What changed in this filing

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Item 9A. Controls and Procedures

2026-03-16 compared with 2025-03-17 · 79 added, 90 removed, 219 unchanged (44% of the section changed)

5 unchanged sentences

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act.

Our internal controls over financial reporting is a process designed under the supervision of our principal executive officer and principal financial and accounting officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Our internal control over financial reporting is a process designed under the supervision of our principal executive officer and principal financial and accounting officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Because of its inherent limitations, internal control over financial reporting may not detect or prevent misstatements.

2 unchanged sentences

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

Based on this assessment, our management concluded that our internal control over financial reporting was not effective as of December 31, 2024, due to the material weaknesses in our internal control over financial reporting described below.

As previously reported, we identified the following material weaknesses, which continue to exist as of December 31, 2024.

We did not maintain appropriately designed entity-level controls impacting the (1) control environment, (2) risk assessment procedures, (3) control activities, (4) information and communication, and (5) monitoring activities to prevent or detect material misstatements to the financial statements and assess whether the components of internal control were present and functioning properly.

These deficiencies were primarily attributed to an insufficient number of qualified resources to support and provide proper oversight and accountability over the performance of controls.

These entity-level material weaknesses resulted in the following specific material weaknesses:

• Information Technology (IT) General Controls - We did not design and maintain effective information technology general controls over logical access, program change management, and segregation of duties for key IT systems.

As a result, certain business process controls that are dependent upon information from these systems were also not effective.

Additionally, we did not design and maintain effective controls over the implementation of new IT systems.

• Financial Reporting - We did not properly design or maintain effective controls over the financial reporting process to enable timely reporting of complete and accurate financial information.

We did not design and implement certain review controls with a sufficient precision to prevent or detect a material misstatement, did not consistently perform sufficient review of journal entries, or consistently retain adequate supporting documentation for financial statement balances and the related footnote disclosures.

Additionally, we did not design and maintain effective controls over

certain non-routine transactions or significant management estimates, including the review of underlying data and assumptions for completeness and accuracy.

Based on this assessment, management concluded that the Company’s internal control over financial reporting was not effective as of December 31, 2025, due to material weaknesses in internal control over financial reporting, as described below.

As previously reported, we identified the following material weakness, which continues to exist as of December 31, 2025.

We did not maintain appropriately designed entity-level controls impacting the (1) control activities and (2) monitoring activities to prevent or detect material misstatements to the financial statements and assess whether the components of internal control were present and functioning properly.

The entity-level material weaknesses resulted in the following material weaknesses over aspects of our financial reporting:

We did not properly design or maintain effective controls over (i) the recording of revenue and accounts receivable, (ii) the review of journal entries, (iii) the accounting for new leases, and (iv) the impairment analysis of long-lived assets, including the review of underlying data and assumptions for completeness and accuracy.

Remediation Activities

In response to these material weaknesses, with oversight from the Audit Committee of the Board of Directors, we have continued to implement measures to improve our internal control structure.

Specifically, we have:

• Internal Controls and Leadership

◦ Accounting, Internal Audit & IT teams

▪ Hired a new CFO in May 2024 with public company experience to execute the finance and accounting transformation planned approach.

▪ Hired new Head of Internal Audit in September 2024 and engaged ITGC and business process control experts to assist the company in remediation efforts.

▪ Hired a new VP, Corporate Controller in February 2025 with extensive experience in internal controls over financial reporting at publicly traded companies and material weakness remediation efforts.

▪ Promoted a VP, Operations who brings 20+ years of industry and operational control standardization experience to lead transformation initiatives.

◦ Oversight & Governance

▪ Established a cross functional Remediation Steering Committee, chaired by the new CFO, to set strategic direction.

▪ Developed a detailed, integrated remediation approach, ensuring senior leadership across all functions (i.e.

Accounting, IT, Finance, Operations, HR and Internal Audit) is actively involved.

