DEF 14A of HF Foods Group Inc., Apr 25, 2025

DEF 14A of HF Foods Group Inc.

Filed Apr 25, 2025 · FY20240001680873-25-000022

Open on EDGAR

  1. PROPOSAL 1: ELECTION OF DIRECTORS

    PROPOSAL 1: ELECTION OF DIRECTORS Our bylaws provide that the Board of Directors shall consist of one or more members. The exact number of directors shall be fixed by and may be changed from time to time by resolution of the Board of Directors. The Board of Directors adopted a resolution on December 13, 2021, to provide that there shall be a total of five (5) directors, who shall hold office until each such director’s successor is elected and qualified, or until such director’s earlier resignation or removal. Our Board of Directors currently consists of five directors: Lisa Lim, Maria Ross, Dr. Yujie Wang, Charlotte Westfall and Xiao Mou “Peter” Zhang. Dr. Wang and Mr. Zhang will not be standing for re-election at the Annual Meeting. The Nominating and Governance Committee (“Nominating Committee”) of the Board of Directors has unanimously recommended Xi “Felix” Lin, Richard Diaz, Lisa Lim, Maria Ross and Charlotte Westfall as nominees to our Board of Directors. If elected at the Annual Meeting, each of the nominees would serve until the 2026 Annual Meeting of Stockholders and until his or her successor is duly elected and qualified, or until such director’s earlier death, resignation or removal. The nominees have consented to being nominated and have expressed their intention to serve if elected. We have no reason to believe that the nominees will be unable to serve if elected to office and, to our knowledge, the nominees intend to serve the entire term for which election is sought. In the event any of the nominees should become unable to serve, or for good cause will not serve, as a director, it is intended that votes will be cast for a substitute nominee designated by the Board of Directors or the Board of Directors may elect to reduce its size. Only the nominees or substitute nominees designated by the Board of Directors will be eligible to stand for election as directors at the Annual Meeting. There are no arrangements or understandings between any director, or nominee for directorship, pursuant to which such director or nominee was selected as a director or nominee. There are no family relationships between any director, executive officer, or nominee for director of the Company.

  2. Considerations in Evaluating Director Nominees

    Considerations in Evaluating Director Nominees In selecting nominees for director, without regard to the source of the recommendation, our Nominating Committee uses a variety of methods for identifying and evaluating director nominees. In its evaluation of director candidates, our Nominating Committee may consider, among other things, the current size and composition of our Board of Directors, the needs of our Board of Directors, and the respective committees of our Board of Directors. Some of the qualifications that may be considered include, without limitation, issues of character, integrity, judgment, diversity of experience, independence, area of expertise, corporate experience, length of service, leadership skills, potential conflicts of interest, and other commitments. Director candidates must have sufficient time available, in the judgment of our Nominating Committee, to perform all Board of Director and committee responsibilities. In addition, our Nominating Committee considers all applicable statutory and regulatory requirements and the requirements of any exchange upon which our common stock is listed or to which it may apply in the foreseeable future. Although our Board of Directors does not maintain a specific policy with respect to board diversity, we believe that our Board of Directors should be a diverse body, and our Nominating Committee considers a broad range of backgrounds and experiences in reviewing candidates for nomination to the Board of Directors. In making determinations regarding nominations of directors, our Nominating Committee may take into account the benefits of diverse viewpoints and other related factors as it oversees the annual Board of Director and committee evaluations. After completing its review and evaluation of director candidates, our Nominating Committee recommends to our full Board of Directors the director nominees for selection.

