What changed in this filing

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Item 1. Financial Statements

2026-08-10 compared with 2026-05-11 · 150 added, 91 removed, 525 unchanged (31% of the section changed)

4 unchanged sentences

(In thousands, except share data)

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

CURRENT ASSETS:

35 unchanged sentences

100,000 shares authorized, no shares issued and outstanding

Series AA Participating Preferred Stock, par value $ 0.001 ;

100,000 shares authorized, no shares issued and outstanding

Preferred Stock, $ 0.001 par value;

3 unchanged sentences

100,000,000 shares authorized;

55,196,255 and 55,041,255 shares issued and 53,198,832 and 53,043,832 shares outstanding as of March 31, 2026 and December 31, 2025, respectively

Treasury stock, at cost;

1,997,423 shares as of March 31, 2026 and December 31, 2025

55,472,840 and 55,041,255 shares issued and 53,900,945 and 53,043,832 shares outstanding as of June 30, 2026 and December 31, 2025, respectively

Treasury stock (included in common stock issued above), at cost;

1,571,895 shares as of June 30, 2026 and 1,997,423 as of December 31, 2025

( 6,099 ) ( 7,750 )

11 unchanged sentences

(In thousands, except share and per share data)

Three Months Ended March 31,

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

2026 2025 2026 2025

Net revenue - third parties $ 322,314 $ 313,550 $ 633,273 $ 611,023

11 unchanged sentences

INCOME (LOSS) BEFORE INCOME TAXES 2,839 1,031 3,798 ( 1,431 )

Income tax benefit

( 397 ) ( 932 )

Income tax expense (benefit) 218 521 ( 179 ) ( 411 )

NET INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) 2,621 510 3,977 ( 1,020 )

net income attributable to noncontrolling interests 131 115

net income (loss) attributable to noncontrolling interests 41 ( 706 ) 172 ( 591 )

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

9 unchanged sentences

(In thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

26 unchanged sentences

Cash flows from financing activities:

Payments for tax withholding related to vested stock awards ( 77 ) ( 156 )

Proceeds from line of credit 833,415 631,713

4 unchanged sentences

Repayment of obligations under finance leases ( 3,536 ) ( 3,070 )

Proceeds from ATM sale 275 —

Proceeds from at-the-market equity offering share sales 275 —

Acquisition of noncontrolling interests

Net cash used in financing activities ( 1,749 ) ( 1,752 )

Net cash provided by (used in) financing activities 11,503 ( 2,693 )

Net increase in cash 9,463 1,183

3 unchanged sentences

Cash paid for interest $ 5,769 $ 5,492

Cash paid (received) for income taxes 225 ( 91 )

Cash paid for income taxes 269 111

Supplemental disclosure of non-cash investing and financing activities:

19 unchanged sentences

Balance at March 31, 2025 54,735,073 $ 5 1,997,423 $ ( 7,750 ) $ 604,609 $ ( 358,844 ) $ 238,020 $ 2,118 $ 240,138

Balance at January 1, 2026 55,041,255 $ 5 1,997,423 $ ( 7,750 ) $ 605,838 $ ( 396,042 ) $ 202,051 $ 1,535 $ 203,586

Net income (loss) — — — — — 1,216 1,216 ( 706 ) 510

Issuance of common stock pursuant to equity compensation plan 316,251 — — — — — — — —

Shares withheld for tax withholdings on vested awards ( 39,196 ) — — — ( 156 ) — ( 156 ) — ( 156 )

Stock-based compensation — — — — 625 — 625 — 625

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

Balance at January 1, 2026 55,041,255 $ 5 1,997,423 $ ( 7,750 ) $ 605,838 $ ( 396,042 ) $ 202,051 $ 1,535 $ 203,586

Net income — — — — — 1,225 1,225 131 1,356

Issuance of common stock under at-the-market equity offering 155,000 — — — 275 — 275 — 275

3 unchanged sentences

Balance at March 31, 2026 55,196,255 $ 5 1,997,423 $ ( 7,750 ) $ 606,243 $ ( 394,817 ) $ 203,681 $ 1,006 $ 204,687

Net income — — — — — 2,580 2,580 41 2,621

Issuance of common stock pursuant to equity compensation plan 313,352 — ( 425,528 ) 1,651 ( 1,651 ) — — — —

Shares withheld for tax withholdings on vested awards ( 36,767 ) — — — ( 77 ) — ( 77 ) — ( 77 )

Stock-based compensation — — — — 587 — 587 — 587

Balance at June 30, 2026 55,472,840 $ 5 1,571,895 $ ( 6,099 ) $ 605,102 $ ( 392,237 ) $ 206,771 $ 1,047 $ 207,818

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

13 unchanged sentences

All adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

The condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and the related notes thereto that are included in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on March 16, 2026 (our “2025 Annual Report”).