• Technology and Data

◦ System Implementation & Automation

▪ Implemented a new inventory and distribution system in several of our distribution centers to improve operational and financial processes, working towards greater accuracy and completeness of financial data.

The remaining distribution centers will implement the new system in FY25.

▪ Legacy applications are set to be retired across all distribution centers in FY25, marking another milestone in our multi-year technology upgrade program.

◦ Standardizing Processes & Compliance Programs

▪ Continued progress on designing and implementing uniform processes across all distribution centers.

▪ Implemented new training programs related to safety, security and compliance through Learning Management System (LMS) application that provides greater visibility into tracking compliance.

We are committed to ensuring that our internal controls over financial reporting are designed and operating effectively.

We believe the efforts taken to date and certain measures that are in progress will improve the effectiveness of our internal controls over financial reporting and mitigate risks of material misstatement.

We are still in the process of implementing these steps and cannot assure investors that these measures will significantly improve or remediate the material weaknesses described above.

Additionally, while we believe these efforts will improve our internal control environment, our remediation is still in progress and subject to ongoing testing of the design and operating effectiveness over a sufficient period of time in order to effectively remediate these material weaknesses.

Under the oversight of the Audit Committee of the Board of Directors, management has continued implementing a comprehensive remediation program during 2025 to strengthen the Company’s internal control over financial reporting.

Remediation of Previously Identified Material Weaknesses:

• Completion of the remediation of previously identified IT general control material weaknesses, including enhancements to logical access, segregation of duties, change management, and system implementation controls.

• Transition from legacy operational systems to upgraded ERP platforms across distribution centers, improving automation, standardization, and financial reporting reliability.

• Comprehensive validation of critical master data, including supplier, customer, and employee records, to improve the integrity of financial reporting inputs.

• Standardization and redesign of financial reporting controls across distribution centers to promote consistent execution and documentation.

• Expanded internal accounting and finance personnel, including the addition of senior leaders who hold certified public accountant (CPA) designation with significant public company and SEC reporting experience, to strengthen oversight and control execution.

• Defined clear control ownership and accountability across Accounting, IT, and Operations to enhance monitoring of control performance.

• As a result of these efforts, including system improvements, process standardization, and enhanced financial reporting oversight, our previously identified material weaknesses in entity-level controls related to the control environment, risk assessment procedures, and information and communication were remediated.

Remediation Plan for Current Material Weaknesses:

Governance and Monitoring Enhancements

• Continue operation of a Remediation Steering Committee, chaired by executive leadership, which will meet regularly to oversee remediation progress, track deficiencies, and monitor progress against defined milestones.

• Continue use of the previously implemented structured deficiency tracking and evaluation process to assess control deficiencies, determine severity, and monitor remediation status.

Remediation Focus Areas

• Further strengthen controls over revenue recognition and accounts receivable, including improvements to invoice validation procedures, monitoring of revenue transactions across distribution centers, and reconciliation processes between operational systems and financial records.

• Enhance review controls related to lease accounting and long-lived asset impairment assessments, including additional validation of key data and assumptions used in these analyses.

• Improve the precision and consistency of journal entry review procedures to ensure that potential errors are identified and corrected in a timely manner.

Management is committed to ensuring that our internal controls over financial reporting are designed and operating effectively and believes the efforts taken to date and certain measures that are in progress have improved the effectiveness of our internal controls over financial reporting and mitigate risks of material misstatement.

Management will continue to test the design and operating effectiveness of these controls and make further enhancements as necessary.

The effectiveness of our internal control over financial reporting as of December 31, 2025 has been audited by BDO USA, P.C., an independent registered public accounting firm, as stated in their attestation report, which is included in Part II, Item 8 of this Annual Report on Form 10-K.

2 unchanged sentences

Although we will continue to implement measures to remedy our internal control deficiencies, there can be no assurance that our efforts will be successful or avoid potential future material weaknesses.

