A. History and Development of the Company Overview Our legal name is Grupo Simec, S.A.B. de C.V. and our commercial name for advertising and publicity purposes is Simec. We are a Sociedad anónima bursátil de capital variable, organized under the laws of Mexico. We are domiciled in the city of Guadalajara, Jalisco, and our principal administrative office is located at Calzada Lázaro Cárdenas 601, Guadalajara, Jalisco, Mexico 44440. Our telephone number is +52-33-3770-6700 and our website is www.gsimec.com.mx. We are a diversified manufacturer, processor and distributor of SBQ steel and structural steel products with production and commercial operations in Mexico and Brazil, and, until 2023, the United States. We believe that, in 2025, 2024 and 2023 we were an important producer of SBQ products in Mexico in terms of shipped volume. Until August 2023, we were also an important producer of SBQ products in the United States; however, we ceased all steelmaking operations in the United States in August 2023 and have had no production activities at our U.S. facilities since then. We also believe that in 2025, 2024 and 2023, we were an important producer of structural and light structural steel products in Mexico in terms of shipped volume. Our SBQ products are used across a broad range of highly-engineered end-user applications, including axles, hubs and crankshafts for automobiles and light trucks, machine tools and off-highway equipment. Our structural steel products are mainly used in the non-residential construction market and other construction applications. We focus on the Mexican steel markets by providing high value-added products and services from our strategically-located plants. The quality of our products and services, together with cost benefits generated by our facility locations, has allowed us to develop long standing relationships with many of our SBQ clients, which include Mexico and U.S.-based automotive and industrial equipment manufacturers and their suppliers. In addition, our facilities located in the northwest and central parts of Mexico allow us to serve the structural steel and construction markets in those regions and southern California with an advantage in the cost of freight over competitors that do not have production facilities in such regions. History Our steel operations commenced in 1969 when a group of families from Guadalajara, Jalisco, formed Compañía Siderúrgica de Guadalajara, S.A. de C.V. (“CSG”), a mini-mill steel company. In 1980, Grupo Sidek, S.A. de C.V. (“Sidek”), our former parent company, was incorporated and became the holding company of CSG. In 1990, Sidek consolidated its steel and aluminum operations into a separate subsidiary, Grupo Simec, S.A. de C.V., a Mexican corporation with limited liability, organized under the laws of Mexico. 15 The Mexicali plant began operations in June 1993. It was established to expand production capacity and consolidate its position in the national and US markets thanks to its strategic border location. In March 2001, Sidek consummated the sale of its entire 62% controlling interest in our company to Industrias CH. Industrias CH subsequently increased its equity position in us through various conversions of debt to equity and capital contributions and currently holds, together with its direct, wholly-owned subsidiaries, approximately 76.19087% of our series B shares. In August 2004, we acquired the Mexican steel-making facilities of Industrias Ferricas del Norte S.A. (Corporación Sidenor of Spain, or “Grupo Sidenor”) located in Apizaco, Tlaxcala and Cholula, Puebla. We refer to this acquisition as the “Atlax Acquisition.” In July 2005, we and Industrias CH acquired 100% of the capital stock of Republic, a U.S. producer of SBQ steel. We acquired 50.2% of Republic’s stock through our majority owned subsidiary, SimRep, and Industrias CH purchased the remaining 49.8% through SimRep. Industrias CH currently owns 0.59% of the capital stock, and Grupo Simec the remaining 99.41%. On May 30, 2008, we acquired Aceros DM and certain affiliated companies (“Grupo San”), a long products rebar, wire rod and wire products steel mini-mill and the second-largest rebar producer in Mexico. Grupo San’s operations are based in San Luis Potosí, Mexico. On September 3, 2010, we formed a Brazilian entity denominated GV do Brazil Indústria e Comércio de Aço Ltda. On August 5, 2011, we acquired 1,300,000 square meters of land on Pindamonhangaba, São Paulo State, Brazil, for the construction of a new steel facility, which started operations in 2015. On January 16, 2015, we entered into a cooperation agreement with the government of the state of Tlaxcala, Mexico, to build a new steel facility on land adjacent to our existing plant in Tlaxcala with a production capacity of 600,000 tons of bar quality steel (SBQ). We started steelmaking operations at this facility in July 2018. On May 1, 2018, Grupo Simec, S.A.B de C.V. entered into a contract with Arcelor Mittal Brasil, S.A. for the acquisition of the steel products plants of Cariacica, in Espíritu Santo, and the transfer of the lease contract and subsequent purchase for the plant in Itauna, in Minas Gerais, both in Brazil. The production capacity of the Cariacica plant is 600,000 tons of liquid steel per year and 348,000 tons of rolled steel products per year and the production capacity of the Itauna plant is 120,000 tons of rolled steel products per year. On January 1, 2019, Grupo Simec, S.A.B. de C.V. increased its equity position to 99.41% in SimRep Corporation, by acquiring 83,862 ordinary shares, priced at U.S.$3.454 each, as repayment of outstanding debt, for a total subscription of U.S.$290 million. On June 11, 2021, CHQ Wire México, S.A. de C.V. (formerly Malla San 1, S.A. de C.V.) purchased the fixed assets of a wire production plant in Silao, Guanajuato. In August 2023, Republic Steel announced the cessation of its steelmaking operations in Canton, Solon, Massillon Ohio and Lackawanna, New York effective September 2023, due to various economic factors, including deteriorating market conditions and operational costs. Republic Steel has continued servicing its customers from its plant in Tlaxcala, Mexico. As of the date of this report, management has determined that the Republic Steel facilities will remain inactive unless changes in prevailing economic conditions justify resuming operations. Management does not currently intend to sell the facilities. Because management does not currently intend to sell the Republic Steel facilities, IFRS 5 (Non-current Assets Held for Sale and Discontinued Operations) does not apply. The assets continue to be accounted for under IAS 16 (Property, Plant and Equipment), measured at cost less accumulated depreciation and any impairment recognized in accordance with IAS 36. In 2024, the Company engaged an authorized independent appraiser to assess the fair value of Republic Steel’s assets. No impairment was identified. 16 On October 30, 2024, fatalities occurred at one of our steel plants located in Apizaco, Tlaxcala, in connection with a liquid steel spill at the plant. Immediate actions were taken to contain the situation and ensure the safety of our employees and surrounding areas. As of today, the affected assets are fully operational. On May 19, 2025, our subsidiary GV do Brasil Indústria e Comércio de Aço Ltda. (“GV do Brasil”) incorporated Siderúrgica Vale do Paraíba Ltda., a Brazilian sociedade limitada. GV do Brasil holds 99% of the share capital of Companhia Siderúrgica Vale do Paraíba, comprising 49,500,000 shares with a unit value of R$1.00 (R$49,500,000 in the aggregate), and our subsidiary Companhia Siderúrgica do Espírito Santo, S.A. holds the remaining 1%, comprising 500,000 shares (R$500,000 in the aggregate). GV do Brasil has exercised corporate control over Siderúrgica Vale do Paraíba since its incorporation. On November 26, 2025, Metrolinx, an agency of the Government of Ontario, Canada responsible for the development of public transportation in the greater Toronto area, expropriated land in Hamilton, Ontario, Canada owned by our subsidiary Republic Canadian Draw Inc., pursuant to Section 24 of the Expropriation Act, R.S.O. 1990, c. E.26. The aggregate expropriation price was CAD$15,915,627, consisting of CAD$15,200,000 attributable to the market value of the land and CAD$715,627 in statutory damages compensation. Of this amount, CAD$226,825 was withheld in respect of outstanding property taxes. Metrolinx paid CAD$14,324,065 to Republic Canadian Draw Inc. on December 10, 2025, and the remaining CAD$1,591,562 is payable no later than July 31, 2026, subject to deduction of any environmental remediation costs determined upon completion of Metrolinx’s environmental testing of the site. The buildings located on the expropriated land were transferred to Metrolinx without separate consideration and have been written off, together with the underlying land, in our 2025 consolidated financial statements. The machinery and equipment previously located at this facility were relocated to our Lackawanna, New York facility. Principal Capital Expenditures We continually seek to improve our operating efficiency and increase sales of our products through capital investments in new equipment and technology. These capital expenditures are financed primarily with funds that we segregate monthly from the results of operations generated by each facility. We currently estimate capital expenditures for the year 2026 will be approximately Ps. 2,653 million (U.S.$ 148 million), which consists of Ps. 1,331 million (U.S.$ 74 million) of estimated capital expenditures in our facilities in Mexico and Ps. 1,322 million (U.S.$ 73.5 million) consisting of capital expenditures in our facilities in Brazil. This estimate is subject to uncertainty and actual capital expenditures in 2026 may differ significantly from such estimate. In 2025, our capital expenditures amounted to approximately Ps. 2,892 million (U.S.$161.1 million), which consisted of Ps. 838 million (U.S.$ 46.7 million) of capital expenditures in our facilities in Mexico and Ps. 2,054 million (U.S.$ 114.4 million) consisting of capital expenditures in our facilities in Brazil. In 2024, our capital expenditures amounted to approximately Ps. 2,127 million (U.S.$103.7 million), which consisted of Ps. 195 million (U.S.$9.5 million) of capital expenditures in our facilities in Mexico and Ps. 1,932 million (U.S.$94.2 million) consisting of capital expenditures in our facilities in Brazil. In 2023, our capital expenditures amounted to approximately Ps. 2,492 million (U.S.$147.5 million), which consisted of Ps. 210 million (U.S.$12.4 million) of capital expenditures in our facilities in Mexico and Ps. 2,282 million (U.S.$135.1 million) consisting of capital expenditures in our facilities in Brazil. 