|
Cayman Islands
(State or other jurisdiction
of incorporation or organization) |
| |
3430
(Primary Standard Industrial
Classification Code Number) |
| |
98-1603252
(I.R.S. Employer
Identification Number) |
|
|
James M. Fischer
Jonathan R. Zimmerman Faegre Drinker Biddle & Reath LLP 2200 Wells Fargo Center 90 S. Seventh Street Minneapolis, Minnesota 55402 (612) 776-7000 |
| |
Stephen E. Older
Rakesh Gopalan David S. Wolpa McGuireWoods LLP 1251 Avenue of the Americas, 20th Floor New York, New York 10020 (212) 548-2100 |
|
| Large accelerated filer ☐ | | | Accelerated filer ☐ | | | Non-accelerated filer ☒ | | | Smaller reporting company ☒ | |
| | | | | | | | | | Emerging growth company ☒ | |
| | ||||||||||||||
Title of each class of securities to be registered
|
| | |
Proposed Maximum
Aggregate Offering Price(1)(2) |
| | |
Amount of
registration fee(2) |
| ||||||
Ordinary shares, $0.001 par value per share(3)
|
| | | | $ | 17,250,000 | | | | | | $ | 1,881.98 | | |
Representative Warrants
|
| | | | $ | — | | | | | | $ | — | | |
Ordinary Shares underlying Representative Warrants(3)(4)
|
| | | | $ | 345,000 | | | | | | $ | 37.64 | | |
Total
|
| | | | $ | 17,595,000 | | | | | | $ | 1,919.62 | | |
| | |
PER SHARE
|
| |
TOTAL
|
| ||||||
Initial public offering price
|
| | | $ | | | | | $ | | | ||
Underwriting discounts and commissions(1)
|
| | | $ | | | | | $ | | | ||
Proceeds, before expenses, to us
|
| | | $ | | | | | $ | | |
| | |
Page
|
| |||
| | | | 1 | | | |
| | | | 13 | | | |
| | | | 29 | | | |
| | | | 30 | | | |
| | | | 31 | | | |
| | | | 32 | | | |
| | | | 33 | | | |
| | | | 34 | | | |
| | | | 36 | | | |
| | | | 38 | | | |
| | | | 54 | | | |
| | | | 63 | | | |
| | | | 68 | | | |
| | | | 72 | | | |
| | | | 73 | | | |
| | | | 75 | | | |
| | | | 79 | | | |
| | | | 81 | | | |
| | | | 84 | | | |
| | | | 88 | | | |
| | | | 88 | | | |
| | | | 88 | | | |
| | | | F-1 | | |
| | |
For the Six Months Ended
June 30, |
| |
For the Years Ended
December 31, |
| ||||||||||||||||||
| | |
2021
|
| |
2020
|
| |
2020
|
| |
2019
|
| ||||||||||||
| | |
USD
|
| |
USD
|
| |
USD
|
| |
USD
|
| ||||||||||||
REVENUES
|
| | | $ | 78,866,047 | | | | | $ | 63,427,817 | | | | | $ | 134,827,701 | | | | | $ | 126,282,212 | | |
COST OF REVENUES
|
| | | | 62,360,079 | | | | | | 49,838,212 | | | | | | 106,423,061 | | | | | | 100,843,143 | | |
GROSS PROFIT
|
| | | | 16,505,968 | | | | | | 13,589,605 | | | | | | 28,404,640 | | | | | | 25,439,069 | | |
OPERATING EXPENSES | | | | | | | | | | | | | | | | | | | | | | | | | |
Selling and distribution
|
| | | | 8,029,209 | | | | | | 7,745,438 | | | | | | 15,487,306 | | | | | | 14,917,601 | | |
General and administrative
|
| | | | 2,982,939 | | | | | | 2,815,852 | | | | | | 5,820,967 | | | | | | 7,355,632 | | |
Research and development
|
| | | | 289,124 | | | | | | 385,534 | | | | | | 814,254 | | | | | | 703,779 | | |
Total operating expenses
|
| | | | 11,301,272 | | | | | | 10,946,824 | | | | | | 22,122,527 | | | | | | 22,977,012 | | |
INCOME FROM OPERATIONS
|
| | | | 5,204,696 | | | | | | 2,642,781 | | | | | | 6,282,113 | | | | | | 2,462,057 | | |
OTHER INCOME (EXPENSES) | | | | | | | | | | | | | | | | ||||||||||
Interest income
|
| | | | 10,778 | | | | | | 2 | | | | | | 32,244 | | | | | | 11,665 | | |
Interest expense
|
| | | | (167,295) | | | | | | (149,824) | | | | | | (418,867) | | | | | | (448,412) | | |
Other income (expenses), net
|
| | | | 1,504,947 | | | | | | (31,730) | | | | | | (390,298) | | | | | | (50,212) | | |
Total other income (expenses), net
|
| | | | 1,348,430 | | | | | | (181,552) | | | | | | (776,921) | | | | | | (486,959) | | |
INCOME BEFORE INCOME TAXES
|
| | | | 6,553,126 | | | | | | 2,461,229 | | | | | | 5,505,192 | | | | | | 1,975,098 | | |
PROVISION FOR (BENEFIT OF) INCOME TAXES
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Current
|
| | | | 833,530 | | | | | | 309,956 | | | | | | 1,074,928 | | | | | | 587,290 | | |
Deferred
|
| | | | 250,281 | | | | | | 58,403 | | | | | | (300,484) | | | | | | (183,286) | | |
Total provision for income taxes
|
| | | | 1,083,811 | | | | | | 368,359 | | | | | | 774,444 | | | | | | 404,004 | | |
NET INCOME
|
| | | | 5,469,315 | | | | | | 2,092,870 | | | | | | 4,730,748 | | | | | | 1,571,094 | | |
OTHER COMPREHENSIVE INCOME | | | | | | | | | | | | | | | | | | | | | | | | | |
Foreign currency translation adjustment
|
| | | | 325,23 | | | | | | (239,804) | | | | | | 298,106 | | | | | | 279,106 | | |
COMPREHENSIVE INCOME
|
| | | | 5,794,551 | | | | | | 1,853,066 | | | | | | 5,028,854 | | | | | | 1,850,200 | | |
WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES
|
| | | | | ||||||||||||||||||||
Basic and diluted
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
EARNINGS PER SHARE | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic and diluted
|
| | | | — | | | | | | — | | | | | $ | — | | | | | $ | — | | |
| | |
As of
June 30, 2021 |
| |
As of
December 31, 2020 |
| ||||||
Balance Sheet Data: | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 3,800,610 | | | | | | 4,018,558 | | |
Working capital (deficit)(1)
|
| | | | (6,658,982) | | | | | | (1,691,240) | | |
Total assets
|
| | | | 50,391,679 | | | | | | 45,147,461 | | |
Total liabilities
|
| | | | 50,495,948 | | | | | | 43,615,765 | | |
Total parent’s net investment
|
| | | | (104,269) | | | | | | 1,531,696 | | |
| | |
As of June 30, 2021
|
| |||||||||
| | |
Actual
|
| |
Pro Forma(1)
|
| ||||||
Cash and cash equivalents
|
| | | $ | 3,800,610 | | | | | $ | | | |
Total liabilities
|
| | | $ | 50,495,948 | | | | | $ | | | |
Ordinary shares, $.001 par value; 50,000,000 shares authorized; shares issued and outstanding, actual and as adjusted
|
| | | | | | | | | | | | |
Parent’s net investment
|
| | | | (104,269) | | | | | | | | |
Total parent’s net (deficit) investment
|
| | | $ | (104,269) | | | | | $ | | | |
Total capitalization
|
| | | $ | 50,391,679 | | | | | $ | | | |
|
Assumed initial public offering price per share
|
| | | | | | | | | $ | | | |
|
Historical net tangible book value per share as of June 30, 2021
|
| | | $ | | | | | | | | | |
|
Decrease in historical net tangible book deficit per share attributable to pro forma
transactions and other adjustments described above |
| | | | | | | | | | | | |
|
Pro forma net tangible book value (deficit) per share as of June 30, 2021
|
| | | | | | | | | | | | |
|
Increase in pro forma net tangible book value per share attributable to new investors participating in this offering
|
| | | | | | | | | | | | |
|
Pro forma as adjusted net tangible book value per share after this offering
|
| | | | | | | | | | | | |
|
Dilution per share to new investors participating in this offering
|
| | | | | | | | | $ | | |
| | |
Shares
Purchased |
| |
Total
Consideration |
| |
Average
Price Per Share |
| |||||||||||||||||||||
| | |
Number
|
| |
Percent
|
| |
Amount
|
| |
Percent
|
| ||||||||||||||||||
Existing shareholders before this offering
|
| | | | | | | | | | % | | | | | $ | | | | | | % | | | | | $ | | | ||
New investors participating in this offering
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total
