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Item 1A. Risk Factors

2026-02-26 compared with 2025-02-19 · 98 added, 112 removed, 171 unchanged (55% of the section changed)

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Operational Risks

The repositioning of our Performance Chemicals business has reduced our net sales and may otherwise adversely affect our financial condition and results of operations during this transition period.

On November 1, 2023 and July 31, 2024, we announced a number of strategic actions designed to further reposition our Performance Chemicals reportable segment to improve the profitability and reduce the cyclicality of the Company as a whole.

These initiatives, including the closure of our plants in DeRidder, Louisiana and Crossett, Arkansas (the “Plant Closures”), focus on reducing exposure to lower margin end-use markets of our industrial specialties product line.

The anticipated timing, charges, costs and results of the closure of the Plant Closures and other current or future repositioning activities are subject to a number of assumptions and risks and the actual results could materially differ from our estimates if such actions result in adverse legal or regulatory actions, if personnel required to effect the shutdown become unavailable, or we are affected by other factors not currently contemplated.

These actions have, and may continue to, adversely affect the Company’s financial condition and results of operations.

Our review of strategic alternatives for the industrial specialties product line and North Charleston, South Carolina crude tall oil (“CTO”) refinery may not result in a transaction and any transaction entered into may not yield the expected results or benefits.

On January 16, 2025, we announced plans to explore strategic alternatives for our industrial specialties product line and North Charleston, South Carolina CTO refinery, including a potential divestiture of portions of the North Charleston site.

While it is our intent to identify and pursue a transaction that will strengthen the Performance Chemicals segment and improve the Company’s financial performance, and benefit our stockholders by enabling us to focus on higher growth and higher margin opportunities, there can be no guarantee that this strategic review will result in such a transaction or achieve such expected results or benefits.

We are dependent upon third parties for the provision of certain critical operating services at several of our facilities.

We are dependent upon third parties for the provision of certain critical operating services, primarily utilities and related services (depending on the site, e.g., steam, compressed air, energy, water, wastewater treatment, hydrogen peroxide), at our Covington, Virginia Performance Materials facility and at our Warrington, United Kingdom Advanced Polymer Technologies facility.

Our review of strategic alternatives for the APT reportable segment and Performance Chemicals road markings product line may not result in a transaction and any transaction we enter into , including the completed sale of our North Charleston CTO refinery assets and the majority of the Performance Chemicals industrial specialties product line, may not yield the expected results or benefits.

On December 8, 2025, we announced plans to explore strategic alternatives for our APT reportable segment and Performance Chemicals road markings product line.

While it is our intent to identify and pursue a transaction for each of APT and the road markings product line, that, in each case will improve the Company's financial performance and benefit our stockholders by enabling us to focus on higher margin opportunities, there can be no guarantee that this strategic review will result in such transactions or achieve such expected results or benefits.

We are dependent upon third parties for the provision of certain critical operating services at several of our plants.

We are dependent upon third parties for the provision of certain critical operating services, primarily utilities and related services (depending on the site, e.g., compressed air, energy, water, wastewater treatment, hydrogen peroxide), at our plants in Covington, Virginia, and Warrington, United Kingdom.

We are co-located with third parties at each of the foregoing plants, and we face related risks of disruptions to our operations arising out of the acts or omissions of such third parties.

We are also co-located with, and provide certain critical operating services to, a third party at our North Charleston, South Carolina plant.

If we are unable to provide such services, we could face liability for disrupting such third party's operations.

The services provided by third parties would be at risk if any of the counterparties were to idle or permanently shut down the associated mill or plant, or if operations at the associated mill or plant were disrupted due to natural or other disaster, or by reason of strikes or other labor disruptions, or if there were a significant contractual dispute between the parties.

The third party provider of critical and non-critical services at our location in Warrington, United Kingdom has announced plans to discontinue operations at its Warrington, United Kingdom plant, but continues to provide services to us.

The third party provider of critical and non-critical services at our location in Warrington, United Kingdom has discontinued most of its operations at its Warrington, United Kingdom plant, but continues to provide services to us.

In the event that the applicable counterparty were to fail to provide the contracted services, we would be required to obtain these services from other third parties, most likely at an increased cost, or to expend capital to provide these services ourselves.

