CAL-MAINE FOODS INC

Report of

Independent

Registered

Public

Accounting Firm

Board

of Directors and

Stockholders

Cal

Opinion on the

We

have audited

the accompanying

balance

sheets of

Cal

as of

May 30,

and May

31,

2025, the

related

of income,

comprehensive

income, stockholders’

equity,

flows

of the three

years in

the period

ended May

and the related

notes and schedule

listed in the

Index

at Items 15(a)(1)

and 15(a)(2) (collectively referred to as the “consolidated financial

statements”).

In our opinion, the consolidated

financial statements

present fairly,

in all material

respects,

the financial

position of Cal

Subsidiaries as of

May 30,

May 31, 2025,

and the results

and their cash

flows for

each of

the three years

in the period

ended

May

with accounting

principles generally accepted

in the United States

of America.

We

also

have

audited,

in

of

the

Public Company

Accounting

Oversight

Board

(United

States)

(“PCAOB”),

the Cal

Subsidiaries’ internal

as of

May 30,

2026, based

on

the criteria

in

2013 Internal

Control

– Integrated

issued by

the Committee

of Sponsoring

of the

and

our report dated

July 22, 2026

expressed

an

unqualified

opinion.

Basis for

Opinion

These

are the

responsibility

of the

entities’

management.

Our responsibility

is to

express

an

opinion

on

these

based

on our

audits.

We

are

a

public

firm

registered

with

the

PCAOB and

are required

to be independent

to Cal

with the U.S.

federal

securities laws

and

the applicable

rules and

regulations of

the Securities and

and

the PCAOB.

We

our audits in accordance

with the standards

of the PCAOB.

Those standards

require that we plan and perform

the

audit

to

obtain

about

whether

the

are

free

of

misstatement,

whether

due

to

error

or

fraud.

Our

audits

to assess

the risks

of material

misstatement

of the

whether due

to

error

or fraud,

and

performing procedures

that

respond

to

those

risks.

Such

examining,

on

a test

basis,

evidence

and

in

the

Our audits

also included

the accounting

used and

made

by management,

as well as evaluating

the overall presentation

of the consolidated

financial statements.

We believe our audits provide

a reasonable

our opinion.

Critical Audit

Matters

The

audit

matters

communicated

below are

matters

arising

from

the

current

period

audit

of the

that were communicated

or required

to be communicated

to the

Audit Committee

and

that:

(1) relate to accounts

or

that are

to the

and (2) involved

our especially

challenging,

subjective,

or

complex

judgments.

The communication

of the critical

audit matters

does not

alter in

any way

our

financial statements,

taken

as a

whole, and

we are not,

by communicating

the critical

audit

matters

below,

providing

a separate

the critical

audit

matters

or on the

or disclosures to which they

relate.

– Litigation

and Claims

– Refer to Note

16 in the Consolidated

Critical Audit Matter Description

Cal

-Maine

Foods,

Inc.

and

record

for

legal

and

claims

in

those

instances

where

they

can

of the loss

and when

the liability is probable.

Where the reasonable

of the probable

loss

is a range, Cal

Subsidiaries record

the most likely

of the loss, or the

low end of the range

if there

is no one

best estimate.

Cal

either disclose

of a possible loss

or range

of

loss in

excess of established accruals

if estimable, or states that

such an estimate cannot be made.

Cal

-Maine Foods, Inc. and Subsidiaries

disclose significant legal proceedings

and claims even where liability is not probable

or the amount of the liability

is not estimable,

or both, if Cal

Subsidiaries believe

there is at

least a

possibility that

a loss may

be incurred.

We

identified litigation

and claims as

a critical audit

matter

because

of the challenges auditing

judgments

applied

in determining

the likelihood

of loss related

to the resolution

of such claims.

Specifically,

auditing management’s

determin

at

ion

of whether

any contingent

loss arising

related

litigation and

claims is

probable, reasonably

possible, or remote,

and

the

related

is subjective

and

requires significant judgment

due to

the sensitivity of

the issue.

How the Critical Audit Matter was addressed during the Audit

Addressing

the

matter

involved

and

audit

evidence

in

with

forming

our

overall

These procedures

included testing the

of the

controls relating

to

the Cal

Inc. and Subsidiaries’

of the

liability related to

legal proceedings and

claims, including controls

over

the

likelihood

of

a

loss

and

whether

the

amount

of loss

can

be

estimated,

as

well

as

stat

ement disclosures over

the legal proceedings

and claims.

These procedures

also included obtaining

and evaluating

the letters

of audit inquiry with

external legal counsel, evaluating

the reasonableness

of Cal

-Maine Foods, Inc. and Subsidiaries’

whether

an

unfavorable

outcome

is

or

probable,

and

estimable,

the

sufficiency

of Cal

-Maine

Foods,

Inc.

and

Subsidiaries’

related

to legal

and

claims and

the

completeness

and

accuracy

of Cal

Subsidiaries’ legal contingencies.

of

Echo

Lake

Foods,

LLC

–

for

Valuation

of

Acquired

Assets

– Refer

to

Note

2 in

the

Critical Audit Matter Description

Cal

-Maine

Foods,

Inc.

and

the acquisitions

of Echo

Lake

Foods,

LLC

and

certain

related

companies,

June

2,

for

a

total

net

of

$275

Cal

-Maine

Foods,

Inc.

and

for

the

of

Echo

Lake

Foods,

LLC

and

certain

related

as

a

combination,

and

accordingly,

allocated

the purchase

price to

and

assumed

based

on their

respective

fair

values

as of

the

date

of the

Identifiable

assets

relationships,

trade

names,

brand names,

and non-compete

agreements.

The excess of the purchase

over the fair value of identifiable

assumed

was recorded as goodwill.

The valuation

of acquired intangible assets

requires significant

due to

the

use

of

models that

incorporate

unobservable

inputs.

In

particular,

the

fair

value

are sensitive to assumptions

such as projected revenue,

growth rates, customer attrition, discount

rates, and contributory

asset

charges, which

require significant estimation.

We

the

of acquired

assets

as a

audit

matter

because

of the

auditor

to

evaluate

the reasonableness

and

the complexity

involved in

the

meth

odologies utilized.

How the Critical Audit Matter was addressed during the Audit

Our audit

related

to the

of acquired

intangible assets

included the

following, among others:

●

Testing

over

Cal

process,

over

the development

and

review of key assumptions

used in the

of intangible

assets

●

Evaluating

the

methodologies

used

by

and

its

specialists,

whether the

methods

were appropriate

and

guidance.

●

Assessing

key assumptions

used in the

models, including:

o

Projected

revenue

growth rates

o

attrition

rates

o

Discount

rates

o

Contributory

asset

charges,

by

comparing

them

to

performance,

market

data,

and

benchmarks

●

Involving

a

fair

value

specialist

to

assist

in

the

methodologies

and

used

in

the

models.

●

Evaluating

the mathematical

accuracy

of the

models and

recalculating

selected fair

values.

●

Assessing

the competence,

capabilities, and

objectivity

specialists.

/s/ Frost, PLLC

We

have

served as

auditor

since 2007.

Little Rock,

Arkansas

Balance

Sheets

(in thousands,

except

for par value

amounts)

May

May

Assets

Current assets:

Cash

and

cash

$

107,217

$

499,392

816,840

892,708

Receivables:

Trade

receivables, net

136,249

244,079

Income

tax

107,867

13,057

Other

20,315

15,225

Total

receivables, net

264,431

272,361

Inventories,

net

375,265

295,670

and

assets

17,789

7,979

Total

current assets

1,581,542

1,968,110

plant

& equipment,

net

1,318,335

1,026,684

97,059

46,776

assets, net

73,130

15,157

Other assets

37,504

27,892

Total

assets

$

3,107,570

$

3,084,619

Liabilities and

equity

Current liabilities:

Trade

payable

$

96,106

$

101,033

Dividends payable

—

114,163

Accrued

wages and

48,371

60,263

Accrued

and

61,039

32,912

Total

current liabilities

205,516

308,371

Other liabilities

39,650

55,582

income

taxes

221,872

154,651

Total

467,038

518,604

Commitments

and

contingencies

• see

Note 16

—

—

Stockholders’

equity:

Common

stock ($

0.01

par value):

Common

stock

– authorized

120,000

shares, issued

75,061

shares in 2026

and

Paid-in capital

86,106

80,845

Retained

2,765,108

2,565,928

other comprehensive

loss, net of tax

(1,466)

(1,007)

Common

stock in treasury,

at

cost –

28,080

and

26,567

shares in 2026

and

2025,

(217,767)

(85,893)

Total

Cal

Inc. stockholders’

equity

2,632,732

2,560,624

Noncontrolling

interest in consolidated

equity

7,800

5,391

Total

equity

2,640,532

2,566,015

Total

liabilities and

equity

$

3,107,570

$

3,084,619

(in thousands,

except

amounts)

Fiscal years

ended

May

May

$

$

$

Cost of

sales

2,239,583

2,411,000

1,784,872

Gross profit

672,049

1,850,885

541,571

and

329,291

314,449

252,625

(Gain) loss

on involuntary

(8,819)

(23,532)

(Gain) loss

on disposal

assets

1,391

(259)

income

350,186

312,452

Other income

(expense):

46,175

48,059

31,726

Patronage

11,670

11,197

11,331

Other,

net

2,973

7,347

4,462

Total

other income

60,818

66,603

47,519

Income

before

income

taxes

411,004

1,603,142

359,971

Income

tax

expense

92,892

384,910

83,689

318,112

276,282

Less:

Income

1,430

(1,816)

(1,606)

to Cal

Inc.

$

316,682

$

$

277,888

to Cal

Inc.:

Basic

$

6.65

$

25.04

$

5.70

Diluted

$

6.63

$

24.95

$

5.69

average

shares outstanding:

Basic

47,650

48,719

48,717

Diluted

47,781

48,891

48,873

of

Comprehensive Income

Fiscal years

ended

May

May

$

318,112

$

$

276,282

income

(loss), before tax:

holding gain

(loss) available

-for-sale securities,

net of

reclassification

(693)

1,271

Decrease in

post-retirement

obligation, net

of

reclassification

income

(loss), before tax

(623)

1,438

Income

tax

expense

(benefit) related

to items of

other comprehensive

income

(loss)

(164)

income

(loss), net of

tax

(459)

1,113

income

317,653

1,218,998

277,395

Less: comprehensive

income

to the

noncontrolling interest

1,430

(1,816)

(1,606)

income

to Cal

Inc.

