STOCKHOLDERS' EQUITY:

12 Months Ended

Jun. 30, 2023

Equity [Abstract]

STOCKHOLDERS' EQUITY:

7.       STOCKHOLDERS' EQUITY:

Debt Modification to Additional paid in capital

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. Because the modifications where with affiliates that are related parties, the debt modification was treated as an equity transaction. The Company recorded a deemed dividend for the reductions.

Mark A. Smith (the Company’s President)(“Smith”), Dominic Bassani (the Company’s Chief Operating Officer)(“Bassani”) and Ed Schafer (Director)(“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 and the adjusted portion of the September 2015 Convertible Notes were renamed Adjusted September 2015 Convertible Notes. The Adjusted 2020 Convertible Obligations of Smith, Bassani and Schafer are convertible into Units at prices of $.0946, $0953, and $.0953, respectively, and the Adjusted September 2015 Convertible Notes may be converted at the sole election of the noteholders into restricted common shares of the Company at a conversion price of $0.115 per share. The adjusted conversion prices slightly reduce the securities to be issued on conversion of each instrument from the amount receivable under the unadjusted instruments. The Adjusted 2020 Convertible Obligations and Adjusted September 2015 Convertible Notes do not accrue any interest until their maturity date (July 1, 2024). After the adjustment, the Company owed Smith, Bassani (and trust) and Schafer $262,154, $434,016 and $96,364, respectively, of Adjusted 2020 Convertible Obligations and Bassani and Schafer, respectively, $24,230 and $4,012 of Adjusted September 2015 Convertible Notes. The debt modification was treated as an equity transaction because the modifications were with affiliates that are related parties.

The Adjusted 2020 Convertible Obligations and Adjusted September 2015 Convertible Notes do not accrue any interest until their maturity date (July 1, 2024). The Company treated this as an equity transaction and recorded the reduction of debt through additional paid in capital at the net present value of the modified debt agreements. This resulted in an increase to Additional Paid in Capital of $3,522,000 at the modification date and a reduction of additional paid in capital of $14,051 for the year ended June 30, 2023 for the adjustment to the net present value of the modified debt agreements.

Series B Preferred stock:

Since July 1, 2014, the Company had 200 shares of Series B redeemable convertible Preferred stock outstanding with a par value of $0.01 per share, convertible at the option of the holder at $2.00 per share, with dividends accrued and payable at 2.5% per quarter. The Series B Preferred stock is mandatorily redeemable at $100 per share by the Company three years after issuance and accordingly was classified as a liability. The 200 shares had reached their redemption date and the Company approved the redemption of the Series B preferred stock during the year ended June 30, 2022. The 200 shares of Series B redeemable convertible Preferred stock were redeemed for $41,000, which included the $21,000 in accrued dividend payable.

During the years ended June 30, 2023, and 2022, the Company declared dividends of nil and $1,000 respectively. The dividends are classified as a component of operations as the Series B Preferred stock is presented as a liability in these financial statements. There is no liability at June 30, 2023.

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 704,309 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, 2023, the Company entered into a subscription agreement to sell 2,000,000 shares of restricted and legended common stock of which 1,800,000 shares were purchased on January 10, 2023 and the other 200,000 shares were purchased on December 31, 2022 for total proceeds during the year ended June 30, 2023 $2,000,000.

During the year ended June 30, 2023, the Company entered into subscription agreements to sell 975,000 units at a price of $1.60, with each unit consisting of one share of the Company’s restricted common stock and one half warrant to purchase one share of the Company’s restricted common stock for $2.40 per share with an expiry date of June 30, 2024, and pursuant thereto, the Company issued 975,000 units for total proceeds of $1,560,000, in aggregate. The Company paid commissions of $86,400 on the sale of units.

During the year ended June 30, 2023, 175,114 warrants were exercised to purchase 175,114 shares of the Company’s common stock at $0.75 per share for total proceeds of $131,335.

During the year ended June 30, 2023, the Company entered into subscription agreements to sell units for $1.00 per unit, with each unit consisting of one share of the Company’s restricted common stock and one warrant to purchase one share of the Company’s restricted common stock for $0.75 per share with an expiry date of December 31, 2024, and pursuant thereto, the Company issued 346,230 units for total proceeds of $346,230.

During the year ended June 30, 2023, the Company issued 50,000 shares of the Company’s common stock to a consultant for services. The shares were issued at $1.60 per share for a total value of $80,000.

During the year ended June 30, 2023, the Company issued 32,259 shares of the Company’s common stock to a consultant for services. The shares were issued at $1.55 per share for a total value of $50,000.

During the year ended June 30, 2023, Smith elected to convert $30,000 in principal and $20,000 in accrued interest from the 2020 Convertible Obligation to 100,000 units at $.50 per unit, with each unit consisting of one share of the Company’s restricted common stock and one warrant to purchase one share of the Company’s restricted common stock for $0.75 per share until December 31, 2024.

During the year ended June 30, 2023, Smith elected to convert $136,462 in principal of his Adjusted 2020 Convertible Obligation into 1,442,514 units at $0.0946 per unit, with each unit consisting of one share of the Company’s restricted common stock and one warrant to purchase one share of the Company’s restricted common stock for $0.75 per share until March 2026. See above and Note 6 for more detail.

