia recovery value proposition available today.
| - | Built a strong core team to execute a commercial strategy |
Bion has added key talent in engineering, agronomy, project management, and marketing.
| - | Built key relationships: engineering, finance, fertilizer distribution |
Bion has proven to be a serious and respected solutions provider that has attracted the attention of a wide range of stakeholders in engineering, finance, agriculture, and fertilizer.
During the past two years, Bion has worked to establish itself as a credible and capable participant in the livestock waste treatment, renewable energy, and sustainable agriculture markets. Management believes its ARS technology has the potential to fundamentally change the economics of manure and digestate management by recovering nitrogen as a high-value organic fertilizer rather than treating it as waste. These successes coincide with long term trends in sustainable agriculture, renewable fuels, and the circular economy that favor Bion’s business opportunities. Bion leadership believes this confluence of events positions the Company, assuming it continues to align with appropriate strategic partners and obtains sufficient financing, to exploit a unique and growing opportunity at the intersection of agriculture, renewable energy, the environment, U.S. food security and public health, and consumer demand.
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THERE IS NO ASSURANCE THAT THE COMPANY WILL REACH OR APPROACH THE GOALS/TARGETS SET FORTH ABOVE. REACHING SUCH GOALS/TARGETS WILL REQUIRE RESOLUTION OF THE COMPANY’S EXISTING FINANCIAL DIFFICULTIES AND ACCESS TO VERY LARGE AMOUNTS OF CAPITAL (EQUITY AND DEBT) AS EACH ARS PROJECT IS PROJECTED TO COST BETWEEN $8 MILLION AND $40 MILLION (DEBT/EQUITY/GRANTS), DEPENDING ON WHETHER IT IS A BOLT-ON OR AN INTEGRATED PROJECT, AND WILL REQUIRE MOBILIZATION OF SUBSTANTIAL PERSONNEL, TECHNICAL RESOURCES AND MANAGEMENT SKILLS. THE COMPANY DOES NOT POSSESS EITHER THE FINANCIAL OR PERSONNEL RESOURCES INTERNALLY AND WILL NEED TO SOURCE SUCH RESOURCES FROM OUTSIDE ITSELF.
For expanded information regarding our ‘HISTORY, BACKGROUND AND CURRENT ACTIVITIES’, see discussion within the Notes (particularly Notes 1, 4, 5, and 8) included in this report, in Forms 8-K and Forms 10-Q filed earlier this year and Item 1 (and other sections) in our Annual Reports on Form 10-K filed in previous years.
CRITICAL ACCOUNTING POLICIES
Revenue Recognition
The Company currently does not generate revenue and if and when the Company begins to generate revenue the Company will comply with the provisions of Accounting Standards Codification (“ASC”) 606 “Revenue from Contracts with Customers”.
Stock-based compensation
The Company follows the provisions of ASC 718, which generally requires that share-based compensation transactions be accounted and recognized in the statement of income based upon their grant date fair values.
Pursuant to ASC Topic 815 “Derivatives and Hedging” (“Topic 815”), the Company reviews all financial instruments for the existence of features which may require fair value accounting and a related mark-to-market adjustment at each reporting period end. Once determined, the Company assesses these instruments as derivative liabilities. The fair value of these instruments is adjusted to reflect the fair value at each reporting period end, with any increase or decrease in the fair value being recorded in results of operations as an adjustment to fair value of derivatives. As of June 30, 2026 and 2025, there are no derivative financial instruments.
Options:
The Company has issued options to employees and consultants under its 2006 Plan to purchase common shares of the Company. Options are valued on the grant date using the Black-Scholes option-pricing model. The expected volatility is based on the historical price volatility of the Company’s common stock. The dividend yield represents the Company’s anticipated cash dividend on common stock over the expected term of the stock options. The U.S. Treasury bill rate for the expected term of the stock options was utilized to determine the risk-free interest rate. The expected term of stock options represents the period of time the stock options granted are expected to be outstanding based upon management’s estimates.
Warrants:
The Company has issued warrants to purchase common shares of the Company. Warrants are valued using a fair value based method, whereby the fair value of the warrant is determined at the warrant issue date using a market-based option valuation model based on factors including an evaluation of the Company’s value as of the date of the issuance, consideration of the Company’s limited liquid resources and business prospects, the market price of the Company’s stock in its mostly inactive public market and the historical valuations and purchases of the Company’s warrants. When warrants are issued in combination with debt or equity securities, the warrants are valued and accounted for based on the relative fair value of the warrants in relation to the total value assigned to the debt or equity securities and warrants combined.
Lease Accounting:
The Company accounts for leases under ASC 842, Leases (“ASC 842”). Accordingly, the Company will determine whether an arrangement contains a lease at the inception of the arrangement. If a lease is determined to exist, the term of such lease is assessed based on the date on which the underlying asset is made available for the Company’s use by the lessor. The Company’s assessment of the lease term reflects the non-cancelable term of the lease, inclusive of any rent-free periods and/or periods covered by early-termination options which the Company is reasonably certain of not exercising, as well as periods covered by renewal options which the Company is reasonably certain of exercising. The Company also determines lease classification as either operating or finance at lease commencement, which governs the pattern of expense recognition and the presentation reflected in the consolidated statements of operations over the lease term.
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For leases with a term exceeding 12 months, a lease liability is recorded on the Company’s consolidated balance sheet at lease commencement reflecting the present value of its fixed minimum payment obligations over the lease term. A corresponding right-of-use (“ROU”) asset equal to the initial lease liability is also recorded, adjusted for any prepaid rent and/or initial direct costs incurred in connection with execution of the lease and reduced by any lease incentives received. For purposes of measuring the present value of its fixed payment obligations for a given lease, the Company uses its incremental borrowing rate, determined based on information available at lease commencement, as rates implicit in its leasing arrangements are typically not readily determinable. The Company's incremental borrowing rate reflects the rate it would pay to borrow on a secured basis and incorporates the term and economic environment of the associated lease.
The Company has elected the short-term lease practical expedient available under ASC 842 for all asset classes. Under this election, for leases with a lease term of 12 months or less at commencement, and which do not include an option to purchase the underlying asset that the Company is reasonably certain to exercise, the Company does not recognize a lease liability or corresponding ROU asset on its consolidated balance sheets. Instead, lease payments associated with such short-term leases are recognized as expense in the consolidated statements of operations on a straight-line basis over the lease term.
YEAR ENDED JUNE 30, 2026 COMPARED TO THE YEAR ENDED JUNE 30, 2025
Revenue
Total revenues were nil for both the years ended June 30, 2026 and 2025.
General and Administrative
Total general and administrative expenses were $1,301,000 and $2,145,000 for the years ended June 30, 2026 and 2025, respectively.
Salaries and related payroll tax expenses were $356,000 and $368,000 for the years ended June 30, 2026 and 2025. Consulting costs were $266,000 and $198,000 in the years ended June 30, 2026 and 2025. The $68,000 increase in consulting costs is due to additional consultants brought in for fertilizer market access and business development. Investor relations expenses were $32,000 and $136,000 for the years ended June 30, 2026 and 2025, respectively, and the $104,000 decrease was due to less investor related activity during the fiscal year in order to conserve cash. Legal costs were $17,000 and $1,000 for the years ended June 30, 2026 and 2025, respectively. The increase of $16,000 was due to the legal costs associated with the litigation and settlements with Hamstra and Dilling.
Stock-based compensation for the years ended June 30, 2026 and 2025 were $125,000 and $844,000 respectively. The $719,000 decrease is primarily due to a lesser expense in 2026 for options and warrant modifications.
Depreciation
Total depreciation expense was nil and $1,000 for the years ended June 30, 2026 and 2025, respectively.
Research and Development
Total research and development expenses were $27,000 and $22,000 for the years ended June 30, 2026 and 2025, respectively.
Salaries and related payroll tax expenses were $6,000 and $6,000 for the years ended June 30, 2026 and 2025, respectively. Consulting costs were nil and nil for the years ended June 30, 2026 and 2025, respectively. Legal expenses were $21,000 and $15,000 for the years ended June 30, 2026 and 2025, respectively.
Loss from Operations
As a result of the factors described above, the loss from operations was $1,328,000 and $2,168,000 for the years ended June 30, 2026 and 2025 respectively.
Other (Income)/Expense
Other expense was $630,000 and $212,000 for the years ended June 30, 2026 and 2025, respectively.
Interest expense was $632,000 and $311,000 for the years ended June 30, 2026 and 2025, respectively. The increase in 2026 was due to the $284,000 interest expense in 2026 for a debt settlement with Hamstra.
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Net Loss Attributable to the Noncontrolling Interest
The net loss attributable to the noncontrolling interest was nil and nil for the years ended June 30, 2026 and 2025, respectively.
Net Loss Attributable to Bion’s Common Stockholders
As a result of the factors described above, the net loss attributable to Bion’s stockholders was $1,958,000 and $2,380,000 for the years ended June 30, 2026 and 2025, respectively, and the net loss per basic common share was $0.03 and $0.04 for the years ended June 30, 2026 and 2025, respectively.
LIQUIDITY AND CAPITAL RESOURCES
The Company's consolidated financial statements for the year ended June 30, 2026 have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The Report of our Independent Registered Public Accounting Firm on the Company's consolidated financial statements as of and for the year ended June 30, 2026 includes a "going concern" explanatory paragraph which means that the auditors stated that conditions exist that raise substantial doubt about the Company's ability to continue as a going concern.
Operating Activities
As of June 30, 2026, the Company had cash of approximately $3,700. During the year ended June 30, 2026, net cash used in operating activities was $806,000, primarily consisting of cash operating expenses related to salaries and benefits, and other general and administrative costs such as insurance, legal, accounting, consulting and investor relations expenses. Cash expenditures were offset in part by proceeds from financing activities, primarily in debt funding.
As previously noted, the Company is currently not generating significant revenue and accordingly has not generated cash flows from operations. The Company does not anticipate generating sufficient revenues to offset operating and capital costs for a minimum of two to five years. While there are no assurances that the Company will be successful in its efforts to develop and construct its Projects and market its Systems, it is certain that the Company will require substantial funding from external sources. As stated in multiple places in this report, over the last fiscal year the Company has had only very limited success in raising needed funds which lack of success has had material negative effects on the Company and its business. Given the unsettled state of the current credit and capital markets for companies such as Bion, there is no assurance the Company will be able to raise the funds it needs on reasonable terms.
Investing Activities
During the year ended June 30, 2026, the Company invested nil in the purchase of property and equipment or other investing activities.
Financing Activities
During the year ended June 30, 2026, the Company received net cash proceeds of $16,000 from a note payable, $789,000 in convertible loans less commissions of $19,000, and net $20,000 from a demand note.
During the year ended June 30, 2025, the Company received net cash proceeds of $400,000 from a note payable and $426,000 in convertible loans less commissions of $5,300.
As of June 30, 2026, the Company has debt obligations consisting of: a) deferred compensation of $1,368,000, b) convertible notes payable of $1,935,000, c) current note payable including accrued interest of $476,000, d) convertible bridge note payable of $491,000 and e) demand note payable of $22,000. As of June 30, 2025, the Company has debt obligations consisting of: a) deferred compensation of $1,173,000, b) convertible notes payable – affiliates of $2,310,000, c) current note payable including accrued interest of $423,000 and d) convertible bridge note payable of $455,000.
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Plan of Operations and Outlook
As of June 30, 2026, the Company had cash of approximately $3,700.
The Company continues to explore sources of additional financing to satisfy its current operating requirements as it is not currently generating any significant revenues. The Company faced substantial difficulty raising capital during the 2025 and 2026 fiscal years (and the first quarter of 2027 through the date of this report) as it emerged from its management challenges and change in direction. The Company raised very limited debt (convertible notes) funds during such periods to meet some of its immediate needs, and therefore, the Company needs to raise substantial additional funds in the upcoming periods. The Company has faced substantial demand for capital and operating expenditures for the fiscal year 2026 that we anticipate will continue (or increase) during the 2027 fiscal year and periods thereafter as it moves toward commercial implementation of its 3G Tech and development of JVs (including costs associated with additions of personnel to carry out the business activities of the Company) and, therefore, is likely to continue to face, significant cash flow management issues due to limited capital resources and working capital constraints. As a result, the Company has faced, and continues to face, significant cash flow management challenges due to material working capital constraints. To partially mitigate these working capital constraints, the Company's core senior management and some key employees and consultants have been deferring much or most of their cash compensation and/or are accepting compensation in the form of securities of the Company and members of the Company's senior management have from time-to-time made loans to the Company in the past and may do so in future periods.
The Company continues to explore sources of additional financing (including potential agreements with strategic partners – both financial, renewable energy- and ag-industry) to satisfy its current and future operating and capital expenditure requirements as it is not currently generating any significant revenues. Bion’s leadership team’s new approach, focusing on the bolt-on opportunity and developing a single proof-of-concept project vs multiple projects developed simultaneously, will substantially reduce the company’s need to raise capital. Further, leadership believes this approach represents a more achievable goal that will reinspire confidence in our own shareholders, as well as assure potential new strategic and institutional investors, and make it easier to raise funds.
Going Concern and Management’s Plans:
The Company’s consolidated financial statements have been prepared assuming the Company will continue as a going concern.
The Company is not currently generating any significant revenues. Further, the Company’s anticipated revenues, if any, from existing JVs and proposed projects will not be sufficient to offset operating and capital costs (for Projects) for a minimum of two to five years. Further, there are no assurances that the Company will ultimately be successful in its efforts to develop and construct its Projects and market its Systems; but it is certain that the Company will require substantial funding from external sources. Given the unsettled state of the current credit and capital markets for companies such as Bion, there is no assurance the Company will be able to raise the funds it needs on reasonable terms. The aggregate effect of these factors raises substantial doubt about the Company’s ability to continue as a going concern.
During the fiscal year ended June 30, 2026, the Company had a loss of $1,958,000 including $125,000 non-cash compensation expenses related to extension of warrants and options.
For more detail regarding Going Concern, including Management’s Plans, see Note 1 of Notes to Financial Statements below.
The accompanying consolidated financial statements do not include any adjustments relating to the recoverability or classification of assets or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern. The following paragraphs describe management’s plans with regard to these conditions.
Management’s Plan
The Company continues to explore sources of financing to satisfy its current operating requirements and future growth needs. The Company has faced substantial demand for capital and operating expenditures for the fiscal year 2026 that we anticipate will increase during the 2027 fiscal year and periods thereafter as we move toward commercial implementation of our ARS and 3G Tech and development of JVs (including costs associated with additions of personnel to carry out the business activities of the Company). As a result, the Company has faced, and continues to face, significant cash flow challenges due to material working capital constraints. To partially mitigate these working capital constraints, the Company's core senior management and some key employees and consultants have been deferring most of their cash compensation and/or are accepting compensation in the form of securities of the Company and members of the Company's senior management have from time-to-time made loans to the Company in the past and may do so in future periods.
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To help alleviate the company’s short-term cash needs following the management challenges in 2024, three affiliates of the Company and two shareholders began advancing money to Bion to cover critical payables. They subsequently formed a loan group, BION BLG, LLC (“BLG”), and provided short-term funding for Bion in a secured promissory note of up to $500,000. The note is secured by the Company’s Intellectual Property (“IP” “Collateral”). BLG will share the Collateral on a pro rata basis with investors in a secured promissory note with similar terms that has been offered to previous Bion investors. The BLG note and security agreements contain other terms set forth therein and are included as exhibits to this filing. The Company has entered into four forbearance agreements with BLG, the last that extended the maturity date to January 31, 2027 (see Note 5 Note payable – related party (BLG)).
