Company: NGVC
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001437749-25-015486
Chunk: 107

Company: Natural Grocers by Vitamin Cottage, Inc.
Filing Date: 2025-05-08
Form: 10-Q
Item: Part II, Item 1A
Chunk 107
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The risk factor below updates those disclosed in Part I, “Item 1A-Risk Factors,” of our Form 10-K.

New or increased tariffs on the foreign-sourced goods that we sell or the foreign-sourced materials incorporated into such goods could have a material adverse effect on our business, financial condition and results of operations.

We rely on foreign suppliers to source certain of the products that we sell. The United States recently has imposed, or has proposed, tariffs on a broad range of foreign-sourced products and materials including tariffs on products imported from China, Mexico and Canada. In response, certain trading partners of the United States, including China, have imposed retaliatory tariffs and other measures on goods manufactured in the United States. Although the tariffs imposed have not had a material impact on our business, financial condition and results of operations, there can be no assurance that this will continue to be the case. The imposition of additional tariffs and trade restrictions on the foreign-sourced goods that we sell, or the foreign-sourced materials that are incorporated into such goods, may cause us to incur higher costs to procure certain products we offer, which may require us to raise prices on such products. If our competitors do not keep pace with any such price increases or are able to offset the impact of tariffs through other actions, our competitive position may be adversely affected. In addition, a prolonged trade conflict between the United States and its trade partners could result in adverse and uncertain economic conditions and adversely impact demand for our products. Any of these factors could have a material adverse effect on our business, financial condition and results of operations.

Item 5. Other Information

On May 7, 2025, the Company and Chalet Properties of Pueblo, L.L.C., a related party owned by members of the Isely family, entered into the Shopping Center Lease pursuant to which the Company will lease real property in New Mexico (the “Lease”). The initial term of the Lease will be 120 months with four additional renewal options of 60 months each. The Company will pay annual rent of approximately $0.2 million pursuant to the Lease during the initial term. On May 7, 2025, the Company also entered into the First Amendment to Lease with the Land Trust (the “Lease Amendment”), modifying the terms of the previously disclosed Lease, dated February 29, 2012, between the Company and the Land Trust, pursuant to which the Company leases real property in Colorado. The Lease Amendment extends the lease term for an additional 99