2 unchanged sentences
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: Report of Independent Registered Public Accounting Firm (PCAOB ID:
+Added: Report of Independent Registered Public Accounting Firm – CBIZ CPAs P.C.
+Added: Report of Independent Registered Public Accounting Firm – Marcum LLP (PCAOB ID:
Consolidated Balance Sheets as of December 31, 202 5 and 202 4
−Removed: Consolidated Statements of Operations and Comprehensive (Loss) Income for the years ended December 31, 202 4 and 202 3
+Added: Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 202 5 and 202 4
Consolidated Statements of Changes in Shareholders’ Equity for the years ended December 31, 202 5 and 202 4
5 unchanged sentences
Opinion on the Financial Statements
−Removed: We have audited the accompanying consolidated balance sheets of FGI Industries Ltd.
−Removed: (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive (loss) income, changes in shareholders’ equity and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”).
−Removed: In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.
+Added: We have audited the accompanying consolidated balance sheet of FGI Industries Ltd.
+Added: (the “Company”) as of December 31, 2025, the related consolidated statements of operations and comprehensive loss, changes in shareholders’ equity and cash flows for the year ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”).
+Added: In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and the results of its operations and its cash flows for the year ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
+Added: We also have audited the adjustments to the 2024 consolidated financial statements to retrospectively apply the change in accounting for income taxes as a result of the adoption of Accounting Standards Update No.
+Added: 2023-09, Income Taxes (Topic 740):
+Added: Improvement to Income Tax Disclosures, as described in Note 2 and 11, as well as the Reverse Share Split of the Company’s ordinary shares, as described in Note 9.
+Added: In our opinion, such adjustments are appropriate and have been properly applied.
+Added: We were not engaged to audit, review, or apply any procedures to the 2024 consolidated financial statements of the Company other than with respect to these adjustments and, accordingly, we do not express an opinion or any other form of assurance on the 2024 consolidated financial statements taken as a whole.
Basis for Opinion
These financial statements are the responsibility of the Company's management.
−Removed: Our responsibility is to express an opinion on the Company's financial statements based on our audits.
+Added: Our responsibility is to express an opinion on the Company's financial statements based on our audit.
We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
−Removed: We conducted our audits in accordance with the standards of the PCAOB.
−Removed: Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
+Added: We conducted our audit in accordance with the standards of the PCAOB.
+Added: Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.
−Removed: As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.
+Added: As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.
Accordingly, we express no such opinion.
−Removed: Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
+Added: Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
−Removed: Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
−Removed: We believe that our audits provide a reasonable basis for our opinion.
+Added: Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
+Added: We believe that our audit provides a reasonable basis for our opinion.
+Added: /s/ CBIZ CPAs P.C.
+Added: CBIZ CPAs P.C.
+Added: We have served as the Company’s auditor since 2020 (such date takes into account the acquisition of certain assets of Marcum LLP by CBIZ CPAs P.C.
+Added: effective November 1, 2024).
+Added: April 10, 2026
+Added: Report of Independent Registered Public Accounting Firm
+Added: To the Shareholders and Board of Directors of
+Added: FGI Industries Ltd.
+Added: Opinion on the Financial Statements
+Added: We have audited, before the effects of the retrospective adjustments for the impact of the reverse stock split (the “Reverse Stock Split Adjustments”) as discussed in Note 9 and the adoption of ASU 2023-09, Income Taxes (Topic 740):
+Added: Improvements to Income Tax Disclosures (“ASU 2023-09”) as discussed in Note 2 and 11 to the consolidated financial statements, the accompanying consolidated balance sheet of FGI Industries Ltd.
+Added: as of December 31, 2024, and the related consolidated statements of operations and comprehensive loss, changes in shareholders' equity, and cash flows for the year ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”) (the 2024 financial statements before the effects of the Reverse Stock Split Adjustments and ASU 2023-09).
+Added: In our opinion, based on our audit, the financial statements, before the effects of the Reverse Stock Split Adjustments and ASU 2023-09, present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the year ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.
+Added: We were not engaged to audit, review, or apply any procedures to the Reverse Stock Split Adjustments and the effect of the retrospective adoption of ASU 2023-09 and, accordingly, we do not express an opinion or any other form of assurance about whether such adjustments are appropriate and have been properly applied.
+Added: Those retrospective adjustments were audited by CBIZ CPAs P.C.
+Added: Basis for Opinion
+Added: These financial statements are the responsibility of the Company's management.
+Added: Our responsibility is to express an opinion on the Company's financial statements based on our audit.
+Added: We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S.
+Added: federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
+Added: We conducted our audit in accordance with the standards of the PCAOB.
+Added: Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
+Added: The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.
+Added: As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.
+Added: Accordingly, we express no such opinion.
+Added: Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
+Added: Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
+Added: Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
+Added: We believe that our audit provides a reasonable basis for our opinion.
/s/ Marcum LLP
−Removed: We have served as the Company’s auditor since 2020.
+Added: We have served as the Company’s auditor from 2020 to April 22, 2025.
March 31, 2025
5 unchanged sentences
Cash $ 1,899,801 $ 4,558,160
−Removed: Accounts receivable, net 20,293,555 16,195,543
+Added: Accounts receivable, net of allowances of 1,210,930 and 1,193,748 as of December 31, 2025 and 2024, respectively
+Added: 13,847,762 20,293,555
Inventories, net 15,292,742 13,957,867
3 unchanged sentences
PROPERTY AND EQUIPMENT, NET 3,853,864 3,634,340
−Removed: Intangible assets 1,849,951 102,227
+Added: Intangible assets, net 1,733,616 1,849,951
Operating lease right-of-use assets, net 11,031,892 12,823,747
17 unchanged sentences
SHAREHOLDERS’ EQUITY
−Removed: Preference Shares ($ 0.0001 par value, 10,000,000 shares authorized, no shares issued and outstanding as of December 31, 2024 and December 31, 2023)
−Removed: Ordinary shares ($ 0.0001 par value, 200,000,000 shares authorized, 9,563,914 and 9,547,607 shares issued and outstanding as of December 31, 2024 and December 31, 2023, respectively)
+Added: Preference Shares ($ 0.0001 par value, 2,000,000 shares authorized, no shares issued and outstanding as of December 31, 2025 and 2024)
+Added: Ordinary shares ($ 0.0005 par value, 40,000,000 shares authorized, 1,920,140 and 1,912,783 shares issued and outstanding as of December 31, 2025 and 2024, respectively)
Additional paid-in capital 21,612,226 21,279,047
−Removed: Retained earnings 3,212,435 4,413,524
+Added: (Accumulated deficit) retained earnings ( 2,927,091 ) 3,212,435
Accumulated other comprehensive loss ( 1,402,946 ) ( 2,239,560 )
7 unchanged sentences
FGI INDUSTRIES LTD.
−Removed: CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
−Removed: For the Years Ended
+Added: CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
+Added: For the Year Ended
Revenue $ 130,528,652 $ 131,818,073
6 unchanged sentences
Total operating expenses 37,653,148 37,526,931
−Removed: (Loss) income from operations ( 2,099,591 ) 2,304,443
+Added: Loss from operations ( 2,402,056 ) ( 2,099,591 )
Other income (expenses)
1 unchanged sentence
Interest expense ( 1,330,714 ) ( 1,246,742 )
−Removed: Other income (expenses), net 1,054,443 ( 177,469 )
−Removed: Total other income (expenses), net ( 182,507 ) ( 916,655 )
−Removed: (Loss) income before income taxes ( 2,282,098 ) 1,387,788
+Added: Other (expenses) income, net ( 611,386 ) 1,054,443
+Added: Total other (expenses) income, net ( 1,936,958 ) ( 182,507 )
+Added: Loss before income taxes ( 4,339,014 ) ( 2,282,098 )
Provision for (benefit of) income taxes
1 unchanged sentence
Deferred 2,454,004 ( 1,496,752 )
−Removed: Total (benefit of) provision for income taxes ( 547,821 ) 808,224
−Removed: Net (loss) income ( 1,734,277 ) 579,564
+Added: Total provision for (benefit of) income taxes 2,786,392 ( 547,821 )
+Added: Net loss ( 7,125,406 ) ( 1,734,277 )
net loss attributable to non-controlling shareholders ( 985,880 ) ( 533,188 )
−Removed: Net (loss) income attributable to FGI Industries Ltd.
+Added: Net loss attributable to FGI Industries Ltd.
shareholders ( 6,139,526 ) ( 1,201,089 )
−Removed: Other comprehensive (loss) income
+Added: Other comprehensive income (loss)
Foreign currency translation adjustment 836,614 ( 1,128,061 )
−Removed: Comprehensive (loss) income ( 2,862,338 ) 864,384
+Added: Comprehensive loss ( 6,288,792 ) ( 2,862,338 )
comprehensive loss attributable to non-controlling shareholders ( 985,880 ) ( 533,188 )
−Removed: Comprehensive (loss) income attributable to FGI Industries Ltd.
+Added: Comprehensive loss attributable to FGI Industries Ltd.
shareholders $ ( 5,302,912 ) $ ( 2,329,150 )
2 unchanged sentences
Diluted 1,918,061 1,913,033
−Removed: (Loss) earnings per share
+Added: Loss per share
Basic $ ( 3.20 ) $ ( 0.63 )
4 unchanged sentences
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’
−Removed: Preference Shares Ordinary Shares Additional
+Added: Ordinary Shares Additional
Capital Retained
−Removed: Earnings Accumulated
+Added: Earnings (Accumulated Deficit) Accumulated
Comprehensive
−Removed: Loss Total FGI
−Removed: Industries Ltd.