17 B. Business Overview Prior to our United States steel facility closures in August 2023, we owned and operated 19 state-of-the-art steelmaking, processing and/or finishing facilities in the United States, Mexico, and Brazil. Although we continue to own all of our plants, including those in the United States, we ceased all production activities at our United States facilities in 2023 and did not operate any of these facilities during 2024 and 2025. Accordingly, we currently operate 12 steelmaking, processing, and finishing facilities with a combined annual crude steel installed production capacity of 6 million tons and a combined annual installed rolling capacity of 5.9 million tons. We own both mini-mill and integrated steelmaking facilities. We currently own and operate: ● a mini-mill in Guadalajara, Jalisco, Mexico; ● a mini-mill in Mexicali, Baja California, Mexico; ● two mini-mills in Apizaco, Tlaxcala, Mexico; ● a cold finishing facility in Cholula, Puebla, Mexico; ● a wire rod processing facility in Silao, Guanajuato, Mexico; ● two mini-mills in San Luis Potosí, San Luis Potosí, Mexico; ● two mini-mills in Pindamonhangaba, São Paulo (Brazil), a mini-mill in Cariacica, Espirito Santo (Brazil) and we own and operate rolling and finishing facilities in Itauna, Minas Gerais (Brazil). We report results in three segments: Mexico, United States and Brazil. In light of the closure of our Republic Steel plants in 2023, we continued to report limited results for the United States segment in 2025 due to residual activity; however, we expect to exclude this segment from our reportable segments in future years. Business Strategy We seek to further consolidate our position as a leading producer, processor and distributor of SBQ steel in North America, structural steel and rebar in Mexico and rebar in Brazil. We also seek to expand our presence in the steel industry by identifying and pursuing growth opportunities and value enhancing initiatives. Our strategy includes: Improving our cost structure. We are continually working to reduce our operating costs and non-operating expenses and plan to continue to do so by reducing overhead expenses and operating costs through sharing best practices among our operating facilities and maintaining a conservative capital structure. Focusing on high margin and value-added products. We prioritize the production of high margin steel products over volume and utilization levels. We plan to continue to base our production decisions on achieving relatively high margins. Building on our strong customer relationships. We intend to strengthen our long-standing customer relationships by maintaining strong customer service and proactively responding to changing customer needs. Pursuing strategic growth opportunities. We have successfully grown our business by acquiring, integrating and improving under-performing operations. We intend to continue to pursue acquisition opportunities that will allow for disciplined growth of our business and value creation for our shareholders. We also intend to pursue organic growth by reinvesting the cash generated by our operating activities to expand the capacity and increase the efficiency of our existing facilities. 18 Our Products We produce a wide range of value-added SBQ steel, long-steel and medium-sized structural steel products. In our Mexican facilities, we produce I-beams, channels, structural and commercial angles, hot rolled bars (round, square and hexagonals), flat bars, rebar, cold finished bars, wire rods and wire products. Until the cessation of operations in 2023, our U.S. facilities produced hot-rolled bars, cold-finished bars, and other semi-finished products. In our Brazil facilities, we produce rebars, channels, structural and commercial angles. The following is a description of these products and their main uses: ● I-Beams. I-Beams, also known as standard beams, are I-shaped steel structural sections with two equal parallel sides joined together by the center with a transversal section, forming 90 degree angles. We produce I-beams in our Mexican and Brazil facilities and they are mainly used by construction sector as structural supports. ● Channels. Channels, also known as U-Beams because of their U-shape, are steel structural sections with two equal parallel sides joined together by its ends with a transversal section, forming 90 degree angles. We produce channels in our Mexican and Brazil facilities, and they are mainly used by construction sector as structure supports and for stocking systems. ● Angles. Angles are two equal-sided sections joined by their ends with a 90 degree angle, in an L-shape. We produce angles in our Mexican and Brazil facilities, and they are used mainly by construction and furniture industries as joist structures and framing systems. ● Hot rolled bars. Hot rolled bars are round, square and hexagonal steel bars that can be made of special or commodity steel. The construction, auto part and furniture industries mainly use the round and square bars. The hexagonal bars are made of special steel and are mainly used by the hand tool industry. We produce hot rolled bars in our Mexican and Brazil facilities. ● Flat bars. Flat bars are rectangular steel sections that can be made of special or commodity steel. We produce flat bars at our Mexican facilities. The auto part industry mainly uses special steel as springs, and the construction industry uses the commodity steel flat bars as supports. ● Rebar. Rebar are reinforced, corrugated round steel bars with sections from 0.375 to 1.5 inches in diameter. We produce rebar in our Mexican facilities and in our Brazil facilities. Rebar is only used by the construction industry to reinforce concrete. Rebar is considered a commodity product due to its general acceptance by most consumers of industry standard specifications. ● Cold-finished bars. Cold-finished bars are round and hexagonal SBQ steel bars transformed through a diameter reduction process. This process consists of (1) reducing the cross-sectional area of a bar by drawing the material through a die without any pre-heating or (2) turning or “peeling” the surface of the bar. The process changes the mechanical properties of the steel, and the finished product is accurate to size, free from scale with a bright surface finish. We produce these bars in our Mexican facilities, primarily to supply the auto part industry. 19 The following table sets forth, for the periods indicated, our sales volume for basic steel products. Sales Volume by Steel Product 2025 2024 2023 (thousands of tons) I-Beams 98.5 86.4 93.8 Channels 32.5 33.8 37.4 Angles(1) 201.3 215.6 213.6 Hot-rolled bars (round, square and hexagonal rods) 237.3 275.6 332.3 Flat bar 131.1 195.0 186.7 Rebar 1,095.5 1,059.7 1,128.8 Cold finished bars 63.8 65.6 75.6 Other semi-finished products(2) 0.0 0.0 0.0 Electro-Welded wire mesh 9.4 11.7 9.9 Wire rod 48.8 61.4 68.6 Electro-Welded wire mesh panel 8.6 7.0 7.9 Other 5.9 44.2 21.0 Total 1,932.7 2,056.0 2,175.6 (1) Includes structural angles and commercial angles. (2) Includes billets and blooms (wide section square and round bars). Sales and Distribution We sell and distribute our steel products in Mexico, the United States and Brazil. We also export steel products from Mexico to Central and South America and Europe. In 2025, approximately 9.8% of our steel product sales in tons represented SBQ steel products, of which we sold 78% to the auto part industry, 5% to service centers and the remaining 17% to other industries. In 2025, direct sales in tons to the automotive industry decreased by 12.6% compared to 2024. In 2024, direct sales in tons to the automotive industry decreased by 8% compared to 2023. The following table sets forth, for the periods indicated, our product sales as a percentage of our total product sales in tons to Mexico, and to the U.S., Canada, Brazil and other countries. Steel Product Sales By Region Mexico United States, Canada, Brazil and Other Countries Year ended December 31, 2025 2024 2023 2025 2024 2023 I-Beams 65 % 53 % 59 % 35 % 47 % 41 % Channels 97 % 91 % 83 % 3 % 9 % 17 % Angles 44 % 42 % 47 % 56 % 58 % 53 % Hot-rolled bars 45 % 45 % 46 % 55 % 55 % 54 % Flat bar 87 % 84 % 87 % 13 % 16 % 13 % Rebar 51 % 52 % 54 % 49 % 48 % 46 % Cold finished bars 32 % 42 % 46 % 68 % 58 % 54 % Other semi-finished products - - - - - - Electro-welded wire mesh 100 % 100 % 100 % - - - Wire rod 99 % 100 % 92 % 1 % - 8 % Electro-welded wire mesh panel 100 % 100 % 100 % - - - Other 21 % 10 % 6 % 79 % 90 % 94 % Total (weighted average) 53 % 52 % 54 % 47 % 48 % 46 % 20 During 2025, approximately 55.25% of our sales volume came from the Mexico segment, approximately 44.71% came from the Brazil segment and approximately 0.04% came from the U.S. segment. In 2025, SBQ products represented 17.7%, 0% and 100% of the Mexico, Brazil and U.S. segments, respectively. Although the U.S. segment contributed 0.04% of our net sales in 2025, it reflected only residual revenues related to the continued winding down of operations. Republic Steel ceased production in August 2023 and we have not had any operational activity in the United States since then. As such, no year-over-year operational comparisons are provided for the U.S. segment. We sell to the Mexican market through a group of approximately 100 independent distributors, who also carry competitor’s product lines, and through our wholly-owned distribution center in Guadalajara. Our sales force and distribution center are an important source of information concerning customer needs and market developments. By working through our distributors, we believe that we have established and can maintain market leadership with small-and mid-market end-users throughout Mexico. We believe that our domestic customers are highly service-conscious. We distribute our exports outside North America primarily through independent distributors who also carry competitor´s product lines. During 2024 and 2023, we received orders for our products in our Mexican facilities on average approximately two weeks before producing those products. Until the cessation of our United States operations in 2023, we generally filled orders for our SBQ steel products sold to United States and Canadian customers within one to 12 weeks of the order, depending on product type, customer needs, and production requirements. Accordingly, we do not believe that backlog is a significant factor in our business. A substantial portion of our production is ordered by our customers prior to production. Our first plant in Brazil began production in June 2015 with 30,000 tons and 4,000 tons sold in the same year, all of which correspond to rebar. Sales have increased since 2015, and by consolidating the expansion within the Brazilian territory, we have reached sales of approximately 931,000 tons for 2024, increasing the variety of products offered in the market. Our main objective is to sell our products through independent distributors, aimed at the construction market by providing the highest quality service and products, a key factor in attracting and retaining customers. Our sales policy in Brazil has been well accepted by our customers, and our sales increased steadily, creating an opportunity in the Brazilian steel market. Our steel production increased 1.1% in 2025 compared with 2024. Our major customers in 2025 include: Pires Do Rio Cibraco Comercio e Industria de Ferro e Aco, Ltda, Marson Distribuicao, Ltda, Aco e Aco Vergalhoes Ltda, Udiaco Comercio e Industria de Ferro e Aco Ltda, Aco Fera Com Ferro e Aco Ltda, Cedisa Central de Aco, S.A., Manetoni Distribuidora de Productos Siderurgicos Importacao e Exportacao, LTDA., Ferragens Santa Monica, LTDA., Brametal, S.A., Automolas Equipamentos, LTDA., Facchini, S.A., VK Industria de Molas e Grampos, LTDA.,Mattheis Borg Adm Part Com Ind, LTDA., Konesul Ind Com, LTDA., RDG Acos Do Brasil, S.A. 21 Competition Competition in the steel industry is significant. Competition in the steel industry also exerts a downward pressure on prices, and, due to high start-up costs, the economics of operating a steel mill on a continuous basis may encourage mill operators to establish and maintain high levels of output even in times of low demand, which further decreases prices and profit margins. The trend of consolidation in the global steel industry may further increase competitive pressures on independent producers of our size, particularly if large steel producers formed through consolidations, which have access to greater resources than us, adopt predatory pricing strategies that decrease prices and profit margins. If we are unable to remain competitive with these producers, our profitability and market share would likely be materially and adversely affected. A number of our competitors in Mexico, Brazil and formerly the United States have undertaken modernization and expansion plans, including the installation of production facilities and manufacturing