Note 7. Commitments and Contingencies

From time to time, and in the ordinary course of business, the Company is subject to certain claims, charges and litigation concerning matters arising in connection with the conduct of the Company’s business activities.

Shareholder Derivative Litigation

Two shareholder derivative suits were filed in February 2021 in the United States District Court for the Northern District of California against current and former officers and directors of the Company and have been consolidated into one action. VGA is also a defendant. The Company is the nominal defendant. The operative complaint alleges that the individual defendants breached various duties to the Company and contains similar allegations to the settled and dismissed securities class action previously brought against the Company and three of its executives in January 2021, in which it was alleged that materially false and misleading statements were made concerning the Company’s business, operations, and prospects, including information regarding its battery technology. The action is currently stayed. Another derivative suit was filed in October 2024 in the same court. The action was related to the consolidated action and is currently stayed.

In June through August 2022, four derivative suits were filed in the Court of Chancery of the State of Delaware against current and former directors and officers of the Company. The Company is the nominal defendant. The complaints allege that the individual defendants breached various duties to the Company. VGA is named as a defendant in three of those actions. In September 2022, the actions were consolidated and stayed. A consolidated amended complaint was filed in July 2024.

A derivative action was filed in the United States District Court for the District of Delaware on February 22, 2024, against current and former directors and officers of the Company. The Company is the nominal defendant. The complaint alleges that the individual defendants breached various duties to the Company and includes a claim for contribution related to the securities class action. The complaint also alleges that plaintiff previously sent a litigation demand to the Board and alleges that the demand has effectively been rejected. The action is currently stayed.

Two additional derivative actions were filed in the Court of Chancery of the State of Delaware in May 2024 and October 2024, against current and former directors and officers of the Company. The Company is the nominal defendant. The complaints allege that the individual defendants breached various duties to the Company. The complaints also allege that the plaintiffs previously sent a litigation demand to the Board and allege that the demands had effectively been rejected. The action filed in May 2024 is currently stayed.

A settlement in principle addressing remedial actions related to the above-described derivative actions was reached in February 2026. No settlement amount has been determined yet, and the specific terms remain subject to negotiation, final documentation, notice to stockholders, and court approval.

Employment Matters

The Company is a defendant in two Private Attorneys General Act (“PAGA”) wage-and-hour actions filed in Santa Clara County Superior Court by former employees, along with a related class action in arbitration. The complaints allege violations of California’s Labor Code. The actions are presently stayed. The Company denies the allegations. In July 2026, the court approved the parties’ agreement to settle the claims for an immaterial amount.

From time to time, the Company is subject to other employment-related claims and disputes, including claims by current and former employees, arising in the ordinary course of business.

For many legal matters, particularly those in early stages, the Company cannot reasonably estimate the possible loss (or range of loss), if any. The Company records an accrual for legal matters at the time or times it determines that a loss is both probable and reasonably estimable. As of September 30, 2026 and December 31, 2025, the amount accrued for each matter was individually not material, and the aggregate amount accrued was approximately $5.7 million as of September 30, 2026 and $4 million as of December 31, 2025. Regarding matters for which no accrual has been made (including the potential for losses in excess of amounts accrued), the Company currently believes, based on its own investigations, that any losses (or ranges of losses) that are reasonably possible and estimable will not, in the aggregate, have a material adverse effect on its financial position, results of operations, or cash flows. However, the ultimate outcome of legal proceedings involves judgments, estimates, and inherent uncertainties and cannot be predicted with certainty. Should the ultimate outcome of any legal matter be unfavorable, the Company’s business, financial condition, results of operations, or cash flows could be materially and adversely affected. The Company may also incur substantial legal fees, which are expensed as incurred, in defending against legal claims.

Other commitments

The Company’s minimum purchase commitments consist of non-cancellable agreements to purchase goods and services, primarily for materials, and licenses and hosting services, entered into in the ordinary course of business.