$

316,223

$

1,220,814

$

279,001

of Stockholders’

Equity

Accum.

Other

Common

Stock

Comp.

Shares

Amount

Class A

Shares

Class A

Amount

Shares

Amount

Paid In

Capital

Retained

Earnings

Income

(loss)

Noncontrolling

Total

Balance

at

June 3, 2023

70,261

$

4,800

$

26,077

$

(30,008)

$

72,112

$

1,571,112

$

(2,886)

$

(1,498)

$

1,609,583

—

—

—

—

(55)

(1,589)

4,259

—

—

—

2,670

1.889

Common

—

—

—

—

—

—

—

(83,565)

—

—

(83,565)

Class A common

—

—

—

—

—

—

—

(9,040)

—

—

(9,040)

(loss)

—

—

—

—

—

—

—

277,888

—

(1,606)

276,282

of tax

—

—

—

—

—

—

—

—

1,113

—

1,113

Balance

at

70,261

4,800

—

26,022

(31,597)

76,371

1,756,395

(1,773)

(3,104)

1,797,043

—

—

—

—

(7)

(3,900)

4,474

—

—

—

Conversion

of Class

A Shares

4,800

(4,800)

(48)

—

—

—

—

—

—

—

—

—

—

—

(50,396)

—

—

—

—

(50,396)

Contributions

to Crepini Foods

LLC

—

—

—

—

—

—

—

—

—

6,485

6,485

of noncontrolling

in

Foods LLC

—

—

—

—

—

—

—

(3,826)

—

3,826

—

8.319

Common

—

—

—

—

—

—

—

(378,062)

—

—

(378,062)

Class A common

—

—

—

—

—

—

—

(28,627)

—

—

(28,627)

(loss)

—

—

—

—

—

—

—

—

(1,816)

of tax

—

—

—

—

—

—

—

—

—

Balance

at

May

75,061

—

—

26,567

(85,893)

80,845

2,565,928

(1,007)

5,391

2,566,015

—

—

—

—

(59)

(1,354)

5,261

—

—

—

3,907

—

—

—

—

1,572

(130,520)

—

—

—

—

(130,520)

2.458

Common

—

—

—

—

—

—

—

(117,502)

—

—

(117,502)

Contributions

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

316,682

—

1,430

318,112

loss, net of tax

—

—

—

—

—

—

—

—

(459)

—

(459)

Balance

at

May

75,061

$

—

$

—

28,080

$

(217,767)

$

86,106

$

2,765,108

$

(1,466)

$

7,800

$

2,640,532

See Notes to

Financial Statements.

of Cash Flows

ended

May

May

from

operating activities:

$

318,112

$

$

276,282

Adjustments

to reconcile net

income

to net

cash

by operating

and

124,342

94,021

80,241

income

taxes

67,363

11,570

(9,672)

expense

5,757

4,527

4,358

Loss on

change

in fair value

—

15,000

5,500

Other operating

activities, net

(4,425)

(15,426)

(6,908)

Change

in operating assets

and

liabilities, net of effects

from

acquisitions:

(Increase)

in trade

139,753

(104,997)

(27,570)

(Increase)

in inventories

(34,978)

(12,224)

28,800

in accounts

payable

and

current accrued

(8,338)

65,311

9,353

Net change

in income taxes

and

payable

(94,810)

(45,946)

91,567

Net changes

in other operating

assets

and

(33,023)

(5,334)

(553)

by operating

479,753

1,224,734

451,398

from

used in investing

of investments

(648,915)

(1,213,593)

(573,565)

Sales of investments

745,240

907,640

358,932

of businesses,

net of

cash

(427,794)

(116,193)

(53,746)

of Van's

(24,776)

—

—

in unconsolidated

—

—

(363)

Distributions

from

3,253

4,050

3,000

of property,

plant

and

(151,220)

(161,255)

(147,116)

Net proceeds

from

property,

plant

and

3,882

used in investing activities

(503,884)

(575,469)

(412,586)

used

in financing

Principal payments

on long-term

debt

—

(2,481)

—

Principal payments

on finance

lease

—

—

(214)

Purchase

of common

stock by

(131,124)

(53,953)

(1,688)

of dividends

(231,622)

(330,290)

(91,856)

used in financing

(362,746)

(386,724)

(93,758)

in cash, cash

and

(386,877)

262,541

(54,946)

Cash,

cash

and

at

beginning of year

500,419

237,878

292,824

Cash,

cash

and

at

end of

year

$

113,542

$

500,419

$

237,878

Notes to

Note 1 -

Summary of

Accounting Policies

Nature of Operations

Cal

Inc. (“we,”

“us,”

“our,”

or the

“Company”)

is the

largest

egg

company

States

(“U.S.”)

and a

leading

player

in

the

food

The

shell

egg

spans

the

full

egg

value

ladder

—from

to

brown,

pasture

-raised, and

eggs—

serving both retail and foodservice

customers nationwide. Cal

-Maine Foods also participates

in

the growing prepared foods

sector,

with offerings

such as pre-cooked

scrambled egg

hard

-cooked eggs, pancakes,

and specialty

wraps.

Our branded

Best®, Land

O’Lakes®,

Eggs®, 4Grain®,

Van’s®,

and Crepini®.

We

sell most of

our products

much of

and aim

efficient, state

located close to our

customers. We

were founded

in

1957 and

are headquartered in Ridgeland,

Principles of Consolidation

The consolidated

financial statements

include the accounts

of all wholly-owned

and of majority

-owned subsidiaries

over which

we exercise

control. All

significant intercompany

and

have

been eliminated

in consolidation.

The

fiscal

year

-end is on

the Saturday

closest to May

The fiscal

years ending

on May

30,

2026,

May 31,

2025,

each

weeks.

Use of Estimates

The preparation

of the consolidated

with generally accepted

principles (“GAAP”)

States of

America requires

to make estimates

that affect

reported in the

and

notes. Actual

results could differ

from

those estimates.

Cash and Cash Equivalents

The

Company

all

highly

liquid

with

a

of

three

months

or

less

when

to

be

cash

equivalents.

We

bank

that

are insured

by

the

Federal

Deposit

Insurance

up

to

$

250,000

.

The

Company

routinely

cash

with

certain

institutions

in

excess

of

federally

insured

amounts.

The

Company

has not experienced

any loss in such accounts.

manages this risk through maintaining

cash deposits

and

other highly

liquid

in high quality financial

institutions.

Available-for-Sale

has determined

that its

debt securities

are available

-for-sale investments

and are

as current

because

the

amounts

are

for

current

Available

are

carried

at

fair

value,

based

on

quoted

market

prices

as

of

the

balance

sheet

date,

with

unrealized

gains

and

losses

in

other

comprehensive

income.

The

cost of debt securities

is adjusted

for amortization

of premiums and

accretion of

discounts to maturity

and is recorded

in interest income.

regularly evaluates

changes to the

rating of its debt

securities by

credit agencies

to

assess

and

record

any

credit losses

through allowance

for

credit

losses,

limited

to

the

amount

that

fair

value

was less than

the amortized

cost basis.

There was

no

for credit losses at

May

and

May

The

cost basis

for realized

gains and

losses on

-for-sale securities

is determined

by the

specific identification

method.

Gains and

losses are recognized in other

income (expense)

as “Other,

net”

and

on

as

are

in

“Interest

income

,

net”

in

the

Trade Receivables

Trade

are stated

at

their

values,

which

include

a reserve

for

credit losses.

At May

30,

and

May

31,

2025, reserves

for credit losses

were $

and $

extends credit to customers

based

on

an

of

each

’s

and

credit

history.

Collateral

is generally

not

required.

The

Company

minimizes exposure

to

counter

party

credit

risk through

credit

and

approvals,

credit limits,

and

monitoring

procedures.

In

our

reserve

for

credit

losses,

are

assigned

an

loss

based

on

loss

as

needed

for

and

other

forward-looking

factors.

At

May

30,

and

May

31,

2025,

one

26.2

% and

28.1

% of the

trade

receivable, respectively.

Inventories of flocks,

feed, supplies, raw materials

and finished

goods are valued

at the lower

of cost or net realizable

value.

The cost

of inventories

is determined

by either the

first-in, first-out method

or the weighted-average

method.

The

cost

with

flocks,

consisting

of

chicks,

feed,

labor,

contractor

and

costs,

are

during a growing period

weeks. Flock costs

are amortized

to cost

lives of the

flocks, generally

one

to

two years

. As the amortization

period of the flocks

is relatively

short,

disclosure of

the gross

cost and

is omitted. Flock mortality

is charged to

cost of

sales as

incurred.

Plant

and Equipment

plant and

are stated

at cost.

is provided

by the

straight-line

method

useful

lives,

to

years for

buildings

and

and

to

years for

and

equipment.

Expenditures

that

extend

the

useful

life

of

the

related

assets

are capitalized.

Normal

repairs

and

are expensed

as

incurred. When

property, plant,

and equipment

are retired, sold, or otherwise

disposed of, the

asset’s carrying

amount

and related

are removed from

the accounts

and

any

gain or loss is included

in operations.

When

certain

events or

changes

in

occur,

asset

lives

may

be

and

an

may

be

performed

on

the

recoverability

of the

carrying amounts.

Investments

in Unconsolidated

Entities

The equity

method

of accounting

is used

when the

Company

can exert significant

over

an entity,

but does

not control

its

and

decisions.

Under

the

equity

method,

original

are

at

cost

and

by the

share of undistributed

earnings or

losses of these entities. Equity investments

without readily determinable

fair values,

when

the

Company

does

not

have

the

ability

to

exercise

over

the

investee,

are

at

cost,

less

impairment,

plus or minus observable

price changes.

the

excess

of

the

price

over

the

fair

value

of

the

net

assets

Goodwill is

for impairment

at

least

or

more

frequently

if

arise

by

first

a qualitative

to determine whether a quantitative

goodwill test is necessary.

