Document and Entity Information
Document and Entity Information - $ / shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 09, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-41207 | |
Entity Registrant Name | FGI Industries Ltd. | |
Entity Incorporation, State or Country Code | E9 | |
Entity Tax Identification Number | 98-1603252 | |
Entity Address State Or Province | NJ | |
Entity Address, Address Line One | 906 Murray Road | |
Entity Address, City or Town | East Hanover | |
Entity Address, Postal Zip Code | 07936 | |
City Area Code | 973 | |
Local Phone Number | 428-0400 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 9,500,000 | |
Entity Central Index Key | 0001864943 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Common Stock [Member] | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Ordinary Shares, $0.0001 par value | |
Entity Listing, Par Value Per Share | $ 0.0001 | |
Trading Symbol | FGI | |
Security Exchange Name | NASDAQ | |
Warrant [Member] | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Warrants to purchase Ordinary Shares, $0.0001 par value | |
Trading Symbol | FGIWW | |
Security Exchange Name | NASDAQ |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
CURRENT ASSETS | ||
Cash | $ 5,369,947 | $ 10,067,428 |
Accounts receivable, net | 16,602,725 | 14,295,859 |
Inventories, net | 9,633,998 | 13,292,591 |
Prepayments and other current assets | 4,446,969 | 2,588,081 |
Prepayments and other receivables - related parties | $ 11,004,487 | $ 5,643,649 |
Other Receivable, after Allowance for Credit Loss, Current, Related Party, Type | Related Party [Member] | Related Party [Member] |
Total current assets | $ 47,058,126 | $ 45,887,608 |
PROPERTY AND EQUIPMENT, NET | 1,408,674 | 1,269,971 |
OTHER ASSETS | ||
Operating lease right-of-use assets, net | 15,512,101 | 9,815,572 |
Deferred tax assets, net | 1,408,629 | 1,265,539 |
Other noncurrent assets | 1,559,421 | 2,128,240 |
Total other assets | 18,480,151 | 13,209,351 |
Total assets | 66,946,951 | 60,366,930 |
CURRENT LIABILITIES | ||
Short-term loans | 7,962,203 | 9,795,052 |
Income tax payable | 222,314 | 33,350 |
Operating lease liabilities - current | 1,467,049 | 1,543,031 |
Accrued expenses and other current liabilities | 3,650,658 | 3,580,359 |
Total current liabilities | 29,840,835 | 29,775,203 |
OTHER LIABILITIES | ||
Operating lease liabilities - noncurrent | 13,920,716 | 7,847,317 |
Total liabilities | 43,761,551 | 37,622,520 |
COMMITMENTS AND CONTINGENCIES | ||
SHAREHOLDERS' EQUITY | ||
Preference Shares ($0.0001 par value, 10,000,000 shares authorized, no shares issued and outstanding as of September 30, 2023 and December 31, 2022) | ||
Ordinary shares ($0.0001 par value, 200,000,000 shares authorized, 9,500,000 shares issued and outstanding as of September 30, 2023 and December 31, 2022) | 950 | 950 |
Additional paid-in capital | 20,791,752 | 20,459,859 |
Retained earnings | 3,874,561 | 3,679,920 |
Accumulated other comprehensive loss | (1,415,820) | (1,396,319) |
FGI Industries Ltd. shareholders' equity | 23,251,443 | 22,744,410 |
Non-controlling interests | (66,043) | |
Total shareholders' equity | 23,185,400 | 22,744,410 |
Total liabilities and shareholders' equity | 66,946,951 | 60,366,930 |
Nonrelated Party [Member] | ||
CURRENT LIABILITIES | ||
Accounts payable | 14,052,847 | 14,718,969 |
Related Party [Member] | ||
CURRENT LIABILITIES | ||
Accounts payable | $ 2,485,764 | $ 104,442 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 |
Preference shares | ||
Preference shares, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preference shares, authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred shares, shares issued (in shares) | 0 | 0 |
Preferred shares, shares outstanding (in shares) | 0 | 0 |
Ordinary shares | ||
Ordinary shares, par value (in per share) | $ 0.0001 | $ 0.0001 |
Ordinary shares, authorized (in shares) | 200,000,000 | 200,000,000 |
Ordinary shares, issued (in shares) | 9,500,000 | 9,500,000 |
Ordinary shares, outstanding (in shares) | 9,500,000 | 9,500,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
REVENUES | $ 29,932,612 | $ 38,544,062 | $ 86,284,791 | $ 129,928,316 |
COST OF REVENUES | 22,103,325 | 30,503,452 | 63,242,944 | 105,942,167 |
GROSS PROFIT | 7,829,287 | 8,040,610 | 23,041,847 | 23,986,149 |
OPERATING EXPENSES | ||||
Selling and distribution | 4,572,593 | 4,268,355 | 14,084,200 | 13,308,414 |
General and administrative | 2,351,307 | 1,865,325 | 6,746,055 | 5,801,294 |
Research and development | 423,697 | 238,638 | 1,152,554 | 788,054 |
Total operating expenses | 7,347,597 | 6,372,318 | 21,982,809 | 19,897,762 |
INCOME FROM OPERATIONS | 481,690 | 1,668,292 | 1,059,038 | 4,088,387 |
OTHER INCOME (EXPENSES) | ||||
Interest income | 1,102 | 306 | 6,524 | 439 |
Interest expense | (16,382) | (159,033) | (559,730) | (398,225) |
Other income, net | 49,598 | 71,750 | 19,357 | 104,521 |
Total other income (expenses), net | 34,318 | (86,977) | (533,849) | (293,265) |
INCOME BEFORE INCOME TAXES | 516,008 | 1,581,315 | 525,189 | 3,795,122 |
PROVISION FOR INCOME TAXES | ||||
Current | 225,127 | 254,917 | 539,681 | 724,716 |
Deferred | (52,611) | 54,256 | (143,090) | 97,541 |
Total provision for income taxes | 172,516 | 309,173 | 396,591 | 822,257 |
NET INCOME | 343,492 | 1,272,142 | 128,598 | 2,972,865 |
Less: net loss attributable to non-controlling shareholders | (66,043) | (66,043) | ||
Net income attributable to FGI Industries Ltd. Shareholders | 409,535 | 1,272,142 | 194,641 | 2,972,865 |
OTHER COMPREHENSIVE LOSS | ||||
Foreign currency translation adjustment | (44,497) | (879,727) | (19,501) | (1,006,323) |
COMPREHENSIVE INCOME | 298,995 | 392,415 | 109,097 | 1,966,542 |
Less: comprehensive loss attributable to non-controlling shareholders | (66,043) | (66,043) | ||
Comprehensive income attributable to FGI Industries Ltd. Shareholders | $ 365,038 | $ 392,415 | $ 175,140 | $ 1,966,542 |
WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES | ||||
Basic (in shares) | 9,500,000 | 9,500,000 | 9,500,000 | 9,280,220 |
Diluted (in shares) | 9,786,522 | 9,508,750 | 9,822,847 | 9,285,701 |
EARNINGS PER SHARE | ||||
Basic (in dollars per share) | $ 0.04 | $ 0.13 | $ 0.02 | $ 0.32 |
Diluted (in dollars per share) | $ 0.04 | $ 0.13 | $ 0.02 | $ 0.32 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) | Parent [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Other Additional Capital [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] | Noncontrolling Interest [Member] | Total |
Beginning balance at Dec. 31, 2021 | $ 7,549,710 | $ 700 | $ 7,549,010 | $ 7,549,710 | ||||
Beginning balance (in shares) at Dec. 31, 2021 | 7,000,000 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Consummation of separation transaction upon completion of reorganization | $ 8,203,742 | (7,549,010) | $ (654,732) | |||||
Share-Based compensation | 39,812 | 39,812 | 39,812 | |||||
Issuance of ordinary shares upon Initial Public Offering ("IPO"), net | 12,370,800 | $ 250 | 12,370,550 | 12,370,800 | ||||
Issuance of ordinary shares upon Initial Public Offering ("IPO"), net (in shares) | 2,500,000 | |||||||
Net income (loss) | 530,193 | $ 530,193 | 530,193 | |||||
Foreign currency translation adjustment | (57,180) | (57,180) | (57,180) | |||||
Ending balance at Mar. 31, 2022 | 20,433,335 | $ 950 | 20,614,104 | 530,193 | (711,912) | 20,433,335 | ||
Ending balance (in shares) at Mar. 31, 2022 | 9,500,000 | |||||||
Beginning balance at Dec. 31, 2021 | 7,549,710 | $ 700 | $ 7,549,010 | 7,549,710 | ||||
Beginning balance (in shares) at Dec. 31, 2021 | 7,000,000 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income (loss) | 2,972,865 | |||||||
Foreign currency translation adjustment | (1,006,323) | |||||||
Ending balance at Sep. 30, 2022 | 22,147,704 | $ 950 | 20,834,944 | 2,972,865 | (1,661,055) | 22,147,704 | ||
Ending balance (in shares) at Sep. 30, 2022 | 9,500,000 | |||||||
Beginning balance at Mar. 31, 2022 | 20,433,335 | $ 950 | 20,614,104 | 530,193 | (711,912) | 20,433,335 | ||
Beginning balance (in shares) at Mar. 31, 2022 | 9,500,000 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Share-Based compensation | 104,920 | 104,920 | 104,920 | |||||
Net income (loss) | 1,170,530 | 1,170,530 | 1,170,530 | |||||
Foreign currency translation adjustment | (69,416) | (69,416) | (69,416) | |||||
Ending balance at Jun. 30, 2022 | 21,639,369 | $ 950 | 20,719,024 | 1,700,723 | (781,328) | 21,639,369 | ||
Ending balance (in shares) at Jun. 30, 2022 | 9,500,000 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Share-Based compensation | 115,920 | 115,920 | 115,920 | |||||
Net income (loss) | 1,272,142 | 1,272,142 | 1,272,142 | |||||
Foreign currency translation adjustment | (879,727) | (879,727) | (879,727) | |||||
Ending balance at Sep. 30, 2022 | 22,147,704 | $ 950 | 20,834,944 | 2,972,865 | (1,661,055) | 22,147,704 | ||
Ending balance (in shares) at Sep. 30, 2022 | 9,500,000 | |||||||
Beginning balance at Dec. 31, 2022 | 22,744,410 | $ 950 | 20,459,859 | 3,679,920 | (1,396,319) | 22,744,410 | ||
Beginning balance (in shares) at Dec. 31, 2022 | 9,500,000 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Share-Based compensation | 119,721 | 119,721 | 119,721 | |||||
Net income (loss) | (303,375) | (303,375) | (303,375) | |||||
Foreign currency translation adjustment | 20,099 | 20,099 | 20,099 | |||||
Ending balance at Mar. 31, 2023 | 22,580,855 | $ 950 | 20,579,580 | 3,376,545 | (1,376,220) | 22,580,855 | ||
Ending balance (in shares) at Mar. 31, 2023 | 9,500,000 | |||||||
Beginning balance at Dec. 31, 2022 | 22,744,410 | $ 950 | 20,459,859 | 3,679,920 | (1,396,319) | 22,744,410 | ||
Beginning balance (in shares) at Dec. 31, 2022 | 9,500,000 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income (loss) | 128,598 | |||||||
Foreign currency translation adjustment | (19,501) | |||||||
Ending balance at Sep. 30, 2023 | 23,251,443 | $ 950 | 20,791,752 | 3,874,561 | (1,415,820) | $ (66,043) | 23,185,400 | |
Ending balance (in shares) at Sep. 30, 2023 | 9,500,000 | |||||||
Beginning balance at Mar. 31, 2023 | 22,580,855 | $ 950 | 20,579,580 | 3,376,545 | (1,376,220) | 22,580,855 | ||
Beginning balance (in shares) at Mar. 31, 2023 | 9,500,000 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Share-Based compensation | 152,835 | 152,835 | 152,835 | |||||
Net income (loss) | 88,481 | 88,481 | 88,481 | |||||
Foreign currency translation adjustment | 4,897 | 4,897 | 4,897 | |||||
Ending balance at Jun. 30, 2023 | 22,827,068 | $ 950 | 20,732,415 | 3,465,026 | (1,371,323) | 22,827,068 | ||
Ending balance (in shares) at Jun. 30, 2023 | 9,500,000 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Share-Based compensation | 59,337 | 59,337 | 59,337 | |||||
Net income (loss) | 409,535 | 409,535 | (66,043) | 343,492 | ||||
Foreign currency translation adjustment | (44,497) | (44,497) | (44,497) | |||||
Ending balance at Sep. 30, 2023 | $ 23,251,443 | $ 950 | $ 20,791,752 | $ 3,874,561 | $ (1,415,820) | $ (66,043) | $ 23,185,400 | |
Ending balance (in shares) at Sep. 30, 2023 | 9,500,000 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||
NET INCOME | $ 343,492 | $ (303,375) | $ 1,272,142 | $ 530,193 | $ 128,598 | $ 2,972,865 | |
Adjustments to reconcile net income to net cash used in operating activities | |||||||
Depreciation and amortization | 135,256 | 182,404 | |||||
Share-based compensation | 331,893 | 260,652 | |||||
Provision for credit losses | 31,324 | 102,842 | $ 261,381 | ||||
Reversal of defective return | (710,643) | (1,456,022) | (1,696,263) | ||||
Foreign exchange transaction gain | (23,875) | (58,901) | |||||
Adjustment for Right of use assets | (89,093) | (2,552,649) | |||||
Deferred income tax (benefit) expense | (143,090) | 108,653 | |||||
Changes in operating assets and liabilities | |||||||
Accounts receivable | (1,627,547) | 9,521,011 | |||||
Inventories | 3,658,593 | 5,276,294 | |||||
Prepayments and other current assets | (1,858,888) | 146,324 | |||||
Prepayments and other receivables - related parties | (5,360,838) | (3,895,562) | |||||
Other noncurrent assets | 568,819 | 655,614 | |||||
Income taxes | 188,964 | (1,048,150) | |||||
Right-of-use assets | 1,336,189 | 1,009,115 | |||||
Accounts payable | (666,122) | (18,257,595) | |||||
Accounts payable-related parties | 2,381,322 | 614,633 | |||||
Operating lease liabilities | (946,208) | 1,529,515 | |||||
Accrued expenses and other current liabilities | 70,299 | (1,443,014) | |||||
Net cash used in operating activities | (2,595,047) | (6,331,971) | |||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||
Proceeds from disposal of property and equipment | 400 | ||||||
Purchase of property and equipment | (274,971) | (55,450) | |||||
Prepayment for purchase of equipment and construction-in-progress | (1,295,924) | ||||||
Net cash used in investing activities | (274,971) | (1,350,974) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||
Net repayments of revolving credit facility | (1,832,849) | (1,649,631) | |||||
Net proceeds from issuance of ordinary shares in IPO | 12,370,800 | ||||||
Net cash (used in) provided by financing activities | (1,832,849) | 10,721,169 | |||||
EFFECT OF EXCHANGE RATE FLUCTUATION ON CASH | 5,386 | (941,101) | |||||
NET CHANGES IN CASH | (4,697,481) | 2,097,123 | |||||
CASH, BEGINNING OF PERIOD | $ 10,067,428 | $ 3,883,896 | 10,067,428 | 3,883,896 | 3,883,896 | ||
CASH, END OF PERIOD | $ 5,369,947 | $ 5,981,019 | 5,369,947 | 5,981,019 | $ 10,067,428 | ||
SUPPLEMENTAL CASH FLOW INFORMATION | |||||||
Cash paid during the period for interest | (560,314) | (395,987) | |||||
Cash paid during the period for income taxes | (350,500) | $ (1,755,531) | |||||
NON-CASH INVESTING AND FINANCING ACTIVITIES | |||||||
New addition on Right-of-use assets | $ (7,644,734) |
Nature of Business and Organiza
Nature of Business and Organization | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business and Organization | Note 1 — Nature of business and organization FGI Industries Ltd. (“FGI” or the “Company”) is a holding company organized on May 26, 2021, under the laws of the Cayman Islands. The Company has no substantive operations other than holding all of the outstanding equity of its operating subsidiaries as described below. The Company is a supplier of global kitchen and bath products and currently focuses on the following categories: sanitaryware (primarily toilets, sinks, pedestals and toilet seats), bath furniture (vanities, mirrors and cabinets), shower systems, customer kitchen cabinetry and other accessory items. These products are sold primarily for repair and remodeling (“R&R”) activity and, to a lesser extent, new home or commercial construction. The Company sells its products through numerous partners, including mass retail centers, wholesale and commercial distributors, online retailers and independent dealers and distributors. The accompanying unaudited condensed consolidated financial statements reflect the activities of FGI and each of the following entities after the Reorganization, as described below: Name Background Ownership FGI Industries, Inc. ● 100% owned by FGI (formerly named Foremost Groups, Inc.) ● ● FGI Europe Investment Limited ● 100% owned by FGI ● FGI International, Limited ● 100% owned by FGI ● ● FGI Canada Ltd. ● 100% owned by FGI Industries, Inc. ● ● FGI Germany GmbH & Co. KG ● 100% owned by FGI Europe Investment Limited ● ● FGI China, Ltd. ● 100% owned by FGI International, Limited ● ● FGI United Kingdom Ltd ● 100% owned by FGI Europe Investment Limited ● ● FGI Australasia Pty Ltd ● 100% owned by FGI ● ● Covered Bridge Cabinetry Manufacturing Co., Ltd ● 100% owned by FGI ● ● Isla Porter LLC ● 60% owned by FGI Industries, Inc. ● ● Reorganization On January 27, 2022, the following reorganization steps were collectively completed: (i) the incorporation of FGI International, Limited (“FGI International”) and FGI China, Ltd., (ii) FGI Industries, Inc. (formerly Foremost Groups, Inc.) (“FGI Industries”), which operates the kitchen and bath (“K&B”) sales and distribution business in the United States and, through its wholly-owned Canadian subsidiary, Foremost International Limited, in Canada, distributed 100% of the outstanding shares of stock of Foremost Kingbetter Food Equipment Inc. (“FKB”), which operates a separate furniture line of business, to Foremost Groups Ltd. (“Foremost”), FGI Industries’ sole shareholder; (iii) Foremost contributed the FKB shares to Foremost Home Inc. (“FHI”), a newly-formed wholly-owned subsidiary of Foremost; and (iv) Foremost contributed 100% of the outstanding shares of stock of each of FGI Industries, FGI Europe Investment Limited (“FGI Europe”), which, directly and, through its wholly-owned German subsidiary, FGI Germany GmbH & Co., operates the K&B sales and distribution business in Europe, and FGI International, which, directly and through its wholly-owned Chinese subsidiary, FGI China, Ltd., operates the K&B sales and distribution business in the remainder of the world, K&B product development and sourcing of K&B products in China, to the Company (collectively, the “Reorganization”), such that, immediately following the Reorganization, (x) Foremost owns 100% of the equity interests in each of the Company and FHI , (y) the Company owns 100% of the equity interests in each of FGI Industries, FGI Europe and FGI International , which collectively, and through subsidiaries, operate the K&B business worldwide (the “K&B Business”), and (z) FHI owns 100% of the equity interests in FKB. Immediately before and after the Reorganization, each of the Company, FGI Industries, FGI Europe and FGI International, and each of their respective subsidiaries was and remains ultimately controlled by Foremost. As such, the accompanying unaudited condensed consolidated financial statements include the assets, liabilities, revenue, expenses and cash flows that are directly attributable to the K&B Business before the Reorganization. The unaudited condensed consolidated financial statements are presented as if the Company had been in existence and the Reorganization had been in effect during the entirety of the three months ended March 31, 2022. However, such presentation may not necessarily reflect the results of operations, financial position and cash flows if the K&B Business had actually existed on a stand-alone basis during the periods presented before the completion of the Reorganization. On January 14, 2022 FGI Industries, a wholly-owned subsidiary of the Company, entered into a shared services agreement (the “FHI Shared Services Agreement”) with Foremost Home Industries, Inc., a newly-formed wholly-owned subsidiary of Foremost (“FHI”). Pursuant to the FHI Shared Services Agreement, FGI Industries provides FHI with general and administrative services, information technology systems services and human resources services, as well as warehouse space services and supply chain services in the United States. Under the FHI Shared Services Agreement, FHI will reimburse any reasonable and documented out-of-pocket fees incurred by FGI Industries as well as pay a service fee for each service. For warehouse services, FHI will pay FGI Industries a $500,000 annual fee as well as a fee equal to 4% of gross product sales of all products stored in such warehouses. For all other services provided, FHI will pay a service fee equal to the total costs incurred by FGI Industries for such service generally divided by the number of FHI employees relative to FGI Industries employees. The FHI Shared Services Agreement will have an initial term of one year and will renew automatically unless cancelled by either party upon the giving of at least 60 days in advance of the expiration of the then-current term. On January 14, 2022, the Company entered into a shared services agreement (the “Worldwide Shared Services Agreement”) with Foremost Worldwide Co., Ltd. (“Foremost Worldwide”) pursuant to which Foremost Worldwide provides FGI Industries with general and administrative services, information technology system services and human resources services, in Taiwan. The terms of the Worldwide Services Agreement as between the service provider and recipient are substantially identical to those of the FHI Shared Services Agreement, including calculation of service fees and termination provisions, with Foremost Worldwide providing services and FGI Industries paying Foremost Worldwide for such services. On January 1, 2023, the Worldwide Services Agreement was amended and restated to include additional digital online and related services. The assets and liabilities have been stated at historical carrying amounts. Only those assets and liabilities that are specifically identifiable to the K&B Business are included in the Company’s unaudited condensed consolidated balance sheets. The Company’s unaudited condensed consolidated statements of income and comprehensive income consist of all the revenues, costs and expenses of the K&B Business, including allocations to selling and distribution expenses, general and administrative expenses, and research and development expenses, and which were incurred by FGI but related to the K&B Business prior to the Reorganization. All revenues and cost of revenues attributable to selling of K&B products were allocated to the Company. Operating expenses were allocated to the Company based on employees and activities that are involved in the K&B Business. Any expenses that were not directly attributable to any specific business were allocated to the Company based on the proportion of the number of employees of the K&B Business to the total number of employees of both the K&B Business and FHI. The following table sets forth the revenues, cost of revenues and operating expenses that were irrelevant to the K&B Business allocated from FGI Industries to Foremost Home, Inc. for three and nine months ended September 30, 2023 and 2022, respectively. For the Three Months Ended For the Nine Months Ended September 30, September 30, 2023 2022 2023 2022 USD USD USD USD Revenues $ — $ 10,081,416 $ 991,919 $ 30,743,753 Cost of revenues — (8,653,083) (768,065) (25,201,282) Gross profit — 1,428,333 223,854 5,542,471 Selling and distribution expenses — (1,187,198) 45,979 (3,509,028) General and administrative expenses — (38,403) — (281,532) Research and development expenses — (59,228) — (219,331) Income from operations $ — $ 143,504 $ 269,833 $ 1,532,580 The following table sets forth the revenues, cost of revenues and operating expenses that were directly related to the K&B Business allocated from Foremost Worldwide Co., Ltd., a wholly-owned subsidiary of Foremost, to FGI International for three and nine months ended September 30, 2023 and 2022, respectively. For the Three Months Ended For the Nine Months Ended September 30, September 30, 2023 2022 2023 2022 USD USD USD USD Revenues $ — $ 474,213 $ — $ 25,022,959 Cost of revenues — (398,768) — (22,853,884) Gross profit — 75,445 — 2,169,075 Selling and distribution expenses — (15,687) — (522,321) General and administrative expenses — (137,987) — (424,861) Research and development expenses — (11,893) — (27,080) Income from operations $ — $ (90,122) $ — $ 1,194,813 Income tax liability is calculated based on a separate return basis as if the K&B Business had filed separate tax returns before the completion of the Reorganization. Immediately following the Reorganization, the K&B Business began to file separate tax returns and report taxation based on the actual tax return of each legal entity. Management believes the basis and amounts of these allocations are reasonable. While the expenses allocated to the Company for these items are not necessarily indicative of the expenses that would have been incurred if the Company had been a separate, stand-alone entity, the Company does not believe that there is any significant difference between the nature and amounts of these allocated expenses and the expenses that would have been incurred if the Company had been a separate, stand-alone entity. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 — Summary of significant accounting policies Liquidity Historically, the Company finances its operations through internally generated cash, short-term loans and payables. As of September 30, 2023, the Company had approximately $5.4 million in cash and cash equivalents, which primarily consists of cash on hand and bank deposits, which are unrestricted as to withdrawal and use. As further described in Note 8, as of the date of this quarterly report, our wholly owned subsidiary FGI Industries Inc. has obtained a waiver for the Corporate Borrower’s Audited Annual Statements, a U.S. standalone reporting obligation under the Credit Agreement with East West Bank, which were due by April 30, 2023. If the Company is unable to realize its assets within the normal operating cycle of a twelve (12) month period, the Company may have to consider supplementing its available sources of funds through the following sources: · · · Based on the above considerations, the Company’s management is of the opinion that it has sufficient funds to meet the Company’s working capital requirements and debt obligations as they become due over the next twelve (12) months. Basis of presentation The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commissions (the “SEC”), regarding financial reporting, and include all normal and recurring adjustments that management of the Company considers necessary for a fair presentation of its financial position and operation results. Principles of consolidation The unaudited condensed consolidated financial statements include the financial statements of the Company and its subsidiaries. All significant intercompany transactions and balances between the Company and its subsidiaries are eliminated upon consolidation. Subsidiaries are those entities which the Company, directly or indirectly, controls more than one half of the voting power; or has the power to govern the financial and operating policies, to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at a meeting of directors. Use of estimates and assumptions The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the periods presented. Significant accounting estimates reflected in the Company’s consolidated financial statements include the useful lives of property and equipment, allowance for credit losses, inventory reserve, accrued defective return, provision for contingent liabilities, revenue recognition, deferred taxes and uncertain tax position. Actual results could differ from these estimates . Foreign currency translation and transaction The functional currencies of the Company and its subsidiaries are the local currency of the country in which the subsidiaries operate, except for FGI International, which is incorporated in Hong Kong and adopted the United States Dollar (“U.S. Dollar” or “USD”) as its functional currency. The reporting currency of the Company is the U.S. Dollar. Assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the applicable rates of exchange in effect at that date. The equity denominated in the functional currencies is translated at the historical rates of exchange at the time of capital contributions. The results of operations and the cash flows denominated in foreign currencies are translated at the average rates of exchange during the reporting period. Because cash flows are translated based on the average translation rates, amounts related to assets and liabilities reported on the unaudited condensed consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances on the unaudited condensed consolidated balance sheets. Translation adjustments arising from the use of different exchange rates from period to period are included as a separate component of accumulated other comprehensive income included in the unaudited condensed consolidated statements of changes in shareholders’ equity. Transaction gains and losses arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency in the unaudited condensed consolidated statements of income and comprehensive income. For the purpose of presenting the financial statements of subsidiaries using the Renminbi (“RMB”) as their functional currency, the Company’s assets and liabilities are expressed in U.S. Dollars at the exchange rate on the balance sheet date, which was 7.3144 and 6.9653 as of September 30, 2023 and December 31, 2022, respectively; shareholders’ equity accounts are translated at historical rates, and income and expense items are translated at the average exchange rate during the period, which was 7.2414 and 6.7811 for the three months ended September 30, 2023 and 2022, respectively, and 7.0384 and 6.5595 for the nine months ended September 30, 2023 and 2022, respectively. For the purpose of presenting the financial statements of the subsidiary using the Canadian Dollar (“CAD”) as its functional currency, the Company’s assets and liabilities are expressed in U.S. Dollars at the exchange rate on the balance sheet date, which was 1.3541 and 1.3541 as of September 30, 2023 and December 31, 2022, respectively; shareholders’ equity accounts are translated at historical rates, and income and expense items are translated at the average exchange rate during the period, which was 1.3541 and 1.2697 for the three months ended September 30, 2023 and 2022, respectively, and 1.3541 and 1.2296 for the nine months ended September 30, 2023 and 2022, respectively. For the purpose of presenting the financial statements of the subsidiary using the Euro (“EUR”) as its functional currency, the Company’s assets and liabilities are expressed in U.S. Dollars at the exchange rate on the balance sheet date, which was 0.9490 and 0.9338 as of September 30, 2023 and December 31, 2022, respectively; shareholders’ equity accounts are translated at historical rates, and income and expense items are translated at the average exchange rate during the period, which was 0.9143 and 0.9770 for the three months ended September 30, 2023 and 2022, respectively, and 0.9227 and 0.9302 for the nine months ended September 30, 2023 and 2022, respectively. Reclassification Certain prior year amounts have been reclassified to conform with the current year presentation, specifically the interest expenses and accrued expenses and other current liabilities in consolidated statements of income and comprehensive income and cash flow. These reclassifications have no effect on the consolidated balance sheets previously reported. Cash Cash consists of cash on hand, demand deposits and time deposits placed with banks or other financial institutions that have original maturities of three months or less. The Company did not have any cash equivalents as of September 30, 2023 and December 31, 2022. Accounts receivable, net Bills and trade receivables include trade accounts due from customers. In establishing the required allowance for expected credit losses, management considers historical collection experience, aging of the receivables, the economic environment, industry trend analysis, and the credit history and financial conditions of the customers. Management reviews its receivables on a regular basis to determine if the expected credit losses are adequate and adjusts the allowance when necessary. Delinquent account balances are written off against allowance for credit losses after management has determined that the likelihood of collection is not probable. Inventories, net Inventories are stated at the lower of cost and net realizable value. Cost consists of purchase price and related shipping and handling expenses, and is determined using the weighted average cost method, based on individual products. The methods of determining inventory costs are used consistently from year to year. A provision for slow-moving items is calculated based on historical experience. Management reviews this provision annually to assess whether, based on economic conditions, it is adequate. Prepayments Prepayments are cash deposited or advanced to suppliers for the purchase of goods or services that have not been received or provided. This amount is refundable and bears no interest. Prepayments and deposits are classified as either current or non-current based on the terms of the respective agreements. These advances are unsecured and are reviewed periodically to determine whether their carrying value has become impaired. Property and equipment, net Property and equipment are stated at cost net of accumulated depreciation and impairment. Depreciation is provided over the estimated useful lives of the assets using the straight-line method from the time the assets are placed in service. Estimated useful lives are as follows: Useful Life Building 20 years Leasehold Improvements Lesser of lease term and expected useful life Machinery and equipment 3 – 5 years Furniture and fixtures 3 – 5 years Vehicles 5 years Molds 3 – 5 years Intangible assets, net The Company’s intangible assets with definite useful lives primarily consist of software acquired for internal use. The Company amortizes its intangible assets with definite useful lives over their estimated useful lives and reviews these assets for impairment. The Company typically amortizes its intangible assets with definite useful lives on a straight-line basis over the estimated useful lives of ten years. Impairment for long-lived assets Long-lived assets, including property and equipment and intangible assets with definite useful lives, are reviewed for impairment whenever material events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset group may not be recoverable. The Company assesses the recoverability of an asset group based on the undiscounted future cash flows the asset group is expected to generate and recognize an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset group plus net proceeds expected from disposition of the asset group, if any, are less than the carrying value of the asset group. If an impairment is identified, the Company would reduce the carrying amount of the asset group to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. As of September 30, 2023 and December 31, 2022, no impairment of long-lived assets was recognized. Leases The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use assets, net (“ROU assets”), operating lease liabilities — current and operating lease liabilities — noncurrent on the unaudited condensed consolidated balance sheets. ROU assets represent our right to use an underlying asset for the duration of the lease term while lease liabilities represent the Company’s obligation to make lease payments in exchange for the right to use an underlying asset. ROU assets and lease liabilities are measured based on the present value of fixed lease payments over the lease term at the commencement date. The ROU asset also includes any lease payments made prior to the commencement date and initial direct costs incurred, and is reduced by any lease incentives received. The Company reviews its ROU assets as material events occur or circumstances change that would indicate the carrying amount of the ROU assets are not recoverable and exceed their fair values. If the carrying amount of an ROU asset is not recoverable from its undiscounted cash flows, then the Company would recognize an impairment loss for the difference between the carrying amount and the current fair value. As most of the Company’s leases do not provide an implicit rate, the Company generally uses its incremental borrowing rate on the commencement date of the lease as the discount rate in determining the present value of future lease payments. The Company determines the incremental borrowing rate for each lease by using the incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The Company’s lease terms may include options to extend or terminate the lease when there are relevant economic incentives present that make it reasonably certain that the Company will exercise that option. The Company accounts for any non- lease components separately from lease components. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Fair Value Measurement The accounting standard regarding fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company. The accounting standards define fair value, establish a three-level valuation hierarchy for disclosures of fair value measurement and enhance disclosure requirements for fair value measures. The three levels of the fair value hierarchy are as follows: ● Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. ● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. ● Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. Financial instruments included in current assets and current liabilities are reported in the consolidated balance sheets at face value or cost, which approximate fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rates of interest. Revenue recognition The Company recognized revenue in accordance with Accounting Standards Codification (“ASC”) 606 – Revenue from Contracts with Customers. Revenues are recognized when control of the promised goods or performance obligations for services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for the goods or services. The Company generates revenues from sales of kitchen and bath products, and recognizes revenue as control of its products is transferred to its customers, which is generally at the time of shipment or upon delivery based on the contractual terms with the Company’s customers. The Company’s customers’ payment terms generally range from 15 to 60 days of fulfilling its performance obligations and recognizing revenue . The Company provides customer programs and incentive offerings, including co-operative marketing arrangements and volume-based incentives. These customer programs and incentives are considered variable consideration. The Company includes in revenue variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the variable consideration is resolved. This determination is made based upon known customer program and incentive offerings at the time of sale, and expected sales volume forecasts as it relates to the Company’s volume- based incentives. This determination is updated on a monthly basis. Certain product sales include a right of return. The Company estimates future product returns at the time of sale based on historical experience and records a corresponding reduction in accounts receivable. The Company records receivables related to revenue when it has an unconditional right to invoice and receive payment. The Company’s disaggregated revenues are summarized as follows: For the Three Months Ended For the Nine Months Ended September 30, September 30, 2023 2022 2023 2022 USD USD USD USD Revenues by product line Sanitaryware $ 20,740,380 $ 25,490,296 $ 54,949,082 $ 84,564,251 Bath Furniture 2,531,430 5,607,990 12,304,688 23,397,263 Shower System 4,931,437 5,441,566 14,248,679 17,885,424 Others 1,729,365 2,004,210 4,782,342 4,081,378 Total $ 29,932,612 $ 38,544,062 $ 86,284,791 $ 129,928,316 Revenues Total assets For the Three Months Ended For the Nine Months Ended As of As of September 30, September 30, September 30, December 31, 2023 2022 2023 2022 2023 2022 USD USD USD USD USD USD (Audited) Revenues/ total assets by geographic location United States $ 18,356,278 $ 23,866,921 $ 54,921,572 $ 80,865,556 $ 41,561,576 $ 38,364,005 Canada 9,081,571 9,494,803 23,120,014 35,388,374 18,103,189 14,584,946 Europe 2,460,762 4,849,551 8,209,204 13,341,599 476,162 343,946 Rest of World 34,001 332,787 34,001 332,787 6,806,024 7,074,033 Total $ 29,932,612 $ 38,544,062 $ 86,284,791 $ 129,928,316 $ 66,946,951 $ 60,366,930 Shipping and Handling Costs Shipping and handling costs are expensed as incurred and are included in selling and distribution expenses on the accompanying statement of operations. For the three months ended September 30, 2023 and 2022, shipping and handling expense was $176,077 and $210,561, respectively, for the nine months ended September 30, 2023 and 2022, shipping and handling expense was $490,161 and $699,756, respectively. Share-based compensation The Company accounts for share-based compensation in accordance with ASC 718, Compensation — Stock Compensation (“ASC 718”). In accordance with ASC 718, the Company determines whether an award should be classified and accounted for as a liability award or an equity award. All the Company’s share-based awards were classified as equity awards and are recognized in the consolidated financial statements based on their grant date fair values. The Company has elected to recognize share-based compensation using the straight-line method for all share-based awards granted over the requisite service period, which is the vesting period. The Company accounts for forfeitures as they occur in accordance with ASC 718. The Company, with the assistance of an independent third-party valuation firm, determines the fair value of the stock options granted to employees. The Black Scholes Model is applied in determining the estimated fair value of the options granted to employees and non-employees. The Company recognized share-based compensation $59,337, $331,893 and $115,920, $260,652 for the three and nine months ended September 30, 2023 and 2022, respectively. Income Taxes Deferred taxes are recognized based on the future tax consequences of the differences between the carrying value of assets and liabilities and their respective tax bases. The future realization of deferred tax assets depends on the existence of sufficient taxable income in future periods. Possible sources of taxable income include taxable income in carryback periods, the future reversal of existing taxable temporary differences recorded as a deferred tax liability, tax-planning strategies that generate future income or gains in excess of anticipated losses in the carryforward period and projected future taxable income. If, based upon all available evidence, both positive and negative, it is more likely than not (i.e., more than 50 percent likely) that such deferred tax assets will not be realized, a valuation allowance is recorded. Significant weight is given to positive and negative evidence that is objectively verifiable. A company’s three- year cumulative loss position is significant negative evidence in considering whether deferred tax assets are realizable, and the accounting guidance restricts the amount of reliance we can place on projected taxable income to support the recovery of the deferred tax assets. The current accounting guidance allows the recognition of only those income tax positions that have a greater than 50 percent likelihood of being sustained upon examination by the taxing authorities. The Company believes that there is an increased potential for volatility in its effective tax rate because this threshold allows for changes in the income tax environment and, to a greater extent, the inherent complexities of income tax law in a substantial number of jurisdictions, which may affect the computation of its liability for uncertain tax positions. The Company records interest and penalties on our uncertain tax positions in income tax expense. As of September 30, 2023, the tax years ended December 31, 2020 through December 31, 2022 for FGI Industries, Inc. remain open for statutory examination by tax authority. We record the tax effects of Foreign Derived Intangible Income (FDII) and Global Intangible Low-Taxed Income (GILTI) related to our foreign operations as a component of income tax expense in the period in which the tax arises. Non-controlling interests The Company’s non-controlling interests represent the minority shareholders’ ownership interests related to the Company’s subsidiary, including 40% in Isla Porter LLC. The non-controlling interests are presented in the unaudited consolidated balance sheets, separate from equity attributable to the shareholders of the Company. Non-controlling interests in the results of operations of the Company are presented on the unaudited condensed consolidated statement of income and comprehensive income as allocations of the net income or loss for the period between non-controlling shareholders and the shareholders of the Company. Comprehensive income Comprehensive income consists of two components: net income and other comprehensive income. Other comprehensive income refers to revenue, expenses, gains and losses that under US GAAP are recorded as an element of equity but are excluded from net income. Other comprehensive income consists of a foreign currency translation adjustment resulting from the Company not using the U.S. Dollar as its functional currencies. Earnings per share The Company computes earnings per share (“EPS”) in accordance with ASC 260, “Earnings per Share” (“ASC 260”). ASC 260 requires companies to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average ordinary shares outstanding for the period. Diluted EPS presents the dilutive effect on a per share basis of the potential ordinary shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential ordinary shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. The following table sets forth the computation of basic and diluted earnings per share for the nine months ended September 30, 2023 and 2022: For the Three Months Ended For the Nine Months Ended September 30, September 30, 2023 2022 2023 2022 USD USD USD USD Numerator: Net income attributable to FGI Industries Ltd. Shareholders $ 409,535 $ 1,272,142 $ 194,641 $ 2,972,865 Denominator: Weighted-average number of ordinary shares outstanding — 9,500,000 9,500,000 9,500,000 9,280,220 Potentially dilutive shares from outstanding options/warrants 286,522 8,750 322,847 5,481 Weighted-average number of ordinary shares outstanding — 9,786,522 9,508,750 9,822,847 9,285,701 Earnings per share — basic $ 0.04 $ 0.13 $ 0.02 $ 0.32 Earnings per share — diluted $ 0.04 $ 0.13 $ 0.02 $ 0.32 Potential ordinary shares that have an anti-dilutive effect are excluded from the calculation of diluted EPS 514,975 and 2,925,000 number of options and warrants, respectively, were excluded from diluted EPS because their effects were anti-dilutive. Segment reporting ASC 280, “Segment Reporting,” establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organizational structure as well as information about geographical areas, business segments and major customers in financial statements for detailing the Company’s business segments. Recently adopted accounting pronouncements In June 2016, the FASB issued ASU 2016- 13, “Financial Instruments-Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments,” amending the accounting for the impairment of financial instruments, including trade receivables. Under previous guidance, credit losses were recognized when the applicable losses had a probable likelihood of occurring and this assessment was based on past events and current conditions. The amended current guidance eliminates the “probable” threshold and requires an entity to use a broader range of information, including forecast information when estimating expected credit losses. Generally, this should result in a more timely recognition of credit losses. This guidance became effective for interim and annual periods beginning after December 15, 2019 with early adoption permitted for interim and annual periods beginning after December 15, 2018. The requirements of the amended guidance should be applied using a modified retrospective approach except for debt securities, which require a prospective transition approach. In November 2019, the FASB issued ASU 2019-10, which finalized the delay of such effective date to fiscal years beginning after December 15, 2022 for private and all other companies, including emerging growth companies. As an emerging growth company, the Company The Company considers the applicability and impact of all ASUs. ASUs not listed above were assessed and determined not to be applicable. |
