10-Q

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 quarterly period ended April 30, 2012

OR

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

For the transition period from _______ to _______.

Commission File No. 333-149235

BIONEUTRAL GROUP, INC.

(Exact name of registrant as specified in its charter)

Nevada	26-0745273
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
55 Madison Avenue, Suite 400,  Morristown, New Jersey	07960
(Address of principal executive offices)	(Zip Code)

(973) 285-3373

 (Registrant’s telephone number, including area code)

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.   x    Yes       o No

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

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

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

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

The number of shares of the registrant's common stock, par value $0.00001 per share, outstanding as of June 1, 2012 was 122,856,184 shares. 

BIONEUTRAL GROUP, INC.

TABLE OF CONTENTS

		Page
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements.	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	15
Item 4.	Controls and Procedures.	21
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings.	23
Item 1A.	Risk Factors.	23
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	23
Item 3.	Defaults Upon Senior Securities.	23
Item 4.	Mine Safety Disclosures.	23
Item 5.	Other Information.	23
Item 6.	Exhibits.	23
Signature		24

ITEM 1.  FINANCIAL STATEMENTS

BIONEUTRAL GROUP, INC

CONDENSED CONSOLIDATED BALANCE SHEETS

ASSETS
	April 30, 2012			October 31, 2011
	Unaudited			Audited
Current Assets
Cash	$	159,499		$	3,215
Accounts Receivable - Net		345			345
Inventory		5,057			4,418
Prepaid Expenses-Related Parties		-			5,431
		164,901			13,409
Total Current Assets
Property & Equipment - Net		675			781
Intellectual Property - Net		10,312,584			10,699,446
Other Assets		14,496			2,500
TOTAL ASSETS	$	10,492,656		$	10,716,136
LIABILITIES AND STOCHOLDERS’ EQUITY
Current Liabilities
Current portion of Notes Payable	$	-		$	102,500
Accounts Payable and Accrued Expense		703,786			1,657,947
Accrued Compensation		143,110			1,105,610
Related Party Payables		65,418			77,575
Current Liabilities		912,314			2,943,632
Long Term Liabilities
Convertible Loans From Unrelated Party		-			210,241
Convertible Loans From Stockholders		812,917			1,855,593
Total Long Term Liabilities		812,917			2,065,834
TOTAL LIABILITIES		1,725,231			5,009,466
Commitments & 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 and 0 issued and outstanding at
April 30, 2012 and October 31, 2011, respectively.
Liquidation Preference $534,910 and $0 at April 30, 2012		54			-
and October 31, 2011, respectively.
Convertible Preferred Stock, Series C, $.001 par value; 100,000
shares authorized, 76,080 and 0 issued and outstanding at
April 30, 2012 and October 31, 2011, respectively.
Liquidation Preference $760,800 and $0 at April 30, 2012		76			-
and October 31, 2011, respectively.
Convertible Preferred Stock, Series D, $.001 par value; 231,100
shares authorized, 136,050 issued and outstanding at
April 30, 2012 and October 31, 2011, respectively.
Liquidation Preference $1,360,500 and $0 at April 30, 2012		136			-
and October 31, 2011, respectively.
Convertible Preferred Stock, Series E, $.001 par value; 140,000
shares authorized, 0 issued and 0 outstanding at
April 30, 2012 and October 31, 2011, respectively.
Liquidation Preference $0 and $0 at April 30, 2012		-			-
and October 31, 2011, respectively.
Common Stock, $.00001 Par Value; 200,000,000 shares authorized,		1,229			795
122,856,184 and 79,579,292 issued and outstanding at April 30, 2012
and October 31, 2011, respectively.
Additional Paid-in Capital		63,990,916			57,958,512
Due from Vinfluence		(1,526,673	)		-
Shares issued to Board of Directors		(47,200	)		-
Accumulated Deficit		(53,861,660	)		(52,581,220	)
Total BioNeutral Group, Inc. Stockholders’ Equity		8,556,878			5,378,087
Non controlling Interest		210,488			328,524
Preferred Stock, $.001 par value; 5,000,000 shares authorized, with 800,000 designated as follows
Convertible Preferred Stock, Series A, $.001 par value; 800,000 shares authorized, 59,493 and 59,493 shares issued and outstanding at April 30, 2011 and October 31, 2010 respectively.
Liquidation Preference $1,072,361 at April 30, 2011 and $1,509,810 at October 31, 2010 included in Non controlling interest		59			59
Total Non controlling Interest		210,547			328,583
Total Equity		8,767,425			5,706,670
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	10,492,656		$	10,716,136

See Notes to Condensed Consolidated Financial Statements

1

BIONEUTRAL GROUP, INC

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

	Three Months Ended April 30, (Unaudited)						Six Months Ended April 30, (Unaudited)
	2012			2011			2012			2011
Revenues	$	338		$	16,612		$	1,502		$	17,926
Cost of Revenues		59			12,526			203			13,167
Gross Profit		279			4,086			1,299			4,759
Operating Expenses
Depreciation and Amortization		177,234			176,374			354,468			352,452
Salaries		97,046			-			187,708			-
Consulting Expense		68,000			108,218			311,692			189,805
Legal and Accounting Expenses		47,287			182,566			158,297			269,927
Other Selling, General and Administrative Expenses		150,248			503,184			362,003			675,406
Total Operating Expenses		539,815			970,342			1,374,168			1,487,590
Loss from Operations		(539,536	)		(966,256	)		(1,372,869	)		(1,482,831	)
Interest Expense		18,582			(37,415	)		(25,607	)		(71,654	)
Net Loss Before Income Taxes		(520,954	)		(1,003,671	)		(1,398,476	)		(1,554,485	)
Provision for Income Taxes		-			-			-			-
Net Loss		(520,954	)		(1,003,671	)		(1,398,476	)		(1,554,485	)
Loss Attributable to Non-controlling Interest		43,972			74,026			118,036			114,566
Net Loss Attributable to BioNeutral Group, Inc.	$	(476,982	)	$	(929,645	)	$	(1,280,440	)	$	(1,439,919	)
Net Loss Per Common Share - Basic and Diluted	$	(0.01	)	$	(0.01	)	$	(0.01	)	$	(0.02	)
Weighted Average Number of Common Shares outstanding
Basic and Diluted Loss per Share		114,781,944			76,296,134			102,496,600			76,393,450

See Notes to Condensed Consolidated Financial Statements

2

BIONEUTRAL GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

	For the Six Months Ended April 30,
	2012			2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss	$	(1,398,476	)	$	(1,554,485	)
Adjustments to Reconcile Net Loss To Net Cash Used in Operating Activities
Stock Based Compensation		5,431			83,336
Depreciation and Amortization		354,468			352,452
Issuance of Stock related to professional services		435,800			398,322
Interest added to promissory notes		38,076			63,290
Changes in Operating Assets and Liabilities
Accounts receivable		-			(16,620	)
Inventory		(638	)		-
Prepaid Expenses		-			5,236
Other Assets		(11,996	)		-
Accounts Payable and Accrued Expenses		(301,255	)		143,305
Related Party Payables		34,874			5,250
NET CASH USED IN OPERATING ACTIVITIES		(843,716	)		(519,914	)
CASH FLOWS FROM FINANCING ACTIVITIES
Net Proceeds From Issuance of Preferred and Common Stock		1,000,000			317,500
Proceeds from Exchangeable Promissory Notes		-			225,000
NET CASH PROVIDED BY FINANCING ACTIVITIES		1,000,000			542,500
NET INCREASE IN CASH		156,284			22,586
CASH, BEGINNING OF PERIOD		3,215			59,395
CASH, END OF PERIOD	$	159,499		$	81,981
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	$	(1,288,592	)	$	-
Non-cash settlements of Accounts Payable and Accrued Expenses	$	(1,629,938	)	$	-
Non-cash Intellectual Property Cost (Accrual Reversal) Additions	$	(32,500	)	$	52,962
Non-cash conversion of promissory note to common stock		(104,900	)		-
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

3

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 April 30, 2012, the Company had negative working capital of $747,413. For the six months ended April 30, 2012 the Company incurred an operating loss of $1,398,476 and since inception has an accumulated deficit of $53,861,660.  For the same period in 2011, the Company’s net loss was $1,554,485.  The Company anticipates it will experience a net loss in fiscal 2012 as it continues to pursue markets for the sale and distribution of its products and development of access to global markets.

