SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C.  20549
                                  FORM 10-QSB


(Mark One)
[X]     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED   September 30, 1997 OR
                                                    --------------------
[ ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 OR THE TRANSITION PERIOD FROM __________ TO __________


COMMISSION FILE NUMBER    0-19333
                       ----------


                      Bion Environmental Technologies, Inc.
     ------------------------------------------------------
     (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)


      Colorado                           84-1176672
(STATE OR OTHER JURISDICTION OF         (I.R.S. EMPLOYER
 INCORPORATION OR ORGANIZATION)        IDENTIFICATION NO.)


   555 17th Street, Suite 3310
      Denver, Colorado                         80202 
  ----------------------------               -------
   (ADDRESS OF PRINCIPAL                   (ZIP CODE)
      EXECUTIVE OFFICES)


           (303) 294-0750    
--------------------------------------
 (REGISTRANT'S TELEPHONE NUMBER,
     INCLUDING AREA CODE)



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.    Yes  X    No___
                                                            ---

The  number  of shares outstanding of registrant's classes of common stock, as
of  November  11,  1997:

     Common  Stock,  No  Par  Value,  3,906,022
Series  B  Convertible  Preferred  Stock,  $.001
  Par  Value,  18,834  shares

<PAGE>

                     Bion  Environmental  Technologies,  Inc.            




                                      INDEX



PART  I                    FINANCIAL INFORMATION                      PAGE NO.
-------                    ---------------------                      --------


ITEM  1                    FINANCIAL  STATEMENTS

                           Balance  Sheets:
                             June  30,  1997  and
                             September  30,  1997                         F2
 
                           Statements  of  Operation:
                             For  the  Three  Month  Periods  Ended
                             September  30,  1996  and
                             September  30,  1997                         F3

                           Statements  of  Cash  Flows:
                             For  the  Three  Month  Periods  Ended
                             September  30,  1996  and
                             September  30,  1997                        F4-F5

                           Statement  of  Changes  in  Stockholders
                             Equity                                      F6

                           Notes  to  Financial  Statements             F7-F11


ITEM  2                    MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF
                             FINANCIAL  CONDITION  AND  RESULTS
                             OF  OPERATIONS                               3



PART  II          OTHER  INFORMATION
--------          ------------------

ITEM  1-6                                                              16-17



<PAGE>


     FINANCIAL  INFORMATION


PART  I

ITEM  1.    FINANCIAL  STATEMENTS


<PAGE>
                    BION ENVIRONMENTAL TECHNOLOGIES, INC.
                             AND SUBSIDIARIES


                        Consolidated Balance Sheet

<TABLE>
<CAPTION>


                                              September  30,      June  30,
                                                  1997               1997
                                              -------------       ---------
                                               (Unaudited)        (Audited)
<S>                                                <C>               <C>
     Assets
Current  assets
 Cash  and  cash  equivalents                 $      6,169         $   9,232
 Accounts  receivable                                   98             5,042
 Contract  receivable (net of allowance
  of $30,000)                                       56,059            67,921
 Work  in  progress (net  of  allowance
  of  $30,000)                                     157,385           168,000
 Assets held for resale                            373,000           600,000
     Total  current  assets                        592,711           850,195

Property  and  equipment,  net                     233,001           244,824

Other  assets
 Patents,  net                                      38,459            38,660
 Deferred  long-term  contract  costs               77,333            77,333
 Other                                               8,694            11,694
      Total  other  assets                         124,486           127,687

Total  assets                                     $950,198        $1,222,706


     Liabilities  and  Stockholder  (Equity)
Current  liabilities
 Accounts  payable                              $  284,754        $  302,820
 Accounts  payable  -  related  party               18,329            29,426
 Line-of-credit  -  stockholder                    105,000           105,000
 Notes  payable                                    192,000           325,000
 Notes  payable  -  stockholders                    82,171            82,171
 Capital  lease  obligations                        63,060            62,546
 Accrued  expenses                                  41,028            36,359
 Accrued  payroll                                  188,250           135,500
     Total  current  liabilities                   974,592         1,078,822

Long-term  liabilities
 Capital  lease  obligation                        132,480           149,488
 Deferred  contract  revenue                       181,000           181,000
     Total  liabilities                          1,288,072         1,409,310

Commitments  and  contingencies

Stockholders'  (deficit)
 Preferred  stock,  $.001  par  value  
  10,000,000 shares  authorized,  18,834 
  series  B (September  30,  1997  and 
  June  30,  1997) shares  issued  and
  outstanding  (liquidation preference
  of  $124,330)                                    95,482            95,482
 Common  stock, no par value, 100,000,000
  shares authorized, 3,840,922 (September  30,
  1997)  and  3,696,816  (June  30,  1997)
  shares  issued  and  outstanding              8,403,051         7,983,274
 Common  stock  subscribed                        672,819           627,822
 Accumulated  deficit                          (9,509,226)       (8,893,182)
     Total  stockholders'  (deficit)             (337,874)         (186,604)

Total  liabilities  and  stockholders'(deficit)  $950,198        $1,222,706

</TABLE>


                         BION ENVIRONMENTAL TECHNOLOGIES, INC.
                                  AND SUBSIDIARIES

                         Consolidated Statements of Operations

<TABLE>
<CAPTION>


                                                  Three  Months  Ended
                                                     September  30
                                                  --------------------
                                                  1997             1996
                                                --------        ----------
                                               (Unaudited)      (Unaudited)
<S>                                              <C>               <C>

Contract  revenues                             $    24,837      $   35,547

Contract  costs                                     93,554         112,182
                                                    ------         -------

     Gross profit (loss)                           (68,717)        (76,635)

General  and  administrative  expenses             469,267         341,432
                                                    -------        -------

Loss  from  operations                            (537,984)       (418,067)

Other  income  (expense)
 Interest  income                                       14         105,130
 Interest  expense                                 (22,904)        (67,935)
 Research  and  development                        (52,757)        (34,551)
 Gain  (Loss)  on  marketable  equity
   securities                                          130               0
                                                   ---------      ---------


Net  (loss)                                      $(613,501)      $(415,423)
                                                  =========       =========

(Loss)  per  weighted  average  share  of
  common  stock                                  $   (0.16)      $   (0.24)
                                                  =========       =========

Weighted  common  shares  outstanding            3,773,656       1,717,575
                                                 =========       =========
</TABLE>


<PAGE>


                     BION ENVIRONMENTAL TECHNOLOGIES, INC.
                                AND SUBSIDIARIES

                  Consolidated  Statements  of  Cash  Flows


<TABLE>
<CAPTION>
                                                  Three  Months  Ended
                                                      September  30,
                                                 ----------------------
                                                   1997           1996
                                                 --------       --------
                                                (Unaudited)   (Unaudited)
<S>                                                  <C>           <C>
Cash  flows  from  operating  activities
 Net  (loss)                                    $(613,501)     $(415,423)
 Adjustments  to  reconcile  net  loss  to
  net  cash  used  in  operating
  activities  -
   Depreciation  and  amortization                 12,724          4,960
   Issuance  of  subscribed  stock  for 
    services                                       47,500              0
   Issuance  of  stock  for  services
    and  interest                                  76,553         44,475
     Change  in  assets  and  liabilities  -
      Contract  receivables                        27,421        (16,784)
      Prepaid  expenses                             3,000            181
      Accounts  payable  and  accrued
       liabilities                                (27,037)        29,330
       Accrued  payroll                            52,750         32,500

