What changed in this filing

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Item 1. Financial Statements

2025-11-10 compared with 2025-08-11 · 148 added, 121 removed, 536 unchanged (33% of the section changed)

4 unchanged sentences

(In thousands, except share data)

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

CURRENT ASSETS:

40 unchanged sentences

100,000,000 shares authorized;

55,012,128 and 54,735,073 shares issued and 53,014,705 and 52,737,650 shares outstanding as of June 30, 2025 and December 31, 2024, respectively

55,041,255 and 54,735,073 shares issued and 53,043,832 and 52,737,650 shares outstanding as of September 30, 2025 and December 31, 2024, respectively

Treasury stock, at cost;

1,997,423 shares as of June 30, 2025 and December 31, 2024

1,997,423 shares as of September 30, 2025 and December 31, 2024

( 7,750 ) ( 7,750 )

9 unchanged sentences

and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

Condensed Consolidated Statements of Operations and Comprehensive Loss

(In thousands, except share and per share data)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

8 unchanged sentences

INCOME FROM OPERATIONS 1,120 511 6,393 3,051

4,119 2,625 5,273 2,540

Interest expense 2,941 2,644 8,367 8,597

Other (income) expense, net ( 234 ) ( 332 ) ( 825 ) 3,040

( 414 ) 3,466 ( 591 ) 3,372

Change in fair value of interest rate swap contracts 47 3,290 1,916 959

Lease guarantee income — — — ( 5,548 )

INCOME (LOSS) BEFORE INCOME TAXES

1,031 1,834 ( 1,431 ) 1,094

LOSS BEFORE INCOME TAXES ( 1,634 ) ( 5,091 ) ( 3,065 ) ( 3,997 )

Income tax expense (benefit) ( 760 ) ( 1,254 ) ( 1,171 ) 164

521 1,599 ( 411 ) 1,418

NET INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)

510 235 ( 1,020 ) ( 324 )

net (loss) income attributable to noncontrolling interests

( 706 ) 218 ( 591 ) 353

NET INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO HF FOODS GROUP INC.

$ 1,216 $ 17 $ ( 429 ) $ ( 677 )

EARNINGS (LOSS) PER COMMON SHARE - BASIC

$ 0.02 $ — $ ( 0.01 ) $ ( 0.01 )

EARNINGS (LOSS) PER COMMON SHARE - DILUTED

NET LOSS AND COMPREHENSIVE LOSS ( 874 ) ( 3,837 ) ( 1,894 ) ( 4,161 )

net income (loss) attributable to noncontrolling interests 242 103 ( 349 ) 456

NET LOSS AND COMPREHENSIVE LOSS ATTRIBUTABLE TO HF FOODS GROUP INC.

$ ( 1,116 ) $ ( 3,940 ) $ ( 1,545 ) $ ( 4,617 )

LOSS PER COMMON SHARE - BASIC $ ( 0.02 ) $ ( 0.07 ) $ ( 0.03 ) $ ( 0.09 )

LOSS PER COMMON SHARE - DILUTED $ ( 0.02 ) $ ( 0.07 ) $ ( 0.03 ) $ ( 0.09 )

WEIGHTED AVERAGE SHARES - BASIC 53,031,801 52,726,683 52,913,907 52,490,321

5 unchanged sentences

(In thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

29 unchanged sentences

Repayment of line of credit ( 1,023,791 ) ( 1,112,012 )

Proceeds from issuance of debt

Repayment of long-term debt ( 4,776 ) ( 4,125 )

1 unchanged sentence

Repayment of obligations under finance leases ( 4,676 ) ( 2,597 )

Net cash (used in) provided by financing activities

( 2,693 ) 3,126

Net increase (decrease) in cash

Net cash provided by financing activities

Net decrease in cash

( 2,139 ) ( 3,787 )

14 unchanged sentences

HF Foods Group Inc.

Noncontrolling

Non-controlling

Interests Total

3 unchanged sentences

Balance at January 1, 2024 54,153,391 $ 5 1,997,423 $ ( 7,750 ) $ 603,094 $ ( 308,688 ) $ 286,661 $ 1,322 $ 287,983

Net (loss) income — — — — — ( 694 ) ( 694 ) 135 ( 559 )

Net income (loss) — — — — — ( 694 ) ( 694 ) 135 ( 559 )

Stock-based compensation — — — — 738 — 738 — 738

6 unchanged sentences

Balance at June 30, 2024 54,668,169 $ 5 1,997,423 $ ( 7,750 ) $ 603,454 $ ( 309,365 ) $ 286,344 $ 2,447 $ 288,791

Net income (loss) — — — — — ( 3,940 ) ( 3,940 ) 103 ( 3,837 )

Issuance of common stock pursuant to equity compensation plan 82,713 — — — — — — — —

Shares withheld for tax withholdings on vested awards ( 16,297 ) — — — ( 45 ) — ( 45 ) — ( 45 )