In November 2024, the Company launched a secured promissory note offering to previous investors/shareholders (and certain others) (“Shareholder Notes”) with similar terms to the BLG note. This and subsequent shareholder offerings have allowed Bion to accomplish the steps needed to commercialize our technology, move forward with potential strategic partners, and position ourselves for the larger offering/ funding that will be required for that commercialization. As of the filing date, Bion has raised $1,399,800 in the Shareholder Note offerings and believes the Company is now positioned to attract investment from outside and/or institutional sources. (see Note 5, Convertible Notes (Shareholder Notes)).
To date, the Company has primarily raised funds through private placements with accredited investors, often conducted through FINRA-registered broker/dealers. However, the Company anticipates moving forward, it will need to raise capital using a combination of financial instruments and sources, that could also include strategic and/or institutional investors, including family offices and private equity, brokered equity or debt offerings with both public and private investors, and banks and other ag lending institutions, among others, although there can be no assurance it will be successful. Many of these financing options may involve dilution, potentially substantial, for current shareholders.
Bion is in discussions with several potential strategic partners in engineering, renewable energy (biogas/RNG) and clean fuels, organic fertilizer distribution, and others involved in reducing the environmental footprint of biogas, agriculture, and livestock production. Bion is now evaluating a number of these as potential development and finance partners for project opportunities and recently signed an MOU with Kimmeridge Energy Management for a potential large RNG facility, that includes a Right of First Refusal on 10 million shares of Bion stock at a premium to the current market. Further, with the recent OMRI Listing for its commercial fertilizer, the Company has initiated discussions with several large U.S. fertilizer manufacturers and distributors that have demonstrated interest in the product. Bion believes that these and potentially other industry relationships could also entail a direct investment in Bion, licensing fee, or some other ‘up front’ financial benefit to Bion, although there is no assurance that they will.
CONTRACTUAL OBLIGATIONS
The Company entered into an agreement on September 23, 2021, to lease approximately four acres of land near Fair Oaks, Indiana, for the development site of its Initial Project. The lease ended December 31, 2024 and there is an agreement to extend month to month at the same rate.
The Company has not made consistent lease payments since October 16, 2023. The Company made five payments totaling $31,250 in the fiscal year 2026. The Company owes $150,000 in lease payments at June 30, 2026. A settlement with the lessor has been reached (see Note 11, Subsequent Events in the footnotes to the financial statements of this filing)
OFF-BALANCE SHEET ARRANGEMENTS
The Company does not have any off-balance sheet arrangements (as that term is defined in Item 303 of Regulation S-K) that are reasonably likely to have a current or future material effect on our financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not applicable.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA
The consolidated financial statements are set forth on pages F-1 through F-28 hereto.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
| 30 |
ITEM 9A. CONTROLS AND PROCEDURES.
Disclosure Controls and Procedures
As of June 30, 2026, management evaluated the effectiveness of the design and operation of the Company's disclosure controls and procedures, under the supervision and with the participation of the Company's Interim Chief Executive Officer, who also serves as the Company's principal financial and accounting officer. Based on that evaluation, the Interim Chief Executive Officer concluded that the Company's disclosure controls and procedures were not effective as of June 30, 2026, because of the material weakness in internal control over financial reporting described below.
Changes in Internal Control over Financial Reporting
There were no changes in internal control over financial reporting during the quarter ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.
Management’s Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934. The Company's Interim Chief Executive Officer, who also serves as its principal financial and accounting officer, evaluated the effectiveness of the Company's internal control over financial reporting based on the framework in Internal Control – Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO").
Based on this evaluation, management concluded that the Company's internal control over financial reporting was not effective as of June 30, 2026, due to a material weakness in the Company's control environment. This weakness results in inadequate segregation of duties and a lack of timely review and approval of related party transactions.
The Company's small size has prevented it from employing sufficient resources to provide an adequate level of supervision and segregation of duties. One person processes the Company's accounting and banking transactions, and a single person oversees cash disbursements, cash receipts and the overall accounting process. While some compensating controls are in place, effective segregation of accounting duties is difficult to achieve, and the volume of transactions does not justify additional full-time staff.
To address this material weakness, the Company engages an outside accounting and consulting firm with SEC and U.S. GAAP experience to assist with the preparation of its financial statements, the evaluation of complex accounting matters, and the review of financial statement account balances. The Company first engaged such a firm in May 2006 and changed to its current firm in December 2021. The Company believes this outside review has improved its disclosure controls and procedures and, if effective over time, will help remediate the segregation of duties weakness. However, the Company may not be able to fully remediate the material weakness without hiring additional staff, and it will continue to evaluate the costs and benefits of doing so.
This annual report does not include an attestation report of the Company's independent registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's independent registered public accounting firm pursuant to SEC rules that permit the Company to provide only management's report in this annual report.
ITEM 9B. OTHER INFORMATION.
Insider Trading Arrangements and Policies
During the quarter ended June 30, 2026, no director
or officer of the Company
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.
Not applicable.
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PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
Our directors, executive officers and significant employees/consultants, along with their respective ages and positions are as follows:
| Name | Age | Position | ||||
| Directors and Officers: | ||||||
| Craig Scott | 66 | Chief Executive Officer and Director | ||||
| Jon Northrop | 83 | Secretary and Director | ||||
| Stephen Posner | 82 | Director | ||||
| Greg Schoener | 58 | Director | ||||
| Salvatore Zizza | 80 | Director | ||||
Stephen Craig (Craig) Scott (66) has been associated with Bion since 1993. Since that time he has been responsible for business and industry intelligence and analysis. He was with Bion full-time from 1996 to 2000, then periodically as a consultant through 2005. Craig rejoined Bion in 2006 and has held several senior positions, including Director of Communications, SVP – Capital Markets, and Head of Business Development. As of June 2024, he joined Bion’s Board of Directors and was subsequently named Interim Chief Executive Officer. Craig studied business and communications at Montana State and Denver-Metro Universities.
Jon Northrop (83) has served as our Secretary and a Director since March of 2003. Since September 2001 he has been self employed as a consultant with a practice focused on business buyer advocacy. Mr. Northrop is one of our founders and served as our Chief Executive Officer and a Director from our inception in September 1989 until August 2001. Before founding Bion Technologies, Inc., he served in a wide variety of managerial and executive positions. He was the Executive Director of Davis, Graham & Stubbs, one of Denver’s largest law firms, from 1981 to 1989. Prior to his law firm experience, Mr. Northrop worked at Samsonite Corporation’s Luggage Division in Denver, Colorado, for over 12 years. His experience was in all aspects of manufacturing, systems design and implementation, and planning and finance, ending with three years as the Division’s Vice President, Finance. Mr. Northrop has a bachelor’s degree in physics from Amherst College, Amherst, Massachusetts (1965), an MBA in Finance from the University of Chicago, Chicago, Illinois (1969), and spent several years conducting post graduate research in low energy particle physics at Case Institute of Technology, Cleveland.
Stephen Posner (82) is a financial markets professional with a 50 year career raising capital, increasing public awareness, and advising on corporate strategy and M&A for companies. He is experienced in facilitating the growth of both large and small companies, private and public. He is currently a Director of a family of ETF’s. He is a proud husband, father, and grandpa and has been involved with Bion and a substantial shareholder in the company for 25 years. He received a BA from Hofstra University, in New York.
Gregory (Greg) Schoener (58) currently serves as a Director of the company since June 1, 2024.He is a successful business owner and operator, serving the construction industry in Houston, Texas. Mr. Schoener has broad management experience in the medical field as well as the construction industry. Mr. Schoener is a Bion Shareholder since 2020.
Salvatore J. Zizza (80) Salvatore Zizza has served as a director of Bion since February 15, 2023. He is presently President of Zizza & Associates Corp. a private holding company which invests in various industries and retired Chairman of BAM (Bethlehem Advanced Materials), which designs and manufactures high-temperature furnaces for sale and for its own use in the processing of specialty carbon, graphite and ceramic materials for semiconductor and aerospace applications, and Chairman of Bergen Cove Realty Inc., with substantial holdings in residential real estate. Mr. Zizza serves as Director & Chairman of Trans-Lux Corporation, a full-service provider of integrated multimedia systems for today’s communications environments (since 2018) and served on board since 2009. Mr. Zizza bought NICO Construction Company, Inc., in 1978 and was President and CFO until 1985 when NICO merged with The LVI Group Inc., a (NYSE), listed company. Prior to joining The LVI Group Inc., Mr. Zizza was an independent financial consultant and had been a lending officer of Chemical Bank. Mr. Zizza is also an investor in numerous private companies and real estate holdings. Mr. Zizza currently holds directorship positions at nineteen (19) Gabelli/GAMCO funds and trusts. He has been associated with this family of investment funds for over thirty (30) years. He received a Baccalaureate/Political Science, St. John’s University (1967) and a Master of Business Administration, St. John’s University (1972). In 2007 Mr. Zizza received a Doctor of Commercial Sciences (Honorary) from St. John’s University.
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Family Relationships
There are currently no family relationships among our Directors and Executive Officers.
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Exchange Act requires our officers and directors, and stockholders owning more than ten percent of a registered class of our equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission. The Company is not aware of any persons who failed to timely file reports under this section.
Involvement in Legal Proceedings
To the best of our knowledge, during the past five years, none of the following occurred with respect to our directors or executive officers:
| (1) | any bankruptcy petition filed by or against any business of which one of them was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; |
| (2) | any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); |
| (3) | being subject to any order, judgment or decree of any court of competent jurisdiction, permanently or temporarily inquiring, barring, suspending or otherwise limiting involvement in any type of business, securities or banking activities; and |
| (4) | being found by a court of competent jurisdiction, the SEC or the CFTC to have violated Federal or state securities or commodities laws. |
Audit Committee
The Company has no audit committee and is not now required to have one, or an audit committee financial expert.
Code of Ethics
The Company has not adopted a written code of ethics applicable to its principal executive, financial and accounting officers, as defined in Item 406 of Regulation S-K. Given the Company's small size and limited resources, the Board of Directors has not considered a formal written code necessary at this time and directly oversees the conduct of the Company's executive officer.
Advisory Group
The Company, which has only six full-time employees/consultants (all of whom are effectively ‘department heads’), has utilized many outside parties as consultants and contract workers for various roles to augment our management capabilities and expertise. The Company maintains a formal ‘advisory’ relationship with some of these people to insure their availability for consultation by our senior management (separate from specific consulting engagements). At present, a) William Rupp (meat and beef industry), b) Matthew Lamb (agriculture/animal husbandry/dairy), c) Stanley Rapp (government affairs), d) Chris Cook (head of business development for Syngenta), e) Ed Schafer (former Sec of Ag and Gov of North Dakota – government affairs), and f) Lily Edwards-Callaway, PhD (animal health and welfare expert), have accepted roles as members of our Advisory Group. The Company anticipates that additional persons will be added to this group over time.
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ITEM 11. EXECUTIVE COMPENSATION.
The Company does not have a compensation committee due to its small size and limited resources. The Board of Directors directly reviews and authorizes all compensation matters.
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation paid to, or accrued for, each of our current executive officers during each of our last two fiscal years.
| Name and Principal Position | Fiscal Year | Salary (1) | Bonus | Stock Awards | Option Awards (2) | Non-Equity Incentive Plan Compensation | Nonqualified Deferred Compensation Earnings | Other Compensation | Total | |||||||||||||||||||||||||||
| Mark A. Smith (3) | 2026 | $ | — | $ | — | $ | — | $ | — | — | — | — | $ | — | ||||||||||||||||||||||
| President and Chief Financial Officer (retired July 31, 2024) | 2025 | $ | 5,000 | $ | — | $ | — | $ | — | — | — | — | $ | 5,000 | ||||||||||||||||||||||
| Craig Scott | 2026 | $ | 168,000 | $ | — | $ | — | $ | 1,200 | — | — | — | $ | 169,200 | ||||||||||||||||||||||
| Chief Executive Officer (4) | 2025 | $ | 168,000 | $ | — | $ | — | $ | 249,197 | — | — | — | $ | 417,197 | ||||||||||||||||||||||
| (1) | Includes compensation paid by Bion Environmental Technologies, Inc. and our wholly owned subsidiaries. |
| (2) | Reflects the dollar amount expensed by the Company during the applicable fiscal year for financial statement reporting purposes pursuant to ASC 718. |
| (3) | Since October 2016, the Company approved a month-to-month contract extension with Smith which included a monthly deferred salary of $18,000 and the right to convert up to $300,000 of deferred compensation, at his sole election, at $0.75 per share until December 31, 2022 (which date was extended to January 15, 2025). Smith also has the right to convert his deferred compensation in whole or in part, at this sole election, at any time in an amount at "market" or into securities sold in the Company's most current/recent private offering. During fiscal year 2021 the Company paid Smith $13,460 for payroll taxes on his deferred compensation conversions which was treated as salary. During the fiscal year 2024, Smith’s compensation was reduced to $10,000 per month as of January 1, 2024 and Smith deferred $190,000 due to cash restraints of the company. Note: Mr. Smith retired effective July 31, 2024, and his salary ceased accruing at that time. |
| (4) | Stephen Craig Scott (“Scott”) was appointed interim CEO on June 1, 2024. Scott has held various positions as employee/consultant with the Company since 1993 including Director of Communications, SVP – Capital Markets and Head of Business Development. On October 25, 2023, Scott entered into an agreement with the Company which included provisions for a monthly salary of $14,000 of which $2,000 is deferred. During the year ended June 30, 2026 and 2025, Scott deferred substantial portions of his monthly salary to help the Company conserve cash. For the year ended June 30, 2026 and 2025, Scott was paid $18,000 and $5,000 respectively. The Company extended options and warrants which had a non-cash value of $1,200 and $249,000 for Craig Scott during the fiscal years ended June 30, 2026 and June 30, 2025, respectively. |
Employment Agreements:
Stephen Craig Scott (“Scott”) was appointed interim CEO on June 1, 2024. Scott has held various positions as employee/consultant with the Company since 1993 including Director of Communications, SVP – Capital Markets and Head of Business Development. On October 25, 2023, Scott entered into an agreement with the Company which included provisions for a monthly salary of $14,000 of which $2,000 is deferred. During the year ended June 30, 2026, Scott deferred substantial portions of his monthly salary to help the Company conserve cash. For the year ended June 30, 2026 and 2025, Scott was paid $18,000 and $5,000 respectively.
Gregory (Greg) Schoener (“Schoener”) currently serves as a Director since June 1, 2024. Schoener currently has no agreement with the Company and is not receiving any compensation.
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Mark A. Smith (“Smith”) has held the positions of Executive Chairman, Director, President and General Counsel of Company and its subsidiaries under various agreements and terms from March 2003 (details regard earlier years and periods between 2003 and 2020 may be found in the Company’s prior Forms 10-K and other SEC filings) until his retirement on July 31, 2024. Pursuant to the extension agreements after expiration of agreements during the prior decades, Smith continued his agreement to: i) defer his cash compensation ($18,000 per month) until the Board of Directors re-instates cash payments to all employees and consultants who are deferring their compensation. Due to expiration of his most recent extension, Mr. Smith served the Company on a month-to –month basis through his retirement. On April 29, 2022, Smith’s nominal monthly salary was increased to $25,000, of which $5,000 was to be deferred each month, but, in actuality, much or all of his salary was deferred over recent years and then converted into securities of the Company by Smith. Mr. Smith may provide some transition-related services for the Company on a consulting basis over the course of the current year.
Other Agreements
The Company has declared contingent deferred stock bonuses to its key employees and consultants at various times throughout the years. The stock bonuses were contingent upon the Company’s stock price exceeding a certain target price per share, and the grantees still being employed by or providing services to the Company at the time the target prices are reached. During the year ended June 30, 2017, pursuant to agreement with the employees and a consultant who had been granted the outstanding contingent stock bonuses, the Company cancelled all 117,500 outstanding contingent stock bonuses. In consideration for the cancellations, the Company granted 109,500 fully vested options to these employees and a consultant to purchase common stock of the Company at $1.00 per share until December 31, 2026 (including recent extensions).
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
The following table sets forth the number of shares of common stock covered by outstanding stock option awards that are exercisable and unexercisable, and the number of shares of common stock covered by unvested restricted stock awards for each of our directors and named executive officers as of June 30, 2026.
| Outstanding Equity Awards at Fiscal Year-End | ||||||||||||||||||||||||||||||||||||
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
| Name |
Number of Securities Underlying Unexercised Options (#) Exercisable |
Number of Securities Underlying Unexercised Options (#)Unexercisable |
Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) |
Option Exercise Price ($) |
Option Expiration Date |
Number of Shares or Units of Stock That Have Not Vested (#) |
Market Value of Shares or Units of Stock That Have Not Vested |
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested |
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested |
|||||||||||||||||||||||||||
| — | — | 2026 | — | — | — | — | ||||||||||||||||||||||||||||||
| — | — | 2026 | — | — | — | — | ||||||||||||||||||||||||||||||
| — | — | 2026 | — | — | — | — | ||||||||||||||||||||||||||||||
| — | — | 2026 | — | — | — | — | ||||||||||||||||||||||||||||||
| — | — | 2026 | — | — | — | — | ||||||||||||||||||||||||||||||
| — | — | 2026 | — | — | — | — | ||||||||||||||||||||||||||||||
| — | — | 2026 | — | — | — | — | ||||||||||||||||||||||||||||||
| — | — | 2026 | — | — | — | — | ||||||||||||||||||||||||||||||
| — | — | 2026 | — | — | — | — | ||||||||||||||||||||||||||||||
| — | — | 2026 | — | — | — | — | ||||||||||||||||||||||||||||||
| — | — | 2026 | — | — | — | — | ||||||||||||||||||||||||||||||
| — | — | 2026 | — | — | — | — | ||||||||||||||||||||||||||||||
| (1) |
Director Compensation
Members of the Board of Directors do not currently receive any cash compensation for their services as Directors, but are entitled to be reimbursed for their reasonable expenses in attending meetings of the Board.
On August 12, 2026, the Board of Directors (the “Board”) of Bion Environmental Technologies, Inc. (the “Company”) adopted a Director Compensation Policy (the “Policy”) applicable solely to the Company’s non-employee directors, establishing the compensation payable to such non-employee directors for service on the Board.
Under the Policy, each non-employee director is entitled to an annual retainer of $50,000 for the Company’s fiscal years ended June 30, 2026 and ending June 30, 2027 (which the Board approved in recognition of the additional workload, responsibility and liability assumed by directors in connection with the Company’s ongoing turnaround efforts), and $25,000 for each fiscal year thereafter, unless otherwise changed by further resolution of the Board. Retainers are payable entirely in shares of the Company’s common stock granted under the Company’s 2006 Consolidated Incentive Plan adopted on 11/14/2006 (as amended) or the 2021 Equity Incentive Awards Plan adopted on 1/4/2022, in lieu of cash.
Beginning with the fiscal year commencing July 1, 2027, retainers will be earned in advance each July 1 by directors then serving on the Board and converted into shares at a price equal to the average of the closing prices of the Company’s common stock for the ten trading days ending on and including the immediately preceding June 30.
For the fiscal years ended June 30, 2026 and ending June 30, 2027, retainers will instead be converted into shares at a price per share equal to the price in the Company’s anticipated financing expected to trigger conversion of the Company’s outstanding convertible notes (the “Note Conversion Financing”). The grant, issuance, vesting and payment of director compensation for those two fiscal years is expressly conditioned upon the closing of the Note Conversion Financing. If the Note Conversion Financing does not close, no compensation will be granted, issued or paid to directors for those fiscal years, notwithstanding that the Policy describes such compensation as having been earned or accrued as of a given date for service-measurement purposes.
DIRECTOR COMPENSATION
The following table sets forth certain information regarding the compensation paid to directors during the fiscal year ended June 30, 2026:
| Director Compensation | ||||||||||||||||||||||||||||
| Name | Fees earned or paid in Cash ($) | Stock Awards ($) | Option Awards ($)(1) | Non-equity incentive plan compensation ($) |
Nonqualified deferred compensation earnings ($) |
All other compensation ($) | Total ($) | |||||||||||||||||||||
| Jon Northrop | — | — | — | — | — | — | — | |||||||||||||||||||||
| Stephen Posner | — | — | — | — | — | — | — | |||||||||||||||||||||
| Greg Schoener | — | — | — | — | — | — | — | |||||||||||||||||||||
| Salvatore Zizza | — | — | — | — | — | — | — | |||||||||||||||||||||
| (1) | Reflects the dollar amount expensed by the Company during the applicable fiscal year for financial statement reporting purposes pursuant to ASC 718. |
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
As of August 1, 2026, the Registrant had 58,116,620 shares of common stock issued and 57,412,311 shares of common stock outstanding (balance of 704,309 shares are owned by Centerpoint, the Company’s majority-owned subsidiary).
The following table sets forth certain information regarding the beneficial ownership of our common stock as of August 1, 2026 by:
| ● | each person that is known by us to beneficially own more than 5% of our common stock; |
| ● | each of our directors; |
| ● | each of our executive officers and significant employees; and |
| ● | all our executive officers, directors and significant employees as a group. |
Under the rules of the Securities and Exchange Commission, beneficial ownership includes voting or investment power with respect to securities and includes the shares issuable under stock options, warrants and convertible securities that are exercisable/convertible within sixty (60) days of August 1, 2026. Those shares issuable under stock options, warrants and/or convertible securities are deemed outstanding for computing the percentage of each person holding options, warrants and/or convertible securities but are not deemed outstanding for computing the percentage of any other person. The percentage of beneficial ownership schedule ‘Entitled to Vote’ is based upon 57,412,311 shares outstanding as of September 1, 2026. The address for those individuals for which an address is not otherwise provided is c/o Bion Environmental Technologies, c/o PO Box 323, Old Bethpage, NY 11804. To our knowledge, except as indicated in the footnotes to this table and pursuant to applicable community property laws, the persons named in the table have sole voting power and investment power with respect to all shares of common stock listed as owned by them.
| Name and Address | Number | Percent of Class Outstanding | Entitled To Vote |
|||||||||
|
Centerpoint Corporation(1) c/o PO Box 323 Old Bethpage, NY 11804 |
704,309 | 1.2 | % | — | ||||||||
|
Mark A. Smith(2) 401 N. Riverside Beach #408 Pompano Beach, FL 33062 |
4,856,456 | 8.4 | % | 8.3 | % | |||||||
|
Christopher B. Parlow(3) 23 Longbow Drive Commack, NY 11725 |
3,917,005 | 6.8 | % | 6.8 | % | |||||||
| Danielle Lominy(4) c/o Dominic Bassani Estate 64 Village Hill Drive Dix Hills, NY 11746 |
3,720,000 | 6.1 | % | 6.4 | % | |||||||
| Gregory W. Schoener (5) c/o Po Box 323 Old Bethpage New York, NY 11804 |
1,000,000 | 1.7 | % | 1.7 | % | |||||||
| Craig Scott (6) 3131 North Daffodil Dr. Billings, MT 59102 |
5,316,423 | 8.5 | % | 9.1 | % | |||||||
| Jon Northrop (7) 59 Chestnut Street Westfield, NY 14787 |
636,135 | 1.0 | % | 1.1 | % | |||||||
|
Salvatore Zizza (8) 641 Lexington Avenue, 20th Floor New York, NY 10022 |
155,112 | 0.2 | % | 0.2 | % | |||||||
|
Stephen Posner (9) 219 Augusta Ct. Roslyn, NY 11576 |
533,078 | 0.9 | % | 0.9 | % | |||||||
| All executive officers and directors as a group (5 persons) | 7,640,748 | 13.3 | % | 13.1 | % | |||||||
| 36 |
| (1) | Centerpoint Corporation is currently majority owned by the Company. Under Colorado law, Centerpoint Corporation is not entitled to vote these shares unless otherwise ordered by a court. These shares of common stock may be distributed to the shareholders of Centerpoint Corporation at a future date pursuant to a dividend declared during July 2004. The shares distributed to Bion, if any, will be cancelled immediately upon receipt. |
| (2) | Includes 3,146,779 shares held directly by Mr. Smith, and 1,624,323 shares held by Mr. Smith’s wife. Also includes 85,354 shares of common stock held by LoTayLingKyur LLC which is controlled by Mr. Smith and his wife. Does not include shares owned by various other family members of which Mr. Smith disclaims beneficial ownership. |
| (3) | Includes 2,005 shares held directly by Christopher Parlow, 65,000 shares held jointly with wife, 250,000 shares owned by the Christopher Parlow Trust and 50,000 shares owned by Christopher Parlow’s minor daughters. (Effective 9/15/2025, Christopher Parlow agreed to a settlement. In consideration of the cancellation of various obligations and security instruments held by Mr. Parlow, including without limitation deferred compensation, convertible notes and warrants, Mr. Parlow will receive, in aggregate, 3,550,000 shares of common stock on or before 12/31/2026). |
| (4) | Includes 170,000 shares held directly by Danielle Lominy (formerly Danielle Bassani), and, 400,000 shares owned by the Danielle Bassani Trust. (Effective 9/15/2025, Danielle Lominy agreed to a settlement. In consideration of the cancellation of various obligations and security instruments held by the Holders, including without limitation deferred compensation, convertible notes and warrants, Ms. Lominy will receive, in aggregate, 3,150,000 shares of common stock on or before 12/31/2026). |
| (5) | Includes 700,000 shares held directly by Mr. Schoener and warrants to purchase 300,000 shares. Mr. Schoener is a 20% owner of a convertible promissory note in the principal amount of $500,000. The note is secured by the Company’s Intellectual Property (IP/Patents). This note is not included in Mr. Schoener’s beneficial ownership calculations. Effective August 12, 2026, the Board of Directors established a Director Compensation policy for non-employee Directors. For the fiscal years ending June 30, 2026, and June 30, 2027, Mr. Schoener will receive an annual retainer of $50,000. The retainers will be issued as common shares. The conversion price will be determined at a future date. These shares are not included in the beneficial ownership calculations. |
| (6) | Includes 478,444 shares held directly by Mr. Scott, 1,545,000 shares underlying options and 573,747 shares underlying warrants held directly by Mr. Scott. This also includes 2,715,232 shares of common stock that could be issued on the conversion (at the election of Mr. Scott) of deferred compensation in the amount of $466,000. |
| (7) | Includes 118,635 shares held directly by Mr. Northrop and options to purchase 517,500 shares held by Mr. Northrop. Does not include shares or options owned by the adult children of Mr. Northrop nor his former wife. Effective August 12, 2026, the Board of Directors established a Director Compensation policy for non-employee Directors. For the fiscal years ending June 30, 2026, and June 30, 2027, Mr. Northrop will receive an annual retainer of $50,000. The retainers will be issued as common shares. The conversion price will be determined at a future date. These shares are not included in the beneficial ownership calculations. |
| (8) | Includes 105,112 shares of common stock and 50,000 shares of common stock underlying options held directly by Mr. Zizza. Effective August 12, 2026, the Board of Directors established a Director Compensation policy for non-employee Directors. For the fiscal years ending June 30, 2026, and June 30, 2027, Mr. Zizza will receive an annual retainer of $50,000. The retainers will be issued as common shares. The conversion price will be determined at a future date. These shares are not included in the beneficial ownership calculations. |
| (9) | Includes 357,178 shares held directly by Mr. Posner and 150,900 held in IRA Accounts. Also includes 25,000 shares underlying warrants. Mr. Posner is the owner of a convertible promissory note in the principal amount of $25,000. The note is secured by the Company’s intellectual property (IP)/Patents. This note is not included in Mr. Posner’s beneficial ownership calculations. Effective August 12, 2026, the Board of Directors established a Director Compensation policy for non-employee Directors. For the fiscal year ending June 30, 2026, and June 30 2027, Mr. Posner will receive an annual retainer of $50,000. The retainers will be issued as common shares. The conversion price will be determined at a future date. These shares are not included in the beneficial ownership calculations. In connection with the policy, The Board approved an amendment to the Company’s Amended and Restated Bylaws, establishing the position of “Lead Director”. Mr. Posner has been appointed Lead Director. Commencing the fiscal year beginning July 1, 2026, Mr. Posner, as Lead Director, will receive an additional annual retainer of $25,000. |
| 37 |
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
Related Party Transactions
In addition to the employment and consulting agreements, deferred compensation arrangements and conversions of debt described in Item 1, Business, and Item 11, Executive Compensation, the Company has the following notes payable to related parties. Further details are in Note 5 to the consolidated financial statements.
| Holder | Relationship | Note | Interest rate | Maturity | Balance at June 30, 2026* | |||||
| Bion BLG LLC | Affiliate of Greg Schoener, a director and former Interim COO | Secured convertible note, October 15, 2024 | 9% | January 31, 2027** | $475,849 | |||||
| Stephen Posner | Director | $25,000 convertible note, July 7, 2025 | 7.5% | December 31, 2026 | $ 26,839 | |||||
| Salvatore Zizza | Director | $24,743 demand note, August 11, 2025 | 10% | On demand | $ 21,940 |
* Includes principal and accrued interest.
**Extended from June 30, 2026 on July 14, 2026.
The Company repaid $5,000 of principal on the Zizza note during fiscal 2026. No other principal or interest has been paid on these notes.
Director Independence
Although the Company's common stock is not listed on a national securities exchange, the Board uses the definition of independence under Nasdaq Listing Rule 5605(a)(2). Under this definition, Jon Northrop is an independent director. Because of the notes described above, Stephen Posner and Salvatore Zizza are not considered independent.
| 38 |
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
Audit Fees
The aggregate fees billed for the fiscal year ended June 30, 2025 by Haynie & Company for professional services rendered for the audit of the Company’s annual financial statements and reviews of the interim financial statements included in the Company’s quarterly reports on Form 10-Q (and related matters) were $84,000.
The aggregate fees billed for the fiscal year ended June 30, 2026 by Haynie & Company for professional services rendered for the audit of the Company’s annual financial statements and reviews of the interim financial statements included in the Company’s quarterly reports on Form 10-Q (and related matters) were $84,000.
Audit Related Fees
There were no fees billed by Haynie & Company for audit-related fees in the last fiscal year ended June 30, 2026.
Tax Fees
The aggregate fees billed for tax services rendered by Haynie & Company for tax compliance and related services for the year ended June 30, 2026 was nil.
All Other Fees
None.