Accounts Receivable, Net
Accounts Receivable, Net | 9 Months Ended |
Sep. 30, 2023 | |
Receivables [Abstract] | |
Accounts Receivable, Net | Note 3 — Accounts receivable, net Accounts receivable, net consisted of the following: As of As of September 30, 2023 December 31, 2022 USD USD (Audited) Accounts receivable $ 17,958,087 $ 16,330,540 Allowance for credit losses (470,167) (438,843) Accrued defective return and discount (885,195) (1,595,838) Accounts receivable, net $ 16,602,725 $ 14,295,859 Movements of allowance for credit losses are as follows: For the Nine Months Ended For the Year Ended September 30, December 31, 2023 2022 USD USD (Audited) Beginning balance $ 438,843 $ 177,462 Addition 31,324 261,381 Ending balance $ 470,167 $ 438,843 Movements of accrued defective return and discount accounts are as follows: For the Nine Months Ended For the Year Ended September 30, December 31, 2023 2022 USD USD (Audited) Beginning balance $ 1,595,838 $ 3,292,101 Provision (710,643) (1,696,263) Ending balance $ 885,195 $ 1,595,838 |
Inventories, Net
Inventories, Net | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Inventories, Net | Note 4 — Inventories, net Inventories, net consisted of the following: As of As of September 30, 2023 December 31, 2022 USD USD (Audited) Finished product $ 10,315,973 $ 13,956,121 Reserves for slow-moving inventories (681,975) (663,530) Inventories, net $ 9,633,998 $ 13,292,591 Movements of inventory reserves are as follows: For the Nine Months Ended For the Year Ended September 30, December 31, 2023 2022 USD USD (Audited) Beginning balance $ 663,530 $ 544,158 Addition 18,445 119,372 Ending balance $ 681,975 $ 663,530 |
Prepayments and Other Assets
Prepayments and Other Assets | 9 Months Ended |
Sep. 30, 2023 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
Prepayments and Other Assets | Note 5 — Prepayments and other assets Prepayments and other assets consisted of the following: As of As of September 30, 2023 December 31, 2022 USD USD (Audited) Prepayments $ 3,677,613 $ 2,026,259 Others 769,356 561,822 Total prepayments and other assets $ 4,446,969 $ 2,588,081 |
Property and Equipment, Net
Property and Equipment, Net | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Note 6 — Property and equipment, net Property and equipment, net consist of the following: As of As of September 30, 2023 December 31, 2022 USD USD (Audited) Building $ 946,066 $ 946,066 Leasehold Improvements 1,212,974 1,074,206 Machinery and equipment 1,994,156 2,246,610 Furniture and fixtures 404,237 516,310 Vehicles 147,912 147,913 Molds 26,377 26,377 Subtotal 4,731,722 4,957,482 Less: accumulated depreciation (3,323,048) (3,687,511) Total $ 1,408,674 $ 1,269,971 Depreciation expenses for the nine months ended September 30, 2023 and 2022 amounted to $135,256 and $139,721 respectively; depreciation expenses for the three months ended September 30, 2023 and 2022 amounted to $56,497 and $44,191. Depreciation expenses were included in general and administrative expenses on the unaudited condensed consolidated statements of income and comprehensive income. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Leases | Note 7 — Leases The Company has operating leases primarily for corporate offices, warehouses and showrooms. as of September 30, 2023, the Company’s leases have remaining lease terms up to 11.4 years. The company also purchased an operating lease land from For the three months ended September 30, 2023 and 2022, the total lease expenses was The table below presents the operating lease related assets and liabilities recorded on the Company’s consolidated balance sheets: As of As of September 30, 2023 December 31, 2022 USD USD (Audited) Operating lease right-of-use assets $ 15,512,101 $ 9,815,572 Operating lease liabilities – current $ 1,467,049 $ 1,543,031 Operating lease liabilities – noncurrent 13,920,716 7,847,317 Total operating lease liabilities $ 15,387,765 $ 9,390,348 Information relating to the lease term and discount rate are as follows: As of As of September 30, 2023 December 31, 2022 (Audited) Weighted-average remaining lease term Operating leases 9.5 years 7.9 years Weighted-average discount rate Operating leases 5.6% 4.7% As of September 30, 2023, the maturities of operating lease liabilities were as follows: For the 12 months ending September 30, 2023 $ 2,308,006 2024 2,544,263 2025 2,640,774 2026 2,660,967 2027 2,312,462 Thereafter 7,527,110 Total lease payments 19,993,582 Less: imputed interest (4,605,817) Present value of lease liabilities $ 15,387,765 |
Short-term Loans
Short-term Loans | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Short-term Loans | Note 8 — Short-term loans Bank loan Our wholly-owned subsidiary FGI Industries, Inc. (formerly named Foremost Groups, Inc.) (“FGI Industries”) has a line of credit agreement (the “Credit Agreement”) with East West Bank, which is collateralized by all assets of FGI Industries and personally guaranteed by Liang Chou Chen, who holds approximately 49.75% of the voting control of Foremost. The current amount of maximum borrowings is $18,000,000 and the Credit Agreement has a maturity date of December 21, 2024. This is an assets-based line of credit, the borrowing limit is calculated based on certain percentage of accounts receivable and inventory balances. Pursuant to the Credit Agreement, FGI Industries is required to maintain (a) a debt coverage ratio (defined as earnings before interest, taxes, depreciation and amortization divided by current portion of long-term debt plus interest expense) of not less than 1.25 to 1, tested at the end of each fiscal quarter; (b) an effective tangible net worth (defined as total book net worth plus minority interest, less amounts due from officers, shareholders and affiliates, minus intangible assets and accumulated amortization, plus debt subordinated to East West Bank) of not less than $10,000,000, tested at the end of each fiscal quarter, on consolidated basis; and (c) a total debt to tangible net worth ratio (defined as total liabilities divided by tangible net worth, which is defined as total book net worth plus minority interest, less loans to officers, shareholders, and affiliates minus intangible assets and accumulated amortization) not to exceed 4.0 to 1, tested at the end of each fiscal quarter, on consolidated basis. As of September 30, 2023, FGI Industries was in compliance with these financial covenants. FGI Industries is also required to provide the lender with certain periodic financial information, including annual audited financial statements of FGI Industries on a non-consolidated basis. As of the date of report, FGI Industries has obtained a waiver for such Corporate Borrower’s Audited Annual Statements, a U.S. standalone reporting obligation under the Credit Agreement, which were due by April 30, 2023 . The loan bears interest at rate equal to, at the Company’s option, either (i) 0.25 percentage points less than the Prime Rate quoted by the Wall Street Journal or (ii) the SOFR Rate (as administered by CME Group Benchmark Administration Limited and displayed by Bloomberg LP) plus 2.20% per annum (in either case, subject to a minimum rate of 4.500% per annum) Each sum of borrowings under the Credit Agreement is deemed due on demand and is classified as a short-term loan. The outstanding balance of such loan was $7,962,203 and $9,795,052 as of September 30, 2023, and December 31, 2022, respectively. HSBC Canada Bank Loan / Foreign Exchange Facility FGI Canada Ltd. has a line of credit agreement with HSBC Canada (the “Canadian Revolver”). The revolving line of credit with HSBC Canada allows for borrowing up to CAD $7,500,000 (US $5,538,734 as of the September 30, 2023 exchange rate). This is an assets-based line of credit, the borrowing limit is calculated based on certain percentage of accounts receivable and inventory balances. Pursuant to the Canadian Revolver, FGI Canada Ltd. is required to maintain (a) a debt to tangible net worth ratio of no more than 3.00 to 1.00; and (b) a ratio of current assets to current liabilities of at least 1.25 to 1.00. The loan bears interest at a rate of Prime rate plus 0.50%. As of September 30, 2023, FGI Canada Ltd. was in compliance with these financial covenants. Borrowings under this line of credit amounts to $0 as of September 30, 2023, and December 31, 2022. The facility matures FGI Canada Ltd. also has a revolving foreign exchange facility with HSBC Canada of up to a permitted maximum of US $3,000,000. The advances are available to purchase foreign exchange forward contacts from time to time up to six months, subject to an overall maximum aggregate USD Equivalent outstanding face value not exceeding $3,000,000. |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Shareholders' Equity | Note 9 — Shareholders’ Equity FGI was incorporated in the Cayman Islands on May 26, 2021 in connection with the planned Reorganization, as described in Note 1. The Company is authorized to issue 50,000,000 ordinary shares with a par value of $0.001 per share. On January 27, 2022, the Company completed the Reorganization upon the consummation of the initial public offering (“IPO”). After the Reorganization and the IPO, the Company’s authorized share capital is $21,000 divided into (i) 200,000,000 Ordinary Shares of par value of $0.0001 each, and (ii) 10,000,000 Preference Shares of par value of $0.0001 each; 9,500,000 ordinary shares were issued and outstanding accordingly. The Company believes it is appropriate to reflect these share issuances as nominal share issuances on a retroactive basis similar to a stock split pursuant to ASC 260. The Company has retroactively adjusted all shares and per share data for all the periods presented. Initial Public Offering On January 27, 2022 , the Company consummated its IPO of 2,500,000 units (“Units”), each consisting of (i) one ordinary share, $0.0001 par value per share, of the Company (the “Shares”), and (ii) one warrant of the Company (the “Warrants”) entitling the holder to purchase one Share at an exercise price of $6.00 per Share. The Shares and Warrants were issued separately in the offering, and may be transferred separately immediately upon issuance. The Units were sold at a price of $6.00 per Unit. The Warrants included in the units were immediately exercisable following the consummation of the offering, have an exercise price equal to the initial public offering price, and expire five years from the date of issuance. For the purposes of covering any over-allotments in connection with the distribution and sale of the Units, the Company granted a 45-day option to the underwriters to purchase (the “Over-allotment Option”), in the aggregate, up to 375,000 ordinary shares (the “Option Shares”) and Warrants to purchase up to 375,000 ordinary shares (the “Option Warrants”), which was exercisable The aggregated fair value of these Warrants on January 27, 2022 was $4.16 million. The fair value has been estimated using the Black-Scholes pricing model The gross proceeds from the IPO were approximately $15.00 million with net proceeds of approximately $12.4 million, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by the Company. Immediately following the consummation of the IPO, there were an aggregate of 9,500,000 ordinary shares issued and outstanding. As a result of the IPO, the ordinary shares and Warrants now trade on the Nasdaq Capital Market under the symbol “FGI” and “FGIWW”, respectively. Public Offering Warrants In connection with and upon the closing of the IPO on January 27, 2022, the Company issued warrants equal to 2% of the Shares issued in the IPO, or 50,000 ordinary shares, to the representative of the underwriters for the IPO. The warrants carry a term of five years, shall not be exercisable for a period of 180 days from the closing of the IPO and shall be exercisable at a price equal to the IPO price per share. Management determined that these warrants meet the definition of a derivative under ASC 815-40; however, they fall under the scope exception, which states that contracts issued that are both a) indexed to its own stock; and b) classified in shareholders' equity are not considered derivatives. The warrants were recorded at their fair value on the date of grant as a component of equity. The aggregated fair value of these IPO warrants on January 27, 2022 was $0.1 million. The fair value has been estimated using the Black-Scholes pricing model |
Stock-based compensation
Stock-based compensation | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-based compensation | Note 10 — Stock-based compensation 2021 Equity Plan and Employee Stock Purchase Plan On October 7, 2021, the board of directors adopted the 2021 Equity Incentive Plan (the “2021 Equity Plan”). The 2021 Equity Plan permits the grant of equity and equity-based incentive awards, including non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock awards, stock unit awards and other stock-based awards. The purpose of the 2021 Equity Plan is to attract and retain the best available personnel for positions of responsibility within the Company, to provide additional incentives to them to align their interests with those of the Company’s shareholders and to thereby promote the Company’s long-term business success. On October 7, 2021, the board approved the adoption of the FGI Industries Ltd. Employee Stock Purchase Plan (the “ESPP”). The ESPP was approved by the Company’s shareholders on October 7, 2021, and became effective on the effective date of the Company’s consummation of the IPO of its ordinary shares. The ESPP offers eligible employees the opportunity to acquire a stock ownership interest in the Company through periodic payroll deductions that will be applied towards the purchase of ordinary shares at a discount from the then-current market price. The board set the maximum aggregate number of ordinary shares reserved and available pursuant to the 2021 Equity Plan at 1,500,000 shares. The number of ordinary shares reserved for issuance under our 2021 Equity Plan will automatically increase on the first day of each year, commencing on January 1, 2022 and ending on (and including) January 1, 2031, in an amount equal to the lesser of (a) 4.5% of the total number of ordinary shares outstanding on December 31 of the immediately preceding calendar year, (b) 600,000 ordinary shares, or (c) such lesser number of shares as determined by the Board. The Equity Plan became effective on September 28, 2021. The Company believes the options or awards granted contain an explicit service condition and/or performance condition. Under ASC 718-10-55-76, if the vesting (or exercisability) of an award is based on the satisfaction of both a service and performance condition, the entity must initially determine which outcomes are probable and recognize the compensation cost over the longer of the explicit or implicit service period. Because an initial public offering generally is not considered to be probable until the initial public offering is effective, no compensation cost was recognized until the IPO occurred. Restricted shares units (“RSU”) On January 27, 2022, the board of directors approved the issuance of 183,750 restricted share units (“RSUs”) to certain officers and employees under the 2021 Equity Plan as compensation awards. The fair value for these RSUs was $716,625 based on the closing share price of $3.90 as at January 27, 2022. These awards will vest in three equal installments on each anniversary of the grant date over three years. As of September 30, 2023, 61,250 of these granted RSUs were vested. On April 13, 2022, the board of directors approved the issuance of 8,750 RSUs to an employee under the 2021 Equity Plan as compensation awards. The fair value for these RSUs was $22,050 based on the closing share price of $2.52 as at April 13, 2022. These awards will vest as to one On May 11, 2022, the board of directors approved the issuance of 87,611 RSUs under the 2021 Equity Plan to Company officers to incentivize their performance and continue to align their interests with the Company’s shareholders. All these awards are subjected to performance conditions through December 31, 2024. The grant date fair value for these RSUs was $198,000 based on the closing share price of $2.26 as at May 11, 2022. If the maximum performance is met, the Company will issue an additional On May 17, 2022, the board of directors approved the issuance of 16,363 to its independent directors under the 2021 Equity Plan as compensation award. All these awards are subjected to performance conditions through December 31, 2024. The fair value for these RSUs was $36,000 based on the closing share price of $2.20 as at May 17, 2022. As of September 30, 2023, none of these RSUs were vested. as at March 29, 2023. If the maximum performance is met, the Company will issue an additional On March 23, 2023, the board of directors approved the issuance of 17,349 to its independent directors under the 2021 Equity Plan as compensation award. All these awards are subjected to performance conditions through December 31, 2025. The grant date fair value for these RSUs was $36,000 based on the closing share price of $2.08 as at March 29, 2023. As of September 30, 2023, none of these RSUs were vested. The following is a summary of the restricted share granted: Restricted shares grants Shares Non-vested as of January 1, 2022 — Granted 296,474 Vested — Canceled — Non-vested as of December 31, 2022 296,474 Granted 113,984 Vested (65,382) Canceled (87,611) Non-vested as of September 30, 2023 257,465 The following is a summary of the status of restricted shares at September 30, 2023: Outstanding Restricted Share Average Remaining Fair Value per share Number Amortization Period (Years) $ 3.90 122,500 1.33 $ 2.52 4,618 1.50 $ 2.20 16,363 1.25 $ 2.08 96,635 2.50 $ 2.08 17,349 2.50 257,465 Share options (“Options”) On March 24, 2022, the board of directors approved the issuance of 98,747 share options under the 2021 Equity Plan with an exercise price per share of $3.07 and a contractual life of 10 years to the Company’s executive officers and directors to incentivize their performance and continue to align their interests with the Company’s shareholders. The grant date fair value for these options was $141,401 determined using the Black-Scholes simplified method at the per option fair value of $1.43. All these options will vest as to one On April 13, 2022, the board of directors approved the issuance of 97,371 share options under the 2021 Equity Plan with an exercise price per share of $2.52 and a contractual life of 10 years to the Company’s employees to incentivize their performance and continue to align their interests with the Company’s shareholders. The grant date fair value for these options was $114,972 determined using the Black-Scholes simplified method at the per option fair value of $1.18. All these options will vest as to one On May 11, 2022, the board of directors approved the issuance of 159,881 share options under the 2021 Equity Plan with an exercise price per share of $2.26 and a contractual life of 10 years to Company officers to incentivize their performance and continue to align their interests with the Company’s shareholders. The fair value for these options was $171,462 determined using the Black-Scholes simplified method at the per option fair value of $1.07. The number of options granted were subject to performance conditions through December 31, 2022, which could result in additional options awarded if maximum performance metrics were met. In addition to the performance criteria, the options