---

---

---

---

---

---

---

Note 1 - Organization and Description of Business

Organization and General

Note 2 - Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”), regarding interim financial reporting. All adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

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.

All significant intercompany balances and transactions have been eliminated in consolidation. For consolidated entities where we own or are exposed to less than 100% of the economics, the Company records net income (loss) attributable to noncontrolling interests in its condensed consolidated statements of operations and comprehensive income (loss) equal to the percentage of the economic or ownership interest retained in such entity by the respective noncontrolling party.

Noncontrolling Interests

GAAP requires that noncontrolling interests in subsidiaries and affiliates be reported in the equity section of the Company’s condensed consolidated balance sheets. 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 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. Following the completion of this transaction, the Company’s ownership interest in Min Food increased from 60.25% to 79.24%, and the noncontrolling interest decreased from 39.75% to 20.76%. Because the Company maintained a controlling financial interest in Min Food both before and after the transaction, this acquisition was accounted for as an equity transaction in accordance with ASC 810, Consolidation. No gain or loss was recognized in the condensed consolidated statements of operations and comprehensive income (loss).

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

($ in thousands)						Ownership of noncontrolling interest at June 30, 2026						June 30, 2026						December 31, 2025
Min Food, Inc.						20.76%						$	686					$	1,173
Monterey Food Service, LLC						35.00%						361						362
Total												$	1,047					$	1,535

Uses of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during each reporting period. Actual results could differ from those estimates. Significant accounting estimates reflected in the

---

Company’s consolidated financial statements include, but are not limited to, inventory reserves, impairment of long-lived assets, and impairment of goodwill.

Recently Issued Accounting Pronouncements not yet Adopted

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The guidance requires additional disclosure of certain amounts included in the expense captions presented on the Statement of Operations as well as disclosures about selling expenses. This guidance is effective on a prospective basis, with the option for retrospective application, for annual periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. 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.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270). This new standard clarifies interim reporting guidance, develops a list of disclosures required by other Topics and intends to enhance consistency in interim reporting across entities. The standard allows for early adoption and becomes effective for fiscal years beginning after December 15, 2027, and interim periods within those annual periods. The Company is in the process of assessing the impact the adoption of this guidance will have on the Company’s interim financial statement disclosures.

In December 2025, the FASB issued ASU 2025-12, Codification Improvements. This update addresses a broad range of topics including technical corrections, unintended applications of the codifications, clarifications of certain items, and other minor improvements. The ASU is effective for annual and interim reporting periods beginning after December 15, 2026. 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

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 Company adopted this guidance prospectively effective January 1, 2026 and elected the practical expedient provided thereunder. The adoption did not have a material impact on the Company’s consolidated financial statements.

---

Note 3 - Revenue

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

						Three Months Ended June 30,																								Six Months Ended June 30,
(In thousands)						2026												2025												2026												2025
Seafood						$	111,027					34		%				$	112,080					36		%				$	227,140					36		%				$	217,655					36		%
Meat and Poultry						62,283						19		%				71,769						23		%				123,835						20		%				137,794						22		%
Asian Specialty						49,555						15		%				57,124						18		%				103,991						16		%				118,104						19		%
Commodity						57,248						18		%				31,295						10		%				93,351						15		%				55,111						9		%
Produce						29,485						9		%				27,606						9		%				59,002						9		%				55,517						9		%
Packaging and Other						14,183						5		%				14,979						4		%				28,464						4		%				29,100						5		%
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)			June 30, 2026						December 31, 2025
Accounts receivable			$	65,050					$	66,890
Less: allowance for expected credit losses			(1,087)						(1,199)
Accounts receivable, net			$	63,963					$	65,691

The beginning balance of accounts receivable as of January 1, 2025 was $55.7 million.

Movement of allowance for expected credit losses was as follows:

			Six Months Ended June 30,
(In thousands)			2026						2025
Beginning balance			$	1,199					$	1,557
Credit for expected credit losses			25						618
Bad debt write-offs			(137)						(1)
Ending balance			$	1,087					$	2,174

Prepaid expenses and other current assets consisted of the following:

(In thousands)			June 30, 2026						December 31, 2025
Prepaid expenses			$	1,319					$	5,641
Advances to suppliers			2,361						1,514
Other current assets			3,544						2,570
Prepaid expenses and other current assets			$	7,224					$	9,725

---

Assets held for sale consisted of the following:

(In thousands)			June 30, 2026						December 31, 2025
Buildings			$	—					$	2,034
Land			—						734
Assets held for sale			$	—					$	2,768

In 2025, the Company approved a plan to sell land and a building it owned in Utah. 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. 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) in the current year.

