Risk Factors Update Summary

• The company recorded beta-alanine raw material revenue of $8.4 million during fiscal 2024, down from $8.7 million in fiscal 2023. This change might result in decreased revenue expectations.
• The Fourth Amendment to the Credit Agreement requires us to suspend share repurchase and dividend activity, impacting cash flow management.
• In October 2023, armed conflict escalated between Israel and Hamas, potentially impacting supply chains. Israel accounts for a small portion of our global net sales.
• The company reported a net loss of $(7,217) for fiscal 2024, compared to net income of $2,522 in fiscal 2023. This change indicates a significant decline in financial performance.
• The company anticipates not complying with all covenants required under the Amended Credit Agreement in the first half of fiscal 2025 due to reduced sales.
• Economic sanctions and export control measures related to Ukraine could adversely affect our European operations. This change might result in significant operational disruptions.
• The total current liabilities increased to $23,465 from $15,884, reflecting a growing financial obligation. This change may impact liquidity and operational flexibility.
• The ongoing Hamas War may disrupt supply chains and increase costs, affecting our ability to source materials from Israel.
• Patent and trademark licensing revenue decreased from $16.2 million in fiscal 2022 to $8.4 million in fiscal 2024, primarily due to increased volume rebates.
• We recorded a U.S. domestic tax benefit of $2.2 million during fiscal 2024, improving our financial position.
• We anticipate continued inflationary pressures affecting operations, with rising costs in labor and transportation impacting our fiscal 2025 results.
• Our available borrowing capacity under the amended credit facility was $12.0 million as of June 30, 2024, limiting financial flexibility.
• Our largest customers represented approximately 68% of consolidated net sales in fiscal 2024, indicating increased revenue concentration risks.