Edgar Filing: BioNeutral Group, Inc

f10k2011_bioneutral.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.20549

FORM 10-K

(Mark One)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended October 31, 2011

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______.

Commission File No. 333-149235

	BIONEUTRAL GROUP, INC.
	(Exact name of registrant as specified in its charter)

Nevada		26-0745273
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

55 Madison Avenue, Suite 400, Morristown, New Jersey		07960
(Address of principal executive offices)		(Zip Code)

(973) 285-3373

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

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. x Yes o No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o Yes o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). o Yes o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	o	Accelerated filer	o

Non-accelerated filer (Do not check if a smaller reporting company)	o	Smaller reporting company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o Yes x No

The aggregate market value of the registrant’s common stock, par value $0.00001 per share (“Common Stock”), held by non-affiliates is $33,443,669 computed by reference to the price at which the Common Stock was last sold on April 30, 2011, as reported on the Over-the-Counter Bulletin Board.

As of January 24, 2012, there were 105,609,092 shares of the registrant’s common stock outstanding.

Documents Incorporated by Reference: None.

BIONEUTRAL GROUP, INC.

TABLE OF CONTENTS

		PAGE
PART I

ITEM 1.	Business	1
ITEM 1A.	Risk Factors	13
ITEM 1B.	Unresolved Staff Comments	24
ITEM 2.	Properties	24
ITEM 3.	Legal Proceedings	25

PART II

ITEM 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	25
ITEM 6.	Selected Financial Data	28
ITEM 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
ITEM 7A.	Quantitative and Qualitative Disclosures about Market Risk	33
ITEM 8.	Financial Statements and Supplementary Data	34
ITEM 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	60
ITEM 9A.	Controls and Procedures	60
ITEM 9B.	Other Information	62

PART III

ITEM 10.	Directors, Executive Officers and Corporate Governance	62
ITEM 11.	Executive Compensation	64
ITEM 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	66
ITEM 13.	Certain Relationships and Related Transactions, and Director Independence	68
ITEM 14.	Principal Accounting Fees and Services	70

PART IV

ITEM 15.	Exhibits, Financial Statement Schedules	71

PART I

In addition to historical information, this Annual Report on Form 10-K contains “forward-looking statements” (within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that involve risks and uncertainties. See “Risk Factors - Cautionary Note Regarding Forward-Looking Statements” of this Annual Report on Form 10-K. References to the “Company,” “we,” “us,” or “our” refers to BioNeutral Group, Inc., a Nevada Corporation.

ITEM 1. BUSINESS

Recent Developments

On January 18, 2012 the Company entered into a Collaborative Agreement (the " Collaborative Agreement") with Saint Barnabas Corporation, a not for profit corporation organized under the laws of the state of New Jersey ("Barnabas Health"). Pursuant to the Collaborative Agreement, the parties agreed to develop protocols for the testing of our Ygiene® 206. The parties further agreed that Barnabas Health shall assist and collaborate with the Company in testing new sporicidal formulations and applications of Ygiene® 206. All test results and reports will be provided to the Company by Barnabas Health. In addition, the Collaborative Agreement provides that Barnabas Health shall have the first right to publish in medical or academic journals the results of the testing and evaluation of Ygiene® 206, subject to certain conditions set forth in the Collaborative Agreement. Further, the Company and Barnabas Health have agreed to a division of revenue earned from the use or sale of Ygiene® 206, as set forth in the Collaborative Agreement. All intellectual property rights relating to Ygiene® 206, and any developments, formulations, uses, applications, enhancements, discoveries, inventions and improvements pertaining thereto, including all uses thereof, shall remain the exclusive property of the Company.

On November 2, 2011 the Company entered into definitive financing and strategic distribution agreements with Vinfluence Pty Ltd ("Vinfluence"), New South Wales, Australia. The agreements provide for the assumption of, and indemnification for, $2,374,932 of accounts payable and accrued compensation and the assumption of, and indemnification for, $2,070,271 of convertible loans and $2,400,000 of equity capital. In exchange for cash and future royalties, the Company has also signed a 10-year licensing and distribution agreement with Vinfluence providing for exclusive manufacturing and distribution in Asia and non-exclusive manufacturing and distribution rights in Europe and sales to the US Military to Vinfluence. In connection with the Vinfluence transaction the following agreements were entered into:

1.	Preferred Stock Purchase Agreement - This agreement provides that Vinfluence will purchase 100,000 shares of Series C Convertible Preferred Stock from the Company for an aggregate purchase price of $1,000,000. Vinfluence is obligated to purchase 20,000 shares per month.

Agreement to Assign and Settle Debt - Pursuant to this agreement, Vinfluence agreed to purchase and subsequently cancel certain debt owed by the Company. In consideration for such purchase, the Company will issue Vinfluence one share of Series B Preferred Stock for every $10 of “Affiliate” debt settled, and one share of Series D Preferred Stock for every $10 of “Non-Affiliate” debt.

Agreement to Assign and Settle Notes - Pursuant to this agreement, Vinfluence agreed to purchase and subsequently cancel certain promissory notes previously issued by the Company that are currently outstanding. In consideration for such purchase, the Company will issue Vinfluence one share of Series B Preferred Stock for every $10 of “Affiliate” debt settled, and one share of Series D Preferred Stock for every $10 of “Non-Affiliate” debt.

4.	Preferred Stock Drawdown Agreement - Under the terms of this agreement, the Company is granted the right, but not the obligation, to sell to Vinfluence up to $1,400,000 worth of Series E Preferred Stock in monthly increments of up to $200,000.

Agreement to License Invention - Under the terms of this agreement, the Company agreed to grant Vinfluence an exclusive license to commercialize certain intellectual property owned by the Company and its Delaware subsidiary, BioNeutral Laboratories Corporation USA (the "Subsidiary"), within the Territory (as defined therein), as well as a non-exclusive license over such intellectual property in the Optioned Territory (as defined therein).

In connection with the Vinfluence agreements outlined above, On October 31, 2011, the Board of Directors of the Company approved the designation of the following series of Preferred Stock:

2. One hundred thousand (100,000) shares of Series C Preferred Stock. Each share of Series C Preferred Stock is convertible into 125 shares of the Company's common stock;

4. One hundred forty thousand shares of Series E Preferred Stock. Each share of Series E Preferred Stock is convertible into the Company's common stock at a conversion price equal to seventy five percent (75%) of the average closing bid price of the Company's common stock, based on the prior 10-day closing price, subject to a floor of $0.08 per share.

During a meeting of the Board of the Company held on October 31, 2011, Mr. Ronald Del Mauro and Mr. Frank Battafarano were appointed as directors of the Board. Their appointments to the Board became effective on November 1, 2011. Mr. Del Mauro served as the Chief Executive Officer of the Saint Barnabas Health Care System since its inception in 1996, and also served as its CEO until 2011. Mr. Battafarano is currently a Healthcare Consultant focusing on Strategic, Business Development, Operational and Financial Consulting to the Healthcare industry. He is also Chairman Executive Advisory Council of the Acute Long Term Hospital Association; a Washington based Hospital Trade Association.

The Company entered into Indemnification Agreements with each of Mr. Battafarano and Mr. Del Mauro pursuant to which the Company agreed to indemnify them against all losses, claims, damages, expenses and liabilities incurred in connection with any suit, proceeding or claim filed against them by reason of (or arising in part or in whole out of) any event or occurrence related to the fact that they are or were or may be deemed directors of the Company or any parent or subsidiary of the Company, or by reason of any action or inaction on their part while serving in such capacity.

The Company also entered into an agreement with Mr. Battafarano pursuant to which he was appointed as the Chairman of the Board. As compensation for his services, Mr. Battafarano will be reimbursed for all reasonable and necessary business expenses, subject to customary expense reporting requirements and subject to prior approval by the chairman of the Company's audit committee of expenses exceeding $3,000 monthly. In addition, Mr. Battafarano will receive compensation in the amount of $10,000 per month, payable in arrears on the last business day of each month. Mr. Battafarano will also receive 500,000 shares of restricted common stock of the Company, subject to a repurchase option by the Company at a repurchase price of $.001 per share in the event that he ceases to serve as Chairman for any reason. Such repurchase option shall expire as to 40,000 shares per month for as long as Mr. Battafarano remains as Chairman of the Board. In addition, Mr. Battafarano will receive an option to purchase 500,000 restricted common stock of the Company upon execution of the agreement. The exercise price for such option shall be the closing price for the Company's common stock as of the execution date. The options shall be exercisable for a period of three (3) years following the date of the agreement and the options shall vest at the rate of 40,000 per month.

The Board appointed Dr. Andrew Kielbania as the Interim Chief Executive Officer of the Company, with such appointment taking effect November 1, 2011. Dr. Kielbania's appointment shall be governed by the employment agreement entered into by the Company and Dr. Andrew Kielbania pursuant to which Dr. Kielbania is to serve as the Company's Interim Chief Executive Officer for a period of six (6) months or until a successor is retained. His salary for such period will be $15,000 a month with certain other benefits. Further, upon the appointment of a new Chief Executive Officer of the Company, Mr. Kielbania shall serve as the Company's Chief Scientific Officer for period of two (2) years. His salary as such will be $10,000 per month, with certain benefits.Dr. Kielbania has served as the Company's Chief Scientific Officer and Secretary since January 30, 2009 and has served as a director of the Company since November 30, 2010. Dr. Kielbania joined the Company as a scientist in 2005. From 2002 to 2005, Dr. Kielbania served as the vice president of Manning Management. He previously held positions at Rohm and Haas where he assumed senior level positions in research and developing. The Company believes Mr. Kielbania is qualified to serve as its Interim Chief Executive Officer based on his scientific knowledge and his management skill.

The Board appointed Tom Thornton, Harry Furey and Steve Warren MD, to its management team. Mr. Furey and Mr. Warren will serve the Company in consulting roles. They joined Tom Cunningham, who will continue to serve as the Company’s CFA. Tom Thornton has in-depth health care experience, including appointments with GOJO, the manufacturer and marketer of America’s number one instant hand sanitizing product Purell ®. Tom heads up business development and strategic alliances in the United States.

Harry Furey is an equally experienced executive with a history of driving innovative medical product sales. In his career, Harry has established distribution relationships with Owens and Minor, Cardinal Health and other national and regional medical product distributors. Harry leads BioNeutral’s sales efforts to hospitals and related health care accounts, recruiting of sales personnel and establishing channels of distribution for BioNeutral's products.

Steve Warren, MD, DPA, is a practicing long-term care physician. He is concurrently a medical director of several nursing homes, hospices and assisted living facilities. Steve has extensive experience with the aging and rehabilitation population and is active in preventing infections for this patient group. He is Board Certified in Family Medicine and Hospice/Palliative Medicine. Steve is also Board Certified as a wound care professional and has extensive experience as a medical director of a wound care company. He has worked in infection control and the development of hand sanitizers. Steve also speaks on behalf of Eli Lilly as a senior care physician. Steve is working with the medical directors of national organizations with respect to BioNeutral’s technology and its role in helping to reduce health care infections.

The Company moved its headquarters into new executive office space on November 1st at 55 Madison Avenue in Morristown, NJ.

At a meeting held by the Board of Directors of the Company on October 31, 2011, Mr. Stephen Broward resigned from his positions as Chief Executive Officer, President and Chairman of the Board. Raj Pamani, Michael Francis and Wayne Stratton stepped down from the board. None of the resignations were the result of any disagreements with the Company.

In connection with the February 28, 2011 approval and registration from the Environmental Protection Agency (the “EPA”) in response to the Company's regulatory application for its Ygiene® 206 sterilant formulation, the Company has secured 32 state approvals to market and distribute Ygiene® 206. These approvals are primarily in states east of the Mississippi River. The Company is pursuing approvals in the remaining 18 states as needed.

The Company attended the 38th Annual APIC Conference (Association for Professionals in Infection Control and Epidemiology) to introduce its all new EPA-approved Ygiene® 206 sterilant technology to the infection control professionals. Ygiene® is BioNeutral's latest weapon against hospital-acquired infections (HAIs), an ongoing and potential threat in the health care industry. This year's APIC conference was held on June 27th through June 29th, 2011 in Baltimore, MD. The Annual APIC Conference is widely recognized as the largest annual gathering of infection preventionists in the world. Over 2,200 infection control professionals attended the conference from as far away as the United Arab Emirates, representing nearly 1,900 health care institutions along with 207 exhibitors. In 3 days with a total of 10.5 hours of open exhibit time, 257 infection control professionals visited our booth and asked to be included in the Company’s database for follow up and 64 of them expressing interest for an initial trial at their facility.

Also on May 3, 2011, the Company announced that the Community Health Network of South Florida (CHI) will introduce Ygiene® to its Product Review Committee for evaluation and potential use among its network of facilities. CHI currently operates seven (7) state-of-the-art primary care centers and twenty-seven (27) school-based programs. Upon approval by the by the Review Committee, the Company anticipates to receive orders for purchase from the CHI. Recently, the Company has elected to redirect its resources toward other marketing opportunities in the US and is not currently pursuing the approval.

On April 20, 2011 in advance of the Florida’s state approval, the Company received its first municipal vendor approvals from Miami-Dade, Broward and Palm Beach counties. These first municipal approvals will allow the Company to sell directly to the corresponding municipal agencies as well as to compete in the Request For Proposal (RFP) competitive bidding process.

On April 5, 2011, the Board of Directors (the "Board") of the Company elected Michael D. Francis as a director of the Company. Mr. Francis' appointment to the Board became effective immediately. As a non-management member of the Board, in remuneration for his services, Mr. Francis will receive an annual grant of 85,000 restricted shares of the Company's common stock. Further, Mr. Francis entered into the Company's form of Director Indemnification Agreement, pursuant to which the Company agreed to indemnify Mr. Francis from certain expenses, including reasonable attorney's fees, incurred by Mr. Francis as a result of serving on the Board (and/or a committee of the Board), subject to certain exclusions for certain delineated matters.

On March 25, 2011 the Company announced the appointment of Dr. Stephen Holt, M.D., PhD, a Distinguished Professor of Medicine (Emeritus) and a medical practitioner in New York State, as the Company's Vice Chairman of the Board and Independent Director. Dr. Holt is an independent consultant to the pharmaceutical and dietary supplement industry, and a Board-certified Internist and Sub-Specialist in the United States, Canada, United Kingdom and European Union. On May 26, 2011 Stephen Holt resigned from the Company’s Board of Directors without disagreement. For his services rendered the Company has agreed to issue Dr. Holt 35,000 shares of its common stock for services of $11,550. The shares were valued at the prevailing quotation prices for the Company's stock at the time of the agreement.

On March 15, 2011 the Company announced that it has entered into global sales and distribution agreement with Raymond Associates LLC, a Service Connected Certified Disabled Veteran-Owned Business and executive management consulting firm. Under the terms of the agreement, Raymond Associates will represent BioNeutral's Military-Grade, patent-pending antimicrobial product Ygiene™ to the homeland security and government sectors in the Middle East, the United Kingdom and the United States. As a result of this agreement, the Company expects to secure new orders and government contracts for our Ygiene™ Military-Grade, which can quickly neutralize a wide variety of on-the-surface, biological contaminants and extremely dangerous microorganisms.

On March 1, 2011 the Company’s wholly owned subsidiary, BioNeutral Services, Inc., was approved by the Commissioner of Kentucky's Department for Business Development (the “Department”) for an economic incentive package. The package provides incentives for companies to relocate and expand their operations into the Commonwealth of Kentucky by agreeing to reimburse certain start up costs and lease expenses for office space. In addition, there are certain Kentucky based tax incentives which are contingent upon employment by the Company within the Commonwealth of Kentucky. The estimated total value of these incentives is approximately $250,000 to $300,000 and was received in writing from the Department. Recently, the Company has elected to redirect its resources toward other marketing opportunities in the US and is not currently pursuing the incentives offered by the Department.

On February 28, 2011, the Company received approval and registration from the EPA in response to the Company's regulatory application for its Ygiene® 206 sterilant formulation.The recent EPA approval will allow the Company to market certain formulations of its Ygiene® professional disinfectant product, subject to prior approval by each state in which the Company intends to distribute the product. Following EPA approval, the Company has made the determination that at this time the Company's resources are best spent pursuing domestic marketing and distribution opportunities. The high level of investment necessary to achieve meaningful international sales could compromise the company's ability to pursue sales opportunities in its home market and therefore the Company has currently postponed further international efforts. If however international opportunities do arise the Company will assess them on a case by case basis.

On February 3, 2011, the Company formed BioNeutral Services, Inc. (“BNS”), a wholly owned subsidiary of BioNeutral Group, Inc. with the intent to market and distribute a family of BioNeutral products that represent a new generation of specialty anti-microbial disinfectants, cleaning agents and neutralizers of odors and harmful gases. The company, based in Kentucky, is a specialty cleaning solutions company servicing the healthcare industry and providing environmentally friendly solutions to everyday care. BNS does not have significant operations at this time. The Company plans to close this subsidiary in 2012.

Prior to February 3, 2011, the Company has been in discussions with the Kentucky Hospital Association (“KHA”) in order to qualify as an applicant to become an Affinity Partner of the KHA. The Affinity Partner Program provides opportunities for Kentucky hospitals to identify and evaluate pre-screened potential suppliers, consultants and other resources. As an Affinity Partner the KHA may endorse for use certain of the Company’s products in certain health care settings. The Company believes that achieving affinity partner status would enhance its marketing efforts in Kentucky. In order to receive such status the Company must submit an Affinity Partner Program Application (the “KHA Application”). Upon submission of the KHA Application, the KHA will perform certain processes of review and evaluation of the applicant and its products subject to a final scoring based on the KHA’s criteria. Upon completion of their review and evaluations, the KHA will then recommend or decline the applicant based on the scoring related to their criteria. If the product receives Affinity Partner status, a formal license agreement is entered into which allows the product to be marketed and advertised using certain marks and logos of the KHA. A subscription fee would be due at that time as well. The Company desires to achieve Affinity Partner status. Currently however, the Company has not submitted the KHA Application and there are no immediate plans to do so. There is no contractual arrangement between KHA and the Company. Our affiliation is currently limited to us being approved to apply to be an affinity partner.

The Company previously entered into negotiations with the KHA through its subsidiary Kentucky Hospital Services Corporation LLC "KHSC" to introduce BioNeutral’s Ogiene® and Ygiene® products into its member hospital association. This arrangement would be contractual in the future, since it is currently contemplated to be in the form of a shared commission agreement to market the products. At this time the Company does not plan to pursue this arrangement.

The negotiations for the affinity partner status and the contractual agreement to market the Company’s products were initiated at approximately the same points in time.

Overview

Company Structure

We are a life science specialty technology company that has developed a novel combinational chemistry-based technology which we believe in certain circumstances may neutralize harmful environmental contaminants, toxins and dangerous micro-organisms, including bacteria, viruses and spores. We currently operate our business through our subsidiary, BioNeutral Laboratories Corporation USA (“BioNeutral Laboratories” or “BioLabs”), a corporation organized in Delaware in 2003.

We were incorporated in the State of Nevada on April 10, 2007 under the name “Moonshine Creations, Inc.”, and changed our name to “BioNeutral Group, Inc.” on December 22, 2008. From our incorporation until January 30, 2009, we did not have significant business operations.

On January 30, 2009, we entered into a share exchange agreement (the “Share Exchange Agreement”), with BioNeutral Laboratories pursuant to which we agreed to issue to the shareholders of BioNeutral Laboratories an aggregate of 44,861,023 shares of our common stock (the “Share Exchange”).

In connection with the Share Exchange, certain shareholders of BioNeutral Laboratories delivered shareholder consents, which we refer to as the "Share Exchange Consents", to BioNeutral Laboratories approving the execution and delivery by BioNeutral Laboratories of the Share Exchange Agreement (the “Consenting Shareholders”). The Share Exchange Consents did not specify the number of shares of BioNeutral Laboratories common stock to be exchanged by the Consenting Shareholder. Schedule II to the Share Exchange Agreement, however, contained a list of holders of BioLabs common stock (certain of which shareholders also held BioLabs Series A Preferred Stock), shares of our common stock to be issued to such shareholders, and shares of our common stock to be issued to holders or BioLabs preferred stock.

Based on the Share Exchange Consents, we caused to be delivered to our transfer agent instructions to issue stock certificates representing 42,649,500 shares of our common stock in accordance with Schedule II to the Share Exchange Agreement. We did not receive Share Exchange Consents in respect of each share of our common stock that was issued by our transfer agent and we believe that stock certificates representing approximately 1,011,362 shares of common stock may have been delivered to those persons who did not deliver a Share Exchange Consent.

In addition, our records indicate that (i) we did not receive stock certificates representing shares of BioNeutral Laboratories common stock for cancellation from the Consenting Shareholders, and (ii) we did not cause to be delivered the applicable stock certificates representing shares of our common stock issued in the Share Exchange to certain of the Consenting Shareholders. Accordingly we intend to request that (i) with respect to each Consenting Shareholder who received a stock certificate, such stockholder affirm its consent, which we refer to as a “Consenting Shareholder Acknowledgement” and deliver to us for cancellation its certificates representing BioNeutral Laboratories common stock; and (ii) with respect to each Consenting Shareholder who did not receive a stock certificate, such stockholder deliver to us a Consenting Shareholder Acknowledgment and deliver to us for cancellation its certificates representing BioNeutral Laboratories common stock, each in advance of us delivering the applicable stock certificate.

With respect to any shareholder of BioNeutral Laboratories who is not able to confirm that it previously delivered a Share Exchange Consent, we are going to evaluate offering to such persons the ability to exchange their shares of common stock of BioNeutral Laboratories for shares of our common stock on the same terms as would have occurred had such exchange occurred at the time of the consummation of the Share Exchange. Although we cannot assure you as to the determination we may make, if we were to make such offer, we would likely request that each such stockholder deliver to us a consent that is similar to a Share Exchange Consent and deliver to us for cancellation its certificates representing BioNeutral Laboratories common stock, each in advance of us delivering the applicable stock certificate for our common stock. With respect to shareholders of BioNeutral Laboratories who did not deliver a Share Exchange Consent and to whom we may have caused to be issued stock certificates for shares of our common stock, upon the receipt of notice from such shareholders, we intend to request a Consenting Shareholder Acknowledgment from each of such persons.

With respect to holders of Series A preferred stock of BioNeutral Laboratories who did not receive shares of our common stock in exchange for such preferred stock, we intend to offer to such persons an aggregate of 2,799,910 shares of our common stock in exchange for their shares of Series A preferred stock, in accordance with Schedule II to the Share Exchange Agreement. We intend to request that such persons execute and deliver a share exchange agreement evidencing such exchange.

For purposes of preparation of our financial statements, we do not treat as outstanding any shares of common stock issued pursuant to the Share Exchange and for which we do not have a record of receiving a Share Exchange Consent. We made this determination despite the fact that certificates representing certain of such shares of our common stock may have been delivered to the applicable BioLabs shareholder. We cannot assure you that any person in possession of such shares of common stock but who did not deliver the applicable Share Exchange Consent will not claim ownership of such shares.

As a result of the closing of the Share Exchange, BioNeutral Laboratories became our subsidiary, and the shareholders of BioNeutral Laboratories acquired the majority ownership and control of our Company. We reviewed the Financial Accounting Standards Board Accounting Standards Codification 805-40 (“FASB ASC 805-40”) and determined that BioNeutral Laboratories was the accounting acquirer and the entity which would be continuing operations. As a result, the transaction between BioNeutral Laboratories and us was accounted for as a reverse recapitalization in accordance with FASB ASC 805-40.

On February 3, 2011, the Company formed BioNeutral Services, Inc., a wholly owned subsidiary of BioNeutral Group, Inc. BioNeutral Services to market and distribute several of the Company’s core products. The company, based in Kentucky, currently does not have significant operations. The Company plans to close this subsidiary in 2012.

The Company has a wholly owned subsidiary, Environmental Commercial Technology, Corp. (“ECT”), a Delaware corporation. ECT has no significant operations.

Business Overview

We are a life science specialty technology corporation focused on commercializing two classes of product formulations: (1) antimicrobials, which are formulations designed to kill certain harmful microscopic living organisms, and (2) bioneutralizers, which are formulations designed to destroy certain agents that are noxious and harmful to health and/or the environment.

In February 2011, the Company received approval and registration from the EPA in response to the Company's regulatory application for its Ygiene® 206 sterilant formulation. To date we have received approvals for distribution of Ygiene® 206 in 32 states located primarily east of the Mississippi River. The Company will apply for approval in the remaining 18 states on an as needed basis. Our Ogiene™ product does not require federal or state approval for sale and distribution. We are actively engaged in marketing both of our product lines by negotiating with distributors and the staging of product trials. To date, we have not generated any meaningful product revenue.

Products

We currently are focused on the commercialization of two classes of product formulations, antimicrobials and bioneutralizers. We refer to our antimicrobial formulations as our Ygiene™ products and our bioneutralizer formulations as our Ogiene™ products. A description of each of these products is set forth below.

Ygiene™

We have developed our Ygiene ™ products with the intent to kill certain harmful microbes, including virulent gram positive or negative bacteria, viruses, yeast, mold, fungi, spores and/or certain bioterrorism agents, such as anthrax. We are designing our Ygiene ™ formulations to target and bind to specific surface proteins and penetrate and alter the cellular structure of such proteins. They are proxy-based and, based on our internal laboratory studies, on a per unit volume basis, we believe it contains more active ingredients than any commercially available antimicrobial known to us. In laboratory tests conducted by us, our Ygiene™ formulations demonstrated large zones of inhibition (areas on agar plates where growth of control organisms are prevented by antibiotics placed on agar surfaces) and high potency across a wide spectrum of harmful microbes.

We are developing our Ygiene ™ formulations for potential use in a broad range of applications, although the marketing and sale of each Ygiene ™ formulation in the United States and internationally will be subject to U.S. and foreign governmental regulations, respectively. We believe there are three potential applications of our Ygiene ™ formulations, as set forth below:

·	Military/First Responders/Hospital Sterilant/Specialty Industrial: We have developed Ygiene ™ formulations for “kill on contact” applications for anthrax and other micro-organisms for use by the military, first responders, hospitals and other special industries.