The Company had $159,499 of cash at April 30, 2012.  Cash used by operations for the six months ended April 30, 2012 was $843,716. 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 six months ended April 30, 2012, the Company raised $1,000,000 of cash from the issuance of its Series C Preferred Stock to fund operations.

While the Company has been able to use proceeds from the sale of its shares of common and preferred stock 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, 2013 and it will need to raise additional capital during fiscal 2012 to fund the full costs associated with its growth and development. The Company believes that it will be able to generate sales by the fourth three months of 2012 and that it will require approximately $2,000,000 in additional capital in order 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 costs in order to conserve cash.

4

These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Accordingly, the accompanying unaudited condensed 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 unaudited condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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

1.   Preferred Stock Purchase Agreement - This agreement provides that Vinfluence will purchase 100,000 shares of Series C Convertible Preferred Stock from the Company for an aggregate purchase price of $1,000,000. Vinfluence has fulfilled this obligation.

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

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

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

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

In connection with the Vinfluence agreements noted above, on November 7, 2011, the Company issued 213,491 shares of Series B Preferred Stock to Vinfluence in exchange for their purchase and assumption of $2,134,914 of accounts payable and certain convertible notes payable.  In addition, on November 7, 2011, the Company issued 231,029 shares of Series D Preferred Stock to Vinfluence in exchange for their purchase and assumption of $2,310,289 of certain accounts payable, accrued compensation and convertible notes payable.  At April 30, 2012, the Company has received confirmed settlements and releases from debt holders of debt associated with Series B Preferred Stock and Series D Preferred Stock of $1,384,876 and $1,533,654, respectively.  Currently, the debt remaining to be settled and released associated with the Series B Preferred Stock was $750,038, and $776,635 associated with the Series D Preferred Stock or an aggregate debt to be settled and released by debt holders of $1,526,673.

5

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 April 30, 2012 and the results of operations for the six months ended April 30, 2012 and 2011 and cash flows for the six months ended April 30, 2012 and 2011 not misleading. The unaudited condensed consolidated financial statements for the quarterly periods ended April 30, 2012, and 2011 should be read in conjunction with the audited financial statements for the years ended October 31, 2011 and 2010 as contained in the Form 10-K filed on February10, 2012.

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 and $49,716 at April 30, 2012 and October 31 2011, respectively.

Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. For financial statement purposes, investments in money market funds are considered a cash equivalent and are included in cash and cash equivalents. The Company maintains it cash and cash equivalents at high credit quality institutions, with balances, at times, in excess of federally insured limits. As of April 30, 2012, 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 April 30, 2012 and October 31 2011, the Company did not hold any cash equivalents.

6

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)

7

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 April 30, 2012 and 2011 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 April 30, 2012 and April 30, 2011.

	4/30/2012		4/30/2011
Convertible Series A Preferred Stock – Non Controlling Interest		594,930		594,930
Convertible Series B Preferred Stock		6,686,375		-
Convertible Series C Preferred Stock		9,510,000		-
Convertible Series D Preferred Stock		17,006,250		-
Convertible Loans		7,102,795		4,866,376
		40,900,350		5,461,306

8

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

Note 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 – Related Parties was $0 and $5,431 at April 30, 2012 and October 31, 2011, respectively.  At October 31, 2011, $5,431 represents share based payments to a company controlled by a former director for consulting services to be provided by the company controlled by said director. The share based payment is being amortized over a three year period, which commenced in January 2009.  For the three months ended April 30, 2012 and April 30, 2011, the Company recognized expense of $0, and $41,668, respectively, related to this share based payments which is recorded in “Consulting Expenses.”  For the six months ended April 30, 2012 and 2011, the Company recognized expense of $5,431, and $83,336, respectively, related to this share based payments which is recorded in “Consulting Expenses.”  

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:

	4/30/2012			10/31/2011
Gross Carrying Amount	$	15,256,688		$	15,289,188
Accumulated Amortization		(4,944,104	)		(4,589,742	)
Net Carrying Amount	$	10,312,584		$	10,699,446

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, 2012 and 2010 was $177,181 and $176,374, respectively, and for the six months ended April 30, 2012 and 2011 was $354,362 and $352,452,respectively.

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Estimated amortization expense is as follows

10/31/2012 (Remaining)	354,362
10/31/2013	708,723
10/31/2014	708,723
10/31/2015	708,723
10/31/2016	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.

On February 28, 2011, the Company received approval and registration from the Environmental Protection Agency (“EPA”) in response to the Company's regulatory application for its Ygiene®206 formulation.

Note 6 - Related Party Payables

During the six months ended April 30, 2012 and 2011, 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.  For the three months ended April 30, 2011 and 2010, the Company recorded interest of $518 and $1,036, respectively.

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 2010 and 2009 were fully vested upon grant of the shares or no later than the respective year end dates.

Employees and Board Members

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

On November 21, 2011, the Company issued 500,000 shares of its restricted common stock to Frank Battafarano, as compensation to serve as the Company’s Chairman of the Board of Directors.   The shares are subject to a repurchase option by the Company at a repurchase price of $.001 per share in the event Mr. Battafarano ceases to serve as Chairman for any reason.   However, the repurchase option shall expire at the rate of 40,000 shares per month on the first day of each month so long as Mr. Battafarano remains engaged as Chairman.   The shares were valued at $.08 per share in connection with a series of contemporaneous capital transactions entered into between the Company and Vinfluence Pty Ltd (“Vinfluence”).   Based on the vesting schedule of 40,000 shares per month, the Company recognized Directors Fee expense of $3,200 and $0 for the three months ended April 30, 2012, respectively, and $12,800 and $0 for the six months ended April 30, 2012 and 2011, respectively.   The cost of shares   not vested as of have been included as a contra-equity account, “Shares issued to Board of Directors” on the Company’s balance sheet at April 30, 2012.   On February 29, 2012, Mr. Frank Battafarano resigned from his position as a member of the Board of Directors of the Company, which resignation became effective immediately. Mr. Battafarano’s resignation is not the result of any disagreement with the Company.   The unvested shares are to be returned to the Company.

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On November 21, 2011 the Company issued 500,000 shares of its restricted stock to Ronald Del Mauro as compensation to serve as a member of the Company’s Board of Directors. Pursuant to the terms of the agreement, if Mr. Del Mauro voluntarily resigns from service on the Board of Directors during the first year after his election, on November 1, 2011, Mr. Del Mauro agreed to return 41,666 shares of the Company’s restricted common stock for each month that his service on the Board of Directors is reduced less than one year.   The shares were valued at $.08 per share in connection with a series of contemporaneous capital transactions entered into between the Company and Vinfluence.   Based on the vesting schedule of 41,666 shares per month, the Company recognized Directors Fee expense of $10,000 and $0 for the three months ended April 30, 2012, respectively, and $20,000 and $0 for the six months ended April 30, 2012 and 2011, respectively.   The cost of shares   not vested as of have been included as a contra-equity account, “Shares issued to Board of Directors” on the Company’s balance sheet at April 30, 2012.    On April 20, 2012, Mr. Del Mauro resigned from his position as a member of the Board of Directors of the Company, which resignation became effective immediately. Mr. Del Mauro’s resignation is not the result of any disagreement with the Company.   The unvested shares are to be returned to the Company.