The expenses associated with obtaining or providing these services, as well as any interruption in our operations as a result of the failure of the counterparty to provide these services, may be significant and may adversely affect our financial condition and results of operations.

Furthermore, in the event that Smurfit WestRock’s Covington, VA paper mill’s wastewater treatment operations do not comply with permits or applicable law and Smurfit WestRock is unable to determine the cause of such non-compliance,

then we will be responsible for between 10 percent and 50 percent of the costs and expenses of such noncompliance (increasing in 10 percent increments per violation during each twelve-month period) despite representing less than 3 percent of the total wastewater volume.

Furthermore, in the event that Smurfit WestRock's Covington, VA paper mill's wastewater treatment operations do not comply with permits or applicable law and Smurfit WestRock is unable to determine the cause of such non-compliance, then we will be responsible for between 10 percent and 50 percent of the costs and expenses of such noncompliance (increasing in 10 percent increments per violation during each twelve-month period) despite representing less than 3 percent of the total wastewater volume.

These costs and expenses may be significant and may adversely impact our financial condition and results of operations.

Additionally, several of our manufacturing facilities are leased.

Additionally, several of our manufacturing plants are leased.

In the event we were to have a dispute with the landlord regarding the terms of the relevant lease agreements, or we were otherwise unable to fully access or utilize the leased property, the associated business disruption may be significant and may adversely affect our financial condition and results of operations.

Disruptions at any of our facilities could negatively impact our production, financial condition and results of operations.

Disruptions to any of our manufacturing operations or other facilities due to natural disasters and extreme weather, such as a hurricane, tropical storm, earthquake, tornado, severe weather, flood or fire, or other unanticipated problems such as labor difficulties, pandemics, equipment failure, cyberattacks or other cybersecurity incidents, capacity expansion difficulties or unscheduled maintenance, could cause operational disruptions of varied duration.

Also, many of our production employees are governed by collective bargaining agreements (“CBAs”).

The CBA at our Warrington, United Kingdom Advanced Polymer Technologies manufacturing facility with GMB Union is negotiated annually and the parties operate under the prior CBA until new terms are agreed.

The CBA at our Covington, Virginia Performance Materials plant with the International Brotherhood of Electrical Workers on behalf of its affiliated Local Union 464 expired on January 15, 2025.

The parties began negotiations in the fourth quarter of 2024 and will continue to operate under the same terms and conditions while negotiations are pending.

The CBA at our Crossett, Arkansas Performance Chemicals manufacturing facility with the International Association of Machinists and Aerospace Workers Union ("IAM") expires on March 1, 2025.

The parties will begin contract renewal negotiations during the first quarter of 2025.

Further, the CBA at our Covington, Virginia Plant with the Covington Paperworkers Union Local 675, affiliated with the Association of Western Pulp and Paper Workers will expire on December 1, 2025.

It is anticipated that the parties will begin contract renewal negotiations during the fourth quarter of 2025.

Disruptions at any of our plants could negatively impact our production, financial condition and results of operations.

Disruptions to any of our manufacturing operations or other plants due to natural disasters and extreme weather, such as a hurricane, tropical storm, earthquake, tornado, severe weather, flood or fire, or other unanticipated problems such as labor

difficulties, pandemics, equipment failure, cyberattacks or other cybersecurity incidents, capacity expansion difficulties or unscheduled maintenance, and planned or unplanned production slowdowns and shutdowns, turnarounds and outages, could cause operational disruptions of varied duration.

Also, many of our production employees are governed by collective bargaining agreements.

T he CBA at our Warrington, United Kingdom APT manufacturing plant with GMB Union is negotiated annually and the parties operate under the prior CBA until new terms are agreed.

The CBA at our Covington, Virginia Performance Materials plant with the International Brotherhood of Electrical Workers ("IBEW") on behalf of its affiliated Local Union 464 expired on January 15, 2025.

A new CBA with IBEW was ratified on June 24, 2025.

The CBA at our Covington, Virginia Plant with the Covington Paperworkers Union Local 675, affiliated with the Association of Western Pulp and Paper Workers expired on December 1, 2025.

The parties began contract renewal negotiations during the fourth quarter of 2025 and negotiations are in process.

The parties will continue to operate under the same terms and conditions while negotiations are pending.