Warrants:

As of June 30, 2023, the Company had approximately 22.5 million warrants outstanding, with exercise prices from $0.60 to $2.40 and expiring on various dates through November 9, 2026.

The weighted-average exercise price for the outstanding warrants is $0.80, and the weighted-average remaining contractual life as of March 31, 2023 is 1.6 years.

During the year ended June 30, 2023, Smith elected to convert $30,000 in principal and $20,000 in accrued interest from the 2020 Convertible Obligation to 100,000 units at $.50 per unit, with each unit consisting of one share of the Company’s restricted common stock and one warrant to purchase one share of the Company’s restricted common stock for $0.75 per share until three years after the date of conversion.

During the year ended June 30, 2023, Smith elected to convert $136,462, in aggregate, of his Adjusted 2020 Convertible Obligation into 1,442,514 units at $0.0946 per unit, with each unit consisting of one share of the Company’s restricted common stock and one warrant to purchase one share of the Company’s restricted common stock for $0.75 per share until March 2026. In more detail: a) effective March 8, 2023, Smith converted $70,000 of his Adjusted 2020 Convertible Obligation into 739,958 Units (each Unit consisting one share and one warrant); b) effective March 31, 2023, Smith converted $29,888 of his Adjusted Convertible Obligation into 315,948 Units (each Unit consisting one share of common stock and one warrant); and c) effective June 4, 2023, Smith converted $36,573 of his Adjusted Convertible Obligation into 386,608 Units (each Unit consisting one share of common stock and one warrant). Smith donated to charitable organizations and/or gifted to family members and others a large portion of these securities (700,000 common shares and 955,000 warrants, in aggregate) while retaining direct ownership of 292,514 common shares and 116,566 warrants and indirect ownership of 450,000 common shares and 370,948 warrants (owned by his wife). The warrants are exercisable for three years from conversion dates. Subsequent to June 30, 2023, Smith converted additional portions of his Adjusted Convertible Obligation. See Note 12.

During the twelve months ended June 30, 2023, the Company approved the issuance of 210,000 warrants, in aggregate, to three new members of its Advisory Group for advisory and/or consulting services of $21,000, in aggregate. The warrants are exercisable at $1.50 to $1.60 and expire in August 2025.

During the twelve months ended June 30, 2023, the Company approved the modification of existing warrants held by one former consultant and investors, which extended certain expiration dates. The modifications resulted in incremental non-cash compensation of $154,932 and interest expenses of $72,589.

During the twelve months ended June 30, 2023, 175,114 warrants were exercised to purchase 175,114 shares of the Company’s common stock at $0.75 per share for total proceeds of $131,335.

Effective May 1, 2022, an entity affiliated with William O’Neill (“O’Neill”) was issued 1,000,000 Incentive Warrants exercisable at $1.00 per share until April 30, 2026 of which up to 700,000 Incentive Warrants may be cancelled if O’Neill is not renewed at 13 months and/or fails to serve the entire contract term thereafter. These warrants each have a 75% exercise price adjustment provision if the terms set forth therein are met. 700,000 of the warrants are vesting through May 1, 2023 and 2024. The vesting resulted in non-cash compensation of $41,653 during the year ended June 30, 2023.

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 30,000,000 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 36,000,000 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 has received grants pursuant to its terms,

On March 15, 2023, the Company granted 30,000 options under the 2006 Plan to two consultants. The options vest equally in thirds on March 20, 2023, June 20, 2023 and September 30, 2023.

On February 7, 2023, the Company granted an aggregate of 275,000 options under the 2006 Plan to five employees/consultants/directors including: i) 25,000 options to Jon Northrop for service as director, ii) 100,000 to two consultants and iii) 150,000 to employees.

On May 9, 2023, the Company granted 500,000 options under the 2006 Plan to Bill O’Neill. 250,000 of these options vest on June 1, 2024 and 250,000 options vest on June 1, 2025; all options expire on June 30, 2026.

The Company recorded compensation expense related to employee stock options of $249,744 and $419,370 for the years ended June 30, 2023 and 2022, respectively. The Company granted 805,000 and 730,000 options for the year ended June 30, 2023 and 2022, respectively.

The fair value of the options granted during the years ended June 30, 2023 and 2022 were estimated on the grant date using the Black-Scholes option-pricing model with the following assumptions:

	Weighted Average, June 30, 2023			Range, June 30, 2023			Weighted Average, June 30, 2022			Range, June 30, 2022
Volatility		65	%		64% -66	%		65	%		65%-69	%
Dividend yield		—			—			—			—
Risk-free interest rate		3.83	%		3.67% – 4.11			2.99	%		1.71%-3.01
Expected term (years)		3.44			2.84 to 3.95	%		3.71			3.04 to 3.72	%

The expected volatility was 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.

A summary of option activity under the 2006 Plan for year ended June 30, 2023 is as follows:

	Options		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life		Aggregate Intrinsic Value
Outstanding at July 1, 2022		11,201,600	$	0.80		2.7	$	4,429,263
Granted		805,000		—
Exercised		—		—
Forfeited		—		—
Expired		—		—
Outstanding at June 30, 2023		12,006,600	$	0.85		1.83	$	5,085,659

The total fair value of stock options that vested during both the year ended June 30, 2023 and 2022 was $249,744 and $419,370, respectively. As of June 30, 2023, the Company had no unrecognized compensation cost related to stock options.