        Net  cash  used  in  operating 
          activities                             (420,590)      (320,761)

Cash  flows  from  investing  activities
 Investments  in  patents                            (700)             0
        Net  cash  used  in  investing 
          activities                                 (700)             0

Cash  flows  from  financing  activities
 Payments  on  notes  payable                    (133,000)             0
 Line  of  credit                                       0         75,000
 Proceeds  from  sale  of  stock                  340,721        151,216
 Payments  on  capital  lease  obligations        (16,494)        (7,815)
 Proceeds  from  the  sale  of  warrants                0         31,250
 Proceeds  from  the  sale  of  assets,  net  of
  selling  expenses                               227,000              0
                                                  -------       --------

       Net cash provided by financing
         activities                               418,227        249,651
                                                  --------      ---------

Net decrease in cash and cash equivalents          (3,063)      (71,110)

Cash  and  cash  equivalents  at beginning of
  period                                            9,232       118,612
                                                   ------     ----------

Cash  and  cash  equivalents  at  end  of  
 period                                          $  6,169     $  47,502
                                                  =======      ========
</TABLE>



Footnote:
     Supplemental  disclosure  of  cash  flow  information
     Cash  paid  during  the  quarter  for  interest  was  $22,904  (1997)
 and  $67,935  (1996).

     Supplemental  disclosure  of  non-cash  financing  activities
     For  the  quarter  ended  September  30,  1997  -
     Declared  and  accrued  dividends of $2,543 for preferred stock Series B.
     Converted  $2,503  of  common  stock subscribed into 598 shares of common
     stock.

     For  the  quarter  ended  September  30,  1996  -
     Entered  into  a  capital  lease  for  equipment  for  $69,239.
     Declared  and  accrued  dividends  of  $2,544  for  preferred  stock 
     Series B.


<PAGE>
                       BION ENVIRONMENTAL TECHNOLOGIES, INC.
                                 AND SUBSIDIARIES

        Consolidated  Statement  of  Changes  in  Stockholders'  Equity

<TABLE>
<CAPTION>
                            
                     Series  "B"                            
                   Preferred  Stock       Common  Stock           Common   
                  ------------------    -------------------        Stock    
                   Shares        Amount    Shares      Amount    Subscribed   
                  --------     --------    ------     --------    ----------    
    <S>              <C>           <C>        <C>         <C>        <C>     

Balances at
 June 30,
 1997              18,834     $ 95,482   3,696,816   $7,983,274     $627,822 

Conversion  of
 common  stock
 subscriptions
 to common stock        -            -         598   $    2,503           -

Common stock
 subscriptions
 for  services          -            -          -            -        47,500  

Issuance of common
 stock for cash         -            -     123,849      340,721           -   

Issuance of common
 stock for services     -            -      19,659       76,553           -

Dividends declared,
 preferred stock
 Series B               -            -         -             -            -

Net (loss) for the
 period  ended
 September 30, 1997     -            -         -             -            -   

Balances  at
 September 30, 1997   18,834    $ 95,482  3,840,922  $8,403,051      $672,819

</TABLE>


Continued below


<TABLE>
<CAPTION>

                                           Accumulated
                                             Deficit              Total
                                           -----------         -----------
<S>                                            <C>                   <C>

Balances at June 30, 1997                  $(8,893,182)       $  (186,604)

Conversion of common stock
 subscriptions to common stock                    -                   -

Common stock subscriptions for
 services                                         -                47,500

Issuance of common stock for cash                 -               340,721

Issuance of common stock for services             -                76,553

Dividends declared, preferred stock
 Series B                                      (2,543)             (2,543)

Net (loss) for the period ended
 September 30, 1997                          (613,501)           (613,501)

Balances at September 30, 1997            $(9,509,226)           (337,874)

</TABLE>

<PAGE>
                     BION ENVIRONMENTAL TECHNOLOGIES, INC.
                               AND SUBSIDIARIES

                  Notes to Consolidated Financial Statements


Note  1  -  Summary  of  Accounting  Policies
---------------------------------------------

The  summary  of  the  significant  accounting  policies of Bion Environmental
Technologies,  Inc.  ("Company") is incorporated by reference to the Company's
annual  report  on  Form  10-KSB  at  June  30,  1997.

The  accompanying  unaudited  condensed  financial  statements and disclosures
reflect  all  adjustments  (all of which are normal recurring accruals) in the
ordinary  course  of business which in the opinion of management are necessary
for a fair presentation of the results of operations, financial positions, and
cash flow of the Company.  The results of operations for the periods indicated
are  not  necessarily  indicative  of  the  results  for  a  full  year.

Note  2  -  Continued  Operations
---------------------------------

The  accompanying  financial  statements have been prepared on a going concern
basis  which  contemplates  the  realization  of  assets  and  liquidation  of
liabilities  in  the ordinary course of business.  In prior years, the Company
had  been  in the development stage and its principal activities had consisted
of  raising  capital,  performing  research and development activities and the
development  of  its  products.    The  Company  has  not  yet  begun  earning
significant  revenue  from its planned principal operations.  Consequently, as
of  September  30,  1997, the Company has incurred accumulated losses totaling
$9,479,226,  resulting  in  an  accumulated stockholders' deficit of $337,874.
Cash  flows from current operations are not sufficient to meet the obligations
of  the  Company.    Management  plans  include  continuing  efforts to obtain
additional capital to fund operations until contract sales along with sales of
BionSoil'  are  sufficient to fund operations.  There can be no assurance that
the Company will be able to successfully attain profitable operations or raise
sufficient  capital.

Note  3  -  Cost  and  Estimated  Earnings  on  Uncompleted  Contracts
----------------------------------------------------------------------

The  Company's  costs  and  estimated earnings on uncompleted treatment system
contracts  consist  of  the  following:

<TABLE>
<CAPTION>

                                                September  30,      June  30,
                                                     1997              1997
                                                 -----------       ----------
<S>                                                 <C>               <C>

Costs  incurred  on  contracts                   $1,531,811       $1,434,719
Estimated  (losses)                                (605,575)        (536,858)
                                                -----------       ----------
                                                    926,236          897,861
   Less  billings  to  date                        (872,518)        (833,528)
                                                -----------       ----------
                                                 $   53,718       $   64,333
                                                ============     ============
</TABLE>


<PAGE>
------


Note  4  -  Capital  Structure
------------------------------

Because  the  Company has a relatively complex capital structure for its size,
the  following  capital  structure  details  are  set  forth:

     Common  Stock
     -------------

As of November 5, 1997 the Company had 3,924,856 shares of Common Stock issued
and  outstanding,  treating  all  18,834  shares  of  Series B Preferred as if
converted  into  18,834  shares  of  common  stock.   Additionally, there were
176,738  shares  of  subscribed stock.  If the Series B Preferred is converted
and  all  subscribed  stock  is issued the Company would have 4,101,594 shares
outstanding.

