UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the ~~three~~quarterly ~~month~~ period ended ~~January~~April 3130, 2013

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.)
211 Warren Street, Newark, New Jersey		07103
211 Warren St., Newark, New Jersey		07103
(Address of principal executive offices)		(Zip Code)

(973) 577-8003

(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 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). xo 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 number of shares of the registrant's common stock, par value $0.00001 per share, outstanding as of ~~March~~June 121, 2013 was ~~130~~143,~~884~~980,~~645~~540 shares.

BIONEUTRAL GROUP, INC.

TABLE OF CONTENTS

		Page
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements.	13
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	1418
Item 4.	Controls and Procedures.	1925
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings.	2026
Item 1A.	Risk Factors.	2026
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	2026
Item 3.	Defaults Upon Senior Securities.	2126
Item 4.	Mine Safety Disclosures.	2126
Item 5.	Other Information.	2126
Item 6.	Exhibits.	2126
Signature		2227

ITEM 1. FINANCIAL STATEMENTS

BIONEUTRAL GROUP, INC

CONDENSED CONSOLIDATED BALANCE SHEETS

ASSETS
	January 31, 2013			October 31, 2012
	April 30, 2013			October 31, 2012
	Unaudited			Audited
Current Assets
Cash	$	~~637~~4,519		$	676
Accounts Receivable - Net		~~657~~1,110			657
Inventory		316,~~139~~385			3,342
Prepaid Expenses - Employee Advances		52,292
Prepaid Expenses		28,653			-
		56,725			4,675
Total Current Assets		50,667			4,675
Total Current Assets
Property & Equipment - Net		463			569
Property & Equipment - Net		516			569
Intellectual Property - Net		9,603,860			9,958,222
Intellectual Property - Net		9,781,041			9,958,222
Other Assets		2,500			14,496
Other Assets		4,481			14,496
TOTAL ASSETS	$	9,657,490		$	9,977,962
TOTAL ASSETS	$	9,842,763		$	9,977,962
Current Liabilities
Accounts Payable and Accrued Expense	$	~~979~~1,~~927~~053,919		$	975,479
Convertible Notes Payable net of Discount of $109,773 at January 31, 2013		147,995			-
Convertible Notes Payable net of Discount of $82,553 at April 30, 2013		155,794			-
Current Portion of Convertible Loans from Stockholders		5859,~~582~~754			416,695
Accrued Compensation		~~295~~260,~~946~~479			167,668
Related Party Payables		7178,~~235~~410			70,199
Derivative Liability		~~140~~108,~~267~~312			-
Current Liabilities		1,~~693~~716,~~952~~668			1,630,041
Long Term Liabilities
Convertible Loans From Stockholders net of Discount of $141,881 at January 31, 2013		1,082,681			788,370
Convertible Loans From Stockholders net of Discount of $97,157 and $- at April 30, 2013 and October 31, 2012		1,268,644			788,370
Total Long Term Liabilities		1,~~082~~268,~~681~~644			788,370
TOTAL LIABILITIES		2,~~776~~985,~~633~~312			2,418,411
Commitments & Contingencies
Commitments and Contingencies
Equity:
BioNeutral Group, Inc. Stockholders’ Equity
Preferred Stock, $.001 par value; 10,000,000 shares authorized, with
684,600 designated as follows
Convertible Preferred Stock, Series B, $.001 par value; 213,500
shares authorized, 53,491 issued and outstanding at
January 31, 2013 and October 31, 2012, respectively.
April 30, 2013 and October 31, 2012, respectively.
Liquidation Preference $534,910 at January 31, 2013
Liquidation Preference $534,910 at April 30, 2013
and October 31, 2012, respectively.		54			54
Convertible Preferred Stock, Series C, $.001 par value; 100,000
shares authorized, 56,081 issued and outstanding at
January 31, 2013 and October 31, 2012, respectively.
April 30, 2013 and October 31, 2012, respectively.
Liquidation Preference $560,810 at January 31, 2013
Liquidation Preference $560,810 at April 30, 2013
and October 31, 2012, respectively.		56			56
Convertible Preferred Stock, Series D, $.001 par value; 231,100
shares authorized, 136,051 issued and outstanding at
January 31, 2013 and October 31, 2012, respectively.
April 30, 2013 and October 31, 2012, respectively.
Liquidation Preference $1,360,510 at January 31, 2013
Liquidation Preference $1,360,510 at April 30, 2013
and October 31, 2012, respectively.		136			136
Convertible Preferred Stock, Series E, $.001 par value; 140,000
shares authorized, 0 issued and outstanding at
January 31, 2013 and October 31, 2012, respectively.
April 30, 2013 and October 31, 2012, respectively.
Liquidation Preference $0 at January 31, 2013
Liquidation Preference $0 at April 30, 2013
and October 31, 2012, respectively.		-			-
Common Stock, $.00001 Par Value; 200,000,000 shares authorized,
126,732,632 and 105,609,092 issued and outstanding at January 31, 2013
139,253,394 and 125,356,184 issued and outstanding at April 30, 2013
and October 31, 2012, respectively.		1,~~267~~392			1,253
Additional Paid-in Capital		6463,~~258~~150,~~857~~135			63,990,912
Due from Vinfluence		(1194,~~526,673~~675	)		(1,526,673	)
Shares issued to Board of Directors		~~(47,200~~-	)		(47,200	)
Accumulated Deficit		(5556,~~664~~273,~~709~~172	)		(54,967,589	)
Total BioNeutral Group, Inc. Stockholders’ Equity		76,~~021~~683,~~788~~926			7,450,949
Non controlling Interest		44(11,~~283~~807	)		108,543
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 shares issued and outstanding at January 31, 2013 and October 31, 2012 respectively.
Convertible Preferred Stock, Series A, $.001 par value; 800,000 shares authorized, 59,493 shares issued and outstanding at April 30, 2013 and October 31, 2012 respectively.
Liquidation Preference $1,072,361 at January 31, 2013 and October 31, 2012, respectively, included in Non controlling interest		59			59
Liquidation Preference $1,072,361 at April 30, 2013 and October 31, 2012, respectively, included in Non controlling interest		59			59
Total Non controlling Interest		44(11,~~342~~748	)		108,602
Total Equity		76,~~066~~672,~~130~~178			7,559,551
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	9,~~842~~628,~~763~~837		$	9,977,962

See Notes to Condensed Consolidated Financial Statements

BIONEUTRAL GROUP, INC

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

	For the Three Months Ended January 31,
	Three Months Ended April 30, (Unaudited)						Six Months Ended April 30, (Unaudited)
	2013			2012			2013			2012
Revenues	$	~~555~~1,085		$	~~1,164~~338		$	1,640		$	1,502
Cost of Revenues		~~203~~356			~~144~~59			558			203
Gross Profit		~~352~~729			~~1,020~~279			1,082			1,299
Operating Expenses
Depreciation and Amortization		177,234			177,234			354,468			354,468
Salaries and Wages		208,404			100,200
Salaries		115,403			97,046			323,807			187,708
Consulting Expense		10210,~~150~~323			~~243~~68,~~692~~000			220,473			311,692
Legal and Accounting Expenses		~~146~~122,~~607~~106			~~113~~47,~~152~~287			268,019			158,297
Other Selling, General and Administrative Expenses		~~138~~205,~~831~~580			~~200~~150,~~076~~248			345,106			362,003
Total Operating Expenses		~~681~~830,~~226~~646			~~834~~539,~~354~~815			1,511,873			1,374,168
Loss from Operations		(~~680~~829,~~874~~917	)		(~~833~~539,~~334~~536	)		(1,510,791	)		(1,372,869	)
Other Income (Expense)
Interest Expense		(~~142~~33,~~381~~399	)		~~(44~~18,~~188~~582	)		(66,137	)		(25,607	)
Change in Fair Value of Derivative Liability		61,875			-
Consulting Fee Reimbursement – Vinfluence Settlement		238,750						238,750
Total Other Income (Expense)		(80,506	)		(44,188	)
Amortization of debt discount		(102,719	)		-			(212,361	)		-
Net Loss Before Provision for Income Taxes		(761,380	)		(877,522	)
Change in Fair Value of Derivative Liability		62,731			-			124,606			-
Provision for Income Taxes		-			-
Total Other Income (Expense)		165,363			18,582			84,858			(25,607	)
Net Loss		(761,380	)		(877,522	)
Net Loss Before Income Taxes		(664,554	)		(520,954	)		(1,425,933	)		(1,398,476	)
Loss Attributable to Non-controlling Interest		64,260			74,064
Provision for Income Taxes		-			-			-			-
Net Loss Attributable to BioNeutral Group, Inc.	$	(697,120	)	$	(803,458	)
Net Loss		(664,554	)		(520,954	)		(1,425,933	)		(1,398,476	)
Net Loss Per Common Share - Basic and Diluted	$	(0.01	)	$	(0.01	)
Loss Attributable to Non-controlling Interest		56,089			43,972			120,350			118,036
Weighted Average Number of Common Shares outstanding
Net Loss Attributable to BioNeutral Group, Inc.	$	(608,465	)	$	(476,982	)	$	(1,305,583	)	$	(1,280,440	)
Basic and Diluted		125,491,943			90,478,328
Net Loss Per Common Share - Basic and Diluted	$	(0.01	)	$	(0.01	)	$	(0.01	)	$	(0.01	)
Weighted Average Number of Common Shares outstanding
Basic and Diluted Loss per Share		132,325,706			114,781,944			129,056,955			102,496,600