In addition, until remediation steps have been completed and operated for a sufficient

period of time, and subsequent evaluation of their effectiveness is completed, the material weaknesses previously identified will continue to exist.

In addition, until remediation steps have been completed and operated for a sufficient period of time, and subsequent evaluation of their effectiveness is completed, the material weaknesses previously identified will continue to exist.

Other than the actions taken to continue our material weaknesses remediation efforts, described above, there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended December 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

7 unchanged sentences

We do not express an opinion or any other form of assurance on management’s statements referring to any corrective actions taken by the Company after the date of management’s assessment.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive income (loss), changes in shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”) and our report dated March 17, 2025 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2025 and 2024, the related consolidated statements of operations and comprehensive loss, changes in shareholders’ equity, and cash flows for each of the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”) and our report dated March 16, 2026 expressed an unqualified opinion thereon.

Basis for Opinion

10 unchanged sentences

The following material weaknesses have been identified and included in the accompanying Management’s Report on Internal Control Over Financial Reporting:

The Company did not maintain appropriately designed entity-level controls impacting the (1) control environment, (2) risk assessment procedures, (3) control activities, (4) information and communication, and (5) monitoring activities to prevent or detect material misstatements to the financial statements and assess whether the components of internal control were present and functioning properly.

These deficiencies were primarily attributed to an insufficient number of qualified resources to support and provide proper oversight and accountability over the performance of controls.

These entity-level material weaknesses resulted in the following specific material weaknesses:

• Information Technology (IT) General Controls – The Company did not design and maintain effective information technology general controls over logical access, program change management and segregation of duties for key IT systems.

As a result, certain business process controls that are dependent upon information from these systems were also not effective.

Additionally, the Company did not design and maintain effective controls over the implementation of new IT systems.

• Financial Reporting – The Company did not properly design or maintain effective controls over the financial reporting process to enable reporting of complete and accurate financial information.

The Company did not design and implement certain review controls with a sufficient precision to prevent or detect a material misstatement, did not consistently perform sufficient review of journal entries, or consistently retain adequate supporting documentation for financial statement balances and the related footnote disclosure.

Additionally, the Company did not design and maintain effective controls over certain non-routine transactions or significant management estimates, including the review of underlying data and assumption for completeness and accuracy.

The Company did not maintain appropriately designed entity-level controls impacting the (1) control activities and (2) monitoring activities to prevent or detect material misstatements to the financial statements and assess whether the components of internal control were present and functioning properly.

These entity-level material weaknesses resulted in the following material weaknesses over aspects of financial reporting:

The Company did not design or maintain effective controls over the recording of revenue and accounts receivable, the review of journal entries, the accounting for new leases, and the impairment analysis of long-lived assets, including the review of underlying data and assumptions for completeness and accuracy.

These material weaknesses were considered in determining the nature, timing, and extent of audit tests applied in our audit of the 2025 consolidated financial statements, and this report does not affect our report dated March 16, 2026 on those consolidated financial statements.

2 unchanged sentences

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

5 unchanged sentences

OTHER INFORMATION

During the fiscal quarter ended December 31, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement” (in each case, as defined in Item 408 of Regulation S-K).

During the quarter ended December 31, 2025, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement” (in each case, as defined in Item 408 of Regulation S-K).

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

1 unchanged sentence

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Information required by this Item will be included in our Proxy Statement for the 2025 Annual Meeting of Stockholders to be filed with the SEC, within 120 days of the fiscal year ended December 31, 2024, and is incorporated herein by reference.

Information required by this Item (other than certain information required by Item 401 of Regulation S-K with respect to our executive officers, which is provided under Item 1 of Part I of this Annual Report on Form 10-K under “Information about our Executive Officers”) will be included in our Proxy Statement for the 2026 Annual Meeting of Stockholders to be filed with the SEC, within 120 days of the fiscal year ended December 31, 2025, and is incorporated herein by reference.

The Company has a Code of Conduct and Business Ethics (the “Code”) that applies to our directors, officers, and employees.