     Options  and  Warrants
     ----------------------

As  of November 5, 1997 (including all options and warrants listed in Footnote
5,  Subsequent  Events)  the  Company  has outstanding options and warrants as
follows:

Options outstanding under the Fiscal Year 1994 Incentive Compensation Plan and
the  Non  Employee  Director  Compensation  Plan:

<TABLE>
<CAPTION>
<S>                                       <C>

Director  ($1.72)                        10,000
Director  ($2.27)                        10,000
                                       --------
                                         20,000

Employee  ($4.00)                        45,262
Employee  ($5.00)                        21,500
Employee  ($6.00)                        77,756
Employee  ($6.25)                        32,000
Employee  ($6.75)                        30,000
Employee  ($7.25)                        10,000
Employee  ($8.00)                        27,754
Employee  ($10.00)                       10,000
Employee  ($12.50)                       10,000
Employee  ($15.00)                       10,000
                                         ------
                                        274,272
</TABLE>

Warrants  outstanding  as  of  November  5,  1997  consist  of  the following:

<TABLE>
<CAPTION>
<S>                                               <C>

$3.00  warrants:
 exercisable  1/22/96  through  1/21/01:         6,730
 exercisable  8/21/96  through  8/20/01:        14,500
 exercisable  9/13/96  through  9/12/01:         5,550
                                               ---------
    Total  $3.00  warrants                      26,780

$4.00  warrants:
 exercisable  6/5/97  through  6/30/99:         35,000
 exercisable  9/15/97  through  12/31/01:       25,000
 exercisable  8/1/97  through  7/31/02:         40,000
 exercisable  1/15/98  through  7/31/02:        75,000
 warrants  are  currently  unearned  partial
 compensation  under  investment  banking
 agreements,  if  earned;
 exercisable  6/1/98  through  12/31/98:        50,000
                                               --------
               Total  $4.00  warrants          225,000

$5.00  warrants:
 exercisable  6/20/96  through  6/20/99:        25,000
 exercisable  8/21/96  through  8/20/01         10,000
                                              --------
                Total  $5.00  warrants          35,000

$6.00  warrants:
 exercisable  6/5/97  through  6/30/00:        100,000
 exercisable  9/15/97  through  12/31/01        25,000
 exercisable  1/15/98  through  7/31/02:        65,000
 exercisable  3/1/98  through  10/1/99:        100,000
 exercisable  6/1/98  through  12/1/98:         50,000
 exercisable  6/9/98  through  12/31/01:         1,250
 exercisable  6/9/99  through  12/31/01:         1,250
 exercisable  6/9/00  through  12/31/01:         1,250
 exercisable  1/1/01  through  12/31/01:     4,863,418
 exercisable  2/1/97  through  12/31/01:        10,000
 exercisable  4/21/97  through  4/20/02:        13,837
                                              --------
             Total  $6.00  warrants          5,231,005

$8.00  warrants:
 exercisable  2/1/97  through  12/31/01:        10,000
 exercisable  8/1/97  through  7/31/02:         40,000
 exercisable  9/15/97  through  12/31/01:       20,000
 exercisable  6/1/98  through  12/31/01:         1,250
 exercisable  6/1/99  through  12/1/99:         50,000
 exercisable  6/9/99  through  12/31/01:         1,250
 exercisable  3/1/00  through  10/1/01:         50,000
 exercisable  6/9/00  through  12/31/01:         1,250
                                                 -----
               Total  $8.00  warrants          173,750

$10.00  warrants:
 exercisable  2/1/97  through  12/31/01:        10,000
 exercisable  4/9/98  through  4/9/99:         375,000
 exercisable  6/9/98  through  12/31/01:         1,250
 exercisable  9/15/98  through  12/31/01:       20,000
 exercisable  6/9/99  through  12/31/01:         1,250
 exercisable  6/9/00  through  12/31/01:         1,250
 exercisable  3/1/02  through  10/1/03:         50,000
 exercisable  1/1/03  through  12/31/03:     1,387,154
                                             ---------
               Total  $10.00  warrants       1,845,904

$12.00  warrants:
 exercisable  8/1/97  through  7/31/02:         80,000
                                            ----------
               Total  $12.00  warrants          80,000

$12.50  warrants:
 exercisable  2/1/97  through  12/31/01:        10,000
 exercisable  6/9/98  through  12/31/01:         1,250
 exercisable  6/9/99  through  12/31/01:         1,250
 exercisable  6/9/00  through  12/31/01:         1,250
 exercisable  9/15/99  through  12/31/01:       20,000
                                                ------
                Total  $12.50  warrants         33,750

$15.00  warrants:
 exercisable  2/1/97  through  12/31/01:        10,000
 exercisable  9/15/99  through  12/31/01:       20,000
                                              --------
                Total  $15.00  warrants         30,000
                                            ----------

Total  of  all  warrants  currently  
 outstanding                                 7,681,189

</TABLE>


Note  5  -  Subsequent  Events
------------------------------

In  October  1997  the  Company  made  awards  to six employees under the 1994
Incentive  Stock  Option  Plan.   The Company granted the following options to
these  employees:

<TABLE>
<CAPTION>
        
        Exercise  Price                 Vesting
     Options       Per  Share            Period
     -------       ----------            ------
        <S>            <C>                 <C>
     10,000           $5.40           10/03/97-12/31/97
     20,000           $6.25           10/03/97-12/31/97
     25,000           $6.75           10/07/97-03/31/98

</TABLE>

The  following cash, restricted and legended common stock, and options will be
issued  as  part  of  an  employee's  separation agreement:  Cash: $4573.06 in
reimbursement of expenses; 3600 shares of legended and restricted common stock
to  be  issued  on  January 15, 1998 (currently subscribed); options under the
Fiscal  Year  1994  Incentive Plan: 5,000 shares at an exercise price of $6.25
per  share (exercisable 10/06/97-12/31/98), 10,000 shares at an exercise price
of  $6.25  per  share  (exercisable  10/06/97  - 09/30/98), 5,000 shares at an
exercise  price  of  $6.75  per  share  (exercisable 12/06/97 - 03/31/99), and
10,000  shares at an exercise price of $7.25 per share (exercisable 10/06/97 -
03/31/99).

As  part  of  an  employment  arrangement the Company issued warrants to a new
employee  to purchase 40,000 shares of common stock at $4.00, 40,000 shares at
$8.00,  and  80,000  shares  at  $12.00 all exercisable for 5 years commencing
August  1,  1997.    Additionally,  the  Company

<PAGE>
cancelled  warrants  previously  issued  to  this  individual  when  he was an
employee  of  Global  Financial  Group,  Inc.  for  25,000  shares  at  $6.00
exercisable  for  6  months  commencing  June  1, 1998, 50,000 shares at $8.00
exercisable  for 6 months commencing June 1, 1999, and 25,000 shares at $10.00
exercisable  for  19 months commencing March 1, 2002.  On January 15, 1998 the
Company  will  issue  50,000  shares  of legended and restricted common stock,
options  under  the Fiscal Year 1994 Incentive Plan for 17,500 shares at $4.00
exercisable  for  54.5 months commencing January 15, 1998, warrants for 75,000
shares  at $4.00, warrants for 65,000 shares at $6.00, and warrants for 50,000
shares  at $12.00 all exercisable for 54.5 months commencing January 15, 1998.

On  October  7,  1997,  the  Company cancelled its consulting agreement in the
amount  of $231,000 with Eximius Investments, Ltd.  The $231,000 was booked as
a  consulting  fee and subscribed stock in the Company's 10-KSB for the fiscal
year  ended  June  30,  1997.