The unaudited condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and the related notes thereto that are included in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on March 16, 2026 (our “2025 Annual Report”).

There have been no material changes to our significant accounting policies as compared to the significant accounting policies described in our 2025 Annual Report.

4 unchanged sentences

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).

On March 1, 2026, the Company acquired a 18.99 % ownership interest in its consolidated subsidiary, Min Food, Inc.

On March 1, 2026, the Company acquired an 18.99 % ownership interest in its consolidated subsidiary, Min Food, Inc.

(“Min Food”), from two investors for total consideration of approximately $ 0.8 million.

2 unchanged sentences

No gain or loss was recognized in the condensed consolidated statements of operations and comprehensive income (loss).

As of March 31, 2026 and December 31, 2025, noncontrolling interest equity consisted of the following:

As of June 30, 2026 and December 31, 2025, noncontrolling interest equity consisted of the following:

($ in thousands) Ownership of

noncontrolling interest at March 31, 2026

March 31, 2026 December 31, 2025

noncontrolling interest at June 30, 2026

June 30, 2026 December 31, 2025

Min Food, Inc.

32 unchanged sentences

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

Three Months Ended March 31,

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

(In thousands) 2026 2025 2026 2025

6 unchanged sentences

Total $ 323,781 100 % $ 314,853 100 % $ 635,783 100 % $ 613,281 100 %

The Company changed its methodology of how it assigns certain food products to its Asian Specialty, Commodity and other categories in the current period.

Prior period amounts have not been adjusted to reflect changes in the methodology for allocating certain food products to the product categories as recasting such prior period amounts was impracticable.

As a result, comparability between periods may be affected.

Note 4 - Balance Sheet Components

Accounts receivable, net consisted of the following:

(In thousands) March 31, 2026 December 31, 2025

(In thousands) June 30, 2026 December 31, 2025

Accounts receivable $ 65,050 $ 66,890

3 unchanged sentences

Movement of allowance for expected credit losses was as follows:

Three Months Ended March 31,

Six Months Ended June 30,

(In thousands) 2026 2025

4 unchanged sentences

Prepaid expenses and other current assets consisted of the following:

(In thousands) March 31, 2026 December 31, 2025

(In thousands) June 30, 2026 December 31, 2025

Prepaid expenses $ 1,319 $ 5,641

3 unchanged sentences

Assets held for sale consisted of the following:

(In thousands) March 31, 2026 December 31, 2025

(In thousands) June 30, 2026 December 31, 2025

Buildings $ — $ 2,034

2 unchanged sentences

The Company engaged a firm to market the location for sale and solicited multiple offers on the property.

On October 17, 2025, the Company executed a sale agreement for

the assets and subsequently determined that the assets met the accounting requirements to be classified as held for sale as of December 31, 2025.

On October 17, 2025, the Company executed a sale agreement for the assets and subsequently determined that the assets met the accounting requirements to be classified as held for sale as of December 31, 2025.

The Company closed on the sale of the land and building on February 12, 2026.

The gain of $ 1.4 million realized on the sale was recognized in other income, net on our condensed consolidated statements of operations and comprehensive income (loss) during the quarter ended March 31, 2026.

The gain of $ 1.4 million realized on the sale was recognized in other income, net on our condensed consolidated statements of operations and comprehensive income (loss) in the current year.

Property and equipment, net consisted of the following:

(In thousands) March 31, 2026 December 31, 2025

(In thousands) June 30, 2026 December 31, 2025

Automobiles (1)

12 unchanged sentences

_________________

(1) The cost and accumulated depreciation of property and equipment related to finance leases was $ 50.5 million and $ 22.4 million, respectively, at March 31, 2026 and $ 50.0 million and $ 21.1 million, respectively, at December 31, 2025.