Hospital/Health Care High-Level Disinfectant/Mold Remediation/Industrial Cleansing: We have developed the Ygiene ™ formulations for sterilant high-level disinfectant applications for Methicillin Resistant Staphylococcus Aureus (MRSA), multi-drug resistant Pseudomonas Aeruginosa, E. Coli, mold and other microbes for use by hospitals and other healthcare facilities, food preparation facilities and other demanding environments, which application we refer to herein as the “Hospital and Industrial Application.”

·	Consumer Products/Light Industrial/Healthcare: We have developed the Ygiene ™ formulations for sporacidal, bactericidal and virucidal applications in general areas of hospitals, nursing homes and physician and dental offices. We also are considering Ygiene ™ formulations for use as skin sanitizers.

Currently, we are focusing our efforts on the commercialization of our Ygiene ™ formulation for use as a high-level cleansing within the industries of acute and long-term health care, veterinary clinics and hospitals, food and livestock production and processing, commercial mold remediation, and travel based hospitality. Based on laboratory tests conducted by us, we believe that, under certain laboratory conditions, this Ygiene ™ formulation may be as effective as chlorine bleach or caustic soda for killing certain microbes, without the high level of toxicity generally associated with chlorine bleach or caustic soda. In these laboratory tests, the Ygiene ™ formulation inhibited the growth of over 200 microbes, including Methicillin resistant Staphylococcus Aureus (MRSA), multi-drug resistant Pseudomonas Aeruginosa and E. coli.

Before we may market and sell any of our Ygiene ™ formulations in the United States, the Ygiene ™ formulation, regardless of their intended applications, must be registered with respect to each disinfectant claim for such formulation with the U.S. Environmental Protection Agency, or the EPA. Similarly, before we may market and sell any Ygiene ™ formulation in any foreign country, the Ygiene ™ formulation must be registered with the appropriate agencies of such foreign country. Our Ygiene ™ formulation that we intend to market for the Hospital and Industrial Application has been registered with the EPA with respect to its disinfectant claims for marketing and sale in the United States and subsequently approved for sale and distribution 32 states in the US. It has also been registered for marketing and sale in Germany.

Ogiene™

We are developing our Ogiene™ products to potentially eliminate or reduce odors of many chemicals such as hydrogen sulfide, formaldehyde and ammonia, and to reduce certain greenhouse gases such as carbon dioxide and sulfur dioxide. Our Ogiene™ formulations are designed to interact with the functional organic or inorganic groups of harmful gases and reduce or eliminate them. We intend to offer Ogiene™ products in the gas phase – being applied as a fog, mist or spray – or in the liquid phase – being applied directly to liquid contaminates. Based on laboratory studies conducted by us, we believe that Ogiene™ is free of unreasonable adverse impacts to health or the environment and that no or minimal clean up is required after application of our Ogiene™ products. We plan to market our Ogiene™ products for hotels, restaurants, industrial manufacturing, controlled animal feeding operations (“CAFOs”), and homes.

In laboratory tests conducted by us, our Ogiene™ formulations have demonstrated an ability to destroy a variety of agents that are noxious and harmful to health and/or the environment, particulates and their associated odors. Specifically, in these tests, our Ogiene™ formulations demonstrated an ability to neutralize hydrogen sulfide, carbon dioxide, sulfur dioxide, formaldehyde and ammonia that are known contributors to foul odors and/or greenhouse gases. We also are seeking to demonstrate that our Ogiene™ formulations may be used to effectively neutralize certain poisonous gases and to remove industrial pollution and environmental contaminants.

We believe our Ogiene™ formulations provide fast delivery capabilities of active ingredients and can eliminate or reduce a broad range of gases. We believe this is important since household, institutional and industrial odors and irritating gases can be the result of either a single odoriferous compound or the result of a multiplicity of odoriferous compounds or components. These odor causing components include various organic carboxylic acids, aldehydes, ketones, amines, mercaptans, sulfides, disulfides and esters. In addition, various inorganic compounds such as ammonia, hydrogen sulfide and sulfur dioxide may add to the complexity of specific odors. Laboratory tests conducted by us have demonstrated that in certain laboratory conditions our Ogiene™ formulations can reduce or eliminate the following:

·	formaldehyde;

·	ammonia and carbon dioxide;

·	sulfur dioxide/ nitrogen oxide (green house gases); and

·	cigar smoke

In general, our Ygiene™ and Ogiene™ formulations have shown the following capabilities in laboratory tests conducted by us:

·	Our formulations have killed spores, bacteria and viruses at room temperature.

·	We can manipulate our products, depending upon the needs of customers, to address requirements that can vary as follows:

o	the kill time from minutes to seconds;

o	the breadth of kill; and

o	the class of target organisms.

·	Our formulations are stable, non-corrosive, nonflammable and water soluble.

·	Our formulations can be applied as a liquid, wet wipe, spray, mist/fog or foam/froth and can be applied to air, surface and water.

Our Customers

To date, we have not significant sales of any of our current products. We plan to market and sell our products for high level cleaning, sanitizing and odor elimination to consumers, acute and long term health care facilities, veterinary clinics and hospitals, livestock production and processing facilities, food processing and packaging, nutraceutical and pharmaceutical processing, biotechnical clean rooms, commercial mold remediation, hospitality and lodging, first responders, waste-water treatment, power generation and military chemical firms in the United States and overseas.

Marketing

We have assembled a small but experienced business team composed of individuals we believe to be highly capable to market, license, sell and distribute our products in the United States. We intend to sell our products directly to the end user and through distribution channels. As our products attract and gain wider acceptance in the US marketplace, we intend to develop an international sales presence in the future. Potential customers include hotels, restaurants and hospitals and those engaged in the military, power generation, mold remediation, surgical equipment sterilization and waste-water treatment industries.

Competition

The markets for our Ogiene™ and Ygiene™ products are highly competitive. We have a number of competitors that vary in size and scope and breadth of products offered. Such competitors include some of the largest corporations in the world, and we believe substantially all of our competitors have greater financial resources than we do, including in the areas of sales, marketing, and branding and product development. We expect to face additional competition from other competitors in the future.

Current competitors include Clorox and other products including Formula 409 from The Clorox Company, Lysol and other cleaning products from Reckitt Benckiser, and laundry products including Tide and Downy from Procter & Gamble. Companies offering competitive industrial cleaning and sanitizing products include such companies as Ecolab, Inc., Steris Corporation and SC Johnson. Although these large competitors have significant market share in the disinfectant and cleaning product markets, product comparison tests that were either supported or conducted by BioNeutral indicate the superiority of BioNeutral products as effective antimicrobials, disinfectants, surface cleaners, laundry cleaners, stain removers, and odor neutralizers.

Since Ogiene™ and Ygiene™ are new formulations enhanced from our initial base formulas, our success will depend, in part, upon our ability to achieve market share at the expense of existing, established and future products developed by our competitors in our relevant target markets. Even if our Ogiene™ and Ygiene™ formulations have technological competitive advantages over competing products, we or potential distributors, will need to invest significant resources in order to attempt to displace traditional technologies sold by what are in many cases well-known international industry leaders. Alternatively, we may pursue strategies in selective markets of encouraging existing competitors to incorporate our products into their existing brands, thereby reducing the proportion of end-use revenues that would accrue to us. To the extent that we were to grant any existing competitor exclusivity to any field and/or territory, we would risk having our technology marketed in a manner that may be less than optimal for us. We recognize that innovative marketing methods may be required in order to establish our products, and that such methods may not be successful.

Intellectual Properties

Our intellectual property includes patent applications for our formulations and our manufacturing processes, and applications to register the trademarks BioNeutral™, AutoNeutral™, Ogiene™, Ygiene™, Collagiene™, Spore No More™ and the tagline SCIENCE TO SAVE LIVES & PROTECT THE ENVIRONMENT™.

Intellectual Property

We believe our patent claims are unique within our chemical composition space. We believe prior lab and field tests completed by us have verified approximately 80 potential applications. As we continue to utilize our technology platform and complement our product offerings, we plan to protect our technology and products by filing appropriate patent applications covering such technology.

We currently have three pending utility patent applications filed with the United States Patent & Trademark Office, or the USPTO, directed to compositions of matter of our formulations, our manufacturing process and a number of applications. In addition, we have pending patent applications in Japan, Europe, Mexico, China, and New Zealand. We also have a pending patent application with the Patent Cooperation Treaty, or PCT, which can potentially be filed in any of the member countries. We cannot assure you, however, that we will be able to obtain or maintain any Intellectual Property for our formulations. See “Item 1A. Risk Factors - If we are unable to obtain, maintain or defend patent and other intellectual property ownership rights relating to our technology, we may not be able to develop and market products based on our technology, which would have a material adverse impact on our results of operations and the price of our common stock.”

Trademarks

In April 2005, the Company filed in the US Patent and Trademark Office (the “USPTO”) an application for the registration of the trademarks BioNeutral™, Ogiene® and Ygiene®, based on our intent to use each of these marks in commerce. In April 2006, the USPTO issued notices of allowance signifying that each of these trademarks was entitled to registration after timely submission of statements of use, including evidence that such trademarks have been properly used in commerce. From June through November of 2008, however, the Company’s applications for each of these trademarks were declared abandoned by the USPTO, since the Company inadvertently failed to timely file the appropriate statements of use with respect to each trademark within the six-month period from the date the USPTO issued the respective notices of allowance. In July 2009, the Company submitted again applications for each of these trademarks as well as the Company’s tagline SCIENCE TO SAVE LIVES & PROTECT THE ENVIRONMENT®; however, the Company learned that PURE Bioscience, a company focused on the development and commercialization of bioscience products, had filed application for the registration of the trademarks BioNeutral™ and Ygiene® prior to the Company’s resubmission of its applications. Subsequently in 2011, the Company received trademark registration from the USPTO for Ygiene®, Ogiene® and the Company’s tagline SCIENCE TO SAVE LIVES & PROTECT THE ENVIRONMENT®. The Company intends to pursue with the Trademark Trial and Appeal Board an opposition to PURE Bioscience's application with respect to BioNeutral™. The Company cannot assure you that it will be successful in such opposition. In May 2011, the Company received notice that PURE Bioscience filed a petition with the USPTO for cancellation of the Company’s Ygiene® registration. The Company is pursuing a vigorous opposition to the petition for cancellation; however the Company cannot assure you that it will be successful with such opposition on a timely basis, if at all.

We have entered into confidentiality agreements with certain third parties in an attempt to protect our trade secrets, including the processes, concepts, ideas and documentation associated with our technologies. We have entered into such agreements with our directors, officers and employees. Accordingly, we may not have sufficient protections for our technology and our competitors could acquire and use information that we consider to be our trade secrets and we may not be able to compete effectively. Most of our competitors have substantially greater financial, marketing, technical and manufacturing resources than we have and we may not be profitable if our competitors are also able to take advantage of our trade secrets.

Research and Development

We conduct our primary research and development activities in-house, and use third-party laboratories to conduct independent testing. Research and development expenditures were approximately $631,000 and $265,000 for the fiscal year ended October 31, 2011 and 2010, respectively. No amounts incurred for Research and Development were borne directly by customers.

Manufacturing

We currently have limited manufacturing capabilities. If and when we have available capital resources, we anticipate considering engaging (1) a contract manufacturers to produce finished products, which can be resold to our distributors/customers in Germany and after we obtain the requisite EPA and/or U.S. Food & Drug Administration clearance, in the United States; and (2) a contract manufacturer to produce the component which may be sold to a customer who may manufacture the finished products for mass distribution using the customer’s brand name.

The active and inactive ingredients in our concentrated and ready-to-use products are readily available from multiple chemical supply companies.

Raw Materials

The active and inactive ingredients in our concentrated and ready-to-use products are readily available from multiple chemical supply companies

Governmental Regulation

Some of our current or future products are or may be subject to the Federal Insecticide, Fungicide and Rodenticide Act, or FIFRA. The objective of FIFRA is to provide federal control of pesticide distribution, sale, and use. All pesticides used in the United States must be registered with or licensed by the EPA. Registration assures that pesticides will be properly labeled and that, if used in accordance with specifications, they will not cause unreasonable harm to the environment. Use of each registered pesticide must be consistent with use directions contained on the label or labeling. Each application for registration of a pesticide product with the EPA must include the results of laboratory testing conducted in accordance with the EPA's Good Laboratory Practice Standards (GLP), which standards are designed to ensure the quality and integrity of test data submitted to the EPA in support of a pesticide product registration. These laboratory tests generally are conducted to demonstrate the efficacy, toxicity and certain physical characteristics of the pesticide product. When the GLP testing for a pesticide product is complete, an application demonstrating that the product candidate does not have unreasonable adverse impacts on health or the environment and that is effective for its intended use must be submitted to the EPA for its consideration. The registration application must include the proposed product label and claims to be made for the product and explain permissible uses and required conditions for use; it must include data to support registration relating to product and residue chemistry, toxicology, environmental fate, eco-toxicology, exposure data, and for public health pesticides such as antimicrobials, efficacy data consistent with EPA’s data requirement standards. The EPA reviews, evaluates, and analyzes the required data over a period of months, ranging from 6-8 months upwards to 20 or more, depending on the complexity of the product and its usage, whether its active ingredient has been registered previously and other factors. A cost-benefit analysis of the scientific data based on environmental, societal and economic variables is used by the EPA to determine the acceptable uses and conditions for use of the pesticide. The standard of analysis requires that the pesticide and its acceptable uses not cause harm to human health with reasonable certainty or pose unreasonable risks to the environment. During its review, the agency may request that studies need to be repeated, or additional studies may need to be conducted and new data submitted. The EPA staff evaluates risk assessment results and makes a decision based on risks versus benefits in light of the proposed use of the product. The EPA also may require changes in proposed labeling, uses, and application methods to mitigate risks to human health or the environment. For a new product with a new active ingredient that has low risk, the estimated time for the EPA to complete review of a registration submission is approximately 15 months. See “Item 1A. Risk Factors - We may not obtain the necessary U.S. or worldwide regulatory registrations, clearances or approvals to commercialize our products, and if we cannot commercialize our products, we will not become profitable.”

Our current or future products also are or may be subject to the Toxic Substance Control Act of 1976, or TSCA. TSCA provides the EPA with authority to require reporting, record-keeping and testing requirements, and restrictions relating to chemical substances and/or mixtures. Certain substances are generally excluded from TSCA, including, among others, food, drugs, cosmetics and pesticides. TSCA addresses the production, importation, use, and disposal of specific chemicals including polychlorinated biphenyls (PCBs), asbestos, radon and lead-based paint. If we determine that our products contain or constitute any “new chemical substances,” we are required to file a premanufacture notice (PMN) with the EPA 90 days before the start of production, and must include information about the chemical identity of the substance, byproducts, production volume, and descriptions of uses, human exposure and disposal practices, and any relevant test data. The EPA will at the end of the 90 day period issue a regulatory decision dropping the substance from any further review or, if not, specifying the need for additional review or other action, including any regulatory constraints upon production.

The marketing and sale of any of our current or future product in the United States for use on or in the human body also will require pre-clearance by the FDA. We understand that the FDA pre-clearance process typically takes from approximately 15 to 19 months, depending upon the type, complexity and novelty of the product candidate.

We also are subject to regulation by the U.S. Federal Trade Commission, or FTC, with respect to our environmental marketing claims. Products advertised as eco-friendly and “green” cleaning products must conform to the FTC's Guides for the Use of Environmental Marketing Claims. In the event the FTC were to determine that any of our products are not in compliance with such guides, the FTC could bring enforcement actions on the basis that our marketing claims are false or misleading, which if successful, could subject us to fines or other penalties which could have a material adverse effect on our operations.

Our Ygiene™ formulations are considered pesticides under FIFRA and require registration with the EPA and approval of each proposed disinfectant claim to be made. We have obtained EPA registration of our Ygiene™ formulation for disinfectant claims with respect to the Hospital and Industrial Application.

Our Ygiene™ professional disinfectant product and multipurpose cleaner and disinfectant product were registered with the German Bundesanstalt für Arbeitsschutz und Arbeitsmedizin, a German government sanctioned institute for safety and health, on January 5, 2010 and November 30, 2009, respectively. As a result of such registrations, we are permitted to sell such Ygiene™-based products in Germany. We have not sold any of our products in Germany and currently do not have adequate resources to attempt to make any such sales or to have our products manufactured for sale.

Our Ogiene™ formulations, which do not rely upon antibiotic or pesticide activity, are not regulated under FIFRA. All of the active ingredients of our Ogiene™ formulations are already on the Chemical Substance Inventory maintained by the EPA under TSCA and therefore are not subject to additional requirements under TSCA.

If we intend to market and sell any of our formulations as a skin sanitizer, to sterilize medical equipment or otherwise for use on or in the human body, we will need to obtain pre-clearance from the FDA. We have not submitted any of our formulations for clearance by the FDA and do not anticipate seeking FDA clearance for any of our formulations unless and until the requisite EPA registration for such formulation is obtained. If we were to seek FDA clearance for any of our formulations, we anticipate that the total cost to us for each pre-clearance would be approximately $400,000.

Employees

As of February 3, 2012, we had three full-time employees. We have part-time consultants devoting time to us. None of our employees are represented by union or collective bargaining agreements. We believe that our relationships with our employees are good.

Advisory and Consultant Agreements

Advisory Agreement

On August 26, 2009, the Company entered into an advisory agreement (the “Original Agreement”) with the Chertoff Group, LLC (“Chertoff Group”) whereby Chertoff Group agreed to provide certain professional services to the Company. The Agreement provided for a monthly advisory fee payable by the Company to Chertoff Group of $75,000 per month. In addition, the Agreement obligated the Company to make an equity award to Chertoff Group in the form of restricted stock or restricted stock units representing the right to receive, on a fully diluted basis, 10% of Company’s common stock on terms to be mutually agreed by the Company and Chertoff Group.

On February 3, 2010, we and Chertoff Group entered into a First Amendment to the Advisory Agreement (the “Amendment”) which amends the Original Agreement. The Amendment modifies, among other things, the scope of services to be provided under the Original Agreement by Chertoff Group and reduces the monthly fee for such services to $28,000 per month during the term of the Original Agreement.

In connection with the execution and delivery of the Amendment, we also entered into a Stock Appreciation Rights Agreement (the "SAR Agreement"), a Registered Stock Unit Agreement (the "RSU Agreement") and a Registration Rights Agreement, dated as of February 3, 2010, with Chertoff Group (the “Registration Rights Agreement” and together with the SAR Agreement and the RSU Agreement, the “Equity Award Agreements”). The Equity Award Agreements evidence the terms of the equity awards required to be made to Chertoff Group pursuant to the Amendment with Chertoff Group. We relied on the exemption from registration provided by Section 4(2) of the Securities Act of 1933, as amended, in issuing the securities covered by the Equity Award Agreements.

On or about June 28, 2010, Chertoff Group informed the Company that Chertoff Group had terminated the August 26, 2009 Advisory Agreement, as amended between Chertoff Group and the Company.

Pursuant to the SAR Agreement, we granted 7,442,725 stock appreciation rights to Chertoff Group evidencing the Chertoff Group’s right to receive, for each stock appreciation right (“SAR”) exercised, up to the number of shares of our common stock (the “SAR Shares”) equal in value to the excess of the Fair Market Value of one share of common stock on the date of exercise (as defined in the SAR Agreement) over $0.186. The SARs shall vest on a cumulative basis according to the following vesting schedule: 25% shall vest on September 1, 2010, an additional 25% shall vest on September 1, 2011, and the remaining 50% shall vest on September 1, 2012. In addition, such vesting shall accelerate and fully vest upon the occurrence of certain events specified in the SAR Agreement, including a Change in Control of our company (as defined in the SAR Agreement).

Pursuant to the RSU Agreement, we granted to Chertoff Group the right to receive on the “Delivery Date” (as defined in the RSU Agreement) a number of shares of common stock (the “RSU Shares,” and together with the SAR Shares, the “Chertoff Group Shares”) equal to “A” divided by “B,” where “A” equals 1,384,346.85, and “B” equals the greater of (i) the Fair Market Value of a share of common stock on the Delivery Date (as defined in the RSU Agreement) and (ii) $0.186. The RSU Agreement defines “Delivery Date” as the earlier to occur of January 2, 2013 and the date that is immediately prior to a Change in Control of our company (as defined in the RSU Agreement). The RSUs shall vest on a cumulative basis according to the following vesting schedule: 25% shall vest on September 1, 2010, 50% shall vest on September 1, 2011 and 100% shall vest on September 1, 2012. In addition, such vesting shall accelerate and fully vest upon the occurrence of certain events specified in the RSU Agreement, including a change in control of our company (as defined in the RSU Agreement).

The Company holds the opinion of which the SAR and RSU Shares were not earned by the Chertoff Group under the terms provided for within the agreements. Therefore, the Company has not issued the SAR’s or RSU Shares, nor does it intend to. Accordingly, the Company has not recorded any expense in connection with the SAR’s or RSU Shares.

Consulting Agreement

During the first quarter of fiscal 2009, we entered into consulting agreements with each of Khasar Investments Limited, Kachiun Investments Limited, Indus Limited, Orient Arts Limited and Style Asia Limited (collectively, the “Consulting Agreements”). The Consulting Agreements with the consultants other than Style Asia Limited related to proposed commercial activities of our company in Japan, South Korea, Israel, New Zealand and Australia (collectively, the “Non-EU Territories”). The Consulting Agreement with Style Asia Limited related to proposed commercial activities of our company in the United Kingdom, France and Germany (the “EU Territories”). Each of the Consulting Agreements has a term that expires three years from the date of such agreement, subject to extension in certain instances. We issued an aggregate of 11,300,000 shares of our common stock as partial consideration for the service obligations contained in the Consulting Agreements, 1,500,000 shares of which were issued to Khasar Investments Limited, 800,000 shares of which were issued to Kachiun Investments Limited, 2,500,000 shares of which were issued to Indus Limited, 3,400,000 shares of which were issued to Orient Arts Limited, and 3,100,000 shares of which were issued to Style Asia Limited. The Consultant Agreement with Style Asia Limited was terminated, effective February 24, 2010, for no additional consideration, beyond the shares issued at inception of the agreement. We have determined that we will not be able to avail ourselves of any services to be provided under the Consultant Agreements relating to the Non-EU Territories prior to the expiration of the initial term of each such agreement.

On February 24, 2010 the company terminated the above Consulting Agreements and no compensation or reimbursement of expenses or other amount is due or owed by the Company pursuant to such agreements.

ITEM 1A. RISK FACTORS

An investment in our common stock is speculative and involves a high degree of risk. You should carefully consider the risks described below, together with the other information contained in this Annual Report on Form 10-K. The risks described below could have a material adverse effect on our business, financial condition and results of operations.

Risks Related to Our Business

We have generated no meaningful product revenues to date and will need to raise additional funds in the near future. If we are unable to obtain the funds necessary to continue our operations, we will be required to delay, scale back or eliminate certain of our product development activities and may not continue as a going concern.

We have not generated significant product revenues to date. We incurred net losses of approximately $2.819 million, after consideration of $224,812 attributable to the Non-Controlling interest's share of the net loss, for the year ended October 31, 2011. For the year ended October 31, 2010, we had net losses of approximately $3.502 million, after consideration of $331,728 attributable to the Non-Controlling interest's share of the net loss, for the year ended October 31, 2010. Our auditors have concluded that our net losses negative cash flow and accumulated deficit as of October 31, 2011 raise substantial doubt about our ability to continue as a going concern.

For the current 2012 fiscal year, we have a total of $2.4 million committed to the Company in the form of equity financing, which to date, we have received $600,000. We may need to raise substantial additional funds or take other measures within the current fiscal year in order to continue our operations. Our future capital requirements will depend on numerous factors, including:

the results of studies relating to the efficacy and impacts on health and the environment of our products;

the scope and results of our research and development efforts;

the time required to obtain regulatory registrations, clearances or approvals;

our ability to establish and maintain marketing alliances and collaborative agreements; and

the cost of our internal marketing activities.

Our ability to accurately project revenues and expenses can be significantly impacted by unforeseen events, developments and contingencies that cannot be anticipated. As such, there can be no assurance that our plans to raise additional financing will be successful or sufficient in order to sustain our operations over the next year.

It is difficult for companies like ours to raise funds in the current economic environment and additional financing may not be available on acceptable terms, if at all. If adequate funds are not available, we will be required to delay, scale back or eliminate our product development activities or operations or obtain funds through arrangements with collaborative partners or others that may require us to relinquish rights to certain of our technologies or products that we would not otherwise relinquish.

We are the subject of an ongoing investigation by the SEC that could have a material adverse impact on our business.

As described under “Item 3. Legal Proceedings”, on October 1, 2009, the SEC issued a formal order of investigation to us regarding possible securities laws violations by us and other persons. The investigation concerns the process by which we became a publicly traded entity, trading in our shares, and disclosure and promotion of developments in our business. The SEC has requested that we deliver certain documents to the SEC. We have incurred, and expect to continue to incur, significant costs in responding to such investigation. Any adverse findings by the SEC in connection with such investigation could have a material adverse impact on our business, including our ability to continue to operate as a publicly traded company.

Our directors and executive officers do not have experience in public company matters, which could impair our ability to comply with legal and regulatory requirements.

Some of our directors and executive officers have almost no public company management experience. This could impair our ability to comply with legal and regulatory requirements such as the Sarbanes-Oxley Act of 2002 and applicable federal securities laws including filing required reports and other information required on a timely basis. In fiscal 2009 we failed to meet the filing deadline for two periodic reports. There can be no assurance that our management will be able to implement and affect programs and policies in an effective and timely manner that adequately respond to increased legal, regulatory compliance and reporting requirements imposed by such laws and regulations. Our failure to comply with such laws and regulations could lead to the imposition of fines and penalties, affect our ability to operate as a publicly traded company and further result in the deterioration of our business.

Management has concluded that our internal controls over financial reporting were ineffective as of October 31, 2011.

Effective internal controls are necessary for us to provide reliable financial reports and effectively prevent fraud. We are required to maintain a system of internal control over financial reporting, which is defined as a process designed by, or under the supervision of, our principal executive officer and principal financial officer, or persons performing similar functions, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

The areas of our internal control over financial reporting requiring improvement were generally with respect to our financial statement close process, our entity level controls (including with respect to disbursements from bank accounts), recording of stock issuances, our functional controls and our segregation of duties. See discussion under “Item 9A. Controls and Procedures” Our management has determined that we had not consistently followed established internal control over financial reporting procedures related to the analysis, documentation and review of selection of the appropriate accounting treatment for certain transactions.

