HF Foods Group Inc. (NASDAQ: HFFG), a leading food distributor to
Asian restaurants across the United States (“HF Foods” or the
“Company”), today announced that it filed a complaint (the
“Complaint”) against Maodong Xu, Zhou Min Ni, Fai Lam in his
capacity as Trustee of the Irrevocable Trust for Raymond Ni, Weihui
Kwok, and Yuanyuan Wu (collectively, the “Xu Group”) in the United
States District Court, District of Nevada.
The Complaint alleges, among other things, that
the Xu Group is attempting to seize control of HF Foods in
violation of the federal securities laws through:
- obfuscating the true identity and
purpose of their group as legally required and by filing false and
misleading regulatory disclosures with the SEC, and
- conducting an illegal tender offer
that includes strong-arming current HF Foods stockholders into
selling their Company shares in violation of the Williams Act of
1968.
The Complaint details evidence that the Xu Group
has engaged in a coordinated, illegal, and undisclosed campaign to
take over the Company, starting from October 2022, if not earlier.
This campaign has included Mr. Xu conducting a series of meetings
with, and outreach to, HF Foods stockholders, in which he has
represented, among other things, that he has agreements in place
that give him control of the Company, stated his intention to
become CEO or Chairman of the Company and pressured stockholders to
sell their Company shares for cash or stock in a Maodong Xu
affiliated company. These meetings and outreach have continued to
the present time. Mr. Xu has been banned by Chinese
regulators from participation in Chinese public markets due to a
history of market manipulation and corporate asset stripping, and
is being pursued by stockholders and creditors from China through
U.S. courts. The Company is deeply concerned he is employing the
same tactics and strategy in his illicit efforts at creeping
control of HF Foods, to the detriment of the Company and all
stakeholders, including our stockholders, employees and
partners.
The Complaint, which was filed on May 11, 2023,
included an emergency motion for a temporary restraining order and
preliminary injunction (the “Emergency Motion”) seeking to prevent
the Xu Group from interfering with the upcoming 2022 & 2023
Annual Meeting of HF Foods’ Stockholders (the “Annual Meeting”) by
fraudulently soliciting votes for a slate of purported director
nominees, composed of an assortment of close family members and
associated persons of the Xu Group, none of whom were up for
election at the Annual Meeting under the Company’s Bylaws. On May
15, 2023, the members of the Xu Group who jointly filed the
associated proxy statement announced that they were withdrawing
their purported slate of director nominees and would not solicit
proxies in connection with the Annual Meeting. In light of these
actions, the Company has elected to withdraw the Emergency Motion.
However, the Company intends to proceed with the Complaint given
the serious and potentially ongoing nature of the alleged illegal
conduct, including Mr. Xu’s furtherance of an illegal tender offer
scheme.
The HF Foods Board of Directors and management
team will continue to act in the best interests of the Company and
all of its stakeholders, including taking legal and other steps to
halt activities designed to mislead stockholders, and to
surreptitiously seek to acquire control of the Company. These
actions have also included the adoption of a limited duration
stockholder rights plan on April 11, 2023.
Stockholders should rest assured that HF Foods
intends to remain vigilant and will continue to take steps to
protect all of its stakeholders, including its employees, partners,
and stockholders.
The complaint is filed in the United States
District Court, District of Nevada, under case number
2:23-cv-00748.
About HF Foods Group Inc.
HF Foods Group Inc. is a leading marketer and
distributor of fresh produce, frozen and dry food, and non-food
products to primarily Asian/Chinese restaurants and other
foodservice customers throughout the United States. HF Foods aims
to supply the increasing demand for Asian American restaurant
cuisine, leveraging its nationwide network of distribution centers
and its strong relations with growers and suppliers of fresh,
high-quality specialty restaurant food products and supplies in the
US, South America, and China. Headquartered in Las Vegas, Nevada,
HF Foods trades on Nasdaq under the symbol “HFFG”. For more
information, visit www.hffoodsgroup.com.
Forward-Looking Statements
All statements in this press release other than
statements of historical facts are forward-looking statements which
contain our current expectations about our future results. We have
attempted to identify any forward-looking statements by using words
such as “believes,” “intends,” and other similar expressions.
Although we believe that the expectations reflected in all of our
forward-looking statements are reasonable, we can give no assurance
that such expectations will prove to be correct. Such statements
are not guarantees of future performance or events and are subject
to known and unknown risks and uncertainties that could cause the
Company’s actual results, events or financial positions to differ
materially from those included within or implied by such
forward-looking statements. Such factors include, but are not
limited to, risks that the Company may not regain compliance with
Nasdaq continued listing requirements relating to the Company’s
annual meeting of stockholders within any applicable grace period,
statements of assumption underlying any of the foregoing, and other
factors disclosed under the caption “Risk Factors” in our Annual
Report on Form 10-K for the year ended December 31, 2022 and other
filings with the SEC. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as
of the date made. Except as required by law, we undertake no
obligation to disclose any revision to these forward-looking
statements.
Important Additional Information and
Where to Find It
The Company filed a definitive proxy statement
on Schedule 14A and form of proxy card with the SEC on April 28,
2023 in connection with the solicitation of proxies for the Annual
Meeting. STOCKHOLDERS ARE STRONGLY ADVISED TO READ THE COMPANY’S
DEFINITIVE PROXY STATEMENT, THE PROXY CARD AND ANY OTHER DOCUMENTS
FILED BY THE COMPANY WITH THE SEC CAREFULLY BECAUSE THEY CONTAIN
IMPORTANT INFORMATION. Stockholders may obtain a free copy of the
Company’s definitive proxy statement, any amendments or supplements
to the proxy statement and other documents as and when filed by the
Company with, or furnished by the Company to, the SEC without
charge from the SEC's website at www.sec.gov or the
Company's website
at https://hffoodsgroup.com/investor-relations/.
Certain Information Regarding
Participants in Solicitation
The Company, its directors, its executive
officers and its nominees for election as director may be deemed
participants in the solicitation of proxies from stockholders in
connection with the matters to be considered at the Annual Meeting.
Information regarding the persons who may, under the rules of the
SEC, be considered participants in the solicitation of stockholders
in connection with the Annual Meeting, and their direct or indirect
interests, by security holdings or otherwise, which may be
different from those of the Company's stockholders generally, are
set forth in the Company's definitive proxy statement filed with
the SEC on April 28, 2023 and other relevant documents filed, or to
be filed, with the SEC.
Inquiries:
Investor Relations:Phone: (404) 836 -
0852Email: investors@hffoodsgroup.com
Media:Dan Gagnier & Riyaz Lalani Gagnier
Communications(646) 342-8087hffg@gagnierfc.com
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