See Notes to Condensed Consolidated Financial Statements

BIONEUTRAL GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

	For the Three Months Ended January 31,
	For the Six Months Ended April 30,
	2013			2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss	$	(~~761~~1,~~380~~425,933	)	$	(~~877~~1,~~522~~398,476	)
Adjustments to Reconcile Net Loss To Net Cash Used in Operating Activities
Stock Based Compensation		-			5,431
Depreciation and Amortization		~~177~~354,~~234~~468			~~177~~354,~~234~~468
Issuance of Stock related to professional services		~~108~~501,~~805~~656			~~422~~435,~~600~~800
Interest added to promissory notes		2953,~~408~~838			4338,~~186~~076
Non-Cash Interest		109,642			-
Non-cash interest		212,361			-
Change in Fair Value of Derivative Liability		(61,875	)		-
Change in fair value of derivative liability		(124,606	)		-
Settlement of Consulting Expense – Vinfluence Settlement		(238,750	)
Changes in Operating Assets and Liabilities
Inventory		203			(698	)
Accounts receivable		(453	)		-
Prepaid Expenses - Employee Advances		(52,292	)		-
Inventory		(13,043	)		(638	)
Other Assets		10,015			(11,996	)
Prepaid Expenses		(28,653	)		-
Accounts Payable and Accrued Expenses		131,165			(175,022	)
Other Assets		11,996			(11,996	)
Related Party Payables		1,036			(2,560	)
Accounts Payable and Accrued Expenses		171,251			(301,255	)
NET CASH USED IN OPERATING ACTIVITIES		(308,039	)		(419,347	)
Related Party Payables		8,211			34,874
NET CASH USED IN OPERATING ACTIVITIES		(517,657	)		(843,716	)
CASH FLOWS FROM FINANCING ACTIVITIES
Net Proceeds From Issuance of Common Stock		-			450,000
Net Proceeds From Issuance of Preferred and Common Stock		-			1,000,000
Proceeds from Exchangeable Promissory Notes		308,000			-
Proceeds from Converible Promissory Notes		521,500			-
NET CASH PROVIDED BY FINANCING ACTIVITIES		~~308~~521,~~000~~500			~~450~~1,000,000
NET (DECREASE) INCREASE IN CASH		(39	)		30,653
NET INCREASE IN CASH		3,843			156,284
CASH, BEGINNING OF PERIOD		676			3,215
CASH, END OF PERIOD	$	~~637~~4,519		$	33159,~~868~~499
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for Interest	$	-		$	-
Cash paid for Income Taxes	$	-		$	-
SUPPLEMENTAL DISCLOSURE OF NON-CASH INFORMATION
Non-cash settlements of Promissory Note	$	-		$	(1,~~077~~288,~~376~~592	)
Non-cash settlements of Accounts Payable and Accrued Expenses	$	-		$	(1,~~613~~629,~~551~~938	)
Non-cash Intellectual Property Cost (Accrual Reversal) Additions	$	-		$	(32,500	)
Shares issued to Board of Directors	$	-		$	60,400
Non-cash conversion of promissory note to common stock	$	116,500			(104,900	)
Preferred Shares Issued to Vinfluence in Settlement of Debt and Notes	$	-		$	1,754,276
Shares issued to Board of Directors	$	-			47,200
Preferred Shares Issued to Vinfluence in Settlement of Debt and Notes	$	-		$	1,526,673

See Notes to Condensed Consolidated Financial Statements

BioNeutral Group, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Note 1 - Nature of Business & Organization

BioNeutral Group, Inc. (the “Company”) is a specialty chemical corporation 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 currently operates its business through its subsidiary, BioNeutral Laboratories Corporation USA (“BioNeutral Laboratories” or “BioLabs”), a corporation organized in Delaware in 2003. The Company was incorporated in the State of Nevada on April 10, 2007 under the name “Moonshine Creations, Inc.,” and changed its name to “BioNeutral Group, Inc.” on December 22, 2008.

On January 30, 2009, the Company entered into a share exchange agreement (the “Share Exchange Agreement”) with BioNeutral Laboratories pursuant to which it agreed to issue to the shareholders of BioNeutral Laboratories 45,000,000 shares of our common stock. Upon completion of this transaction, the former shareholders of BioNeutral Laboratories became the majority stockholders of the Company. Accordingly, the transaction was accounted for as a reverse merger and recapitalization of BioNeutral Group, Inc.

Note 2 – Liquidity and Financial Condition

The Company's unaudited condensed 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 unaudited condensed 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 ~~January~~April 3130, 2013, the Company had negative working capital of $1,~~637~~666,~~227~~001. For the ~~three~~six months ended ~~January~~April 3130, 2013 the Company incurred an ~~operating~~net loss of $~~761~~1,~~380~~425,933 and since inception has an accumulated deficit of $5556,~~665~~273,~~013~~172. For the same period in ~~2011~~2012, the Company’s net loss was $~~877~~1,~~522~~398,476. The Company anticipates it will experience a net loss in fiscal 2013 as it continues to pursue markets for the sale and distribution of its products and development of access to global markets.

The Company had $~~637~~4,519 of cash at ~~January~~April 3130, 2013. Cash used by operations for the ~~three~~six months ended ~~January~~April 3130, 2013 was $~~308~~517,~~039~~657. The principal use of funds were for consulting services supporting the development of our business plan, legal and accounting fees in connection with being a public company and daily operations of the business, including rent, travel and laboratory costs.

During the ~~three~~six months ended ~~January~~April 3130, 2013, the Company raised $~~308~~521,~~000~~500 of cash from the issuance of convertible debentures to fund operations.

4On December 12, 2012 the Company issued a convertible promissory note to JMJ financial in the amount of $250,000 of which it received payments through the date of this report of $110,000. It expects to receive additional payments from JMJ under the note at various intervals during the calendar year 2013.

On December 12, 2012 the Company issued a convertible promissory note to JMJ financial in the amount of $250,000 of which it received payments through the date of this report of $85,000. It expects to receive additional payments from JMJ under the note at various intervals during the calendar year 2013.

On October 18, 2012, the Board of Directors of the Company approved a stock compensation plan for professionals and consultants. The Plan was approved by the Board, on November 7, 2012 and the Company filed with the Securities and Exchange Commission a registration statement on Form S-8 for issuance of up to ten (10) million shares pursuant to the stock compensation plan. It plans to fund a portion of our expenses by issuing shares of its S-8 common stock to consultants and professionals.

On December 11, 2012, the Company entered into an Equity Purchase Agreement (“Equity Line of Credit”) with Southridge Partners II, LP (“Southridge”) for an equity line of up to $10,000,000. Pursuant to the Equity Purchase Agreement, the Company has the right, at its discretion, to sell to Southridge up to $10 million of its common stock from time to time over a 36-month period. The Company will have the right, but is not obligated, to sell stock to Southridge depending on certain conditions as set forth in the Agreement. The Company submitted a registration statement to the SEC and it plans to begin utilizing the Equity Line of Credit upon approval by the SEC.6

~~While~~On December 11, 2012, the Company ~~has~~entered ~~been~~into ~~able~~an Equity Purchase Agreement (“Equity Line of Credit”) with Southridge Partners II, LP (“Southridge”) for an equity line of up to ~~use~~$10,000,000. ~~proceeds~~Pursuant ~~from~~to the ~~issuance~~Equity ofPurchase ~~convertible~~Agreement, ~~promissory~~the ~~notes~~Company has the right, at its discretion, to ~~fund~~sell ato ~~substantial~~Southridge ~~balance~~up to $10 million of its ~~operating~~common ~~costs,~~stock itfrom ~~does~~time ~~not~~to ~~expect~~time ~~that~~over ~~its~~a ~~funds~~36-month period. The Company will behave ~~sufficient~~the right, but is not obligated, to ~~meet~~sell ~~its~~stock ~~anticipated~~to ~~needs~~Southridge ~~through~~depending ~~February~~on 1,certain ~~2014~~conditions ~~and~~as itset ~~will~~forth ~~need~~in the Agreement. The Company submitted a registration statement to ~~raise~~the ~~additional~~SEC ~~capital~~and ~~during~~is ~~fiscal~~currently ~~2013~~engaged in the process of responding to ~~fund~~comments received from the ~~full~~SEC. ~~costs~~The ~~associated~~Company ~~with~~cannot ~~its~~begin ~~growth~~utilizing ~~and~~the ~~development~~Equity Line of Credit until approval is granted by the SEC.

While the Company has been able to use proceeds from the issuance of convertible promissory notes to fund a substantial balance of its operating costs, it does not expect that its funds will be sufficient to meet its anticipated needs through May 1, 2014 and it will need to raise additional capital during fiscal 2013 to fund the full costs associated with its growth and development.

The Company believes that it will be able to generate significant sales by the fourth quarter of 2013 providing for sufficient cash flows to supplement its equity financing based on its current plans. If it’s able to execute its plan, the Company can begin to accumulate cash reserves. There is no assurance however that its funds will be sufficient to meet its anticipated needs through its fiscal year 2013, and it may need to raise additional capital during fiscal 2013 to fund the full costs associated with its growth and development. The Company believes that it will require approximately $2,000,000 in additional capital to achieve its goals. There can be no assurances that it 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 unaudited condensed 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 unaudited condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Note 3 - Summary of Significant Accounting Policies

Basis of Presentation

The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements and with Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (the “SEC”). Accordingly, they do not contain all the information and footnotes required by GAAP for annual financial statements. The condensed consolidated financial statements include the accounts of the Company and its majority owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation. In the opinion of the Company’s management, the accompanying condensed consolidated financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to make the financial position of the Company as of ~~January~~April 3130, 2013 and the results of operations for the three and six months ended ~~January~~April 3130, 2013 and 2012 and cash flows for the ~~three~~six months ended ~~January~~April 3130, 2013 and 2012 not misleading. The unaudited condensed consolidated financial statements for the quarterly periods ended ~~January~~April 3130, 2013, and 2012 are not necessarily indicative of the operating results for the full year and it is suggested that these unaudited condensed consolidated financial statements be read in conjunction with the audited financial statements for the years ended October 31, 2012 and 2011 as contained in the Form 10-K filed on January 29, 2013.

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 $44,672 at ~~January~~April 3130, 2013 and October 31 2012, respectively.

Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of ~~three~~six 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 ~~January~~April 3130, 2013, 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 ~~January~~April 3130, 2013 and October 31 2012, 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 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 shareholders 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 unaudited condensed consolidated financial statements.

Use of Estimates

The preparation of the financial statements in conformity with GAAP 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 estimating the fair value of long-lived assets to assess whether impairment charges may be necessary. 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 record adjustments when necessary.

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)

Financial liabilities measured at fair value on a recurring basis are summarized below:

Fair value measurements at January 31, 2012

Fair value measurements at April 30, 2013

January 31,

Quoted prices in

2013

active markets for

Significant

active markets for

Significant

~~unobservable~~

unobservable

~~other~~

~~observable~~other

observable

identical assets

inputs

April 30,

identical assets

inputs

(Level 1)

(Level 2)

(Level 3)

2013

(Level 1)

(Level 2)

(Level 3)

Derivative liability

~~140~~108,~~267~~312

~~140,267~~

108,312

The derivative liabilities are measured at fair value using quoted market prices and estimated volatility factors based on historical quoted market prices for the Company’s common stock, and are classified within Level 3 of the valuation hierarchy.

The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial liabilities that are measured at fair value on a recurring basis:

	January 31,		October 31,
	April 30,		October 31,
	2013		2012
	(unaudited)
Beginning Balance	$	--	$	--
Aggregate fair value of derivative issued	$	~~183~~214,~~285~~061	$	--
Issuance date charge for difference between fair value and note proceeds		18,857		-
Change in fair value of derivative included in results of operations	$	(61124,~~875~~606)	$	--
Ending Balance	$	~~140~~108,~~267~~312	$	--

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.

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.

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.

Net income (loss) per share

The Company utilizes FASB ASC 260, Earnings per Share, to calculate gain or loss per share. Basic gain or loss per share is computed by dividing the gain or loss available to common stockholders (as the numerator) by the weighted-average number of shares of common stock outstanding (as the denominator). Diluted gain or loss per share is computed similar to basic gain 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 loss for the three and six months ended ~~January~~April 3130, 2013 and 2012 therefore, common stock equivalents have been excluded from the calculation of diluted loss per share.

~~The following table outlines the common stock equivalents outstanding as of January 31, 2013 and January 31, 2012.~~10

	1/31/2013		1/31/2012
Convertible Series A Preferred Stock – Non Controlling Interest		594,930		594,930
Convertible Series B Preferred Stock		6,686,375		6,686,375
Convertible Series C Preferred Stock		7,010,125		5,625,000
Convertible Series D Preferred Stock		17,006,375		28,878,625
Stock Options		6,142,809		-
Convertible Loans		25,003,347		8,415,755
		62,443,961		50,200,685

The following table outlines the common stock equivalents outstanding as of April 30, 2013 and 2012.

	4/30/2013		4/30/2012
Convertible Series A Preferred Stock – Non Controlling Interest		594,930		594,930
Convertible Series B Preferred Stock		6,686,375		6,686,375
Convertible Series C Preferred Stock		7,010,125		9,510,000
Convertible Series D Preferred Stock		17,006,375		17,006,250
Stock Options		6,142,809		-
Convertible Loans		116,967,680		7,102,795
		154,408,294		40,900,350

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.

Recent Accounting Pronouncements

In July 2012, the FASB issued ASU 2012-02, “Intangibles-Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment." This ASU simplifies how entities test indefinite-lived intangible assets for impairment which improve consistency in impairment testing requirements among long-lived asset categories. These amended standards permit an assessment of qualitative factors to determine whether it is more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying value. For assets in which this assessment concludes it is more likely than not that the fair value is more than its carrying value, these amended standards eliminate the requirement to perform quantitative impairment testing as outlined in the previously issued standards. The guidance is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, early adoption is permitted. The adoption of this standard did not have a material impact on the Company’s consolidated financial position and results of operations.

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.

Prepaid Expenses ~~–Employee Advances~~ was $5228,~~292~~653 and $0 at ~~January~~April 3130, 2013 and October 31, 2012, respectively. At ~~January~~April 3130, 2013, $5228,~~292~~653 represents share based payments to our sales and administrative staff. We expect to recover these amounts ~~with~~within a one year period.

Note 5 – 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:

	1/31/2013			10/31/2012
	4/30/2013			10/31/2012
Gross Carrying Amount	$	15,256,688		$	15,256,688
Accumulated Amortization		(5,~~475~~652,~~647~~828	)		(5,298,466	)
Net Carrying Amount	$	9,~~781~~603,~~041~~860		$	9,958,222

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 three months ended January 31, 2013 and 2012 was $177,181 and $177,181, respectively.11

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 three months ended April 30, 2013 and 2012 was $177,181 and $177,181, respectively. Amortization expense for the six months ended April 30, 2013 and 2012 was $354,362 and $354,362, respectively.

Estimated amortization expense is as follows

10/31/2013 (Remaining)			~~531~~354,~~542~~362
10/31/2014			708,723
10/31/2015			708,723
10/31/2016			708,723
10/31/2017			708,723

The Intellectual Property is evaluated annually for recoverability pursuant to FASB ASC 350-30-35-14 and related guidance in ASC 360-10-35-17 thru 35-35. An impairment loss is recognized if the asset is determined not to be recoverable and its carrying amount exceeds its fair value. During its annual impairment testing, the Company did not identify an impairment loss.

Note 6 - Related Party Payables

During the three months ended ~~January~~April 3130, 2013 and 2012, the Company recorded interest of $518 and $518, respectively, and during the six months ended April 30, 2013 and 2012, the Company recorded interest of $1,036 and $1,036, respectively, on promissory notes entered into with former members of the Board of Directors who resigned their positions with the Company on January 29, 2009.

Note 7 - 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 issued during fiscal years 2012 and 2011 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.

OnDuring ~~December~~the 26three months ended April, ~~2012~~30, 2013, the Company issued 12,~~230~~340,~~769~~350 and 0 shares of its S-8 registered common stock to employees for compensation and out of pocket expenses of $9876,~~462~~347 and $0 for the three and six months ended April 30, 2013 and 2012, respectively. The shares were valued and issued ~~at $.08 per share~~ based on the preceding ten (10) day average of the prevailing quotation prices for the Company's stock.

On April 25, 2013 the Company issued 787,500 shares of its restricted common stock to employees as bonus compensation of $78,750 for the 2012 calendar year. The shares were valued and issued at $.10 based on the closing quotation price for the Company's stock on December 31, 2012. The administrative process to issue the shares finally culminated on April 25, 2013.

On February 27, 2013, the Company issued an aggregate of 1,075,375 shares of its restricted common stock to members of its Board of Directors as compensation for their participation the Board, and recorded $78,500 of expenses of board of directors’ fees. The shares were valued and issued at $.07 per share based on the preceding ten (10) day average of the prevailing quotation prices for the Company's stock.

Note 8 - Stockholder’s Equity (and Non-Controlling Interest)

Common Stock

On December 26, 2012, the Company issued 145,678 shares of its S-8 registered common stock to Daniel Medina, a marketing consultant, for his efforts offering our products for sale to potential customers and recorded travel and entertainment expenses of $10,343. The shares were valued and issued at $.08 per share based on the preceding ten (10) day average of the prevailing quotation prices for the Company's stock.

The Company issued 1,230,770 and 0 shares of its S-8 registered common stock to sales consultants for their fees of $98,462 and $0 for the three months ended April 30, 2013 and April 30, 2012, respectively, and issued 5,071,099 and 0 shares of its S-8 registered common stock to sales consultants for their fees $225,192 and $0 for the six months ended April 30, 2013 and 2012, respectively. The shares were valued and issued based on the preceding ten (10) day average of the prevailing quotation prices for the Company's stock.

On February 27, 2013, the Company issued 121,951 shares of its restricted common stock to the WahlRich Group, a marketing consultant firm, for fees associated with their efforts of package design for our products. The Company recorded $10,000 to consulting expense. The shares were valued and issued at $.08 per share based on the preceding ten (10) day average of the prevailing quotation prices for the Company's stock.

During the three months ended April 30, 2013 the Company issued 181,818 shares of its S-8 registered common stock to Eday Jagadeesan for accounting services fees of $8,040 for the three and six months ended April 30, 2013. The shares were valued and issued based on the preceding ten (10) day average of the prevailing quotation prices for the Company's stock.

During the three months ended April 30, 2013 the Company issued 412,121 shares of its S-8 registered common stock to Denny Flores for administrative support services fees of $16,320 for the three and six months ended April 30, 2013. The shares were valued and issued based on the preceding ten (10) day average of the prevailing quotation prices for the Company's stock.

During the six months ended April 30, 2013, the Company received conversion notices for two unsecured promissory notes issued to Asher Enterprises on June 24, 2012 and September 20, 2012 in the amounts of $83,500 and $53,000, respectively, which issuances resulted in gross proceeds to the Company of $136,500. The Company issued 4,351,351 shares of common stock to Asher for partial settlement of the gross proceeds of $116,500.

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 condensed 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, 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
Non-Controlling interest Share of Net Loss for the Year ended October 31, 2012	$	(219,981	)
Non-Controlling Interest at October 31, 2012	$	108,602
Non-Controlling interest Share of Net Loss for the three months ended January 31, 2013	$	(64,260	)
Non-Controlling interest Share of Net Loss for the six months ended April 30, 2013	$	(120,350	)
Non-Controlling Interest at January 31, 2013	$	44,342
Non-Controlling Interest at April 30, 2013	$	(11,748	)

The Series A Preferred Stock is not 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 ~~January~~April 3130, 2013 and October 31, 2012.

