Company: FGI
Filing Date: 2025-08-13
Form Type: 10-Q
Source: 0001628280-25-040149
Chunk: 19

Company: FGI Industries Ltd.
Filing Date: 2025-08-13
Form: 10-Q
Item: Part I, Item 2
Chunk 19
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 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.

We may not be able to refinance or renew our indebtedness or be able to borrow under our Credit Agreement with East West Bank or other future credit facilities, which may have a material adverse effect on our financial condition.

The original maturity date for our Credit Agreement with East West Bank was December 21, 2024. Since that time, East West Bank has extended the maturity date on several occasions while the parties work on a renewal of the facility. The current maturity date is August 21, 2025. While we continue to work closely with East West Bank and believe we have sufficient accounts receivable available for factoring should the loan amounts become due, there can be no assurances that we will negotiate a renewal by such date or that the lender will extend the maturity date again. Moreover, there can be no assurances that we will be able to renew or refinance the Credit Agreement on substantially similar terms, or at all. In recent quarters, we have not been in compliance with the debt coverage ratio in the Credit Agreement, which may require a renewed facility to have different terms or borrowing limits, or there may be additional fees and expenses that we might have to pay, and we may have to agree to terms that could increase the cost of our debt structure. If we are unable to renew 

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or refinance the Credit Agreement or other indebtedness on terms that are substantially similar to the terms