Company: FGI
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001628280-25-052375
Chunk: 142

Company: FGI Industries Ltd.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 8
Chunk 142
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 December 31, 2024, we identified the following 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 have begun implementing remediation measures to address the reported material weaknesses. Specifically, we have segregated responsibilities for journal entry processing, implementing system supported detection and approval controls to strengthen oversight, standardized the account reconciliation process with documented management review, and introduced a secondary review for loan covenant calculations. Management will continue to evaluate and test the operating effectiveness of these controls to ensure the material weaknesses are fully and effectively remediated.    

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 September 30, 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.

There can be no assurance that our common stock will maintain compliance with the minimum bid price requirement or other applicable listing standards of The Nasdaq Stock Market LLC or another national securities exchange.

There can be no assurance that we will be able to continue to meet The Nasdaq Capital Market listing standards. We have in the past, and may in the future, be unable to comply with certain of the listing standards that we are required to 

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meet to maintain the listing of our common shares on The Nasdaq Capital Market. If we are unable to maintain compliance with all applicable listing standards, our common stock may no longer be listed on The Nasdaq Capital Market or another national securities exchange and