After assessing

the totality of events or circumstances,

if we

it is more

likely than

a reporting

unit is

amount,

then we perform

tests to determine

the magnitude

of any

impairment.

Assets

Intangible assets

are initially recorded at fair value in business

which include franchise

rights, customer relationships,

non-compete

agreements, trademarks

and right of use intangibles.

They are amortized

over their estimated

useful lives of

to

years. The

gross

cost

and

of

assets

are

removed

when

the

amounts

are

fully

and

the asset

is no longer

in use

or the

has

expired. When certain

events

in

occur, asset

lives may be adjusted

and an impairment assessment

may be performed on the recoverability of the carrying amounts.

Indefinite life

assets

are recorded at

fair value in

and represent

brand names

and water

rights. They are not

amortized,

but are

reviewed for impairment

at

least annually

or more frequently

if impairment

arise.

Insurance Liabilities and Restricted Cash

The

Company

uses

a

combination

of

and

self-insurance

a

wholly-owned

captive

subsidiary

(the “Captive”)

coverage

for the

potential liabilities

for

workers’

auto

liability and general

risks. Liabilities

risks

that

are retained

by the

Company

are not discounted

and

are estimated,

in

part, by

claims experience,

severity

factors

actuarial

These liabilities

within

“Accrued

current

in the

Balance

Sheets and

were

$

11.4

million

and

$

8.0

million at May

and

May

The Captive

certain levels

of cash

which

are restricted

in use

to secure

the insurer’s

for workers’ compensation,

auto

liability and general

liability programs.

cash was $

6.3

$

1.0

million as of

May

30,

and

May

31,

2025,

and

within

“Prepaid

and

other

current

assets

”

in

the

Balance

Sheets.

The

Company

also maintains

medical

plans

covering substantially

all full-time

employees.

Under the

plan, the

Company

self-

insures its portion of medical claims and

uses stop-loss insurance to limit its portion of medical claims to $

275,000

per occurrence.

with

these

risks

are

in

part

by

claims

experience,

medical

cost

trends,

demographic

factors, severity

factors

actuarial

including accruals

for incurred

but not reported

claims were approximately

$

26.6

22.8

$

23.0

million in fiscal years

2026, 2025, and

2024,

The

liability recorded

for incurred

but not

claims

was

$

4.3

million

and

$

3.0

million as

of May

and

May

31,

2025,

and

are

within

“Accrued

and

other

current

in

the

Balance

Sheets.

Payable

Dividends are

accrued

at the end

of each

quarter according

to the

dividend policy

adopted

by its Board

of Directors

(“Board”)

.

The

Company

pays a

dividend to

of its

Common

Stock on

a quarterly

each quarter

reports net income attributable

,

in

with

GAAP,

in an amount

equal

to

one-third

(1/3) of such quarterly

net income.

Dividends are paid

to stockholders

of record as

of the 60th

day following the

last

day

of such

except

for the

fourth

fiscal quarter.

For the

fourth

pays dividends

to stockholders

of

record on the 65th

day after the quarter

end. Dividends are payable

on the 15th day following the record date.

Following a quarter

does not report

to Cal

Inc., the

Company

will not pay

for

profitable

quarter

until the

Company

is profitable on

a cumulative

from

of the

most

recent quarter

for which a

paid. The dividend

policy is

subject to periodic

review

by the Board.

with

our variable

dividend policy,

we will not

pay a cash

dividend to holders

Stock with respect

to our fourth

quarter

Revenue Recognition

The

Company

recognizes revenue

through

sale

of its

to

through

retail,

and

other

The

of

the

revenue

is

derived

from

or

with

based

upon

the

ordering

its

with

a

single

of

delivering

the

product.

The

Company

the

is met

upon

and

of the

product

by

our

which

occurs

upon

shipment or delivery

to a customer based

on terms of the sale. Costs paid to third party

brokers to obtain

are expensed

as the

are generally less than

one year.

Revenues

are

in

an

amount

that reflects

the net

we

expect

for

of the

products. The Company

periodically offers sales incentives

or other programs

such as rebates,

discounts,

coupons, volume

-based

incentives,

guaranteed

other programs.

The

Company

records an

for costs

which

as a reduction

in revenue

at the time

of sale

using

redemption

rates

of

each

The

Company

regularly

reviews

these

and

any

between

the

costs

and

actual

realization

would be recognized

the subsequent

period.

Shipping and Distribution

Costs

to

deliver

product

to

are

in

selling,

general

and

in

the

and totaled $

108.0

93.5

$

72.7

million in fiscal

years 2026,

2025, and

2024,

Income

Taxes

Income

taxes

are

for

using

the

method.

income

taxes

reflect

the

net

tax

effects

of

between

the

amounts

and

for

and

the

amounts

used

for

income tax

purposes. The Company’s

policy with

respect to evaluating uncertain

tax positions is based upon whether management

it

is more

likely

than

not the

uncertain

tax

will

be

sustained

upon

review

by

the taxing

authorities.

The

tax

must meet

the more-likely-than

-not recognition

with consideration

given to

and probabilities of

the

outcomes

that

realized

upon

using

the

facts,

and

at

the reporting

date.

The

Company

will reflect

only

the portion

of

the

tax

benefit

that

will

be

sustained

upon

resolution

of the

position

and

on the portion of

the tax benefit

not recognized.

initially and subsequently

the largest amount

of

tax

benefit

that

is greater

than

50% likely

to be

realized

upon

with

a taxing

authority

that

has

full knowledge

of all

relevant

information.

The

Company

records

and

penalties

on

uncertain

tax

as

a

component

of

income

tax

expense.

Based

upon

assessment,

there are

no uncertain

tax

positions expected

to have

impact

on the

Business Combinations

applies the acquisition

method

of accounting,

which requires

that once

control is obtained,

all the

assumed,

amounts

interests,

at

their respective

fair values at

the

date

of acquisition.

The

excess

of

the

price

over

fair

values

of

assets

and

liabilities is

as

goodwill.

We

use

various

models

and

methods

to

the

fair

values

of

assets

and

such

as

and

bottom-up

for inventory,

cost method

and

market

for property,

relief-from-royalty

and

excess

earnings to

value intangibles.

in valuing

certain intangible

assets include,

but are not limited

to, the amount

and

timing of future

cash

flows, growth rates, discount

useful lives.

Gain (Loss)

on Involuntary

Conversions

The

Company

maintains insurance

for both

damage

and

business interruption

to catastrophic

events, such

as

fires,

hurricanes,

tornadoes

and

other acts

of God,

and

is eligible

to

participate

in U.S.

of Agriculture

(“USDA”)

indemnity

and

for

certain

losses

due

to

disease

such

as

highly

avian

(“HPAI”).

Specifically,

the Animal

Health Protection

Act authorizes

the USDA to

provide indemnity

to producers for

birds and

eggs

that

must be destroyed

during a

disease response.

received under

these programs

on the

fair

market

value

of the

poultry

and/or

eggs at the

time that

HPAI

virus

is detected

in the

flock.

Other covered

costs

include

feed,

depopulation

and

disposal costs,

and

virus elimination

costs.

The

USDA

does

not provide

indemnity

for income

or

losses

suffered

due

to

downtime

or

other

nor

for

indirect

continuing

Recoveries

received

for

damage,

and

disease

in excess

of or

the

net book

value

of damaged

assets,

including poultry,

clean-up and

demolition costs, and other direct post-event costs are recorded within

“Gain (loss) on involuntary

conversions”

in the

period received

or committed

when all contingencies

with the recoveries are

resolved.

Loss Contingencies

Certain conditions may

exist as of the date the consolidated financial statements are issued that

may result

in

a loss to the Company

but which will

only be resolved

when one or

more future events

occur or fail to occur.

and its legal

counsel

assess

such

and

such assessment

inherently

involves

an

exercise

of

judgment.

In assessing

loss

contingencies

related

to

legal

that

are pending

against

the

Company

or unasserted

claims that

may

such

legal

counsel evaluates

the perceived

merits of

any legal

or unasserted

claims as

well

as the

perceived merits

of the

amount

of relief sought or expected

to be sought

therein.

If the

of a

indicates

it is probable

that

loss has

been incurred

and

of the

can be estimated,

liability would

be accrued

financial statements.

If the assessment

indicates a potentially

material loss contingency is not probable,

but is reasonably

possible, or is

probable but

cannot

be estimated,

then

the nature

of the

liability,

together

with an

of the

range

of possible

loss

if determinable

and

material,

disclosed.

Loss contingencies

considered

remote are

not disclosed

unless they

involve

guarantees,

case

the nature

of the

would be disclosed.

the costs

of litigation as

they

are incurred.

New Accounting Pronouncements and Policies

In December

2023, the

FASB

issued ASU

-09,

Income Taxes

(Topic

Improvements

to Income Tax

. This

ASU

that

an

entity,

on

an

annual

basis,

disclose

income

tax

related

to

the

rate

reconciliation

and income

taxes paid.

The

ASU is

to enhance

the transparency

and decision

usefulness

of income

tax

ASU 2023

-09 is

periods

after

15,

The

Company

has adopted

ASU

2023-09

for the

year

ended

May

on a

prospective

basis.

See

Note 14 -

Income

Taxes

for additional

In

2024,

the

FASB

issued

ASU

-03,

Income

—

Income

—

Expense

Disaggregation

(Subtopic

220-40)

. The objective

of ASU 2024

-03 is to improve

about

a public entity’s

through additional

disaggregation

of income

in January

2025,

the FASB

further

clarified

the

date

of

ASU

-03 with

the

of ASU

-01. ASU

-03 is effective

for

annual

periods

after

15,

2026,

and

interim periods

within

annual

reporting periods

after

15,

Early

adoption

is permitted and

may

be applied

either on a

prospective

or retrospective

basis.

