HF Foods Group Inc.

Note 1 - Organization and Description of Business

Organization and General

HF Foods Group Inc., headquartered in Las Vegas, Nevada, operating through our subsidiaries (collectively “HF Foods” or the “Company”) is a marketer and distributor of fresh produce, frozen and dry food, and non-food products to Asian restaurants, as well as other foodservice customers, throughout the United States and Canada. With multiple distribution centers located throughout the United States and recently acquired operations in Canada, HF Foods supplies Asian cuisine through its relationships with growers and suppliers of food products in North America, South America and Asia. On August 31, 2026, the Company acquired Searay Foods Inc. and Morgan Foods Inc. and, in a related transaction, the U.S. inventory and customer contracts of an affiliate, Searay Foods USA Inc. (together, “Searay”), an importer and distributor of branded ethnic and specialty frozen seafood based in Richmond, British Columbia (see Note 3 - Business Combination). The Company’s business consists ofone operating segment, which is also itsone reportable segment: HF Foods, which offers specialty restaurant foods and supplies to its customers.

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”). Except for the policies related to business combinations, contingent consideration, goodwill, foreign currency and debt modifications described below, which became significant to the Company during the quarter, 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 loss equal to the percentage of the economic or ownership interest retained in such entity by the respective noncontrolling party. The condensed consolidated financial statements include the results of the Searay Acquisition (as defined below) from August 31, 2026, the date of the acquisition (the “Acquisition Date”).

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 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 loss.

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

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, impairment of goodwill, the fair values of assets acquired and liabilities assumed in business combinations, and the fair values of contingent consideration and the escrow share obligation.

Business Combinations

The Company accounts for business combinations under ASC 805, Business Combinations, using the acquisition method. Identifiable assets acquired and liabilities assumed are recorded at their estimated fair values as of the acquisition date, and the excess of the purchase consideration over the fair value of the net identifiable assets acquired is recorded as goodwill. Determining fair value requires significant estimates and assumptions, particularly for intangible assets, inventory and contingent consideration. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the provisional amounts recognized to reflect new information about facts and circumstances that existed as of the acquisition date, with a corresponding adjustment to goodwill. Acquisition-related costs are expensed as incurred.

Contingent Consideration

Contingent consideration arising from a business combination, including the Company’s obligation to purchase the Escrow Shares at a guaranteed price, is classified as a liability, recorded at its estimated fair value as of the acquisition date and remeasured to fair value at each reporting date until settled. Changes in fair value resulting from events after the acquisition date will be recognized in operating income in the condensed consolidated statements of operations and comprehensive loss.

Goodwill

Goodwill represents the excess of the purchase consideration over the fair value of the net identifiable assets acquired. Goodwill is not amortized but is tested for impairment annually, or more frequently if events or changes in circumstances indicate that the carrying amount of a reporting unit may exceed its fair value.

Foreign Currency

The functional currency of the Company’s Canadian subsidiaries is the Canadian dollar, and the functional currency of the Company’s other subsidiaries is the U.S. dollar. Assets and liabilities of subsidiaries with a non-U.S. dollar functional currency are translated into U.S. dollars at exchange rates in effect at the balance sheet date, and revenues and expenses are translated at average exchange rates for the period. The resulting translation adjustments are recorded in other comprehensive loss and accumulated in accumulated other comprehensive loss within shareholders’ equity. Gains and losses from transactions denominated in currencies other than an entity’s functional currency are recognized in other income, net.

Debt Modifications and Extinguishments

The Company evaluates amendments to its debt arrangements under ASC 470-50, Debt—Modifications and Extinguishments, on a lender-by-lender basis. For term debt, a modification is accounted for as an extinguishment when the present value of the cash flows under the new terms differs by at least 10% from the present value of the remaining cash flows under the original terms. For revolving arrangements, the Company compares the borrowing capacity of the new and old arrangements and writes off unamortized deferred costs in proportion to any decrease in a lender’s borrowing capacity. Debt issuance costs related to term debt are presented as a reduction of the carrying amount of the debt, and costs related to the revolving credit facility are presented in other long-term assets; both are amortized to interest expense.

