Company: HFFG
Filing Date: 2025-03-17
Form Type: 10-K
Source: 0001680873-25-000006
Chunk: 111

Company: HF Foods Group Inc.
Filing Date: 2025-03-17
Form: 10-K
Item: Item 8
Chunk 111
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 its subsidiary, HFFI, and as such, the NOL balances and valuation allowance associated with this entity were written off during the year.In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. During the year ended December 31, 2024, management concluded that it was more likely than not that the Company would be able to realize the benefit of the deferred tax assets in the future. We based this conclusion on historical and projected operating performance, as well as our expectation that our operations will generate sufficient taxable income in future periods to realize the tax benefits associated with the deferred tax assets. As of December 31, 2023, management established a valuation allowance of $0.7 million against certain deferred taxes attributable to the assets of the Company’s subsidiary, HFFI. In 2024, the Company dissolved its subsidiary, HFFI. As such, the deferred tax balances and corresponding valuation allowance associated with this entity were written off during the year. The Company will continue to assess the need for a valuation allowance in the future by evaluating both positive and negative evidence that may exist.

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Unrecognized Tax BenefitsYear Ended December 31,(In thousands)202420232022Total unrecognized tax benefits on January 1,$106 $350 $752 Decrease related to positions taken on items from prior years(106)(244)(402)Increase related to positions taken in the current year— — — Total unrecognized tax benefits on December 31,$— $106 $350 The Company has no unrecognized tax benefits as of December 31, 2024. Due to the statute of limitations expiring, the unrecognized tax liability for the tax year ended December 31, 2020, was reversed, which was recorded as an income tax benefit on the consolidated statements of operations and comprehensive income (loss), in the amount of $0.1 million as of December 31, 2024. As of December 31, 2024 and 2023, the Company had no accrued penalties and $17,000, respectively, and no accrued interest and $10,000, respectively. During the year ended December 31, 2024, the Company reversed accrued penalties and accrued interest of $17,000 and $10,000