vest as to one On March 23, 2023, the board of directors approved the issuance of 158,976 share options under the 2021 Equity Plan with an exercise price per share of $2.08 and a contractual life of 10 years to Company officers to incentivize their performance and continue to align their interests with the Company’s shareholders. The grant date fair value for these options was $201,000 determined using the Black-Scholes simplified method at the per option fair value of $1.26. All these options are subjected to performance conditions through December 31, 2023, which could result in additional options awarded if maximum performance metrics are met. In addition to the performance criteria, the options will vest as to one The options granted to employees are measured based on the grant date fair value of the equity instrument. They are accounted for as equity awards and contain service or performance vesting conditions. The following table summarizes the Company’s employee share option activities: Weighted Weighted Weighted Average Average Average Grant date Remaining Average Number of Exercise Fair Contractual Intrinsic Options Price Value Term value USD USD Years USD Share options outstanding at December 31, 2022 380,745 2.54 1.19 9.35 — Granted 158,976 2.08 1.26 9.75 — Forfeited 24,746 — — — — Exercised — — — — — Expired — — — — — Share options outstanding at September 30, 2023 514,975 2.41 1.22 8.88 — Vested and exercisable at September 30, 2023 166,412 2.57 1.21 8.59 — For the nine months ended September 30, 2023 and 2022, the total fair value of options awarded was $628,834 and $454,373, respectively. The aggregate intrinsic value in the table above represents the difference between the exercise price of the awards and the fair value of the underlying Ordinary Shares at each reporting date, for those awards that had exercise price below the estimated fair value of the relevant Ordinary Shares. Fair value of options The Company used the Black-Scholes simplified method for the nine months ended September 30, 2023. The assumptions used to value the options granted to employees were as follows: For the Nine Months Ended For the Year Ended September 30, December 31, 2023 2022 (Audited) Risk-free interest rate 3.65 % 2.49 - 2.92 % Expected volatility range 63.36 % 40.30 - 45.67 % Fair market value per ordinary share as at grant dates $ 2.08 $ 2.26 - 3.07 The risk-free interest rate for periods within the contractual life of the options is based on the U.S. Treasury yield curve in effect at the time of grant for a term consistent with the contractual term of the awards. Expected volatility is estimated based on the volatility of ordinary shares or common stock of several comparable companies in the same industry. The expected exercise multiple is based on management’s estimation, which the Company believes is representative of the future. The Company has elected to recognize share-based compensation expense using a straight-line method for all the employee equity awards granted with graded vesting based on service conditions, provided that the amount of compensation cost recognized at any date is at least equal to the portion of the grant date fair value of the equity awards that are vested at that date. The following table sets forth the amount of share-based compensation expense included in each of the relevant financial statement line items: For the Nine Months Ended September 30, 2023 2022 USD USD Selling and distribution expenses $ 93,746 $ 77,447 General and administrative expenses 238,147 183,205 Total share-based compensation expenses $ 331,893 $ 260,652 As of September 30, 2023, there was $1,061,378 in total unrecognized employee share-based compensation expense related to unvested options and RSUs, which may be adjusted for actual forfeitures occurring in the future. Total unrecognized compensation cost may be recognized over a weighted-average period of 1.82 years. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 11 — Income taxes The source of pre-tax income and the components of income tax expense are as follows: For the Three Months Ended For the Nine Months Ended September 30, September 30, 2023 2022 2023 2022 USD USD USD USD Income components United States $ (239,835) $ 370,822 $ (641,733) $ 461,022 Outside United States 755,843 1,210,493 1,166,922 3,334,100 Total pre-tax income $ 516,008 $ 1,581,315 $ 525,189 $ 3,795,122 Provision for income taxes Current Federal $ (6,062) $ 9,563 $ 4,562 $ 25,850 State 7,210 840 10,343 8,916 Foreign 223,979 244,514 524,776 689,950 225,127 254,917 539,681 724,716 Deferred Federal (42,497) 38,456 (135,172) 69,077 State (10,114) 12,241 (3,930) 24,905 Foreign — 3,559 (3,988) 3,559 (52,611) 54,256 (143,090) 97,541 Total provision for income taxes $ 172,516 $ 309,173 $ 396,591 $ 822,257 Reconciliations between taxes at the U.S. federal income tax rate and taxes at the Company’s effective income tax rate on earnings before income taxes are as follows: For the Nine Months Ended September 30, 2023 2022 Federal statutory rate 21.0 % 21.0 % (Decrease) increase in tax rate resulting from: State and local income taxes, net of federal benefit (1.7) 0.6 Foreign operations 21.5 (0.2) Permanent items 0.7 0.2 Deferred rate changes 2.1 — Others 0.1 0.1 Effective tax rate 43.7 % 21.7 % The effective tax rate for the nine months ended September 30, 2023 as presented in the table above did not give consideration to the elimination of unrealized profit from intercompany sales. The following is a summary of the components of the net deferred tax assets and liabilities recognized in the consolidated balance sheets: As of As of September 30, 2023 December 31, 2022 USD USD (Audited) Deferred tax assets Allowance for credit losses $ 114,781 $ 109,713 Other reserve 134,866 144,333 Accrued expenses 169,246 126,992 Lease liability 1,882,977 2,144,348 Charitable contributions 8,363 8,565 Business interest limitation 492,467 385,069 Net operating loss – federal 394,381 414,905 Net operating loss – state 70,694 75,863 Other 49,965 46,005 Total deferred tax assets 3,317,740 3,455,793 Less: valuation allowance — — Net deferred tax assets 3,317,740 3,455,793 Deferred tax liabilities Fixed assets 1,920,097 2,190,254 Intangibles (10,986) — Total deferred tax liabilities 1,909,111 2,190,254 Deferred tax assets, net of deferred tax liabilities $ 1,408,629 $ 1,265,539 The deferred tax assets related to the Company’s net operating losses of $2,994,939 (Federal $1,878,000 and States $1,116,939) and $3,174,799 (Federal $1,975,734 and States $1,199,065) as of September 30, 2023 and December 31, 2022, respectively. The Federal Net Operating losses have no expiration date. The States Net Operating losses have either 20 years or no expiration date. The Company had no material unrecognized tax benefits at September 30, 2023 or, December 31, 2022. The Company has not taken any tax positions for which it is reasonably possible that unrecognized tax benefits will significantly increase within the next 12 months. Inflation Reduction Act of 2022 On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for, among other things, a new U.S. federal 1% excise tax on certain repurchases of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023. The excise tax is imposed on the repurchasing corporation itself, not its shareholders from which shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of the Treasury (the “Treasury”) has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax. |
Related Party Transactions and
Related Party Transactions and Balances | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions and Balances | Sales and purchases from a related party – consisted of the following: Nature of For the Three Months Ended September 30, For the Nine Months Ended September 30, Name of Related Party Relationship transactions 2023 2022 2023 2022 USD USD USD USD Focal Capital Holding Limited An entity under common control Purchase $ 980,910 $ 1,307,506 $ 5,950,640 $ 6,960,700 Foremost Worldwide Co., Ltd An entity under common control Purchase 717,188 2,779,646 1,755,577 4,802,928 F.P.Z. FURNITURE (CAMBODIA) CO., LTD An entity under common control Purchase 575,060 — 575,060 — Foremost Australasia Pty Ltd An entity under common control Purchase 413,339 — 413,339 — $ 2,686,497 $ 4,087,152 $ 8,694,616 $ 11,763,628 Nature of For the Nine Months Ended September 30, For the Nine Months Ended September 30, Name of Related Party Relationship transactions 2023 2022 2023 2022 USD USD USD USD Foremost Worldwide Co., Ltd An entity under common control Sales $ — $ 332,787 $ — $ 332,787 $ — $ 332,787 $ — $ 332,787 The ending balance of such transactions as of September 30, 2023 and December 31, 2022, are listed of the following: Prepayments — related parties As of As of September 30, December 31, Name of Related Party 2023 2022 USD USD (Audited) Focal Capital Holding Limited $ 9,843,421 $ 3,806,873 Rizhao Foremost Woodwork Manufacturing Co., Ltd. 8,681 — $ 9,852,102 $ 3,806,873 Accounts Payables — related parties As of As of September 30, December 31, Name of Related Party 2023 2022 USD USD (Audited) Foremost Worldwide Co., Ltd $ 1,475,778 $ 104,442 F.P.Z FURNITURE (CAMBODIA) CO., LTD. 575,060 — Foremost Australasia Pty Ltd 434,926 — $ 2,485,764 $ 104,442 Shared Service and Miscellaneous expenses – related party FGI Industries, Inc. is party to the FHI Shared Services Agreement with FHI. Total amounts provided to FHI under the FHI Share Services Agreement for the three and nine months ended September 30, 2023 and 2022 were $178,249 , $655,230 and $91,139 , $1,004,937 respectively, FGI is party to the Worldwide Shared Services Agreement with Foremost Worldwide. Total amounts provided from Foremost Worldwide under the Worldwide Shared Services Agreement for the three and nine months ended September 30, 2023 and 2022 were $72,408 , $8,878 and $217,650 , $77,482 , respectively. Other Payables — related parties As of As of Nature of September 30, December 31, Name of Related Party Relationship transactions 2023 2022 USD USD (Audited) F.P.Z FURNITURE (CAMBODIA) CO., LTD. An entity under common control Miscellaneous $ (147,368) $ — Foremost Home Inc. (“FHI”) An entity under common control Shared services and Miscellaneous 1,813,028 1,879,249 Foremost Worldwide Co., Ltd An entity under common control Shared services and Miscellaneous (513,275) (42,473) $ 1,152,385 $ 1,836,776 Property purchase — related party In July 2022, FGI entered into a property purchase agreement with a common control related party to purchase a building and sub-leased the land use right with an initial term of 50 years in amount of $1,963,521. The building and sub-lease the land use right were recorded at historic cost in amount of $946,066 and $519,450, respectively. The excess payment over carrying value $498,005 was recorded under shareholders equity statement. Loan guarantee by a related party Liang Chou Chen holds approximately 49.75% of the voting control of Foremost, the Company’s majority shareholder and is a guarantor of the loan obtained by FGI Industries from East West Bank under the Credit Agreement. See Note 8 for details. |
Concentrations of Risks
Concentrations of Risks | 9 Months Ended |
Sep. 30, 2023 | |
Risks and Uncertainties [Abstract] | |
Concentrations of Risks | Note 13 — Concentrations of risks Credit risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash. The Federal Deposit Insurance Corporation pays compensation up to a limit of USD 250,000 if the bank with which a depositor holds its eligible deposit fails. As of September 30, 2023, a cash balance of USD 751,452 was maintained at financial institutions in the United States, of which USD 360,276 was subject to credit risk. The Canadian Deposit Insurance Corporation pays compensation up to a limit of CAD a limit of New Taiwan Dollar 3,000,000 (approximately USD 93,000) if the bank with which an individual/a company holds its eligible deposit fails. As of September 30, 2023, an aggregated cash balance of USD 1,708,564 was maintained at financial institutions in Taiwan, of which USD 1,369,394 was subject to credit risk. The European Banking Authority pays compensation up to a limit of EUR 100,000 (approximately USD 105,000) if the bank with which an individual/a company holds its eligible deposit fails. As of September 30, 2023, cash balance of EUR 106,855 (USD 112,597) was maintained at financial institutions in Europe, of which EUR 6,855 (USD 7,223) was subject to credit risk. as of September 30, 2023, cash balance of US 423 was maintained at financial institutions in Kingdom of Cambodia, of which USD 423 was subject to credit risk. While management believes that these financial institutions are of high credit quality, it also continually monitors their credit worthiness. The Company is also exposed to risk from its accounts receivable and other receivables. These assets are subjected to credit evaluations. An allowance has been made for estimated unrecoverable amounts which have been determined by reference to past default experience and the current economic environment. Customer concentration risk For the three months ended September 30, 2023, three customers accounted for 14.5%, 14.3% and 13.9% of the Company’s total revenues, respectively. For the three months ended September 30, 2022, two customers accounted for 23.8% and 19.2% of the Company’s total revenues, respectively. No other customer accounted for more than 10% of the Company’s revenue for the three months ended September 30, 2023 and 2022. For the nine months ended September 30, 2023, two customers accounted for 17.4% and 16.6% of the Company’s total revenues, respectively. For the nine months ended September 30, 2022, two customers accounted for 22.1% and 21.1% of the Company’s total revenues, respectively. No other customer accounted for more than 10% of the Company’s revenue for the nine months ended September 30, 2023 and 2022. As of September 30, 2023, four customers accounted for 19.3%, 15.0%, 13.3% and 12.7% of the total balance of accounts receivable, respectively. As of December 31, 2022, two customers accounted for 36.7% and 13.6% of the total balance of accounts receivable, respectively. No other customer accounted for more than 10% of the Company’s accounts receivable as of September 30, 2023 and December 31, 2022. Vendor concentration risk For the three months ended September 30, 2023, Tangshan Huida Ceramic Group Co., Ltd (“Huida”) accounted for 55.8% of the Company’s total purchases of the Company’s total purchases. For the three months ended September 30, 2022, Huida accounted for 49.9% of the Company’s total purchases. No other supplier accounted for more than 10% of the Company’s total purchases for the three months ended September 30, 2023 and 2022. For the nine months ended September 30, 2023, Huida accounted for 54.5% of the Company’s total purchases, and another vendor accounted 10.1% of the Company’s total purchases. For the nine months ended September 30, 2022, Huida accounted for 51.4% of the Company’s total purchases. No other supplier accounted for more than 10% of the Company’s total purchases for the nine months ended September 30, 2023 and 2022. As of September 30, 2023, Huida accounted for 78.3% and another vendor accounted 13.0% of the total balance of accounts payable. As of December 31, 2022, Huida accounted for 85.5% of the total balance of accounts payable. No other supplier accounted for more than 10% of the Company’s accounts payable as of September 30, 2023 and December 31, 2022. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 14 — Commitments and contingencies Litigation From time to time, the Company is involved in legal and regulatory proceedings that are incidental to the operation of its businesses. These proceedings may seek remedies relating to matters including environmental, tax, intellectual property, acquisitions or divestitures, product liability, property damage, personal injury, privacy, employment, labor and pension, government contract issues and commercial or contractual disputes. Although the ultimate outcome of any legal matter cannot be predicted with certainty, based on present information, including management’s assessment of the merits of the particular claims, the Company does not believe it is reasonably possible that any asserted or unasserted legal claims or proceedings, individually or in aggregate, will have a material adverse effect on its results of operations or financial condition. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Segment Information | Note 15 — Segment information The Company follows ASC 280, “Segment Reporting,” which requires that companies disclose segment data based on how management makes decisions about allocating resources to each segment and evaluating their performances. The Company has one reporting segment. The Company’s chief operating decision maker has been identified as the chief executive officer, who reviews consolidated results when making decisions about allocating resources and assessing performance of the Company, and hence the Company has only one reportable segment. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Liquidity | Liquidity Historically, the Company finances its operations through internally generated cash, short-term loans and payables. As of September 30, 2023, the Company had approximately $5.4 million in cash and cash equivalents, which primarily consists of cash on hand and bank deposits, which are unrestricted as to withdrawal and use. As further described in Note 8, as of the date of this quarterly report, our wholly owned subsidiary FGI Industries Inc. has obtained a waiver for the Corporate Borrower’s Audited Annual Statements, a U.S. standalone reporting obligation under the Credit Agreement with East West Bank, which were due by April 30, 2023. If the Company is unable to realize its assets within the normal operating cycle of a twelve (12) month period, the Company may have to consider supplementing its available sources of funds through the following sources: · · · Based on the above considerations, the Company’s management is of the opinion that it has sufficient funds to meet the Company’s working capital requirements and debt obligations as they become due over the next twelve (12) months. |
Basis of presentation | Basis of presentation The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commissions (the “SEC”), regarding financial reporting, and include all normal and recurring adjustments that management of the Company considers necessary for a fair presentation of its financial position and operation results. |
Principles of consolidation | Principles of consolidation The unaudited condensed consolidated financial statements include the financial statements of the Company and its subsidiaries. All significant intercompany transactions and balances between the Company and its subsidiaries are eliminated upon consolidation. Subsidiaries are those entities which the Company, directly or indirectly, controls more than one half of the voting power; or has the power to govern the financial and operating policies, to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at a meeting of directors. |
Use of estimates and assumptions | Use of estimates and assumptions The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the periods presented. Significant accounting estimates reflected in the Company’s consolidated financial statements include the useful lives of property and equipment, allowance for credit losses, inventory reserve, accrued defective return, provision for contingent liabilities, revenue recognition, deferred taxes and uncertain tax position. Actual results could differ from these estimates . |
Foreign currency translation and transaction | Foreign currency translation and transaction The functional currencies of the Company and its subsidiaries are the local currency of the country in which the subsidiaries operate, except for FGI International, which is incorporated in Hong Kong and adopted the United States Dollar (“U.S. Dollar” or “USD”) as its functional currency. The reporting currency of the Company is the U.S. Dollar. Assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the applicable rates of exchange in effect at that date. The equity denominated in the functional currencies is translated at the historical rates of exchange at the time of capital contributions. The results of operations and the cash flows denominated in foreign currencies are translated at the average rates of exchange during the reporting period. Because cash flows are translated based on the average translation rates, amounts related to assets and liabilities reported on the unaudited condensed consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances on the unaudited condensed consolidated balance sheets. Translation adjustments arising from the use of different exchange rates from period to period are included as a separate component of accumulated other comprehensive income included in the unaudited condensed consolidated statements of changes in shareholders’ equity. Transaction gains and losses arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency in the unaudited condensed consolidated statements of income and comprehensive income. For the purpose of presenting the financial statements of subsidiaries using the Renminbi (“RMB”) as their functional currency, the Company’s assets and liabilities are expressed in U.S. Dollars at the exchange rate on the balance sheet date, which was 7.3144 and 6.9653 as of September 30, 2023 and December 31, 2022, respectively; shareholders’ equity accounts are translated at historical rates, and income and expense items are translated at the average exchange rate during the period, which was 7.2414 and 6.7811 for the three months ended September 30, 2023 and 2022, respectively, and 7.0384 and 6.5595 for the nine months ended September 30, 2023 and 2022, respectively. For the purpose of presenting the financial statements of the subsidiary using the Canadian Dollar (“CAD”) as its functional currency, the Company’s assets and liabilities are expressed in U.S. Dollars at the exchange rate on the balance sheet date, which was 1.3541 and 1.3541 as of September 30, 2023 and December 31, 2022, respectively; shareholders’ equity accounts are translated at historical rates, and income and expense items are translated at the average exchange rate during the period, which was 1.3541 and 1.2697 for the three months ended September 30, 2023 and 2022, respectively, and 1.3541 and 1.2296 for the nine months ended September 30, 2023 and 2022, respectively. For the purpose of presenting the financial statements of the subsidiary using the Euro (“EUR”) as its functional currency, the Company’s assets and liabilities are expressed in U.S. Dollars at the exchange rate on the balance sheet date, which was 0.9490 and 0.9338 as of September 30, 2023 and December 31, 2022, respectively; shareholders’ equity accounts are translated at historical rates, and income and expense items are translated at the average exchange rate during the period, which was 0.9143 and 0.9770 for the three months ended September 30, 2023 and 2022, respectively, and 0.9227 and 0.9302 for the nine months ended September 30, 2023 and 2022, respectively. |
