What changed in this filing

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Item 1A. Risk Factors

2026-04-10 compared with 2025-03-31 · 56 added, 59 removed, 441 unchanged (21% of the section changed)

82 unchanged sentences

We have entered into long-term agreements with certain significant suppliers to help ensure continued availability of our manufactured product supply and to establish firm pricing, but at times these contractual commitments may result in our paying above market prices for manufactured products during the term of the contract.

Increases in tariffs, trade restrictions or taxes on our products could have an adverse impact on our operations.

The commerce we conduct in the international marketplace and our reliance on overseas manufacturing makes us subject to tariffs, trade restrictions and other taxes when the raw materials or components we purchase, and the products we ship, cross international borders.

Trade tensions between the United States and China, Canada, Mexico and other countries have been escalating in recent years.

In 2025, the U.S.government enacted significant changes to its tariff regime that increased rates on a substantial number of imports.

Certain foreign jurisdictions have responded with reciprocal tariffs which resulted in corresponding actions by the U.S.

Certain of these tariffs have been paused or modified from time to time as trade discussions ensued.

In February 2026, in response to the Supreme Court invalidating many of the existing tariffs, the administration instituted a 10% global tariff on all imports and has signaled it may seek higher tariffs.

The potential for additional tariff increases may continue to result in increased reciprocal tariffs or other restrictive trade measures by the U.S.

or foreign jurisdictions.

Given our products are manufactured primarily in Asia, including China, Vietnam, Cambodia, and other Asian countries, additional tariffs are likely to increase our costs of goods sold and could materially adversely impact our profitability, results of operations and financial condition.

Moreover, we would likely need to alter our pricing as a result of such tariffs, which could reduce demand for our products or make our products less competitive than those of our competitors whose inputs are not subject to these tariffs, thereby decreasing our revenues and adversely impacting our results of operations.

Products we sell into certain foreign markets could also become subject to similar retaliatory tariffs, making the products we sell uncompetitive compared to similar products not subjected to such import tariffs.

The recent enactment of tariffs by the government of the United States, along with the unpredictability of the tariff rates, poses a significant risk to our business operations and may materially increase our costs and reduce our margins.

We are continuing to analyze and enact strategies to moderate or minimize the effects of these trade actions, including evaluating the country of origin for sourcing product into the United States and diversifying our supply chain, negotiating with suppliers, and adjusting our pricing strategies.

However, there can be no assurance that these measures will be successful, or that they will offset the negative impact of the tariffs on our business.

Given the uncertainty regarding scope and duration of the current and potential tariffs, as well as the potential for additional trade actions by the United States or other countries, the specific impact to our business, results of operations, cash flows, and financial condition is uncertain but could be material.

Our top ten customers represent a large portion of our sales.

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Our sales are concentrated with ten significant customers who collectively represented 66% and 69% of our consolidated net sales for 2025 and 2024, respectively, and this concentration may continue to increase.

In particular, The Home Depot represented approximately 17% and 18% of our consolidated net sales in 2024 and 2023, respectively.

The Home Depot and other home center retailers can significantly affect the prices we receive for our products and the terms and conditions on which we do business with them.

A significant portion of our sales are to home center retailers, which can significantly affect the prices we receive for our products and the terms and conditions on which we do business with them.

Additionally, these home center retailers may reduce the number of vendors from which they purchase and could make significant changes in their volume of purchases from us.

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There are risks associated with our international operations and global strategies.

In each of 2024 and 2023, approximately 38% and 36%, respectively of our sales were made outside of the United States (principally in Canada and Europe) and transacted in currencies other than the U.S.

In each of 2025 and 2024, approximately 38% of our sales were made outside of the United States (principally in Canada and Europe) and transacted in currencies other than the U.S.

In addition to our Canadian and European operations, we manufacture products and source products and components from China and parts of Southeast Asia.

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We may seek to mitigate the risk of such impacts through hedging, but such hedging activities may be costly and may not be effective.

In addition, emerging market economies in which we operate may be particularly vulnerable to the impact of rising interest rates, inflationary pressures, weaker oil and other commodity prices, and large external deficits.

In addition, emerging market economies in which we operate may be particularly vulnerable to the impact of rising interest rates, inflationary pressures, weaker oil and other commodity prices,

and large external deficits.

Risks in one country can limit our opportunities for portfolio growth and negatively affect our operations in another country or countries.

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In addition, we may be exposed to credit risks in some of those markets.

Global or regional unrest, conflict, geopolitical disputes or catastrophic events could affect our operations and results of operations.

Global or regional unrest, conflict (such as the hostilities in the Middle East and the war between Russia and Ukraine), geopolitical disputes or catastrophic events could affect global trade routes, financial markets, global economic activity and our operations and results of operations.

Our business can be affected by war, large-scale terrorist or other hostile acts, especially those directed against the United States or other major industrialized countries in which we do business or supply products, major natural disasters, long-term periods of drought, or widespread outbreaks of infectious diseases.

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For example, the U.S.-China trade relations remain uncertain, and if tensions continue to worsen, our supply chain, production and delivery of products could be negatively impacted.

Further, regional conflicts, such as the Ukraine-Russia and Israel-Hamas conflicts, could escalate and expand, which in turn could have negative impacts on our operations, the global economy and financial markets.

Further, regional conflicts, such as the hostilities in the Middle East and the war between Russia and Ukraine, could escalate and expand, which in turn could have negative impacts on trade routes, our operations, the global economy and financial markets.

Such disruptions of regional or global economic activity can affect consumers’ purchasing power in the affected areas and, therefore, reduce demand for our products.

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To be successful, we must invest significant resources to attract, develop and retain highly qualified, talented and diverse employees at all levels, who have the experience, knowledge and expertise to implement our strategic initiatives.

We compete for employees with a broad range of employers in many different industries, including large multinational firms, and we may fail in recruiting, developing, motivating and retaining them, particularly when there are low

unemployment levels.

From time to time, we have been affected by a shortage of qualified personnel in certain geographic areas.

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The extent of the impact of a pandemic similar to the COVID-19 pandemic on our business and financial results will depend on numerous evolving factors that we are not able to accurately predict and that all will vary by market, including the duration and scope of the pandemic, the emergence of new variants of the virus and the efficacy of vaccines against such variants, global economic conditions during and after the pandemic, including disruptions in the global supply chain, inflation and labor shortages, government actions that may be taken in the future, in response to the pandemic, and changes in customer behavior in response to the pandemic, some of which may be more than just temporary.

Increases in tariffs, trade restrictions or taxes on our products could have an adverse impact on our operations.

Trade tensions between the United States and China, Canada, Mexico and other countries have been escalating in recent years.

Recently, the U.S.

presidential administration has announced new tariffs on imports from China, Canada and Mexico and may impose restrictions against other regions.

In prior years, U.S.

tariff impositions against Chinese exports have been followed by retaliatory Chinese tariffs on U.S.

exports to China and this may recur in China as well as Canada and Mexico.

Our products are manufactured primarily in Asia, and such countries may in the future be subject to these tariffs.

To the extent these tariffs increase our costs of goods sold, it could materially adversely impact our profitability, results of operations and financial condition.

To the extent we alter our pricing as a result of such tariffs, it could reduce demand for our products or make our products less competitive than those of our competitors whose inputs are not subject to these tariffs, thereby decreasing our revenues and adversely impacting our results of operations.

We are still evaluating the potential impact of the recently-announced tariffs on our business and financial condition.

There can be no assurances that we will not be adversely impacted by such tariffs or that we will be able to pass on any incremental costs to our customers.

Further changes in U.S.

trade policies, tariffs, taxes, export restrictions or other trade barriers, or restrictions on raw materials or components may limit our ability to produce products, increase our manufacturing costs, decrease our profit margins, reduce the competitiveness of our products, or inhibit our ability to sell products or purchase raw materials or components, which would have a material adverse effect on our business, results of operations and financial condition.

Risks Related to Doing Business in China

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We believe we are compliant with these regulations, to the extent they are applicable to us, and we do not believe our business will be materially affected by these measures.

However, if we were selected for review, or one of our suppliers

was selected for review, we or such supplier may be required to suspend operations in China during such review.

However, if we were selected for review, or one of our suppliers was selected for review, we or such supplier may be required to suspend operations in China during such review.

Cybersecurity review could also result in negative publicity with respect to our company or our suppliers and could divert managerial attention and financial resources.

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agencies to investigate or inspect our operations or to otherwise provide information.

While we will comply with requests from these regulators, there is no guarantee that such requests will be honored by those entities that provide services to us or with which we associate, especially for any such entities that are located in China.

Furthermore, an on-site inspection of our facilities by any of these regulators may be

limited or entirely prohibited.

entities that are located in China.

Furthermore, an on-site inspection of our facilities by any of these regulators may be limited or entirely prohibited.

Such inspections, though permitted by our company and our affiliates, are subject to the unpredictability of the Chinese enforcement and other government agencies and may therefore be impossible to facilitate.

Our auditor, Marcum LLP, is a Registered Public Accounting Firm with the PCAOB and is based in New York, New York.

Our auditor, CBIZ CPAs P.C., is a Registered Public Accounting Firm with the PCAOB and is based in New York, New York.

Under the Holding Foreign Companies Accountable Act (the “HFCAA”), the PCAOB is permitted to inspect our independent public accounting firm.

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Our competitive advantage is due, in part, to our ability to maintain our strong brands and to develop and introduce innovative new and improved products.

Our initiatives to invest in brand building, brand awareness and product innovation

may not be successful.

Our initiatives to invest in brand building, brand awareness and product innovation may not be successful.

The uncertainties associated with developing and introducing innovative and improved products, such as gauging changing consumer demands and preferences and successfully developing, manufacturing, marketing and selling these products, may impact the success of our product introductions.

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We operate in an industry that is subject to changing consumer trends, demands and preferences.

The uncertainties associated with developing and introducing new products, such as gauging changing consumer preferences and successfully developing, manufacturing, marketing and selling new products, could lead to, among other things, rejection of a new product line, reduced demand and price reductions for our products.

of a new product line, reduced demand and price reductions for our products.

If our products do not keep up with consumer trends, demands and preference, we could lose market share, which could have a material adverse effect on our business, financial condition or results of operations.

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If these AI products do not work as intended, or if our competitors are better able to effectively integrate these new technologies into their offerings, our competitive position may suffer.

In addition, we may be harmed if our proprietary or confidential information regarding our business is exposed through the unauthorized use of AI technologies or our systems infringe on intellectual property rights of others.

Changes in Cayman Islands or U.S.

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We have been and may continue to be subject to cybersecurity attacks, which could adversely affect our results of operations and financial position.

Global cybersecurity vulnerabilities, threats and more frequent, sophisticated and targeted attacks pose a risk to our information technology systems and to critical third-party information technology platforms we utilize.

We have implemented security policies, processes and layers of defense designed to help identify and protect against misappropriation or corruption of our systems and information and disruption of our operations.

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We may be adversely affected if our information systems breakdown, fail, or are no longer supported or if our AI capabilities do not function as intended.

In addition to the consequences that may occur from interruptions in our systems, global cybersecurity vulnerabilities, threats and more sophisticated and targeted attacks pose a risk to our information technology systems.

In addition to the consequences that

may occur from interruptions in our systems, global cybersecurity vulnerabilities, threats and more sophisticated and targeted attacks pose a risk to our information technology systems.

We have implemented security policies, processes and layers of defense designed to help identify and protect against intentional and unintentional misappropriation or corruption of our systems and information and disruption of our operations.

Despite these efforts, our systems may in the future be damaged, disrupted, or shut down due to cybersecurity attacks by unauthorized access, malware, ransomware, undetected intrusion, hardware failures, or other events, and in these circumstances our disaster recovery plans may be ineffective or inadequate.

In addition, the rapid evolution and increased adoption of new technologies, such as artificial intelligence, may intensify our cybersecurity risks.

These breaches or intrusions could in the future lead to business interruption, production or operational downtime, product shipment delays,

exposure or loss of proprietary, confidential, personal or financial information, data corruption, an inability to report our financial results in a timely manner, damage to the reputation of our brands, damage to our relationships with our customers and suppliers, exposure to litigation, and increased costs associated with the remediation and mitigation of such attacks.

In addition, the rapid evolution and increased adoption of new technologies, such as AI, may intensify our cybersecurity risks.

These breaches or intrusions could in the future lead to business interruption, production or operational downtime, product shipment delays, exposure or loss of proprietary, confidential, personal or financial information, data corruption, an inability to report our financial results in a timely manner, damage to the reputation of our brands, damage to our relationships with our customers and suppliers, exposure to litigation, and increased costs associated with the remediation and mitigation of such attacks.

Such events could adversely affect our results of operations and financial position.

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Any disclosure of confidential information provided by, or concerning, our employees, customers or other third parties, including through inadvertent disclosure, unapproved dissemination, or unauthorized access, our reputation could be harmed and we could be subject to civil or criminal liability and regulatory actions could require us to comply with various breach notification laws and may expose us to litigation, remediation and investigation costs, increased costs for security measures, loss of revenue, damage to our reputation, and potential liability.

collateral consequences, remedial measures and legal expenses, all of which could adversely affect our business, results of operations, financial condition and reputation.

We are subject to anti-corruption, anti-bribery, anti-money laundering, financial and economic sanctions and similar laws, and non-compliance with such laws can subject us to administrative, civil and criminal fines and penalties, collateral consequences, remedial measures and legal expenses, all of which could adversely affect our business, results of operations, financial condition and reputation.

We are subject to anti-corruption, anti-bribery, anti-money laundering, financial and economic sanctions and similar laws and regulations in various jurisdictions in which we conduct or in the future may conduct activities, including the U.S.

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If we issue ordinary shares or securities convertible into ordinary shares, our ordinary shareholders would experience additional dilution and, as a result, our share price may decline.

We are an emerging growth company and a smaller reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to “emerging growth companies” or “smaller reporting companies,” this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.

“smaller reporting companies,” this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.

We are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

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We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our ordinary shares held by non-affiliates equals or exceeds $700 million as of the last business day of any second fiscal quarter before that time, in which case we would no longer be an emerging growth company as of the end of such fiscal year.

We cannot predict whether investors would find our securities less

attractive in the event that we rely on these exemptions.

We cannot predict whether investors would find our securities less attractive in the event that we rely on these exemptions.

If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.

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Although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States, the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain conditions are met.

For a foreign judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained in a manner, or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards of punitive or multiple damages may well be held to be

contrary to public policy).

A Cayman Islands Court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.

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General Risk Factors

Management’s determination that material weaknesses exist in our internal controls over financial reporting could have a material adverse impact on our ability to produce timely and accurate financial statements and could negatively impact our business and the market for our ordinary shares .

Management’s determination that a material weakness exists in our internal controls over financial reporting could have a material adverse impact on our ability to produce timely and accurate financial statements and could negatively impact our business and the market for our ordinary shares.

The process of designing and implementing an effective accounting and financial reporting system is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments and to expend significant resources to maintain an accounting and financial reporting system that is adequate to satisfy our reporting obligations.

Based upon an evaluation conducted in connection with the preparation of FGI’s audited consolidated financial statements as of December 31, 2024, management concluded that our internal controls over financial reporting were not effective due to the material weaknesses in our internal controls over financial reporting.

Material weaknesses in our internal control over financial reporting included (a) inadequate segregation of duties related to the initiation and recording of journal entries to the general ledger, (b) inadequate evidence of management review controls regarding the review and approval of certain account reconciliations, and (c) inadequate evidence and precision of management review controls regarding loan covenants and covenant calculations.

We believe that these material weaknesses set forth above did not have an effect on our financial results.

We have been 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.

Additionally, we have enhanced our management review controls, including more robust documentation requirements for the review and approval of journal entries.

To address the material weakness related to 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.

Based upon an evaluation conducted in connection with the preparation of FGI’s audited consolidated financial statements as of December 31, 2025, management concluded that our internal controls over financial reporting were not effective due to the material weakness in our internal controls over financial reporting.

Specifically, this material weakness relates to insufficient precision in the design and operation of journal entry and account reconciliation review controls at a foreign subsidiary that was newly brought into scope and subject to a full-scope evaluation of internal controls over financial close and reporting for the first time during the year.

We believe that this material weakness set forth above did not have an effect on our financial results.

We have been evaluating and have begun implementing certain practices and procedures to address the foregoing material weakness.

To remediate the material weakness, management has initiated a series of corrective actions.

These include adding dedicated in-house accounting personnel to enhance oversight of the financial close process, implementing more robust journal entry and account reconciliation review procedures with clearly defined documentation and approval requirements, and strengthening evidence retention practices.

Management believes that, once these measures are fully implemented and have operated for a sufficient period of time, the material weakness will be remediated.

Management will continue to monitor and test the operating effectiveness of the related controls on an ongoing basis.

While we are actively identifying and implementing actions to improve the effectiveness of our internal controls over financial reporting and disclosure controls and procedures, there can be no assurance that our remediation efforts will be fully successful.

We expect to continue to incur or expend substantial accounting and other expenses and significant management time and resources in these efforts.

It is possible that our future assessment, or the future assessment by our independent registered public accounting firm, may reveal additional material weaknesses in our internal controls.

The failure to fully remediate the existing material weaknesses or the discovery of any future potential material weaknesses could result in future misstatements in our financial statements or in documents we file with the SEC and could have a negative impact on our business and the market for our ordinary shares.

For more information on our material weaknesses and the status of our remediation efforts, see Item 9A - Controls and Procedures, which includes Management’s Report on Internal Controls Over Financial Reporting.

It is possible that our future assessment, or the future assessment by our independent registered

public accounting firm, may reveal additional material weakness in our internal controls.

The failure to fully remediate the existing material weakness or the discovery of any future potential material weakness could result in future misstatements in our financial statements or in documents we file with the SEC and could have a negative impact on our business and the market for our ordinary shares.

For more information on our material weakness and the status of our remediation efforts, see Item 9A - Controls and Procedures, which includes Management’s Report on Internal Controls Over Financial Reporting.

Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud.

We are subject to the periodic reporting requirements of the Exchange Act.

We designed our disclosure controls and procedures to provide reasonable assurance that information we must disclose in reports we file or submit under the Exchange Act is accumulated and communicated to management, and recorded, processed, summarized and reported

within the time periods specified in the rules and forms of the SEC.

We believe that any disclosure controls and procedures, no matter how well those controls and procedures are conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

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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 1A. Risk Factors