Note 9 – Notes Payable

On ~~December~~October 1231, 2012, ~~BioNeutral~~the ~~Group,~~Company ~~Inc.~~entered into a Securities Purchase Agreement (the “~~Company~~Purchase Agreement”) ~~issued~~with aAsher for the sale and issuance of an 8% convertible promissory note in the principal amount of $53,000 (the “~~JMJ~~ Note”). inThe Purchase Agreement became effective on November 2, 2012 when the transaction closed. The principal ~~amount~~balance of ~~$250~~the Note is convertible into common stock,~~000~~ to$0.00001 ~~JMJ~~par ~~Financial~~value, ~~(“JMJ”)~~of the Company, at the election of ~~which~~the ~~$85~~Holder,~~000~~ ~~has~~beginning ~~been~~180 ~~received~~days ~~through~~after the ~~date~~issuance of ~~this~~the ~~report~~Note. The ~~JMJ~~conversion price of the Note isshall ~~due~~be equal to 58% multiplied by the market price (as defined in the Note). The Note matures on ~~December~~August 122, 2013. ~~JMJ~~The ~~Note~~Company ishas ~~interest~~the ~~free~~right ifto ~~repaid~~prepay ~~within~~the 90principal ~~days~~ and ifinterest ~~not~~at ~~paid~~a ~~within~~premium 90depending ~~days~~on the date that it ~~bears~~is ~~interest~~prepaid. Interest on the Note accrues at 10a rate of 8% per annum. The ~~principal~~Note ~~and~~contains ~~any~~customary ~~accrued~~default ~~interest~~provisions, ~~are~~including ~~convertible~~provisions ~~into~~for ~~the~~potential ~~Company’s~~acceleration ~~common~~of ~~stock~~the atNote, ~~the~~a ~~lower~~default ofpremium, ~~$.09~~and ~~per~~default ~~share~~interest of 7022%. On ofJune 20, 2013 the ~~lowest~~Company ~~trade~~received ~~price~~a innotice of default from Asher for the 25outstanding ~~days~~balance ~~prior~~due toon ~~conversion.~~the ~~JMJ~~Note ~~has~~of ~~piggyback~~$8,000 ~~registration~~plus ~~rights~~accrued ~~with~~default ~~respect~~interest tofor ~~the~~failure ~~shares~~to ~~into~~comply ~~which~~with the ~~JMJ~~filing ~~Note~~deadline isof ~~convertible.~~this Form 10-Q. The Company ~~evaluated~~is ~~the~~currently ~~beneficial~~in ~~conversion~~discussions ~~feature~~with ~~embedded~~Asher into cure the ~~convertible~~event ~~promissory~~of ~~note~~default. However ~~and~~the ~~determined~~Company ~~the~~cannot ~~effect~~provide ~~was~~reasonable ~~not~~assurance ~~material~~that they will be successful in reaching a favorable outcome.

On December 12, 2012, BioNeutral Group, Inc. (the “Company”) issued a promissory note (the “JMJ Note”) in the principal amount of $250,000 to JMJ Financial (“JMJ”), of which $110,000 has been received through the date of this report. The JMJ Note is due on December 12, 2013. JMJ Note is interest free if repaid within 90 days and if not paid within 90 days it bears interest at 10%. The principal and any accrued interest are convertible into the Company’s common stock at the lower of $.09 per share of 70% of the lowest trade price in the 25 days prior to conversion. JMJ has piggyback registration rights with respect to the shares into which the JMJ Note is convertible.

On December 6, 2012, the Company entered issued a new promissory note (the “Francis Note”) to Michael D. Francis, the Company’s principal stockholder in the amount of $409,252. The Francis Note includes all amounts previously owed and due to Mr. Francis. The Francis Note also includes $185,000 of new funding provided by Mr. Francis. The Francis Note is due on May 6, 2014. The Francis Note bears interest at 18% per annum. Mr. Francis has the right to convert the principal and interest into the Company’s common stock at $.055 per share which is equal to 75% of the closing price of the Company’s common stock or the 10 preceding days prior to December 6, 2012. ~~The Company evaluated the beneficial conversion feature embedded in the convertible promissory note and determined the effect was not material.~~

On ~~October~~February 3125, ~~2012~~2013, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with Asher Enterprises, Inc., a Delaware Corporation (the “Holder”) for the sale and issuance of an 8% convertible promissory note in the principal amount of $5342,~~000~~500 (the “Note”). The Purchase Agreement became effective on ~~November~~March 218, ~~2012~~2013 when the transaction closed. The principal balance of the Note is convertible into common stock, $0.00001 par value, of the Company, at the election of the Holder, beginning 180 days after the issuance of the Note. The conversion price of the Note shall be equal to 58% multiplied by the market price (as defined in the Note). The Note matures on ~~August~~November 227, 2013. The Company has the right to prepay the principal and interest at a premium depending on the date that it is prepaid. Interest on the Note accrues at a rate of 8% per annum. The Note contains customary default provisions, including provisions for potential acceleration of the Note, a default premium, and default interest of 22%. ~~The~~On June 20, 2013 the Company ~~evaluated~~received a notice of default from Asher for the ~~beneficial~~outstanding ~~conversion~~balance ~~feature~~due ~~imbedded~~on inthe Note of $42,500 plus accrued default interest for failure to comply with the ~~convertible~~filing ~~promissory~~deadline ~~note~~of ~~and~~this ~~determined~~Form 10-Q. The Company is currently in discussions with Asher to cure the ~~effect~~event ~~was~~of ~~not~~default. However ~~material~~the Company cannot provide reasonable assurance that they will be successful in reaching a favorable outcome.

The Company received loan proceeds from Michael D. Francis, the Company’s principal stockholder during the six months ended April 30, 2013, which resulted in gross proceeds to the Company of $131,000. The Company and Mr. Francis are currently in negotiations to determine the terms of the loans.

DERIVATIVE FINANCIAL INSTRUMENT

The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with ASC 815, Derivatives and Hedging which requires issuers of financial statements to make a determination as to whether (1) an embedded conversion meets the definition of a derivative in its entirety and (2) the derivative would qualify for a scope exception to derivative accounting, which includes evaluating whether the embedded derivative would be considered indexed to the issuer’s own stock.

ASC 815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as separate derivatives in the event such derivatives would not be classified in stockholders’ equity if they were free standing. These three 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 applicable US 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 subject to the requirements of ASC 815. ASC 815 also provides for an exception to this rule if a debt host instrument is deemed to be a conventional debt instrument.

The Company evaluated the conversion option embedded in its Convertible notes in accordance with the provisions of ASC 815 and determined that on the conversion date, the conversion option will have all of the characteristics of a derivative in its entirety and does not qualify for an exception to the derivative accounting rules. Specifically, because the exercise price of the conversion option is not fixed at any time during the term of the note. Accordingly, the embedded conversion option in the Convertible notes are classified as derivative liabilities at the conversion dates and are marked to market through earnings at the end of each reporting period. The fair value of the conversion option was determined using the intrinsic value method which the Company believes approximate the results obtained using the Binomial Lattice model. The gross proceeds from the issuance of the Convertible notes were recorded net of a discount of $~~185~~214,~~285~~061 related to the derivative liability. The debt discount will be charged to amortization of debt discount ratably over the term of the Convertible notes. Additionally, the Company recorded a discount in the amount of $159,154 in connection with the initial valuation of the beneficial conversion feature of another Convertible notes to be amortized utilizing the interest method of accretion over the expected term of the note. The Company recorded an aggregate amortization of the debt discount in the amount of $~~109~~102,~~642~~719 and $212,361 for the ~~quarter~~three and six months ended ~~January~~April 3130, 2013 and is included in Interest Expense.

Note 10 - Related Party Transactions

Related Party Transactions During the ~~Three~~Six ~~Months~~months Ended ~~January~~April 3130, ~~2012~~2013

~~The~~On ~~Company~~April ~~received~~12, ~~conversion~~2013, ~~notices~~the ~~from~~Company ~~Vinfluence~~entered ininto ~~aggregate~~a ~~for~~Settlement 0Agreement, ~~and~~Global ~~160,000~~Release ~~shares~~Cancellation of ~~Series B~~ Preferred Stock ~~and~~Purchase ~~Series~~Agreement, D Preferred Stock ~~which~~Drawdown ~~are~~Agreement, ~~convertible~~The ~~into~~Agreement ~~125~~to ~~shares~~Assign ofand ~~common~~Settle ~~stock~~Notes ~~for~~and ~~each~~Agreement ~~share~~to ofLicense ~~the~~Invention ~~Preferred~~by ~~Stock~~and ~~for~~between the ~~three~~Company ~~months ended January 31, 2013~~ and ~~2012,~~Vinfluence ~~respectively. In~~Pty ~~satisfaction~~Ltd of (the ~~conversion~~"Global ~~notices, the Company issued 20,000,000 shares of common stock to Vinfluence~~Agreement").

~~During~~The Global Agreement settles the ~~three~~claims ~~months~~of ~~ended~~each ~~January~~of 31the Company and Vinfluence which had been the subject of litigation. The Agreement also terminates the Preferred Stock Purchase Agreement, ~~2012~~the Preferred Stock Drawdown Agreement, the Agreement to Assign and Settle Debt, the Agreement to Assign and Settle Notes Agreement and the Vinfluence License Agreement (collectively, the "Vinfluence Agreements"). As a result of the Global Agreement, the Company will cancel an aggregate of 178,042 shares of Series B and Series D Preferred Stock that had been issued 45to Vinfluence. The only Series B and Series D Preferred Stock that remains outstanding (an aggregate of 67,~~000~~581 shares) represents debt or notes that were actually settled by Vinfluence. Each share of Preferred Stock cancelled was convertible into 125 shares of the Company’'s ~~Series~~common Cstock thus the cancellation of the Vinfluence Agreements results in significantly less dilution than if the Preferred Stock ~~for~~had ~~gross~~been ~~proceeds~~converted. As part of ~~$450~~the Global Agreement,~~000~~ tothe Company will issue Vinfluence an aggregate of 2,000,000 shares of Common Stock.

