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Litigation and Loss Contingencies
3 Months Ended
Mar. 31, 2026
Litigation and Loss Contingencies [Abstract]  
LITIGATION AND LOSS CONTINGENCIES

NOTE 16 – LITIGATION AND LOSS CONTINGENCIES

 

From time to time, we may be subject to other legal proceedings, claims, investigations, and government inquiries (collectively, legal proceedings) in the ordinary course of business. We may receive claims from third parties asserting, among other things, infringement of their intellectual property rights, defamation, labor and employment rights, privacy, and contractual rights.

 

On January 30, 2025, the Company was served with a civil complaint by Messer Financial Group Inc. (“Messer”), a sublessee of the Company’s previously rented office space in Charlotte, NC, for breach of contract. On July 28, 2025, the Company and the plaintiff conducted a mediation session, which was unsuccessful in resolving the dispute. On September 22, 2025, the plaintiff commenced discovery proceedings in the litigation, and in September 2025, the Company was informed that the plaintiff’s expert indicated estimated damages in excess of $5 million. On February 5, 2026, the Company agreed to a settlement agreement with Messer Financial Group Inc. pursuant to the settlement agreement, the Company is required to pay (i) a one-time lump sum of $10 thousand cash consideration; (ii) issue restricted shares of common stock (“RSU”) of Marpai in an amount valued at $25 thousand as consideration for Messer’s attorney’s fees; and (iii) 400,000 RSUs in installments issuable as follows: (a) 100,000 restricted shares of common stock within thirty (30) days of the Effective Date; (b) 100,000 restricted shares of common stock by July 1, 2026; (c) 100,000 restricted shares of common stock by January 1, 2027; and (d) 100,000 restricted shares of common stock by July 1, 2027. On January 3, 2028, if the Total Value (defined below) of the Stock Consideration is less than $1.0 million, Marpai will (A) pay Messer an additional $250 thousandin cash, or (B) issue Messer $250 thousand in restricted shares of common stock of Marpai (MRAI), valued in the same manner as Total Value. Total Value shall be determined by averaging Marpai’s closing stock price on (A) the payment due date, (B) 45 days prior to the payment due date, and (C) 90 days prior to the payment due date.

 

After Messer received the Cash Consideration, Messer voluntarily dismissed the Lawsuit in its entirety as to all Defendants with prejudice.