On January 14, 2011 the Company issued an annual grant of 85,000 restricted shares of the Company's common stock as compensation to Wayne Stratton, a non-management member of the Board of Directors for services.  The fair market value of the grant issued is $34,000 based on the closing share price of the Company’s stock as of January 14, 2011, the date of his appointment.  Payment will be made in restricted shares of the Company’s common stock, which have not been issued as of April 30, 2012.  The Company recognized the expense of $0 and $1,588 for Directors’ Fees for the six months ended April 30, 2012 and 2011, respectively, and recorded as a liability to issue common shares.  Effective October 31, 2011 Mr. Stratton resigned his position as a member of the Company’s Board of Directors without disagreement.  The Company’s current plan is to issue these shares.

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

Common Stock

During the six months ended April 30, 2012, the Company converted 160,000 Series B Preferred Stock to 20,000,000 shares of the Company’s common stock, 23,919 shares of Series C Preferred Stock to 2,989,875 shares of the Company’s common stock and 94,978 shares of Series D Preferred Stock to 11,872,250 shares of the Company’s common stock. 

During the three months ended April 30, 2012, the Company issued 2,384,967 shares of common stock to convert short-term convertible promissory notes in the aggregate of $104,900.

On December 6, 2011, the Company issued 30,000 shares of common stock to a consultant for accounting services performed of $5,000 recorded to Accounting Expense for the six months ended April 30, 2012. The shares for services were valued and issued at the prevailing quotation prices for the Company's stock at the time of issuance.

On November 21, 2011, the Company issued 2,500,000 shares of common stock to Piccadilly Consulting Pty. Ltd (“Piccadilly”) and recorded consulting expenses of $200,000 for the six months ended April 30, 2012 pursuant to an agreement entered into with Piccadilly to assist the Company in pursuing strategic relationships and commercial strategies for the Company’s products.  The shares were valued at $.08 per share reflective of the value for the Company’s common stock established by the Vinfluence transactions.

On November 21, 2011, the Company issued 2,500,000 shares of the Company’s common stock to Mr. Andrew Kielbania for services rendered in the scientific advancement of the Company’s products of $200,000 which was recorded to Scientific Consulting Expenses in Fiscal 2011. The shares were valued at $.08 in connection with the valuation established by the Vinfluence transactions. 

On November 21, 2011, the Company issued 1,000,000 shares of the Company’s common stock to members of the Company’s Board of Directors that were appointed effective for November 1, 2011.   Pursuant to their agreements, the shares vest on a monthly basis.  For the three months ended April 30, 2012, the Company recorded $13,200 of Board of Directors fees expense in connection to the issuance of these shares.  For the six months ended April 30, 2012, the Company recorded $32,800 of Board of Directors Fees expense in connection to the issuance of these shares.   The shares were valued at $.08 in connection with the valuation established by the Vinfluence transactions.

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Preferred Stock

On October 31, 2011, the Board of Directors of the Company approved the designation of the following series of Preferred Stock:

1.  Two hundred thirteen thousand four hundred ninety one (213,491) shares of Series B Preferred Stock. Each share of Series B Preferred Stock is convertible into 125 shares of the Company's common stock.

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

3.  Two hundred thirty one thousand and twenty nine (231,029) shares of Series D Preferred Stock. Each share of Series D Preferred Stock is convertible into 125 shares of the Company's common stock; and

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

On November 7, 2011, the Company issued 213,491 shares of Series B Preferred Stock to Vinfluence in exchange for their purchase and assumption of $2,134,914 of accounts payable and certain convertible notes payable. In addition, on November 7, 2011, the Company issued 231,029 shares of Series D Preferred Stock to Vinfluence in exchange for their purchase and assumption of $2,310,289 of certain accounts payable, accrued compensation and convertible notes payable. At April 30, 2012, the Company has received confirmed settlements and releases from debt holders of debt associated with Series B Preferred Stock and Series D Preferred Stock of $1,384,876 and $1,533,654, respectively. At April 30, 2012 debt remaining to be settled and released associated with the Series B Preferred Stock was $750,038, and $776,635 associated with the Series D Preferred Stock. At April 30, 2012, Vinfluence has not contacted all creditors to arrange for releases of the debts. The Company is currently engaged in discussions with Vinfluence to determine their future plans to settle all debts pursuant to the Series B and D Preferred Stock. At April 30, 2012, in aggregate, the total Series B and D debt remaining to be settled and released by debt holders was $1,526,673 and has been recorded as a contra-shareholders’ equity account on the Company’s balance sheet as “Due from Vinfluence.” The amount has been recorded as a contra-equity account due to the fact that the full amounts of the shares have been issued to Vinfluence in advance of the debt settlements of which $1,526,673 remain to be settled.

During the six months ended April 30, 2012, the Company issued 100,000 shares of the Company’s Series C Preferred Stock to Vinfluence for gross proceeds of $1,000,000.   The shares were valued at $.08 per share pursuant to the value established by Vinfluence and consistent with the terms of the Preferred Stock Purchase Agreement between Vinfluence and the Company.

Non-Controlling Interest

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

BioLabs is authorized to issue 5,000,000 shares of preferred stock, $0.001 par value, of which 800,000 shares are designated as Convertible Series A Preferred Stock.  The BioLabs’ Certificate of Incorporation authorizes the Board of Directors to determine the preferences, limitations and relative rights of any class or series of preferred stock prior to issuance.  Each such class or series must be given distinguishable designated rights prior to issuance. As of April 30, 2012 and October 31, 2011, 59,493 and 59,493 shares of the Company’s Series A Preferred Stock were issued and outstanding, respectively.

During the six months ended April 30, 2012, no shares of Series A Preferred Stock were converted to shares of common stock.  During the six months ended April 30,  2011, various holders of Series A Preferred Stock exchanged 6,934 of Series A Preferred shares into 69,340 shares of common stock at the rate of 10 common shares to one preferred share, in accordance with the term of our preferred share agreement, dated December 12, 2006.

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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 six months ended April 30, 2012	$	(118,036	)
Non-Controlling Interest at April 30, 2012	$	210,547

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 April 30, 2012 and October 31, 2011.

Note 9 - Related Party Transactions

Related Party Transactions during the Six Months Ended April 30, 2012

During the six months ended April 30, 2012, the Company issued 100,000 shares of the Company’s Series C Preferred Stock for gross proceeds of $1,000,000 to Vinfluence.

During the six months ended April 30, 2012, Vinfluence provided the Company with confirmations of a settlements and releases of an aggregate of $1,288,592 of convertible notes.

Note 10 – Commitments & Contingencies

Litigation

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 requested that the Company deliver certain documents to them.  The Company has fully cooperated with the SEC with respect to its investigation.

The Company has incurred, and may incur in the future, significant costs in responding to the 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.

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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.

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 11 - Subsequent Events:

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

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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.

• 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.