Although we have assigned priority to the improvement in our internal control over financial reporting and have taken certain actions, and plan to continue to take, action in furtherance of such improvement, we cannot assure you that the above-mentioned areas will be fully remedied. Moreover, we cannot assure you that we will not, in the future, identify further areas requiring improvement in our internal control over financial reporting. We cannot assure you that the measures we have taken or will take to remediate any areas in need of improvement will be effective or that we will implement and maintain adequate controls over our financial processes and reporting in the future as we continue our growth.

If we are unable to establish appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations, result in additional restatements of our financial statements, harm our operating results, subject us to regulatory scrutiny and sanction, cause investors to lose confidence in our reported financial information and have a negative effect on the market price for shares of our common stock. In addition, we may incur significant expenses in connection with restating our previously reported financial statements and remediating the weaknesses in our internal control over financial reporting which could have a negative effect on our operating results.

We failed to file federal tax returns for the fiscal years ended December 31, 2007 and the ten months ended October 31, 2008 and for the fiscal year ended October 31, 2010 and 2009. We have also failed to file any New Jersey state tax returns. We cannot assure you that we will not incur fines and penalties for failure to file such tax returns.

We have a non-controlling interest in our subsidiary BioNeutral Laboratories.

We currently hold approximately 96% of the outstanding interests in our subsidiary, BioNeutral Laboratories. We did not receive consents to the Share Exchange from all common and preferred shareholders of BioNeutral Laboratories, and we have accounted for those shareholders who did not sign consents as holders of the remaining 4% outstanding interests in BioNeutral Laboratories as not have received shares in BioNeutral. As described in “Item I Business -- Company Overview” the Share Exchange Consents did not specify the number of shares of BioNeutral Laboratories common stock to be exchanged by the Consenting Shareholder and did not affirmatively make the representation and warranties to be made by our stockholders as set forth in the Share Exchange Agreement. In light of such omissions, there can be no assurances that a shareholder will not challenge the validity of its consent and request a rescission offer in respect of shares of common stock issued to such person. There can also be no assurances that in light of the content of such Share Exchange Consent, we had a basis for a valid private placement of our common stock issued in the Share Exchange and that we will not be requested to conduct a rescission offer.

In addition, we believe that the shareholders who consented to the Share Exchange and were issued shares of our common stock failed to deliver to us the stock certificates representing their shares of common stock and Series A Preferred Stock of BioNeutral Laboratories and may claim they also have an ownership interest in BioNeutral Laboratories. Although we would challenge any such claims, we cannot assure you that we would prevail, in which case our percentage ownership interest in BioNeutral Laboratories would decrease. In addition, any litigation with respect to such claims could result in substantial costs, diversion of management's attention and diversion of our resources. The size and uncertainty with respect to the Non-Controlling interest in BioNeutral Laboratories may make it difficult for us to raise capital, and even if we were to raise capital, would result in dilution to our stockholders at the public company level that is not experienced by stockholders that are part of the Non-Controlling interest, each of which would have a material adverse effect on our financial position.

We have a limited operating history on which to evaluate our potential for future success and to determine whether we will be able to execute our business plan. This makes it difficult to evaluate future prospects and the risk of success or failure of our business.

We have not commenced the marketing and sale of our bioneutralizer, odor controllers and antimicrobial applications and have generated no significant revenues to date. Consequently, our historical results of operations may not give you an accurate indication of our future results of operations or prospects. You must consider our business and prospects in light of the risks and difficulties we will encounter as an early-stage company in a new and rapidly evolving market. These risks include:

·	our ability to obtain regulatory registration, clearance or approval of our products;

·	our ability to effectively and efficiently market and distribute our products through our sales force and third-party distributors;

·	the ability of manufacturers utilized by us to effectively and efficiently manufacture our products;

·	our ability to obtain market acceptance of our current products and future products that may be developed by us;

·	our ability to sell our products at competitive prices which exceed our per unit costs;

·	our ability to adequately protect our intellectual property;

·	our ability to attract and retain key business development, technical and management personnel; and

·	our ability to effectively manage our anticipated growth.

We may not be able to address these risks and difficulties, which could materially and adversely affect our revenues, operating results and our ability to continue to operate our business. There can be no assurance that we will be able to achieve or sustain profitability, or generate sufficient cash flow to meet our capital and operating expense obligations. As a result, you could lose your entire investment in our stock.

We currently are not profitable and may never become profitable, which could negatively impact the value of our common stock.

We have a history of losses and expect to incur substantial losses and negative operating cash flow for the foreseeable future, and we may never achieve or maintain profitability. Even if we succeed in developing and commercializing one or more of our products, we expect to incur substantial losses for the foreseeable future and may never become profitable. We also expect to continue to incur significant operating and capital expenditures and anticipate that our expenses will increase substantially in the foreseeable future as we:

continue to undertake development and laboratory testing for our product candidates;

seek regulatory registrations, clearances or approvals for our products;

implement additional internal systems and infrastructure;

lease additional or alternative office facilities; and

hire additional personnel.

We also expect to experience negative operating cash flow for the foreseeable future as we fund our operating losses and capital expenditures. As a result, we will need to generate significant revenues in order to achieve and maintain profitability. We may not be able to generate these revenues or achieve profitability in the future. Our failure to achieve or maintain profitability could negatively impact the value of our common stock.

We may not obtain the necessary U.S. or worldwide regulatory registrations, clearances or approvals to commercialize our products, and if we cannot commercialize our products, we will not become profitable.

We will need to register as pesticides with the EPA certain of our products we intend to commercialize in the U.S. and to obtain similar registrations from the EPA equivalent regulatory authorities in foreign jurisdictions to commercialize our product candidates in those jurisdictions. We also may need to obtain FDA clearance to commercialize any of our products we intend to market for human application.

Some of our current or future products are or may be subject to FIFRA. In order to market or sell any of our formulations that constitute pesticides, including our Ygiene ™ formulation, such formulations must be registered or licensed by the EPA. Each application for registration of a pesticide product by the EPA must include the results of laboratory testing conducted, which tests must be conducted in accordance with GLP to ensure the quality and integrity of test data submitted to the EPA in support of a pesticide product registration. If and when the GLP testing for a pesticide product is complete, we will need to submit to the EPA an application demonstrating that the product candidate is effective for its intended use and when used in accordance with recognized practice, will not cause “unreasonable adverse effects” to humans or the environment. Satisfaction of the EPA’s regulatory requirements typically requires from nine to over twenty months to complete, depending upon the type, complexity and novelty of the product and requires substantial resources for research, development and testing. We cannot predict whether our research and testing will result in products that the EPA finds effective for indicated uses and consistent with applicable regulatory standards regarding effects on humans or the environment. Testing, preparation of necessary applications and the processing of those applications by the EPA is expensive and time consuming. We do not know if the EPA will act favorably or quickly in making such reviews, and significant difficulties or costs may be encountered by us in our efforts to obtain EPA registration. The EPA also may place conditions on registrations that could restrict commercial applications of such products. Product registrations may be withdrawn if compliance with regulatory standards is not maintained or if problems occur following initial marketing.

The EPA has substantial discretion in the registration process and may require us to conduct additional testing or to perform post-marketing studies. The registration process may also be delayed by changes in government regulation, future legislation or administrative action or changes in EPA policy that occur prior to or during our regulatory review. Delays in obtaining regulatory registrations, clearances or approvals may:

delay commercialization of, and our ability to derive product revenues from, our product candidates;

impose costly procedures on us; and

diminish any competitive advantages that we may otherwise have.

Even if we comply with all EPA requests, the EPA ultimately may reject any or all of our future applications. We cannot be sure that we will ever obtain registration of any of our antimicrobial products. Failure to obtain EPA registration of any of our antimicrobial products will severely undermine our business by reducing our number of salable products and, therefore, corresponding product revenues.

In foreign jurisdictions, we must obtain similar regulatory approvals from the appropriate authorities before we can commercialize our products. Foreign regulatory registration, clearance or approval processes generally include all of the risks associated with the EPA registration procedures described above. We have not yet made any determination as to which foreign jurisdictions we may seek regulatory approval in and have not undertaken any steps to obtain approvals or register our products for sale in any foreign jurisdiction other than Germany.

Independent GLP tests are very expensive, time consuming and difficult to design and implement.

Independent GLP tests are very expensive and difficult to design and implement, in part because they are subject to rigorous regulatory requirements. The laboratory testing process is also time consuming. The GLP laboratory tests with respect to the impacts on health and the environment of our Ygiene™ formulation was completed in January 2010, with positive result for submission to the EPA. The GLP laboratory tests with respect to the efficacy and physical characteristics of the Ygiene™ formulation was completed during July 2010. On August 19, 2010, the Company submitted its application to the U.S. Environmental Protection Agency of the Company’s Ygiene antimicrobial for approval for use as a bactericide, fungicide, sporicide on hard, non-porous surfaces in hospitals, health care facilities and other commercial uses. The Company received approval and registration for Ygiene 206 on February 28, 2011.

If other products we may develop in the future are completed as planned, we cannot be certain that their results will support our product claims. The GLP testing may fail to demonstrate that our product candidates are effective for indicated use or meet the EPA's standards with respect to the impacts on health and the environment. This failure would cause us to abandon a product formulation and may delay development of other products. Any delay in, or termination of, GLP testing will delay the filing of our applications with the EPA and, ultimately, our ability to commercialize our products and generate product revenues.

If our efforts to achieve and maintain market acceptance of our products are not successful, we will not attain profitability.

We have invested a significant portion of our time and financial resources in the development and commercialization of our Ygiene™ and Ogiene™ formulations. We expect that sales of our Ygiene™ and Ogiene™ formulations will constitute a substantial portion, or all, of any revenues in future periods. Failure to obtain market acceptance for Ygiene™ and Ogiene™ formulations, whether as a result of competition, lack of customer demand, lack of product effectiveness and safety, or any other factor, would have a materially adverse effect on our business, financial condition and results of operations. Even if our products achieve market acceptance, we may not be able to maintain product sales or other forms of revenue over time if new products or technologies are introduced that are more favorably received or are more cost-effective than our products or otherwise render our products less attractive or obsolete.

We are subject to regulation by the FTC with respect to our environmental marketing claims and any other advertising claims, and if we fail to comply with such regulation, we could become subject to fines or other penalties which could have a material adverse effect on our operations.

We expect to advertise some of our products as “eco-friendly” and “green” cleaning products and must conform with the FTC's Guides for the use of Environmental Marketing Claims. In the event the FTC were to determine that our products are not in compliance with such guides, the FTC could bring enforcement actions against us on the basis that our marketing claims are false or misleading, which if successful, could subject us to fines or other penalties which could have a material adverse effect on our operations.

The specialty chemical products market is highly competitive and we may not be able to compete effectively.

Our Ogiene™ and Ygiene™ products will compete in highly competitive markets dominated by extremely large, well financed domestically and internationally recognized chemical and pharmaceutical companies. We believe substantially all of our competitors have greater financial resources than we do in the areas of sales, marketing, and branding and product development. Many of our competitors also already have well established brands and distribution, and we expect to face additional competition from these competitors in the future. Focused competition by larger chemical and pharmaceutical corporations could substantially limit or eliminate our potential market share and ability to profit from our products and technologies.

The specialty chemical products market is susceptible to rapid change, and developments by competitors with greater resources may render our products or technologies uneconomical or obsolete. Our ability to compete will depend upon our ability to quickly develop marketable products, brand recognition and novel distribution methods, and to displace existing, established and future products in our relevant target markets. We may not be successful in doing so and may not become profitable.

If we are not able to manage rapid growth effectively, we may not become profitable.

Our success will depend upon the expansion of our operations and the effective management of our growth, which will place a significant strain on our management and on our administrative, operational and financial resources. The growth in the size and geographic range of our business will place significant demands on management and our operating systems. Our ability to manage our growth effectively will depend on our ability to, among other things:

·	attract additional management personnel;

·	develop and improve our operating systems;

·	hire, train, and manage an employee base; and

·	maintain adequate service capacity.

There can be no assurance that we will be able to effectively manage growth and build the infrastructure necessary to achieve our plans for growth. If we are unable to manage our growth effectively, our business may suffer.

Our success depends on our ability to retain our key personnel and the loss of any of our key personnel may materially and adversely affect our operations and our ability to execute our growth strategy.

Our present and future performance will depend on the continued service of our senior management personnel. Our key employee is Dr. Andy Kielbania, our Chief Scientific Officer and Interim Chief Executive Officer. We currently have a 2 year contract with Mr. Kielbania as our Chief Scientific Officer. The loss of the services of this individual could have a material and adverse effect on us and our stock price may decline. In addition, our ability to execute our business plan is dependent on our ability to attract and retain additional highly skilled personnel. We currently do not have long term employment agreements with our officers. We do not maintain any key man life insurance on any of our key personnel.

Because competition for highly qualified business development and scientific personnel is intense, we may not be able to attract and retain the employees we need to support our planned growth.

To successfully meet our objectives, we must attract and retain highly qualified business development and scientific personnel with specialized skill sets focused on the industries in which we compete, or intend to compete. Competition for qualified business development and scientific personnel can be intense. Our ability to meet our business development objectives will depend in part on our ability to recruit, train and retain top quality people with advanced skills who understand our technology and business. In addition, it takes time for our new personnel to become productive and to learn our business. If we are unable to hire or retain qualified business development and scientific personnel, it will be difficult for us to sell our products or to license our technology, and we may experience a shortfall in revenue and not achieve our anticipated growth.

We may become subject to product liability claims, as a result of which we could incur substantial liabilities and be required to limit commercialization of our products, which could adversely affect our business.

If we are able to sell any of our products for use by consumers and institutions, we may become liable for any damage caused by our products, whether used in the manner intended or not. Any such claim of liability, whether meritorious or not, could be time-consuming, result in costly litigation, damage our reputation and/or require us to limit the commercialization of our products. Although we maintain general liability insurance, our insurance may not cover potential claims of the types described above and may not be adequate to indemnify for all liabilities that may be imposed. Any imposition of liability that is not covered by insurance or is in excess of insurance coverage could harm our business and operating results, and you may lose some or all of any investment you have made, or may make, in our common stock.

If we are unable to obtain, maintain or defend patent and other intellectual property ownership rights relating to our technology, we may not be able to develop and market products based on our technology, which would have a material adverse impact on our results of operations and the price of our common stock.

We rely and expect in the future to rely on a combination of patent, trademark, trade secret and copyright law, and contractual restrictions to protect the proprietary aspects of our technology and business. These legal protections afford only limited protection for our intellectual property and trade secrets. Unauthorized parties may attempt to copy aspects of our proprietary technology or otherwise obtain and use information that we regard as proprietary. As a result, we cannot assure you that our means of protecting our proprietary rights will be adequate, and the infringement of such rights could have a material negative impact on our business and on our results of operations.

We have filed U.S. and foreign patent applications for our intellectual property as well as applications in the U.S. and European Community for the registration of our trademarks, BioNeutral ™ Ygiene ™ and Ogiene ™. We have also filed an application in the U.S. to register our tagline SCIENCE TO SAVE LIVES & PROTECT THE ENVIRONMENT™. We may not be successful in obtaining the Intellectual Property or trademark registrations, and we may be unable to obtain additional patent and trademark protection in the future. Further, the scope of the Intellectual Property and trademarks we may obtain could potentially be inadequate to encompass our commercial operations. Furthermore, legal standards relating to the validity, enforceability and scope of protection of intellectual property rights are uncertain. It is possible that, despite our efforts, competitors or others will create and use products in violation of our Intellectual Property and/or adopt service names similar to our service names or otherwise misappropriate our intellectual property. Such patent infringement or misappropriation could have a material adverse effect on our business. Any unauthorized production of our products, whether in the U.S. or overseas, would or could reduce our own sales of products, thereby reducing, perhaps significantly, our actual or potential profits. Adopting similar names and trademarks by competitors could lead to customer confusion. Any claims or customer confusion related to our trademarks could negatively affect our business.

Litigation or other action may be necessary to enforce our intellectual property rights and protect our trade secrets. If third parties apply to register our trademarks in the U.S. or other countries, we may oppose those applications and may be required to participate in proceedings before the regulatory agencies who determine priority of rights to such trademarks. We currently are opposing applications for registration by a third party of our trademark BioNeutral ™; however, there can be no assurance that we will prevail with such opposition. Such administrative proceedings and any other litigation or adverse priority proceeding could result in substantial costs and diversion of resources, and could seriously harm our business and operating results. See “Item 3. Legal Proceedings.”

To the extent that we operate internationally, the laws of foreign countries may not protect our proprietary rights to the same extent as do the laws of the United States. Many countries have a “first-to-file” trademark registration system. As a result, we may be prevented from registering or using our trademarks in certain countries if third parties have previously filed applications to register or have registered the same or similar trademarks. Our means of protecting our proprietary rights may not be adequate, and our competitors, or potential competitors, could independently develop similar technology.

It is possible that our products infringe upon the Intellectual Property or violate the proprietary rights of others, which could have a material adverse effect on our business.

In the event that products we sell are deemed to infringe upon the Intellectual Property or other proprietary rights of third parties, we could be required to modify our products or obtain a license for the manufacture and/or sale of such products and services. In such event, we cannot assure you that we would be able to do so in a timely manner, upon acceptable terms and conditions, or at all, and the failure to do any of the foregoing could have a material adverse effect upon our business. Moreover, we cannot assure you that we will have the financial or other resources necessary to enforce or defend a patent infringement or proprietary rights violation action. In addition, if our products or proposed products are deemed to infringe or likely to infringe upon the Intellectual Property or proprietary rights of others, we could be subject to injunctive relief and, under certain circumstances, become liable for damages, which could also have an adverse effect on our business.

Because we have no experience selling, marketing or distributing products and no internal capability to do so, we may not be successful in marketing our products, which would adversely affect our results of operations.

We currently have no significant sales. We are developing our marketing and distribution capabilities. While we anticipate having the resources in the foreseeable future to allocate to the sales and marketing of our proposed products, there is no assurance that we will be able to do so. Significant capital expenditures, management resources and time will be required to establish and develop an in-house marketing and sales force with technical expertise. There can also be no assurance that we will be able to develop in-house sales capabilities or that we will be able to market and sell our product in the United States or overseas, which would adversely affect the results of our operations.

We have no distribution capabilities and expect to rely primarily on product distribution arrangements with third parties. We may license our technology to certain third parties for commercialization of certain applications. We expect to enter into additional distribution agreements and licensing agreements in the future, and we may not be able to enter into these additional agreements on terms that are favorable to us, if at all. In addition, we may have limited or no control over the distribution activities of these third parties. These third parties could sell competing products and may devote insufficient sales efforts to our products. As a result, our future revenues from sales of our products, if any, will depend on the success of the efforts of these third parties.

We expect to rely exclusively on a limited number of third parties to manufacture our products, and may be unable to distribute our products if any of our manufacturers are unable to manufacture our products in a timely manner or at all, which could adversely affect our results of operations.

We have no experience in manufacturing products and do not intend to establish our own manufacturing facilities. We lack the resources and expertise to manufacture our own products. If we receive the requisite approvals to market and sell any of our products, we intend to contract with one or more manufacturers to manufacture our products. Our anticipated reliance on a limited number of third-party manufacturers exposes us to the following risks:

We may be unable to identify manufacturers on acceptable terms or at all because the number of potential manufacturers is limited and depending on the product formulation being manufactured may require registration, clearance or approval by the EPA or FDA. This registration, clearance or approval would require testing and compliance inspections. In addition, a new manufacturer would have to be educated in, or develop substantially equivalent processes for, production of our products after receipt of EPA or FDA registration, clearance or approval, if any.

Our third-party manufacturers might be unable to manufacture our products in the volume and of the quality required to meet our clinical and commercial needs, if any.

Our future contract manufacturers may not perform as agreed or may not remain in the contract manufacturing business for the time required to distribute our products.

Pesticide manufacturers are subject to ongoing periodic unannounced inspection by the EPA and in some cases, the FDA, and corresponding state agencies to ensure strict compliance with good manufacturing practice and other government regulations and corresponding foreign standards. We do not have control over third-party manufacturers’ compliance with these regulations and standards.

If any third-party manufacturer makes improvements in the manufacturing process for our products, we may not own, or may have to share, the intellectual property rights to the innovation.

We expect to rely, in part, on third parties to develop Ogiene™ and Ygiene™ -based products and they may not do so successfully or diligently.

We will rely, in part, on third parties to whom we license rights to our technology to develop products containing Ogiene™ and Ygiene™ for many of the applications for which we believe Ogiene™ and Ygiene™ -based products have, or may have, market opportunities. Generally, under our contractual relationships with these third parties, we rely on the third party to fund and direct product development activities and appropriate regulatory filings. Any of these third parties may not be able to successfully develop such Ogiene™ and Ygiene™ -based products, due to, among other factors, a lack of capital, a lack of appropriate diligence, a change in the evaluation by the third party of the market potential for Ogiene™ or Ygiene™ -based products, technical failures and poorer than expected test results resulting from trial use of any products that may be developed.

If we are unable to timely fill orders for our products, our operations could be materially adversely impacted.

In order for us to successfully market our products, we must be able to timely fill orders for our product line. Our ability to timely meet our supply requirements will depend on numerous factors including our ability to successfully maintain an effective distribution network and to maintain adequate inventories and the ability of any manufacturer we engage to adequately produce our products in volumes sufficient to meet demand. Our failure to adequately supply our products to retailers or of our manufacturer to adequately produce products to meet demand could materially adversely impact our operations.

Our failure to procure adequate supplies of raw materials could delay the commercial introduction or shipment and hinder market acceptance of our products, which could materially adversely affect our business.

If for any reason we are unable to obtain any of the raw materials in our products on a timely basis or at all or if the prices of such materials increase the commercial introduction and shipment of our products could be delayed or halted and the market acceptance of our products could be hindered, any or all of which could adversely affect our business.

Risks Related to Our Corporate Governance and Common Stock

Our stock price is, and we expect it to remain, volatile, which could limit investors’ ability to sell stock at a profit.

The market price of our common stock is highly volatile and could be subject to wide fluctuations in response to a number of factors some of which are beyond our control, including:

•		dilution caused by our issuance of additional shares of common stock and other forms of equity securities in connection with future capital financings to fund our operations and growth, to attract and retain valuable personnel and in connection with future strategic partnerships with other companies;
•		announcements of new acquisitions or other business initiatives by our competitors;
•		our ability to take advantage of new acquisitions or other business initiatives;
•		fluctuations in revenue from our products;
•		changes in the market for our products and/or in the capital markets generally;
•		changes in the demand for our products, including changes resulting from the introduction or expansion of new products;
•		quarterly variations in our revenues and operating expenses;
•		changes in the valuation of similarly situated companies, both in our industry and in other industries;
•		changes in analysts’ estimates affecting our company (if any), our competitors and/or our industry;
•		changes in the accounting methods used in or otherwise affecting our industry;
•		additions and departures of key personnel;
•		announcements of technological innovations or new products available to the our industry;
•		announcements by relevant governments pertaining to incentives for products utilizing our technology;
•		fluctuations in interest rates and the availability of capital in the capital markets; and
•		significant sales of our common stock, including sales by investors following registration of the shares of our common stock issued in connection with the Share Exchange Agreement and/or future investors in future offerings we expect to make to raise additional capital.

These and other factors are largely beyond our control, and the impact of these risks, singly or in the aggregate, may result in material adverse changes to the market price of our common stock. In addition, the stock market in general, and the market for specialty chemical companies in particular, has experienced extreme price and volume fluctuations that may have been unrelated or disproportionate to the operating performance of individual companies. These broad market and industry factors may seriously harm the market price of our common stock, regardless of our operating performance.

On the OTCBB, there will be a limited trading market for our common stock and you may not be able to resell your shares at or above the price at which you purchased your shares, or at all.

Our common stock is quoted on the OTCBB. Trading volume of OTCBB stocks have been historically lower and more volatile than stocks traded on an exchange. Quoting of our stock on the OTCBB could have an adverse effect on the market price of, and the efficiency of the trading market for, our common stock, not only in terms of the number of shares that can be bought and sold at a given price, but also through delays in the timing of transactions and less coverage of us by securities analysts, if any. Trading on the OTCBB may also reduce the fair market value of our common stock and have an adverse effect on our ability to raise capital in the public of private equity markets or to acquire other companies or technologies by using common stock as consideration.

Future sales of our common stock, or the perception that such sales could occur, could have an adverse effect on the market price of our common stock.

As of January 24, 2012 there were approximately 105,609,092 shares of our common stock and approximately 150 holders of our common stock. Future sales of our common stock, pursuant to a registration statement or Rule 144 under the Securities Act, or the perception that such sales could occur, could have an adverse effect on the market price of our common stock. The shares of our common stock issued in connection with the consummation of the Share Exchange which is a large number of shares relative to the trading volume of our common stock, may be eligible for resale under Rule 144 following the date on which we file this Annual Report so long as the applicable conditions contained in Rule 144(i) are satisfied. The market price of our common stock could fall if the holders of these shares sell them or are perceived by the market as intending to sell them.

Since our common stock is classified as a “penny stock,” our common stock will be subject to rules that impose sales practice and disclosure requirements on broker-dealers who engage in certain transactions involving a penny stock.

We are subject to the penny stock rules adopted by the SEC that require brokers to provide extensive disclosure to its customers prior to executing trades in penny stocks. These disclosure requirements may cause a reduction in the trading activity of our common stock, which in all likelihood would make it difficult for our stockholders to sell their securities.

Rule 3a51-1 of the Exchange Act establishes the definition of a “penny stock,” for purposes relevant to us, as any equity security that has a minimum bid price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to a limited number of exceptions which are not available to us. It is likely that our shares will be considered to be penny stocks for the immediately foreseeable future. This classification severely and adversely affects any market liquidity for our common stock.

For any transaction involving a penny stock, unless exempt, the penny stock rules require that a broker or dealer approve a person's account for transactions in penny stocks and the broker or dealer receive from the investor a written agreement to the transaction setting forth the identity and quantity of the penny stock to be purchased. In order to approve a person's account for transactions in penny stocks, the broker or dealer must obtain financial information and investment experience and objectives of the person and make a reasonable determination that the transactions in penny stocks are suitable for that person and that that person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prepared by the SEC relating to the penny stock market, which, in highlight form, sets forth:

	·	the basis on which the broker or dealer made the suitability determination; and
	·	that the broker or dealer received a signed, written agreement from the investor prior to the transaction.

