v3.26.1
Related Party Transactions
 3 Months Ended
Mar. 31, 2026
Related Party Transactions [Abstract]  
Related Party Transactions
Note 12 - Related Party Transactions

The Company makes regular purchases from and sales to various related parties. Related party affiliations were attributed to transactions conducted between the Company and those business entities partially or wholly owned by the Company, the Company’s officers and/or shareholders who owned no less than 5% shareholdings of the Company.

The Company believes that Mr. Xiao Mou Zhang (“Mr. Zhang”), the former Chief Executive Officer through October 24, 2024, together with certain of his immediate family members are collectively beneficial owners of more than 5% of the Company’s outstanding common stock, and they have ownership interests in various related parties involved in (i) the distribution of food and related products to restaurants and other retailers and (ii) the supply of fresh food, frozen food, and packaging supplies to distributors. Mr. Zhang does not have any involvement in negotiations with any of the above-mentioned related parties.

The Company believes that Mr. Zhou Min Ni (“Mr. Ni”), the Company’s former Co-Chief Executive Officer, together with various trusts for the benefit of Mr. Ni’s four children, are collectively beneficial owners of more than 5% of the outstanding shares of the Company’s common stock, and he and certain of his immediate family members have ownership interests in related parties involved in (i) the distribution of food and related products to restaurants and other retailers and (ii) the supply of fresh food, frozen food, and packaging supplies to distributors.

The related party transactions as of March 31, 2026 and December 31, 2025 and for the three months ended March 31, 2026 and 2025, are identified as follows:

Related Party Sales, Purchases, and Lease Agreements

Purchases

Below is a summary of purchases of goods and services from related parties recorded for the three months ended March 31, 2026 and 2025, respectively:
Three Months Ended March 31,
(In thousands)Nature20262025
(a)Asahi Food, Inc.Trade$22 $25 
(b)Conexus Food Solutions LLC (formerly known as Best Food Services, LLC)Trade758 1,024 
(c)Ocean Pacific Seafood Group, Inc.Trade113 73 
(c)Rainfield Ranches, LPTrade57 21 
Total$950 $1,143 
_______________
(a)The Company, through its subsidiary Mountain Food, LLC, owns an equity interest in this entity.
(b)An equity interest is held by three Irrevocable Trusts for the benefit of Mr. Zhang’s children.
(c)Mr. Zhou Min Ni owns an equity interest in this entity.
Sales

Below is a summary of sales to related parties recorded for the three months ended March 31, 2026 and 2025, respectively:

Three Months Ended March 31,
(In thousands)20262025
(a)ABC Food Trading, LLC$378 $427 
(b)Asahi Food, Inc.193 152 
(a)Conexus Food Solutions LLC (formerly known as Best Food Services, LLC)460 342 
(c)First Choice Seafood, Inc.— 6 
(c)Fortune One Foods, Inc.12 28 
Total$1,043 $955 
_______________
(a)An equity interest is held by three Irrevocable Trusts for the benefit of Mr. Zhang’s children.
(b)The Company, through its subsidiary Mountain Food, LLC, owns an equity interest in this entity.
(c)Mr. Zhou Min Ni owns an equity interest in this entity indirectly through its parent company.

Lease Agreement

The Company has a lease agreement with a related party, Asahi Food, Inc. Beginning 2014, the Company leased a warehouse to Asahi Food, Inc. under a commercial lease agreement which was rescinded March 1, 2020. A new commercial lease agreement was entered into, expiring September 1, 2023, with optional renewal periods. The lease term was extended by an addendum dated September 1, 2023, which extended the lease through September 1, 2025. A second addendum, executed effective September 1, 2025, was enacted during the third quarter 2025 which extends the expiration of the lease by one year to September 1, 2026. Rental income was $36 thousand for both the three months ended March 31, 2026 and 2025, which is included in other income, net in the condensed consolidated statements of operations and comprehensive income (loss).

Related Party Balances

Accounts Receivable - Related Parties, Net

Below is a summary of accounts receivable with related parties recorded as of March 31, 2026 and December 31, 2025, respectively:

(In thousands)March 31, 2026December 31, 2025
(a)ABC Food Trading, LLC$309 $115 
(b)Asahi Food, Inc.169 177 
(a)Conexus Food Solutions LLC (formerly known as Best Food Services, LLC) 126 254 
(c)Fortune One Foods, Inc.12 — 
Total$616 $546 
_______________
(a)An equity interest is held by three Irrevocable Trusts for the benefit of Mr. Zhang’s children.
(b)The Company, through its subsidiary Mountain Food, LLC, owns an equity interest in this entity.
(c)Mr. Zhou Min Ni owns an equity interest in this entity indirectly through its parent company.

All accounts receivable from these related parties are current and considered fully collectible. No allowance is deemed necessary as of March 31, 2026 and December 31, 2025.

Line of Credit Note - Related Parties

The Company issued a $51,000 line of credit note to Asahi Food, Inc. on November 1, 2024, which is outstanding at March 31, 2026 and included in other current assets in the consolidated balance sheet. Interest shall accrue at a rate of 7.25% per annum with monthly payments of interest only due beginning December 1, 2024 and continuing through the first day of each calendar month until the maturity date. The note was extended for an additional twelve months during the fourth quarter and will become due on October 31, 2026. Interest income was $616 and $1,233 for the three months ended March 31, 2026 and 2025,
respectively, which is included in other income expense, net in the condensed consolidated statements of operations and comprehensive income (loss).

Accounts Payable - Related Parties

All the accounts payable to related parties are payable upon demand without interest. Below is a summary of accounts payable with related parties recorded as of March 31, 2026 and December 31, 2025, respectively:

(In thousands)March 31, 2026December 31, 2025
(a)Conexus Food Solutions LLC (formerly known as Best Food Services, LLC)$243 $360 
Others28 24 
Total$271 $384 
_______________
(a)An equity interest is held by three Irrevocable Trusts for the benefit of Mr. Zhang’s children.