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Recent Developments

On April 24, 2012, Mr. Mark Lowenthal was appointed as director of the Company.  Mr. Lowenthal currently serves as a member of the Operation Executive Board of AUA Gotham Equity Partners, a position he has held since 2010. Prior to such, Mr. Lowenthal served as the President and Chief Executive Officer of European Soaps, LLC from 2008 to 2009, where he was responsible for developing and implementing the company's business plan.  While at European Soaps, LLC, he co-lead a private equity group in the buy-out of European Soaps Ltd., the U.S.'s largest distributor of luxury soap and personal care products to the gift industry.  He also previously served as President of Revlon Europe, Asia and the Middle East from 1995 to 1999 where he was responsible for planning and implementing a major restructuring of the company's business, including shifting from an individual country management approach to an integrated global approach. In addition, Mr. Lowenthal previously served as the President and General Manager of Almay, Inc. and as the Vice-President of Marketing of International Playtex, Inc.Mr. Lowenthal received his BA from the University of Buffalo where he majored in History and received an MBA from New York University.

On April 20, 2012, Mr. Ronald Del Mauro resigned from his position as a member of the Board of Directors of the Company, which resignation became effective immediately. Mr. Del Mauro’s resignation is not the result of any disagreement with the Company.

On April 4, 2012 the Company announced positive results of a series of tests performed by Dr. Philip Tierno with respect to the use of Ygiene 206 and the sterilization of surgical instruments. Surgical instruments and surgical material were contaminated with difficult to kill organisms at levels up to 10,000x. This presented significant sterilizing challenges, including challenges with bacterial spores. Following a 20-minute soak in Ygiene 206, the instruments were sterile. "I contaminated the surgical instruments and other material with very high levels of dangerous organisms (10/10th), letting the contaminants bind to the instruments for two hours. Without removal of any of the microorganisms, the instruments were placed in a tray for a 20 minute soak with direct contact to Ygiene 206. After which time I was able to determine that the instruments were indeed, sterile. Along with its compatibility with surgical stainless steel and other materials and surfaces, these tests show that Ygiene 206 would be an excellent pre-soak for contaminated surgical instruments," said Dr. Philip Tierno.  Dr. Andy Kielbania, ICEO of BioNeutral Group advised that, "A clinical test at Barnabas Health commenced April 3rd. We expect results in 45 days. A confirmed positive result would help position Ygiene 206 in its first significant commercial application." Nationally, there are over 40 million surgical cases a year resulting in highly contaminated surgical instruments.  The clinical tests are currently proceeding and the Company expects to have published results by August 1, 2012.

On February 29, 2012, Mr. Frank Battafarano resigned from his position as a member of the Board of Directors of the Company, which resignation became effective immediately. Mr. Battafarano’s resignation is not the result of any disagreement with the Company.

On February 28, 2012, the Company into an Engagement Agreement (the "Agreement") with DLA Piper US LLP ("DLA") for the provision by DLA of government contracting services to the Company related to its sporicide and sterilent, Ygiene™. In particular, the Agreement provides that DLA will provide the Company with (i) government contact counseling and assistance in obtaining a General Services Administration (GSA) Multiple Award Schedule contract, as well assistance in obtaining any other prime contract or subcontract with a federal, state or local government agency or international organization; (ii) outreach to and education of select government senior officials, members of Congress, health networks and other relevant organizations about Ygiene™; and (iii) strategic advice regarding public policy matters related to Ygiene™. Under the Agreement, Senator Tom Daschle, DLA's Senior Policy Advisor, will oversee the management of the services to be provided by DLA, which will be provided by other attorneys and professionals of DLA. Such representation does not include representation of the Company's subsidiaries, affiliates, stockholder, officers or directors.In consideration for the services to be provided by DLA, the Company agreed to pay DLA (i) a monthly retainer in the amount of $22,500 from March 1, 2012 to September 1, 2012; (ii) thereafter, and unless otherwise mutually agreed upon, a retainer of $40,000 per month; and (iii) an annual fee of 12.5% of all gross sales of Ygiene™ (or its successor) products that DLA was a factor in securing.  In addition, the Company agreed to pay for all travel and other associated costs incurred by DLA, as approved by the Company's Chief Executive Officer.  None of the fees payable to DLA shall be derived from federal appropriations.

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

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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) 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, 2012 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.

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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 April 30, 2012 and for the three months ended April 30, 2011.

Revenues:  During the three months ended April 30, 2012, the Company generated revenues of $338 as compared to revenues of $16,612 for three months ended April 30,  2011.  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 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 Expenses:   Operating expenses were $539,815 for the three months ended April 30, 2012 and $970,342 for the three months ended April 30, 2011, a 44% decrease of $430,527.  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.

Total legal and accounting expenses for the three months ended April 30, 2012 were $47,287 a decrease of $135,279 over amounts for three months ended April 30, 2011 which were $182,566, reflecting a decrease in legal fee expenses. Consulting fee expenses were $68,000 for the three months ended April 30, 2012, as compared to $108,218 for the three months ended April 30, 2011 for a 37% decrease of $40,218.  The decrease reflects lower costs relating to fewer marketing retainer agreements entered into in 2012.

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Depreciation & amortization increased to $177,234 for the three months ended April 30, 2012 from the $176,374 reported for the same three months in 2011, primarily as a result of the increased investment in our intellectual property.

Interest expense for the three months ended April 30, 2012 was $(18,582).  The amount is net of $35,818 of interest expense reductions related debt settlements obtained by Vinfluence.

Net Loss:  We experienced a net loss from operations before consideration of our Non-Controlling interest of $520,954 for the three months ended April 30, 2012. The discussion of operating expenses identifies the elements of the net loss.  For the same period in 2011, our net loss was $1,003,671.  We anticipate we will experience a net loss in fiscal 2012 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,  2012, the Company generated revenues of $1,502 as compared to revenues of $17,926 for six months ended April 30,  2011.   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 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 Expenses:   Operating expenses were $1,374,168 for the six months ended April 30, 2012 and $1,487,590 for the six months ended April 30, 2011, an 8% decrease of $113,422.  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.

Total legal and accounting expenses for the six months ended April 30, 2012 were $158,297 a decrease of $111,630 over amounts for the six months ended April 30, 2011 which were $269,927, reflecting a decrease in legal fees associated with the SEC matter and audit fee expenses associated with the financial audit for the year ended October 31, 2010. Consulting fee expenses were $311,692 for the six months ended April 30, 2012 as compared to $189,805 for the six months ended April 30, 2011 for a 64% increase of $121,887. The increase reflects the costs relating to additional marketing retainer agreements entered into in for the six months ended April 30, 2012.

Amortization & depreciation increased to $354,468 for the six months ended April 30, 2012 from the $352,452 reported for the same six months in 2011, as a result of the increased investment in our intellectual property.

Net Loss:  We experienced a net loss from operations before consideration of our Non-Controlling interest of $1,398,476 for the six months ended April 30, 2012. The discussion of operating expenses identifies the elements of the net loss.  For the same period in 2011, our net loss was $1,554,485.  We anticipate that we will experience a net loss in fiscal 2011 as we continue to pursue regulatory approvals for the sale and distribution of our products and development of access to global markets.

