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5. Commitments and Contingencies

12 Months Ended

Dec. 31, 2017

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Operating Leases

As of December 31, 2017, the Company, through its subsidiaries, has non-cancelable future minimum operating lease payments for various office space locations. Future minimum operating lease payments are as follows:

Twelve months ended December 31,		Future Rent Payments
2018		$	673
2019			697
2020			419
2021			218
Total		$	2,007

The Company recognized rent expense of $0.6 million and $0.5 million for the years ended December 31, 2017 and 2016, respectively.

Property taxes on the Keyes plant have accrued since 2012 and are nearing the five-year term for this process. The company has an option to enter into a payment plan with Stanislaus County to make regular payments over a period of up to five years. During the second quarter of 2018, the company intends to negotiate and enter into such a plan.

Legal Proceedings

On August 31, 2016, the Company filed a lawsuit in Santa Clara County Superior Court against defendants EdenIQ, Inc. (EdenIQ) and its CEO, Brian D. Thome and Trinity Capital Investments (Trinity). The lawsuit is based on EdenIQ’s wrongful termination of a merger agreement that would have effectuated the merger of the Company and EdenIQ. The lawsuit also asserts that EdenIQ and Mr. Thome fraudulently induced the Company into assisting EdenIQ to obtain EPA approval for a new technology, which the Company would not have done but for the merger agreement. The relief sought includes EdenIQ’s specific performance of the merger agreement and monetary damages, as well as punitive damages, attorneys’ fees, and costs. Trinity was later dismissed from the lawsuit due to jurisdictional issues, but the Company is pursuing Trinity in Arizona where it is domiciled. In response to the Company’s Santa Clara County lawsuit, EdenIQ has filed a cross-complaint asserting causes of action relating to the Company’s alleged inability to consummate the merger, the Company’s interactions with EdenIQ’s business partners, and the Company’s publicity of the status of the merger. EdenIQ seeks monetary damages, punitive damages, injunctive relief, attorneys’ fees and costs. Due to the early stage of the litigation, an estimate as to any Company losses cannot be made at this time.

On August 4, 2013, GS Cleantech Corporation, a subsidiary of Greenshift Corporation (“Greenshift”), filed a complaint in the United States District Court for the Eastern District of California – Fresno Division against us and our subsidiary, AAFK. The case was transferred to the Southern District of Indiana and joined to a pending Multidistrict Litigation. The complaint alleges infringement of patent rights assigned to Greenshift and pertaining to corn oil extraction processes we employ, and seeks royalties, treble damages, attorney’s fees, and injunctions precluding us from further infringement. The corn oil extraction process we use is licensed to us by Valicor Separation Technologies LLC. Valicor has no obligations to indemnify us. On October 23, 2014, the Court ruled that all the claims of all the patents at issue in the case are invalid and, therefore, not infringed and adopted this finding in our case on January 16, 2015. GS Cleantech has said it will appeal this decision when the remaining claim in the suit has been decided. We believe the likelihood of Greenshift succeeding on appeal of the invalidity findings is small since the Court’s findings included several grounds for invalidity of each allegedly infringed patent. If Greenshift successfully appeals the findings of invalidity, damages may be $1 million or more. The suit also alleged that GS Cleantech obtained the patents at issue by inequitably conducting itself before the United States Patent Office. A trial in the District Court for the Southern District of Indiana on that issue was concluded and the Court found the patents unenforceable because of inequitable conduct by GS Cleantech and its counsel before the Patent and Trademark Office. GS Cleantech has asked the Court to reconsider its decision, citing the existence of a recently issued patent that the patent examiner allowed despite the Court’s findings and the allowance of which the Court did not consider when making its decision of inequitable conduct. On March 20, 2017, GS Cleantech and its counsel, Cantor Colburn LLP filed a Notice of Appeal regarding the current ruling on inequitable conduct. The Appeal has been stayed for 60 days to allow the parties an opportunity to discuss settlement. On April 5, 2017, the parties asked the Court for an extension of the current stay in the case which was granted. As of February 14, 2018, GS Cleantech resisted the defendants’ (including the Companies) request to maintain the stay and asked that the Court of Appeals to the Federal Circuit enter a briefing schedule of the appeal. Defendants’ purpose for maintaining the stay would be to allow time for briefing and decision at the District Court regarding defendants’ exceptional case motion and motion for legal fees and costs. Proceeding in this manner would allow all issues to be ready for appeal together, avoiding piecemeal litigation and simultaneous pendency of all issues on appeal at the Federal Circuit. No judicial ruling on this issue has been entered as of this date. On March 14, 2018, the Companies filed their exceptional case motions seeking their attorneys’ fees and bills of cost.

As of February 14, 2018, GS Cleantech resisted the defendants’ (including the Companies) request to maintain the stay and asked that the CAFC enter a briefing schedule of the appeal. Defendants’ purpose for maintaining the stay would be to allow time for briefing and decision at the District Court regarding defendants’ exceptional case motion and motion for legal fees and costs. Proceeding in this manner would allow all issues to be ready for appeal together, avoiding piecemeal litigation and simultaneous pendency of all issues on appeal at the Federal Circuit. No judicial ruling on this issue has been entered as of this date. On March 14, 2018, the Companies filed their exceptional case motions seeking their attorneys’ fees and bills of cost.