On October 8, 1997, the Company entered into an agreement (the "Agreement") to
design  and  install  a number of its patented Bion NMS animal waste treatment
systems  in  the  states  of  Colorado  and Nebraska.  The Agreement marks the
Company*s initial entry into the Colorado and Nebraska animal raising markets.
The  Agreement  is  subject  to  certain contingencies regarding financing and
other matters which must be resolved by November 15, 1997 (which date has been
extended  to  November  30,  1997  by  mutual  agreement of the parties to the
Agreement,  see Item 5, Other Information).  The Agreement covers Phase I of a
proposed  hog  farm  in eastern Colorado and western Nebraska which will house
330,000  finishing hogs and grants an option for Bion NMS system installations
for  Phase  II  totaling an additional 330,000 hogs. For Phase I the Agreement
calls  for  payment  of  $1,200,000  in  fees  to  the  Company  and an equity
investment  in  the  Company  of  $3,000,000 through the purchase of 1,000,000
Units at a purchase price of $3.00 per Unit (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  at  a  price of $7.00 per share
exercisable  from  the  effective  date of the Agreement until June 30, 1998).
(See  Form  8-K/A  dated  September  30,  1997).

On  Friday,  October  24,  1997,  the  first of the two contract contingencies
relating  to  this  Agreement  was satisfied when Bowman Family Farms of Wray,
Colorado  and  Murphy  Family  Farms of Rose Hill, North Carolina, executed an
agreement  concerning the operation of Phase I (and Phase II in the future) of
this project.  As a result of the Bowman/Murphy agreement only the securing of
financing remains before the Bion/Bowman Agreement to construct these Bion NMS
systems  becomes  effective.


<PAGE>
                     BION ENVIRONMENTAL TECHNOLOGIES, INC.
                               AND SUBSIDIARIES



ITEM  2.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS  OF  OPERATIONS

     The  Company designs, installs and operates advanced waste and wastewater
treatment  systems.    These  systems,  which  incorporate patented biological
technologies, are capable of removing solids, nutrients and other contaminants
from  agricultural,  industrial  and  municipal  wastewater.  In addition, the
agricultural  systems  installed  on  animal  raising  facilities  produce  a
marketable,  nutrient-rich  soil-like  product,  BionSoil.

     The  Company currently has systems treating swine, dairy, fruit and juice
processing,  and  sugar  cane  plantation  waste streams in Florida, New York,
North  Carolina, and Washington. The Company is in the process of designing or
monitoring  the installation of twelve additional systems, raising capital for
operations and future growth, reviewing strategic partners for various aspects
of  the business, continuing a research and development effort on both systems
applications  and  byproducts,  and  strengthening  its  patent  coverage.

Liquidity  and  Capital  Resources
----------------------------------

     The  Company's  current  ratio as of September 30, 1997 was 0.61 : 1.0 as
compared  to  0.79  :  1.0 as of June 30, 1997.  Cash as of September 30, 1997
decreased  to  $6,169  as  compared  to  $9,232  as  of  June  30,  1997.

     During  the  three  months ended September 30, 1997, the Company borrowed
$7,000 from a shareholder at 1% interest per month.  The Company also sold one
portion  of  the  Property  Held For Resale for $242,000.  As a result of this
transaction  the  Company repaid a note payable plus interest in the amount of
$145,401,  paid  closing  costs  of $14,870 and received cash in the amount of
$81,729.

     Also,  during  the three months ended September 30, 1997 the Company sold
123,849  shares  of  restricted  and  legended  common  stock  for net cash of
$340,721,  issued 19,659 shares of restricted and legended common stock valued
at  $76,553  for services, and converted 598 shares of subscribed stock to 598
shares  of restricted and legended common stock valued at $2,503.  The Company
has  increased  subscribed stock by $47,500 for legended and restricted common
stock awarded but not issued to certain employees and an officer as additional
compensation.


<PAGE>
     Effective  September  15,  1997, the Company issued awards to all current
employees (excluding the Company's officers and directors) under the Company's
Fiscal Year 1994 Incentive Plan totaling 27,762 options with an exercise price
of  $4.00 per share, 27,756 options with an exercise price of $6.00 per share,
27,754  options with an exercise price of $8.00 per share, 10,000 options with
an  exercise  price of $10.00 per share, 10,000 options with an exercise price
of  $12.50  per share, and 10,000 options with an exercise price of $15.00 per
share; all of the above options expire on December 31, 2001.  The options will
vest  as  follows: for employees with less than one year of service, the first
third  shall  vest  on  their one year employment anniversary date, the second
third  shall  vest on the second anniversary date, and the last third on their
third  anniversary.    For  employees  with more than one year of service, the
first  third  shall  vest on the above effective date, and the second and last
third  shall  vest  twelve  and  twenty-four  months  thereafter respectively.

     Effective  September  15,  1997,  the  Company authorized the issuance of
restricted  stock  and  warrants  to  purchase stock to M. Duane Stutzman, the
Company's  Chief  Financial  Officer,  as  follows:  (a)  10,000 shares of the
Company's  restricted and legended common stock (subscribed stock), (b) 25,000
warrants  with  an  exercise price of $4.00 per share, 25,000 warrants with an
exercise  price of $6.00 per share, and 20,000 warrants with an exercise price
of  $8.00  per  share,  all  three  classes  of  warrants will vest and become
exercisable  commencing  September  15,  1997;  (c)  20,000  warrants  with an
exercise  price  of $10.00 per share which will vest and become exercisable on
September  15,  1998; (d) 20,000 warrants with an exercise price of $12.50 per
share  and  20,000  warrants  with an exercise price of $15.00 per share which
will  vest  and  become  exercisable  on  September  15, 1999.  All classes of
warrants  discussed  in this paragraph are to purchase restricted and legended
shares  of  common  stock of the Company and will expire on December 31, 2001.

     Effective  September  15,  1997, the Company issued the following: to Jon
Northrop,  the  Company's  Chief  Executive  Officer,  and  to  Jere Northrop,
President  of  the  Company,  75,000  Class  E-1 warrants each to purchase the
Company's  restricted  and  legended  common stock at $6.00 per share with the
exercise  period  commencing  on  January 1, 2001 and expiring on December 31,
2001,  and  150,000  Class X warrants each to purchase restricted and legended
common  stock  of the Company at a price of $10.00 per share with the exercise
period  commencing  January  1,  2003  and  expiring  December  31,  2003.

     On  August  20,  1997 the Company granted, pursuant to the Company's 1996
Nonemployee  Director  Stock Option Plan, options to the two outside directors
Mr.  Cullis  and  Mr. Schwanekamp for 10,000 shares each (5,000 shares for the
year  ended  June  30,  1996 and 5,000 for the year ended June 30, 1997) at an
exercise price of $1.72 and $2.27 per share, respectively commencing on August
20,  1997  and  expiring  on  August  19,  2002.

<PAGE>
   The  Company  has  incurred  losses  since  inception  of $9,479,226 and is
currently  experiencing  liquidity  problems.  Continued  losses  without  the
infusion  of additional capital raise doubt about its ability to continue as a
going  concern.  Management  plans  include  continuing  efforts  to  obtain
additional  capital  to  fund operations until such time, if ever, as contract
sales    and  the  sale  of  BionSoil  are  sufficient  to fund operations. No
assumptions  can  be made that the Company will be able to successfully attain
profitable  operations  and/or raise sufficient capital to sustain operations.

Results  of  Operations
-----------------------

   Comparison  of  the Three Months Ended September 30, 1997 with Three Months
   ---------------------------------------------------------------------------
Ended  September  30,  1996
 --------------------------

   Revenue  in  the three months ended September 30, 1997 was $24,837 compared
to  $35,547  for  the  corresponding three month period in 1996, a decrease of
$10,710.  Contract  costs were lower in the 1997 three month period by $18,628
due  to the leveling off of startup expenses for the BionSoil processing sites
in  New  York  and  Florida. The above resulted in a gross loss for the period
ended September 30, 1997 of $68,717 as compared to a gross loss of $76,635 for
the  same  three  month  period  in  1996.

