LXU · LSB Industries, Inc.

This settlement resolves a long-standing litigation matter stemming from engineering and procurement contracts for LSB’s El Dorado, AR ammonia plant — a project initiated in 2016 and central to the company’s capital-intensive industrial strategy. The $20.9 million payment represents a concrete, near-term cash inflow that improves working capital and reduces contingent liability exposure tied specifically to Benham. However, the agreement deliberately preserves LSB’s far larger dispute with Leidos Inc. and Leidos Engineering, where the company continues to pursue over $300 million in damages across fraud and breach of contract claims. That trial remains scheduled for October 2026, meaning material legal uncertainty persists — not only regarding potential recovery but also the risk of adverse findings, counterclaims, or cost awards. Because the settlement does not constitute an admission of liability, it avoids setting unfavorable precedent for the ongoing Leidos litigation. From an investor perspective, the event is high-materiality: it delivers tangible financial benefit while simultaneously confirming that the most consequential legal risk remains active and unresolved, with trial just six months away. The forward-looking statements section explicitly cautions that settlement proceeds may not be received as contemplated and that litigation outcomes remain inherently uncertain — reinforcing the dual nature of this development as both a partial resolution and a continuation of strategic legal exposure.