OnThe ~~January~~Company ~~23,~~received ~~2012,~~conversion notices from Vinfluence ~~provided~~in ~~the~~aggregate ~~Company~~for ~~with~~0 ~~confirmation~~and 160,000 shares of aSeries ~~settlement~~B Preferred Stock and ~~release~~Series D Preferred Stock which are convertible into 125 shares of $1common stock for each share of the Preferred Stock for the six months ended April 30,~~077~~ 2013 and 2012,~~376~~ respectively. In satisfaction of ~~convertible~~the ~~notes~~conversion ~~previously~~notices, the Company issued to20,000,000 ~~Michael~~shares ~~Francis~~of common stock to Vinfluence.

1115

Note 11 – Commitments & Contingencies

Litigation

On November 26, 2012, the Company filed a complaint against Raj Pamani, a shareholder and former director of the Company in the Superior Court of New Jersey Essex County: Chancery Division (“the Complaint”). Included also as defendants were several entities to which in 2009 the Company awarded approximately 13 million shares of its common stock in consideration for consulting contracts which the Company has concluded were fraudulently induced and were later deemed to be worthless (the “Defendant Entities”). By causing the Company to enter into the contracts to its detriment in favor of Mr. Pamani’s and the Defendant Entities self-enrichment, the Company seeks to recover damages incurred from the actions of Mr. Pamani and the Defendant Entities as a result of self-dealing, breach of fiduciary duty, breach of loyalty and fraud. As this matter unfolds, the Company may pursue and recover damages incurred from other parties that come to its attention for their participation.

On August 1, 2012, the Company filed a complaint for declaratory judgment against Vinfluence in the United States District Court for the Southern District of New York (“the Complaint”). Due to issues and disagreements under the contracts, the Company seeks to cancel and/or rescind the contracts, and to prevent actual damages from occurring. In doing so, we seek a declaratory judgment from the court that 1.) all five contracts between the Company and Vinfluence should be read together as one integrated contract; 2.) Vinfluence did not exercise the Option, as defined in the Agreement to License Invention (“License Agreement”), and that the Option has expired; and 3.) New York is the proper forum for disputes. In response, on December 24, 2012, Vinfluence filed a Statement of Claim in the Supreme Court of South Wales in Sydney Australia (“the “Vinfluence Claim”). The Vinfluence Claim seeks monetary damages and alleges several breaches of contract under the License Agreement most importantly that 1.) Vinfluence performed its obligations and supplied adequate consideration for both the license for their Territory and for the Optioned Territory (as defined in the License Agreement); and BioNeutral failed to deliver on all of its obligations. The Company and Vinfluence have been negotiating and an agreement in principle has been reached the details of which are being incorporated in a written agreement. Among other provisions, the “Agreement to Assign and Settle Debt” and the “Agreement to Assign and Settle Notes” would be terminated and a certain amount of shares provided to Vinfluence under such agreements would be returned to the Company. In addition, the License Agreement would be terminated and replaced by a Distribution Agreement pursuant to which Vinfluence would receive distribution rights in certain Asian-Pacific countries. In the event that the agreement in principle cannot be finalized, the Company will vigorously pursue the matter in court.

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 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 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.

1216

Other Contingencies

Approximately 6 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.

Note 12 - Subsequent Events:

On ~~February~~June 271, 2013, the Company ~~received~~entered into a Note Satisfaction and Exchange Agreement with Herb Kozlov, a shareholder of the Company, for the satisfaction of a promissory note issued by the Company on December 6, 2010 in exchange for cash proceeds of $2550,000. Pursuant to the Note Satisfaction and Exchange Agreement, the Company will issue 2,500,000 shares of its restricted common stock to Mr. Kozlov as satisfaction of the ~~JMJ~~principal ~~Note~~amount of the note of $50,000 plus accrued and unpaid interest of $10,750 for a total of $60,750.

On ~~February~~May 272, 2013, the Company ~~issued~~entered ~~145,678~~into ~~shares~~a ofSecurities ~~its~~Purchase ~~restricted~~Agreement ~~common~~(the ~~stock~~“Purchase toAgreement”) awith ~~marketing~~Asher ~~consultant~~Enterprises, ~~for~~Inc., ~~their~~a ~~efforts~~Delaware ~~offering~~Corporation ~~our~~(the ~~products~~“Holder”) for the sale toand ~~potential~~issuance ~~customers~~of an 8% convertible promissory note in the principal amount of $42,500 (the “Note”). The ~~Company~~Purchase ~~recorded~~Agreement ~~consulting~~became ~~fee~~effective ~~expenses~~on March 4, 2013 when the transaction closed. The principal balance of the Note is convertible into common stock, $100.00001 par value,~~343~~ ~~during~~of the ~~fiscal~~Company, ~~year~~at ~~ended~~the ~~October~~election 31of the Holder, ~~2012~~beginning 180 days after the issuance of the Note. The ~~shares~~conversion ~~were~~price ~~valued~~of the Note shall be equal to 51% multiplied by the market price (as defined in the Note). The Note matures on February 6, 2014. The Company has the right to prepay the principal and ~~issued~~interest at $a premium depending on the date that it is prepaid.08 Interest on the Note accrues at a rate of 8% per ~~share~~annum. ~~based~~The onNote contains customary default provisions, including provisions for potential acceleration of the ~~preceding~~Note, ~~ten~~a ~~(10)~~default ~~day~~premium, ~~average~~and default interest of 22%. On June 20, 2013 the ~~prevailing~~Company ~~quotation~~received ~~prices~~a notice of default from Asher for the outstanding balance due on the Note of $42,500 plus accrued default interest for failure to comply with the filing deadline of this Form 10-Q. The Company's ~~stock~~is currently in discussions with Asher to cure the event of default. However the Company cannot provide reasonable assurance that they will be successful in reaching a favorable outcome.

OnBased ~~February~~on ~~27, 2013,~~ the ~~Company~~receipt ~~issued~~of anseveral ~~aggregate~~notices of ~~1,075,375~~conversion ~~shares~~during ofMay ~~its~~2013 ~~restricted~~from ~~common~~Asher ~~stock~~Enterprises, tothe ~~members~~Company ofissued ~~its~~an ~~Board~~aggregate of ~~Directors as compensation for their participation the Board~~4, ~~and recorded $78~~727,~~500~~146 ofshares ~~expenses~~ of ~~board~~common ofstock ~~directors’~~to ~~fees. The~~convert ~~shares~~short-term ~~were~~convertible ~~valued~~promissory ~~and~~notes ~~issued~~in ~~at $.07 per share based on~~ the ~~preceding~~aggregate ~~ten (10) day average~~ of ~~the prevailing quotation prices for the Company's stock~~$52,120.

On ~~February~~April 2512, 2013 and in connection with the Global Agreement, the Company also entered into adistribution ~~Securities~~agreement ~~Purchase Agreement~~ (the ~~“Purchase~~"New Distribution Agreement”") with ~~Asher~~White ~~Enterprises,~~Charger ~~Inc.~~Limited, a ~~Delaware~~New ~~Corporation~~Zealand (company whereby White Charger has the ~~“Holder”)~~right ~~for~~to distribute the ~~sale~~Company's ~~and~~products ~~issuance~~in ofAustralia, anNew 8%Zealand, ~~convertible~~Indonesia, ~~promissory~~Malaysia, ~~note~~Philippines, inSingapore, ~~the~~Thailand, ~~principal~~Brunei, ~~amount~~Burma, ofNew ~~$42~~Caledonia,~~500~~ (Kiribati, the ~~“Note”).~~Marshal ~~The~~Islands, ~~Purchase~~Micronesia, ~~Agreement~~Nauru, ~~became~~Palau, ~~effective~~Papua onNew ~~March~~Guinea, 4Solomon Islands, ~~2013~~Tuvalu, ~~when~~Pitcairn, ~~the~~Henderson, ~~transaction~~Mauritius ~~closed~~and Ocneo. ~~The~~ ~~principal~~This ~~balance~~is ofa much narrower territory than the ~~Note~~original islicensing ~~convertible~~agreement ~~into~~and ~~common~~does ~~stock,~~not ~~$0.00001~~include ~~par~~China, ~~value~~Taiwan, ofHong ~~the~~Kong ~~Company,~~or atJapan. ~~the~~It ~~election~~also ofdoes ~~the~~not ~~Holder,~~include ~~beginning~~any ~~180~~option ~~days~~for ~~after~~Europe. ~~the~~No ~~issuance~~intellectual property of the ~~Note~~Company is transferred to White Charger. The ~~conversion~~New ~~price~~Distribution ofAgreement ~~the~~requires ~~Note~~White ~~shall~~Charger beto ~~equal~~purchase toat ~~58%~~least ~~multiplied~~$500,000 byof the ~~market~~Company's ~~price~~products ~~(as~~during ~~defined in~~ the ~~Note).~~first ~~The~~24 ~~Note~~months ~~matures~~of onwhich ~~November 27~~$175,000 ~~2013.~~must ~~The~~be ~~Company~~purchased ~~has~~during the ~~right~~first to12 ~~prepay~~months of the ~~principal~~New ~~and~~Distribution ~~interest~~Agreement. atThe aInitial ~~premium~~Term ~~depending~~of on the ~~date~~New ~~that~~Distribution itAgreement is ~~prepaid.~~for ~~Interest~~five on(5) ~~the~~years ~~Note~~and ~~accrues~~can atbe aextended ~~rate~~for ofan 8%additional ~~per~~five ~~annum.~~years ~~The~~if ~~Note~~White ~~contains~~Charger ~~customary~~purchases ~~default~~at ~~provisions~~least $3,000,000 ~~including~~of ~~provisions~~product ~~for~~during ~~potential~~the ~~acceleration~~Initial ofTerm. ~~the~~The ~~Note,~~New aDistribution ~~default~~Agreement ~~premium,~~also ~~and~~contains ~~default~~a ~~interest~~non-competition agreement on behalf of ~~22%~~White Charger.

Based on the receipt of several notices of conversion during February 2013, the Company issued an aggregate of 2,954,750 shares of common stock to convert short-term convertible promissory notes in the aggregate of $83,500.

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.

