Company: HFFG
Filing Date: 2025-03-05
Form Type: CORRESP
Source: 0001680873-25-000004
Chunk: 1

Company: HF Foods Group Inc.
Filing Date: 2025-03-05
Form: CORRESP
Chunk 1
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 of its response. As disclosed in Note 16 - Commitments and Contingencies to the consolidated financial statements included in the Form 10-K for the Fiscal Year Ended December 31, 2023, the $10.0 million resulting from the settlement was recorded in distribution, selling, and administrative expense in the consolidated statement of operations as a recovery of previously recorded expenses related to the litigation. Expenses related to the litigation were incurred during the current period and prior periods and exceeded the $10.0 million recovery. The Company considered non-GAAP C&DI 100.03 which states that a non-GAAP measure can be misleading if the measure excludes charges, but does not exclude any gains. As the litigation expenses incurred were not excluded from our computation of Adjusted EBITDA in the current or prior periods, we did not adjust for the recovery of the expenses in our computation of Adjusted EBITDA.

In future filings, the Company will revise its presentation of Adjusted EBITDA to exclude the $10.0 million recovery and will include the following disclosure in its table reconciling net (loss) income to Adjusted EBITDA:

As discussed in Note 17 - Commitments and Contingencies to the consolidated financial statements in this Annual Report on Form 10-K, the Company recovered approximately $10.0 million related to the Settlement Agreement. The Company accounted for the settlement as a recovery of previously recorded expenses related to the litigation. The Company has adjusted for the $10.0 million recovery.

Consolidated Statements of Cash Flows, page 43

2. We note your response to our prior comment 2. Your book overdraft should not result in a financing activity on the cash flow statement because the transaction relates only

Securities and Exchange Commission

March 5, 2025

Page 3

to a payment to a vendor, which is an operating activity. This is not similar to a bank overdraft which results in a borrowing from the bank, a financing activity. Your transaction does not appear to meet the definition of a financing activity. Refer to ASC 230-10-45-15, 45-17, and the glossary of ASC 230. Please revise accordingly.

Response: The Company advises the Staff that in order to manage and track vendor payments, each of the Company’s distribution centers utilize zero balance bank accounts which are ultimately attached to the Company’s line of credit via a sweep structure. The zero balance accounts receive funds from the line of credit when needed to cover