Quarterly Financial Information | NOTE 20 - QUARTERLY FINANCIAL INFORMATION (UNAUDITED) The tables below present unaudited quarterly financial information and the footnotes correspond to the error descriptions in Note 1 - Organization, Business Description and Restatement of Previously Issued Consolidated Financial Statements, except for the following: m. The Company identified an error related to the timing and amount of stock-based compensation for restricted stock awards issued during 2021, impacting the quarterly periods within 2021. n. During the preparation of the September 30, 2021 financial statements, the Company identified errors in its accounting for the January 21, 2021 lease described in Note 12 – Leases as the 273 Lease Agreement. In its original accounting, the Company concluded that the lease was an operating lease and used an incorrect discount rate to calculate the right-of-use asset and obligations under operating lease liabilities balances. The Company subsequently changed the discount rate on the lease and reclassified the lease as a finance lease, as the present value of the future cash flows associated with the lease exceeded substantially all of the fair value of the property. The Company has adjusted the balances associated with the lease from operating lease right-of-use asset to property and equipment, net and from obligations under operating lease liabilities to obligations under finance leases in the quarterly financial statements for March 31, 2021 and June 30, 2021. The following tables summarize the effect of the restatements on each affected financial statement line item as of the dates as indicated, impacting the unaudited condensed consolidated balance sheets. Condensed Consolidated Balance Sheet (In thousands) As Previously Reported Reclass Adjustments As Restated March 31, 2021 Property and equipment, net $ 136,044 $ — $ 5,932 (a) 7,793 (n) $ 149,769 Operating lease right-of-use assets 15,993 — 353 (a) (13,676) (n) 2,670 TOTAL ASSETS 500,798 — 402 501,200 Accounts payable 36,504 — (520) (k) 35,984 Accounts payable - related parties 1,473 — 520 (k) 1,993 Current portion of obligations under finance leases 277 — 1,852 (a) 2,129 Current portion of obligations under operating leases 637 — 62 (a) (7) (n) 692 Accrued expenses and other liabilities 7,362 281 545 (e) 791 (j) 8,979 Obligation under interest rate swap contracts 281 (281) — TOTAL CURRENT LIABILITIES 79,253 — 3,243 82,496 Obligations under finance leases, non-current 704 — 4,210 (a) 7,854 (n) 12,768 Obligations under operating leases, non-current 15,460 — 303 (a) (13,764) (n) 1,999 TOTAL LIABILITIES 234,247 1,846 236,093 Accumulated deficit (325,627) — (142) (a) (545) (e) (791) (j) 34 (n) (327,071) TOTAL SHAREHOLDERS' EQUITY ATTRIBUTABLE TO HF FOODS GROUP INC. 261,957 — (1,444) 260,513 TOTAL SHAREHOLDERS' EQUITY 266,551 — (1,444) 265,107 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 500,798 — 402 501,200 Condensed Consolidated Balance Sheet (In thousands) As Previously Reported Reclass Adjustments As Restated June 30, 2021 Property and equipment, net $ 134,756 $ — $ 5,514 (a) 7,728 (n) 147,998 Operating lease right-of-use assets 16,326 — 487 (a) (13,583) (n) 3,230 TOTAL ASSETS 507,221 — 146 507,367 Accounts payable 41,669 — (408) (k) 41,261 Accounts payable - related parties 1,957 — 408 (k) 2,365 Current portion of obligations under finance leases 273 — 1,868 (a) 2,141 Current portion of obligations under operating leases 610 — 179 (a) (31) (n) 758 Accrued expenses and other liabilities 5,123 393 700 (e) 830 (j) 7,046 Obligation under interest rate swap contracts 393 (393) — — TOTAL CURRENT LIABILITIES 89,959 — 3,546 93,505 Obligations under finance leases, non-current 631 — 3,839 (a) 7,887 (n) 12,357 Obligations under