AMERICAN VANGUARD CORP

Current report

The war between the US and Iran coupled with instability among other nations within the Middle East may have an adverse effect upon the agricultural economy in general and the Company’s financial performance in particular. Military activity in and near Iran and the consequent blockade of the Strait of Hormuz are interfering with international shipping lanes for oil, fertilizer and other products which, in turn, are increasing grower costs. In addition, these activities could lead to counterterrorism and/or counterattacks that could put US persons and assets at risk. These factors are likely to further constrain grower liquidity and profitability, to affect growers’ procurement practices and lead to a reduction in demand for the Company’s products. There is no guarantee that the war will end any time soon or that the terms of its cessation will restore shipping lanes to pre-blockade status. In short, these factors could have a material adverse impact on the Company’s operations and/or financial performance.

Previous report

Reduced financial performance may adversely affect the Company’s ability to maintain a capital structure that is sufficient to meet working capital needs. Because the Company’s credit agreement expires in December 2026, under applicable accounting rules, if the credit agreement is not extended or replaced by the time that the Company reports its financial results for the quarter and period ending December 31, 2025, then such debt (which is currently recorded as long term debt) will need to be recorded as current debt on the Company's balance sheet. In addition, such a characterization could lead to the accounting conclusion that the Company was not able to operate as a going concern. The threat of such result could have an adverse effect upon relationships with business partners. Thus, it is in the Company's best interest to extend or replace the credit agreement as soon as possible and, at any rate, well prior to such filing date. However, despite improved financial performance in the immediately preceding quarter, in light of poor financial performance of the prior several quarters, there is no guarantee that the Company will be able to maintain capital sufficient to meet its working capital needs or that such capital will be available on terms that are as favorable as those under the current agreement. Failure to obtain capital in a timely fashion or in inadequate amounts or on unfavorable terms could have a material adverse effect upon the Company’s financial performance and/or could impair the Company’s ability to carry on business as a going concern.