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. The Company does not currently plan to early adopt this guidance.

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 - Business Combination

Searay Acquisition

On August 31, 2026, the Company completed the previously announced acquisition of Searay Foods Inc., a corporation formed under the laws of British Columbia (“Searay Canada”), and Morgan Foods Inc., a corporation formed under the laws of British Columbia (“Morgan Foods” and, together with Searay Canada, the “Company Group”), pursuant to the Securities Purchase Agreement, dated as of July 17, 2026 (the “Purchase Agreement”), as amended by the Amendment to Securities Purchase Agreement, dated as of August 27, 2026 (the “Purchase Agreement Amendment”), by and among the Company, HF Acquisition Newco Inc., a Delaware corporation and wholly-owned subsidiary of the Company (the “Buyer”), HF Toro Canada Holdings Inc., a British Columbia limited company (“Searay Acquisition Co” and, together with the Company and the Buyer, the “Buyer Entities”), the Company Group; the sellers named therein (the “Sellers”), and Jackie Chi Fai Chan, solely in his capacity as the representative of the Sellers, pursuant to which the Buyer Entities acquired 100% of the issued and outstanding securities of the Company Group from the Sellers (the “Searay Acquisition”).

In accordance with the terms of the Purchase Agreement, the Company acquired 100% of the issued and outstanding equity interests of the Company Group from the Sellers, for an aggregate base purchase price of CAD$47,921,740 (equal tofive times the baseline Adjusted EBITDA of CAD$9,556,348, plus CAD$140,000), paid as (i) CAD$38,365,392 in cash and (ii)1,701,871 shares of the Company’s common stock were issued into escrow at closing, priced at $4.00 per share (the “Escrow Shares”). In addition, the Sellers are eligible to receive contingent earnout payments based on achievement of specified EBITDA targets over atwo- tothree-year period following the closing of the Searay Acquisition (the “Closing”).

In connection with the Closing, the parties entered into the Purchase Agreement Amendment, which, among other things, (i) subordinates the earnout payments to the credit facilities of the Buyer Entities, (ii) provides for simple interest at SOFR plus 2% per annum on any deferred earnout payments, (iii) waives, solely as a closing condition, the requirement to obtain certain third-party consents at or prior to the Closing, (iv) provides for uncapped indemnification by the Sellers for losses arising from the failure to obtain such consents and (v) permits the Buyer Entities to assign their rights under the Purchase Agreement to affiliates and as collateral security to lenders.

Additionally, in connection with the Closing, the Company and the other borrowers under the Third Amended and Restated Credit Agreement, dated as of March 31, 2022 (as amended, the “Credit Agreement”), with JPMorgan Chase Bank, N.A., as administrative agent (the “Administrative Agent”), entered into a Consent (the “Consent”), pursuant to which the Administrative Agent and the required lenders consented to the joinder of Searay Canada, Morgan Foods and any subsidiary formed or acquired in connection with the Searay Acquisition as parties to the Credit Agreement and related loan documents within five business days following the closing of the Searay Acquisition (or such later date as agreed by the Administrative Agent), rather than immediately upon consummation of the Searay Acquisition.

In a related transaction on the date of Closing, the Company purchased the U.S. inventory of Searay Foods USA Inc., an affiliate of the Sellers, and assumed its supply agreement with a certain customer. The inventory purchase was not material to the Company’s condensed consolidated financial statements.

Searay, headquartered in Richmond, British Columbia, is an importer and distributor of branded ethnic and specialty frozen seafood serving retail, wholesale and restaurant customers in Canada and the United States. The Searay Acquisition establishes the Company’s operations in Canada and expands its specialty seafood offerings.

The Searay Acquisition was accounted for as a business combination under ASC 805, Business Combinations, using the acquisition method. The results of Searay are included in the Company’s condensed consolidated financial statements from the date of Closing.

