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distressed business, they simply couldn't overcome the unexpectedly large challenges, and will be exiting the business." For over 30 years, the Company has been grappling with thousands of asbestos litigation claims related to the Company's past use of asbestos in cement and texture products under prior ownership, a practice that was discontinued in 1981. Through the cumulative cash drain caused by legal settlements and the cost of defending ever-continuing case filings, the Company's ability to reinvest in the business—including investments needed to address historical supply chain challenges that were exacerbated by the recent pandemic— has been severely constrained for an extended period of time. Despite paying out approximately$600 million over the past 20 years to settle asbestos claims, a recent study commissioned by the Company estimates future asbestos liabilities exceed $170 million. The Company has also been impacted by insurmountable legal liabilities inherited by the current ownership group from their 2022 acquisition of the Company, including millions of dollars of previously unpaid sales and use taxes. The Company is pursuing its legal rights with respect to these claims. After acquiring Kelly-Moore in October of 2022, Pleuger Chemicals appointed Gassenheimer, a seasoned businessman and experienced turnaround professional, to evaluate and implement strategies for improving the Company's dire financial position by enhancing the Company's reach and market share. These strategies included starting the process of relocating the Company's headquarters from California to Texas, exploring new supply-chain partnerships domestically and abroad, planning strategic technology and store upgrades, and resolving a sizeable portion of the pending asbestos claims. The Company also engaged and worked with outside professional advisors to assess and improve its liquidity position, exploring various options for new funding sources or partnerships to avert a wind-down. The Company and its advisors conducted an exhaustive process that included pursuing opportunities for new capital investment, a potential sale, merger or reorganization. However, largely due to the asbestos litigation overhang, it was impossible to attract any additional funding or interest to recapitalize, restructure or reorganize the business. Ultimately, to its deep regret, the Company's leadership team determined with the assistance of outside advisors that the Company is financially unable to continue operations. Kelly-Moore leaders today informed employees, stakeholders, creditors and other interested parties of the Company's need to cease operations and conduct an orderly, out-of-court wind-down process. Neither a bankruptcy reorganization nor an in-court liquidation is viable or advantageous given the Company's inability to fund its continued operations, as well as the fact that the Company leases all its facilities and has no unencumbered hard assets that could be made available for distribution to creditors. All inquiries should be directed to.kminfo@kellymoore.com.