−Removed: Shareholders'
Interests Total
Shareholders'
−Removed: Shares Amount Shares Amount
+Added: Shares Amount
Balance at January 1, 2024 1,909,521 $ 955 $ 20,877,832 $ 4,413,524 $ ( 1,111,499 ) $ ( 154,040 ) $ 24,026,772
Share-based compensation 3,262 1 401,215 — — — 401,216
−Removed: Net income (loss) — — — — — 733,604 — 733,604 ( 154,040 ) 579,564
+Added: Net loss — — — ( 1,201,089 ) — ( 533,188 ) ( 1,734,277 )
Foreign currency translation adjustments — — — — ( 1,128,061 ) — ( 1,128,061 )
8 unchanged sentences
CONSOLIDATED STATEMENTS OF CASH FLOWS
−Removed: For the Years Ended
+Added: For the Year Ended
CASH FLOWS FROM OPERATING ACTIVITIES
−Removed: Net (loss) income $ ( 1,734,277 ) $ 579,564
−Removed: Adjustments to reconcile net (loss) income to net cash used in operating activities
+Added: Net loss $ ( 7,125,406 ) $ ( 1,734,277 )
+Added: Adjustments to reconcile net loss to net cash provided by (used in) operating activities
Depreciation 667,432 474,828
3 unchanged sentences
Provision for defective return 5,392 257,643
−Removed: Foreign exchange transaction (gain) loss ( 659,544 ) 185,317
−Removed: Deferred income tax (benefit) expense ( 1,496,752 ) 96,707
+Added: Foreign exchange transaction loss (gain) 563,740 ( 659,544 )
+Added: Deferred income tax expense (benefit) 2,454,004 ( 1,496,752 )
Changes in operating assets and liabilities
9 unchanged sentences
Accrued expenses and other current liabilities ( 297,719 ) 1,865,625
−Removed: Net cash (used in) provided by operating activities ( 7,425,317 ) 2,212,823
+Added: Net cash provided by (used in) operating activities 673,220 ( 7,425,317 )
CASH FLOWS FROM INVESTING ACTIVITIES
3 unchanged sentences
CASH FLOWS FROM FINANCING ACTIVITIES
−Removed: Net proceeds from (repayments of) revolving credit facility 7,543,192 ( 2,835,876 )
−Removed: Net cash provided by (used in) financing activities 7,543,192 ( 2,835,876 )
+Added: Proceeds from credit facilities 60,348,042 74,136,436
+Added: Repayments of credit facilities ( 62,981,581 ) ( 66,593,244 )
+Added: Net cash (used in) provided by financing activities ( 2,633,539 ) 7,543,192
EFFECT OF EXCHANGE RATE FLUCTUATION ON CASH 317,807 ( 461,140 )
6 unchanged sentences
NON-CASH INVESTING AND FINANCING ACTIVITIES
−Removed: New addition on right-of-use assets $ ( 158,082 ) $ ( 7,204,742 )
+Added: Lease liability arising from obtaining a right-of-use asset $ ( 1,150,282 ) $ ( 158,082 )
+Added: Derecognition of right-of-use asset and lease liability upon early termination $ ( 1,251,111 ) $ —
Acquisition of intangible asset partially through prior period advanced payment $ — $ ( 1,241,664 )
8 unchanged sentences
The Company is a supplier of global kitchen and bath products and currently focuses on the following categories:
−Removed: sanitaryware (primarily toilets, sinks, pedestals and toilet seats), bath furniture (vanities, mirrors and cabinets), shower systems, customer kitchen cabinetry and other accessory items.
+Added: sanitaryware (primarily toilets, sinks, pedestals and toilet seats), bath furniture (vanities, mirrors and cabinets), shower systems, custom kitchen cabinetry and other accessory items.
These products are sold primarily for repair and remodeling (“R&R”) activity and, to a lesser extent, new home or commercial construction.
The Company sells its products through numerous partners, including mass retail centers, wholesale and commercial distributors, online retailers and independent dealers and distributors.
−Removed: The accompanying consolidated financial statements reflect the activities of FGI and each of the following entities, in each case, as contemplated after the Reorganization, as described below:
+Added: The accompanying consolidated financial statements reflect the activities of FGI and each of the following entities as described below:
Name Background Ownership
FGI Industries Inc.
−Removed: (formerly named Foremost Groups, Inc.) • A New Jersey corporation
+Added: (“FGI Industries”, formerly named Foremost Groups, Inc.) • A New Jersey corporation
• Incorporated on January 5, 1988
1 unchanged sentence
100 % owned by FGI
−Removed: FGI Europe Investment Limited • A British Virgin Islands holding company
+Added: FGI Europe Investment Limited
+Added: (“FGI Europe”) • A British Virgin Islands holding company
• Incorporated on January 1, 2007
100 % owned by FGI
−Removed: FGI International, Limited • A Hong Kong company
+Added: FGI International, Limited
+Added: (“FGI HK”) • A Hong Kong company
• Incorporated on June 2, 2021
2 unchanged sentences
FGI Canada Ltd.
−Removed: • A Canadian company
+Added: (“FGI Canada”) • A Canadian company
• Incorporated on October 17, 1997
2 unchanged sentences
FGI Germany GmbH & Co.
−Removed: KG • A German company
+Added: (“FGI Germany”) • A German company
• Incorporated on January 24, 2013
2 unchanged sentences
FGI China, Ltd.
−Removed: • A PRC limited liability company
+Added: (“FGI China”) • A PRC limited liability company
• Incorporated on August 19, 2021
1 unchanged sentence
100 % owned by FGI International, Limited
−Removed: FGI United Kingdom Ltd • An UK company
+Added: FGI United Kingdom Ltd
+Added: (“FGI UK”) • An UK company
• Incorporated on December 10, 2021
1 unchanged sentence
100 % owned by FGI Europe Investment Limited
−Removed: FGI Australasia Pty Ltd • An Australian company
+Added: FGI Australasia Pty Ltd
+Added: (“FGI AU”) • An Australian company
• Incorporated on September 8, 2022
• Sales and distribution in Australia
+Added: • Dissolved in 2025
100 % owned by FGI
−Removed: Covered Bridge Cabinetry Manufacturing Co., Ltd • A Cambodian company
+Added: Covered Bridge Cabinetry Manufacturing Co., Ltd
+Added: (“CBM”) • A Cambodian company
• Incorporated on April 21, 2022
1 unchanged sentence
100 % owned by FGI
−Removed: Isla Porter LLC • A New Jersey company
+Added: Isla Porter LLC
+Added: (“Isla Porter”) • A New Jersey company
• Formed on June 2, 2023
1 unchanged sentence
60 % owned by FGI Industries Inc.
−Removed: FGI Industries India Private Limited • An Indian company
+Added: FGI Industries India Private Limited
+Added: (“FGI India”) • An Indian company
• Incorporated on June 11, 2024
1 unchanged sentence
100 % owned by FGI
−Removed: Reorganization
−Removed: On January 27, 2022, the following reorganization steps were collectively completed:
−Removed: (i) the incorporation of FGI International, Limited (“FGI International”) and FGI China, Ltd., (ii) FGI Industries Inc.
−Removed: (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.
−Removed: (“FKB”), which operates a separate furniture line of business, to Foremost Groups Ltd.
−Removed: (“Foremost”), FGI Industries’ sole shareholder;
−Removed: (iii) Foremost contributed the FKB shares to Foremost Home Inc.
−Removed: (“FHI”), a newly-formed wholly-owned subsidiary of Foremost;
−Removed: and (iv) Foremost contributed 100 % of the outstanding shares of stock of each of FGI Industries, FGI Europe Investment Limited (“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.
−Removed: On January 14, 2022, FGI Industries, a wholly-owned subsidiary of the Company, entered into a shared services agreement (the “FHI Shared Services Agreement”) with Foremost Home Inc., a newly-formed wholly-owned subsidiary of Foremost (“FHI”).
−Removed: Pursuant to the FHI Shared Services Agreement, FGI Industries provides FHI with general and administrative services, information technology systems services and human resources services, as well as warehouse space services and supply chain services in the United States.
−Removed: Under the FHI Shared Services Agreement, FHI will reimburse any reasonable and documented out-of-pocket fees incurred by FGI Industries as well as pay a service fee for each service.
−Removed: For warehouse services, FHI will pay FGI Industries a $ 500,000 annual fee as well as a fee equal to 4 % of gross product sales of all products stored in such warehouses.
−Removed: For all other services provided, FHI will pay a service fee equal to the total costs incurred by FGI Industries for such service generally divided by the number of FHI employees relative to FGI Industries employees.
−Removed: The FHI Shared Services Agreement had an initial term of one year and renews automatically unless cancelled by either party upon the giving of at least 60 days notice in advance of the expiration of the then-current term.
−Removed: On January 14, 2022, the Company entered into a shared services agreement (the “Worldwide Shared Services Agreement”) with Foremost Worldwide Co., Ltd.
−Removed: (“Foremost Worldwide”) pursuant to which Foremost Worldwide provides FGI Industries with general and administrative services, information technology system services and human resources services, in Taiwan.
−Removed: The terms of the Worldwide Services Agreement as between the service provider and recipient are substantially identical to those of the FHI Shared Services Agreement, including calculation of service fees and termination provisions, with Foremost Worldwide providing services and FGI Industries paying Foremost Worldwide for such services.
−Removed: On January 1, 2023, the Worldwide Services Agreement was amended and restated to include additional digital online and related services.
−Removed: The assets and liabilities have been stated at historical carrying amounts.
−Removed: Only those assets and liabilities that are specifically identifiable to the K&B Business are included in the Company’s consolidated balance sheets.
−Removed: The Company’s consolidated statements of operations and comprehensive (loss) income consists all the revenue, costs and expenses of the K&B Business, including allocations to selling and distribution expenses, general and administrative expenses, and research and development expenses, and which were incurred by FGI but related to the K&B Business prior to the Reorganization.
−Removed: All revenue and cost of revenue attributable to selling of K&B products were allocated to the Company.
−Removed: Operating expenses were allocated to the Company based on employees and activities that are involved in the K&B Business.
−Removed: 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.
−Removed: Since December 2023, the books and records of FHI have been completely separated from FGI Industries.
−Removed: The following table sets forth the revenue, cost of revenue and operating expenses that were irrelevant to the K&B Business allocated from FGI Industries to Foremost Home, Inc.
−Removed: for years ended December 31, 2024 and 2023, respectively.
−Removed: For the Years Ended
−Removed: Revenue $ — $ 991,919
−Removed: Cost of revenue — ( 768,065 )
−Removed: Gross profit — 223,854
−Removed: Selling and distribution expenses — 45,979
−Removed: General and administrative expenses — —
−Removed: Research and development expenses — —
−Removed: Income from operations $ — $ 269,833
−Removed: Since October 2022, the books and records of FGI International have been completely separated from Foremost Worldwide Co., Ltd., a wholly-owned subsidiary of Foremost.
−Removed: Income tax liability is calculated based on a separate return basis as if the K&B Business had filed separate tax returns before the completion of the Reorganization.
−Removed: Immediately following the Reorganization, the K&B Business began to file separate tax returns and report taxation based on the actual tax return of each legal entity.
−Removed: Management believes the basis and amounts of these allocations are reasonable.
−Removed: While the expenses allocated to the Company for these items are not necessarily indicative of the expenses that would have been incurred if the Company had been a separate, stand-alone entity, the Company does not believe that there is any significant difference between the nature and amounts of these allocated expenses and the expenses that would have been incurred if the Company had been a separate, stand-alone entity.
Note 2 — Summary of significant accounting policies
−Removed: Historically, the Company finances its operations through internally generated cash, short-term loans and payables.
−Removed: As of December 31, 2024 , the Company had approximately $ 4.6 million in cash and cash equivalents, which primarily consists of cash on hand and bank deposits, which are unrestricted as to withdrawal and use.
−Removed: If the Company is unable to realize its assets within the normal operating cycle of a twelve (12) month period, the Company may have to consider supplementing its available sources of funds through the following sources:
−Removed: • other available sources of financing from other banks and financial institutions;
−Removed: • sales of additional securities to the public or other investors;
−Removed: • financial support from the Company’s shareholders.
−Removed: Based on the above considerations, the Company’s management is of the opinion that it has sufficient funds to meet the Company’s working capital requirements and debt obligations as they become due over the next twelve (12) months.
+Added: The Company's consolidated financial statements have been prepared on a going concern basis, which assumes that the Company will continue to operate in the normal course of business and will be able to realize its assets and discharge its liabilities as they become due.
+Added: The Company has incurred net loss of $7.1 million and $1.7 million for the years ended December 31, 2025 and 2024, respectively.
+Added: In addition, the Company had net cash provided by operating activities of $0.7 million and net cash used in operating activities of $7.4 million for the same respective periods.
+Added: As of December 31, 2025, the Company had approximately $ 1.9 million in cash and cash equivalents and had $11.9 million outstanding under its credit facilities, which were used primarily for working capital purposes.
+Added: As discussed in Note 8, FGI Industries was not in compliance with certain financial covenants related to its debt coverage ratio as of December 31, 2025.
+Added: Subsequent to year end, in March 2026, the Company amended and restated its Credit Agreement with East West Bank and is currently in compliance with all covenants.
+Added: As of December 31, 2025, FGI Canada was not in compliance with certain covenants related to its debt to tangible net worth ratio.
+Added: RBC agreed to waive its right to call the debt related to this noncompliance.
+Added: However, the Company has been facing and expects to continue to face adverse impacts from elevated tariff costs on imported goods.
+Added: These increased costs have put pressure on gross margins and have contributed to the overall liquidity challenges.
+Added: In response to the conditions, the Company implemented a number of actions, including:
+Added: • Termination of the lease for one of its warehouse facilities in the first quarter of 2025, which resulted in a non-recurring lease exit cost.
+Added: The facility had idle capacity, and the termination reduced the Company’s ongoing fixed overhead expenses.
+Added: • Execution of cost control initiatives across multiple operating departments, targeting to lower recurring operating expenses.
+Added: • Commercial launch and promotion of new product lines, including anti-overflow toilets, shower systems, and custom kitchen cabinetry, which have begun generating increased revenue.
+Added: • Successful renewal of the Company’s credit facility with East West Bank, extending the maturity and maintaining access to committed financing.
+Added: As a result of these actions, the Company expects to improve its liquidity and reduce its cost structure.
+Added: The Company’s management is of the opinion that it has sufficient funds to meet the Company’s working capital requirements and debt obligations as they become due over the next twelve (12) months.
Basis of presentation
20 unchanged sentences
Translation adjustments arising from the use of different exchange rates from period to period are included as a separate component of accumulated other comprehensive income included in the consolidated statements of changes in shareholders’ equity.
−Removed: Transaction gains and losses arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency in the consolidated statements of operations and comprehensive (loss) income.
+Added: Transaction gains and losses arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency in the consolidated statements of operations and comprehensive loss.
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.
8 unchanged sentences
For the purpose of presenting the financial statements of the subsidiary using the Indian Rupee (“INR”) as its functional currency, the Company’s assets and liabilities are expressed in U.S.
−Removed: Dollars at the exchange rate on the balance sheet date, which was 85.4912 as of December 31, 2024;
+Added: Dollars at the exchange rate on the balance sheet date, which was 89.8354 and 85.4912 as of December 31, 2025 and 2024, respectively;
shareholders’ equity accounts are translated at historical rates, and income and expense items are translated at the average exchange rate during the period.
−Removed: Reclassification
−Removed: Certain prior year amounts have been reclassified to conform with the current year presentation, specifically the depreciation and amortization in the consolidated statements of cash flows.
−Removed: These reclassifications have no effect on the consolidated balance sheets and the consolidated statements of operations and comprehensive (loss) income previously reported.
Cash consists of cash on hand and demand deposits placed with banks or other financial institutions that have original maturities of three months or less.
−Removed: The Company did not have any cash equivalents as of December 31, 2024 and 2023.
+Added: The Company did not have any cash equivalents as of December 31, 2025 or 2024.
Accounts receivable, net
1 unchanged sentence
In establishing the required allowance for expected credit losses, management considers historical collection experience, aging of the receivables, the economic environment, industry trend analysis, and the credit history and financial conditions of the customers.
−Removed: Management reviews its receivables on a regular basis to determine if the expected credit losses are adequate and adjusts the allowance when necessary.
+Added: Management reviews its
+Added: receivables on a regular basis to determine if the expected credit losses are adequate and adjusts the allowance when necessary.
Delinquent account balances are written off against allowance for credit losses after management has determined that the likelihood of collection is not probable.
3 unchanged sentences
The methods of determining inventory costs are used consistently from year to year.
−Removed: A provision for slow-moving items is calculated based on historical experience.
−Removed: Management reviews this provision annually to assess whether, based on economic conditions, it is adequate.
+Added: The Company record reserves for slow-moving, excess, or obsolete inventory based on historical experience, current inventory levels, forecasted demand, and market conditions.
+Added: Management reviews this provision quarterly to assess whether, based on economic conditions, it is adequate.
+Added: Inventory, net consisted of finished goods as of December 31, 2025 and 2024.
Prepayments are cash deposited or advanced to suppliers for the purchase of goods or services that have not been received or provided.
5 unchanged sentences
Depreciation is provided over the estimated useful lives of the assets using the straight-line method from the time the assets are placed in service.
+Added: Upon retirement or disposal, the cost and accumulated depreciation are removed from the accounts and any gain or loss is included in the consolidated statements of operations and comprehensive income (loss).
+Added: Maintenance and repair costs are charged against earnings as incurred.
Estimated useful lives are as follows:
8 unchanged sentences
The Company amortizes its intangible assets with definite useful lives over their estimated useful lives and reviews these assets for impairment.
−Removed: The Company typically amortizes its intangible assets with definite useful lives on a straight-line basis over the estimated useful lives of ten years .
+Added: The Company typically amortizes its intangible assets with definite useful lives on a straight-line basis over the estimated useful lives of three to ten years .
Impairment for long-lived assets
23 unchanged sentences
Financial instruments included in current assets and current liabilities are reported in the consolidated balance sheets at face value or cost, which approximate fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rates of interest.
+Added: Reverse Share Split
+Added: On July 28, 2025, the Company filed an amendment (the “Amendment”) to the Company’s Amended and Restated Memorandum and Articles of Association with the Registrar of Companies in the Cayman Islands to effect a 1-for-5 reverse share split (the “Reverse Share Split”) of the Company’s ordinary shares, which was effected on July 31, 2025.
+Added: Unless otherwise noted, the share and per share information in this Annual Report on Form 10-K have been adjusted to give effect to the Reverse Share Split.
Revenue recognition
−Removed: The Company recognized revenue in accordance with Accounting Standards Codification (“ASC”) 606 – Revenue from Contracts with Customer.
+Added: The Company recognized revenue in accordance with Accounting Standards Codification (“ASC”) 606 – Revenue from Contracts with Customers.
Revenue is recognized when control of the promised goods or performance obligations for services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for the goods or services.
10 unchanged sentences
The Company’s disaggregated revenue is summarized as follows:
−Removed: For the Years Ended
+Added: For the Year Ended
Revenue by product line
5 unchanged sentences
Total Revenue Total Assets
−Removed: For the Years Ended
+Added: For the Year Ended
December 31, As of
8 unchanged sentences
Shipping and Handling Costs
−Removed: Shipping and handling costs are expensed as incurred and are included in selling and distribution expenses on the accompanying statement of operations.
+Added: Shipping and handling costs are expensed as incurred and are included in selling and distribution expenses on the accompanying statement of operations and comprehensive loss.
For the years ended December 31, 2025 and 2024, shipping and handling expense was $ 1,381,070 and $ 1,261,294 , respectively.
5 unchanged sentences
The Company accounts for forfeitures as they occur in accordance with ASC 718.
−Removed: The Company, with the assistance of an independent third-party valuation firm, determines the fair value of the stock options granted to employees.
+Added: The Company determines the fair value of the stock options granted to employees.
The Black Scholes Model is applied in determining the estimated fair value of the options granted to employees and non-employees.
8 unchanged sentences
The Company believes that there is an increased potential for volatility in its effective tax rate because this threshold allows for changes in the income tax environment and, to a greater extent, the inherent complexities of income tax law in a substantial number of jurisdictions, which may affect the computation of its liability for uncertain tax positions.
−Removed: The Company records and penalties on its uncertain tax positions, which were insignificant for the years ended December 31, 2024 and 2023, in income tax expense.
+Added: The Company records interest and penalties on its uncertain tax positions in income tax expense.
As of December 31, 2025, the tax years ended December 31, 2022 through December 31, 2024 for FGI Industries remain open for statutory examination by tax authority.
−Removed: The Company record the tax effects of Foreign Derived Intangible Income (FDII) and Global Intangible Low-Taxed Income (GILTI) related to our foreign operations as a component of income tax expense in the period in which the tax arises.
+Added: The Company records the tax effects of Foreign Derived Intangible Income (FDII) and Global Intangible Low-Taxed Income (GILTI) related to our foreign operations as a component of income tax expense in the period in which the tax arises.
Non-controlling interests
1 unchanged sentence
The non-controlling interests are presented in the consolidated balance sheets, separate from equity attributable to the shareholders of the Company.
−Removed: Non-controlling interests in the results of operations of the Company are presented on the consolidated statements of operations and comprehensive (loss)
−Removed: income as allocations of the net income or loss for the period between non-controlling shareholders and the shareholders of the Company.
+Added: Non-controlling interests in the results of operations of the Company are presented on the consolidated statements of operations and comprehensive loss as allocations of the net income or loss for the period between non-controlling shareholders and the shareholders of the Company.
Comprehensive income (loss)
12 unchanged sentences
The following table sets forth the computation of basic and diluted earnings per share for the year ended December 31, 2025 and 2024 :
−Removed: For the Years Ended
−Removed: Net (loss) income attributable to FGI Industries Ltd.
+Added: For the Year Ended
+Added: Net loss attributable to FGI Industries Ltd.
shareholders $ ( 6,139,526 ) $ ( 1,201,089 )
4 unchanged sentences
1,918,061 1,913,033
−Removed: Earnings (loss) per share — basic $ ( 0.13 ) $ 0.08
−Removed: Earnings (loss) per share — diluted $ ( 0.13 ) $ 0.07
+Added: Loss per share — basic $ ( 3.20 ) $ ( 0.63 )
+Added: Loss per share — diluted $ ( 3.20 ) $ ( 0.63 )
Segment reporting
1 unchanged sentence
Recently adopted accounting standards
−Removed: In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-07, “Segment Reporting (Topic 280):
−Removed: Improvements to Reportable Segment Disclosures,” which requires additional disclosures regarding an entity’s reportable segments, particularly regarding significant segment expenses, as well as information relating to the chief operating decision maker.
−Removed: The amendments in this update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.
−Removed: Early adoption is permitted.
−Removed: The Company adopted this standard on a retrospective basis for annual periods beginning January 1, 2024, and will adopt for interim periods within those annual periods beginning January 1, 2025.
−Removed: The adoption of this guidance modified our disclosures, but did not have an impact on our financial position or results of operations.
−Removed: Recently issued accounting standards
In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740):
1 unchanged sentence
ASU 2023-09 is effective on a prospective or retrospective basis for annual period beginning after December 15, 2024, with early adoption permitted.
−Removed: The Company plans to adopt this ASU for its annual period beginning January 1, 2025.
−Removed: The adoption of this guidance will modify its disclosures, but will not have an impact on its financial position or results of operations.
+Added: The Company has adopted this guidance retrospectively as of January 1, 2024.
+Added: The adoption of this guidance modified its disclosures, but did not have an impact on its financial position or results of operations.
+Added: Recently issued accounting standards
In November 2024, the FASB issued ASU 2024-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40):
2 unchanged sentences
Early adoption is permitted.
−Removed: The Company plans to adopt this ASU for its annual period beginning January 1, 2027.
−Removed: The adoption of this guidance will modify its disclosures, but will not have an impact on its financial position or results of operations.
+Added: The Company plans to adopt this ASU for
+Added: its annual period beginning January 1, 2027 and will modify the Company's disclosures, but is not expected to have an impact on its financial position or results of operations.
+Added: In July 2025, the FASB released ASU 2025-05, "Financial Instruments – Credit Losses (Topic 326):
+Added: Measurement of Credit Losses for Accounts Receivable and Contract Assets." This update introduces a practical expedient permitting entities to assume that the economic conditions existing at the balance sheet date will remain unchanged throughout the remaining life of the asset when calculating expected credit losses for current accounts receivable and contract assets.
+Added: The new guidance will be applied prospectively and becomes effective for interim and annual periods beginning on or after January 1, 2026.
+Added: The implementation of ASU 2025-05 is not anticipated to have a significant effect on our financial position or operating results.
The Company considers the applicability and impact of all ASUs.
9 unchanged sentences
Movements of allowance for credit losses are as follows:
−Removed: For the Years Ended
+Added: For the Year Ended
December 31, For the Year Ended
4 unchanged sentences
Movements of accrued defective return and discount accounts are as follows:
−Removed: For the Years Ended
−Removed: December 31, For the Year Ended
−Removed: Beginning balance $ 744,284 $ 1,595,838
−Removed: Provision (recovery) 257,643 ( 851,554 )
−Removed: Ending balance $ 1,001,927 $ 744,284
−Removed: Note 4 — Inventories, net
−Removed: Inventories, net consisted of the following:
−Removed: December 31, 2024 As of
−Removed: December 31, 2023
−Removed: Finished product $ 14,789,552 $ 10,565,858
−Removed: Reserves for slow-moving inventories ( 831,685 ) ( 642,006 )
−Removed: Inventories, net $ 13,957,867 $ 9,923,852
−Removed: Movements of inventory reserves are as follows:
−Removed: For the Years Ended
+Added: For the Year Ended
December 31, For the Year Ended
Beginning balance $ 1,001,927 $ 744,284
−Removed: Provision (recovery) 189,679 ( 21,524 )
+Added: Provision 5,392 257,643
Ending balance $ 1,007,319 $ 1,001,927
20 unchanged sentences
Total $ 3,853,864 $ 3,634,340
−Removed: Depreciation expenses for the years ended December 31, 2024 and 2023 amounted to $ 474,828 and $ 200,764 , respectively, which were included in general and administrative expenses on the consolidated statements of operations and comprehensive (loss) income.
+Added: Depreciation expenses for the years ended December 31, 2025 and 2024 amounted to $ 667,432 and $ 474,828 , respectively, which were included in general and administrative expenses on the consolidated statements of operations and comprehensive loss.
+Added: Note 6 — Intangible assets, net
+Added: Intangible assets, net consist of the following:
+Added: Weighted average amortization period (years) As of
+Added: December 31, 2025 As of
+Added: December 31, 2024
+Added: Software 9.7 $ 2,089,909 $ 1,981,250
+Added: Accumulated amortization ( 356,293 ) ( 131,299 )
+Added: Intangible assets, net $ 1,733,616 $ 1,849,951
+Added: Amortization expenses for the years ended December 31, 2025 and 2024 amounted to $246,442 and $163,705, respectively, which were included in general and administrative expenses on the consolidated statements of operations and comprehensive loss.
+Added: As of December 31, 2025, future amortization was as follows:
+Added: For the 12 months ending December 31,
+Added: 2026 $ 227,470
+Added: Thereafter 671,063
+Added: Total future amortization $ 1,733,616
Note 7 — Leases
The Company has operating leases primarily for corporate offices, warehouses and showrooms.
−Removed: As of December 31, 2024, the Company’s leases have remaining lease terms up to 10.2 years.
−Removed: The Company also purchased an operating lease for land from a common control affiliate for manufacturing purposes, which has a remaining lease term up to 47.5 years and can be extended for another 50.0 years for $ 1 .
For the years ended December 31, 2025, and 2024, the total lease expenses were $ 2,577,192 and $ 2,763,970 respectively.
27 unchanged sentences
The Company's wholly-owned subsidiary, FGI Industries, has a line of credit agreement (the “Credit Agreement”) with East West Bank, which is collateralized by all assets of FGI Industries and personally guaranteed by Liang Chou Chen, who holds approximately 49.91 % of the voting control of Foremost.
−Removed: The current amount of maximum borrowings is $ 18,000,000 and the Credit Agreement had a maturity date of December 21, 2024.
−Removed: East West Bank has agreed to extend the maturity date to June 21, 2025 while efforts regarding a renewal of the facility are ongoing.
+Added: The current amount of maximum borrowings is $ 18,000,000 and the Credit Agreement had an original maturity date of December 21, 2024.
+Added: East West Bank has agreed to extend the maturity date on several occasions, most recently through April 3, 2026, while the parties discuss a renewal of the facility.
This is an assets-based line of credit, the borrowing limit is calculated based on certain percentage of accounts receivable and inventory balances.
2 unchanged sentences
and (c) a total debt to tangible net worth ratio (defined as total liabilities divided by tangible net worth, which is defined as total book net worth plus minority interest, less loans to officers, shareholders, and affiliates minus intangible assets and accumulated amortization) not to exceed 4.0 to 1, tested at the end of each fiscal quarter, on a consolidated basis.
−Removed: As of December 31, 2024, FGI Industries was in compliance with these financial covenants.
+Added: As of December 31, 2025, FGI Industries was not in compliance with certain financial covenants related to its debt coverage ratio.
+Added: The Company has classified the outstanding balance of the loan as a current liability on the consolidated balance sheet as of December 31, 2025.
The loan bears interest at rate equal to, at the Company’s option, either (i) 0.25 percentage points less than the Prime Rate quoted by the Wall Street Journal or (ii) the SOFR Rate (as administered by CME Group Benchmark Administration Limited and displayed by Bloomberg LP) plus 2.20 % per annum (in either case, subject to a minimum rate of 4.500 % per annum) .
The interest rate as of December 31, 2025 and 2024 was 6.50 % and 7.25 %, respectively.
−Removed: Each sum of borrowings under the Credit Agreement is deemed due on demand and is classified as a short-term loan.
+Added: On March 27, 2026, FGI Industries renewed its credit facility with East West Bank, extending the maturity to April 17, 2027.
+Added: The renewal includes a tiered interest‑rate margin determined by the subsidiary’s trailing‑twelve‑month EBITDA and updates to certain financial covenants, including revised EBITDA requirements and limitations on intercompany balances.
+Added: Following the renewal, the Company is in compliance with the revised covenant requirements.
+Added: Each sum of borrowings under the Credit Agreement is classified as a short-term loan.
The outstanding balance of such loan was $ 8.1 million and $ 9.6 million as of December 31, 2025 and 2024, respectively.
RBC Bank Loan / Foreign Exchange Facility
−Removed: FGI Canada Ltd.
−Removed: has a line of credit agreement with Royal Bank of Canada (“RBC”), successor by amalgamation of HSBC Canada (the “Canadian Revolver”).
−Removed: The revolving line of credit with RBC allows for borrowing up to CAD 7.5
−Removed: million (USD 5.2 million as of December 31, 2024).
−Removed: This is an assets-based line of credit, the borrowing limit is calculated based on certain percentage of accounts receivable and inventory balances.
−Removed: Pursuant to the Canadian Revolver, FGI Canada Ltd.
−Removed: is required to maintain (a) a debt to tangible net worth ratio of no more than 3.00 to 1.00;
+Added: FGI Canada has a line of credit agreement with Royal Bank of Canada (“RBC”), successor by amalgamation of HSBC Canada (the “Canadian Revolver”).
+Added: The revolving line of credit with RBC allows for borrowing up to CAD 7.5 million (USD 5.5 million as of December 31, 2025).
+Added: This is an assets-based line of credit, the borrowing limit is calculated based
+Added: on certain percentage of accounts receivable and inventory balances.
+Added: Pursuant to the Canadian Revolver, FGI Canada is required to maintain (a) a debt to tangible net worth ratio of no more than 3.00 to 1.00;
and (b) a ratio of current assets to current liabilities of at least 1.25 to 1.00.
The loan bears interest at a rate of Prime rate plus 0.50 %.
−Removed: As of December 31, 2024, FGI Canada Ltd.
−Removed: was not in compliance with certain financial covenants in the Canadian Revolver related to its debt to tangible net worth ratio.
−Removed: In December 2024, FGI Canada Ltd.
−Removed: obtained a waiver from the lender acknowledging the non-compliance and FGI Canada Ltd.’s plan to remedy the default on or before March 31, 2025.
−Removed: The Company has classified the outstanding balance of the loan as a current liability on the consolidated balance sheet as of December 31, 2024.
−Removed: The Company has sufficient liquidity to repay the loan in full if immediate settlement were required.
−Removed: Borrowings under this line of credit amounted to $ 2.6 million and $ 0 as of December 31, 2024 and 2023, respectively.
+Added: As of December 31, 2025, FGI Canada was not in compliance with certain covenants related to its debt to tangible net worth ratio.
+Added: RBC agreed to waive its right to call the debt related to this noncompliance.
+Added: Borrowings under this line of credit amounted to $ 1.7 million and $ 2.6 million as of December 31, 2025 and 2024, respectively.
The facility matures at the discretion of RBC upon 60 days’ notice.
−Removed: FGI Canada Ltd.
−Removed: also has a revolving foreign exchange facility with RBC of up to a permitted maximum of USD 3.0 million.
+Added: FGI Canada also has a revolving foreign exchange facility with RBC of up to a permitted maximum of USD 3.0 million.
The advances are available to purchase foreign exchange forward contracts from time to time up to six months, subject to an overall maximum aggregate USD Equivalent outstanding face value not exceeding USD 3.0 million.
2 unchanged sentences
Under the CTBC Credit Line, FGI International may borrow, from time to time, up to $2.5 million , with borrowings limited to 90 % of FGI International’s export “open account” trade receivables.
−Removed: The CTBC Credit Line will bear interest at a rate of “Base Rate”, which is based on monthly or quarterly Taipei Interbank Offered in effect from time to time, plus 120 base points and handling fees, unless otherwise agreed to by the parties.
+Added: The CTBC Credit Line will bear interest at a rate of “Base Rate”, which is based on monthly or quarterly Taipei Interbank Offered Rate in effect from time to time, plus 120 base points and handling fees, unless otherwise agreed to by the parties.
The CTBC Credit Line is unsecured and is fully guaranteed by the Company and partially guaranteed by Liang Chou Chen.
−Removed: Borrowings under this line of credit amounted to $ 2.3 million and $ 0 as of December 31, 2024 and 2023, respectively.
−Removed: On January 14, 2025, FGI International and CTBC agreed to increase the CTBC Credit Line to $ 3.0 million.
+Added: Borrowings under this line of credit amounted to $ 2.1 million and $ 2.3 million as of December 31, 2025 and December 31, 2024, respectively.
Note 9 — Shareholders’ Equity
−Removed: FGI was incorporated in the Cayman Islands on May 26, 2021 in connection with the planned Reorganization, as described in Note 1.
−Removed: The Company is authorized to issue 50,000,000 ordinary shares with a par value of $ 0.001 per share.
−Removed: On January 27, 2022, the Company completed the Reorganization upon the consummation of the initial public offering (“IPO”).
−Removed: After the Reorganization and the IPO, the Company’s authorized share capital is $ 21,000 divided into (i) 200,000,000 Ordinary Shares of par value of $ 0.0001 each, and (ii) 10,000,000 Preference Shares of par value of $ 0.0001 each;
−Removed: 9,500,000 ordinary shares were issued and outstanding accordingly.
−Removed: The Company believes it is appropriate to reflect these share issuances as nominal share issuances on a retroactive basis similar to a stock split pursuant to ASC 260.
−Removed: The Company has retroactively adjusted all shares and per share data for all the periods presented.
−Removed: Initial Public Offering
−Removed: On January 27, 2022, the Company consummated its IPO of 2,500,000 units (“Units”), each consisting of (i) one ordinary share, $ 0.0001 par value per share, of the Company (the “Shares”), and (ii) one warrant of the Company (the “Warrants”) entitling the holder to purchase one Share at an exercise price of $ 6.00 per Share.
−Removed: The Shares and Warrants were issued separately in the offering, and may be transferred separately immediately upon issuance.
−Removed: The Units were sold at a price of $ 6.00 per Unit.
−Removed: The Warr ants included in the units were immediately exercisable following the consummation of the offering, have an exercise price equal to the initial public offering price, and expire five years from the date of issuance.
−Removed: For the purposes of covering any over-allotments in connection with the distribution and sale of the Units, the Company granted a 45 -day option to the underwriters to purchase (the “Over-allotment Option”), in the aggregate, up to 375,000 ordinary shares (the “Option Shares”) and Warrants to purchase up to 375,000 ordinary shares (the “Option Warrants”), which was exercisable in any combination of Option Shares and/or Option Warrants at the per Share purchase price and/or the per Warrant purchase price, respectively.
−Removed: On January 25, 2022, the underwriters exercised in full their option to purchase up to an additional 375,000 Warrants at the price of $ 0.01 per Option Warrant.
−Removed: Management determined that these Warrants meet the definition of a derivative under ASC 815-40;
−Removed: however, they fall under the scope exception, which states that contracts issued that both a) indexed to its own stock;
−Removed: and b) classified in shareholders' equity are not considered derivatives.
−Removed: The Warrants were recorded at their fair value on the date of grant as a component of equity.
−Removed: The aggregated fair value of these Warrants on January 27, 2022 was $ 4.16 million.
−Removed: The fair value has been estimated using the Black-Scholes pricing model with the following weighted-average assumptions:
−Removed: market value of underlying stock of $ 1.448 ;
−Removed: risk free rate of 1.66 %;
−Removed: expected term of five years;
−Removed: exercise price of the warrants of $ 6.00 ;
−Removed: volatility of 44.00 %;
−Removed: and expected future dividends of $ 0 .
−Removed: As of the date of this report, 2,875,000 warrants were issued and outstanding;
−Removed: and none of the warrants has been exercised.
−Removed: The gross proceeds from the IPO were approximately $ 15.0 million with net proceeds of approximately $ 12.4 million, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by the Company.
−Removed: Immediately following the consummation of the IPO, there were an aggregate of 9,500,000 ordinary shares issued and outstanding.
−Removed: As a result of the IPO, the ordinary shares and Warrants now trade on the Nasdaq Capital Market under the symbol “FGI” and “FGIWW”, respectively.
−Removed: Public Offering Warrants
−Removed: In connection with and upon the closing of the IPO on January 27, 2022, the Company issued warrants equal to 2 % of the Shares issued in the IPO, or 50,000 ordinary shares, to the representative of the underwriters for the IPO.
−Removed: The warrants carry a term of five years , shall not be exercisable for a period of 180 days from the closing of the IPO and shall be exercisable at a price equal to the IPO price per share.
−Removed: Management determined that these warrants meet the definition of a derivative under ASC 815-40;
−Removed: however, they fall under the scope exception, which states that contracts issued that are both a) indexed to its own stock;
−Removed: and b) classified in shareholders' equity are not considered derivatives.
−Removed: The warrants were recorded at their fair value on the date of grant as a component of equity.
−Removed: The aggregated fair value of these IPO warrants on January 27, 2022 was $ 0.1 million.
−Removed: The fair value has been estimated using the Black-Scholes pricing model with the following weighted-average assumptions:
−Removed: market value of underlying stock of $ 1.448 ;
−Removed: risk free rate of 1.66 %;
−Removed: expected term of five years;
−Removed: exercise price of the warrants of $ 6.00 ;
−Removed: volatility of 44.00 %;
−Removed: and expected future dividends of $ 0 .
−Removed: As of the date of this report, warrants exercisable for 50,000 shares were issued and outstanding;
+Added: FGI was incorporated in the Cayman Islands on May 26, 2021.
+Added: The Company’s authorized share capital was $ 21,000 divided into (i) 200,000,000 Ordinary Shares of par value of $ 0.0001 each, and (ii) 10,000,000 Preference Shares of par value of $ 0.0001 each.
+Added: On July 28, 2025, the Company filed an amendment (the “Amendment”) to the Company’s Amended and Restated Memorandum and Articles of Association with the Registrar of Companies in the Cayman Islands to effect a 1-for-5 reverse share split (the “Reverse Share Split”) of the Company’s ordinary shares, par value $ 0.0001 per share (“Ordinary Shares”).
+Added: Pursuant to the Amendment, effective as of 12:01 a.m., Eastern Time, on July 31, 2025 (the “Effective Time”), every 5 Ordinary Shares issued and outstanding, including Ordinary Shares held by the Company as treasury shares, was automatically combined into one Ordinary Share.
+Added: As a result of the Reverse Share Split, the number of authorized Ordinary Shares was decreased to 40 million and the par value of the Company’s Ordinary Shares went from $ 0.0001 per share to $ 0.0005 per share.
+Added: The Reverse Share Split affected all record holders of the Ordinary Shares uniformly and did not affect any record holder’s percentage ownership interest in the Company, except for de minimis changes as a result of the elimination of fractional shares.
+Added: Proportional adjustments were made to the number of Ordinary Shares issuable upon the exercise, conversion or
+Added: vesting of the Company’s equity awards and warrants, as well as the applicable exercise price.
+Added: As of the date of this report, equity-classified warrants exercisable for 575,000 shares were issued and outstanding;
and none of the warrants have been exercised.
8 unchanged sentences
The ESPP offers eligible employees the opportunity to acquire a stock ownership interest in the Company through periodic payroll deductions that will be applied towards the purchase of ordinary shares at a discount from the then-current market price.
−Removed: The board set the maximum aggregate number of ordinary shares reserved and available pursuant to the 2021 Equity Plan at 1,500,000 shares.
+Added: The board set the maximum aggregate number of ordinary shares reserved and available pursuant to the 2021 Equity Plan at 300,000 shares (giving effect to the Reverse Share Split that became effective July 31, 2025).
The number of ordinary shares reserved for issuance under our 2021 Equity Plan will automatically increase on the first day of each year, commencing on January 1, 2022 and ending on (and including) January 1, 2031, in an amount equal to the lesser of (a) 4.5 % of the total number of ordinary shares outstanding on December 31 of the immediately preceding calendar year, (b) 120,000 ordinary shares, or (c) such lesser number of shares as determined by the Board.
2 unchanged sentences
Under ASC 718-10-55-76, if the vesting (or exercisability) of an award is based on the satisfaction of both a service and performance condition, the entity must initially determine which outcomes are probable and recognize the compensation cost over the longer of the explicit or implicit service period.
−Removed: Because an initial public offering generally is not considered to be probable until the initial public offering is effective, no compensation cost was recognized until the IPO occurred.
−Removed: Restricted shares units (“RSU”)
−Removed: In January 2022, the Company issued 183,750 restricted share units (“RSUs”) to certain officers and employees under the 2021 Equity Plan as compensation awards.
−Removed: The fair value for these RSUs was $ 716,625 based on the closing share price of $ 3.90 as of January 27, 2022.
−Removed: These awards will vest in three equal installments on each anniversary of the grant date over three years .
−Removed: As of December 31, 2024, 122,500 of these granted RSUs were vested.
−Removed: In April 2022, the Company issued 8,750 RSUs to an employee under the 2021 Equity Plan as compensation awards.
−Removed: The fair value for these RSUs was $ 22,050 based on the closing share price of $ 2.52 as of April 13, 2022.
−Removed: These awards will vest as to one-third of the shares on the one-year anniversary of the grant date.
−Removed: 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.
−Removed: As of December 31, 2024, 7,778 of these granted RSUs were vested.
−Removed: In May 2022, the Company issued 87,611 RSUs under the 2021 Equity Plan to Company officers to incentivize their performance and continue to align their interests with the Company’s shareholders.
−Removed: All these awards were subjected to performance conditions through December 31, 2024.
−Removed: The grant date fair value for these RSUs was $ 198,000 based on the closing share price of $ 2.26 as of May 11, 2022.
−Removed: If the maximum performance was met, the Company would have issued an additional 43,805 RSUs under these awards with a grant date fair value of $ 99,000 .
−Removed: As of December 31, 2024, all RSUs were canceled and none of them were vested.
−Removed: In May 2022, the Company issued 16,363 RSUs to its independent directors under the 2021 Equity Plan as compensation award.
−Removed: All these awards are subjected to performance conditions through December 31, 2024 .
−Removed: The fair value for these RSUs was $ 36,000 based on the closing share price of $ 2.20 as of May 17, 2022.
−Removed: As of December 31, 2024 , all RSUs were canceled and none of them were vested.
−Removed: In March 2023, the Company issued 96,635 RSUs under the 2021 Equity Plan to Company officers to incentivize their performance and continue to align their interests with the Company’s shareholders.
−Removed: All these awards are subjected to performance conditions through December 31, 2025.
−Removed: The grant date fair value for these RSUs was $ 201,000 based on the closing share price of $ 2.08 as of March 29, 2023.
−Removed: If the maximum performance is met, the Company will issue an additional 48,317 RSUs under these awards with a grant date fair value of $ 100,500 .
−Removed: As of December 31, 2024, none of these RSUs were vested.
−Removed: In March 2023 , the Company issued 17,349 RSUs to its independent directors under the 2021 Equity Plan as compensation award.
−Removed: All these awards are subjected to performance conditions through December 31, 2025.
−Removed: The grant date fair value for these RSUs was $ 36,000 based on the closing share price of $ 2.08 as of March 29, 2023 .
−Removed: As of December 31, 2024 , 10,120 of these RSUs were vested.
−Removed: In March 2024, the Company issued 413,354 RSUs under the 2021 Equity Plan to the Company’s directors, officers and employees.
−Removed: All these awards are subjected to performance conditions through December 31, 2026.
−Removed: The grant date fair value for these RSUs was $ 620,031 based on the closing share price of $ 1.50 as of March 22, 2024.
−Removed: If the maximum performance is met, the Company will issue an additional 206,677 RSUs under these awards with a grant date fair value of $ 310,016 .
−Removed: As of December 31, 2024 , none of these RSUs were vested.
−Removed: In April 2024, the Company issued 13,333 RSUs under the 2021 Equity Plan to one of the Company’s employees.
−Removed: This award was subject to performance obligations through December 31, 2024.
−Removed: The grant date fair value for these RSUs was $ 20,000 based on the closing share price of $ 1.50 as of April 1, 2024.
−Removed: If the maximum performance was met, the Company would have issued an additional 6,667 RSUs under these awards with a grant date fair value of $ 10,000 .
−Removed: As of December 31, 2024 , all RSUs were canceled and none of them were vested.
−Removed: The following is a summary of the restricted share granted:
−Removed: Restricted shares grants Shares
−Removed: Non-vested as of January 1, 2023 296,474
−Removed: Granted 113,984
−Removed: Vested ( 66,111 )
−Removed: Canceled ( 87,611 )
−Removed: Non-vested as of December 31, 2023 256,736
−Removed: Granted 426,687
−Removed: Vested ( 74,287 )
−Removed: Canceled ( 29,696 )
−Removed: Non-vested as of December 31, 2024 579,440
−Removed: The following is a summary of the status of restricted share at December 31, 2024:
−Removed: Outstanding Restricted Shares
−Removed: Fair Value per share Number Average Remaining
−Removed: Amortization Period (Years)
−Removed: $ 3.90 61,250 0.08
−Removed: $ 2.52 972 0.25
−Removed: $ 2.08 96,635 1.25
−Removed: $ 2.08 7,229 1.25
−Removed: $ 1.50 413,354 2.25
−Removed: Share options (“Options”)
−Removed: In March 2022, the Company issued 98,747 share options under the 2021 Equity Plan with an exercise price per share of $ 3.07 and a contractual life of 10 years to the Company’s executive officers and directors to incentivize their performance and continue to align their interests with the Company’s shareholders.
−Removed: The grant date fair value for these options was $ 141,401 determined using the Black-Scholes simplified method at the per option fair value of $ 1.43 .
−Removed: All these options will vest as to one-third of the options on the one-year anniversary of the grant date.
−Removed: The remaining options will vest in a series of 24 successive equal monthly installments upon completion of each additional month of service.
−Removed: As of December 31, 2024, 90,518 of these granted options were vested.
−Removed: In April 2022, the Company issued 97,371 share 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.
−Removed: The grant date fair value for these options was $ 114,972 determined using the Black-Scholes simplified method at the per option fair value of $ 1.18 .
−Removed: All these options will vest as to one-third of the shares on the one-year anniversary of the grant date.
−Removed: The remaining options will vest in a series of 24 successive equal monthly installments upon completion of each additional month of service.
−Removed: As of December 31, 2024, 86,552 of these granted options were vested.
−Removed: In May 2022, the Company issued 159,881 share options under the 2021 Equity Plan with an exercise price per share of $ 2.26 and a contractual life of 10 years to Company officers to incentivize their performance and continue to align their interests with the Company’s shareholders.
−Removed: The fair value for these options was $ 171,462 determined using the Black-Scholes simplified method at the per option fair value of $ 1.07 .
−Removed: The number of options granted were subject to performance conditions through December 31, 2022, which could result in additional options awarded if maximum performance metrics were met.
−Removed: In addition to the performance criteria, the options vest as to one-third of the shares on the one-year anniversary of the grant date.
−Removed: 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.
−Removed: The options paid out at threshold under the performance metrics, and no additional options were awarded.
−Removed: As of December 31, 2024, 137,675 of these granted options were vested.
−Removed: In March 2023, the Company issued 158,976 share options under the 2021 Equity Plan with an exercise price per share of $ 2.08 and a contractual life of 10 years to Company officers to incentivize their performance and continue to align their interests with the Company’s shareholders.
−Removed: The grant date fair value for these options was $ 201,000 determined using the Black-Scholes simplified method at the per option fair value of $ 1.26 .
−Removed: All these options are subjected to performance conditions through December 31, 2023, which could result in additional options awarded if maximum performance metrics are met.
−Removed: In addition to the performance criteria, the options will vest as to one-third of the shares on the one-year anniversary of the grant date.
−Removed: 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.
−Removed: As of December 31, 2024, all options were canceled and none of them were vested.
−Removed: In April 2023, the Company issued 106,341 share options under the 2021 Equity Plan with an exercise price per share of $ 1.74 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.
−Removed: The grant date fair value for these options was $ 112,423 determined using the Black-Scholes simplified method at the per option fair value of $ 1.06 .
−Removed: All these options will vest as to one-third of the shares on the one -year anniversary of the grant date.
−Removed: The remaining options will vest in a series of 24 successive equal monthly installments upon completion of each additional month of service.
−Removed: As of December 31, 2024, 59,078 of these granted options were vested.
−Removed: In March 2024, the Company issued 529,635 share options under the 2021 Equity Plan with an exercise price per share of $ 1.50 and a contractual life of 10 years to Company officers to incentivize their performance and continue to align their interests with the Company’s shareholders.
−Removed: The grant date fair value for these options was $ 447,000 determined using the Black-Scholes simplified method at the per option fair value of $ 0.84 .
−Removed: All these options are subjected to performance conditions through December 31, 2024, which could result in additional options awarded if maximum performance metrics are met.
−Removed: In addition to the performance criteria, the options will vest as to one-third of the shares on the one-year anniversary of the grant date.
−Removed: 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.
−Removed: As of December 31, 2024 , none of these granted options were vested.
−Removed: In April 2024, the Company issued 167,994 share options under the 2021 Equity Plan with an exercise price per share of $ 1.32 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.
−Removed: The grant date fair value for these options was $ 126,163 determined using the Black-Scholes simplified method at the per option fair value of $ 0.75 .
−Removed: All these options will vest as to one-third of the shares on the one-year anniversary of the grant date.
−Removed: The remaining options will vest in a series of 24 successive equal monthly installments upon completion of each additional month of service.
−Removed: As of December 31, 2024, none of these granted options were vested.
−Removed: The options granted to employees are measured based on the grant date fair value of the equity instrument.
−Removed: They are accounted for as equity awards and contain service or performance vesting conditions.
−Removed: The following table summarizes the Company’s employee share option activities:
+Added: The following table summarizes the Company's share option and RSU activity for the twelve months ended December 31, 2025:
+Added: Share Options RSUs
Options Weighted
1 unchanged sentence
Value Weighted
−Removed: USD USD Years USD
−Removed: Share options outstanding at December 31, 2023 462,340 $ 2.37 $ 1.20 9.35 $ —
+Added: Value Number of RSUs Weighted
+Added: USD USD Years USD USD
+Added: Beginning of period 234,283 $ 9.10 $ 4.81 117,912 $ 13.53
Granted 208,640 $ 3.79 $ 2.75 166,766 $ 4.05
−Removed: Share options outstanding at December 31, 2024 1,159,969 1.82 0.96 8.56 —
−Removed: Vested and exercisable at December 31, 2024 373,824 $ 2.43 $ 1.18 7.44 $ —
−Removed: For the years ended December 31, 2024 and 2023, the total fair value of options awarded was $ 573,163 and $ 313,423 , respectively.
+Added: Canceled ( 105,927 ) $ 7.50 $ 4.22 —
+Added: Exercised or released — ( 12,444 ) $ 19.40
+Added: End of period 336,996 $ 6.32 $ 3.72 8.39 $ 397,909 272,234 $ 8.34
+Added: Vested and exercisable 109,979 $ 10.99 $ 5.50 6.82 $ —
+Added: For the twelve months ended December 31, 2025 and 2024, the total fair value of options awarded was $ 572,745 and $ 573,163 , respectively.
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 price below the estimated fair value of the relevant Ordinary Shares.
Fair value of options
−Removed: The Company used the Black-Scholes simplified method for the year ended December 31, 2024.
+Added: The Company used the Black-Scholes simplified method for the twelve months ended December 31, 2025 and 2024.
The assumptions used to value the options granted to employees were as follows:
−Removed: April 2024 March 2024
−Removed: April 2023 March 2023
+Added: April 2025 March 2025 April 2024 March 2024
Risk-free interest rate (%) 4.24 4.05 4.54 4.21
1 unchanged sentence
Fair market value per ordinary share as at grant dates $ 2.45 $ 4.05 $ 6.60 $ 7.50
+Added: The table above gives retroactive effect to the Reverse Share Split of the Preference Shares and Ordinary Shares at a ratio of 1-for-5 that became effective July 31, 2025.
+Added: See Note 9 “Shareholders' Equity” for details.
The risk-free interest rate for periods within the contractual life of the options is based on the U.S.
Treasury yield curve in effect at the time of grant for a term consistent with the contractual term of the awards.
−Removed: Expected volatility is estimated based on the volatility of ordinary shares or common stock of several comparable companies in the same industry.
+Added: Expected volatility is estimated based on the volatility of ordinary shares of the Company.
The expected exercise multiple is based on management’s estimation, which the Company believes is representative of the future.
1 unchanged sentence
The following table sets forth the amount of share-based compensation expense included in each of the relevant financial statement line items:
−Removed: For the Years Ended
+Added: For the Year Ended
Selling and distribution expenses $ 88,590 $ 190,864
5 unchanged sentences
The source of pre-tax income and the components of income tax expense are as follows:
−Removed: For the Years Ended
+Added: For the Year Ended
Income components
1 unchanged sentence
Outside United States 1,039,485 3,018,662
−Removed: Total pre-tax (loss) income $ ( 2,282,098 ) $ 1,387,788
+Added: Total pre-tax loss $ ( 4,339,014 ) $ ( 2,282,098 )
Provision for (benefit of) income taxes
7 unchanged sentences
2,454,004 ( 1,496,752 )
−Removed: Total (benefit of) provision for income taxes $ ( 547,821 ) $ 808,224
+Added: Total provision for (benefit of) income taxes $ 2,786,392 $ ( 547,821 )
Reconciliations between taxes at the U.S.
federal income tax rate and taxes at the Company’s effective income tax rate on earnings before income taxes are as follows:
−Removed: For the Years Ended
−Removed: Federal statutory rate 21.0 21.0
+Added: For the Year Ended
+Added: Income tax expense at Federal statutory tax rate $ ( 911,194 ) 21.0 $ ( 479,240 ) 21.0
Increase (decrease) in tax rate resulting from:
State and local income taxes, net of federal benefit (1)
−Removed: Foreign operations ( 6.4 ) 15.1
−Removed: Permanent items ( 8.1 ) 3.1
−Removed: Deferred adjustments — 16.8
−Removed: Others 4.1 2.7
−Removed: Effective tax rate 24.0 58.2
+Added: 311,429 ( 7.2 ) ( 306,778 ) 13.4
+Added: Foreign tax effects (statutory rate differential)
+Added: Hong Kong ( 54,845 ) 1.3 ( 165,121 ) 7.3
+Added: Canada 158,369 ( 3.7 ) 150,688 ( 6.6 )
+Added: Cayman Islands 184,621 ( 4.3 ) 134,299 ( 5.9 )
+Added: Cambodia ( 123,932 ) 2.9 ( 8,626 ) 0.4
+Added: Other ( 87,185 ) 2.0 34,313 ( 1.6 )
+Added: Nontaxable or nondeductible items 25,721 ( 0.6 ) 185,639 ( 8.1 )
+Added: Valuation allowance 3,419,636 ( 78.8 ) — —
+Added: Other adjustments ( 136,228 ) 3.2 ( 92,995 ) 4.1
+Added: Income tax expense $ 2,786,392 ( 64.2 ) $ ( 547,821 ) 24.0
+Added: (1) The states that contribute to the majority (greater than 50%) of the tax effect in this category include California and New Jersey for 2025 and 2024.
+Added: Income taxes paid by jurisdiction were as follows:
+Added: For the Year Ended
+Added: Federal $ — $ —
+Added: State 8,729 10,144
+Added: Canada 677,614 651,750
+Added: Germany 42,607 28,129
+Added: Hong Kong 30,644 418,026
+Added: Other 7,309 4,591
+Added: Total cash paid for income taxes, net of refunds received $ 766,903 $ 1,112,640
The following is a summary of the components of the net deferred tax assets and liabilities recognized in the consolidated balance sheets:
24 unchanged sentences
The Company has not taken any tax positions for which it is reasonably possible that unrecognized tax benefits will significantly increase within the next 12 months.
−Removed: Inflation Reduction Act of 2022
−Removed: On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law.
−Removed: The IR Act provides for, among other things, a new U.S.
−Removed: federal 1% excise tax on certain repurchases of stock by publicly traded U.S.
−Removed: domestic corporations and certain U.S.
−Removed: domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023.
−Removed: The excise tax is imposed on the repurchasing corporation itself, not its shareholders from which shares are repurchased.
−Removed: The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase.
−Removed: However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year.
−Removed: In addition, certain exceptions apply to the excise tax.
−Removed: Department of the Treasury (the “Treasury”) has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax.
−Removed: There was no material impact of the IR Act on the Company’s consolidated financial statements.
+Added: On July 4, 2025, President Trump signed into law the legislation commonly referred to as the One Big Beautiful Bill Act (“OBBBA”).
+Added: The OBBBA includes various provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions.
+Added: The OBBBA legislation did not have a material impact on our effective tax rate, deferred tax position, or results of operations in 2025.
Note 12 — Related party transactions and balances
1 unchanged sentence
Name of Related Party Relationship Nature of
−Removed: Transactions For the Years Ended
+Added: Transactions For the Year Ended
Foremost Worldwide Co., Ltd.
3 unchanged sentences
Name of Related Party Relationship Nature of
−Removed: Transactions For the Years Ended
+Added: Transactions For the Year Ended
Focal Capital Holding Limited An entity under common control Purchases $ 5,861,323 $ 6,157,455
5 unchanged sentences
An entity under common control Purchases 15,376 125,208
−Removed: Foremost Australasia Pty Ltd An entity under common control Purchases — 409,777
$ 12,236,955 $ 14,999,058
3 unchanged sentences
Focal Capital Holding Limited $ 4,118,054 $ 9,975,298
−Removed: Rizhao Foremost Woodwork Manufacturing Co., Ltd.
+Added: Foremost Worldwide Co., Ltd.
$ 14,096,990 $ 9,975,298
4 unchanged sentences
Rizhao Foremost Woodwork Manufacturing Co., Ltd.
+Added: $ 49,855 $ 56,389
Furniture (Cambodia) Co., Ltd.
2 unchanged sentences
Shared Service and Miscellaneous expenses – related party
−Removed: FGI Industries is party to the FHI Shared Services Agreement with FHI.
+Added: FGI Industries is party to the FHI Shared Services Agreement with Foremost Home Inc.
Total amounts provided to FHI under the FHI Share Services Agreement for the years ended December 31, 2025 and 2024 were $ 615,929 and $ 761,672 , respectively, which were booked under selling and distribution expenses and administration expenses.
9 unchanged sentences
Furniture (Cambodia) Co., Ltd.
−Removed: An entity under common control Shared services and Miscellaneous expenses ( 291,710 ) —
+Added: An entity under common control Miscellaneous expenses ( 73,509 ) ( 291,710 )
$ 3,177,869 $ 2,021,675
4 unchanged sentences
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash.
−Removed: The Canadian Deposit Insurance Corporation pays compensation up to a limit of CAD100,000 (approximately USD69,522) if the bank with which an individual/a company holds its eligible deposit fails.
−Removed: As of December 31, 2024, a cash balance of CAD 1,937,962 (USD 1,347,304 ) was maintained at financial institutions in Canada, of which CAD 1,837,962 (USD 1,276,880 ) was subject to credit risk.
−Removed: The Taiwan Central Deposit Insurance Corporation pays compensation up to a limit of New Taiwan Dollar 3,000,000 (approximately USD91,500) if the bank with which an individual/a company holds its eligible deposit fails.
+Added: The Federal Deposit Insurance Corporation pays compensation up to a limit of USD250,000 if the bank with which a depositor holds its eligible deposit fails.
+Added: As of December 31, 2025, a cash balance of USD 276,577 was maintained at financial institutions in the United States, of which USD 16,944 was subject to credit risk.
+Added: The Taiwan Central Deposit Insurance Corporation pays compensation up to a limit of New Taiwan Dollar 3,000,000 (approximately USD95,450) if the bank with which an individual or a company holds its eligible deposit fails.
As of December 31, 2025, an aggregated cash balance of USD 788,834 was maintained at financial institutions in Taiwan, of which USD 498,062 was subject to credit risk.
−Removed: The European Banking Authority pays compensation up to a limit of EUR100,000 (approximately USD104,167) if the bank with which an individual/a company holds its eligible deposit fails.
+Added: The European Banking Authority pays compensation up to a limit of EUR100,000 (approximately USD117,647) if the bank with which an individual or a company holds its eligible deposit fails.
As of December 31, 2025, cash balance of EUR 248,403 (USD 292,238 ) was maintained at financial institutions in Europe, of which EUR 148,403 (USD 174,591 ) was subject to credit risk.
7 unchanged sentences
Customer concentration risk
−Removed: For the year ended December 31, 2024, two customers accounted for 17.9 % and 16.7 % of the Company’s total revenue, respectively.
For the year ended December 31, 2025, three customers accounted for 15.5 %, 13.6 % and 10.4 % of the Company’s total revenue, respectively.
+Added: For the year ended December 31, 2024, two customers accounted for 17.9 % and 16.8 % of the Company’s total revenue, respectively.
No other customer accounted for more than 10% of the Company’s revenue for the years ended December 31, 2025 and 2024.
−Removed: As of December 31, 2024, two customers accounted for 29.4 % and 11.4 % of the total balance of accounts receivable, respectively.
As of December 31, 2025, four customers accounted for 21.1 %, 15.3 %, 13.8 % and 11.8 % of the total balance of accounts receivable, respectively.
+Added: As of December 31, 2024, two customers accounted for 29.4 % and 11.4 % of the total balance of accounts receivable, respectively.
No other customer accounted for more than 10% of the Company’s accounts receivable as of December 31, 2025 and 2024.
20 unchanged sentences
Kitchen and Bath Segment
−Removed: For the Years Ended
+Added: For the Year Ended
Revenue $ 130,528,652 $ 131,818,073
5 unchanged sentences
1,936,958 182,507
−Removed: (Benefit of) provision for income taxes ( 547,821 ) 808,224
−Removed: Segment net (loss) income ( 1,734,277 ) 579,564
+Added: Provision for (benefit of) income taxes 2,786,392 ( 547,821 )
+Added: Segment net loss ( 7,125,406 ) ( 1,734,277 )
Reconciliation of profit or loss
Adjustments and reconciling items — —
−Removed: Consolidated net (loss) income $ ( 1,734,277 ) $ 579,564
+Added: Consolidated net loss $ ( 7,125,406 ) $ ( 1,734,277 )
(1) Other segment items included interest income, interest expense and non-recurring other income and expenses.
+Added: Note 16 — Subsequent events
+Added: On March 27, 2026, FGI Industries renewed its credit facility with East West Bank, extending the maturity to
+Added: April 17, 2027.
+Added: The renewal extends the maturity date of the facility through April 17, 2027 and maintains a maximum
+Added: borrowing amount of $ 18,000,000 , subject to borrowing base limitations.
+Added: The credit facility is collateralized by all assets of
+Added: FGI Industries and guaranteed by the Company, certain other subsidiaries, and by Liang Chou Chen, who holds
+Added: approximately 49.91 % of the voting control of Foremost Groups Ltd.
+Added: The renewal includes a tiered interest‑rate margin
+Added: determined by the subsidiary’s trailing‑twelve‑month EBITDA and updates to certain financial covenants, including revised EBITDA requirements and limitations on intercompany balances.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
−Removed: There were no disagreements with Marcum LLP.
+Added: There were no disagreements with CBIZ CPAs P.C.
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.