Audit Committee Pre-Approval Policy
Under provisions of the Sarbanes-Oxley Act of 2002, the Company's principal accountant may not be engaged to provide non-audit services that are prohibited by law or regulation to be provided by it, and the Board of directors (which serves as the Company's audit committee) must pre-approve the engagement of the Company's principal accountant to provide audit and permissible non-audit services. The Company's Board has not established any policies or procedures other than those required by applicable laws and regulations.
| 39 |
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
| Exhibit Number |
Description and Location |
| 3.1 | Amended and Restated Articles of Incorporation of Bion Environmental Technologies, Inc., filed with the Secretary of State of the State of Colorado on April 11, 2022. (Incorporated by reference to Exhibit 3.1 filed with Form 8-K filed on April 12, 2022). |
| 3.2 | Amended and Restated Bylaws. (Incorporated by reference to Exhibit 3.2 filed with Form 8-K filed on January 4, 2022). |
| 3.3 | Amendment #1 to Amended and restated bylaws (Incorporated by reference to Exhibit 3.1 filed with Form 8-K filed on August 13, 2026). |
| 10.1 | Subscription Agreement dated January 10, 2002 between Bion Environmental Technologies, Inc. and Centerpoint Corporation regarding issuance of stock in exchange for cash and claims regarding Aprilia (Incorporated by reference to Exhibit 10.1 filed with Form 10SB12G on November 14, 2006). |
| 10.2 | Agreement dated March 15, 2002 and effective January 15, 2002 between Bion Environmental Technologies, Inc. and Centerpoint Corporation regarding purchase of warrant and management agreement (Incorporated by reference to Exhibit 10.2 filed with Form 10SB12G on November 14, 2006). |
| 10.3 | Agreement dated February 12, 2003 between Bion Environmental Technologies, Inc. and Centerpoint Corporation canceling provisions of the Subscription Agreement by and between Bion Environmental Technologies, Inc. and Centerpoint Corporation (Incorporated by reference to Exhibit 10.3 filed with Form 10SB12G on November 14, 2006). |
| 10.4 | Promissory Note and Security Agreement between Bion Environmental Technologies, Inc. and Bright Capital, LLC (Incorporated by reference to Exhibit 10.4 filed with Form 10SB12G on November 14, 2006). |
| 10.5 | Letter Agreement with Bright Capital, Ltd. (Incorporated by reference to Exhibit 10.8 filed with Form 10SB12G on November 14, 2006). |
| 10.6 | Amended Agreement with Centerpoint Corporation dated April 23, 2003 (Incorporated by reference to Exhibit 10.10 filed with Form 10SB12G on November 14, 2006). |
| 10.7 | Promissory Note and Conversion Agreement between Bion Environmental Technologies, Inc. and Mark A. Smith related to deferred compensation (Incorporated by reference to Exhibit 10.21 filed with Form 10SB12G on November 14, 2006). |
| 10.8 | Promissory Note and Conversion Agreement between Bion Environmental Technologies, Inc. and Bright Capital, Ltd. related to deferred compensation (Incorporated by reference to Exhibit 10.22 filed with Form 10SB12G on November 14, 2006). |
| 10.9 | Employment agreement with Mark A. Smith (Incorporated by reference to Exhibit 10.23 filed with Form 10SB12G on November 14, 2006). |
| 10.10 | Employment agreement with Bright Capital, Ltd. (Incorporated by reference to Exhibit 10.25 filed with Form 10SB12G on November 14, 2006). |
| 10.11 | Employment agreement with Jeremy Rowland (Incorporated by reference to Exhibit 10.27 filed with Form 10SB12G on November 14, 2006). |
| 10.12 | 2006 Consolidated Incentive Plan (Incorporated by reference to Exhibit 10.29 filed with Form 10SB12G on November 14, 2006). |
| 10.13 | Memo to Dominic Bassani & Bright Capital, Ltd. dated October 16, 2006 regarding Change in Title/Status of DB/Amendment to Brightcap Agreement (Incorporated by reference to Exhibit 10.30 filed with Form 10SB12G on November 14, 2006). |
| 10.14 | Promissory Note and Conversion Agreement for Mark Smith, dated January 1, 2007 (Incorporated by reference to Exhibit 10.31 filed with Form 10SB12G/A on February 1, 2007). |
| 10.15 | Promissory Note and Conversion Agreement for Bright Capital, Ltd., dated January 1, 2007 (Incorporated by reference to Exhibit 10.35 filed with Form 10SB12G/A on February 1, 2007). |
| 10.16 | Extension Agreement dated March 31, 2007 between the Company and Mark A Smith (Incorporated by reference to Exhibit 10.1 filed with Form 8-K filed on April 3, 2007) |
| 10.17 | Form of Note dated March 31, 2007 in the amount of $151,645.89 in favor of Mark A. Smith (Incorporated by reference to Exhibit 10. 2 filed with Form 8-K filed on April 3, 2007) |
| 10.18 | Form of Note dated March 31, 2007 in the amount of $455.486.30 in favor of Bright Capital, Ltd. (Incorporated by reference to Exhibit 10.4 filed with Form 8-K filed on April 3, 2007) |
| 10.19 | Memorandum of Understanding with Kreider Farms (Incorporated by reference to Exhibit 99.1 filed with Form 8-K filed on February 27, 2008) |
| 10.20 | Subscription Agreement from Bright Capital, Ltd. (Incorporated by reference to Exhibit 99.1 filed with Form 8-K filed on June 3, 2008) |
| 40 |
| 10.21 | Amendment to 2006 Consolidated Incentive Plan (Incorporated by reference to Exhibit 99.2 filed with Form 8-K filed on June 3, 2008) |
| 10.22 | Agreement between the Company and Mark A. Smith dated May 31, 2008 (Incorporated by reference to Exhibit 99.3 filed with Form 8-K filed on June 3, 2008). |
| 10.23 | Promissory Note between Bion Environmental Technologies, Inc. and Dominic Bassani (Incorporated by reference to Exhibit 10.2 filed with Form 8-K filed on September 30, 2008). |
| 10.24 | Promissory Note between Anthony Orphanos and Bion dated October 30, 2008, Guaranteed by Dominic Bassani (Incorporated by reference to Exhibit 10.3 filed with Form 8-K filed on November 13, 2008). |
| 10.25 | Addendum to Settlement Agreement and Release Stipulation from Bion, Bion Dairy and Mark Smith dated October 31, 2008 (Incorporated by reference to Exhibit 10.4 filed with Form 8-K filed on November 13, 2008). |
| 10.26 | Kreider Farms Agreement (September 25, 2008): REDACTED (Incorporated by reference to Exhibit 10.1 filed with Form 10-Q filed on November 14, 2008). |
| 10.27 | Amendment #3 to 2006 Consolidated Incentive Plan (Incorporated by reference to Exhibit 10.2 filed with Form 8-K filed on January 6, 2009). |
| 10.28 | Agreement between Bright Capital, Ltd. and Dominic Bassani and Bion effective January 11, 2009 (Incorporated by reference to Exhibit 10.1 filed with Form 8-K filed on January 15, 2009). |
| 10.29 | Agreement between Mark A. Smith and Bion effective January 12, 2009 (Incorporated by reference to Exhibit 10.2 filed with Form 8-K filed on January 15, 2009). |
| 10.30 | Orphanos Extension Agreement dated January 13, 2009 (Incorporated by reference to Exhibit 10.3 filed with Form 8-K filed on January 15, 2009). |
| 10.31 | Extension Agreement with Mark A. Smith. (Incorporated by reference to Exhibit 10.1 filed with Form 8-K filed on August 18, 2010). |
| 10.32 | Agreement with Edward Schafer (Incorporated by reference to Exhibit 10.2 filed with Form 8-K filed on August 18, 2010). |
| 10.33 | Schafer Employment Agreement (dated December 21, 2010) (Incorporated by reference to Exhibit 10.2 filed with Form 8-K filed on December 6, 2010). |
| 10.34 | Biography of Edward T. Schafer (Incorporated by reference to Exhibit 10.3 filed with Form 8-K filed on December 6, 2010). |
| 10.35 | Kreider Farms Clarification Agreement (Incorporated by reference to Exhibit 10.3 filed with Form 8-K filed on March 16, 2011). |
| 10.36 | PADEP Certification of Kreider Poultry Credits (Incorporated by reference to Exhibit 10.1 filed with Form 8-K filed on June 1, 2011). |
| 10.37 | Bassani/Bright Capital Extension Agreement (executed August 31, 2011) (Incorporated by reference to Exhibit 10.2 filed with Form 8-K filed on September 2, 2011). |
| 10.38 | Smith Extension Agreement (executed August 31, 2011) (Incorporated by reference to Exhibit 10.1 filed with Form 8-K filed on September 2, 2011). |
| 10.39 | Bloom Employment Agreement (executed September 30, 2011) (Incorporated by reference to Exhibit 10.1 filed with Form 8-K filed on October 4, 2011). |
| 41 |
| 10.40 | Extension/Conversion Agreement with Smith and Bassani (dated March 31, 2012) (Incorporated by reference to Exhibit 10.1 filed with Form 8-K filed on April 4, 2012). |
| 10.41 | Memorialization of extension of Maturity of Bassani convertible deferred compensation (dated July 31, 2012) (Incorporated by reference to Exhibit 10.1 filed with Form 8-K filed on August 3, 2012). |
| 10.42 | Memorialization of Smith Extension Agreement (dated August 14, 2012) (Incorporated by reference to Exhibit 10.1 filed with Form 8-K filed on August 21, 2012). |
| 10.43 | Memorialization of Bassani Extension Agreement (dated August 14, 2012) (Incorporated by reference to Exhibit 10.2 filed with Form 8-K filed on August 21, 2012). |
| 10.44 | Memorialization of Schafer Agreement (dated August 21, 2012) (Incorporated by reference to Exhibit 10.3 filed with Form 8-K filed on August 21, 2012). |
| 10.45 | Board Ratification dated May 5, 2013 (Incorporated by reference to Exhibit 10.1 filed with Form 10-Q filed on May 14, 2013). |
| 10.46 | Demand Promissory Note dated May 13, 2013 (Incorporated by reference to Exhibit 10.2 filed with Form 10-Q filed on May 14, 2013). |
| 10.47 | Extension Agreement with Mark A. Smith (w/o exhibits) (February 10, 2015) (Incorporated by reference to Exhibit 10.1 filed with Form 10-Q filed on February 11, 2015). |
| 10.48 | Extension Agreement with Dominic Bassani (w/o exhibits) (February 10, 2015) (Incorporated by reference to Exhibit 10.2 filed with Form 10-Q filed on February 11, 2015). |
| 10.49 | Agreement with Edward Schafer (w/o exhibits) (February 10, 2015) (Incorporated by reference to Exhibit 10.3 filed with Form 10-Q filed on February 11, 2015). |
| 10.50 | Convertible Promissory Note between the Company and Dominic Bassani dated September 8, 2015 (Incorporated by reference to Exhibit 10.96 filed with Form 10-K filed on September 22, 2015). |
| 10.51 | Convertible Promissory Note between the Company and Edward Schafer dated September 8, 2015 (Incorporated by reference to Exhibit 10.97 filed with Form 10-K filed on September 22, 2015). |
| 10.52 | Convertible Promissory Note between the Company and Anthony Orphanos dated September 8, 2015 (Incorporated by reference to Exhibit 10.98 filed with Form 10-K filed on September 22, 2015). |
| 10.53 | Kreider Poultry Joint Venture Agreement (May 5, 2016) (Incorporated by reference to Exhibit 10.1 filed with Form 10-Q filed on May 9, 2016). |
| 10.54 | Bassani Warrant Purchase effective August 1, 2018 (Incorporated by reference to Exhibit 10.100 filed with Form 10-K filed on September 24, 2019). |
| 10.55 | Smith Warrant Purchase effective August 1, 2018 (Incorporated by reference to Exhibit 10.101 filed with Form 10-K filed on September 24, 2019). |
| 10.56 | Amendment #9 to 2006 Consolidated Incentive Plan, as amended (Incorporated by reference to Exhibit 10.102 filed with Form 10-K filed on September 24, 2019). |
| 10.57 | Lease (executed September 23, 2021) (Incorporated by reference to Exhibit 10.1 filed with Form 8-K filed on September 29, 2021). |
| 10.58 | Subsidiaries of the Registrant (Incorporated by reference to Exhibit 21 filed with Form 10SB12G on November 14, 2006). |
| 10.59 | Buflovak/Hebeler Purchase Order (January 28, 2022)(without Technical Details and Standard Terms and Conditions) (Incorporated by reference to Exhibit 10.1 filed with Form 8-K filed on February 1, 2022) |
| 10.60 | Agreement with BioNTech SE re sale/purchase of domain name <biontech.com> (Incorporated by reference to Exhibit 10.1 filed with Form 8-K filed on March 25, 2022) |
| 10.61 | Bion Environmental Technologies, Inc. 2021 Equity Incentive Award Plan. (Incorporated by reference to Exhibit 10.1 filed with Form 8-K filed on January 4, 2022). |
| 10.62 | William O’Neill Employment Agreement (effective May 1, 2022) (without exhibits). (Incorporated by reference to Exhibit 10.1 filed with Form 8-K filed on May 3, 2022). |
| 10.63 | Letter of Intent with Ribbonwire Ranch (July 20, 2022). (Incorporated by reference to Exhibit 10.1 filed with Form 8-K filed on July 27, 2022). |
| 10.64 | Letter of Intent Transparency Wise LLC (Incorporated by reference to Exhibit 10.1 filed with Form 8-K filed on November 17, 2023). |
| 10.65 | Form of Bassani Family Agreement (Incorporated by reference to Exhibit 10.1 filed with Form 8-K filed on April 3, 2024). |
| 10.66 | Form of MAS Agreement (Incorporated by reference to Exhibit 10.1 filed with Form 8-K filed on April 3, 2024). |
| 10.67 | S. Craig Scott Resume (Incorporated by reference to Exhibit 10.1 filed with Form 8-K filed on June 4, 2024). |
| 10.68 | Gregory Schoener Background (Incorporated by reference to Exhibit 10.2 filed with Form 8-K filed on June 4, 2024). |
| 10.69 | Turk Stoval Resume (Incorporated by reference to Exhibit 10.1 filed with Form 8-K filed on June 20, 2024). |
| 10.70 | Bassani Family 20% Give Back List dated 6/30/2024 (Incorporated by reference to Exhibit 10.1 filed with Form 8-K filed on July 3, 2024). |
| 10.71 | OMRI Status Notification for Bion (Incorporated by reference to Exhibit 10.1 filed with Form 8-K filed on August 29, 2024). |
| 10.72 | Dilling Group Summons (Incorporated by reference to Exhibit 99.1 filed with Form 8-K filed on April 7, 2025). |
| 10.73 | Hamstra Builders Summons (Incorporated by reference to Exhibit 99.1 filed with Form 8-K filed on April 17, 2025). |
| 10.74 | Perfect Blend LOI (Incorporated by reference to Exhibit 10.1 filed with Form 8-K filed on May 30, 2025). |
| 10.75 | Yield RMG LOI (Incorporated by reference to Exhibit 10.2 filed with Form 8-K filed on May 30, 2025). |
| 10.76 | BLG Forbearance Agreement (Incorporated by reference to Exhibit 10.3 filed with Form 8-K filed on May 30, 2025). |
| 10.77 | BLG Second Forbearance Agreement (Incorporated by reference to Exhibit 10.1 filed with Form 8-K filed on July 24, 2025). |
| 10.78 | Bion BLG Promissory Note (Incorporated by reference to Exhibit 10.2 filed with Form 8-K filed on July 24, 2025). |
| 10.79 | BLG Security Agreement (Incorporated by reference to Exhibit 10.3 filed with Form 8-K filed on July 24, 2025). |
| 10.80 | Bassani Family Settlement (Incorporated by reference to Exhibit 10.1 filed with Form 8-K filed on October 8, 2025). |
| 10.81 | Mark Smith Settlement (Incorporated by reference to Exhibit 10.2 filed with Form 8-K filed on October 8, 2025). |
| 10.82 | Edward Schafer Settlement (Incorporated by reference to Exhibit 10.3 with Form 8-K filed on October 8, 2025). |
| 10.83 | Kimmeridge MOU (Incorporated by reference to Exhibit 99.2 filed with Form 8-K filed on December 9, 2025). |
| 10.84 | Kimmeridge MOU Extension (Incorporated by reference to Exhibit 99.1 filed with Form 8-K filed on June 11, 2026). |
| 10.85 | Hamstra Settlement (Incorporated by reference to Exhibit 10.1 filed with Form 8-K filed on July 14, 2026). |
| 10.86 | Hamstra Note (Incorporated by reference to Exhibit 10.2 filed with Form 8-K filed on July 14, 2026). |
| 10.87 | Director Compensation Policy (Incorporated by reference to Exhibit 10.1 filed with Form 8-K filed on August 13, 2026). |
| 10.88 | NPH Settlement and mutual Release Agreement (Incorporated by reference to Exhibit 10.1 filed with Form 8-K filed on August 27, 2026). |
| 10.89 | NPH Convertible Promissory Note (Incorporated by reference to Exhibit 10.2 filed with Form 8-K filed on August 27, 2026). |
| 19.1 | Insider Trading Policy (Incorporated by reference to Exhibit 19.1 filed with Form 10-K filed on September 29, 2025) |
| 31.1 | Certification of Chief Executive Officer, Principal Executive Officer and Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002- Filed herewith electronically. |
| 32.1 | Certification of Chief Executive Officer Pursuant to Section 18 U.S.C. Section 1350. Furnished* |
| 101.INS | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
*This exhibit is being furnished rather than filed and shall not be deemed incorporated by reference into any filing, in accordance with Item 601 of Regulation S-K.
