STEPAN CO 10-Q

Item 1 – Legal Proceedings On March 19, 2025, the Company received a pre-filing notice from the USEPA for alleged violations of the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) associated with certain of the Company’s biocide products sold by a licensed distributor. The notice informed the Company of the USEPA’s intent to seek a potential penalty from the Company. Negotiations related to this matter are ongoing with the USEPA. The alleged damages may result in a range of possible penalties and the Company believes it is probable that it will have exposure for this matter. At this stage, the Company is unable to predict the ultimate outcome of this matter, or what impact, if any, the outcome might have on the Company's financial position, results of operations or cash flows. The Company believes it has recourse to any such penalties and the Company expects to pursue indemnification claims against the licensed distributor with respect to this matter. SEC regulations require the Company to disclose certain information about administrative or judicial proceedings involving certain environmental matters to which a governmental authority is a party if the Company reasonably believes that such proceedings may result in monetary sanctions above a specified threshold. Pursuant to SEC regulations, the Company has adopted a threshold of $1.0 million for purposes of determining whether disclosure of any such proceedings is required. The Company believes that this threshold is reasonably designed to result in disclosure of any such proceedings that are material to its business or financial condition. There have been no other material changes to the legal proceedings disclosed in the Company’s 2024 Annual Report on Form 10-K. Item 1A – Risk Factors There have been no material changes to the risk factors disclosed in the Company’s 2024 Annual Report on Form 10-K. 31