AMERICAN VANGUARD CORP

The Company continually re-assesses the business risks, and as part of that process detailed a range of risk factors in the disclosures in American Vanguard’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed on March 16, 2026. There have been no material changes in our risk factors as of September 30, 2026, except as follows:

Continued military activity in the Middle East has significantly increased fuel and freight costs domestically. The interruption of shipping lanes and the attendant interference with the supply of oil from the Middle East arising from regional military activity has significantly increased fuel prices and, consequentially, freight costs for the Company particularly with respect to liquid products that are shipped in bulk. These increases have eroded the Company’s profit margin in a number of products. There is no guarantee that the geopolitical situation giving rise to these increased costs will end any time soon. Nor is there any guarantee that the Company, through price increases or other measures, will be able to return to higher profit margins for these products. In short, it is possible that, if these conditions persist, the Company’s earnings could continue to be adversely affected.

The development of Agentic AI tools may overtake the efficacy of available cybersecurity defense tools and, as such, could put the Company’s computing systems at risk. Fueled by enormous investment and activity from competing global developers, agentic AI solutions are evolving at a rapid pace and becoming increasingly powerful. By contrast, cybersecurity defense tools are evolving at a slower rate and are largely configured to defend against traditional, pre-agentic AI threats. Thus, it is possible that the strength of existing defense tools will soon be exceeded by that of new, agentic AI tools. While the Company is taking extensive measures to ensure that its computing systems are well-defended, there is no guarantee that agentic AI tools, whether on their own or in the hands of threat actors, will not breach these systems, which, in turn, could have a material adverse effect upon the Company’s operations or financial performance.

The Company’s primary synthesis factories are dependent upon the continued provision of shared services from competitors. The Company’s manufacturing facilities in both Hannibal, Missouri and Axis, Alabama depend upon the provision of essential services (e.g., utilities, waste treatment) from competitors that are co-located with the Company on those sites. Further, while it owns the machinery and equipment at those sites, the Company is a tenant, and the competitors are landlords, as per the terms of ground leases. There is no guarantee that the landlords of either site will continue to be able to supply some or all shared services to the Company without interruption. Nor does the Company have any control over the disposition of the fee interest of the sites on which its operations are situated. Cessation of some or all shared services by the landlords without sufficient lead time could have a material adverse effect upon the Company’s ability to produce various high-margin products.

The Company’s ability to remain in compliance with the leverage covenant under its 1L Term Loan depends on generating significant adjusted EBITDA during the fourth quarter of 2026. Historically, the fourth quarter has been an important period for the Company’s annual results. In light of the Company’s financial performance through the first nine months of 2026, remaining in compliance with this covenant will require the Company to generate significant adjusted EBITDA during the fourth quarter. There can be no assurance that the Company will generate adjusted EBITDA sufficient to remain in compliance with this covenant. Further, any noncompliance under the 1L Term Loan could have a material adverse effect on the Company’s liquidity, financial condition and results of operations.

If we fail to satisfy the continued listing standards of the New York Stock Exchange, our Common Stock could be delisted. Our Common Stock is listed on the New York Stock Exchange under the symbol “AVD.” To maintain that listing, we must satisfy the NYSE’s continued listing standards, which include, among other things, a minimum average closing share price. The market price of our Common Stock may be affected by, among other things, our recent net losses, significant leverage and weakness in the agricultural economy. If we fail to satisfy any of the listing standards, the NYSE could begin suspension and delisting procedures. A delisting could reduce the liquidity and market price of our Common Stock, impair our ability to raise equity capital and adversely affect our reputation with customers, suppliers and employees. Any of these could adversely affect our business and the value of our Common Stock.