Litigation

The Company legal proceeding styled Phunware, Inc., v. Wilson Sonsini Goodrich & Rosati, Professional Corporation, Does 1-25, Case No. 21CV381517, filed in the Superior Court of the State of California for the County of Santa Clara and removed to arbitration in California, was settled in 2024. The Company paid approximately $2.2 million of the outstanding amount alleged to be owed by Phunware to WSGR in this proceeding, which had previously been recorded in accounts payable in the consolidated balance sheet.

The Company legal proceeding styled Wild Basin Investments, LLC, et al. v. Phunware, Inc., et al., filed in the Court of Chancery of the State of Delaware (Cause No. 2022-0168-LWW) (the "Wild Basin Litigation"), was partially settled in 2024 for a payment of $2.8 million from the Company’s insurers to the Plaintiffs and a payment of $0.2 million from the Company's insurers to Phunware.

In December 2025, the parties to the Wild Basin Litigation and the legal proceeding styled Phunware, Inc., v. Wilson Sonsini Goodrich & Rosati, Professional Corporation, Does 1-25, Case No. 21CV386411, filed in the Superior Court of the State of California for the County of Santa Clara and removed to arbitration in California, engaged in further settlement discussions and settled those proceedings pursuant to a Settlement Agreement and Mutual Release of Claims on or about February 25, 2026, and the proceedings were dismissed with prejudice on or about March 17, 2026. These settlements resolved, among other things, the outstanding accounts payable invoices that were previously alleged to be owed by the Company to WSGR. In connection with these settlements, the Company recorded approximately $4.7 million in other income, net and $3.8 million in additional legal fees and costs in general and administrative expenses in the consolidated statement of operations and comprehensive loss for the year ended December 31, 2025 related to the foregoing.

Further reference is made to Note 13, "Related Party Transactions" for discussion regarding an additional related party legal proceeding.

From time to time, we are and may become involved in various legal proceedings in the ordinary course of business. The outcomes of our legal proceedings are inherently unpredictable, subject to significant uncertainties, and could be material to our operating results and cash flows for a particular reporting period. In addition, for the matters disclosed above or in Note 13 that do not include an estimate of the amount of loss or range of losses, such an estimate is not possible, and we may be unable to estimate the possible loss or range of losses that could potentially result from the application of non-monetary remedies.