A copy of the Code is available on our official website at https://hffoodsgroup.com.

We intend to disclose any amendments or waivers of the Code on our website within four (4) business days.

The Company has an insider trading policy that governs the purchase, sale, and/or other disposition of our securities and is applicable to our directors, officers, employees, and other covered persons.

The Company believes its insider trading policy is reasonably designed to promote compliance with insider trading laws, rules, and regulations, and listing standards applicable to the Company.

A copy of the Company’s insider trading policy is filed as Exhibit 19.1 to this Annual Report on Form 10-K.

EXECUTIVE COMPENSATION

16 unchanged sentences

Appendix Filing Date

2.1 Merger Agreement dated March 27, 2018, by and among Atlantic Acquisition Corp., HF Group Merger Sub Inc., HF Group Holding Corporation, the stockholders of HF Group Holding Corporation and Zhou Min Ni, as the stockholders’ representative

DEF14A A 7/18/2018

3.1 Second Amended and Restated Certificate of Incorporation

24 unchanged sentences

4.7 Description of Registrant’s Securities

10-K 4.7 3/17/2024

10.1† HF Food Group Inc.

21 unchanged sentences

10-K 10.17 4/1/2019

10.9 Warehouse Lease Agreement dated as January 7, 2019 between Yoan Chang Trading and Kirnland Food Service

10-K 10.18 4/1/2019

10.11 Membership Interest Purchase Agreement among B&R Global Holdings, Inc., B&R Group Realty Holding, LLC, and subsidiaries of B&R Group Realty Holding, LLC, dated January 17, 2020

10-Q 2.1 5/18/2020

10.9 Second Amended and Restated Credit Agreement among HF Foods Group Inc.

11 unchanged sentences

10-K 10.27 3/16/2021

10.16 Lease Agreement between Yoan Chang Trading, Inc.

and Kirnland Food Distribution, Inc., dated as of January 1, 2021

10-K 10.29 3/16/2021

10.17 Stock Purchase Agreement, dated May 28, 2021, by and among Ki Tai Yeung, HF Group Holding Corp., and Kirnland Food Distribution, Inc.

8-K 10.1 6/1/2021

Incorporated by Reference

Exhibit Number Description Form Exhibit/

Appendix Filing Date

10.13† HF Foods Group Inc.

6 unchanged sentences

8-K 10.1 9/9/2021

Incorporated by Reference

Exhibit Number Description Form Exhibit/

Appendix Filing Date

10.16 Consent, Waiver, Joinder and Amendment No.

3 unchanged sentences

8-K 10.1 1/4/2022

10.22 Asset Purchase Agreement by and among Great Wall Seafood Supply, Inc., Great Wall Restaurant Supplier, Inc., First Mart Inc., Great Wall Seafood IL, L.L.C., Great Wall Seafood TX, L.L.C., Bo Chuan Wong and Qiu Xian Li, dated December 30, 2021

8-K 10.2 1/4/2022

10.17† Form of Restricted Stock Agreement

4 unchanged sentences

8-K 10.1 4/1/2022

10.25† Offer of Employment for Felix Lin dated April 15, 2022

8-K 10.1 4/20/2022

10.26 Asset Purchase Agreement, dated as of April 19, 2022, by and among Sealand Food, Inc., Connie Wang, Jenny Wang and Great Wall Seafood VA, L.L.C.

and, solely for purposes of Section 2.1(d) thereof, HF Foods Group, Inc.

8-K 10.1 4/25/2022

10.19 Consent Under Third Amended and Restated Credit Agreement, dated October 26, 2022

3 unchanged sentences

8-K 10.1 2/9/2024

10.21† Offer of Employment for Felix Lin dated April 15, 2022

8-K 10.1 4/20/2022

10.22† Offer Letter, dated April 22, 2024, by and among HF Foods Group Inc.