|
| | | | | | | | | | 100% | | | | | | | | | | | | 100% | | | | | | | | |
| | |
For the Six Months Ended
June 30, |
| |
For the Years Ended
December 31, |
| ||||||||||||||||||
| | |
2021
|
| |
2020
|
| |
2020
|
| |
2019
|
| ||||||||||||
| | |
USD
|
| |
USD
|
| |
USD
|
| |
USD
|
| ||||||||||||
REVENUES
|
| | | $ | 78,866,047 | | | | | $ | 63,427,817 | | | | | $ | 134,827,701 | | | | | $ | 126,282,212 | | |
COST OF REVENUES
|
| | | | 62,360,079 | | | | | | 49,838,212 | | | | | | 106,423,061 | | | | | | 100,843,143 | | |
GROSS PROFIT
|
| | | | 16,505,968 | | | | | | 13,589,605 | | | | | | 28,404,640 | | | | | | 25,439,069 | | |
OPERATING EXPENSES | | | | | | | | | | | | | | | | | | | | | | | | | |
Selling and distribution
|
| | | | 8,029,209 | | | | | | 7,745,438 | | | | | | 15,487,306 | | | | | | 14,917,601 | | |
General and administrative
|
| | | | 2,982,939 | | | | | | 2,815,852 | | | | | | 5,820,967 | | | | | | 7,355,632 | | |
Research and development
|
| | | | 289,124 | | | | | | 385,534 | | | | | | 814,254 | | | | | | 703,779 | | |
Total operating expenses
|
| | | | 11,301,272 | | | | | | 10,946,824 | | | | | | 22,122,527 | | | | | | 22,977,012 | | |
INCOME FROM OPERATIONS
|
| | | | 5,204,696 | | | | | | 2,642,781 | | | | | | 6,282,113 | | | | | | 2,462,057 | | |
OTHER INCOME (EXPENSES) | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest income
|
| | | | 10,778 | | | | | | 2 | | | | | | 32,244 | | | | | | 11,665 | | |
Interest expense
|
| | | | (167,295) | | | | | | (149,824) | | | | | | (418,867) | | | | | | (448,412) | | |
Other income (expenses), net
|
| | | | 1,504,947 | | | | | | (31,730) | | | | | | (390,298) | | | | | | (50,212) | | |
Total other income (expenses), net
|
| | | | 1,348,430 | | | | | | (181,552) | | | | | | (776,921) | | | | | | (486,959) | | |
INCOME BEFORE INCOME TAXES
|
| | | | 6,553,126 | | | | | | 2,461,229 | | | | | | 5,505,192 | | | | | | 1,975,098 | | |
PROVISION FOR (BENEFIT OF) INCOME TAXES
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Current
|
| | | | 833,530 | | | | | | 309,956 | | | | | | 1,074,928 | | | | | | 587,290 | | |
Deferred
|
| | | | 250,281 | | | | | | 58,403 | | | | | | (300,484) | | | | | | (183,286) | | |
Total provision for income taxes
|
| | | | 1,083,811 | | | | | | 368,359 | | | | | | 774,444 | | | | | | 404,004 | | |
NET INCOME
|
| | | | 5,469,315 | | | | | | 2,092,870 | | | | | | 4,730,748 | | | | | | 1,571,094 | | |
OTHER COMPREHENSIVE INCOME | | | | | | | | | | | | | | | | | | | | | | | | | |
Foreign currency translation adjustment
|
| | | | 325,23 | | | | | | (239,804) | | | | | | 298,106 | | | | | | 279,106 | | |
COMPREHENSIVE INCOME
|
| | | | 5,794,551 | | | | | | 1,853,066 | | | | | | 5,028,854 | | | | | | 1,850,200 | | |
WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES
|
| | | | | | | | | | | | | | | ||||||||||
Basic and diluted
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
EARNINGS PER SHARE | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic and diluted
|
| | | | — | | | | | | — | | | | | $ | — | | | | | $ | — | | |
| | |
As of
June 30, 2021 |
| |
As of
December 31, 2020 |
| ||||||
Balance Sheet Data: | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 3,800,610 | | | | | $ | 4,018,558 | | |
Working capital (deficit)(1)
|
| | | | (6,658,982) | | | | | | (1,691,240) | | |
Total assets
|
| | | | 50,391,679 | | | | | | 45,147,461 | | |
Total liabilities
|
| | | | 50,495,948 | | | | | | 43,615,765 | | |
Total parent’s net investment
|
| | | | (104,269) | | | | | | 1,531,696 | | |
| | |
For the Six-month period Ended June 30,
|
| |
Change
|
| ||||||||||||||||||
| | |
2021
|
| |
2020
|
| |
Amount
|
| |
Percentage
|
| ||||||||||||
| | |
USD
|
| |
USD
|
| |
USD
|
| |
%
|
| ||||||||||||
Revenues
|
| | | $ | 78,866,047 | | | | | $ | 63,427,817 | | | | | $ | 15,438,230 | | | | | | 24.3 | | |
Cost of revenues
|
| | | | 62,360,079 | | | | | | 49,838,212 | | | | | | 12,521,867 | | | | | | 25.1 | | |
Gross profit
|
| | | | 16,505,968 | | | | | | 13,589,605 | | | | | | 2,916,363 | | | | | | 21.5 | | |
Selling and distribution expenses
|
| | | | 8,029,209 | | | | | | 7,745,438 | | | | | | 283,771 | | | | | | 3.7 | | |
General and administrative expenses
|
| | | | 2,982,939 | | | | | | 2,815,852 | | | | | | 167,087 | | | | | | 5.9 | | |
Research and development expenses
|
| | | | 289,124 | | | | | | 385,534 | | | | | | (96,410) | | | | | | (25.0) | | |
Total other income (expenses), net
|
| | | | 1,348,430 | | | | | | (181,552) | | | | | | 1,529,982 | | | | | | 842.7 | | |
Provision for income taxes
|
| | | | 1,083,811 | | | | | | 368,359 | | | | | | 715,452 | | | | | | 194.2 | | |
Net income
|
| | | $ | 5,469,315 | | | | | $ | 2,092,870 | | | | | $ | 3,376,445 | | | | | | 161.3 | | |
| | |
For the Six-month period Ended June 30,
|
| |
Change
|
| ||||||||||||||||||||||||
| | |
2021
|
| |
Percentage
|
| |
2020
|
| |
Percentage
|
| |
Percentage
|
| |||||||||||||||
| | |
USD
|
| |
%
|
| |
USD
|
| |
%
|
| |
%
|
| |||||||||||||||
Sanitaryware
|
| | | $ | 43,535,821 | | | | | | 55.2 | | | | | | 41,432,365 | | | | | | 65.3 | | | | | | 5.1 | | |
Bath Furniture
|
| | | | 27,439,887 | | | | | | 34.8 | | | | | | 17,924,406 | | | | | | 28.3 | | | | | | 53.1 | | |
Other | | | | | 7,890,339 | | | | | | 10.0 | | | | | | 4,071,046 | | | | | | 6.4 | | | | | | 93.8 | | |
Total
|
| | | $ | 78,866,047 | | | | | | 100.0 | | | | | $ | 63,427,817 | | | | | | 100.0 | | | | | | 24.3 | | |
| | |
For the Six-Month Periods Ended June 30,
|
| |
Change
|
| ||||||||||||||||||||||||
| | |
2021
|
| |
Percentage
|
| |
2020
|
| |
Percentage
|
| |
Percentage
|
| |||||||||||||||
| | |
USD
|
| |
%
|
| |
USD
|
| |
%
|
| |
%
|
| |||||||||||||||
United States
|
| | | $ | 51,297,861 | | | | | | 65.0 | | | | | $ | 40,316,389 | | | | | | 63.6 | | | | | | 27.2 | | |
Canada
|
| | | | 18,518,691 | | | | | | 23.5 | | | | | | 15,880,144 | | | | | | 25.0 | | | | | | 16.6 | | |
Europe
|
| | | | 9,049,495 | | | | | | 11.5 | | | | | | 7,231,284 | | | | | | 11.4 | | | | | | 25.1 | | |
Total
|
| | | $ | 78,866,047 | | | | | | 100.0 | | | | | $ | 63,427,817 | | | | | | 100.0 | | | | | | 24.3 | | |
| | |
For the Year Ended December 31,
|
| |
Change
|
| ||||||||||||||||||
| | |
2020
|
| |
2019
|
| |
Amount
|
| |
Percentage
|
| ||||||||||||
| | |
USD
|
| |
USD
|
| |
USD
|
| |
%
|
| ||||||||||||
Revenues
|
| | | $ | 134,827,701 | | | | | $ | 126,282,212 | | | | | $ | 8,545,489 | | | | | | 6.8 | | |
Cost of revenues
|
| | | | 106,423,061 | | | | | | 100,843,143 | | | | | | 5,579,918 | | | | | | 5.5 | | |
Gross profit
|
| | | | 28,404,640 | | | | | | 25,439,069 | | | | | | 2,965,571 | | | | | | 11.7 | | |
Selling and distribution expenses
|
| | | | 15,487,306 | | | | | | 14,917,601 | | | | | | 569,705 | | | | | | 3.8 | | |
General and administrative expenses
|
| | | | 5,820,967 | | | | | | 7,355,632 | | | | | | (1,534,665) | | | | | | (20.9) | | |
Research and development expenses
|
| | | | 814,254 | | | | | | 703,779 | | | | | | 110,475 | | | | | | 15.7 | | |
Other expenses, net
|
| | | | 776,921 | | | | | | 486,959 | | | | | | 289,962 | | | | | | 59.5 | | |
