The Company is subject to various legal proceedings and claims arising in the ordinary course of business. Management does not expect that the results of any of these ordinary course legal proceedings, as presently positioned, will have a material adverse effect on Matthews' financial condition, results of operations or cash flows. In addition to these ordinary course legal proceedings, the Company is involved in the following legal proceedings. On October 7, 2024, the United States District Court for the Northern District of California granted the Company’s motion to compel arbitration in response to a complaint filed by Tesla on June 14, 2024 against the Company in the Northern District of California, Civil Action No. 5:24-cv-03615 (N.D. Cal.), which alleged trade secret misappropriation under the Defend Trade Secrets Act (the "DTSA") and the California Uniform Trade Secrets Act (the "CUTSA"), breach of contract and unfair business practices. Tesla initiated that arbitration on November 8, 2024. On February 13, 2026, the arbitrator entered an interim decision addressing liability on certain of Tesla’s claims, finding Tesla had established liability on only a limited subset of its claims. The amount of potential damages, if any, will be determined in future phases of the arbitration. The interim decision provided additional clarity regarding the Company’s ongoing dispute with Tesla and clarified the Company’s ownership of and rights in certain dry battery electrode (“DBE”) technology that the Company has been developing over the past two decades. The interim decision includes a narrow injunction preventing the Company from using certain parts in DBE machines. The Company already has approved replacement parts, and thus the injunction has not materially impeded its operations or sales. In response to Tesla's motion to confirm the injunction, on May 27, 2026 the United States District Court for the Northern District of California issued a ruling confirming, in part, a portion of the interim decision but also remanding the interim decision for further specificity in compliance with Federal Rule 65(d). Additional phases of the arbitration remain pending. In addition, on February 13, 2025, Tesla filed a separate complaint against the Company in the United States District Court for the Northern District of California alleging, in part, claims related to correction of inventorship, breach of contract, promissory estoppel and quasi-contract/restitution arising from and/or related to various U.S. patents and provisional patents, including but not limited to U.S. Patent No. 12,136,727. Similar to the prior matter, this case has also been compelled to confidential arbitration by the United States District Court for the Northern District of California. Tesla filed a confidential arbitration demand on February 10, 2026, which included the above-referenced claims as well as claims for trade secret misappropriation. The Company maintains the claims are without merit and intends to vigorously defend itself against the allegations as the confidential arbitration proceeds. In addition, the Company is also pursuing counterclaims against Tesla. The Company is also defending an additional separate confidential arbitration demand, initiated by Tesla on September 8, 2025, which alleges claims for breach of express warranty, design defects in manufacturing, declaratory relief, and breach of contract. The arbitration demand seeks declaratory relief and actual damages, plus interest and costs. An estimate of the possible loss or range of loss related to the foregoing matters cannot be made at this time given the continued lack of specificity in the pending proceedings and/or the applicable pleadings. In light of the substantial harm caused to the Company by Tesla's actions, the Company is also pursuing counterclaims against Tesla. On October 1, 2025, Judge Edward Davila, a federal court judge from the United States District Court for the Northern District of California, issued an opinion and order granting Matthews’ petition to confirm a prior confidential arbitration award, and rejected Tesla’s motion to vacate that same arbitration award. Tesla has appealed Judge Davila’s ruling to the United States Court of Appeals for the Ninth Circuit. An estimate of the possible loss or range of loss related to the foregoing matters cannot be made at this time given the continued lack of specificity in the pending proceedings and/or the applicable pleadings. In light of the substantial harm caused to the Company by Tesla's actions, the Company is also pursuing counterclaims against Tesla. As of the date of the filing of this Quarterly Report on Form 10-Q, the Company does not expect these matters will have a material adverse effect on Matthews' financial condition, results of operations or cash flows. Sales relating to dry battery electrode solutions were approximately 4% of the Company's sales for fiscal 2025. For a discussion of the risks to the Company associated with this matter, see Part I, Item 1A to our Annual Report on Form 10-K for the fiscal year ended September 30, 2025 - "Risk Factors - Intellectual property infringement assertions by third parties, including those of Tesla, could result in significant costs and adversely affect the Company's business, financial condition, operating results and reputation." 44 Part II - Other Information, Continued