Company: FGI
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001628280-25-015656
Chunk: 118

Company: FGI Industries Ltd.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 7
Chunk 118
---
. The increase was driven by inflationary pressures and expenses related to newly formed subsidiaries and growth initiatives, supporting our continued expansion and operational growth.

Research and development expenses primarily comprised personnel costs and product development expenditures. Our R&D activities remained stable and had a minimal impact on our overall consolidated results of operations.

Other Income (Expenses)

We incurred insignificant other income and expenses during the years ended December 31, 2024 and 2023. Other income and expenses primarily include interest income and expenses, as well as miscellaneous non-operating income and expenses.

Total other expenses, net decreased by approximately $0.7 million or 80.1%, to $0.2 million for the year ended December 31, 2024, from $0.9 million for the year ended December 31, 2023. This decrease was primarily driven by proceeds from a settlement agreement and gains from foreign currency transactions, partially offset by higher interest expenses derived from our credit facilities.

Provision for Income Taxes

We recorded income tax benefit of $0.5 million for the year ended December 31, 2024, and provision for income tax of $0.8 million for the year ended December 31, 2023. Loss before income taxes resulted in a tax benefit for the year.

Net (Loss) Income

For the year ended December 31, 2024, we reported a net loss of $1.7 million, compared to a net income of $0.6 million in 2023, reflecting a $2.3 million decrease. This change was driven by a combination of factors discussed above. While these factors impacted short-term profitability, they position us for long-term growth and operational strength.

Liquidity and Capital Resources

Our principal sources of liquidity are cash generated from operating activities and cash borrowed under credit facilities, which we believe provides sufficient liquidity to support our financing needs. As of December 31, 2024, we had cash and working capital of $4.6 million and $10.4 million, respectively. As of December 31, 2024, we had approximately $14.5 million outstanding in the aggregate under our credit facilities discussed below for working capital replenishment.

We believe our revenue and operations will continue to grow and the current working capital is sufficient to support our operations and debt obligations well into the foreseeable future. However, we may need additional cash resources in the 

36

future if we experience changes in business conditions or other developments, such as rising interest rates, inflation and