operating leases, non-current 15,931 — 252 (a) (13,745) (n) 2,438 TOTAL LIABILITIES 242,242 — 1,779 244,021 Accumulated deficit (322,031) — (137) (a) (700) (e) (830) (j) 34 (n) (323,664) TOTAL SHAREHOLDERS' EQUITY ATTRIBUTABLE TO HF FOODS GROUP INC. 261,697 — (1,633) 260,064 TOTAL SHAREHOLDERS' EQUITY 264,979 — (1,633) 263,346 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 507,221 — 146 507,367 Condensed Consolidated Balance Sheet (In thousands) As Previously Reported Reclass Adjustments As Restated September 30, 2021 Property and equipment, net $ 141,740 $ — $ 5,197 (a) $ 146,937 Operating lease right-of-use assets 2,551 — 459 (a) 3,010 TOTAL ASSETS 514,502 — 5,656 520,158 Accounts payable 42,044 — (450) (k) (180) (l) 41,414 Accounts payable - related parties 2,500 — 450 (k) 2,950 Current portion of obligations under finance leases 270 — 1,879 (a) 2,149 Current portion of obligations under operating leases 687 — 112 (a) 799 Accrued expenses and other liabilities 3,841 341 854 (e) 869 (j) 5,905 Obligation under interest rate swap contracts 341 (341) — — TOTAL CURRENT LIABILITIES 97,803 — 3,534 101,337 Obligations under finance leases, non-current 8,449 — 3,482 (a) 11,931 Obligations under operating leases, non-current 2,011 — 222 (a) 2,233 TOTAL LIABILITIES 241,170 — 7,238 248,408 Additional paid-in capital 583,929 — 169 (m) 584,098 Accumulated deficit (314,179) — (39) (a) (854) (e) (869) (j) (169) (m) (316,110) TOTAL SHAREHOLDERS' EQUITY ATTRIBUTABLE TO HF FOODS GROUP INC. 269,755 — (1,762) 267,993 Noncontrolling interest 3,577 180 (l) 3,757 TOTAL SHAREHOLDERS' EQUITY 273,332 — (1,582) 271,750 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 514,502 — 5,656 520,158 Condensed Consolidated Balance Sheet (In thousands) As Previously Reported Adjustments As Restated March 31, 2020 Property and equipment, net $ 139,941 $ 6,208 (a) $ 146,149 Operating lease right-of-use assets 884 626 (a) 1,510 TOTAL ASSETS 521,412 6,834 528,246 Accounts payable 32,456 (375) (f) 32,081 Current portion of obligations under finance leases 288 1,518 (a) 1,806 Current portion of obligations under operating leases 333 181 (a) 514 Accrued expenses and other liabilities 2,960 98 (e) 375 (f) 673 (j) 4,106 TOTAL CURRENT LIABILITIES 103,507 2,470 105,977 Obligations under finance leases, non-current 980 4,881 (a) 5,861 Obligations under operating leases, non-current 550 480 (a) 1,030 TOTAL LIABILITIES 253,567 7,831 261,398 Accumulated deficit (324,060) (226) (a) (673) (e) (98) (j) (325,057) TOTAL SHAREHOLDERS' EQUITY ATTRIBUTABLE TO HF FOODS GROUP INC. 263,524 (997) 262,527 TOTAL SHAREHOLDERS' EQUITY 267,845 (997) 266,848 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 521,412 6,834 528,246 Condensed Consolidated Balance Sheet (In thousands) As Previously Reported Reclass Adjustments As Restated June 30, 2020 Property and equipment, net $ 139,273 $ — $ 6,159 (a) $ 145,432 Operating lease right-of-use assets 785 — 592 (a) 1,377 TOTAL ASSETS 496,278 — 6,751 503,029 Accounts payable 30,373 — (639) (f) 29,734 Current portion of obligations under finance leases 293 — 1,604 (a) 1,897 Current portion of obligations under operating leases 300 — 178 (a) 478 Accrued expenses and other liabilities 3,530 1,337 195 (e) 639 (f) 699 (j) 6,400 Obligation under interest rate swap contracts 1,337 (1,337) — — TOTAL CURRENT LIABILITIES 85,565 — 2,676 88,241 Obligations under finance leases, non-current 904 — 4,712 (a) 5,616 Obligations under operating leases, non-current 486 — 439 (a) 925 TOTAL LIABILITIES 232,747 — 7,827 240,574 Accumulated deficit (328,119) — (182) (a) (195) (e) (699) (j) (329,195) TOTAL SHAREHOLDERS' EQUITY ATTRIBUTABLE TO HF FOODS GROUP INC. 259,465 — (1,077) 258,388 TOTAL SHAREHOLDERS' EQUITY 263,531 — (1,077) 262,454 