What changed in this filing

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Item 1. Financial Statements

2022-08-15 compared with 2022-05-13 · 124 added, 78 removed, 633 unchanged (24% of the section changed)

2 unchanged sentences

INDEX TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unaudited Condensed Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021

Unaudited Condensed Consolidated Statements of Income and Comprehensive Income for the three months ended March 31, 2022 and 2021

Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity (Parent’s Net Investment) for the three months ended March 31, 2022 and 2021

Unaudited Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2022 and 2021

Unaudited Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021

Unaudited Condensed Consolidated Statements of Income and Comprehensive Income for the three and six months ended June 30, 2022 and 2021

Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity (Parent’s Net Investment) for the three and six months ended June 30, 2022 and 2021

Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2022 and 2021

Notes to Unaudited Condensed Consolidated Financial Statements

1 unchanged sentence

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

March 31, 2022

June 30, 2022

December 31, 2021

24 unchanged sentences

SHAREHOLDERS’ EQUITY

Preference Shares ($ 0.0001 par value, 10,000,000 shares authorized, no shares issued and outstanding as of March 31, 2022 and December 31, 2021)

Ordinary shares ( $ 0.0001 par value, 200,000,000 shares authorized, 9,500,000 and 7,000,000 shares issued and outstanding as of March 31, 2022 and December 31, 2021*)

Preference Shares ($ 0.0001 par value, 10,000,000 shares authorized, no shares issued and outstanding as of June 30, 2022 and December 31, 2021)

Ordinary shares ( $ 0.0001 par value, 200,000,000 shares authorized, 9,500,000 and 7,000,000 shares issued and outstanding as of June 30, 2022 and December 31, 2021*)

Parent’s net investment

9 unchanged sentences

For the Three Months Ended

For the Six Months Ended

COST OF REVENUES

11 unchanged sentences

INCOME BEFORE INCOME TAXES

PROVISION FOR (BENEFIT OF) INCOME TAXES

PROVISION FOR INCOME TAXES

Total provision for income taxes

18 unchanged sentences

Balance at March 31, 2021 (Unaudited)

Net distribution to Parent

( 6,109,488 )

Foreign currency translation adjustments

Balance at June 30, 2021 (Unaudited)

Preference shares

8 unchanged sentences

Balance at March 31, 2022 (Unaudited)

Share-Based compensation

Foreign currency translation adjustments

Balance at June 30, 2022 (Unaudited)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

1 unchanged sentence

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Three Months Ended March 31,

For the Six Months Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES

Adjustments to reconcile net income to net cash used in operating activities

Adjustments to reconcile net income to net cash (used in) provided by operating activities

Depreciation and amortization

4 unchanged sentences

Interest expenses

Gain on Forgiveness of PPP loan

( 1,680,900 )

Deferred income taxes

Loss on disposal of property and equipment

Changes in operating assets and liabilities

1 unchanged sentence

( 1,852,844 )

( 4,366,126 )

Prepayments and other current assets

3 unchanged sentences

Other noncurrent assets

( 3,841,292 )

Right-of-use assets

1 unchanged sentence

( 10,805,982 )

( 4,016,850 )

Accounts payable-related parties

1 unchanged sentence

Accrued expenses and other current liabilities

Net cash used in operating activities

( 1,050,269 )

Net cash (used in) provided by operating activities

( 12,990,336 )

CASH FLOWS FROM INVESTING ACTIVITIES

Proceeds from disposal of property and equipment

Purchase of property and equipment

9 unchanged sentences

NET CHANGES IN CASH

( 2,174,658 )

CASH, BEGINNING OF PERIOD

60 unchanged sentences

(i) the incorporation of FGI Europe Investment Limited (“FGI Europe”), FGI International, Limited (“FGI International”) and FGI China, Ltd., (ii) FGI Industries, Inc.

(formerly Foremost Groups, Inc.) (“FGI Industries”), which operates the kitchen and bath (“K&B”) sales and distribution business in the United States and, through its wholly-owned Canadian subsidiary, Foremost International Limited, in Canada, distributed 100 % of the outstanding shares of stock of Foremost Kingbetter Food

Equipment Inc.

(“FKB”), which operates a separate furniture line of business, to Foremost Groups Ltd.

(“Foremost”), FGI Industries’ sole shareholder;

(iii) Foremost is expected to contribute the FKB shares to Foremost Home Inc.

(“FHI”), a newly-formed wholly-owned subsidiary of Foremost;

(iii) Foremost contributed the FKB shares to Foremost Home Inc.