Analysis of Impairment

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

We computed the Intellectual Property value of using an undiscounted cash model. In our undiscounted cash flow analysis, we prepared a five year forecast of our expected earnings to derive an explicit stream of expected free cash flows through October 31, 2016. We developed our revenue and direct variable costs forecast based on a variety of factors including our current and anticipated sales pipeline, knowledge of our business and industry, general economic conditions in the marketplace and expectations of market opportunity with respect to the specific types of advertising services we provide. Our operating expenses are generally fixed and predictable; however, we increased our budgeted operating expenses by an amount that we believe is approximately equal to theoretical lease costs we would incur had our parent company not provided us with facilities that are not a component of operating costs in our goodwill reporting unit. After having determined the amount of our explicit year cash flows, we assumed that the Company would experience a long-term growth rate in free cash flows of 2% per annum thereafter. We then multiplied our cash flows by a marginal federal and state tax rate of 40% to derive our after-tax yearly cash flows. The range of Intellectual Property values we derived using the above amounted to $39,391,088, which exceeds the carrying value of our Intellectual Property of $10,669,446.  For the three and six months ended April 30, 2012 the Company has concluded that no circumstances arose that would cause an impairment to the carrying value of the Intellectual Property.

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Liquidity and Capital Resources

We had $159,499 of cash at April 30, 2012.  Cash used in operations for the three months ended April 30, 2012 was $843,716. 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.  

For the six months Ended April 30, 2012, we raised $1,000,000 of cash from the issuance of our Series C Preferred Stock to fund operations.  

We are not currently generating significant revenues and rely on raising new capital to fund our ongoing operations and development of our strategic business objectives. While we have been able to use proceeds from the sale of our shares of common stock to fund a substantial balance of our operating costs, the Company believes that it will be able to generate sales by the fourth three months of 2012 and that it will require approximately $2,000,000 in additional capital in order to achieve its goals. If we are able to execute our plan, the Company can begin to accumulate cash reserves.  There is no assurance however that our funds will be sufficient to meet our anticipated needs through our fiscal year 2012, and we may need to raise additional capital during fiscal 2012 to fund the full costs associated with our growth and development. There can be no assurances that we will be successful in raising additional capital on favorable terms if at all. If the Company is unable to secure additional capital, it may be required to curtail its business development initiatives, impair its intellectual property and take additional measures to reduce cost in order to conserve cash.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Accordingly, the accompanying unaudited condensed 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 unaudited condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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

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

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

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

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

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

In connection with the Vinfluence agreements noted above, on November 7, 2011, the Company issued 213,491 shares of Series B Preferred Stock to Vinfluence in exchange for their purchase and assumption of $2,134,914 of accounts payable and certain convertible notes payable.  In addition, on November 7, 2011, the Company issued 231,029 shares of Series D Preferred Stock to Vinfluence in exchange for their purchase and assumption of $2,310,289 of certain accounts payable, accrued compensation and convertible notes payable.  At April 30, 2012, the Company has received confirmed settlements and releases from debt holders of debt associated with Series B Preferred Stock and Series D Preferred Stock of $1,384,876 and $1,533,654, respectively.  Currently, the debt remaining to be settled and released associated with the Series B Preferred Stock was $750,038, and $776,634 associated with the Series D Preferred Stock.  At the current time, the total Series B and D debt remaining to be settled and released by debt holders was $1,526,673.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

ITEM 4.  CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Exchange Act, as of April 30, 2012.  Based on this evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures are not effective to ensure that all information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and is accumulated and communicated to our management, including our principal executive and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Our principal executive officer and principal financial officer reached a similar conclusion based on their evaluation of our disclosure controls and procedures as of October 31, 2011. Although our principal executive officer and principal financial officer believe that progress has been made with respect to our disclosure controls and procedures during the past year, the following areas have been identified as requiring further improvement:

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

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

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

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

Our size dictates that most policies are self policing and adjusted on an ad-hoc basis as required so formal policies are essentially not formed and recorded.

In order to help improve our disclosure controls and procedures, the Company has engaged a chief financial advisor. The Company intends to form an audit committee to further assist with improving its disclosure controls and procedures.

We are committed to improving our financial organization.  As part of this commitment, we intend to continue to educate our management personnel to comply with GAAP and the SEC’s disclosure requirements and to increase management oversight of accounting and reporting functions in the future.

Management's Report on Internal Control over Financial Reporting

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

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

As of April 30, 2012, management assessed the effectiveness of the Company’s internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.  Based on our evaluation under the framework in Internal Control - Integrated Framework, our management concluded that our internal control over financial reporting was not effective as of April 30, 2012 for the reasons outlined above.

Changes in Internal Controls over Financial Reporting

There have been no changes in our internal controls over financial reporting that occurred during our last fiscal 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.  

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PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 1A.  RISK FACTORS

Not Applicable.

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

During the six months ended April 30, 2012, the Company issued 55,000 shares of the Company’s Series C Preferred Stock for gross proceeds of $550,000 to Vinfluence.

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.

None.

ITEM 4.  

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)
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.

*  Filed herewith.

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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.
June 14, 2012	By:	/s/Andrew Kielbania
		Andrew Kielbania
		Interim Chief Executive Officer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)

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EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Andrew Kielbania, certify that:

1.   I have reviewed this annual report on Form 10-Q of BioNeutral Group, Inc. for the period ended April 30, 2012;

2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.   I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;

(b)   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)   Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.   I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

June 14, 2012	/s/ Andrew Kielbania
	Name:	Andrew Kielbania
	Title:	Interim Chief Executive Officer (Principal Executive Officer and Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATIONS

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of BioNeutral Group, Inc. (the “Company”) on Form 10-Q for the period ended April 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Andrew Kielbania, Principal Executive Officer and Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1.   The report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.   The information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the Company.

June 14, 2012	/s/ Andrew Kielbania
	Name:	Andrew Kielbania
	Title:	Interim Chief Executive Officer (Principal Executive Officer and Principal Financial Officer)

XML

Prepaid Expenses

6 Months Ended

Apr. 30, 2012

Prepaid Expense, Current [Abstract]

Prepaid Expenses [Text Block]

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 – Related Parties was $0 and $5,431 at April 30, 2012 and October 31, 2011, respectively.  At October 31, 2011, $5,431 represents share based payments to a company controlled by a former director for consulting services to be provided by the company controlled by said director. The share based payment is being amortized over a three year period, which commenced in January 2009.  For the three months ended April 30, 2012 and April 30, 2011, the Company recognized expense of $0, and $41,668, respectively, related to this share based payments which is recorded in “Consulting Expenses.”  For the six months ended April 30, 2012 and 2011, the Company recognized expense of $5,431, and $83,336, respectively, related to this share based payments which is recorded in “Consulting Expenses.”

XML

Summary of Significant Accounting Policies

6 Months Ended

Apr. 30, 2012

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

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 April 30, 2012 and the results of operations for the six months ended April 30, 2012 and 2011 and cash flows for the six months ended April 30, 2012 and 2011 not misleading. The unaudited condensed consolidated financial statements for the quarterly periods ended April 30, 2012, and 2011 should be read in conjunction with the audited financial statements for the years ended October 31, 2011 and 2010 as contained in the Form 10-K filed on February10, 2012.

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 and $49,716 at April 30, 2012 and October 31 2011, respectively.

Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. For financial statement purposes, investments in money market funds are considered a cash equivalent and are included in cash and cash equivalents. The Company maintains it cash and cash equivalents at high credit quality institutions, with balances, at times, in excess of federally insured limits. As of April 30, 2012, 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 April 30, 2012 and October 31 2011, 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)

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 April 30, 2012 and 2011 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 April 30, 2012 and April 30, 2011.