1317

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

The following discussion and analysis of the condensed consolidated financial condition and results of operations of BioNeutral Group, Inc. (the “Company,” “we” or “us”) should be read in conjunction with the condensed consolidated financial statements and notes thereto appearing elsewhere herein. In the following discussions, most percentages and dollar amounts have been rounded to aid presentation, and accordingly, all amounts are approximations.

Forward-Looking Information

This Quarterly Report on Form 10-Q contains forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act").

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 Securities and Exchange Commission (the "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 U.S. Environmental Protection Agency (the "EPA"), the U.S. Food & Drug Administration (the "FDA") and the U.S. Federal Trade Commission.

~~● our failure to obtain the necessary regulatory approvals for our products;~~18

● ~~the~~changes ~~results~~in ofaccounting ~~the~~policies, ~~current~~rules ~~Securities~~ and ~~Exchange~~practices; ~~Commission~~● (changes in technology or products, which may be more difficult or costly, or less effective than anticipated; and ● the ~~"SEC")~~other ~~investigation~~factors oflisted ~~our~~under “Risk Factors” in the Company;’s Form 10-K for the fiscal year ended October 31, 2011 and other filings with the SEC.

● 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 U.S. Environmental Protection Agency (the "EPA"), the U.S. Food & Drug Administration (the "FDA") and the U.S. Federal Trade Commission.

● 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 “Risk Factors” in the Company’s Form 10-K for the fiscal year ended October 31, 2011 and other filings with the SEC.

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 Quarterly Report on Form 10-Q or the date of the document incorporated by reference into this report. 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.

Recent Developments

On May 2, 2013, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with Asher Enterprises, Inc., a Delaware Corporation (the “Holder”) for the sale and issuance of an 8% convertible promissory note in the principal amount of $42,500 (the “Note”). The Purchase Agreement became effective on March 4, 2013 when the transaction closed. The principal balance of the Note is convertible into common stock, $0.00001 par value, of the Company, at the election of the Holder, beginning 180 days after the issuance of the Note. The conversion price of the Note shall be equal to 51% multiplied by the market price (as defined in the Note). The Note matures on February 6, 2014. The Company has the right to prepay the principal and interest at a premium depending on the date that it is prepaid. Interest on the Note accrues at a rate of 8% per annum. The Note contains customary default provisions, including provisions for potential acceleration of the Note, a default premium, and default interest of 22%. On June 20, 2013 the Company received a notice of default from Asher for the outstanding balance due on the Note of $42,500 plus accrued default interest for failure to comply with the filing deadline of this Form 10-Q. The Company is currently in discussions with Asher to cure the event of default. However the Company cannot provide reasonable assurance that they will be successful in reaching a favorable outcome.

Based on the receipt of several notices of conversion during May 2013 from Asher Enterprises, the Company issued an aggregate of 4,727,146 shares of common stock to convert short-term convertible promissory notes in the aggregate of $52,120.

On April 12, 2013 and in connection with the Global Agreement, the Company also entered into distribution agreement (the "New Distribution Agreement") with White Charger Limited, a New Zealand company whereby White Charger has the right to distribute the Company's products in Australia, New Zealand, Indonesia, Malaysia, Philippines, Singapore, Thailand, Brunei, Burma, New Caledonia, Kiribati, the Marshal Islands, Micronesia, Nauru, Palau, Papua New Guinea, Solomon Islands, Tuvalu, Pitcairn, Henderson, Mauritius and Ocneo. This is a much narrower territory than the original licensing agreement and does not include China, Taiwan, Hong Kong or Japan. It also does not include any option for Europe. No intellectual property of the Company is transferred to White Charger. The New Distribution Agreement requires White Charger to purchase at least $500,000 of the Company's products during the first 24 months of which $175,000 must be purchased during the first 12 months of the New Distribution Agreement. The Initial Term of the New Distribution Agreement is for five (5) years and can be extended for an additional five years if White Charger purchases at least $3,000,000 of product during the Initial Term. The New Distribution Agreement also contains a non-competition agreement on behalf of White Charger.

On February 27, 2013, the Company received $25,000 of the JMJ Note. On March 27, 2013, the Company received $25,000 of the JMJ Note. On June 4, 2013, the Company received $25,000 of the JMJ Note.

On February 25, 2013, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with Asher Enterprises, Inc., a Delaware Corporation (the “Holder”) for the sale and issuance of an 8% convertible promissory note in the principal amount of $42,500 (the “Note”). The Purchase Agreement became effective on March 4, 2013 when the transaction closed. The principal balance of the Note is convertible into common stock, $0.00001 par value, of the Company, at the election of the Holder, beginning 180 days after the issuance of the Note. The conversion price of the Note shall be equal to 58% multiplied by the market price (as defined in the Note). The Note matures on November 27, 2013. The Company has the right to prepay the principal and interest at a premium depending on the date that it is prepaid. Interest on the Note accrues at a rate of 8% per annum. The Note contains customary default provisions, including provisions for potential acceleration of the Note, a default premium, and default interest of 22%.

At a meeting of the Board of Directors held on February 13, 2013, the Board approved the appointment Ben Hanafin to serve immediately as a member of its Audit Committee and the issuance of 2,577,709 shares of its common stock for compensation to its employees.

On January 25, 2013 the Company received $10,000 of loan proceeds from Michael Francis. The Company and Mr. Francis intend to amend the Francis Note, as referenced below, to include these proceeds.

On December 12, 2012, the Company appointed Robert Machinist as Chairman of is Audit Committee and Ben Hanafin as Chairman of its Executive Compensation Committee. The Company also approved a grant of unregistered common stock to its independent directors as follows: Ben Hanafin 342,466 shares, Robert Machinist 513,698 shares and Philip Tierno 219,178 shares. The shares were valued and issued at $.07 per share based on the preceding ten (10) day average of the prevailing quotation prices for the Company's stock.

On December 12, 2012, the Company received $60,000 of the JMJ Note.

On December 11, 2012, the Company entered into an Equity Purchase Agreement with Southridge Partners II, LP for an equity line of up to $10,000,000. Pursuant to the Equity Purchase Agreement, the Company has the right, at its discretion, to sell to Southridge up to $10 million of its common stock from time to time over a 36-month period. The Company will have the right, but is not obligated, to sell stock to Southridge depending on certain conditions as set forth in the Agreement. Both parties have also entered into a Registration Rights Agreement under which, the Company agreed to file a registration statement with the Securities and Exchange Commission with respect to the Shares. The ability to draw on the line is conditioned upon having an effective registration statement. In connection with obtaining the equity line, the Company will incur a $50,000 promissory note to Southridge (the “Southridge Note”) due May 31, 2013 to satisfy its fees owned to Southridge on the equity line. The Southridge Note is convertible into common stock at a 50% discount to the lowest closing bid price of the common stock for the five days prior to conversion.

Pursuant to a Securities Purchase Agreement entered into with Asher Enterprises, Inc. on October 31, 2012, the Company received net proceeds of $47,350 on November 6, 2012.

Company Overview

We are a 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~~bioneutralizers, 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 have been 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 have been 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 and sale of our Ogiene® products are subject to EPA registration or FDA clearance. We have not had significant sales 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 market and sell 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, 2013 is focused on leveraging developments in the United States for our Ygiene® professional disinfectant product. The Company received approval and registration from the EPA for its hospital and industrial grade line of products to be used as high level disinfectant and sterilants.

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.

Currently, we are focusing our efforts on the commercialization of a Ygiene® formulation for 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.20

Currently, we are focusing our efforts on the commercialization of a Ygiene® formulation for healthcare and industrial applications. Some of our potential customers that operate in the healthcare marketplace require product testing and trials before purchasing our products. We have retained four professional sales persons with experience selling specialty chemicals such as ours. In doing so, we are investing our resources in their process to market and sell our products. 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.

Most of our customer’s perform trial testing of our products prior to purchasing the product which lengthens the sales cycle in some instances. For calendar 2013 to date, our initial commercialization strategy has led to 40 trials of our products which have been ordered within the market segments of laboratory medical research, acute healthcare, veterinarian care, mold remediation and industrial odor control. These trials have led to the addition of 9 new customers for our products. The remaining 31 trials are in process.”

We believe, although no assurance can be given, 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 we believe that our Ogiene® and Ygiene® formulations may have technological competitive advantages over competing products, we or our 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 the three months ended ~~January~~April 3130, 2013 and for the three months ended ~~January~~April 3130, 2012.

Revenues: During the three months ended ~~January~~April 3130, 2013, the Company generated revenues of $~~555~~1,085 as compared to revenues of $~~1,164~~338 for three months ended ~~January~~April 3130, 2012. 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 ~~hospital~~healthcare and industrial applications in the United States. ~~Additionally, we are continuing our efforts to obtain the remaining state regulatory approvals required for the sale and distribution of our Ygiene® formulation throughout the entire United States.~~

~~Operating~~Most ~~Expenses:Operating~~of ~~expenses~~our ~~were~~customer’s ~~$681,226~~perform ~~for~~trial ~~the~~testing ~~three~~of ~~months~~our ~~ended~~products ~~January~~prior ~~31,~~to ~~2013~~purchasing ~~and~~which ~~$834,354~~can ~~for~~lengthen the ~~three~~sales ~~months~~cycle ~~ended~~in ~~January~~some ~~31,~~instances. For ~~2012~~calendar an2013 ~~18%~~to ~~decrease~~date, ofour ~~$153,128. Our~~initial ~~operating~~commercialization ~~expenses~~strategy ~~consist~~has ofled ~~compensation~~to 40 trials of our ~~executive~~products ~~and~~which ~~scientific~~have ~~staff,~~been ~~consulting~~ordered ~~expenses~~within ~~supporting~~the ~~development~~market segments of laboratory medical research, ~~and~~acute ~~regulatory~~healthcare, ~~approvals~~veterinarian ~~for~~care, mold remediation and industrial odor control. These trials have led to the addition of 9 new customers of our products,. The ~~legal~~remaining ~~and~~31 ~~accounting~~trials ~~services,~~are ~~and~~in ~~non-cash~~process ~~amortization~~pending results. We anticipate material orders of our ~~intellectual~~products ~~property~~to commence in September 2013.