capacity for certain products that compete with our products. As these producers become more efficient, we may face increased competition from them and may experience a loss of market share. In each of Mexico and Brazil we also face competition from international steel producers. International competition and global oversupply may still affect global pricing trends and the competitiveness of our Mexican and Brazilian operations. Increased international competition, especially when combined with excess production capacity, would likely force us to lower our prices or to offer increased services at a higher cost to us, which could materially reduce our profit margins. Mexico We compete in the Mexican domestic market and in its export markets for long steel products primarily on the basis of price and product quality. In addition, we compete in the domestic market based upon our responsiveness to customer delivery requirements. The flexibility of our production facilities allows us to respond quickly to the demand for our products. We also believe that the geographic locations of our various facilities throughout Mexico and variety of products help us maintain our competitive market position in Mexico. We believe that our Mexicali mini-mill, is competitive in terms of production and transportation costs in northwestern Mexico. We believe that our competitors’ closest plants to the North Western Mexico market are: Nucor Corporation, located in Plymouth, Utah; Commercial Metals Company, located in Meza, Arizona; Thyssenkrupp Steel North America, Inc., located in Santa Fe Springs, California; Deacero, S.A. de C.V. (“Deacero”), located in Saltillo, Coahuila, México and Gerdau Corsa, S.A.P.I. de C.V. (“Gerdau Corsa”), Tultitlán Tlalnepantla State of Mexico and Tula Ciudad Sahagún, Hidalgo, Mexico. We believe that we have an advantage over certain competitors due to the labor cost in our Mexican operations. In 2025, we sold approximately 268,811 tons of I-beams, channels and angles at least three inches in width, which represented approximately 13.91% of our total finished product sales for the year. In 2024, we sold approximately 269,836 tons of I-beams, channels and angles at least three inches in width, which represented approximately 13.1% of our total finished product sales for the year. In 2023, we sold approximately 267,778 tons of I-beams, channels and angles at least three inches in width, which represented approximately 12.3% of our total finished product sales for the year. We believe that the domestic competitors in the Mexican market for structural steel are Gerdau Corsa, Deacero, Grupo Acerero, S.A. de C.V., Grupo Collado, S.A. de C.V. and Siderúrgica del Golfo, S.A. de C.V. (a wholly-owned subsidiary of Industrias CH). We estimate that our share of Mexican production of structural steel was 14.9% in 2025, 11% in 2024 and 10% in 2023, according to information provided by Mexico’s Cámara Nacional de la Industria del Hierro y del Acero (CANACERO). 22 In 2025, we sold approximately 301,100 tons of hot rolled and cold finished steel bars compared to 341,200 tons in 2024. Our other major product lines are rebar and light structural steel (angles less than three inches in width and flat bar), for which our share of domestic production was 14.33% and 15.05% respectively in 2025, 14.6% and 14% respectively in 2024 and 13.9% and 13.3% respectively in 2023. Rebar and light structural steel together accounted for approximately 1,247,417 tons, or 64.5%, of our total production of finished steel products in Mexico and Brazil in 2025. We compete in the Mexican market with a number of producers of these products, including Deacero, Talleres y Aceros, S.A., Grupo Acerero, S.A. de C.V., ArcelorMittal Lázaro Cárdenas, S.A. de C.V., Ternium Mexico, S.A. de C.V., Grupo Acerero Fonderia, Suacero, S.A. de C.V., Gerdau Corsa and Comercial Metals Company. We believe that we have been able to maintain our domestic market share and profitable pricing levels in Mexico in part because the central Mexico sites of the Guadalajara, Apizaco, Cholula and San Luis facilities afford us cost advantages relative to certain U.S. producers when shipping to customers in central and southern Mexico. Furthermore, our flexible production facility has given us the ability to ship specialty products in relatively small quantities with short lead times. The Mexicali mini-mill has helped to increase sales in northwestern Mexico because its proximity to these areas reduces our freight costs. United States Until 2024, we competed primarily with both domestic SBQ steel producers and importers in the United States. Domestic competition for hot-rolled engineered bar products included large U.S. steelmakers and specialized mini-mills. Non-U.S. competition also impacted segments of the SBQ market, particularly where certifications were not required, and during periods when the U.S. dollar was strong compared with foreign currencies. The principal areas of competition in these markets were product quality on time, delivery reliability, service and price. Special chemistry and precise processing requirements characterize SBQ steel products. Maintaining high standards of product quality, while keeping production costs low, was essential to our ability to compete. The ability to respond quickly to customer orders was important, especially as customers increasingly reduced their in-plant raw material inventories. Our principal competitors in the U.S. market, depending on the product, included Nucor Corporation, Charter Steel, Steel Dynamics, Cascade Rolling Mills, Commercial Metals Company, Vinton Steel, and Gerdau. In August 2023, Republic Steel announced the closure of its steelmaking operations in Canton, Solon, Massillon, Ohio, and Lackawanna, New York, effective September 2023, due to various economic factors, including deteriorating market conditions and operational costs. Brazil The Brazilian steel industry is comprised of 12 business groups operating 31 mills in 10 Brazilian states, making Brazil the 9th largest steel producer in the world. Our main competitors in the Brazilian market are ArcelorMittal Brazil, CSN, Gerdau, Sinobras, Usiminas, Ternium do Brasil and Vallourec, as well as specialty steel producers such as Villares Metals. We compete in the Brazilian domestic market for long steel products primarily based on price and product quality. Additionally, we differentiate ourselves through our ability to meet customer delivery requirements. The flexibility of our production facilities enables us to quickly respond to fluctuations in product demand. The growing needs of Brazil, along with our diverse product range, help us maintain a strong competitive position in the Brazilian market. 23 Certifications ISO is a worldwide federation of national standards bodies which have united to develop internationally accepted standards so that customers and manufacturers have a system in place to provide a product of known quality and standards. The standards set by ISO covers every aspect of quality from management responsibility to service and delivery. We believe that adhering to the stringent ISO procedures not only creates efficiency in manufacturing operations, but also positions us to meet the strict standards that our customers require. We are engaged in a total quality program designed to improve customer service, overall personnel qualifications and team work. The facilities at Apizaco and Cholula have received ISO/TS 16949:2009 certification from International Quality Certifications, effective until September, 2027. Prior to the closure of Republic Steel’s plants in 2023, all such facilities were certified to ISO9001:2015 and IATF16949:2016. The certifications for the Canton, Lackawanna, Massillon, and Solon plants remained in effect through January 2024, but are no longer active given the termination of operations. The IATF 16949:2016 standard, developed by the International Automotive Task Force, is the result of the harmonization of the supplier quality requirements of vehicle manufacturers worldwide and provides for a single quality management system of continuous improvement, defect prevention and reduction of variation and waste in the supply chain. It places greater emphasis on management’s commitment to quality and customer focus. Raw Materials Prices for raw materials necessary for production of our steel products have fluctuated significantly in the past and significant increases in raw material prices could adversely affect our profit margins. During periods when prices for scrap metal, iron ore, ferroalloys, coking coal and other raw materials have increased, our industry has historically sought to maintain profit margins by passing along increased raw materials costs to customers by means of price increases. For example, prices of scrap metal decreased 14% in 2025, decreased approximately 15% in 2024, and decreased 40% in 2023, and prices of ferroalloys decreased approximately 5% in 2025, decreased 19% in 2024 and increased approximately 36.4% in 2023. We may not be able to pass along these and other cost increases in the future and even when we can successfully increase our prices, interim reductions in profit margins frequently occur due to a time lag between the increase in raw material prices and the market acceptance of higher selling prices for finished steel products. We purchase our raw material requirements either in the open market or from certain key suppliers. If any of our key suppliers fails to deliver or we fail to renew our supply contracts, we could face limited access to some raw materials, or higher costs and delays resulting from the need to obtain our raw materials requirements from other suppliers. In 2025, our cost of sales in Mexico, as a percentage of sales in Mexico, was 78%, compared to 70% in Brazil. Our consolidated cost of sales, as a percentage of consolidated sales, was 75%. Scrap metal, electricity, ferroalloys, electrodes and refractory products are the principal materials that we use to manufacture our steel products. Scrap metal. Scrap metal is among the most important components for our steel production and accounted for approximately 48% of our consolidated manufacturing conversion cost in 2025 (47% of the manufacturing conversion cost in our Mexico operations, and 49% in our Brazil operations). Scrap metal is principally generated from automobile, industrial, naval and railroad industries. The market for scrap metal is influenced by availability, freight costs, speculation by scrap brokers and other conditions largely beyond our control. Fluctuations in scrap costs directly influence the cost of sales of finished goods. 