The total future minimum lease payments under all finance leases as of March 31, 2026 is $ 42.9 million.

Depreciation expense was $ 3.6 million and $ 2.9 million for the three months ended March 31, 2026 and 2025, respectively.

(1) The cost and accumulated depreciation of property and equipment related to finance leases was $ 51.2 million and $ 24.2 million, respectively, at June 30, 2026 and $ 50.0 million and $ 21.1 million, respectively, at December 31, 2025.

The total future minimum lease payments under all finance leases as of June 30, 2026 is $ 41.7 million.

Depreciation expense was $ 3.5 million and $ 3.2 million for the three months ended June 30, 2026 and 2025, respectively.

Depreciation expense was $ 7.1 million and $ 6.1 million for the six months ended June 30, 2026 and 2025, respectively.

Long-term investments consisted of the following:

(In thousands) Ownership as of March 31,

2026 March 31, 2026 December 31, 2025

(In thousands) Ownership as of June 30,

2026 June 30, 2026 December 31, 2025

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 March 31, 2026 and 2025 for these investments.

The Company determined there was no impairment for the six months ended June 30, 2026 and 2025 for these investments.

Accrued expenses and other liabilities consisted of the following:

(In thousands) March 31, 2026 December 31, 2025

(In thousands) June 30, 2026 December 31, 2025

Accrued compensation $ 6,376 $ 6,690

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:

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

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

12 unchanged sentences

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

March 31, 2026

Fair Value Measurements Carrying Value

(In thousands) Level 1 Level 2 Level 3

June 30, 2026

Fixed rate debt:

1 unchanged sentence

Other financial institutions $ — $ 2,566 $ — $ 2,956

— 1,708 — 1,959

Variable rate debt:

19 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 carried at nonrecurring fair value at March 31, 2026.

There were no assets carried at nonrecurring fair value at June 30, 2026.

There were no assets carried at nonrecurring fair value other than goodwill as of December 31, 2025.

2 unchanged sentences

The components of the intangible assets are as follows:

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

(In thousands) Gross

7 unchanged sentences

Total $ 235,140 $ ( 91,543 ) $ 143,597 $ 235,140 $ ( 83,652 ) $ 151,488

Amortization expense for intangible assets was $ 3.9 million each for the three months ended March 31, 2026 and 2025, respectively.

Amortization expense for intangible assets was $ 3.9 million each for the three months ended June 30, 2026 and 2025, respectively.

Amortization expense for intangible assets was $ 7.9 million and $ 7.8 million for the six months ended June 30, 2026 and 2025, respectively.

Note 7 - Derivative Financial Instruments

13 unchanged sentences

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 consolidated statements of operations and comprehensive income (loss).

As of March 31, 2026, the Company determined that the fair values of the IRS contracts were $ 0.3 million in an asset position and $ 0.8 million in a liability position.

As of December 31, 2025, the fair values of the IRS contracts were $ 0.5 million in an asset position and none in a liability position.

As of June 30, 2026, the Company determined that the fair values of the IRS contracts were $ 0.3 million in an asset position and $ 0.1 million in a liability position.

As of December 31, 2025, the fair values of the IRS contracts were $ 0.2 million in an asset position and $ 1.6 million in a liability position.

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

Note 8 - Long-Term Debt

Long-term debt at March 31, 2026 and December 31, 2025 is summarized as follows:

Long-term debt at June 30, 2026 and December 31, 2025 is summarized as follows:

($ in thousands)

Bank Name Maturity Interest Rate at March 31, 2026

March 31, 2026 December 31, 2025

Bank Name Maturity Interest Rate at June 30, 2026

June 30, 2026 December 31, 2025

Bank of America (a)

3 unchanged sentences

August 2027 - September 2029 5.91 % - 7.25 %

JPMorgan Chase (c)

Regents Capital Corp.

February 2030 9.26 %

JPMorgan Chase (d)

January 2030 5.60 %

1 unchanged sentence

Other financial institutions

April 2026 - July 2030 6.60 % - 7.70 %

October 2028 - July 2030 6.99 % - 7.70 %

Total debt, principal amount 100,757 106,292

8 unchanged sentences

Balloon payments of $ 1.9 million and $ 2.9 million are due at maturity in 2027 and 2029, respectively.