Purchase Consideration

The following table summarizes the preliminary fair value of the purchase consideration:

The cash consideration is subject to a post-closing adjustment based on final closing cash, indebtedness, transaction expenses and net working capital. The base purchase price of CAD$47.9 million was adjusted at closing for Searay’s closing cash, indebtedness, transaction expenses and net working capital, resulting in cash paid of CAD$62.2 million. The Company paid US$45.1 million to acquire the Canadian dollars at closing; the cash consideration of US$44.9 million reflects the CAD$62.2 million translated at the Acquisition Date exchange rate, and the difference of $0.2 million was recognized as a foreign currency loss in other income, net.

At the Closing, the Company placed 1,701,871 shares of its common stock into escrow (the “Escrow Shares”), consisting of 129,976 newly issued shares and 1,571,895 shares transferred from treasury. The Escrow Shares secure the Sellers’ post-closing adjustment and indemnification obligations, and the number of shares released will be reduced if Searay’s average Adjusted EBITDA (as defined in the Purchase Agreement) for thetwo years following the date of Closing is less than 97% of its baseline Adjusted EBITDA of CAD$9.6 million. If the 20-day volume-weighted average price of the Company’s common stock on August 31, 2028 is below $4.00, the Company is required to purchase the Escrow Shares then remaining from the Sellers for $4.00 per share in cash. The undiscounted amount the Company could be required to pay under this price guarantee ranges from zero to approximately $6.8 million. The fair value of the Escrow Share Consideration of $5.6 million reflects both the shares and this price guarantee and was estimated using a Monte Carlo simulation based on Level 3 inputs (see Note 6 - Fair Value Measurements). Because the Company may be required to settle the Escrow Share Consideration in cash, it is classified as a liability, and the Escrow Shares are not reflected as issued or outstanding in the condensed consolidated financial statements; the 1,571,895 shares transferred from treasury remain in treasury stock at cost (see Note 10 - Shareholders’ Equity). The liability is included in other long-term liabilities in the condensed consolidated balance sheet and is remeasured to fair value at each reporting date, with changes in fair value recognized in operating income.

The Sellers are also eligible to receive two cash earnouts. The Growth Earnout pays 50% of the amount by which Searay’s Adjusted EBITDA, excluding EBITDA generated from sales to a certain customer (the “Specified Customer”), exceeds its baseline Adjusted EBITDA growth at 3% per year, for each of thetwo years following the date of Closing, with growth above 10% per year excluded, resulting in undiscounted payments ranging from zero to a maximum of approximately CAD$0.7 million (US$0.5 million) in total. The Customer Earnout pays an amount equal to Searay’s EBITDA from sales to the Specified Customer for each of thethree years following the date of Closing, up to a maximum of CAD$2.1 million (US$1.5 million) in total, and is payable only if Searay’s average Adjusted EBITDA meets minimum levels. The earnouts and any cash payable to purchase the Escrow Shares are unsecured and subordinated to the Company’s senior credit facility. The Company recorded the acquisition-date fair value of the earnouts of $0.8 million, estimated using a Monte Carlo simulation based on Level 3 inputs (see Note 6 - Fair Value Measurements). The earnout liability is included in Other long-term liabilities and is remeasured to fair value at each reporting date, with changes in fair value recognized in operating income.

Preliminary Purchase Price Allocation

The following table summarizes the preliminary allocation of the purchase consideration to the fair value of the assets acquired and liabilities assumed as of the date of Closing:

The purchase price allocation is preliminary because the third-party valuations and the post-closing purchase price adjustment have not been finalized, and is based on information available as of the date of this report. The Company is still finalizing the valuation of intangible assets, inventory, property and equipment, leases, income taxes, the post-closing purchase price adjustment, the Escrow Share Consideration and the earnouts. Changes to these provisional amounts during the measurement period, which will not exceed one year from the date of Closing, may be material and will be recorded as adjustments to goodwill.

The Company recorded acquired intangible assets of $23.1 million. These intangible assets include tradenames of $2.5 million, customer relationships of $20.1 million and non-competition agreements of $0.5 million. The useful lives of the tradenames areten years, customer relationships areten years and non-competition agreements arethree years, with a weighted average amortization period of approximately 9.8 years. The intangible assets are amortized on a straight-line basis over their estimated useful lives.