Reclassification | Reclassification Certain prior year amounts have been reclassified to conform with the current year presentation, specifically the interest expenses and accrued expenses and other current liabilities in consolidated statements of income and comprehensive income and cash flow. These reclassifications have no effect on the consolidated balance sheets previously reported. |
Cash | Cash Cash consists of cash on hand, demand deposits and time deposits placed with banks or other financial institutions that have original maturities of three months or less. The Company did not have any cash equivalents as of September 30, 2023 and December 31, 2022. |
Accounts receivable, net | Accounts receivable, net Bills and trade receivables include trade accounts due from customers. In establishing the required allowance for expected credit losses, management considers historical collection experience, aging of the receivables, the economic environment, industry trend analysis, and the credit history and financial conditions of the customers. Management reviews its receivables on a regular basis to determine if the expected credit losses are adequate and adjusts the allowance when necessary. Delinquent account balances are written off against allowance for credit losses after management has determined that the likelihood of collection is not probable. |
Inventories, net | Inventories, net Inventories are stated at the lower of cost and net realizable value. Cost consists of purchase price and related shipping and handling expenses, and is determined using the weighted average cost method, based on individual products. The methods of determining inventory costs are used consistently from year to year. A provision for slow-moving items is calculated based on historical experience. Management reviews this provision annually to assess whether, based on economic conditions, it is adequate. |
Prepayments | Prepayments Prepayments are cash deposited or advanced to suppliers for the purchase of goods or services that have not been received or provided. This amount is refundable and bears no interest. Prepayments and deposits are classified as either current or non-current based on the terms of the respective agreements. These advances are unsecured and are reviewed periodically to determine whether their carrying value has become impaired. |
Property and equipment, net | Property and equipment, net Property and equipment are stated at cost net of accumulated depreciation and impairment. Depreciation is provided over the estimated useful lives of the assets using the straight-line method from the time the assets are placed in service. Estimated useful lives are as follows: Useful Life Building 20 years Leasehold Improvements Lesser of lease term and expected useful life Machinery and equipment 3 – 5 years Furniture and fixtures 3 – 5 years Vehicles 5 years Molds 3 – 5 years |
Intangible assets, net | Intangible assets, net The Company’s intangible assets with definite useful lives primarily consist of software acquired for internal use. The Company amortizes its intangible assets with definite useful lives over their estimated useful lives and reviews these assets for impairment. The Company typically amortizes its intangible assets with definite useful lives on a straight-line basis over the estimated useful lives of ten years. |
Impairment for long-lived assets | Impairment for long-lived assets Long-lived assets, including property and equipment and intangible assets with definite useful lives, are reviewed for impairment whenever material events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset group may not be recoverable. The Company assesses the recoverability of an asset group based on the undiscounted future cash flows the asset group is expected to generate and recognize an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset group plus net proceeds expected from disposition of the asset group, if any, are less than the carrying value of the asset group. If an impairment is identified, the Company would reduce the carrying amount of the asset group to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. As of September 30, 2023 and December 31, 2022, no impairment of long-lived assets was recognized. |
Leases | Leases The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use assets, net (“ROU assets”), operating lease liabilities — current and operating lease liabilities — noncurrent on the unaudited condensed consolidated balance sheets. ROU assets represent our right to use an underlying asset for the duration of the lease term while lease liabilities represent the Company’s obligation to make lease payments in exchange for the right to use an underlying asset. ROU assets and lease liabilities are measured based on the present value of fixed lease payments over the lease term at the commencement date. The ROU asset also includes any lease payments made prior to the commencement date and initial direct costs incurred, and is reduced by any lease incentives received. The Company reviews its ROU assets as material events occur or circumstances change that would indicate the carrying amount of the ROU assets are not recoverable and exceed their fair values. If the carrying amount of an ROU asset is not recoverable from its undiscounted cash flows, then the Company would recognize an impairment loss for the difference between the carrying amount and the current fair value. As most of the Company’s leases do not provide an implicit rate, the Company generally uses its incremental borrowing rate on the commencement date of the lease as the discount rate in determining the present value of future lease payments. The Company determines the incremental borrowing rate for each lease by using the incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The Company’s lease terms may include options to extend or terminate the lease when there are relevant economic incentives present that make it reasonably certain that the Company will exercise that option. The Company accounts for any non- lease components separately from lease components. Lease expense for lease payments is recognized on a straight-line basis over the lease term. |
Fair Value Measurement | Fair Value Measurement The accounting standard regarding fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company. The accounting standards define fair value, establish a three-level valuation hierarchy for disclosures of fair value measurement and enhance disclosure requirements for fair value measures. The three levels of the fair value hierarchy are as follows: ● Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. ● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. ● Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. Financial instruments included in current assets and current liabilities are reported in the consolidated balance sheets at face value or cost, which approximate fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rates of interest. |
Revenue recognition | Revenue recognition The Company recognized revenue in accordance with Accounting Standards Codification (“ASC”) 606 – Revenue from Contracts with Customers. Revenues are recognized when control of the promised goods or performance obligations for services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for the goods or services. The Company generates revenues from sales of kitchen and bath products, and recognizes revenue as control of its products is transferred to its customers, which is generally at the time of shipment or upon delivery based on the contractual terms with the Company’s customers. The Company’s customers’ payment terms generally range from 15 to 60 days of fulfilling its performance obligations and recognizing revenue . The Company provides customer programs and incentive offerings, including co-operative marketing arrangements and volume-based incentives. These customer programs and incentives are considered variable consideration. The Company includes in revenue variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the variable consideration is resolved. This determination is made based upon known customer program and incentive offerings at the time of sale, and expected sales volume forecasts as it relates to the Company’s volume- based incentives. This determination is updated on a monthly basis. Certain product sales include a right of return. The Company estimates future product returns at the time of sale based on historical experience and records a corresponding reduction in accounts receivable. The Company records receivables related to revenue when it has an unconditional right to invoice and receive payment. The Company’s disaggregated revenues are summarized as follows: For the Three Months Ended For the Nine Months Ended September 30, September 30, 2023 2022 2023 2022 USD USD USD USD Revenues by product line Sanitaryware $ 20,740,380 $ 25,490,296 $ 54,949,082 $ 84,564,251 Bath Furniture 2,531,430 5,607,990 12,304,688 23,397,263 Shower System 4,931,437 5,441,566 14,248,679 17,885,424 Others 1,729,365 2,004,210 4,782,342 4,081,378 Total $ 29,932,612 $ 38,544,062 $ 86,284,791 $ 129,928,316 Revenues Total assets For the Three Months Ended For the Nine Months Ended As of As of September 30, September 30, September 30, December 31, 2023 2022 2023 2022 2023 2022 USD USD USD USD USD USD (Audited) Revenues/ total assets by geographic location United States $ 18,356,278 $ 23,866,921 $ 54,921,572 $ 80,865,556 $ 41,561,576 $ 38,364,005 Canada 9,081,571 9,494,803 23,120,014 35,388,374 18,103,189 14,584,946 Europe 2,460,762 4,849,551 8,209,204 13,341,599 476,162 343,946 Rest of World 34,001 332,787 34,001 332,787 6,806,024 7,074,033 Total $ 29,932,612 $ 38,544,062 $ 86,284,791 $ 129,928,316 $ 66,946,951 $ 60,366,930 Shipping and Handling Costs Shipping and handling costs are expensed as incurred and are included in selling and distribution expenses on the accompanying statement of operations. For the three months ended September 30, 2023 and 2022, shipping and handling expense was $176,077 and $210,561, respectively, for the nine months ended September 30, 2023 and 2022, shipping and handling expense was $490,161 and $699,756, respectively. |
Share-based compensation | Share-based compensation The Company accounts for share-based compensation in accordance with ASC 718, Compensation — Stock Compensation (“ASC 718”). In accordance with ASC 718, the Company determines whether an award should be classified and accounted for as a liability award or an equity award. All the Company’s share-based awards were classified as equity awards and are recognized in the consolidated financial statements based on their grant date fair values. The Company has elected to recognize share-based compensation using the straight-line method for all share-based awards granted over the requisite service period, which is the vesting period. The Company accounts for forfeitures as they occur in accordance with ASC 718. The Company, with the assistance of an independent third-party valuation firm, determines the fair value of the stock options granted to employees. The Black Scholes Model is applied in determining the estimated fair value of the options granted to employees and non-employees. The Company recognized share-based compensation $59,337, $331,893 and $115,920, $260,652 for the three and nine months ended September 30, 2023 and 2022, respectively. |
Income Taxes | Income Taxes Deferred taxes are recognized based on the future tax consequences of the differences between the carrying value of assets and liabilities and their respective tax bases. The future realization of deferred tax assets depends on the existence of sufficient taxable income in future periods. Possible sources of taxable income include taxable income in carryback periods, the future reversal of existing taxable temporary differences recorded as a deferred tax liability, tax-planning strategies that generate future income or gains in excess of anticipated losses in the carryforward period and projected future taxable income. If, based upon all available evidence, both positive and negative, it is more likely than not (i.e., more than 50 percent likely) that such deferred tax assets will not be realized, a valuation allowance is recorded. Significant weight is given to positive and negative evidence that is objectively verifiable. A company’s three- year cumulative loss position is significant negative evidence in considering whether deferred tax assets are realizable, and the accounting guidance restricts the amount of reliance we can place on projected taxable income to support the recovery of the deferred tax assets. The current accounting guidance allows the recognition of only those income tax positions that have a greater than 50 percent likelihood of being sustained upon examination by the taxing authorities. The Company believes that there is an increased potential for volatility in its effective tax rate because this threshold allows for changes in the income tax environment and, to a greater extent, the inherent complexities of income tax law in a substantial number of jurisdictions, which may affect the computation of its liability for uncertain tax positions. The Company records interest and penalties on our uncertain tax positions in income tax expense. As of September 30, 2023, the tax years ended December 31, 2020 through December 31, 2022 for FGI Industries, Inc. remain open for statutory examination by tax authority. We record the tax effects of Foreign Derived Intangible Income (FDII) and Global Intangible Low-Taxed Income (GILTI) related to our foreign operations as a component of income tax expense in the period in which the tax arises. |
Non-controlling interests | Non-controlling interests The Company’s non-controlling interests represent the minority shareholders’ ownership interests related to the Company’s subsidiary, including 40% in Isla Porter LLC. The non-controlling interests are presented in the unaudited consolidated balance sheets, separate from equity attributable to the shareholders of the Company. Non-controlling interests in the results of operations of the Company are presented on the unaudited condensed consolidated statement of income and comprehensive income as allocations of the net income or loss for the period between non-controlling shareholders and the shareholders of the Company. |
Comprehensive income | Comprehensive income Comprehensive income consists of two components: net income and other comprehensive income. Other comprehensive income refers to revenue, expenses, gains and losses that under US GAAP are recorded as an element of equity but are excluded from net income. Other comprehensive income consists of a foreign currency translation adjustment resulting from the Company not using the U.S. Dollar as its functional currencies. |
Earnings per share | Earnings per share The Company computes earnings per share (“EPS”) in accordance with ASC 260, “Earnings per Share” (“ASC 260”). ASC 260 requires companies to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average ordinary shares outstanding for the period. Diluted EPS presents the dilutive effect on a per share basis of the potential ordinary shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential ordinary shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. The following table sets forth the computation of basic and diluted earnings per share for the nine months ended September 30, 2023 and 2022: For the Three Months Ended For the Nine Months Ended September 30, September 30, 2023 2022 2023 2022 USD USD USD USD Numerator: Net income attributable to FGI Industries Ltd. Shareholders $ 409,535 $ 1,272,142 $ 194,641 $ 2,972,865 Denominator: Weighted-average number of ordinary shares outstanding — 9,500,000 9,500,000 9,500,000 9,280,220 Potentially dilutive shares from outstanding options/warrants 286,522 8,750 322,847 5,481 Weighted-average number of ordinary shares outstanding — 9,786,522 9,508,750 9,822,847 9,285,701 Earnings per share — basic $ 0.04 $ 0.13 $ 0.02 $ 0.32 Earnings per share — diluted $ 0.04 $ 0.13 $ 0.02 $ 0.32 Potential ordinary shares that have an anti-dilutive effect are excluded from the calculation of diluted EPS 514,975 and 2,925,000 number of options and warrants, respectively, were excluded from diluted EPS because their effects were anti-dilutive. |
Segment reporting | Segment reporting ASC 280, “Segment Reporting,” establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organizational structure as well as information about geographical areas, business segments and major customers in financial statements for detailing the Company’s business segments. |
Recently adopted accounting pronouncements | Recently adopted accounting pronouncements In June 2016, the FASB issued ASU 2016- 13, “Financial Instruments-Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments,” amending the accounting for the impairment of financial instruments, including trade receivables. Under previous guidance, credit losses were recognized when the applicable losses had a probable likelihood of occurring and this assessment was based on past events and current conditions. The amended current guidance eliminates the “probable” threshold and requires an entity to use a broader range of information, including forecast information when estimating expected credit losses. Generally, this should result in a more timely recognition of credit losses. This guidance became effective for interim and annual periods beginning after December 15, 2019 with early adoption permitted for interim and annual periods beginning after December 15, 2018. The requirements of the amended guidance should be applied using a modified retrospective approach except for debt securities, which require a prospective transition approach. In November 2019, the FASB issued ASU 2019-10, which finalized the delay of such effective date to fiscal years beginning after December 15, 2022 for private and all other companies, including emerging growth companies. As an emerging growth company, the Company The Company considers the applicability and impact of all ASUs. ASUs not listed above were assessed and determined not to be applicable. |
Nature of Business and Organi_2
Nature of Business and Organization (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of ownership interests | Name Background Ownership FGI Industries, Inc. ● 100% owned by FGI (formerly named Foremost Groups, Inc.) ● ● FGI Europe Investment Limited ● 100% owned by FGI ● FGI International, Limited ● 100% owned by FGI ● ● FGI Canada Ltd. ● 100% owned by FGI Industries, Inc. ● ● FGI Germany GmbH & Co. KG ● 100% owned by FGI Europe Investment Limited ● ● FGI China, Ltd. ● 100% owned by FGI International, Limited ● ● FGI United Kingdom Ltd ● 100% owned by FGI Europe Investment Limited ● ● FGI Australasia Pty Ltd ● 100% owned by FGI ● ● Covered Bridge Cabinetry Manufacturing Co., Ltd ● 100% owned by FGI ● ● Isla Porter LLC ● 60% owned by FGI Industries, Inc. ● ● |
Schedule of net results of reorganized operations | The following table sets forth the revenues, cost of revenues and operating expenses that were irrelevant to the K&B Business allocated from FGI Industries to Foremost Home, Inc. for three and nine months ended September 30, 2023 and 2022, respectively. For the Three Months Ended For the Nine Months Ended September 30, September 30, 2023 2022 2023 2022 USD USD USD USD Revenues $ — $ 10,081,416 $ 991,919 $ 30,743,753 Cost of revenues — (8,653,083) (768,065) (25,201,282) Gross profit — 1,428,333 223,854 5,542,471 Selling and distribution expenses — (1,187,198) 45,979 (3,509,028) General and administrative expenses — (38,403) — (281,532) Research and development expenses — (59,228) — (219,331) Income from operations $ — $ 143,504 $ 269,833 $ 1,532,580 The following table sets forth the revenues, cost of revenues and operating expenses that were directly related to the K&B Business allocated from Foremost Worldwide Co., Ltd., a wholly-owned subsidiary of Foremost, to FGI International for three and nine months ended September 30, 2023 and 2022, respectively. For the Three Months Ended For the Nine Months Ended September 30, September 30, 2023 2022 2023 2022 USD USD USD USD Revenues $ — $ 474,213 $ — $ 25,022,959 Cost of revenues — (398,768) — (22,853,884) Gross profit — 75,445 — 2,169,075 Selling and distribution expenses — (15,687) — (522,321) General and administrative expenses — (137,987) — (424,861) Research and development expenses — (11,893) — (27,080) Income from operations $ — $ (90,122) $ — $ 1,194,813 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Schedule of property and equipment, net | Useful Life Building 20 years Leasehold Improvements Lesser of lease term and expected useful life Machinery and equipment 3 – 5 years Furniture and fixtures 3 – 5 years Vehicles 5 years Molds 3 – 5 years As of As of September 30, 2023 December 31, 2022 USD USD (Audited) Building $ 946,066 $ 946,066 Leasehold Improvements 1,212,974 1,074,206 Machinery and equipment 1,994,156 2,246,610 Furniture and fixtures 404,237 516,310 Vehicles 147,912 147,913 Molds 26,377 26,377 Subtotal 4,731,722 4,957,482 Less: accumulated depreciation (3,323,048) (3,687,511) Total $ 1,408,674 $ 1,269,971 |
Schedule of disaggregated revenues by product line | For the Three Months Ended For the Nine Months Ended September 30, September 30, 2023 2022 2023 2022 USD USD USD USD Revenues by product line Sanitaryware $ 20,740,380 $ 25,490,296 $ 54,949,082 $ 84,564,251 Bath Furniture 2,531,430 5,607,990 12,304,688 23,397,263 Shower System 4,931,437 5,441,566 14,248,679 17,885,424 Others 1,729,365 2,004,210 4,782,342 4,081,378 Total $ 29,932,612 $ 38,544,062 $ 86,284,791 $ 129,928,316 |