| 42 |
BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIES
Table of Contents
| Report of Independent Registered Public Accounting Firm (Haynie, PCAOB ID: |
F-2 |
| Consolidated balance sheets | F-4 |
| Consolidated statements of operations | F-5 |
| Consolidated statements of changes in stockholders’ equity (deficit) | F-6 |
| Consolidated statements of cash flows | F-7 |
| Notes to consolidated financial statements | F-8 - F-29 |
| F-1 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
the Board of Directors and
Stockholders of Bion Environmental Technologies, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Bion Environmental Technologies, Inc. (the Company) as of June 30, 2026 and 2025, and the related consolidated statements of operations, changes in stockholders’ equity (deficit), and cash flows for each of the years in the two-year period ended June 30, 2026, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2026 and 2025, and the results of its operations and its cash flows for each of the years in the two-year period ended June 30, 2026, in conformity with accounting principles generally accepted in the United States of America.
Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has yet to generate any revenue and has suffered recurring losses from operations. These factors raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also discussed in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
| F-2 |
Equity Transactions
As discussed in Note 5 and Note 6 to the financial statements, the Company has numerous equity-based agreements, including stock options and warrants issued for services, of which many were modified during the year. These agreements require management to estimate the value of options and warrants issued for services on the measurement date, constituting a significant management estimate subject to possible management bias. During the year ended June 30, 2026, the Company recorded interest related to the modification of warrants in the amount of $161,917, and compensation expense related to the modification of options and warrants of $7,260 and $117,397, respectively.
Our audit procedures required a significant amount of time performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements. Those procedures included gaining an overall understanding of the Company’s process for estimating fair value and the related calculations. We read the related equity-based agreements verifying the terms of each agreement to the Company’s calculations and ensuring the mathematical accuracy. We evaluated the assumptions used by management to develop their estimates and considered the relevant accounting guidance.
/s/ Haynie
We have served as the Company’s auditor since 2023.
September 29, 2026
| F-3 |
BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
| June 30, | June 30, | |||||||
| 2026 | 2025 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | $ | ||||||
| Prepaid expenses | ||||||||
| Deposits and other assets | ||||||||
| Total current assets | ||||||||
| Property and equipment, net (Note 3) | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND EQUITY (DEFICIT) | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Deferred compensation (Note 4) | ||||||||
| Convertible notes payable (Note 5) | ||||||||
| Convertible bridge note payable (Note 5) | ||||||||
| Note payable - related party (Note 5) | ||||||||
| Demand note payable - related party (Note 5) | ||||||||
| Total current liabilities | ||||||||
| Convertible notes payable (Note 5) | ||||||||
| Total liabilities | ||||||||
| Equity (deficit): | ||||||||
| Bion's stockholders' equity (deficit): | ||||||||
| Series A Preferred stock, $ par value, shares authorized, shares issued and outstanding |
||||||||
| Series C Convertible Preferred stock, $ par value, shares authorized; shares issued and outstanding |
||||||||
| Common stock, par value, shares authorized, and shares issued, respectively; and shares outstanding, respectively |
||||||||
| Shares to be issued (Note 8) | ||||||||
| Additional paid-in capital | ||||||||
| Subscription receivable - affiliates (Note 7) | ( |
) | ||||||
| Accumulated deficit | ( |
) | ( |
) | ||||
| Total Bion's stockholders’ equity (deficit) | ( |
) | ( |
) | ||||
| Noncontrolling interest | ||||||||
| Total equity (deficit) | ( |
) | ( |
) | ||||
| Total liabilities and Equity (deficit) | $ | $ | ||||||
See notes to consolidated financial statements
| F-4 |
BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED JUNE 30, 2026 AND 2025
| 2026 | 2025 | |||||||
| Revenue | $ | $ | ||||||
| Operating expenses: | ||||||||
| General and administrative (including stock-based compensation) | ||||||||
| Depreciation | ||||||||
| Research and development (including stock-based compensation) | ||||||||
| Total operating expenses | ||||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other (income) expense: | ||||||||
| Interest income | ( | ) | ( | ) | ||||
| Interest expense | ||||||||
| Gain on debt forgiveness | ( | ) | ||||||
| Other income | ( | ) | ||||||
| Total other expense | ||||||||
| Net (loss) | ( | ) | ( | ) | ||||
| Net (loss) attributable to the noncontrolling interest | ||||||||
| Net (loss) applicable to Bion's common stockholders | $ | ( | ) | $ | ( | ) | ||
| Net (loss) applicable to Bion's common stockholders per basic and diluted common share |
|
$ |
|
) |
|
$ |
|
) |
| Weighted-average number of common shares outstanding: | ||||||||
| Basic and diluted | ||||||||
See notes to consolidated financial statements
| F-5 |
BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS'
EQUITY (DEFICIT)
YEARS ENDED JUNE 30, 2026 AND 2025
| Bion's Stockholders' | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Series A Preferred Stock | Series C Preferred Stock | Common Stock | Common Stock | Additional | Subscription Receivables | |||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares to be Issued | Amount | paid-in capital | for Shares | Accumulated deficit | Noncontrolling interest | Total equity/(deficit) | ||||||||||||||||||||||||||||||||||||||||
| Balances, July 1, 2024 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Issuance of units for services | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Modification of warrants | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Modification of options | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Commission on the sale of units | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||
| Balances, June 30, 2025 | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | |||||||||||||||||||||||||||||||||||||
| Cashless exercise of warrants | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Modification of warrants | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Modification of options | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Settlement agreements - cancellation of convertible obligations, deferred compensation and subscription receivables for shares to be issued | — | — | — | 8,101,746 | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||
| Recognition of interest accrued on subscription receivables cancelled in period | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Promissory note agreement to net against Deferred Compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Commission | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||
| Shares issued from shares to be issued | — | — | (400,000 | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||
| Balances, June 30, 2026 | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||||||||||||||||||||||||||||||||
See notes to consolidated financial statements
| F-6 |
BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED JUNE 30, 2026 AND 2025
| 2026 | 2025 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net (loss) | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation expense | ||||||||
| Accrued interest on loans payable, deferred compensation and other | ||||||||
| Stock-based compensation | ||||||||
| Stock-based compensation for services | ||||||||
| Forgiveness of debt | ( | ) | ||||||
| (Increase) decrease in prepaid expenses | ( | ) | ( | ) | ||||
| Increase in accounts payable and accrued expenses | ||||||||
| (Increase) in operating lease assets and liabilities | ||||||||
| Increase in deferred compensation | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Net cash used in investing activities | ||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Proceeds from convertible notes payable | ||||||||
| Proceeds from demand note | ||||||||
| Payments on demand note | ( | ) | ||||||
| Proceeds from note payable loan, related party | ||||||||
| Commissions on proceeds from convertible notes payable | ( | ) | ( | ) | ||||
| Net cash provided by financing activities | ||||||||
| Net decrease in cash | ( | ) | ( | ) | ||||
| Cash at beginning of year | ||||||||
| Cash at end of year | $ | $ | ||||||
| Supplemental disclosure of cash flow information: | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for income taxes | $ | $ | ||||||
| Non-cash investing and financing transactions: | ||||||||
| Settlement agreements - cancellation of convertible obligations, deferred compensation and subscription receivables for shares to be issued | $ | $ | ||||||
| Adjustment for offsetting subscription receivable with deferred compensation | $ | |||||||
See notes to consolidated financial statements
| F-7 |
BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2026 AND 2025
1. BUSINESS AND ORGANIZATION:
Nature of Operations
Bion Environmental Technologies, Inc.'s ("Bion," "Company," "We," "Us," or "Our") was incorporated in 1987 in the State of Colorado.
Our patented and proprietary technology was developed to provide advanced waste treatment and resource recovery for large-scale livestock production facilities (also known as “Concentrated Animal Feeding Operations” or “CAFOs"). Our Gen3Tech can largely mitigate the environmental problems of CAFOs, while simultaneously improving operational/ resource efficiencies by recovering high-value co-products from the waste stream, including renewable energy, nutrients, and clean water. For the last several years, Bion was 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.
Until recently, we believed that the best opportunity for the Company to prove its technology, along with the sustainable beef concept, was with the Stovall Ranch, in Montana. In June 2024, Bion formed a strategic relationship with Turk Stovall and Stovall Ranching Companies. Bion and Stovall agreed to establish a JV, to be led by Mr. Stovall, with the goal of developing a 16,000-head sustainable beef project at Stovall’s Yellowstone Cattle Feeders (‘YCF’) location in Shepherd, Montana. We anticipated establishing the Stovall-Bion JV and creating related distribution agreements with key value chain partners during the 2024 calendar year, with the intent to begin construction in the first quarter of 2025. However, due to several factors, including 1) the extended development timeline to reach revenues at Stovall (which could be at least two years or more), 2) a need to prove our technology at full-scale as quickly as possible, and 3) enter the fertilizer markets with product in the 2026 growing season, we shifted our focus to smaller ‘bolt-on’ opportunities in both the animal waste and industrial sectors that we think can be developed more quickly.
Bion’s patents were expanded in 2024 to include industrial and municipal wastewater sources, in addition to animal waste streams that were previously covered. To that end, Bion directed part of its limited resources to understanding and evaluating opportunities to apply its Ammonia Recovery System (ARS) as a bolt-on or ‘standalone’ ammonia control solution in the industrial sector. In such cases, the ARS would be deployed as an ammonia control solution (vs integrated into a Bion Gen3Tech livestock platform) for facilities (both new and existing) that produce biogas from organic waste streams, such as food, food processing, and livestock packing/slaughter. These facilities are subject to EPA-mandated discharge limits that require ammonia control or face other limitations on ammonia/nitrogen in the effluent from biogas production. It should be noted that central processing facilities that treat the waste from more than one farm are required to have discharge permits, like industrial facilities. We will also seek to identify opportunities to provide ammonia control solutions in the livestock/animal waste at existing farms with anaerobic digesters already in place (which will also shorten the development timeline). While we have not abandoned developing new integrated livestock projects with our Gen3tech platform, we believe there is a robust opportunity to provide bolt-on ammonia control solutions to others’ biogas facilities, and we are now devoting almost all of our resources to developing this opportunity.
| F-8 |
BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2026 AND 2025 |
Going Concern
The Company’s consolidated financial statements have been prepared assuming the Company will continue as a going concern.
The Company is not currently generating any significant revenues. Further, the Company’s anticipated revenues, if any, from existing JVs and proposed projects will not be sufficient to offset operating and capital costs (for Projects) for a minimum of two to five years. Further, there are no assurances that the Company will ultimately be successful in its efforts to develop and construct its Projects and market its Systems; but, it is certain that the Company will require substantial funding from external sources. Given the unsettled state of the current credit and capital markets for companies such as Bion, there is no assurance the Company will be able to raise the funds it needs on reasonable terms. The aggregate effect of these factors raises substantial doubt about the Company’s ability to continue as a going concern.
During the year ended June 30, 2026 the Company had a loss of
$
During the year ended June 30, 2025 the Company had a loss of
$
The constraints on available resources have had, and
continue to have, negative effects on the pace and scope of the Company’s efforts to operate and develop its business. The Company
has had to delay payment of trade obligations and has had to economize in many ways that have potentially negative consequences. If the
Company is able to raise needed funds during the remainder of the current fiscal year (and subsequent periods), of which there is no assurance,
management will not need to consider deeper cuts (including additional personnel cuts) and/or curtailment of ongoing activities including
research and development activities. The Company will need to obtain additional capital to fund its operations and technology development,
to satisfy existing creditors, and to develop Projects. The Company anticipates that it will seek to raise from $
The accompanying consolidated financial statements do not include any adjustments relating to the recoverability or classification of assets or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern. The following paragraphs describe management’s plans with regard to these conditions.
| F-9 |
BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2026 AND 2025 |
Management’s Plan
The Company continues to explore sources of financing to satisfy its current operating requirements and future growth needs. The Company faced substantial demand for capital and operating expenditures during fiscal year 2026, which has continued during the 2027 fiscal year, and which we expect to increase for the periods thereafter as we move toward commercial implementation of our ARS (including costs associated with additions of personnel to carry out the business activities of the Company). As a result, the Company has faced, and continues to face, significant cash flow management challenges due to material working capital constraints. To partially mitigate these working capital constraints, the Company's core senior management and some key employees and consultants have been deferring most of their cash compensation and/or are accepting compensation in the form of securities of the Company and members of the Company's senior management have from time-to-time made loans to the Company in the past and may do so in future periods.
To help alleviate the company’s short-term cash
needs following the management challenges in 2024, three affiliates of the Company and two shareholders began advancing money to Bion
to cover critical payables. They subsequently formed a loan group, BION BLG, LLC (“BLG”), and provided short-term funding
for Bion in a secured promissory note of up to $
In November 2024, the Company launched a series of secured promissory note offerings to previous investors/shareholders (and certain others) (“Shareholder Notes”) with similar terms to the BLG note. The capital raised in these offerings allowed Bion to accomplish the steps needed to commercialize our technology, move forward with potential strategic partners, and position ourselves for the larger offering/ funding that will be required for that commercialization. As of the filing date, Bion has raised $1,399,800 in the Shareholder Note offerings and believes the Company is now positioned to attract investment from outside and/or institutional sources. (see Note 5, Convertible Notes (Shareholder Notes).
To date, the Company has primarily raised funds through private placements with accredited investors, often conducted through FINRA-registered broker/dealers. However, the Company anticipates moving forward, it will need to raise capital using a combination of financial instruments and sources, that could also include strategic and/or institutional investors, including family offices and private equity, brokered equity or debt offerings with both public and private investors, and banks and other ag lending institutions, among others, although there can be no assurance it will be successful. Many of these financing options may involve dilution, potentially substantial, for current shareholders, although management is committed to minimizing that dilution compared to recent share prices.