(c) Real estate term loan with a principal balance of $ 91.7 million as of March 31, 2026 and $ 96.2 million as of December 31, 2025 is secured by assets held by the Company and has a maturity date of January 2030.

(d) Real estate term loan with a principal balance of $ 90.6 million as of June 30, 2026 and $ 96.2 million as of December 31, 2025 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 March 31, 2026, the Company was in compliance with its covenants.

As of June 30, 2026, the Company was in compliance with its covenants.

Credit Facility

14 unchanged sentences

and (iii) add HF Atlanta, LLC as an additional loan party as a “Borrower” thereunder.

As of March 31, 2026, the Company was in compliance with its covenants.

The outstanding principal balance on the line of credit as of March 31, 2026 was $ 61.8 million and outstanding letters of credit amounted to $ 8.0 million leaving access to approximately $ 55.2 million in additional funds through our $ 125.0 million line of credit, subject to a borrowing base calculation.

As of June 30, 2026, the Company was in compliance with its covenants.

The outstanding principal balance on the line of credit as of June 30, 2026 was $ 77.1 million and outstanding letters of credit amounted to $ 8.2 million leaving access to approximately $ 39.7 million in additional funds through our $ 125.0 million line of credit, subject to a borrowing base calculation.

Note 9 - Shareholders' Equity

The Company had 100,000,000 shares of common stock authorized, with a par value of $ 0.0001 per share as of March 31, 2026 and December 31, 2025.

The Company had 100,000,000 shares of common stock authorized, with a par value of $ 0.0001 per share as of June 30, 2026 and December 31, 2025.

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

1 unchanged sentence

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 $ 100.0 million, subject to the terms of the sales agreement.

During the quarter ended March 31, 2026, the Company sold 155,000 Shares for cash proceeds of $ 0.3 million under the offering.

During the quarter ended June 30, 2026, the Company sold no shares under the offering.

During the six months ended June 30, 2026 the Company sold 155,000 Shares for cash proceeds of $ 0.3 million under the offering.

The Company sold no Shares under the offering during the year ended December 31, 2025.

Preferred Stock

The Company had authorized 100,000 shares of Series A Participating Preferred Stock, with a par value of $ 0.001 per share and 1,000,000 shares of Preferred Stock, with a par value of $ 0.001 per share as of March 31, 2026 and December 31, 2025.

The Company had no preferred stock outstanding as of March 31, 2026 or December 31, 2025.

The Company had no preferred stock outstanding as of June 30, 2026 or December 31, 2025.

Stockholder Rights Plan

On June 11, 2026, the Company's Board of Directors declared a dividend distribution of one preferred share purchase right (a "Right") for each outstanding share of the Company's common stock to stockholders of record as of the close of business on June 22, 2026.

The Rights were issued pursuant to a Preferred Stock Rights Agreement, dated as of June 11, 2026 (the "Rights Agreement"), between the Company and Equiniti Trust Company, LLC, as rights agent.

In connection with the Rights Agreement, the Board designated 100,000 shares of Series AA Participating Preferred Stock, par value $ 0.001 per share ("Series AA Preferred Stock"), and reserved such shares for issuance upon exercise of the Rights.

No shares of Series AA Preferred Stock were issued or outstanding as of June 30, 2026.

Each Right entitles the registered holder to purchase from the Company one one-thousandth of a share of Series AA Preferred Stock at an exercise price of $ 9.55 , subject to adjustment.

The Rights are attached to, and trade with, the shares of common stock and are not exercisable until the earlier of ten business days following (i) a public announcement that a person or group has acquired beneficial ownership of 15 % or more of the Company's outstanding common stock without Board approval, or (ii) the commencement of a tender or exchange offer that would result in such ownership.

If the Rights become exercisable, each Right (other than Rights beneficially owned by the acquiring person or group, which become null and void) will entitle the holder to purchase shares of common stock having a market value of twice the exercise price.

The Rights may be redeemed by the Board at a price of $ 0.001 per Right at any time prior to a triggering event and expire at 5:00 p.m., New York City time, on June 10, 2027, unless earlier redeemed, exchanged, or terminated.