Goodwill of $13.6 million represents the excess of the purchase consideration over the fair value of the net identifiable assets acquired and is primarily attributable to Searay’s assembled workforce, the Company’s entry into the Canadian market, the expansion of its specialty seafood offerings across its existing distribution network and expected purchasing synergies, none of which qualify for recognition as a separate intangible asset. None of the goodwill is expected to be deductible for income tax purposes. The goodwill has been assigned to the Company’s single reportable segment.

Under the Purchase Agreement, the Sellers are required to reimburse the Company, dollar for dollar, for (i) acquired accounts receivable that remain uncollected 90 days after the date of Closing and (ii) acquired inventory that expires, is written off or remains unsold through August 31, 2028, in each case in exchange for the return of the related receivables or inventory to the Sellers.

The Company’s condensed consolidated statements of operations for the three and nine months ended September 30, 2026 include net revenue of $4.2 million and net income of $0.5 million attributable to Searay from the Acquisition Date.

Acquisition-Related Costs

The Company incurred acquisition-related costs of $0.4 million and $0.6 million for the three and nine months ended September 30, 2026, respectively, which were expensed as incurred and are included in distribution, selling and administrative expenses in the condensed consolidated statements of operations.

Unaudited Supplemental Pro Forma Information

The following unaudited supplemental pro forma information presents the combined results of the Company and Searay as if the acquisition had occurred on January 1, 2025:

The unaudited supplemental pro forma information reflects adjustments for the amortization of acquired intangible assets, depreciation of the fair value adjustment to property and equipment, interest expense on borrowings used to fund the Searay Acquisition and the related income tax effects. Acquisition related costs of $0.6 million are reflected in the pro forma results for the nine months ended September 30, 2025, as if they had been incurred on January 1, 2025, and have been excluded from the pro forma results for the three and nine months ended September 30, 2026. The unaudited supplemental pro forma information is not necessarily indicative of the results that would have been achieved had the Searay Acquisition occurred on January 1, 2025, or of future results.

Note 4 - Revenue

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

The Company changed its methodology of how it assigns certain food products to its Asian Specialty, Commodity and other categories in the second quarter of 2026. 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.

Net revenue for the three and nine months ended September 30, 2026 includes $4.2 million from Searay for the period from August 31, 2026 through September 30, 2026, substantially all of which is included in the Seafood category.

Note 5 - Balance Sheet Components

Accounts receivable, net consisted of the following:

Movement of allowance for expected credit losses was as follows:

Prepaid expenses and other current assets consisted of the following:

Assets held for sale consisted of the following:

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 in the condensed consolidated statements of operations and comprehensive loss in the current year.

Property and equipment, net consisted of the following:

(1) The cost and accumulated depreciation of property and equipment related to finance leases was $51.3 million and $25.9 million, respectively, at September 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 September 30, 2026 is $40.3 million.

Depreciation expense was $3.6 million and $3.2 million for the three months ended September 30, 2026 and 2025, respectively. Depreciation expense was $10.7 million and $9.4 million for the nine months ended September 30, 2026 and 2025, respectively.

Long-term investments consisted of the following:

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 wasno impairment for the nine months ended September 30, 2026 and 2025 for these investments.

Accrued expenses and other liabilities consisted of the following:

Note 6 - 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:

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

The Company’s contingent consideration liabilities arising from the Searay Acquisition, consisting of the Growth Earnout, the Customer Earnout and the Escrow Share Consideration, are measured at fair value on a recurring basis using significant unobservable inputs (Level 3). Fair value for the Growth Earnout is estimated using a Monte Carlo simulation of Searay’s projected Adjusted EBITDA. Significant unobservable inputs for the Growth Earnout include projected Adjusted EBITDA, EBITDA volatility of 25% to 30%, share volatility of 65.9% to 68.3% and weighted average cost of capital of 12.5% to 13.0%. Fair value for the Escrow Share Consideration, the Company’s share price through August 31, 2028, discounted to present value. Significant unobservable inputs for the Escrow Share Consideration include projected Adjusted EBITDA, EBITDA volatility of 25% to 30%, share price volatility of 65.9% to 68.3% and weighted average cost of capital of 12.5% to 13.0%. Increases in projected Adjusted EBITDA would increase the fair value of the earnouts, and decreases in the Company’s share price would increase the fair value of the Escrow Share Consideration. See Note 3 - Business Combination.

