Company: NGVC
Filing Date: 2025-12-11
Form Type: 10-K
Source: 0001437749-25-037556
Chunk: 27

Company: Natural Grocers by Vitamin Cottage, Inc.
Filing Date: 2025-12-11
Form: 10-K
Item: Item 1A
Chunk 27
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 of our labeling or ingredient claims.

Environmental and Green Claims. The FTC has promulgated a guidance document referred to as the “Green Guides” that, while non-binding, expresses its view that marketing claims of general environmental benefits are potentially misleading; that any environmental benefits claim should be properly limited and qualified; and that consumer product packaging bearing specified environmental claims, such as “recyclable,” “recycled content,” “biodegradable” and “compostable,” should meet defined standards, so as not to be misleading. There has been a substantial rise in the number of consumer class action lawsuits against businesses making environmental claims. Should we be the subject of a consumer class action alleging that any environmental claims that appear on the product packaging we sell, such claims may adversely affect our reputation and brand value, expose us to claims for significant damages as well as attorneys’ fees and costs, and require us to incur litigation defense costs.

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PFAS Statutes and Lawsuits. Many states have enacted laws prohibiting the intentional inclusion of PFAS in any amount or the unintentional inclusion of PFAS in defined amounts in certain of the products we sell, particularly packaged food products. If any of the products we sell violate these statutes, we may be subject to civil penalties, restitution, injunctive relief, or possibly criminal penalties. In addition, plaintiffs’ class action lawyers have filed lawsuits relating to PFAS, either under the theory that the presence of PFAS renders certain advertising claims false or misleading or actual product liability claims for injury based on the presence of PFAS in human blood. 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 marketing claims, or in our products, themselves, 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.

FSMA Implementation Risks. The FSMA significantly expanded food safety requirements and the FDA’s regulatory authority over food safety. Extensive regulations and rules issued under the FSMA have been