24 We purchase raw scrap from dealers in Mexico and the San Diego California area, and we process the raw scrap into refined scrap metal at our Guadalajara, San Luis, Mexicali and Apizaco facilities. We meet our refined scrap metal requirements through: (i) our wholly-owned scrap processing facilities, which in the aggregate provided us with approximately 11% and 15% of our refined scrap tonnage in 2025 and 2024, respectively, and (ii) purchases from third party scrap processors in Mexico and the southwestern United States, which, in the aggregate, provided us with approximately 88% and 1% of our refined scrap tonnage, respectively, in 2025 and approximately 82% and 3% respectively in 2024. We are a large scrap collector in the Mexicali, Tijuana and Hermosillo regions, and, by primarily dealing directly with small Mexican scrap collectors, we believe we have been able to purchase scrap at prices lower than those in the international and Mexican markets. We purchase scrap on the open market through a number of brokers. We purchase scrap on the open market through a number of brokers or directly from scrap dealers for our Brazil facilities. We do not depend on any single scrap supplier to meet our scrap requirements. Ferroalloys, Electrodes and Refractory Products. Ferroalloys, electrodes and refractory products collectively accounted for i) approximately 16% of our manufacturing conversion cost in 2025 in our Mexican operations, compared to 14% in 2024 and ii) 8% of our manufacturing conversion cost in 2025 compared to 9% in 2024 in our Brazil facilities. Ferroalloys are essential for the production of steel and are added to the steel during manufacturing process to reduce undesirable elements and to enhance its hardness, durability and resistance to friction and abrasion. For our Mexican operations, we buy most of our manganese ferroalloys from Compañía Minera Autlán, S.A., Autlán Metal Services, S.A. de C.V., Elmet, S.A. de C.V., Marco Metales de Mexico, S. de R.L. de C.V., Metaloides, S.A. de C.V., Micro Abrasivos, S.A. de C.V., Posshel, S.A. de C.V. and Distribuidora de Aleaciones y Metales, S.A. de C.V. Our Brazil facilities purchase most of their ferroalloys from Multiligas Eireli. Ltda, Comercial Cometa Industria y Comercio Ltda., Fertileg Ferro Liga Ltda, Granha Ligas Ltda., and Cia de Ferro Ligas de Bahia Ferbasa. For our Mexican operations, we obtain electrodes used to melt raw materials (scrap metal) from Jilin Carbon Co. Ltd., Interfer Edelsthal H. Mbh, Interfer Austria GMBH, FRC Global Inc, Dalian Xihua Refractories Materials Co., Dalian Wanlong Trading LTD, Haihan Industry Inc. Jiangsu Chianaref Refractory Co. LTD, Jilin Songjiang Carbon I/E Co. LTD and Jiangsu Jianglong New Energy Technology Co. LTD. Our Brazil facilities purchase most of their electrodes from Jilin Carbon Import, Jilim Songjiang Carbon I/E Co. LTD, Zhongsheng Industrial Trading, Co. Limited and Jiangsu Chianaref Refractory Co. LTD. Refractory products include firebricks, which line and insulate furnaces, ladles and other transfer vessels. We purchase our refractory products for our Mexican operations from Vesuvius México, S.A. de C.V., RHI Refmex, S.A. de C.V., Magna Refractarios México, S.A. de C.V., FRC Global Inc, Puyang Refractories group Co. Ltd. Kumas, Manyezit Sanayi A.S., Refractarios Alfran México, S.A. de C.V., Harbison Walker México, S.A. de C.V., Refratechnik Steel GMBH and Rectix Materiales Refractarios, S.A. de C.V. Our Brazil facilities purchase most of their refractory products from Magnesitas Navarras, S.A., Vesivius Refractarios LTDA, RHI Refractarios Brasil LTDA, Puyang Refractories Group Co. LTD, TRL Krosaki Refractories LTD, FRC Global INC, Refractarios Kelsen, S.A., Kumas Mannerist Sanayi, A.S., Dalian Xihua Refractory Material Co. LTD, LMM Group Co. LTD and Osrfar East Limited. Electricity. In 2025, 2024 and 2023, electricity accounted for approximately 8%, 9% and 9% of our consolidated manufacturing conversion cost, respectively. Electricity accounted for 9%, 10% and 9% in 2025, 2024 and 2023, respectively, of our manufacturing conversion in our Mexico facilities and was supplied by CFE for basic service and Iberdrola for qualified service. Electricity also accounted for 11% of the manufacturing conversion cost in our U.S. operations in 2023, and was supplied by American Electric Power Company, Archer Energy, National Grid, The Illumination Company, New York Power and Ohio Edison. It accounted for 7%, 8% and 8% in 2025, 2024 and 2023, respectively, of the manufacturing conversion cost in our Brazil operations, where it is supplied by Ecom Energia Ltda., Comercializadora de Energia Eletrica Ltda. and Comerc Ltda. We, like most high-volume users of electricity in Mexico, pay special rates to CFE for electricity. Energy prices in Mexico have historically been very volatile and subject to dramatic price increases in short periods of time. In the late 1990s, the CFE began to charge for electricity usage based on the time of use during the day and the season (summer or winter). As a result, we have modified our production schedule in order to reduce electricity costs by limiting production during periods when peak rates are in effect. We cannot assure that any future cost increases will not have a material adverse effect on our business. 25 Natural Gas. Natural gas (including “combustoleo” fuel oil which is an oil derivative that is less refined than gasoline and diesel fuel oil that can be used instead of gasoline in our Mexicali plant) consisted of approximately 3% of our consolidated manufacturing conversion cost (2% of the manufacturing conversion cost of our Mexican operations and 4% of our Brazil operations) in 2025, and approximately 2% of our consolidated manufacturing conversion cost (2% of the manufacturing conversion cost of our Mexican operations and 3% of our Brazil operations) in 2024. In previous years we have entered into natural gas cash-flow exchange contracts or swaps where we receive a floating price and pay a fixed price to hedge our risk of from fluctuations in natural gas prices. Fluctuations in natural gas prices from volume consumed are recognized as part of our operating costs. As applicable, we recognized the fair value of instruments either as liabilities or assets. We periodically evaluated the changes in the cash flows of derivative instruments to analyze if the swaps are highly effective for mitigating the exposure to natural gas price fluctuations. At December 31, 2025, 2024 and 2023, we did not have natural gas cash-flow exchange contracts or swaps. We do not enter into contracts for speculation purposes. Regulation Mexican Operations We are subject to Mexican federal, state and municipal laws, administrative regulations and Mexican Official Rules (Normas Oficiales Mexicanas) relating to a variety of environmental matters, anti-trust matters, trade regulations, and tax and employee matters. Among other matters, Mexican tax returns are open for review generally for a period of five years, and, according to Mexican tax law, the purchaser of a business may become jointly and severally liable for unpaid tax liabilities of the business prior to its acquisition, which may have an impact on the liabilities and contingencies derived from any such acquisitions. Although we believe that we are in compliance with all material Mexican federal, state and municipal laws, administrative regulations and Mexican Official Rules, we cannot assure you that the interpretation of the Mexican authorities of the laws and regulations affecting our business or the enforcement thereof will not change in a manner that could increase our costs of doing business or could have a material adverse effect on our business, results of operations, financial condition or prospects. Environmental Matters We are subject to various Mexican federal, state and municipal laws, administrative regulations and Mexican Official Rules relating to the protection of human health, the environment and natural resources. The major federal environmental laws applicable to our operations, among others, are ● the General Law of Ecological Balance and Environmental Protection (Ley General del Equilibrio Ecológico y la Protección al Ambiente or the “General Law on Environmental Protection”) and its regulations; ● the General Law for the Prevention and Integral Management of Waste (Ley General para la Prevención y Gestión Integral de los Residuos or the “General Law on Waste Management”); ● the National Waters Law (Ley de Aguas Nacionales) and its regulations; and ● the Federal Law on Environmental Responsibility (Ley Federal de Responsabilidad Ambiental) 26 The General Law on Environmental Protection, the General Law on Waste Management and the Federal Law on Environmental Responsibility are administered by the Ministry of the Environment and Natural Resources (Secretaría de Medio Ambiente y Recursos Naturales or the “Ministry of the Environment”) and enforced by the Federal Attorney’s Office for the Protection of the Environment (Procuraduría Federal de Protección al Ambiente or “PROFEPA”). The National Waters law is also administered by the Ministry of the Environment and is enforced by the National Waters Commission (Comisión Nacional de Agua or “CONAGUA”). In addition to the foregoing, Mexican Official Rules, which are technical standards issued by applicable regulatory authorities pursuant to the General Normalization Law (Ley General de Metrología y Normalización) and to other laws that include the environmental laws described above, establish standards relating to air emissions, waste water discharges, the generation, handling and disposal of hazardous waste and noise control, among others. Mexican Official Rules regarding soil contamination and waste management were enacted in order to protect these potential contingencies. Although not enforceable, the internal administrative criteria on soil contamination established by PROFEPA is widely used as guidance in cases where soil remediation, restoration or clean-up is required. The General Law on Environmental Protection sets forth the legal framework applicable to the generation and handling of hazardous wastes and materials, the release of contaminants into the air, soil and water, as well as the environmental impact assessment of the construction, development and operation of different projects, sites, facilities and industrial plants similar to the ones owned and/or operated by us and our subsidiaries. In addition, the General Law on Waste Management regulates the generation, handling, transportation, storage and final disposal of hazardous waste. The General Law on Environmental Protection also mandates that companies that contaminate soil be responsible for the clean-up. Furthermore, the General Law on Waste Management provides that owners and lessors of real property with soil contamination are jointly and severally liable for the remediation of such contaminated sites, irrespective of any recourse or other actions such owners and lessors may have against the contaminating party, and aside from the criminal or administrative liability to which the contaminating party may be subject. The General Law on Waste Management also restricts the transfer of contaminated sites. PROFEPA can bring administrative, civil and criminal proceedings against companies that violate environmental laws, regulations and Mexican Official Rules, and has the power to impose a variety of sanctions. These sanctions may include, among others, monetary fines, revocation of authorizations, concessions, licenses, permits or registries, administrative arrests, seizure of contaminating equipment, and in certain cases, temporary or permanent closure of facilities. Additionally, as part of its inspection authority, PROFEPA is entitled to periodically visit the facilities of companies whose activities are regulated by Mexican environmental legislation, and verify compliance. Similar rights are granted to state environmental authorities pursuant to applicable state environmental laws. Companies in Mexico are required to obtain proper authorizations, concessions, licenses, permits and registrations from competent environmental authorities for the performance of activities that may have an impact on the environment or may constitute a source of contamination. Such companies in Mexico are also required to comply with a variety of reporting obligations that include, among others, providing PROFEPA and the Ministry of the Environment with periodic reports regarding compliance with various environmental laws. Among other permits, the operations and related activities of the steel industry are subject to the prior obtainment of an environmental impact authorization granted by the Ministry of the Environment. We believe that we have obtained all the necessary authorizations, concessions, general operating licenses, permits and registries from the applicable environmental authorities to duly operate our facilities, plants and sites, and sell our products and that we are in material compliance with applicable environmental legislation. We, through our subsidiaries, have made significant capital investments to assure our production and operation facilities comply with requirements of federal, state and municipal law and administrative regulation, to remain in compliance with our current authorizations, concessions, licenses, permits and registries. 