While the Company has generally positive relations with its labor unions, there is no guarantee the Company will be able to successfully negotiate new union contracts without work stoppages, labor difficulties or unfavorable terms.

In addition, existing CBAs may not prevent a strike or work stoppage at the applicable plant.

These types of disruptions could materially adversely affect our financial condition and results of operations to varying degrees depending upon the facility, the duration of the disruption, and our ability to shift business to another facility or find alternative sources of manufacturing capacity.

These types of disruptions could materially adversely affect our financial condition and results of operations to varying degrees depending upon the plant, the duration of the disruption, and our ability to shift business to another plant or find alternative sources of manufacturing capacity.

Any losses due to these events may not be covered by our existing insurance policies or may be subject to certain deductibles.

In certain cases, we have products, such as our extruded honeycomb, caprolactone, pavement preservation products, road construction products, pavement reconstruction and recycling products, and industrial specialties products, that are only made at a single site, such as our Covington, Virginia Performance Materials plant .

While we have some redundancies within the facilities that are the sole manufacturer of certain products, we have limited ability to make these products at other facilities .

In certain cases, we have products, such as our extruded honeycomb, caprolactone, pavement preservation products, road construction products, pavement reconstruction and recycling products, that are only made at a single site, such as our Waynesboro, Georgia Performance Materials plant, North Charleston Performance Chemicals plant and Warrington, U.K.

While we have some redundancies within the plants that are the sole manufacturer of certain products, we have limited ability to make these products at other plants.

Supply Chain Risks

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inability to procure these raw materials or to pass on price increases could negatively impact our operations or financial results.

The Company purchases a variety of raw materials from third parties for its manufacturing operations, including, but not limited to, CTO, hardwood sawdust, phosphoric acid, ethylene amines, black liquor, maleic/fumaric acid, hydrogen peroxide, cyclohexanone, and ethoxylates.

The Company purchases a variety of raw materials from third parties for its manufacturing operations, including, but not limited to, hardwood sawdust, phosphoric acid, ethylene amines, tall oil fatty acid ("TOFA"), lignin, maleic/fumaric acid, hydrogen peroxide, cyclohexanone, and ethoxylates.

Each raw material is subject to its own supply and demand dynamics which may, at times, limit availability and/or cause price volatility.

The Company may be unable to procure the quantities of raw materials it needs which could negatively impact our operations or we may be unable to pass through price increases to our customers which could negatively impact our financial results.

For example, our Performance Chemicals segment produces many products derived from CTO and lignin, which are co-products of the kraft pulping process.

While we have taken aggressive action to limit the Company’s exposure to the volatility of the CTO market, its limited availability and competing demands for its use could again impact our financial results and results of operations if we are unable to source a sufficient supply at a reasonable cost.

Lignin is also in limited supply and if we are unable to secure a sufficient amount of lignin on a cost-effective basis we could suffer disruption to our road technologies product line, which could negatively impact our financial results and our results of operations.

For example, lignin and TOFA are in limited supply and if we are unable to secure a sufficient amount of lignin or TOFA on a cost-effective basis we could suffer disruption to our pavement technologies product line, which could negatively impact our financial results and our results of operations.

Disruptions within our supply chain could negatively impact, our production, financial condition and results of operations.

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Disruptions at our suppliers could lead to volatility or increases in raw material or energy costs and/or reduced availability of materials or energy, potentially affecting our financial condition and results of operations.

International Operations Risks

We are exposed to the risks inherent in international sales and operations.

In 2025, sales to customers outside of the U.S.

made up approximately 43 percent of our total sales, and we sell our products to customers in approximately 70 countries.

We have exposure to risks of operating outside the U.S., including:

fluctuations in foreign currency exchange rates, including the euro, pound sterling, Japanese yen, Brazilian Real, and Chinese renminbi;

restrictions on, or difficulties and costs associated with, the repatriation of cash from foreign countries to the U.S.;

difficulties and costs associated with complying with a wide variety of complex laws, treaties and regulations, which may carry

significant penalties for non-compliance including reputational harm, fines or shutdowns;

unexpected changes in political or regulatory environments;

earnings and cash flows that may be subject to tax withholding requirements or the imposition of tariffs, exchange controls or other restrictions;

geopolitical and economic instability, including the wars in Ukraine and the Middle East and the potential escalation of these conflicts;

general country strikes or work stoppages;

unforeseen public health crises, such as pandemic and epidemic diseases;

import and export restrictions;

difficulties in maintaining overseas subsidiaries and international operations;

difficulties in obtaining approval for significant transactions;

government limitations on foreign ownership;

government takeover or nationalization of business;

and government mandated price controls.