Disclosure also must be made about the risks of investing in penny stocks in both public offerings and in secondary trading and commission’s payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

Because of these regulations, broker-dealers may not wish to engage in the above-referenced necessary paperwork and disclosures and/or may encounter difficulties in their attempt to sell shares of our common stock, which may affect the ability of selling shareholders or other holders to sell their shares in any secondary market and have the effect of reducing the level of trading activity in any secondary market. These additional sales practice and disclosure requirements could impede the sale of our common stock, if and when our common stock becomes publicly traded. In addition, the liquidity for our common stock may decrease, with a corresponding decrease in the price of our common stock. Our common stock are subject to such penny stock rules for the foreseeable future and our shareholders will, in all likelihood, find it difficult to sell their common stock.

The market for penny stock has experienced numerous frauds and abuses which could adversely impact subscribers of our stock.

We believe that the market for penny stocks has suffered from patterns of fraud and abuse. Such patterns include:

	·	control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer;
	·	manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases;

	·	“boiler room” practices involving high pressure sales tactics and unrealistic price projections by inexperienced sales persons;
	·	excessive and undisclosed bid-ask differentials and markups by selling broker-dealers; and
	·	wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the inevitable collapse of those prices with consequent investor losses.

We believe that many of these abuses have occurred with respect to the promotion of low price stock companies that lacked experienced management, adequate financial resources, an adequate business plan and/or marketable and successful business or product.

We do not expect to pay dividends in the foreseeable future.

We do not intend to declare dividends for the foreseeable future, as we anticipate that we will reinvest any future earnings in the development and growth of our business. Therefore, investors will not receive any funds unless they sell their common stock, and stockholders may be unable to sell their shares on favorable terms or at all. Investors cannot be assured of a positive return on investment or that they will not lose the entire amount of their investment in the common stock.

Cautionary Note Regarding Forward-Looking Statements.

This Annual Report on Form 10-K may contain forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act.

Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions, and future performance, and involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements.

All statements other than statements of historical fact are statements that could be forward-looking statements. You can identify these forward-looking statements through our use of words such as “may,” “will,” “can,” “anticipate,” “assume,” “should,” “indicate,” “would,” “believe,” “contemplate,” “expect,” “seek,” “estimate,” “continue,” “plan,” “point to,” “project,” “predict,” “could,” “intend,” “target,” “potential,” and other similar words and expressions of the future. These forward-looking statements may not be realized due to a variety of factors, including, without limitation:

	·	our inability to raise capital;
	·	our failure to obtain the necessary regulatory approvals for our products;
	·	the results of the current SEC investigation of our company;
	·	the inability to obtain or retain customer acceptance of our products;
	·	the failure of the market for our products to develop;
	·	our inability to protect our intellectual property;
	·	our inability to manage any growth;
	·	the effects of competition from a wide variety of local, regional, national and other providers of products similar to our products;
	·	changes in laws and regulations, including tax and securities laws and regulations and laws and regulations promulgated by the EPA, FDA and FTC.
	·	changes in accounting policies, rules and practices;
	·	changes in technology or products, which may be more difficult or costly, or less effective than anticipated; and
	·	the other factors listed under this Item 1A - “Risk Factors.”

All forward-looking statements are expressly qualified in their entirety by this cautionary notice. You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this Annual Report on Form 10-K. We have no obligation, and expressly disclaim any obligation, to update, revise or correct any of the forward-looking statements, whether as a result of new information, future events or otherwise. We have expressed our expectations, beliefs and projections in good faith and we believe they have a reasonable basis. However, we cannot assure you that our expectations, beliefs or projections will result or be achieved or accomplished.

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not Applicable.

ITEM 2. PROPERTIES

Our executive offices are located at 55 Madison Avenue, Suite 400, Morristown, NJ 07960. Our office located in Morristown consists of approximately 600 square feet of office space. We currently occupy this space pursuant to a lease which began on November 1, 2011 and expires on October 31, 2012. Pursuant to the lease, we pay rent in the amount of $4,998 per month.

We lease facilities at the New Jersey Institute of Technology (“NJIT”), located at 211 Warren Street, Newark, New Jersey 07103 which consist of approximately 519 square feet of office space and approximately 590 square feet of laboratory space. We currently occupy this space pursuant to a lease which began on September 1, 2005 and was renewed every year since inception. The current lease has been renewed on September 1, 2011 and expires on August 31, 2012, subject to our option to renew the lease for an additional one year period on terms and conditions set forth therein. All leases at the NJIT campus are limited to a one year term. Pursuant to the lease, we are required to pay rent in the amount of $3,019 per month. Such rental payment includes all common area maintenance costs.

We believe that our existing facilities are suitable as office and laboratory space, and are adequate to meet our current needs. We also believe that our insurance coverage adequately covers our current interest in our leased space. We do not own any real property for use in our operations or otherwise.

ITEM 3. LEGAL PROCEEDINGS

On October 1, 2009, the SEC issued a formal order of investigation to the Company regarding possible securities laws violations by us and other persons. The investigation concerns the process by which the Company became a publicly traded entity, trading in the Company’s shares, and disclosure and promotion of developments in the Company’s business. The SEC has requested that the Company deliver certain documents to the SEC. The Company has, and will continue to fully cooperate with the SEC with respect to its investigation.

The Company has incurred, and expects to continue to incur, significant costs in responding to such investigation. Any adverse findings by the SEC in connection with such investigation could have a material adverse impact on the Company's business, including the Company's ability to continue to operate as a publicly traded company.

In April 2005, the Company filed in the US Patent and Trademark Office (the “USPTO”) an application for the registration of the trademarks BioNeutral™, Ogiene® and Ygiene®, based on its intent to use each of these marks in commerce. In April 2006, the USPTO issued notices of allowance signifying that each of these trademarks was entitled to registration after timely submission of statements of use, including evidence that such trademarks have been properly used in commerce. From June through November of 2008, however, the Company’s applications for each of these trademarks were declared abandoned by the USPTO, since the Company inadvertently failed to timely file the appropriate statements of use with respect to each trademark within the six-month period from the date the USPTO issued the respective notices of allowance. In July 2009, the Company submitted again applications for each of these trademarks as well as the Company’s tagline SCIENCE TO SAVE LIVES & PROTECT THE ENVIRONMENT®; however, the Company learned that PURE Bioscience, a company focused on the development and commercialization of bioscience products, had filed application for the registration of the trademarks BioNeutral™ and Ygiene® prior to the Company’s resubmission of its applications. Subsequently in 2011, the Company received trademark registration from the USPTO for Ygiene®, Ogiene® and the Company’s tagline SCIENCE TO SAVE LIVES & PROTECT THE ENVIRONMENT®. The Company intends to pursue the Trademark Trial and Appeal Board an opposition to PURE Bioscience's application with respect to BioNeutral™. The Company cannot assure you that it will be successful with such opposition on a timely basis, if at all. In May 2011, the Company received notice that PURE Bioscience filed a petition with the USPTO for cancellation of the Company’s Ygiene® registration. The Company intends to pursue a vigorous opposition to the petition for cancellation; however the Company cannot assure you that it will be successful with such opposition on a timely basis, if at all.

Other than the foregoing, the Company is not a party to, and none of the Company’s property is the subject of, any pending legal proceedings other than routine litigation that is incidental to the Company’s business.

PART II.

ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Public Market for Common Stock

Our common stock has been quoted on the OTC Bulletin Board under the symbol “BONU.OB” since February 20, 2009. Prior to February 20, 2009, there was no public trading market for our shares of common stock. The following table sets forth the range of quarterly high and low sales prices of our common stock as reported for the periods indicated:

	High		Low
January 31, 2010	$	1.09	$	0.43
April 30, 2010	$	0.75	$	0.20
July 31, 2010	$	0.95	$	0.36
October 31, 2010	$	0.55	$	0.29
January 31, 2011	$	0.50	$	0.39
April 30, 2011	$	0.77	$	0.33
July 31, 2011	$	0.38	$	0.25
October 31, 2011	$	0.25	$	0.08
January 31, 2012	$	0.28	$	0.09

As of January 15, 2012 there were approximately 150 holders of record of our common stock.

Dividends

We have not paid any cash dividends to shareholders. The declaration of any future cash dividends is at the sole discretion of our board of directors and depends upon our earnings, if any, our capital requirements and financial position, our general economic conditions, and other pertinent conditions. It is our present intention not to pay any cash dividends in the foreseeable future, but rather to reinvest earnings, if any, in our business operations.

Unregistered Sales and Issuance of Equity Securities.

The following is a description of issuances of shares of our equity securities that were not registered under the Securities Act during the year ended October 31, 2011 and which shares were not previously disclosed by us in a Quarterly Report on Form 10-Q or Current Report on Form 8-K.

During fiscal 2010, the Company exchanged shares with several of the BioLabs preferred and common stockholders, all of whom exchanged their shares at a ratio of 1 share of preferred stock for 10 shares of common stock and 1 to 1 common exchange, except for four preferred stockholders and common stockholders of BioLabs who were issued an aggregate of 3,598,800 shares of common stock. These four shareholders exchanged their shares at a ratio of 200 shares of common stock for 1 share of preferred stock and a 1 to 1 common share exchange. Although all of the exchanged shares are reflected in the financial statements as issued and outstanding, the issuance of shares to the four holders who exchanged at the higher exchange ratio is subject to dispute.

As a result of the above transaction, the company is disputing the issuance 2,634,730 shares of common stock. The outcome of this dispute is expected to be resolved in the near future.

During the years ended October 31, 2011 and 2010, various holders of our preferred shares exchanged 24,269 and 196,238, respectively, of Series A Preferred shares into 242,690 and 1,962,380 shares of common stock at the rate of 10 common shares to one preferred share, in accordance with the term of our preferred share agreement, dated December 12, 2006.

Equity Issuance

During the years ended October 31, 2011 and October 31, 2010, the Company issued 1,810,116 and 735,715 shares of the Company’s common stock for gross proceeds of $342,500 and $180,000, respectively, to various investors. All of such shares were issued pursuant to an exemption from registration under the Securities Act by virtue of Section 4(2) of the Securities Act. Each individual investor represented to us, among other things, that such investor is a sophisticated investor with access to all relevant information necessary to evaluate its investment and that the purchased shares were being acquired for investment purposes only.

Shares Issued Pursuant to Consulting Agreements

During the years ended October 31, 2011 and 2010, the Company issued an aggregate of 1,683,713 and 593,510 shares of common stock for professional services having a value of $516,517 and $230,500, respectively. The shares for services were valued and issued at the prevailing quotation prices for the Company's stock at the time of issuance.

Shares issued in the above paragraph are valued at the market price during the period for which services were provided.

Other Equity Issuances

During the years ended October 31, 2011and 2010 and in connection with the Share Exchange (as defined below), various non-controlling interests exchanged 1,199,458 and 1,572,044 shares of BioLabs common stock for the same number of shares of the Company common stock.

Convertible Debt Capital Funding

The Company issued unsecured promissory notes to Michael D. Francis, (“Francis”) a shareholder and former member of the board of directors of the Company. On January 4, 2010, the Company issued (i) an unsecured promissory note in the amount of $250,000, a (ii) a second unsecured promissory note in the amount of $250,000, on March 15, 2010 of which $100,000 was drawn down by the Company on March 15, 2010 and $150,000 on April 1, 2010, (iii) a third secured promissory note in the amount of $100,000 on April 30, 2010 with an original issuance date of April 26, 2010, (v) a fourth unsecured promissory note in the amount of $25,000 on July 7, 2010, and (vi) a fifth unsecured promissory note in the amount of $75,000 on December 10, 2010 (all such notes issued to Mr. Francis are collectively referred to as the “Francis Notes”).

The Company issued six unsecured promissory notes to Capara Investments, (“Capara”). On November 13, 2009, the Company issued (i) an unsecured promissory note to Francis in the amount of $250,000, (ii) a second unsecured promissory note to Capara Investments on January 4, 2010 in the amount of $250,000, (iii) a third unsecured promissory note to Capara Investments on September 2, 2010 in the amount of $25,000, (iv) a fourth unsecured promissory note to Capara Investments on October 13, 2010 in the amount of $25,000, (v) a fifth unsecured promissory note to Capara Investments on June 1, 2011 in the amount of $50,000, a (vi) a sixth unsecured promissory note to Capara Investments on July 1, 2011 in the amount of $50,000, and a seventh unsecured promissory note to Capara Investments on October 24, 2011 in the amount of $5,000. The sole member of Capara Investments, Raj Pamani, is a former member of our Board and a shareholder of the Company (all such notes issued to Capara are collectively referred to as the “Capara Notes”).

The Company issued an unsecured promissory note to Herbert Kozlov, (“Kozlov”) a shareholder of the Company, on December 6, 2010, which issuance resulted in gross proceeds to the Company of $50,000 (all such notes issued to Kozlov are collectively referred to as the “Kozlov Notes”).

The Francis Notes, Capara Notes and the Kozlov Notes are sometimes referred to herein as the “Shareholder Notes”. The Shareholder Notes resulted in gross proceeds to the Company of $1,655,000.

Each of the Shareholders Notes bears an 8% annual interest rate, is due and payable in cash on the fifth anniversary of the date of issuance, and upon consummation of a “Qualified Financing” (as defined in each of the Shareholder Notes), will automatically be exchanged for, solely at our election, either (i) securities on the same terms and conditions as those received by investors in such Qualified Financing based on an assumed exchange rate reflecting the pricing used in such financing or (ii) shares of our common stock equal to the quotient obtained by dividing (x) the then outstanding principal amount of the Shareholder Note by (y) the lower of (i) $0.69 and (ii) the Fair Market Value (as defined in the Shareholder Notes) of one share of our common stock as of the date of such exchange (the Kozlov Note provides for an exchange rate of (y) the lower of (i) $0.69 and (ii) the Fair Market Value (as defined in the Shareholder Notes) of one share of our common stock as of the date of such exchange). On each three (3) month anniversary of the issuance of each Shareholder Note, all accrued and unpaid interest shall be added to the unpaid principal amount of such note. Each of the Shareholder Notes defines “Qualified Financing” as an investment in securities of the Company (including any financing that includes convertible indebtedness and/or warrants) occurring after the date of issuance of the Shareholder Note by an investor that is not an affiliate of our company in which we receive net proceeds greater than $500,000 (including any additional investment by the holder of the Shareholder Note or by the holder of any other 8% exchangeable promissory note) in the Qualified Financing.

The Company issued two unsecured promissory notes to Blackbeth Holdings Ltd (“Blackbeth Notes”). On October 28, 2010, the Company issued (i) an unsecured promissory note to Blackbeth Holdings Ltd in the amount of $50,000 and (ii) on August 1, 2011 the Company issued (ii) an unsecured promissory note to Blackbeth Holdings Ltd in the amount of $50,000.

The Company issued an unsecured promissory note to River Falls Financial Services, LLC, (“River Falls Note”) on December 20, 2010, which issuance resulted in gross proceeds to the Company of $100,000.

The Blackbeth Notes and the River Falls Note are sometimes referred to herein as the “Unrelated Party Notes”. The Shareholder Notes resulted in gross proceeds to the Company of $200,000.

Each of the Unrelated Party Notes bears an 8% annual interest rate, is due and payable in cash on the fifth anniversary of the date of issuance, and upon consummation of a “Qualified Financing” (as defined in each of the Unrelated Party Notes), will automatically be exchanged for, solely at our election, either (i) securities on the same terms and conditions as those received by investors in such Qualified Financing based on an assumed exchange rate reflecting the pricing used in such financing or (ii) shares of our common stock equal to the quotient obtained by dividing (x) the then outstanding principal amount of the Unrelated Party Note by (y) the lower of (i) $0.40 and (ii) the Fair Market Value (as defined in the Unrelated Party Notes) of one share of our common stock as of the date of such exchange (the Blackbeth Note issued on August 1, 2011 assumes an exchange rate of (y) the lower of (i) $0.69 and (ii) the Fair Market Value (as defined in the Unrelated Party Notes) of one share of our common stock as of the date of such exchange). On each three (3) month anniversary of the issuance of each Unrelated Party Note, all accrued and unpaid interest shall be added to the unpaid principal amount of such note. Each of the Unrelated Party Notes defines “Qualified Financing” as an investment in securities of the Company (including any financing that includes convertible indebtedness and/or warrants) occurring after the date of issuance of the Unrelated Party Note by an investor that is not an affiliate of our company in which we receive net proceeds greater than $500,000 (including any additional investment by the holder of the Unrelated Party Note or by the holder of any other 8% exchangeable promissory note) in the Qualified Financing.

The Company issued two unsecured promissory notes to Asher Enterprises, Inc. (“Asher Notes”, “the Holder”) on August 18, 2011 and September 15, 2011 (“the Issue Dates”) which issuances resulted in gross proceeds to the Company of $60,000 and $42,500, respectively. The notes bear an 8% annual interest rate, is due and payable with unpaid interest in cash on May 22, 2012 and June 19, 2012 (“the Maturity Dates”).The Holder may convert from time to time, and at any time during the period beginning on the date which is one hundred eighty (180) days following the Issue Dates and ending on the Maturity Dates the unpaid principal amount and interest into shares of the Company’s common stock equal at the Conversion Price which is the product obtained by multiplying 58% by the Market Price (as defined in the notes) and then dividing the then outstanding principal amount of the note by the Conversion Price as of the date of such conversion.

Accrued and unpaid interest is added to the unpaid principal amount of the Director Notes, Shareholder Note, Unrelated Party Notes and the Asher Notes every three months. Interest expense on the Director Notes, Shareholder Note, Unrelated Party Notes and the Asher Notes for the year ended October 31, 2011 and 2010 was $151,771 and $87,097, respectively. As of October 31, 2011 and October 31, 2010, $211,833 and $70,646, respectively, of accrued interest was added to the principal amount of the Director Notes, Shareholder Note, Unrelated Party Notes and the Asher Notes.

We relied on the exemption from registration provided by Section 4(2) of the Securities Act for all such issuances of our common stock described above.

ITEM 6. SELECTED FINANCIAL DATA

Not applicable.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

The following discussion contains forward-looking statements and involves risks and uncertainties, including, but not limited to, those described under “Item 1. Business-Risk Factors” of this Annual Report on Form 10-K. Actual Results may differ materially from those contained in any forward-looking statements. The following discussion should be read in conjunction with the financial statements and notes thereto included elsewhere in this Annual Report on Form 10-K.

Company Overview

We are life science specialty technology corporation that has developed a novel combinational chemistry-based technology which we believe can, in certain circumstances, neutralize harmful environmental contaminants, toxins and dangerous micro-organisms including bacteria, viruses and spores. We are focused on developing and commercializing two classes of product formulations: (1) antimicrobials, which are formulations designed to kill certain harmful microscopic living organisms, and (2) bioneutralizer, which are formulations designed to destroy certain agents that are noxious and harmful to health and/or the environment. We have not marketed any of our products and have not generated any meaningful product revenue to date.

We currently are focused on the commercialization of two classes of product formulations, antimicrobials and bioneutralizer. We refer to our antimicrobial formulations as our Ygiene™ products and our bioneutralizer formulations as our Ogiene™ products. Our Ygiene ™ products are being developed to kill certain harmful microbes, including virulent gram and bacteria (which cause staph infections), viruses, yeast, mold, fungi, spores and/or certain bioterrorism agents, such as anthrax. Our Ogiene™ products are being developed to eliminate or reduce odors of many chemicals such as hydrogen sulfide, formaldehyde and ammonia, and to reduce certain greenhouse gases such as carbon dioxide and sulfur dioxide.

The marketing and sale in the United States and foreign countries of some of our current products and the products we may develop in the future are and may be subject to U.S. and foreign governmental regulations, respectively, which vary substantially from country to country. The marketing and sale of our Ygiene ™ products in the United States, is subject to EPA registration and in some cases, FDA clearance, and we cannot market and sell any of such products in the United States until such registration or clearance is obtained. We do not believe the marketing sale of our Ogiene ™ products are subject to EPA registration or FDA clearance. We have not sold significant amounts of our Ygiene ™ or Ogiene ™ products to date. We currently are focusing our efforts and resources on obtaining the registrations, clearances and approvals necessary to marketing and selling our Ygiene ™ products in the United States; however, we cannot assure you that we will be have the financial resources to do so or that such registrations, clearances and approvals will be obtained on a timely basis, if at all.

Plan of Operation

Our strategic plan for our fiscal year ending October 31, 2011 was focused on leveraging developments in the United States for our Ygiene™ professional disinfectant product and continuing our work within the regulatory process of the U.S. for EPA registration of additional variations of Ygiene™. Our Ygiene™ professional disinfectant product and multipurpose cleaner and disinfectant product were registered and approved with the US EPA on February 28, 2011. Subsequently, we have registered Ygiene™ in 32 US states for sale and distribution. Our Ygiene™ was registered with the German Bundesanstalt für Arbeitsschutz und Arbeitsmedizin, a German government sanctioned institute for safety and health, on January 5, 2010 and November 30, 2009, respectively. As a result of such registrations, we are permitted to sell such Ygiene™ based products in Germany, although we have not sold any of our products in Germany and currently do not have adequate resources to attempt to make any such sales or to have our products manufactured for sale. We believe these registrations present us with a strong and dynamic platform for accessing well developed global markets for commercial use of our Ygiene™ professional disinfectant product and multipurpose cleaner and disinfectant product.

Currently, we are focusing our efforts on the development and commercialization of Ygiene ™ formulation for the Hospital and Industrial Application. We are developing our Ogiene™ products to potentially eliminate or reduce odors of many chemicals such as hydrogen sulfide, formaldehyde and ammonia, and to reduce certain greenhouse gases such as carbon dioxide and sulfur dioxide. Our Ogiene™ formulations are designed to interact with the functional organic or inorganic groups of harmful gases and reduce or eliminate them.

We believe that our products can offer a superior solution that addresses needs not currently being met in the marketplace for combating bacteria, viral and spore based threats. We further believe that our products can provide a distinct advantage when distinguishing them from those that are currently in use in our targeted markets. In addition, our core product is flexible and adaptable for multiple applications. Industry or use specific modifications made by our professional scientist allow our products to be readily customized to the demands of multiple unique markets.

We are emphasizing these strategic advantages as part of our brand development efforts to overcome competitive barriers to entry in markets that are driven by large, established organizations. The markets for our Ogiene™ and Ygiene™ products and each of their potential channels are highly competitive. We have a number of competitors that vary in size and scope and breadth of products offered. Such competitors include some of the largest corporations in the world, and we believe substantially all of our competitors have greater financial resources than we do, including in the areas of sales, marketing, and branding and product development. We expect to face additional competition from other competitors in the future.

Because Ogiene™ and Ygiene™ are new formulations enhanced from our initial base formulas, our success will depend, in part, upon our ability to achieve market share at the expense of existing, established and future products in our relevant target markets. Even if our Ogiene™ and Ygiene™ formulations may have technological competitive advantages over competing products, we or potential distributors, will need to invest significant resources in order to attempt to displace traditional technologies sold by what are in many cases well-known international industry leaders. Alternatively, we may pursue strategies in selective markets of encouraging existing competitors to incorporate our products into their existing brands, thereby reducing the proportion of end-use revenues that would accrue to us. To the extent that we were to grant any existing competitor exclusivity to any field and/or territory, we would risk having our technology marketed in a manner that may be less than optimal for us. We recognize that innovative marketing methods may be required in order to establish our products, and that such methods may not be successful.

Results of Operations

Comparison of Results of Operations for Fiscal Year Ended October 31, 2011 (“fiscal 2011”) and the Fiscal Year Ended October 31, 2010 (“fiscal 2010”).

Revenues : During fiscal 2011 the Company generated revenues of $53,579 as compared to revenues of $15,500 for fiscal 2010 from the Ogiene™ product line from a distributor that is focusing on distribution of our Ogiene™ odor eliminator and multipurpose cleaner. Our efforts have been focused on sales and marketing of our non-regulated Ogiene™ product line as well the sale of our Ygiene™ formulation for the Hospital and Industrial Application in the United States where the product has been registered for marketing and sale.

Operating Expenses: Operating expenses were $2,937,412 for fiscal 2011 and $3,749,602 for fiscal 2010 for a 22% decrease of $(812,190). Our operating expenses consist of compensation of our executive and scientific staff, consulting expenses supporting development of, and regulatory approvals for, our products, legal and accounting services, and non-cash amortization of our intellectual property.

Selling, general & administrative (“SG&A”) expenses were $2,230,584 for fiscal 2011 and $3,052,852 for fiscal 2010 for a 27% decrease of $(822,268). Fiscal 2011 SG&A expenses decreased primarily due to reduced professional services fees in fiscal 2011 that were incurred during fiscal 2010 related to the EPA approval of Ygiene® 206 sterilant formulation and other matters. As a result, professional fees decreased from $1,224,443 to 548,309. Fiscal 2011 Research and Development expenses included non-cash stock-based compensation to Dr. Andrew Kielbania of $289,027 and accrued compensation of $200,000 for a total of compensation of $489,027. Mr. Kielbania was compensated at $120,000 for fiscal 2010. These items caused our Research and Development costs to increase to $630,768 from $264,810.

SG&A costs for fiscal 2010 include approximately $159,208 related to our agreement with the Chertoff Group, L.L.C., an aggregate of approximately $189,900 to a director and a company with which such director is affiliated under agreements we have with the director and his affiliated company, and $91,300 for independent consulting expenses.

Amortization & depreciation increased to $706,828 in fiscal 2011 from the $696,750 reported in fiscal 2010 as a result of the increased investment in our intellectual property.

We anticipate operating expenses will increase for fiscal 2012. We anticipate increased legal, accounting and investor relations fees related to being public and the regulatory processes involved with registration, clearance or approval of our products for sale in global markets. We also anticipate we will need to add up to five additional employees to our professional and support staff, as part of our growth and development.

Net loss: We experienced a net loss from operations before consideration of our Non-Controlling interest of $3,060,721 for fiscal 2011. The discussion of operating expenses identifies the elements of the net loss. In 2010, our net loss was $3,833,324. We anticipate we will experience a net loss in fiscal 2012 as we continue to pursue regulatory approvals for the sale and distribution of our products and development of access to global markets.

Analysis of Impairment

In conjunction with our 2011 audit, we performed our annual impairment testing during January 2012. In this analysis, we determined that the current carrying value of our Intellectual Property was $10,699,446.