27 Mexican environmental laws and administrative regulations have become increasingly stringent over the last decade, and this trend is likely to continue, influenced recently by the North American Agreement on Environmental Cooperation entered into by Mexico, the United States and Canada in connection with the USMCA. In this regard, any obligation to remedy environmental damages caused by us or any contaminated sites owned or leased by us could require significant unplanned capital expenditures and be materially adverse to our financial condition and results of operations. Water The National Waters Law regulates water resources in Mexico. In addition, the Mexican Official Rules govern water quality standards. A concession granted by CONAGUA is required for the use and exploitation of national waters. Some of our facilities in Mexico have renewable concessions to use and exploit underground waters from wells in order to meet the water requirements of our production processes. We pay CONAGUA duties per cubic meter of water extracted under our concessions. We believe we are in substantial compliance with all the requirements imposed by each of the concessions we have obtained. The Mexicali plant, is currently undergoing a nullity proceeding related to its water concession (Conagua), before the Federal Court of Administrative Justice (Tijuana, Baja California). The case is pending resolution, and the company has presented all valid legal arguments and therefore believes a favorable outcome is expected. Pursuant to the National Waters Law, companies that discharge waste into national water bodies must comply with certain requirements, including maximum permissible contamination or pollution levels. Periodic reports on water quality must be provided by dischargers to applicable authorities. Liability may result from the contamination of underground waters or recipient water bodies. We believe that we are in substantial compliance with all water and waste water legislation applicable to us. Antitrust Matters We are also subject to the Mexican Antitrust Law (Ley Federal de Competencia Económica), which regulates monopolies and monopolistic practices in Mexico and requires Mexican Government approval of certain mergers, acquisitions and joint ventures. We believe that we are currently in material compliance with the Mexican Antitrust Law. However, due to our growth strategy of acquiring new businesses and assets and because we are a large manufacturer with a significant share of the markets in Mexico with respect to certain of our products, we may be subject to greater regulatory scrutiny in the future. Measurements Law Mexico’s Ministry of the Economy (Secretaría de Economía), through the General Rules Department (Dirección General de Normas or “DGN”), promulgates regulations regarding many products that we manufacture. Specifically, pursuant to the Measurements Law (Ley Federal sobre Metrología y Normalización), the DGN issues specifications on the quality and safety standards for our product lines. We believe that all our products are in material compliance with all applicable DGN regulations. United States Our former operations in the United States were subject to U.S. federal, state and local environmental laws and administrative regulations concerning, among other things, the management of hazardous materials and the discharge of pollutants to the atmosphere and to surface waters. These operations were the subject of administrative action by federal, state and local environmental authorities. Although our U.S. facilities ceased operations in 2023, the resolution of any of these claims may result in significant liabilities. See “Item 3—Key Information—Risk Factors—Risks Related to the Global Economy and Our Business—In the event of environmental violations at our facilities we may incur significant liabilities” and “Item 8—Financial Information—Legal Proceedings.” 28 Environmental Matters We are subject to a broad range of environmental laws and regulations, including those governing the following: ● discharges to the air, water and soil; ● the handling and disposal of solid and hazardous wastes; ● the release of petroleum products, hazardous substances, hazardous wastes, or toxic substances to the environment; and ● the investigation and remediation of contaminated soil, sediment and groundwater. We monitor our compliance with these laws and regulations through our environmental management system, and believe that we currently are in substantial compliance with them. If we fail to comply with these laws and regulations, we may be assessed fines or penalties or be subject to injunctive relief which could have a material adverse effect on us. Future changes in the applicable environmental laws and regulations, or changes in the regulating agencies’ approach to enforcement or interpretation of their regulations, could cause us to make additional capital expenditures beyond what we currently anticipate. Although all of our United States production facilities ceased operations in 2023, certain facilities such as the Lorain and Canton, Ohio plants remain subject to legacy environmental regulations, including the Maximum Achievable Control Technology (“MACT”) standard for Electric Arc Furnaces as an “area source”. Revisions of this standard may impose future obligations with respect to these non-operational assets, including those relating to mercury emissions and control. Our steelmaking operations in the United States, Brazil and in Mexico use electric arc furnaces where carbon dioxide generation is primarily linked to energy use. Until 2023, certain United States operations also employed this technology. In the United States, the Environmental Protection Agency has issued rules imposing inventory and reporting obligations to which certain legacy facilities are subject, and has also issued rules that will affect preconstruction permits for United States facilities where increases in greenhouse gas pollutants are contemplated. The U.S. Congress has debated various measures for regulating greenhouse gas emission (such as carbon dioxide) and may enact them in the future. Such laws and regulations may also result in higher costs for coking coal, natural gas and electricity generated by carbon-based systems (such as coal-fired electric generating facilities). Such future laws and regulations, whether in the form of cap-and-trade emissions permit system, a carbon tax or other regulatory regime may have a negative effect on our remaining operations or legacy compliance obligations. Climate change policy is evolving at regional, national and international levels, and political and economic events may significantly affect the scope and timing of climate change measures that are ultimately put in place. As a signatory to the UNFCCC, Mexico became subject to the Paris Agreement to fight climate change, which was taken by the parties at the 21th session of the UNFCCC conference of the Parties in 2015. In August 2017, the U.S. State Department officially informed the United Nations of the United States withdrawal from the Paris Agreement. Following the 2020 U.S. presidential election, the U.S. formally rejoined the Paris Agreement in February 2021. As a result, while our United States facilities are no longer operational, legacy obligations may still fall under future regional, provincial and/or federal climate change regulations to manage greenhouse emissions. More stringent greenhouse policies and regulations could adversely affect our business and results of operations. Various federal, state and local laws, regulations and ordinances govern the removal, encapsulation or disturbance of asbestos-containing materials (“ACMs”). These laws, regulations and ordinances may impose liability for the release of ACMs and may permit third parties to seek recovery from owners or operators of facilities at which ACMs were or are located for personal injury associated with exposure to ACMs. We are aware of the presence of ACMs at certain legacy facilities, but we currently believe that such materials are being managed in accordance with applicable law, asbestos was removed from the Lorain plant, buildings with asbestos in said plant were demolished. In the United States, the federal Environmental Protection Agency has in the past introduced regulation regarding the phasing out of polychlorinated biphenyl (“PCB”) containing fluid in equipment that we previously used at many of our U.S. facilities. If any such rules are enacted, these legacy facilities may be required to reduce the levels of PCBs in our equipment, which will in turn may require us to incur costs for the removal and disposal of PCB containing oils, sampling and possible replacement of equipment in the event PCB levels cannot be reduced to acceptable levels. 29 Also in the United States, more stringent standards were promulgated in 2012. As these standards were implemented through the different state programs, we experienced higher costs associated with any preconstruction permitting of new or modified sources at our U.S. facilities. These costs were related to extensive dispersion modeling and/or pre-construction monitoring not previously required. While we no longer operate steelmaking facilities in the United States, these historical regulatory experiences may include future obligations associated with environmental permitting or site remediation at our legacy facilities. Brazil operations We produce according to technical specifications of the Brazilian standard ABNT NBR 7480:2007 for steel bars and wires designed for the reinforcement for concrete structures. Our products are also registered with the Brazilian National Institute of Metrology, Quality and Technology (INMETRO), in accordance with Resolution CONMETRO No. 05, dated May 6, 2008, and comply with conformity assessment regulations, including Ordinance No. 73, dated March 17, 2010, and with compulsory product certification regulations. We have received environmental permits from the Sao Paulo State, for which hydrological studies and feasibility of groundwater have been conducted, such permits include a license granted by the Ministry of Environment of Sao Paulo and an operations license granted by the Ministry of Environment CETESBE Sao Paulo State. Trade Regulation We have experienced significant competition from imports into Mexico in the past as a result of excess worldwide steel production, particularly in periods of economic slowdown, and as a consequence of the peso’s appreciation relative to other currencies, making imports cheaper and more competitive in peso terms. Recently, the Mexican government, at the request of CANACERO, has taken several measures to prevent unfair trade practices such as dumping in the steel import market. The overall climate for imports in Mexico is influenced by the free trade agreements that Mexico has entered with other countries, as well as the level of tariffs and anti-dumping duties. We benefit from Mexico’s free trade agreements. Specifically, in the past, we have directly benefited from our ability to export finished steel products directly to export markets and compete with similar products manufactured in those markets. We have also indirectly benefited from increased demand from our domestic customers who similarly manufacture their products to foreign markets under free trade agreements. Nevertheless, we cannot assure you that the trade agreements affecting our business or the enforcement thereof will not change in a manner that could have a material adverse effect