Changes in tariff regimes could negatively impact our business.

government has imposed new global tariffs, and is considering the imposition of additional tariffs.

These new tariffs have resulted in (or could result in) retaliatory measures imposed, announced or under consideration by certain U.S.

trading partners, most notably China.

These changes to trade policy are expected to make it more difficult or costly for us to export our products and import raw materials.

This in turn could require us to increase prices to our customers, which may reduce demand.

Such demand reduction or inability to increase customer prices may negatively impact our profitability.

The retaliatory tariff measures imposed by China, if not unwound, may significantly lower our margin on Performance Materials and Performance Chemicals products sold from the United States into China if we are unable to pass these costs onto our customers.

These tariff measures may also result in decreased demand for our customers' products that incorporate our products, and adversely affect our financial condition and results of operations.

Reciprocal tariffs from China and other trading partners could impact our competitive position compared to local competitors and other companies not subject to the same restrictions.

As such, we could lose market position and our business, operating results, and financial condition would be adversely impacted.

Adverse conditions in the automotive market may negatively impact demand for our automotive carbon products.

Sales of our automotive activated carbon products are tied to global internal combustion engine ("ICE") and hybrid electric vehicle automobile ("HEV") production levels.

ICE and HEV automotive production in the markets we serve can be affected by macro-economic factors such as interest rates, fuel prices, shifts in vehicle mix (including shifts toward alternative energy vehicles), consumer confidence, employment trends, regulatory and legislative oversight requirements, and trade agreements.

The Company’s road technologies product line is heavily dependent on government infrastructure spending.

A significant portion of our customers’ revenues in our road technologies business is derived from contracts with various foreign and U.S.

ICE and HEV automotive production in the markets we serve can be affected by macro-economic and other outside factors such as interest rates, fuel prices, shifts in vehicle mix (including shifts toward alternative energy vehicles), consumer confidence, employment trends, regulatory and legislative oversight requirements, tariffs, trade agreements, microchip shortages, and disruptions to the operations of suppliers within the automotive original equipment manufacturer ("OEM") supply chain.

The Company's pavement technologies product line is heavily dependent on government infrastructure spending.

A significant portion of our customers' revenues in our pavement technologies is derived from contracts with various foreign and U.S.

governmental agencies, and therefore, when government spending is reduced, our customers' demand for our products is similarly reduced.

While we do not do business directly with governmental agencies, our customers provide paving services to the governments of various jurisdictions within North America, South America, Europe, China, Brazil and India, and revenue either directly or indirectly attributable to such government spending continues to remain a significant portion of our revenues.

While we do not do business directly with governmental agencies in our pavement technologies product line, our customers provide paving services to the governments of various jurisdictions within North America, South America, Europe, China, Brazil and India, and revenue either directly or indirectly attributable to such government spending continues to remain a significant portion of our revenues.

Government business is, in general, subject to special risks and challenges, including:

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and international conflicts or other military operations that could cause the temporary or permanent diversion of government funding from transportation or other infrastructure projects.

Certain of the Company’s products are sold into cyclical end-markets, such as the automotive market and the apparel market, which are impacted by changes in consumer and industrial demand.

Certain of our products are sold into end-markets that are cyclical and subject to frequent and rapid technology changes, changes in consumer preferences, evolving standards, and changes in product supply and demand.

For example, demand for our Advanced Polymer Technologies products in the automotive market, where our products are formulated into automotive resins and coatings and various components, may be affected by technological advances, changing automotive original equipment manufacturer ("OEM") specifications, and global automobile production levels.

Demand for our Advanced Polymer Technologies products which are sold into automotive applications, footwear adhesives and structural support, may be affected by consumer discretionary spending and changes in consumer preferences.

Additionally, sales of our industrial specialties and Advanced Polymer Technologies products have, and may continue to be, negatively impacted due to reduced global industrial demand.

The impact of these changes may lead to increased competition from competing and substitute products and downward pricing pressures on our customers, and therefore, on our Advanced Polymer Technologies and industrial specialties product offerings.