We computed the Intellectual Property value of using an undiscounted cash model. In our undiscounted cash flow analysis, we prepared a five year forecast of our expected earnings to derive an explicit stream of expected free cash flows through October 31, 2016. We developed our revenue and direct variable costs forecast based on a variety of factors including our current and anticipated sales pipeline, knowledge of our business and industry, general economic conditions in the marketplace and expectations of market opportunity with respect to the specific types of advertising services we provide. Our operating expenses are generally fixed and predictable; however, we increased our budgeted operating expenses by an amount that we believe is approximately equal to theoretical lease costs we would incur had our parent company not provided us with facilities that are not a component of operating costs in our goodwill reporting unit. After having determined the amount of our explicit year cash flows, we assumed that the Company would experience a long-term growth rate in free cash flows of 2% per annum thereafter. We then multiplied our cash flows by a marginal federal and state tax rate of 40% to derive our after-tax yearly cash flows. The range of Intellectual Property values we derived using the above amounted to $39,391,088, which exceeds the carrying value of our Intellectual Property of $10,669,446.

Liquidity and Capital Resources

We had $3,215 of cash at October 31, 2011. Cash used by operations for fiscal 2011 was $879,181. The principal use of funds were for consulting services supporting the development of our business plan, legal, and accounting fees in connection with becoming a public company and daily operations of the business, including rent and travel and laboratory costs.

In fiscal 2011, we raised $342,500 of cash from the issuance of our capital stock to fund operations. We received $482,500 from the issuance of convertible debentures.

In fiscal 2010, we raised $180,000 of cash from the issuance of our capital stock to fund operations. We received $1,475,000 from the issuance of convertible debentures.

We are not currently generating significant revenues and rely on raising new capital to fund our ongoing operations and development of our strategic business objectives. While we have been able to use proceeds from the sale of our shares of common stock to fund a substantial balance of our operating costs. For the period February 2012 through October 2012 Vinfluence has committed to provide equity financing in the amount of $200,000 per month for a total of $1.8 million. The Company believes that we will be able to generate significant sales by the fourth quarter of 2012 providing for sufficient cash flows to supplement our equity financing. If we are able to execute our plan, the Company can begin to accumulate cash reserves. There is no assurance however that our funds will be sufficient to meet our anticipated needs through our fiscal year 2012, and we may need to raise additional capital during fiscal 2012 to fund the full costs associated with our growth and development. There can be no assurances that we will be successful in raising additional capital on favorable terms if at all. If the Company is unable to secure additional capital, it may be required to curtail its business development initiatives, impair its intellectual property and take additional measures to reduce cost in order to conserve cash.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Accordingly, the accompanying audited consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplates continuation of the Company as a going concern and the realization of assets and the satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the financial statements do not necessarily purport to represent realizable or settlement values. The audited consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

In November 2011, the Company initiated a plan to restructure most aspects of management and operations. Pursuant to the plan the Company retained new management and board of director’s representatives with experience in acute care hospitals, long-term health care and consumer oriented hygiene based products. In addition, on November 2, 2011 the Company entered into definitive financing and strategic distribution agreements with Vinfluence Pty Ltd ("Vinfluence"), New South Wales, Australia. The agreements provide for the assumption of, and indemnification for, $2,374,932 of accounts payable and accrued compensation and the assumption of, and indemnification for, $2,070,271 of convertible loans and $2,400,000 of equity capital. In exchange for cash and future royalties, the Company has also signed a 10-year licensing and distribution agreement with Vinfluence for exclusive manufacturing and distribution in Asia and non-exclusive manufacturing and distribution rights in Europe and sales to the US Military. In connection with the Vinfluence transaction the following agreements were entered into:

1.	Preferred Stock Purchase Agreement - This agreement provides that Vinfluence will purchase 100,000 shares of Series C Convertible Preferred Stock from the Company for an aggregate purchase price of $1,000,000. Vinfluence is obligated to purchase 20,000 shares per month.

4.	Preferred Stock Drawdown Agreement - Under the terms of this agreement, the Company is granted the right, but not the obligation, to sell to Vinfluence up to $1,400,000 worth of Series E Preferred Stock in monthly increments of up to $200,000.

As of February 7, 2012 the Company and in connection with the Vinfluence transactions outlined above, the Company has exchanged 213,491 and 231,029 shares of Series B Preferred Stock and Series D Preferred Stock, respectively, in exchange for the settlement and release of $2,374,932 and $2,070,271 of accounts payable and accrued compensation, and notes payable, respectively. On December 4, 2011, 160,000 shares of Series B Preferred Stock were converted to 20,000,000 shares of the Company’s common stock. The Company has received 3 payments of $200,000 in consideration for the issuance of Series C Preferred Stock pursuant to the Preferred Stock Purchase Agreement. The Company has 2 payments remaining of $200,000 each in February and March 2012 under the Preferred Stock Purchase Agreement. In addition, the Company has the option to begin drawing at the rate of $200,000 per month for seven consecutive months beginning in April 2012 under the Preferred Stock Drawdown Agreement.

The balance sheet impacts of the Series B Preferred Stock and Series D Preferred Stock issuances are summarized and presented in the following Consolidated Pro Forma Balance Sheet. On a Pro Forma basis, the Company’s working capital deficit improved from a deficit of $(2,930,223) to a deficit of $(550,262), and convertible loans were eliminated.

BIONEUTRAL GROUP, INC
CONSOLIDATED PRO FORMA BALANCE SHEET
IF THE REFINANCING AND RESTRUCTURING OCCURRED OCTOBER 31, 2011

ASSETS

	October 31, 2011			Vinfluence			October 31, 2011
	Audited			Debt Settlements			Pro Forma
Current Assets
Cash	$	3,215		$	-		$	3,215
Accounts Receivable - Net		345			-			345
Inventory		4,418			-			4,418
Prepaid Expenses-Related Parties		5,431			-			5,431
		13,409			-			13,409
Total Current Assets

Property & Equipment - Net		781			-			781
Intellectual Property - Net		10,699,446			-			10,699,446
Other Assets		2,500			-			2,500

TOTAL ASSETS	$	10,716,136		$	-		$	10,716,136


LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities
Current portion of Notes Payable	$	102,500		$	-		$	102,500
Accounts Payable and Accrued Expense		1,657,947			(1,516,352	)		141,595
Accrued Compensation		1,105,610			(858,580	)		247,030
Related Party Payables		77,575			(4,437	)		73,138
Current Liabilities		2,943,632			(2,379,369	)		564,263

Long Term Liabilities
Convertible Loans From Unrelated Party		210,241			(210,241	)		-
Convertible Loans From Stockholders		1,855,593			(1,855,593	)		-
Total Long Term Liabilities		2,065,834			(2,065,834	)		-

TOTAL LIABILITIES		5,009,466			(4,445,203	)		564,263

Commitments & Contingencies

Equity:
BioNeutral Group, Inc. Stockholders’ Equity
Common Stock, $.00001 Par Value; 200,000,000 shares authorized, 79,579,292 issued and outstanding at October 31, 2011		795			200			995
Preferred Stock, $.001 par value; 10,000,000 shares authorized, with 444,600 designated as follows
Convertible Preferred Stock, Series B, $.001 par value; 213,500 shares authorized, 53,491 issued and outstanding at October 31, 2011
Preference Liquidation Value $534,910 at October 31, 2011					53			53
Convertible Preferred Stock, Series D, $.001 par value; 231,100 shares authorized, 231,029 issued and outstanding at October 31, 2011
Preference Liquidation Value $2,310,290 at October 31, 2011		-			231			231
Additional Paid-in Capital		57,958,512			4,444,719			62,403,231
Accumulated Deficit		(52,581,220	)		-			(52,581,220	)
Total BioNeutral Group, Inc. Stockholders’ Equity		5,378,087			4,445,203			9,823,290

Non controlling Interest		328,524			-			328,524
Preferred Stock, $.001 par value; 5,000,000 shares authorized, with 800,000 designated as follows								-
Convertible Preferred Stock, Series A, $.001 par value; 800,000 shares authorized, 59,493 and 83,762 shares issued and outstanding at October 31, 2011 and October 31, 2010 respectively.
Preference Liquation Value $1,072,361 at October 31, 2011 and $1,509,810 at October 31, 2010 included in Non controlling interest		59			-			59
Total Non controlling Interest		328,583			-			328,583

Total Equity		5,706,670			4,445,203			10,151,873

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	10,716,136		$	-		$	10,716,136

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires judgment on the part of management to arrive at estimates and assumptions on matters that are inherently uncertain. These estimates may affect the amount of assets, liabilities, revenue and expenses reported in the financial statements and accompanying notes and disclosure of contingent assets and liabilities within the financial statements. Estimates and assumptions are periodically evaluated and may be adjusted in future periods. Actual results could differ from those estimates.

Stock-Based Payments – Significant amounts of our shares of common stock are issued as payment to employees and non-employees for services and periodically as consideration for acquisition of assets. These are non-cash transactions that require management to make judgments related to the fair value of the shares issued, which affects the amounts reported in our consolidated financial statements for certain of our assets and expenses. For historic fiscal years when there was not an observable active, liquid market for our shares, the valuation of the shares issued in a non-cash share payment transaction relied on observation of arms-length transactions where cash was received for our shares, before and after the non-cash share payment date.

Impairment of long-lived assets - Long-lived assets, such as property and equipment and definite-life intangible assets (i.e. Intellectual Property) are evaluated for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable in accordance with FASB ASC 360-10-35-17 thru 35-35 “Measurement of an Impairment Loss”. We assess the impairment of the assets based on the undiscounted future cash flow the assets are expected to generate compared to the carrying value of the assets. If the carrying amount of the assets is determined not to be recoverable, a write-down to fair value is recorded. Management estimates future cash flows using assumptions about expected future operating performance. Management’s estimates of future cash flows may differ from actual cash flow due to, among other things, technological changes, economic conditions or changes to our business operations. Our Intellectual Property was tested for impairment as of October 31, 2011. Forecasted undiscounted future cash flows exceeded the carrying amount of the assets indicating that the assets were not impaired.

New Accounting Pronouncements

See Note 2 of Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not Applicable.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Index to Consolidated financial statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	35

CONSOLIDATED BALANCE SHEETS	36

CONSOLIDATED STATEMENTS OF OPERATIONS	37

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY	38

CONSOLIDATED STATEMENTS OF CASH FLOWS	39

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	40

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and

Stockholders of BioNeutral Group, Inc.

We have audited the accompanying consolidated balance sheets of BioNeutral Group, Inc. and Subsidiaries (the “Company”) as of October 31, 2011 and 2010, and the related consolidated statements of operations, stockholders’ equity, and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits include consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of BioNeutral Group, Inc. and subsidiaries as of October 31, 2011 and 2010, and the consolidated results of their operations and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 3, the Company has recurring losses, had a working capital deficiency of approximately $2.9 million and an accumulated deficit of approximately $53 million as of October 31, 2011. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plan regarding these matters is described in Note 3. The consolidated financial statements do not include adjustments that might result from the outcome of this uncertainty.

/s/ Marcum LLP

Marcum, LLP

New York, NY

February 10, 2012

BIONEUTRAL GROUP, INC

CONSOLIDATED BALANCE SHEETS

	October 31, 2011			October 31, 2010
ASSETS

Current Assets
Cash	$	3,215		$	59,395
Accounts Receivable - Net		345			-
Inventory		4,418			-
Prepaid Expenses		-			5,236
Prepaid Expenses-Related Parties		5,431			172,102


Total Current Assets		13,409			236,733

Property and Equipment - Net		781			993
Intellectual Property - Net		10,699,446			11,254,154
Other Assets		2,500			2,500

TOTAL ASSETS	$	10,716,136		$	11,494,380

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities
Accounts Payable and Accrued Expense	$	1,657,947		$	1,244,763
Current portion of Notes Payable		102,500			-
Accrued Compensation		1,105,610			725,080
Related Party Payables		77,575			70,517
Current Liabilities		2,943,632			2,040,360

Long Term Liabilities
Convertible Loans From Unrelated Party		210,241			50,000
Convertible Loans From Stockholders		1,855,593			1,495,646
Total Long Term Liabilities		2,065,834			1,545,646

TOTAL LIABILITIES		5,009,466			3,586,006

Commitments and Contingencies

Equity:
BioNeutral Group, Inc. Stockholders’ Equity
Common Stock, $.00001 Par Value; 200,000,000 shares authorized, 79,579,092 shares and 74,643,115 shares issued and outstanding at October 31, 2011 and 2010 respectively.		795			746
Additional Paid-in Capital		57,958,512			57,099,519
Accumulated Deficit		(52,581,220	)		(49,762,192	)
Total BioNeutral Group, Inc. Stockholders’ Equity		5,378,087			7,338,073

Non controlling Interest		328,524			570,217
Preferred Stock, $.001 par value; 5,000,000 shares authorized, with 800,000 designated as follows					-
Convertible Preferred Stock, Series A, $.001 par value; 800,000 shares authorized, 59,493 and 83,762 shares issued and outstanding at October 31, 2011 and 2010 respectively.
Preference Liquation Value $1,072,361 at October 31, 2011 and $1,509,810 at October 31, 2010 included in Non controlling interest		59			84
Total Non controlling Interest		328,583			570,301

Total Equity		5,706,670			7,908,374

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	10,716,136		$	11,494,380

See Notes to Consolidated Financial Statements

BIONEUTRAL GROUP, INC

CONSOLIDATED STATEMENTS OF OPERATIONS


	For the Year Ended December 31,
	2011			2010

Revenues	$	53,579		$	15,500

Cost of Revenues		20,627			12,299

Gross Profit		32,952			3,201

Operating Expenses
Depreciation and Amortization		706,828			696,750
Consulting Expense		529,716			768,108
Legal and Accounting Expenses		548,309			1,224,443
Research and Development Expense		630,768			264,810
Other Selling, General and Administrative Expenses		521,791			795,491
Total Operating Expenses		2,937,412			3,749,602

Loss from Operations		(2,904,460	)		(3,746,401	)

Interest Expense		(156,261	)		(86,923	)

Net Loss Before Provision for Income Taxes		(3,060,721	)		(3,833,324	)

Provision for Income Taxes		-			-

Net Loss		(3,060,721	)		(3,833,324	)

Loss Attributable to Non-controlling Interest		241,693			331,728

Net Loss Attributable to BioNeutral Group, Inc.	$	(2,819,028	)	$	(3,501,596	)

Net Loss Per Common Share - Basic and Diluted	$	(.04	)	$	(.06	)

Weighted Average Number of Common Shares outstanding
Basic and Diluted		77,649,466			62,813,098

See Notes to Consolidated Financial Statements

BIONEUTRAL GROUP, INC

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

	Common Stock				Additional Paid-in			Retained Earnings			BioNeutral Group, Inc. Stockholders’			Non Controlling			Non Controlling Preferred						Total Stockholders’
	Shares		Amount		Capital			(Deficit)			Equity			Interest			Shares			Amount			Equity
Balance, October 31, 2009		60,849,200	$	608	$	56,675,657		$	(46,260,596	)	$	10,415,669		$	901,945			279,991		$	280		$	(11,317,894	)
Issuance of shares for cash		735,715		7		179,993						180,000												180,000
Issuance of shares for professional services		593,510		6		230,494						230,500												230,500
Issuance of shares to satisfy bad debt		90,000		1		13,499						13,500												13,500
Issuance of shares in prior period		1,450,000		14		(14	)					-												-
Adjustment to reconcile to Transfer Agent records		4,755,536		48		(48	)					-												-
Conversions to controlling interest		1,572,044		16		(16	)					-												-
Preferred Conversion at 10-1		1,962,380		20		(20	)					-						(196,238	)		(196	)		(196	)
Disputed Shares		2,634,730		26		(26	)
Net Loss									(3,501,596	)		(3,501,596	)		(331,728	)								(3,833,324	)
Balance, October 31, 2010		74,643,115		746		57,099,519			(49,762,192	)		7,338,073			570,217			83,753			84			7,908,374
Issuance of shares for cash		1,810,116		18		342,482						342,500												342,500
Issuance of shares for professional services		1,683,713		17		516,500						516,517												516,517
Preferred Conversion at 10-1		242,690		2		23						25						(24,269	)		(25	)		-
Conversions to controlling interest		1,199,458		12		(12	)					-												-
Net Loss									(2,819,028	)		(2,819,028	)		(241,693	)								(3,060,721	)
Balance, October 31, 2011		79,579,092	$	795	$	57,958,512		$	(52,581,220	)		5,378,387			328,524			59,484		$	59		$	5,706,670

See Notes to Consolidated Financial Statements

BIONEUTRAL GROUP, INC

CONSOLIDATED STATEMENTS OF CASH FLOWS


	For the Year Ended December 31,
	2011			2010

CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss	$	(3,060,721	)	$	(3,833,324	)
Adjustments to Reconcile Net Loss To Net Cash Used in Operating Activities
Stock Based Compensation		166,671			168,966
Depreciation and Amortization		706,828			696,751
Issuance of Stock related to professional services		516,517			244,000
Interest added to promissory notes		140,188			86,238
Provision for bad debts		49,716			-
Changes in Operating Assets and Liabilities
Accounts receivable		(50,061	)		2,825
Inventory		(4,418	)		2,925
Prepaid Expenses		5,236			284,371
Accounts Payable and Accrued Expenses		641,806			588,467
Related Party Payables		7,058			23,513

NET CASH USED IN OPERATING ACTIVITIES		(881,180	)		(1,735,268	)

CASH FLOWS FROM FINANCING ACTIVITIES
Net Proceeds From Issuance of Common Stock		342,500			180,000
Proceeds from Exchangeable Promissory Notes		482,500			1,475,000

NET CASH PROVIDED BY FINANCING ACTIVITIES		825,000			1,655,000

NET DECREASE IN CASH		(56,180	)		(80,268	)

CASH, BEGINNING OF YEAR		59,395			139,663

CASH, END OF YEAR	$	3,215		$	59,395


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for Interest	$	-		$	-
Cash paid for Income Taxes	$	-		$	-


SUPPLEMENTAL DISCLOSURE OF NON-CASH INFORMATION
Non-cash Intellectual Property Cost Additions	$	151,908		$	211,854
Cancellation of Debt Upon Agreement to Issue Shares of Common Stock	$	-		$	13,500

See Notes to Consolidated Financial Statements

BioNeutral Group, Inc.

Notes to the Consolidated Financial Statements

Note 1 - Nature of Business and Organization

BioNeutral Group, Inc (the “Company”) is a specialty chemical company seeking to develop and commercialize a novel combinational chemistry-based technology which it believes in certain circumstances may neutralize harmful environmental contaminants, toxins and dangerous micro-organisms, including bacteria, viruses and spores. The Company’s business operations are conducted through BioNeutral Laboratories Corporation USA, a corporation organized in Delaware in 2003 (“BioLabs”).

On January 30, 2009, the Company (formerly called Moonshine Creations Inc. (“Moonshine”) entered into a share exchange agreement (the “Share Exchange Agreement”) with BioLabs pursuant to which the Company agreed to issue to the shareholders of BioLabs 44,861,023 shares of its common stock (the “Share Exchange”).

In connection with the Share Exchange, certain shareholders of BioLabs delivered shareholder consents (collectively, the “Share Exchange Consents”) to BioLabs approving the execution and delivery by BioLabs of the Share Exchange Agreement. Such persons are referred to herein as the “Consenting Shareholders”. The Share Exchange Consents did not specify the number of shares of BioLabs common stock to be exchanged by the Consenting Shareholder. Schedule II to the Share Exchange Agreement, however, contained a list of holders of BioLabs common stock (certain of these shareholders also held BioLabs Series A Preferred Stock), shares of Company common stock to be issued to such shareholders, and shares of Company common stock to be issued to holders of BioLabs preferred stock.

Based on the Share Exchange Consents, the Company caused to be delivered to its transfer agent instructions to issue stock certificates representing 42,649,500 shares of its common stock in accordance with Schedule II to the Share Exchange Agreement. The Company did not receive Share Exchange Consents in respect of each share of common stock that was issued by the Company's transfer agent and the Company believes that stock certificates representing approximately 1,011,362 shares of common stock may have been delivered to those persons who did not deliver a Share Exchange Consent.

In addition, the Company's records indicate that (i) the Company did not receive stock certificates representing shares of BioNeutral Laboratories common stock for cancellation from the Consenting Shareholders, and (ii) the Company did not cause to be delivered the applicable stock certificates representing shares of common stock issued in the Share Exchange to certain of the Consenting Shareholders. Accordingly, the Company intends to request that (i) with respect to each Consenting Shareholder who received a stock certificate, such stockholder affirm its consent, which we refer to as a “Consenting Shareholder Acknowledgement”, and deliver to the Company for cancellation its certificates representing BioNeutral Laboratories common stock; and (ii) with respect to each Consenting Shareholder who did not receive a stock certificate, such stockholder deliver to the Company a Consenting Shareholder Acknowledgment and deliver to the Company for cancellation its certificates representing BioNeutral Laboratories common stock, each in advance of the Company delivering the applicable stock certificate.

With respect to any shareholder of BioNeutral Laboratories who is not able to confirm that it previously delivered a Share Exchange Consent, the Company is going to evaluate offering to such persons the ability to exchange their shares of common stock of BioNeutral Laboratories for shares of the Company's common stock on the same terms as would have occurred had such exchange occurred at the time of the consummation of the Share Exchange. Although there can be no assurance as to the determination it may make, if it were to make such offer, it would likely request that each such stockholder deliver to it a consent that is similar to a Share Exchange Consent and deliver to it for cancellation its certificates representing BioNeutral Laboratories common stock, each in advance of the Company delivering the applicable stock certificate. With respect to shareholders of BioNeutral Laboratories who did not deliver a Share Exchange Consent and to whom the Company may have caused to be issued stock certificates for shares of its common stock, it intends to request a Consenting Shareholder Acknowledgment from each of such persons.

With respect to holders of Series A preferred stock of BioNeutral Laboratories who did not receive shares of the Company's common stock in exchange for such preferred stock, the Company intends to offer to such persons 2,799,910 shares of common stock in exchange for their shares of Series A preferred stock, in accordance with Schedule II to the Share Exchange Agreement. The Company intends to request that such persons execute and deliver a share exchange agreement evidencing such exchange.

For purposes of preparation of these consolidated financial statements, the Company does not treat as outstanding any shares of common stock issued pursuant to the Share Exchange and for which the Company does not have a record of receiving a Share Exchange Consent. The Company made this determination despite the fact that certificates representing certain of such shares of its common stock may have been delivered to the applicable shareholder. There can be no assurance that any person in possession of such shares of common stock but who did not deliver the applicable Share Exchange Consent will not claim ownership of such shares.

Approximately 86% of BioLabs common shareholders initially exchanged their BioLabs shares of common stock for shares of common stock of the Company (including 65% of the Series A Preferred Stock of BioLabs on an as-converted basis). The Company issued approximately 42,646,100 million shares to acquire all of the exchanged shares of Bio Labs. As a result of the Share Exchange, BioLabs held an approximately 66% controlling interest in the combined entity, after giving effect to the Share Exchange.

Since the owners and management of BioLabs possessed voting and operating control of the combined company after the Share Exchange, the transaction constituted a reverse acquisition for accounting purposes, as contemplated by FASB ASC 805-40 and corresponding ASC 805-10-55-10, 12 and 13. Under this accounting, the entity that issues shares (Moonshine – the legal acquirer) is identified as the acquiree for accounting purposes. The entity whose shares are acquired (BioLabs) is the accounting acquirer.

In addition, Moonshine was characterized as a non-operating public shell company, pursuant to SEC reporting rules. The SEC staff considers a reverse-acquisition with a public shell to be a capital transaction, in substance, rather than a business combination. The transaction is effectively a reverse recapitalization, equivalent to the issuance of stock by the private company (BioLabs) for the net monetary assets of the shell corporation (Moonshine) accompanied by a recapitalization. The accounting is similar to that resulting from a reverse acquisition, except that the transaction was consummated at book value and no goodwill or intangible assets were recognized.

For SEC reporting purposes, BioLabs is treated as the continuing reporting entity that acquired the Company (the historic shell registrant). All reports filed after the transaction have been prepared as if BioLabs (accounting acquirer) were the legal successor to Moonshine’s reporting obligation as of the date of the acquisition. Therefore, these financial statements and all such statements filed subsequent to the transaction reflect the historical financial condition, results of operations and cash flows of BioLabs, for all periods presented.

Note that Moonshine changed its name to BioNeutral Group, Inc. in the month prior to the exchange, to facilitate the Share Exchange. References to “Moonshine” in this description of the accounting treatment is included to add clarity to the separation of the independent entities involved in the Share Exchange, prior to such exchange.

As referenced above, approximately 14% of BioLabs shareholders did not participate in the exchange of their shares of common stock of BioLabs for shares of common stock of Moonshine. Those shareholders are recognized as a Non-Controlling interest in the Company’s consolidated financial statements in accordance with FASB ACS 805-40-25-2. However, the shares representing ownership of the Company reflect the combined entity after the Share Exchange transaction, while BioLabs shares represent ownership of only that legal entity.

In connection with the reverse acquisition and recapitalization, all share and per share amounts of BioLabs were retroactively adjusted to reflect the legal capital structure of Moonshine pursuant to FASB ASC 805-40-45-1.

Note 2 - Summary of Significant Accounting Policies

Principles of Consolidation

The accompanying Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The accompanying financial statements include the accounts of the Company and its wholly owned and majority-owned subsidiaries. All significant intercompany transactions and balances were eliminated.

Revenue recognition

The revenue recorded is presented net of sales and other taxes we collect on behalf of governmental authorities and includes shipping and handling costs, which generally are included in the list price to the customer. Our policy is to recognize revenue in accordance with SEC Staff Accounting Bulletin No. 104 based on when (i) persuasive evidence of an arrangement exists, (ii) delivery or performance has occurred, (iii) the fee is fixed or determinable, and (iv) collectability of the sale is reasonably assured, which is normally the date the product is shipped.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are stated at the amount the Company expects to collect. The Company provides an allowance for doubtful accounts equal to the estimated uncollectible amounts. The Company’s estimate is based on historical collection experience and a review of the current status of trade accounts receivable. It is reasonably possible that the Company’s estimate of the allowance for doubtful accounts will change. Accounts receivable are presented net of an allowance for doubtful accounts of $49,716 and $0 at October 31, 2011, and 2010, respectively.

Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. For financial statement purposes, investments in money market funds are considered a cash equivalent and are included in cash and cash equivalents. The Company maintains it cash and cash equivalents at high credit quality institutions, with balances, at times, in excess of federally insured limits. As of October 31, 2011, the Company did not exceed the federally insured limits. Management believed that the financial institution that holds our deposits are financially sound and therefore pose minimal credit risk. At October 31, 2011 and 2010, the Company did not hold any cash equivalents.

Inventory

Inventories are stated at the lower of cost or market determined by the first-in, first-out method. In the normal course of business, when a customer places an order, the Company will place an order for manufacturing with its contract manufacturer. Inventory consists primarily of finished goods. Once completed, the contract manufacturer will ship directly to the customer. As such, the Company does not currently store inventoried product at any location. In addition, the Company does not have significant sales. If sales were to increase in the future, the Company may decide that the best course of action would be to carry inventory.

Non-Controlling Interest

A Non-Controlling Interest (“non-controlling interest”) was created as a result of the Company’s reorganization and recapitalization with a public shell corporation. The non-controlling interest arose because the Company’s records indicated that initially 14% of the shareholder’s of the accounting acquirer in the transaction, BioLabs, did not participate in the exchange of their shares of common stock of BioLabs for shares of common stock of the Company. In all material respects, the shares of the Company and the shares of the common stock of BioLabs included in the non-controlling interest represent different legal instruments conveying mirror ownership claims to the same underlying net assets and operations, as reflected in these consolidated financial statements.

Long-Lived Assets

Long-lived

Long-lived assets, such as property and equipment and definite-life intangible assets are evaluated for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable in accordance with FASB ASC 360-10-35-17 thru 35-35 “Measurement of an Impairment Loss.” The Company assesses the impairment of the assets based on the undiscounted future cash flow the assets are expected to generate compared to the carrying value of the assets. If the carrying amount of the assets is determined not to be recoverable, a write-down to fair value is recorded. Management estimates future cash flows using assumptions about expected future operating performance. Management’s estimates of future cash flows may differ from actual cash flow due to, among other things, technological changes, economic conditions or changes to the Company’s business operations.

Intangible Assets

The cost of intangible assets with determinable useful lives is amortized to reflect the pattern of economic benefits consumed, either on a straight-line or accelerated basis over the estimated periods benefited. Intellectual Property is generally amortized over their respective legal or contractual lives. When certain events or changes in operating conditions occur, an impairment assessment is performed and lives of intangible assets with determinable lives may be adjusted. The Company continually evaluates the reasonableness of the useful lives of these assets. Once these assets are fully amortized, they are removed from the Consolidated Balance Sheets. During its annual impairment testing of its intellectual property, the Company did not identify an impairment loss.

Property and Equipment

Property and equipment is located at the Company’s office in Newark, New Jersey and is recorded at cost less accumulated depreciation. Depreciation and amortization is calculated using the straight-line method over the expected useful life of the asset, after the asset is placed in service. The Company generally uses the following depreciable lives for its major classifications of property and equipment:

Description		Useful Lives
Furniture and Fixture		7 years
Computer hardware		3 years

Ordinary maintenance and repair expenses are charged to operations when incurred.

Use of Estimates

The preparation of the financial statements in conformity with Accounting Principles generally accepted in The United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. These estimates and assumptions include valuing equity securities, share based payment arrangements, deferred taxes and related valuation allowances and assumptions used in impairment analysis. Certain of our estimates, could be affected by external conditions, including those unique to our industry, and general economic conditions. It is possible that these external factors could have an effect on our estimates that could cause actual results to differ from our estimates. The Company re-evaluates all of its accounting estimates at least quarterly based on these conditions and records adjustments when necessary.

Advertising expenses

The Company expenses all advertising costs as incurred. Advertising expense was immaterial for the years ended October 31, 2011 and 2010, respectively.

Research and Development

In accordance with ASC Topic 730 research and development costs are expensed as incurred. Research and development expenses consist of purchased technology (including but not limited to intellectual property), purchased research and development rights and outside services for research and development activities associated with product development.

Income Taxes

The Company uses the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized.

ASC Topic 740-10-30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740-10-40 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The Company will classify as income tax expense any interest and penalties. The tax years ending 2007, 2008, 2009 and 2010 are still open for review by the various tax jurisdictions. The state jurisdiction the Company files in is New Jersey. The Company has no material uncertain tax positions for any of the reporting periods presented.

Fair Value Measurements

The Company adopted the provisions of ASC Topic 820, “Fair Value Measurements and Disclosures”, which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements.

The estimated fair value of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. The carrying amounts of our long term credit obligations approximate fair value because the effective yields on these obligations, are comparable to rates of returns for instruments of similar credit risk.

ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:

Level 1 — quoted prices in active markets for identical assets or liabilities

Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable

Level 3 — inputs that are unobservable (for example cash flow modeling inputs based on assumptions)

Stock-Based Compensation

The Company recognizes compensation expense for stock-based compensation in accordance with ASC Topic 718. For employee stock-based awards, the Company calculates the fair value of the award on the date of grant using the Black-Scholes method for stock options and the quoted price of its common stock for unrestricted shares; the expense is recognized over the service period for awards expected to vest. For non-employee stock-based awards, the Company calculate the fair value of the award on the date of grant in the same manner as employee awards, however, the awards are revalued at the end of each reporting period and the pro rata compensation expense is adjusted accordingly until such time the nonemployee award is fully vested, at which time the total compensation recognized to date equals the fair value of the stock-based award as calculated on the measurement date, which is the date at which the award recipient’s performance is complete. The estimation of stock-based awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from original estimates, such amounts are recorded as a cumulative adjustment in the period estimates are revised. The Company considers, many factors when estimating expected forfeitures, including types of awards, employee class, and historical experience.

Convertible Instruments

The Company evaluates and accounts for conversion options embedded in convertible instruments in accordance with ASC 815 “Derivatives and Hedging Activities.”

Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.

Net income (loss) per share

The Company utilizes FASB ASC 260, Earnings per Share, to calculate net income or loss per share. Basic income or loss per share is computed by dividing the income or loss available to common stockholders (as the numerator) by the weighted-average number of shares of common stock outstanding (as the denominator). Diluted income or loss per share is computed similar to basic income or loss per share except that the denominator is increased to include the number of additional shares of common stock that would have been outstanding if all potential common stock (including common stock equivalents) had all been issued, and if such additional shares of common stock were dilutive. Under FASB ASC 260, if the additional shares of common stock are not dilutive, they are not added to the denominator in the calculation. Where there is a loss, the inclusion of additional shares of common stock is anti-dilutive (since the increased number of shares reduces the per share loss available to common stock holders). The Company incurred a net loss for the years ended October 31, 2011 and 2010 therefore, common stock equivalents have been excluded from the calculation of diluted loss per share, since they would be anti-dilutive.

The following table outlines the common stock equivalents outstanding as of October 31, 2011 and October 31, 2010.

	10/31/2011		10/31/2010
Convertible Series A Preferred Stock – Non Controlling Interest		594,930		837,620
Convertible Loans		16,018,272		3,154,380
		16,613,202		3,992,000

The Convertible Series A Preferred shares are currently held by the Non-Controlling interests until such time as they are converted into the Company’s common shares.

Segment Information

Accounting Standards Codification subtopic 280-10, Segment Reporting (“ASC 280-10”) establishes standards for reporting information regarding operating segments in annual financial statements and requires selected information for those segments to be presented in interim financial reports issued to stockholders. ASC 280-10 also establishes standards for related disclosures about products and services and geographic areas. Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision-making group, in making decisions how to allocate resources and assess performance. The information disclosed therein materially represents all of the financial information related the Company’s principal operating segments.

The Company with its limited resources is currently operating in one segment and reporting unit. As it matures it will look to organize the Company into various reporting units as it starts to develop and ascertain its markets and avenues of distribution and product offerings. Therefore, it anticipates in the future it may be operating in multiple reporting units.

Reclassifications

Certain accounts in the prior year financial statements have been reclassified for comparative purposes to conform with the presentation in the current year financial statements. These reclassifications have no effect on previously reported loss.

Recent Accounting Pronouncements

In May 2011, FASB issued ASU No. 2011-04, Fair Value Measurements (ASC Topic 820). This ASU provides additional guidance on fair value disclosures. This guidance contains certain updates to the measurement guidance as well as enhanced disclosure requirements. The most significant change in disclosures is an expansion of the information required for “Level 3” measurements including enhanced disclosure for: (1) the valuation processes used by the reporting entity; and (2) the sensitivity of the fair value measurement to changes in unobservable inputs and the interrelationships between those unobservable inputs, if any. This guidance is effective for interim and annual periods beginning on or after December 15, 2011, with early adoption prohibited. Other than requiring additional disclosures on the Company’s “Level 3” disclosures, the adoption of this new guidance will not have a material impact on the Company’s consolidated results of operations and financial position.

Note 3 – Going Concern

The Company's financial statements are prepared using generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has had no significant revenues and has generated losses from operations. In order to continue as a going concern and achieve a profitable level of operations, the Company will need, among other things, additional capital resources and to develop a consistent source of revenues. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish its strategic plan and/or recognize revenue from its intangible assets and eventually attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. There can be no assurance the Company will be able to continue as a going concern.

At October 31, 2011, the Company had negative working capital of $(2,930,223). For the year ended October 31, 2010 the Company incurred an operating loss of $(3,060,721) and since inception has accumulated a deficit of $(52,581,220).

The Company had $3,215 of cash at October 31, 2011. Cash used by operations for fiscal 2011 was $881,180. The principal use of funds were for consulting services supporting the development of our business plan, legal, and accounting fees in connection with becoming a public company and daily operations of the business, including rent and travel and laboratory costs.

In fiscal 2011, the Company raised $342,500 of cash from the issuance of our capital stock to fund operations and received $482,500 from the issuance of convertible debentures.

These conditions raise substantial doubt about the ability of the Company to continue as a going concern.

In November 2011, the Company initiated a plan to restructure most aspects of management and operations. Pursuant to the plan the Company retained new management and board of director’s representatives with experience in acute care hospitals, long-term health care and consumer oriented hygiene products. In addition, on November 2, 2011 the Company entered into definitive financing and strategic distribution agreements with Vinfluence Pty Ltd ("Vinfluence"), New South Wales, Australia. The agreements provide for the assumption of, and indemnification for, $2,374,932 of accounts payable and accrued compensation and the assumption of, and indemnification for, $2,070,271 of convertible loans and $2,400,000 of equity capital. In exchange for cash and future royalties, the Company has also signed a 10-year licensing and distribution agreement with Vinfluence for exclusive manufacturing and distribution in Asia and non-exclusive manufacturing and distribution rights in Europe and sales to the US Military. In connection with the Vinfluence transaction the following agreements were entered into:

1.	Preferred Stock Purchase Agreement - This agreement provides that Vinfluence will purchase 100,000 shares of Series C Convertible Preferred Stock from the Company for an aggregate purchase price of $1,000,000. Vinfluence is obligated to purchase 20,000 shares per month.

4.	Preferred Stock Drawdown Agreement - Under the terms of this agreement, the Company is granted the right, but not the obligation, to sell to Vinfluence up to $1,400,000 worth of Series E Preferred Stock in monthly increments of up to $200,000.

As of February 7, 2012 the Company and in connection with the Vinfluence transactions outlined above, the Company has exchanged 213,491 and 231,029 shares of Series B Preferred Stock and Series D Preferred Stock, in exchange for the settlement and release of $2,374,932 and $2,070,271 of accounts payable and accrued compensation, and notes payable, respectively. On December 4, 2011, 160,000 shares of Series B Preferred Stock were converted to 20,000,000 shares of the Company’s common stock. The Company has received 3 payments of $200,000 in consideration for the issuance of Series C Preferred Stock pursuant to the Preferred Stock Purchase Agreement. The Company has 2 payments remaining to be received of $200,000 each in February and March 2012 under the Preferred Stock Purchase Agreement. In addition, the Company has the option to begin drawing at the rate of $200,000 per month for seven consecutive months beginning in April 2012 under the Preferred Stock Drawdown Agreement.

Note 4 - Prepaid Expenses

The Company periodically pays for services supporting its business operations with shares of its common stock. When these services are provided by third parties (i.e. non-employees) and performance extends over more than the current reporting period, a prepaid asset is established at the agreement date for the value of shares issued. The prepaid asset is established in the same period and manner as if cash were paid for the underlying goods or services, pursuant to FASB ASC 505-50-25-4 and 25-6.

Amounts are expensed on a straight line basis (and the prepaid asset reduced) over the periods the services are provided. The prepaid expense balance includes $5,431 and $ 172,101 at October 31, 2011 and October 31, 2010 respectively for share based payments to non-employees for services. The share based payment is being amortized over a three year period, starting in January 2009. For the years ended October 31, 2011 and 2010, the Company recognized expense of $166,671 and $168,751, respectively related to this share based payments which is recorded in “Consulting Expenses.” See Note 8 for a complete discussion of the share valuation and accounting for share based payments to non-employees in exchange for services and a detailed listing of the transaction amounts.

Note 5 - Property & Equipment

Property and equipment consisted of the following:

	10/31/2011			10/31/2010
Computer Hardware	$	4,233		$	4,233
Furniture and Fixtures		1,494			1,494
Less: Accumulated depreciation & amortization		(4,946	)		(4,734	)
	$	781		$	993

Depreciation expense incurred during the years ended October 31, 2011 and 2010 amounted to $212 and $213, respectively.

Note 6 – Intellectual Property

The Company has several patent applications pending regarding proprietary chemical formulations that the Company believes are capable of neutralizing noxious chemicals and eliminating harmful microbes. The Company capitalized the costs of acquired technology, know-how and trade secrets and identifiable costs incurred to develop file and defend the Company’s Intellectual Property and new patent or provisional patent applications (collectively “Intellectual Property”) in accordance with FASB ASC 350. Periodic gross carrying amounts and related accumulated amortization were as follows:

	10/31/2011			10/31/2010
Gross Carrying Amount	$	15,289,188		$	15,137,280
Accumulated Amortization		(4,589,742	)		(3,883,126	)
Net Carrying Amount	$	10,699,446		$	11,254,154

The Company follows FASB ASC 350-30-35 and amortizes the costs of its Intellectual Property over the shorter of its specific useful life, or 20 years. The Company is amortizing its Intellectual Property over 20 years, with no anticipated residual value. Amortization expense for the years ended October 31, 2011 and 2010 was $706,616 and $696,537, respectively.

Estimated amortization expense is as follows

10/31/2012	$	709,428
10/31/2013	$	709,428
10/31/2014	$	709,428
10/31/2015	$	709,428
10/31/2016	$	709,428

On February 28, 2011, the Company received approval and registration from the Environmental Protection Agency(“EPA”) in response to the Company's regulatory application for its Ygiene® 206 formulation. The Company has secured 32 state approvals to market and distribute Ygiene®206. These approvals are primarily in states east of the Mississippi River. The Company is pursuing approvals in the remaining 18 states as needed

Note 7 - Related Party Payables

The Company recorded interest on promissory notes entered into with former members of the Board of Directors who resigned their positions with the Company on January 29, 2009. For the years ended October 31, 2011 and 2010, the Company recorded interest of $2,072 and $630, respectively related to these notes.

The Company and its former director, Raj Pamani, are parties to a consulting agreement, dated as of June 15, 2008, pursuant to which Mr. Pamani agreed to accept responsibilities and take direction from the Company's board of directors. Pursuant to the agreement, Pamani Foods LLC agreed to conduct market research and promote networking opportunities for sales of the Company’s products in India and certain Asian countries. Under this agreement, the Company was obligated to pay Mr. Pamani $10,000 per month. The Company and Mr. Pamani collectively agreed to terminate the agreement effective October 31, 2010. During the year ended October 31, 2010 the Company paid or credited and expensed $30,000 to Mr. Pamani under this agreement, which was recorded as consulting expense and recorded in a Related Party Payable account. Mr. Pamani has charged certain personal expenses against the Company's cash account which have been treated by the Company as repayment of the Related Party Payable.

On September 6, 2008, the Company entered into an agreement with Jina Partners Ltd. (“Jina”), an affiliate of Raj Pamani, for consulting services relating to the development of market research and to promote networking opportunities for sales of the Company’s products in the European Union and certain Asian countries. Under this agreement, the Company was obligated to pay Jina $10,000 per month. The term of this agreement was for two years and expired on September 4, 2010. During the years ended October 31, 2011 and October 31, 2010, the Company paid or credited and expensed $0 and $90,000, respectively, to Jina related to this agreement.

Note 8 - Stock Based Compensation

The Company issues shares of its common stock to employees and non-employees as compensation for services provided. Stock based compensation related to employees is accounted for in accordance with FASB ASC 718-10 and ASC 505-50 for non-employees. All shares, except those listed below, issued during fiscal years 2011 and 2010 were fully vested upon grant of the shares or no later than the respective year end dates.

Employees and Board Members

Measurement of compensation cost related to shares of common stock issued to employees is based on the grant date fair value of the shares. Fair value was determined through the use of quoted prices in the trading market for the Company’s shares (OTCBB) or arms-length exchanges of shares for cash in private transactions, in periods that quoted market prices were not available.

On January 14, 2011 the Company issued an annual grant of 85,000 restricted shares of the Company's common stock as compensation to Wayne Stratton, a non-management member of the Board of Directors for services. The fair market value of the grant issued is $34,000 based on the closing share price of the Company’s stock as of January 14, 2011, the date of his appointment. Payment will be made in restricted shares of the Company’s common stock, which have not been issued as of October 31, 2011. The Company recognized the expense of $27,088 for Directors’ Fees and has recorded as a liability to issue common shares.

On April 5, 2011 the Company issued an annual grant of 85,000 restricted shares of the Company's common stock as compensation to Michael Francis, a non-management member of the Board of Directors for services. The fair market value of the grant issued is $34,850 based on the closing share price of the Company’s stock as of April 5, 2011, the date of his appointment. Payment will be made in restricted shares of the Company’s common stock, which have not been issued as of October 31, 2011. The Company recognized the expense of $19,942, for Directors’ Fees and has recorded as a liability to issue common shares.

On April 5, 2011the Company issued an annual grant of 85,000 restricted shares of the Company's common stock as compensation to Michael Francis, a non-management member of the Board of Directors for services.The fair market value of the grant issued is $34,850 based on the closing share price of the Company’s stock as of April 5, 2011, the date of his appointment.Payment will be made in restricted shares of the Company’s common stock, which have not been issued as of October 31, 2011.The Company recognized the expense of $19,942, for Directors’ Fees andis recorded as a liability to issue common shares.

On February 28, 2011, the Company received approval and registration from the EPA in response to the Company's regulatory application for its Ygiene® 206 formulation. In conjunction with the recent EPA approval and the verbal agreement entered into, the Chief Scientific Officer earned 555,822 restricted shares of common stock on February 28, 2011. The value of the stock based compensation was $289,027 which was based on the closing price of the Company’s common stock on February 28, 2011. The Company issued the shares on April 18, 2011. The Company recognized the expense as research and development and increased common stock and additional paid in capital accordingly.In addition, on October 31, 2011, the Company awarded Mr. Kielbania 2,500,000 shares of the Company’s common stock for services rendered in the scientific advancement of the Company’s products. The shares were valued at $.08 in connection with the valuation established by the Vinfluence transactions. The Company recognized the expense of $200,000 for Research and Development and has recorded as a liability to issue common shares. The shares were issued on November 21, 2011.

During the fiscal year ended October 31, 2010, 0 shares of common stock were issued to employees and Board members, respectively as compensation for services.

Note 9 - Stockholder’s Equity (and Non-Controlling Interest)

Common Stock

During the years ended October 31, 2011 and 2010, the Company issued 1,810,116 and 735,715 shares of the Company’s common stock for gross proceeds of $342,500 and $180,000, respectively, in private placement transactions.

At the time of the reverse merger, the Company delivered to its transfer agent instructions to issue stock certificates in accordance with the schedule to the share exchange agreement. However, the Company did not receive share exchange consents in respect to all shares issued or receive stock certificates representing shares of BioNeutral Laboratories Corporation USA common stock for cancellation in accordance with the schedule to the share exchange agreement. This resulted in the Company’s records reflecting less common shares as being issued and outstanding than what the transfer agent’s report was reflecting. Previously, the Company disclosed “the adjustment to reconcile transfer agent records” on page 4 of its 2009 Form 10-K by making the following disclosure “The Company’s transfer agent's records indicated that as of February 16, 2010, 65,618,604 shares of common stock were outstanding as compared to the Company’s record of 60,849,200 shares. In its fiscal 2009 annual report such amount was disclosed but not reflected as being outstanding, however during the fiscal year ended October 31, 2010, the Company elected to record the difference between the transfer agent’s records and that of the Company. Although the difference reported in 2009 was 4,769,404 shares, the final reconciled difference as of October 31, 2010 was 4,755,536 shares. Based on the information currently available, the Company believes the accounting for these shares is final.

Preferred Stock

Included in stockholder’s equity is Series A Preferred Stock that is convertible into common stock of BioLabs at a rate of 10 shares of common stock for each share of preferred stock.

BioLabs is authorized to issue 5,000,000 shares of preferred stock, $0.001 par value, of which 800,000 shares are designated as Convertible Series A Preferred Stock. The BioLabs’ Certificate of Incorporation authorizes the Board of Directors to determine the preferences, limitations and relative rights of any class or series of preferred stock prior to issuance. Each such class or series must be given distinguishable designated rights prior to issuance. As of October 31, 2011 and October 31, 2010, 59,493 and 83,762 shares of the Company’s Series A Preferred Stock were issued and outstanding, respectively.

Through the date of this report, the rights and preferences of the outstanding preferred stock are identified below:

Convertible Series A Preferred Stock:

	1.	800,000 Authorized shares.
	2.	Holders of shares of Series A Preferred Stock have the right to vote and shall be entitled to the number of votes equal to the largest number of full shares of Common Stock into which such shares of Series A Preferred could be converted.
	3.	Each share of Convertible Series A Preferred Stock is convertible into 10 shares of common stock of BioNeutral Laboratories Corp, which can be exchanged on a 1 for 1 basis with BioNeutral Group, Inc.’s common stock.
	4.	Liquidation preference equal to 250% of the stated value of $7.21 of the shares.
	5.	No dividends are issuable to any shareholders who rank junior to the preferred shares.
	6.	Upon an initial public offering or if a significant trading market develops and other parameters occur in relation to the Company's common stock, each preferred share shall be mandatorily converted into 10 shares of common stock.
	7.	Par value of $0.001.

During fiscal year ended October 31, 2010 the Company exchanged shares with several of the BioLabs preferred and common stockholders, all of whom exchanged their shares at a ratio of 1 share of preferred stock for 10 shares of common stock and 1 to 1 common exchange, except for four preferred stockholders and common stockholders of BioLabs who were issued an aggregate of 3,598,800 shares of common stock. These four shareholders exchanged their shares at a ratio of 200 shares of common stock for 1 share of preferred stock and a 1 to 1 common share exchange. Although all of the exchanged shares are reflected in the financial statements as issued and outstanding, the issuance of shares to the four holders who exchanged at the higher exchange ratio is subject to dispute. As a result of the above transaction, the Company is disputing the issuance of 2,634,730 shares of common stock. A resolution of this dispute is currently being pursued by the Company. However the exact nature and effect of such a resolution on the financial statements of the Company is not currently known. Therefore, the Company has no basis to estimate or quantify the effect of a resolution on its financial statements. In this regard, a prospective resolution could ultimately produce various financial statement effects including, but not limited to a reduction in the Company’s issued and outstanding common stock and an increase to earnings per share or no effect at all.

Non-Controlling Interest

In connection with the reverse acquisition disclosed in Note 1, initially approximately 14% of BioLabs’ common shareholders did not participate in the exchange of their shares of BioLabs common stock for shares of common stock of the Company. Those shareholders are recognized as a non-controlling interest in the Company’s consolidated financial statements in accordance with FASB ACS 805-40-25-2. The assets, liabilities and operations underlying the shares of BioLabs and the Company are identical. However, the shares representing ownership of the Company reflect the combined entity after the Share Exchange transaction, while BioLabs shares included in the non-controlling interest held by the non-controlling interest represent ownership of that legal entity.

Non-Controlling Interest at October 31,2009	$	902,225
Non-Controlling Interest Converted	$	(196	)
Non-Controlling interest Share of Net Loss for the Year ended October 31, 2010	$	(331,728	)
Non-Controlling Interest at October 31, 2010	$	570,301
Non-Controlling Interest Converted	$	(25	)
Non-Controlling interest Share of Net Loss for the Year ended October 31, 2011	$	(241,693	)
Non-Controlling Interest at October 31, 2011	$	328,583

The Series A Preferred Stock is recognized in the Non-Controlling Interest. If the 59,493 shares of preferred stock were fully converted into shares of BioLabs common stock and Preferred Shareholders did not elect to exchange those shares for Company common stock, the Non-Controlling interest would be 8.44% as of October 31, 2011 and if 83,762 shares of preferred stock were fully converted into shares of BioLabs common stock at October 31, 2010 and Preferred Shareholders did not elect to exchange those shares for Company common stock, the Non-Controlling interest would be 11.84% as of October 31, 2010.

Note 10 - Taxes

The Company has not filed federal tax returns for the fiscal years ended December 31, 2007, the ten months ended October 31, 2008 and the fiscal year ended October 31, 2009 and 2010. Those returns, which are not expected to report any tax due are currently being prepared. The Company has its primary operations in the State of New Jersey and is required to file New Jersey corporate income tax returns. The Company has not filed New Jersey State tax returns, but is in the process of bringing its filings up to date. Since the Company has incurred operating and tax losses for each of the years for which returns have not been filed, it anticipates that only minimal taxes will be due, including any interest and penalties that might be assessed.

The Company is not in discussions with any tax authorities whereby any settlements over past due taxes are in progress.