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 496,278 — 6,751 503,029 Condensed Consolidated Balance Sheet (In thousands) As Previously Reported Reclass Adjustments As Restated September 30, 2020 Property and equipment, net $ 138,107 $ — $ 5,798 (a) $ 143,905 Operating lease right-of-use assets 694 — 554 (a) 1,248 TOTAL ASSETS 489,889 — 6,352 496,241 Accounts payable 33,685 — (658) (f) 33,027 Current portion of obligations under finance leases 293 — 1,629 (a) 1,922 Current portion of obligations under operating leases 264 — 175 (a) 439 Accrued expenses and other liabilities 5,212 1,357 293 (e) 658 (f) 726 (j) 8,246 Obligation under interest rate swap contracts 1,357 (1,357) — — TOTAL CURRENT LIABILITIES 81,974 — 2,823 84,797 Obligations under finance leases, non-current 833 — 4,295 (a) 5,128 Obligations under operating leases, non-current 430 — 399 (a) 829 TOTAL LIABILITIES 226,754 — 7,517 234,271 Accumulated deficit (328,743) — (146) (a) (293) (e) (726) (j) (329,908) TOTAL SHAREHOLDERS' EQUITY ATTRIBUTABLE TO HF FOODS GROUP INC. 258,841 — (1,165) 257,676 TOTAL SHAREHOLDERS' EQUITY 263,134 — (1,165) 261,969 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 489,889 — 6,352 496,241 The following tables summarize the effect of the restatements on each affected financial statement line item for the periods ended as indicated, impacting the consolidated statements of changes in shareholders' equity. Restated amounts are computed independently each quarter; therefore, the sum of the quarterly amounts may not equal the total amount for the respective year due to rounding. Common Stock Additional Paid-in Capital Accumulated Deficit Total Shareholders’ Noncontrolling Total (In thousands, except share data) Number of Amount As Previously Reported Balance at January 1, 2021 51,913,411 $ 5 $ 587,579 $ (327,150) $ 260,434 $ 4,367 $ 264,801 Net income — — — 1,523 1,523 300 1,823 Distribution to shareholders — — — — — (73) (73) Balance at March 31, 2021 51,913,411 5 587,579 (325,627) 261,957 4,594 266,551 Restatement Impacts Balance at January 1, 2021 — — — (1,279) (1,279) — (1,279) Net (loss) income — — — (165) (165) — (165) Distribution to shareholders — — — — — — — Balance at March 31, 2021 — — — (1,444) (1,444) — (1,444) As Restated Balance at January 1, 2021 (as restated) 51,913,411 5 587,579 (328,429) 259,155 4,367 263,522 Net income (as restated) — — — 1,358 1,358 300 1,658 Distribution to shareholders — — — — — (73) (73) Balance at March 31, 2021 (as restated) 51,913,411 $ 5 $ 587,579 $ (327,071) $ 260,513 $ 4,594 $ 265,107 Common Stock Additional Paid-in Capital Accumulated Deficit Total Shareholders’ Noncontrolling Total (In thousands, except share data) Number of Amount As Previously Reported Balance at March 31, 2021 51,913,411 $ 5 $ 587,579 $ (325,627) $ 261,957 $ 4,594 $ 266,551 Net (loss) income — — — 3,596 3,596 (91) 3,505 Acquisition of noncontrolling interest — — (3,856) — (3,856) (1,144) (5,000) Distribution to shareholders — — — — — (77) (77) Balance at June 30, 2021 51,913,411 5 583,723 (322,031) 261,697 3,282 264,979 Restatement Impacts Balance at March 31, 2021 — — — (1,444) (1,444) — (1,444) Net (loss) income — — — (189) (189) — (189) Acquisition of noncontrolling interest — — — — — — — Distribution to shareholders — — — — — — — Balance at June 30, 2021 — — — (1,633) (1,633) — (1,633) As Restated Balance at March 31, 2021 (as restated) 51,913,411 5 587,579 (327,071) 260,513 4,594 265,107 Net (loss) income (as restated) — — — 3,407 3,407 (91) 3,316 Acquisition of noncontrolling interest — — (3,856) — (3,856) (1,144) (5,000) Distribution to shareholders — — — — — (77) (77) Balance at June 30, 2021 (as restated) 51,913,411 $ 5 $ 583,723 $ (323,664) $ 260,064 $ 3,282 $ 263,346 Common Stock Additional Paid-in Capital