(“FHI”), a newly-

formed wholly-owned subsidiary of Foremost;

and (iv) Foremost contributed 100 % of the outstanding shares of stock of each of FGI Industries, FGI Europe, which, directly and through its wholly-owned German subsidiary, FGI Germany GmbH & Co., operates the K&B sales and distribution business in Europe, and FGI International, which, directly and through its wholly-owned Chinese subsidiary, FGI China, Ltd., operates the K&B sales and distribution business in the remainder of the world, K&B product development and sourcing of K&B products in China, to the Company (collectively, the “Reorganization”), such that, immediately following the Reorganization, (x) Foremost owns 100 % of the equity interests in each of the Company and FHI , (y) the Company owns 100 % of the equity interests in each of FGI Industries, FGI Europe and FGI International , which collectively, and through subsidiaries, operate the K&B business worldwide (the “K&B Business”), and (z) FHI owns 100 % of the equity interests in FKB.

1 unchanged sentence

As such, the accompanying unaudited condensed consolidated financial statements include the assets, liabilities, revenue, expenses and cash flows that are directly attributable to the K&B Business (excluded otherwise) before the Reorganization.

The unaudited condensed consolidated financial statements are presented as if the Company had been in existence and the Reorganization had been in effect during the entirety of the three months ended March 31, 2022 and 2021.

However, such presentation may not necessarily reflect the results of operations, financial position and cash flows if the K&B Business had actually existed on a stand-alone basis during the periods presented before the completion of the Reorganization.

13 unchanged sentences

Operating expenses were allocated to the Company based on employees and activities that are involved in the K&B Business.

Any expenses that were not directly attributable to any specific business were allocated to the Company based on the

proportion of the number of employees of the K&B Business to the total number of employees of both the K&B Business and FHI.

Any expenses that were not directly attributable to any specific business were allocated to the Company based on the proportion of the number of employees of the K&B Business to the total number of employees of both the K&B Business and FHI.

The following table sets forth the revenues, cost of revenues and operating expenses that were irrelevant to the K&B Business allocated from FGI Industries to Foremost Home, Inc.

for the three months ended March 31, 2022 and 2021, respectively.

for the three and six months ended June 30, 2022 and 2021, respectively.

In accordance with SAB Topic 5.z.7, the Company retroactively reflected the Reorganization in its unaudited condensed consolidated financial statements since the spin-off transaction occurred prior to effectiveness of the registration statement.

For the Three Months Ended

For the Six Months Ended

Cost of revenues

1 unchanged sentence

( 13,996,992 )

( 16,548,199 )

( 28,739,239 )

Selling and distribution expenses

( 1,249,018 )

( 1,486,794 )

( 2,321,830 )

( 2,327,917 )

General and administrative expenses

1 unchanged sentence

Income from operations

The following table sets forth the revenues, cost of revenues and operating expenses that were directly related to the K&B Business allocated from Foremost Worldwide Co., Ltd., a wholly-owned subsidiary of Foremost, to FGI International for the three months ended March 31, 2022 and 2021, respectively.

The following table sets forth the revenues, cost of revenues and operating expenses that were directly related to the K&B Business allocated from Foremost Worldwide Co., Ltd., a wholly-owned subsidiary of Foremost, to FGI International for the three and six months ended June 30, 2022 and 2021, respectively.

For the Three Months Ended

For the Six Months Ended

Cost of revenues

1 unchanged sentence

( 23,599,738 )

( 22,455,116 )

( 43,128,324 )

Selling and distribution expenses

9 unchanged sentences

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for information pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).

The results of operations for the three months

ended March 31, 2022 are not necessarily indicative of results to be expected for the full year of 2022.

The results of operations for the six months ended June 30, 2022 are not necessarily indicative of results to be expected for the full year of 2022.

Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements as of and for the years ended December 31, 2021 and 2020.

19 unchanged sentences

For the purpose of presenting the financial statements of subsidiaries using the Renminbi (“RMB”) as their functional currency, the Company’s assets and liabilities are expressed in U.S.

Dollars at the exchange rate on the balance sheet date, which was 6.3524 and 6.3762 as of March 31, 2022 and December 31, 2021, respectively;

shareholders’ equity or parent’s net investment accounts are translated at historical rates, and income and expense items are translated at the average exchange rate during the period, which was 6.3532 and 6.4824 for the three months ended March 31, 2022 and 2021, respectively.

Dollars at the exchange rate on the balance sheet date, which was 6.6988 and 6.3762 as of June 30, 2022 and December 31, 2021, respectively;

shareholders’ equity or parent’s net investment accounts are translated at historical rates, and income and expense items are translated at the average exchange rate during the period, which was 6.5443 , 6.4488 and 6.4615 , 6.4720 for the three and six months ended June 30, 2022 and 2021, respectively.

For the purpose of presenting the financial statements of the subsidiary using the Canadian Dollar (“CAD”) as its functional currency, the Company’s assets and liabilities are expressed in U.S.

Dollars at the exchange rate on the balance sheet date, which was 1.2697 and 1.2697 as of March 31, 2022 and December 31, 2021, respectively;

shareholders’ equity or parent’s net investment accounts are translated at historical rates, and income and expense items are translated at the average exchange rate during the period, which was 1.2697 and 1.2741 for the three months ended March 31, 2022 and 2021, respectively.

Dollars at the exchange rate on the balance sheet date, which was 1.2697 and 1.2697 as of June 30, 2022 and December 31, 2021, respectively;

shareholders’ equity or parent’s net investment accounts are translated at historical rates, and income and expense items are translated at the average exchange rate during the period, which was 1.2697 and 1.2444 for the three months ended June 30, 2022 and 2021, respectively, and 1.2697 and 1.2593 for the six months ended June 30, 2022 and 2021, respectively.

For the purpose of presenting the financial statements of the subsidiary using the Euro (“EUR”) as its functional currency, the Company’s assets and liabilities are expressed in U.S.

Dollars at the exchange rate on the balance sheet date, which was 0.8979 and 0.8815 as of March 31, 2022 and December 31, 2021, respectively;

parent’s net investment accounts are translated at historical rates, and income and expense items are translated at the average exchange rate during the period, which was 0.8887 and 0.8197 for the three months ended March 31, 2022 and 2021, respectively.

Dollars at the exchange rate on the balance sheet

date, which was 0.9532 and 0.8815 as of June 30, 2022 and December 31, 2021, respectively;

parent’s net investment accounts are translated at historical rates, and income and expense items are translated at the average exchange rate during the period, which was 0.9249 , 0.9068 and 0.8325 , 0.8261 for the three and six months ended June 30, 2022 and 2021, respectively.

Cash consists of cash on hand, demand deposits and time deposits placed with banks or other financial institutions that have original maturities of three months or less.

The Company did no t have any cash equivalents as of March 31, 2022 and December 31, 2021.

The Company did no t have any cash equivalents as of June 30, 2022 and December 31, 2021.

Accounts receivable, net

31 unchanged sentences

If an impairment is identified, the Company would reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values.

As of March 31, 2022 and December 31, 2021, no impairment of long-lived assets was recognized.

As of June 30, 2022 and December 31, 2021, no impairment of long-lived assets was recognized.

The Company determines if an arrangement is a lease at inception.

34 unchanged sentences

For the Three Months Ended

For the Six Months Ended

Revenues by product line

1 unchanged sentence

For the Three Months Ended

For the Six Months Ended

Revenues by geographic location

50 unchanged sentences

Accounts receivable, net consisted of the following:

March 31, 2022

June 30, 2022

December 31, 2021

6 unchanged sentences

Movements of allowance for doubtful accounts are as follows:

March 31, 2022

June 30, 2022

December 31, 2021

2 unchanged sentences

Movements of accrued defective return and discount accounts are as follows:

March 31, 2022

June 30, 2022

December 31, 2021

Beginning balance

Addition (Provision)

Ending balance

1 unchanged sentence

Inventories, net consisted of the following:

March 31, 2022

June 30, 2022

December 31, 2021

3 unchanged sentences

Movements of inventory reserves are as follows:

March 31, 2022

June 30, 2022

December 31, 2021

Beginning balance

Addition (Reversal)

Ending balance

1 unchanged sentence

Prepayments and other assets consisted of the following:

March 31, 2022

June 30, 2022

December 31, 2021

2 unchanged sentences

Property and equipment, net consist of the following:

March 31, 2022

June 30, 2022

December 31, 2021

5 unchanged sentences

( 3,602,615 )

Depreciation expense for the three months ended March 31, 2022 and 2021 amounted to $ 47,615 and $ 52,969 , respectively, which were included in general and administrative expenses on the unaudited condensed consolidated statements of income and comprehensive income.

Depreciation expense for the six months ended June 30, 2022 and 2021 amounted to $ 95,530 and $ 99,565 , respectively, which were included in general and administrative expenses on the unaudited condensed consolidated statements of income and comprehensive income.

Note 7 — Leases

The Company has operating leases primarily for corporate offices, warehouses and showrooms.

As of March 31, 2022, the Company’s leases have remaining lease terms up to 7 years .

Total operating lease cost as of March 31, 2022 and December 31, 2021 amounted to $ 8,907,641 and $ 9,137,045 , respectively.

As of June 30, 2022, the Company’s leases have remaining lease terms up to 7 years .

Total operating lease cost as of June 30, 2022 and December 31, 2021 amounted to $ 8,678,120 and $ 9,137,045 , respectively.

The table below presents the operating lease related assets and liabilities recorded on the Company’s consolidated balance sheets:

March 31, 2022

June 30, 2022

December 31, 2021

4 unchanged sentences

Information relating to the lease term and discount rate are as follows:

March 31, 2022

June 30, 2022

December 31, 2021

3 unchanged sentences

Operating leases

As of March 31, 2022, the maturities of operating lease liabilities were as follows:

As of June 30, 2022, the maturities of operating lease liabilities were as follows:

For the years ending December 31,

14 unchanged sentences

however, East West Bank provided a waiver for such non-compliance.

As of March 31, 2022, East West Bank waived testing of this financial covenant.

As of June 30, 2022, FGI Industries was in compliance with this financial covenant.

The loan bears interest at a rate per annum equal to 0.25 percentage points above the Prime Rate quoted by the Wall Street Journal.

Under no circumstances will the interest rate on this loan be less than 3.250 % per annum or more than the maximum rate allowed by applicable law.

The interest rate as of March 31, 2022 and December 31, 2021 was 3.75 % and 3.50 %, respectively.

The interest rate as of June 30, 2022 and December 31, 2021 was 4.75 % and 3.50 %, respectively.

Each sum of borrowings under the Credit Agreement is deemed due on demand and is classified as a short-term loan.

The outstanding balance of such loan was $ 16,321,410 and $ 14,657,280 as of March 31, 2022 and December 31, 2021, respectively.

The outstanding balance of such loan was $ 14,690,048 and $ 14,657,280 as of June 30, 2022 and December 31, 2021, respectively.

On April 9, 2020, Foremost Groups, Inc.

83 unchanged sentences

The remaining options will vest in a series of 24 successive equal monthly installments upon completion of each additional month of service, commencing on the grant date.

On April 13, 2022, the board of directors approved the issuance of 97,371 stock options under the 2021 Equity Plan with an exercise price per share of $ 2.52 and a contractual life of 10 years to the Company’s employees to incentivize their performance and continue to align their interests with the Company’s shareholders.

All these options will vest as to one -third of the shares on the one-year anniversary of the grant date.

The remaining options will vest in a series of 24 successive equal monthly installments upon completion of each additional month of service, commencing on the grant date.

On April 13, 2022, the board of directors approved the issuance of 8,750 restricted shares to an employee under the 2021 Equity Plan.

These awards will vest as to one -third of the shares on the one-year anniversary of the grant date.

The remaining shares will vest in a series of 24 successive equal monthly installments upon completion of each additional month of service, commencing on the grant date.

On May 11, 2022, the board of directors approved the issuance of 184,627 stock options under the 2021 Equity Plan with an exercise price per share of $ 2.26 and a contractual life of 10 years to the Company’s certain officers to incentivize their performance and continue to align their interests with the Company’s shareholders.

All these options will vest as to one -third of the shares on the one-year anniversary of the grant date.

The remaining options will vest in a series of 24 successive equal monthly installments upon completion of each additional month of service, commencing on the grant date.

On May 11, 2022, the board of directors approved the issuance of 87,611 restricted shares under the 2021 Equity Plan to the Company’s certain officers to incentivize their performance and continue to align their interests with the Company’s shareholders.

All these awards will vest as to one -third of the shares on the one-year anniversary of the grant date.

The remaining shares will vest in a series of 24 successive equal monthly installments upon completion of each additional month of service, commencing on the grant date.

On May 17, 2022, the board of directors approved the issuance of 16,363 restricted shares to our non-employee directors under the 2021 Equity Plan.

These awards will vest on December 31, 2024.

The Company has elected to recognize share-based compensation expense using a straight-line method for all the employee equity awards granted with graded vesting based on service conditions, provided that the amount of compensation cost recognized at any date is at least equal to the portion of the grant date fair value of the equity awards that are vested at that date.

The options granted to employees are measured based on the grant date fair value of the equity instrument.

They are accounted for as equity awards and contain only service vesting conditions.