20 unchanged sentences

DEF14A Annex 4/24/2024

10.37† Separation Agreement, effective May 31, 2024, between HF Foods Group Inc.

and Carlos Rodriguez.

8-K 10.1 6/5/2024

10.30† Form of Director Letter Agreement

5 unchanged sentences

3 to Third Amended and Restated Credit Agreement, dated as of September 18, 2024

Incorporated by Reference

Exhibit Number Description Form Exhibit/

Appendix Filing Date

10-K 10.4 3/17/2025

10.33 Lease Agreement between CH Realty IX-NDG Atlanta Freeman Intermodal, L.P., as Landlord, and HF Foods Group, Inc., as Tenant, dated as of September 30, 2024

10-Q 10.2 11/12/2024

10.42 Cooperation Agreement, dated as of November 18, 2024, by and among the Stockholder Related Parties and HF Foods Group, Inc.

8-K 10.1 11/22/2024

10.34† Employment Agreement between HF Foods Group Inc.

and Xi Li n, dated as of December 16, 2024 and effective as of January 1, 2025

and Xi Lin, dated as of December 16, 2024 and effective as of January 1, 2025

8-K 10.1 12/19/2024

2 unchanged sentences

8-K 10.1 2/18/2025

10.36 Sales Agreement, by and among HF Foods Group Inc., D.A.

Davidson & Co.

and Roth Capital Partners, LLC, dated September 25, 2025.

8-K 10.1 9/25/2025

10.37† Offer letter, dated February 6, 2025, by and between the Company and Paul McGarry.

8-K 10.1 10/16/2025

10.38† Amendment to Offer Letter, dated October 13, 2025, by and between the Company and Paul McGarry.

8-K 10.2 10/16/2025

10.39† Separation Agreement, effective October 30, 2025, between HF Foods Group Inc., and Cindy Yao.

8-K 10.1 11/5/2025

10.40† A mended Letter Agreement, dated February 2, 2026, between HF Foods Group Inc.

and Paul McGarry

8-K 10.1 2/2/2026

Incorporated by Reference

Exhibit Number Description Form Exhibit/

Appendix Filing Date

10.41† A mended Severance Plan, effective January 27, 2026

8-K 10.2 2/2/2026

10.42† F orm Key Employee Letter Agreement for the Amended Severance Plan

8-K 10.3 2/2/2026

19.1 Insider Trading Policy

10-K 19.1 3/17/2025

21.1* Subsidiaries of Registrant

14 unchanged sentences

† Indicates a management contract or compensatory plan or arrangement.

++ Certain portions of this exhibit have been omitted in accordance with Regulation S-K Item 601(b)(10)(iv) because they are both (i) not material to investors and (ii) the type of information that the Company customarily and actually treats as private or confidential, and have been marked with ‘‘[***]’’ to indicate where omissions have been made.

The Company agrees to furnish supplementally an unredacted copy of the exhibit to the SEC upon its request.

FORM 10-K SUMMARY

6 unchanged sentences

March 16, 2026 By:

/s/ Cindy Yao

/s/ Paul McGarry

Chief Financial Officer

2 unchanged sentences

Signature Title Date

/s/ Xiao Mou Zhang Director March 17, 2025

Xiao Mou Zhang

/s/ Lisa Lim Director March 17, 2025

/s/ Maria Ross Director March 17, 2025

/s/ Yujie Wang Director March 17, 2025

/s/ Charlotte Westfall Director March 17, 2025

Charlotte Westfall

/s/ Felix Lin Chief Executive Officer and President March 16, 2026

Felix Lin (Principal Executive Officer)

/s/ Paul McGarry Chief Financial Officer March 16, 2026

Paul McGarry (Principal Financial and Accounting Officer)

/s/ Richard Diaz Director March 16, 2026

/s/ Dennis Lam Director March 16, 2026

/s/ Jeffery Taylor Director March 16, 2026

Jeffery Taylor

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-K

Item 9A. Controls and Procedures