The

Company

is currently

the impact

of ASU 2024-03

on its consolidated

There

are no

other new

pronouncements

issued or effective

during

the fiscal

year

that had

or are expected

to

have

a

impact

on our consolidated

Note 2 – Acquisition

s

Acquisition of Creighton Brothers, LLC

on

March 2, 2026

acquired the shell egg,

foods assets of

Creighton Brothers

LLC and

Crystal Lake

LLC

(“Creighton”).

assets

include

and grading

with capacity

3.2

million layers, including

cage-free layers, and

pullets, a feed mill,

1,007

land, as

well

as an

egg products and

hard-cooked

egg processing facility located

near

Warsaw,

Indiana.

The

table

the consideration

paid

for

and

of

assets

and

assumed

at

date

Cash

paid

$

128,784

amounts

assets

and

assumed

$

16,504

and

assets

plant

& equipment

101,883

assets, net

119,337

payable

and

(553)

Total

118,784

10,000

$

128,784

Inventories consisted

of flock, feed

packaging, and

egg inventory.

Flock inventory

at carrying

value

as

that

its

value

best

its

fair

value.

Feed

and

egg

were all valued

based

prices as of

March

2, 2026.

plant

and

were

valued

the

cost

and

market

and

were

valued

the

cost

which

is

based

on

replacement

or

reproduction

costs

of

the

assets

and

any

from physical

and/or

Land

and

buildings were valued

by using a real

estate

valuation.

Goodwill recorded in

with

the Creighton acquisition

is primarily attributable

to improved efficiencies from integrating

of Creighton

of the

recognized goodwill of

$

10.0

million

as a

result of

the acquisition.

of Clean

Egg, LLC

October 10, 2025

,

certain

assets

of Clean

Egg,

LLC (“Clean

Egg”) based

in Langwood,

Texas,

for

$

23.7

million. The

assets

brown cage-free

and

layers

and

pullets

and

other

inventory,

and

related

to

its

and

egg processing

The

Company

of $

10.2

million

as a

result

of

the

The

Company

for the

as

a business

combination.

of Echo

Lake Foods,

LLC

June 2, 2025

acquired Echo

Lake

certain

related

(collectively “Echo

Lake

Foods”).

Echo

Lake

Foods is

based

in Burlington,

Wisconsin

and

produces,

packages,

markets

and

distributes prepared

foods,

including pre-cooked

omelets, folded and

scrambled egg formats,

pancakes and

waffles. The Company

accounted for

as a

The

Company

finalized

the

combination

during

the

second

quarter

of

fiscal

2026,

which

in

immaterial

measurement

period adjustments.

table

the consideration

paid

for

Foods and

and

assumed

recognized at

date

Cash

paid

$

275,406

amounts

assets

and

assumed

Cash

$

14,147

31,923

21,601

and

assets

3,131

plant

& equipment

151,697

assets

36,800

259,414

payable

and

(14,114)

Total

245,300

30,106

$

275,406

Cash and

accounts receivable

acquired along with liabilities

assumed

were valued at their carrying value

which approximates

fair

value

due to

the short

instruments.

of

raw materials,

and

finished goods.

Raw

and

supplies were

valued

at

their

value

as management

believes that

their carrying

value best

their fair value.

Finished

goods were

valued

using both the

bottom

-up and top-down

The bottom

-up approach

measures the value of inventory

as the value

created

by the

target

company

(i.e., the costs

incurred, profit

realized,

and

tangible and

assets

utilized)

pre-acquisition

date.

The

of inventory

as the

incremental

value

created

by the

market

participant

buyer as

part of

its

selling effort

to an

end customer

(i.e., the

costs

that will

be incurred,

the profit

that will

be

realized,

and the

tangible and

intangible assets

that

will

be utilized)

post-acquisition

date.

plant

and

were

valued

the

cost

and

market

and

were

valued

the

cost

which

is

based

on

replacement

or

reproduction

costs

of

the

assets

and

any

from physical

and/or

Land

and

buildings were valued

by using a real

estate

valuation.

assets

of customer

and a

trade

name.

Customer relationships

were

valued using

the

excess earnings

method

and

the trade

name

using the relief-from-royalty

method.

represents the excess

of the purchase

price of the acquired

business over

date fair value

of the net

assets

Goodwill recorded

Foods acquisition

is primarily

to projected synergies

from integrating

Foods with

of the Company.

recognized goodwill of

$

30.1

million as a

acquisition,

all of which is deductible

for tax

purposes.

recorded transaction

costs of $

thousand in the first quarter of fiscal 2026

and $

6.6

million in the fourth

quarter

of fiscal 2025, respectively,

as a result of the Echo Lake

Foods acquisition,

within “Selling,

general

expenses”

in the

of Deal-Rite

Feeds, Inc. Assets

February 3, 2025

,

acquired certain assets of Deal-Rite Feeds, Inc. and certain

of its

(“Deal-Rite”)

for

$

4.7

The

assets

two

feed

mills,

storage

usable

grain,

vehicles,

related

and

a retail

feed

sales

located

in North

The

assets

will

produce

and

deliver

feed

to

our

nearby

facilities. The Company

for the

as a

plant

and

were valued

the cost

which is based

on replacement

or reproduction

costs

of

and

any

resulting from physical

and/or

Goodwill recorded

with the Deal-Rite acquisition

is primarily attributable

to improved efficiencies from integrating

the assets of

Deal-Rite

with the operations

of the Company.

recognized goodwill of $

1.0

million as a

of ISE America, Inc. Assets

June 28, 2024

, the

Company

all of

the

shell

egg

and

egg

breaking

of ISE

America,

certain

of its

(“ISE”).

The assets

facilities with

a capacity

at the time of acquisition

4.7

million laying hens,

1.0

million cage-free,

and

1.2

million

pullets,

feed

mills,

4,000

land,

inventories

and

an

egg

products breaking

assets

also include an

customer distribution

network across

the Northeast

and

Mid-Atlantic states, and

in

Maryland,

New

Jersey,

Delaware and South

for the

as a

The

table

the

paid

for

the

ISE

assets

and

the

amounts

and

assumed

recognized at

date

Cash

paid

$

111,521

amounts

assets

and

assumed

$

20,547

plant

and

90,572

assets

111,829

payable

and

(308)

Total

$

111,521

Inventories consisted

of flock, feed

packaging, and

egg inventory.

Flock inventory

at carrying

value

as

that

its

value

best

its

fair

value.

Feed

and

egg

were all valued

based

prices as of

June 28,

plant

and

were valued

the cost

which is based

on replacement

or reproduction

costs

of

and

any

resulting from physical

and/or

Intangible assets

of customer lists

acquired. Customers

lists were valued

using the income

method

approac

h.

Other Acquisitions

and Investments

May 12, 2026

,

acquired certain assets of Van’s

Foods business of Sara Lee Frozen Bakey,

LLC (“Van’s”)

$

24.8

million. The assets acquired included trademarks

and trade names, customer

networks and inventory and

will

support

our

foods

segment

and

deliver

greater

value

across

the

supply

chain.

The

Company

for the

as an

asset

September 9, 2024

a strategic

with Crepini LLC, establishing a new egg products

foods venture. The new entity, located in Hopewell Junction, New York,

operates

as Crepini Foods LLC (“Crepini”).

The

Company

capitalized

Crepini with

$

6.75

cash

and

other assets

and

fund

working

capital

in

exchange

for

a

% interest

in

the

new

venture.

Crepini

LLC

contributed

its

assets

and

for a

% interest in the new venture.

November 30, 2024

,

the

Company

the

9.23

%

in

our

majority-owned

subsidiary,

Foods LLC.

Note 3 -

Available-for-Sale

The

presents

the

as

of

May

30,

and

May

31,

(in

May

Amortized

Cost

Gains

Losses

Fair

Value

$

12,362

$

$

—

$

12,366

paper

42,562

—

42,546

bonds

569,137

—

568,395

3,226

—

3,220

and

agency

153,172

—

152,985

bills

37,334

—

37,328

Total

current investment

$

817,793

$

$

$

816,840

May

Amortized

Cost

Gains

Losses

Fair

Value

$

21,695

$

$

—

$

21,698

paper

90,880

—

90,830

bonds

431,378

—

431,508

5,200

—

5,194

and

agency

240,655

—

240,395

bills

103,119

—

103,083

Total

current investment

$

892,927

$

$

$

892,708

Actual maturities

may

differ from

contractual

maturities as

some borrowers

have

the right to

call or

prepay

with

or

without penalties.

Contractual

of current

securities at

May

are as

follows (in thousands):

Fair Value

Within one

year

$

474,328

1-5 years

342,512

Total

$

816,840

Note 4 -

Fair Value

Measurements

The

Company

is required

to

categorize

both

and

nonfinancial

assets

and

based

on the

hierarchy.

The

fair

value

of

an

asset

is the

price

at

which

the asset

could

be

sold in

an

orderly

between

unrelated,

knowledgeable,

and willing

parties able

to engage

in the

transaction.

A liability’s

fair value is

defined as

that would

be paid to

transfer the

liability to a new

obligor in a

between such parties, not

that would be paid to

settle

the liability with

the creditor.

●

Level 1

• Quoted

prices in

active

markets

for identical

assets

or liabilities

●

Level

Inputs

other

than

quoted

prices included

in

Level 1

that

are observable

for

the

asset

or

liability,

either

directly or

indirectly,

including:

o

Quoted

prices for similar

assets

or liabilities in

active

markets

o

Quoted

prices for identical

or similar

assets

in non-active

markets

o

Inputs

other than

quoted

prices that

are observable

for the

asset

or liability

o

Inputs

derived principally from

or corroborated

by other

observable

market

data

●

Level

Unobservable

inputs

for

the

asset

or

that

are supported

by

little

or

no

market

and

are

to the

of the

assets

or liabilities

The disclosure

of fair

value

assets

and

that

at

cost are

as follows:

Cash and Cash Equivalents, Accounts Receivable, and

Accounts Payable

The carrying

amount

due to

the short

instruments.