Stock-based compensation — — — — 701 — 701 — 701

Balance at September 30, 2024 54,734,585 $ 5 1,997,423 $ ( 7,750 ) $ 604,110 $ ( 313,305 ) $ 283,060 $ 2,550 $ 285,610

Balance at January 1, 2025 54,735,073 $ 5 1,997,423 $ ( 7,750 ) $ 604,235 $ ( 357,199 ) $ 239,291 $ 2,003 $ 241,294

Net (loss) income — — — — — ( 1,645 ) ( 1,645 ) 115 ( 1,530 )

Net income (loss) — — — — — ( 1,645 ) ( 1,645 ) 115 ( 1,530 )

Stock-based compensation — — — — 374 — 374 — 374

6 unchanged sentences

Balance at June 30, 2025 55,012,128 $ 5 1,997,423 $ ( 7,750 ) $ 605,078 $ ( 357,628 ) $ 239,705 $ 1,412 $ 241,117

Net income (loss) — — — — — ( 1,116 ) ( 1,116 ) 242 ( 874 )

Issuance of common stock pursuant to equity compensation plan 29,127 — — — — — — — —

Stock-based compensation — — — — 619 — 619 — 619

Balance at September 30, 2025 55,041,255 $ 5 1,997,423 $ ( 7,750 ) $ 605,697 $ ( 358,744 ) $ 239,208 $ 1,654 $ 240,862

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

20 unchanged sentences

Prior periods amounts were reclassified to conform to the current period presentation.

The reclassification did not impact condensed consolidated balance sheets or condensed consolidated statements of operations and comprehensive income (loss).

The reclassification did not impact condensed consolidated balance sheets or condensed consolidated statements of operations and comprehensive loss.

Variable Interest Entities

3 unchanged sentences

If deemed the primary beneficiary, the Company consolidates the VIE.

For the quarter ended June 30, 2025, the Company had no VIEs.

The Company had one VIE, AnHeart, Inc.

(“AnHeart”), for which the Company was not the primary beneficiary and therefore did not consolidate.

Effective April 30, 2024, the Company assumed the lease for which AnHeart was a lessee and the Company was a guarantor, and as such, it no longer recognizes AnHeart as a VIE.

See Note 14 - Commitments and Contingencies for additional information on AnHeart.

For the quarter ended September 30, 2025, the Company had no VIEs.

Noncontrolling Interests

1 unchanged sentence

In addition, the amounts attributable to the net income (loss) of those noncontrolling interests are reported separately in the condensed consolidated statements of operations and comprehensive income (loss).

As of June 30, 2025 and December 31, 2024, noncontrolling interest equity consisted of the following:

As of September 30, 2025 and December 31, 2024, noncontrolling interest equity consisted of the following:

($ in thousands) Ownership of

noncontrolling interest at June 30, 2025

June 30, 2025 December 31, 2024

noncontrolling interest at September 30, 2025

September 30, 2025 December 31, 2024

Min Food, Inc.

18 unchanged sentences

The Company is in the process of assessing the impact the adoption of this guidance will have on the Company’s financial statement disclosures.

In July 2025, the FASB issued ASU 2025-05, Measurement of Credit Losses for Accounts Receivable and Contract Assets.

This standard amends ASC 326-20 to provide a practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606.

The guidance is effective on a prospective basis for annual reporting periods beginning after December 15, 2025 and interim periods in those annual periods.

The Company is in the process of assessing the impact the adoption of this guidance will have on the Company’s financial statement disclosures.

In September 2025, the FASB issued ASU 2025-06, Targeted Improvements to the Accounting for Internal-Use Software.

This standard is intended to improve the operability and application of guidance related to capitalized software development costs.

The guidance becomes effective on a prospective basis, with the option for modified prospective or retrospective application, for all entities for annual reporting periods beginning after December 15, 2027 and interim periods in those annual periods.

The Company is in the process of assessing the impact the adoption of this guidance will have on the Company’s financial statement disclosures.

Recently Adopted Accounting Pronouncements

5 unchanged sentences

The following table presents the Company’s net revenue disaggregated by principal product categories:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

($ in thousands) 2025 2024 2025 2024

Seafood $ 108,752 35 % $ 98,826 33 % $ 326,407 35 % $ 292,751 33 %

Asian Specialty 57,124 18 % 77,493 26 % 118,104 19 % 157,702 26 %

Meat and Poultry 70,072 23 % 64,538 21 % 207,866 23 % 186,080 21 %

Asian Specialty 52,826 17 % 74,269 25 % 170,930 18 % 231,971 26 %

Produce 27,829 9 % 31,670 11 % 83,346 9 % 95,924 10 %

4 unchanged sentences

Accounts receivable, net consisted of the following:

(In thousands) June 30, 2025 December 31, 2024

(In thousands) September 30, 2025 December 31, 2024

Accounts receivable $ 54,724 $ 55,664

2 unchanged sentences

Movement of allowance for expected credit losses was as follows:

