Company: FGI
Filing Date: 2025-04-18
Form Type: PRE 14A
Source: 0001628280-25-018388
Chunk: 23

Company: FGI Industries Ltd.
Filing Date: 2025-04-18
Form: PRE 14A
Chunk 23
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 UNDER ANY APPLICABLE INCOME TAX TREATY.

We intend for any reverse stock split to qualify as a “recapitalization” for U.S. federal income tax purposes and, consequently, as a “reorganization” within the meaning of Section 368(a)(1)(E) of the Code. Assuming a reverse stock split so qualifies:

• a U.S. Holder will not recognize gain or loss as a result of such reverse stock split, except with respect to any cash received in lieu of a fractional ordinary share;

• the aggregate tax basis of our ordinary shares received by a U.S. Holder in such reverse stock split will be equal to the aggregate tax basis of the ordinary shares surrendered in exchange therefor (excluding any portion of such basis allocable to a fractional ordinary share);

• the holding period of our ordinary shares received by a U.S. Holder in such reverse stock split will include the holding period of the ordinary shares exchanged therefor;

• a U.S. Holder that receives cash in lieu of a fractional ordinary share pursuant to such reverse stock split will generally be treated as having received the fractional ordinary share pursuant to such reverse stock split and then as having sold such fractional ordinary share for cash to a third party and, accordingly, should recognize taxable capital gain or loss in an amount equal to the difference, if any, between the amount of cash received and the portion of such U.S. Holder’s aggregate adjusted tax basis in the surrendered ordinary shares that is allocated to such fractional ordinary share; and

• any such capital gain or loss will be long-term capital gain if the surrendered ordinary shares were held for more than one year at the time of such reverse stock split.

U.S. Treasury regulations provide detailed rules for allocating the tax basis and holding period among our ordinary shares acquired by a shareholder on different dates and at different prices. U.S. Holders that acquired our ordinary shares on different dates or at different prices should consult their tax advisors regarding the allocation of the tax basis and holding period among such ordinary shares.

Payments of cash made in lieu of a fractional ordinary share may, under certain circumstances, be subject to information reporting and backup withholding. To avoid backup withholding, each U.S. Holder of our ordinary shares that

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does not otherwise establish an exemption from backup withholding should furnish, generally on IRS Form W-9, its taxpayer identification number and comply with the applicable certification procedures.

Backup withholding is not an additional tax and amounts withheld will be allowed as a credit against a U.S