   General  and  administrative  expenses  were higher by $127,835 in the 1997
period  due  to  increased compensation, consulting fees, and public relations
expenses.

   The  Company recorded $105,116 less in interest income for the three months
ended  September  30,  1997.    This is a result of the one time sale of Delta
Petroleum,  Inc.  stock  associated  with the Settlement Agreement and General
Release  on the UFG note in the first quarter of 1996 (see Form 10-KSB/A dated
June  30,  1996).  This  was the final amount to be collected on the UFG note.
The  total amount collected is $191,581 in excess of the original principal of
the  note.  The Company also recorded $22,904 in interest expense on its notes
payable  and  $52,757  in  research and  development costs. As a result of the
above,  the  Company recorded a net loss of $613,501 in the three month period
ended  September  30,  1997,  compared to a net loss of $415,423 for the three
month  period  ended  September  30,  1996.

   The  Company  will  need  to  increase  sales  significantly  to  obtain
profitability.

<PAGE>
General  Discussion  of  Current  and  Proposed  Operations
-----------------------------------------------------------

     THE DISCUSSION BELOW CONTAINS FORWARD-LOOKING STATEMENTS (IDENTIFIED WITH
AN  ASTERISK  "*" AT THE END OF EACH SUCH STATEMENT) MADE IN RELIANCE UPON THE
PROVISIONS OF RULE 175 PROMULGATED UNDER THE SECURITIES ACT OF 1933 AND SHOULD
BE  READ  IN  CONJUNCTION WITH THE COMPANY'S CONSOLIDATED FINANCIAL STATEMENTS
AND  THE  NOTES  THERETO.

     As  shown  in  the  unaudited financial statements contained in this Form
10-QSB, over $9,100,000 of equity has been invested in the Company through the
close  of  the  fiscal  quarter  ended  September  30,  1997.  These financial
statements also show that on September 30, 1997 the Company had a negative net
worth  of  $337,874, cumulative losses of $9,509,226, limited current revenues
and substantial current operating losses.  Continued losses without additional
outside funding raise doubt about the Company*s ability to continue as a going
concern.  Management  plans  to  continue  raising  additional capital to fund
operations  until such time, if ever, as systems sales along with the sales of
BionSoil  and  BionSoil  products  are  sufficient  to  fund  operations.

     Management believes, however, that additional information is necessary to
evaluate  the Company and its progress relative to the business it is pursuing
and  the  associated  value  the Company has developed during the last several
years.    Therefore, the following section of this Form 10-QSB is presented by
management to give the reader a better understanding of the development of the
business  of  the  Company  to  date,  and its goals for growth in the future.

     Business  Development
     ---------------------

     The  Company's mission is to provide services, systems and products which
solve  environmental  problems  and, in appropriate situations, recycle wastes
into  high  value  horticultural  products which produce superior plant growth
performance.  Based on this, the Company is currently focused primarily on the
application  of  its  patented and proprietary technology in two complementary
business  areas;  first,  Bion  NMS'  systems: the design, sales, installation
oversight,  operations management, and material harvesting of Bion NMS systems
for  large  animal raising agricultural facilities; and, second, BionSoil: the
processing, blending, packaging, marketing, distribution and sales of BionSoil
and  BionSoil-based  products  which are produced from the biosolids harvested
from  the  Bion  NMS  systems.

<PAGE>
     From  prior  to September 20, 1989, (when Bion Technologies, Inc., one of
the  subsidiaries  of the Company, was incorporated) through at least June 30,
1997, the Company was in the technology development mode with limited sales of
primarily  first-of-a-kind  wastewater  and/or  Bion  NMS  systems.

     As  of June 30, 1997 the Company has, in the aggregate, performed studies
for,  sold,  installed,  or  had  under construction, systems in four distinct
regions:  North  Carolina,  New  York, Florida, and the Pacific Northwest. The
systems  in  these  regions  establish multiple applications for the Company's
technology  including:

     (a)        Dairy farm wastewater treatment and nutrient reduction systems
which  treat  wastewater  from  dairy farms to remove phosphorus, nitrogen and
other  nutrients  and create water suitable for discharge or reuse; located in
Florida,  New  York,  and  Washington.

     (b)          Dairy  farm  Bion  NMS systems which solve the environmental
problems  associated with dairy farms and also create BionSoil; located in New
York,  Maryland,  North  Carolina,  Florida,  Washington,  and  Oregon.

     (c)      Hog farm Bion NMS systems which solve odor, waste and wastewater
problems  associated with hog farms and also create BionSoil; located in North
Carolina.

     (d)        Combination food processing and manure waste treatment systems
which  treat  nutrients  and  solid wastes in waste streams from combined food
processing  plants  and  animal  confinement  areas;  located  in  New  York.

     (e)          Fruit  processing  wastewater  treatment systems which treat
wastewater  from fruit processing plants to remove solids, nutrients and other
contaminants  to  create  water  suitable  for  discharge or reuse; located in
Florida,  New  York,  and  Washington.

     (f)         Storm water and surface water run-off treatment systems which
treat  storm  water  run-off from agricultural and industrial installations to
remove nutrients and other contaminants to create water suitable for discharge
or  reuse;  located  in  Florida,  treating  run-off from dairy farm pastures,
industrial  installations  and  sugar  cane  plantations.

     (g)     A feasibility study for the installation of a Bion system for the
treatment  of  all  wastewater  generated  in  a  small mobile home community;
located  in  New  York.

<PAGE>
     Geographic  Expansion
     ---------------------

     The  activities  of  the  Company  to design, permit, install and operate
these  systems  have  established  credibility  with federal, state, and local
regulators  and  environmental  and  agricultural  professionals.  The Company
estimates that the cost associated with staffing, servicing, and marketing its
systems  in  new  geographic  regions,  including initial sales calls, design,
regulatory  approvals,  installation  and  operation  through  the  cash-flow
break-even point (the Company has not yet achieved cash-flow break-even in any
of  its  regional  operations),  is not less than $500,000 per region, and may
exceed  $1,500,000.    Based on experience to date in the regions where system
sales  and installation activity have been focused, the Company estimates that
approximately  $3.5  million  has been expensed related to these matters which
has  created what might be called "good will," "marketing" and/or "regulatory"
value  *.

     An  example  of  the  accumulation  of  these  costs can be understood by
reference  to  the  development  and installation of the Company's initial hog
farm  Bion  NMS  system  in  North Carolina.  During February 1994 the Company
opened  its  office  in  Smithfield,  North  Carolina with one full time sales
employee.  Numerous  contacts  were  made  in  both  the hog raising and dairy
farming  industries,  and the first agreement (for a hog system) was signed in
December  1994.    A  second  full  time employee, required to provide design,
engineering,  construction  and system operation expertise, was transferred to
North  Carolina  in  February  1995.    Adverse  weather conditions during the
construction  period  resulted in a longer construction time than anticipated;
however, system start-up was achieved in June of 1995, and the system has been
in continuous operation since. Based on this investment of time and effort and
the  successful  operation of the system, the Company has expanded its efforts
in  North  Carolina  including  hiring  a  horticulturist for BionSoil product
development  and testing and a manager for the region.  Currently, the Company
has  submitted  proposals  to  a  number of potential customers, is engaged in
discussions  with  several  of  these,  and  has  signed  agreements  for five
additional  system  installations.    Management  estimates  that, to date, in
excess  of  $600,000  has  been  devoted  to the effort to build the Company's
business  in North Carolina.  Current projections are that it will require, at
a  minimum,  an  additional  nine to twelve months before sufficient cash flow
will  be  generated from system and BionSoil sales in North Carolina to offset
ongoing  expenses  for  operations  conducted  in  that  state  *.