	4/30/2012		4/30/2011
Convertible Series A Preferred Stock – Non Controlling Interest		594,930		594,930
Convertible Series B Preferred Stock		6,686,375		-
Convertible Series C Preferred Stock		9,510,000		-
Convertible Series D Preferred Stock		17,006,250		-
Convertible Loans		7,102,795		4,866,376
		40,900,350		5,461,306

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

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Condensed Consolidated Balance Sheets (USD $)	Apr. 30, 2012	Oct. 31, 2011
Current Assets
Cash	$ 159,499	$ 3,215
Accounts Receivable - Net	345	345
Inventory	5,057	4,418
Prepaid Expenses-Related Parties	0	5,431
Total Current Assets	164,901	13,409
Property & Equipment - Net	675	781
Intellectual Property - Net	10,312,584	10,699,446
Other Assets	14,496	2,500
TOTAL ASSETS	10,492,656	10,716,136
Current Liabilities
Current portion of Notes Payable	0	102,500
Accounts Payable and Accrued Expense	703,786	1,657,947
Accrued Compensation	143,110	1,105,610
Related Party Payables	65,418	77,575
Current Liabilities	912,314	2,943,632
Long Term Liabilities
Convertible Loans From Unrelated Party	0	210,241
Convertible Loans From Stockholders	812,917	1,855,593
Total Long Term Liabilities	812,917	2,065,834
TOTAL LIABILITIES	1,725,231	5,009,466
BioNeutral Group, Inc. Stockholders’ Equity
Common Stock, $.00001 Par Value; 200,000,000 shares authorized, 122,856,184 and 79,579,292 issued and outstanding at April 30, 2012 and October 31, 2011, respectively.	1,229	795
Additional Paid-in Capital	63,990,916	57,958,512
Due from Vinfluence	(1,526,673)	0
Shares issued to Board of Directors	(47,200)	0
Accumulated Deficit	(53,861,660)	(52,581,220)
Total BioNeutral Group, Inc. Stockholders’ Equity	8,556,878	5,378,087
Non controlling Interest	210,488	328,524
Preferred Stock, $.001 par value; 5,000,000 shares authorized, with 800,000 designated as follows Convertible Preferred Stock, Series A, $.001 par value; 800,000 shares authorized, 59,493 and 59,493 shares issued and outstanding at April 30, 2012 and October 31, 2011 respectively. Liquidation Preference $1,072,361 at April 30, 2012 and $1,509,810 at October 31, 2011 included in Non controlling interest	59	59
Total Non controlling Interest	210,547	328,583
Total Equity	8,767,425	5,706,670
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	10,492,656	10,716,136
Series B Preferred Stock
BioNeutral Group, Inc. Stockholders’ Equity
Preferred Stock, $.001 par value	54	0
Series C Preferred Stock
BioNeutral Group, Inc. Stockholders’ Equity
Preferred Stock, $.001 par value	76	0
Series D Preferred Stock
BioNeutral Group, Inc. Stockholders’ Equity
Preferred Stock, $.001 par value	136	0
Series E Preferred Stock
BioNeutral Group, Inc. Stockholders’ Equity
Preferred Stock, $.001 par value	$ 0	$ 0

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Nature of Business and Organization

6 Months Ended

Apr. 30, 2012

Organization, Consolidation and Presentation Of Financial Statements [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

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.

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Liquidity and Financial Condition

6 Months Ended

Apr. 30, 2012

Liquidity and Financial Condition [Abstract]

Liquidity Disclosure [Policy Text Block]

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 April 30, 2012, the Company had negative working capital of $747,413. For the six months ended April 30, 2012 the Company incurred an operating loss of $1,398,476 and since inception has an accumulated deficit of $53,861,660.  For the same period in 2011, the Company’s net loss was $1,554,485.  The Company anticipates it will experience a net loss in fiscal 2012 as it continues to pursue markets for the sale and distribution of its products and development of access to global markets.

The Company had $159,499 of cash at April 30, 2012.  Cash used by operations for the six months ended April 30, 2012 was $843,716. 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 six months ended April 30, 2012, the Company raised $1,000,000 of cash from the issuance of its Series C Preferred Stock to fund operations.

While the Company has been able to use proceeds from the sale of its shares of common and preferred stock 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, 2013 and it will need to raise additional capital during fiscal 2012 to fund the full costs associated with its growth and development. The Company believes that it will be able to generate sales by the fourth three months of 2012 and that it will require approximately $2,000,000 in additional capital in order 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 costs 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 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 unaudited condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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

1.   Preferred Stock Purchase Agreement - This agreement provides that Vinfluence will purchase 100,000 shares of Series C Convertible Preferred Stock from the Company for an aggregate purchase price of $1,000,000. Vinfluence has fulfilled this obligation.

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

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

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

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

In connection with the Vinfluence agreements noted above, on November 7, 2011, the Company issued 213,491 shares of Series B Preferred Stock to Vinfluence in exchange for their purchase and assumption of $2,134,914 of accounts payable and certain convertible notes payable.  In addition, on November 7, 2011, the Company issued 231,029 shares of Series D Preferred Stock to Vinfluence in exchange for their purchase and assumption of $2,310,289 of certain accounts payable, accrued compensation and convertible notes payable.  At April 30, 2012, the Company has received confirmed settlements and releases from debt holders of debt associated with Series B Preferred Stock and Series D Preferred Stock of $1,384,876 and $1,533,654, respectively.  Currently, the debt remaining to be settled and released associated with the Series B Preferred Stock was $750,038, and $776,635 associated with the Series D Preferred Stock or an aggregate debt to be settled and released by debt holders of $1,526,673.

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $)	Apr. 30, 2012	Oct. 31, 2011
Preferred Stock, par value (in dollars per shares)	$ 0.001	$ 0.001
Preferred Stock, shares authorized	10,000,000	10,000,000
Common stock, par value	$ 0.00001	$ 0.00001
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	122,856,184	79,579,292
Common stock, shares outstanding	122,856,184	79,579,292
Series A Preferred stock, par value	$ 0.001	$ 0.001
Series A Preferred stock, shares authorized	5,000,000	5,000,000
Series B Preferred Stock
Preferred Stock, par value (in dollars per shares)	$ 0.001	$ 0.001
Preferred Stock, shares authorized	213,500	213,500
Preferred Stock, Shares Issued	53,491	0
Preferred Stock, Shares Outstanding	53,491	0
Preference Liquation, Value included in Noncontrolling interest	$ 534,910	$ 0
Series C Preferred Stock
Preferred Stock, par value (in dollars per shares)	$ 0.001	$ 0.001
Preferred Stock, shares authorized	100,000	100,000
Preferred Stock, Shares Issued	76,080	0
Preferred Stock, Shares Outstanding	76,080	0
Preference Liquation, Value included in Noncontrolling interest	760,800	0
Series D Preferred Stock
Preferred Stock, par value (in dollars per shares)	$ 0.001	$ 0.001
Preferred Stock, shares authorized	231,100	231,100
Preferred Stock, Shares Issued	136,050	136,050
Preferred Stock, Shares Outstanding	136,050	136,050
Preference Liquation, Value included in Noncontrolling interest	1,360,500	0
Series E Preferred Stock
Preferred Stock, par value (in dollars per shares)	$ 0.001	$ 0.001
Preferred Stock, shares authorized	140,000	140,000
Preferred Stock, Shares Issued	0	0
Preferred Stock, Shares Outstanding	0	0
Preference Liquation, Value included in Noncontrolling interest	0	0
Series Preferred Stock
Series A Preferred stock, par value	$ 0.001	$ 0.001
Series A Preferred stock, shares authorized	800,000	800,000
Series A Preferred stock, shares issued	59,493	59,493
Series A Preferred stock, shares outstanding	59,493	59,493
Series A Preferred stock, liquidation preference	$ 1,072,361	$ 1,509,810