Assets and

Measured

at Fair Value

on a Recurring

Basis

with the fair value

hierarchy

described

above,

the following

table

shows the fair

value

of our

financial assets

and

that are required

to be measured

at fair value on a recurring

basis as of May

30, 2026 and

May 31, 2025 (in thousands

):

May

Level 1

Level 2

Level 3

Balance

$

—

$

12,366

$

—

$

12,366

paper

—

42,546

—

42,546

bonds

—

568,395

—

568,395

—

3,220

—

3,220

and

agency

—

152,985

—

152,985

bills

—

37,328

—

37,328

Total

measured

at

$

—

$

816,840

$

—

$

816,840

—

—

21,500

21,500

Total

liabilities measured

at

$

—

$

—

$

21,500

$

21,500

May

Level 1

Level 2

Level 3

Balance

$

—

$

21,698

$

—

$

21,698

paper

—

90,830

—

90,830

bonds

—

431,508

—

431,508

—

5,194

—

5,194

and

agency

—

240,395

—

240,395

bills

—

103,083

—

103,083

Total

measured

at

$

—

$

892,708

$

—

$

892,708

—

—

21,500

21,500

Total

liabilities measured

at

$

—

$

—

$

21,500

$

21,500

securities – available

-for-sale are all classified

as Level 2 and

consist of

securities with maturities

of three

months

or

longer

when

purchased.

We

these

as

current

because

amounts

are

readily

for

current

Observable

inputs for

these securities

are yields, credit

risks, default

rates, and

volatility.

as Level

3 consists

of the

to pay

an

earnout

to Fassio

Egg Farms,

Inc.

(“Fassio”)

on the

meeting

certain

return

on

milestones

over

a

three-year

period

that

commenced

on the date

of the

in the second

quarter

The fair value

of the

is

using a discounted

cash flow

model. Key

and unobservable

inputs that require

used

in the

include weighted

average

cost of

capital,

egg

prices,

revenue

and

period

for

which

the

is

measured,

and

the

probability

assessments

with

respect

to

the

likelihood

of

achieving

the

forecaste

d

projections.

table

shows the

and

ended

in fair value

for the

consideration:

Fassio Contingent

Consideration

June 4, 2023

$

—

of Fassio

1,000

5,500

6,500

15,000

May

21,500

—

May

$

21,500

At May

30, 2026, the contingent

with accrued

expenses and

liabilities in the consolidated

balance

sheets.

Adjustments

to

the

fair

value

of

are

within

the

selling,

general

and

in the consolidated

of income.

Note 5 -

of the

May

May

Flocks, net

of amortization

$

192,673

$

166,507

Feed and

84,769

65,192

Raw materials

and

finished goods

97,823

63,971

$

375,265

$

295,670

We

grow and

maintain flocks of layers

(mature female

chickens), pullets

(female chickens

under 18 weeks

of age), and

breeders

(male and

female

chickens used

to produce

fertile eggs

to hatch

for egg production

flocks).

Our

total flock

at May 30,

May 31,

2025, consisted

14.1

11.5

million

pullets and

breeders

and

50.0

million

and

48.3

million

layers,

expensed

and

with the flocks

to cost

as follows (in thousands):

May

May

$

205,041

$

196,248

$

198,298

Mortality

11,170

10,619

10,640

Total

flock costs

charged

to cost

$

216,211

$

206,867

$

208,938

Note 6 -

Plant and Equipment

plant

and

of the

May

May

Land

and

$

176,243

$

158,627

Buildings and

835,670

722,552

and

1,085,789

876,024

Construction

-in-progress

207,006

148,621

2,304,708

1,905,824

Less: accumulated

986,373

879,140

$

1,318,335

$

1,026,684

expense was $

116.6

91.1

$

77.2

million in the fiscal years ended

May 30, 2026, May

and

June 1, 2024,

Note 7 -

in Unconsolidated

Entities

30, 2026 and

May 31,

2025,

owned

% of Specialty

Eggs,

LLC (“Specialty

Eggs”) and

of Southwest

Eggs,

LLC (“Southwest

Eggs”),

for using the equity

method

of accounting.

Eggs owns the Egg-Land’s

Best franchise

for most of Georgia and

South Carolina,

as well as a portion

of western North Carolina

and eastern

Alabama.

Southwest Specialty Eggs

owns the Egg-Land’s

Best franchise

for Arizona, southern

California and

Clark

County,

Nevada

(including Las Vegas).

Equity

method

are

in

“Other

assets”

in

the

Balance

Sheets

and

totaled

$

5.6

$

10.3

million at May

and

May

Equity in income (loss) of unconsolidated

entities of a $

1.3

million loss, $

6.2

million income,

and $

1.4

million income from these

has

been included

in

“Other,

net” in

the

2026,

2025,

and

2024,

relates to

with these unconsolidated

For the

ended

May

May

Sales to unconsolidated

$

76,130

$

110,106

$

100,553

from

75,031

76,167

63,916

Distributions

from

3,253

4,050

3,000

May

May

from

$

5,224

$

5,090

payable

to unconsolidated

Note 8 -

Goodwill and

Other Intangible

Assets

During the

fourth

quarter of

transitioned

into its new reporting

structure which

in changes

to

operating segments and

reporting units.

The goodwill of the Company’s

historical reporting units were reallocat

ed

to the

new reporting

units on a

relative fair

value

basis as

of the date

of the reorganization.

The

Company

assessed

goodwill for

before and

after the

reorganization

and concluded

that

there was no

goodwill impairment.

For

more information

regarding the

changes

to

our

in

the fourth

quarter

2026,

Note 15 –

Segment Reporting

.

The changes

in the carrying amount

of goodwill were (in thousands):

Shell

Eggs

Foods

Total

Balance

$

45,776

$

—

$

—

$

—

$

45,776

1,000

—

—

1,000

Balance

May

46,776

—

—

—

46,776

50,283

—

—

—

50,283

Balance

March

2, 2026

97,059

—

—

—

97,059

reallocation

(97,059)

13,790

53,163

30,106

—

Balance

May

$

—

$

13,790

$

53,163

$

30,106

$

97,059

Assets

The carrying

amounts

for indefinite-lived

intangibles consisted

of the

May

May

Brand

name

$

14,526

$

—

Water

rights

2,942

2,942

Total

$

17,468

$

2,942

During

fiscal

2026,

the

Company

the

Van’s

brand

name

as

part

of

the

asset

This

asset

is

as an

indefinite-lived brand

name.

assets, net,

subject

to amortization,

of the

following (in

Franchise rights

Other intangibles

Total

Balance

$

11,787

$

$

$

13,054

—

1,319

(1,596)

(353)

(209)

(2,158)

Balance

May

10,191

1,069

12,215

—

40,000

10,212

50,212

(1,595)

(3,555)

(1,615)

(6,765)

Balance

May

$

8,596

$

37,400

$

9,666

$

55,662

For

assets

subject

to

amortization,

the

gross

amounts

and

are

as

follows

(in

May

May

Gross carrying

Gross carrying

amount

amount

Amortizable

assets:

Franchise rights

$

27,979

$

(19,383)

$

29,284

$

(19,093)

41,700

(4,300)

1,700

(745)

Other intangibles

11,981

(2,315)

1,769

(700)

Total

$

81,660

$

(25,998)

$

32,753

$

(20,538)

No significant

residual value is estimated

for these intangible assets.

Aggregate amortization

expense for fiscal years 2026,

2025,

and 2024

totaled $

6.8

2.2

million and $

2.2

million, respectively.

expenses is classified in “Selling,

general

and

”

in the accompanying

The

table

presents

the

total

expense

of

assets

for

the

five

succeeding

years

(in

For fiscal year

expense

$

7,735

7,665

7,602

7,512

6,351

Thereafter

18,797

Total

$

55,662

Note 9 -

Employee

Benefit Plans

KSOP

The

Company

a

KSOP covering

all employees

(the

“Plan”).

The

Company

contributes

% of

eligible

plus discretionary

amounts,

with

vesting

immediately.

Cash

to

the

Plan

were

$

7.0

$

5.5

$

4.3

million

in

fiscal

2026,

2025,

and

2024,

The Plan

Company

stock in the

open

market

using Company

and

dividends.

Deferred Compensation

and Other Postretirement

Plans

maintains several

and other postretirement

plans for

certain

and a

select group

of

and

highly compensated

employees of

The liability

related

to

these

was

$

6.7

$

4.1

May 30,

and May

and is classified

within “Accrued

current

and

“Other

in

Balance

Sheets. The

related

expense

for these

plans

was $

1.1

1.5

$

1.2

million in fiscal 2026,

and

2024,

Note 10

• Credit Facility

For

fiscal

years

2026,

and

2024,

expense

was

$

$

and

$

related

fees on

the Credit Facility described

below.

On November 15, 2021,

we entered into an Amended

Credit Agreement (as amended,

the “Credit Agreement”) with

a

five-year

term, expiring

15, 2026. The

for

a

senior secured

revolving

credit facility

(the

“Credit

Facility”

or “Revolver”)

in

an

initial

amount

of up

to

$

which

a $

million

sublimit

for

the

of standby

letters

of

credit

and

a $

million

sublimit

for

swingline

loans.

The

Credit

Facility

also

an accordion

feature

permitting,

consent of

BMO Harris

Bank N.A.

(the “Administrative

Agent”),

in

the

Credit

Facility

in

the

up

to

$

million

by

adding

one

or

more

incremental

senior

secured

term

loans

or

one

or

more

times

the

revolving

commitments

under

the

Revolver.

No

amounts

were

borrowed

under

the

Credit

Facility as of

May 30,

2026 or May

31, 2025 or during

or fiscal

2025. The Company

had $

5.9

million of outstanding

standby

letters of credit issued under

the Credit Facility

at

May

.

On May

26,

2023, we

entered

First Amendment

(the “First

Amendment”)

to the

Credit

Agreement,

which replaced

the

London Interbank

Offered Rate

interest rate benchmark

with the secured overnight

financing rate

as administered

by the Federa

l

Reserve

Bank of

New York

or a

successor

administrator

of the

secured overnight

financing

rate (“SOFR”).

The

rate in

with loans

made

is based

on, at

election,

either the

Term

SOFR

Rate plus

the Applicable

Margin

or the Base

Rate plus the

Applicable

Margin.

The

“Adjusted Term

SOFR”

means

to any

tenor, the

per annum

rate equal

to the

sum of

(i)

Term

SOFR as defined

in the Credit Agreement

plus (ii)

0.10

% (10 basis

points);

provided, if

Term

SOFR determined

as provided

above

shall ever

be less

than

the Floor,

then

Adjusted Term

SOFR shall

be deemed to be the Floor.

The “Floor” means

the rate per annum

of interest equal to

0.00

%. The “Base

Rate” means

a fluctuating

rate per

annum

equal to the highest of (a)

the federal funds

rate plus

0.50

% per annum,

(b) the prime rate of interest

by the

Administrative

Agent, and

(c) the

Term

SOFR for

a

one

-month tenor

plus

1.00

%. The

“Applicable

Margin”

means

0.00

% to

0.75

% per annum

for Base Rate

Loans and

1.00

% to

1.75

% per annum

for SOFR

Loans, in

each case

depending

upon the

Total Funded

Debt

to Capitalization

Ratio for the Company

at the quarterly pricing date.

will

pay a commitment

fee on the unused portion of the Credit

Facility payable

quarterly from

0.15

% to

0.25

%, in

each case depending

upon

the Total

Funded

Debt to Capitalization

Ratio

for the

Company

at

the quarterly

pricing date.

On

March

25, 2025,

entered

Second

Amendment

(the “Second

Amendment”)

to

the

Credit Agreement.

Under

the

Credit Agreement,

a

Change

of

Control

is an

event

of default.

The

Second

Amendment

amended

the definition

of

Change

of

Control

to exclude

from

that

definition the

(the

“Class

A

Conversion”)

of

all outstanding

shares

of the

Class A Common

Stock into

Common

Stock which occurred

on April 14, 2025.

The Credit Facility is guaranteed

by substantially all the current and future

wholly-owned direct

and indirect domestic

of

the

Company

(the

“Guarantors”),

and

is

secured

by

a

first-priority

perfected

in

all

of

the

and the Guarantors’ accounts, payment

intangibles, instruments (including promissory notes),

chattel paper,

(including farm

products)

and

deposit accounts

maintained

with the Administrative

Agent.

The

customary

covenants,

including restrictions

on the

incurrence

of liens,

incurrence

of additiona

l

debt, sales

and

other fundamental

changes and

investments.

The Credit Agreement

of

two financial

covenants:

(i) a maximum

Total Funded

Debt

to Capitalization

Ratio tested

quarterly of

no greater

than

%; and

(ii) a requirement

Minimum Tangible

Net Worth

at all times

of $

Million

plus

% of net income (if

is

positive)

less

permitted

restricted

for

each

fiscal

quarter

after

27,

The

Credit

Agreement

also

customary

events of default

and customary

remedies upon the

occurrence

of an event

of default, including

acceleration

of the

amounts

due under

the Credit Facility and

foreclosure of

the collateral

securing the Credit Faci

lity.

terms

of the

Credit

Agreement,

payment

of dividends

Company

’s current dividend

policy of

one-

third of the

Company

’s net income,

with

GAAP,

and payment

of other dividends or

repurchases

by the

Company

of its capital

stock is allowed,

as long

as after

giving effect

to such

or repurchases

no default

has

occurred and

is continuing

and the sum

of cash

of the Company

and its subsidiaries

plus availability

under

the Credit Facility

equals

at

least $

At May

we were in compliance

with the covenant

of the

Credit Agreement.

Note

• Equity

On April

14, 2025,

all

4.8

million shares

of Class

A

Common

Stock were

converted

into

Common

Stock. Upon

the conversion

of the

Class A Stock, the

Company

was no longer a

controlled company

rules of The Nasdaq

Stock Market.

25, 2025,

the Board

a

$

million

program

authorizes

the Company,

in

discretion, to repurchase

Common

Stock from time to time for an

aggregate purchase

price up to

$

million

(exclusive

of

any

fees,

taxes,

commissions

or

other

related

to

such

repurchases),

subject

to

market

actual

timing, number

and value

program

will

be determined

by management

in its discretion

and

will depend

on a

number

of

but not

limited to,

the

market

price of

the

Common

and

1,571,950

and

551,876

shares during fiscal

2025, respectively,

30, 2026, the

Company

had remaining authorization

to purchase up to

$

320.7

million under

the repurchase

Authorized

stock

of

10,000,000

shares,

with

a

par

value

of

$

0.01

,

of

which

no

shares

were

issued

and

as of

May

and

May

Note 12

• Net Income per

Common

Share

Basic net income per

Foods, Inc. is based

on the weighted average

shares of Common

Stock (and

when they were outstanding,

shares of Class A

Common

Stock) outstanding. All shares of Class A Common

Stock were

converted

into Common

Stock on April 14, 2025.

Diluted

per share attributable

is based on

weighted-

average

Common

Stock outstanding

during the relevant

period adjusted

for the

dilutive effect

of share

-based

awards.

table provides a reconciliation

of the numerators

and denominators

used to determine basic and

diluted net income

per common

(amounts

in thousands,

except

data):

May

May

Numerator

$

318,112

$

$

276,282

Less: Net income

1,430

(1,816)

(1,606)

to Cal

Inc.

$

316,682

$

$

277,888

Denominator

Weighted-average

common

shares outstanding,

basic

47,650

48,719

48,717

Effect

of dilutive securities

of restricted

shares

Weighted-average

common

shares outstanding,

diluted

47,781

48,891

48,873

per common

to Cal

Inc.

Basic

$

6.65

$

25.04

$

5.70

Diluted

$

6.63

$

24.95

$

5.69

Note 13

– Stock-Based

Compensation

The

stock-based

plan,

the Amended

Cal

Inc. 2012

Omnibus Long

-Term

Plan (the

“LTIP

Plan”),

for

the granting

of equity

-based

awards

such as

restricted

stock,

stock

units and

stock options

.

Awards

may

be granted under

the LTIP

Plan to any employee,

any non

-employee member

of the Board,

and

any

consultant

who

is a

natural

person

and

services to

us or

one

of

our

(except

for

incentive

stock

be granted

only

to our

employees).

As of

May

30,

2026,

number

for issuance

was

719,234

, and

may

be authorized

but unissued

shares or

shares. Common

Stock issued

from

shares under

the plan

was

89,867

shares,

47,700

shares and

86,803

shares for

and

2024,

Stock

stock

LTIP

Plan

vests

three years

from

the grant

date,

or upon

death

or disability,

change

in

control, or

(subject to certain

requirements).

The restricted

stock contains

no other service

or performance

stock is

awarded

in the

name

of the

recipient and,

except

for the

right of

disposal, constitutes

issued and

shares of the

Common

Stock for

all corporate

during the period of

restriction including the right to receive

dividends. Compensation

expense is a fixed amount

based on the grant date closing price and is amortized

on a straight-line basis

vesting period.

Forfeitures

are recognized

as they

occur.

Total

stock-based

expense related to

the restricted

stock was

$

5.3

$

4.5

$

4.4

fiscal

2026,

and

2024,

Our unrecognized

expense as

of non-vested

shares was

$

9.0

May 30,

and $

8.0

May

.

The

unrecognized

expense

will

be

to stock

expense

over a

period

of

2.1

years.

A summary

of our

and

related

for our restricted

stock is as follows:

Shares

Average

Grant

Date Fair Value

277,954

$

49.38

Granted

47,700

109.97

Vested

(108,058)

41.32

Forfeited

(4,879)

54.86

May

212,717

$

66.93

Granted

89,867

76.47

Vested

(88,519)

55.61

Forfeited

(5,063)

83.85

May

209,002

$

75.42

Performance-Based

Long-Term

Awards

June

1, 2025,

the

Company

a new

-based long-term

incentive

award

under

our

program,

which provides

for

awards

of performance

share units

(“PSUs”)

to certain

key

executives.

Pursuant

to

these awards,

certain

officers have

the opportunity

Common

Shares after

a three-year

period contingent

on (a)

the executive’s

service

through the

period, except

as otherwise

in the

award agreement,

and

(b)

the

achievement

of specific

goals tied

to

the

two equally

weighted

measures:

the

EBITDA and relative total stockholder

return compared

to a peer group. Depending

on the level

of achievement

of these two

over

the performance

period, the PSUs

will pay

out between

% and

% of the

target

award.

Total

expense

as a

performance-based

program

was $

in fiscal 2026.

Our unrecognized

expense as a result

of non-vested

shares in

the performance-based

program was $

at May 30, 2026

.

The unrecognized compensation

expense will be amortized

to stock compensation

expense over a period

of

2.0

years.

A summary

of our

and

related

for our

performance-based

awards

is as follows:

Shares

Average

Grant

Date Fair Value

May

—

$

—

Granted

9,260

101.95

May

9,260

$

101.95

Note 14

• Income Taxes

Income

Tax

Provision

The components

of our

income

tax

provision (benefit)

were (in thousands):

ended

May

May

Current:

Federal

$

29,749

$

312,000

$

83,721

State

(4,220)

61,340

9,640

25,529

373,340

93,361

Deferred:

Federal

59,739

12,703

(7,371)

State

7,624

(1,133)

(2,301)

67,363

11,570

(9,672)

Total

income

tax

$

92,892

$

384,910

$

83,689

Deferred Taxes

The tax

effects

of significant

creating deferred

tax

assets

and

were (in thousands):

May

May

tax

assets:

Accrued

$

3,985

$

3,620

State

loss carryforwards

income

Right of

use - asset

3,334

Other

12,969

13,239

Total

tax

assets

21,203

17,869

tax

liabilities:

plant

and

$

(180,377)

$

(128,789)

(49,478)

(35,041)

in affiliates

(1,618)

(2,205)

Right of

use - liability

(3,358)

(240)

Other

(8,244)

(6,245)

Total

tax

(243,075)

(172,520)

Net deferred

tax

$

(221,872)

$

(154,651)

The company

had income tax

net operating loss carryforwards

related to its

state operations

$

thousand as of

May

30, 2026.

The loss carryforwards

are not

subject

to expiration.

On July 4, 2025,

H.R. 1, informally known

as the One Big Beautiful

Bill Act ("The Tax

Act"), was enacted.

The Tax Act extends

and makes

permanent

several key

provisions of

the Tax

Cuts and

Jobs Act of

previously set to

expire as of

31,

2025. The impacts

of the Tax Act are

reflected in our

results for

the year ended May

and had

no material impact

on our

income

tax

expense

or effective

tax

rate.

Reconciliation

of the U.S. Federal

Statutory Rate

to the

Rate

The

Company

has

elected

to

prospectively

adopt

the

guidance

in ASU 2023

-09,

Income

Taxes

(Topic

740):

Improvements

to

Income

Taxes

. The

following table

is a

reconciliation

of the

U.S. federal

to the

total

tax

rates for

the year

ended

May

with the guidance

in ASU

2023-09

end May

Amount

Percent

U.S. federal

tax

rate

$

86,226

21.0

%

State

and

local income

taxes*

4,290

1.1

Tax

credits

(251)

(0.1)

Nontaxable

or nondeductible

items

2,627

0.7

Provision for

income

taxes

$

92,892

22.7

%

*State taxes

in

Georgia, Florida,

Mississippi, and

Texas

made up the majority (greater than

50%) of the tax effect

in

this category.

table

is a reconciliation

of the

U.S.

federal statutory

tax rate to the

total effective

tax rate for

the years

ended May

and

with guidance

prior to the adoption

of ASU 2023-09

end

May

Statutory

federal

income

tax

$

337,042

$

75,931

State

income

taxes,

net

47,169

5,798

Other,

net

1,960

$

384,910

$

83,689

Income

Tax

table is a summary

of income taxes

paid (net of refunds) by jurisdiction

to the disclosure requirements

of

ASU 2023-09

for the

year

ended

May

end

May

Federal

$

89,583

State

30,344

Income

tax

$

119,927

We

paid

income

taxes, net

of refunds,

of $

119.9

426.2

$

35.1

million during

fiscal

years 2026,

2025,

and

2024,

we had

no

significant unrecognized

tax benefits.

We

accrued

and paid

no

interest or penalties

during

or 2025

related

to uncertain

tax

positions.

We

to income

tax

in many

jurisdictions

within

We

are

not

under

audit

by the

Revenue

Service

or

by

any

state

and

local

tax

authorities.

Tax

periods

for

all

years

with

fiscal

year

remain

open

to

examination

by federal

and

state

taxing jurisdictions

to which we are subject.

Note 15

– Segment

previously managed

its

as

one

and reportable

segment.

in the

of 2026,

the

Company

revised its

to

change

the

manner

its

is managed,

which reflects

a

focus

on

product categories

rather

than

on a

basis.

As a result,

three

segments:

Shell

Eggs,

Shell

Eggs,

and

Foods.

The

,

which

include

co-pack

hard

-cooked

other

activities,

are not

reportable segments,

as defined by

the applicable accounting

standard

.

All

prior fiscal year

periods

recast to reflect the

.

The

Shell

Eggs

segment

of

the

and

sold as conventional

shell eggs, which includes our

brands

and

Sunny Meadow®.

The Specialty

segment

of the production,

packaging, marketing

of shell eggs sold as cage

-free, nutritionally

organic, brown, pasture

eggs. This segment

our

brands

Eggs

® and

as well

as

branded

from

our membership

of Eggland’s

Best, Inc. cooperative

which includes

Best®

and

Land O’ Lakes®.

Foods

The

Foods

segment

of the

,

and

of

foods

such

as

egg

folded

and

egg

formats

,

and

wraps.

This segment

Van

’s®

and

operating segment

s

are determined

on the

basis of our organizational

structure and

that

is regularly

reviewed

by our Chief

Decision

Maker

(“CODM”).

CODM

is Sherman

Miller,

President

and Chief

Officer.

Segment

income

is

utilized

during

our

forecasting

process

to

assess

profitability,

strategic

and

capital

investments.

The

CODM

compares

actual

of segment

segment

income

to

prior period

periodic forecasts

to assist with assessing

and

deciding how to allocate

resources.

The accounting

policies of the segments are generally the same

as those presented in

Note 1 - Summary of Significant Accounting

Policies

.

Segment SG&A represents

direct costs

with

each segment

for

mar

keting, delivery and employee

costs.

Other

– segment

income

segment

income

from other

such

as co-pack

hard

-cooked

other business

that

do not

individually

meet

the quantitative

thresholds for

separate

disclosure.

SG&A

such

as

payroll

related

legal

and

professional

fees,

and

other expenses

that

are not

used to

measure

segment

income

and

is managed

at

the corporate

office.

sales represent

sales between segments

as part of our vertical integration.

sales from the Conventional

and

Shell

Egg

are

sales

related

to

our

non-reportable

egg

or

hard

-cooked

and Specialty

Shell Egg intersegment

sales are transferred

at discounted

fixed rates

to account

for undergrad

es and

yield loss,

market

rates, or at

costs.

does not report total assets by segment as operations

are highly

integrated,

and assets

are shared amongst

The CODM does

not assess

or allocate

resources based

on segment

assets.

Segment results, including

the significant expense

categories regularly provided

to the CODM, are provided below (in thousand

s):

ended

May

Shell

Eggs

Foods

Total

$

1,309,557

$

1,049,228

$

244,802

$

2,603,587

sales

38,519

21,230

—

59,749

Total

segment

sales

1,348,076

1,070,458

244,802

2,663,336

1,059,179

777,920

185,370

2,022,469

72,256

110,994

25,550

208,800

$

216,641

$

181,544

$

33,882

$

432,067

income

19,044

SG&A

(108,353)

Gain on involuntary

8,819

Loss on

fixed assets

(1,391)

income

350,186

net

60,818

Income

before

income

taxes

$

411,004

ended

May

Shell

Eggs

Foods

Total

$

2,703,502

$

1,126,601

$

4,050

$

3,834,153

sales

52,357

28,350

—

80,707

Total

segment

sales

2,755,859

1,154,951

4,050

3,914,860

1,393,212

717,411

4,511

2,115,134

72,644

103,938

1,658

178,240

$

1,290,003

$

333,602

$

(2,119)

$

1,621,486

income

42,091

SG&A

(127,141)

Loss on

(156)

Gain on disposal

assets

income

net

66,603

Income

before

income

taxes

$

1,603,142

ended

Shell

Eggs

Total

$

1,226,903

$

863,297

$

2,090,200

sales

20,389

10,322

30,711

Total

segment

sales

1,247,292

873,619

2,120,911

970,031

648,236

1,618,267

63,560

89,188

152,748

$

213,701

$

136,195

$

349,896

income

33,566

SG&A

(94,516)

Gain on involuntary

23,532

Loss on

fixed assets

(26)

income

312,452

net

47,519

Income

before

income

taxes

$

359,971

table

shows the reconciliation

of net

sales to consolidated

results (in thousands):

Ended

May

May

Total

$

2,603,587

$

3,834,153

$

2,090,200

sales

308,045

427,732

236,243

Total

$

$

$

Other

– segment

sales

represent

sales

from

our

non-reportable

which

co-pack

sales,

egg

product

sales, hard

-cooked

eggs and other

business activities.

Revenue primarily

derives from

sales

table

revenue

disaggregated

by segment

and

by sales channel

May

Retail

Other

Total

$

1,099,245

$

193,614

$

16,698

$

1,309,557

952,556

92,343

4,329

1,049,228

Foods

92,031

104,157

48,614

244,802

sales

245,415

60,269

2,361

308,045

$

2,389,247

$

450,383

$

72,002

$

May

Retail

Other

Total

$

2,247,913

$

424,133

$

31,456

$

2,703,502

1,022,253

98,508

5,840

1,126,601

Foods

4,050

—

—

4,050

sales

337,489

89,347

427,732

$

3,611,705

$

611,988

$

38,192

$

Retail

Other

Total

$

1,007,282

$

210,423

$

9,198

$

1,226,903

835,826

25,879

1,592

863,297

sales

198,943

36,972

236,243

$

2,042,051

$

273,274

$

11,118

$

Retail customers

include

and regional grocery

store chains,

club

stores, and

servicing independent

in

the

U.S.

include

that

sell

food

and

related

items

to

restaura

nts, healthcare

and

education

facilities and

hotels.

Walmart

Inc. (including

Sam’s Club)

for

30.0

%,

33.6

% and

34.0

% of net sales dollars

2026,

2025,

and

2024,

Note 16

• Commitments

and Contingencies

In re Shell

Eggs Litigation

Since

2025,

the

Company

has

been

named

as

a

defendant

in

several

filed

in

federal

courts

alleging

identical claims,

including:

(1) the

following lawsuits

in the

Southern

District of

Indiana:

(a) King Kullen

Grocery

Co., Inc. v. Cal

-Maine Foods, Inc.,

et al., Case No. 1:25

-cv-2274, (b) Nineteenseventynine

LLC d/b/a

The Breakfast

Joynt v. Cal-

Maine

et

-cv-2301, (c)

Taylor

Egg Products,

Inc. v.

Cal

Inc., et

No. 1:25-

cv-2554,

(d) Hudson

v.

Cal

Inc. et al.,

Case

-cv-02573, (e) Brandon

Huyler v.

Cal

Inc.,

et

al., Case No. 1:26

-cv-00135, and

(f) Gloria

Emery,

Carol Goldberg,

and Casey

Whalen v. Cal

-Maine Foods, Inc.,

et al., Case No.

1:26-cv-00135;

(2) the

in the

Northern

of

Illinois: (a)

Birchmans

Parisian,

LLC (d/b/a

Lisciandro's

Restaurant)

v. Cal

Inc.,

et al., Case

No.

1:25

-cv-14030, (b)

Phil-N-Cindy's

Lunch,

Inc. v.

Cal

Inc.,

et al., Case

-cv-14082, (c) Yell

-O-Glow

v.

Cal

Inc., et

-cv-15084, and

(d)

Tariq

Habash,

Delia Govea, Andrew

Phillips,

and

Catalina

Torres v.

Urner

Barry

Publications,

Inc.,

Cal

Inc.,

et

No.

1:25

-cv-14112;

(3) the following

in the

Western

of Wisconsin:

(a) Matthew

Edlin v.

Cal

-Maine

et al., Case No. 3:25

-cv-946, and (b) India Price, Lakia Session,

and Karen Solomon

v. Cal

Inc., et al.,

Case

No.

3:25

-cv-1016;

and (4)

a

lawsuit in

the Western

of Missouri:

Ryan

v. Cal

Inc.,

et al.,

Case

No.

4:25-cv-00999.

The

allege

that

the

along

with

other

egg

and

associations,

conspired to artificially

inflate the prices of

shell eggs nationwide, primarily

through manipulation

of industry price

benchmarks

(such as

the Urner

Barry

Egg Index

and

Eggs Clearinghouse,

Inc. spot

market),

coordinated

supply

during

the calendar

year

highly pathogenic

avian

(“HPAI”)

outbreak.

In each

case, the

plaintiff

seeks

certification

of

a

putative

class

of

either

direct

or

indirect

purchasers,

monetary

damages,

relief,

attorneys’

fees, and, in some cases, restitution under Section 1 of the Sherman

Act, 15 U.S.C. § 1 (the “Sherman Act”) and various

state

and

protection

statutes.

10, 2026,

the

Joint

Panel on

Multidistrict

Litigation

issued a

Transfer

Order,

consolidating

the above

actions and

transferring

them to the Western

District of Wisconsin

for pre-trial proceedings.

An initial judicial

conference took

place

on May

8,

2026,

where

entered

an

initial

case

order, setting

forth

deadlines

for

the

complaints

and initial

briefing

to be filed.

No discovery

has taken

place in any of

the actions.

disputes plaintiffs’

allegations

in each

actions

and

intends to

vigorously defend

itself in these actions.

Civil Investigative

Demand

In March

2025,

received a

Civil Investigative

Demand

(“CID”) from

the

U.S. Department

of

Justice

(“DOJ”) in

with

an

to

whether

there

was

a

violation

of

the

laws

through

alleged

anticompetitive

conduct

by and among egg producers.

In August 2025,

received a subpoena

from the State of New

York

requesting information

and documents

related to its investigation

of anticompetitive

conduct

and

high egg

prices in the egg

and in

March 2026, the

Company

received a similar subpoena

from the State of Washington

related

to its investigation

of anticompetitive

conduct

and high egg prices

in the egg

various

states’

attorneys

general sought

to join

the DOJ’s

or requested

access

to the

confidential

disclosures by the

Company

to the

DOJ.

On or about

June 25, 2026,

entered into an

with the DOJ

and 17

states’ attorneys

general to resolve

the

investigation,

subject to applicable

court approvals

and procedures.

denied all wrongdoing or violations of law and

no fines

or penalties

were assessed

against

In connection

with

the agreement,

agreed to implement

certain

and

measures,

to donate

million eggs

to food

banks

and

non-profits,

and

to pay

$

1.5

million to

the settling

states

to resolve the

matter.

The

State

of Washington

did not

join

in

this settlement

and

continues to

comply

State

of Washington’s

subpoena

and cooperate

with

its investigations.

cannot predict the eventual

scope, duration or outcome

of the State

of Washington’s

and

is unable to

or range of

losses, if any,

at

this time.

Kraft Foods

Global, Inc.

et al. v.

United Egg

Producers,

Inc. et al.

25,

2008,

the

Company

was named

as one

of several

in numerous

cases

involving the

U.S.

shell

egg

The

Company

settled all

of

these

cases,

except

for

the

claims

plaintiffs

who

sought

substantia

l

damages

allegedly arising from the purchase

of egg products (as opposed to shell eggs). These remaining

plaintiffs are Kraft Food

Global,

Inc.,

General

Mills, Inc.,

and

Nestle

USA,

Inc. (the

“Egg Products

Plaintiffs”)

and,

until

was

reached

as described

below, The Kellogg

13, 2019, the case with

the Egg Products

Plaintiffs was remanded

from

a multi

-district litigation proceeding in the

United States District

Court for the Eastern

District of Pennsylvania,

In re Processed Egg Products

Antitrust Litigation,

MDL

No.

2002,

to

the

United

States

Court

for

the

Northern

of

Illinois,

Kraft

Foods

Global,

Inc.

et

al.

v.

United

Egg

Producers, Inc. et al., Case No. 1:11

-cv-8808, for trial.

The Egg Products Plaintiffs

alleged that

and other defendants

violated

Section

1 of the

Sherman

Act, by

agreeing

to limit

the production

of eggs

and

thereby

illegally to

raise the

prices

that

plaintiffs

paid

for processed

In particular,

the Egg

Products Plaintiffs

attacked

certain

features

of the

United

Egg

Producers

animal

-welfare guidelines and

program

used by

and

many

other egg producers.

On October

24,

2019, the

Company

entered into a confidential

with The Kellogg

Company

dismissing all

claims

against the

Company

for an amount

that did not

have a

material impact

on

or results

of

On

11,

2019,

a

stipulation

for

dismissal

was

filed

with

the

court,

and

on March

28,

2022,

the

court

dismissed

with prejudice.

The trial

of this case

began on

October 17,

2023. On

1, 2023,

the jury

returned

a decision

awarding

the Egg

Products

Plaintiffs

$

17.8

million

in damages.

On November

6, 2024,

entered

a final

judgement

against the

Company

defendants,

jointly and severally, totaling $

43.6

million after trebling. On December 4, 2024, the Company

filed a renewed

motion

for judgment

as a matter

of law or for a new trial, and

a motion to alter or amend

the judgment. On December

13, 2024, the

court

granted

defendants’

20, 2024

motion to

stay enforcement

of the

and

entered

an

agreed order

requiring the

to post security during

post-judgment

and appeal,

and stayed

proceedings to

enforce

the judgment

until

the disposition

of the

post-judgment

motions

and

appeals. On

17, 2024,

posted

a bond

in the

approximate

amount

of $

23.9

million, representing

a portion

of the

total

bond

to preserve

the

right to

appeal

the trial

court’s

decision. Another defendant

posted a bond for the remaining amount.

On November 19, 2025, the plaintiffs filed

a motion

to lift stay of proceedings on

attorney’s

fees and costs, and on December

5, 2025, the defendants

filed their

response in opposition

to such motion. The court has

not ruled on this motion. The Company

intends to continue to vigorously defend

the claims asserted

by the

Egg Products Plaintiffs.

If the

jury’s

decision

is ultimately

upheld,

jointly

and

severally

liable

with

other defendants

for treble

damages,

or

$

43.6

subject

to

credit

for

certain

settlements

with

previous

settling

defendants,

plus

the

Egg

Product

Plaintiffs’ reasonable

attorneys’

fees. During our second

2024, we recorded

an accrued

expense of $

19.6

million

in selling,

general

expenses in

Condensed

and classified

as other noncurrent

Condensed

Balance Sheets. Although less

than

the bond posted

by

the

the

accrual

our

of

the

proportional

share

of

the

damages

award, excluding the Egg Product Plaintiffs’ attorneys’

fees that we believe would be approximately

offset

by the credits

noted above.

We have

entered into a judgment

and joint defense

with the other defendants

remaining in the

case. Our

accrual

may

change

to the

extent

we are successful

in further proceedings

in the litigation.

State of

Oklahoma Watershed

Pollution Litigation

On June

18,

2005,

of Oklahoma

filed suit,

in the

United

States

Court for

the Northern

of Oklahoma,

against Cal

-Maine Foods, Inc. and

Tyson Foods,

Inc., Cobb

-Vantress,

Inc., Cargill, Inc., George’s,

Inc., Peterson

Farms, Inc. and

Simmons

of their affiliates.

The State of Oklahoma

claims that

through the disposal

of chicken

litter the

polluted

the

Illinois River

Watershed.

This

watershed

water

to

eastern

Oklahoma.

The

complaint

sought

relief and monetary

damages, but the claim

for monetary

damages was dismissed

by the court.

Cal

Inc.

discontinued

in the

watershed

in or

around

Since the

began,

%

of the membership

interests of Benton County

Foods, LLC,

which is an ongoing commercial shell egg operation

within the Illinois

River

Watershed.

Benton

County

Foods,

LLC

is

not

a

defendant

in

the

litigation.

We

also

have

a

number

of

small

that

operate

in the area.

The non-jury

trial in

the case began

in September

2009 and

concluded in

February 2010.

On January

18, 2023, the court

entered

findings of

fact and

conclusions

of law

in favor

of the

State of

Oklahoma.

The court

found

the defendants

jointly and severally

liable for state

law nuisance, federal common

law nuisance, and state

law trespass. The court also found the producers

vicariously

liable

for the

actions

producers. On

June

12, 2023,

the

court ordered

the parties

to mediate,

but the

mediation

was unsuccessful.

On June

26, 2024, the

district

court denied

defendants’

motion to dismiss

the case.

13, 2024,

a

status

hearing

was

held

and

scheduled

an

evidentiary

hearing

for

3,

2024,

to determine

whether

any

legal

remedy is available

based on the now 15-year-old record and changed circumstances

of the Illinois

River watershed. On December

9, 2025,

entered

a final judgment

imposing

$

420,000

in total penalties

for all

and awarding

certain non

-monetary

remedies, including injunctive

relief. Pursuant

to the final

judgment,

is

to pay

$

70,000

in penalties.

The judgment

also entitles

of Oklahoma

to an award

of attorneys’

fees and

costs in

an amount

to

be determined

at

a later

date.

The

relief provides

for,

among

other things,

a special

master to

oversee

an investigation,

develop

a remediation

plan

subject

to court

and

provide ongoing

monitoring

of remediation

projects,

the

costs

of which

will

be

paid

jointly

and

severally by

the defendants.

The defendants

are required to fund $

million within

5 days

of appointment

of the special master,

and

ongoing funding

of $

million any

time the

fund

is below $

million. This

funding obligation

is expected

to

continue for the

30 years

term. The defendants

are in

discussions of a potential expense

sharing agreement;

however, the Company

does

not currently

expect

to

have

share

of

the

funding.

The

relief also

certain

annual

on future

within

the Illinois

River Watershed,

removal

of

litter,

storage, transportation,

disposal and

future

land

applications.

On January

2, 2026, the Company filed its

notice of appeal

to the United States Court of Appeals for the Tenth Circuit. On January

16, 2026,

the district

court stayed

the monetary

portions of the

judgement

but declined

to stay

the injunctive

portions. Effective

July 10, 2026, the Company

and all

other defendants