Property and equipment, net consisted of the following:

(In thousands)			June 30, 2026						December 31, 2025
Automobiles (1)			$	65,574					$	65,202
Buildings			64,608						60,648
Building improvements (1)			41,164						41,182
Furniture and fixtures			454						489
Land			57,721						49,180
Machinery and equipment (1)			12,018						14,500
Construction in progress			8,017						2,493
Subtotal			249,556						233,694
Less: accumulated depreciation			(70,667)						(70,297)
Property and equipment, net			$	178,889					$	163,397

_________________

(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 June 30, 2026						June 30, 2026						December 31, 2025
Asahi Food, Inc. (“Asahi”)			49.0%						$	248					$	344
Pt. Tamron Akuatik Produk Industri (“Tamron”)			12.0%						1,800						1,800
Total long-term investments									$	2,048					$	2,144

The investment in Tamron is accounted for using the measurement alternative under Accounting Standards Codification (“ASC”) Topic 321 Investments—Equity Securities, which is measured at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments, if any. 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 six months ended June 30, 2026 and 2025 for these investments.

---

Accrued expenses and other liabilities consisted of the following:

(In thousands)						June 30, 2026						December 31, 2025
Accrued compensation						$	6,376					$	6,690
Accrued professional fees						681						300
Accrued interest and fees						818						862
Self-insurance liability						2,580						1,969
Advance from customers						430						549
Other						4,905						4,624
Total accrued expenses and other liabilities						$	15,790					$	14,994

Note 5 - Fair Value Measurements

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, 2026																								December 31, 2025
			Level 1						Level 2						Level 3						Total						Level 1						Level 2						Level 3						Total
			Quoted Prices in Active Markets for Identical Assets						Significant Other Observable Inputs						Significant Unobservable Inputs												Quoted Prices in Active Markets for Identical Assets						Significant Other Observable Inputs						Significant Unobservable Inputs
			(In thousands)
Assets:
Interest rate swaps			$	—					$	283					$	—					$	283					$	—					$	241					$	—					$	241
Liabilities:
Interest rate swaps			$	—					$	77					$	—					$	77					$	—					$	1,607					$	—					$	1,607

The Company follows the provisions of ASC Topic 820 Fair Value Measurement which clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

•Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.

•Level 2 - Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.

•Level 3 - Inputs are unobservable inputs which reflect the reporting entity’s own assumptions about what assumptions market participants would use in pricing the asset or liability based on the best available information.

Any transfers of assets or liabilities between Level 1, Level 2, and Level 3 of the fair value hierarchy will be recognized at the end of the reporting period in which the transfer occurs. There were no transfers between fair value levels in any of the periods presented herein.

The carrying amounts reported in the consolidated balance sheets for cash, accounts receivable, other current assets, accounts payable, checks issued not presented for payment and accrued expenses and other liabilities approximate their fair value based on the short-term maturity of these instruments.

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 - Long-Term Debt, including the current portion, as of the dates indicated:

						Fair Value Measurements																		Carrying Value
(In thousands)						Level 1						Level 2						Level 3
June 30, 2026
Fixed rate debt:
Bank of America						$	—					$	—					$	24					$	25
Other financial institutions						$	—					$	2,566					$	—					$	2,956
Variable rate debt:
JPMorgan Chase						$	—					$	90,490					$	—					$	90,490
Bank of America						$	—					$	1,850					$	—					$	1,850
East West Bank						$	—					$	5,234					$	—					$	5,234
December 31, 2025
Fixed rate debt:
Bank of America						$	—					$	—					$	48					$	51
Other finance institutions						$	—					$	2,474					$	—					$	2,784
Variable rate debt:
JPMorgan Chase						$	—					$	96,023					$	—					$	96,023
Bank of America						$	—					$	1,930					$	—					$	1,930
East West Bank						$	—					$	5,331					$	—					$	5,331

The carrying value of the variable rate debt approximates its fair value because of the variability of interest rates associated with these instruments. 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 - 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.