Bion is now in discussions with several potential strategic partners in engineering, renewable energy (biogas/RNG) and clean fuels, organic fertilizer distribution, and others involved in reducing the environmental footprint of biogas, agriculture, and livestock production. The Company is evaluating a number of these as potential development and finance partners for project opportunities and on December 5, 2025, entered into an MOU with Kimmeridge Energy Management for a potential large RNG facility. The MOU includes a Right of First Refusal for Kimmeridge on 10 million shares of Bion stock at a premium to the current market. Effective June 6, 2026, the Company and Kimmeridge extended the MOU, including the Right of First Refusal, for six months under the same terms. Further, with the recent OMRI Listing for its commercial fertilizer, the Company has initiated discussions with several large U.S. fertilizer manufacturers and distributors that have demonstrated strong interest in the product. Bion believes that these developing relationships could also entail a direct investment in Bion, licensing fee, or some other 'up front' financial benefit to Bion, although there is no assurance that they will.
| F-10 |
BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2026 AND 2025 |
THERE IS NO ASSURANCE THAT THE COMPANY WILL REACH OR APPROACH THE GOALS/TARGETS SET FORTH ABOVE. REACHING SUCH GOALS/TARGETS WILL REQUIRE RESOLUTION OF THE COMPANY’S EXISTING FINANCIAL DIFFICULTIES AND ACCESS TO VERY LARGE AMOUNTS OF CAPITAL (EQUITY AND DEBT) AS EACH ARS PROJECT IS PROJECTED TO COST BETWEEN $8 MILLION AND $40 MILLION (DEBT/EQUITY/GRANTS), DEPENDING ON WHETHER IT IS A BOLT-ON OR AN INTEGRATED PROJECT, AND WILL REQUIRE MOBILIZATION OF SUBSTANTIAL PERSONNEL, TECHNICAL RESOURCES AND MANAGEMENT SKILLS. THE COMPANY DOES NOT POSSESS EITHER THE FINANCIAL OR PERSONNEL RESOURCES INTERNALLY AND WILL NEED TO SOURCE SUCH RESOURCES FROM OUTSIDE.
2. SIGNIFICANT ACCOUNTING POLICIES:
Principles of consolidation:
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Bion Integrated Projects Group, Inc., Bion Technologies, Inc., BionSoil, Inc., Bion Services, Bion PA2 LLC and Bion 3G-1 LLC (“3G1”); and its 58.9% owned subsidiary, Centerpoint Corporation (“Centerpoint”). All significant intercompany accounts and transactions have been eliminated in consolidation.
Operating Segment:
The Company operates as a single operating and reportable segment: advanced waste treatment and resource recovery solutions for organic waste streams. While in the future the Company may pursue other segments, such as integrated livestock projects, CAFO retrofits, and other opportunities to use its proprietary technology, it is currently focused entirely on bolt-on solutions for existing or planned biogas production facilities.
The Company's Chief Executive Officer is the chief operating decision maker ("CODM"). The CODM assesses performance and allocates resources based on consolidated net loss, as reported in the consolidated statements of operations. The CODM uses net loss, together with budget-to-actual comparisons and cash forecasts, to monitor spending, manage the Company's limited liquidity, and decide how to allocate resources to operations, research and development, and financing activities. The measure of segment assets is total consolidated assets, as reported in the consolidated balance sheets. The accounting policies of the segment are the same as those described in this Note.
The significant segment expenses and other segment items regularly provided to the CODM are as follows:
| Year ended June 30, 2026 | Year ended June 30, 2025 | |||||||
| Revenue | $ | $ | ||||||
| General and administrative (including stock-based compensation) | ||||||||
| Research and development (including stock-based compensation) | ||||||||
| Depreciation | ||||||||
| Interest expense | ||||||||
| Other segment items (1) | ( | ) | ( | ) | ||||
| Segment and consolidated net loss | $ | $ | ||||||
| (1) |
Non-cash stock-based compensation included in the expenses above was $ and $ for the years ended June 30, 2026 and 2025, respectively.
Cash and cash equivalents:
The Company considers all highly liquid investments
purchased with an original maturity of three months or less to be cash and cash equivalents. As of June 30, 2026 and June 30, 2025 there
are
Property and equipment:
Property and equipment are stated at cost and are depreciated, when placed into service, using the straight-line method over the estimated useful lives of the related assets, generally three to twenty years. The Company reviews its property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized based on the amount by which the carrying value of the assets or asset group exceeds its estimated fair value and is recognized as a loss from operations.
| F-11 |
BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2026 AND 2025 |
Patents:
The Company has elected to expense all costs and filing fees related to obtaining patents (resulting in no related asset being recognized in the Company’s consolidated balance sheets) because the Company believes such costs and fees are immaterial (in the context of the Company’s total costs/expenses) and have no direct relationship to the value of the Company’s patents.
The Company follows the provisions of Accounting Standards Codification (“ASC”) 718, which generally requires that share-based compensation transactions be accounted and recognized in the statement of operations based upon their grant date fair values.
Derivative Financial Instruments:
Pursuant to ASC Topic 815 “Derivatives and Hedging” (“Topic 815”), the Company reviews all financial instruments for the existence of features which may require fair value accounting and a related mark-to-market adjustment at each reporting period end. Once determined, the Company assesses these instruments as derivative liabilities. The fair value of these instruments is adjusted to reflect the fair value at each reporting period end, with any increase or decrease in the fair value being recorded in results of operations as an adjustment to fair value of derivatives.
Options:
The Company has issued options to employees and consultants under the 2006 Plan to purchase common shares of the Company. Options are valued on the grant date using the Black-Scholes option-pricing model. The expected volatility is based on the historical price volatility of the Company’s common stock. The dividend yield represents the Company’s anticipated cash dividend on common stock over the expected term of the stock options. The U.S. Treasury bill rate for the expected term of the stock options was utilized to determine the risk-free interest rate. The expected term of stock options represents the period of time the stock options granted are expected to be outstanding based upon management’s estimates.
Warrants:
The Company has issued warrants to purchase common shares of the Company. Warrants are valued using a fair value based method, whereby the fair value of the warrant is determined at the warrant issue date using a market-based option valuation model based on factors including an evaluation of the Company’s value as of the date of the issuance, consideration of the Company’s limited liquid resources and business prospects, the market price of the Company’s stock in its mostly inactive public market and the historical valuations and purchases of the Company’s warrants. When warrants are issued in combination with debt or equity securities, the warrants are valued and accounted for based on the relative fair value of the warrants in relation to the total value assigned to the debt or equity securities and warrants combined.
Concentrations of credit risk:
The Company's financial instruments that are exposed to concentrations of credit risk consist of cash. The Company's cash is in demand deposit accounts placed with federally insured financial institutions and selected brokerage accounts. Such deposit accounts at times may exceed federally insured limits. The Company has not experienced any losses on such accounts.
| F-12 |
BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2026 AND 2025 |
Noncontrolling interests:
In accordance with ASC 810, “Consolidation”, the Company separately classifies noncontrolling interests within the equity section of the consolidated balance sheets and separately reports the amounts attributable to controlling and noncontrolling interests in the consolidated statements of operations. In addition, the noncontrolling interest continues to be attributed its share of losses even if that attribution results in a deficit noncontrolling interest balance.
Fair Value Measurements:
The Company measures fair value in accordance with ASC 820, Fair Value Measurement. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, in the principal or most advantageous market. ASC 820 establishes a three-level fair value hierarchy that requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs. A fair value measurement is categorized in its entirety based on the lowest level of input that is significant to the measurement. The three levels are:
Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 – Inputs other than quoted prices included in Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active.
Level 3 – Unobservable inputs that are supported by little or no market activity and that reflect management's own assumptions about the assumptions market participants would use.
The Company had no assets or liabilities measured at fair value on a recurring basis as of June 30, 2026 or 2025.
Lease Accounting:
The Company accounts for leases under ASC 842, Leases (“ASC 842”). Accordingly, the Company will determine whether an arrangement contains a lease at the inception of the arrangement. If a lease is determined to exist, the term of such lease is assessed based on the date on which the underlying asset is made available for the Company’s use by the lessor. The Company’s assessment of the lease term reflects the non-cancelable term of the lease, inclusive of any rent-free periods and/or periods covered by early-termination options which the Company is reasonably certain of not exercising, as well as periods covered by renewal options which the Company is reasonably certain of exercising. The Company also determines lease classification as either operating or finance at lease commencement, which governs the pattern of expense recognition and the presentation reflected in the consolidated statements of operations over the lease term.
For leases with a term exceeding 12 months, a lease liability is recorded on the Company’s consolidated balance sheet at lease commencement reflecting the present value of its fixed minimum payment obligations over the lease term. A corresponding right-of-use (“ROU”) asset equal to the initial lease liability is also recorded, adjusted for any prepaid rent and/or initial direct costs incurred in connection with execution of the lease and reduced by any lease incentives received. For purposes of measuring the present value of its fixed payment obligations for a given lease, the Company uses its incremental borrowing rate, determined based on information available at lease commencement, as rates implicit in its leasing arrangements are typically not readily determinable. The Company's incremental borrowing rate reflects the rate it would pay to borrow on a secured basis and incorporates the term and economic environment of the associated lease.
The Company has elected the short-term lease practical expedient available under ASC 842 for all asset classes. Under this election, for leases with a lease term of 12 months or less at commencement, and which do not include an option to purchase the underlying asset that the Company is reasonably certain to exercise, the Company does not recognize a lease liability or corresponding ROU asset on its consolidated balance sheets. Instead, lease payments associated with such short-term leases are recognized as expense in the consolidated statements of operations on a straight-line basis over the lease term.
Loss Contingencies and Legal Costs:
The Company is subject to various legal proceedings, claims, and regulatory matters arising in the ordinary course of business. In accordance with ASC 450, Contingencies, the Company records an accrual for a loss contingency when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. When a loss is probable and a range of loss can be estimated, the Company accrues its best estimate within that range. If no amount within the range is a better estimate than any other, the Company accrues the minimum amount in the range. The Company reviews these accruals each reporting period and adjusts them to reflect negotiations, settlements, rulings, advice of legal counsel, and other developments relating to each matter. When a loss is reasonably possible but not probable, or is probable but not reasonably estimable, the Company does not record an accrual. Instead, it discloses the nature of the contingency and, where material, an estimate of the possible loss or range of loss, or states that such an estimate cannot be made. Legal costs associated with loss contingencies are expensed as incurred and are included in general and administrative expenses in the consolidated statements of operations.
| F-13 |
BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2026 AND 2025 |
Revenue Recognition:
The Company currently does not generate revenue and if and when the Company begins to generate revenue the Company will comply with the provisions of ASC 606 “Revenue from Contracts with Customers”.
Basic income (loss) per share amounts are calculated using the weighted average number of shares of common stock outstanding during the period. Diluted income (loss) per share assumes the conversion, exercise, or issuance of all potential common stock instruments, such as options or warrants, unless the effect is to reduce the income (loss) per share or increase the earnings per share. During the years ended June 30, 2026 and 2025, the basic and diluted income (loss) per share was the same, as the impact of potential dilutive common shares was anti-dilutive.
The following table represents the warrants and options (as if exercised) and convertible securities (as if converted) that have been excluded from the calculation of basic income (loss) per share:
| June 30, 2026 | June 30, 2025 | |||||||
| Warrants | ||||||||
| Options | ||||||||
| Convertible debt | ||||||||
The following is a reconciliation of the denominators of the basic and diluted income (loss) per share computations for the years ended June 30, 2026 and 2025.
Year ended June 30, | Year ended June 30, | |||||||
| Shares issued – beginning of period | ||||||||
| Shares held by subsidiaries (Note 6) | ( | ) | ( | ) | ||||
| Shares outstanding – beginning of period | ||||||||
| Weighted average shares issued during the period | ||||||||
| Diluted weighted average shares – end of period | ||||||||
Use of estimates:
In preparing the Company’s consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Recent Accounting Pronouncements:
The Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a study to determine the consequences of the change to its consolidated financial statements and assures that there are proper controls in place to ascertain that the Company’s consolidated financial statements properly reflect the change.
Recently Adopted Accounting Pronouncements:
ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. In November 2023, the FASB issued ASU 2023-07, which requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”), the CODM’s title and position, and an explanation of how the CODM uses reported segment profit or loss measures, among other enhanced segment disclosures. The Company adopted ASU 2023-07 effective July 1, 2024 (fiscal year ended June 30, 2025) and applied it retrospectively to all periods presented. The adoption did not have a material impact on the Company’s consolidated financial statements, as it affects disclosure only.
| F-14 |
BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2026 AND 2025 |
ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. In December 2023, the FASB issued ASU 2023-09, which enhances the transparency and decision usefulness of income tax disclosures. Key provisions require disclosure of income or loss before income tax, income tax expense (or benefit) from continuing operations, and income taxes paid (net of refunds received), each disaggregated by domestic, foreign, federal (national), and state components, with further disaggregation of income taxes paid for significant individual jurisdictions. Public business entities are also required to provide a more detailed tabular reconciliation of the effective tax rate, including percentages, amounts, and qualitative descriptions by jurisdiction. The Company adopted ASU 2023-09 effective July 1, 2025, on a retrospective basis, as required for its fiscal year ended June 30, 2026. The adoption did not materially impact the Company’s consolidated financial statements but resulted in expanded income tax disclosures, as reflected in Note 9, Income Taxes.
Accounting Pronouncements Issued But Not Yet Adopted:
ASU 2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments. In November 2024, the FASB issued ASU 2024-04, which clarifies the criteria for determining whether a settlement of convertible debt instruments should be accounted for as an induced conversion rather than an extinguishment. The ASU is effective for the Company’s fiscal year beginning July 1, 2026 (fiscal year ending June 30, 2027), with early adoption permitted for entities that have adopted ASU 2020-06. The Company is currently evaluating the impact of this standard on its consolidated financial statements.
ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. In July 2025, the FASB issued ASU 2025-05, which introduces a practical expedient allowing entities to assume that current conditions persist through the forecast period when estimating credit losses on current trade receivables and contract assets, along with an accounting policy election available to non-public entities. The ASU is effective for the Company’s fiscal year beginning July 1, 2026, applied prospectively, with early adoption permitted. The Company is currently evaluating the impact of this standard on its allowance for credit losses. The Company has no receivables or allowances and the standard is not expected to have any effect.
ASU 2024-03, as clarified by ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This ASU requires disaggregated disclosure of specified categories of expenses (including purchases of inventory, employee compensation, and depreciation and amortization) within relevant income statement expense captions. For public business entities, it is effective for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027 — for the Company, this will first apply to the fiscal year beginning July 1, 2027. Early adoption is permitted. The Company is currently evaluating the impact of this standard, which is expected to result in expanded disclosure only.
Management does not believe that any other recently issued, but not yet effective, accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements.
| F-15 |
BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2026 AND 2025 |
3. PROPERTY AND EQUIPMENT:
Property and equipment consist of the following:
| June 30, 2026 |
June 30, 2025 |
|||||||
| Computers and office equipment | ||||||||
| Less accumulated depreciation | ( |
) | ( |
) | ||||
| Property and equipment, net | $ | $ | ||||||
Depreciation expense was nil and $
The Company owes deferred compensation to various
employees, former employees and consultants totaling $
Family members of the late Dominic Bassani,
Bion’s former CEO and Mark A. Smith, previously a Director and President are owed a balance of nil
and nil as of June 30, 2026 and $
Effective September 15, 2025, family members of the late Dominic Bassani and Smith, and Edward Schafer, previously a Director, each individually agreed to a settlement (“Settlement Agreements”) that will simplify Bion’s capital structure and substantially reduce the number of Fully Diluted Shares. In consideration of the cancellation of various obligations and security instruments held by Smith and Bassani, including without limitation deferred compensation, Smith and the Bassani heirs will receive shares of common stock, as described below in Note 6, Stockholders’ Equity. Included in the Bassani family Settlement Agreement was a provision to cancel their remaining 5% obligation under their previous Giveback Agreement.