Schedule of revenues and assets by geographic location | Revenues Total assets For the Three Months Ended For the Nine Months Ended As of As of September 30, September 30, September 30, December 31, 2023 2022 2023 2022 2023 2022 USD USD USD USD USD USD (Audited) Revenues/ total assets by geographic location United States $ 18,356,278 $ 23,866,921 $ 54,921,572 $ 80,865,556 $ 41,561,576 $ 38,364,005 Canada 9,081,571 9,494,803 23,120,014 35,388,374 18,103,189 14,584,946 Europe 2,460,762 4,849,551 8,209,204 13,341,599 476,162 343,946 Rest of World 34,001 332,787 34,001 332,787 6,806,024 7,074,033 Total $ 29,932,612 $ 38,544,062 $ 86,284,791 $ 129,928,316 $ 66,946,951 $ 60,366,930 |
Schedule of earnings per share | For the Three Months Ended For the Nine Months Ended September 30, September 30, 2023 2022 2023 2022 USD USD USD USD Numerator: Net income attributable to FGI Industries Ltd. Shareholders $ 409,535 $ 1,272,142 $ 194,641 $ 2,972,865 Denominator: Weighted-average number of ordinary shares outstanding — 9,500,000 9,500,000 9,500,000 9,280,220 Potentially dilutive shares from outstanding options/warrants 286,522 8,750 322,847 5,481 Weighted-average number of ordinary shares outstanding — 9,786,522 9,508,750 9,822,847 9,285,701 Earnings per share — basic $ 0.04 $ 0.13 $ 0.02 $ 0.32 Earnings per share — diluted $ 0.04 $ 0.13 $ 0.02 $ 0.32 |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Receivables [Abstract] | |
Schedule of accounts receivable, net | As of As of September 30, 2023 December 31, 2022 USD USD (Audited) Accounts receivable $ 17,958,087 $ 16,330,540 Allowance for credit losses (470,167) (438,843) Accrued defective return and discount (885,195) (1,595,838) Accounts receivable, net $ 16,602,725 $ 14,295,859 |
Schedule of movements of allowance for doubtful accounts | For the Nine Months Ended For the Year Ended September 30, December 31, 2023 2022 USD USD (Audited) Beginning balance $ 438,843 $ 177,462 Addition 31,324 261,381 Ending balance $ 470,167 $ 438,843 |
Schedule of movements of accrued defective return and discount accounts | For the Nine Months Ended For the Year Ended September 30, December 31, 2023 2022 USD USD (Audited) Beginning balance $ 1,595,838 $ 3,292,101 Provision (710,643) (1,696,263) Ending balance $ 885,195 $ 1,595,838 |
Inventories, Net (Tables)
Inventories, Net (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories, net | Inventories, net consisted of the following: As of As of September 30, 2023 December 31, 2022 USD USD (Audited) Finished product $ 10,315,973 $ 13,956,121 Reserves for slow-moving inventories (681,975) (663,530) Inventories, net $ 9,633,998 $ 13,292,591 Movements of inventory reserves are as follows: For the Nine Months Ended For the Year Ended September 30, December 31, 2023 2022 USD USD (Audited) Beginning balance $ 663,530 $ 544,158 Addition 18,445 119,372 Ending balance $ 681,975 $ 663,530 |
Prepayments and Other Assets (T
Prepayments and Other Assets (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
Schedule of prepayments and other assets | As of As of September 30, 2023 December 31, 2022 USD USD (Audited) Prepayments $ 3,677,613 $ 2,026,259 Others 769,356 561,822 Total prepayments and other assets $ 4,446,969 $ 2,588,081 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment, net | Useful Life Building 20 years Leasehold Improvements Lesser of lease term and expected useful life Machinery and equipment 3 – 5 years Furniture and fixtures 3 – 5 years Vehicles 5 years Molds 3 – 5 years As of As of September 30, 2023 December 31, 2022 USD USD (Audited) Building $ 946,066 $ 946,066 Leasehold Improvements 1,212,974 1,074,206 Machinery and equipment 1,994,156 2,246,610 Furniture and fixtures 404,237 516,310 Vehicles 147,912 147,913 Molds 26,377 26,377 Subtotal 4,731,722 4,957,482 Less: accumulated depreciation (3,323,048) (3,687,511) Total $ 1,408,674 $ 1,269,971 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Schedule of leases | The table below presents the operating lease related assets and liabilities recorded on the Company’s consolidated balance sheets: As of As of September 30, 2023 December 31, 2022 USD USD (Audited) Operating lease right-of-use assets $ 15,512,101 $ 9,815,572 Operating lease liabilities – current $ 1,467,049 $ 1,543,031 Operating lease liabilities – noncurrent 13,920,716 7,847,317 Total operating lease liabilities $ 15,387,765 $ 9,390,348 Information relating to the lease term and discount rate are as follows: As of As of September 30, 2023 December 31, 2022 (Audited) Weighted-average remaining lease term Operating leases 9.5 years 7.9 years Weighted-average discount rate Operating leases 5.6% 4.7% |
Schedule of maturities of operating lease liabilities | For the 12 months ending September 30, 2023 $ 2,308,006 2024 2,544,263 2025 2,640,774 2026 2,660,967 2027 2,312,462 Thereafter 7,527,110 Total lease payments 19,993,582 Less: imputed interest (4,605,817) Present value of lease liabilities $ 15,387,765 |
Stock-based compensation (Table
Stock-based compensation (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of restricted share units | The following is a summary of the restricted share granted: Restricted shares grants Shares Non-vested as of January 1, 2022 — Granted 296,474 Vested — Canceled — Non-vested as of December 31, 2022 296,474 Granted 113,984 Vested (65,382) Canceled (87,611) Non-vested as of September 30, 2023 257,465 The following is a summary of the status of restricted shares at September 30, 2023: Outstanding Restricted Share Average Remaining Fair Value per share Number Amortization Period (Years) $ 3.90 122,500 1.33 $ 2.52 4,618 1.50 $ 2.20 16,363 1.25 $ 2.08 96,635 2.50 $ 2.08 17,349 2.50 257,465 |
Schedule of share option activities | Weighted Weighted Weighted Average Average Average Grant date Remaining Average Number of Exercise Fair Contractual Intrinsic Options Price Value Term value USD USD Years USD Share options outstanding at December 31, 2022 380,745 2.54 1.19 9.35 — Granted 158,976 2.08 1.26 9.75 — Forfeited 24,746 — — — — Exercised — — — — — Expired — — — — — Share options outstanding at September 30, 2023 514,975 2.41 1.22 8.88 — Vested and exercisable at September 30, 2023 166,412 2.57 1.21 8.59 — |
Schedule of assumptions used to value options granted | For the Nine Months Ended For the Year Ended September 30, December 31, 2023 2022 (Audited) Risk-free interest rate 3.65 % 2.49 - 2.92 % Expected volatility range 63.36 % 40.30 - 45.67 % Fair market value per ordinary share as at grant dates $ 2.08 $ 2.26 - 3.07 |
Schedule of share-based compensation expense | For the Nine Months Ended September 30, 2023 2022 USD USD Selling and distribution expenses $ 93,746 $ 77,447 General and administrative expenses 238,147 183,205 Total share-based compensation expenses $ 331,893 $ 260,652 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of source of pre-tax income | For the Three Months Ended For the Nine Months Ended September 30, September 30, 2023 2022 2023 2022 USD USD USD USD Income components United States $ (239,835) $ 370,822 $ (641,733) $ 461,022 Outside United States 755,843 1,210,493 1,166,922 3,334,100 Total pre-tax income $ 516,008 $ 1,581,315 $ 525,189 $ 3,795,122 Provision for income taxes Current Federal $ (6,062) $ 9,563 $ 4,562 $ 25,850 State 7,210 840 10,343 8,916 Foreign 223,979 244,514 524,776 689,950 225,127 254,917 539,681 724,716 Deferred Federal (42,497) 38,456 (135,172) 69,077 State (10,114) 12,241 (3,930) 24,905 Foreign — 3,559 (3,988) 3,559 (52,611) 54,256 (143,090) 97,541 Total provision for income taxes $ 172,516 $ 309,173 $ 396,591 $ 822,257 |
Schedule of the components of income tax expense | For the Three Months Ended For the Nine Months Ended September 30, September 30, 2023 2022 2023 2022 USD USD USD USD Income components United States $ (239,835) $ 370,822 $ (641,733) $ 461,022 Outside United States 755,843 1,210,493 1,166,922 3,334,100 Total pre-tax income $ 516,008 $ 1,581,315 $ 525,189 $ 3,795,122 Provision for income taxes Current Federal $ (6,062) $ 9,563 $ 4,562 $ 25,850 State 7,210 840 10,343 8,916 Foreign 223,979 244,514 524,776 689,950 225,127 254,917 539,681 724,716 Deferred Federal (42,497) 38,456 (135,172) 69,077 State (10,114) 12,241 (3,930) 24,905 Foreign — 3,559 (3,988) 3,559 (52,611) 54,256 (143,090) 97,541 Total provision for income taxes $ 172,516 $ 309,173 $ 396,591 $ 822,257 |
Schedule of reconciliation of effective income tax rate on earnings before income taxes | For the Nine Months Ended September 30, 2023 2022 Federal statutory rate 21.0 % 21.0 % (Decrease) increase in tax rate resulting from: State and local income taxes, net of federal benefit (1.7) 0.6 Foreign operations 21.5 (0.2) Permanent items 0.7 0.2 Deferred rate changes 2.1 — Others 0.1 0.1 Effective tax rate 43.7 % 21.7 % |
Summary of components of net deferred tax assets and liabilities | As of As of September 30, 2023 December 31, 2022 USD USD (Audited) Deferred tax assets Allowance for credit losses $ 114,781 $ 109,713 Other reserve 134,866 144,333 Accrued expenses 169,246 126,992 Lease liability 1,882,977 2,144,348 Charitable contributions 8,363 8,565 Business interest limitation 492,467 385,069 Net operating loss – federal 394,381 414,905 Net operating loss – state 70,694 75,863 Other 49,965 46,005 Total deferred tax assets 3,317,740 3,455,793 Less: valuation allowance — — Net deferred tax assets 3,317,740 3,455,793 Deferred tax liabilities Fixed assets 1,920,097 2,190,254 Intangibles (10,986) — Total deferred tax liabilities 1,909,111 2,190,254 Deferred tax assets, net of deferred tax liabilities $ 1,408,629 $ 1,265,539 |
Related Party Transactions an_2
Related Party Transactions and Balances (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
Schedule of related party transactions and balances | Sales and purchases from a related party – consisted of the following: Nature of For the Three Months Ended September 30, For the Nine Months Ended September 30, Name of Related Party Relationship transactions 2023 2022 2023 2022 USD USD USD USD Focal Capital Holding Limited An entity under common control Purchase $ 980,910 $ 1,307,506 $ 5,950,640 $ 6,960,700 Foremost Worldwide Co., Ltd An entity under common control Purchase 717,188 2,779,646 1,755,577 4,802,928 F.P.Z. FURNITURE (CAMBODIA) CO., LTD An entity under common control Purchase 575,060 — 575,060 — Foremost Australasia Pty Ltd An entity under common control Purchase 413,339 — 413,339 — $ 2,686,497 $ 4,087,152 $ 8,694,616 $ 11,763,628 Nature of For the Nine Months Ended September 30, For the Nine Months Ended September 30, Name of Related Party Relationship transactions 2023 2022 2023 2022 USD USD USD USD Foremost Worldwide Co., Ltd An entity under common control Sales $ — $ 332,787 $ — $ 332,787 $ — $ 332,787 $ — $ 332,787 The ending balance of such transactions as of September 30, 2023 and December 31, 2022, are listed of the following: Prepayments — related parties As of As of September 30, December 31, Name of Related Party 2023 2022 USD USD (Audited) Focal Capital Holding Limited $ 9,843,421 $ 3,806,873 Rizhao Foremost Woodwork Manufacturing Co., Ltd. 8,681 — $ 9,852,102 $ 3,806,873 Accounts Payables — related parties As of As of September 30, December 31, Name of Related Party 2023 2022 USD USD (Audited) Foremost Worldwide Co., Ltd $ 1,475,778 $ 104,442 F.P.Z FURNITURE (CAMBODIA) CO., LTD. 575,060 — Foremost Australasia Pty Ltd 434,926 — $ 2,485,764 $ 104,442 Other Payables — related parties As of As of Nature of September 30, December 31, Name of Related Party Relationship transactions 2023 2022 USD USD (Audited) F.P.Z FURNITURE (CAMBODIA) CO., LTD. An entity under common control Miscellaneous $ (147,368) $ — Foremost Home Inc. (“FHI”) An entity under common control Shared services and Miscellaneous 1,813,028 1,879,249 Foremost Worldwide Co., Ltd An entity under common control Shared services and Miscellaneous (513,275) (42,473) $ 1,152,385 $ 1,836,776 |
Nature of Business and Organi_3
Nature of Business and Organization - Ownership by Parent (Details) | Sep. 30, 2023 | Jan. 27, 2022 |
FGI Industries, Inc. [Member] | ||
Noncontrolling Interest [Line Items] | ||
Ownership percentage (as a percent) | 100% | |
FGI Europe Investment Limited [Member] | ||
Noncontrolling Interest [Line Items] | ||
Ownership percentage (as a percent) | 100% | 100% |
FGI International, Limited [Member] | ||
Noncontrolling Interest [Line Items] | ||
Ownership percentage (as a percent) | 100% | 100% |
FGI Austrlasia Pty Ltd [Member] | ||
Noncontrolling Interest [Line Items] | ||
Ownership percentage (as a percent) | 100% | |
Covered Bridge Cabinetry Manufacturing Co., Ltd [Member] | ||
Noncontrolling Interest [Line Items] | ||
Ownership percentage (as a percent) | 100% | |
Isla Porter LLC [Member] | ||
Noncontrolling Interest [Line Items] | ||
Ownership percentage (as a percent) | 60% | |
FGI Industries, Inc. [Member] | FGI Canada Ltd. [Member] | ||
Noncontrolling Interest [Line Items] | ||
Ownership percentage (as a percent) | 100% | |
FGI Europe Investment Limited [Member] | FGI Germany GmbH & Co. KG [Member] | ||
Noncontrolling Interest [Line Items] | ||
Ownership percentage (as a percent) | 100% | |
FGI Europe Investment Limited [Member] | FGI United Kingdom Ltd [Member] | ||
Noncontrolling Interest [Line Items] | ||
Ownership percentage (as a percent) | 100% | |
FGI International, Limited [Member] | FGI China, Ltd [Member] | ||
Noncontrolling Interest [Line Items] | ||
Ownership percentage (as a percent) | 100% |
Nature of Business and Organi_4
Nature of Business and Organization - Reorganization - General Information (Details) | Jan. 27, 2022 | Sep. 30, 2023 |
Noncontrolling Interest [Line Items] | ||
Percentage of outstanding stock expected to be distributed (as a percent) | 100% | |
Percentage of outstanding stock expected to be contributed (as a percent) | 100% | |
FGI Industries Ltd. [Member] | ||
Noncontrolling Interest [Line Items] | ||
Ownership percentage (as a percent) | 100% | |
FGI Industries, Inc. [Member] | ||
Noncontrolling Interest [Line Items] | ||
Ownership percentage (as a percent) | 100% | |
FGI Europe Investment Limited [Member] | ||
Noncontrolling Interest [Line Items] | ||
Ownership percentage (as a percent) | 100% | 100% |
FGI International, Limited [Member] | ||
Noncontrolling Interest [Line Items] | ||
Ownership percentage (as a percent) | 100% | 100% |
Foremost Groups Ltd. [Member] | FGI Industries Ltd. [Member] | ||
Noncontrolling Interest [Line Items] | ||
Ownership percentage (as a percent) | 100% | |
Foremost Groups Ltd. [Member] | Foremost Home Incorporated [Member] | ||
Noncontrolling Interest [Line Items] | ||
Ownership percentage (as a percent) | 100% | |
Foremost Home Incorporated [Member] | Foremost Kingbetter Food Equipment Inc. [Member] | ||
Noncontrolling Interest [Line Items] | ||
Ownership percentage (as a percent) | 100% |
Nature of Business and Organi_5
Nature of Business and Organization - Reorganization - Shared Services Agreement (Details) | Jan. 14, 2022 USD ($) |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Annual fee | $ 500,000 |
Annual fee percent (as a percent) | 4% |
Term of shared service agreement | 1 year |
Notice period for renewal of agreement | 60 days |
Nature of Business and Organi_6
Nature of Business and Organization - Reorganization - Tabular Disclosure (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenues | $ 29,932,612 | $ 38,544,062 | $ 86,284,791 | $ 129,928,316 |
Cost of revenues | (22,103,325) | (30,503,452) | (63,242,944) | (105,942,167) |
Gross profit | 7,829,287 | 8,040,610 | 23,041,847 | 23,986,149 |
Selling and distribution expenses | (4,572,593) | (4,268,355) | (14,084,200) | (13,308,414) |
General and administrative expenses | (2,351,307) | (1,865,325) | (6,746,055) | (5,801,294) |
Research and development expenses | (423,697) | (238,638) | (1,152,554) | (788,054) |
Income from operations | $ 481,690 | 1,668,292 | 1,059,038 | 4,088,387 |
Business Allocated from FGI Industries to Foremost Home, Inc. [Member] | ||||
Revenues | 10,081,416 | 991,919 | 30,743,753 | |
Cost of revenues | (8,653,083) | (768,065) | (25,201,282) | |
Gross profit | 1,428,333 | 223,854 | 5,542,471 | |
Selling and distribution expenses | (1,187,198) | 45,979 | (3,509,028) | |
General and administrative expenses | (38,403) | (281,532) | ||
Research and development expenses | (59,228) | (219,331) | ||
Income from operations | 143,504 | $ 269,833 | 1,532,580 | |
Business Allocated from Foremost Worldwide Co., Ltd., to FGI International [Member] | ||||
Revenues | 474,213 | 25,022,959 | ||
Cost of revenues | (398,768) | (22,853,884) | ||
Gross profit | 75,445 | 2,169,075 | ||
Selling and distribution expenses | (15,687) | (522,321) | ||
General and administrative expenses | (137,987) | (424,861) | ||
Research and development expenses | (11,893) | (27,080) | ||
Income from operations | $ (90,122) | $ 1,194,813 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Liquidity (Details) $ in Millions | Sep. 30, 2023 USD ($) |
Cash and Cash Equivalents, at Carrying Value [Abstract] | |
Cash and cash equivalents | $ 5.4 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Foreign Currency Translation and Transaction (Details) | 3 Months Ended | 9 Months Ended | |||||||||||||||
Sep. 30, 2023 ¥ / $ | Sep. 30, 2023 $ / $ ¥ / $ | Sep. 30, 2023 € / $ ¥ / $ | Sep. 30, 2022 ¥ / $ | Sep. 30, 2022 $ / $ | Sep. 30, 2022 € / $ | Sep. 30, 2023 ¥ / $ | Sep. 30, 2023 ¥ / $ $ / $ | Sep. 30, 2023 € / $ ¥ / $ | Sep. 30, 2022 ¥ / $ | Sep. 30, 2022 $ / $ | Sep. 30, 2022 € / $ | Sep. 30, 2023 $ / $ | Sep. 30, 2023 € / $ | Dec. 31, 2022 ¥ / $ | Dec. 31, 2022 $ / $ | Dec. 31, 2022 € / $ | |
Multiple Foreign Currency Exchange Rates [Abstract] | |||||||||||||||||
Exchange rate on the balance sheet date | 7.3144 | 7.3144 | 7.3144 | 7.3144 | 7.3144 | 7.3144 | 1.3541 | 0.9490 | 6.9653 | 1.3541 | 0.9338 | ||||||
Average exchange rate | 7.2414 | 1.3541 | 0.9143 | 6.7811 | 1.2697 | 0.9770 | 7.0384 | 1.3541 | 0.9227 | 6.5595 | 1.2296 | 0.9302 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Cash (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Cash and Cash Equivalents, at Carrying Value [Abstract] | ||
Cash equivalents | $ 0 | $ 0 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Property and Equipment, Net (Details) | Sep. 30, 2023 |
Building [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful life | 20 years |
Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | us-gaap:UsefulLifeShorterOfTermOfLeaseOrAssetUtilityMember |
Machinery and Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful life | 3 years |
Machinery and Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful life | 5 years |
Furniture and Fixtures [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful life | 3 years |
Furniture and Fixtures [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful life | 5 years |
Vehicles [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful life | 5 years |
Molds [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful life | 3 years |
Molds [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful life | 5 years |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Intangible Assets, Net (Details) | Sep. 30, 2023 |
Accounting Policies [Abstract] | |
Useful lives of intangible assets | 10 years |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Impairment for Long-lived Assets (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Asset Impairment Charges [Abstract] | ||
Impairment of long-lived assets | $ 0 | $ 0 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Revenues - General Information (Details) | 9 Months Ended |
Sep. 30, 2023 | |
Revenues [Abstract] | |
Customer payment term, low end of range | 15 days |
Customer payment term, high end of range | 60 days |
Summary of Significant Accou_11
Summary of Significant Accounting Policies - Revenues - Disaggregation by Product Line (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 29,932,612 | $ 38,544,062 | $ 86,284,791 | $ 129,928,316 |
Sanitaryware [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 20,740,380 | 25,490,296 | 54,949,082 | 84,564,251 |
Bath Furniture [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 2,531,430 | 5,607,990 | 12,304,688 | 23,397,263 |
Shower System [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 4,931,437 | 5,441,566 | 14,248,679 | 17,885,424 |
Others [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 1,729,365 | $ 2,004,210 | $ 4,782,342 | $ 4,081,378 |
Summary of Significant Accou_12
Summary of Significant Accounting Policies - Revenues - Disaggregation by Geographic Location (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenues | $ 29,932,612 | $ 38,544,062 | $ 86,284,791 | $ 129,928,316 |
United States [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenues | 18,356,278 | 23,866,921 | 54,921,572 | 80,865,556 |
Canada [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenues | 9,081,571 | 9,494,803 | 23,120,014 | 35,388,374 |
Europe [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenues | 2,460,762 | 4,849,551 | 8,209,204 | 13,341,599 |
Rest of World [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenues | $ 34,001 | $ 332,787 | $ 34,001 | $ 332,787 |
Summary of Significant Accou_13
Summary of Significant Accounting Policies - Assets by Geographic Location (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Assets | $ 66,946,951 | $ 60,366,930 |
United States [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Assets | 41,561,576 | 38,364,005 |
Canada [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Assets | 18,103,189 | 14,584,946 |
Europe [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Assets | 476,162 | 343,946 |
Rest of World [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Assets | $ 6,806,024 | $ 7,074,033 |
Summary of Significant Accou_14
Summary of Significant Accounting Policies - Shipping and Handling Costs (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Selling, General and Administrative Expense [Abstract] | ||||
Shipping and handling expense | $ 176,077 | $ 210,561 | $ 490,161 | $ 699,756 |
Summary of Significant Accou_15
Summary of Significant Accounting Policies - Share-based Compensation (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Jan. 26, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Statement Compensation Expense Items [Abstract] | |||||