We performed a quantitative goodwill impairment analysis as of December 31, 2025. The results of testing as of December 31, 2025 concluded that the estimated fair value of our one reporting unit fell short of carrying value, and therefore impairment existed as of that date. A goodwill impairment charge of $38.8 million was recorded for the year ended December 31, 2025, which resulted in the full impairment of our remaining goodwill balance. 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 June 30, 2026. There were no assets carried at nonrecurring fair value other than goodwill as of December 31, 2025.

---

Note 6 - Intangible Assets

Intangible Assets

The components of the intangible assets are as follows:

						June 30, 2026																		December 31, 2025
(In thousands)						Gross Carrying Amount						Accumulated Amortization						Net Carrying Amount						Gross Carrying Amount						Accumulated Amortization						Net Carrying Amount
Trademarks and trade names						$	44,207					$	(26,097)					$	18,110					$	44,207					$	(23,894)					$	20,313
Customer relationships						185,266						(64,501)						120,765						185,266						(59,218)						126,048
Inventory Management System						5,667						(945)						4,722						5,667						(540)						5,127
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 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

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 - Long-Term Debt). The Company does not use any other derivative financial instruments for trading or speculative purposes.

On August 20, 2019, HF Foods entered into two IRS contracts with East West Bank (the “EWB IRS”) for initial notional amounts of $1.1 million and $2.6 million, respectively. On April 20, 2023, the Company amended the corresponding mortgage term loans, which pegged the two mortgage term loans to 1-month Term SOFR (Secured Overnight Financing Rate) + 2.29% per annum for the remaining duration of the term loans. The amended EWB IRS contracts fixed the two term loans at 4.23% per annum until maturity in September 2029.

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 + 2.50%. The BOA IRS was modified accordingly to fix the SOFR based loan to approximately 4.50%. The term loan and corresponding BOA IRS contract mature in December 2029.

On March 15, 2023, the Company entered into an amortizing IRS contract with JPMorgan Chase for an initial notional amount of $120.0 million, effective from March 1, 2023 and expiring in March 2028, as a means to partially hedge its existing floating rate loans exposure. Pursuant to the agreement, the Company will pay the swap counterparty a fixed rate of 4.11% in exchange for floating payments based on Term SOFR.

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 consolidated statements of operations and comprehensive income (loss).

---

Note 8 - Long-Term Debt

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

($ in thousands)
Bank Name						Maturity						Interest Rate at June 30, 2026						June 30, 2026						December 31, 2025
Bank of America (a)						October 2026 - December 2029						4.34% - 6.23%						$	1,876					$	1,981
East West Bank (b)						August 2027 - September 2029						5.91% - 7.25%						5,234						5,331
Regents Capital Corp. (c)						February 2030						9.26%						1,353						—
JPMorgan Chase (d)						January 2030						5.60%						90,642						96,196
Other financial institutions						October 2028 - July 2030						6.99% - 7.70%						1,652						2,784
Total debt, principal amount																		100,757						106,292
Less: debt issuance costs																		(202)						(173)
Total debt, carrying value																		100,555						106,119
Less: current portion																		(5,211)						(6,683)
Long-term debt																		$	95,344					$	99,436

_______________

(a)Loan balance consists of real estate term loan and equipment term loan, collateralized by one real property and specific equipment. The real estate term loan is pegged to TERM SOFR + 2.50%.

(b)Real estate term loans with East West Bank are collateralized by three real properties. Balloon payments of $1.9 million and $2.9 million are due at maturity in 2027 and 2029, respectively.

(c)Equipment loan secured by the financed equipment assets and has a maturity date in February 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 June 30, 2026, the Company was in compliance with its covenants.

Credit Facility

On March 31, 2022, the Company entered into the Third Amended Credit Agreement extending the Revolving Facility for five years, with a maturity date of March 31, 2027. The Third Amended Credit Agreement provides for a $100.0 million asset-secured revolving credit facility with a one-month SOFR plus a credit adjustment of 0.1% plus 1.375% per annum. 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. On July 15, 2024, the Company again amended the Third Amended Credit Agreement to (i) increase the issuing bank sublimit to $10.0 million and; (ii) modify the due date for a borrowing base certificate based on availability under the revolving credit facility.

On February 12, 2025, the Company entered into a Joinder and Amendment no. 4 to the Third Amended Credit Agreement, which revised certain terms 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. 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.