  3. Executive Compensation Philosophy

    Executive Compensation Philosophy The Company is committed to maintaining a compensation program that aligns with corporate values, promotes stockholder interests, and drives long-term sustainable growth. The Company’s compensation philosophy is guided by the following key principles: •Performance Alignment: We believe in linking executive compensation directly to the Company's performance and strategic objectives. Compensation is tied to both short-term and long-term performance metrics, ensuring that executives are incentivized to achieve results that drive stockholder value creation and support the Company’s strategic goals. •Pay-for-Performance: Our compensation program emphasizes a pay-for-performance philosophy, where executive pay is directly tied to individual and Company performance. We believe that executives should be rewarded based on their contributions to the Company's success, with a significant portion of compensation being variable and performance based. •Competitive Compensation: We strive to offer competitive compensation packages to attract and retain top executive talent within our industry. To develop 2024 compensation levels, compensation levels were benchmarked in late 2023 against industry peers and relevant market data to ensure that our executives are fairly compensated relative to their peers and industry standards. •Stockholder Alignment: We are committed to aligning executive compensation practices with the interests of our stockholders. We believe that executive pay should be transparent, reasonable, and aligned with stockholder value creation, promoting accountability and responsible governance. •Governance and Oversight: The Compensation Committee of the Board of Directors oversees the development, implementation, and evaluation of our executive compensation program. The committee is composed of independent directors with relevant expertise and experience in compensation matters and operates in accordance with best corporate governance practices. The Compensation Committee has retained Pay Governance LLC (“Pay Governance”) to provide advice on best practices, review and assess compensation programs, and to assist in analyzing executive compensation. Pay Governance is an independent compensation consultant that provides executive compensation program design as well as research and competitive market intelligence on executive pay. Prior to engaging Pay Governance, the Compensation Committee considered the independence of Pay Governance and concluded that the work of Pay Governance did not raise any conflicts of interests. •Transparency and Disclosure: We are committed to transparency and disclosure regarding our executive compensation practices. We believe that stockholders have the right to understand how executive pay is determined and how it aligns with Company performance and stockholder interests. The compensation program for the Company’s NEOs consists of the following components: •Base Salary: Provides a fixed annual salary to NEOs, reflecting their experience, skills, and responsibilities within the organization, and ensuring a competitive level of compensation relative to industry benchmarks. •Annual Incentive Compensation: Performance-based bonuses tied to the achievement of annual financial targets, operational objectives, and individual performance goals, encouraging executives to deliver results that drive business success. •Long-Term Incentive Plan: Equity-based awards designed to align NEO interests with long-term stockholder value creation and incentivize sustained performance and growth. •Benefits: Comprehensive benefits packages provided to NEOs on the same basis as other employees, including health insurance, retirement plans, and other employee benefits, aimed at supporting the well-being and financial security of executives, employees and their families. Pay Mix The Company’s compensation mix is designed to align with the Company’s strategic objectives and performance goals, ensuring that executive pay reinforces the Company’s strategic priorities. The CEO and each of the other NEOs each receive compensation in each of these forms.

  4. Executive Compensation Philosophy

    | Element | Form | Purpose | Metrics | Time-Period | % of 2024 Pay Mix for NEOs (1) | | Base Salary | Cash | To attract and retain and to provide a competitive salary | | 1-year | 31% | | Annual Incentive Plan | Cash | To incentivize for overall company performance and individual objectives | •Financial Targets (70%) i.Net Revenue (10%) ii.Gross Profit (45%) iii.Internal Adjusted EBITDA(2) (45%) •Initiative Based Targets (30%) | 1-year performance period | 33% | | Equity Incentive Compensation | Restricted Stock Units (“RSUs”) and Performance Share Units (“PSUs”) | To incentivize for long-term financial performance and drive long-term shareholder value. 50% granted as RSUs and 50% granted as PSUs. RSUs vest based on continued employment through vesting date or earlier vesting as specified. PSUs vest based on attainment of specified goals. | For PSUs: •Revenue (50%) •Internal Adjusted EBITDA (50%) •The Compensation Committee has the ability to adjust payout based upon management’s achievement of significant milestones within the Company’s long-term strategic plan. | 3-year performance period | 36% |

  5. Key Elements of Compensation

    Key Elements of Compensation When compensation decisions for 2024 were made in 2023, we did not use a prescribed formula to establish pay levels. Rather, the Compensation Committee considered changes in the business, external market factors and the Company’s financial position when determining pay levels for the NEOs. The Compensation Committee generally seeks to set an NEO’s targeted total cash compensation opportunity within a range of the median of the applicable peer company and/or general industry compensation survey data, adjusted as appropriate for individual performance and internal pay equity and labor market conditions. In 2023, the Compensation Committee relied on market data to determine competitive compensation levels for the NEOs. In 2023, for fiscal 2024 compensation decisions, Pay Governance developed with the Compensation Committee the following peer group consisting of fifteen companies:

  6. Key Elements of Compensation

    In November 2024, for fiscal year 2025 compensation decisions, Pay Governance reviewed the peer group, in collaboration with the Compensation Committee, and determined that the peer group remained appropriate and no changes were needed. Factors considered in developing the peer group included but were not limited to industry, revenue size, market capitalization, company location and unique characteristics of our business model. The peer group was utilized for direct benchmarking of 2024 pay levels and practices for executives and independent Board Members. Base Salary The base salaries of the Company’s NEOs are reviewed on an annual basis by the Compensation Committee and the CEO (other than with respect to the CEO’s own salary which is reviewed and determined by the Compensation Committee). This review is supplemented by assessments of the performance of the NEOs by the Compensation Committee. Base salaries are paid to the NEOs to compensate them for their day-to-day services. Each NEO’s base salary is supplemented by various benefit plans that provide health, life, accident and disability benefits, most of which are the same plans as those provided to all of our employees. The salaries typically are used to recognize the experience, skills, knowledge, past performance, and responsibilities of each NEO. The following table shows the changes to the annual base salaries of the NEOs that were effective during fiscal year 2024 as part of the Compensation Committee’s annual review process.

