Item 3. Legal Proceedings
ITEM 3. LEGAL PROCEEDINGS.
The Company is currently involved in no litigation
matters excerpt :
On September 10, 2021, the Company filed a federal lawsuit ‘in rem’
to recover the <biontech.com> domain and the unknown ‘John Doe’ who hacked and attempted to steal the website. The litigation
has been filed in the United States District Court for the Eastern District of Virginia, Alexandria Division under the heading ‘Bion
Environmental Technologies, Inc., Plaintiff, vs John Doe and <biontech.com>, Defendants’ (Case No. 1:21-cv-01034), seeking
recovery of the domain name and other relief as set forth therein.
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On September 25, 2014, Pennvest exercised its right
to declare the Pennvest Loan in default and accelerated the Pennvest Loan and demanded that PA1 pay $8,137,117 (principal, interest plus
late charges) on or before October 24, 2014. PA1 did not make the payment and does not have the resources to make the payments demanded
by Pennvest. PA1 commenced discussions and negotiations with Pennvest concerning this matter but Pennvest rejected PA1’s proposal
made during the fall of 2014. PA1 made a new proposal to Pennvest during September 2021 which proposal is presently under consideration
by Pennvest. PA1 provides Pennvest with its financial statements (which include a description of system status) annually. During the 2021
fiscal year, Pennvest’s auditors requested a ‘corrective action plan’ and PA1 informed Pennvest that “…
there is no viable corrective action plan for the Pennvest Loan (‘Loan’). The facility funded by the Loan has been shut down
for many years (which has been disclosed in the annual financial reports to Pennvest and in public filings by the parent of PA1) and the
technology utilized in the facility is now obsolete. The facility has not been commercially operated for approximately six years and has
generated zero income. We recommend that Pennvest take appropriate steps to remove and sell the equipment.” Pennvest recently responded
favorably to the approach of selling the equipment but no actions have yet taken place. PA1 and the Company are currently discussing proposals
with Pennvest seeking full resolution to these matters. The Company anticipates additional communication with Pennvest on this matter
during the current year. It is not possible at this date to predict the final outcome of this matter, but the Company believes it is likely
that that the equipment will be sold with the proceeds delivered to Pennvest during our current fiscal year. However, the resolution of
these matters including the manner and means of such equipment sale has not been agreed upon as of this date. PA1 will evaluate the appropriate
manner to resolve/wrap-up its business over the balance of this calendar year.
During August 2012, the Company provided Pennvest
(and the PADEP) with data demonstrating that the Kreider 1 system met the ‘technology guaranty’ standards which were incorporated
in the Pennvest financing documents and, as a result, the Pennvest Loan is now solely an obligation of PA1. However, the Company’s
consolidated balance sheet as of June 30, 2021 reflects the Pennvest Loan as a liability of $9,868,495 despite the fact that the obligation
(if any) solely an obligation of PA 1 .
Litigation has not commenced in this matter
but has been threatened by Pennvest. Such litigation is likely if negotiations do not produce a resolution (although the likelihood is
somewhat reduced by the passage of time).
The Company currently is not involved in any other material litigation.
ITEM 4. MINE SAFETY DISCLOSURES.
None.
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PART II
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.