Share-based compensation expenses | $ 0 | $ 59,337 | $ 115,920 | $ 331,893 | $ 260,652 |
Summary of Significant Accou_16
Summary of Significant Accounting Policies - Income Taxes (Details) | 9 Months Ended |
Sep. 30, 2023 | |
Earliest Tax Year [Member] | |
Income Tax Contingency [Line Items] | |
Open tax year | 2020 |
Latest Tax Year [Member] | |
Income Tax Contingency [Line Items] | |
Open tax year | 2022 |
Summary of Significant Accou_17
Summary of Significant Accounting Policies - Non-controlling Interests (Details) | Sep. 30, 2023 |
Isla Porter LLC [Member] | |
Noncontrolling Interest [Line Items] | |
Percentage of non-controlling interests | 40% |
Summary of Significant Accou_18
Summary of Significant Accounting Policies - Earnings Per Share - Tabular Disclosure (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Net Income (Loss) Available to Common Stockholders, Diluted [Abstract] | ||||
Net income attributable to FGI Industries Ltd. Shareholders | $ 409,535 | $ 1,272,142 | $ 194,641 | $ 2,972,865 |
Net income attributable to FGI Industries Ltd - basic | 409,535 | 1,272,142 | 194,641 | 2,972,865 |
Net income attributable to FGI Industries Ltd - diluted | $ 409,535 | $ 1,272,142 | $ 194,641 | $ 2,972,865 |
Weighted Average Number of Shares Outstanding, Diluted [Abstract] | ||||
Weighted-average number of ordinary shares outstanding - basic (in dollars per share) | 9,500,000 | 9,500,000 | 9,500,000 | 9,280,220 |
Potentially dilutive shares from outstanding options/warrants | 286,522 | 8,750 | 322,847 | 5,481 |
Weighted-average number of ordinary shares outstanding - diluted (in dollars per share) | 9,786,522 | 9,508,750 | 9,822,847 | 9,285,701 |
Earnings Per Share, Diluted [Abstract] | ||||
Earnings per share - basic (in dollars per share) | $ 0.04 | $ 0.13 | $ 0.02 | $ 0.32 |
Earnings per share - diluted (in dollars per share) | $ 0.04 | $ 0.13 | $ 0.02 | $ 0.32 |
Summary of Significant Accou_19
Summary of Significant Accounting Policies - Earnings Per Share - Anti-dilutive Securities (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Earnings Per Share, Diluted, Other Disclosure [Abstract] | ||||
Antidilutive securities excluded from computation of earnings per share, amount | 514,975 | 2,925,000 | 514,975 | 2,925,000 |
Summary of Significant Accou_20
Summary of Significant Accounting Policies - Recently Issued Accounting Pronouncements (Details) - Accounting Standards Update 2016-13 [Member] | Sep. 30, 2023 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Change in Accounting Principle, Accounting Standards Update, Adopted | true |
Change in Accounting Principle, Accounting Standards Update, Adoption Date | Jan. 01, 2023 |
Accounts Receivable, Net - Comp
Accounts Receivable, Net - Composition (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Accounts Receivable, after Allowance for Credit Loss, Current [Abstract] | |||
Accounts receivable | $ 17,958,087 | $ 16,330,540 | |
Allowance for credit losses | (470,167) | (438,843) | $ (177,462) |
Accrued defective return and discount | (885,195) | (1,595,838) | $ (3,292,101) |
Accounts receivable, net | $ 16,602,725 | $ 14,295,859 |
Accounts Receivable, Net - Allo
Accounts Receivable, Net - Allowance for Doubtful Accounts Roll Forward (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Beginning balance | $ 438,843 | $ 177,462 | $ 177,462 |
Addition | 31,324 | $ 102,842 | 261,381 |
Ending balance | $ 470,167 | $ 438,843 |
Accounts Receivable, Net - Accr
Accounts Receivable, Net - Accrued Defective Return and Discount Accounts Roll Forward (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Receivables [Abstract] | |||
Beginning balance | $ 1,595,838 | $ 3,292,101 | $ 3,292,101 |
Provision | (710,643) | $ (1,456,022) | (1,696,263) |
Ending balance | $ 885,195 | $ 1,595,838 |
Inventories, Net - Composition
Inventories, Net - Composition (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Inventory, Net [Abstract] | ||
Finished product | $ 10,315,973 | $ 13,956,121 |
Reserves for slow-moving inventories | (681,975) | (663,530) |
Inventories, net | $ 9,633,998 | $ 13,292,591 |
Inventories, Net - Inventory Re
Inventories, Net - Inventory Reserves Roll Forward (Details) - SEC Schedule, 12-09, Reserve, Inventory [Member] - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Beginning balance | $ 663,530 | $ 544,158 |
Addition | 18,445 | 119,372 |
Ending balance | $ 681,975 | $ 663,530 |
Prepayments and Other Assets (D
Prepayments and Other Assets (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Prepaid Expense and Other Assets, Current [Abstract] | ||
Prepayments | $ 3,677,613 | $ 2,026,259 |
Others | 769,356 | 561,822 |
Total prepayments and other assets | $ 4,446,969 | $ 2,588,081 |
Property and Equipment, Net - C
Property and Equipment, Net - Composition (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment, Net [Abstract] | ||
Subtotal | $ 4,731,722 | $ 4,957,482 |
Less: accumulated depreciation | (3,323,048) | (3,687,511) |
Total | 1,408,674 | 1,269,971 |
Building [Member] | ||
Property, Plant and Equipment, Net [Abstract] | ||
Subtotal | 946,066 | 946,066 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment, Net [Abstract] | ||
Subtotal | 1,212,974 | 1,074,206 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment, Net [Abstract] | ||
Subtotal | 1,994,156 | 2,246,610 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment, Net [Abstract] | ||
Subtotal | 404,237 | 516,310 |
Vehicles [Member] | ||
Property, Plant and Equipment, Net [Abstract] | ||
Subtotal | 147,912 | 147,913 |
Molds [Member] | ||
Property, Plant and Equipment, Net [Abstract] | ||
Subtotal | $ 26,377 | $ 26,377 |
Property and Equipment, Net - D
Property and Equipment, Net - Depreciation Expense (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Depreciation [Abstract] | ||||
Depreciation expense | $ 56,497 | $ 44,191 | $ 135,256 | $ 139,721 |
Leases - General Information (D
Leases - General Information (Details) | Sep. 30, 2023 |
Maximum [Member] | |
Lessee, Lease, Description [Line Items] | |
Leases, remaining lease terms | 11 years 4 months 24 days |
Leases - Operating Lease Land f
Leases - Operating Lease Land from Affiliate (Details) | Sep. 30, 2023 USD ($) |
Maximum [Member] | |
Related Party Transaction [Line Items] | |
Leases, remaining lease terms | 11 years 4 months 24 days |
Property Purchase Agreement [Member] | Sub-lease, Land Use Right [Member] | |
Related Party Transaction [Line Items] | |
Lessee, operating lease, renewal term | 50 years |
Lessee, operating lease, renewal term, purchase amount | $ 1 |
Property Purchase Agreement [Member] | Sub-lease, Land Use Right [Member] | Maximum [Member] | |
Related Party Transaction [Line Items] | |
Leases, remaining lease terms | 48 years 9 months |
Leases - Total Lease Expense (D
Leases - Total Lease Expense (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Lease, Cost [Abstract] | ||||
Total lease expenses | $ 697,205 | $ 413,829 | $ 1,862,939 | $ 1,231,989 |
Leases - Assets and Liabilities
Leases - Assets and Liabilities (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Assets and Liabilities, Lessee [Abstract] | ||
Operating lease right-of-use assets | $ 15,512,101 | $ 9,815,572 |
Operating Lease, Liability [Abstract] | ||
Operating lease liabilities - current | 1,467,049 | 1,543,031 |
Operating lease liabilities - noncurrent | 13,920,716 | 7,847,317 |
Total operating lease liabilities | $ 15,387,765 | $ 9,390,348 |
Leases - Lease Term and Discoun
Leases - Lease Term and Discount Rate (Details) | Sep. 30, 2023 | Dec. 31, 2022 |
Lessee Disclosure [Abstract] | ||
Weighted-average remaining lease term, operating leases | 9 years 6 months | 7 years 10 months 24 days |
Weighted-average discount rate, operating leases | 5.60% | 4.70% |
Leases - Maturities of Operatin
Leases - Maturities of Operating Lease Liabilities (Details) | Sep. 30, 2023 USD ($) |
Lessee, Operating Lease, Liability, to be Paid, Rolling Maturity [Abstract] | |
2023 | $ 2,308,006 |
2024 | 2,544,263 |
2025 | 2,640,774 |
2026 | 2,660,967 |
2027 | 2,312,462 |
Thereafter | 7,527,110 |
Total lease payments | $ 19,993,582 |
Leases - Gross Difference (Deta
Leases - Gross Difference (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Lessee, Operating Lease, Liability, to be Paid, Gross Difference [Abstract] | ||
Total lease payments | $ 19,993,582 | |
Less: imputed interest | (4,605,817) | |
Present value of lease liabilities | $ 15,387,765 | $ 9,390,348 |
Short-term Loans - Guarantee (D
Short-term Loans - Guarantee (Details) | Sep. 30, 2023 |
Mr. Liang Chou Chen [Member] | Foremost Groups Ltd. [Member] | |
Short-Term Debt [Line Items] | |
Ownership percentage (as a percent) | 49.75% |
Short-term Loans - Bank Loans (
Short-term Loans - Bank Loans (Details) | 9 Months Ended | |||
Dec. 02, 2021 CAD ($) | Sep. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 02, 2022 USD ($) | |
Short-Term Debt [Line Items] | ||||
Short-term loans | $ 7,962,203 | $ 9,795,052 | ||
Line of Credit [Member] | Non-discretionary Line of Credit [Member] | ||||
Short-Term Debt [Line Items] | ||||
Line of credit facility, expiration date | Dec. 21, 2024 | |||
Maximum borrowing capacity | $ 18,000,000 | |||
Debt coverage ratio | 1.25 | |||
Tangible net worth | $ 10,000,000 | |||
Tangible net worth ratio | 4 | |||
Interest rate (as a percent) | 8.25% | 7.25% | ||
Short-term loans | $ 7,962,203 | $ 9,795,052 | ||
Line of Credit [Member] | Non-discretionary Line of Credit [Member] | Minimum [Member] | ||||
Short-Term Debt [Line Items] | ||||
Interest rate (as a percent) | 4.50% | |||
Line of Credit [Member] | Non-discretionary Line of Credit [Member] | Prime Rate [Member] | ||||
Short-Term Debt [Line Items] | ||||
Basis spread (as a percent) | (0.25%) | |||
Line of Credit [Member] | Non-discretionary Line of Credit [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | ||||
Short-Term Debt [Line Items] | ||||
Basis spread (as a percent) | 2.20% | |||
Line of Credit [Member] | Discretionary Line of Credit [Member] | ||||
Short-Term Debt [Line Items] | ||||
Maximum borrowing capacity | $ 7,500,000 | $ 5,538,734 | ||
Tangible net worth ratio | 3 | |||
Current ratio | 1.25 | |||
Short-term loans | $ 0 | $ 0 | ||
Line of credit facility, expiration, notice period | 60 days | |||
Line of Credit [Member] | Discretionary Line of Credit [Member] | Prime Rate [Member] | ||||
Short-Term Debt [Line Items] | ||||
Basis spread (as a percent) | 0.50% | |||
Line of Credit [Member] | Revolving Foreign Exchange Facility [Member] | ||||
Short-Term Debt [Line Items] | ||||
Maximum borrowing capacity | $ 3,000,000 |
Shareholders' Equity - General
Shareholders' Equity - General Information (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 | Jan. 27, 2022 | May 26, 2021 |
Equity [Abstract] | ||||
Authorized amount | $ 21,000 | |||
Common Stock, Number of Shares, Par Value and Other Disclosure [Abstract] | ||||
Ordinary shares, authorized (in shares) | 200,000,000 | 200,000,000 | 200,000,000 | 50,000,000 |
Ordinary shares, par value (in per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.001 |
Ordinary shares, issued (in shares) | 9,500,000 | 9,500,000 | 9,500,000 | |
Ordinary shares, outstanding (in shares) | 9,500,000 | 9,500,000 | 9,500,000 | |
Preferred Stock, Number of Shares, Par Value and Other Disclosure [Abstract] | ||||
Preference shares, authorized (in shares) | 10,000,000 | 10,000,000 | 10,000,000 | |
Preference shares, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Shareholders' Equity - Offering
Shareholders' Equity - Offerings (Details) - USD ($) | 9 Months Ended | ||
Jan. 27, 2022 | Jan. 25, 2022 | Sep. 30, 2022 | |
Subsidiary, Sale of Stock [Line Items] | |||
Gross proceeds from the IPO | $ 15,000,000 | ||
Net proceeds from the IPO | $ 12,400,000 | $ 12,370,800 | |
IPO [Member] | |||
Subsidiary, Sale of Stock [Line Items] | |||
Issuance of ordinary shares upon Initial Public Offering ("IPO"), net (in shares) | 2,500,000 | ||
Issuance of ordinary shares per unit upon Initial Public Offering ("IPO") (in shares) | 1 | ||
Share price (in dollars per share) | $ 6 | ||
Over-Allotment Option [Member] | |||
Subsidiary, Sale of Stock [Line Items] | |||
Underwriters' option period | 45 days | ||
Number of shares issuable (in shares) | 375,000 |
Shareholders' Equity - Warrants
Shareholders' Equity - Warrants - General Information (Details) - $ / shares | Jan. 27, 2022 | Sep. 30, 2023 | Jan. 25, 2022 |
Initial Public Offering Warrants and Option Warrants to Purchase Ordinary Shares [Member] | |||
Class of Warrant or Right [Line Items] | |||
Warrants outstanding (in shares) | 2,875,000 | ||
Warrants exercised (in shares) | 0 | ||
Initial Public Offering Warrants to Purchase Ordinary Shares [Member] | |||
Class of Warrant or Right [Line Items] | |||
Date from which warrants exercisable | Jan. 27, 2022 | ||
Number of shares called warrants (in shares) | 2,500,000 | ||
Number of shares called by each warrant (in shares) | 1 | ||
Exercise price of warrants (in dollars per share) | $ 6 | ||
Term of warrants | 5 years | ||
Initial Public Offering Option Warrants to Purchase Ordinary Shares [Member] | |||
Class of Warrant or Right [Line Items] | |||
Number of shares called warrants (in shares) | 375,000 | ||
Number of shares called by each warrant (in shares) | 1 | ||
Exercise price of warrants (in dollars per share) | $ 0.01 | ||
Public Offering Warrants to Purchase Ordinary Shares [Member] | |||
Class of Warrant or Right [Line Items] | |||
Warrants issued, percentage of IPO shares (as a percent) | 2% | ||
Date from which warrants exercisable, period from IPO closing | 180 days | ||
Number of shares called warrants (in shares) | 50,000 | ||
Term of warrants | 5 years | ||
Warrants outstanding (in shares) | 50,000 | ||
Warrants exercised (in shares) | 0 |
Shareholders' Equity - Warran_2
Shareholders' Equity - Warrants - Fair Value Measurement Inputs and Techniques (Details) | Jan. 27, 2022 USD ($) $ / shares Y |
Initial Public Offering Warrants and Option Warrants to Purchase Ordinary Shares [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants, fair value | $ | $ 4,160,000 |
Warrants and Rights Outstanding, Valuation Technique | us-gaap:ValuationTechniqueOptionPricingModelMember |
Initial Public Offering Warrants and Option Warrants to Purchase Ordinary Shares [Member] | Measurement Input, Share Price [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and Rights Outstanding, Measurement Input | $ / shares | 1.448 |
Initial Public Offering Warrants and Option Warrants to Purchase Ordinary Shares [Member] | Measurement Input, Risk Free Interest Rate [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and Rights Outstanding, Measurement Input | 0.0166 |
Initial Public Offering Warrants and Option Warrants to Purchase Ordinary Shares [Member] | Measurement Input, Expected Term [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and Rights Outstanding, Measurement Input | Y | 5 |
Initial Public Offering Warrants and Option Warrants to Purchase Ordinary Shares [Member] | Measurement Input, Exercise Price [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and Rights Outstanding, Measurement Input | $ / shares | 6 |
Initial Public Offering Warrants and Option Warrants to Purchase Ordinary Shares [Member] | Measurement Input, Price Volatility [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and Rights Outstanding, Measurement Input | 44 |
Initial Public Offering Warrants and Option Warrants to Purchase Ordinary Shares [Member] | Measurement Input, Expected Dividend Payment [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and Rights Outstanding, Measurement Input | $ | 0 |
Public Offering Warrants to Purchase Ordinary Shares [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants, fair value | $ | $ 100,000 |
Warrants and Rights Outstanding, Valuation Technique | us-gaap:ValuationTechniqueOptionPricingModelMember |
Public Offering Warrants to Purchase Ordinary Shares [Member] | Measurement Input, Share Price [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and Rights Outstanding, Measurement Input | $ / shares | 1.448 |
Public Offering Warrants to Purchase Ordinary Shares [Member] | Measurement Input, Risk Free Interest Rate [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and Rights Outstanding, Measurement Input | 0.0166 |
Public Offering Warrants to Purchase Ordinary Shares [Member] | Measurement Input, Expected Term [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and Rights Outstanding, Measurement Input | Y | 5 |
Public Offering Warrants to Purchase Ordinary Shares [Member] | Measurement Input, Exercise Price [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and Rights Outstanding, Measurement Input | $ / shares | 6 |
Public Offering Warrants to Purchase Ordinary Shares [Member] | Measurement Input, Price Volatility [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and Rights Outstanding, Measurement Input | 0.4400 |
Public Offering Warrants to Purchase Ordinary Shares [Member] | Measurement Input, Expected Dividend Payment [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and Rights Outstanding, Measurement Input | $ | 0 |
Stock-based compensation - Gene
Stock-based compensation - General Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Oct. 07, 2021 | Jan. 26, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Compensation cost recognized | $ 0 | $ 59,337 | $ 115,920 | $ 331,893 | $ 260,652 | |
Equity Plan 2021 [Member] | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Shares reserved (in shares) | 1,500,000 | |||||
Threshold percentage (as a percent) | 4.50% | |||||
Threshold number of shares (in shares) | 600,000 |
Stock-based compensation - Rest
Stock-based compensation - Restricted Share Units - General Information (Details) - Restricted Stock Units (RSUs) [Member] | 9 Months Ended | 12 Months Ended | |||||||
Sep. 30, 2023 shares | Mar. 23, 2023 USD ($) $ / shares shares | May 17, 2022 USD ($) $ / shares shares | May 11, 2022 USD ($) $ / shares shares | Apr. 13, 2022 USD ($) installment $ / shares shares | Jan. 27, 2022 USD ($) $ / shares shares | Sep. 30, 2023 shares | Dec. 31, 2022 shares | Dec. 31, 2021 shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||
Granted (in shares) | 113,984 | 296,474 | |||||||
Outstanding (in shares) | 257,465 | 257,465 | 296,474 | 0 | |||||
RSU Vested | 65,382 | ||||||||
Awards Issued 27 January 2022 [Member] | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||
Granted (in shares) | 183,750 | ||||||||
Fair value of awards granted | $ | $ 716,625 | ||||||||
Share price (in dollars per share) | $ / shares | $ 3.90 | ||||||||
Vesting period | 3 years | ||||||||
Outstanding (in shares) | 122,500 | 122,500 | |||||||
RSU Vested | 61,250 | ||||||||
Awards Issued 13 April 2022 [Member] | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||
Granted (in shares) | 8,750 | ||||||||
Fair value of awards granted | $ | $ 22,050 | ||||||||
Share price (in dollars per share) | $ / shares | $ 2.52 | ||||||||
Outstanding (in shares) | 4,618 | 4,618 | |||||||
RSU Vested | 4,132 | ||||||||
Awards Issued 13 April 2022 [Member] | Share-Based Payment Arrangement, Tranche One [Member] | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||
Vesting rights (as a percent) | 33.33% | ||||||||
Vesting period | 1 year | ||||||||
Awards Issued 13 April 2022 [Member] | Share-Based Payment Arrangement, Tranche Two [Member] | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||
Vesting rights, successive equal monthly installments | installment | 24 | ||||||||
Awards Issued 11 May 2022 [Member] | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||
Granted (in shares) | 87,611 | ||||||||
Potential award (in shares) | 43,805 | ||||||||
Fair value of awards granted | $ | $ 198,000 | ||||||||
Potential award, fair value | $ | $ 99,000 | ||||||||
Share price (in dollars per share) | $ / shares | $ 2.26 | ||||||||
Vested (in shares) | 0 | 0 | |||||||
Awards Issued 17 May 2022 [Member] | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||
Granted (in shares) | 16,363 | ||||||||
Fair value of awards granted | $ | $ 36,000 | ||||||||
Share price (in dollars per share) | $ / shares | $ 2.20 | ||||||||
Vested (in shares) | 0 | 0 | |||||||
Outstanding (in shares) | 16,363 | 16,363 | |||||||
Awards Issued 23 May 2023, Officers [Member] | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||
Granted (in shares) | 96,635 | ||||||||
Potential award (in shares) | 48,317 | ||||||||
Fair value of awards granted | $ | $ 201,000 | ||||||||
Potential award, fair value | $ | $ 100,500 | ||||||||
Share price (in dollars per share) | $ / shares | $ 2.08 | ||||||||
Vested (in shares) | 0 | 0 | |||||||
Outstanding (in shares) | 96,635 | 96,635 | |||||||
Awards Issued 23 May 2023, Independent Directors [Member] | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||
Granted (in shares) | 17,349 | ||||||||
Fair value of awards granted | $ | $ 36,000 | ||||||||
Share price (in dollars per share) | $ / shares | $ 2.08 | ||||||||
Vested (in shares) | 0 | 0 | |||||||
Outstanding (in shares) | 17,349 | 17,349 |
Stock-based compensation - Re_2
Stock-based compensation - Restricted Share Units - Activity (Details) - Restricted Stock Units (RSUs) [Member] - shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Non-vested, beginning balance (in shares) | 296,474 | 0 |
Granted (in shares) | 113,984 | 296,474 |
Vested (in shares) | (65,382) | |
Canceled (in shares) | (87,611) | |
Non-vested, ending balance (in shares) | 257,465 | 296,474 |
Stock-based compensation - Re_3
Stock-based compensation - Restricted Share Units - Summary (Details) - Restricted Stock Units (RSUs) [Member] - $ / shares | 9 Months Ended | ||
Sep. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Outstanding (in shares) | 257,465 | 296,474 | 0 |
Awards Issued 27 January 2022 [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Fair value per share (in dollars per share) | $ 3.90 | ||
Outstanding (in shares) | 122,500 | ||
Average remaining amortization period | 1 year 3 months 29 days | ||
Awards Issued 13 April 2022 [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Fair value per share (in dollars per share) | $ 2.52 | ||
Outstanding (in shares) | 4,618 | ||
Average remaining amortization period | 1 year 6 months | ||
Awards Issued 17 May 2022 [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Fair value per share (in dollars per share) | $ 2.20 | ||
Outstanding (in shares) | 16,363 | ||