  7. Key Elements of Compensation

    | | 2024 AIP Target Award | | 2024 AIP Actual Award | | | Name | % of Base Salary Rate | $ Amount | % of Target | $ Amount | | Xiao Mou “Peter” Zhang (1) | 125% | 675,000 | —% | — | | Xi “Felix” Lin (2) | 100% | 495,000 | 107% | 529,791 | | Cindy Yao (3) | 100% | 375,000 | 61% | 227,500 | | Christine Chang | 100% | 375,000 | 91% | 341,250 |

  8. Key Elements of Compensation

    (1) Mr. Zhang’s employment as CEO was terminated effective October 24, 2024. AIP achievement was 0%. (2) Mr. Lin’s bonus target was modified by the Compensation Committee to the CEO level for the three month Mr. Lin served as Interim CEO. The actual AIP achievement of 107% of target represents 91% achievement of nine months of President and three months of CEO. (3) Ms. Yao’s bonus payout was prorated to reflect the portion of the year in which she was employed by the Company. Subsequent Events For fiscal year 2025, Mr. Lin’s bonus payout target increased from 100% to 125% in connection with his promotion to President and Chief Executive Officer. Equity Grants Equity awards granted under the 2018 Plan, such as RSUs and PSUs, are an integral component of the Company’s compensation program. These awards serve multiple purposes: •Alignment with Stockholder Interests: Equity grants align the interests of executives with those of stockholders, incentivizing executives to drive long-term value creation and stockholder returns. •Retention and Motivation: Equity awards are an effective tool for retaining and motivating key executive talent, as they provide executives with a stake in the Company’s future performance and success. •Long-Term Performance Incentives: By vesting over time or contingent upon the achievement of performance goals, equity awards provide executives with long-term performance incentives, encouraging sustained growth and strategic execution. The Company grants various types of equity awards to executives, including: •RSUs: RSUs represent a promise to deliver shares of Company stock to executives at a future date, subject to vesting conditions. These awards incentivize executives to remain with the Company and contribute to its long-term success. The time-based RSUs awarded in fiscal year 2024 vest in equal one-third installments on the first through third anniversary of the date of grant. •PSUs: PSUs are granted based on the achievement of predetermined performance metrics over a specified performance period. These awards directly link executive compensation to the Company’s financial and operational performance, promoting accountability and alignment with corporate goals. The PSUs granted in 2024 have a three-year performance period. The performance metrics are Internal Adjusted EBITDA (50%) and net revenue (50%). During fiscal year 2024, the Compensation Committee approved the granting of time-based RSUs and PSUs to each of the NEOs. For these awards, the target award value was set at 150% of base salary for Mr. Zhang and 100% of base salary for Mr. Lin, Ms. Yao, and Ms. Chang. The mix of awards consists of 50% PSUs and 50% time-based RSUs. The Company granted PSUs in 2024 which may be earned over a three-year performance period, with vesting to be earned, if at all, at the end of the three-year performance period based on the applicable NEO’s continuation in service through the end of the performance period and the attainment of pre-determined goals. The performance metrics for the PSUs granted in 2024 for each of the three year performance periods is as follows: (i) for fiscal year 2024, in order to vest at 100%, the Company must have achieved a revenue of $1.155 billion, which represents 1% growth, and must have achieved an Internal Adjusted EBITDA of 4.33% of revenue; (ii) for fiscal year 2025, in order to vest at 100%, the Company must achieve a revenue of $1.190 billion, which represents 3% growth, and must have an Internal Adjusted EBITDA of 4.5% of revenue; and (iii) for fiscal year 2026, in order to vest at 100%, the Company must achieve a revenue of $1.231 billion, which represents 3.5% growth, and must have an Internal Adjusted EBITDA of 5.0% of revenue. Vesting of the PSUs is cumulative over the performance periods, and a metric not satisfied in the applicable performance period may be satisfied in a future period. The Company’s NEOs grant of RSUs and potential grant of PSUs are calculated as a percentage of the individual NEO’s salary as listed below.

  9. Key Elements of Compensation

    | Name | RSU Grant as % of Base Salary | Max PSU Grant as % of Base Salary | $ Total Amount | | Xiao Mou “Peter” Zhang | 75% | 75% | 1,012,500 | | Xi “Felix” Lin | 50% | 50% | 495,000 | | Cindy Yao | 50% | 50% | 375,000 | | Christine Chang | 50% | 50% | 375,000 |

