9.	COMMITMENTS AND CONTINGENCIES:

Employment and consulting agreements:

Smith has held the positions of Director, President and General Counsel of Company and its subsidiaries under various agreements (and extensions) and terms since

March 2003.

October 10, 2016,

the Company approved a month to month contract extension, with Smith which includes provisions for i) a monthly deferred salary of

$18,000

until the Board of Directors re-instates cash payments to all employees and consultants who are deferring compensation, ii) the right to convert up to

$300,000

of his deferred compensation, at his sole election, at

$0.75

per share, until

December 31, 2022),

and iii) the right to convert his deferred compensation in whole or in part, at his sole election, at any time in any amount at “market” or into securities sold in the Company's current/most recent private offering at the price of such offering to

third

parties. Smith agreed effective

July 29, 2018

to continue to serve the Company under the same basic terms.

Since

March 31, 2005,

the Company has had various agreements with Brightcap and/or Bassani, through which the services of Bassani are provided (any reference to Brightcap or Bassani for all purposes are the same individual). The Board appointed Bassani as the Company's CEO effective

May 13, 2011.

February 10, 2015,

the Company executed an Extension Agreement with Bassani pursuant to which Bassani extended the term of his service to the Company to

December 31, 2017, (

with the Company having an option to extend the term an additional

six

months.) Pursuant to the Extension Agreement, Bassani continued to defer his cash compensation (

$31,000

per month) until the Board of Directors re-instates cash payments to all employees and consultants who are deferring their compensation. During

October 2016

Bassani was granted the right to convert up to

$125,000

of his deferred compensation, at his sole election, at

$0.75

per share, until

March 15, 2018 (

which was expanded on

April 27, 2017

to the right to convert up to

$300,000

of his deferred compensation, at his sole election, at

$0.75

per share, and subsequently extended until

December 31, 2022).

During

February 2018,

the Company agreed to the material terms for a binding

two

-year extension agreement for Bassani's services as CEO, while a detailed, fully executed agreement is still being negotiated and will be finalized in the future. Bassani's salary will remain

$372,000

per year, which will continue to be accrued until there is adequate cash available while negotiations proceed toward the re-instatement of a least a partial cash payment. Additionally, the Company has agreed to pay him

$2,000

per month to be applied to life insurance premiums. On

August 1, 2018,

in the context of extending his agreement to provide services to the Company on a full-time basis through

December 31, 2022)

plus

years after that on a part-time basis, the Company received an interest bearing secured promissory note for

$300,000

from Bassani as consideration to purchase warrants to purchase

3,000,000

shares of the Company's restricted common stock, which warrants are exercisable at

$0.60

and have expiry dates of

June 30, 2025.

The promissory note is secured by a portion of Bassani's

2020

Convertible Obligations and as of

June 30, 2021,

the principal and accrued interest was

$335,965.

For the years ended

June 30, 2021

and

2020,

Brightcap was paid

$155,000

and

$135,000,

respectively.

Execution/exercise bonuses:

As part of agreements the Company entered into with Bassani and Smith effective

May 15, 2013,

they were each granted the following: a) a

50%

execution/exercise bonus which shall be applied upon the effective date of the notice of intent to exercise (for options and warrants) or issuance event, as applicable, of any currently outstanding and/or subsequently acquired options, warrants and/or contingent stock bonuses owned by each (and/or their donees) as follows: i) in the case of exercise by payment of cash, the bonus shall take the form of reduction of the exercise price; ii) in the case of cashless exercise, the bonus shall be applied to reduce the exercise price prior to the cashless exercise calculations; and iii) with regard to contingent stock bonuses, issuance shall be triggered upon the Company's common stock reaching a closing price equal to

50%

of currently specified price; and b) the right to extend the exercise period of all or part of the applicable options and warrants for up to

five

years (

one

year at a time) by annual payments of

$.05

per option or warrant to the Company on or before a date during the

three

months prior to expiration of the exercise period at least

three

business days before the end of the expiration period. Effective

January 1, 2016

such annual payments to extend warrant exercise periods have been reduced to

$.01

per option or warrant.

During the year ended

June 30, 2021,

the Company applied a

75%

execution/exercise bonus on

3,000,000

warrants held by a trust owned by Bassani.

As of

June 30, 2021,

the execution/exercise bonuses ranging from

90%

were applicable to

10,326,600

of the Company's outstanding options and

16,742,789

of the Company's outstanding warrants.

Litigation:

September 10, 2021,

the Company filed a federal lawsuit ‘in rem' to recover the biontech.com domain and the unknown ‘John Doe' who hacked and attempted to steal the website. The litigation has been filed in the United States District Court for the Eastern District of Virginia, Alexandria Division under the heading ‘Bion Environmental Technologies, Inc., Plaintiff, vs John Doe and biontech.com , Defendants' (Case

No.

1:21

-cv-

01034

), seeking recovery of the domain name and other relief as set forth therein.

September 25, 2014,

the Pennsylvania Infrastructure Investment Authority (“Pennvest”) exercised its right to declare the

PA1's

Pennvest Loan in default, accelerated the Pennvest Loan and demanded that

PA1

pay

$8,137,117

(principal, interest plus late charges) on or before

October 24, 2014.

PA1

did

not

make the payment and does

not

have the resources to make the payments demanded by Pennvest.

PA1

commenced discussions and negotiations with Pennvest concerning this matter but Pennvest rejected

PA1's

proposal made during the fall of

2014.

PA1

made a new proposal to Pennvest during

September 2021

which proposal is presently under consideration by Pennvest.

PA1

provides Pennvest with its financial statements (which include a description of system status) annually. During the

2021

fiscal year, Pennvest's auditors requested a ‘corrective action plan' and

PA1

informed Pennvest that “… there is

viable corrective action plan for the Pennvest Loan (‘Loan'). The facility funded by the Loan has been shut down for many years (which has been disclosed in the annual financial reports to Pennvest and in public filings by the parent of Bion PA

LLC) and the technology utilized in the facility is now obsolete. The facility has

not

been commercially operated for approximately

six

years and has generated

zero

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

actions have yet taken place.

PA1

and the Company are currently discussing proposals with Pennvest seeking full resolution of these matters. The Company anticipates additional communication with Pennvest on this matter during the current year. It is

not

possible at this date to predict the final outcome of this matter, but the Company believes it is likely that that the equipment will be sold with the proceeds delivered to Pennvest during the

2022

fiscal year. However, the resolution of these matters including manner and means of such equipment sale has

not

been agreed upon as of this date.

PA1

will evaluate the appropriate manner to resolve/wrap-up its business over the balance of the current fiscal year.

During

August 2012,

the Company provided Pennvest (and the PADEP) with data demonstrating that the Kreider

system met the ‘technology guaranty' standards which were incorporated in the Pennvest financing documents and, as a result, the Pennvest Loan is now solely an obligation of

PA1.

litigation has commenced related to this matter but such litigation is likely if negotiations do

not

produce a resolution (Note

and Note

The Company currently is

not

involved in any other material litigation.