On March 30, 2026, the Company entered into a Joinder and Amendment no. 5 (the “Fifth Amendment”) to the Third Amended Credit Agreement, with JPMorgan Chase Bank, and certain other lender parties thereto, to revise the Third Amended Credit Agreement. The Fifth Amendment revises the credit agreement to (i) extend the maturity date of the credit facility to the earlier of March 31, 2031 or certain other dates subject to conditions specified in the agreement; (ii) amend the interest rate to be based upon the one month SOFR plus a fixed spread based upon the daily availability of the aggregate revolving commitment; and (iii) add HF Atlanta, LLC as an additional loan party as a “Borrower” thereunder.

---

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

Common Stock

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. 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 $100.0 million, subject to the terms of the sales agreement. 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 June 30, 2026 and 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

The Company computes earnings (loss) per share (“EPS”) in accordance with ASC Topic 260 (“ASC 260”), Earnings per Share. ASC 260 requires companies with complex capital structures to present basic and diluted EPS. 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 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 June 30,												Six Months Ended June 30,
($ in thousands, except share and per share data)						2026						2025						2026						2025
Numerator:
Net income (loss) attributable to HF Foods Group Inc.						$	2,580					$	1,216					$	3,805					$	(429)
Denominator:
Weighted-average common shares outstanding						53,429,826						52,969,037						53,242,757						52,853,982
Effect of dilutive securities						460,585						445,678						467,644						—
Weighted-average dilutive shares outstanding						53,890,411						53,414,715						53,710,401						52,853,982
Earnings (loss) per common share:
Basic						$	0.05					$	0.02					$	0.07					$	(0.01)
Diluted						$	0.05					$	0.02					$	0.07					$	(0.01)

---

Note 11 - Income Taxes

The determination of the Company’s overall effective income tax rate requires the use of estimates. The effective income tax rate reflects the income earned and taxed in U.S. federal and various state jurisdictions based on enacted tax law, permanent differences between book and tax items, tax credits and the Company’s change in relative income in each jurisdiction. 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, 2026, the Company had immaterial operations outside the U.S. and as such, no foreign income tax was recorded.

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

The Company makes regular purchases from and sales to various related parties. Related party affiliations were attributed to transactions conducted between the Company and those business entities partially or wholly owned by the Company, the Company’s officers and/or shareholders who owned no less than 5% shareholdings of the Company.

The Company believes that Mr. Xiao Mou Zhang (“Mr. 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.

The Company believes that Mr. Zhou Min Ni (“Mr. Ni”), the Company’s former Co-Chief Executive Officer, together with various trusts for the benefit of Mr. 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 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

Purchases

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
(a)			Asahi Food, Inc.						Trade						$	28					$	40					$	50					$	65
(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						—
(c)			Ocean Pacific Seafood Group, Inc.						Trade						62						41						175						114
(c)			Rainfield Ranches, LP						Trade						20						22						77						43
			Total												$	1,219					$	1,038					$	2,169					$	2,181

_______________

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

(b)An equity interest is held by three Irrevocable Trusts for the benefit of Mr. Zhang’s children.

(c)Mr. Zhou Min Ni owns an equity interest in this entity.

---

Sales

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
(a)			ABC Food Trading, LLC						$	715					$	497					$	1,093					$	924
(b)			Asahi Food, Inc.						248						235						441						387
(a)			Conexus Food Solutions LLC (formerly known as Best Food Services, LLC)						497						498						957						840
(c)			First Choice Seafood, Inc.						—						—						—						6
(c)			Fortune One Foods, Inc.						7						62						19						90
(d)			Ocean Pacific Seafood Group, Inc.						—						11						—						11
			Total						$	1,467					$	1,303					$	2,510					$	2,258

_______________

(a)An equity interest is held by three Irrevocable Trusts for the benefit of Mr. Zhang’s children.

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

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

(d)Mr. 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 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 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 June 30, 2026 and December 31, 2025, respectively:

			(In thousands)						June 30, 2026						December 31, 2025
(a)			ABC Food Trading, LLC						$	419					$	115
(b)			Asahi Food, Inc.						331						177
(a)			Conexus Food Solutions LLC (formerly known as Best Food Services, LLC)						245						254
			Total						$	995					$	546

_______________

(a)An equity interest is held by three Irrevocable Trusts for the benefit of Mr. Zhang’s children.

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

All accounts receivable from these related parties are current and considered fully collectible. 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 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 $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 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
			Others						4						24
			Total						$	298					$	384

_______________

(a)An equity interest is held by three Irrevocable Trusts for the benefit of Mr. Zhang’s children.