The Company owes deferred compensation to Craig Scott
of $
Bill O’Neill, former CEO, is owed a balance
of $
The Company also owes various consultants and employees,
pursuant to various agreements, for deferred compensation of $
The Company recorded interest expense of $
| F-16 |
BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2026 AND 2025 |
5. NOTES PAYABLE:
Adjusted 2020 Convertible Obligations and Adjusted September 2015 Convertible Notes
Effective February 1, 2023, three (3) directors/officers of the Company agreed to adjust the provisions of long term convertible obligations (including most of the 2020 Convertible Obligations and September 2015 Convertible Notes --- see below) owed to them by the Company in a manner which reduced the indebtedness of the Company by 80% (approximately $3.47 million, in aggregate while equitably maintaining existing conversion rights). The debt modification was treated as an equity transaction because the modifications were with affiliates that are related parties.
Mark A. Smith (the Company’s former President)(“Smith”),
Dominic Bassani (the Company’s former Chief Operating Officer) (“Bassani”) (NOTE: Dominic Bassani passed away
on November 11, 2023) and Ed Schafer (former Director)(“Schafer”), adjusted/reduced the principal owed to them by $
As of June 30, 2026, the Adjusted 2020
Convertible Obligation balances, including accrued interest, owed Bassani (and his donees), Smith and Edward Schafer were nil. As of June 30 2025, the Adjusted 2020 Convertible
Obligation balances, including accrued interest, owed Bassani (and his donees), Smith and Edward Schafer were $
As of June 30, 2026 the Adjusted September
2015 Convertible Notes balances, including accrued interest, owed Bassani Family Trusts and Schafer were nil .
As of June 30, 2025 the Adjusted September 2015 Convertible Notes balances, including accrued interest, owed Bassani Family Trusts
and Schafer were $
On September 15, 2025, settlements were reached with Mr. Smith, Mr. Schafer, and the Bassani family, to surrender additional securities. Included in these agreements were provisions to cancel these convertible note obligations, effective on that date.
| F-17 |
BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2026 AND 2025 |
2020 Convertible Obligations
The 2020 Convertible Obligations (which combined/replaced prior convertible instruments dating to 2017 (or earlier), which accrue interest at either 4% per annum or 4% compounded quarterly and effective January 1, 2020 were due and payable on July 1, 2024. The 2020 Convertible Obligations (including accrued interest, plus all future deferred compensation added subsequently), are convertible, at the sole election of the holder, into Units consisting of one share of the Company’s common stock and one half to one warrant to purchase a share of the Company’s common stock, at a price of $0.50 per Unit until July 1, 2024 The original conversion price of $0.50 per Unit approximated the fair value of the Units at the date of the agreements; therefore, no beneficial conversion feature exists. Management evaluated the terms and conditions of the embedded conversion features based on the guidance of ASC 815-15 “Embedded Derivatives” to determine if there was an embedded derivative requiring bifurcation. An embedded derivative instrument (such as a conversion option embedded in the deferred compensation) must be bifurcated from its host instruments and accounted for separately as a derivative instrument only if the “risks and rewards” of the embedded derivative instrument are not “clearly and closely related” to the risks and rewards of the host instrument in which it is embedded. Management concluded that the embedded conversion feature of the deferred compensation was not required to be bifurcated because the conversion feature is clearly and closely related to the host instrument, and because of the Company’s limited trading volume that indicates the feature is not readily convertible to cash in accordance with ASC 815-10, “Derivatives and Hedging”. Effective February 1, 2023, a large portion of the 2020 Convertible Obligations were adjusted. The maturity date of the notes has been extended to September 15, 2025.
Effective January 9, 2025, the Board of Directors amended the terms of the 2020 Adjusted Convertible Note owned by Ed Schafer, who retired from the Company’s Board of Directors on December 31, 2024. The maturity date of the 2020 Adjusted Convertible Note has been extended to September 15, 2025.
On September 15, 2025, a settlement was reached with Mr. Schafer to cancel the 2020 Adjusted Convertible Note, effective on that date.
As of June 30, 2026, the remaining unadjusted
portion of the 2020 Convertible Obligation balances, including accrued interest, owed Bassani Family Trusts and Smith were nil. As of
June 30, 2025, the remaining unadjusted portion of the 2020 Convertible Obligation balances, including accrued interest, owed Bassani
Family Trusts (and his donees) and Smith, were $
The Company recorded interest expense of $
Effective February 1, 2023, three (3) directors/officers of the Company agreed to adjust the provisions of long-term convertible obligations (including most of the 2020 Convertible Obligations and September 2015 Convertible Notes) owed to them by the Company in a manner which reduced the indebtedness of the Company by 80% (approximately $3.47 million, in aggregate) while equitably maintaining existing conversion rights. Because the modifications were with affiliates that are related parties, the debt modification was treated as an equity transaction. The Company recorded a deemed dividend for the reductions.
Smith, Bassani and Schafer, adjusted/reduced the principal owed to them by $1,109,649, $1,939,670 and $424,873, respectively. Subsequent to the adjustment, the adjusted portion of the 2020 Convertible Obligations were renamed Adjusted 2020 Convertible Obligations (see above and Note 8.).
| F-18 |
BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2026 AND 2025 |
September 2015 Convertible Notes
During the year ended June 30, 2016, the Company entered into September 2015 Convertible Notes with Bassani, Schafer and a Shareholder which replaced previously issued promissory notes. The September 2015 Convertible Notes bear interest at 4% per annum, have maturity dates of July 1, 2024, and may be converted at the sole election of the noteholders into restricted common shares of the Company at a conversion price of $0.60 per share. As the conversion price of $0.60 approximated the fair value of the common shares at the date of the September 2015 Convertible Notes, no beneficial conversion feature exists. The maturity date of the notes has been extended to September 15, 2025 for all note holders. On September 15, 2025 the maturity date for two of the 2015 Convertible Notes was extended to September 15, 2027.
Effective January 16, 2025, Mr. Schafer voluntarily surrendered 36,918 shares of common stock that would have been issued as the result of the conversion of his $4,246 Adjusted 2015 Convertible Note. The note was convertible at $0.115 per share.
As of June 30, 2026, the remaining unadjusted
portion of the 2015 Convertible Notes balances including accrued interest owed Bassani, Schafer and Shareholder are nil, nil and
$, respectively. The balances of the September 2015 Convertible Notes as of June 30, 2025, including accrued interest owed
Bassani, Schafer and Shareholder, were $
The Company recorded interest expense of $
On September 15, 2025, settlements were reached with Mr. Smith, Mr. Schafer, and the Bassani family to surrender additional securities. Included in these agreements were provisions to cancel these convertible note obligations, effective on that date.
Convertible Bridge Loan/Default
On September 28, 2023, the Company entered into
an agreement for a $
The balances of the Convertible Bridge Loan, including
accrued interest, are $
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. These funds 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 Company is currently involved in discussions with representatives of SEB in an effort to achieve a mutually satisfactory resolution.
The Company recorded interest expense of $
| F-19 |
BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2026 AND 2025 |
May 2024 Convertible Notes
During the year ended June 30, 2024, the Company entered into May 2024 Convertible Notes with five individuals. The May 2024 Convertible Notes bear interest at 6% per annum, had maturity dates of December 31, 2025, and may be converted at the sole election of the noteholders into one restricted common shares and one warrant of the Company at a conversion price of $1.00 per unit. The maturity date of the notes has been extended to December 31, 2026. As the conversion price of $1.00 approximated the fair value of the common shares at the date of the May 2024 Convertible Notes, no beneficial conversion feature exists.
The balances of the May 2024 Convertible Notes including
accrued interest owed is $
The Company recorded interest expense of $
Note payable - related party (BLG)
To help alleviate the company’s short-term cash needs following the management challenges in 2024, three affiliates of the Company (Greg Schoener, Interim COO & Director; Turk Stovall, previous Director; Bob Weerts, now-deceased Director) and two shareholders (one of whom is the brother of Greg Schoener) began advancing money to Bion to cover critical payables. Schoener, Weerts, and the two non-affiliate members were also large Bion shareholders, prior to the formation of BLG.
On October 22, 2024, Bion's Board of Directors ratified
an agreement with the Bion BLG, LLC, loan group, effective October 15, 2024, to purchase a Convertible Promissory Note in the principal
amount of up to $
At that time, three Bion Directors (Schoener, Stovall – former/resigned, and Weerts – former/deceased) were members of the loan group and together comprised 60% ownership of the loan group (each member owns 20%). The Note is secured by the Company's Intellectual Property (IP)/patents. The Note will convert into securities in the Company at the price of a later capital raise (or other source of funding) in excess of $3.0 million, which had to be completed within six (6) months.
Effective May 29, 2025, the Company entered into a Forbearance Agreement with Bion BLG, LLC, extending the maturity date of the BLG Note to July 15, 2025 (See Bion’s Form 8-K, dated May 30, 2025).
On July 24, 2025, the Company entered into a Forbearance Agreement with Bion BLG, LLC, (effective July 15, 2025) extending the maturity
date of the BLG Note to
On January 8, 2026, BLG informed Bion it was extending the maturity date of its Convertible Promissory Note’s Second Forbearance
Agreement, with an effective date of July 15, 2025 (see 8-K filed July 24, 2025), under the same terms and conditions (including the collateral
sharing agreement), until June 30, 2026. In the fourth forbearance signed July 14, 2026, BLG extended the maturity date to
The balances of the BLG note payable including accrued
interest owed is $
The Company recorded interest expense of $
| F-20 |
BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2026 AND 2025 |
Convertible notes (shareholder notes)
The Company has issued multiple series of convertible
notes to various individuals from November 1, 2024 through June 30, 2026. The convertible notes bear interest at a rate of
The Notes will automatically convert into units of the Company ("Units") upon the closing of a later capital raise in which the Company raises aggregate capital of at least $3 million. The conversion will occur at the price of that future capital raise. The Notes are secured by the Company's Intellectual Property (IP)/patents, which security is shared with the BLG.
The aggregate balances of all convertible notes,
including accrued interest, are $
The Company recorded interest expense of $
Convertible notes payable – related party
Included in the July 2025 convertible notes is
a $
As of June 30, 2026, the balance of the note,
including accrued interest, was $
Demand note payable – related party
On August 11, 2025, the Company issued an unsecured
demand note payable to Salvatore Zizza, a member of the Company's Board of Directors, in exchange for cash proceeds of $
As of June 30, 2026, the outstanding principal balance
was $
The scheduled maturities of the Company's debt, including accrued interest, as of June 30, 2026, by fiscal year ending June 30, are as follows:
| Fiscal year ending June 30, | Amount | |
| 2027 | $ | |
| 2028 | ||
| 2029 | ||
| 2030 | ||
| 2031 | ||
| Thereafter | ||
| Total | $ | |
6. STOCKHOLDERS’ EQUITY:
Write down of carry value of Initial Project
Effective June 30, 2024, at the same time the
Initial Project was deemed placed in service, the Board of Directors determined that the capitalized carrying value of the Initial Project
on the Company balance sheet as of that date be reduced to $
“Give-back” Agreements to Additional Paid in Capital
Effective April 1, 2024 the Company entered into two material definitive agreements (“Giveback Agreements”) regarding voluntary surrender for cancellation of securities of the Company (and related matters) by: 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”)(see Exhibit 10.1)(“Bassani Family Agreement”), and b) Mark A. Smith, recently retired President of the Company and a director (see Exhibit 10.2)(“MAS Agreement”). The Bassani Family and Smith 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 “giveback” agreements were treated as equity transactions because the forfeitures were with affiliates that are related parties.
The Bassani Family agreed to surrender not less
than approximately 20% of its Company holdings (as of December 2023), which surrender would increase to approximately 30% based on certain
financing performances. The Bassani Family elected to surrender deferred compensation of $
On January 18, 2025, under the Bassani Family
Agreement described above, Bion cancelled
MAS 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 (, in aggregate) and waived $
| F-21 |
BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2026 AND 2025 |
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.
On January 9, 2025, the Company agreed to amend the terms of the agreements dated April 1, 2024 regarding voluntary surrender for cancellation of securities of the Company (and related matters) by: 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”)(see Form 8-K dated April 3, 2024, Exhibit 10.1)(“Bassani Family Agreement”), and b) Mark A. Smith, former President of the Company and a director (“MAS”)(see Form 8-K dated April 3, 2024, Exhibit 10.2)(“MAS Agreement”). 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 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 dated January 15, 2025, to April 15, 2025. No changes were made regarding any ‘give backs’ of securities of the Company.
Effective September 15, 2025, family members of
the late Dominic Bassani, Bion’s former CEO, Mark A. Smith, previously a Director and President, and Edward Schafer, previously
a Director, have each individually agreed to a settlement (“Settlement Agreements”) that will simplify Bion’s capital
structure and substantially reduce the number of Fully Diluted Shares. In consideration of the cancellation of various obligations, as
noted below, and security instruments held by the Holders, including without limitation deferred compensation, convertible notes, warrants,
and options, that could have increased the
On September 18, 2025 the
On September 17, 2025,
On September 18, 2025,
On January 22, 2026, the Board of Directors ratified granting a 90-day extension to the issuance of settlement shares to two affiliates of the Company (Danielle Lominy and Christopher Parlow, family members of the late Dominic Bassani, Bion’s former CEO), and two non-affiliates of the Company (Dominic Bassani’s spouse and Edward Schafer, previously a Director) (referred to hereinafter collectively as ‘Holders’), effective January 15, 2026. The Holders have agreed to the extension.
On April 15, 2026, at the request of Danielle Lominy, Christopher Parlow, Edward Schafer, and Dominic Bassani’s spouse, Bion agreed to extend the issuance of their settlement shares to December 31, 2026, subject to a capital raise or other source of funding which would trigger the immediate issuance of the shares.
| F-22 |
BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2026 AND 2025 |
Series B Preferred stock:
The Company has shares of Series B redeemable
convertible preferred stock, par value $ per share, authorized. All previously outstanding shares of the Company's Series B redeemable
convertible preferred stock were redeemed during the fiscal year ended June 30, 2022. shares of Series B Preferred stock were issued
or outstanding, and
Common stock:
Holders of common stock are entitled to one vote per share on all matters to be voted on by common stockholders. In the event of liquidation, dissolution or winding up of the Company, the holders of common stock are entitled to share in all assets remaining after liabilities have been paid in full or set aside and the rights of any outstanding preferred stock have been satisfied. Common stock has no preemptive, redemption or conversion rights. The rights of holders of common stock are subject to, and may be adversely affected by, the rights of the holders of any outstanding series of preferred stock or any series of preferred stock the Company may designate in the future.
Centerpoint holds shares of the Company’s common stock. These shares of the Company’s common stock held by Centerpoint are for the benefit of its shareholders without any beneficial interest.
During the year ended June 30, 2026, shares of common stock were issued as cashless warrant exercises.
During the year ended June 30, 2026, shares of common stock were issued to Mark Smith for the Settlement Agreement.
During the year ended June 30, 2025, shares
of restricted common stock were issued for consulting services valued at $
Warrants:
As of June 30, 2026, the Company had approximately
The weighted-average exercise price for the outstanding warrants is $, and the weighted-average remaining contractual life as of June 30, 2026 is years.