The following table presents the changes in the fair value of the Level 3 contingent consideration liabilities:

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

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 9 - 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 ourone 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 September 30, 2026. There were no assets carried at nonrecurring fair value other than goodwill as of December 31, 2025.

Note 7 - Goodwill and Intangible Assets

Goodwill

The following table presents the changes in the carrying amount of goodwill:

Intangible Assets

The components of the intangible assets are as follows:

Amortization expense for intangible assets was $3.9 million and $4.0 million for the three months ended September 30, 2026 and 2025, respectively. Amortization expense for intangible assets was $11.8 million for each of the nine months ended September 30, 2026 and 2025.

Note 8 - 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 9 - 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 intotwo 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 thetwo 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 thetwo 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.

In connection with the repayment of the related East West Bank and Bank of America mortgage term loans on July 29, 2026, the Company terminated the EWB IRS and BOA IRS contracts for a net receipt of $0.3 million, which is included in change in fair value of interest rate swap contracts.

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, which following the Seventh Amendment (see Note 9 - Long-Term Debt) relates to the term loans under the Amended Credit Agreement. 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 loss.

As of September 30, 2026, the Company determined that the fair value of the remaining IRS contract was $0.8 million in an asset 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 inother long-term assets andother long-term liabilities, respectively, on the consolidated balance sheets.

Note 9 - Long-Term Debt

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

(a)The Bank of America real estate term loan was repaid in full on July 29, 2026 in connection with the Seventh Amendment. The remaining balance as of September 30, 2026 relates to an equipment loan collateralized by specific equipment.

(b)The East West Bank real estate term loans were repaid in full on July 29, 2026 in connection with the Seventh Amendment.

(c)Equipment loan secured by the financed equipment assets and has a maturity date in February 2030.

(d)Real estate term loans with a principal balance of $123.6 million as of September 30, 2026 and $96.2 million as of December 31, 2025 are secured by assets held by the Company. The term loans are payable in monthly installments of $0.7 million and mature on July 29, 2036.

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 minimum fixed charge coverage ratio of 1.10 x, tested quarterly, and minimum availability under the revolving credit facility of $12.5 million. As of September 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 forfive 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.

On July 29, 2026, the Company entered into Amendment No. 7 (the “Seventh Amendment”) to its Third Amended and Restated Credit Agreement (as amended, the “Amended Credit Agreement”), which increased the revolving credit facility from $125.0 million to $140.0 million and extended its maturity to July 29, 2031, and increased the real estate term loans from $90.3 million to $125.0 million and extended their maturity to July 29, 2036. The Company used the incremental term loan proceeds to repay $7.1 million of Bank of America and East West Bank mortgage debt and recognized a loss on extinguishment of debt of $0.2 million for the three and nine months ended September 30, 2026.

The Seventh Amendment amended the revolving credit facility and the real estate term loans together. For the Revolving Credit facility, the Revolving Commitments were increased to $140.0 million and reallocated among JPMorgan Chase Bank, N.A., Fifth Third Bank, N.A. and TD Bank, N.A., which joined as a lender, and Wells Fargo Bank, N.A. ceased to be a lender, with its outstanding revolving loans assigned to the continuing and new lenders. In connection with the closing, the Company repaid $26.3 million of outstanding revolving borrowings with term loan proceeds. Revolving borrowings continue to bear interest at one-month SOFR plus a spread based on daily availability. The Company accounted for the revolving credit facility amendment under ASC 470-50 by comparing the borrowing capacity of each lender before and after the amendment: $0.1 million of fees paid to revolving lenders were deferred and, together with the remaining unamortized costs of the continuing lenders, are being amortized over the extended term, and the unamortized costs attributable to Wells Fargo Bank, N.A. of $0.2 million were written off and included in the loss on extinguishment of debt. The amendments to the term loans held by continuing lenders were accounted for as modifications, the term loan funded by TD Bank, N.A. was accounted for as a new borrowing, and the repayment of the mortgage debt was accounted for as an extinguishment.

