Company: NGVC
Filing Date: 2025-12-11
Form Type: 10-K
Source: 0001437749-25-037556
Chunk: 26

Company: Natural Grocers by Vitamin Cottage, Inc.
Filing Date: 2025-12-11
Form: 10-K
Item: Item 1A
Chunk 26
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 and decrease our sales, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. Such claims could expose us to the potential of substantial damages awards, particularly for private label products, as well as the costs of defending such claims.

“Healthy” Claims. Due to increased adherence by food and dietary supplement companies to FDA regulations regarding the current requirements for “healthy” claims, plaintiffs’ consumer class action lawyers have filed lawsuits asserting that certain advertising terms are equivalent to “healthy” (e.g., “nutritious”) and the challenged products either do not meet the FDA’s current requirements for “healthy,” or, even if they do, the products contain too much added sugar to qualify as healthy as set forth in draft regulations proposed by the FDA. Should we become subject to similar lawsuits or claims, consumers may avoid purchasing products from us or seek alternatives, even if the basis for the claim is ultimately determined to be unfounded. Adverse publicity about these matters may discourage consumers from buying our products. Further, the cost of defending against any such class actions could be significant and, to the extent we are found liable, result in substantial monetary damages. Any loss of confidence on the part of consumers in the truthfulness of our labeling or ingredient claims would be difficult and costly to overcome and may significantly reduce our brand value. Any of these events could adversely affect our reputation and brand and decrease our sales, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Organic and Non-GMO Claims. We are also subject to the requirements of the USDA’s National Organic Program (NOP), which establishes federal standards for organically produced agricultural products. The NOP regulations assure our customers that products with the “USDA Organic” seal meet consistent and uniform standards. The failure of one or more of our suppliers to comply with the NOP regulations could cause a disruption in the supply of our product offerings. In addition, the USDA has promulgated final rules on the labeling of food produced with bioengineering called the National Bioengineered Food Disclosure Standard, although certain provisions of the rule have been successfully challenged. The Agricultural Marketing Service (AMS) of the USDA authorizes AMS to enforce compliance with the standard through records audits and examinations, hearings, and public disclosure of the summary of the results of audits, examinations, and similar activities. Public disclosure of our suppliers’ violations of the National Bioengineered Food Disclosure Standard could result in a loss of confidence on the part of consumers in the truthfulness