Company: HFFG
Filing Date: 2025-05-12
Form Type: 10-Q
Source: 0001680873-25-000036
Chunk: 14

Company: HF Foods Group Inc.
Filing Date: 2025-05-12
Form: 10-Q
Item: Item 8
Chunk 14
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 warehouse lease from Yoan Chang Trading Inc. under an operating lease agreement which expired on December 31, 2020. In February 2021, the Company executed a new five-year operating lease agreement with Yoan Chang Trading Inc., effective January 1, 2021 and expiring on December 31, 2025. Rent expense was $0.1 million for the three months ended March 31, 2025 and 2024, respectively, which is included in distribution, selling and administrative expenses in the condensed consolidated statements of operations and comprehensive loss. Beginning 2014, the Company leased a warehouse to Asahi Food, Inc. under a commercial lease agreement which was rescinded March 1, 2020. A new commercial lease agreement for a period of one year was entered into, expiring February 28, 2021, with a total of four renewal periods with each term being one year. The lease term was extended by an addendum dated  September 1, 2023, which extended the lease through September 1, 2025. Rental income was $36 thousand for the three months ended March 31, 2025 and 2024, respectively, which is included in other expense (income), net in the condensed consolidated statements of operations and comprehensive loss. Related Party BalancesAccounts Receivable - Related Parties, NetBelow is a summary of accounts receivable with related parties recorded as of March 31, 2025 and December 31, 2024, respectively:(In thousands)March 31, 2025December 31, 2024(a)ABC Food Trading, LLC$189 $155 (b)Asahi Food, Inc.146 84 Total$335 $239 _______________(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 additional allowance is deemed necessary as of March 31, 2025 and December 31, 2024.

15

Line of Credit Note - Related PartiesThe Company issued a $51,000 line of credit note to Asahi Food, Inc. on November 1, 2024, which is outstanding at March 31, 2025 and included in other current assets in the consolidated balance sheet. Interest