Note 13 - Stock-Based Compensation

In 2021, the Company began issuing awards under the HF Foods Group Inc. 2018 Omnibus Equity Incentive Plan (the “2018 Incentive Plan”), which reserves up to 3,000,000 shares of the Company’s common stock for issuance of awards to employees and non-employee directors. 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, 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 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

The Company’s business consists of one operating segment, which is also its one reportable segment. The Company operates solely in the United States and derives revenues by providing sales of food and non-food to customers. The segment’s customer base consists primarily of Asian restaurants located throughout the United States. The Company’s chief operating decision maker (“CODM”) is its chief executive officer, who reviews financial information presented on a consolidated basis. The CODM uses consolidated net income (loss) to assess financial performance and allocate resources. 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 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
Net revenue			$	323,781					$	314,853					$	635,783					$	613,281
Less:
Cost of revenue			268,733						259,721						530,209						507,190
Operating expenses:
Payroll and related labor costs			24,373						25,644						48,425						50,423
Professional fees			2,503						2,138						4,150						4,728
Depreciation			3,511						3,241						7,090						6,129
Amortization			3,949						4,021						7,891						7,890
Other segment expenses (a)			17,895						15,969						34,164						31,648
Distribution, selling and administrative expenses			52,231						51,013						101,720						100,818
Other (income) expenses:
Interest expense			2,916						2,817						5,728						5,426
Other income, net			(2,209)						(414)						(4,100)						(591)
Change in fair value of interest rate swap contracts			(729)						685						(1,572)						1,869
Income tax expense (benefit)			218						521						(179)						(411)
Less: net income (loss) attributable to noncontrolling interests			41						(706)						172						(591)
NET INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO HF FOODS GROUP INC.			$	2,580					$	1,216					$	3,805					$	(429)

_______________

(a)Other segment expenses include distribution, selling and administrative expenses which are not provided to the CODM on a regular basis. These expenses include primarily auto & truck expense, insurance, occupancy expense and utilities.

Note 15 - Commitments and Contingencies

From time to time, the Company is a party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of business. When the Company becomes aware of a claim or potential claim, it assesses the likelihood of any loss or exposure. In accordance with authoritative guidance, the Company records loss contingencies in its financial statements only for matters in which losses are probable and can be reasonably estimated. Where a range of loss can be reasonably estimated with no best estimate in the range, the Company records the minimum estimated liability. If the loss is not probable or the amount of the loss cannot be reasonably estimated, the Company discloses the nature of the specific claim if the likelihood of a potential loss is reasonably possible and the amount involved is material. The Company continuously assesses the potential liability related to its pending litigation and revises its estimates when additional information becomes available. Adverse outcomes in some or all of these matters may result in significant monetary damages or injunctive relief against the Company that could adversely affect its ability to conduct business. There also exists the possibility of a material adverse effect on the Company’s financial statements for the period in which the effect of an unfavorable outcome becomes probable and reasonably estimable. Legal costs associated with loss contingencies are expensed as incurred.

AnHeart Lease Matter

In connection with lease arrangements relating to properties located at 273 Fifth Avenue and 275 Fifth Avenue in Manhattan, New York, the Company previously guaranteed certain obligations of AnHeart, Inc. under those leases. Following AnHeart’s

---

default under the 275 Fifth Avenue lease in 2022, the Company performed under its guaranty and pursued remedies to recover amounts it believes are owed under contractual and related arrangements.

On February 25, 2022, the Company initiated legal proceedings against AnHeart, Inc. and Minsheng Pharmaceutical Group Company, Ltd. (“Minsheng”), who in 2019 executed on behalf of AnHeart, an unconditional guaranty of all liabilities arising from the leases, in favor of the Company. In March 2022, that proceeding was stayed in connection with certain payment commitments being made by AnHeart. After such payment commitments were not satisfied, the Company commenced a new action in New York County Supreme Court on October 25, 2023 against AnHeart and Minsheng seeking recovery of amounts alleged to be due under the relevant arrangements. The parties subsequently entered into a settlement arrangement providing for specified monthly payments through December 2025, after which regular monthly rental payments were to resume in accordance with the applicable lease terms.

The Company continues to evaluate and pursue its rights and remedies with respect to these matters. The ultimate outcome cannot be predicted with certainty. Based on information currently available, management does not believe that the resolution of this matter will have a material adverse effect on the Company’s consolidated financial statements.

Other Commitments

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.

---

---

---

---

---

---

---

---

---

---

---

---

---