Accumulated Deficit Total Shareholders’ Noncontrolling Total (In thousands, except share data) Number of Amount As Previously Reported Balance at June 30, 2021 51,913,411 $ 5 $ 583,723 $ (322,031) $ 261,697 $ 3,282 $ 264,979 Net income — — — 7,852 7,852 357 8,209 Distribution to shareholders — — — — — (62) (62) Stock-based compensation — — 206 — 206 — 206 Balance at September 30, 2021 51,913,411 5 583,929 (314,179) 269,755 3,577 273,332 Restatement Impacts Balance at June 30, 2021 — — — (1,633) (1,633) — (1,633) Net (loss) income — — — (298) (298) — (298) Distribution to shareholders — — — — — 180 180 Stock-based compensation — — 169 — 169 — 169 Balance at September 30, 2021 — — 169 (1,931) (1,762) 180 (1,582) As Restated Balance at June 30, 2021 (as restated) 51,913,411 5 583,723 (323,664) 260,064 3,282 263,346 Net income (as restated) — — — 7,554 7,554 357 7,911 Distribution to shareholders — — — — — 118 118 Stock-based compensation — — 375 — 375 — 375 Balance at September 30, 2021 (as restated) 51,913,411 $ 5 $ 584,098 $ (316,110) $ 267,993 $ 3,757 $ 271,750 Common Stock Treasury Stock Additional Paid-in Capital Accumulated Deficit Total Shareholders’ Noncontrolling Total (In thousands, except share data) Number of Amount Number of Amount As Previously Reported Balance at January 1, 2020 53,050,211 $ 5 (905,115) $ (12,038) $ 599,617 $ 15,824 $ 603,408 $ 4,249 $ 607,657 Net (loss) income — — — — — (339,884) (339,884) 197 (339,687) Distribution to shareholders — — — — — — — (125) (125) Balance at March 31, 2020 53,050,211 5 (905,115) (12,038) 599,617 (324,060) 263,524 4,321 267,845 Restatement Impacts Balance at January 1, 2020 — — — — — (741) (741) — (741) Net income (loss) — — — — — (256) (256) — (256) Distribution to shareholders — — — — — — — — — Balance at March 31, 2020 — — — — — — (997) (997) — (997) As Restated Balance at January 1, 2020 (as restated) 53,050,211 5 (905,115) (12,038) 599,617 15,083 602,667 4,249 606,916 Net (loss) income — — — — — (340,140) (340,140) 197 (339,943) Distribution to shareholders — — — — — — — (125) (125) Balance at March 31, 2020 (as restated) 53,050,211 $ 5 (905,115) — $ (12,038) — $ 599,617 $ (325,057) $ 262,527 $ 4,321 $ 266,848 Common Stock Treasury Stock Additional Paid-in Capital Accumulated Deficit Total Shareholders’ Noncontrolling Total (In thousands, except share data) Number of Amount Number of Amount As Previously Reported Balance at March 31, 2020 53,050,211 $ 5 (905,115) $ (12,038) $ 599,617 $ (324,060) $ 263,524 $ 4,321 $ 267,845 Net loss — — — — — (4,059) (4,059) (255) (4,314) Distribution to shareholders — — — — — — — — — Balance at June 30, 2020 53,050,211 5 (905,115) (12,038) 599,617 (328,119) 259,465 4,066 263,531 Restatement Impacts Balance at March 31, 2020 — — — — — (997) (997) — (997) Net (loss) income — — — — — (80) (80) — (80) Distribution to shareholders — — — — — — — — — Balance at June 30, 2020 — — — — — (1,077) (1,077) — (1,077) As Restated Balance at March 31, 2020 (as restated) 53,050,211 5 (905,115) (12,038) 599,617 (325,057) 262,527 4,321 266,848 Net loss (as restated) — — — — — (4,139) (4,139) (255) (4,394) Distribution to shareholders — — — — — — — — — Balance at June 30, 2020 (as restated) 53,050,211 $ 5 (905,115) $ (12,038) $ 599,617 $ (329,196) $ 258,388 $ 4,066 $ 262,454 Common Stock Treasury Stock Additional Paid-in Capital Accumulated Deficit Total Shareholders’ Noncontrolling Total (In thousands, except share data) Number of Amount Number of Amount As Previously Reported Balance at June 30, 2020 53,050,211 $ 5 (905,115) $ (12,038) $ 599,617 $ (328,119) $ 259,465 $ 4,066 $ 263,531 Net (loss) income — — — — — (624) (624) 227 (397) Distribution to shareholders — — — — — — — — — Balance at September 30, 2020 53,050,211 5 (905,115) (12,038) 