Subsequent Events

6 Months Ended

Jun. 30, 2016

NOTE 19

SUBSEQUENT EVENTS

On October 13, 2009, the U.S. Patent and Trademark Office (“USPTO”) issued U.S. Patent No. 7,601,858, titled “Method of Processing Ethanol Byproducts and Related Subsystems” (the ’858 Patent) to GS CleanTech Corporation, a wholly-owned subsidiary of GreenShift Corporation. On October 27, 2009, the USPTO issued U.S. Patent No. 7,608,729, titled “Method of Freeing the Bound Oil Present in Whole Stillage and Thin Stillage” (the ’729 Patent) to GS CleanTech. Both the ’858 Patent and the ’729 Patent relate to the Company’s corn oil extraction technologies. GS CleanTech Corporation, our wholly-owned subsidiary, subsequently filed legal actions in multiple jurisdictions alleging infringement by various persons and entities. Multiple additional related suits and countersuits were filed. On May 6, 2010, we submitted a “Motion to Transfer Pursuant to 28 U.S.C. § 1407 for Consolidated Pretrial Proceedings” to the United States Judicial Panel on Multidistrict Litigation (the “Panel”) located in Washington, D.C. In this motion, we moved the Panel to transfer and consolidate all pending suits involving infringement of our patents to one federal court for orderly and efficient review of all pre-trial matters. On August 6, 2010, the Panel ordered the consolidation and transfer of all pending suits in the U.S. District Court, Southern District of Indiana for pretrial proceedings (the “MDL Case”). In October 2014, the District Court in Indiana ruled in favor of the defendants in our pending patent infringement matter on their motions for summary judgment alleging that our corn oil extraction patents were invalid, including U.S. Patent Nos. 7,601,858 (the “’858 patent”); 8,008,516 (the “’516 patent”); 8,008,517 (the “’517 patent”); and 8,283,484 (the “’484 patent” and, collectively, the “Patents in Suit”). In September 2016, the District Court ruled that the Patents in Suit were additionally unenforceable due to inferences that our inventors and attorneys withheld material information from the USPTO. Critically, no trial or hearing was ever held in respect of material factual determinations supporting the court’s 2014 ruling, including the material factual issues that should have resulted in the right to a jury trial. Further, in connection with ongoing patent filings, the USPTO allowed CleanTech’s patents after considering the very information that the court found to have been withheld, and upon which the bulk of the court’s recent ruling was based; all of the information alleged to have been withheld from the USPTO in connection with the Patents in Suit was provided to and considered by the USPTO prior to issuance of several additional patents (U.S. Patent Nos. 9,212,334 (the “’334 patent”); 9,108,140 (the “’140 patent”); 9,320,990 (the “’990 patent”); and 9,012,668 (the “’668 patent” and, collectively, the “New Patents”). Neither the October 2014 nor the September 2016 ruling is a final judgment. We strongly disagree with the court’s conclusions in each ruling and we intend to mount a vigorous appeal.