The Rights carry no voting or dividend rights.

Because the Rights were not exercisable as of June 30, 2026, their issuance had no effect on the Company's condensed consolidated financial statements for the three and six months ended June 30, 2026.

Note 10 - Earnings (Loss) Per Share

4 unchanged sentences

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 1,446,582 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 March 31, 2025, because their effect could have been anti-dilutive.

There were 1,305,105 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, because their effect could have been anti-dilutive.

The Rights described in Note 9 - Shareholders' Equity are contingently issuable and were excluded from the computation of diluted EPS for the three and six months ended June 30, 2026, as the events that would cause the Rights to become exercisable had not occurred as of June 30, 2026.

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

Three Months Ended March 31,

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

($ in thousands, except share and per share data) 2026 2025 2026 2025

12 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 March 31, 2026, the Company had immaterial operations outside the U.S.

As of June 30, 2026, the Company had immaterial operations outside the U.S.

and as such, no foreign income tax was recorded.

For the three months ended March 31, 2026 and 2025, the Company’s effective income tax rates were ( 41.4 )% and 37.9 %, respectively.

For the three months ended March 31, 2026, the effective income tax rate differed from the federal statutory rate primarily due to significant investment tax credits recognized in the period, partially offset by permanent differences and state income taxes.

For the three months ended March 31, 2025, the Company’s effective income tax rate differed from the federal statutory tax rate primarily due to permanent differences and state income taxes.

For the three and six months ended June 30, 2026, the Company’s effective income tax rate of 7.7 % and ( 4.7 )%, respectively, differed from the federal statutory rate primarily as a result of investment tax credits recognized in the period, partially offset by discrete tax items, permanent differences and state income taxes.

The Company’s tax provision for the six months ended June 30, 2026 includes a discrete tax expense of $ 122 thousand related to stock-based compensation shortfalls and $ 98 thousand related to the remeasurement of deferred tax assets associated with executive compensation.

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

Note 12 - Related Party Transactions

4 unchanged sentences

Zhang”), the former Chief Executive Officer through October 24, 2024, together with certain of his immediate family members are collectively beneficial owners of more than 5 % of the Company’s outstanding common stock, and they have ownership interests in various 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.

Zhang does not have any involvement in negotiations with any of the above-mentioned related parties.

The Company believes that Mr.

2 unchanged sentences

Ni’s four children, are collectively beneficial owners of more than 5 % 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 March 31, 2026 and December 31, 2025 and for the three months ended March 31, 2026 and 2025, are identified as follows:

The related party transactions as of June 30, 2026 and December 31, 2025 and for the six months ended June 30, 2026 and 2025, 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 months ended March 31, 2026 and 2025, respectively:

Three Months Ended March 31,

Below is a summary of purchases of goods and services from related parties recorded for the three and six months ended June 30, 2026 and 2025, respectively:

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

(In thousands) Nature 2026 2025 2026 2025

2 unchanged sentences

(b) Conexus Food Solutions LLC (formerly known as Best Food Services, LLC) Trade 1,099 935 1,857 1,959

(b) Empire Trading Investment LLC Trade 10 — 10 —

Trade 62 41 175 114

5 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 March 31, 2026 and 2025, respectively:

Three Months Ended March 31,

Below is a summary of sales to related parties recorded for the three and six months ended June 30, 2026 and 2025, respectively:

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

(In thousands) 2026 2025 2026 2025

1 unchanged sentence

(b) Asahi Food, Inc.

248 235 441 387

(a) Conexus Food Solutions LLC (formerly known as Best Food Services, LLC) 497 498 957 840

1 unchanged sentence

(d) Ocean Pacific Seafood Group, Inc.

Total $ 1,467 $ 1,303 $ 2,510 $ 2,258

4 unchanged sentences

Zhou Min Ni owns an equity interest in this entity indirectly through its parent company.

Zhou Min Ni owns an equity interest in this entity.

Lease Agreement

The Company has a lease agreement with a related party, Asahi Food, Inc.

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

under a commercial lease agreement which was rescinded March 1, 2020.

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

under a commercial lease agreement which was rescinded on March 1, 2020.