  10. Summary Compensation Table

    Summary Compensation Table

  11. Summary Compensation Table

    | Name | Year | Salary ($) | Bonus ($) | Stock Awards (6) ($) | All Other Compensation ($) | Total ($) | | Xiao Mou “Peter” Zhang (1) | 2024 | 537,692 | — | 1,012,500 | 1,379,528 (7) | 2,929,720 | | Former Chief Executive Officer | 2023 | 600,000 | 481,800 | 900,000 | 170,000 (8) | 2,151,800 | | | 2022 | 600,000 | 596,400 | 900,000 | — | 2,096,400 | | Carlos Rodriguez (2) | 2024 | 106,154 | — | — | 404,369 (9) | 510,523 | | Former Chief Financial Officer | 2023 | 400,000 | 280,000 | 400,000 | — | 1,080,000 | | | 2022 | 153,846 | 250,000 | 400,000 | — | 803,846 | | Xi “Felix” Lin (3) | 2024 | 493,096 | 529,791 | 495,000 | 104,093 (10) | 1,621,980 | | President and Chief Operating Officer, | 2023 | 450,000 | 406,350 | 450,000 | 75,088 (11) | 1,381,438 | | Interim CFO, Interim CEO | 2022 | 285,577 | 447,300 | 610,000 | 92,504 (11) | 1,435,381 | | Cindy Yao (4) | 2024 | 252,404 | 227,500 | 375,000 | 233,556 (12) | 1,088,460 | | Chief Financial Officer | | | | | | | | Christine Chang (5) | 2024 | 375,000 | 341,250 | 375,000 | 9,808 (13) | 1,101,058 | | General Counsel and Chief Compliance Officer | 2023 | 346,154 | 338,625 | 300,000 | — | 984,779 | | | 2022 | 234,903 | 223,650 | 262,500 | — | 721,053 |

  12. Summary Compensation Table

    (1)Mr. Zhang was appointed Co-CEO on November 4, 2019, following the merger with B&R Global and became sole CEO on February 23, 2021. Mr. Zhang departed his role as Chief Executive Officer effective October 24, 2024. Mr. Zhang currently servers as a director on the Board of Directors and will not stand for re-election at the Annual Meeting. (2)Mr. Rodriguez was appointed as the Company’s Chief Financial Officer August 1, 2022. On February 12, 2024, Mr. Rodriguez went on a personal leave of absence and effective April 8, 2024, Mr. Rodriguez departed from the Company. (3)Mr. Lin was a member of the Board of Directors prior to commencing service as the Company’s Chief Operating Officer on May 1, 2022. He was appointed Interim Chief Financial Officer effective May 9, 2022, following Mr. Lee’s departure. Upon Mr. Rodriguez’s hiring and appointment as Chief Financial Officer, effective August 1, 2022, Mr. Lin relinquished his duties as Interim Chief Financial Officer and remained Chief Operating Officer. On February 9, 2024, the Company appointed Mr. Lin as President effective February 12, 2024. Effective on Mr. Rodriguez’s leave of absence, on February 12, 2024, Mr. Lin also served as the Company’s Interim Chief Financial Officer from February 12, 2024 until Ms. Yao’s appointment as Chief Financial Officer on May 1, 2024. On October 24, 2024, Mr. Lin was appointed to serve as Interim Chief Executive Officer, and continued to serve as the Company’s Chief Operating Officer and President through December 31, 2024. On December 17, 2024, the Company appointed Mr. Lin to serve as President and Chief Financial Officer, effective January 1, 2025. (4)Ms. Yao joined the Company May 1, 2024. (5)Ms. Chang joined the Company in September 2021. (6)Amounts reflect the full grant-date fair value of restricted stock units (“RSUs”) and performance restricted stock units (“PSUs”) granted during the years ended December 31, 2024, 2023 and 2022 computed in accordance with ASC Topic 718, rather than the amounts paid to or realized by the named executive officer. The value of the PSUs set forth above is based on the probable outcome of the performance conditions on the grant date. We provide information regarding the assumptions used to calculate the value of all PSUs and RSUs granted to our executive officers in Note 14 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024. (7)Consists of the amounts accrued under the Severance Plan in relation to Mr. Zhang’s departure from his role as Chief Executive Officer including COBRA premiums totaling $29,528. (8)Consists of payment under a modified bonus arrangement for 2021 which deferred payment of 20%, or $170,000, of the 2021 total bonus of $850,000 contingent upon the filing of the 2021 Annual Report on Form 10-K, which occurred on January 31, 2023. (9)Consists of the amounts accrued under the Severance Plan in relation to Mr. Rodriguez’s departure from his role as Chief Financial Officer and employer matching contributions under the Company’s defined contribution plan of $4,369. (10)Consists of Interim CFO compensation of $55,385, Interim CEO compensation of $33,923 and employer matching contributions under the Company’s defined contribution plan of $14,785. (11)Consists of amounts paid to reimburse relocation expenses of $92,504 for 2022 and $68,165 for 2023 and payments for 2023 of employer matching contributions under the Company’s defined contribution plan of $6,923. (12)Consists of amounts paid to reimburse relocation expenses grossed up for taxes of $205,172, housing allowance reimbursements of $22,742, cell phone allowance disbursements of $450 and employer matching contributions under the Company’s defined contribution plan of $5,192. (13)Consists of employer matching contributions under the Company’s defined contribution plan of $9,808. Policies and Practices Related to the Grant of Certain Equity Awards. We do not grant equity awards in anticipation of the release of material nonpublic information, and we do not time the release of material nonpublic information based on equity award grant dates or for the purpose of affecting the value of executive compensation. While we do not have a formal policy with respect to the timing of awards of stock options, stock appreciation right, or similar option-like instruments to our NEOs, historically, including during fiscal 2024, our Compensation Committee has not granted such awards.