The income tax provision (benefit) consists of the following:

	October 31, 2011			October 31, 2010
Federal
Current	$	-		$	-
Deferred		(1,020,907	)		(1,286,542	)
State and Local
Current		-			-
Deferred		(178,358	)		(224,767	)
Change in valuation allowance		1,199,265			1,511,309
Income tax provision (benefit)	$	-		$	-

The following is a reconciliation of the expected tax expense (benefit) on the U.S. statutory rate to the actual tax expense (benefit) reflected in the statement of operations:

	Years Ended
	October 31, 2011			October 31, 2010
U.S. federal statutory rate		(34	%)		(34	%)
State income tax, net of federal benefit		(5.9	%)		(5.9	%)
Increase in valuation allowance		39.2	%		39.4	%
Other permanent items		.8	%		.5	%
Income Tax provision (benefit)		0	%		0	%

As of October 31, 2011 and 2010, the Company’s deferred tax assets consisted of the effects of temporary differences attributable to the following:

	Years Ended
	October 31, 2011			October 31, 2010
Deferred Tax Assets
Net operating loss carryovers	$	14,256,341		$	13,045,345
Amortization of intellectual property		1,562,855			1,656,929
Amortization of 2006 write-off		2,603,302			2,820,245
Allowance for doubtful accounts		19,857			-
Accrued compensation		441,581			291,131
Interest on convertible debt		97,128			34,717
Stock-based compensation		198,449			131,881
Total deferred tax assets		19,179,513			17,980,248
Valuation allowance		(19,179,513	)		(17,980,248	)
Deferred tax assets, net of valuation allowance	$	-		$	-

For the year ended October 31, 2011 and October 31, 2010, the Company had approximately $35,694,393 and $32,662,356, respectively, of federal and state net operating loss carryovers (“NOLs”) which will expire twenty years after the date each tax return is filed. The NOLs may be subject to limitation under Internal Revenue Code Section 382 should there be a greater than 50% ownership change as determined under regulations.

In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the assessment, management has established a full valuation allowance against all of the deferred tax assets for every period because it is more likely than not that all of the deferred tax assets will not be realized. The change in valuation allowance for the years ended October 31, 2011 and 2010 is $1,199,265 and $1,511,309, respectively.

The Company believes that the cumulative issuances of its common stock likely resulted in an “ownership change” for tax purposes. This determination would have no effect on the Company’s reported historic results. However, under this treatment, the Company’s ability to utilize its net operating loss carry-forwards in future years, in the event the Company has net income for federal and state income tax purposes, which is not assured, may be very limited and there can be no assurance the Company would be able to fully utilize this tax benefit in full over the periods it is allowed. The Company intends to conduct further analysis to confirm this treatment.

Note 11 - Related Party Transactions

Related Party Events for Fiscal Year Ended October 31, 2011

The Company issued an unsecured promissory note to Michael D. Francis, (“Francis”) a shareholder of the Company, on December 10, 2010, which issuance resulted in gross proceeds to the Company of $75,000.

The Company issued three unsecured promissory notes to Capara Investments, (“Capara”) an affiliated company of Raj Pamani of which Mr. Pamani is the sole member, and a shareholder of the Company, of $50,000 on June 1, 2011, $50,000 on July 1, 2011 and $5,000 on October 24, 2011, which issuances resulted in gross proceeds to the Company of $105,000 in total.

Related Party Events for Fiscal Year Ended October 31, 2010

On November 13, 2009, the Company issued (i) an unsecured promissory notes to Francis in the amounts of $250,000, (ii) a second unsecured promissory note on January 4, 2010 in the amount of $250,000, a (iii) a third unsecured promissory note in the amount of $250,000, on March 15, 2010 of which $100,000 was drawn down by the Company on March 15, 2010 and $150,000 on April 1, 2010, (iv) a fourth secured promissory note in the amount of $100,000 on April 30, 2010 with an original issuance date of April 26, 2010, and (v) a fifth unsecured promissory note in the amount of $25,000 on July 7, 2010.

On November 13, 2009, the Company issued an unsecured promissory notes to Capara in the amount of $250,000 and (ii) a second unsecured promissory note to Capara on January 4, 2010 in the amount of $250,000 and (iii) a third unsecured promissory note to Capara on September 2, 2010 in the amount of $25,000 and (iv) a fourth unsecured promissory note to Capara on October 13, 2010 in the amount of $25,000.

The Francis Notes, Kozlov Notes and Capara Notes are sometimes referred to herein as the “Shareholder Notes.” The Shareholder Notes resulted in gross proceeds to the Company of $230,000 and $1,425,000, respectively, during years ending October, 31, 2011 and 2010.

Each of the Shareholder Notes bear an 8% annual interest rate, is due and payable in cash on the fifth anniversary of the date of issuance, and upon consummation of a “Qualified Financing” (as defined in the note), will automatically be exchanged for, solely at the Company’s election, either (i) securities on the same terms and conditions as those received by investors in such Qualified Financing based on an assumed exchange rate reflecting the pricing used in such financing or (ii) shares of the Company’s common stock equal to the quotient obtained by dividing (x) the then outstanding principal amount of the note by (y) the lower of (i) $0.69 and (ii) the Fair Market Value (as defined in the note) of one share of the Company’s common stock as of the date of such exchange (the Kozlov Note provides for an exchange rate of (y) the lower of (i) $0.40 and (ii) the Fair Market Value (as defined in the Shareholder Notes) of one share of our common stock as of the date of such exchange). On each three (3) month anniversary of the issuance of the note, all accrued and unpaid interest shall be added to the unpaid principal amount of such note. The note defines “Qualified Financing” as an investment in securities of the Company (including any financing that includes convertible indebtedness and/or warrants) occurring after the date of issuance of the note by an investor that is not an affiliate of the Company in which the Company receives net proceeds greater than $500,000 (including any additional investment by the holder of the note or by the holder of any other 8% exchangeable promissory note) in the Qualified Financing.

Accrued and unpaid interest is added to the unpaid principal amount of the Shareholder Notes every three months. Interest expense on the Shareholder Notes for the year ended October 31, 2011 and 2010 was $151,080 and $87,098, respectively. During the years ended October 31, 2011 and 2010, $140,188 and $86,238 of accrued interest was added to the principal amount of the Shareholder Notes.

Note 12 – Notes Payable

The Blackbeth Notes and the River Falls Note are sometimes referred to herein as the “Unrelated Party Notes”. The Shareholder Notes resulted in gross proceeds to the Company of $200,000.

Each of the Unrelated Party Notes bears an 8% annual interest rate, is due and payable in cash on the fifth anniversary of the date of issuance, and upon consummation of a “Qualified Financing” (as defined in each of the Unrelated Party Notes), will automatically be exchanged for, solely at the Company's election, either (i) securities on the same terms and conditions as those received by investors in such Qualified Financing based on an assumed exchange rate reflecting the pricing used in such financing or (ii) shares of our common stock equal to the quotient obtained by dividing (x) the then outstanding principal amount of the Unrelated Party Note by (y) the lower of (i) $0.40 and (ii) the Fair Market Value (as defined in the Unrelated Party Notes) of one share of our common stock as of the date of such exchange (the Blackbeth Note issued on August 1, 2011 assumes an exchange rate of (y) the lower of (i) $0.69 and (ii) the Fair Market Value (as defined in the Unrelated Party Notes) of one share of our common stock as of the date of such exchange). On each three (3) month anniversary of the issuance of each Unrelated Party Note, all accrued and unpaid interest shall be added to the unpaid principal amount of such note. Each of the Unrelated Party Notes defines “Qualified Financing” as an investment in securities of the Company (including any financing that includes convertible indebtedness and/or warrants) occurring after the date of issuance of the Unrelated Party Note by an investor that is not an affiliate of our company in which we receive net proceeds greater than $500,000 (including any additional investment by the holder of the Unrelated Party Note or by the holder of any other 8% exchangeable promissory note) in the Qualified Financing.

The Company issued two unsecured promissory notes to Asher Enterprises, Inc. (“Asher Notes”, “the Holder”) on August 18, 2011 and September 15, 2011 (“the Issue Dates”) which issuances resulted in gross proceeds to the Company of $60,000 and $42,500, respectively, for total gross proceeds of $102,500. The notes bear an 8% annual interest rate, is due and payable with unpaid interest in cash on May 22, 2012 and June 19, 2012. (“the Maturity Dates”) and is reported in the Company’s balance sheet as Notes Payable – Short Term. The Holder may convert from time to time, and at any time during the period beginning on the date which is one hundred eighty (180) days following the Issue Dates and ending on the Maturity Dates the unpaid principal amount and interest into shares of the Company’s common stock equal to the Conversion Price which is the product obtained by multiplying 58% by the Market Price (as defined in the notes) and then dividing the then outstanding principal amount of the note by the Conversion Price as of the date of such conversion.

Note 13 – Commitments & Contingencies

Operating Leases

The Company renewed its annual lease agreement for its office and laboratory space in Newark, New Jersey. The lease term is for the twelve months September 1, 2011 to August 31, 2012. The monthly rent is $3,019 per month.

On November 1, 2011, the Company leased office space in Morristown, New Jersey for a period of one year. The monthly rent is $4,998 per month.

The following table summarizes the Company’s future minimum lease payments under operating leases agreements for the one year subsequent to October 31, 2011:

Year Ended:
October 31, 2012		$	102,165

Rent expense for fiscal years ended October 31, 2011 and 2010 was $23,405 and $12,307, respectively.

Litigation

In April 2005, the Company filed in the US Patent and Trademark Office (the “USPTO”) an application for the registration of the trademarks BioNeutral™, Ogiene® and Ygiene®, based on its intent to use each of these marks in commerce. In April 2006, the USPTO issued notices of allowance signifying that each of these trademarks was entitled to registration after timely submission of statements of use, including evidence that such trademarks have been properly used in commerce. From June through November of 2008, however, the Company’s applications for each of these trademarks were declared abandoned by the USPTO, since the Company inadvertently failed to timely file the appropriate statements of use with respect to each trademark within the six-month period from the date the USPTO issued the respective notices of allowance. In July 2009, the Company again submitted applications for each of these trademarks as well as the Company’s tagline SCIENCE TO SAVE LIVES & PROTECT THE ENVIRONMENT®; however, the Company learned that PURE Bioscience, a company focused on the development and commercialization of bioscience products, had filed application for the registration of the trademarks BioNeutral™ and Ygiene® prior to the Company’s resubmission of its applications. Subsequently in 2011, the Company received trademark registration from the USPTO for Ygiene®, Ogiene® and the Company’s tagline SCIENCE TO SAVE LIVES & PROTECT THE ENVIRONMENT®. The Company intends to pursue with the Trademark Trial and Appeal Board an opposition to PURE Bioscience's application with respect to BioNeutral™. The Company cannot assure you that it will be successful with such opposition on a timely basis, if at all. In May 2011, the Company received notice that PURE Bioscience filed a petition with the USPTO for cancellation of the Company’s Ygiene® registration. The Company intends to pursue a vigorous opposition to the petition for cancellation; however the Company cannot assure you that it will be successful with such opposition on a timely basis, if at all.

Other Contingencies

Approximately 4.8 million shares issued in the Share Exchange were issued by the then transfer agent to stockholders of BioLabs for whom the Company does not have records as having consented to the Share Exchange. The Company currently holds approximately 91% of the outstanding interests in its subsidiary, BioLabs. The Company did not receive consents to the Share Exchange from all common and preferred shareholders of BioLabs, and the Company has accounted for those shareholders who did not sign consents as holders of the remaining 9% outstanding interests in BioLabs. The Share Exchange consents did not specify the number of shares of BioLabs common stock to be exchanged by the consenting shareholder and did not affirmatively make the representation and warranties to be made by our stockholders as set forth in the Share Exchange. In light of such omissions, there can be no assurances that a shareholder will not challenge the validity of its consent and request a rescission offer in respect of shares of common stock issued to such person. There can also be no assurances that in light of the content of such Shareholder consent, the Company had a basis for a valid private placement of its common stock issued in the Share Exchange, which if such were the case, may negatively affect our status as a publicly traded company.

In addition, the Company believes that the shareholders who consented to the Share Exchange and were issued shares of Company common stock failed to deliver the stock certificates representing their shares of common stock and Series A Preferred Stock of BioLabs and may claim they also have an ownership interest in BioLabs. Although the Company would challenge any such claims, it cannot assure investors that it would prevail, in which case the Company’s percentage ownership interest in BioLabs would decrease.

Searchhelp, Inc. Royalty Rights

On February 3, 2004, the Company’s subsidiary, Environmental Commercial Technology, Corp. (“ECT”), entered into an agreement with Searchhelp, Inc. (“Searchhelp”). Searchhelp paid cash and issued shares of its common stock and stock warrants to ECT in order to acquire a royalty equal to 5% of the gross sales of a product ECT was developing (the “U.S. Product”). The U.S. Product, which has not been commercially released and has not been approved by the U.S. Environmental Protection Agency ("EPA"), was intended to prevent the growth of mold and fungus. The Company has determined that for reasons based on the underlying science, the U.S. Product cannot be approved by the EPA. As a result, the U.S. Product is not commercially viable for the production of revenue. The agreement with Searchhelp was for a 5 ½ year term, commencing on the first quarter in which the royalty payments to Searchhelp have aggregated to $50,000. The U.S. Product has not produced revenue and therefore the Company is under no obligation to make royalty payments. With respect to the consideration paid in the form of cash and issued shares by Searchhelp to ECT, repayment is contingent to the extent that the Company has materially modified the underlying license agreements. The Company has not modified the underlying license agreements, and as such, is under no obligation to return the consideration of cash and shares. Accordingly, no liability has been recorded. The Company reached these conclusions based on recent internal review of the underlying agreements and products related thereto.

Note 14 - Subsequent Events:

Subsequent events have been evaluated through the date the financial statements were issued. All appropriate subsequent event disclosure, if any, have been made in the notes to the consolidated financial statements.

On December 7, 2011, the Company issued 20,000 shares of Series C Preferred Stock to Vinfluence in consideration for the receipt of $200,000 pursuant to the Preferred Stock Purchase Agreement. The shares were valued at $.08 per share pursuant to the value established by Vinfluence and consistent with the terms of the Preferred Stock Purchase Agreement between Vinfluence and the Company.

On December 6, 2011, the Company issued 30,000 shares of common stock for accounting services performed. The shares for services were valued and issued at the prevailing quotation prices for the Company's stock at the time of issuance.

On November 21, 2011, the Company issued 2,500,000 shares of common stock to Piccadilly Consulting Pty. Ltd (“Piccadilly”) in connection with a consulting agreement entered into with Piccadilly to assist the Company in pursuing strategic relationships and commercial strategies for the Company’s products. The shares were valued at $.08 per share reflective of the value for the Company’s common stock established by the Vinfluence transactions.

The Company issued 500,000 shares each, respectively, to Frank Battafarano and Ronald Del Mauro pursuant to their agreements to participate as members of the Company’s board of directors. The shares for services were valued at $.08 per share reflective of the value for the Company’s common stock established by the Vinfluence transactions.

On November 7, 2011, the Company issued 213,491 shares of Series B Preferred Stock and 231,029 shares of Series D Preferred Stock to Vinfluence in connection with the Agreements to settle liabilities. In addition, the Company issued 20,000 shares of Series C Preferred Stock to Vinfluence as consideration for future advancements of monies to be received by the Company under the Preferred Stock Purchase Agreement. On December 2, 2011, the Company received a notice of conversion from Vinfluence for 160,000 Series B Preferred Stock in connection with the settlement and unconditional release of approximately $1.6 million of the Company’s outstanding accounts payable. Pursuant to the notice of conversion, the Company issued a certificate for 1,232,404 and a certificate of 18,767,596 of shares of its common stock to Vinfluence for a total of 20,000,000 shares. Subsequently, on January 4, 2012 and at the request of Vinfluence, the Company cancelled the certificate for 18,767,596 shares to Vinfluence, and as an accommodation to Vinfluence, issued the 18,767,596 shares to accounts of Michael Francis, a former member of the Company’s board of directors. The shares issued to Mr. Francis were in consideration for the settlement and unconditional release of $1,084,412 of convertible notes payable issued to Mr. Francis and consideration for certain other obligations of Vinfluence to Mr. Francis.

On November 2, 2011 the Company entered into definitive financing and strategic distribution agreements with Vinfluence. The agreements provide for the assumption of, and indemnification for, $2,374,932 in accounts payable and accrued compensation and the assumption of, and indemnification for, $2,070,271 in convertible loans and $2,400,000 of equity capital.

In exchange for cash and future royalties, the Company has also signed a 10-year licensing and distribution agreement with Vinfluence for exclusive manufacturing and distribution in Asia and non-exclusive manufacturing and distribution rights in Europe and sales to the US Military. The transaction value of $.08 per share of the Company’s common stock reflects the market for the Company’s common stock as established by Vinfluence as a willing purchaser of up to 85,573,875 common shares on a fully converted basis. In connection with the Vinfluence transaction the following agreements were entered into:

1.	Preferred Stock Purchase Agreement - This agreement provides that Vinfluence will purchase 100,000 shares of Series C Convertible Preferred Stock from the Company for an aggregate purchase price of $1,000,000. Vinfluence is obligated to purchase 20,000 shares per month.

4.	Preferred Stock Drawdown Agreement - Under the terms of this agreement, the Company is granted the right, but not the obligation, to sell to Vinfluence up to $1,400,000 worth of Series E Preferred Stock in monthly increments of up to $200,000.

In connection with the Vinfluence agreements outlined above, On October 31, 2011, the Board of Directors of the Company approved the designation of the following series of Preferred Stock:

1. Two hundred thirteen thousand four hundred ninety one (213,491) shares of Series B Preferred Stock. Each share of Series B Preferred Stock is convertible into 125 shares of the Company's common stock. The basis for the shares is $.08 per share based on the conversion formula of 125 shares of common stock per share of Series B Preferred Stock with a stated value of $10.00 per share.

2. One hundred thousand (100,000) shares of Series C Preferred Stock. Each share of Series C Preferred Stock is convertible into 125 shares of the Company's common stock. The basis for the shares is $.08 per share based on the conversion formula of 125 shares of common stock per share of Series B Preferred Stock with a stated value of $10.00 per share.

3. Two hundred thirty one thousand and twenty nine (231,029) shares of Series D Preferred Stock. Each share of Series D Preferred Stock is convertible into 125 shares of the Company's common stock. The basis for the shares is $.08 per share based on the conversion formula of 125 shares of common stock per share of Series B Preferred Stock with a stated value of $10.00 per share.

During a meeting of the Company’s Board of Directors held on November 1, 2011 the following events occurred:

1.	Mr. Ronald Del Mauro and Mr. Frank Battafarano were appointed as directors of the Board. Their appointments to the Board became effective on November 1, 2011

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”), as of October 31, 2011. Based on this evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures are not effective as of October 31, 2011 due to material weaknesses as identified below to ensure that all information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and is accumulated and communicated to our management, including our principal executive and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Our principal executive officer and principal financial officer reached a similar conclusion based on their evaluation of our disclosure controls and procedures as of October 31, 2010. Although our principal executive officer and principal financial officer believe that progress has been made with respect to our disclosure controls and procedures during the past year, the following areas continue to be identified as requiring further improvement:

·	There is insufficient supervision and review by our corporate management, particularly relating to transactions relating to equity and debt instruments.

·	There is an insufficient level of monitoring and oversight controls for review and recording of stock issuances, agreements and contracts, including insufficient documentation and review of the selection and application of GAAP to significant non-routine transactions.

There are insufficient corporate governance policies. Our corporate governance activities and processes are not always formally documented. Specifically, decisions made by the board to be carried out by management should be documented and communicated on a timely basis to reduce the likelihood of any misunderstandings regarding key decisions affecting our operations and management.

We currently have insufficient resources and an insufficient level of monitoring and oversight, which may restrict our ability to gather, analyze and report information relative to the financial statements in a timely manner, including insufficient documentation and review of the selection and application of generally accepted accounting principles to significant non-routine transactions. In addition, the limited size of our accounting function makes it impractical to achieve an optimum segregation of duties.

Our size dictates that most policies are self-policing and adjusted on an ad-hoc basis as required so formal policies are essentially not formed and recorded. We believe that our weaknesses in internal control over financial reporting and disclosure controls relate in part to the fact we are an emerging business with limited personnel and resources.

In order to help improve our disclosure controls and procedures, the Company has engaged a chief financial advisor. The Company intends to form an audit committee to further assist with improving its disclosure controls and procedures. Management and the Board of Directors believe that the Company must allocate additional human and financial resources to address these matters.

Management's Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining effective internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act over the registrant. Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of our financial reporting for external purposes in accordance with accounting principles generally accepted in the United States. Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of our financial statements would be prevented or detected.

An internal control material weakness is a significant deficiency, or aggregation of deficiencies, that does not reduce to a relatively low level the risk that material misstatements in financial statements will be prevented or detected on a timely basis by employees in the normal course of their work. An internal control significant deficiency, or aggregation of deficiencies, is one that could result in a misstatement of the financial statements that is more than inconsequential.

As of October 31, 2011, management assessed the effectiveness of the Company’s internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under the framework in Internal Control - Integrated Framework, our management concluded that our internal control over financial reporting was not effective as of October 31, 2011 for the reasons outlined above.

Changes in Internal Controls over Financial Reporting

There have been no changes in our internal controls over financial reporting that occurred during our last fiscal quarter to which this Annual Report on Form 10-K relates that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting. We are committed to improving our financial organization. As part of this commitment, we intend to continue to educate our management personnel to comply with U.S. GAAP and SEC disclosure requirements and to increase management oversight of accounting and reporting functions in the future.

ITEM 9B . OTHER INFORMATION

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Directors and Executive Officers

The following table sets forth the names, ages and titles of our directors and executive officers as of January 15, 2012, and the years in which such directors became directors. All directors hold office until the next annual meeting of shareholders or until their respective successors are elected and qualified.

Name	Age	Positions and Offices Held	Director Since
Frank Battafarano	61	Director	2011
Ron Del Mauro	68	Director	2011
Dr. Andy Kielbania	65	Director and Interim Chief Executive Officer	2010

Mr. Frank Battafarano is currently a Healthcare Consultant focusing on Strategic, Business Development, Operational and Financial Consulting to the Healthcare industry. He is also Chairman Executive Advisory Council of the Acute Long Term Hospital Association; a Washington based Hospital Trade Association.

Mr. Battafarano served as Chief Operating Officer of Kindred Healthcare Inc. and served as its Executive Vice President and President of the Hospital Division from February 2005 to March 2008. Mr. Battafarano served as President of the Hospital Division of Kindred Healthcare, Inc. from November 1998 to February 2005.

Throughout his career, Mr. Battafarano has been actively involved in many professional organizations and health associations including Kindred Healthcare Inc. as the Chief Operating Officer from 2008 through 2010. He was Kindred Healthcare’s Executive Vice President and President, Hospital Division from 1998 until 2008. Prior to that, Mr. Battafarano was Vice President of Operations from 1996 until 1998 and Executive Director Hospital Operations from 1992 until 1996. From 1987 to 1991, he was Senior Vice President, Acute Care Operations for Provident Medical Corporation and Vice President of Operations for United Medical Corporation from 1984 until 1987. He previously held Operating positions with United Medical Corporation and Lifemark Corporation.

Mr. Ronald Del Mauro is currently a member of our board of directors. Ron served as the Chief Executive Officer of the Saint Barnabas Health Care System since its inception in 1996, and also served as its President until 2010.

Mr. Del Mauro began his career with Saint Barnabas Medical Center in 1967. For 14 years, he served as Vice President for Human Resources and Director of Personnel. In 1983, he was named Senior Vice President for Human Resources for the Saint Barnabas Corporation and General Manager and Chief Operating Officer of Livingston Services Corporation, the for-profit affiliate of the Barnabas Health.

In 1985, Mr. Del Mauro was elected President and Chief Executive Officer of Saint Barnabas Medical Center. In 1986, he was also named President and Chief Executive Officer of the Saint Barnabas Corporation, and in 1993, he was elected Chairman of the Board of Trustees of the Medical Center. From 1998 to 2000, he also served as Chairman of the Board of Trustees of Clara Maass Medical Center, a System affiliate.

Throughout his career, Mr. Del Mauro has been actively involved in many professional organizations and health associations including the New Jersey Hospital Association, of which he is former Chairman; Chairman of the Infrastructure Advisory Committee of the N.J. Domestic Security Preparedness Task Force; the New Jersey Chamber of Commerce; Life Sciences Advisory Committee of the CIT Group, Inc.; Leadership Council of the Center for Leadership Studies and The Center for Public Service Advisory Council at Seton Hall University; member of the Board of Trustees of the Delbarton School in Morristown; member of the Certificate of Need Study Commission, an appointment by Governor Christine Todd Whitman; member of the New Jersey Essential Health Services Commission, an appointment by Governor James Florio; a member of the Board of Directors of Margaretten Financial Services Commission; a Management Trustee of Local 68 International Union of Operating Engineers’ Pension Fund; a member of the Board of Trustees of the New Jersey Organ and Tissue Sharing Network and of the Stone Center of New Jersey and the Papermill Playhouse in Millburn.

Mr. Del Mauro is a graduate of Seton Hall University, where he served as an Adjunct Professor at the Graduate School of Public Administration from 1983 to 1985.

Dr. Andy Kielbania has served as our Chief Scientific Officer and Secretary since January 30, 2009 and has served a director of our company since November 30, 2010. Dr. Kielbania joined BioNeutral Laboratories as a scientist in 2005. From 2002 to 2005 Dr. Kielbania served as the vice president of Manning Management. He previously held positions at Rohm and Haas where he assumed senior level positions in research and developing. Dr. Kielbania received his Ph.D. in organic chemistry from the University of California at Berkeley. As a result of these and other professional experiences, we believe Mr. Kielbania is qualified to serve as a director based on his scientific knowledge and his management skill.

Family Relationships

There are no family relationships between any of our executive officers or directors.

Code of Ethics

We have a code of ethics that applies to our chief executive officer, chief financial officer and other persons who perform similar functions. A copy of our code of ethics is incorporated by reference as an exhibit to this Annual Report on Form 10-K.

Audit Committee Financial Expert

Our Board of Directors, which currently consists of three individuals, does not have any separately-designated standing committees, including a separately-designated standing audit committee. The entire Board of Directors currently acts as our audit committee. We may, however, as our business grows and if additional members are added to our Board of Directors, our Board of Directors will establish an audit committee, one of the members of which may be an “audit committee financial expert,” as such term is defined in the rules of the SEC.

ITEM 11 . EXECUTIVE COMPENSATION

Summary Compensation Table

(Fiscal Year Ended October 31, 2011 and 2010)

The following table sets forth all of the compensation awarded to, earned by or paid to (i) each individual serving as our principal executive officer during the fiscal years ended October 31, 2011 and 2010 (ii) the two most highly compensated executive officers, other than the principal executive officer who were serving as executive officers at the end of such fiscal year and who received total compensation in excess of $100,000 during such fiscal year (collectively, the “named executive officers”).

