Company: HFFG
Filing Date: 2025-05-12
Form Type: 10-Q
Source: 0001680873-25-000036
Chunk: 9

Company: HF Foods Group Inc.
Filing Date: 2025-05-12
Form: 10-Q
Item: Item 8
Chunk 9
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 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 condensed consolidated statements of operations and comprehensive loss.

As of March 31, 2025, the Company determined that the fair values of the IRS contracts were $0.4 million in an asset position and $1.0 million in a liability position. As of December 31, 2024, the fair values of the IRS contracts were $0.5 million in an asset position and none in a liability position. The Company includes these in other long-term assets and other long-term liabilities, respectively, on the condensed consolidated balance sheets. 

Note 8 - DebtLong-term debt at March 31, 2025 and December 31, 2024 is summarized as follows:($ in thousands)Bank NameMaturityInterest Rate at March 31, 2025March 31, 2025December 31, 2024Bank of America (a)October 2026 - December 20294.34% - 6.91%$2,120 $2,176 East West Bank (b)August 2027 - September 20296.61% - 8.00%5,472 5,518 JPMorgan Chase (c)January 20306.30%99,991 101,255 Total debt, principal amount107,583 108,949 Less: debt issuance costs(206)(215)Total debt, carrying value107,377 108,734 Less: current portion(5,410)(5,410)Long-term debt$101,967 $103,324 _______________(a)Loan balance consists of real estate term loan and equipment term loan