FTC Issues Staff Opinion For Crailar “Flax” Designation On Products

VICTORIA, B.C. and PORTLAND, Ore. — July 9, 2012 — The Federal Trade Commission has issued a staff
opinion that Naturally Advanced Technologies Inc. (“NAT” or the “Company”) (TSXV: NAT) (OTCBB:
NADVF), which produces and markets CRAiLAR® Flax Fiber, will merchandise products with a generic
“flax” designation on content labels, rather than linen, lending further definition to the unique
nature of the process and the Company’s resulting product.

In a letter dated June 26, 2012, the FTC wrote: 

“Based on the information about the CRAiLAR® process and the attributes of the fibers you
provide in your letter, we conclude that describing these fibers as flax on labels attached to
textile fiber products made from the fibers would comply with the Rules.  We also conclude
that describing these fibers as linen rather than flax could mislead or deceive consumers.  We
base these conclusions on your assertions that the CRAiLAR® process involves a manner of obtaining
flax fibers that does not chemically alter them, that the attributes of the fibers differ from
those of linen, and that international standards and practice as well as the U.S. government
recognize the use of the term “flax” to describe flax fibers that have not been chemically

“This is an important step in defining the groundbreaking nature of CRAiLAR,” said Jay
Nalbach, Chief Marketing Officer of NAT. “Our process results in a pure flax product that feels and
can be cared for like cotton, and we believe that articulating that at retail is an important part
of the unique brand proposition for CRAiLAR Flax, to the merchandising opportunities of our partner
brands, and to the relationship we intend to build with consumers.” 

NAT today supplies its CRAiLAR Flax to HanesBrands, Georgia-Pacific, and Brilliant Global
Knitwear for commercial use, and to Levi Strauss  Co., Cintas, Carhartt, Ashland, Westex,
Target and PVH Corp for evaluation and development. NAT is in construction on its first full-scale
production facility in Pamplico, South Carolina, and anticipates it will be delivering fiber from
the facility in Q3 2012. It will partner with Tintoria Piana and Barnhardt Manufacturing on the
processing of that fiber.

Posted on July 10, 2012

Source: Naturally Advanced Technologies