Crexendo, Inc.

From time to time, we are involved in lawsuits, claims, investigations and proceedings that arise in the ordinary course of business. There are no matters pending or threatened that we expect to have a material adverse impact on our business, results of operations, financial condition or cash flows.

On March 5, 2026, ReadyComm LLC (“ReadyComm”) filed a complaint against Crexendo, Inc. in the United States District Court for the District of Delaware, captioned ReadyComm LLC v. Crexendo, Inc., Case No. 1:26-cv-00234-MN. The complaint alleges that certain of the Company’s products and services directly and indirectly infringe one or more claims of U.S. Patent No. 9,179,011, titled “Telephone Communication System and Method of Using.” ReadyComm seeks monetary damages, interest, costs and expenses, attorneys’ fees under certain circumstances, and other relief the court may deem appropriate.

The Company denies ReadyComm’s allegations and does not believe that it has infringed any valid and enforceable claim of the patent. The Company has asserted counterclaims seeking declarations that it does not infringe the patent and that the patent is invalid, as well as dismissal of the complaint with prejudice and recovery of its costs and attorneys’ fees. ReadyComm has denied the substantive allegations of the Company’s counterclaims. The litigation and discovery therein remain at an early stage.

The Company intends to vigorously defend against ReadyComm’s claims and pursue its counterclaims. Based on the information currently available, the Company does not believe that a loss is probable and, therefore, has not recorded a reserve relating to this matter. However, litigation is inherently uncertain, and the ultimate outcome cannot presently be predicted.