ARGAN INC

In the normal course of business, we may be involved in legal proceedings and other incidental matters related to pending claims. It is our opinion, based on information available at this time, that any current claim or proceeding will not have a material effect on our consolidated financial statements (see Note 10 to the accompanying consolidated financial statements).

In March 2025, APC’s subsidiary in the U.K., Atlantic Projects Company (UK) Limited (“APC UK”), sued EP NI Energy Limited and EP UK Investment Limited (together referred to as “EP”) in the High Court of Justice, Business and Property Courts of England and Wales for EP’s breach of contract and failure to remedy various events which negatively impacted the schedule and costs of a project to construct a 2 x 330 MW natural gas-fired power plant in Carrickfergus (the “Kilroot Project”), resulting in EP receiving the benefits of the construction efforts of APC UK and the corresponding progress on the project without making payments for the value received. As previously disclosed, APC UK provided 14 days’ notice to terminate as a result of project owner breaches of the contract. Those breaches were not resolved during that 14-day period, as a result of which the contract terminated on May 3, 2024. APC UK has significant billable receivables, unresolved contract variations and claims for extensions of time, among other issues, related to the Kilroot Project. The project owner has asserted counterclaims that APC UK disputes. APC UK will vigorously assert its rights and claims in order to recover its lost value and collect any remaining monies owed.