Provision for income taxes
|
| | | | 774,444 | | | | | | 404,004 | | | | | | 370,440 | | | | | | 91.7 | | |
Net income
|
| | | $ | 4,730,748 | | | | | $ | 1,571,094 | | | | | $ | 3,159,654 | | | | | | 201.1 | | |
| | |
For the Year Ended December 31,
|
| |
Change
|
| ||||||||||||||||||||||||
| | |
2020
|
| |
Percentage
|
| |
2019
|
| |
Percentage
|
| |
Percentage
|
| |||||||||||||||
| | |
USD
|
| |
%
|
| |
USD
|
| |
%
|
| |
%
|
| |||||||||||||||
Sanitaryware
|
| | | $ | 88,392,378 | | | | | | 65.6 | | | | | $ | 90,928,256 | | | | | | 72.0 | | | | | | (2.8) | | |
Bath Furniture
|
| | | | 38,214,235 | | | | | | 28.3 | | | | | | 28,558,130 | | | | | | 22.6 | | | | | | 33.8 | | |
Other
|
| | | | 8,221,088 | | | | | | 6.1 | | | | | | 6,795,826 | | | | | | 5.4 | | | | | | 21.0 | | |
Total
|
| | | $ | 134,827,701 | | | | | | 100.0 | | | | | $ | 126,282,212 | | | | | | 100.0 | | | | | | 6.8 | | |
| | |
For the Year Ended December 31,
|
| |
Change
|
| ||||||||||||||||||||||||
| | |
2020
|
| |
Percentage
|
| |
2019
|
| |
Percentage
|
| |
Percentage
|
| |||||||||||||||
| | |
USD
|
| |
%
|
| |
USD
|
| |
%
|
| |
%
|
| |||||||||||||||
United States
|
| | | $ | 83,700,229 | | | | | | 62.1 | | | | | $ | 76,829,764 | | | | | | 60.8 | | | | | | 8.9 | | |
Canada
|
| | | | 35,008,869 | | | | | | 26.0 | | | | | | 32,105,878 | | | | | | 25.4 | | | | | | 9.0 | | |
Europe
|
| | | | 16,118,603 | | | | | | 11.9 | | | | | | 17,346,570 | | | | | | 13.8 | | | | | | (7.1) | | |
Total
|
| | | $ | 134,827,701 | | | | | | 100.0 | | | | | $ | 126,282,212 | | | | | | 100.0 | | | | | | 6.8 | | |
| | |
For the Six-Month period
Ended June 30, |
| |
For the Year Ended
December 31, |
| ||||||||||||||||||
| | |
2021
|
| |
2020
|
| |
2020
|
| |
2019
|
| ||||||||||||
| | |
USD
|
| |
USD
|
| |
USD
|
| |
USD
|
| ||||||||||||
Net cash (used in) provided by operating activities
|
| | | $ | 629,772 | | | | | $ | (591,716) | | | | | $ | 5,799,759 | | | | | $ | 1,293,235 | | |
Net cash used in investing activities
|
| | | | (1,751) | | | | | | (43,937) | | | | | | (76,532) | | | | | | (233,861) | | |
Net cash (used in) provided by financing activities
|
| | | | (1,072,328) | | | | | | 1,668,189 | | | | | | (4,250,298) | | | | | | (1,978,043) | | |
Effect of exchange rate change on cash
|
| | | | 226,359 | | | | | | (207,557) | | | | | | 128,750 | | | | | | 229,662 | | |
Net change in cash
|
| | | | (217,948) | | | | | | 824,979 | | | | | | 1,601,679 | | | | | | (689,007) | | |
Cash at beginning of the year
|
| | | | 4,018,558 | | | | | | 2,416,879 | | | | | | 2,416,879 | | | | | | 3,105,886 | | |
Cash at end of the year
|
| | | $ | 3,800,610 | | | | | $ | 3,241,858 | | | | | $ | 4,018,558 | | | | | $ | 2,416,879 | | |
| | |
Useful Life
|
|
Leasehold Improvements | | |
Lesser of lease term or expected useful life
|
|
Machinery and equipment | | |
3 – 5 years
|
|
Furniture and fixtures | | |
3 – 5 years
|
|
Vehicles | | |
5 years
|
|
Molds | | |
3 – 5 years
|
|
| | |
For the Six-Month Period Ended June 30,
|
| |||||||||
| | |
2021
|
| |
2020
|
| ||||||
| | |
USD
|
| |
USD
|
| ||||||
Revenues by product line | | | | | | | | | | | | | |
Sanitaryware
|
| | | $ | 43,535,821 | | | | | $ | 41,432,365 | | |
Bath Furniture
|
| | | | 27,439,887 | | | | | | 17,924,406 | | |
Other
|
| | | | 7,890,339 | | | | | | 4,071,046 | | |
Total
|
| | | $ | 78,866,047 | | | | | $ | 63,427,817 | | |
| | |
For the Year Ended December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
| | |
USD
|
| |
USD
|
| ||||||
Revenues by product line | | | | | | | | | | | | | |
Sanitaryware
|
| | | $ | 88,392,378 | | | | | $ | 90,928,256 | | |
Bath Furniture
|
| | | | 38,214,235 | | | | | | 28,558,130 | | |
Other
|
| | | | 8,221,088 | | | | | | 6,795,826 | | |
Total
|
| | | $ | 134,827,701 | | | | | $ | 126,282,212 | | |
| | |
For the Six Months Ended June 30,
|
| |||||||||
| | |
2021
|
| |
2020
|
| ||||||
| | |
USD
|
| |
USD
|
| ||||||
Revenues by geographic location | | | | | | | | | | | | | |
United States
|
| | | $ | 51,297,861 | | | | | $ | 40,316,389 | | |
Canada
|
| | | | 18,518,691 | | | | | | 15,880,144 | | |
Europe
|
| | | | 9,049,495 | | | | | | 7,231,284 | | |
Total
|
| | | $ | 78,866,047 | | | | | $ | 63,427,817 | | |
| | |
For the Year Ended December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
| | |
USD
|
| |
USD
|
| ||||||
Revenues by geographic location | | | | | | | | | | | | | |
United States
|
| | | $ | 83,700,229 | | | | | $ | 76,829,764 | | |
Canada
|
| | | | 35,008,869 | | | | | | 32,105,878 | | |
Europe
|
| | | | 16,118,603 | | | | | | 17,346,570 | | |
Total
|
| | | $ | 134,827,701 | | | | | $ | 126,282,212 | | |
NAME
|
| |
AGE
|
| |
POSITION(S)
|
|
Executive Officers | | | | | | | |
David Bruce | | | 55 | | | Chief Executive Officer and President, Director | |
John Chen | | | 42 | | | Executive Chairman, Director | |
Perry Lin | | | 45 | | | Chief Financial Officer | |
Bob Kermelewicz | | | 58 | | | Executive Vice President, FGI USA | |
Jennifer Earl | | | 46 | | | Executive Vice President, FGI Canada | |
Norman Kroenke | | | 57 | | | Executive Vice President, FGI Europe | |
Non-Employee Directors | | | | | | | |
Todd Heysse | | | 48 | | | Director | |
Kellie Zesch Weir | | | 41 | | | Director | |
Jae Chung | | | 54 | | | Director | |
Name and Principal Position
|
| |
Fiscal
Year |
| |
Salary
($) |
| |
Bonus
($) |
| |
All Other
Compensation(1) ($) |
| |
Total
($) |
| |||||||||||||||
David Bruce
Chief Executive Officer |
| | | | 2020 | | | | | | 237,835 | | | | | | 26,466 | | | | | | 10,884 | | | | | | 275,185 | | |
John Chen
Executive Chairman |
| | | | 2020 | | | | | | 250,000 | | | | | | — | | | | | | 257 | | | | | | 250,257 | | |
Perry Lin
Chief Financial Officer |
| | | | 2020 | | | | | | 115,168 | | | | | | 3,000 | | | | | | 1,223 | | | | | | 119,391 | | |
Name of Beneficial Owner
|
| |
Before Offering
|
| |
After Offering
|
| |||||||||
|
Number of
Shares Beneficially Owned |
| |
Percentage of
Shares Beneficially Owned |
| |
Number of
Shares Beneficially Owned |
| |
Percentage of
Shares Beneficially Owned |
| |||||
Greater than 5% Shareholders: | | | | | | | | | | | | | | | | |
Foremost Groups Ltd.(1)
|
| | | | | | | % | | | | | | | | |
Directors and Named Executive Officers: | | | | | | | | % | | | | | | | | |
David Bruce
|
| | | | | | | % | | | | | | | | |
John Chen
|
| | | | | | | % | | | | | | | | |
Perry Lin
|
| | | | | | | % | | | | | | | | |
Todd Heysse
|
| | | | | | | % | | | | | | | | |
Kellie Zesch Weir
|
| | | | | | | % | | | | | | | | |
Jae Chung
|
| | | | | | | % | | | | | | | | |
Directors and executive officers as ( persons)
|
| | | | | | | % | | | | | | | | |
Approximate Number of Shares
|
| |
First Date Available for Sale on the Public Markets
|
|
shares | | | 181 days after the date of this prospectus, upon expiration of the lock-up agreements referred to below, subject in some cases to applicable volume, manner of sale and other limitations under Rule 144 and Rule 701. | |
Underwriter
|
| |
Number
of Shares |
| |||
The Benchmark Company, LLC
|
| | | | | | |
Northland Securities, Inc.
