What LSB Industries, Inc. told the SEC could break it.

A substantial portion of LSB's sales depends on a limited number of customers — one customer accounted for 12% of total net sales in 2025 (16% in 2024, 14% in 2023) and its five largest customers were ~32% of consolidated net sales — so loss of, or a material reduction in purchases by, one or more of these customers could materially harm its business, results and liquidity if it cannot replace the volume. (Largest customer not named, though it operates a Baytown facility on behalf of Covestro.)

“A substantial portion of our sales is dependent upon a limited number of customers. For 2025, five customers accounted for approximately 32% of our consolidated net sales.”

Natural gas is the critical feedstock for LSB's nitrogen products (ammonia, AN/nitric acid, UAN), generally purchased at first-of-month market prices (it held ~0.2M MMBtu of contracts at $4.39/MMBtu through March 2026); North American natural-gas prices are volatile, and because a substantial portion of LSB's sales do not provide for raw-material cost pass-through and agricultural spot prices track nitrogen-market conditions rather than gas costs, it may be unable to recover its full production cost.

“Additionally, we depend on certain vendors to deliver natural gas and other key components that are required in the production of our products. Any disruption in the supply of natural gas and other key components could result in lost production or delayed shipments.”

LSB's Senior Secured Notes are secured by a first-priority security interest in substantially all of its fixed assets (subject to customary exceptions), and it had ~$192.8M of combined cash/short-term investments; this secured-debt structure, with covenants that can suspend only upon achieving investment-grade ratings, plus related-party financing history (Eldridge), exposes it to refinancing and covenant risk if cash flows weaken in a cyclical nitrogen market.

“Obligations in respect of the Senior Secured Notes are secured by a first priority security interest in substantially all of our fixed assets, subject to certain customary exceptions.”

LSB competes against fertilizer/ammonia/urea exporters from Russia, Northern Africa, the Middle East and China that benefit from below-market natural-gas prices, so changes in import duties or trade policy could increase imports and pressure prices; conversely, tariffs and preliminary anti-dumping duties on MDI imports currently support domestic nitric-acid demand, and broader tariff uncertainty plus EPA environmental regulation of its facilities add policy risk.

“Russia, Northern Africa and the Middle East have substantial capacity to produce and export fertilizers. Producers in some of these countries and regions also benefit from below-market prices for natural gas, due to government regulation and other factors. In addition, producers in China have substantial capacity to produce and export ammonia and urea.”