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

Company: HF Foods Group Inc.
Filing Date: 2025-05-12
Form: 10-Q
Item: Item 8
Chunk 12
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,737,650 52,155,968 Effect of dilutive securities— — Weighted-average dilutive shares outstanding52,737,650 52,155,968 Loss per common share:Basic$(0.03)$(0.01)Diluted$(0.03)$(0.01)

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Note 10 - 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 March 31, 2025, the Company had one subsidiary outside the U.S. However, the foreign subsidiary did not record any activity as of March 31, 2025. As such, no foreign income tax was recorded.For the three months ended March 31, 2025 and 2024, the Company’s effective income tax rate of 37.9% and 24.5%, respectively, differed from the federal statutory tax rate primarily as a result of permanent differences and state income taxes, partially offset by tax credits.

Note 11 - Related Party TransactionsThe 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 10% shareholdings of the Company. Mr. Xiao Mou Zhang (“Mr. Zhang”), the former Chief Executive Officer through October 24, 2024 and current Director on the board of directors of the Company, and certain of his immediate family members 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. Mr. Zhang does not have any involvement in negotiations with any of the above-mentioned related parties. 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 10% of the outstanding shares of the Company’s common stock, and