HF Foods Group (HFFG) risk factors, FY2025 10-K

Other

1. 01Our industry is characterized by low margins, and periods of significant or prolonged inflation or deflation affect our product and operational costs, which may negatively impact our profitability
2. 02Changes to U.S. trade policy, tariff and import/export regulations may adversely affect our operating results26% rewritten
3. 03A shortage of qualified labor or an inability to attract, train or retain employees could negatively affect our business and materially reduce earnings
4. 04Unfavorable macroeconomic conditions in the U.S. may adversely affect our business, financial condition and results of operations
5. 05Competition may increase in the future, which may adversely impact our margins and ability to retain customers, and make it difficult to maintain our market share, growth rate and profitability
6. 06We may not be able to fully compensate for increases in fuel costs when fuel prices experience high volatility, and our operating results would be adversely affected
7. 07We rely on third-party suppliers, and our business may be affected by interruption of supplies or increases in product costs54% rewritten
8. 08Our relationships with customers may be materially diminished or terminated. The loss of customers could adversely affect our business, financial condition, and results of operations
9. 09We rely on technology in our business and any cybersecurity incident (including artificial intelligence (“AI”) -enabled threads), AI-related operational errors, other technology disruption or delay in implementing new technology could negatively affect our business and our relationships with customers50% rewritten
10. 10Changes in consumer eating habits could materially and adversely affect our business, financial condition, and results of operations
11. 11We engage in transactions with related parties and such transactions present possible conflicts of interest that could have an adverse effect on us
12. 12We may be unable to protect or maintain our intellectual property, which could result in customer confusion, a negative perception of our brand and adversely affect our business26% rewritten
13. 13If we are unable to renew or replace our current leases on favorable terms, or any of our current leases are terminated prior to expiration of their stated terms, and we cannot find suitable alternate locations, our operations and profitability could be negatively impacted35% rewritten
14. 14Turnover among our senior management, directors and other key personnel may create uncertainty and adversely affect our operations
15. 15Changes in and enforcement of immigration laws could increase our costs and adversely affect our ability to attract and retain qualified employees
16. 16Potential labor disputes with employees and increases in labor costs could adversely affect our business
17. 17If we fail to comply with requirements imposed by applicable law and other governmental regulations, we could become subject to lawsuits, investigations and other liabilities and restrictions on our operations that could significantly and adversely affect our business
18. 18If the products distributed by us are alleged to have caused injury or illness, or to have failed to comply with governmental regulations, we may need to recall our products and may experience product liability claims29% rewritten
19. 19Litigation may materially adversely affect our business, financial condition and results of operations
20. 20An increase in interest rates could adversely affect our cash flow and financial condition22% rewritten
21. 21Impairment charges for goodwill, amortizable intangible assets or other long-lived assets could adversely affect our financial condition and results of operation26% rewritten
22. 22Our continued growth depends on future acquisitions of other distributors or wholesalers and enlarging our customer base. The failure to achieve these goals could negatively impact our results of operations and financial condition
23. 23There is a scarcity of and competition for acquisition opportunities

Risks related to acquisition financing

1. 24We may experience difficulties in integrating the operations, personnel and assets of acquired businesses that may disrupt our business, dilute stockholder value and adversely affect our operating results
2. 25We have identified material weaknesses in our internal control over financial reporting, which could affect our ability to ensure timely and reliable financial reports, affect the ability of our auditors to attest to the effectiveness of our internal controls, and weaken investor confidence in our financial reporting
3. 26Zhou Min Ni has significant influence over the Company and may have interests that conflict with those of our other shareholders61% rewritten
4. 27Our amended and restated certificate of incorporation, amended and restated bylaws and Delaware law contain provisions which could have the effect of rendering more difficult, delaying, or preventing an acquisition deemed undesirable by our board of directors35% rewritten