on our business, results of operations, financial condition or prospects. United States-Mexico-Canada Agreement (USMCA) The North American Free Trade Agreement (“NAFTA”) became effective on January 1, 1994, and provided for the progressive elimination of most duties on steel products traded among the United States, Mexico and Canada. On July 1, 2020, NAFTA was replaced by the USMCA, which maintains tariff-free access for most steel and steel-related products among the three countries. The USMCA includes provisions intended to facilitate regional trade and reduce customs-related barriers. As part of its terms, the agreement is subject to a joint review by the three countries in 2026, six years after its entry into force. See “Item 3—Key Information—Risk Factors—Risks Related to Mexico—Economic and political developments in the United States and elsewhere may adversely affect Mexican economic policy and, in turn, our operations.” The USMCA has benefits on custom expenses, an orderly economic competition, clear rules for investment and its protection. Impact of Reinstated Section 232 Tariffs on U.S. Steel Exports As of the date of this annual report, certain of our steel exports from Mexico to the United States are subject to tariffs imposed under Section 232 of the U.S. Trade Expansion Act of 1962. In March 2025, the U.S. government reinstated a 25% tariff on all steel imports, including those originating from Mexico. We understand that, as a result of this reinstatement, our exports of all steel products from Mexico to the United States are currently subject to the 25% tariff. These tariffs increase the cost of our products in the U.S. market, potentially affecting the competitiveness of our exports and resulting in reduced volumes or pressure on margins. Since the reinstatement of the tariffs, we have seen a reduction in our export volumes to the United States, with current shipments averaging around 300 metric tons per month compared to prior levels of approximately 3,000 metric tons per month. We continue to monitor trade developments closely and evaluate our commercial and operational strategy in light of evolving trade policies. Mexican-European Community Free Trade Agreement. The Mexican-European Free Trade Agreement (“MEFTA”) became effective on July 1, 2000, and taxes applying to a large quantity of imported goods were eliminated or reduced. The goal of this trade agreement was to establish a bilateral and preferential, progressive and reciprocal framework to encourage the development of trade in goods and services, taking into account the sensitivity of certain products and services sectors, and in accordance with relevant rules of the World Trade Organization (WTO). The Joint Council is responsible for deciding the arrangements and timetable for the liberalization of duties and non-duty barriers to trade in goods, in accordance with the relevant WTO rules. This agreement was modified in 2018. 30 Mexico-Japan Economic Association. On January 1, 2004, Japan and the other members of the G-7, agreed to reduce the steel tariffs to zero percent, so Mexico has benefited from this rate since such date. However, Mexico is sensitive to the steel exports coming from Japan, so the Mexico-Japan Economic Association (the “Association”) was negotiated in the following terms: (i) the specialized steel not produced in Mexico used to produce vehicles, spare parts, electronics, machinery and heavy equipment was relieved from any tariffs, (ii) steel products coming from Japan into Mexico are subject to a zero percent rate and (iii) the products to be imported from programs established by the Association pay tariffs pursuant to the fixed rates established in such programs. The electronic and vehicles industries are exempted as of the date of the Association. Other Trade Agreements. In the last several years, Mexico has signed other free trade agreements, including free trade agreements with Israel (2000), Iceland, Norway, Liechtenstein and Switzerland (2001), and with the following Latin American countries: Chile (1992 and amended in 1999); Venezuela and Colombia (1995); Costa Rica (1995); Bolivia (1995); Nicaragua (1998); Honduras, El Salvador and Guatemala (2001); and Uruguay (2003). We do not anticipate any significant increase in competition in the Mexican steel market as a result of these trade agreements due to their minimal steel production or, in the case of Venezuela and Chile, minimal share of the Mexican market. Venezuela withdrew from the free trade agreement with Mexico and Colombia in 2006. Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). On February 4, 2016, Mexico, along with Australia, Brunei, Canada, Chile, United States, Japan, Malaysia, New Zealand, Peru, Singapore and Vietnam, signed the Transpacific Partnership Trade Agreement, in the City of Auckland, New Zealand, which was intended to grant Mexican products access to six markets (Australia, Brunei, Malaysia, New Zealand, Singapore and Vietnam) with approximately 155 million of potential consumers, which were not covered by any other trade agreement. In January 2017, the United States withdrew from the agreement, after which the remaining 11 countries reached a revised agreement and renamed it the CPTPP. On December 30, 2018, it became effective without U.S. participation. The CPTPP eliminates or reduces tariff and non-tariff barriers across substantially all trade in goods and services and covers the full spectrum of trade, including goods and services trade and investment, so as to create new opportunities and benefits for the businesses, workers, and consumers of the members. The CPTPP is intended to facilitate the development of production and supply chains, and seamless trade, enhancing efficiency and supporting the goal of creating and supporting jobs, raising living standards, enhancing conservation efforts, and facilitating cross-border integration, as well as opening domestic markets. The CPTPP is intended to promote innovation, productivity, and competitiveness by addressing new issues, including the development of the digital economy, and the role of state-owned enterprises in the global economy. Finally, the CPTPP includes new elements that seek to ensure that economies at all levels of development and businesses of all sizes can benefit from trade. It also includes specific commitments on development and trade capacity building. Dumping and Countervailing Duties. We are or have been a party to, or have been affected by, numerous steel dumping and countervailing duty claims. Many of these claims have been brought by Mexican steel producers against international steel companies, while others have been brought against Mexican steel companies. In certain instances, such cases have resulted in duties being imposed on certain imported steel products and, in a few instances, duties have been imposed on Mexican steel exports. In the aggregate, these duties have not had a material impact on our results of operations. On September 11, 2013, the United States International Trade Commission (the “USITC”) started an official anti-dumping investigation against rebar exports from Mexico and Turkey promoted by Nucor, Gerdau, Commercial Metals, and Cascade Steel Buyer. 31 On October 14, 2014, the USITC determined that the U.S. steel industry was materially injured by imports of steel concrete reinforcing bar from Mexico that are sold in the United States at less than fair value and from Turkey that are subsidized by the government of Turkey. As a result of the USITC’s affirmative determinations, the U.S. Department of Commerce issued an anti-dumping duty order on imports of this product from Mexico and a countervailing duty order on imports of this product from Turkey. The U.S. government-imposed tariffs of 66.7% against imports for rebar from Deacero, S.A.P.I de C.V. and us and tariffs of 20.58% for rebar imports from all other producers in Mexico, which tariffs were rescinded in June 2017. On January 6, 2021, a preliminary dumping rate of 66.7% was imposed on our exports of rebar to the United States. Such dumping rate was ratified in June 1, 2022. Following the U.S. Department of Commerce’s physical review carried out at our San Luis Potosí plant on February 17, 2020 after we argued that there were deficiencies and adverse facts during the U.S. Department of Commerce’s information process, a preliminary dumping rate of 6.35% was imposed and was ratified in the first semester of 2023. On August 9, 2023 a dumping rate of 5.93% was published and imposed. On December 4, 2024 a dumping rate of 2.11% was published and imposed. This rate remained in effect as of the date of this annual report. A final result for the 2024 has not yet been published. For the period from November 1, 2024, to October 31, 2025, Grupo Simec, S.A.B. C.V. was selected as a mandatory participant in the dumping research. On January 19, 2023, the International Trade Practices Unit (UPCI) published the final resolution of the China wire rod countervailing duty examination, extending the countervailing duty on wire rod imports from China for 5 years. And on February 24, 2023, the UPCI published the final resolution imposing countervailing duties on imports of type I and II steel beams from Spain, Germany and the United Kingdom. Labor. In July 2017, the Brazilian government issued Law No.13,467 (Labor Reform Law), which resulted in significant changes to labor regulations. This law allows 12-hour work shifts, provided that there is a 36-hour rest period afterwards. With regard to negotiations with labor unions, Law No. 13,467 provides that certain rights, such as constitutional and women’s rights, cannot be subjet of the negotiation, as the Constitution and existing law prevail over any collective bargaining agreement. In addition, Law No.13,467 allows companies to outsource activities, including the company’s principal activities and activities that are currently carried out by the company’s own employees. Furthermore, the law provides that a claimant seeking to enforce his or her rights under this law may be required to pay certain costs and expenses related to the lawsuit and limits compensation for moral damages to certain thresholds. We are currently in compliance with these labor regulations. 32 C. Organizational Structure The chart below sets forth a summary of our corporate structure. (1) Includes the following subsidiaries: Compañía Siderúrgica del Pacífico, S.A. de C.V. (99.99%); Coordinadora de Servicios Siderúrgicos de Calidad, S.A. de C.V. (100.00%); Industrias del Acero y del Alambre, S.A. de C.V. (99.99%); Procesadora Mexicali, S.A. de C.V. (99.99%); Servicios Simec, S.A. de C.V. (100.00%); Sistemas de Transporte de Baja California, S.A. de C.V. (100.00%); Operadora de Metales, S.A. de C.V. (100.00%); Operadora de Servicios Siderúrgicos de Tlaxcala, S.A. de C.V. (100.00%); Administradora de Servicios Siderúrgicos de Tlaxcala, S.A. de C.V. (100.00%); Operadora de Servicios de la Industria Siderúrgica ICH, S.A. de C.V. (100.00%); Arrendadora Simec S.A. de C.V. (100.00%); CSG Comercial, S.A. de C.V. (99.95%); Compañía Siderúrgica de Guadalajara, S.A. de C.V. (99.99%); Simec Acero, S.A. de C.V. (100.00%); Undershaft Investment N. V., (100.00%); Simec USA Corp. (100.00%); Pacific Steel Projects Inc. (100.00%); Simec Steel Inc. (100.00%); Simec International, S.A. de C.V.(100.00%); Corporativos G&DL, S.A. de C.V. (100.00%); Simec International 6, S. A. de C. V., (100.00%), Simec International 7, S. A. de C. V., (99.99%), Simec International 9, S.A.P.I. de C.V., (100.00%); Corporación ASL, S.A. de C.V. (99.99%); Siderúrgica del Occidente y Pacífico, S.A. de C.V. (100.00%), Aceros Especiales Simec Tlaxcala, S.A. de C.V. (100.00%), Gases Industriales de America, S.A. de C.V. (100.00%), GSIM de Occidente, S.A. de C.V.(100.00%), Siderúrgicos Noroeste, S.A. de C.V.(100.00%), Fundiciones de Acero Estructrual, S.A. de C.V. (100.00%), Simec Siderúgico, S.A. de C.V. (100.00%). Orge, S.A. de C.V. (99.99%), RRLC, S.A.P.I. de C.V. (99.99%), Grupo Chant, S.A.P.I. de C.V. (99.99%) and Acero Transporte San, S.A. de C.V. (100.00%). (2) SimRep, Co. owns 100% of Republic Steel, Inc. (3) Grupo San facilities are conformed by Corporación Aceros DM, S.A. de C.V. (100.00%) and Subsidiaries, Aceros DM, S.A. de C.V. (100.00%), Aceros San Luis, S.A. de C.V. (100.00%), CHQ Wire México, S.A. de C.V. (100.00%) (formerly Malla San 1, S.A. de C.V.), Malla San 2, S.A. de C.V. (100.00%) and Alambres Trefilados de San Luis Potosí, S.A. de C.V. (100.00%). (4) Our Brazil facilities are conformed by GV do Brasil Industria e Comercio de Aço LTDA., Companhia Siderúrgica do Espirito Santo, S.A. and Siderurgica Vale do Paraíba LTDA. 33 The following table identifies each of our significant operating subsidiaries, including its country of incorporation and our percentage ownership thereof at December 31, 2025 and December 31, 2024 and 2023: Percentage of equity owned 2025 2024 2023 Subsidiaries established in Mexico: Compañía Siderúrgica de Guadalajara, S.A. de C.V. 99.99 % 99.99 % 99.99 % Arrendadora Simec, S.A. de C.V. 100.00 % 100.00 % 100.00 % Simec International, S.A. de C.V. 100.00 % 100.00 % 100.00 % Compañía Siderúrgica del Pacifico, S.A. de C.V. 99.99 % 99.99 % 99.99 % Coordinadora de Servicios Siderúrgicos de Calidad, S.A. de C.V. 100.00 % 100.00 % 100.00 % Industrias del Acero y del Alambre, S.A. de C.V. 99.99 % 99.99 % 99.99 % Procesadora Mexicali, S.A. de C.V. 99.99 % 99.99 % 99.99 % Servicios Simec, S.A. de C.V. 100.00 % 100.00 % 100.00 % Sistemas de Transporte de Baja California, S.A. de C.V. 100.00 % 100.00 % 100.00 % Operadora de Servicios Siderúrgicos de Tlaxcala, S.A. de C.V. 100.00 % 100.00 % 100.00 % Operadora de Metales, S.A. de C.V. 100.00 % 100.00 % 100.00 % Administradora de Servicios Siderúrgicos de Tlaxcala, S.A. de C.V. 100.00 % 100.00 % 100.00 % CSG Comercial, S.A. de C.V. 99.95 % 99.95 % 99.95 % Operadora de Servicios de la Industria Siderúrgica ICH, S.A. de C.V. 100.00 % 100.00 % 100.00 % Corporación Aceros DM, S.A. de C.V. and subsidiaries (1) 100.00 % 100.00 % 100.00 % Acero Transportes San, S.A. de C.V. (1) 100.00 % 100.00 % 100.00 % Simec Acero, S.A. de C.V. 100.00 % 100.00 % 100.00 % Corporación ASL, S. A. de C.V. 99.99 % 99.99 % 99.99 % Simec International 6, S.A. de C.V. 100.00 % 100.00 % 100.00 % Simec International 7, S.A. de C.V. 99.99 % 99.99 % 99.99 % Simec International 9, S.A.P.I. de C.V. 100.00 % 100.00 % 100.00 % Corporativos G&DL, S.A. de C.V. 100.00 % 100.00 % 100.00 % Orge, S.A. de C.V. 99.99 % 99.99 % 99.99 % Siderúrgica del Occidente y Pacifico, S.A. de C.V. 100.00 % 100.00 % 100.00 % RRLC, S.A.P.I. de C.V. 99.99 % 99.99 % 99.99 % Grupo Chant, S.A.P.I. de C.V. 99.99 % 99.99 % 99.99 % Aceros Especiales Simec Tlaxcala, S.A. de C.V. 100.00 % 100.00 % 100.00 % Gases Industriales de America, S.A. de C.V. 100.00 % 100.00 % 100.00 % GSIM de Occidente S.A. de C.V. 100.00 % 100.00 % 100.00 % Fundiciones de Acero Estructural, S.A. de C.V. 100.00 % 100.00 % 100.00 % Siderúrgicos Noroeste, S.A. de C.V. 100.00 % 100.00 % 100.00 % Simec Siderúrgico, S.A. de C.V. 100.00 % 100.00 % 100.00 % Subsidiaries established in countries outside of Mexico: SimRep Corporation and Subsidiaries (3) (4) (5) 99.41 % 99.41 % 99.41 % Pacific Steel, Inc. (4) 100.00 % 100.00 % 100.00 % Pacific Steel Projects, Inc. (4) 100.00 % 100.00 % 100.00 % Simec Steel, Inc. (4) 100.00 % 100.00 % 100.00 % Simec USA, Corp. (4) 100.00 % 100.00 % 100.00 % Undershaft Investments, NV. (6) 100.00 % 100.00 % 100.00 % GV do Brasil Industria e Comercio de Aço LTDA (2) 99.99 % 99.99 % 100.00 % Companhia Siderurgica do Espiritu Santo S.A. (2) 100.00 % 100.00 % 100.00 % Siderurgica Vale do Paraiba LTDA (2) 100.00 % (1) Companies located in San Luis Potosi. For purposes of this report constitute the “Grupo San.” (2) Companies located in Brazil. 34 (3) ICH owns 0.59% of the shares in this company at December 31, 2025. (4) Companies established in the United States, except a subsidiary of SimRep which is established in Canada. (5) SimRep as an individual company has no significant operations. (6) Company established in Curaçao. D. Property, Plants and Equipment Our Operations and Production Facilities As of the date of this annual report, we conduct our operations at 12 facilities throughout North and South America. At December 31, 2025, our crude steel production capacity was 6 million tons, of which 1.2 million tons were based on an integrated blast furnace technology, and 4.8 million were based on electric arc furnace, or mini-mill, technology. Although we continue to own our U.S. facilities, we ceased all production activities in the United States in August 2023 and these facilities have remained idle since then. Our Mexican facilities have 2.6 million tons of crude steel production capacity, operating six mini-mill facilities. Our U.S. facilities have 2.3 million tons of installed crude steel production capacity, but were not in operation during 2024 or 2025 and our Brazil operations have 1.1 million tons of crude steel production capacity. In addition, we have 5.9 million tons of rolling and finishing capacity, of which 2.9 million are in Mexico, 1.8 million are in the United States (though the U.S. capacity has not been utilized since August 2023), and 1.2 million are in Brazil. We operate nine mini-mills, six in Mexico and three in Brazil. The Mexican mini-mills are in: one in Guadalajara, Jalisco; two in Apizaco, Tlaxcala; one in Silao Guanajuato; one in Mexicali, Baja California; as well as two in San Luis Potosí. Our mini-mills in Brazil, are two in Pindamonhangaba, São Paulo; and one in Cariacica, Espírito Santo; following the cessation of our U.S. steelmaking operations in 2023, the Canton, Ohio mini-mill is no longer operational. We also previously operated an integrated blast furnace and an electric arc furnace in Lorain, Ohio and a rolling mill in Lackawanna, New York. In August 2023, Republic Steel announced the cessation of its operations, including its steel mill in Canton and Lorain, Ohio and its rolling mill in Lackawanna, New York, all of which remain idled as of the date of this report. As long as our facilities are not operating at full capacity, we can allocate production based on the relative cost of basic inputs (scrap metal and electricity) to the facility where production costs would be the lowest. Our production facilities are designed to permit the rapid changeover from one product to another. This flexibility permits us to efficiently produce small volume orders to meet customer needs and to produce varying quantities of standard product. Production runs, or campaigns, occur on four to eight weeks cycles, minimizing customer waiting time for both standard and specialized products. We produce liquid steel using electric arc furnace, alloying elements and carbon are added, and then it is transported to continuous casters for solidification. The continuous casters produce long, square strands of steel that are cut into billet and transferred to the rolling mills for further processing or, in some cases, sold to other steel producers. In the rolling mills, the billet is reheated in a walking beam furnace with preheating burners, passed through a rolling mill for size reduction and conformed into final sections and sizes. The shapes are then cut into a variety of lengths. Our facility in Canton, Ohio, is capable of producing billets and blooms. Mini-mill plants typically produce certain steel products more efficiently because of the lower energy requirements resulting from their smaller size and because of their use of ferrous scrap. Mini-mills are designed to provide shorter production runs with relatively fast product changeover times. 35 The production levels and capacity utilization rates for our melt shops and rolling mills for the periods indicated are presented below. Production Volume and Capacity Utilization Year Ended December 31, 2025 2024 2023 (thousands of tons) Melt shops Steel billet production 2,055 2,343 2,440 Annual installed capacity(1) 6,010 6,010 6,006 Effective capacity utilization 34 % 39 % 41 % Rolling mills Total production 1,965 2,092 2,194 Annual installed capacity(1) 5.924 5,572 5,720 Effective capacity utilization 33 % 38 % 38 % (1) Annual installed capacity is determined based on the assumption that billet of various specified diameters, width and length is produced at the melt shops or that a specified mix of rolled products are produced in the rolling mills on a continuous basis throughout the year except for periods during which operations are discontinued for routine maintenance, repairs and improvements. Amounts presented represent annual installed capacity as of December 31 for each year. Mexican Operations and Facilities The following table presents production by product at each of our Mexican facilities as a percentage of total production at that facility as of December 31, 2025. Mexican Production per Facility by Product Location Product Guadalajara Mexicali Apizaco/ Cholula San Luis Total Production (%) I-Beams 29.2 % 0.0 % 0.0 % 0.0 % 6.0 % Channels 10.8 % 4.6 % 0.0 % 0.0 % 3.0 % Angles 36.4 % 4.9 % 0.0 % 0.0 % 8.4 % Hot rolled bars (round, square and hexagonal rods) 15.3 % 1.3 % 53.3 % 0.9 % 13.3 % Rebar 0.0 % 88.1 % 1.2 % 84.9 % 53.0 % Flat bars 7.7 % 1.1 % 12.3 % 0.0 % 4.0 % Cold finished bars 0.0 % 0.0 % 32.20 % 0.0 % 5.9 % Electro-Welded wire mesh 0.0 % 0.0 % 0.0 % 2.0 % 0.9 % Wire rod 0.0 % 0.0 % 0.0 % 10.4 % 4.6 % Electro-Welded wire mesh panel 0.0 % 0.0 % 0.0 % 1.8 % 0.8 % Other 0.6 % 0.0 % 0.0 % 0.0 % 0.1 % Total 100 % 100 % 100 % 100 % 100 % 36 Guadalajara. Our Guadalajara mini-mill facility is located in central western Mexico in the state of Jalisco which is Mexico’s second largest city. Our Guadalajara facilities and equipment include one improved electric arc furnace utilizing water-cooled sidewalls and roof, one four-strand continuous caster, five reheating furnaces and three rolling mills. The Guadalajara mini-mill has an annual installed capacity of 420,000 tons of billet and an annual installed capacity of finished product of 480,000 tons. In 2025, the Guadalajara mini-mill produced 178,169 tons of steel billet and 205,555 tons of finished product, operating at 42% capacity for billet production and 42% capacity for finished product production. The Guadalajara rolling facilities process billet from our Mexicali and Apizaco mills. Our Guadalajara facility is 336 miles from Mexico City. Our Guadalajara facility mainly produces structural steel, SBQ steel, and light structural steel. Guadalajara Mini-Mill As of December 31, 2025 2024 2023 Steel sales (thousands of tons) 221 208 230 Average finished product price per ton Ps. 18,088 Ps. 18,661 Ps. 23,656 Average scrap cost per ton 5,462 7,497 8,443 Average manufacturing conversion cost per ton of finished product(1) 5,159 4,434 4,372 Average manufacturing conversion cost per ton of billet(1) 3,130 3,069 2,940 (1) Manufacturing conversion cost is defined as all production costs excluding the cost of scrap and related yield loss. Mexicali. In 1993, we began operations at our mini-mill located in Mexicali, Baja California. The mini-mill is strategically located approximately 22 miles south of the California border and approximately 220 miles from Los Angeles. Our Mexicali facilities and equipment include one electric arc furnace utilizing water-cooled sidewalls and roof, one four-strand continuous caster, one walking beam reheating furnace, one SACK rolling mill, a Linde oxygen plant and a water treatment plant. This facility has an annual installed capacity of 420,000 tons of steel billet and an annual installed capacity of finished product of 220,000 tons. Excess billet produced at the Mexicali facility is used primarily by the Guadalajara facility. This allows us to increase the utilization of the Guadalajara facility’s finishing capacity, which exceeds its production capacity. In 2025, the Mexicali mini-mill produced approximately tons 212,820 of billet and 182,570 tons of finished products, operating at 51% capacity for billet production and at 83% capacity for finished product production. Our facility is strategically located and has access to key markets in Mexico and the United States, stable public sources of scrap, electricity and a highly skilled workforce. The Mexicali mini-mill also is situated near major highways and a railroad linking the Mexicali and Guadalajara mini-mills, allowing for coordinated production at the two facilities. Our Mexicali facility mainly produces light structural steel and rebar. Mexicali Mini-Mill Years Ended December 31 2025 2024 2023 Steel sales (thousands of tons) 186 190 189 Average finished product price per ton Ps. 14,315 Ps. 15,295 Ps. 18,834 Average scrap cost per ton 5,414 6,020 7,067 Average manufacturing conversion cost per ton of finished product(1) 3,650 3,780 4,226 Average manufacturing conversion cost per ton of billet(1) 2,625 2,646 2,835 (1) Manufacturing conversion cost is defined as all production costs excluding the cost of scrap and related yield loss. Apizaco mini-mills (mini-mill 1 and mini-mill 2) and Cholula facility. We have operated our Apizaco mini-mill 1 and Cholula facility since August 1, 2004 and Apizaco mini-mill 2 since July, 2018. Mini-mill 1 and 2 are located in central Mexico in Apizaco, Tlaxcala. Our Apizaco facilities and equipment include two EBT electric arc furnace utilizing water-cooled sidewalls and roof, three ladle stations, two degasification stations, two four-strand continuous casters, three walking beam reheating furnaces and three rolling mills. Mini-mill 1 has an annual installed capacity of 510,000 tons of steel billet and an annual installed capacity of finished product of 450,000 tons. In 2025, mini-mill 1 produced 11,555 tons of steel billet and 122,616 tons of finished products, operating at 2% capacity for billet production and at 27% capacity for finished product production. Mini-mill 2 has an installed capacity of 630,000 tons of steel billet and an installed capacity of finished product of 550,000 tons. In 2025, mini-mill 2 produced 247,410 tons of steel billet and 88,883 tons of finished products, operating at 39% capacity for billet production and at 39% capacity for finished product production. Our Apizaco mini-mills are less than 124 miles from Mexico City. Our Apizaco facilities mainly produce SBQ steel. Our Cholula facility is approximately 25 miles from our Apizaco facilities, which allows the integrated operations of the Apizaco mini-mills that supply finished products as raw materials to the Cholula facility. Our Cholula facilities and equipment include cold drawing and turning machines for peeling bars. This facility has an annual installed capacity of finished product of 72,000 tons. In 2025, the Cholula facility produced 65,540 tons of finished products, at 91% capacity. Our Cholula facility mainly produces cold finished SBQ steel. 37 Apizaco Mini-Mills and Cholula Facility Years Ended December 31, 2025 2024 2023 Steel sales (thousands of tons) 191 237 243 Average finished product price per ton Ps. 23,866 Ps. 22,430 Ps. 23,524 Average scrap cost per ton 6,321 7,739 8,444 Average manufacturing conversion cost per ton of finished product(1) 7,420 6,563 7,095 Average manufacturing conversion cost per ton of billet(1) 3,764 4,533 4,732 (1) Manufacturing conversion cost is defined as all production costs excluding the cost of scrap and related yield loss. San Luis Potosí Operations and Facilities. We have operated our San Luis facilities since we acquired them on May 30, 2008. The facilities are located in central Mexico in the city of San Luis Potosí, in the state of San Luis Potosí. Our San Luis facilities and equipment include four electric arc furnaces, three continuous casters, three reheating furnaces, two rebar rolling mills and one wire rod rolling mill. As of December 31, 2025, these facilities had an annual installed capacity of 614,000 tons of billet and 982,000 tons of finished product. In 2025, the San Luis facilities produced 428,496 tons of steel billet and 417,012 tons of finished product, operating at 70% capacity for billet production and 42% capacity for finished product production. Our San Luis facilities mainly produce rebar and wire rod. The following table sets forth, for the periods indicated selected operating data for our San Luis facilities. Years Ended December 31, 2025 2024 2023 Steel sales (thousands of tons) 470 486 541 Average finished product price per ton Ps. 14,830 Ps. 15,280 Ps. 18,607 Average scrap cost per ton 6,176 7,467 8,583 Average manufacturing conversion cost per ton of finished product(1) 3,223 3,037 3,102 Average manufacturing conversion cost per ton of billet(1) 2,456 2,320 2,373 (1) Manufacturing conversion cost is defined as all production costs excluding the cost of scrap and related yield loss The following table sets forth, for the periods Indicated selected operating data for our Republic Steel facilities. Years Ended December 31, 2025 2024 2023 Steel sales (thousands of tons) 1 3 83 Average finished product price per ton Ps. 34,936 Ps. 25,983 Ps. 29, 215 Average scrap cost per ton - - 9,100 Average manufacturing conversion cost per ton of finished product(1) - - 26,901 Average manufacturing conversion cost per ton of billet(1) - - 10,694 (1) Manufacturing conversion cost is defined as all production costs excluding the cost of scrap and related yield loss. 38 Lorain, Ohio. The Lorain facility operated is an integrated steel mill. It has a blast furnace, two 220-ton basic oxygen furnaces, a 150-ton electric arc furnace, two ladle metallurgy facilities, a vacuum degasser, a five-strand continuous bloom caster, a six-strand billet caster, a billet rolling mill and two bar rolling mills. As of December 31, 2025, the facility had an annual installed capacity of 1,049,000 tons of steel billet and 900,000 tons of finished product. This facility has been idled since 2023 and did not produce any steel billet or finished products in 2025, 2024 or 2023. Canton, Ohio. This facility primarily produced SBQ steel and included two 200-ton electric arc furnaces, a 5-strand bloom/billet caster, two ladle metallurgical furnaces, two vacuum degassers, and two slag rakes. Additional equipment included an inline rolling mill, billet grinders, a saw line, and a QVL inspection line. As of December 31, 2025, it had an annual installed capacity of 1,247,000 tons of steel billet. In 2023, it produced 85,059 tons of semi-finished products, operating at 7% capacity. The facility ceased operations in August 2023 and has remained non-operational since then. Lackawanna, New York. This facility featured a walking beam reheat furnace, a 17-stand rolling mill, a 5-stand sizing mill, and three saw lines. It produced hot-rolled bars and had an annual installed capacity of 720,000 tons as of December 31, 2025. In 2023, it produced 62,873 tons, operating at 9% of capacity. It ceased operations in August 2023 and has remained non-operational since then. Massillon, Ohio. This cold-finishing facility included equipment for drawing, turning, grinding, straightening and sawing SBQ steel. As of December 31, 2023, it had an annual capacity of 138,000 tons. In 2023, it produced 8,600 tons of cold-finished bars, operating at 6% capacity. This facility ceased operations in August 2023 and has remained non-operational since then. Solon, Ohio. Acquired in 2011, this plant produced wire products. As of December 31, 2023, it had an installed capacity of 72,000 tons of wire. It produced no finished product in 2023. This facility ceased operations in August 2023 and has remained non-operational since then. Brazil. We have four plants in Brazil: two mini-mills, rebar and wire-rod rolling mills in Pindamonhangaba, São Paulo, a mini-mill in Cariacica, Espirito Santo and rolling and finishing facilities in Itauna, Minas Gerais. Our plant located in Pindamonhangaba, State of Sao Paulo, is 87 miles from the city of Sao Paulo, and is 218 miles from Rio de Janeiro. Our Pindamonhangaba facility and equipment includes two electric arc furnaces and two rebar and wire rod rolling mills. Our facility in Pindamonhangaba began operations in July 2015 and currently produces rebar, while the plants in Cariacica and Itauna were acquired in August 2018, and include an electric arc furnace and two rebar and wire rod rolling mills. As of December 31, 2025, our plants in Pindamonhangaba had installed capacity to produce 520,000 tons of billet and 750,000 tons of finished product per year. In 2025, our plant in Pindamonhangaba produced 507,959 tons of billet and 555,458 tons of finished product, operating at 98% of its capacity for billet and 74% capacity for finished product. Our plant in Cariacica had installed capacity to produce 600,000 tons of billet and 450,000 tons of finished product. In 2025, our plant in Cariacica produced 468,076 tons of billet and 269,407 tons of finished product, operating at 78% of its capacity for billet and 76% capacity for finished product. The plant in Itauna had installed capacity to produce 140,000 tons of finished product. In 2025, our plant in Itauna produced 123,233 tons of finished product, operating at 88% capacity for finished product. In 2025, our plants in Brazil produced 976,035 tons of billet and 942,415 tons of finished product, operating at 87% of its billet capacity and 71% capacity for finished product. The following table sets forth, for the period indicated, selected operating data for our Brazil facilities. Years Ended December 31, 2025 2024 2023 Steel sales (thousands of tons) 864 931 890 Average finished product price per ton Ps. 13,978 Ps. 15,073 Ps. 15,664 Average scrap cost per ton 5,634 6,599 6,776 Average manufacturing conversion cost per ton of finished product(1) 3,972 3,754 3,992 Average manufacturing conversion cost per ton of billet(1) 2,489 2,706 2,704 (1) Manufacturing conversion cost is defined as all production costs excluding the cost of scrap and related yield loss. 39 The following table shows the products that we produce, the equipment that we use and the volume that we produce in each of our separate production facilities: Production per Facility by Product, Equipment and Volume Location Product Equipment Finished Product 2025 Annual Production Volume (tons) Finished Product Annual Installed Capacity (tons) Guadalajara I-Beams, Channels, Angles, Hot rolled bars, Flat bars. Electric arc furnace with continuous caster, rolling mill and bar processing lines. 205,555 480,000 Mexicali Angles, Rebar, Channels, Hot rolled bars. Electric arc furnace with continuous caster and rolling mills. 182,570 220,000 Apizaco and Cholula SBQ. Electric arc furnace with vacuum tank degasser, continuous caster, rolling mills, cold drawn and bar turning equipment. 211,499 1,072,000 San Luis Potosí Rebar, Wire rod, Electro-Welded wire mesh, Electro-Welded wire mesh panel, Hot rolled bars. Electric arc furnaces, with continuous casters, rolling mills, wire rod rolling mill, pickling line, wire drawing machines and electrowelders. 417,012 982,000 Lorain SBQ. Electric arc furnace, blast furnace, vacuum tank degasser, continuous caster, and rolling mills. 0 900,000 Canton SBQ. Electric arc furnace, vacuum tank degasser and continuous caster. 0 0 Lackawanna SBQ. Rolling mill and wire rod rolling mill. 0 720,000 Massillon SBQ. Cold drawn, bar turning and heat treating equipment. 0 138,000 Solon SBQ. Equipment to clean and coat, draw, and anneal wire. 0 72,000 Brazil Rebar, Angles, Hot rolled bars and Flat bars. Electric arc furnaces, with continuous casters with rolling mills and wire rod rolling mill. 948,098 1,340,000 40