Average remaining amortization period | 1 year 3 months | ||
Awards Issued 23 May 2023, Officers [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Fair value per share (in dollars per share) | $ 2.08 | ||
Outstanding (in shares) | 96,635 | ||
Average remaining amortization period | 2 years 6 months | ||
Awards Issued 23 May 2023, Independent Directors [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Fair value per share (in dollars per share) | $ 2.08 | ||
Outstanding (in shares) | 17,349 | ||
Average remaining amortization period | 2 years 6 months |
Stock-based compensation - Opti
Stock-based compensation - Options - General Information (Details) | 3 Months Ended | 9 Months Ended | ||||||
Mar. 23, 2023 USD ($) installment $ / shares shares | May 11, 2022 USD ($) installment $ / shares shares | Apr. 13, 2022 USD ($) installment $ / shares shares | Mar. 24, 2022 USD ($) installment $ / shares shares | Mar. 23, 2022 $ / shares | Sep. 30, 2023 USD ($) shares | Sep. 30, 2023 $ / shares shares | Sep. 30, 2022 USD ($) | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Options issued (in shares) | shares | 158,976 | |||||||
Options issued, exercise price (in dollars per share) | $ 2.08 | |||||||
Weighted average grant date fair value, granted (in dollars per share) | $ 1.26 | |||||||
Awards Issued 24 March 2022 [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Options issued (in shares) | shares | 98,747 | |||||||
Options issued, exercise price (in dollars per share) | $ 3.07 | |||||||
Weighted average grant date fair value, granted (in dollars per share) | $ 1.43 | |||||||
Awards Issued 13 April 2022 [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Options issued (in shares) | shares | 97,371 | |||||||
Options issued, exercise price (in dollars per share) | $ 2.52 | |||||||
Weighted average grant date fair value, granted (in dollars per share) | $ 1.18 | |||||||
Awards Issued 11 May 2022 [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Options issued (in shares) | shares | 159,881 | |||||||
Options issued, exercise price (in dollars per share) | $ 2.26 | |||||||
Weighted average grant date fair value, granted (in dollars per share) | $ 1.07 | |||||||
Awards Issued 23 May 2023, Officers [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Options issued (in shares) | shares | 158,976 | |||||||
Options issued, exercise price (in dollars per share) | $ 2.08 | |||||||
Contractual life | 10 years | |||||||
Weighted average grant date fair value, granted (in dollars per share) | $ 1.26 | |||||||
Employee Stock Option [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Fair value of awards granted | $ | $ 628,834 | $ 454,373 | ||||||
Employee Stock Option [Member] | Awards Issued 24 March 2022 [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Contractual life | 10 years | |||||||
Fair value of awards granted | $ | $ 141,401 | |||||||
Vested (in shares) | shares | 49,374 | 49,374 | ||||||
Employee Stock Option [Member] | Awards Issued 24 March 2022 [Member] | Share-Based Payment Arrangement, Tranche One [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Vesting rights (as a percent) | 33.33% | |||||||
Vesting period | 1 year | |||||||
Employee Stock Option [Member] | Awards Issued 24 March 2022 [Member] | Share-Based Payment Arrangement, Tranche Two [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Vesting rights, successive equal monthly installments | installment | 24 | |||||||
Employee Stock Option [Member] | Awards Issued 13 April 2022 [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Contractual life | 10 years | |||||||
Fair value of awards granted | $ | $ 114,972 | |||||||
Vested (in shares) | shares | 45,981 | 45,981 | ||||||
Employee Stock Option [Member] | Awards Issued 13 April 2022 [Member] | Share-Based Payment Arrangement, Tranche One [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Vesting rights (as a percent) | 33.33% | |||||||
Vesting period | 1 year | |||||||
Employee Stock Option [Member] | Awards Issued 13 April 2022 [Member] | Share-Based Payment Arrangement, Tranche Two [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Vesting rights, successive equal monthly installments | installment | 24 | |||||||
Employee Stock Option [Member] | Awards Issued 11 May 2022 [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Contractual life | 10 years | |||||||
Fair value of awards granted | $ | $ 171,462 | |||||||
Vested (in shares) | shares | 71,058 | 71,058 | ||||||
Employee Stock Option [Member] | Awards Issued 11 May 2022 [Member] | Share-Based Payment Arrangement, Tranche One [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Vesting rights (as a percent) | 33.33% | |||||||
Vesting period | 1 year | |||||||
Employee Stock Option [Member] | Awards Issued 11 May 2022 [Member] | Share-Based Payment Arrangement, Tranche Two [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Vesting rights, successive equal monthly installments | installment | 24 | |||||||
Employee Stock Option [Member] | Awards Issued 23 May 2023, Officers [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Fair value of awards granted | $ | $ 201,000 | |||||||
Vested (in shares) | shares | 0 | 0 | ||||||
Employee Stock Option [Member] | Awards Issued 23 May 2023, Officers [Member] | Share-Based Payment Arrangement, Tranche One [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Vesting rights (as a percent) | 33.33% | |||||||
Vesting period | 1 year | |||||||
Employee Stock Option [Member] | Awards Issued 23 May 2023, Officers [Member] | Share-Based Payment Arrangement, Tranche Two [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Vesting rights, successive equal monthly installments | installment | 24 |
Stock-based compensation - Op_2
Stock-based compensation - Options - Activity (Details) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding [Roll Forward] | ||
Number of options, beginning of period (in shares) | 380,745 | |
Granted (in shares) | 158,976 | |
Forfeited (in shares) | 24,746 | |
Number of options, end of period (in shares) | 514,975 | 380,745 |
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||
Weighted average exercise price, beginning of period (in dollars per share) | $ 2.54 | |
Granted (in dollars per share) | 2.08 | |
Weighted average exercise price, end of period (in dollars per share) | 2.41 | $ 2.54 |
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||
Weighted average grant date fair value, beginning of period (in dollars per share) | 1.19 | |
Weighted average grant date fair value, granted (in dollars per share) | 1.26 | |
Weighted average grant date fair value, end of period (in dollars per share) | $ 1.22 | $ 1.19 |
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Additional Disclosures [Abstract] | ||
Weighted average remaining contractual term, outstanding | 8 years 10 months 17 days | 9 years 4 months 6 days |
Weighted average remaining contractual term, granted | 9 years 9 months | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested and Expected to Vest [Abstract] | ||
Number of options, vested and exercisable (in shares) | 166,412 | |
Weighted average exercise price, vested and exercisable (in dollars per share) | $ 2.57 | |
Weighted average grant date fair value - vested and exercisable (in dollars per share) | $ 1.21 | |
Weighted average remaining contractual term, vested and exercisable | 8 years 7 months 2 days |
Stock-based compensation - Op_3
Stock-based compensation - Options - Fair Value (Details) - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2023 | Sep. 30, 2022 | |
Employee Stock Option [Member] | ||
Shares Granted, Value, Share-Based Payment Arrangement, after Forfeiture [Abstract] | ||
Fair value of options awarded | $ 628,834 | $ 454,373 |
Stock-based compensation - Op_4
Stock-based compensation - Options - Fair Value Assumptions (Details) - Employee Stock Option [Member] - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||
Risk-free interest rate, minimum (as a percent) | 2.49% | |
Risk-free interest rate, maximum (as a percent) | 2.92% | |
Risk-free interest rate (as a percent) | 3.65% | |
Expected volatility range, minimum (as a percent) | 40.30% | |
Expected volatility range, maximum (as a percent) | 45.67% | |
Expected volatility range (as a percent) | 63.36% | |
Share price (in dollars per share) | $ 2.08 | |
Minimum [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||
Share price (in dollars per share) | $ 2.26 | |
Maximum [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||
Share price (in dollars per share) | $ 3.07 |
Stock-based compensation - Shar
Stock-based compensation - Share-based Compensation Expense (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Jan. 26, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Abstract] | |||||
Share-based compensation expenses | $ 0 | $ 59,337 | $ 115,920 | $ 331,893 | $ 260,652 |
Selling and Marketing Expense [Member] | |||||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Abstract] | |||||
Share-based compensation expenses | 93,746 | 77,447 | |||
General and Administrative Expense [Member] | |||||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Abstract] | |||||
Share-based compensation expenses | $ 238,147 | $ 183,205 |
Stock-based compensation - Unre
Stock-based compensation - Unrecognized Share-based Compensation Expense (Details) | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount [Abstract] | |
Unrecognized employee share-based compensation expense | $ 1,061,378 |
Unrecognized employee share-based compensation expense related to unvested awards, weighted-average period for recognition | 1 year 9 months 25 days |
Income Taxes - Pre-tax Income (
Income Taxes - Pre-tax Income (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest [Abstract] | ||||
United States | $ (239,835) | $ 370,822 | $ (641,733) | $ 461,022 |
Outside United States | 755,843 | 1,210,493 | 1,166,922 | 3,334,100 |
INCOME BEFORE INCOME TAXES | $ 516,008 | $ 1,581,315 | $ 525,189 | $ 3,795,122 |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Expense (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Current Income Tax Expense (Benefit), Continuing Operations [Abstract] | ||||
Federal | $ (6,062) | $ 9,563 | $ 4,562 | $ 25,850 |
State | 7,210 | 840 | 10,343 | 8,916 |
Foreign | 223,979 | 244,514 | 524,776 | 689,950 |
Current, Total | 225,127 | 254,917 | 539,681 | 724,716 |
Deferred Income Tax Expense (Benefit), Continuing Operations [Abstract] | ||||
Federal | (42,497) | 38,456 | (135,172) | 69,077 |
State | (10,114) | 12,241 | (3,930) | 24,905 |
Foreign | 3,559 | (3,988) | 3,559 | |
Deferred, Total | (52,611) | 54,256 | (143,090) | 97,541 |
Total provision for income taxes | $ 172,516 | $ 309,173 | $ 396,591 | $ 822,257 |
Income Taxes - Effective Income
Income Taxes - Effective Income Tax Rate Reconciliation (Details) | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | ||
Federal statutory rate (as a percent) | 21% | 21% |
State and local income taxes, net of federal benefit (as a percent) | (1.70%) | 0.60% |
Foreign operations (as a percent) | 21.50% | (0.20%) |
Permanent items (as a percent) | 0.70% | 0.20% |
Deferred rate changes | 2.10% | |
Others (as a percent) | 0.10% | 0.10% |
Effective tax rate (as a percent) | 43.70% | 21.70% |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Components of Deferred Tax Assets [Abstract] | ||
Allowance for credit losses | $ 114,781 | $ 109,713 |
Other reserve | 134,866 | 144,333 |
Accrued expenses | 169,246 | 126,992 |
Lease liability | 1,882,977 | 2,144,348 |
Charitable contributions | 8,363 | 8,565 |
Business interest limitation | 492,467 | 385,069 |
Net operating loss - federal | 394,381 | 414,905 |
Net operating loss - state | 70,694 | 75,863 |
Other | 49,965 | 46,005 |
Total deferred tax assets | 3,317,740 | 3,455,793 |
Net deferred tax assets | 3,317,740 | 3,455,793 |
Components of Deferred Tax Liabilities [Abstract] | ||
Fixed assets | 1,920,097 | 2,190,254 |
Intangibles | (10,986) | |
Total deferred tax liabilities | 1,909,111 | 2,190,254 |
Deferred tax assets, net of deferred tax liabilities | $ 1,408,629 | $ 1,265,539 |
Income Taxes - Operating Loss C
Income Taxes - Operating Loss Carryforwards (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | |
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards | $ 2,994,939 | $ 3,174,799 |
Domestic Tax Authority [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards | 1,878,000 | 1,975,734 |
State and Local Jurisdiction [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards | $ 1,116,939 | $ 1,199,065 |
Net operating loss carryforwards, subject to expiration, period | 20 years |
Related Party Transactions an_3
Related Party Transactions and Balances - Purchase from a Related Party (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Related Party Transaction [Line Items] | ||||
Purchase from a related party | $ 2,686,497 | $ 4,087,152 | $ 8,694,616 | $ 11,763,628 |
Affiliated Entity [Member] | Focal Capital Holding Limited [Member] | ||||
Related Party Transaction [Line Items] | ||||
Purchase from a related party | 980,910 | 1,307,506 | 5,950,640 | 6,960,700 |
Affiliated Entity [Member] | Foremost Worldwide Company, Limited [Member] | ||||
Related Party Transaction [Line Items] | ||||
Purchase from a related party | 717,188 | $ 2,779,646 | 1,755,577 | $ 4,802,928 |
Affiliated Entity [Member] | F.P.Z FURNITURE (CAMBODIA) CO., LTD [Member] | ||||
Related Party Transaction [Line Items] | ||||
Purchase from a related party | 575,060 | 575,060 | ||
Affiliated Entity [Member] | Foremost Australasia Pty Ltd [Member] | ||||
Related Party Transaction [Line Items] | ||||
Purchase from a related party | $ 413,339 | $ 413,339 |
Related Party Transactions an_4
Related Party Transactions and Balances - Sales from a Related Party (Details) - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2022 | Sep. 30, 2022 | |
Related Party Transaction [Line Items] | ||
Revenues | $ 332,787 | $ 332,787 |
Affiliated Entity [Member] | Foremost Worldwide Company, Limited [Member] | ||
Related Party Transaction [Line Items] | ||
Revenues | $ 332,787 | $ 332,787 |
Related Party Transactions an_5
Related Party Transactions and Balances - Prepayments (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Related Party Transaction [Line Items] | ||
Prepayments - related parties | $ 9,852,102 | $ 3,806,873 |
Affiliated Entity [Member] | Rizhao Foremost Woodwork Manufacturing Company, Limited [Member] | ||
Related Party Transaction [Line Items] | ||
Prepayments - related parties | 8,681 | |
Affiliated Entity [Member] | Focal Capital Holding Limited [Member] | ||
Related Party Transaction [Line Items] | ||
Prepayments - related parties | $ 9,843,421 | $ 3,806,873 |
Related Party Transactions an_6
Related Party Transactions and Balances - Accounts Payables (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Related Party [Member] | ||
Related Party Transaction [Line Items] | ||
Accounts payable | $ 2,485,764 | $ 104,442 |
Affiliated Entity [Member] | Foremost Worldwide Company, Limited [Member] | ||
Related Party Transaction [Line Items] | ||
Accounts payable | 1,475,778 | $ 104,442 |
Affiliated Entity [Member] | F.P.Z FURNITURE (CAMBODIA) CO., LTD [Member] | ||
Related Party Transaction [Line Items] | ||
Accounts payable | 575,060 | |
Affiliated Entity [Member] | Foremost Australasia Pty Ltd [Member] | ||
Related Party Transaction [Line Items] | ||
Accounts payable | $ 434,926 |
Related Party Transactions an_7
Related Party Transactions and Balances - Shared Service and Miscellaneous Expenses - General Information (Details) - Affiliated Entity [Member] - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Shared Services Agreement and Miscellaneous Expenses, Provide Services [Member] | Foremost Home Incorporated [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related party transaction, amounts of transaction | $ 178,249 | $ 91,139 | $ 655,230 | $ 1,004,937 |
Shared Services Agreement and Miscellaneous Expenses, Receive Services [Member] | Foremost Worldwide Company, Limited [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related party transaction, amounts of transaction | $ 72,408 | $ 217,650 | $ 8,878 | $ 77,482 |
Related Party Transactions an_8
Related Party Transactions and Balances - Shared Service and Miscellaneous Expenses - Tabular Disclosure (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Related Party Transaction [Line Items] | ||
Other receivables | $ 1,152,385 | $ 1,836,776 |
Affiliated Entity [Member] | F.P.Z FURNITURE (CAMBODIA) CO., LTD [Member] | ||
Related Party Transaction [Line Items] | ||
Other liabilities | (147,368) | |
Affiliated Entity [Member] | Foremost Home Incorporated [Member] | ||
Related Party Transaction [Line Items] | ||
Other receivables | 1,813,028 | 1,879,249 |
Affiliated Entity [Member] | Foremost Worldwide Company, Limited [Member] | ||
Related Party Transaction [Line Items] | ||
Other liabilities | $ (513,275) | $ (42,473) |
Related Party Transactions an_9
Related Party Transactions and Balances - Property Purchase (Details) - USD ($) | 1 Months Ended | ||
Jul. 31, 2022 | Sep. 30, 2023 | Dec. 31, 2022 | |
Related Party Transaction [Line Items] | |||
Property, plant and equipment, gross | $ 4,731,722 | $ 4,957,482 | |
Operating lease right-of-use assets | 15,512,101 | 9,815,572 | |
Building [Member] | |||
Related Party Transaction [Line Items] | |||
Property, plant and equipment, gross | $ 946,066 | $ 946,066 | |
Property Purchase Agreement [Member] | |||
Related Party Transaction [Line Items] | |||
Related party transaction, amounts of transaction | $ 1,963,521 | ||
Excess payment over carrying value | $ 498,005 | ||
Property Purchase Agreement [Member] | Sub-lease, Land Use Right [Member] | |||
Related Party Transaction [Line Items] | |||
Lessee, operating lease, term of contract | 50 years | ||
Operating lease right-of-use assets | $ 519,450 | ||
Property Purchase Agreement [Member] | Building [Member] | |||
Related Party Transaction [Line Items] | |||
Property, plant and equipment, gross | $ 946,066 |
Related Party Transactions a_10
Related Party Transactions and Balances - Loan Guarantee by Related Party (Details) | Sep. 30, 2023 |
Mr. Liang Chou Chen [Member] | Foremost Groups Ltd. [Member] | |
Related Party Transaction [Line Items] | |
Ownership percentage (as a percent) | 49.75% |
Concentrations of Risks - Credi
Concentrations of Risks - Credit Risk (Details) | Sep. 30, 2023 USD ($) | Sep. 30, 2023 CAD ($) | Sep. 30, 2023 TWD ($) | Sep. 30, 2023 EUR (€) | Dec. 31, 2022 USD ($) |
Cash and Cash Equivalents, at Carrying Value [Abstract] | |||||
Cash | $ 5,369,947 | $ 10,067,428 | |||
Cash, Insured and Uninsured [Abstract] | |||||
Cash, FDIC insured amount | 250,000 | ||||
Cash, uninsured amount | 360,276 | ||||
Cash, Canadian Deposit Insurance Corporation insured amount | 74,000 | $ 100,000 | |||
Cash, amount uninsured by Canadian Deposit Insurance Corporation | 2,629,765 | 3,560,964 | |||
Cash, Taiwan Central Deposit Insurance Corporation insured amount | 93,000 | $ 3,000,000 | |||
Cash, amount uninsured by Taiwan Central Deposit Insurance Corporation | 1,369,394 | ||||
Cash, European Banking Authority insured amount | 105,000 | € 100,000 | |||
Cash, amount uninsured by European Banking Authority | 7,223 | 6,855 | |||
Cash, amount uninsured by Kingdom of Cambodia regulation | 423 | ||||
United States [Member] | |||||
Cash and Cash Equivalents, at Carrying Value [Abstract] | |||||
Cash | 751,452 | ||||
Canada [Member] | |||||
Cash and Cash Equivalents, at Carrying Value [Abstract] | |||||
Cash | 2,703,614 | $ 3,660,964 | |||
TAIWAN | |||||
Cash and Cash Equivalents, at Carrying Value [Abstract] | |||||
Cash | 1,708,564 | ||||
European Union [Member] | |||||
Cash and Cash Equivalents, at Carrying Value [Abstract] | |||||
Cash | 112,597 | € 106,855 | |||
CAMBODIA | |||||
Cash and Cash Equivalents, at Carrying Value [Abstract] | |||||
Cash | $ 423 |
Concentrations of Risks - Custo
Concentrations of Risks - Customer Concentration Risk (Details) - Customer Concentration Risk [Member] | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Revenue from Contract with Customer Benchmark [Member] | Largest Customer [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk (as a percent) | 14.50% | 23.80% | 17.40% | 22.10% | |
Revenue from Contract with Customer Benchmark [Member] | Customer, Second Largest [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk (as a percent) | 14.30% | 19.20% | 16.60% | 21.10% | |
Revenue from Contract with Customer Benchmark [Member] | Customer, Third Largest [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk (as a percent) | 13.90% | ||||
Accounts Receivable [Member] | Largest Customer [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk (as a percent) | 19.30% | 36.70% | |||
Accounts Receivable [Member] | Customer, Second Largest [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk (as a percent) | 15% | 13.60% | |||
Accounts Receivable [Member] | Customer, Third Largest [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk (as a percent) | 13.30% | ||||
Accounts Receivable [Member] | Customer, Fourth Largest [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk (as a percent) | 12.70% |
Concentrations of Risks - Vendo
Concentrations of Risks - Vendor Concentration Risk (Details) - Supplier Concentration Risk [Member] | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Cost of Goods and Service Benchmark [Member] | Tangshan Huida Ceramic Group Co., Ltd [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk (as a percent) | 55.80% | 49.90% | 54.50% | 51.40% | |
Cost of Goods and Service Benchmark [Member] | Supplier, Second Largest [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk (as a percent) | 10.10% | ||||
Accounts Payable [Member] | Tangshan Huida Ceramic Group Co., Ltd [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk (as a percent) | 78.30% | 85.50% | |||
Accounts Payable [Member] | Supplier, Second Largest [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk (as a percent) | 13% |
Segment information (Details)
Segment information (Details) - segment | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | ||||
Number of reportable segment | 1 | 1 | 1 | 1 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net Income (Loss) | $ 409,535 | $ 1,272,142 | $ 194,641 | $ 2,972,865 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Rule10b51 Arrangement Modified | false |
Non-Rule10b51 Arrangement Modified | false |