|
| | | | | | |
Total
|
| | | | | |
| | |
Per Share
|
| |
Total with No
Over-Allotment |
| |
Total with
Over-Allotment |
| |||||||||
Public offering price
|
| | | $ | | | | | $ | | | | | $ | | | |||
Underwriting discount to be paid by us (7%)
|
| | | $ | | | | | $ | | | | | $ | | | |||
Proceeds, before expenses, to us
|
| | | $ | | | | | $ | | | | | $ | | | |||
Non-accountable expense allowance (1%)
|
| | | $ | | | | | $ | | | | | $ | | | |
| Audited Consolidated Financial Statements | | | ||
| | | | ||
| | | | ||
| | | | ||
| | | | ||
| | | | ||
| | | | ||
| Unaudited Condensed Consolidated Financial Statements | | | ||
| | | | ||
| | | | ||
| | | | ||
| | | | ||
| | | |
| | |
As of December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
| | |
USD
|
| |
USD
|
| ||||||
ASSETS | | | | | | | | | | | | | |
CURRENT ASSETS | | | | | | | | | | | | | |
Cash
|
| | | $ | 4,018,558 | | | | | $ | 2,416,879 | | |
Accounts receivable, net
|
| | | | 17,338,279 | | | | | | 15,672,499 | | |
Inventories, net
|
| | | | 8,308,342 | | | | | | 9,293,371 | | |
Prepayments and other current assets
|
| | | | 799,724 | | | | | | 953,863 | | |
Prepayments and other receivables – related parties
|
| | | | 3,263,136 | | | | | | 14,058 | | |
Income tax receivable
|
| | | | — | | | | | | 52,697 | | |
Total current assets
|
| | | | 33,728,039 | | | | | | 28,403,367 | | |
PROPERTY AND EQUIPMENT, NET
|
| | | | 545,697 | | | | | | 795,496 | | |
OTHER ASSETS | | | | | | | | | | | | | |
Intangible assets
|
| | | | 128,050 | | | | | | 213,417 | | |
Right-of-use assets
|
| | | | 9,311,277 | | | | | | 8,785,379 | | |
Deferred tax assets, net
|
| | | | 1,263,395 | | | | | | 941,047 | | |
Other noncurrent assets
|
| | | | 171,003 | | | | | | 379,336 | | |
Total other assets
|
| | | | 10,873,725 | | | | | | 10,319,179 | | |
Total assets
|
| | | $ | 45,147,461 | | | | | $ | 39,518,042 | | |
LIABILITIES AND PARENT’S NET INVESTMENT | | | | | | | | | | | | | |
CURRENT LIABILITIES | | | | | | | | | | | | | |
Short-term loans
|
| | | $ | 11,074,383 | | | | | $ | 8,207,165 | | |
Accounts payable
|
| | | | 19,510,272 | | | | | | 15,999,049 | | |
Accounts payable – related parties
|
| | | | — | | | | | | 697,500 | | |
Income tax payable
|
| | | | 580,036 | | | | | | — | | |
Operating lease liabilities – current
|
| | | | 1,245,629 | | | | | | 1,761,260 | | |
Accrued expenses and other current liabilities
|
| | | | 3,008,959 | | | | | | 2,144,481 | | |
Total current liabilities
|
| | | | 35,419,279 | | | | | | 28,809,455 | | |
OTHER LIABILITIES | | | | | | | | | | | | | |
Operating lease liabilities – noncurrent
|
| | | | 8,196,486 | | | | | | 7,088,231 | | |
Total liabilities
|
| | | | 43,615,765 | | | | | | 35,897,686 | | |
COMMITMENTS AND CONTINGENCIES | | | | | | | | | | | | | |
PARENT’S NET INVESTMENT | | | | | | | | | | | | | |
Ordinary shares ($0.001 par value, 50,000,000 shares authorized, no shares issued and outstanding as of December 31, 2020 and 2019)
|
| | | | — | | | | | | — | | |
Parent’s net investment
|
| | | | 1,531,696 | | | | | | 3,620,356 | | |
Total parent’s net investment
|
| | | | 1,531,696 | | | | | | 3,620,356 | | |
Total liabilities and parent’s net investment
|
| | | $ | 45,147,461 | | | | | $ | 39,518,042 | | |
| | |
For the Years Ended December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
| | |
USD
|
| |
USD
|
| ||||||
REVENUES
|
| | | $ | 134,827,701 | | | | | $ | 126,282,212 | | |
COST OF REVENUES
|
| | | | 106,423,061 | | | | | | 100,843,143 | | |
GROSS PROFIT
|
| | | | 28,404,640 | | | | | | 25,439,069 | | |
OPERATING EXPENSES | | | | | | | | | | | | | |
Selling and distribution
|
| | | | 15,487,306 | | | | | | 14,917,601 | | |
General and administrative
|
| | | | 5,820,967 | | | | | | 7,355,632 | | |
Research and development
|
| | | | 814,254 | | | | | | 703,779 | | |
Total operating expenses
|
| | | | 22,122,527 | | | | | | 22,977,012 | | |
INCOME FROM OPERATIONS
|
| | | | 6,282,113 | | | | | | 2,462,057 | | |
OTHER INCOME (EXPENSES) | | | | | | | | | | | | | |
Interest income
|
| | | | 32,244 | | | | | | 11,665 | | |
Interest expense
|
| | | | (418,867) | | | | | | (448,412) | | |
Other income (expenses), net
|
| | | | (390,298) | | | | | | (50,212) | | |
Total other income (expenses), net
|
| | | | (776,921) | | | | | | (486,959) | | |
INCOME BEFORE INCOME TAXES
|
| | | | 5,505,192 | | | | | | 1,975,098 | | |
PROVISION FOR (BENEFIT OF) INCOME TAXES | | | | | | | | | | | | | |
Current
|
| | | | 1,074,928 | | | | | | 587,290 | | |
Deferred
|
| | | | (300,484) | | | | | | (183,286) | | |
Total provision for income taxes
|
| | | | 774,444 | | | | | | 404,004 | | |
NET INCOME
|
| | | | 4,730,748 | | | | | | 1,571,094 | | |
OTHER COMPREHENSIVE INCOME | | | | | | | | | | | | | |
Foreign currency translation adjustment
|
| | | | 298,106 | | | | | | 279,106 | | |
COMPREHENSIVE INCOME
|
| | | | 5,028,854 | | | | | | 1,850,200 | | |
WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES | | | | | | | | | | | | | |
Basic and diluted
|
| | | | — | | | | | | — | | |
EARNINGS PER SHARE | | | | | | | | | | | | | |
Basic and diluted
|
| | | $ | — | | | | | $ | — | | |
| | |
Parent’s net
investment |
| |||
BALANCE, January 1, 2019
|
| | | $ | 3,813,915 | | |
Net income for the year
|
| | | | 1,571,094 | | |
Net distribution to Parent
|
| | | | (2,043,759) | | |
Foreign currency translation adjustment
|
| | | | 279,106 | | |
BALANCE, December 31, 2019
|
| | | | 3,620,356 | | |
Net income for the year
|
| | | | 4,730,748 | | |
Net distribution to Parent
|
| | | | (7,117,514) | | |
Foreign currency translation adjustment
|
| | | | 298,106 | | |
BALANCE, December 31, 2020
|
| | | $ | 1,531,696 | | |
| | |
For the Years Ended December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
| | |
USD
|
| |
USD
|
| ||||||
CASH FLOWS FROM OPERATING ACTIVITIES | | | | | | | | | | | | | |
Net income
|
| | | $ | 4,730,748 | | | | | $ | 1,571,094 | | |
Adjustments to reconcile net income to net cash provided by operating activities
|
| | | | | | | | | | | | |
Depreciation and amortization
|
| | | | 560,804 | | | | | | 525,128 | | |
Bad debt recovery
|
| | | | (10,172) | | | | | | (87,418) | | |
Provision (reversal) of defective return
|
| | | | 378,248 | | | | | | (627,028) | | |
Foreign exchange transaction loss
|
| | | | 181,599 | | | | | | 51,706 | | |
Interest expenses
|
| | | | 418,867 | | | | | | 448,412 | | |
Deferred income taxes
|
| | | | (322,349) | | | | | | (183,624) | | |
Loss on disposal of property and equipment
|
| | | | 64,125 | | | | | | 2,320 | | |
Changes in operating assets and liabilities
|
| | | | | | | | | | | | |
Accounts receivable
|
| | | | (2,033,856) | | | | | | 2,064,701 | | |
Inventories
|
| | | | 985,029 | | | | | | 381,763 | | |
Prepayments and other current assets
|
| | | | 154,139 | | | | | | (194,653) | | |
Prepayments and other receivables – related parties
|
| | | | (3,249,078) | | | | | | (12,880) | | |
Income taxes
|
| | | | 632,734 | | | | | | 480,732 | | |
Right-of-use assets
|
| | | | (543,037) | | | | | | (8,785,379) | | |
Accounts payable
|
| | | | 3,511,223 | | | | | | (4,590) | | |
Accounts payables – related parties
|
| | | | (697,500) | | | | | | (3,056,519) | | |
Operating lease liabilities
|
| | | | 592,623 | | | | | | 8,849,492 | | |
Accrued expenses and other current liabilities
|
| | | | 445,612 | | | | | | (130,022) | | |
Net cash provided by operating activities
|
| | | | 5,799,759 | | | | | | 1,293,235 | | |
CASH FLOWS FROM INVESTING ACTIVITIES | | | | | | | | | | | | | |
Purchase of property and equipment
|
| | | | (76,532) | | | | | | (233,861) | | |
Net cash used in investing activities
|
| | | | (76,532) | | | | | | (233,861) | | |
CASH FLOWS FROM FINANCING ACTIVITIES | | | | | | | | | | | | | |
Net proceeds from revolving credit facility
|
| | | | 2,867,216 | | | | | | 65,716 | | |
Net changes in parent company investment
|
| | | | (7,117,514) | | | | | | (2,043,759) | | |
Net cash provided by financing activities
|
| | | | (4,250,298) | | | | | | (1,978,043) | | |
EFFECT OF EXCHANGE RATE FLUCTUATION ON CASH
|
| | | | 128,750 | | | | | | 229,662 | | |
NET CHANGE IN CASH
|
| | | | 1,601,679 | | | | | | (689,007) | | |
CASH, BEGINNING OF YEAR
|
| | | | 2,416,879 | | | | | | 3,105,886 | | |
CASH, END OF YEAR
|
| | | $ | 4,018,558 | | | | | $ | 2,416,879 | | |
SUPPLEMENTAL CASH FLOW INFORMATION | | | | | | | | | | | | | |
Cash paid during the year for interest
|
| | | | (421,393) | | | | | | (449,206) | | |
Cash received during the year for income taxes
|
| | | | 439,793 | | | | | | 99,908 | | |
NON-CASH INVESTING AND FINANCING ACTIVITIES | | | | | | | | | | | | | |
Net changes in parent company investment
|
| | | | (7,117,514) | | | | | | (2,043,759) | | |
Name
|
| |
Background
|
| |
Ownership
|
|
FGI Industries, Inc. (formerly named Foremost Groups, Inc.) | | |
•
A New Jersey corporation
•
Incorporated on January 5, 1988
•
Sales and distribution in the United States
|
| | Expected to be 100% owned by FGI | |
FGI Europe Investment Limited | | |
•
A British Virgin Islands company (incorporation of this entity is currently in process)
•
Sales and distribution in Europe
|
| | Expected to be 100% owned by FGI | |
FGI International, Limited | | |
•
A Hong Kong company
•
Incorporated on June 2, 2021
•
Sales, sourcing and product development
|
| | Expected to be 100% owned by FGI | |
Foremost International Ltd. | | |
•
A Canada company
•
Incorporated on October 17, 1997
•
Sales and distribution in Canada
|
| | 100% owned by FGI Industries, Inc. | |
FGI Germany GmbH & Co. KG
|
| |
•
A German company
•
Incorporated on January 24, 2013