     The  Company  anticipates  continuing  its  expansion  into  new
areas  in  the future, and this expansion will require similar additional cash
resources which, when expended, will also be expensed and not shown as balance
sheet  assets  *.

<PAGE>
     Technology  Expansion
     ---------------------

     The  Company  has  five  issued U.S. Patents: a Bioconversion Reactor and
System,  an  Animal  Waste  Bioconversion System, a Bioconverted Nutrient Rich
Humus,  a  Phosphorous  Treatment  Process,  and  a  Storm  Water  Remediatory
Bioconversion  System.   The Company also has an issued Canadian Patent for an
Aqueous Stream Treatment Process.  These patents provide broad coverage of the
fundamental  technology that underlies the Company's systems and processes. It
is  anticipated  that  additional  patent  filings  will  occur  as  further
applications  are  developed.

     The Company estimates that a large portion of the net loss through fiscal
year  1995  (then  shown  on  the  financial  statements as approximately $4.0
million)  was  actually  expended on system development and the enhancement of
the technology and construction of systems that are the basis of the Company's
planned  future  expansion.  All  of  these  costs  have  been expensed by the
Company.

     Just  as  there  are  additional  expenses  associated  with geographical
expansion,  there  also are additional expenses associated with the adaptation
of  existing technology for use in regions where climate, soil, and regulatory
conditions  are  different from those experienced in other already established
installations.    Further,  the Company anticipates additional expenditures in
the  near  future associated with expansions of the technology into the cattle
feedlot  and  poultry raising businesses where adaptation of the technology is
necessary  to  treat  waste  with both different characteristics and different
collection technologies than for existing dairy or swine waste systems *.  The
majority of such expenses (which are investments in the Company's future) will
not  show  as  balance  sheet assets despite the fact that very real long term
technological  value  is  being  developed  *.

     Financial  Discussion
     ---------------------

     The  Company receives two distinct revenue streams from Bion NMS systems:
1)  initial fees for system design, permitting, start-up and initial operation
(and,  for  selected systems, periodic management or technology license fees),
and  2) after the initial start-up period for a system (approximately 12 to 15
months  after  the agreement is signed), revenue from the sale of BionSoil and
BionSoil-based  products  produced  from  the  systems.

     BionSoil  Economics
     -------------------


<PAGE>
     The  Company  tracks  its  BionSoil  business  on  the basis of a Company
defined  standard  unit (a "BionAnimal"), which relates BionSoil production to
confined  animal  weight.    When  all  the  manure  and urine produced by one
BionAnimal  is  collected  and  converted into BionSoil, the Company estimates
that  each  BionAnimal  will  yield  approximately 10 cubic yards of processed
BionSoil  per  year*.    Based  on data available from the American Society of
Agricultural  Engineers  (ASAE D384.1 - 1989) the Company has calculated that,
for  totally confined animals where all wastes are captured, approximately one
dairy cow, 2.2 beef cattle, 11 market hogs, 200 turkeys, or 475 layer chickens
will  equal  one  BionAnimal.

     As  of  September  30, 1997 the Company has nine systems containing 4,730
BionAnimals  that  are on line and producing biosolids which will be processed
into  BionSoil.    Further,  the  Company  has  signed  contracts covering six
additional  systems  that  will  contain 4,575 BionAnimals that are not yet in
production.    These  systems  are  in  various stages from preliminary design
through construction.  As a result, the Company has fifteen systems containing
9,305  total  BionAnimals  in  production or covered by signed contracts.  The
Company  estimates  that these BionAnimals should produce approximately 93,000
cubic  yards  of  processed  BionSoil  per year when all of the systems are on
line,  which  is  currently  expected  to occur within the next nine to twelve
months*.

     The Company did not meet its systems sales and BionAnimal projections for
the  fiscal year ended June 30, 1997 due to a number of factors, including but
not  limited  to  capital  availability,  the  decision to close the Company's
Washington  state  operations,  uncertainty  created in certain markets due to
pending  legislation  which  could  directly impact animal waste treatment and
disposal practices, the decision to cancel certain agreements and/or contracts
for  systems that were not profitable, and the decision to renegotiate certain
of  its  existing  agreements  for  systems  to establish more equitable terms
(which  systems  have been removed from the above system and BionAnimal totals
until  such  time  as  the  renegotiations  result  in  new signed contracts).

     As  systems  are  brought on line and biosolids harvested, BionSoil, Inc.
(the  Company's  other  wholly-owned  subsidiary) will purchase (for cash) the
harvested  material  from  Bion  Technologies,  Inc.  to process it into final
products  for  sale to customers *.  Subsequently, some farms may be paid fees
as  royalty  for  the  biosolids *.  These payments may represent an important
part  of the strategy developed by the Company for the successful marketing of
Bion  NMS  systems  *.   Most large animal raising facilities have substantial
operating  costs  associated  with  the  disposal  of waste products which are
produced  in large quantities at these facilities*.  With the construction and
operation  of  a  Bion  NMS  on  a  farm  site,  many  of  these  costs can be
substantially  reduced  or eliminated, and the farm may also receive a revenue
stream  from  the  cash  payments  made  by  the  Company  to  the  farm  *.

<PAGE>
     Initial BionSoil harvests have been made during the last twelve months of
approximately  12,500  cubic  yards.    Of  that  amount, 2,110 cubic yards of
BionSoil  were  sold  in bulk at prices ranging from $4.00 to $20.00 per yard.
Small  quantities  of  processed  and bagged BionSoil, in 20 to 75 pound bags,
have been sold to organic farmers, nurseries, and at farmers markets and green
markets  in  New  York and Florida for the equivalent of $40.00 to $100.00 per
cubic  yard.    During the year ended June 30, 1997, the first distribution to
retail  outlets  was  initiated  with  Agway  stores  in  western  New  York.
Deliveries  averaging  six  pallets  per  store  were  made to 15 Agway retail
stores.   This product is being sold to Agway at introductory prices of $65.00
per  cubic  yard  ($1.625  per  25-pound bag).  Additionally, at the Company's
Hermitage New York facility, BionSoil is being blended with Sphagnum peat moss
and  processed into both 20 pound and 40 pound bags.  The Company estimates it
will  manufacture 200,000 bags in preparation for sale to the retail market in
the  Spring  of 1998 *.  The average selling price during the past fiscal year
for bulk, unprocessed BionSoil was $9.88 per cubic yard, and for processed and
bagged  BionSoil was $87.89 per cubic yard.  It should be noted, however, that
a  large  part  of  this  BionSoil was from  first harvests of various systems
which, due to start-up issues, yield a lower quantity of high quality product.

