Note 15. Commitments and Contingencies

Legal Proceedings

From time to time, the Company may face legal claims or actions in the normal course of business. At each reporting date, the Company evaluates whether a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that address accounting for contingencies. The Company expenses the costs related to its legal proceedings as incurred.

In July 2021, Continuous Composites Inc. (“Continuous Composites”), a company based out of Idaho, brought a claim in the United States District Court for the District of Delaware against the Company regarding patent infringement. On April 11, 2024, the jury returned a verdict against the Company in the amount of $17.3 million. The jury found one of the two patent claims Continuous Composites asserted at trial against the Company to be invalid and not infringed. However, the jury found that the Company had infringed the other patent claim and awarded monetary damages. The Company disagrees with this verdict and intends to seek to overturn the verdict in post-trial motions with the District Court. The Company is exploring all available options, including seeking to overturn the verdict and any resulting judgment through the appeals process.

As of March 31, 2024, the Continuous Composites verdict is accrued within the litigation judgment caption on the condensed consolidated statement of operations, and litigation judgment payable caption on the condensed consolidated balance sheet. While the Company cannot predict what additional action Continuous Composites may take, Continuous Composites has stated it may seek future royalty payments for sales after December 31, 2023. Any further legal actions could materially impact the Company’s business, financial condition, results of operations and cash flows. At this time, we cannot estimate a range of loss for any additional costs related to Continuous Composite royalties that exceed the current estimated liability.