Commitments and Contingencies
In the ordinary course of business, we may become liable with respect to pending and threatened litigation, tax, environmental and other matters. Legal costs associated with such matters are expensed as incurred.
Oxygenator Water Techs vs. Tennant Company
On November 25, 2024, the Company received an adverse jury verdict in an intellectual property damages dispute in the United States District Court for the District of Minnesota (the "Court"). Oxygenator Water Technologies, Inc. ("OWT") alleged that between 2015 and 2023, the Company infringed certain of OWT’s patents through the manufacture and sale of certain component parts in ecH2O and nanoclean system options included on commercial floor scrubbers. The jury ruled against the Company and awarded compensatory damages of $9.8 million, plus prejudgment interest of $4.7 million, in favor of OWT. Accordingly, in the fourth quarter of 2024, the Company recorded an accrued expense and a corresponding liability of $14.5 million.
Subsequently, on September 17, 2025, the Court issued a post-trial ruling enhancing damages by 30%, resulting in total damages and interest of approximately $20.2 million, including $9.8 million in compensatory damages, $2.9 million in enhanced damages, and $7.4 million in prejudgment interest. As a result, the Company recorded an incremental accrued expense and corresponding liability of $6.0 million for the year ended December 31, 2025.
The Company and OWT have appealed certain of the Court's decisions. In connection with the Company's appeal and in order to stay execution of the judgment pending resolution of the appeal, the Company obtained a supersedeas bond in the amount of $20.3 million, as required by the Court. The bond was issued by a third-party surety, and the Company pays an annual premium related to the bond. The bond secures payment of the judgment, including applicable post-judgment interest and costs, if the judgment is affirmed or otherwise becomes payable following the appeal. The Company has not posted cash collateral in connection with the bond.
As litigation outcomes are inherently uncertain and can result in unanticipated developments, it is possible that the Company’s exposure to loss could change following the issuance of these financial statements. The Company intends to vigorously defend its position through its appeal and assessment of next steps in the proceedings.
The ruling does not impact the Company’s ability to sell its products and is not expected to affect its long-term business objectives.
Other Matters
In addition to the above matter, the Company is involved in various other claims and litigation incidental to its business. Although the outcome of these matters cannot be determined with certainty, we do not expect that the final outcome will have a material effect on the Company's consolidated results of operations or financial position.