As of September 30, 2026, the Company was in compliance with its covenants. The outstanding principal balance on the line of credit as of September 30, 2026 was $80.0 million and outstanding letters of credit amounted to $10.9 million leaving access to approximately $49.1 million in additional funds through our $140.0 million line of credit, subject to a borrowing base calculation.

Note 10 - 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 September 30, 2026 and December 31, 2025. As of September 30, 2026,55,602,816 shares of common stock were legally issued, including 1,701,871 shares placed in escrow in connection with the Searay Acquisition (the “Escrow Shares”), which consist of 129,976 newly issued shares and 1,571,895 shares transferred from treasury. Because the Escrow Shares are accounted for as part of a contingent consideration liability (see Note 3 - Business Combination), they are not reflected as issued or outstanding in the condensed consolidated financial statements. Accordingly,55,472,840 shares are presented as issued, which excludes the 129,976 newly issued Escrow Shares, and 53,900,945 shares are presented as outstanding, with the 1,571,895 shares transferred from treasury remaining in treasury stock at cost.

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 (the “Sales Agreement”), 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 September 30, 2026, the Company soldno Shares under the offering. During the nine months ended September 30, 2026 the Company sold 155,000 Shares for cash proceeds of $0.3 million under the offering. On September 17, 2026, the Company terminated the Sales Agreement and the at-the-market offering program, effective September 24, 2026. As a result, the Company suspended and terminated the prospectus supplement, dated September 25, 2025, related to the Company’s common stock issuable pursuant to the terms of the Sales

Agreement (the “ATM Prospectus”). The termination of the Sales Agreement and ATM Prospectus was effective as of September 24, 2026.

Preferred Stock

The Company had authorized 100,000 shares of Series A Participating Preferred Stock, with a par value of $0.001 per share,100,000 shares of Series AA Participating Preferred Stock, with a par value of $0.001 per share, designated in June 2026 in connection with the Rights Agreement described below, and 1,000,000 shares of Preferred Stock, with a par value of $0.001 per share as of September 30, 2026 and December 31, 2025.

The Company hadno preferred stock outstanding as of September 30, 2026 or December 31, 2025.

Stockholder Rights Plan

On June 11, 2026, the Company's Board of Directors declared a dividend distribution ofone 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 12, 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 September 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 September 30, 2026, their issuance had no effect on the Company's condensed consolidated financial statements for the three and nine months ended September 30, 2026.

Note 11 - 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. Potential common shares related to performance-based restricted stock units, restricted stock units and restricted stock awards were excluded from the calculation of EPS for the three and nine months ended September 30, 2026 and 2025, because their effect would have been anti-dilutive. The Rights described in Note 10 - Shareholders' Equity are contingently issuable and were excluded from the computation of diluted EPS for the three and nine months ended September 30, 2026, as the events that would cause the Rights to become exercisable had not occurred as of September 30, 2026.

On August 31, 2026, the Company issued 1,701,871 shares of common stock into escrow in connection with the Searay Acquisition (the “Escrow Shares”; see Note 3 - Business Combination). The Escrow Shares are legally issued and outstanding but are contingently returnable to the Company. Accordingly, they are excluded from the weighted-average number of common shares outstanding used to compute basic earnings per share until the conditions for their release are satisfied. The Escrow Shares are included in diluted earnings per share only if, based on conditions at the end of the reporting period, they would be released to the Sellers and the effect is dilutive, in which case the change in fair value of the related contingent consideration liability is removed from the numerator. As of September 30, 2026, the 20-day volume-weighted average price of the Company’s common stock was below $4.00, the Escrow Share Consideration would have been settled in cash, and no Escrow Shares were included in diluted loss per share.

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

Note 12 - 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, state and foreign 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. Following the Searay Acquisition on August 31, 2026, the Company has operations in Canada, and its income tax provision includes Canadian federal and provincial income taxes.