599,617 (328,743) 258,841 4,293 263,134 Restatement Impacts Balance at June 30, 2020 — — — — — (1,077) (1,077) — (1,077) Net (loss) income — — — — — (88) (88) — (88) Distribution to shareholders — — — — — — — — — Balance at September 30, 2020 — — — — — (1,165) (1,165) — (1,165) As Restated Balance at June 30, 2020 (as restated) 53,050,211 5 (905,115) (12,038) 599,617 (329,196) 258,388 4,066 262,454 Net (loss) income — — — — — (712) (712) 227 (485) Distribution to shareholders — — — — — — — — — Balance at September 30, 2020 (as restated) 53,050,211 $ 5 (905,115) $ (12,038) $ 599,617 $ (329,908) $ 257,676 $ 4,293 $ 261,969 Common Stock Additional Paid-in Capital Accumulated Deficit Total Shareholders’ Noncontrolling Total (In thousands, except share data) Number of Amount As Previously Reported Balance at January 1, 2019 22,167,486 $ 2 $ 22,921 $ 10,434 $ 33,357 $ 1,104 $ 34,461 Net income — — — 1,673 1,673 121 1,794 Distribution to shareholders — — — — — — — Balance at March 31, 2019 22,167,486 2 22,921 12,107 35,030 1,225 36,255 Restatement Impacts Balance at January 1, 2019 — — — (325) (325) — (325) Net (loss) income — — — (555) (555) — (555) Distribution to shareholders — — — — — — — Balance at March 31, 2019 — — — (880) (880) — (880) As Restated Balance at January 1, 2019 (as restated) 22,167,486 2 22,921 10,109 33,032 1,104 34,136 Net income — — — 1,118 1,118 121 1,239 Distribution to shareholders — — — — — — — Balance at March 31, 2019 (as restated) 22,167,486 $ 2 $ 22,921 $ 11,227 $ 34,150 $ 1,225 $ 35,375 Common Stock Additional Paid-in Capital Accumulated Deficit Total Shareholders’ Noncontrolling Total (In thousands, except share data) Number of Amount As Previously Reported Balance at March 31, 2019 22,167,486 $ 2 $ 22,921 $ 12,107 $ 35,030 $ 1,225 $ 36,255 Net income — — — 1,023 1,023 38 1,061 Distribution to shareholders — — — — — (90) (90) Balance at June 30, 2019 22,167,486 2 22,921 13,130 36,053 1,173 37,226 Restatement Impacts Balance at March 31, 2019 — — — (880) (880) — (880) Net (loss) income — — — 8 8 — 8 Distribution to shareholders — — — — — — — Balance at June 30, 2019 — — — (872) (872) — (872) As Restated Balance at March 31, 2019 (as restated) 22,167,486 2 22,921 11,227 34,150 1,225 35,375 Net income — — — 1,031 1,031 38 1,069 Distribution to shareholders — — — — — (90) (90) Balance at June 30, 2019 (as restated) 22,167,486 $ 2 $ 22,921 $ 12,258 $ 35,181 $ 1,173 $ 36,354 Common Stock Treasury Stock Additional Paid-in Capital Accumulated Deficit Total Shareholders’ Noncontrolling Total (In thousands, except share data) Number of Amount Number of Amount As Previously Reported Balance at June 30, 2019 22,167,486 $ 2 — $ — $ 22,921 $ 13,130 $ 36,053 $ 1,173 $ 37,226 Net income — — — — — 1,348 1,348 181 1,529 Exercise of stock options 182,725 — — — — — — — — Treasury stock — — (905,115) (12,038) (12,038) — (24,076) — (24,076) Distribution to shareholders — — — — — — — (90) (90) Balance at September 30, 2019 22,350,211 2 (905,115) (12,038) 10,883 14,478 13,325 1,264 14,589 Restatement Impacts Balance at June 30, 2019 — — — — — (872) (872) — (872) Net (loss) income — — — — — 39 39 — 39 Exercise of stock options — — — — — — — — — Treasury stock — — — — — — — — — Distribution to shareholders — — — — — — — — — Balance at September 30, 2019 — — — — — (833) (833) — (833) As Restated Balance at June 30, 2019 (as restated) 22,167,486 2 — — 22,921 12,258 35,181 1,173 36,354 Net income — — — — — 1,387 1,387 181 1,568 Exercise of stock options 182,725 — — — — — — — — Treasury stock — — (905,115) (12,038) (12,038) — (24,076) — (24,076) Distribution to shareholders — — — — — — — (90) (90) Balance at September 30, 2019 (as restated) 22,350,211 $ 2 (905,115) — $ (12,038) — $ 10,883 $ 13,645 $ 12,492 $ 1,264 $ 13,756 |