We face competition from new technologies and new or emerging competitors.

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Our future growth depends on our ability to gauge the direction of commercial and technological progress in key end-use markets, to swiftly identify and respond to disruptive technologies, and to fund and successfully develop, manufacture, and market products in such changing end-use markets.

If we fail to keep pace with the evolving or disruptive

technological innovations in our end-use markets on a competitive basis, our financial condition and results of operations could be adversely affected .

In the Performance Materials segment, there is competition from other activated carbon manufacturers.

If we fail to keep pace with the evolving or disruptive technological innovations in our end-use markets on a competitive basis, our financial condition and results of operations could be adversely affected.

In the Performance Materials segment, there is competition from other activated carbon and honeycomb manufacturers.

These competitors are trying to develop more advanced and alternative activated carbon products that could more effectively compete with our products in automotive applications.

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and California regulations.

There is also emerging competition in the "honeycomb" space, which may impact sales of the Company's products.

If a competitor were to succeed in developing products that are better suited than ours for automotive evaporative emissions capture applications and/or a competitive technology, such as, but not limited to, sealed gas tanks, our financial results could be negatively impacted.

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In the Advanced Polymer Technologies segment, there is competition from other caprolactone manufacturers, including new market entrants.

If we are unable to successfully compete in our end-use markets, our financial condition and results of operations could be adversely affected.

This increased competition in our end-use markets, has impacted and may continue to impact, our financial condition and results of operations.

Certain of our products face competition from substitute products where the costs of different raw material inputs can impact the price competitiveness of our products and negatively impact our sales and/or profits as we respond to substitute product competition.

The price of gum rosin has a significant impact on the market price for TOR and rosin derivatives and is driven by labor rates for harvesting, land leasing costs, and various other factors that are not within our control.

Hydrocarbon resins, for example, C5 resins, are co-products from the manufacture of isoprene (synthetic rubber).

Availability and pricing are determined by the supply/demand dynamics for synthetic rubber as well as the price of crude oil as the feedstock for isoprene and various other factors that are not within our control.

Animal and plant based fatty acids compete with TOFA products in industrial specialties.

The market price for our TOFA and oleochemical products are impacted by the prices of other fats and oils, and the prices for other fats and oils are driven by actual and expected harvest rates, petroleum oil prices, and the biofuel market.

Other monomers, thermoplastics, and polyols compete with our caprolactone-based products.

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We may not be able to pass through raw material cost increases, or we may lose market share if we do not effectively manage our pricing, which in either case could negatively impact our financial results.

Additionally, the price of energy may directly or indirectly impact demand, pricing or profitability for certain of our products.

As petroleum oil prices can change rapidly, Performance Chemical segment products may be disadvantaged due to the fact that CTO is a thinly traded commodity with pricing commonly established for periods ranging from one quarter to one-year periods of time.

Due to this, alternative technologies which compete with product offerings provided by Ingevity may be advantaged from time to time in the marketplace.

Protracted periods of high volatility or sustained oversupply of petroleum oil may also translate into increased competition from petroleum-based alternatives.

In addition, pricing for competing oleochemicals such as palm or soybean is likely to put further pressure on pricing of the Company’s products during periods of depressed petroleum prices.

Certain of the Company's products are sold into cyclical end-markets, such as the automotive market and the apparel market, which are impacted by changes in consumer and industrial demand.

For example, demand for our Advanced Polymer Technologies products in the automotive market, where our products are formulated into automotive resins and coatings and various components, may be affected by technological advances, changing OEM specifications, and global automobile production levels.

Additionally, sales of our Advanced Polymer Technologies products have, and may continue to be, negatively impacted due to reduced global industrial demand.

We are dependent on certain large customers.

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No customer accounted for more than 10 percent of total sales for 2025.

Wi th some exceptions, our business with those large customers is based primarily upon individual purchase orders.

As such, our customers could cease buying our products from us at any time, for any reason, with little or no recourse.

With some exceptions, our business with those large customers is based primarily upon individual purchase orders.

As such, our customers could cease buying our products from us

at any time, for any reason, with little or no recourse.

If a major customer or multiple smaller customers elected not to purchase products from us, our financial condition and results of operations could be materially adversely affected.