~~Depreciation & Amortization was $177,234 for the three months ended January 31, 2013 and January 31, 2012, respectively.~~21

~~Total~~Operating ~~legal~~Expenses: ~~and~~Operating ~~accounting~~ expenses were $830,646 for the three months ended ~~January~~April 3130, 2013 ~~were~~and $~~146~~539,~~607~~815 ~~an increase of $33,455 over amounts~~ for the three months ended ~~January~~April 3130, 2012 ~~which~~a ~~were~~54% increase of $~~113~~290,~~152~~831. Our ~~The~~operating ~~increase~~expenses ~~reflects~~consist anof ~~increase~~compensation inof ~~legal~~our ~~fee~~executive ~~expenses~~and asscientific astaff, ~~result~~consulting expenses supporting development of, ~~the~~and ~~complaints~~regulatory ~~filed~~approvals onfor, ~~Vinfluence~~our products, legal and ~~Mr.~~accounting ~~Pamani~~services, and non-cash amortization of our intellectual property.

~~Salaries~~Depreciation ~~expense~~& ~~for~~Amortization ~~the~~was ~~three months ended January 31, 2013 were~~ $~~208~~177,~~404~~234 ~~an increase of 108% over amounts~~ for the three months ended ~~January~~April 3130, ~~2012,~~2013 ~~which~~and ~~were~~April ~~$100~~30,~~200,~~ ~~reflecting the retention of corporate employees in~~ 2012 ~~versus contract consultants~~, ~~utilized in 2011~~respectively. ~~In addition, overall compensation was higher in 2013 due to the addition of a CEO and President which was a position not filled at the Company during the three months ended January 31, 2012.~~

~~Consulting~~Salaries ~~fee~~expense ~~expenses were $10,150~~ for the three months ended ~~January~~April 3130, 2013 aswere ~~compared to~~ $~~243~~115,~~692~~403 an increase of 19% over amounts for three months ended ~~January~~April 3130, 2012, ~~for~~which awere ~~96% decrease of~~ $~~233~~97,~~542. The~~046, ~~decrease~~reflecting ~~primarily~~the ~~reflects~~retention ~~a reduction~~ of ~~costs~~internal ~~incurred~~sales ~~during~~assistance ~~the~~in ~~three~~2013 ~~months ended January 31, 2012 relating~~ to ainitialize ~~marketing~~the ~~consulting~~Company’s ~~agreement~~commercialization ~~with Piccadilly Consultants, which was $200,000~~strategy.

~~Other~~Consulting ~~Selling,~~fee ~~General~~expenses ~~and~~were ~~Administrative~~$210,323 ~~Expenses~~ for the three months ended ~~January~~April 3130, 2013 ~~were~~as ~~$138,831,~~compared ato ~~decrease of~~ $6168,~~244~~000 ~~over amounts~~ for three months ended ~~January~~April 3130, 2012 ~~which~~for ~~were~~a 209% increase of $~~200~~142,~~075~~323. The ~~decrease~~increase reflects ~~primarily~~the aaddition ~~reduction~~ of ~~$45,499~~sales ofconsultants ~~travel~~in ~~and~~2013 ~~entertainment~~to ~~expenses~~begin as the ~~Company~~commercialization ~~has~~strategy ~~scaled~~that ~~back~~we ~~those~~launched ~~costs~~in January 2013.

~~Net~~Total ~~Loss: We~~legal ~~experienced~~and aaccounting ~~net~~expenses ~~loss from operations before consideration of our Non-Controlling interest of $680,874~~ for the three months ended ~~January~~April 3130, 2013. ~~The~~were ~~discussion~~$122,106 ofan ~~operating~~increase ~~expenses~~of ~~identifies~~$74,819 ~~the~~over ~~elements~~amounts offor ~~the~~three ~~net~~months ~~loss. For~~ended ~~the~~April ~~same~~30, ~~period in~~ 2012, ~~our~~which ~~net~~were ~~loss was~~ $~~833~~47,~~334~~287. We ~~anticipate~~The weincrease ~~will~~reflects ~~experience~~an aincrease ~~net loss~~ in ~~fiscal~~legal ~~2013~~fee expenses as wea ~~continue~~result toof ~~pursue~~the ~~regulatory~~complaints ~~approvals~~filed ~~and~~on ~~further~~Vinfluence ~~identify markets for the sale~~ and ~~distribution~~Mr. ~~of our products~~Pamani.

17Other Selling, General and Administrative Expenses for the three months ended April 30, 2013 were $205,580, a 37% increase of $55,332 over amounts for three months ended April 30, 2012 which were $150,248. The increase reflects primarily additional board of directors fees of $65,300 in 2013 offset by an decrease in most categories of expenses as the Company has scaled back those costs to accommodate the increase in selling expenses.

Other Income and Expense for the three months ended April 30, 2013 were $(165,363), a 790% decrease of $146,781 over amounts for three months ended April 30, 2012 which were $(18,582). The decrease primarily reflects a reduction of costs incurred during for 2013 relating to a credit to consulting expense of $238,750 received pursuant to the settlement with Vinfluence. The credit provided was a reimbursement of bonus compensation paid to Dr. Andy Kielbania for the year ended October 2011. For 2013, the Company recorded non-cash amortization of debt discount of $(102,719) and non-cash charge for change in Fair Value of Derivative Liability of $62,731. For 2012 certain promissory notes were settled by Vinfluence carried interest expense reductions which in turn led to reversals of previously recorded interest expense.

Net Loss: We experienced a net loss from operations before consideration of our Non-Controlling interest of $608,465 for the three months ended April 30, 2013. The discussion of operating expenses identifies the elements of the net loss. For the same period in 2012, our net loss was $476,982. We anticipate we will experience a net loss in fiscal 2013 as we continue to pursue regulatory approvals and further identify markets for the sale and distribution of our products.

Comparison of Results of Operations for the six months ended April 30, 2012 and for the six months ended April 30, 2011.

Revenues: During the six months ended April 30, 2013, the Company generated revenues of $1,640 as compared to revenues of $1,502 for six months ended April 30, 2012. 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 healthcare and industrial applications in the United States. Additionally, we are continuing our efforts to obtain the remaining state regulatory approvals required for the sale and distribution of our Ygiene® formulation throughout the entire United States.

Most of our customer’s trial test our products prior to purchasing which can lengthen the sales cycle in some instances. For calendar 2013 to date, our initial commercialization strategy has led to 40 trials of our products which have been ordered within the market segments of laboratory medical research, acute healthcare, veterinarian care, mold remediation and industrial odor control. These trials have led to the addition of 9 new customers of our products. The remaining 31 trials are in process pending results. We anticipate material orders of our products to commence in September 2013.

Operating Expenses: Operating expenses were $1,511,873 for the six months ended April 30, 2013 and $1,374,168 for the six months ended April 30, 2012 a 10% increase of $137,705. 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.

Depreciation & Amortization was $354,468 for the six months ended April 30, 2013 and April 30, 2012, respectively.

Salaries expense for the six months ended April 30, 2013 were $323,807 an increase of 73% over amounts for six months ended April 30, 2012, which were $187,708, primarily reflecting the retention of internal selling assistance, and the addition of a CEO and President which was a position not filled at the Company during the three months ended April 30, 2012.

Consulting fee expenses were $220,473 for the six months ended April 30, 2013 as compared to $311,692 for six months ended April 30, 2012 for a 29% decrease of $91,219. The decrease primarily reflects a reduction of costs due to a $200,000 consulting fee expense from Picaadilly Consultants in 2012 which it did not incur in 2013. Piccadilly Consultants were not consultants of the Company in 2013. The reduction was materially offset by the addition of sales consultants in 2013 to begin the commercialization strategy that we launched in January 2013.

Total legal and accounting expenses for the six months ended April 30, 2013 were $268,019 an increase of $109,722 over amounts for six months ended April 30, 2012 which were $158,297. The increase reflects an increase in legal fee expenses as a result of the complaints filed on Vinfluence and Mr. Pamani.

Other Selling, General and Administrative Expenses for the six months ended April 30, 2013 were $345,105, a decrease of $16,898 over amounts for six months ended April 30, 2012 which were $362,003. The decrease reflects primarily additional board of directors fees of $65,300 in 2013 offset by an decrease in most categories of expenses as the Company has scaled back those costs to accommodate the increase in selling expenses.

Other Income and Expense for the six months ended April 30, 2013 were $(84,858), a 431% decrease of $110,465 over amounts for six months ended April 30, 2012 which were $25,607. The decrease primarily reflects a reduction of costs incurred during for 2013 relating to a credit to consulting expense of $238,750 received pursuant to the settlement with Vinfluence. The credit provided was a reimbursement of bonus compensation paid to Dr. Andy Kielbania for the year ended October 2011. For 2013, the Company recorded non-cash amortization of debt discount of $(212,361) and non-cash charge for change in Fair Value of Derivative Liability of $124,606. For 2012 certain promissory notes were settled by Vinfluence carried interest expense reductions which in turn led to reversals of previously recorded interest expense.

Net Loss: We experienced a net loss from operations before consideration of our Non-Controlling interest of $1,305,583 for the six months ended April 30, 2013. The discussion of operating expenses identifies the elements of the net loss. For the same period in 2012, our net loss was $1,280,440. We anticipate we will experience a net loss in fiscal 2013 as we continue to pursue regulatory approvals and further identify markets for the sale and distribution of our products.

Analysis of Impairment

In conjunction with our 2012 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 $9,958,222.

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, 2017. 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 $41,431,530, which exceeds the carrying value of our Intellectual Property of $9,958,222.