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Document and Entity Information	6 Months Ended
	Apr. 30, 2012	Jun. 01, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	BioNeutral Group, Inc
Entity Central Index Key	0001427030
Amendment Flag	false
Current Fiscal Year End Date	--10-31
Document Type	10-Q
Document Period End Date	Apr. 30, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q2
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		122,856,184

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Condensed Consolidated Statements of Operations (USD $)	3 Months Ended		6 Months Ended
	Apr. 30, 2012	Apr. 30, 2011	Apr. 30, 2012	Apr. 30, 2011
Revenues	$ 338	$ 16,612	$ 1,502	$ 17,926
Cost of Revenues	59	12,526	203	13,167
Gross Profit	279	4,086	1,299	4,759
Operating Expenses
Depreciation and Amortization	177,234	176,374	354,468	352,452
Salaries	97,046	0	187,708	0
Consulting Expense	68,000	108,218	311,692	189,805
Legal and Accounting Expenses	47,287	182,566	158,297	269,927
Other Selling, General and Administrative Expenses	150,248	503,184	362,003	675,406
Total Operating Expenses	539,815	970,342	1,374,168	1,487,590
Loss from Operations	(539,536)	(966,256)	(1,372,869)	(1,482,831)
Interest Expense	18,582	(37,415)	(25,607)	(71,654)
Net Loss Before Income Taxes	(520,954)	(1,003,671)	(1,398,476)	(1,554,485)
Provision for Income Taxes	0	0	0	0
Net Loss	(520,954)	(1,003,671)	(1,398,476)	(1,554,485)
Loss Attributable to Non-controlling Interest	43,972	74,026	118,036	114,566
Net Loss Attributable to BioNeutral Group, Inc.	$ (476,982)	$ (929,645)	$ (1,280,440)	$ (1,439,919)
Net Loss Per Common Share - Basic and Diluted	$ (0.01)	$ (0.01)	$ (0.01)	$ (0.02)
Weighted Average Number of Common Shares outstanding - Basic and Diluted Loss per Share	114,781,944	76,296,134	102,496,600	76,393,450

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Stock Based Compensation

6 Months Ended

Apr. 30, 2012

Share-Based Compensation [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

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 2010 and 2009 were fully vested upon grant of the shares or no later than the respective year end dates.

Employees and Board Members

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

On November 21, 2011, the Company issued 500,000 shares of its restricted common stock to Frank Battafarano, as compensation to serve as the Company’s Chairman of the Board of Directors. The shares are subject to a repurchase option by the Company at a repurchase price of $.001 per share in the event Mr. Battafarano ceases to serve as Chairman for any reason. However, the repurchase option shall expire at the rate of 40,000 shares per month on the first day of each month so long as Mr. Battafarano remains engaged as Chairman. The shares were valued at $.08 per share in connection with a series of contemporaneous capital transactions entered into between the Company and Vinfluence Pty Ltd (“Vinfluence”). Based on the vesting schedule of 40,000 shares per month, the Company recognized Directors Fee expense of $3,200 and $0 for the three months ended April 30, 2012, respectively, and $12,800 and $0 for the six months ended April 30, 2012 and 2011, respectively. The cost of shares not vested as of have been included as a contra-equity account, “Shares issued to Board of Directors” on the Company’s balance sheet at April 30, 2012. On February 29, 2012, Mr. Frank Battafarano resigned from his position as a member of the Board of Directors of the Company, which resignation became effective immediately. Mr. Battafarano’s resignation is not the result of any disagreement with the Company. The unvested shares are to be returned to the Company.

On November 21, 2011 the Company issued 500,000 shares of its restricted stock to Ronald Del Mauro as compensation to serve as a member of the Company’s Board of Directors. Pursuant to the terms of the agreement, if Mr. Del Mauro voluntarily resigns from service on the Board of Directors during the first year after his election, on November 1, 2011, Mr. Del Mauro agreed to return 41,666 shares of the Company’s restricted common stock for each month that his service on the Board of Directors is reduced less than one year. The shares were valued at $.08 per share in connection with a series of contemporaneous capital transactions entered into between the Company and Vinfluence. Based on the vesting schedule of 41,666 shares per month, the Company recognized Directors Fee expense of $10,000 and $0 for the three months ended April 30, 2012, respectively, and $20,000 and $0 for the six months ended April 30, 2012 and 2011, respectively. The cost of shares not vested as of have been included as a contra-equity account, “Shares issued to Board of Directors” on the Company’s balance sheet at April 30, 2012.  On April 20, 2012, Mr. Del Mauro resigned from his position as a member of the Board of Directors of the Company, which resignation became effective immediately. Mr. Del Mauro’s resignation is not the result of any disagreement with the Company. The unvested shares are to be returned to the Company.

On January 14, 2011 the Company issued an annual grant of 85,000 restricted shares of the Company's common stock as compensation to Wayne Stratton, a non-management member of the Board of Directors for services.  The fair market value of the grant issued is $34,000 based on the closing share price of the Company’s stock as of January 14, 2011, the date of his appointment.  Payment will be made in restricted shares of the Company’s common stock, which have not been issued as of April 30, 2012.  The Company recognized the expense of $0 and $1,588 for Directors’ Fees for the six months ended April 30, 2012 and 2011, respectively, and recorded as a liability to issue common shares.  Effective October 31, 2011 Mr. Stratton resigned his position as a member of the Company’s Board of Directors without disagreement.  The Company’s current plan is to issue these shares.

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Related Party Payables

6 Months Ended

Apr. 30, 2012

Due To Related Parties [Abstract]

Related Party Payables [Text Block]

Note 6 - Related Party Payables

During the six months ended April 30, 2012 and 2011, 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.  For the three months ended April 30, 2011 and 2010, the Company recorded interest of $518 and $1,036, respectively.

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Commitments and Contingencies

6 Months Ended

Apr. 30, 2012

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

Note 10 – Commitments & Contingencies

Litigation

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 requested that the Company deliver certain documents to them.  The Company has fully cooperated with the SEC with respect to its investigation.

The Company has incurred, and may incur in the future, significant costs in responding to the 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.

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.

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Stockholder's Equity (and Non-Controlling Interest)

6 Months Ended

Apr. 30, 2012

Stockholders Equity, Including Portion Attributable To Noncontrolling Interest [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

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

Common Stock

During the six months ended April 30, 2012, the Company converted 160,000 Series B Preferred Stock to 20,000,000 shares of the Company’s common stock, 23,919 shares of Series C Preferred Stock to 2,989,875 shares of the Company’s common stock and 94,978 shares of Series D Preferred Stock to 11,872,250 shares of the Company’s common stock. 

During the three months ended April 30, 2012, the Company issued 2,384,967 shares of common stock to convert short-term convertible promissory notes in the aggregate of $104,900.

On December 6, 2011, the Company issued 30,000 shares of common stock to a consultant for accounting services performed of $5,000 recorded to Accounting Expense for the six months ended April 30, 2012. The shares for services were valued and issued at the prevailing quotation prices for the Company's stock at the time of issuance.

On November 21, 2011, the Company issued 2,500,000 shares of common stock to Piccadilly Consulting Pty. Ltd (“Piccadilly”) and recorded consulting expenses of $200,000 for the six months ended April 30, 2012 pursuant to an agreement entered into with Piccadilly to assist the Company in pursuing strategic relationships and commercial strategies for the Company’s products.  The shares were valued at $.08 per share reflective of the value for the Company’s common stock established by the Vinfluence transactions.