     While  sales  of  Bion  NMS systems have been sporadic over the last four
years,  and  significant  quantities  of  BionSoil  have  only recently become
available,  the  Company  believes  it has clearly demonstrated the technology
with ten systems in successful operation, seven of which have been on line for
more  than  two  years.    Additionally,  through  both  Company performed and
independent  university  sponsored testing, BionSoil has been shown to clearly
enhance  plant growth performance.  Based on these results and analysis of the
Company's potential markets, a series of aggressive goals for system sales and
installations have been established.  These goals which, if actually achieved,
would  result  in  a  major  expansion of the Company, are based on historical
sales  during  the  past  year,  the large number of proposals and preliminary
agreements  currently  being  prepared,  and  the apparent steadily increasing
interest  in  Bion  NMS  systems  in  the  large  animal  agriculture  area*.


<PAGE>
     Management's  goals  at  present  set  as a target a level of 250 systems
under contract containing 200,000 BionAnimals by June 30, 2000, the end of the
Company's  fiscal  year  2000 *.  If actually achieved, this goal represents a
2200%  growth  in  the  number  of  BionAnimals  under contract *.  To support
achievement  of  this long range goal the Company has established the addition
of 40 systems under contract (containing 30,000 BionAnimals) as its target for
June  30,  1998  *.  The Company is currently working with the offices in each
region  to  develop  strategic plans to achieve this level of sales as well as
the  short  range  plans  to accomplish the fiscal year 1998 goal *.  If these
targets  for  fiscal  year  1998  are  met  and  the  systems are brought into
production  as  anticipated,  after  appropriate start-up period, BionSoil and
BionSoil  products  in  the approximate amount of 400,000 cubic yards per year
should  be  available  for  harvest  and preparation for sale during and after
fiscal  1999  *.   If the Company's goal for growth through fiscal 2000 is met
approximately 2,000,000 cubic yards per year of BionSoil and BionSoil products
would  be  available  for  sale  in  fiscal  years  after  fiscal year 2000 *.

     Market  Size
     ------------

     The  long  range sales goal outlined by the Company represents aggressive
growth  for  the Company *.  Although an examination of the size of the target
markets  for  system sales and installations and BionSoil sales shows that the
percent  of  total  market  penetration  which  these goals represent are very
modest,  there  can  be  no  assurance  that the Company will be successful in
achieving  its  targeted  goals  *.

     The  Company  has analyzed the 1992 U.S. Department of Agriculture Census
statistics  (the most recent information available from the U.S. Department of
Agriculture)  and  developed  the  data  presented below for the target market
segments  for  system sales.  The Company has analyzed the economics of system
installation  and  operation as they relate to the size of farms, and based on
this  analysis has established a potential target universe of approximately 14
million  BionAnimals  which  are on large farms, and therefore are believed by
the  Company  to  be  potential  candidates for system installation *.  On the
basis  of  these  assumptions  and the analysis done, the goal for fiscal year
1998  system  sales  (and  the  associated  BionAnimals)  would  represent
approximately  a  0.3%  market  penetration  in  fiscal 1998, and the goal for
fiscal  year  2000,  if  achieved, would represent approximately a 1.4% market
penetration  *.


<PAGE>
     The  Company  believes that the potential market for BionSoil and blended
BionSoil  products has been described and quantified by the Battelle Institute
in  a study conducted for the Solid Waste Composting Council  (see Biomass and
                                                                   -----------
Bioenergy,  Vol. 3, Nos 3-4, pp. 281-299, 1992, "Compost: United States Supply
---------
and  Demand  Potential") *. Batelle calculated that the demand for compost and
compost-like  products  (including  products ranging from manures to composted
organic  wastes  to manufactured potting soils and soil enhancers) in the U.S.
alone  is  projected to be in excess of one billion cubic yards per year which
far  exceeds  projected  supply  in  nine  application  segments: landscapers,
delivered  topsoil,  bagged  retail,  nurseries, landfill final cover, surface
mine  reclamation,  sod production, silvaculture, and agriculture *.  Targeted
markets for BionSoil include these segments in addition to state and municipal
park  and  transportation  departments, golf courses and athletic fields, home
gardeners,  reforestation  projects  for  timber and mining companies, and the
U.S.  Park  Service  *.   On the basis of this projected market potential, the
BionSoil  that  the  Company  anticipates  will  be  produced  from the 40,000
BionAnimals  if  the  Company  reaches  its  fiscal year 1998 sales target (in
excess  of  400,000  cubic  yards)  would  result  in  less than a 0.1% market
penetration,  and  the goal for fiscal year 2000, if achieved, would represent
approximately  a 0.2% market penetration in this broadly defined market *.  As
part  of  its  current  planning  process the Company is developing a detailed
analysis  of  targeted  market segments and is establishing plans to penetrate
these  segments  *.

     Based  on  current  pricing  experience, a review of prices for soils and
soil-enhancing  products in the market, target market segment strategies being
developed,  and limited sales to date, the Company believes that BionSoil will
sell  at  no  less  than $10 per cubic yard when sold unprocessed in bulk, and
will  sell  for higher prices when processed and bagged, prices which may rise
to  $100  per  cubic yard (or greater) *.  Additionally, based on actual costs
experienced in BionSoil harvesting and processing to date, and projected costs
as  volume levels increase to the forecast levels, the Company has established
projected costs for the various levels of processing required to sell BionSoil
products  *.    Therefore,  given  the  contract  terms and projected costs of
production  and  sales,  the  potential  return  to  the Company from BionSoil
products sales alone has been projected for a series of potential price points
(and the implied processing levels required to achieve the products to be sold
at  these price points) *.  Table 1 presents this information for six selected
price  points  *.  This table has been prepared based on the Company's limited
experience to date with the harvesting and processing of BionSoil and BionSoil
products *.  While this information represents management's best estimates for
possible  future performance, there can be no guarantee that these projections
will  be  achieved  *.

     Table  1  *


<TABLE>
<CAPTION>


     Projected                                            Projected
 BionSoil Selling          Projected                  Annual Gross Margin
                                                     --------------------
Price  Per  Cubic            Bion                    Per Cubic      Per Bion
     Yard  *              Expenses  *                  Yard *       Animal *
------------          -----------                    ----------     ----------
<S>                        <C>                         <C>            <C>
     $  10  *          $    8  *                      $  2  *       $  20  *
        20  *              13  *                         7  *          70  *
        40  *              28  *                        12  *          120  *
        60  *              37  *                        23  *          230  *
        80  *              40  *                        40  *          400  *
       100  *              43  *                        57  *          570  *

</TABLE>

<PAGE>
     Income  from  BionSoil sales is anticipated to begin in an average of one
and  a  half  to  two  years  after the signing of an agreement for a Bion NMS
system  *.    These  gross  margins would be expected to be repeated each year
thereafter  for  as  long as the installations remain in operation *.  No fees
for  system  installation,  licensing,  or  management  are  included in these
projections  *.

     If  the  Company  is  successful  in  bringing  targeted  systems on line
producing BionSoil within the 12 to 15 month start-up time frame (which cannot
be  assured  and  is  subject  to  numerous and substantial risks as explained
below)  and is successful in realizing a target average sales price of $40 per
cubic  yard (starting in fiscal year 1998)(which also cannot be assured and is
subject to numerous and substantial risks as explained below), each BionAnimal
would  contribute  $400  of  revenue  per  year  to  the Company, resulting in
projected  gross margins of $120 per year *.  Under the terms of most Bion NMS
agreements,  this  contribution  to revenue and gross margin is anticipated to
continue  for  at  least  a  15-year  period (the term of most Bion NMS system
contracts  before  extension  (if  any)  for  additional years) *.  If the net
present value (discounted at 10%) of this gross margin cash flow is calculated
for  this  15-year  period,  the  Company  projects  that  each  BionAnimal is
anticipated  to  have  approximately  $950 net present value to the Company *.