•
Sales and distribution in Germany
|
| | Expected to be 100% owned by FGI Europe Investment Limited | |
FGI China, Ltd. | | |
•
A PRC limited liability company (incorporation of this entity is currently in process)
•
Sourcing and product development
|
| | 100% owned by FGI International | |
| | |
For the Years Ended
December 31, |
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
| | |
USD
|
| |
USD
|
| ||||||
Revenues
|
| | | $ | 47,126,107 | | | | | $ | 46,172,790 | | |
Cost of revenues
|
| | | | (38,743,695) | | | | | | (38,373,659) | | |
Gross profit
|
| | | | 8,382,412 | | | | | | 7,799,131 | | |
Selling and distribution expenses
|
| | | | (4,104,345) | | | | | | (6,012,731) | | |
General and administrative expenses
|
| | | | (1,824,792) | | | | | | (2,124,229) | | |
Research and development expenses
|
| | | | (800,010) | | | | | | (1,245,698) | | |
Income (loss) from operations
|
| | | $ | 1,653,265 | | | | | $ | (1,583,527) | | |
| | |
For the Years Ended
December 31, |
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
| | |
USD
|
| |
USD
|
| ||||||
Revenues
|
| | | $ | 74,357,895 | | | | | $ | 84,723,675 | | |
Cost of revenues
|
| | | | (67,213,516) | | | | | | (78,067,249) | | |
Gross profit
|
| | | | 7,144,379 | | | | | | 6,656,426 | | |
Selling and distribution expenses
|
| | | | (1,017,317) | | | | | | (1,161,929) | | |
General and administrative expenses
|
| | | | (1,181,791) | | | | | | (2,676,402) | | |
Research and development expenses
|
| | | | (72,971) | | | | | | (93,426) | | |
Income from operations
|
| | | $ | 4,872,300 | | | | | $ | 2,724,669 | | |
| | |
Useful Life
|
|
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
|
|
| | |
For the Years Ended
December 31, |
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
| | |
USD
|
| |
USD
|
| ||||||
Revenues by product line | | | | | | | | | | | | | |
Sanitaryware
|
| | | $ | 88,392,378 | | | | | $ | 90,928,256 | | |
Bath Furniture
|
| | | | 38,214,235 | | | | | | 28,558,130 | | |
Others
|
| | | | 8,221,088 | | | | | | 6,795,826 | | |
Total
|
| | | $ | 134,827,701 | | | | | $ | 126,282,212 | | |
| | |
For the Years Ended
December 31, |
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
| | |
USD
|
| |
USD
|
| ||||||
Revenues by geographic location | | | | | | | | | | | | | |
United States
|
| | | $ | 83,700,229 | | | | | $ | 76,829,764 | | |
Canada
|
| | | | 35,008,869 | | | | | | 32,105,878 | | |
Europe
|
| | | | 16,118,603 | | | | | | 17,346,570 | | |
Total
|
| | | $ | 134,827,701 | | | | | $ | 126,282,212 | | |
| | |
As of December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
| | |
USD
|
| |
USD
|
| ||||||
Accounts receivable
|
| | | $ | 18,703,026 | | | | | $ | 16,669,170 | | |
Allowance for doubtful accounts
|
| | | | (146,637) | | | | | | (156,809) | | |
Accrued defective return and discount
|
| | | | (1,218,110) | | | | | | (839,862) | | |
Accounts receivable, net
|
| | | $ | 17,338,279 | | | | | $ | 15,672,499 | | |
| | |
As of December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
| | |
USD
|
| |
USD
|
| ||||||
Beginning balance
|
| | | $ | 156,809 | | | | | $ | 244,227 | | |
Reversal
|
| | | | (10,172) | | | | | | (87,418) | | |
Ending balance
|
| | | $ | 146,637 | | | | | $ | 156,809 | | |
| | |
As of December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
| | |
USD
|
| |
USD
|
| ||||||
Beginning balance
|
| | | $ | 839,862 | | | | | $ | 1,466,890 | | |
Provision (reversal)
|
| | | | 378,248 | | | | | | (627,028) | | |
Ending balance
|
| | | $ | 1,218,110 | | | | | $ | 839,862 | | |
| | |
As of December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
| | |
USD
|
| |
USD
|
| ||||||
Finished product
|
| | | $ | 8,903,767 | | | | | $ | 10,106,782 | | |
Reserves for slow-moving inventories
|
| | | | (595,425) | | | | | | (813,411) | | |
Inventories, net
|
| | | $ | 8,308,342 | | | | | $ | 9,293,371 | | |
| | |
As of December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
| | |
USD
|
| |
USD
|
| ||||||
Beginning balance
|
| | | $ | 813,411 | | | | | $ | 889,741 | | |
Reversal
|
| | | | (217,986) | | | | | | (76,330) | | |
Ending balance
|
| | | $ | 595,425 | | | | | $ | 813,411 | | |
| | |
As of December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
| | |
USD
|
| |
USD
|
| ||||||
Prepayments
|
| | | $ | 671,924 | | | | | $ | 810,255 | | |
Others
|
| | | | 127,800 | | | | | | 143,608 | | |
Total prepayments and other assets
|
| | | $ | 799,724 | | | | | $ | 953,863 | | |
| | |
As of December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
| | |
USD
|
| |
USD
|
| ||||||
Leasehold Improvements
|
| | | $ | 1,122,092 | | | | | $ | 1,157,495 | | |
Machinery and equipment
|
| | | | 2,299,527 | | | | | | 2,486,340 | | |
Furniture and fixtures
|
| | | | 499,154 | | | | | | 492,250 | | |
Vehicles
|
| | | | 178,218 | | | | | | 176,175 | | |
Molds
|
| | | | 26,377 | | | | | | 18,251 | | |
Subtotal
|
| | | | 4,125,368 | | | | | | 4,330,511 | | |
Less: accumulated depreciation
|
| | | | (3,579,671) | | | | | | (3,535,015) | | |
Total
|
| | | $ | 545,697 | | | | | $ | 795,496 | | |
| | |
As of December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
| | |
USD
|
| |
USD
|
| ||||||
Right-of-use assets
|
| | | $ | 9,311,277 | | | | | $ | 8,785,379 | | |
Operating lease liabilities – current
|
| | | $ | 1,245,629 | | | | | $ | 1,761,260 | | |
Operating lease liabilities – noncurrent
|
| | | | 8,196,486 | | | | | | 7,088,231 | | |
Total operating lease liabilities
|
| | | $ | 9,442,115 | | | | | $ | 8,849,491 | | |
| | |
For the Years Ended
December 31, |
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
| | |
USD
|
| |
USD
|
| ||||||
Weighted-average remaining lease term | | | | | | | | | | | | | |
Operating leases
|
| |
7 years
|
| |
7 years
|
| ||||||
Weighted-average discount rate | | | | | | | | | | | | | |
Operating leases
|
| | | | 4.7% | | | | | | 4.7% | | |
|
2021
|
| | | $ | 1,631,392 | | |
|
2022
|
| | | | 1,671,751 | | |
|
2023
|
| | | | 1,580,868 | | |
|
2024
|
| | | | 1,549,033 | | |
|
2025
|
| | | | 1,242,115 | | |
|
Thereafter
|
| | | | 3,478,406 | | |
|
Total lease payments
|
| | | | 11,153,565 | | |
|
Less: imputed interest
|
| | | | (1,711,450) | | |
|
Present value of lease liabilities
|
| | | $ | 9,442,115 | | |
| | |
For the Years Ended
December 31, |
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
| | |
USD
|
| |
USD
|
| ||||||
Income components | | | | | | | | | | | | | |
United States
|
| | | $ | 80,320 | | | | | $ | (926,417) | | |
Outside United States
|
| | | | 6,424,872 | | | | | | 3,901,515 | | |
Intercompany eliminations
|
| | | | (1,000,000) | | | | | | (1,000,000) | | |
Total pre-tax income (loss)
|
| | | $ | 5,505,192 | | | | | $ | 1,975,098 | | |
Provision for (benefit of) income taxes | | | | | | | | | | | | | |
Current
|
| | | | | | | | | | | | |
Federal
|
| | | $ | — | | | | | $ | 30,958 | | |
State
|
| | | | 7,954 | | | | | | (56,416) | | |
Foreign
|
| | | | 1,066,974 | | | | | | 612,748 | | |
| | | | | 1,074,928 | | | | | | 587,290 | | |
Deferred
|
| | | | | | | | | | | | |
Federal
|
| | | | (245,174) | | | | | | (123,043) | | |
State
|
| | | | (55,310) | | | | | | (35,948) | | |
Foreign
|
| | | | — | | | | | | (24,295) | | |
| | | | | (300,484) | | | | | | (183,286) | | |
Total provision for (benefit of) income taxes
|
| | | $ | 774,444 | | | | | $ | 404,004 | | |
| | |
For the Years Ended
December 31, |
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Federal statutory rate
|
| | | | 21.0% | | | | | | 21.0% | | |
Increase (decrease) in tax rate resulting from: | | | | | | | | | | | | | |
State and local income taxes, net of federal benefit
|
| | | | (1.0) | | | | | | (6.5) | | |
Foreign operations/Other
|
| | | | (12.1) | | | | | | (5.5) | | |
Permanent items
|
| | | | 0.9 | | | | | | 0.4 | | |
Deferred rate changes
|
| | | | 0.1 | | | | | | (0.5) | | |
Foreign dividends and earnings taxable in the United States
|
| | | | 5.2 | | | | | | 11.6 | | |
Effective tax rate
|
| | | | 14.1% | | | | | | 20.5% | | |
| | |
As of December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
| | |
USD
|
| |
USD
|
| ||||||
Deferred tax assets | | | | | | | | | | | | | |
Allowance for doubtful accounts
|
| | | $ | 36,472 | | | | | $ | 39,303 | | |
Other reserve
|
| | | | 92,025 | | | | | | 130,713 | | |
Accrued expenses
|
| | | | 143,735 | | | | | | 90,169 | | |
Lease liability
|
| | | | 1,752,546 | | | | | | 1,766,104 | | |
Charitable contributions
|
| | | | 8,553 | | | | | | 8,586 | | |
Business interest limitation
|
| | | | 370,640 | | | | | | 289,160 | | |
Net operating loss, federal
|
| | | | 536,212 | | | | | | 385,106 | | |
Net operating loss, state
|
| | | | 103,489 | | | | | | 75,940 | | |
Other
|
| | | | 66,636 | | | | | | 44,770 | | |
Total deferred tax assets
|
| | | | 3,110,308 | | | | | | 2,829,851 | | |
Less: valuation allowance
|
| | | | — | | | | | | — | | |
Net deferred tax assets
|
| | | | 3,110,308 | | | | | | 2,829,851 | | |
Deferred tax liabilities | | | | | | | | | | | | | |
Fixed assets
|
| | | | 1,815,064 | | | | | | 1,835,314 | | |
Intangibles
|
| | | | 31,849 | | | | | | 53,490 | | |
Total deferred tax liabilities
|
| | | | 1,846,913 | | | | | | 1,888,804 | | |
Deferred tax assets, net of deferred tax liabilities
|
| | | $ | 1,263,395 | | | | | $ | 941,047 | | |
Name of Related Party
|
| |
Relationship
|
| |
Nature of
transactions |
| |
December 31,
2020 |
| |
December 31,
2019 |
| ||||||
| | | | | | | | |
USD
|
| |
USD
|
| ||||||
Rizhao Foremost Woodwork
Manufacturing Co., Ltd. |
| |
An entity under common control
|
| |
Purchase
|
