UNIVERSAL CORP /VA/

Current report

We have identified a material weakness in our internal control over financial reporting and, if we are not able to remediate the material weakness, or if we identify additional material weaknesses in the future or otherwise fail to design and maintain effective internal control over financial reporting, we may be unable to accurately report our results of operations, meet our reporting obligations or prevent misstatements due to fraud or error.

Current report

Under the supervision and with the participation of the Company’s management, including its Chief Executive Officer and its Chief Financial Officer, the Company conducted an evaluation of the effectiveness of its internal control over financial reporting as of March 31, 2024. As disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2024 (the “Original Form 10-K”), based on that evaluation, the Company concluded that its internal control over financial reporting was effective as of March 31, 2024. However, as disclosed in Amendment No. 1 to the Original Form 10-K, for the reasons discussed below, the Company’s management conducted a reevaluation of the effectiveness of the Company’s internal control over financial reporting. Based on this reassessment, the Company’s management concluded that the Company’s internal control over financial reporting was not effective as of March 31, 2024.

Current report

As previously disclosed, in August 2024, shortly before filing the Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, the Company’s management was made aware of embezzlement by a former senior finance employee at the Company’s Mozambique subsidiary, Mozambique Leaf Tobacco Ltda. (“MLT”). As result of the discovery of the embezzlement, the Company’s management reassessed the effectiveness of its internal control over financial reporting. This reassessment identified certain control activities at MLT that were deficient in that they had failed to prevent or detect the embezzlement in a timely manner. Additionally, the Company’s management concluded that it was unable to rely on controls performed at MLT due to the lack of competence and integrity of certain individuals at MLT executing those controls. The Company’s management concluded that these control deficiencies collectively constituted a material weakness in the Company’s internal control over financial reporting as of March 31, 2024. Under standards established by the Public Company Accounting Oversight Board, a material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company's annual or interim financial statements will not be prevented or detected on a timely basis.

Current report

While this material weakness did not result in a material misstatement of the Company’s consolidated financial statements, these deficient control activities had not been remediated as of March 31, 2024, and there is a reasonable possibility that they could have resulted in a material misstatement in the Company’s annual or interim consolidated financial statements that would not be prevented or detected. The Company, under the oversight of the Audit Committee, has taken steps to implement its remediation plan. However, the material weakness will not be considered remediated until the enhanced controls operate for a sufficient period of time and management has concluded, through testing, that the related controls are effective. Furthermore, the Company cannot give any assurance that the measures it takes will remediate the material weakness.

Current report

The Company cannot give any assurance that additional material weaknesses will not arise in the future. Any failure to remediate the material weakness, or the development of new material weaknesses in the Company’s internal control over financial reporting, could result in material misstatements in the Company’s financial statements and cause it to fail to meet our reporting and financial obligations, which in turn could have a negative impact on its financial condition, results of operations or cash flows, restrict its ability to access the capital markets, require significant resources to correct the material weaknesses or deficiencies, subject the Company to fines, penalties or judgments, harm our reputation or otherwise cause a decline in investor confidence and cause a decline in the market price of the Company’s stock.

Current report

The Company is no longer eligible to use a Form S-3 registration statement, which could impair its capital-raising activities.

Current report

As a result of the Company’s failure to timely file its Form 10-Q for the quarter ended September 30, 2024, and the Form 10-Q for the quarter ended December 31, 2024 with the SEC, it is no longer eligible to use a Form S-3 registration statement. Further, as a result of the late Form 10-Q filing for the quarter ended September 30, 2024 and the late Form 10-Q filing for the quarter ended December 31, 2024, the Company is also no longer a “well-known seasoned issuer,” as such term is used in the SEC’s regulations, which otherwise would allow it to, among other things, file automatically effective Form S-3 registration statements. The Company’s eligibility to use a Form S-3 registration statement may not be restored until March 1, 2026, and then only if it has not had any other filing delinquency that would preclude Form S-3 eligibility and satisfies all other requirements for Form S-3 eligibility. During any period when the Company is not eligible to use Form S-3 or qualify as a “well-known seasoned issuer,” its capital-raising ability may be impaired. Under these circumstances, the Company would be required to conduct its offering on an exempt basis, such as in accordance with Rule 144A, or file a registration statement on Form S-1. Using a Form S-1 registration statement for a public offering would likely take significantly longer than using a registration statement on Form S-3 and increase the Company’s transaction costs, and could, to the extent it is not able to conduct offerings using alternative methods, adversely impact the Company’s ability to raise capital or complete acquisitions of other companies in a timely manner.