HF Foods Group Inc. 10-Q

ITEM 4. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures Our management, including our principal executive officer and principal financial and accounting officer, conducted an evaluation of the effectiveness of our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of March 31, 2026. Based on that evaluation, our principal executive officer and principal financial and accounting officer concluded that, due to the material weaknesses in internal control over financial reporting described below, our disclosure controls and procedures were not effective at the reasonable assurance level as of March 31, 2026. 24 Notwithstanding the material weaknesses, management has concluded that the consolidated financial statements included in this Quarterly Report on Form 10-Q present fairly, in all material respects, the Company’s financial position, results of operations and cash flows in conformity with U.S. GAAP. Previously Reported Material Weaknesses As previously disclosed in our 2025 Annual Report, management identified material weaknesses in internal control over financial reporting related to entity-level controls impacting the control activities and monitoring components of the COSO framework. These entity-level deficiencies resulted in the following material weaknesses over certain aspects of financial reporting, including controls related to: • 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 continued to exist as of March 31, 2026. Remediation Activities During the first quarter of 2026, management continued executing its remediation plan under the oversight of the Audit Committee of the Board of Directors. The Company’s remediation efforts are focused on strengthening accounting-related controls, improving review precision, enhancing evidence of review, and validating the completeness and accuracy of key data used in control execution. Management’s remediation efforts during 2026 include: • Strengthening controls over revenue recognition and accounts receivable, including invoice validation, reconciliation procedures, and monitoring of revenue transactions; • enhancing controls over lease accounting and long-lived asset impairment assessments, including review of key inputs, assumptions, and supporting data; • improving the precision and consistency of journal entry review procedures. Management believes these actions are designed to improve the effectiveness of internal control over financial reporting. However, the material weaknesses will not be considered remediated until the applicable controls have been designed, implemented and operated effectively for a sufficient period of time, and management has completed testing to support that conclusion. Changes in Internal Controls Over Financial Reporting Other than the ongoing remediation activities 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 March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 25 PART II - OTHER INFORMATION