Expensify Inc

On November 29, 2023, a putative securities class action (the “Putative Class Action”) was filed in the United States District Court for the District of Oregon captioned Wilhite v. Expensify, Inc., et al., Case No. 3:23-cv-01784-JR, naming us, two of our executive officers and two of our former directors as defendants (collectively, the "Defendants"). The lawsuit is purportedly brought on behalf of all those who purchase or acquired our stock pursuant or traceable to our initial public offering (“IPO”). The complaint alleges claims under Sections 11 and 15 of the Securities Act of 1933 based on allegedly false or misleading statements in the offering documents filed in connection with our IPO. The lawsuit seeks unspecified damages and other relief. On January 29, 2024, three shareholders moved to be appointed lead plaintiff in the Putative Class Action. The court appointed a lead plaintiff and lead counsel on March 11, 2024. Pursuant to the parties' stipulation, the lead plaintiff's amended complaint was filed May 10, 2024, naming six of our current board members as additional defendants (together with the Defendants, the "Amended Defendants"). Amended Defendants' motion to dismiss the amended complaint was filed on July 9, 2024. The lead plaintiff's opposition was filed September 6, 2024, and the Amended Defendants' reply was filed October 18, 2024. The court has not yet scheduled a hearing on the Amended Defendants' motion to dismiss. The Amended Defendants deny the allegations of wrongdoing and will continue to vigorously defend against the claims in the Putative Class Action.

On May 10, 2024, a shareholder derivative lawsuit (the "Derivative Action") was filed in the United States District Court for the District of Oregon captioned O'Halloran v. Barrett et al., Case No. 3:24-cv-00775, naming us, all of our current board members and executive officers and two of our former directors as defendants (collectively, the "Derivative Defendants"). On August 14, 2024, the Court stayed the Derivative Action pending resolution of any and all motion(s) to dismiss the Putative Class Action. The case remains stayed. The Derivative Defendants deny the allegations of wrongdoing and will continue to vigorously defend against the claims in the Derivative Action.

In addition to the matters described above, from time to time, we are involved in various legal proceedings arising from the normal course of business activities. We are not presently a party to any litigation the outcome of which, we believe, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, cash flows or financial condition. We have received, and may in the future continue to receive, claims from third parties asserting, among other things, infringement of their intellectual property rights. Defending such proceedings is costly and can impose a significant burden on management and employees. We may receive unfavorable preliminary or interim rulings in the course of litigation, and there can be no assurances that favorable final outcomes will be obtained. The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors.