What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2025-03-31 compared with 2024-03-26 · 41 added, 44 removed, 119 unchanged (42% of the section changed)

16 unchanged sentences

Based on such evaluation, the Company’s management concluded that, during the period covered by this Report, internal controls and procedures over financial reporting were not effective.

This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.

The following material weakness was noted:

We noted that there is an inadequate segregation of duties related to certain accounting functions due to the size of the Company’s subsidiaries.

In addition, the Company lacks evidence of management review controls activity taking place, such as but not limited to, the review and approval of journal entries and account reconciliations.

Management’s Remediation Initiatives

As of December 31, 2023, and through the date of this filing we are in the process of implementing segregation of duties and are determining further initiatives to undertake in order to remediate this remaining material weakness and anticipate that these initiatives will be implemented by the end of fiscal year 2024.

Remediation of Previously Reported Material Weaknesses

As previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022, our management concluded that we did not maintain effective internal control over financial reporting as of December 31, 2022, due to a weakness in our IT security environment, and controls and procedures including a lack of formal IT policies and procedures.

We have taken remediation steps to address this material weakness by strengthening IT securities and controls.

During the year ended December 31, 2023, we have developed and implemented formal IT policies and procedures, which ensured a structure approach to managing and safeguarding our IT environment.

We have also formed our cybersecurity committee and conducted regular cybersecurity training to foster a culture of security awareness throughout our organization.

As a result, management has concluded that the identified material weakness

related to the Company’s IT environment, policies and procedures has been considered remediated as of December 31, 2023.

This annual report does not include an attestation report of the Company’s registered independent public accounting firm regarding internal control over financial reporting.

Management’s report was not subject to attestation by the Company’s registered independent public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this Annual Report on Form 10-K.

Material Weaknesses in Internal Control Over Financial Reporting

During our assessment of internal control over financial reporting as of December 31, 2024, we identified the following material weaknesses:

• Inadequate segregation of duties related to the initiation and recording of journal entries to the general ledger.

• Inadequate evidence of management review controls regarding the review and approval of certain account reconciliations.

• Inadequate evidence and precision of management review controls regarding loan covenants and covenant calculations.

Remediation Efforts

We are evaluating and have begun implementing certain practices and procedures to address the foregoing material weaknesses.

To remediate the material weaknesses related to the review of journal entry and account reconciliation, we have implemented system controls designed to prevent significant unauthorized transactions from being posted without review and established sufficient compensating controls for effective account reconciliations.

To address the material weakness related to the debt covenant compliance, we have implemented an additional layer of review in the calculation and reporting process.

We plan to continue the implementation of these and other remediation efforts to address the identified material weaknesses in the future.

Changes in Internal Control Over Financial Reporting

1 unchanged sentence

OTHER INFORMATION

During the three months ended December 31, 2024, no director or executive officer adopted , modified or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement", as each term is defined in Item 408(a) of Regulation S-K.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

1 unchanged sentence

DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

The information required by this item is incorporated by reference to the 2023 Proxy Statement, which will be filed no later than 120 days after December 31, 2023.

We have adopted an insider trading policy governing the purchase, sale, and other disposition of our securities by our directors, officers, and employees.

We believe this policy is reasonably designed to promote compliance with insider trading laws, rules, and regulations and listing standards applicable to the Company.

A copy of our insider trading policy is filed as Exhibit 19 to this Form 10-K.

The other information required by this item is incorporated by reference to the 2024 Proxy Statement, which will be filed no later than 120 days after December 31, 2024.

EXECUTIVE COMPENSATION

7 unchanged sentences

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

DOCUMENTS FILED AS PART OF THIS REPORT

(a) DOCUMENTS FILED AS PART OF THIS REPORT

The following is a list of our financial statements filed in this Annual Report on Form 10-K under Item 8 of Part II hereof:

4 unchanged sentences

See Index to Exhibits below.

Number Description

3.1 Second Amended and Restated Memorandum and Articles of Association of FGI Industries Ltd., effective January 27, 2022 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on January 27, 2022).

15 unchanged sentences

10.2 Shared Services Agreement, dated January 14, 2022, by and between FGI Industries Inc.

and Foremost Home Industries, Inc.

and Foremost Home Inc.

(incorporated by reference to Exhibit 10.2 to the Company’s Annual Report on Form 10-K filed on March 31, 2022).

13 unchanged sentences

Annual Report on Form 10-K filed on March 31, 2022).

Number Description

10.7† FGI Industries Ltd.

26 unchanged sentences

10.19 Facility Letter by and between HSBC Bank Canada and FGI Canada Ltd., dated December 2, 2021 (incorporated by reference to Exhibit 10.19 to the Company’s Annual Report on Form 10-K filed April 17, 2023).

10.20* Letter Amendment by and between Royal Bank of Canada and FGI Canada Ltd., dated January 30, 202 5 .

10.21* General Agreement for Omnibus Credit Lines, by and between CTBC Bank Co., Ltd.

and FGI International, Limited

Subsidiaries of Registrant.

and FGI International, Limite d .

19.1* Insider Trading Polic y .

21.1* Subsidiaries of Registran t.

23.1* Consent of Marcum LLP, Independent Registered Public Accounting Firm.

3 unchanged sentences

32.1* Rule 1350 Certifications.

FGI Industries Compensation Recovery Policy, effective November 30, 2023.

XBRL Instance – The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

XBRL Taxonomy Schema Document

XBRL Taxonomy Calculation Linkbase Document

XBRL Taxonomy Definition Linkbase Document

XBRL Taxonomy Labels Linkbase Document

XBRL Taxonomy Presentation Linkbase Document

97 FGI Industries Compensation Recovery Policy, effective November 30, 2023 (incorporated by reference to Exhibit 97 to the Company's Annual Report on Form 10-K filed on March 26, 2024 .

101.INS XBRL Instance – The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH XBRL Taxonomy Schema Document

101.CAL XBRL Taxonomy Calculation Linkbase Document

101.DEF XBRL Taxonomy Definition Linkbase Document

101.LAB XBRL Taxonomy Labels Linkbase Document

Number Description

101.PRE XBRL Taxonomy Presentation Linkbase Document

104 Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101).

_____________________________________________________________________

† Indicates management contract or compensatory plan or arrangement.

11 unchanged sentences

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

/s/ David Bruce

Chief Executive Officer and Director

March 26, 2024

(Principal Executive Officer)

/s/ Perry Lin

Chief Financial Officer

March 26, 2024

(Principal Financial and Accounting Officer)

/s/ John Chen

Executive Chairman and Director

March 26, 2024

/s/ Todd Heysse

March 26, 2024

/s/ Kellie Zesch Weir

March 26, 2024

Signature Title Date

/s/ David Bruce Chief Executive Officer and Director March 31, 2025

David Bruce (Principal Executive Officer)

/s/ Perry Lin Chief Financial Officer March 31, 2025

Perry Lin (Principal Financial and Accounting Officer)

/s/ John Chen Executive Chairman and Director March 31, 2025

/s/ Todd Heysse Director March 31, 2025

/s/ Kellie Zesch Weir Director March 31, 2025

Kellie Zesch Weir

/s/ Jae Chung

March 26, 2024

/s/ Anagha Apte Director March 31, 2025

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-K

Item 9A. Controls and Procedures