Cow-abunga!

The good folks at Bion Environmental Technologies (BNET:  OTC/QB) have an excellent reason to be joyful.  The aspiring waste recycler just received third-party endorsement for an organic fertilizer product made from livestock waste using Bion’s proprietary processing technology.  The Organic Materials Review Institute provides independent review of products used in organic agriculture, giving farmers and ranchers comfort in choosing fertilizers, feed and medicines. 

Bion can produce a 0.5% ammonium bicarbonate solution that can be used as a source of nitrogen for crops. Ammonium bicarbonate is an inorganic compound with the formula NH5CO3.  It is a colorless solid that degrades easily to carbon dioxide and ammonia.  When produced in an organic process ammonium bicarbonate is attractive for crop production.

The company has developed an integrated system to recover nutrients from livestock waste streams.  Anaerobic digestion is used to produce methane, leaving residual materials that contain the dissolved ammonium bicarbonate.  Upgrades to the system have brought nutrient recovery rates to over 95%.  Bion has patented the process in the U.S. and several other countries in South America and the European Union.

Waste recycling developers like Bion count on the high cost of waste disposition to help drive the economics of capital intensive processing systems.  Bion is no exception.   Livestock producers must comply with strict environmental standards to prevent contamination of water ways.  As a consequence, disposal of livestock waste represents a significant cost.  If the waste can be turned into a feedstock for valuable chemical product streams, it is all the better for the livestock owner. 

Bion has yet to realize a return on its development work.   No product sales have been made so the company had to use $276,345 in cash resources to support operations during the three months ending March 2020.  Bion closed out the quarter ending March 2020, with $356,619 in cash resources and raised an additional $150,000 after the close of the quarter by selling commons stock and warrants.  The company was also approved for a $34,800 loan from the Paycheck Protection Program.

The road has been long and bumpy for Bion on its journey to a feasible waste processing system.  The recent independent recognition of its product is just one more step closer to a viable commercial product.  So yes, it is time to shout ‘cowabunga’ and celebrate cow poo-to-fertilizer, but shareholders would have even more to cheer if management followed through with steps to get this process into the hands of paying customers.    

Neither the author of the Small Cap Strategist web log, Crystal Equity Research nor its affiliates have a beneficial interest in the companies mentioned herein.