| | | $ | 1,138,316 | | | | | $ | — | | |
Focal Capital Holding Limited
|
| |
An entity under common control
|
| |
Purchase
|
| | | | 2,098,461 | | | | | | — | | |
| | | | | | | | | | $ | 3,236,777 | | | | | $ | — | | |
Name of Related Party
|
| |
Relationship
|
| |
Nature of
transactions |
| |
December 31,
2020 |
| |
December 31,
2019 |
| ||||||
| | | | | | | | |
USD
|
| |
USD
|
| ||||||
Foremost Xingye Business
Consultancy (Shenzhen) Co., Ltd. |
| |
An entity under common control
|
| |
Miscellaneous
expenses |
| | | | 26,359 | | | | | | 14,058 | | |
| | | | | | | | | | $ | 26,359 | | | | | $ | 14,058 | | |
Name of Related Party
|
| |
Relationship
|
| |
Nature of
transactions |
| |
December 31,
2020 |
| |
December 31,
2019 |
| ||||||
| | | | | | | | |
USD
|
| |
USD
|
| ||||||
Rizhao Foremost Woodwork
Manufacturing Co., Ltd. |
| |
An entity under common control
|
| |
Purchase
|
| | | $ | — | | | | | $ | 536,533 | | |
Focal Capital Holding Limited
|
| |
An entity under common control
|
| |
Purchase
|
| | | | — | | | | | | 160,092 | | |
Sunrise Investment Limited
|
| |
An entity under common control
|
| |
Purchase
|
| | | | — | | | | | | 875 | | |
| | | | | | | | | | $ | — | | | | | $ | 697,500 | | |
| | |
As of
June 30, 2021 |
| |
As of
December 31, 2020 |
| ||||||
| | |
USD
|
| |
USD
|
| ||||||
ASSETS | | | | | | | | | | | | | |
CURRENT ASSETS | | | | | | | | | | | | | |
Cash
|
| | | $ | 3,800,610 | | | | | $ | 4,018,558 | | |
Accounts receivable, net
|
| | | | 16,067,567 | | | | | | 17,338,279 | | |
Inventories, net
|
| | | | 12,674,468 | | | | | | 8,308,342 | | |
Prepayments and other current assets
|
| | | | 974,744 | | | | | | 799,724 | | |
Prepayments and other receivables – related parties
|
| | | | 2,545,987 | | | | | | 3,263,136 | | |
Total current assets
|
| | | | 36,063,376 | | | | | | 33,728,039 | | |
PROPERTY AND EQUIPMENT, NET
|
| | | | 455,446 | | | | | | 545,697 | | |
OTHER ASSETS | | | | | | | | | | | | | |
Intangible assets
|
| | | | 85,366 | | | | | | 128,050 | | |
Right-of-use assets
|
| | | | 8,745,647 | | | | | | 9,311,277 | | |
Deferred tax assets, net
|
| | | | 1,029,549 | | | | | | 1,263,395 | | |
Other noncurrent assets
|
| | | | 4,012,295 | | | | | | 171,003 | | |
Total other assets
|
| | | | 13,872,857 | | | | | | 10,873,725 | | |
Total assets
|
| | | $ | 50,391,679 | | | | | $ | 45,147,461 | | |
LIABILITIES AND PARENT’S NET INVESTMENT | | | | | | | | | | | | | |
CURRENT LIABILITIES | | | | | | | | | | | | | |
Short-term loans
|
| | | $ | 15,751,671 | | | | | $ | 11,074,383 | | |
Accounts payable
|
| | | | 19,870,710 | | | | | | 19,510,272 | | |
Accounts payable-related parties
|
| | | | 66,502 | | | | | | — | | |
Income tax payable
|
| | | | 1,178,326 | | | | | | 580,036 | | |
Operating lease liabilities – current
|
| | | | 1,086,876 | | | | | | 1,245,629 | | |
Accrued expenses and other current liabilities
|
| | | | 4,768,273 | | | | | | 3,008,959 | | |
Total current liabilities
|
| | | | 42,722,358 | | | | | | 35,419,279 | | |
OTHER LIABILITIES | | | | | | | | | | | | | |
Operating lease liabilities – noncurrent
|
| | | | 7,773,590 | | | | | | 8,196,486 | | |
Total liabilities
|
| | | | 50,495,948 | | | | | | 43,615,765 | | |
COMMITMENTS AND CONTINGENCIES | | | | | | | | | | | | | |
PARENT’S NET INVESTMENT | | | | | | | | | | | | | |
Ordinary shares ($0.001 par value, 50,000,000 shares authorized, no shares issued and outstanding as of June 30, 2021 and December 31, 2020)
|
| | | | — | | | | | | — | | |
Parent’s net (deficit) investment
|
| | | | (104,269) | | | | | | 1,531,696 | | |
Total parent’s net (deficit) investment
|
| | | | (104,269) | | | | | | 1,531,696 | | |
Total liabilities and parent’s net investment
|
| | | $ | 50,391,679 | | | | | $ | 45,147,461 | | |
| | |
For the Six-Month Period Ended
June 30, |
| |||||||||
| | |
2021
|
| |
2020
|
| ||||||
| | |
USD
|
| |
USD
|
| ||||||
REVENUES
|
| | | $ | 78,866,047 | | | | | $ | 63,427,817 | | |
COST OF REVENUES
|
| | | | 62,360,079 | | | | | | 49,838,212 | | |
GROSS PROFIT
|
| | | | 16,505,968 | | | | | | 13,589,605 | | |
OPERATING EXPENSES | | | | | | | | | | | | | |
Selling and distribution
|
| | | | 8,029,209 | | | | | | 7,745,438 | | |
General and administrative
|
| | | | 2,982,939 | | | | | | 2,815,852 | | |
Research and development
|
| | | | 289,124 | | | | | | 385,534 | | |
Total operating expenses
|
| | | | 11,301,272 | | | | | | 10,946,824 | | |
INCOME FROM OPERATIONS
|
| | | | 5,204,696 | | | | | | 2,642,781 | | |
OTHER INCOME (EXPENSES) | | | | | | | | | | | | | |
Interest income
|
| | | | 10,778 | | | | | | 2 | | |
Interest expense
|
| | | | (167,295) | | | | | | (149,824) | | |
Other income (expenses), net
|
| | | | 1,504,947 | | | | | | (31,730) | | |
Total other income (expenses), net
|
| | | | 1,348,430 | | | | | | (181,552) | | |
INCOME BEFORE INCOME TAXES
|
| | | | 6,553,126 | | | | | | 2,461,229 | | |
PROVISION FOR INCOME TAXES | | | | | | | | | | | | | |
Current
|
| | | | 833,530 | | | | | | 309,956 | | |
Deferred
|
| | | | 250,281 | | | | | | 58,403 | | |
Total provision for income taxes
|
| | | | 1,083,811 | | | | | | 368,359 | | |
NET INCOME
|
| | | | 5,469,315 | | | | | | 2,092,870 | | |
OTHER COMPREHENSIVE INCOME | | | | | | | | | | | | | |
Foreign currency translation adjustment
|
| | | | 325,236 | | | | | | (239,804) | | |
COMPREHENSIVE INCOME
|
| | | $ | 5,794,551 | | | | | $ | 1,853,066 | | |
WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES | | | | | | | | | | | | | |
Basic and diluted
|
| | | | — | | | | | | — | | |
EARNINGS PER SHARE | | | | | | | | | | | | | |
Basic and diluted
|
| | | $ | — | | | | | $ | — | | |
| | |
Parent’s net
(deficit) investment |
| |||
BALANCE, January 1, 2021
|
| | | $ | 1,531,696 | | |
Net income for the period
|
| | | | 5,469,315 | | |
Net distribution to Parent
|
| | | | (7,430,516) | | |
Foreign currency translation adjustment
|
| | | | 325,236 | | |
BALANCE, June 30, 2021
|
| | | $ | (104,269) | | |
BALANCE, January 1, 2020
|
| | | $ | 3,620,356 | | |
Net income for the period
|
| | | | 2,092,870 | | |
Net distribution to Parent
|
| | | | (3,062,661) | | |
Foreign currency translation adjustment
|
| | | | (239,804) | | |
BALANCE, June 30, 2020
|
| | | $ | 2,410,761 | | |
| | |
For the Six Months Ended June 30,
|
| |||||||||
| | |
2021
|
| |
2020
|
| ||||||
| | |
USD
|
| |
USD
|
| ||||||
CASH FLOWS FROM OPERATING ACTIVITIES | | | | | | | | | | | | | |
Net income
|
| | | $ | 5,469,315 | | | | | $ | 2,092,870 | | |
Adjustments to reconcile net income to net cash provided by (used in) used
in operating activities |
| | | | | | | | | | | | |
Depreciation and amortization
|
| | | | 142,248 | | | | | | 169,128 | | |
Bad debt expense
|
| | | | 14,749 | | | | | | 38,688 | | |
Provision of defective return
|
| | | | 3,108,807 | | | | | | 777,884 | | |
Foreign exchange transaction loss (gain)
|
| | | | 94,316 | | | | | | (37,589) | | |
Interest expenses
|
| | | | 167,295 | | | | | | 149,824 | | |
Forgiveness of PPP loan
|
| | | | (1,680,900) | | | | | | — | | |
Deferred income taxes
|
| | | | 233,846 | | | | | | 1,642 | | |
(Gain) loss on disposal of property and equipment
|
| | | | (3,000) | | | | | | 46,235 | | |
Changes in operating assets and liabilities
|
| | | | | | | | | | | | |
Accounts receivable
|
| | | | (1,852,844) | | | | | | (888,136) | | |
Inventories
|
| | | | (4,366,126) | | | | | | 2,423,310 | | |
Prepayments and other current assets
|
| | | | (175,021) | | | | | | 198,646 | | |
Prepayments and other receivables — related parties
|
| | | | (23,294) | | | | | | (19,376) | | |
Other noncurrent assets
|
| | | | (3,841,292) | | | | | | (605,119) | | |
Income taxes
|
| | | | 598,290 | | | | | | 359,318 | | |
Accounts payable
|
| | | | 360,438 | | | | | | (2,472,458) | | |
Accounts payable-related parties
|
| | | | 807,902 | | | | | | (3,039,088) | | |
Right-of-use assets
|
| | | | 565,630 | | | | | | 245,766 | | |
Operating lease liabilities
|
| | | | (581,649) | | | | | | (201,994) | | |
Accrued expenses and other current liabilities
|
| | | | 1,591,062 | | | | | | 168,733 | | |
Net cash provided by (used in) operating activities
|
| | | | 629,772 | | | | | | (591,716) | | |
CASH FLOWS FROM INVESTING ACTIVITIES | | | | | | | | | | | | | |
Proceeds from disposal of property and equipment
|
| | | | 3,000 | | | | | | 15,000 | | |
Purchase of property and equipment
|
| | | | (4,751) | | | | | | (58,937) | | |
Net cash used in investing activities
|
| | | | (1,751) | | | | | | (43,937) | | |
CASH FLOWS FROM FINANCING ACTIVITIES | | | | | | | | | | | | | |
Net proceeds from revolving credit facility
|
| | | | 6,358,188 | | | | | | 4,730,850 | | |
Net changes in parent company investment
|
| | | | (7,430,516) | | | | | | (3,062,661) | | |
Net cash (used in) provided by financing activities
|
| | | | (1,072,328) | | | | | | 1,668,189 | | |
EFFECT OF EXCHANGE RATE FLUCTUATION ON CASH
|
| | | | 226,359 | | | | | | (207,557) | | |
NET CHANGE IN CASH
|
| | | | (217,948) | | | | | | 824,979 | | |
CASH, BEGINNING OF YEAR
|
| | | | 4,018,558 | | | | | | 2,416,879 | | |
CASH, END OF YEAR
|
| | | $ | 3,800,610 | | | | | $ | 3,241,858 | | |
SUPPLEMENTAL CASH FLOW INFORMATION | | | | | | | | | | | | | |
Cash paid during the period for interest
|
| | | | (163,956) | | | | | | (151,178) | | |
Cash paid during the period for income taxes
|
| | | | (251,354) | | | | | | (4,460) | | |
NON-CASH INVESTING AND FINANCING ACTIVITIES | | | | | | | | | | | | | |
Net changes in parent company investment
|
| | | | (7,430,516) | | | | | | (3,062,661) | | |
Name
|
| |
Background
|
| |
Ownership
|
|
FGI Industries, Inc.
(formerly named Foremost Groups, Inc.) |
| |
•
A New Jersey corporation
•
Incorporated on January 5, 1988
•
Sales and distribution in the United States
|
| | Expected to be 100% owned by FGI | |
FGI Europe Investment Limited | | |
•
A British Virgin Islands company (incorporation of this entity is currently in process)
|
| | Expected to be 100% owned by FGI | |
FGI International, Limited | | |
•
A Hong Kong company
•
Incorporated on June 2, 2021
•
Sales, sourcing and product development
|
| | Expected to be 100% owned by FGI | |
Foremost International Ltd. | | |
•
A Canada company
•
Incorporated on October 17, 1997
•
Sales and distribution in Canada
|
| | 100% owned by FGI Industries, Inc. | |
FGI Germany GmbH & Co. KG | | |
•
A German company
•
Incorporated on January 24, 2013
•
Sales and distribution in Germany
|
| | Expected to be 100% owned by FGI Europe Investment Limited | |
FGI China, Ltd. | | |
•
A PRC limited liability company (incorporation of this entity is currently in process)
•
Sourcing and product development
|
| | 100% owned by FGI International, Limited | |
| | |
For the Six Months Ended June 30,
|
| |||||||||
| | |
2021
|
| |
2020
|
| ||||||
| | |
USD
|
| |
USD
|
| ||||||
Revenues
|
| | | $ | 33,580,454 | | | | | $ | 28,381,519 | | |
Cost of revenues
|
| | | | (28,739,239) | | | | | | (23,924,383) | | |
Gross profit
|
| | | | 4,841,215 | | | | | | 4,457,136 | | |
Selling and distribution expenses
|
| | | | (2,327,917) | | | | | | (2,398,651) | | |
General and administrative expenses
|
| | | | (769,250) | | | | | | (934,953) | | |
Research and development expenses
|
| | | | (313,947) | | | | | | (470,214) | | |
Income from operations
|
| | | $ | 1,430,101 | | | | | $ | 653,318 | | |
| | |
For the Six Months Ended June 30,
|
| |||||||||
| | |
2021
|
| |
2020
|
| ||||||
| | |
USD
|
| |
USD
|
| ||||||
Revenues
|
| | | $ | 49,710,413 | | | | | $ | 34,147,100 | | |
Cost of revenues
|
| | | | (43,128,324) | | | | | | (31,082,167) | | |
Gross profit
|
| | | | 6,582,089 | | | | | | 3,064,933 | | |
Selling and distribution expenses
|
| | | | (974,069) | | | | | | (611,302) | | |
General and administrative expenses
|
| | | | (605,026) | | | | | | (572,867) | | |
Research and development expenses
|
| | | | (54,804) | | | | | | (20,186) | | |
Income from operations
|
| | | $ | 4,948,190 | | | | | $ | 1,860,578 | | |
| | |
Useful Life
|
|
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
|
|
| | |
For the Six Months
Ended June 30, |
| |||||||||
| | |
2021
|
| |
2020
|
| ||||||
| | |
USD
|
| |
USD
|
| ||||||
Revenues by product line | | | | | | | | | | | | | |
Sanitaryware
|
| | | $ | 43,535,821 | | | | | $ | 41,432,365 | | |
Bath Furniture
|
| | | | 27,439,887 | | | | | | 17,924,406 | | |
Others
|
| | | | 7,890,339 | | | | | | 4,071,046 | | |
Total
|
| | | $ | 78,866,047 | | | | | $ | 63,427,817 | | |
| | |
For the Six Months
Ended June 30, |
| |||||||||
| | |
2021
|
| |
2020
|
| ||||||
| | |
USD
|
| |
USD
|
| ||||||
Revenues by geographic location | | | | | | | | | | | | | |
United States
|
| | | $ | 51,297,861 | | | | | $ | 40,316,389 | | |
Canada
|
| | | | 18,518,691 | | | | | | 15,880,144 | | |
Europe
|
| | | | 9,049,495 | | | | | | 7,231,284 | | |
Total
|
| | | $ | 78,866,047 | | | | | $ | 63,427,817 | | |
| | |
As of
June 30, 2021 |
| |
As of
December 31, 2020 |
| ||||||
| | |
USD
|
| |
USD
|
| ||||||
Accounts receivable
|
| | | $ | 20,555,870 | | | | | $ | 18,703,026 | | |
Allowance for doubtful accounts
|
| | | | (161,386) | | | | | | (146,637) | | |
Accrued defective return and discount
|
| | | | (4,326,917) | | | | | | (1,218,110) | | |
Accounts receivable, net
|
| | | $ | 16,067,567 | | | | | $ | 17,338,279 | | |
| | |
As of
June 30, 2021 |
| |
As of
December 31, 2020 |
| ||||||
| | |
USD
|
| |
USD
|
| ||||||
Beginning balance
|
| | | $ | 146,637 | | | | | $ | 156,809 | | |
Addition (reversal)
|
| | | | 14,749 | | | | | | (10,172) | | |
Ending balance
|
| | | $ | 161,386 | | | | | $ | 146,637 | | |
| | |
As of
June 30, 2021 |
| |
As of
December 31, 2020 |
| ||||||
| | |
USD
|
| |
USD
|
| ||||||
Beginning balance
|
| | | $ | 1,218,110 | | | | | $ | 839,862 | | |
Provision
|
| | | | 3,108,807 | | | | | | 378,248 | | |
Ending balance
|
| | | $ | 4,326,917 | | | | | $ | 1,218,110 | | |
| | |
As of
June 30, 2021 |
| |
As of
December 31, 2020 |
| ||||||
| | |
USD
|
| |
USD
|
| ||||||
Finished product
|
| | | $ | 13,217,598 | | | | | $ | 8,903,767 | | |
Reserves for slow-moving inventories
|
| | | | (543,130) | | | | | | (595,425) | | |
Inventories, net
|
| | | $ | 12,674,468 | | | | | $ | 8,308,342 | | |
| | |
As of
June 30, 2021 |
| |
As of
December 31, 2020 |
| ||||||
| | |
USD
|
| |
USD
|
| ||||||
Beginning balance
|
| | | $ | 595,425 | | | | | $ | 813,411 | | |
(Reversal)
|
| | | | (52,295) | | | | | | (217,986) | | |
Ending balance
|
| | | $ | 543,130 | | | | | $ | 595,425 | | |
| | |
As of
June 30, 2021 |
| |
As of
December 31, 2020 |
| ||||||
| | |
USD
|
| |
USD
|
| ||||||
Prepayments
|
| | | $ | 949,301 | | | | | $ | 671,924 | | |
Others
|
| | | | 25,443 | | | | | | 127,800 | | |
Total prepayments and other assets
|
| | | $ | 974,744 | | | | | $ | 799,724 | | |
| | |
As of
June 30, 2021 |
| |
As of
December 31, 2020 |
| ||||||
| | |
USD
|
| |
USD
|
| ||||||
Leasehold Improvements
|
| | | $ | 1,128,110 | | | | | $ | 1,122,092 | | |
Machinery and equipment
|
| | | | 2,260,398 | | | | | | 2,299,527 | | |
Furniture and fixtures
|
| | | | 501,870 | | | | | | 499,154 | | |
Vehicles
|
| | | | 178,390 | | | | | | 178,218 | | |
Molds
|
| | | | 26,377 | | | | | | 26,377 | | |
Subtotal
|
| | | | 4,095,145 | | | | | | 4,125,368 | | |
Less: accumulated depreciation
|
| | | | (3,639,699) | | | | | | (3,579,671) | | |
Total
|
| | | $ | 455,446 | | | | | $ | 545,697 | | |
| | |
As of
June 30, 2021 |
| |
As of
December 31, 2020 |
| ||||||
| | |
USD
|
| |
USD
|
| ||||||
Right-of-use assets
|
| | | $ | 8,745,647 | | | | | $ | 9,311,277 | | |
Operating lease liabilities – current
|
| | | $ | 1,086,876 | | | | | $ | 1,245,629 | | |
Operating lease liabilities – noncurrent
|
| | | | 7,773,590 | | | | | | 8,196,486 | | |
Total operating lease liabilities
|
| | | $ | 8,860,466 | | | | | $ | 9,442,115 | | |
| | |
As of
June 30, 2021 |
| |
As of
December 31, 2020 |
| ||||||
| | |
USD
|
| |
USD
|
| ||||||
Weighted-average remaining lease term | | | | | | | | | | | | | |
Operating leases
|
| |
5.8 years
|
| |
6.1 years
|
| ||||||
Weighted-average discount rate | | | | | | | | | | | | | |
Operating leases
|
| | | | 4.7% | | | | | | 4.7% | | |
|
2022
|
| | | $ | 1,667,949 | | |
|
2023
|
| | | | 1,683,300 | | |
|
2024
|
| | | | 1,611,960 | | |
|
2025
|
| | | | 1,466,290 | | |
|
2026
|
| | | | 1,191,935 | | |
|
Thereafter
|
| | | | 2,946,945 | | |
|
Total lease payments
|
| | | | 10,568,379 | | |
|
Less: imputed interest
|
| | | | (1,707,913) | | |
|
Present value of lease liabilities
|
| | | $ | 8,860,466 | | |
| | |
For the Six Months
Ended June 30, |
| |||||||||
| | |
2021
|
| |
2020
|
| ||||||
| | |
USD
|
| |
USD
|
| ||||||
Income components | | | | | | | | | | | | | |
United States
