Company: CHEF
Filing Date: 2025-02-25
Form Type: 10-K
Source: 0001517175-25-000002
Chunk: 62

Company: Chefs' Warehouse, Inc.
Filing Date: 2025-02-25
Form: 10-K
Item: Item 1A
Chunk 62
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5, with disclosure obligations set to take effect 

27

starting in 2026 on or by a date to be determined by CARB. Non-compliance with the requirements of SB 253 could expose us to a fine of up to $500,000 per reporting year. Additionally, California enacted Assembly Bill 1305 (“AB 1305”). AB 1305, which became effective January 1, 2024, created new annual disclosure requirements regarding substantiation of certain climate-related statements, and may increase our compliance costs. Non-compliance with the requirements of AB 1305 could expose us to fines of up to $2,500 per individual violation, up to a total of $500,000.

Compliance with these climate-related disclosure rules will require additional time and attention of management and financial resources. We must develop robust systems, processes, and controls for assessing and reporting our climate-related financial risks, as well as ensuring transparency and accuracy in our disclosures. Furthermore, if our competitors’ climate change or sustainability performance is perceived to be better than ours, potential or current investors may elect to invest with our competitors instead. In addition, in the event that we communicate certain initiatives or goals regarding greenhouse gas emission reductions, we could fail, or be perceived to fail, in our achievement of such initiatives or goals, or we could be criticized for the scope of such initiatives or goals. If we fail to satisfy the expectations of investors, customers, employees and other stakeholders or our initiatives are not executed as planned, our business, financial condition or results of operations could be adversely affected.

Adverse judgments or settlements resulting from legal proceedings in which we may be involved in the ordinary course of our business could reduce our profits or limit our ability to operate our business.

In the ordinary course of our business, we may become involved in various legal proceedings. The outcome of these proceedings cannot be predicted. If any of these proceedings were to be determined adversely to us or a settlement involving a payment of a material sum of money were to occur, it could materially and adversely affect our profits or ability to operate our business. Additionally, we could become the subject of future claims by third parties, including our employees; suppliers, customers, and other counterparties; our investors; or regulators. For example, we are subject to the risk of employment-related litigation, which we believe increased as a result of our large workforce in California and New York, at both the state and federal levels, including claims styled as class action lawsuits, which are more costly to defend