  13. Grants of Plan-Based Awards

    Grants of Plan-Based Awards

  14. Grants of Plan-Based Awards

    | Name | Grant Date | Estimated future payouts under equity incentive plan awards | | All other stock awards: Number of shares of stock or units (2) (#) | Grant date fair value of stock awards (3) ($) | | | | Threshold/Target (#) | Maximum (1) (#) | | | | Xiao Mou “Peter” Zhang | 6/05/2024 | 142,606 | 142,606 | 142,606 | 1,012,500 | | Carlos Rodriguez | N/A | — | — | — | — | | Xi “Felix” Lin | 6/05/2024 | 69,718 | 69,718 | 69,718 | 495,000 | | Cindy Yao | 6/05/2024 | 52,817 | 52,817 | 52,817 | 375,000 | | Christine Chang | 6/05/2024 | 52,817 | 52,817 | 52,817 | 375,000 |

  15. Grants of Plan-Based Awards

    (1)Represents PSUs granted under the 2018 Plan. The PSUs vest over a three-year period, with vesting to be earned, if at all, at the end of the three-year performance period based on the applicable NEO’s continuation in service through the end of the performance period and the attainment of pre-determined goals. The performance goals are described in the “Compensation Metrics” section within the Compensation Discussion and Analysis section above. (2)Represents RSUs granted under the 2018 Plan. The RSUs vest over three equal annual installments on the first three anniversaries of the grant date and are subject to forfeiture in the event of NEO’s termination of service under specified circumstances. (3)Amounts for the year ended December 31, 2024, reflect the full grant-date fair value of RSUs and PSUs granted during the year ended December 31, 2024, computed in accordance with ASC Topic 718, rather than the amounts paid to or realized by the NEO. The value of the PSUs set forth above is based on the probable outcome of the performance conditions on the grant date. We provide information regarding the assumptions used to calculate the value of all PSUs and RSUs granted to our NEOs in Note 14 to the consolidated financial statements included in in our Annual Report on Form 10-K for the year ended December 31, 2024.

  16. Outstanding Equity Awards at December 31, 2024

    Outstanding Equity Awards at December 31, 2024 The following table provides information regarding outstanding stock awards to our NEOs that remained subject to vesting at December 31, 2024.

  17. Outstanding Equity Awards at December 31, 2024

    | Name | Equity Incentive Plan Awards: Number of unearned shares, units or other rights that have not vested (#) | Equity Incentive Plan Awards: Market or payout value of unearned shares, units or other rights that have not vested (7)(8) ($) | | Xiao Mou “Peter” Zhang | — | — | | Carlos Rodriguez | — | — | | Xi “Felix” Lin | 21,200 (1) | 68,052 | | | 16,643 (2) | 53,424 | | | 38,860 (3) | 124,741 | | | 40,084 (4) | 128,670 | | | 69,718 (5) | 223,795 | | | 69,718 (6) | 223,795 | | Cindy Yao | 52,817 (5) | 169,543 | | | 52,817 (6) | 169,543 | | Christine Chang | 8,561 (1) | 27,481 | | | 9,708 (2) | 31,163 | | | 25,906 (3) | 83,158 | | | 26,722 (4) | 85,778 | | | 52,817 (5) | 169,543 | | | 52,817 (6) | 169,543 |

  18. Outstanding Equity Awards at December 31, 2024

    (1) Shares of RSUs granted to the NEOs in 2022 vest over three equal annual installments beginning from April 15, 2023, and are subject to forfeiture in the event of the NEO’s termination of service to the Company under specified circumstances. (2) Shares of PSUs granted to the NEOs in 2022 vest over three equal installments beginning from April 15, 2023, and are subject to forfeiture in the event of the NEO’s termination of service to the Company under specified circumstances. The number of shares shown is the target amount, and the actual number of shares that may vest ranges from 0% to 100% of the target amount, depending on the achievement of specified performance goals. (3) Shares of RSUs granted to the NEOs in 2023 vest over three equal annual installments beginning from April 15, 2024, and are subject to forfeiture in the event of the NEO’s termination of service to the Company under specified circumstances. (4) Shares of PSUs granted to the NEOs in 2023 vest over three equal installments beginning from April 15, 2024, and are subject to forfeiture in the event of the NEO’s termination of service to the Company under specified circumstances. The number of shares shown is the target amount, and the actual number of shares that may vest ranges from 0% to 100% of the target amount, depending on the achievement of specified performance goals. (5) Shares of RSUs granted to the NEOs in 2024 vest over three equal annual installments beginning from April 15, 2025, and are subject to forfeiture in the event of the NEO’s termination of service to the Company under specified circumstances. (6) Shares of PSUs granted to the NEOs in 2024 vest over a three-year period, with vesting to be earned, if at all, April 15, 2027, and are subject to forfeiture in the event of the NEO’s termination of service to the Company under specified circumstances. The number of shares shown is the target amount, and the actual number of shares that may vest ranges from 0% to 100% of the target amount, depending on the achievement of specified performance goals. (7) Dollar amount is determined by multiplying the number of unvested shares of RSUs by the closing price per share of the Company’s common stock on December 31, 2024 ($3.21), as reported on the NASDAQ Capital Market. (8) Dollar amount is determined by multiplying the number of unvested shares of PSUs by the closing price per share of the Company’s common stock on December 31, 2024 ($3.21), as reported on the NASDAQ Capital Market.

  19. Option Exercises and Stock Vested

    Option Exercises and Stock Vested The following table sets forth information regarding the exercise of stock options and the vesting of stock awards for each NEO on an aggregated basis during the fiscal year ended December 31, 2024.

  20. Option Exercises and Stock Vested

    | Name | Option Awards | | Stock Awards | | | | Number of shares acquired on exercise (#) | Value realized on exercise ($) | Number of shares acquired on vesting (#) | Value realized on vesting ($) | | Xiao Mou Zhang | - | - | 162,982 | 504,288 | | Carlos Rodriguez | - | - | 59,541 | 188,150 | | Xi Lin | - | - | 73,508 | 232,285 | | Christine Chang | - | - | 49,192 | 154,888 | | Cindy Yao | - | - | - | - |

  21. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

    POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL Potential payments upon a termination or change in control as of December 31, 2024, for the NEOs are set forth in the Change in Control and Severance Payments Table below. The amounts of these payments as of December 31, 2024, for each of Mr. Lin, Ms. Yao and Ms. Chang are set forth in the Change in Control and Severance Payments Table. All of the NEOs participate in and are eligible to receive severance benefits under the Severance Plan, as described in the Severance Plan section above, with the following “severance plan policy” attachments applying to each NEO: for Mr. Lin and Ms. Chang, the “Key Executive” policy; for Ms. Yao, severance pay equal to one half times base salary per the severance terms of her employment agreement until completing eighteen months of continuous service to the Company at which time she will be an eligible “Key Executive” under the policy. As described above, receiving these payments is subject to the named NEO’s execution of a general release of claims. Mr. Rodriguez departed from his role as Chief Financial Officer of the Company effective April 8, 2024, and Mr. Zhang departed from his role as Chief Executive Officer of the Company effective October 24, 2024, and therefore the potentially payable severance or other benefits no longer apply to them. In connection with Mr. Rodriguez’s departure, the Company entered into a Separation Agreement with Mr. Rodriguez on May 31, 2024. Under the Separation Agreement Mr. Rodriguez was entitled, subject to his non-revocation of a general release of claims in favor of the Company, to payments from the Company in an amount equal to Mr. Rodriguez’s annual base salary of $400,000. In connection with Mr. Zhang’s departure, the Company entered into a Severance Agreement and General Release with Mr. Zhang on November 21, 2024. Pursuant to the Severance Agreement and General Release, which includes a general release of claims by Mr. Zhang against the Company, Mr. Zhang will receive standard severance benefits provided to a Chief Executive Officer under the Company’s Amended and Restated Severance Plan, which consists of payment of base salary multiplied by two, totaling $1.35 million, and payment of COBRA premiums, for up to 12 months. For equity awards granted in 2023 and prior, in the event of a change in control, all unvested equity awards will accelerate in vesting. For equity awards granted in 2024, unvested equity awards will accelerate in vesting in the event of a termination by the Company without cause within twelve months following a change in control. In the event of a termination without a change in control, the number of shares of common stock subject to RSU awards that vest shall be determined by the Compensation Committee.

  22. Chief Executive Officer Pay Ratio

    Chief Executive Officer Pay Ratio The Company’s chief executive officer to median employee pay ratio was calculated in accordance with SEC requirements. However, due to the flexibility afforded by Item 402(u) of Regulation S‑K in calculating the pay ratio, the ratio presented herein is a reasonable estimate and may not be comparable to the pay ratio presented by other companies. The Company identified the median employee by examining 2024 total compensation for all employees of the Company excluding the Chief Executive Officer. The employee population used to identify the Company’s median employee included all employees of the Company, whether employed on a full‑time, part‑time or seasonal basis, as of December 31, 2024. The compensation measure described above was consistently applied to this entire employee population. The Company did not make any assumptions, adjustments or estimates with respect to the employee population or the compensation measure, but it did annualize the compensation for any employees that were not employed by the Company for all of 2024. After identifying the median employee based on the compensation measure described above, the Company calculated annual total compensation for the median employee using the same methodology used for our named executive officers as set forth in the “Summary Compensation Table” herein. The median employee was identified as of December 31, 2024, and the chief executive officer to median employee pay ratio was calculated with respect to the annualized compensation for Mr. Lin had he been the Chief Executive Officer for all of 2024. As illustrated in the table below, in 2024, the Company’s Chief Executive Officer’s annual total compensation was 32.6 times that of the Company’s median employee.

  23. Chief Executive Officer Pay Ratio

    | 2024 Annual Total Compensation of CEO | $2,455,313 | | 2024 Annual Total Compensation of Median Employee | $75,353 | | Total Annual Compensation Pay Ratio | 32.6 |

  24. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION The following table sets forth compensation for each director for the year ended December 31, 2024:

  25. DIRECTOR COMPENSATION

    | Name | Fees Earned (10) ($) | Stock Awards (11) ($) | All Other Compensation ($) | Total ($) | | Xiao Mou Zhang (1) | — | — | — | — | | Russell T. Libby (2) | 54,167 | — | — | 54,167 | | Dr. Hong Wang (3) | 37,500 | — | — | 37,500 | | Valerie Chase (4) | 43,750 | — | — | 43,750 | | Prudence Kuai (5) | 30,000 | — | — | 30,000 | | Charlotte Westfall (6) | 29,167 | 30,000 | — | 59,167 | | Lisa Lim (7) | 29,167 | 30,000 | — | 59,167 | | Maria Ross (8) | 26,250 | 30,000 | — | 56,250 | | Dr. Yujie Wang (9) | 23,333 | 30,000 | — | 53,333 |

  26. DIRECTOR COMPENSATION

    (1)Mr. Zhang did not receive any additional compensation for his service as a director. (2)Mr. Libby served as Chairman of the Board, Chair of the Governance and Nominating Committee, and Chair of the Special Investigation Committee. Mr. Libby resigned from the board of directors effective May 31, 2024. (3)Dr. Hong Wang served as Chair of the Compensation Committee. Dr. Hong Wang resigned from the board of directors effective June 28, 2024. (4)Ms. Chase served as Chair of the Audit Committee and Chair of the Special Transaction Committee and served as a member of the Special Investigation Committee. Ms. Chase resigned from the board of directors effective May 31, 2024. (5)Ms. Kuai resigned from the board of directors effective July 5, 2024. (6)Ms. Westfall was appointed to the board of directors effective June 7, 2024. Ms. Westfall serves as the Lead Independent Director and Chair of the Governance and Nominating Committee. (7)Ms. Lim was appointed to the board of directors effective June 7, 2024. Ms. Lim serves as Chair of the Audit Committee. (8)Ms. Ross was appointed to the board of directors effective June 28, 2024. Ms. Ross serves as Chair of the Compensation Committee. (9)Dr. Yujie Wang was appointed to the board of directors effective June 28, 2024. Dr. Yujie Wang serves as Chair of the Special Transaction Committee. (10)Director fees under the program are payable in arrears in four equal quarterly installments. (11)Amounts reflect the full grant-date fair value of RSUs granted during the year ended December 31, 2024, computed in accordance with ASC Topic 718, rather than the amounts paid to or realized by the director. The award values were calculated using the grant date stock price on August 7, 2024, of $3.09, and will vest on August 7, 2025, subject to the director’s continuous service. If the director’s continuous service terminates for any other reason prior to the applicable vesting date, the RSUs shall automatically be forfeited for no consideration. The aggregate number of unvested RSU awards held as of December 31, 2024 by each non-employee director was 9,709.

  27. Narrative Disclosure to Director Compensation Table

    Narrative Disclosure to Director Compensation Table For the year ending December 31, 2024, we paid our former Chairman of the Board $25,000 per quarter and former independent directors Dr. Hong Wang, Ms. Chase and Ms. Kuai $15,000 per quarter. Audit Committee Chair Ms. Chase was paid $5,000 per quarter. The Chairs of the Compensation Committee (Dr. Hong Wang), the Governance and Nominating Committee (Mr. Libby), and the Special Transaction Committee (Ms. Chase) were paid $3,750 per quarter. Special Investigation Committee Chair Mr. Libby received $3,750 per quarter and member Ms. Chase received $2,500 per quarter. Our newly appointed independent directors Ms. Westfall, Ms. Lim, Ms. Ross and Dr. Yujie Wang were paid $7,500 per quarter. Acting Lead Independent Director Ms. Westfall was paid an additional $2,500 per quarter. Audit Committee Chair Ms. Lim was paid $5,000 per quarter. Compensation Committee Chair Ms. Ross was paid $3,750 per quarter. The Governance and Nominating Committee Chair, Ms. Westfall, and the Special Transaction Committee Chair, Dr. Yujie Wang, were paid $2,500 per quarter. An annual equity award in the form of RSUs, which vest on the one year anniversary of the grant, with grant date fair values of $30,000 were issued to the newly appointed independent directors Ms. Westfall, Ms. Lim, Ms. Ross and Dr. Yujie Wang. The dollar value of RSU awards granted during 2024 were computed in accordance with Financial Accounting Standard Board Accounting Standards Codification Topic 718 (“ASC Topic 718”), rather than the amounts paid to or realized by the named individual. We reimburse directors for any out-of-pocket expenses incurred in connection with attending board or committee meetings.