On March 31, 2026 the Company modified
On December 31, 2025 the Company modified
On October 28, 2025 the Company modified
| F-23 |
BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2026 AND 2025 |
On October 28, 2025 the Company modified
On July 15, 2025 the Company modified
On July 15, 2025 the Company modified
On September 30, 2025 the Company modified
On September 15, 2025, settlements were reached with MAS, the Bassani family and Schafer, to surrender additional securities. Included in the Bassani family agreement was a provision to cancel their remaining 5% obligation under the Giveback Agreement. For details on the settlement agreement, see Giveback and Settlement Agreements above.
Stock options:
On April 7, 2022 the Company’s shareholders approved the Bion Environmental Technologies, Inc. 2021 Equity Incentive Award Plan (the “Equity Plan”). The Equity Plan provides for the issuance of options (and/or other securities) to purchase up to shares of the Company’s common stock. The Equity Plan was adopted and ratified by Board of Directors on April 8, 2022. Terms of exercise and expiration of options/securities granted under the Equity Plan may be established at the discretion of the Board of Directors, but no option may be exercisable for more than ten years. No grants have been made pursuant to the Equity Plan as of the date of this report.
The Company’s 2006 Consolidated Incentive Plan, as amended during the year ended June 30, 2021 (the “2006 Plan”), provides for the issuance of options (and/or other securities) to purchase up to shares of the Company’s common stock. Terms of exercise and expiration of options/securities granted under the 2006 Plan may be established at the discretion of the Board of Directors, but no option may be exercisable for more than ten years. The 2006 Plan will be maintained to service grants already made thereunder (together with new grants, if any, to employees and consultants who already had received grants pursuant to its terms).
The Company recorded compensation expense related to employee stock options of $ and $ for the year ended June 30, 2026 and 2025, respectively. The Company granted nil and nil options for the year ended June 30, 2026 and 2025, respectively.
On July 15, 2024 the Company modified
On September 15, 2025, a settlement was reached with Mr. Schafer to cancel the 2020 Adjusted Convertible Note and surrender 1,215,000 options, effective on that date. For details on the settlement agreement, see Giveback and Settlement Agreements above.
On December 31, 2025 the Company modified
| F-24 |
BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2026 AND 2025 |
On March 31, 2026 the Company modified
A summary of option activity under the 2006 Plan for years ended June 30, 2026 and 2025 is as follows:
| Options | Weighted- Average Exercise Price |
Weighted- Average Remaining Contractual Life |
Aggregate Intrinsic Value |
|||||||||||||||
| Outstanding at July 1, 2024 | ||||||||||||||||||
| Granted | ||||||||||||||||||
| Exercised | ||||||||||||||||||
| Forfeited | ||||||||||||||||||
| Expired | ) | |||||||||||||||||
| Outstanding at June 30, 2025 | $ | $ | ||||||||||||||||
| Granted | ||||||||||||||||||
| Exercised | ||||||||||||||||||
| Forfeited | ||||||||||||||||||
| Expired | ) | |||||||||||||||||
| Outstanding at June 30, 2026 | $ | $ | ||||||||||||||||
The total fair value of stock options that vested during the years ended June 30, 2026 and 2025 was nil and nil, respectively. As of June 30, 2026, the Company had no unrecognized compensation cost related to stock options.
7. SUBSCRIPTION RECEIVABLE - AFFILIATES:
As of June 30, 2025, the Company has three interest
bearing, secured promissory notes with an aggregate principal amount of $
As of June 30, 2025, the Company has an interest bearing,
secured promissory note for $
As of June 30, 2025, the Company has an interest bearing,
secured promissory note for $
As of June 30, 2025, the Company has one interest
bearing, secured promissory note with an aggregate principal amount of $
As of September 15, 2025 the subscription receivable
balance of $
As of September 30, 2025, the Company and Scott agreed
to offset the subscription receivable with the Deferred Compensation balance; $
As of September 30, 2025, the Company and an employee
agreed to offset the subscription receivable with the Deferred Compensation balance; $
As of June 30, 2026, the Company has no outstanding subscription receivables.
These secured promissory notes are recorded as “Subscription receivable—affiliates” on the Company’s balance sheet pending payment.
| F-25 |
BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2026 AND 2025 |
8. COMMITMENTS AND CONTINGENCIES:
A: Employment/Consulting (and related) agreements:
Stephen Craig Scott (“Scott”) was appointed
interim CEO effective June 1, 2024. Scott had previously been working with the Company as an employee/consultant since 1993 in various
positions including Director of Communications, SVP- Capital Markets and Head of Business Development. On October 25, 2023, Scott entered
into an agreement with the Company which included provisions for a monthly salary of $
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) by: 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”)(“Bassani Family Agreement”), and b) Mark A. Smith, recently retired President of the Company and a director (“MAS”) (“MAS Agreement”), as described in multiple places herein.
Until his retirement on July 31, 2024, MAS held the positions of Director, President, Interim Chief Financial Officer and General Counsel of Company (and its subsidiaries) under various agreements (and extensions) and terms since March 2003. Over the years, MAS accumulated various obligations and security instruments, including without limitation deferred compensation, convertible notes, warrants, and options, as noted above in 6. STOCKHOLDERS EQUITY, Giveback and Settlement Agreements. On September 18, 2025, MAS surrendered all obligations and security instruments and accepted 400,000 common shares in settlement. For the years ended June 30, 2026 and 2025, MAS was paid nil and $, respectively, of cash compensation.
Dominic Bassani, who was serving as the Company’s Chief Operating Officer (‘COO’) at the time, passed away on November 11, 2023. He had served as the Company’s Chief Executive Officer (‘CEO’) since 2011 (any reference to Brightcap or Bassani for all purposes are referring to the same individual). Over the years, Bassani accumulated various obligations and security instruments, including without limitation deferred compensation, convertible notes, warrants, and options, as noted above in 6. STOCKHOLDERS EQUITY, Giveback and Settlement Agreements. On September 18, 2025, the Bassani family surrendered all obligations and security instruments and accepted 7,200,000 common shares in settlement. For the years ended June 30, 2026 and 2025, Bassani/Brightcap was paid nil and nil , respectively, of cash compensation.
| F-26 |
BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2026 AND 2025 |
B: Initial Project:
On January 28, 2022, Bion entered into a Purchase
Order Agreement with Buflovak and Hebeler Process Solutions (collectively ‘Buflovak’) in the amount of $
Management previously believed that the Initial Project had reached the point where it could be appropriately deemed ‘placed in service’ at January 1, 2024. However, 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. 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 had been ‘placed in service’ at the June 30, 2024, fiscal year end.
Further, after extensive discussion, it was determined
that the ‘carrying value’ of the Initial Project on the Company balance sheet as of that date be reduced to $0 in order to
conform to accepted accounting practices, because the Initial Project was recently reclassified as largely a research & development
facility and is located on land subject to a short-term lease (as described above in Item 7, Management’s Discussion and Analysis).
As a result, a large ‘one time/non-recurring’ ‘non-cash’ charge of $
GAAP accounting rules notwithstanding, the Fair Oaks facility has been and continues to be the most important asset of the Company. In addition to providing data needed to optimize a full-scale commercial system, Bion has conducted dozens of demonstrations with developers and operators, engineering firms, potential fertilizer and finance partners, and others. Further, Fair Oaks is operating at capacity to produce samples of Bion’s Ammonium Bicarbonate fertilizers for testing by various stakeholders.
On April 16, 2025, the Company was served a summons by Hamstra Builders, Inc. (“Hamstra”) related to a Notice of Intent to file a Mechanic’s Lien, that was filed April 16, 2024, and has been disclosed in our public filings since that date. Hamstra is seeking to recover $1,494,513 in unpaid invoices related to the construction of Bion’s Ammonia Recovery System at Fair Oaks, Indiana. This sum includes $653,915 owed to Dilling Group, Inc., a subcontractor of Hamstra. Dilling filed suit to recover that amount on March 31, 2025, which was disclosed in Bion’s 8-K, dated April 7, 2025.
On July 14, 2026, Bion executed a Settlement Agreement with Hamstra Builders, Inc. The settlement, along with a separate agreement between Hamstra and Dilling Group, a subcontractor, results in the dismissal by both parties of all mechanics liens and litigation related to the construction of the Ammonia Recovery System at Fair Oaks. See Note 11, Subsequent Events for more details on the settlement with Hamstra, Dilling, and NPHLLC.
| F-27 |
BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2026 AND 2025 |
C: Lease:
The Company entered into an agreement on September 23, 2021, to lease approximately four acres of land near Fair Oaks, Indiana, for the development site of its Initial Project. The lease ended December 31, 2024 and there is an agreement to extend month to month at the same rate.
The Company has not made consistent lease
payments since October 16, 2023. The Company made five payments totaling $
D: Litigation (and related matters):
On April 16, 2025, the Company was served a summons by Hamstra Builders, Inc. (“Hamstra”) along with three other defendants: Bion Technologies, Inc. (“Biontech”), Bion 3G-1, LLC (“3G-1”), both entities of Bion Environmental Technologies, Inc., and North Prairie Holdings, LLC (‘NPHLLC”) the property lessor. The Hamstra suit is related to the Notice of Intent to file a Mechanic’s Lien, that was filed April 16, 2024, and has been disclosed in our public filings since that date. Bion has retained counsel in Indiana to represent the company in these actions. Hamstra is seeking to recover $1,494,513 in unpaid invoices related to the construction of Bion’s Ammonia Recovery System at Fair Oaks, Indiana. This sum includes $653,915 owed to Dilling Group, Inc., a subcontractor of Hamstra. Dilling filed suit to recover that amount on March 31, 2025, which was disclosed in Bion’s 8-K, dated April 7, 2025. These amounts are included in Accounts payable and accrued expenses.
On July 14, 2026, Bion executed a Settlement Agreement with Hamstra Builders, Inc. The settlement, along with a separate agreement between Hamstra and Dilling Group, a subcontractor, results in the dismissal by both parties of all mechanics liens and litigation related to the construction of the Ammonia Recovery System at Fair Oaks. See Note 11, Subsequent Events for details on the settlement with Hamstra, Dilling, and NPHLLC.
The Company currently is not involved in any other material litigation or similar events.
9. INCOME TAXES:
The Company adopted ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, for the year ended June 30, 2026, and has applied it retrospectively to all periods presented.
All of the Company’s loss before income taxes was generated in the United States. The Company has no foreign operations and no foreign income or losses. The Company recorded no current or deferred federal, state or foreign income tax expense or benefit for the years ended June 30, 2026 and 2025.
The following is a reconciliation between the expected federal income tax expense (benefit), computed by applying the federal statutory rate of 21% to loss before income taxes, and the actual income tax expense (benefit) for the years ended June 30, 2026 and 2025:
| 2026 | 2025 | |||||||||||||||
| Amount | % | Amount | % | |||||||||||||
| Expected federal income tax benefit at statutory rate | $ | ( | ) | ( | )% | $ | ( | ) | ( | )% | ||||||
| State and local income taxes, net of federal income tax effect (1) | ( | ) | ( | )% | ( | ) | ( | )% | ||||||||
| Nontaxable or nondeductible items | % | % | ||||||||||||||
| Other adjustments: expiration of net operating loss carryforwards | % | % | ||||||||||||||
| Change in valuation allowance | % | % | ||||||||||||||
| Income tax expense (benefit) | $ | % | $ | % | ||||||||||||
| (1) |
| F-28 |
BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2026 AND 2025 |
The Company paid no income taxes, net of refunds, to federal, state or foreign jurisdictions during the years ended June 30, 2026 and 2025.
As of June 30, 2026, the Company had federal net
operating loss carryforwards (“NOLs”) of approximately $
The Company’s deferred tax assets as of June 30, 2026 and 2025 are estimated as follows:
| 2026 | 2025 | |||||||
| Net operating loss carryforwards (federal) | $ | $ | ||||||
| Stock-based compensation | ||||||||
| Impairment | ||||||||
| Business interest expense limitation | ||||||||
| Deferred compensation | ||||||||
| Capitalized research and development | ||||||||
| Gross deferred tax assets | ||||||||
| Valuation allowance | ( | ) | ( | ) | ||||
| Net deferred tax assets | $ | $ | ||||||
The Company has provided a valuation allowance
of
Reclassification of Prior-Year Amounts
Certain amounts in the prior-year income tax disclosures
have been reclassified to conform to the current-year presentation. Certain deferred tax asset components as of June 30, 2025 were reclassified,
resulting in an increase of $
These reclassifications had no effect on previously reported income tax expense (benefit), net deferred tax assets, net loss, total assets, total liabilities, stockholders’ equity, or loss per share.
10. 401(k) PLAN:
The Company maintained the Bion Technologies, Inc. 401(k) Profit Sharing Plan and Trust (the "401(k) Plan"), a defined contribution retirement plan for the benefit of its employees. The 401(k) Plan was a salary deferral only plan, and the Company did not match employee contributions. The 401(k) Plan was open to all employees over 21 years of age, with no service requirement.
The Company discontinued the 401(k) Plan effective July 7, 2025. The Company recognized no costs related to the 401(k) Plan during the fiscal years ended June 30, 2026 and 2025.
The Company discontinued the 401(k) plan as of July 7, 2025.
11. SUBSEQUENT EVENTS:
On July 14, 2026, Bion executed a Settlement Agreement with Hamstra Builders, Inc., the General Contractor for the Fair Oaks demonstration facility that was completed in July 2023. The settlement, along with a separate agreement between Hamstra and Dilling Group, a subcontractor, results in the dismissal by both parties of all mechanics liens and litigation related to the construction of the Ammonia Recovery System at Fair Oaks. The first lien was filed on April 16, 2024 and litigation commenced in April 2025; details have been disclosed in various SEC 8-K’s, 10-Q’s, and 10-K’s, since that time.
Bion will issue Hamstra a convertible promissory note
in the amount of $
All holders of Bion’s Secured Convertible Promissory Notes, along with all holders of Bion’s May 2024 Convertible Promissory Notes, both Notes with a maturity date of June 30, 2026, have agreed to extend their maturity date, under the same terms until December 31, 2026.
The Bion Loan Group has agreed to extend its Secured
Convertible Promissory Note, with a maturity date of June 30, 2026, under the same terms until January 31, 2027. Subsequent to yearend
BLG has advanced an additional $
During July 2026, the Company entered into Convertible
Notes with seven individuals for $
On August 12, 2026,
On August 25, 2026, Bion executed a Settlement and
Mutual Release Agreement with North Prairie Holdings, LLC, the landlord of the real property in Newton County, Indiana on which Bion's
Ammonia Recovery System demonstration facility at Fair Oaks is located, together with a related convertible promissory note issued by
the Company in the initial principal amount of $
F-29
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunder duly authorized.
| BION ENVIRONMENTAL TECHNOLOGIES, INC. | |
| Dated: September 29, 2026 | By: /s/ Stephen Craig Scott |
| Stephen Craig Scott, Interim Chief Executive Officer, Interim Principal Financial and Accounting Officer, and Director | |
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:
| SIGNATURE | TITLE | DATE | ||
| /s/ Stephen Craig Scott | Interim Chief Executive Officer, Principal | September 29, 2026 | ||
| Stephen Craig Scott | Financial and Accounting Officer, and Director | |||
| /s/ Jon Northrop | Secretary and Director | September 29, 2026 | ||
| Jon Northrop | ||||
| /s/ Stephen Posner | Director | September 29, 2026 | ||
| Stephen Posner | ||||
| /s/ Greg Schoener | Director | September 29, 2026 | ||
| Greg Schoener | ||||
| /s/ Salvatore Zizza | Director | September 29, 2026 | ||
| Salvatore Zizza |
43