Our initial commercialization strategy, which was utilized as a basis for our 2012 impairment testing, contained a forecast that called for material sales to begin to occur in April of 2013. However, primarily due to the lead time involved with the following activities: 1) sales force orientation and training; 2) production of selling materials and 3) a relatively long sales cycle that includes product trial testing, we have lowered our 2013 revenue forecast to $1,120,000. We forecast to make up the difference between our original forecast and our current forecast in calendar years 2014 and 2015, and the effect of our revision is not anticipated to have a significant impact on our valuation.

Liquidity and Capital Resources

We had $~~637~~4,519 of cash at ~~January~~April 3130, 2013. Cash used in operations for the ~~three~~six months ended ~~January~~April 3130, 2013 was $~~308~~517,~~039~~657. 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, travel and laboratory costs.

~~For the three months Ended January 31, 2013, we raised $308,000 of cash from the issuance of convertible debentures.~~ 23

WeFor are not currently generating significant revenues and rely on raising new capital to fund our ongoing operations and development of our strategic business objectives. We have been able to use proceeds from the ~~sale~~six ofmonths ~~our~~Ended ~~shares~~April of30, ~~common stock to fund a substantial balance of our operating costs. On December 12~~2013, ~~2012~~ we ~~issued~~raised ~~a convertible promissory note to JMJ financial in the amount of~~ $~~250~~521,~~000~~500 of ~~which~~cash ~~we received an initial $60,000 payment. We expect to receive similar payments~~ from ~~JMJ under~~ the ~~note~~issuance atof ~~various~~convertible ~~intervals during the calendar year 2013~~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. 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. On December 12, 2012 we issued a convertible promissory note to JMJ financial in the amount of $250,000 of which we received an initial $110,000 in payments. We expect to receive additional payments from JMJ under the note at various intervals during the calendar year 2013.

On October 18, 2012, the Board of Directors of the Company approved a stock compensation plan for professionals and consultants. The Plan was approved by the Board, on November 7, 2012 and the Company filed with the Securities and Exchange Commission a registration statement on Form S-8 for issuance of up to ten (10) million shares pursuant to the stock compensation plan. We plan to fund a portion of our expenses by issuing shares of our S-8 common stock to consultants and professionals.

On December 11, 2012, the Company entered into an Equity Purchase Agreement (“Equity Line of Credit”) with Southridge Partners II, LP for an equity line of up to $10,000,000. Pursuant to the Equity Purchase Agreement, the Company has the right, at its discretion, to sell to Southridge up to $10 million of its common stock from time to time over a 36-month period. The Company will have the right, but is not obligated, to sell stock to Southridge depending on certain conditions as set forth in the Agreement. We ~~plan~~are tocurrently ~~submit~~responding ato ~~registration~~questions ~~statement~~from to the SEC ~~and~~regarding weour ~~plan~~registration tostatement. We ~~begin~~need ~~utilizing~~to ~~the~~have ~~Equity~~approval ~~Line~~from ofSEC ~~Credit~~before ~~upon~~we ~~approval~~can bybegin using the ~~SEC~~Equity Line.

The Company believes that we will be able to generate significant sales by the fourth quarter of 2013 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 based on our current plans, however that our funds will be sufficient to meet our anticipated needs through our fiscal year 2013, and we may need to raise additional capital during fiscal 2013 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.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures

WeAs ~~previously~~of ~~reported~~the ~~that~~end ~~our~~of ~~disclosure~~the ~~controls~~period ~~and~~covered ~~procedures~~by ~~were~~this ~~not~~report, ~~effective~~we asconducted ofan ~~October 31~~evaluation, ~~2011~~under the supervision and ~~through~~with the ~~quarter~~participation ~~ended~~of ~~July~~our ~~31,~~chief ~~2012. During~~executive ~~the~~officer ~~year~~and ~~ended~~chief ~~October~~financial ~~31,~~officer ~~2012~~of ~~the~~our ~~Company~~disclosure ~~has~~controls ~~made~~and ~~extensive~~procedures ~~changes~~(as todefined ~~both~~in ~~its~~Rule ~~board~~13a-15(e) ofand ~~directors~~Rule ~~and~~15d-15(e) ~~management~~of ~~team~~the Exchange Act). On ~~July~~Based 4,upon ~~2012~~this ~~the~~evaluation, ~~principal~~our chief executive officer and chief financial officer ~~issued~~concluded athat ~~set~~our ofdisclosure ~~policies~~controls and procedures towere ~~establish~~effective ato ~~culture~~ensure ofthat ~~adherence~~information required to anbe ~~effective~~disclosed ~~system~~by ofus ~~internal~~in ~~controls. Among~~the reports that we file or submit under the ~~many~~Exchange ~~upgrades~~Act is: (1) accumulated and communicated to our management, anincluding ~~audit~~our ~~committee~~chief ~~was~~executive ~~formed~~officer and ~~formal~~chief ~~budgetary~~financial officer, as appropriate to allow timely decisions regarding required disclosure; and ~~corporate~~(2) ~~planning~~recorded, ~~process~~processed, ~~were~~summarized ~~installed~~and reported, within the time periods specified in the SEC's rules and forms.

Evaluation of Disclosure Controls and Procedures. Our management, with the participation of our CEO and our principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, our CEO and our principal financial officer concluded that our disclosure controls and procedures as of the end of the period covered by this report were effective such that material information required to be disclosed is made known to management and others, as appropriate, to allow timely decision regarding required disclosure and that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including our CEO and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

The conclusion that our internal controls of over assets and liabilities and financial disclosure were rendered based on the satisfactory results of the following evaluations:

1. Oversight and the results thereof by the principal executive officer and principal financial officer of our assets and incurrence of liabilities. The oversight is performed on a weekly basis with regularly scheduled meetings with management to discuss among other things financial needs and incurrence of liabilities. Throughout the course of the weekly planning sessions, no item or area occurred that would lead to an adjustment or modification of the control environment;

2. Review of periodic financial statements including those filed with the SEC (prior to filing);

3. Review of cash position, cash transactions and accounts payable. The review indicated that materially the Company did not enter into any agreements or approved of transactions that were contrary or otherwise outside of policies and procedures established on July 4, 2012;

4. The principal executive and financial officer held discussions with our outside counsel firms and gathered their conclusions regarding our operations and financial reporting. None of our outside counselors reported material exceptions to our financial reporting or controls thereof.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives.

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 three months to which this Quarterly Report on Form 10-Q relates that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

~~None~~On November 26, 2012, the Company filed a complaint against Raj Pamani, a shareholder and former director of the Company in the Superior Court of New Jersey Essex County: Chancery Division (“the Complaint”). Included also as defendants were several entities to which in 2009 the Company awarded approximately 13 million shares of its common stock in consideration for consulting contracts which the Company has concluded were fraudulently induced and were later deemed to be worthless (the “Defendant Entities”). By causing the Company to enter into the contracts to its detriment in favor of Mr. Pamani’s and the Defendant Entities self-enrichment, the Company seeks to recover damages incurred from the actions of Mr. Pamani and the Defendant Entities as a result of self-dealing, breach of fiduciary duty, breach of loyalty and fraud. As this matter unfolds, the Company may pursue and recover damages incurred from other parties that come to its attention for their participation.

ITEM 1A. RISK FACTORS

Not Applicable.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

On ~~December~~April 2625, ~~2012,~~2013 the Company issued 1787,~~230,769~~500 shares of its ~~S-8~~restricted ~~registered~~ common stock to employees ~~for~~as bonus compensation of $9878,~~462~~750 for the 2012 calendar year. The shares were valued and issued at $.0810 ~~per share~~ based on the ~~preceding~~closing ~~ten (10) day average of the prevailing~~ quotation ~~prices~~price for the Company's stock on December 31, 2012.

20On February 27, 2013, the Company issued an aggregate of 1,075,375 shares of its restricted common stock to members of its Board of Directors as compensation for their participation the Board, and recorded $78,500 of expenses of board of directors’ fees. The shares were valued and issued at $.07 per share based on the preceding ten (10) day average of the prevailing quotation prices for the Company's stock.

On ~~December~~February 2627, ~~2012~~2013, the Company issued ~~145~~121,~~678~~951 shares of its ~~S-8~~restricted ~~registered~~ common stock to the WahlRich Group, a marketing consultant ~~for~~firm, ~~his efforts offering our products~~ for ~~sale~~fees toassociated ~~potential~~with ~~customers~~their ~~and~~efforts ~~recorded~~of ~~travel~~package ~~and~~design ~~entertainment~~for ~~expenses~~our ~~of $10,343~~products. The shares were valued and issued at $.08 per share based on the preceding ten (10) day average of the prevailing quotation prices for the Company's stock.

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.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

On June 20, 2013 the Company received a notice of default from Asher for the outstanding balance due on the Note of $42,500 plus accrued default interest for failure to comply with the filing deadline of this Form 10-Q. The Company is currently in discussions with Asher to cure the event of default. However the Company cannot provide reasonable assurance that they will be successful in reaching a favorable outcome.

ITEM 4.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

None.

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS

The following exhibits are filed with this Quarterly Report on Form 10-Q:

Exhibit No.		Description
3.1		Articles of Incorporation of BioNeutral Group, Inc. (1)
3.2		Amendment to Articles of Incorporation of BioNeutral Group, Inc. (2)
3.3		Bylaws of BioNeutral Group, Inc. (formerly known as Moonshine Creations, Inc.) (1)
10.41		Global release, cancellation of Preferred Stock Purchase Agreement, Preferred Stock Drawdown Agreement, The Agreement to Assign and Settle Notes and Agreement to License Invention by and Between the Company.(3)
10.42		Note Satisfaction and Exchange Agreement between the Company and Herb Kozlov
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*

________________________

(1) 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.

(2) 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.

(3) Incorporated by reference to BioNeutral Group, Inc.'s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 18, 2013.

* Filed herewith.

2126

SIGNATURE

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.
March 15, 2013	By:	/s/ Mark Lowenthal
June 24, 2013	By:	/s/ Mark Lowenthal
		Mark Lowenthal
		Chief Executive Officer and President (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)
		Chief Executive Officer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)

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