Company: FGI
Filing Date: 2025-08-13
Form Type: 10-Q
Source: 0001628280-25-040149
Chunk: 192

Company: FGI Industries Ltd.
Filing Date: 2025-08-13
Form: 10-Q
Item: Part II, Item 8
Chunk 192
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 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 currently available to us or obtain alternative or additional financing arrangements, or if such amounts became due, it could have a material adverse effect on our business, results of operations, cash flows, and financial condition.

There is substantial doubt about our ability to continue as a going concern due to pressure on our financial covenants arising from the current tariff environment.

The challenging consumer environment, in particular as a result of current tariff implementation in the United States, has adversely impacted and is expected to adversely impact our performance. These factors have placed pressure on our ability to meet the financial covenants in our credit agreements, including the Credit Agreement with East West Bank. Failure to satisfy the debt covenants under our loan facilities, without a timely cure, waiver or amendment, is considered an event of default. If an event of default occurs and is not cured or waived, the lender could elect to declare all amounts outstanding under such agreement immediately due and payable and exercise other remedies as set forth in such agreement. As of June 30, 2025, FGI Industries was not in compliance with certain financial covenants related to its debt coverage ratio in its Credit Agreement with East West Bank. As of the date of this quarterly report, FGI Industries has requested a waiver from the lender, which is being processed by the lender. However, it is possible that the lender could demand repayment of amounts owed or cease to lend to us. This and the other factors raise substantial doubt about the Company’s ability to continue as a going concern for the next twelve months from the date of issuance of the condensed consolidated financial statements included in this Quarterly Report. Management has implemented plans which are disclosed in Note 2. As a result of these actions, management believes that the