They are accounted for as equity awards and contain service or performance vesting conditions.

The following table summarizes the Company’s employee share option activities:

Share options outstanding at December 31, 2021

Share options outstanding at March 31, 2022

Vested and exercisable at March 31, 2022

Share options outstanding at June 30, 2022

Vested and exercisable at June 30, 2022

The aggregate intrinsic value in the table above represents the difference between the exercise price of the awards and the fair value of the underlying ordinary shares at each reporting date for those awards that had exercise prices below the estimated fair value of the relevant ordinary shares.

For the three months ended March 31, 2022 and 2021, the total fair value of options awarded was $ 141,401 and $ 0 , respectively.

For the six months ended June 30, 2022 and 2021, the total fair value of options awarded was $ 454,373 and $ 0 , respectively.

Fair value of options

The Company used the Black-Scholes simplified method for the three months ended March 31, 2022.

The Company used the Black-Scholes simplified method for the six months ended June 30, 2022.

The assumptions used to value the options granted to employees were as follows:

For the three months ended

For the six months ended

Risk-free interest rate

Expected volatility range

40.30 ~ 45.67

Fair market value per ordinary share as at grant dates

4 unchanged sentences

The following table sets forth the amount of share-based compensation expense included in each of the relevant financial statement line items:

For the three months ended

For the six months ended

Selling and marketing expenses

1 unchanged sentence

Total share-based compensation expenses

As of March 31, 2022, there was $ 818,213 in total unrecognized employee share-based compensation expense related to unvested options, which may be adjusted for actual forfeitures occurring in the future.

As of June 30, 2022, there was $ 1,282,314 in total unrecognized employee share-based compensation expense related to unvested options, which may be adjusted for actual forfeitures occurring in the future.

Total unrecognized compensation cost may be recognized over a weighted-average period of 2.70 years.

2 unchanged sentences

For the Three Months Ended

For the Six Months Ended

Income components

6 unchanged sentences

federal income tax rate and taxes at the Company’s effective income tax rate on earnings before income taxes are as follows:

For the Three Months Ended

For the Six Months Ended

Federal statutory rate

6 unchanged sentences

The following is a summary of the components of the net deferred tax assets and liabilities recognized in the consolidated balance sheets:

March 31, 2022

June 30, 2022

December 31, 2021

14 unchanged sentences

Deferred tax assets, net of deferred tax liabilities

The deferred tax assets related to the Company’s net operating losses as of March 31, 2022 and December 31, 2021 have no expiration date.

The deferred tax assets related to the Company’s net operating losses as of June 30, 2022 and December 31, 2021 have no expiration date.

Note 12 — Related party transactions and balances

5 unchanged sentences

An entity under common control

Foremost Worldwide Co.,Ltd

An entity under common control

Other receivables — related parties

15 unchanged sentences

The Canadian Deposit Insurance Corporation pays compensation up to a limit of CAD 100,000 (approximately USD 79,000 ) if the bank with which an individual/a company holds its eligible deposit fails.

As of March 31, 2022, a cash balance of CAD 755,669 (USD 595,155 ) was maintained at financial institutions in Canada, of which CAD 655,669 (USD 516,397 ) was subject to credit risk.

As of June 30, 2022, a cash balance of CAD 2,241,729 (USD 1,765,558 ) was maintained at financial institutions in Canada, of which CAD 2,141,729 (USD 1,686,799 ) was subject to credit risk.

The Taiwan Central Deposit Insurance Corporation pays compensation up to a limit of New Taiwan Dollar 3,000,000 (approximately USD 105,000 ) if the bank with which an individual/a company holds its eligible deposit fails.

As of March 31, 2022, a cash balance of USD 300,186 was maintained at financial institutions in Taiwan, of which USD 195,401 was subject to credit risk.

As of June 30, 2022, an aggregated cash balance of USD 865,845 was maintained at financial institutions in Taiwan, of which USD 645,912 was subject to credit risk.

The Federal Deposit Insurance Corporation pays compensation up to a limit of USD 250,000 if the bank with which an individual/a company holds its eligible deposit fails.

As of March 31, 2022, a cash balance of USD 7,570,686 was maintained at financial institutions in the United States, of which USD 7,320,686 was subject to credit risk.

As of June 30, 2022, a cash balance of USD 275,776 was maintained at financial institutions in the United States, of which USD 25,776 was subject to credit risk.

While management believes that these financial institutions are of high credit quality, it also continually monitors their creditworthiness.

3 unchanged sentences

Customer concentration risk

For the three months ended March 31, 2022, two customers accounted for 27.8 % and 18.6 % of the Company’s total revenues, respectively.

For the three months ended March 31, 2021, two customers accounted for 29.9 % and 13.9 % of the Company’s total revenues, respectively.

No other customer accounts for more than 10% of the Company’s revenue for the three months ended March 31, 2022 and 2021.

As of March 31, 2022, three customers accounted for 24.3 %, 15.4 % and 15.3 % of the total balance of accounts receivable, respectively.

For the three months ended June 30, 2022, three customers accounted for 21.2 %, 19.3 % and 10.8 % of the Company’s total revenues, respectively.

For the three months ended June 30, 2021, three customers accounted for 26.3 %, 18.5 % and 13.1 % of the Company’s total revenues, respectively.

No other customer accounts for more than 10% of the Company’s revenue for the three months ended June 30, 2022 and 2021.

For the six months ended June 30, 2022, two customers accounted for 23.3 % and 20.0 % of the Company’s total revenues, respectively.

For the six months ended June 30, 2021, three customers accounted for 27.9 %, 13.5 % and 13.1 % of the Company’s total revenues, respectively.

No other customer accounts for more than 10% of the Company’s revenue for the six months ended June 30, 2022 and 2021.

As of June 30, 2022, four customers accounted for 22.1 %, 17.9 %, 13.8 % and 11.2 % of the total balance of accounts receivable, respectively.

As of December 31, 2021, four customers accounted for 22.4 %, 14.0 %, 13.1 % and 12.1 % of the total balance of accounts receivable, respectively.

No other customer accounted for more than 10% of the Company’s accounts receivable as of March 31, 2022 and December 31, 2021.

No other customer accounted for more than 10% of the Company’s accounts receivable as of June 30, 2022 and December 31, 2021.

Vendor concentration risk

For the three months ended March 31, 2022, Tangshan Huida Ceramic Group Co., Ltd (“Huida”) accounted for 45.3 % of the Company’s total purchases, and another vendor accounted 12.2 % of the Company’s total purchases.

For the three months ended March 31, 2021, Huida accounted for 42.6 % and another vendor accounted 12.4 % of the Company’s total purchases.

No other supplier accounted for more than 10% of the Company’s total purchases for the three months ended March 31, 2022 and 2021.

As of March 31, 2022, Huida accounted for 70.2 % of the total balance of accounts payable.

For the three months ended June 30, 2022, Tangshan Huida Ceramic Group Co., Ltd (“Huida”) accounted for 58.8 % of the Company’s total purchases.

For the three months ended June 30, 2021, Huida accounted for 34.8 % of the Company’s total purchases.

No other supplier accounted for more than 10% of the Company’s total purchases for the three ended June 30, 2022 and 2021

For the six months ended June 30, 2022, Tangshan Huida Ceramic Group Co., Ltd (“Huida”) accounted for 52.2 % of the Company’s total purchases.

For the six months ended June 30, 2021, Huida accounted for 38.3 % and another vendor accounted 10.2 % of the Company’s total purchases.

No other supplier accounted for more than 10% of the Company’s total purchases for the six months ended June 30, 2022 and 2021.

As of June 30, 2022, Huida accounted for 68.9 % of the total balance of accounts payable.

As of December 31, 2021, Huida accounted for 66.1 % of the total balance of accounts payable.

No other supplier accounts for more than 10% of the Company’s accounts payable as of March 31, 2022 and December 31, 2021.

No other supplier accounts for more than 10% of the Company’s accounts payable as of June 30, 2022 and December 31, 2021.

Note 14 — Commitments and contingencies

7 unchanged sentences

Note 16 — Subsequent events

All these options will vest as to one -third of the shares on the one-year anniversary of the grant date.

The remaining options will vest in a series of 24 successive equal monthly installments upon completion of each additional month of service, commencing on the grant date.

On April 13, 2022, the board of directors approved the issuance of 8,750 restricted shares to an employee under the 2021 Equity Plan.

These awards will vest as to one -third of the shares on the one-year anniversary of the grant date.

The remaining shares will vest in a series of 24 successive equal monthly installments upon completion of each additional month of service, commencing on the grant date.

In July 2022, FGI has entered into a property purchase agreement with a related party to purchase building and sub-lease of land for the aggregated amount of approximately $ 1.97 million.

As of the date of this report, FGI has remitted approximately $ 0.6 million, and is expected to remit the remaining balance by the end of November 2022 to complete the purchase transactions.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements