> - The Hershey Company (“HSY”) is a multi-brand iconic U.S. confectionery maker with a $37 billion market cap. Its most famous brands include Hershey’s, Reese’s, Almond Joy, and Mounds, which rank among the top products in consumer trust and appreciation. In 2023, HSY generated 81% of net sales and 91% of income from its North American confectionery segment. > - PFAS, or “forever chemicals,” are carcinogenic, and a ban or phase-out for plastic food and candy packaging was introduced until 2024 in at least 13 U.S. states. Children are especially vulnerable to PFAS toxins. PFAS in higher concentration usually originates from anti-grease and anti-soak coatings that serve no direct function for consumers in plastic wrappers. > - In the U.S. alone, PFAS polluting companies have already paid a total of $11.5 billion in damages, with many cases still outstanding. PFAS expert attorney Bilott, who was instrumental in a $4 billion PFAS settlement case against DuPont, Cehmours and Corteva, estimates that PFAS-related damage claims are “potentially much larger in scope and scale” than the tobacco settlements of $200 billion. > - We commissioned the mass testing of the packaging of about 40 different food products for U.S. consumer retail. We used a novel test method based on light spectroscopy, and a Reese’s Pieces pouch tested positive for strong PFAS contamination on the packaging inside in an “inhomogeneous pattern.” It was one of only two flagged products in total. > - We commissioned four different test labs in the U.S., Germany, and China with four different testing methods to independently test HSY’s best-selling chocolate candy products against competitors’ best-selling plastic-wrapped products in the U.S. by Mars, Nestlé, and Ferrero. All four labs found heightened traces of PFAS in various HSY’s products but none or negligible amounts in products by Mars and Nestlé. The U.S. sales of affected brands represent about 43% of HSY’s total revenue and a much larger portion of income, with further brands likely being also affected. > - Among all tested products, surprisingly high amounts of the PFAS over 10 mg/kg were found in wrappers of Hershey’s Milk Chocolate bar (by HSY), Hershey’s Cookies’ n’ Creme bar (HSY), Reese’s Pieces pouch for the U.S. market (HSY), Reese’s Pieces pouch for the E.U. market (HSY), Almond Joy bar (HSY), Mounds bar (HSY), Reese’s Peanut Butter Cups (paper cups, HSY), Reese’s Peanut Butter Cups (wrapping foil, HSY), Hershey’s Kisses (HSY), KitKat (HSY) and in one test each but none of the replication tests, Butterfinger bar (Ferrero). In 50 tests, the labs found 20 cases of high contamination over 10 mg/kg, of which 19 were in HSY’s wrappers. The highest reading was 81.5 mg/kg of total fluorine. All three comparison best-selling products by Mars, and the one comparison best-selling product by Nestlé were free of heightened PFAS levels in all tests. > - Experts we talked to were very surprised about the high levels of PFAS we found in HSY candy wrappers because plastic wrappers do not need anti-stick or anti-grease treatment. Experts suggested the data might be explained by foil dusting with PFAS for easier production processes, unclean production processes or aesthetic concerns. > - Our labs found the highest fluorine amounts in Reese’s Pieces pouches for E.U. distribution, but none of the most common PFAS compounds. Our expert heading this case believes that HSY deliberately uses uncommon, harder-to-detect PFAS compounds to avoid detection and bans, while the negative health implications of such uncommon substances remain similar. > - According to our understanding, the use of PFAS despite the ban must be authorized by the FDA via the Food Contact Notifications process. As of today, the Inventory of Effective Food Contact Substance (FCS) Notifications database does not show any authorization of PFAS use for HSY > - We believe Hershey’s, Reese’s and other HSY brands have severe PFAS contamination that the direct competition can avoid. This can materially affect these brands’ recognition and add material reputational and litigation risk to HSY.

> - Universal Stainless, a key supplier for Boeing and the aerospace industry, is set to be acquired by Aperam S.A. in early 2025. According to a U.S. Air Force Safety Investigation Board report leaked to the media, Universal Stainless is behind a fatal Osprey crash in Japan that killed eight U.S. airmen, and potentially at least five prior aircraft failures. The Osprey has become known as “the widow-maker.” > - An attorney for two of the families of airmen lost in the Japan crash told Hunterbrook Media that they are contemplating a lawsuit against the Osprey manufacturers, which could include Universal Stainless. > - Universal has a history of quality control issues going back at least as far as 2001, when Teledyne Technologies Inc. sued Universal Stainless, accusing it of producing defective steel that caused multiple crankshaft failures in general aviation aircraft engines, with over 90% of the crankshafts found to be flawed. > - Former Universal Stainless employees describe a toxic workplace culture with equipment dating back to the 1950s, pressure to prioritize production over quality, and instances of discrimination and unsafe working conditions. One former employee said he stopped flying, knowing Universal’s metal could be on the plane. > - Multiple former employees have filed lawsuits against Universal Stainless, alleging a range of misconduct. These include claims of racial and age discrimination, disregard for safety, and retaliation against employees who raised concerns. One lawsuit alleged that when an employee tried to report harassment, they were told by HR to “keep your head down and your mouth shut.” Employee reviews on job sites paint a similarly negative picture. > - On Glassdoor, Universal Stainless has an overall rating of 2.3 stars, which is 32% below the manufacturing industry average and significantly lower than comparable aerospace metals producers. Its ratings are similarly low on Indeed, at 2.2. Reviewers cite poor quality control, safety standards, and mental health conditions. > - Over the past decade, Universal Stainless was also four times more likely to receive an Occupational Safety and Health Administration (OSHA) violation than the average rate among its competitors in the aerospace metals industry, according to data compiled by Hunterbrook from a database maintained by Good Jobs First, a national policy resource center that promotes corporate and government accountability in economic development. > - The company cycled through three different auditors in 2023, an exceptionally rare event for a publicly traded company. The probability of two auditor turnovers in one year is just 0.69% for Russell 3000 members, which includes Universal Stainless. > - Amid the auditor turnover, Universal Stainless reported unprecedented gross margin growth, from 7.0% in 2022 to 25.4% in Q2 2024, significantly outpacing industry peers. > - Universal’s latest annual report revealed a series of material weaknesses in internal controls, including ineffective “internal controls over certain business process cycles” and inadequate documentation of management review controls. The company’s financial statements show an unusually low cash balance of $1,000 or less as of July 2024. > - Universal Stainless is heavily reliant on Boeing, based on company statements. Aerospace accounts for the majority of its business. But Boeing is currently facing significant challenges, including a worker strike, regulatory scrutiny, and a renewed emphasis on safety following recent incidents, which may not align with Universal’s checkered track record on quality. > - The Aperam acquisition will need to clear a CFIUS review due to national security risk because Aperam would become a foreign owner of American steel production used for the military. > - Universal did not respond to Hunterbrook’s request for comments on a long list of our key findings, including its role in the Osprey crash, allegations of major product defects, employee lawsuits, auditor turnover, and material weaknesses in its financial reporting.