On November 21, 2011, the Company issued 2,500,000 shares of the Company’s common stock to Mr. Andrew Kielbania for services rendered in the scientific advancement of the Company’s products of $200,000 which was recorded to Scientific Consulting Expenses in Fiscal 2011. The shares were valued at $.08 in connection with the valuation established by the Vinfluence transactions. 

On November 21, 2011, the Company issued 1,000,000 shares of the Company’s common stock to members of the Company’s Board of Directors that were appointed effective for November 1, 2011. Pursuant to their agreements, the shares vest on a monthly basis.  For the three months ended April 30, 2012, the Company recorded $13,200 of Board of Directors fees expense in connection to the issuance of these shares.  For the six months ended April 30, 2012, the Company recorded $32,800 of Board of Directors Fees expense in connection to the issuance of these shares. The shares were valued at $.08 in connection with the valuation established by the Vinfluence transactions.

Preferred Stock

On October 31, 2011, the Board of Directors of the Company approved the designation of the following series of Preferred Stock:

1.  Two hundred thirteen thousand four hundred ninety one (213,491) shares of Series B Preferred Stock. Each share of Series B Preferred Stock is convertible into 125 shares of the Company's common stock.

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

3.  Two hundred thirty one thousand and twenty nine (231,029) shares of Series D Preferred Stock. Each share of Series D Preferred Stock is convertible into 125 shares of the Company's common stock; and

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

On November 7, 2011, the Company issued 213,491 shares of Series B Preferred Stock to Vinfluence in exchange for their purchase and assumption of $2,134,914 of accounts payable and certain convertible notes payable. In addition, on November 7, 2011, the Company issued 231,029 shares of Series D Preferred Stock to Vinfluence in exchange for their purchase and assumption of $2,310,289 of certain accounts payable, accrued compensation and convertible notes payable. At April 30, 2012, the Company has received confirmed settlements and releases from debt holders of debt associated with Series B Preferred Stock and Series D Preferred Stock of $1,384,876 and $1,533,654, respectively. At April 30, 2012 debt remaining to be settled and released associated with the Series B Preferred Stock was $750,038, and $776,635 associated with the Series D Preferred Stock. At April 30, 2012, Vinfluence has not contacted all creditors to arrange for releases of the debts. The Company is currently engaged in discussions with Vinfluence to determine their future plans to settle all debts pursuant to the Series B and D Preferred Stock. At April 30, 2012, in aggregate, the total Series B and D debt remaining to be settled and released by debt holders was $1,526,673 and has been recorded as a contra-shareholders’ equity account on the Company’s balance sheet as “Due from Vinfluence.” The amount has been recorded as a contra-equity account due to the fact that the full amounts of the shares have been issued to Vinfluence in advance of the debt settlements of which $1,526,673 remain to be settled.

During the six months ended April 30, 2012, the Company issued 100,000 shares of the Company’s Series C Preferred Stock to Vinfluence for gross proceeds of $1,000,000.   The shares were valued at $.08 per share pursuant to the value established by Vinfluence and consistent with the terms of the Preferred Stock Purchase Agreement between Vinfluence and the Company.

Non-Controlling Interest

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

BioLabs is authorized to issue 5,000,000 shares of preferred stock, $0.001 par value, of which 800,000 shares are designated as Convertible Series A Preferred Stock.  The BioLabs’ Certificate of Incorporation authorizes the Board of Directors to determine the preferences, limitations and relative rights of any class or series of preferred stock prior to issuance.  Each such class or series must be given distinguishable designated rights prior to issuance. As of April 30, 2012 and October 31, 2011, 59,493 and 59,493 shares of the Company’s Series A Preferred Stock were issued and outstanding, respectively.

During the six months ended April 30, 2012, no shares of Series A Preferred Stock were converted to shares of common stock.  During the six months ended April 30,  2011, various holders of Series A Preferred Stock exchanged 6,934 of Series A Preferred shares into 69,340 shares of common stock at the rate of 10 common shares to one preferred share, in accordance with the term of our preferred share agreement, dated December 12, 2006.

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 six months ended April 30, 2012	$	(118,036	)
Non-Controlling Interest at April 30, 2012	$	210,547

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 April 30, 2012 and October 31, 2011.

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Related Party Transactions

6 Months Ended

Apr. 30, 2012

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

Note 9 - Related Party Transactions

Related Party Transactions during the Six Months Ended April 30, 2012

During the six months ended April 30, 2012, the Company issued 100,000 shares of the Company’s Series C Preferred Stock for gross proceeds of $1,000,000 to Vinfluence.

During the six months ended April 30, 2012, Vinfluence provided the Company with confirmations of a settlements and releases of an aggregate of $1,288,592 of convertible notes.

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Subsequent Events

6 Months Ended

Apr. 30, 2012

Subsequent Events [Abstract]

Subsequent Events [Text Block]

Note 11 - Subsequent Events:

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

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Condensed Consolidated Statements of Cash Flows (USD $)	6 Months Ended
	Apr. 30, 2012	Apr. 30, 2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss	$ (1,398,476)	$ (1,554,485)
Adjustments to Reconcile Net Loss To Net Cash Used in Operating Activities
Stock Based Compensation	5,431	83,336
Depreciation and Amortization	354,468	352,452
Issuance of Stock related to professional services	435,800	398,322
Interest added to promissory notes	38,076	63,290
Changes in Operating Assets and Liabilities
Accounts receivable	0	(16,620)
Inventory	(638)	0
Prepaid Expenses	0	5,236
Other Assets	(11,996)	0
Accounts Payable and Accrued Expenses	(301,255)	143,305
Related Party Payables	34,874	5,250
NET CASH USED IN OPERATING ACTIVITIES	(843,716)	(519,914)
CASH FLOWS FROM FINANCING ACTIVITIES
Net Proceeds From Issuance of Preferred and Common Stock	1,000,000	317,500
Proceeds from Exchangeable Promissory Notes	0	225,000
NET CASH PROVIDED BY FINANCING ACTIVITIES	1,000,000	542,500
NET INCREASE IN CASH	156,284	22,586
CASH, BEGINNING OF PERIOD	3,215	59,395
CASH, END OF PERIOD	159,499	81,981
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for Interest	0	0
Cash paid for Income Taxes	0	0
SUPPLEMENTAL DISCLOSURE OF NON-CASH INFORMATION
Non-cash settlements of Promissory Note	(1,288,592)	0
Non-cash settlements of Accounts Payable and Accrued Expenses	(1,629,938)	0
Non-cash Intellectual Property Cost (Accrual Reversal) Additions	(32,500)	52,962
Non-cash conversion of promissory note to common stock	(104,900)	0
Shares issued to Board of Directors	47,200	0
Preferred Shares Issued to Vinfluence in Settlement of Debt and Notes	$ 1,526,673	$ 0

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Intellectual Property

6 Months Ended

Apr. 30, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets Disclosure [Text Block]

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:

	4/30/2012			10/31/2011
Gross Carrying Amount	$	15,256,688		$	15,289,188
Accumulated Amortization		(4,944,104	)		(4,589,742	)
Net Carrying Amount	$	10,312,584		$	10,699,446

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, 2012 and 2010 was $177,181 and $176,374, respectively, and for the six months ended April 30, 2012 and 2011 was $354,362 and $352,452,respectively.

Estimated amortization expense is as follows

10/31/2012 (Remaining)	354,362
10/31/2013	708,723
10/31/2014	708,723
10/31/2015	708,723
10/31/2016	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.

On February 28, 2011, the Company received approval and registration from the Environmental Protection Agency (“EPA”) in response to the Company's regulatory application for its Ygiene®206 formulation.