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As we rely on information technologies to conduct our business, cyber-attacks, data and privacy breaches, or a failure of information technology systems could disrupt our operations and expose us to liability, which could cause our business and reputation to suffer.

We rely on our information technology systems, some of which are managed by third parties, to support, manage and maintain the day-to-day operations and activities of our business, including our manufacturing facilities, customer and vendor transactions, and financial, accounting, and business records.

We rely on our information technology systems, some of which are managed by third parties, to support, manage and maintain the day-to-day operations and activities of our business, including our manufacturing plants, customer and vendor transactions, and financial, accounting, and business records.

In addition, we collect and store certain data, including proprietary business information, and may have access to confidential or personal information that is subject to privacy and security laws and regulations.

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Despite our security architecture and controls, and those of our third-party providers, we may be vulnerable to cyber-attacks, computer viruses, security breaches, ransomware attacks, inadvertent or intentional employee actions, system failures, and other risks that could potentially lead to the compromising of sensitive, confidential or personal data, improper use of our, or our third-party provider systems, solutions or networks, unauthorized access, use, disclosure, modification or destruction of information, and operational disruptions.

Further, the widespread availability, adoption and rapid evolution of artificial intelligence ("AI") technologies may increase our cybersecurity risk, including the use of generative artificial intelligence to augment existing or to create new malware, and additional vulnerabilities may be introduced from the use of artificial intelligence by our customers or third parties.

We also maintain an information security risk insurance policy to help mitigate the financial consequences of these risks, however, there is no guarantee that such a policy will be sufficient to address such costs.

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GDPR, which applies to the collection, use, retention, security, processing, and transfer of personally identifiable information of residents of EU countries, mandates new compliance obligations and imposes significant fines and sanctions for violations.

CCPA requires

companies to provide new data disclosure, access, deletion, and opt-out rights to consumers in California.

CCPA requires companies to provide new data disclosure, access, deletion, and opt-out rights to consumers in California.

Implementing and complying with these laws and regulations may be more costly or take longer than we anticipate, or could otherwise affect our business operations.

Information security breaches, cyber incidents, and disruptions, or failure to comply with laws and regulations related to information security or privacy, could result in legal claims or proceedings against us by governmental entities or individuals, significant fines, penalties or judgements, disruption of our operations, remediation requirements, changes to our business practices, and damage to our reputation, which could adversely affect our business, financial condition or results of operations.

International Operations Risks

We are exposed to the risks inherent in international sales and operations.

In 2024, sales to customers outside of the U.S.

made up approximately 42 percent of our total sales, and we sell our products to customers in approximately 70 countries.

We have exposure to risks of operating outside the U.S., including:

fluctuations in foreign currency exchange rates, including the euro, pound sterling, Japanese yen, Brazilian Real, and Chinese renminbi;

restrictions on, or difficulties and costs associated with, the repatriation of cash from foreign countries to the U.S.;

difficulties and costs associated with complying with a wide variety of complex laws, treaties and regulations, which may carry significant penalties for non-compliance;

unexpected changes in political or regulatory environments;

earnings and cash flows that may be subject to tax withholding requirements or the imposition of tariffs, exchange controls or other restrictions;

geopolitical and economic instability, including the wars in Ukraine and the Middle East;

general country strikes or work stoppages;

unforeseen public health crises, such as pandemic and epidemic diseases;

import and export restrictions;

difficulties in maintaining overseas subsidiaries and international operations;

difficulties in obtaining approval for significant transactions;

government limitations on foreign ownership;

government takeover or nationalization of business;

and government mandated price controls.

Tariffs and other trade barriers or retaliatory actions could also negatively impact our business.

For example, the new U.S.

administration has increased the tariff on Chinese products to 10 percent and has imposed, or is considering imposing, tariffs on products from other countries.

Whether and to what extent these tariffs will be imposed is presently unknown, however such tariffs (and any retaliatory action taken as a result) could lead to increased costs, which could cause decreased customer demand for our products as well as our customers’ products that incorporate our products due to increased pricing, and adversely affect our financial condition and results of operations.

Any one or more of the above factors could adversely affect our international operations and could significantly affect our financial condition and results of operations.

For example, Chinese government agencies ha ve in the past required companies to reduce or suspend manufacturing operations from time to time, with little or no notice, for reasons such as energy restrictions and air quality concerns.

