Bion Environmental Technologies, Inc.

Overview

There is an increasing focus in the U.S. on water quality issues, particularly concerning the levels of dissolved nutrients such as nitrogen & phosphorous. Excessive levels of these nutrients have been linked to changes in the Florida Everglades ecosystem, the "dead zone" in the Gulf of Mexico, fish kills in the rivers of NC & MD, & contamination in underground aquifers in many parts of the country.

A major source of this pollution is confined to animal raising operations - large hog & dairy farms, cattle feedlots, & poultry farms. A 1997 census indicates that there are in excess of 107 million cattle, 61 million hogs, & 1.6 billion fowl in the U.S.

They produce a staggering 1.4 billion tons of waste per year. It doesn't take too much imagination to envision the odor & environmental impact of this serious problem. The public is up-in-arms & legislation is popping up all around the country in an effort to control the problem. BION has spent years of research developing the technology required to harness & manage this waste & make a profit doing it. BION's system has tremendous potential in treating municipal & industrial wastewater as well.

History

BION was incorporated 9/89 with the mission of solving industrial & agricultural waste problems utilizing biophysics, chemical engineering, & management principals. Its early years were largely R&D & its initial sales & installations were agricultural wastewater treatment systems.

It soon recognized the value of the by-product these systems generated &, in 1993, added organic soil/fertilizer production to its business. During the past two years, it emerged from R&D to the sales & marketing of its patented Bion NMS™ Nutrient Management System & BionSoil by-products produced by those systems.

The main thrust has been to solve environmental problems (ground & surface water contamination & odor) faced by agricultural & food processing facilities. BION has contracted with large commercial animal operations where its systems already demonstrate the benefits of its waste treatment systems. The results have been most encouraging & have received considerable notoriety & press.

In 1998, BION began test-marketing its BionSoil organic soil/fertilizer product in nurseries & garden care outlets in western NY. The soil contains beneficial microbes & organic nutrients instead of the chemicals so prevalent today. Beneficial bacteria & other microorganisms help to stabilize otherwise leachable forms of nutrients by converting them into amino acids & other stable, plant-available forms.

Business/Products

A "BionAnimal" is a unit of animals that produces one cubic yard of BionSoil annually -- approximately equal to the waste produced by one market hog, 1/10 dairy cow, 1/2 steer, 4.4 nursery pigs, or 50 layer chickens.

As of 2/99, Bion operated 13 animal waste systems in five states. An additional 63 systems are in various stages of design, permitting, & construction. When online, these systems will provide waste treatment for approximately 1.1 million BionAnim-als. These Bion NMS™ installations solve a broad range of disposal problems at greatly reduced costs. In many cases, they improve the profitability of the user.

They rely on natural, biological processes that do not require the expensive structures of alternative waste treatment technolo-gies. Bion NMS™ creates a self-contained natural habitat & signifi-cantly reduces odor.

The system treats both solid & liquid portions of the manure wastestream through a complex series of natural microbial processes. It consists of bioreactors, solid ecoreactors, temporary water storage areas, & polishing ecoreactors, all of which meet local regulatory requirements.

BionSolids, the solid materials produced as a result of the bio-conversion of manure & urine by Bion NMS™ , are periodically "harvested," & removed from the farm site to be sold as BionSoil™ . The remaining water is available for many uses throughout the animal operation. The high concentration of aerobic bacteria in the system assures that the odor-producing portion of the waste stream is quickly absorbed, virtually eliminating the odor -- a welcome result for the community.

Studies have shown that BionSoil™ has a ready market in home gardens, landscaping, potting soils, organic farming, soil remediation, golf courses, nurseries, sod farms, groves, field crops, & many other applications. Marketing of this product is currently underway.

Market

As recently as 8/97, BION had just 70,000 BionAnimals under contract. Today, when all of its potential systems are online, BION will provide waste treatment for about 1.1 million BionAnimals... a tenfold increase in 14 months. It now serves such major producers as Continental Grain, TDM, & Murphy Family Farms, a multi-system, multi-state hog producer. Discussions are underway with a number of other top pork producers.

Based on the U.S. Department of Agriculture census, the company estimates there are 560 million BioAnimals on farms in the U.S. Considering the economics of its system, the company estimates that about one third of these would be candidates for the Bion NMSTM system. Due to the growth of the industry, management believes it will have over 5 million BioAnimals under contract by 2002. The market for BION's premium natural BionSoil products is forecasted to be substantial. Nurseries currently consume 120 million cubic yards of soil annually, & the needs of golf courses & the turf industry are equally large. Test-marketing of BionSoil in the spring of 1998, with no advertising or national retail tie-in, was pegged at around $40 per cubic yard... an encouraging number.

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