Company: FGI
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001628280-25-025588
Chunk: 1

Company: FGI Industries Ltd.
Filing Date: 2025-05-14
Form: 10-Q
Item: Part I, Item 3
Chunk 1
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 material weaknesses:

•Inadequate segregation of duties related to the initiation and recording of journal entries to the general ledger.

•Inadequate evidence of management review controls regarding the review and approval of certain account reconciliations.

•Inadequate evidence and precision of management review controls regarding loan covenants and covenant calculations.

Management’s Remediation Initiatives

We continue to evaluate and have begun implementing certain practices and procedures to address the foregoing material weaknesses. To remediate the material weaknesses related to the review of journal entry and account reconciliation, we have implemented system controls designed to prevent significant unauthorized transactions from being posted without review and established sufficient compensating controls for effective account reconciliations. To address the material weakness related to the debt covenant compliance, we have implemented an additional layer of review in the calculation and reporting process. We plan to continue the implementation of these and other remediation efforts to address the identified material weaknesses in the future.

Changes in Internal Control over Financial Reporting

Other than as described above, there have been no changes in our internal control over financial reporting that occurred during the quarter ended March 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II- OTHER INFORMATION

Item 1.   Legal Proceedings.

We may be subject to legal proceedings and claims in the ordinary course of business. We cannot predict the results of any such disputes, and despite the potential outcomes, the existence thereof may have an adverse material impact on us due to diversion of management time and attention as well as the financial costs related to resolving such disputes.

Item 1A.     Risk Factors.

Our Annual Report on Form 10-K for the year ended December 31, 2024, includes a detailed discussion of our risk factors. At the time of this filing, except as provided below, there have been no material changes to the risk factors that were included in the Form 10-K.

Our failure to meet the continued listing requirements of The Nasdaq Capital Market could result in a delisting of our ordinary shares. 

On March 6, 2025, we received notice from Nasdaq that it had granted the Company a 180-day extension to regain compliance with the Nasdaq continued listing standards through September 1, 2025. We initially received notice from 

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Nasdaq on September 6, 2024 that the closing bid price for our common stock had been below $1.00 per share for the previous 30