     Table  2,  below,  summarizes  this  net present value projection for the
BionSoil  selling  prices  reflected  in  Table  1,  above  *.

     Table  2  *

<TABLE>
<CAPTION>

  Projected                                      Projected
BionSoil  Selling                         15  Year  Net  Present
  Price  Per                              Value  of  Per  Animal
 Cubic  Yard  *                           Annual  Gross  Margins  *
---------------                           -------------------------
<S>                                                 <C>
     $    10  *                               $      158  *
          20  *                                      555  *
          40  *                                      952  *
          60  *                                    1,826  *
          80  *                                    3,176  *
         100  *                                    4,525  *


<PAGE>
     In  the  past  the  Company  has  lost money on system design, permitting
support,  construction oversight and initial system operation.  However, based
on  experience  to date, the Company has established pricing for its contracts
that  the  Company  believes  will,  independent of BionSoil revenues, will be
sufficient  to  cover  direct  expenses  (such  as  system  design, permitting
support, construction oversight and initial system operation) related to these
system  installations  *.    Even  though  the  Company  is extremely small at
present,  has not yet developed substantial market penetration, needs to raise
additional  capital, and has (and is continuing to accrue) losses to date, the
potential  return  based  on  the  Company's  growth  goals is apparent if the
Company  is  successful  in  achieving  its  targets  *.

     As  the  discussion  above  includes  forward  looking statements made in
reliance  upon the provisions of Rule 175 promulgated under the Securities Act
of 1933, readers are cautioned that, although management believes it currently
has  a reasonable good faith basis for disclosing the substance of some of its
internal  projections  to  the  public at this time, there can be no assurance
given  that the Company will ever be successful in achieving any of its stated
goals.    The  Company intends to periodically report on its progress, or lack
thereof,  in attaining the goals set forth above.  The ultimate realization of
most (if not all) of the Company's goals will require significant expenditures
of  funds  which  as  of this date are not currently available to the Company.

     It  is  currently  anticipated  that  the  selling  and  installation  of
additional  BionSoil  systems  will  require  the  Company  to hire additional
personnel,  make  significant  capital expenditures and generally increase its
overhead.    Further, the marketing and sale of BionSoil products will require
the  implementation  of a distribution network of wholesalers and/or retailers
and  a  transportation  system  for  delivery  of  the product to the intended
recipients,  and  may  require permitting in some locations, none of which the
Company may be successful in achieving.  Additional expenditures for personnel
and equipment will be necessary to harvest, process, package, sell and deliver
the  product.    The  projections stated by management assume that the Company
will be successful in obtaining the requisite funds on commercially reasonable
terms and that the other stated obstacles will be successfully overcome in the
process  of  making  sales  of  products  in  the  future.

     As  the  Company  has  never  operated at a profit and has a negative net
worth  at  the  present  time,  its  ability to successfully confront even the
currently identified challenges which lie ahead in meeting its stated goals is
far  from  certain.    It  is  likely  that  the  Company will face additional
challenges  which  have  not  as  yet  even been identified.  In the event the
Company  is  not  able  to obtain sufficient outside funding to accomplish its
goals  within  the  time periods indicated, the goals will not be met.  In the
event  the  Company  is  not  able  to  successfully overcome the other stated
obstacles  in  the  process  of  making  future  sales within the time periods
indicated,  the  goals  will  not be met.  As the Company's operations are not
currently  profitable,  readers  are further cautioned that, if the Company is
not  successful in obtaining outside funding in an amount sufficient for it to
meet its operating expenses even at its current level, the Company's continued
existence  is  uncertain.

<PAGE>
     OTHER  INFORMATION
     ------------------


PART  II
--------

ITEM  1.          Legal  Proceedings.

The  Company  knows  of  no  material  pending  legal proceedings to which the
Company  (or  the Subsidiary) is a party or to which any of its systems is the
subject  and  no  such  proceedings  are  known  to  the  Company.

ITEM  2.          Changes  in  Securities.

(c)      The following securities were sold in the quarter ended September 30,
1997  without  registering  the  securities  under  the  Securities  Act.:

  90,500  shares  of restricted and legended Common Stock to nine investors in
privately  negotiated  transactions  for  an  aggregate  amount  of  $271,500.

  29,849  shares of restricted and legended Common Stock to one investor under
the  terms  of  a  1992 agreement granting such investor a preemptive right to
acquire  such  shares  for  an  aggregate  amount  of  $55,220.65.

  598  shares of restricted and legended Common Stock to two employees in lieu
of  cash  for  services  rendered  valued  at,  in  aggregate,  $2,503.50.

  3,202  shares  of  restricted and legended Common Stock to a shareholder for
rent  and  services  valued  in  aggregate  at  $10,725.


<PAGE>
The  shares  of  the  Company's Common Stock which were issued pursuant to the
transactions  set forth above were issued in reliance upon the exemptions from
registration  afforded  by  Sections  3(b),  4(2),  or other provisions of the
Securities  Act  of  1933,  as  amended.    Each  of  the persons to whom such
securities  were  issued  made  an  informed  investment  decision  based upon
negotiation  with  the  Company  and  was  provided  with appropriate offering
documents  and  access  to  material  information  regarding the Company.  The
Company  believes  that such persons had knowledge and experience in financial
and  business matters such that they were capable of evaluating the merits and
risks  of  the  acquisition  of  the Company's Common Stock in connection with
these  transactions.  All certificates representing such common shares bear an
appropriate  legend  restricting  the  transfer  of such securities, except in
accordance  with  the  Securities  Act  of 1933, as amended, and stop transfer
instructions  have been provided to the Company's transfer agent in accordance
therewith.

ITEM  3.          Defaults  Upon  Senior  Securities.    None

ITEM  4.          Submission  of  Matters to a Vote of Security Holders.  None

ITEM  5.          Other  Information.

The  Agreement  between  Bion  Technologies, Inc. and Bowman Family Farms, LLC
dated October 8, 1997 has been amended to, among other things, extend the date
for  satisfaction  of the two contingencies from November 15, 1997 to November
30,  1997,  and  change  Bowman  Family Farms, LLC to Crystal Springs, LLC and
Bowman  Family  Farms,  Inc.    See  Exhibit  10.1  below.

ITEM  6.          Exhibits  and  Reports  on  Form  8-K.
     (a)    Exhibits:
10.1  Amended  Agreement  between  Bion
      Technologies,  Inc.  and  Crystal  Springs,
      LLC  and  Bowman  Family  Farms,  Inc.
      27  Financial  Data  Schedule.
     (b)    Reports  on  Form  8-K:
       Form  8-K  (dated  September  1,  1997)
      reporting  on  item  5.
      Form  8-K  (dated  September  30,  1997)
      reporting  on  item  5  &  7.
Form  8-K/A  (dated  September  30,  1997)
 reporting  on  items  5  &  7.




<PAGE>



     SIGNATURE




     Pursuant  to the requirements of the Securities Exchange Act of 1934, the
Company  has  duly  caused  this  report  to  be  signed  on its behalf by the
undersigned  thereunder  duly  authorized.


     Bion  Environmental  Technologies,  Inc.




          /s/  M.  Duane  Stutzman
     -----------------------------
M.  Duane  Stutzman,  Chief  Financial
   Officer




Dated:        November  13,  1997
          -----------------------





<PAGE>
Bion Technologies, Inc.
-----------------------








</TABLE>