Name and Principal Position	Year	Salary ($)		Bonus ($)		Stock Awards ($)			All Other Compensation ($)			Totals ($)
Stephen Browand	2011		0		0		0			0			0
Chief Executive Officer	2010		0		0		0			0			0

Dr. Andy Kielbania	2011		120,000		0		489,027	(2)		10,296	(1)		419,323
Chief Scientist &	2010		120,000		0		0			10,855	(1)		130,855
Secretary

________________________

(1) Represents the cost of a leased car utilized by Dr. Kielbania.

(2) On February 28, 2011, the Company received approval and registration from the EPA in response to the Company's regulatory application for its Ygiene® 206 formulation. In conjunction with the recent EPA approval and the verbal agreement entered into, the Chief Scientific Officer earned 555,822 restricted shares of common stock on February 28, 2011. The value of the stock based compensation is $289,027 which is based on the closing price of the Company’s common stock on February 28, 2011. The Company issued the shares on April 18, 2011. In addition, on October 31, 2011, the Company awarded Mr. Kielbania 2,500,000 shares of the Company’s common stock for services rendered in the scientific advancement of the Company’s products. The shares were valued at $.08 in connection with the valuation established by the Vinfluence transactions. The Company recognized the expense of $200,000, for Research and Development and has recorded as a liability to issue common shares.The shares were issued on November 21, 2011.

We entered into a consulting agreement with our Chief Scientific Officer, pursuant to which Dr. Kielbania agreed to take responsibilities and take direction from our board of directors. Under this agreement, we are obligated to pay Dr. Kielbania $10,000 per month; provided, that compensation need not be paid until we have adequate funds in order to make payment on the compensation owed to him. Effective November 1, 2011 the Board appointed Dr. Andrew Kielbania as the Interim Chief Executive Officer of the Company, with such appointment taking effect immediately. Dr. Kielbania's appointment shall be governed by the employment agreement entered into by the Company and Dr. Andrew Kielbania pursuant to which Dr. Kielbania is to serve as the Company's Interim Chief Executive Officer for a period of six (6) months or until a successor is retained. His salary for such period will be $15,000 a month with certain other benefits. Further, upon the appointment of a new Chief Executive Officer of the Company, Mr. Kielbania shall serve as the Company's Chief Scientific Officer for period of two (2) years. His salary as such will be $10,000 per month, with certain benefits.

2009 Stock Incentive Plan

On January 30 , 2009, at a special meeting of our stockholders, our stockholders approved the BioNeutral Group, Inc. 2009 Stock Incentive Plan (the “Plan”), which had been previously approved by our Board of Directors, subject to stockholder approval. The purpose of the Plan is to foster and promote our long-term financial success and to increase stockholder value by, among other things, enabling key employees and outside directors to share in our long-term growth and success. A total of 5,000,000 shares of common stock are available for incentive awards granted under the Plan, subject to adjustment. As of this filing, the Plan has not been executed upon. New Company management has expressed a desire to implement a share based incentive plan and during fiscal 2012 will examine the merits of the Plan for future use by the Company.

Outstanding Equity Awards at Fiscal Year End

(Fiscal Year Ended October 31, 2011)

As of October 31, 2011, none of our named executive officers held any outstanding unexercised stock options, unvested stock awards, or any other equity incentive plan awards.

Director Compensation

All directors are reimbursed for their reasonable out-of-pocket expenses incurred in connection with attending board of director and committee meetings.

Non-management members of the Board will receive an annual grant of 85,000 restricted shares of the Company's common stock.

The following table provides certain information with respect to the compensation earned or paid to our non-employee directors during the fiscal year ended October 31, 2011. Mr. Browand did not receive any compensation for his service on our board of directors beyond the compensation he received as our Chief Executive Officer.

Name	Fees earned or paid in cash ($)		Stock awards ($)			Option awards ($)		Non-equity incentive plan compensation ($)		Nonqualified deferred compensation earnings ($)		All other compensation ($)			Total ($)
Raj Pamani		0		0			0		0		0		17,684	(1)		17,684
Wayne Stratton		0		27,088	(2)		0		0		0					27,088
Michael Francis		0		19,942	(3)		0		0		0					19,942

(1) This amount consists of $17,684 in respect of a car leased by us that is utilized by Mr. Pamani.

(2) On January 14, 2011 the Company issued an annual grant of 85,000 restricted shares of the Company's common stock as compensation to Wayne Stratton, a non-management member of the Board of Directors for services. The fair market value of the grant issued is $34,000 based on the closing share price of the Company’s stock as of January 14, 2011, the date of his appointment. Payment will be made in restricted shares of the Company’s common stock, which have not been issued as of October 31, 2011. The services are to be performed over a 12 month period beginning January 14, 2011. For the year ended October 31, 2011, the Company recognized an expense of $27,088 for Directors’ Fees and has recorded as a liability to issue common shares. Mr. Stratton resigned as a member of the Board of Directors effective October 31, 2011. The resignation was not the result of any disagreements with the Company.

(3) On April 5, 2011 the Company issued an annual grant of 85,000 restricted shares of the Company's common stock as compensation to Michael Francis, a non-management member of the Board of Directors for services. The fair market value of the grant issued is $34,850 based on the closing share price of the Company’s stock as of April 5, 2011, the date of his appointment. Payment will be made in restricted shares of the Company’s common stock, which have not been issued as of October 31, 2011. The services are to be performed over a 12 month period beginning April 5, 2011. For the year ended October 31, 2011, the Company recognized an expense of $19,942, for Directors’ Fees and has recorded as a liability to issue common shares. Mr. Francis resigned as a member of the Board of Directors effective October 31, 2011. The resignation was not the result of any disagreements with the Company.

Consulting Agreements with Certain Directors

The Company and its former director, Raj Pamani, are parties to a consulting agreement, dated as of June 15, 2008, pursuant to which Mr. Pamani agreed to accept responsibilities and take direction from the Company's board of directors. Pursuant to the agreement, Pamani Foods LLC agreed to conduct market research and promote networking opportunities for sales of the Company’s products in India and certain Asian countries. Under this agreement, we were obligated to pay Mr. Pamani $10,000 per month. The Company and Mr. Pamani collectively agreed to terminate the agreement effective October 31, 2010. During the year ended October 31, 2010 the Company paid or credited and expensed $30,000 to Mr. Pamani under this agreement, which was recorded as consulting expense and recorded in a Related Party Payable account. Mr. Pamani has charged certain personal expenses against the Company's cash account which have been treated by the Company as repayment of the Related Party Payable.

On September 6, 2008, the Company entered into an agreement with Jina Partners Ltd. (“Jina”), an affiliate of Raj Pamani, for consulting services relating to the development of market research and to promote networking opportunities for sales of the Company’s products in the European Union and certain Asian countries. Under this agreement, the Company was obligated to pay Jina $10,000 per month. The term of this agreement was for two years and expired on September 4, 2010. During the year ended October 31, 2011 and October 31, 2010, the Company paid or credited and expensed $0 and $90,000, respectively ,to Jina.

Between January 1, 2009 and February 28, 2009, R.K. and Associates, Inc. (“R.K.”), provided environmental consulting services to us for whom we paid R.K. approximately $10,000 for consulting services and approximately $3,000 for expenses incurred by R.K. while providing those services. Our former director, Suresh Relwani, is the sole owner of R.K. In addition, on November 12, 2008, we entered into a Consultant Agreement with R.K. (the “R.K. Consultant Agreement”) pursuant to which R.K. agreed to provide us with environmental consulting services. The term of the R.K. Consultant Agreement expires on November 11, 2011, unless terminated earlier by either party. On January 29, 2009, we granted R.K. 500,000 shares of our common stock, valued at $500,000, under the R.K. Consultant Agreement, for future consulting services to us, which is being amortized over three years. At October 31, 2011 and 2010, the balance of prepaid compensation was $5,431 and $172,101, respectively.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information regarding ownership of shares of our common stock, as of January 24, 2012:

	•	by each person known by us to be the beneficial owner of 5% or more of our common stock;

	•	by each of our directors and named executive officers; and

	•	By all of our directors and executive officers as a group.

Except as otherwise indicated, each person and each group shown in the table below has sole voting and investment power with respect to the shares of common stock indicated. For purposes of the table below, in accordance with Rule 13d-3 under the Exchange Act, a person is deemed to be the beneficial owner of any shares of our common stock over which he or she has or shares, directly or indirectly, voting or investment power or of which he or she has the right to acquire beneficial ownership at any time within 60 days. As used in this proxy statement, “voting power” is the power to vote or direct the voting of shares and “investment power” includes the power to dispose or direct the disposition of shares. Common stock beneficially owned and percentage ownership as of January 24, 2012 was based on 105,609,092 shares outstanding.

Name and Address of Beneficial Owner (1)	Amount and Nature of Beneficial Ownership (1)		Percentage of Class
Dr. Andy Kielbania		3,498,096		3.31	%
Frank Battafarano		580,000		*
Ron Del Mauro		500,000		*
All Directors and Executive Officers as a Group (3 persons) (2)		4,578,096		4.34	%

* Less than 1%

(1) Unless otherwise stated, the address for all the officers and directors is c/o BioNeutral Group, Inc., Madison Avenue, Suite 400, Morristown, New Jersey 07960.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Certain Relationships and Related Transactions

On April 5, 2011 the Company issued an annual grant of 85,000 restricted shares of the Company's common stock as compensation to Michael Francis, a non-management member of the Board of Directors for services. The fair market value of the grant issued is $34,850 based on the closing share price of the Company’s stock as of April 5, 2011, the date of his appointment. Payment will be made in restricted shares of the Company’s common stock, which have not been issued as of October 31, 2011. The Company recognized an expense of $19,942, for Directors’ Fees and increased Accrued Compensation accordingly. Mr. Francis resigned as a member of the Board of Directors effective October 31, 2011. The resignation was not the result of any disagreements with the Company.

On February 28, 2011, the Company received approval and registration from the EPA in response to the Company's regulatory application for its Ygiene® 206 formulation. In conjunction with the recent EPA approval and the verbal agreement entered into, the Chief Scientific Officer earned 555,822 restricted shares of common stock on February 28, 2011. The value of the stock based compensation was $289,027 which was based on the closing price of the Company’s common stock on February 28, 2011. The Company issued the shares on April 18, 2011. The Company recognized the expense as research and development and increased common stock and additional paid in capital accordingly.In addition, on October 31, 2011, the Company awarded Mr. Kielbania 2,500,000 shares of the Company’s common stock for services rendered in the scientific advancement of the Company’s products. The shares were valued at $.08 in connection with the valuation established by the Vinfluence transactions. The Company recognized the expense of $200,000, for Research and Development and has recorded as a liability to issue common shares. The shares were issued on November 21, 2011.

On January 14, 2011 the Company issued an annual grant of 85,000 restricted shares of the Company's common stock as compensation to Wayne Stratton, a non-management member of the Board of Directors for services. The fair market value of the grant issued is $34,000 based on the closing share price of the Company’s stock as of January 14, 2011, the date of his appointment. Payment will be made in restricted shares of the Company’s common stock, which have not been issued as of October 31, 2011. The Company recognized an expense of $27,088 for Directors’ Fees and increased Accrued Compensation accordingly. Mr. Stratton resigned as a member of the Board of Directors effective October 31, 2011. The resignation was not the result of any disagreements with the Company.

The Company and its former director, Raj Pamani, are parties to a consulting agreement, dated as of June 15, 2008, pursuant to which Mr. Pamani agreed to accept responsibilities and take direction from the Company's board of directors. Pursuant to the agreement, Pamani Foods LLC agreed to conduct market research and promote networking opportunities for sales of the Company’s products in India and certain Asian countries. Under this agreement, we were obligated to pay Mr. Pamani $10,000 per month. The Company and Mr. Pamani collectively agreed to terminate the agreement effective October 31, 2010. During the year ended October 31, 2010 the Company paid or credited and expensed $30,000 to Mr. Pamani under this agreement, which was recorded as consulting expense and recorded in a Related Party Payable account. Mr. Pamani has charged certain personal expenses against the Company's cash account which have been treated by the Company as repayment of the Related Party Payable.

On September 6, 2008, the Company entered into an agreement with Jina Partners Ltd. (“Jina”), an affiliate of Raj Pamani, for consulting services relating to the development of market research and to promote networking opportunities for sales of the Company’s products in the European Union and certain Asian countries. Under this agreement, the Company was obligated to pay Jina $10,000 per month. The term of this agreement was for two years and expired on September 4, 2010. During the year ended October 31, 2011 and October 31, 2010, the Company paid or credited and $0 and $90,000 to Jina.

Between January 1, 2009 and February 28, 2009, R.K. provided environmental consulting services to us for whom we paid R.K. approximately $10,000 for consulting services and approximately $3,000 for expenses incurred by R.K. while providing those services. Our director, Suresh Relwani, is the sole owner of R.K. In addition, on November 12, 2008, we entered into the R.K. Consultant Agreement pursuant to which R.K. agreed to provide us with environmental consulting services. The term of the R.K. Consultant Agreement expires on November 11, 2011, unless terminated earlier by either party. On January 29, 2009, we granted R.K. 500,000 shares of our common stock, valued at $500,000, for future consulting services under the R.K. Consultant Agreement, which amount is being amortized over three years. At October 31, 2011 and 2010, the balance of prepaid compensation was $5,431 and $172,101, respectively.

The Company issued seven unsecured promissory notes to Capara Investments, (“Capara”). On November 13, 2009, the Company issued (i) an unsecured promissory note to Francis in the amount of $250,000, (ii) a second unsecured promissory note to Capara Investments on January 4, 2010 in the amount of $250,000, (iii) a third unsecured promissory note to Capara Investments on September 2, 2010 in the amount of $25,000, (iv) a fourth unsecured promissory note to Capara Investments on October 13, 2010 in the amount of $25,000, (v) a fifth unsecured promissory note to Capara Investments on June 1, 2011 in the amount of $50,000, a (vi) a sixth unsecured promissory note to Capara Investments on July 1, 2011 in the amount of $50,000, and a seventh unsecured promissory note to Capara Investments on October 24, 2011 in the amount of $50,000. The sole member of Capara Investments, Raj Pamani, is a former member of our Board and a shareholder of the Company (all such notes issued to Capara are collectively referred to as the “Capara Notes”).

The Francis Notes, Capara Notes and the Kozlov Notes are sometimes referred to herein as the “Shareholder Notes”. The Shareholder Notes resulted in gross proceeds to the Company of $1,655,000.

Each of the Shareholders Notes bears an 8% annual interest rate, is due and payable in cash on the fifth anniversary of the date of issuance, and upon consummation of a “Qualified Financing” (as defined in each of the Shareholder Notes), will automatically be exchanged for, at our election, either (i) securities on the same terms and conditions as those received by investors in such Qualified Financing based on an assumed exchange rate reflecting the pricing used in such financing or (ii) shares of our common stock equal to the quotient obtained by dividing (x) the then outstanding principal amount of the Shareholder Note by (y) the lower of (i) $0.69 and (ii) the Fair Market Value (as defined in the Shareholder Notes) of one share of our common stock as of the date of such exchange. On each three (3) month anniversary of the issuance of each Shareholder Note, all accrued and unpaid interest shall be added to the unpaid principal amount of such note. Each of the Shareholder Notes defines “Qualified Financing” as an investment in securities of the Company (including any financing that includes convertible indebtedness and/or warrants) occurring after the date of issuance of the Shareholder Note by an investor that is not an affiliate of our company in which we receive net proceeds greater than $500,000 (including any additional investment by the holder of the Shareholder Note or by the holder of any other 8% exchangeable promissory note) in the Qualified Financing. The secured promissory note in the principal amount of $100,000 issued by the Company to Mr. Francis on April 30, 2010, is secured by the Company’s Intellectual Property (as defined in such promissory note).

From time to time, one or more of our affiliates may form or hold an ownership interest in and/or manage other businesses both related and unrelated to the type of business that we own and operate. These persons expect to continue to form, hold an ownership interest in and/or manage additional other businesses which may compete with ours with respect to operations, including financing and marketing, management time and services and potential customers. These activities may give rise to conflicts between or among the interests of us and other businesses with which our affiliates are associated. Our affiliates are in no way prohibited from undertaking such activities, and neither we nor our shareholders will have any right to require participation in such other activities.

Further, because we intend to transact business with or affiliates have a material interest, potential conflicts may arise between the respective interests of us and these related persons or entities. We believe that such transactions will be effected on terms at least as favorable to us as those available from unrelated third parties.

We have not adopted policies and procedures to review, approve, or ratify transactions involving real or apparent conflicts of interest.

Director Independence

Our common stock is not listed on a national securities exchange and therefore, we are not subject to any corporate governance requirements regarding independence of board or committee members. Under the definition of independence contained in the rules of The American Stock Exchange, LLC, an “independent director” of a company means a person who is not an officer or employee of the company or its subsidiaries and who the board of directors has affirmatively determined does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. After review of all relevant transactions or relationships between each director, or any of his family members, and our company, our senior management and our independent registered public accounting firm, we have determined that Mr. Del Mauro and Mr. Battafarano are the only of our directors that are independent directors within the meaning of the applicable AMEX listing standard.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

In accordance with the requirements of the Sarbanes-Oxley Act of 2002, all audit and audit-related work and all non-audit work performed by our registered independent public accounting firm, Marcum LLP (“Marcum”) is approved in advance by our Board of Directors, including the proposed fees for such work. The Board of Directors is informed of each service actually rendered. None of the services provided by our independent registered public accounting firm for the fiscal year ended October 31, 2011 was obtained in reliance on the waiver of the pre-approval requirement afforded in SEC regulations.

Audit Fees

The aggregate fees billed by Marcum for professional services rendered for the audit of our annual financial statements for the fiscal years ended October 31, 2011 and 2010, and for the review of the financial statements included in our Quarterly Reports on Form 10-Q for the fiscal years ended October 31, 2011 and 2010 were $ 111,000 and $53,500 respectively.

Audit-Related Fees

Other than the fees described under the caption “Audit Fees” above, Marcum did not bill any fees for services rendered to us during fiscal years ended October 31, 2011 and 2010 for assurance and related services in connection with the audit or review of our financial statements.

Tax Fees

There were no fees billed by Marcum and for professional services rendered for tax compliance, tax advice or tax planning during fiscal years ended October 31, 2011 and 2010.

All Other Fees

There were no fees billed by Marcum an for products or professional services rendered, other than services described under the caption “Audit Fees” above during fiscal years ended October 31, 2011 and 2010.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

(a) List of Financial Statements, Financial Statement Schedules, and Exhibits.

1. Financial Statements. The following financial statements of BioNeutral Group, Inc. are included in Item 8 of Part II of this Annual Report on Form 10-K:

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets as of October 31, 2011 and October 31, 2010

Consolidated Statements of Operations for the years ended October 31, 2011 and October 31, 2010

Consolidated Statements of Changes in Shareholders’ Equity for the years ended October 31, 2011 and October 31, 2010

Consolidated Statements of Cash Flows for the years ended October 31, 2011 and October 31, 2010 Notes to Consolidated Financial Statements

2. Financial Statement Schedules.

All financial statement schedules are omitted from this Annual Report on Form 10-K, as they are not required or applicable or the required information is included in the financial statements or notes thereto.

3. Exhibits. The following exhibits are filed with this Annual Report on Form 10-K or are incorporated herein by reference, as indicated.

Exhibit No.		Description

2.1		Share Exchange Agreement by and among BioNeutral Group, Inc. and BioNeutral Laboratories Corporation USA and the shareholders thereof (1)

3.1		Articles of Incorporation of BioNeutral Group, Inc. (2)

3.2		Amendment to Articles of Incorporation of BioNeutral Group, Inc. (3)

3.3		Bylaws of BioNeutral Group, Inc. (formerly known as Moonshine Creations, Inc.) (2)

4.1		Form of Stock Certificate of BioNeutral Group, Inc. (7)

4.2		Form of Debenture of BioNeutral Group, Inc. (one in a series of debentures with identical terms) (3)

4.3		Form of Agreement to Convert BioNeutral Debenture (one in a series of agreements with identical terms) (3)

4.4		Registration Rights Agreement, dated as of February 3, 2010, between BioNeutral Group, Inc. and Chertoff Group, LLC (6)

4.5		8% exchangeable promissory note, dated November 13, 2009, issued in favor of Michael D. Francis (6)

4.6		8% exchangeable promissory note, dated November 13, 2009, issued in favor of Capara Investments LLC (6)

4.7		8% exchangeable promissory note, dated February 12, 2010, issued in favor of Michael D. Francis (6)

4.8		8% exchangeable promissory note, dated March 9, 2010, issued in favor of Capara Investments LLC (7)

4.9		8% exchangeable promissory note, dated March 15, 2010, issued in favor of Michael D. Francis (8)

4.10		8% exchangeable promissory note, dated April 30, 2010, issued in favor of Michael D. Francis (9)

4.11		8% exchangeable promissory note, dated July 7, 2010, issued in favor of Michael D. Francis (9)

4.12		8% exchangeable promissory note, dated August 31, 2010, issued in favor of Capara Investments LLC*


4.13		8% exchangeable promissory note, dated October 12, 2010, issued in favor of Capara Investments LLC*

4.14		8% exchangeable promissory note, dated October 28, 2010, issued in favor of Blackbeth Holdings Ltd.*

10.1		BioNeutral Group, Inc. 2009 Stock Incentive Plan (3)

10.2		Consulting Agreement, dated as of June 15, 2008, between BioNeutral Group, Inc. and Raj Pamani (7)

10.3		Letter of Intent, dated March 20, 2009, between BioNeutral Group, Inc. and Orient Arts Inc. (4)

10.4		Professional Services Agreement between BioNeutral Group, Inc. and Dorothy Canter Consulting, LLC (4)

10.5		Consulting Agreement, dated March 13, 2009, between BioNeutral Group, Inc. and James Crane (4)

10.6		Advisory Agreement, dated August 26, 2009, by and among BioNeutral Group, Inc. and Chertoff Group, LLC (5)

10.7		First Amendment to Advisory Agreement, dated February 3, 2010, by and among BioNeutral Group, Inc. and Chertoff Group, LLC (6)

10.8		Stock Appreciation Rights Agreement, dated as of February 3, 2010, between the Company and Chertoff Group, LLC (6)

10.9		Restricted Stock Unit Agreement, dated as of February 3, 2010, between the Company and Chertoff Group, LLC (6)

10.10		Lease Agreement, dated September 1, 2009, between BioNeutral Group, Inc. and New Jersey Institute of Technology (Enterprise Development Center) (7)

10.11		Consultant Agreement, dated September 6, 2008, between BioNeutral Laboratories Corporation USA and Jina Partners (7)

10.12		Consultant Agreement, dated November 12, 2008, between BioNeutral Laboratories Corporation USA and R.K. and Associates, Inc. (7)

10.13		Consulting Agreement between BioNeutral Laboratories Corporation USA and Andrew Kielbania (7)

10.14		Consulting Agreement, dated September 15, 2008, between BioNeutral Laboratories Corporation USA, Pamani Group Ltd. and Angel's Assets Holdings Ltd. (7)

10.15		Form of Indemnification Agreement, dated February 10, 2009, between BioNeutral Group, Inc. and each of its executive officers and directors.(7)

10.16		Preferred Stock Purchase Agreement between BioNeutral Group, Inc. and Vinfluence Pty Ltd (10)

10.17		Agreement to Assign and Settle Debt between BioNeutral Group, Inc. and Vinfluence Pty Ltd (10)

10.18		Agreement to Assign and Settle Notes between BioNeutral Group, Inc. and Vinfluence Pty Ltd (10)

10.19		Preferred Stock Drawdown Agreement between BioNeutral Group, Inc. and Vinfluence Pty Ltd (10)

10.20		Agreement to License Invention with between BioNeutral Group, Inc. and Vinfluence Pty Ltd (10)

10.21		Agreement for appointment to Board of Directors – Ronald Del Mauro

10.22		Indemnification Agreement – Ron Del Mauro

10.23		Agreement for Appointment of Chairman – Frank Battafarano (10)

10.24		Indemnification Agreement – Frank Battafarano (10)

10.25		Collaboration Agreement between BioNeutral Group, Inc. and St. Barnabas Corporation (11)

14.1		BioNeutral Group, Inc. Code of Ethics (3)

21.1		Subsidiaries of BioNeutral Group, Inc. (7)

23.1		Consent of Bartolomei Pucciarelli, LLC.*

31.1		Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

32.1		Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

* Filed herewith.

(1) Incorporated by reference to BioNeutral Group, Inc.'s Amendment No. 1 to Current Report on Form 8-K filed with the Securities and Exchange Commission on February 23, 2009.

(2) Incorporated by reference to BioNeutral Group, Inc.'s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on February 14, 2008.

(3) Incorporated by reference to BioNeutral Group, Inc.'s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 5, 2009.

(4) Incorporated by reference to BioNeutral Group, Inc.'s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on March 23, 2009.

(5) Incorporated by reference to BioNeutral Group, Inc.'s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 4, 2009.

(6) Incorporated by reference to BioNeutral Group, Inc.'s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 18, 2010.

(7) Incorporated by reference to BioNeutral Group, Inc.'s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 17, 2010.

(8) Incorporated by reference to BioNeutral Group, Inc.'s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on June 14, 2010.

(9) Incorporated by reference to BioNeutral Group, Inc.'s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on September 20, 2010.

(10) Incorporated by reference to BioNeutral Group, Inc.'s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 8, 2011.

(11) Incorporated by reference to BioNeutral Group, Inc.'s Current Report on Form 8-K filed with the Securities and Exchange Commission on January25, 2012.

(b) Exhibits. The exhibits required by Item 601 of Regulation S-K are filed herewith or incorporated by reference.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	BIONEUTRAL GROUP, INC.

	By:	/s/ Andrew Kielbania
		Andrew Kielbania
		Chief Executive Officer
Dated: February 10, 2012

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

/s/ Andrew Kielbania	Interim Chief Executive Officer and Director (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)	February 10, 2012
Andrew Kielbania

/s/ Frank Battafarano	Director	February 10, 2012
Frank Battafarano

/s/ Ronald Del Mauro	Director	February 10, 2012
Ronald Del Mauro