  28. PAY VERSUS PERFORMANCE

    PAY VERSUS PERFORMANCE

  29. PAY VERSUS PERFORMANCE

    | Year(1) | Summary Compensation Table Total for Xiao Mou Zhang ($) | Summary Compensation Table Total for Xi Lin ($) | Compensation Actually Paid to Xiao Mou Zhang(2) ($) | Compensation Actually Paid to Xi Lin (2) ($) | Average Summary Compensation Table Total for Non-PEO Named Executive Officers ($) | Average Compensation Actually Paid to Non-PEO Named Executive Officers(2) ($) | Value of Initial Fixed $100 Investment Based on: | | Net Income (Loss) ($)(4) | Adjusted EBITDA ($)(4)(5) | | | | | | | | | Total Shareholder Return ($) | Peer Group Total Shareholder Return ($)(3) | | | | 2024 | 2,929,720 | 1,621,980 | 296,086 | 1,165,566 | 900,014 | 565,861 | 37.94 | 140.34 | (48,102) | 42,041 | | 2023 | 2,151,800 | — | 2,619,163 | — | 1,148,739 | 1,355,440 | 63.12 | 103.69 | (2,662) | 34,583 | | 2022 | 2,096,400 | — | 1,205,945 | — | 836,756 | 521,323 | 47.99 | 89.71 | 235 | 40,133 |

  30. PAY VERSUS PERFORMANCE

    (1)For 2024, both Xiao Mou “Peter” Zhang and Xi “Felix” Lin are PEOs. For 2023 and 2022, the Principal Executive Officer (“PEO”) was Xiao Mou “Peter” Zhang. For 2024, the non-PEO named executive officers are Carlos Rodriguez, Cindy Yao and Christine Chang. For 2023, the non-PEO named executive officers are Xi Lin, Carlos Rodriguez and Christine Chang. For 2022, the non-PEO named executive officers are Kong Hian Lee, Xi Lin, Carlos Rodriguez and Christine Chang. (2)The following table details the applicable adjustments that were made to determine compensation actually paid (“CAP”).

  31. PAY VERSUS PERFORMANCE

    | | 2024 | | | 2023 | | 2022 | | | | PEO Xiao Mou Zhang ($) | PEO Xi Lin ($) | Average Non-PEO NEOs ($) | PEO ($) | Average Non-PEO NEOs ($) | PEO ($) | Average Non-PEO NEOs ($) | | Summary Compensation Table (SCT) Total | 2,929,720 | 1,621,980 | 900,014 | 2,151,800 | 1,148,739 | 2,096,400 | 836,756 | | Less Stock Award Value Reported in SCT for the Covered Year | 1,012,500 | 495,000 | 250,000 | 900,000 | 383,333 | 900,000 | 424,167 | | Plus Year End Fair Value of Equity Awards Granted During the Covered Year that Remain Outstanding and Unvested as of Last Day of the Covered Year | — | 447,590 | 226,057 | 1,245,074 | 530,308 | 738,957 | 338,162 | | Plus Year over Year Change in Fair Value as of the Last Day of the Covered Year of Outstanding and Unvested Equity Awards Granted in Prior Years | — | (248,756) | (50,337) | 211,020 | 74,027 | (510,647) | (172,381) | | Plus Year over Year Change in Fair Value as of the Vesting Date of Equity Awards Granted in Prior Years that Vested During the Covered Year | (366,036) | (160,248) | (79,199) | 29,066 | (4,856) | (96,036) | (25,237) | | Less Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Covered Year | 1,255,098 | — | 180,674 | 117,797 | 9,445 | 122,729 | 31,810 | | Compensation Actually Paid (CAP) Total | 296,086 | 1,165,566 | 565,861 | 2,619,163 | 1,355,440 | 1,205,945 | 521,323 |

  32. PAY VERSUS PERFORMANCE

    (3)The Company’s peer group consists of the S&P 500 Food & Staple Retailing Index (TR). (4)Values shown are in thousands. (5)Adjusted EBITDA is defined as net income (loss) before interest expense, interest income, income taxes, and depreciation and amortization, further adjusted to exclude certain unusual, non-cash, or non-recurring expenses. See Appendix for reconciliation to most directly comparable GAAP measure.