What changed in this filing

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Item 3. Legal Proceedings

2026-04-16 compared with 2025-08-04 · 36 added, 11 removed, 8 unchanged (85% of the section changed)

1 unchanged sentence

From time to time, we may be party to or otherwise involved in legal proceedings arising in the ordinary course of business.

We recognize provisions for legal proceedings in our financial statements, in accordance with accounting rules, when we are advised by independent outside counsel that (i) it is probable that an outflow of resources will be required to settle the obligation and (ii) a

reliable estimate can be made of the amount of the obligation.

The assessment of the likelihood of loss includes analysis by outside counsel of available evidence, the hierarchy of laws, available case law, recent court rulings and their relevance in the legal system.

2 unchanged sentences

Management does not believe that there is any pending or threatened proceeding against us, which, if determined adversely, would have a material adverse effect on our business, results of operations or financial condition, except as described below.

On February 26, 2024, Robert Zrallack and RJZ Holdings LLC (the “Plaintiffs”) filed suit against Aurai LLC (“Aurai”), ConnectM Florida RE LLC (“ConnectM Florida RE”), and Florida Solar Products, Inc.

(“Florida Solar”), each a wholly owned subsidiary of ConnectM, in the circuit court for the 19th judicial circuit (St.

Lucie County, Florida).

In this suit, the Plaintiffs allege various contract claims arising out of a transaction under which Aurai acquired Florida Solar from Mr.

Zrallack in 2022 and ConnectM Florida RE acquired certain real estate from RJZ Holdings LLC in 2022 from which Florida Solar operates.

Specifically, the Plaintiffs allege breach of the stock purchase agreement and certain promissory notes in connection with the purchase of Florida Solar and the related real estate, as well as breach of a services agreement with Mr.

ConnectM believes the Plaintiffs’ claims have no merit and plans to assert counterclaims against the Plaintiffs in connection with the underlying transactions.

ConnectM is defending itself in this matter.

Regardless of the final outcome, defending lawsuits, claims, government investigations, and proceedings in which ConnectM is involved is costly and can impose a significant burden on management and employees, and there can be no assurances that favorable final outcomes will be obtained.

Florida Solar acquisition litigation (Zrallack and RJZ Holdings LLC v.

Aurai LLC, ConnectM Florida RE LLC, and Florida Solar Products, Inc.;

Florida 19th Judicial Circuit—St.

Lucie County)

On February 26, 2024, Robert J.

Zrallack and RJZ Holdings LLC (the “Plaintiffs”) filed suit against Aurai LLC (“Aurai”), ConnectM Florida RE LLC (“ConnectM Florida RE”), and Florida Solar Products, Inc.

(“Florida Solar”) (collectively, the “Subsidiaries”), each wholly owned subsidiaries of ConnectM Technology Solutions, Inc.

(“ConnectM”), in connection with the Company’s 2022 acquisition of Florida Solar and related real estate transactions.

The matter was compelled to arbitration pursuant to the Stock Purchase Agreement.

Following evidentiary hearings conducted in June and July 2025, the arbitrator issued an Interim Arbitration Award on September 11, 2025.

Subsequent orders were entered addressing modification and attorneys’ fees and costs.

On December 25, 2025, the arbitrator issued a Final Award incorporating prior rulings.

The Final Award includes:

● Approximately $446,945 awarded in connection with claims relating to a mortgage and promissory note (plus continuing per diem interest);

● Approximately $1,342,480 in damages relating to additional claims under the Stock Purchase Agreement (plus continuing per diem interest);

● Attorneys’ fees and costs totaling approximately $418,138 as of September 11, 2025, with interest accruing thereafter;

Arbitrators’ fees and costs totaling approximately $74,013;

● Certain equitable and payment-related relief, including obligations relating to specified debt instruments and credit card balances.

● In aggregate, Plaintiffs’ motion to confirm seeks entry of judgment totaling approximately $2,500,000 plus continuing interest.

On December 30, 2025, Plaintiffs filed a motion to confirm the arbitration award in the Circuit Court for the 19th Judicial Circuit (St.

Lucie County, Florida), later amended on January 7, 2026.

A hearing on the motion to confirm was noticed for February 12, 2026.

The Company has filed a motion to vacate the arbitration award, which is scheduled to be heard on April 30, 2026.

The Company believes confirmation of the award is not appropriate while post-award relief remains pending and continues to evaluate all available legal remedies.

On January 7, 2026, Plaintiffs also served post-award discovery requests styled as “discovery in aid of execution.” The Subsidiaries filed a motion to strike such discovery and for a protective order on the basis that no final judgment has been entered and discovery in aid of execution is premature.

As of the date of this filing:

● The arbitration award has not yet been confirmed by the court;

● No final enforceable judgment has been entered;

● Post-award motion practice remains pending;

● The Subsidiaries are pursuing available legal remedies, including seeking vacatur and opposing confirmation.

The Company has recorded a litigation reserve of $1,024,002 in connection with this matter based on management’s assessment of probable loss under ASC 450.

The amount reserved reflects management’s current estimate of probable exposure;

however, the total amount sought by Plaintiffs significantly exceeds the recorded reserve.

The ultimate outcome of the confirmation proceedings, any motion to vacate, and related enforcement proceedings cannot be predicted with certainty.

The final resolution of this matter could result in adjustments to the amount reserved, which could be material to the Company’s consolidated financial statements in the period such adjustment is determined.

Mine Safety Disclosures.

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 3. Legal Proceedings