For the three and nine months ended September 30, 2026, the Company's effective income tax rate of (4.3)% and 1.7%, respectively, differed from the U.S. federal statutory rate of 21% primarily as a result of investment tax credits recognized in the period, partially offset by discrete tax items, permanent differences including non-deductible transaction costs, state income taxes and the higher statutory rate applicable to the Company's Canadian operations. The Company’s tax provision for the nine months ended September 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 nine months ended September 30, 2025, the Company's effective income tax rate of 46.5% and 38.2%, respectively, differed from the U.S. federal statutory rate of 21% primarily as a result of permanent differences and state income taxes, partially offset by tax credits.

In connection with the Searay Acquisition, the Company recorded net deferred tax liabilities of $6.2 million, primarily related to acquired intangible assets, as part of the preliminary purchase price allocation (see Note 3). The income tax amounts included in the purchase price allocation are provisional and may be adjusted during the measurement period.

Note 13 - 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 September 30, 2026 and December 31, 2025 and for the nine months ended September 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 nine months ended September 30, 2026 and 2025, respectively:

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

(b)An equity interest is held bythree 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 nine months ended September 30, 2026 and 2025, respectively:

(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 byone year to September 1, 2026. A third addendum extended the lease by one additional year to September 1, 2027. Rental income was $0.1 million for each of the nine months ended September 30, 2026 and 2025, respectively, which is included in other income, net in the condensed consolidated statements of operations and comprehensive loss.

In connection with the Searay Acquisition, we entered into a lease of a facility located at 6511 Graybar Road, Richmond, British Columbia with JP Searay Holdings Ltd., an entity controlled by Jackie Chi Fai Chan and Chi Kin Philip Chan, who are Sellers and, following the acquisition, employees of the Company. The lease commenced on August 31, 2026, has a term ofeight years and may be terminated by Searay at the end of the fifth year. The operating lease right-of-use asset and lease liability recognized for this lease were $4.6 million as of the Acquisition Date. Lease expense under this lease was $0.1 million for the period from August 31, 2026 through September 30, 2026.

Related Party Balances

Accounts Receivable - Related Parties, Net

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

(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 September 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 September 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 of 2025 to October 2026, and effective October 31, 2026, the Company and Asahi Food Inc. amended the note to further extend the maturity date by six months to April 30, 2027. Interest income was $2,773 and $3,081 for the nine months ended September 30, 2026 and 2025, respectively, which is included in other income, net in the condensed consolidated statements of operations and comprehensive loss.

Accounts Payable - Related Parties

All the accounts payable to related parties are payable upon demand without interest. Below is a summary of accounts payable with related parties recorded as of September 30, 2026 and December 31, 2025, respectively:

Note 14 - 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 September 30, 2026, the Company had 1,120,799 time-based vesting restricted stock units (“RSUs”) unvested, and 1,566,806 performance-based restricted stock units (“PSUs”) unvested,1,790,745 shares of common stock vested and 2,521,650 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”) tofour 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 $0.9 million and $0.6 million for the three months ended September 30, 2026 and 2025, respectively. Stock-based compensation expense was $1.7 million and $1.6 million for the nine months ended September 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 loss.

As of September 30, 2026, there was $4.5 million of total unrecognized compensation cost related to all non-vested outstanding RSUs, PSUs, and RSAs outstanding under the Company’s 2018 Incentive Plan, with a weighted average remaining service period of 1.88 years.

Note 15 - Segment Information

The Company’s business consists ofone operating segment, which is also itsone reportable segment. The Company operates in the United States and, following the Searay Acquisition on August 31, 2026, Canada, and derives revenues by providing sales of food and non-food products to customers. The segment’s customer base consists primarily of Asian restaurants located throughout the United States, as well as retail, wholesale and restaurant customers in Canada and 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, including the results of Searay. 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 nine months ended September 30, 2026 and 2025:

(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 16 - 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.

Other Commitments

As of September 30, 2026, the Company had additional vehicle leases that had not yet commenced which total $2.9 million in future minimum lease payments.