The timing and length of these suspensions, which are expected to continue occurring, are difficult to predict.

These unpredictable events could negatively impact our results of operations and cash flows.

Further, any of these factors may impact our customers’ non-U.S.

operations, which could reduce demand for our products.

As our international operations and activities expand, we inevitably have greater exposure to the risks associated with operating in many foreign countries .

Legal and Regulatory Risks

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Our patents and other intellectual property rights may be challenged, invalidated, circumvented, and rendered unenforceable or otherwise compromised.

We are currently involved in several legal actions related to the intellectual property associated with

the 844 Patent.

We are currently involved in a legal action related to the intellectual property associated with the 844 Patent.

On September 15, 2021, a jury in the lawsuit filed by the Company against BASF Corporation for patent infringement in the U.S.

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On February 13, 2024, the court in the Delaware Proceeding denied BASF's motion for pre-judgment interest on its tortious interference claim as well as our motion seeking judgment as a matter of law, or a new trial in the alternative.

In addition, BASF may seek post-judgment interest and attorneys’ fees and costs in amounts that they will have to prove at a future date.

Earlier in the Delaware Proceeding, the U.S.

District Court dismissed the Company's patent infringement claims against BASF alleging BASF infringed the 844 Patent and invalidated some, but not all, of the claims in our 844 patent, which expired in March 2022.

The Company disagrees with the verdict, including the court’s application of the law and entry of judgment.

Therefore, on March 13, 2024, we appealed the verdict as well as the U.S.

District Court’s November 2020 dismissal of our patent infringement claims against BASF.

As of December 31, 2024 , the final resolution of these matters could take up to 15 months and there can be no assurance that the Company will prevail in its attempts to challenge the verdict.

Because the outcome of the Company’s post-trial motions and possible appeal is difficult to predict, as of December 31, 2024, the Company has accrued a total of $85.0 million , the full amount of the jury’s verdict (including treble damages).

The amount accrued for this matter is included within Other liabilities on the consolidated balance sheet as of December 31, 2024, and the charge is included within Other (income) expense, net on the consolidated statement of operations for the twelve months ended December 31, 2021.

On March 13, 2024, we appealed the verdict as well as the U.S.

District Court's November 2020 dismissal of our patent infringement claims against BASF to the U.S.

Federal Circuit Court of Appeals.

On February 11, 2026, the U.S.

Federal Circuit Court of Appeals ruled against Ingevity on our appeal and we have decided to no longer pursue any further appeals.

We expect payment of the judgment, plus post-judgment interest, to be made in the second quarter of 2026.

The Company continues to accrue a total of $85.0 million, the full amount of the jury's verdict (including treble damages).

The amount accrued for this matter is included within Accrued expenses on the consolidated balance sheets as of December 31, 2025, and the charge was included within Other (income) expense, net on the consolidated statement of operations for the twelve months ended December 31, 2021.

In addition, as a result of the judgment being officially entered on May 18, 2023, we have started accruing for post-judgment interest at the legally mandated interest rate.

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The amount of any liability the Company may ultimately incur related to the Delaware Proceeding could be more or less than the amount accrued.

The Company has and may continue to incur additional fees, costs and expenses for as long as the post-trial motions and possible appeal are ongoing.

If the Company is required to pay the entire jury verdict (together with any associated fees, costs, and expenses), or the Company must make certain changes to its business when the matters associated with the Delaware Proceeding are eventually resolved, such outcomes could have an adverse effect on the Company’s business, financial condition, and operating results .

The Delaware Proceeding and other legal actions to protect, defend or enforce our intellectual property rights could result in significant costs and diversion of our resources and our management’s attention, and we may not prevail in any such suits or proceedings, which could have an adverse effect on our financial condition and results of operations.

BASF has indicated it will seek attorneys' fees and costs in amounts that they will allege and have to demonstrate at a future date.

The Company has and may continue to incur additional fees, costs and expenses for as long as the post-trial motions are ongoing.

If the Company is required to pay any associated fees, costs, and expenses, such outcomes could have an adverse effect on the Company's business, financial condition, and operating results.

The Delaware Proceeding and other legal actions to protect, defend or enforce our intellectual property rights could result in significant costs and diversion of our resources and our management's attention, and we may not prevail in any such other actions, which could have an adverse effect on our financial condition and results of operations.

Similarly, third parties may assert claims against us and our customers and distributors alleging our products infringe upon third-party intellectual property rights.

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For instance, we manufacture some of our products in China where we may be at a greater risk of a third party misappropriating our intellectual property despite the foregoing policies, procedures and agreements.

The failure of our patents or confidentiality agreements to protect our proprietary technology, know-how or trade secrets could result in significantly lower revenues, reduced profit margins, or loss of market share .

The failure of

our patents or confidentiality agreements to protect our proprietary technology, know-how or trade secrets could result in significantly lower revenues, reduced profit margins, or loss of market share.

Environmental and Sustainability Risks

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For those countries that have not significantly regulated gasoline vapor emissions, enacting more stringent regulations governing gasoline vapor emissions represents a significant upside to our Performance Materials' automotive carbon business.

However, regulators may react to a variety of considerations, including economic and political, that may result in any such more stringent regulations being delayed or

shelved entirely, in one or more countries or regions.

However, regulators may react to a variety of considerations, including economic and political, that may result in any such more stringent regulations being delayed or shelved entirely, in one or more countries or regions.

As the adoption of more stringent regulations governing gasoline vapor emissions is expected to drive significant growth in our automotive carbon applications, the failure to enact such regulations would have a negative impact on the growth prospects for these products.

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There are hazards associated with the chemicals we manufacture and the related storage and transportation of our raw materials, including common solvents, such as toluene and methanol, and reactive chemicals, such as acrylic acid, all of which fall under the OSHA Process Safety Management Code.

These hazards could lead to an interruption or suspension of operations and have an adverse effect on the productivity and profitability of a particular manufacturing facility or on us as a whole.

These hazards could lead to an interruption or suspension of operations and have an adverse effect on the productivity and profitability of a particular manufacturing plant or on us as a whole.

While we endeavor to provide adequate protection for the safe handling of these materials, issues could be created by various events, including natural disasters, severe weather events, acts of sabotage and performance by third parties, and as a result we could face potential hazards, including the following:

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Additionally, changes in the regulation of greenhouse gases, as well as future climate change laws and regulations, depending on their nature and scope, could subject our operations to significant additional costs or limits on operations.

Our manufacturing facilities use energy, including electricity and natural gas and some of our plants emit amounts of greenhouse gasses that may in the future be affected by legislative and regulatory efforts to limit greenhouse gas emissions.

Potential consequences could include increased energy, transportation, and raw material costs and may require us to make additional investments in facilities and equipment or limit our ability to grow.

Any such changes are uncertain and, therefore, it is not possible for Ingevity to predict with certainty the amount of additional capital expenditures or operating expenses that could be necessary for compliance with respect to any such changes .

Our manufacturing plants use energy, including electricity and natural gas and some of our plants emit amounts of greenhouse gasses that may in the future be affected by legislative and regulatory efforts to limit greenhouse gas emissions.

Potential consequences could include increased energy, transportation, and raw material costs and may require us to make additional investments in plants and equipment or limit our ability to grow.

such changes are uncertain and, therefore, it is not possible for Ingevity to predict with certainty the amount of additional capital expenditures or operating expenses that could be necessary for compliance with respect to any such changes.

Independent of any such regulation, increased public awareness and adverse publicity about potential impacts on climate change or environmental harm from us or our industry could harm our reputation or otherwise impact Ingevity adversely.

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Adverse weather conditions and other environmental impacts (such as climate change and extreme weather) may impact our operations and the demand for some of our products, which could negatively affect our financial condition and results of operations.

Our road technologies product line is seasonal in nature, with roughly 70 to 75 percent of revenue generated between April and September each year.

Adverse weather conditions, which directly affect the ability to engage in paving and/or road marking activity, have had, and going forward may have, an adverse effect on sales in the road technologies product line if such conditions result in lower customer demand due to a shortened season.

Our pavement technologies and road markings product lines are seasonal in nature, with roughly 70 to 75 percent of revenue generated between April and September each year.

Adverse weather conditions, which directly affect the ability to engage in paving and/or road marking activity, have had, and going forward may have, an adverse effect on sales in the pavement technologies and road markings product lines if such conditions result in lower customer demand due to a shortened season.

Increasing weather-related impacts on our operations and plant sites may impact the cost or availability of insurance.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors