CAL-MAINE FOODS INC

to numerous

uncertainties,

many of which

are beyond

our control.

The

is

a description

of

the

known

factors

that

have

or

may

in

the

future

affect

our

condition or

They should

be considered

carefully, in

addition to

this

Annual

Report

on Form

10-K, including

under

Discussion

and Analysis

of Financial

Condition

and Results

of Operations,

in

making

any investment

decisions

with

respect

to our

securities.

Additional

risks or

that are

not currently known to

us,

or

that we

are aware

of but

currently deem

to be

immaterial or

that could apply to any

company could

also materially

our business, financial

condition or results of operations.

See

“Forward

-Looking

Statements” at the beginning of this

report.

INDUSTRY

Market

prices

of wholesale

shell

eggs are

volatile

and decreases

prices

have

had, and in

the

future may

have, a

on our revenues

and profits.

Our operating

results are

by wholesale shell

egg market

prices, which

widely and

are outside

our

control.

shell

egg

market

prices

affect

the selling

prices

of

our

sold

under

market

-based

pricing

and

may

indirectly impact

our products

sold

under cost

-based

and

hybrid pricing

as customers

may

seek to

renegotiate

the

terms

during

periods

of sustained

low

prices.

our

results

are not

necessarily

indicative

of future

performance.

Modest increases

in industry supply

or decreases in demand

have resulted in, and may

in

the future have

a material adverse effect

on shell egg

prices. Low

affect

our revenues

and

profits.

Market prices

for wholesale

have been,

and in

may

be, volatile and

cyclical.

Shell egg

prices have

risen

in

the past

during periods

of high

demand

such as

the initial outbreak

of the

COVID-19 pandemic

and

periods when high

protein

diets

are

popular.

Shell

egg

prices

have

also

risen

during

periods

of

constrained

supply,

such

as

during

of

highly

avian

(“HPAI”).

During

times

when

prices

are high,

the egg

has

typically

more

eggs,

by

the

number

of

layers,

which

has

ultimately

in

an

oversupply

of eggs,

leading

to

periods

of lower prices.

As discussed above

in

Part I. Item 1. Business – Seasonality

,

seasonal fluctuations

impact

shell

Therefore, comparisons

of

our

sales

and

results

between

different

within

a

single

fiscal

year

are

not

necessarily

meaningful

A

decline

in

demand

for shell

eggs

or

our prepared

foods

have had,

and in

the

future

,

a

our business.

We

believe high-protein

diet trends,

industry advertising

campaigns,

the improved

of eggs and

in at

-home consumption

of eggs during

the COVID-19

pandemic,

have all

contributed

at one

time or

another

to increased

shell

egg demand.

it is possible that

the demand

for shell eggs will decline

in the future. Adverse

publicity relating

to health

or

safety

concerns

and

changes

in

the

perception

of the

value

of

shell

eggs,

changes

in

views

of animal

-based products,

as well as movement

away from

high protein diets,

and in the

future may

have

an adverse

effect

on demand

for shell eggs, which has had

and in the future could

on our results of

and

Certain

of our prepared

foods offerings

are generally

subject to changing

consumer trends,

demands

and preferences

a

modest amount

of seasonality. Trends within

the prepared foods

industry change often,

and failure to

identify and react

to changes

in

these

trends

could

lead

to,

among

other

things,

reduced

demand

and

price

reductions

for

our

foods

brands

and

products.

We

strive

to respond

to

and

social

expectations,

but we

may

not be

successful

in

our

efforts.

we

could

be

if

lose

confidence

in

the

safety

and

quality

of

certain

food

or

or the

food

safety

system

generally.

Prolonged

negative

perceptions

the health

implications

food products

or ingredients

or loss

of confidence

in the

food safety

system generally could

consumer preferences

and

of some

of our

and

programs.

Continued

negative

perceptions

and

failure

to

satisfy

adverse

effect

on our sales,

and

Feed costs

are

volatile and

costs

have

had,

and

,

our

Feed

costs are

the largest

element

of our

cost,

typically exceeding

50% of

our total

farm production

costs.

Although feed ingredients,

primarily corn and

soybean

meal, are available from

a number of sources, we do not have control ov

er

the

prices

of the

ingredients

we

purchase,

by weather,

various

global

and

U.S. supply

and

demand

and

storage costs,

speculators,

agricultural,

energy

and

trade

policies in

the

U.S.

and

internationally,

and

global

instability,

as a result of geopolitical conflicts. For example,

while feed costs declined during fiscal 2026,

we saw higher

prices for corn

meal over the last

four fiscal

years as a

result of

weather

-related shortfalls

and

yields,

ongoing

supply

chain

disruptions,

and

geopolitical

conflicts

and

their

impact

on

the

export

markets.

Our

costs

for

corn

and

soybean

meal

are also

by local basis

prices.

in

feed costs

unaccompanied

by increases

in

the selling

price

of eggs

and in

may

have a

materia

l

adverse

effect

on the

our

and

cash

flow. Decreases

in feed

costs can

lead to

and

the egg supply,

possibly

lower egg prices

and

lower revenue.

in

other

input

costs

such

as

materials,

and

as

of

and

tariffs

,

have

had

and

in

the

future

may

have,

adverse

impact

on

our

.

In addition to

feed ingredient

costs,

other significant

input costs include

costs of packaging

materials and

delivery expenses.

Our

costs

of packaging

past

three fiscal

years due

to inflation

and

higher labor

costs,

and

these

costs

may

to increase.

We

have

also experienced

delivery expenses

due to

in fuel

and

labor costs

for

both

our

fleet

and

trucking, and

may

to increase.

Changes

in

U.S.

trade

and

tariffs

policies

have

caused

and

may

to cause

higher costs

for

materials,

and

other items.

in

are largely

outside of

our control

and

adverse

effect

on our profitability

and

cash

flow.

Agricultural

risks,

of avian

such

as HPAI,

have harmed

and in

the

future could

harm

our

Our shell

to a

variety of

risks.

Unusual

or extreme

weather

disease

and pests

and in the future may

on the quality and

quantity

of shell eggs we produce

and

distribute.

HPAI

is

widespread

in

the

wild

bird

worldwide.

Outbreaks

of

HPAI

among

poultry

occur

periodically

worldwide,

recently

in

the

U.S.,

with

an

risk during

migratory

seasons

for

wild

birds.

HPAI

in

have in the past caused

significant depopulation

of U.S.

table egg layer flocks, which contributed

to

lower

shell

egg

and

higher

shell

egg

prices.

For

during

the

third

and

fourth

2024,

we

HPAI

located

in Kansas

and

Texas,

and

in March

of 2026

we

a HPAI

pullet

the depopulation

352,000

pullets. For

.

We

and

to

reduce

the

risk

of exposing

our

flocks

and

to

harmful

diseases;

despite

these efforts,

of avian

diseases have

occurred and

may

occur, which has

had

and

in the future may

on the

health of our flocks

and in

could adversely

impact

the health of

our employees.

Continued

or intensified

spread

of HPAI

could

have

adverse

impact

on our financial

results by,

among

other things,

decreasing

revenue,

costs, increasing

on the

sale and

of our

,

other new

and

requiring

us to

euthanize

the affected

layers. Negative

publicity

from

HPAI

within

our

industry can

impact

perception.

If a substantial

portion of our

layers or

are

affected by

any of

these factors

in any

given quarter

or year,

and

Our shell

eggs, prepared

foods

and egg

are susceptible

to contamination,

and we

may

be required

to,

or we may

voluntarily,

recall

contaminated products.

We sell

food products

for human

consumption, including shell eggs, prepared foods

and egg products, which involves

food safety

risks such

as:

●

food contamination

caused

by disease-producing

organisms

or pathogens,

such as Listeria

monocytogenes,

Salmonella

Enteritidis,

and pathogenic

E Coli., including contamination

caused

by introduction of pathogens

as a result of improper

handling

by

or

(over

which

we

have

no

control),

or

by

errors

by

suppliers

or

co-

manufacturers

or in our facilities;

●

mislabeling,

to food

allergens;

●

food

spoilage;

●

and

health

-related concerns;

and

●

product

tampering.

Shipment

of contaminated,

mislabeled, spoiled

or otherwise

deficient products,

even if

inadvertent,

could result in

a violation

of

law and

lead to increased

risk of exposure

to product

liability claims,

product recall

or withdrawal

and scrutiny

by federal,

state

and local regulatory

agencies. We

have little, if any,

control over proper handling

once the product has

been shipped

or delivered.

In addition, products

from other producers could contain

contaminants, or be spoiled, mislabeled or otherwise

deficient

that might

be

inadvertently

redistributed

or sold by

us. As

such, we might

decide

or be

to recall

or withdraw

a product

if we, our customers or regulators believe

it poses a potential

health risk. This has occurred in the past and

may

occur in

the future.

Any shipment

of deficient product

or any

action taken

in response, such

as a

product

recall or withdraw, could

result in a loss

of

confidence

in our products,

affect

our reputation

with existing

and potential

adverse

effect

on

our

results

of

and

We

with

respect

to

certain

of these risks,

product liability

business interruption

product recall

insurance and

general

liability insurance,

but in many

cases such insurance is expensive

and difficult to

obtain, and

can be given that

such

insurance will adequately

cover our costs or

can be maintained

in

the future on acceptable terms

or in

sufficient amounts

to protect

us against

losses due

to any

such events,

or at all.

AND OPERATIONAL

Our acquisition

growth strategy

subjects us

to various

risks.

As discussed in

Part I. Item I. Business – Growth Strategy

,

we plan to

continue to

pursue a growth

strategy that

includes, in part,

selective acquisitions

of other businesses

engaged

in the production

and sale of

with a

priority

on

those that

will facilitate

our ability to

expand

our specialty

shell egg and

capabilities

in key locations

and markets.

We may over

-estimate or under

-estimate the demand

for specialty shell eggs or our prepared

foods offerings,

which

could

cause

our

to

be

less-than

-optimal

for

our

future

growth

and

profitability.

The

number

of

with

that we may

be able

is limited.

Conversely,

when

we acquire

capacity,

which is more expensive to purchase

and operate,

and customer demands

or legal

for

were

to change,

any

lack of

demand

for specialty

shell

eggs

has

and

in

may

higher costs and

lower profitability.

we

had

already

diversified

our

with

some

foods

product

our

of

Echo

Lake

Foods in the first quarter

of fiscal 2026 represented

a significant expansion

of our strategy to diversify our

product mix

to include

foods.

we have

and in

may

unexpected

challenges

in integrating

and

the

foods

and

brands

that

we

acquire

from

time

to

time.

Integrating

the

foods

and

brands

that

we

acquire,

may

be

more

costly

or

time-consuming

than

we

expect.

Even

if

these

and

brands are

successfully integrated,

we may

not realize the

we expect

from

the acquisitions,

including the synergies, cost

savings,

in

volatility,

strong

team,

margin

expansion,

returns,

new

or

customer and

vendor relationships, or sales or growth opportunities.

Our experience managing

businesses is much

more limited

than

our experience

our shell

egg and

and our

to diversify our

product

mix to include

foods may

not produce

the favorable

financial and

other results

that we

anticipate.

regarding our

and our

strategy to diversify

our product

mix

to include

foods,

see Part

I.

Item

1. Business –

and

Growth Strategy

.

require capital resources

and can

divert management’s

attention from

our existing business. Acquisitions

also entail

an inherent risk that

we could become subject

to contingent

or other liabilities, including liabilities arising from events

or conduct

prior

to

our

of a

that

were unknown

to

us at

the

time

of

We

could

incur significantly

greater

in integrating an

business than

we anticipated

at

the time

of its purchase.

We

cannot

assure you

that

we:

●

will identify

suitable acquisition

candidates;

●

can

consummate

on acceptable

terms;

●

can

successfully integrate

an

business into our

operations;

or

●

can

successfully manage

of an

No

can

be

given

that

we

acquire

in

the

future

will

contribute

positively

to

our

results

of

or

federal

laws require

approval

of acquisitions

that

exceed

certain

levels

of significance

or that

could otherwise

affect

competition,

and we

cannot

that such approvals

would

be obtained.

Further, current

or future federal antitrust

regulations may

current operations

such

as required

divestitures

or spin-offs

or assets

and

limitations

on

the

types or

amounts

of products

we

could produce

.

The

we pay

in

with any

affects

our financial

results.

If we

pay cash,

be required

to

use

a

portion

of

our

cash

or

credit

to

consummate

the acquisition.

To

the

extent

we

issue

shares

of

our

Common

Stock, existing stockholders

may

be diluted. In addition, acquisitions

may

debt. Our ability to access

any

capital

that

may

be needed

for an

may

be adversely

by higher interest

uncertainty.

Disruptions

to

our

supply

chain

or

or

to

the

of key

or

sales

channels, could

our business and

Our ability

to produce, supply

and distribute

foods efficiently

and reliably

is critical

to our success.

Our

depend on the

availability and

functioning

of our

facilities, supply chain,

logistics and

networks, some of

which are supported

by third-party providers.

A significant disruption

to any of these capabilities,

whether due to

failures, labor shortages,

disruptions, facility outages,

facility upgrades

or other events,

could impair

our ability to meet customer

requirements or

operate

in

a profitable manner

.

For example, Echo Lake

Foods has and

is expected

to

to experience

a temporary

volumes

and

higher costs,

which

began

late

in

the

second quarter

of fiscal 2026 and

to be completed in fiscal

2027. We

may

not be able to successfully

complete these

projects

timely or on

budget,

if at all.

In

we

rely

on

our

and

sales

channels

to

sell

our

to

Disruptions

affecting

a significant customer, distributor,

provider, retailer or other sales channel,

including operational

or changes in purchasing

or distribution practices,

could result in reduced sales

volumes,

delays in product movement,

in the

mix of

products sold.

Any

such disruptions

on our results

and financial

have accounted

for a significant

portion of

our net

sales, and

the loss of,

reduced purchases

by,

or

pricing pressure

from, one

or more

of such

large

customers could

Our top three

for an aggregate of 43.1%,

49.2% and

49.0% of our net

sales for fiscal

2026,

2025 and

2024,

Our

largest

Walmart

Inc.

Sam's Club),

for 30.0%,

33.6% and

34.0%

of net

sales

dollars

for

fiscal

2026,

and

2024,

we

have

with

most

of

our

who

to

from

us based

on our ability

to service

their

needs,

they

are generally

free

to acquire

our

from

other

sources.

If, for

any

reason,

one

or more

of

our

large customers

were

less of

our

products in

the future,

terminate

their purchases

from us or

demand

significantly lower

pricing, and

we were not

able to

sell

our

products to

new customers at

comparable

levels, it would have

a material adverse

effect

on our business, financial condition,

and

The sophistication

and buying power of certain

of our customers,

their ability to expand

private-label

could adversely

affect

our pricing, margins

Certain

of

our

large

retailers,

clubs,

and

distributors,

are

large

and

sophisticated

significant bargaining

power.

These customers

may

be more capable

of resisting price

increases and may

demand

lower pricing,

promotional

activity,

alternative

pricing

structures,

or

customized

and

services.

In

some of these

have the

scale and

resources

with

reduced

inventories,

modify sourcing

strategies,

or

develop

and

market

their

own

private

-label or

store-brand

that

compete

with

our

branded

and

offerings.

Shelf space

and product

placement

at retail customers

are not guaranteed,

and customers

may

choose to allocate

shelf

space

to competing

products,

including private-label

or lower-priced

alternatives.

These

risks may

be exacerbated

during periods of

economic weakness,

inflation,

or elevated

food prices,

when

consumers may

trade down to lower-priced

options

,

reduce purchases

of specialty products, or shift

to private-label offerings.

If we are

unable

to

respond

to

these

pressures

through

pricing,

cost

efficiencies,

or

product

innovation,

or

if our

change

their

purchasing

or

expand

competing

private

-label offerings,

our

sales volumes,

and

High market prices for

eggs, primarily

caused by HPAI-related

reductions

in supply, have

led to pressure

from customers

to change

long-standing

market-based

and/or otherwise

reduce

the price

of our eggs

and may

do so

in the

future.

A

change

in our

sales

with

key customers

could

have a

adverse

effect

on

our revenues,

gross profits

and net income.

Other

to high

egg prices,

by state

or

federal government

agencies, may

also adversely

impact our business.

Market prices

for wholesale

shell eggs have

been volatile

and cyclical

over

time. Market

prices

for eggs

tend to increase

during

and

following outbreaks

in the

egg

that

reduce the

supply

of

eggs, which

has

occurred

during

HPAI

outbreaks,

until the

supply

and demand

balance

is restored. Some

of our

sales arrangements

with

for

shell

eggs,

are

based

on

that

take

into

account,

in

varying

ways,

independently

quoted

wholesale market

eggs. High market

eggs have led to pressure from customers to change longstanding

market-

based pricing

and/or

otherwise reduce

the price of

our eggs

and may

do so in the future.

To remain

and

retain our customers

and gain new ones, we

must consider our

customer relationships

and the reactions

and potential

reactions of

competitors. A material

change in our sales arrangements

with

key customers could have

a material adverse effect

on our revenues

and

gross profits.

Other

to

high

egg

prices,

or

by

state

or

federal

or

private

plaintiffs,

may

also adversely

impact

our business.

In March

2025,

we received

a civil

investigative

demand

in

with

a

widely

publicized

by

the

Antitrust

Division

of

the

of

Justice

(“DOJ”)

into

the

causes

behind

nationwide

We

settled the

case in June

2026, but the

settlement remains

subject to

court approval

which

may

or may

not be

obtained.

Since November

2025,

we

have

been named

as a

defendant,

along with other

egg

and

associations,

in

various

class

actions

that

allege

the defendants

conspired

to

fix the

prices of

nationwide,

through

manipulation

of

price

benchmarks,

coordinated

and

supply

during

the

avian

flu outbreak.

persistent high

egg prices

may

cause

some consumers

fewer

eggs.

Persistent

high-price

cycles,

and

may

also

attention

on the

egg

and

the

Company

specifically,

by

state

and

federal

or

plaintiffs,

which

may

lead

to

,

lawsuits or

related activities,

to the adoption

of new regulations.

For further discussion,

see Part I. Item 3. Legal Proceedings below and

Part II. Item 8. Notes to the Consolidated Financial

16 - Commitments

and Contingencies

.

The

impacts

of

these

on

our

are

unclear,

unpredictable

and

may

divert

our

resources

and

attention

from

our core business

activities, which may

have

adverse

effect

is highly competitive.

The production

and

sale of

fresh shell eggs, which

for 84.6% to 94.3%

of our

in our last three

fiscal years,

is

intensely

competitive.

We

compete

with

a large

number

of competitors

that

may

prove to

be

more

successful

than

we are

in

producing,

marketing and

selling shell eggs.

We

cannot

provide assurance

that we will

be able to compete

successfully with

any

or all of these

could result in price reductions,

greater cyclicality,

reduced margins

and loss of

market

share, which would negatively

affect

our business, results of

and

In

our

growth

of

our

product

foods.

The

foods

is intensely

and includes

from other

food companies

and other suppliers

of prepared

and

foods,

restaurants,

grocery stores

and

stores, many

of which

have

more experience

or

scale operating

prepared and

foods businesses.

In response

pressures,

we may

have to

reduce

the prices of our products,

or increase or reallocate

our spending on marketing,

and promotional

activity.

Competitive

pressures

may

also restrict

our ability

to increase prices,

in response

to commodity

and other input cost

increases.

Our

profits

could decrease

if either

a reduction

in

prices or

in costs

without comparable

increase in price

is not offset

with

sales

volume.

Alternatively,

if we

do not

reduce our

prices

or increase

our prices,

and

our competitors

seek advantage

through pricing or promotional

changes, our revenues

,

and market

share could be adversely affected.

We

are dependent

on our

team, and

the loss

of any

key member

of this

team may

have a

adverse

effect

on the implementation

of our business

plan in a

timely manner.

Our success

depends

largely upon

the continued

service of

our

senior management

team

and the recruitment

of additional

team

members

as

we

grow.

The

loss

or

of

service

of

one

or more

of

our

key

could

have

a

adverse

effect

on our ability

our operations

and/or

pursue our

growth strategy.

We

have

not entered

into

any

employment

or non

-compete

with

any

of our

officers.

could

cause

us to

lose

talented

employees,

and

unplanned

turnover

could deplete

institutional

knowledge.

for employees

has, and

may

to, result in increased

costs.

Our

is

dependent

on

our

systems

and

software,

and

failure

to

protect

against

or

respond to cyber

-attacks,

breaches,

or

other incidents

involving

those

systems, could

day-to-day

s

and

decision

making

processes

and

have

a

adverse

effect

on

our

and

reputation.

The efficient

of our business

depends on

our information

technology systems,

which we

rely on to effectively

manage

our

data,

communications,

logistics,

accounting,

and

other

If

we

do

not

allocate

and

manage

the resources necessary to

build and sustain

an appropriate

technology environment,

our business, reputation,

results could

impacted.

In addition, our information

technology systems

may

be vulnerable

to damage

or

from

beyond

our

systems

failures,

natural

disasters,

terrorist

attacks,

viruses,

ransomware,

breaches

or

cyber

Cyber

-attacks

are becoming

more

sophisticated

and

are

in

the

number of

and frequency

by groups and

individuals with

a wide

range of

motives.

We

have experienced

and expect

to

to experience

attempted

cyber

-attacks

of our

systems

or networks.

We regularly

engage with third-party service providers

as part of our operations

to provide a high

level of service to our

We

have implemented

certain practices

and policies

to minimize the

potential risks

with the exchange

of information

with

contracted

vendors.

Despite these

and

policies, we

cannot

that information

systems

of our

service

will

prevent

and

detect

all cybersecurity

breaches

and

we

require

service providers

to notify us upon a potential

breach or incident, there is a potential risk that our business, reputation,

results could

by cybersecurity

incidents at

their businesses.

future or past business transactions

(such as acquisitions or integrations) have

exposed and

in

the future may

expose

us to

vulnerabilities,

as our

systems

could

by vulnerabilities

present

in

or integrated

systems

and

technologies.

we may

discover security

issues

that

were not found

during due

diligence of such acquired

or integrated businesses, and

it

may

be difficult to integrate businesses

into our information

and

security program.

Our information

technology systems

also subject

us to numerous

data

privacy obligations.

We may

at times fail

(or be perceived

to have

failed) in

our

efforts to

comply

data

privacy obligations.

If we

or the

third parties

on which

we rely

fail, or

are

perceived to

have failed,

or comply

data

privacy obligations,

face significant

consequences,

including but not limited to government

enforcement

actions and litigation.

A security breach of sensitive information

could result

in damage

to our reputation

and our

relations

or employees.

Any

such damage

or interruption

could have a

adverse

effect

and

related

and

to change

rapidly.

Failure

to

update

or replace

legacy

systems

to

address

these

changes

could

result

in

costs,

costs,

system

downtime,

third

party

litigation,

regulatory actions

or cyber security

vulnerabilities

which could

have

adverse

effect

We

are currently

implementing

a new

enterprise

planning

(“ERP”) system,

and difficulties

with this

could have a

.

We are

in the process of replacing

and modernizing

our core financial and

operational systems

through a new ERP platform.

This

implementation

is a complex,

multi-phase

project

that

has

and

will require

of time,

capital,

and

resources.

There

can be

that the ERP

system will

be implemented

on the

timeline,

within

budget

or with

the intended

functionality.

Challenges

with the ERP

,

data

conversion issues,

system integration

problems, process

redesign,

user adoption

difficulties, or disruptions to existing operations

could impair our ability to process transactions

,

manage our supply

chain

and

human

resources,

produce

accurate

and

timely

reports,

over

reporting or otherwise

disrupt our business

.

The implementation

may also divert management

’s attention

from normal

If we are

unable to successfully complete

the ERP implementation,

or if

unexpected

issues arise

during the transition, our business,

and

Labor

shortages

or

in

labor

costs

have

had

and

in

the

future

could

have

a

adverse

impact

on

our

Our

success

is

dependent

upon

recruiting,

motivating,

and

retaining

staff

our

facilities.

Approximately

80.7% of

our employees

at hourly

rates, often

in entry

-level positions.

While all

our

are paid at

rates above

the federal

minimum

wage requirements,

any

in

local, state

or federal

minimum

wage requirements

could

increase our

labor costs.

any regulatory

changes

requiring us

employee benefits

or mandating

other employee

-related costs,

such as unemployment

insurance or workers

would increase

our costs.

A

shortage

in the

labor

pool,

be caused

by competition

from

other employers,

the

remote

of many

of our

fac

ilities, decreased

labor

rates

or

changes

in

-provided

support

or

immigration

laws

or

in

times

of lower

unemployment,

has

had

and

could

have

an

adverse

effect

on our

business and

results of operations. A shortage of labor available

to us could cause our production facilities

to operate with reduced

staff,

which could negatively

impact

and efficiencies. In

and 2026,

labor wages continued

to

rise due

to

and

low unemployment.

Any significant labor

shortages

or increases

in our

labor costs

has

had,

and

in the

future

could have,

adverse

effect

on our results of

We

also rely

on third-party

suppliers

for the

of contingent

workers,

and

our failure

to

manage

our use of

such contingent

workers

our costs and

our results of operations.

We

may

be subject to shortages,

oversupply,

or fixed

contractual

terms relating

to contingent

workers.

Our

ability

the size and

cost

of our

workforce

may

be subject

to additional

constraints

imposed

by local laws.

Global or regional

health crises

,

including pandemics

or epidemics

,

could have a material

and operations.

The

effects

of

global

or

pandemics

or

epidemics

have

had

and

in

the

future

may

have

a

impact

on

our

demand

for

our

could

as

a

result

of

such

as

travel

bans

and

quarantin

es, shelter-in-place orders, and

business and government

shutdowns, which

can prompt

more consumers to eat

at home,

these

could

also

our

cost of

doing business

due to

labor

shortages,

supply-chain

disruptions,

costs and

availability of packaging

supplies or

feed, and increased

medical and

other costs.

We

these

impacts

as a

result

of the

COVID-19

pandemic,

during

our

fiscal

years 2020

and

The

impacts

of health

crises are difficult to

predict and

depend on numerous

factors including the severity, length

and geographic

scope of the outbreak,

resurgences

of the

disease

and

variants,

and

of vaccines,

and

governmental,

and

individuals’

responses.

LEGAL AND

REGULATORY

Pressure

from animal rights

groups regarding

the treatment

of animals may subject

us to additional costs

to conform our

to

comply

with

developing

or

subject

us

to

costs

to

defend

challenges

to

our

current

and protect

our image

In particular,

and state

legislation

have accelerated

in demand for

cage-free eggs,

which increases

uncertainty

in our business

and increases our

costs.

We

and many

of our customers face

pressure from animal rights

groups, such as People for

the Ethical Treatment

of Animals and

the

Humane

Society of

the U.

S., to

require

that

supply food

their businesses

in

a manner

that

treats animals

with certain

developed or approved

by these

groups. In general,

we may

incur additiona

l

costs if

we conform

our practices

any of these

or to defend

our existing practices

to protect

our image

with

our

The

promoted

by these

groups change

over time,

but typically

require minimum

cage

space

for hens,

among

other requirements,

and some

of these groups

have led successful

legislative efforts

to ban

any form

of caged

housing in

various

states.

As

discussed

in

Part I. Item 1. Business - Government Regulation

,

ten

states

have

passed

minimum

space

and/or

for

hens,

and

other

states

are considering

such

In

a

number

of our

have announced

goals to either exclusively

offer

cage-free eggs or significantly

increase the volume

of cage

-free egg sales in the

future, subject

in most cases

to availability

of supply,

affordability

and consumer

demand,

among

other contingencies.

While we

anticipate

that our retail and foodservice customers

will

continue to transition

to selling cage-free eggs given publicly stated

goals,

there

is no

that

this transition

will

take

place or

take

place according

to

the

timeline of

current

goals. For

customers may

accelerate

their transition to stocki

ng cage-free eggs,

challenge our ability to

meet the cage-

free

volume

needs of

those customers

and

a loss

egg sales.

Similarly,

who

commit

to stock

greater

proportional

quantities of cage

-free eggs are under no

obligation to continue to do so, which

may

result in an oversupply of cage-

free

eggs

and

result

in

lower

shell

egg

prices,

which

could

reduce

the

return

on

our

capital

in

production.

on July

9, 2025,

the DOJ

filed a

lawsuit

against

of California

alleging that

California’s

cage-

free laws

“impose

burdensome

red tape on the

of eggs

and poultry products

nationally

in violation of

the Supremacy

Clause of the U.S.

Constitution”

and lead to higher egg prices

for U.S. consumers.

this lawsuit was dismissed

in March

2026,

similar

future

could

further

complicate

and

the

egg

landscape

and

affect

our

ability

to

successfully

navigate

these issues.

Changing

our

infrastructure

and

to

conform

to

preferences,

demands,

laws

and

challenges to

these laws has resulted and

will continue to result in

costs, including capital and

operating cost increases.

In response

to our

announced

goals and

legal requirements

for

eggs, we

have

capital

to

our

capacity.

We

are

also

enhancing

our

focus

on

when

opportunities.

Our

typically

do

not

commit

to

of specific

quantities

or

type

of eggs

with us,

and as

we

cannot

predict with any

certainty

which types

of eggs

they

will require

us to

supply

in

future periods.

The production

of cage

-free eggs is more

costly

than

the production of

and these higher

costs contribute

to the prices

of cage-free eggs,

which historically

have typically

been higher

than

shell

Many

consumers prefer to buy less expensive

shell eggs. These consumer

preferences, in addition

to the

regulatory landscape,

may

in turn influence

our customers’

future

needs for

cage-free and

shell eggs. Due

uncertai

nties, we may

over-estimate

future

demand

-free eggs, which could increase our

costs unnecessarily,

or we may

under-estimate

future

demand

-free eggs, which

could harm

us competitively.

If our

obtain non

-cancelable

contracts to provide cage

-free eggs to our existing

or potential

customers, then there

may

be decreased demand

for our

eggs

due

to

these

lost

sales.

If

we

and

our

egg

and

there

is

no

commensurate

increase in demand for cage-free eggs, this overproduction

could lead to an oversupply of cage

-free eggs, reducing

the sales

price for

our return on

capital

in cage-free production.

Failure

to

comply

with

governmental

environmental

could

harm

our

operating results,

and reputation.

we may incur significant

costs to comply with

any current

or future

We

are

subject

to

state

and

local

to

quality

distribution,

advertising,

labeling, sanitary

control, food

safety,

storage, waste disposal,

and other areas

of our business and

may

be subject to

regulations in

the future.

As a fully-integrated

shell egg producer,

our shell

egg facilities

to regulation

and

inspection

by the

USDA, OSHA,

EPA

and FDA,

local

agencies,

among

others.

Our

and feed

mill facilities as well as our

to FDA, USDA,

EPA

and OSHA

regulation

and

inspections,

as applicable.

In

rules

are often

proposed

that,

if adopted

as proposed,

our

costs.

the marketing,

labeling and

of our products

to extensive

regulation under

local

laws, including consumer

protection laws. We

make

statements in our marketing, labeling and

advertising regarding, among

other

things,

product

attributes,

content,

sourcing

practices,

animal

welfare

and

sustainability

characteristics.

These

may

be

challenged

as

false,

misleading

or deceptive.

Changes

in legal or

requirements,

with

respect

to

nutrition

facts,

allergen

serving

size

standards,

front

-of-pack

labeling,

ingredient

or

or marketing practices,

or differing

or evolving enforcement

priorities, may

increase our compliance

costs or require

changes to

our products,

practices. Failure, or

a

perceived failure,

could subject

us to civil

penalties, injunctions,

product relabeling,

recalls or withdrawals,

loss of necessary

approvals

or permits,

loss

of customers

or

damage

to

our

reputation,

any

of

which

could

have

a

adverse

effect

on

our

and

Our operations

and facilities

are subject to

various federal,

local environmental,

health, and

safety

laws and regulations

governing,

among

other

things,

the

generation,

storage,

handling,

use,

transportation,

disposal,

and

of

hazardous

materials.

Under these laws

and regulations,

we are

required to obtain

permits from

governmental

authorities,

but not

limited to

wastewater

discharge permits

and

manure

and

litter land applications.

If we

fail to

comply

with

laws or

or fail

to obtain

permits,

be

subject

to significant

fines and

penalties or

other sanctions,

our reputation

could be harmed,

and our operating

financial condition

because

these

laws

and

are

becoming

more

stringent,

it

i

s

possible that

we will be required to

incur significant

costs for

with existing and

future

laws and

Events

beyond

our

such

as

extreme

weather,

natural

disasters

and

changing

climate

and

legal

or

responses

Extreme

weather events,

such as

derechos, wildfires,

drought, tornadoes,

hurricanes,

other storms,

excessive cold

or heat, floods

or other natural

disasters, as well

as other events

beyond

our control, such

as bioterrorism,

water rights restrictions

fire

events, some of which

have in the past and

in

the future could have

a material adverse

effect

on our operating results and financial

Such events have,

and in the

future may,

among

other things, cause

one or more

of the following:

impair

the health or

growth of our flocks, decrease production

or availability of feed ingredients, or interfere with our operations

due to power outages,

fuel shortages,

discharges

from overtopped

or breached

wastewater treatment

lagoons, damage

to our production

labor shortages

or disruption of

global temperatures

and more

frequent

occurrences

of extreme

weather

events

may

cause crop

and livestock

areas to

become unsuitable,

including due to water scarcity

or high or unpredictable

temperatures,

which may result in much greater stress

on

food

and

water systems

and

more

pronounced

food

insecurity

globally.

Lower global

crop

corn

and

soybean

meal, which are

the primary

feed

ingredients

that

support

the health

of our

animals,

may

higher

these commodity

inputs, impact our

ability to source the

commodities

we use to feed our

flocks, and

negatively impact

our

ability

or grow

our

Changing

climate

may

expose

workers

and

animals

to

high heat

and humidity

stressors that adversely impact

poultry production

and our costs. Increased greenhouse

gas emissions may

also

impact

air

quality,

soil

quality

and

water

quality,

which

may

hamper

our

ability

to

support

our

in higher water

and

soil-stressed regions.

Increasing

frequency

of severe

weather

events may

impact

our ability to

raise poultry

and produce

eggs profitably

or

our

and logistics

supply

chains. These

changes

may

cause

us to change,

significantly,

our

day

-to-day

and our

strategy.

Changing climate

and extreme

weather

events

may

also impact demand

for our

products given

evolution of consumer

food preferences.

Even if we take

to position our business in anticipation

of such

changes, compliance

with current and future legal or regulatory

requirements may

require significant management

time, oversight

and enterprise

expense.

We may

also incur significant

expense

tied to regulatory fines

if laws and

regulations are interpreted

and

applied

in

a manner

that

is inconsistent with

our

We

can

make

no assurances

that our

efforts

to prepare

for

these adverse events

will

be in line with future market

and regulatory expectations

and our access to capital to support our business

may

also be adversely

impacted.

Current

and future litigation

legal matters could

expose us to significant

liabilities and

adverse

effect

reputation.

We

and

certain

of

our

are

involved

in

various

legal

and

other

legal

matters.

Litigation,

and

other

legal

matters

are

inherently

unpredictable

and

costly,

and

although

we

believe

we

have

meaningful

defenses

in

these

matters,

we

may

incur

due

to adverse

judgments

or penalties

or

we

may

enter into

settlements

of

claims, which could

on our results

of operations, cash

flow and financial condition.

For a discussion

of

our

ongoing

legal

see

Part

I. Item

Legal

Proceedings

below

and

Part

II.

Item

to

the

Note 16 - Commitments and Contingencies

.

Such

lawsuits,

and

other

legal

matters

are

expensive to

respond to and

defend, divert management’s

attention, and

may result in significant adverse

judgments,

penalties

or

settlements.

In addition, legal proceedings

may

expose us to negative

publicity,

all of which

could have a material

on our business,

result of operations,

and

preference

for our products

and

brands.

AND ECONOMIC

Economic

and interest rates,

could

impact our business.

Economic

including inflation

and

interest rates,

may

affect

our business by:

●

Limiting our

access

to capital

markets

or increasing the cost

of capital

we may

need to

grow or operate

our business;

●

Changing consumer

spending and habits

and demand for eggs, particularly higher-priced eggs,

as well as prepared foods;

●

Restricting

the supply

of energy

sources or increasing

our

cost to

procure energy;

or

●

Reducing the availability

of feed ingredients, packaging

material, and

other raw materials, or increasing

the cost of these

items.

Deterioration

of economic

could also

impact:

●

The financial

of our

suppliers, which may

make

it more difficult

for them

to supply

raw materials;

●

The financial

of our

customers, which

may

decrease demand

for eggs and

or increase our

bad

debt expense; or

●

The

of our

insurers,

which

our

cost to

obtain

and/or

make

it difficult

for

our insurers

to meet

their obligations in

the event

we experience a

loss due to an

insured peril.

to

the

U.S.

Bureau

of

Labor

Statistics,

from

June

to

June

2022,

the

Consumer

Price

Index

for

All

Urban

Consumers

(“CPI-U”)

9.1%,

the

largest

12-month

since

the

period

ending

The

CPI-

U

3.3%,

2.4% an

d

4.2% annually

from

May 2023

to May

Inflationary

costs have increased

our

input costs,

and if

we are

unable

to pass

through to

the customer

it could have

adverse

effect

We

hold

cash

in deposit

with

deposits

in

excess

of

insured

by

the

Federal

Deposit

Insurance

(“FDIC”). In

the event of a bank

failure at an institution where we

deposits in excess of the FDIC-

insured

amount,

we may

lose such excess

deposits.

The

loss

of

any

registered

trademark

or

other

intellectual

could

enable

other

to

compete

more

with us.

We

utilize

intellectual

in

our

trademarks,

copyrights

and

trade

secrets.

For

we

own

the

Eggs

®,

4Grain

®,

Sunups

®,

Sunny

Meadow®,

Van

’s®,

and

We

produce

and

market

Egg-

Land’s

Best

®

and

Land

O’

Lakes

®

under

license

with

EB.

We

have

a

amount

of money

in

establishing

and promoting

our trademarked

brands. The loss or expiration of any intellectual property

could require

us to rebrand

or discontinue affected

products, reduce sales volumes, or incur additional

costs and may

enable our competitors to compete

more

with

us by

allowing

them

to

make

and

sell products

similar

to

those

we

offer.

This

could

impact

our ability to produce and

sell those products, thereby having a material

on our business,

financial condition

and

.

Impairment

in the carrying value

of goodwill or other assets could

affect our results of

operations or

net worth.

the

excess

of

the

cost

of business

over

the

fair

value

of

the

net

assets

is

reviewed

at

least

for

by

qualitative

factors

to

whether

the

existence

of

events or

leads to

a determination

that it is

more likely

than

a reporting

unit is

its carrying amount.

As of May 30, 2026, we had

$97.1 of goodwill.

While we believe the

current carrying

this goodwill

is

not impaired,

future

charges

could

have

adverse

effect

on

our

results

of

in

any

particular

period and

our net worth.

RELATING

TO OUR COMMON

STOCK

Provisions of our

certificate of incorporation,

bylaws, and Delaware

law may make

an acquisition of us

or a change in our

more difficult.

Certain provisions

of our certificate of incorporation

and bylaws could discourage,

delay or prevent a merger,

or other

change in

control that

may

consider favorable,

including transactions

in which an investor

might otherwise receive

a premium for

its shares.

These provisions also

could limit the price

that investors

might be willing

to pay in the future for

shares

Stock, thereby depressing

price of our Common

Stock. Stockholders

who wish to participate

may

the opportunity

to

do

so.

these

provisions

could

prevent

or

frustrate

by our

to replace

or remove

our management.

These provisions:

●

provide

for the

division

of the

Board

into three

classes

as nearly

equal

in size as

practicable

with staggered

three-year

terms and

limit the removal

of directors and

the filling of vacancies;

●

authorize

our

Board to

set the terms

of and

issue preferred

stock, without

that could

be issued

to

persons

friendly

to management

or could operate

as a

“poison pill”

to dilute

the stock

of a potential

hostile

acquirer to

prevent

an

that

is not approved

by our Board;

●

prohibit

action

by written consent;

●

prohibit

from

calling special meetings

of stockholders;

●

establish advance

notice requirements for stockholder

nominations

to our Board or for stockholder

proposals that

can be

acted

on at

meetings; and

●

require the approval

of the holders of at least

66-2/3% of the voting power

of all then outstanding

shares of capital stock

of the Company

entitled to vote generally in the election of

directors, voting

together as a single class,

in order to amend

our certificate

of incorporation

and

bylaws.

In

we

are

governed

by the

provisions

of

Section

of the

Delaware

General

Law,

which

may,

unless

certain criteria

are met, prohibit

large stockholders,

in particular those owning

15% or more of our outstanding

voting stock, from

merging

or combining

with us for

a prescribed

period of

time.

The price

of our

Common

Stock

may

be affected

by the

for sale

in the market,

and

investors

may

significant dilution

as a result

of future issuances

of our securities,

which could

on the

market price

Stock.

The sale

or availability

for sale of

substantial

amounts

Stock could

impact

the price

of our

Common

Stock. Our

Fourth Amended

Certificate of Incorporation

authorizes us to issue 120,000,000

shares of our Common

Stock

and

10,000,000

shares

of

stock.

As

of

July

22,

2026,

there

were

46,917,080

shares

of

our

Common

Stock

and

no shares

of preferred

stock outstanding.

a substantial

number

of

our

Common

Stock

remain authorized

for issuance and

could become

for sale in the market.

Our Fourth Amended

Certificate

of Incorporation

authorizes our Board to set the terms

of and issue preferred

stock, without stockholder

and such shares

if

issued

could

dilute

the

voting

and

interests

of

holders

of

Common

Stock.

Also,

we

may

be

obligated

to

issue

shares of our Common

Stock in connection with employee

benefit plans (including

equity incentive

plans or under

our

KSOP).

In

the

future,

we

may

decide

to

raise

capital

through

of

our

Common

Stock,

stock,

convertible

into or exchangeable

for our Common

Stock or preferred

stock, or

rights to acquire

those securities

or our

Common

Stock

or preferred

stock. We

may

also issue

such

as consideration

in an

The

of

such

could result

in dilution of existing

equity interests

in us. Issuances

of substantial amounts

Stock or

preferred stock, or the perception

that such issuances

could occur, may

prevailing market prices for our Common

Stock.

The price

Stock may

fluctuate significantly.

The market

price of our Common

Stock has fluctuated

significantly and may

continue to do so for various

reasons

including, but

not limited

to, the following,

many

of which are

beyond

our control:

●

our quarterly

or annual

earnings or those

of other

in our industry;

●

the public’s

reaction

to our press releases,

our other

public announcements

and

our filings with

the SEC;

●

recommendations

by research analysts

who track our

Common

Stock or the stock of

other companies

in our

or a

decision by such

an

analyst

to reduce

or cease

coverage

regarding our Common

Stock;

●

changes in general conditions in the U.S. and global economy,

financial markets

or our

industry, including those resulting

from

changes

in

trade

and

tariff

changes

in

fuel

prices

or

fuel

shortages,

geopolitical

conflicts,

incidents

of

terrorism,

pandemics

or responses to

such events;

●

changes

in

the

landscape

for

our

any

changes

from

consolidation

whether or

not involving

us;

●

our liquidity

position;

●

future

sales of

our Common

Stock;

●

any

changes

in our dividend policy

or share repurchase

program;

and

●

other risks,

including those

described in

this Risk Factors

The

actual

timing,

number

and

value

of

shares

under

our

share

program

will

be

by

in

its

discretion and

will

depend on a number

of factors, including but not limited to,

price of our

Common

program may

at

any

time without

UNRESOLVED

STAFF

COMMENTS