A new commercial lease agreement was entered into, expiring September 1, 2023, with optional renewal periods.

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

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

Rental income was $ 36 thousand for both the three months ended March 31, 2026 and 2025, which is included in other 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 of 2025 which extends the expiration of the lease by one year to September 1, 2026.

Rental income was $ 72 thousand for both the six months ended June 30, 2026 and 2025, which is included in other income, net in the condensed consolidated statements of operations and comprehensive income (loss).

Related Party Balances

Accounts Receivable - Related Parties, Net

Below is a summary of accounts receivable with related parties recorded as of March 31, 2026 and December 31, 2025, respectively:

(In thousands) March 31, 2026 December 31, 2025

Below is a summary of accounts receivable with related parties recorded as of June 30, 2026 and December 31, 2025, respectively:

(In thousands) June 30, 2026 December 31, 2025

(a) ABC Food Trading, LLC $ 419 $ 115

1 unchanged sentence

(a) Conexus Food Solutions LLC (formerly known as Best Food Services, LLC) 245 254

Total $ 995 $ 546

3 unchanged sentences

(b) The Company, through its subsidiary Mountain Food, LLC, owns an equity interest in this entity.

Zhou Min Ni owns an equity interest in this entity indirectly through its parent company.

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

No allowance is deemed necessary as of March 31, 2026 and December 31, 2025.

No allowance is deemed necessary as of June 30, 2026 and December 31, 2025.

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 March 31, 2026 and included in other current assets in the consolidated balance sheet.

on November 1, 2024, which is outstanding at June 30, 2026 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.

The note was extended for an additional twelve months during the fourth quarter and will become due on October 31, 2026.

Interest income was $ 616 and $ 1,233 for the three months ended March 31, 2026 and 2025,

respectively, which is included in other income expense, net in the condensed consolidated statements of operations and comprehensive income (loss).

Interest income was $ 1,849 and $ 2,157 for the six months ended June 30, 2026 and 2025,

respectively, which is included in other income, net in the condensed consolidated statements of operations and comprehensive income (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 March 31, 2026 and December 31, 2025, respectively:

(In thousands) March 31, 2026 December 31, 2025

Below is a summary of accounts payable with related parties recorded as of June 30, 2026 and December 31, 2025, respectively:

(In thousands) June 30, 2026 December 31, 2025

(a) Conexus Food Solutions LLC (formerly known as Best Food Services, LLC) $ 294 $ 360

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 March 31, 2026, the Company had 535,810 time-based vesting restricted stock units unvested, 912,071 performance-based restricted stock units unvested, 1,515,321 shares of common stock vested and 4,036,798 shares remaining available for future awards under the 2018 Incentive Plan.

Stock-based compensation expense was $ 0.3 million and $ 0.4 million for the three months ended March 31, 2026 and 2025, respectively.

As of June 30, 2026, the Company had 1,090,679 time-based vesting restricted stock units (“RSUs”) unvested, and 1,566,806 performance-based restricted stock units (“PSUs”) unvested, 1,828,673 shares of common stock vested and 2,513,842 shares remaining available for future awards under the 2018 Incentive Plan.

On June 11, 2026, the Company granted an aggregate of 425,528 time-based restricted-stock awards (“RSAs”) to four participants issued from treasury stock.

The RSAs have a grant date fair value of $ 1.88 per share, or approximately $ 0.8 million in the aggregate, and cliff vest on October 18, 2027, subject to the recipient’s continued service through the vesting date.

Recipients hold full voting rights and nonforfeitable dividend rights with respect to the RSAs from the grant date.

Stock-based compensation expense was $ 0.6 million and $ 0.6 million for the three months ended June 30, 2026 and 2025, respectively.

Stock-based compensation expense was $ 0.9 million and $ 1.0 million for the six months ended June 30, 2026 and 2025, 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 March 31, 2026, there was $ 2.0 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 1.67 years.

As of June 30, 2026, there was $ 5.4 million of total unrecognized compensation cost related to all non-vested outstanding RSUs, PSUs, and RSAs outstanding under the Company’s Equity Plans, with a weighted average remaining service period of 2.12 years.

