View:
United States securities and exchange commission logo
November 23, 2021
Kong Hian Lee
Chief Financial Officer
HF Foods Group Inc.
19319 Arenth Avenue
City of Industry, CA 91748
Re: HF Foods Group Inc.
Form 10-K for the
Year Ended December 31, 2020
Filed March 16,
2021
Form 10-Q for the
Fiscal Quarter Ended June 30, 2021
Filed August 9,
2021
File No. 001-38180
Dear Mr. Lee:
We have limited our review of your filing to the financial
statements and related
disclosures and have the following comments. In some of our comments, we
may ask you to
provide us with information so we may better understand your disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 10-K for the Year Ended December 31, 2020
HF Foods Group Consolidated Financial Statements for the Years Ended
December 31, 2020 and
2019
Notes to Consolidated Financial Statements
Note 7. Business Combination with B&R Global, page 60
1. You state HF Group is
considered both the legal and accounting acquirer of B&R Global
because there was no
change in control in connection with this business combination.
Yet, on page 3 you
state immediately after the business combination B&R Global
stockholders owned
approximately 58.9% of HF Group. Please reconcile these two
statements for us.
Kong Hian Lee
FirstName LastNameKong Hian Lee
HF Foods Group Inc.
Comapany 23,
November NameHF
2021 Foods Group Inc.
November
Page 2 23, 2021 Page 2
FirstName LastName
2. Given in the business combination that (i) B&R Global stockholders
owned a majority of
HF Group, (ii) B&R Global's CEO became co-CEO and (iii) the amount of
B&R Global's
assets and revenue was much larger than those of HF Group, please
explain to us how you
concluded that HF Group was the accounting acquirer in the business
combination.
Form 10-Q for the Fiscal Quarter Ended June 30, 2021
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Results of Operations for the Three Months Ended June 30, 2021 and 2020
Sales and Gross Profit, page 39
3. You refer to an inflationary environment and the continuing impact on
newer sourced
product cost in the discussion of "Gross Profit" for the three and
nine months ended
periods. Please tell us and disclose (i) what you mean by "better
management in
procurement and sales operations" in regard to inflation, (ii) the
impact inflation had on
your costs of revenue and any consequential impact on the prices for
your products, and
(iii) to the extent material, whether inflation is a known trend that
you reasonably expect
will impact your future gross profit. Refer to the introductory
paragraph of Item 303(c)
and (b)(2)(ii) of Regulation S-K and Release Nos. 33-6835 and 33-8350
for guidance.
EBITDA and Adjusted EBITDA, page 44
4. You disclose the adjustment for "non-recurring expenses" represents
legal fees related
to class action lawsuits and a SEC investigation. Based on your
disclosures it appears
these expenses are recurring and therefore the adjustment does not
comply with Item
10(e)(1)(ii)(B) of Regulation S-K. Also refer to 102.03 of staff's
"Non-GAAP Financial
Measures" Compliance and Disclosure Interpretations for guidance.
Please revise your
presentation as appropriate.
In closing, we remind you that the company and its management are
responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review,
comments, action or
absence of action by the staff.
You may contact Robert Shapiro at (202) 551-3273 or Doug Jones at (202)
551-3309
with any questions.
Sincerely,
Division of
Corporation Finance
Office of Trade
& Services