[8-K] HF Foods Group Inc. Reports Material Event

Rhea-AI Filing Summary

Educational Development Corporation (NASDAQ: EDUC) filed its Form 10-Q for the quarter ended 31 May 2025. Net revenues fell 29% year-over-year to $7.1 million as average active PaperPie Brand Partners dropped 42% to 7,700. Product discounts and shipping promotions further pressured sales and gross margin, which declined to 58.2% of revenue (65% prior-year). Despite the contraction, aggressive cost controls—most notably a 38% reduction in operating expenses—narrowed the quarterly net loss to $1.1 million (-$0.13 per share) from $1.3 million in the comparable 2024 period.

Cash generation and balance-sheet moves: Operating cash flow turned positive at $1.4 million, helped by a $2.6 million inventory draw-down. Total inventory (current + non-current) remains sizable at $42.0 million but is down 5.9% sequentially. Cash, cash equivalents and restricted cash increased to $1.8 million, while total debt stands at $30.5 million (including $4.2 million on the revolving line and $26.4 million of term loans). All bank borrowings mature within 12 months (revolver: 11 July 2025; term loans: 19 September 2025) and now carry higher rates (SOFR+6% on the revolver).

Real-estate monetisation plan: The company signed a definitive agreement on 14 May 2025 to sell its 402,000 sq ft Tulsa “Hilti Complex” for $35.15 million, assigning existing tenant leases and entering a 10-year triple-net lease for its own space at $8.62 psf. Closing is expected within 10 days after a due-diligence period ending 11 September 2025. Proceeds are earmarked to fully retire the revolving loan and both term loans. The asset is carried at $19.3 million; no gain or loss will be recorded until closing.

Supplier & concentration risk: Usborne Publishing products generated 44% of PaperPie revenue, yet EDUC failed to meet minimum purchase volumes or provide the required letter of credit, giving Usborne the right (not yet exercised) to terminate the distribution agreement and withholding a $1.0 million rebate. Total Usborne inventory is $22.6 million.

Going-concern disclosure: Management states that short debt maturities, recurring losses, and uncertainty over lender support together “raise substantial doubt” about the company’s ability to continue as a going concern. The plan relies on (1) successful completion of the Hilti Complex sale, (2) continued inventory liquidation, and (3) rebuilding Brand Partner ranks.

Segment results:

• PaperPie: Revenue $6.06 million (-32%); operating income $0.46 million; margin 7.6%.
• Publishing: Revenue $1.05 million (-4%); operating income $0.21 million; margin 19.9%.

Key metrics:

• Gross margin $4.1 million vs $6.5 million YoY.
• Interest expense $0.50 million (-17%).
• Effective tax benefit rate 25.8%.
• Available revolver capacity $0.55 million (after required step-down).

Insights

Equity Research Analyst

TL;DR – Revenue slide continues, but expense cuts and cash from inventory liquidation cushion losses; equity story now hinges on closing the real-estate sale.

The 29% top-line decline is severe, driven by a shrinking Brand Partner base and heavier discounting. Yet management’s swift cost actions swung operating cash flow positive and narrowed the loss. The pending $35 million asset sale is transformative: it would eliminate bank debt and interest burden, restoring flexibility. Execution risk is high—failure to close before loan maturities would likely force dilutive financing or covenant breaches. On balance, the quarter is operationally mixed but strategically pivotal. Impact: neutral/slightly negative until the property deal closes.

Credit Risk Specialist

TL;DR – Imminent debt maturities, supplier uncertainty, and going-concern warning outweigh near-term cash gains.

All $30 million of bank debt matures within 12 months; the revolver rate has jumped to double-digit territory and availability is under $0.6 million. The lender has repeatedly extended deadlines but offers no commitment beyond July 2025. The Usborne contract risk threatens 44% of division revenue and $22 million of inventory value. Positive operating cash flow is encouraging but largely inventory-driven and therefore unsustainable. Credit profile remains high-risk pending property sale execution.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 1, 2025

HF FOODS GROUP INC.

(Exact name of registrant as specified in its charter)

Delaware  State or other Jurisdiction of     incorporation )   001-38180 (Commission File No.) 81-2717873 (IRS Employer Identification No)

6325 South Rainbow Boulevard, Suite 420 Las Vegas, Nevada (Address of principal executive offices)   89118 (Zip Code)

Registrant’s telephone number, including area code: (888)-905-0998

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class			Trading Symbol			Name of each exchange on which registered
Common Stock, $0.0001 par value			HFFG			Nasdaq Capital Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company     ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Item 5.02.    Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Adoption of Amended and Restated Executive Severance Plan

On July 1, 2025, the board of directors (the “Board”) of HF Foods Group Inc. (the “Company”) adopted and approved the Amended and Restated HF Foods Group Inc. Severance Plan (the “Severance Plan”), effective July 1, 2025, which amends and restates, in its entirety, the severance plan previously approved by the Board of the Company on December 30, 2022. The Severance Plan is for employees of the Company at the level of Vice President or above, including the Company’s Senior Vice Presidents ("SVPs") and other executive officers. Generally, the Severance Plan provides for severance payments to certain executives and employees eligible to participate on a termination of employment without “cause” (as defined in the Severance Plan) or by the individual for “good reason” (as defined in the Severance Plan), with different severance payments depending on the title of the individual and whether or not the termination occurring during the period beginning six months before through 12 months after a “change in control” (as defined in the Severance Plan).

The changes effected by the amendment and restatement of the Severance Plan were , among other things:

•Removing an exception from a “change in control” event where a majority of the members of the board of directors of the entity resulting from a “business combination” (as defined in the Severance Plan) were members of the “incumbent board” (as defined in the Severance Plan) at the time of the initial agreement or action providing for such business combination.

•Except for employees classified as Senior Vice Presidents or Vice Presidents (as described in Exhibit C to the Severance Plan), severance payment timing for eligible employees is revised from a payment over a series of monthly installments to a lump sum payment within 60 days following a qualifying termination, subject to the execution and non-revocation of a release of claims.

•Eligibility for an additional pro rata target bonus subject to a performance review for eligible "key executives" (as defined in Exhibit B to the Severance Plan) as a severance benefit (in Exhibit B to the Severance Plan)

The above description is a summary of the terms of the amendments to the Severance Plan and is subject to and qualified in its entirety by the terms of the Severance Plan and the Form Letter Agreement for the Severance Plan, copies of which are attached hereto as Exhibit 10.1 and Exhibit 10.2, respectively, to this Current Report on Form 8-K and incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.						Description
10.1						Amended and Restated HF Foods Group Inc. Severance Plan.
10.2						Form Key Executive Letter Agreement for the Severance Plan.
104						Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

			HF FOODS GROUP INC.
Date: July 7, 2025			/s/ Cindy Yao
			Cindy Yao
			Chief Financial Officer