Note 14 - Segment Information

5 unchanged sentences

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

The following table presents selected financial information with respect to the Company’s single operating segment for the three months ended March 31, 2026 and 2025:

Three Months Ended March 31,

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, 2026 and 2025:

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

(In thousands) 2026 2025 2026 2025

13 unchanged sentences

Change in fair value of interest rate swap contracts ( 729 ) 685 ( 1,572 ) 1,869

Income tax benefit ( 397 ) ( 932 )

net income attributable to noncontrolling interests 131 115

Income tax expense (benefit) 218 521 ( 179 ) ( 411 )

net income (loss) attributable to noncontrolling interests 41 ( 706 ) 172 ( 591 )

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

28 unchanged sentences

Other Commitments

As of March 31, 2026, the Company had additional automobile leases that had not yet commenced which total $ 0.8 million in future minimum lease payments.

As of June 30, 2026, the Company had additional vehicle leases that had not yet commenced which total $ 3.2 million in future minimum lease payments.

Note 16 - Subsequent Events

Acquisition of Searay Foods Inc.

On July 17, 2026, the Company, HF Acquisition Newco Inc., a Delaware corporation and wholly-owned subsidiary of the Company, and HF Toro Canada Holdings Inc., a British Columbia company and wholly-owned subsidiary of the Company (collectively, the "Buyer Entities"), entered into a Securities Purchase Agreement (the "Purchase Agreement") with Searay Foods Inc.

and Morgan Foods Inc., each a corporation formed under the laws of British Columbia (collectively, "Searay"), the sellers named therein (the "Sellers"), and a representative of the Sellers.

Pursuant to the Purchase Agreement, the Buyer Entities will acquire 100 % of the issued and outstanding securities of Searay.

The aggregate base purchase price is CAD$ 47.9 million (approximately US$ 35 million based on the exchange rate in effect on the date of the Purchase Agreement), payable as (i) CAD$ 38.4 million in cash, subject to customary post-closing adjustments, and (ii) 1,701,871 shares of the Company's common stock to be deposited into escrow at closing.

The shares to be issued will be exempt from registration under the Securities Act of 1933, as amended, in reliance on Regulation S and Regulation D thereunder.

In addition, the Sellers are eligible to receive contingent earnout payments based on the achievement of specified EBITDA targets over a two - to three-year period following the closing.

The closing is subject to the satisfaction or waiver of customary closing conditions, including the receipt of required regulatory approvals, and is expected to occur no later than August 31, 2026, unless the Purchase Agreement is earlier terminated or extended in accordance with its terms.

In connection with the Purchase Agreement, certain key employees of Searay, including a Seller, entered into employment agreements with a subsidiary of the Company.

The transaction will expand the Company's operational footprint into Canada through the Vancouver, British Columbia market and will serve as the Company's first expansion into an international market outside of the United States.

Amendment to Real Estate Term Loan and Revolving Credit Agreement

On July 29, 2026, the Company, its wholly-owned subsidiary B&R Global Holdings, Inc., and certain other wholly-owned subsidiaries and affiliates of the Company, as borrowers, and certain material subsidiaries of the Company, as guarantors, entered into a Joinder and Amendment No.

7 (the “Seventh Amendment”) to the Third Amended and Restated Credit Agreement, dated as of March 31, 2022, as previously amended (the “Existing Credit Agreement”, and as amended by the Seventh Amendment, the “Amended Credit Agreement”), with JPMorgan Chase Bank, N.A., as Administrative Agent, and JPMorgan Chase Bank, N.A., TD Bank, N.A.

and Fifth Third Bank, N.A., as lenders.

In connection with the Seventh Amendment, Wells Fargo Bank, N.A.

ceased to be a lender under the Amended Credit Agreement.

The Seventh Amendment does not constitute a novation of the obligations under the Existing Credit Agreement, and all existing obligations thereunder continue in full force and effect as obligations under the Amended Credit Agreement.

The Seventh Amendment increased the revolving commitments under the Company’s asset-based revolving credit facility from $ 125.0 million to $ 140.0 million and refinanced and upsized the Company’s term loans, resulting in term loans with an aggregate outstanding principal balance of $ 125.0 million immediately following the closing.

The revolving commitments mature on July 29, 2031, and the term loans mature on July 29, 2036.

Additional information regarding the Seventh Amendment is included in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 31, 2026.

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