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Related Party Transactions and Balances

12 Months Ended

Dec. 31, 2023

Related Party Transactions [Abstract]

Related Party Transactions and Balances

Note 12 — Related party transactions and balances

Sales/ Purchase from a related party – consisted of the following:

​	​	​	​	​	​	​	​	​	​	​
​		​		Nature of		For the Year Ended December 31,
Name of Related Party	​	Relationship	​	transactions	​	2023		​	2022
​	​	​	​	​	​	USD		​	USD
Focal Capital Holding Limited	​	An entity under common control	​	Purchase	​	$	7,003,714	​	$	9,850,083
Foremost Worldwide Co., Ltd		An entity under common control		Purchase	​	​	2,308,468	​	​	5,812,457
F.P.Z. FURNITURE (CAMBODIA) CO., LTD	​	An entity under common control	​	Purchase	​	​	575,061	​	​	—
Foremost Australasia Pty Ltd	​	An entity under common control		Purchase	​	​	409,777	​	​	—
RIZHAO FOREMOST WOODWORK MANUFACTURING CO. LTD	​	An entity under common control		Purchase	​	​	16,026	​	​	—
​	​	​	​	​	​	$	10,313,046	​	$	15,662,540

​

​	​	​	​	​	​	​	​	​	​	​
​		​		Nature of	​	For the Year Ended December 31,
Name of Related Party	​	Relationship	​	transactions	​	2023		​	2022
​	​	​	​	​	​	USD		​	USD
Foremost Worldwide Co., Ltd		An entity under common control		Sales	​	$	—	​	$	593,578
​	​	​	​	​	​	$	—	​	$	593,578

​

The ending balance of such transactions as of December 31, 2023 and December 31, 2022, are listed of the following:

Prepayments — related parties

​	​	​	​	​	​	​
​	​	As of		​	As of
​		December 31,			December 31,
Name of Related Party	​	2023		​	2022
​	​	USD		​	USD
​	​	​		​	​
Focal Capital Holding Limited	​	$	6,658,498	​	$	3,806,873
Rizhao Foremost Woodwork Manufacturing Co., Ltd.	​	​	9,181	​	​	—
​	​	$	6,667,679	​	$	3,806,873

​

Accounts Payables — related parties

​	​	​	​	​	​	​
​	​	As of		​	As of
​		December 31,			December 31,
Name of Related Party	​	2023		​	2022
​	​	USD		​	USD
​	​	​		​	​
Foremost Worldwide Co., Ltd		$	735,308	​	$	104,442
​	​	$	735,308	​	$	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 years ended December 31, 2023 and 2022 were $821,864 and $1,122,996, respectively, which were booked under selling and distribution expenses and administration expenses.

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 years ended December 31, 2023 and 2022 were $304,103 and $126,745, respectively.

The ending balance as of December 31, 2023 and December 31, 2022, are listed of the following:

​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	As of		​	As of
​		​		Nature of		December 31,			December 31,
Name of Related Party	​	Relationship	​	transactions	​	2023		​	2022
​	​	​	​	​	​	USD		​	USD
​	​	​	​	​	​	​		​	​
Foremost Home Inc. (“FHI”)	​	An entity under common control	​	Shared services and Miscellaneous expenses	​	​	1,183,612	​	​	1,879,249
Foremost Worldwide Co., Ltd	​	An entity under common control	​	Shared services and Miscellaneous expenses	​	​	(251,008)	​	​	(42,473)
​	​	​	​	​	​	$	932,604	​	$	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-lease the land use right with an initial term of 50 years in amount of $1,963,521. As 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 49.89% of the voting control of Foremost, the Company’s majority shareholder and guarantor of the loan obtained by FGI Industries from East West Bank under the Credit Agreement. See Note 8 for details.

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- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

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