|
| | | $ | 1,036,967 | | | | | $ | 45,221 | | |
Outside United States
|
| | | | 5,516,159 | | | | | | 2,416,006 | | |
Total pre-tax income
|
| | | $ | 6,553,126 | | | | | $ | 2,461,227 | | |
Provision for income taxes | | | | | | | | | | | | | |
Current
|
| | | | | | | | | | | | |
Federal
|
| | | $ | — | | | | | $ | — | | |
State
|
| | | | 7,837 | | | | | | 7,214 | | |
Foreign
|
| | | | 825,693 | | | | | | 302,742 | | |
| | | | | 833,530 | | | | | | 309,956 | | |
Deferred
|
| | | | | | | | | | | | |
Federal
|
| | | | 241,767 | | | | | | 24,219 | | |
State
|
| | | | 8,514 | | | | | | 33,069 | | |
Foreign
|
| | | | — | | | | | | 1,115 | | |
| | | | | 250,281 | | | | | | 58,403 | | |
Total provision for income taxes
|
| | | $ | 1,083,811 | | | | | $ | 368,359 | | |
| | |
For the Six Months
Ended June 30, |
| |||||||||
| | |
2021
|
| |
2020
|
| ||||||
Federal statutory rate
|
| | | | 21.0% | | | | | | 21.0% | | |
Increase (decrease) in tax rate resulting from: | | | | | | | | | | | | | |
State and local income taxes, net of federal benefit
|
| | | | 0.2 | | | | | | 1.1 | | |
Foreign operations
|
| | | | (5.3) | | | | | | (5.7) | | |
Permanent items
|
| | | | (4.6) | | | | | | 0.7 | | |
Deferred rate changes
|
| | | | — | | | | | | 0.1 | | |
Foreign dividends and earnings taxable in the United States
|
| | | | 1.3 | | | | | | 2.2 | | |
Others
|
| | | | 3.9 | | | | | | (4.4) | | |
Effective tax rate
|
| | | | 16.5% | | | | | | 15.0% | | |
| | |
As of
June 30, 2021 |
| |
As of
December 31, 2020 |
| ||||||
| | |
USD
|
| |
USD
|
| ||||||
Deferred tax assets | | | | | | | | | | | | | |
Allowance for doubtful accounts
|
| | | $ | 40,140 | | | | | $ | 48,623 | | |
Other reserve
|
| | | | 84,425 | | | | | | 84,648 | | |
Accrued expenses
|
| | | | 175,785 | | | | | | 99,078 | | |
Lease liability
|
| | | | 1,851,543 | | | | | | 1,752,546 | | |
Charitable contributions
|
| | | | 8,520 | | | | | | 8,520 | | |
Business interest limitation
|
| | | | 298,271 | | | | | | 254,291 | | |
Net operating loss – federal
|
| | | | 376,615 | | | | | | 217,017 | | |
Net operating loss – state
|
| | | | 60,124 | | | | | | 26,369 | | |
Other
|
| | | | 67,889 | | | | | | 625,028 | | |
Total deferred tax assets
|
| | | | 2,963,312 | | | | | | 3,116,120 | | |
Less: valuation allowance
|
| | | | — | | | | | | — | | |
Net deferred tax assets
|
| | | | 2,963,312 | | | | | | 3,116,120 | | |
Deferred tax liabilities | | | | | | | | | | | | | |
Fixed assets
|
| | | | 1,912,531 | | | | | | 1,810,260 | | |
Intangibles
|
| | | | 21,232 | | | | | | 42,465 | | |
Total deferred tax liabilities
|
| | | | 1,933,763 | | | | | | 1,852,725 | | |
Deferred tax assets, net of deferred tax liabilities
|
| | | $ | 1,029,549 | | | | | $ | 1,263,395 | | |
Name of Related Party
|
| |
Relationship
|
| |
Nature of
transactions |
| |
June 30,
2021 |
| |
December 31,
2020 |
| ||||||
| | | | | | | | |
USD
|
| |
USD
|
| ||||||
Rizhao Foremost Woodwork
Manufacturing Co., Ltd. |
| |
An entity under common control
|
| | Purchase | | | | $ | 2,495,376 | | | | | $ | 1,138,316 | | |
Focal Capital Holding Limited
|
| |
An entity under
common control |
| | Purchase | | | | | — | | | | | | 2,098,461 | | |
| | | | | | | | | | $ | 2,495,376 | | | | | $ | 3,236,777 | | |
Name of Related Party
|
| |
Relationship
|
| |
Nature of
transactions |
| |
June 30,
2021 |
| |
December 31,
2020 |
| ||||||
| | | | | | | | |
USD
|
| |
USD
|
| ||||||
Foremost Xingye Business Consultancy
(Shenzhen) Co., Ltd. |
| |
An entity under
common control |
| |
Miscellaneous
expenses |
| | | | 49,653 | | | | | | 26,359 | | |
Full Leader Holding Limited
|
| |
An entity under
common control |
| |
Miscellaneous
expenses |
| | | | 229 | | | | | | — | | |
Focal Capital Holding Limited
|
| |
An entity under
common control |
| |
Miscellaneous
expenses |
| | | | 729 | | | | | | — | | |
| | | | | | | | | | $ | 50,611 | | | | | $ | 26,359 | | |
Name of Related Party
|
| |
Relationship
|
| |
Nature of
transactions |
| |
June 30,
2021 |
| |
December 31,
2020 |
| ||||||
| | | | | | | | |
USD
|
| |
USD
|
| ||||||
Focal Capital Holding Limited
|
| |
An entity under
common control |
| | Purchase | | | | | 66,502 | | | | | | — | | |
| The Benchmark Company | | | Northland Capital Markets | |
Item
|
| |
Amount
|
| |||
SEC registration fee
|
| | | $ | 1,919.62 | | |
FINRA filing fee
|
| | | | 3,500.00 | | |
Nasdaq Capital Market listing fee
|
| | | | 5,000 | | |
Printing expenses
|
| | | | * | | |
Legal fees and expenses
|
| | | | * | | |
Accounting fees and expenses
|
| | | | * | | |
Transfer agent fees and expenses
|
| | | | * | | |
Miscellaneous expenses
|
| | | | * | | |
Total
|
| | | $ | * | | |
Exhibit
Number |
| |
Exhibit Description
|
|
1.1* | | | Form of Underwriting Agreement | |
3.1* | | | Memorandum and Articles of Association | |
3.2* | | | Form of Amended and Restated Memorandum and Articles of Association | |
4.1* | | | Specimen Ordinary Share Certificate | |
4.2* | | | Form of Representative’s Warrant | |
5.1* | | | Opinion of Faegre Drinker Biddle & Reath LLP | |
5.2* | | | Opinion of Travers Thorp Alberga | |
10.1* | | |
Agreement for Co-operations, dated October 20, 2020, by and between FGI Industries, Inc. and Tangshan Huida Ceramic Group Co., Ltd
|
|
10.2* | | |
Shared Services Agreement dated [ ], 2021, by and between FGI Industries, Inc. and Foremost Home Industries, Inc.
|
|
10.3* | | |
Shared Services Agreement dated [ ], 2021, by and between FGI Industries Ltd. and Foremost Worldwide Co., Ltd.
|
|
21.1* | | | Subsidiaries of the Registrant | |
23.1 | | | | |
23.2* | | | Consent of Faegre Drinker Biddle & Reath LLP (included in Exhibit 5.1) | |
23.3* | | | Consent of Travers Thorp Alberga (included in Exhibit 5.2) | |
Exhibit
Number |
| |
Exhibit Description
|
|
24.1* | | | Power of Attorney (included on the signature page to this registration statement) | |
|
Signature
|
| |
Title
|
| |
Date
|
|
|
/s/ David Bruce
David Bruce
|
| |
Chief Executive Officer and Director
(Principal Executive Officer) |
| |
September 10, 2021
|
|
|
/s/ Perry Lin
Perry Lin
|
| |
Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer) |
| |
September 10, 2021
|
|
|
/s/ John Chen
John Chen
|
| | Executive Chairman and Director | | |
September 10, 2021
|
|
|
/s/ Todd Heysse
Todd Heysse
|
| | Director | | |
September 10, 2021
|
|
|
/s/ Kellie Zesch Weir
Kellie Zesch Weir
|
| | Director | | |
September 10, 2021
|
|
|
/s/ Jae Chung
Jae Chung
|
| | Director | | |
September 10, 2021
|
|
Exhibit 23.1
Independent Registered Public Accounting Firm’s Consent
We consent to the inclusion in this Registration Statement of FGI Industries Ltd. on Form S-1 of our report dated June 06, 2021, with respect to our audits of the consolidated financial statements of FGI Industries Ltd as of December 31, 2020 and 2019 and for each of the two years in the period ended December 31, 2020 which report appears in the Prospectus, which is part of this Registration Statement. We also consent to the reference to our Firm under the heading “Experts” in such Prospectus.
/s/ Marcum llp
Marcum llp
Melville, NY
September 10, 2021