Six Months Ended June 30,

Nine Months Ended September 30,

(In thousands) 2025 2024

4 unchanged sentences

Prepaid expenses and other current assets consisted of the following:

(In thousands) June 30, 2025 December 31, 2024

(In thousands) September 30, 2025 December 31, 2024

Prepaid expenses $ 3,652 $ 4,443

3 unchanged sentences

Property and equipment, net consisted of the following:

(In thousands) June 30, 2025 December 31, 2024

(In thousands) September 30, 2025 December 31, 2024

Automobiles (1)

12 unchanged sentences

_________________

(1) The cost and accumulated depreciation of property and equipment related to finance leases was $ 49.5 million and $ 17.5 million, respectively, at June 30, 2025 and $ 36.1 million and $ 14.3 million, respectively, at December 31, 2024.

The total future minimum lease payments under all finance leases as of June 30, 2025 is $ 47.1 million.

Depreciation expense was $ 3.2 million and $ 2.5 million for the three months ended June 30, 2025 and 2024, respectively.

Depreciation expense was $ 6.1 million and $ 5.1 million for the six months ended June 30, 2025 and 2024, respectively.

(1) The cost and accumulated depreciation of property and equipment related to finance leases was $ 50.1 million and $ 19.4 million, respectively, at September 30, 2025 and $ 36.1 million and $ 14.3 million, respectively, at December 31, 2024.

The total future minimum lease payments under all finance leases as of September 30, 2025 is $ 45.8 million.

Depreciation expense was $ 3.2 million and $ 2.6 million for the three months ended September 30, 2025 and 2024, respectively.

Depreciation expense was $ 9.4 million and $ 7.7 million for the nine months ended September 30, 2025 and 2024, respectively.

Long-term investments consisted of the following:

(In thousands) Ownership as of June 30,

2025 June 30, 2025 December 31, 2024

(In thousands) Ownership as of September 30,

2025 September 30, 2025 December 31, 2024

Asahi Food, Inc.

4 unchanged sentences

The investment in Asahi is accounted for under the equity method due to the fact that the Company has significant influence but does not exercise control over this investee.

The Company determined there was no impairment for the three months ended June 30, 2025 and 2024 for these investments.

The Company determined there was no impairment for the three months ended September 30, 2025 and 2024 for these investments.

Accrued expenses and other liabilities consisted of the following:

(In thousands) June 30, 2025 December 31, 2024

(In thousands) September 30, 2025 December 31, 2024

Accrued compensation $ 6,325 $ 7,497

7 unchanged sentences

The following table presents the Company’s hierarchy for its assets and liabilities measured at fair value on a recurring basis as of the dates indicated:

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total

11 unchanged sentences

See Note 7 - Derivative Financial Instruments for additional information regarding the Company’s interest rate swaps.

Carrying Value and Estimated Fair Value of Outstanding Debt - The following table presents the carrying value and estimated fair value of the Company’s outstanding debt as described in Note 8 - Debt , including the current portion, as of the dates indicated:

Carrying Value and Estimated Fair Value of Outstanding Debt - The following table presents the carrying value and estimated fair value of the Company’s outstanding debt as described in Note 8 - Long-Term Debt , including the current portion, as of the dates indicated:

Fair Value Measurements

(In thousands) Level 1 Level 2 Level 3 Carrying Value

June 30, 2025

September 30, 2025

Fixed rate debt:

Bank of America $ — $ — $ 66 $ 70

Other financial institutions

— 2,433 — 2,587

Variable rate debt:

5 unchanged sentences

Bank of America $ — $ — $ 104 $ 113

Other finance institutions $ — $ — $ — $ —

Variable rate debt:

4 unchanged sentences

For the Company’s fixed rate debt, the fair values were estimated using discounted cash flow analyses, based on the current incremental borrowing rates for similar types of borrowing arrangements.

See Note 8 - Debt for additional information regarding the Company’s debt.

See Note 8 - Long-Term Debt for additional information regarding the Company’s debt.

Nonrecurring Fair Values

The Company measures fair value of certain assets on a nonrecurring basis when events or changes in circumstances indicate that the carrying value of the assets may not be recoverable.

No adjustments to fair value from the write-down of asset values due to impairment were made during the six months ended June 30, 2025 and 2024.

No adjustments to fair value from the write-down of asset values due to impairment were made during the nine months ended September 30, 2025 and 2024.

As further disclosed in Note 6 - Goodwill and Acquired Intangible Assets, we performed a quantitative goodwill impairment analysis as of December 31, 2024.

2 unchanged sentences

The calculation of the fair value of our reporting unit was determined using Level 3 fair value measurements due to its use of internal projections and unobservable measurement inputs.

There were no assets that were carried at nonrecurring fair value at June 30, 2025.

There were no assets that were carried at nonrecurring fair value at September 30, 2025.

There were no assets carried at nonrecurring fair value other than goodwill at December 31, 2024.

Note 6 - Goodwill and Acquired Intangible Assets

There is only one reporting unit at June 30, 2025 and December 31, 2024.

There is only one reporting unit at September 30, 2025 and December 31, 2024.

The Company tests goodwill for impairment at least annually, as of December 31, or whenever events or changes in circumstances indicated goodwill might be impaired.

6 unchanged sentences

If, in future periods, the financial performance of the reporting unit does not meet forecasted expectations, or a prolonged decline occurs in the market price of the Company’s common stock, it may cause a change in the results of the impairment assessment and, as such, could result in further impairment of goodwill.

The Company determined that there were no events or circumstances during the six months ended June 30, 2025 that would more likely than not reduce the fair value of the reporting unit below its carrying value.

Goodwill was $ 38.8 million as of June 30, 2025 and December 31, 2024.

The Company determined that there were no events or circumstances during the nine months ended September 30, 2025 that would more likely than not reduce the fair value of the reporting unit below its carrying value.

Goodwill was $ 38.8 million as of September 30, 2025 and December 31, 2024.

Acquired Intangible Assets

The components of the intangible assets are as follows:

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

(In thousands) Gross

8 unchanged sentences

Total $ 239,032 $ ( 83,592 ) $ 155,440 $ 233,365 $ ( 71,839 ) $ 161,526

Amortization expense for acquired intangible assets was $ 3.9 million and $ 4.1 million for the three months ended June 30, 2025 and 2024.

Amortization expense for acquired intangible assets was $ 7.8 million and $ 8.1 million for the six months ended June 30, 2025 and 2024.

Amortization expense for acquired intangible assets was $ 4.0 million and $ 4.1 million for the three months ended September 30, 2025 and 2024.

Amortization expense for acquired intangible assets was $ 11.8 million and $ 12.2 million for the nine months ended September 30, 2025 and 2024.

Note 7 - Derivative Financial Instruments

Derivative Instruments

The Company utilizes interest rate swaps (“IRS”) for the sole purpose of mitigating interest rate fluctuation risk associated with floating rate debt instruments (as defined in Note 8 - Debt ).

The Company utilizes interest rate swaps (“IRS”) for the sole purpose of mitigating interest rate fluctuation risk associated with floating rate debt instruments (as defined in Note 8 - Long-Term Debt ).

The Company does not use any other derivative financial instruments for trading or speculative purposes.

3 unchanged sentences

On December 19, 2019, HF Foods entered into an IRS contract with Bank of America (the “BOA IRS”) for an initial notional amount of $ 2.7 million in conjunction with a newly contracted mortgage term loan of corresponding amount.

On December 19, 2021, the Company entered into the Second Amendment to Loan Agreement, which pegged the mortgage term loan to Term SOFR + 2.5 % .

On December 19, 2021, the Company entered into the Second Amendment to Loan Agreement, which pegged the mortgage term loan to Term

SOFR + 2.5 %.

The BOA IRS was modified accordingly to fix the SOFR based loan to approximately 4.50 %.

3 unchanged sentences

The Company evaluated the aforementioned IRS contracts currently in place and did not designate those as cash flow hedges.

Hence, the fair value changes of these IRS contracts are accounted for and recognized as a change in fair value of interest rate swap contracts in the condensed consolidated statements of operations and comprehensive income (loss).

As of June 30, 2025, the Company determined that the fair values of the IRS contracts were $ 0.3 million in an asset position and $ 1.6 million in a liability position.

As of September 30, 2025, the Company determined that the fair values of the IRS contracts were $ 0.3 million in an asset position and $ 1.7 million in a liability position.

As of December 31, 2024, the fair values of the IRS contracts were $ 0.5 million in an asset position and none in a liability position.

The Company includes these in other long-term assets and other long-term liabilities , respectively, on the condensed consolidated balance sheets.

Note 8 - Debt

Long-term debt at June 30, 2025 and December 31, 2024 is summarized as follows:

Note 8 - Long-Term Debt

Long-term debt at September 30, 2025 and December 31, 2024 is summarized as follows:

($ in thousands)

Bank Name Maturity Interest Rate at June 30, 2025

June 30, 2025 December 31, 2024

Bank Name Maturity Interest Rate at September 30, 2025

September 30, 2025 December 31, 2024

Bank of America (a)

6 unchanged sentences

97,461 101,255

Other financial institutions

April 2026 - July 2030 6.60 % - 6.99 %

Total debt, principal amount 107,448 108,949

8 unchanged sentences

Balloon payments of $ 1.8 million and $ 2.9 million are due at maturity in 2027 and 2029, respectively.

(c) Real estate term loan with a principal balance of $ 98.7 million as of June 30, 2025 and $ 101.3 million as of December 31, 2024 is secured by assets held by the Company and has a maturity date of January 2030.

(c) Real estate term loan with a principal balance of $ 97.5 million as of September 30, 2025 and $ 101.3 million as of December 31, 2024 is secured by assets held by the Company and has a maturity date of January 2030.

The terms of the various loan agreements related to long-term bank borrowings require the Company to comply with certain financial covenants, including, but not limited to, a fixed charge coverage ratio and effective tangible net worth.

As of June 30, 2025, the Company was in compliance with its covenants.

As of September 30, 2025, the Company was in compliance with its covenants.

Credit Facility

2 unchanged sentences

On February 6, 2024, the Company amended the Third Amended Credit Agreement to (i) remove a cap on permitted indebtedness in respect of capital lease obligations, subject to certain enumerated conditions;

(ii) create a reserve on the borrowing base, which will be reduced on a dollar-for-dollar basis once the Company has made expenditures in excess of such amount relating to the development and construction of certain real property, and which amounts shall be excluded from certain financial covenants

under the Third Amended Credit Agreement and;

(iii) remove certain sublease income from various financial covenants.

1 unchanged sentence

(ii) modify the due date for a borrowing base certificate based on availability under the revolving credit facility.

On February 12, 2025, the Company amended certain terms and conditions of the Third Amended Credit Agreement, by, among other things, (i) increasing the Revolving Commitment (as defined in the Credit Agreement) from $ 100.0 million to $ 125.0 million, (ii) joining three new subsidiaries of the Company to the Credit Agreement, each as a “Borrower” thereunder, (iii) joining Wells Fargo Bank, N.A.

(ii) joining three new subsidiaries of the Company to the Credit Agreement, each as a “Borrower” thereunder, (iii) joining Wells Fargo Bank, N.A.

to the credit agreement as a “Lender” thereunder, (iv) amending certain affirmative covenants commensurate with the increase in the Revolving Facility, and (v) amending certain restrictions regarding incurring obligations under real property leases and equipment financings in the ordinary course of business.

As of June 30, 2025, the Company was in compliance with its covenants.

The outstanding principal balance on the line of credit as of June 30, 2025 was $ 60.8 million and outstanding letters of credit amounted to $ 6.4 million leaving access to approximately $ 57.8 million in additional funds through our $ 125.0 million line of credit, subject to a borrowing base calculation.

As of September 30, 2025, the Company was in compliance with its covenants.

The outstanding principal balance on the line of credit as of September 30, 2025 was $ 67.2 million and outstanding letters of credit amounted to $ 8.0 million leaving access to approximately $ 49.8 million in additional funds through our $ 125.0 million line of credit, subject to a borrowing base calculation.

Note 9 - Stockholder's Equity

The Company has 100,000,000 shares of common stock authorized, with a par value of $ 0.0001 per share.

On September 25, 2025, the Company entered into an At-the-Market (ATM) Sales Agreement with D.A.

Davidson & Co.

and Roth Capital Partners, LLC, pursuant to which the Company may sell, from time to time, at its discretion, shares (the “Shares”) of the Company’s common stock, par value $ 0.0001 per share, having an aggregate offering price of up to $ 100,000,000 , subject to the terms of the sales agreement.

During the period, the Company did not sell any Shares under the offering.

Note 10 - Earnings (Loss) Per Share

1 unchanged sentence

ASC 260 requires companies with complex capital structures to present basic and diluted EPS.

Basic EPS is measured as net (loss) income divided by the weighted average common shares outstanding for the period.

Basic EPS is measured as net income (loss) divided by the weighted average common shares outstanding for the period.

Diluted EPS is similar to basic EPS, but presents the dilutive effect on a per share basis of potential common shares (e.g., convertible securities, options, warrants and restricted stock) as if they had been converted at the beginning of the periods presented, or issuance date, if later.

Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS.

There were 1,305,105 and 1,354,908 potential common shares related to performance-based restricted stock units and restricted stock units that were excluded from the calculation of diluted EPS for the six months ended June 30, 2025 and 2024, respectively, because their effect could have been anti-dilutive.

There were 1,046,087 and 601,719 potential common shares related to performance-based restricted stock units and restricted stock units that were excluded from the calculation of diluted EPS for the three months ended September 30, 2025 and 2024, respectively, because their effect could have been anti-dilutive.

There were 1,216,821 and 1,542,412 potential common shares related to performance-based restricted stock units and restricted stock units that were excluded from the calculation of diluted EPS for the nine months ended September 30, 2025 and 2024, respectively, because their effect could have been anti-dilutive.

The following table sets forth the computation of basic and diluted EPS:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

($ in thousands, except share and per share data) 2025 2024 2025 2024

Net income (loss) attributable to HF Foods Group Inc.

Net loss attributable to HF Foods Group Inc.

$ ( 1,116 ) $ ( 3,940 ) $ ( 1,545 ) $ ( 4,617 )

2 unchanged sentences

Weighted-average dilutive shares outstanding 53,031,801 52,726,683 52,913,907 52,490,321

Earnings (Loss) per common share:

Loss per common share:

Basic $ ( 0.02 ) $ ( 0.07 ) $ ( 0.03 ) $ ( 0.09 )

5 unchanged sentences

Changes in tax laws and rates may affect recorded deferred tax assets and liabilities and the Company’s effective income tax rate in the future.

As of June 30, 2025, the Company had one subsidiary outside the U.S.

As of September 30, 2025, the Company had one subsidiary outside the U.S.

that generated an insignificant amount of activity.

As such, no foreign income tax was recorded.

For the three and six months ended June 30, 2025, the Company’s effective income tax rate of 50.5 % and 28.7 %, respectively, differed from the federal statutory tax rate primarily as a result of permanent differences and state income taxes, partially offset

by tax credits.

The company’s tax provision for the three and six months ended June 30, 2025 includes a discrete tax expense of $ 500 related to stock-based compensation shortfalls.

For the three and six months ended June 30, 2024, the Company’s effective income tax rate of 87.2 % and 129.6 %, respectively, differed from the federal statutory tax rate primarily as a result of discrete tax items, permanent differences and state income taxes.

The Company’s tax provision for the three and six months ended June 30, 2024 included a discrete tax expense of $ 1.0 million related to the Company’s SEC settlement and $ 0.1 million tax expense related to stock-based compensation shortfalls.

Absent the discrete items, the estimated annual effective income tax rate from continuing operations for the three and six months ended June 30, 2024 was 25.5 % and 25.1 %, respectively.

For the three and nine months ended September 30, 2025, the Company’s effective income tax rate of 46.5 % and 38.2 %, respectively, differed from the federal statutory tax rate primarily as a result of permanent differences and state income taxes, partially offset by tax credits.

The Company’s tax provision for the three and nine months ended September 30, 2025 includes a discrete tax expense of $ 1,900 and $ 2,500 related to stock-based compensation shortfalls.

For the three and nine months ended September 30, 2024, the Company’s effective income tax rate of 24.6 % and ( 4.1 )%, respectively, differed from the federal statutory tax rate primarily as a result of permanent differences and state income taxes.

The Company’s tax provision for the nine months ended September 30, 2024 included a discrete tax expense of $ 1.0 million related to the Company’s SEC settlement.

Additionally, the Company’s tax provision for the three and nine months ended September 30, 2024 included a discrete tax expense of $ 0.1 million and $ 0.2 million, respectively, related to stock-based compensation shortfalls.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S.

1 unchanged sentence

The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027.

The Company is currently evaluating the impact of the new legislation but does not expect it to have a material impact on its consolidated financial statements.

The Company evaluated the impact of the OBBBA in the third quarter of 2025, the period of enactment, and determined the impact was not material to the Company’s tax provision as of September 30, 2025.

The Company will continue to evaluate the impact of the new legislation on its year-end consolidated financial statements but does not expect the OBBBA to have a material impact.

Note 12 - Related Party Transactions

9 unchanged sentences

Ni’s four children, are collectively beneficial owners of more than 10 % of the outstanding shares of the Company’s common stock, and he and certain of his immediate family members have ownership interests in related parties involved in (i) the distribution of food and related products to restaurants and other retailers and (ii) the supply of fresh food, frozen food, and packaging supplies to distributors.

The related party transactions as of June 30, 2025 and December 31, 2024 and for the three and six months ended June 30, 2025, and 2024, are identified as follows:

The related party transactions as of September 30, 2025 and December 31, 2024 and for the three and nine months ended September 30, 2025, and 2024 , are identified as follows:

Related Party Sales, Purchases, and Lease Agreements

Below is a summary of purchases of goods and services from related parties recorded for the three and six months ended June 30, 2025 and 2024, respectively:

Three Months Ended June 30, Six Months Ended June 30,

Below is a summary of purchases of goods and services from related parties recorded for the three and nine months ended September 30, 2025 and 2024, respectively:

Three Months Ended September 30, Nine Months Ended September 30,

(In thousands) Nature 2025 2024 2025 2024

11 unchanged sentences

Zhou Min Ni owns an equity interest in this entity.

Below is a summary of sales to related parties recorded for the three months ended June 30, 2025 and 2024, respectively:

Three Months Ended June 30, Six Months Ended June 30,

Below is a summary of sales to related parties recorded for the three and nine months ended September 30, 2025 and 2024, respectively:

Three Months Ended September 30, Nine Months Ended September 30,

(In thousands) 2025 2024 2025 2024

5 unchanged sentences

Ocean Pacific Seafood Group, Inc.

28 44 118 151

(d) Ocean Pacific Seafood Group, Inc.

Total $ 1,220 $ 770 $ 3,478 $ 2,599

10 unchanged sentences

In February 2021, the Company executed a new five-year operating lease agreement with Yoan Chang Trading Inc., effective January 1, 2021 and expiring on December 31, 2025.

Rent expense, which is included in distribution, selling and administrative expenses in the condensed consolidated statements of operations and comprehensive income (loss), was $ 0.1 million for both the three months ended June 30, 2025 and 2024, and $ 0.2 million for both the six months ended June 30, 2025 and 2024.

Rent expense, which is included in distribution, selling and administrative expenses in the condensed consolidated statements of operations and comprehensive loss, was $ 0.1 million for both the three months ended September 30, 2025 and 2024, and $ 0.2 million for both the nine months ended September 30, 2025 and 2024.

Beginning 2014, the Company leased a warehouse to Asahi Food, Inc.

2 unchanged sentences

The lease term was extended by an addendum dated September 1, 2023, which extended the lease through September 1, 2025.

Rental income was $ 36 thousand for both the three months ended June 30, 2025 and 2024, and $ 72 thousand for both the six months ended June 30, 2025 and 2024, which is included in other expense (income), net in the condensed consolidated statements of operations and comprehensive income (loss).

A second addendum, executed effective September 1, 2025, was enacted during the third quarter which extends the expiration of the lease by one year to September 1, 2026.

Rental income was $ 36,000 for both the three months ended September 30, 2025 and 2024, and $ 0.1 million for both the nine months ended September 30, 2025 and 2024, which is included in other expense (income), net in the condensed consolidated statements of operations and comprehensive loss.

Related Party Balances

Accounts Receivable - Related Parties, Net

Below is a summary of accounts receivable with related parties recorded as of June 30, 2025 and December 31, 2024, respectively:

(In thousands) June 30, 2025 December 31, 2024

Below is a summary of accounts receivable with related parties recorded as of September 30, 2025 and December 31, 2024, respectively:

(In thousands) September 30, 2025 December 31, 2024

(a) ABC Food Trading, LLC $ 118 $ 155

7 unchanged sentences

All accounts receivable from these related parties are current and considered fully collectible.

No additional allowance is deemed necessary as of June 30, 2025 and December 31, 2024.

No allowance is deemed necessary as of September 30, 2025 and December 31, 2024.

Line of Credit Note - Related Parties

The Company issued a $ 51,000 line of credit note to Asahi Food, Inc.

on November 1, 2024, which is outstanding at June 30, 2025 and included in other current assets in the consolidated balance sheet.

on November 1, 2024, which is outstanding at September 30, 2025 and included in other current assets in the consolidated balance sheet.

Interest shall accrue at a rate of 7.25 % per annum with monthly payments of interest only due beginning December 1, 2024 and continuing through the first day of each calendar month until the maturity date of October 31, 2025.

Interest income was $ 924 and $ 2,157 for the three and six months ended June 30, 2025, which is included in other income, net in the condensed consolidated statements of operations and comprehensive income (loss).

Interest income was $ 924 and $ 3,081 for the three and nine months ended September 30, 2025, which is included in other income, net in the condensed consolidated statements of operations and comprehensive loss.

Accounts Payable - Related Parties

All the accounts payable to related parties are payable upon demand without interest.

Below is a summary of accounts payable with related parties recorded as of June 30, 2025 and December 31, 2024, respectively:

(In thousands) June 30, 2025 December 31, 2024

Below is a summary of accounts payable with related parties recorded as of September 30, 2025 and December 31, 2024, respectively:

(In thousands) September 30, 2025 December 31, 2024

(a) Conexus Food Solutions LLC (formerly known as Best Food Services, LLC) $ 539 $ 35

7 unchanged sentences

On June 3, 2024, the Company’s shareholders approved an amendment to the 2018 Incentive Plan which increased the number of shares of the Company’s common stock available for issuance under the 2018 Incentive Plan to 7,000,000 , an increase of 4,000,000 shares.

As of June 30, 2025, the Company had 671,128 time-based vesting restricted stock units unvested, 1,077,464 performance-based restricted stock units unvested, 1,486,194 shares of common stock vested and 3,765,214 shares remaining available for future awards under the 2018 Incentive Plan.

Stock-based compensation expense was $ 0.6 million and $ 0.5 million for the three months ended June 30, 2025 and 2024, respectively.

Stock-based compensation expense was $ 1.0 million and $ 1.3 million for the six months ended June 30, 2025 and 2024, respectively.

Stock-based compensation expense was included in distribution, selling and administrative expenses in the Company’s condensed consolidated statements of operations and comprehensive income (loss).

As of June 30, 2025, there was $ 4.8 million of total unrecognized compensation cost related to all non-vested outstanding RSUs and PSUs outstanding under the 2018 Incentive Plan, with a weighted average remaining service period of 2.25 years.

As of September 30, 2025, the Company had 616,061 time-based vesting restricted stock units unvested, 1,056,233 performance-based restricted stock units unvested, 1,515,321 shares of common stock vested and 3,812,385 shares remaining available for future awards under the 2018 Incentive Plan.

Stock-based compensation expense was $ 0.6 million and $ 0.7 million for the three months ended September 30, 2025 and 2024, respectively.

Stock-based compensation expense was $ 1.6 million and $ 2.0 million for the nine months ended September 30, 2025 and 2024, respectively.

Stock-based compensation expense was included in distribution, selling and administrative expenses in the Company’s condensed consolidated statements of operations and comprehensive loss.

As of September 30, 2025, there was $ 4.1 million of total unrecognized compensation cost related to all non-vested outstanding RSUs and PSUs outstanding under the 2018 Incentive Plan, with a weighted average remaining service period of 2.04 years.

Note 14 - Segment Information

5 unchanged sentences

The Company’s measure of segment assets is total assets, as reported on the condensed consolidated balance sheets.

The following table presents selected financial information with respect to the Company’s single operating segment for the three and six months ended June 30, 2025 and 2024:

Three Months Ended June 30, Six Months Ended June 30,

The following table presents selected financial information with respect to the Company’s single operating segment for the three and nine months ended September 30, 2025 and 2024:

Three Months Ended September 30, Nine Months Ended September 30,

(In thousands) 2025 2024 2025 2024

11 unchanged sentences

Other (income) expense, net ( 234 ) ( 332 ) ( 825 ) 3,040

( 414 ) 3,466 ( 591 ) 3,372

Change in fair value of interest rate swap contracts 47 3,290 1,916 959

1 unchanged sentence

Income tax expense (benefit) ( 760 ) ( 1,254 ) ( 1,171 ) 164

521 1,599 ( 411 ) 1,418

net income attributable to noncontrolling interests ( 706 ) 218 ( 591 ) 353

NET INCOME AND COMPREHENSIVE INCOME ATTRIBUTABLE TO HF FOODS GROUP INC.

net income (loss) attributable to noncontrolling interests 242 103 ( 349 ) 456

NET LOSS AND COMPREHENSIVE LOSS ATTRIBUTABLE TO HF FOODS GROUP INC.

$ ( 1,116 ) $ ( 3,940 ) $ ( 1,545 ) $ ( 4,617 )

23 unchanged sentences

In March 2024, the Company began construction of a multi-use facility on 273 Fifth Avenue and committed $ 7.0 million for the completion of the construction project.

The Company has incurred $ 7.2 million in construction costs which was recorded in construction in progress within property and equipment, net in the Company’s condensed consolidated balance sheet as of June 30, 2025.

The Company completed construction as of June 2025 and is currently waiting for final approval on its certificate of occupancy for the building.

The Company has incurred $ 7.3 million in construction costs which was placed in service in September 2025 after receiving the certificate of occupancy.

On January 17, 2022, the Company received notice that AnHeart had defaulted on its obligations as tenant under the lease for 275 Fifth Avenue.

21 unchanged sentences

The Company shall pay rent of approximately $ 120,000 per month with provisions for yearly increases totaling $ 29.0 million in future minimum lease payments over 15 years.

As of June 30, 2025, the current portion and non-current portion of obligations under all operating leases was $ 4.3 million and $ 24.9 million, respectively.

As of June 30, 2025, the Company had additional automobile leases that had not yet commenced which total $ 0.8 million in future minimum lease payments.

As of September 30, 2025, the current portion and non-current portion of obligations under all operating leases was $ 4.2 million and $ 23.8 million, respectively.

Note 16 - Subsequent Events

No subsequent events have occurred that would require recognition in the unaudited condensed consolidated financial statements or disclosure in the accompanying notes.

Departure of Chief Financial Officer

Cindy Yao, separated from the Company as its Chief Financial Officer effective October 15, 2025 (the “Separation Date”).

In connection with Ms.

Yao’s separation, the Company entered into a separation agreement with Ms.

Yao on October 30, 2025 (the “Separation Agreement”).

Under the Separation Agreement, Ms.

Yao will be entitled, subject to her non-revocation of a general release of claims in favor of the Company, to one-half of her annual base salary of $ 375,000 , paid out over a period of six months following the Separation Date (the “Severance Period”), subject to deduction for applicable withholding taxes.

Yao will also be eligible to elect group health plan continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) following the Separation Date, including coverage for eligible dependents, until the earliest of (i) the expiration of the Severance Period, (ii) the expiration of eligibility for continuation coverage under COBRA, or (iii) the date on which Ms.

Yao becomes eligible for substantially equivalent health insurance coverage in connection with new employment.

Utah Building Sale

On October 17, 2025, the Company entered into an agreement to sell a warehouse owned by the Company located in West Jordan, Utah.

The agreement provides for a sale price of $ 4.6 million and is expected to close during the fourth quarter, subject to customary closing conditions.

The Company does not expect the transaction to have any significant impact on current customers as operations will be consolidated into another nearby facility owned by the Company.

As the building remains in use, the asset was not classified as held for sale as of September 30, 2025 on the Company’s Consolidated Balance Sheet.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements