Company: FSTWF
Filing Date: 2025-07-08
Form Type: F-1/A
Source: 0001213900-25-061884
Chunk: 31

Company: FST Corp.
Filing Date: 2025-07-08
Form: F-1/A
Chunk 31
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 adequate control over financial processes and reporting. Failure to implement required new or improved controls, or difficulties encountered in their implementation, could harm the Company’s results of operations or cause it to fail to meet its reporting obligations. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. If the Company discovers a material weakness, the disclosure of that fact, even if quickly remedied, could reduce investor confidence in its consolidated financial statements and effectiveness of the Company’s internal controls, which ultimately could negatively impact the market price of the Company’s common shares. In connection with the preparation of the Company consolidated financial statements for the year ended December 31, 2024, the Company has identified errors in financial reporting for the year ended December 31, 2023, related to the recognition of deferred income taxes and initial offering process (IOP) expenses. These errors stem from material weaknesses in internal controls relating to 1) an insufficient allocation of resources in the financial reporting process to ensure appropriate financial reporting, and 2) a lack of appropriately skilled resources with experience and technical knowledge in Generally Accepted Accounting Principles in the United States (“U.S. GAAP”). To address the identified deficiencies, the Company plans to implement the following corrective measures: 1.Continuous improvement of professional knowledge and practical skills: Strengthening staff in -servicetraining for internal finance and accounting personnel and encouraging participation in courses related to U.S. GAAP to enhance the Company’s ability to handle complex accounting issues. 2.Engagement of external professional consultants: Engaging a professional accounting firm with experience in large -scalecorporate audits and tax consulting to help clarify the recognition logic of deferred income taxes and optimize trial balance and reconciliation processes, improving the accuracy of financial reporting. 3.Optimization of period -endclosing and review mechanisms: Restructuring the monthly and annual closing processes, introducing multi -levelreview checkpoints, and standardizing operational procedures to ensure the consistency, accuracy, and timeliness of key accounting entries. The Company plan to take corrective measures, but full implementation will require time and resources. The Company expects to continue monitoring their effectiveness over the coming quarters and make adjustments as necessary until the relevant internal controls are effectively preventing and detecting errors. If the Company is unable to successfully remediate the existing deficiencies, or if additional material weaknesses are identified in the future,