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What changed in FG Nexus Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of FG Nexus Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+249 added−253 removedSource: 10-K (2025-03-31) vs 10-K (2024-03-14)

Top changes in FG Nexus Inc.'s 2024 10-K

249 paragraphs added · 253 removed · 89 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeWe are not a party to any collective bargaining agreement and believe that relations with our employees are satisfactory. Website Our corporate website is www.fundamentalglobal.com. A copy of our Code of Ethics can be found in the Governance Documents section of our website. Information contained at the website is not a part of this report.
Biggest changeA copy of our Code of Ethics can be found in the Governance Documents section of our website. Information contained at the website is not a part of this report. Human Capital Resources We employed 130 persons at December 31, 2024, all of which were full-time.
Upon completion of the merger, the combined company would be renamed to Fundamental Global Inc. and the common stock and Series A cumulative preferred stock of the combined company would continue to trade on the Nasdaq under the tickers “FGF” and “FGFPP,” respectively.
Upon completion of the Merger, the combined company was renamed to Fundamental Global Inc., and the common stock and Series A cumulative preferred stock of the combined company continued to trade on the Nasdaq Stock Market LLC (the “Nasdaq”) under the tickers “FGF” and “FGFPP,” respectively. On May 3, 2024, Strong Global Entertainment, Inc.
Under the plan of the merger, FGH common stockholders would receive one share of FGF common stock for each share of common stock of FGH held by such stockholder.
In connection with the Merger, FGH common stockholders received one share of FGF common stock for each share of common stock of FGH held by such stockholder.
SPAC Platform and Merchant Banking On December 21, 2020, we formed FG Management Solutions LLC (“FGMS”), formerly known as FG SPAC Solutions, LLC, a Delaware company, to facilitate the launch of our “SPAC Platform.” Under the SPAC Platform, we provide various strategic, administrative, and regulatory support services to newly formed SPACs for a monthly fee.
We manage our merchant banking and asset management activities through FG Management Solutions LLC (“FGMS”), formerly known as FG SPAC Solutions, LLC. Merchant banking services include various strategic, administrative, and regulatory support services to newly formed SPACs (our “SPAC Platform”).
Additionally, the Company co-founded a partnership, FG Merchant Partners, LP (“FGMP”), formerly known as FG SPAC Partners, LP, to participate as a co-sponsor for newly formed SPACs. In the third quarter of 2022, the Company announced the expansion of its growth strategy through the formation of a merchant banking division. Employees As of December 31, 2023, we had six employees.
Additionally, the Company co-founded a partnership, FG Merchant Partners, LP (“FGMP”), formerly known as FG SPAC Partners, LP, to participate as a co-sponsor for newly formed SPACs and other merchant banking clients. Our merchant banking group provides advisory services, facilitates capital formation and allocates capital to equity holdings.
Removed
ITEM 1. BUSINESS Recent Developments On January 3, 2024, FG Financial Group, Inc. (“FGF”) and FG Group Holdings, Inc. (NYSE American: FGH) (“FGH”), signed a definitive plan of merger to combine the companies in an all-stock transaction. The plan of merger and transaction were unanimously approved by the independent members of the Board of Directors of both FGF and FGH.
Added
ITEM 1. BUSINESS Fundamental Global Inc. (“FG”, “FGF” or the “Company”, “we”, or “us”) is a holding company incorporated in the state of Nevada. On Decem ber 9, 2022, FG completed its reincorporation from a Delaware corporation to a Nevada corporation. Our Common Stock and Series A Preferred are currently listed on Nasdaq under the symbols “FGF” and “FGFPP,” respectively.
Removed
On February 29, 2024, FGF and FGH completed the previously announced merger transaction pursuant to the Plan of Merger, dated as of January 3, 2024, by and among FGF, FGH and FG Group LLC, a Nevada limited liability company and wholly owned subsidiary of FGF (the “Merger Sub”).
Added
The address of FG’s principal executive offices is 108 Gateway Blvd, Suite 204, Mooresville, North Carolina 28117 , and its telephone number is (704) 994-8279 . Recent Developments On February 29, 2024, FGF and FG Group Holdings, Inc. (“FGH”) closed a plan of merger to combine the companies in an all-stock transaction (the “Merger”).
Removed
Pursuant to the terms of the Merger Agreement and in accordance with the Nevada Revised Statutes, FGH merged with and into the Merger Sub (the “Merger”), with the Merger Sub as the surviving entity and wholly owned subsidiary of FGF.
Added
(“Strong Global Entertainment” or “SGE”) entered into an acquisition agreement (the “Acquisition Agreement”) with FG Acquisition Corp. (“FGAC”), a special purpose acquisition company (“SPAC”), Strong/MDI Screen Systems, Inc. (“Strong/MDI”), FGAC Investors LLC, and CG Investments VII Inc. The transaction closed on September 25, 2024.
Removed
Following the Merger, on February 29, 2024, the Company amended its Amended and Restated Articles of Incorporation to change its name to Fundamental Global Inc. Effective immediately following the closing of the Merger, the Board of Directors of the Company increased in size from six to seven directors. In connection with the closing of the Merger, E.
Added
As part of the closing, FGAC was renamed Saltire Holdings, Ltd (“Saltire”), and Saltire acquired all of the outstanding shares of one of the Company’s indirect wholly-owned subsidiaries, Strong/MDI. As a result of the acquisition, Strong/MDI became a wholly-owned subsidiary of Saltire.
Removed
Gray Payne and Larry G. Swets, Jr., resigned from the Board. In addition, in accordance with the terms of the Plan of Merger and effective immediately following the closing of the Merger each of Michael C. Mitchell, Ndamukong Suh, and Robert J. Roschman were appointed to the Board. The Board has determined that all of its directors, except for D.
Added
On May 30, 2024, the Company and Strong Global Entertainment, an operating company in which we held approximately 76% of the Class A common shares, entered into a definitive arrangement agreement and plan of arrangement to combine the companies in an all-stock transaction (the “Arrangement”).
Removed
Kyle Cerminara, are “independent directors” as such term is defined by the applicable rules and regulations of the SEC and Nasdaq. In connection with the Merger, Larry G. Swets, President and Chief Executive Officer of FGF prior to the closing of the Merger, and Hassan R.
Added
Upon completion of the Arrangement, the stockholders of Strong Global Entertainment received 1.5 common shares of the Company for each share of Strong Global Entertainment. The transaction closed on September 30, 2024.
Removed
Baqar, Executive Vice President and Chief Financial Officer of FGF prior to the closing of the Merger, resigned from their respective positions with the combined company. Messrs. Swets and Baqar will remain with the combined company leading the merchant banking and SPAC businesses. Effective as of the closing of the Merger, the Board appointed D.
Added
Following the closing, Strong Global Entertainment ceased to exist, and its common shares were delisted from NYSE American LLC (“NYSE American”) and deregistered under the Securities Exchange Act of 1934 (the “Exchange Act”).
Removed
Kyle Cerminara as Chief Executive Officer and Mark D. Roberson as Chief Financial Officer of Fundamental Global Inc. Unless stated otherwise, all information included within this Annual Report relates to information that precedes the Merger with FGH. Overview Fundamental Global Inc.
Added
As the Company was the majority shareholder of Strong Global Entertainment, the financial results of Strong Global Entertainment are presented on a consolidated basis in the Company’s consolidated financial statements included in this Annual Report on Form 10-K (this “Form 10-K”).
Removed
(“FGF”, the “Company”, “we”, or “us”), formerly known as FG Financial Group, Inc., is a reinsurance, merchant banking and asset management holding company. We focus on opportunistic collateralized and loss-capped reinsurance, while allocating capital to merchant banking activities. The Company’s principal business operations are conducted through its subsidiaries and affiliates.
Added
On October 10, 2024, the Company’s Board of Directors (the “Board”) approved a reverse stock split of the Company’s authorized, issued and outstanding shares of the Company’s common stock at a ratio of one (1)-for-twenty-five (25) (the “Reverse Stock Split”). The Reverse Stock Split became effective on October 31, 2024 (the “Effective Date”), at 5:00 p.m., Eastern Time.
Removed
As of December 31, 2023, FG Financial Holdings, LLC (“FG”), a private partnership focused on long-term strategic holdings, and its affiliated entity, collectively beneficially owned approximately 54.6% of our common stock. D. Kyle Cerminara, Chairman of our Board of Directors, serves as Chief Executive Officer, Co-Founder and Partner of FG. Reincorporation Effective at 5:01 p.m.
Added
The Company’s common shares began trading on a split-adjusted basis at the commencement of trading on November 1, 2024. All equity awards outstanding immediately prior to the Reverse Stock Split were adjusted to reflect the Reverse Stock Split.
Removed
ET on December 9, 2022, the Company completed its reincorporation from a Delaware corporation to a Nevada corporation (the “Reincorporation”). The Reincorporation was accomplished by means of a merger by and between the Company and its former wholly owned subsidiary FG Financial Group, Inc., a Nevada corporation.
Added
As a result of the Reverse Stock Split, all references to the Company’s common stock in this Form 10-K have been adjusted to reflect the Reverse Stock Split.
Removed
As of December 9, 2022, the rights of the Company’s stockholders began to be governed by the Nevada corporation laws, our Amended and Restated Nevada Articles of Incorporation and our Nevada Bylaws. The Reincorporation was approved by the Company’s stockholders at a special meeting held on December 6, 2022.
Added
Overview and Current Business Operations Fundamental Global is a holding company that focuses on allocating capital to our business operations including our managed services and merchant banking business and related real estate and equity holdings. Continuing Operations We currently have two operating business segments, merchant banking and managed services.
Removed
Other than the change in the state of incorporation, the Reincorporation did not result in any change in the business, physical location, management, assets, liabilities or net worth of the Company, nor did it result in any change in location of the Company’s employees, including the Company’s management.
Added
In our SPAC Platform, this also includes launching, sponsoring and providing strategic, administrative, and regulatory support services to newly formed SPACs. Our merchant banking division has facilitated the launch of several new companies, including FG Communities, Inc.
Removed
The Reincorporation did not alter any stockholder’s percentage ownership interest or number of shares owned in the Company and the Company’s common stock continues to be quoted on the Nasdaq Global Market under the same symbol “FGF” and the 8.00% Cumulative Preferred Stock, Series A of the Company continues to be quoted on the Nasdaq Global Market under the same symbol, “FGFPP.” Current Business Our strategy has evolved to focus on opportunistic collateralized and loss capped reinsurance, with capital allocation to merchant banking activities with asymmetrical risk/reward opportunities.
Added
(“FGC”), a self-managed real estate company focused on a growing portfolio of manufactured housing communities that are owned and operated by FGC, and Saltire, a Canadian public company that allocates capital to equity, debt and/or hybrid securities of high-quality private companies, among others. 3 Our wholly-owned subsidiary and managed services business, Strong Technical Services (“STS”), is a leader in the entertainment industry providing mission critical products and services to cinema exhibitors and entertainment venues for over 90 years.
Removed
As part of our refined focus, we have adopted the following capital allocation philosophy: “ Grow intrinsic value per share with a long-term focus using fundamental research , allocating capital to asymmetric risk/reward opportunities.” Currently, the business operates as a diversified holding company of insurance, reinsurance, asset management, our Special Purpose Acquisition Corporation “SPAC” Platform businesses, and our merchant banking division.
Added
STS provides comprehensive managed service offerings including remote network operating center support, on-site field service, content delivery, installation and other services designed to support cinema and entertainment operators. Discontinued Operations The Company operates a reinsurance business, which has been classified as assets held for sale as of December 31, 2024.
Removed
Insurance Sponsor Protection Coverage and Risk, Inc. has been formed as a special purpose captive in South Carolina to provide reinsurance coverage for Sides A, B, & C Directors and Officers Liability insurance coverage for related and unrelated entities of FG Reinsurance Ltd (“FGRe”).
Added
The Company entered into an agreement for the sale of a portion of its reinsurance business for $5.6 million, which it expects to close in the first half of 2025. The Company also intends to sell the remaining portion of the reinsurance business in 2025. The Company previously operated Strong Studios and Strong/MDI.
Removed
These will include SPAC entities engaged in the services or business of taking companies public, as well as small cap businesses performing an initial public offering. Sponsor Protection Coverage and Risk, Inc. has yet to write any business. Reinsurance The Company’s wholly owned reinsurance subsidiary, FGRe, a Cayman Islands limited liability company, provides specialty property and casualty reinsurance.
Added
Those business units were sold in 2024 and are no longer part of the Company’s consolidated operations as of December 31, 2024. These discontinued business units are more fully described in Item 8, Note 5, in the Notes to the Consolidated Financial Statements included in this Form 10-K. Website Our corporate website is www.fundamentalglobal.com.
Removed
FGRe has been granted a Class B (iii) insurer license in accordance with the terms of The Insurance Act (as revised) of the Cayman Islands and underlying regulations thereto and is subject to regulation by the Cayman Islands Monetary Authority (the “Authority”).
Added
Of these employees, 31 positions were considered operational, 67 were service related and 32 were considered sales and administrative. We are not a party to any collective bargaining agreement. The Company believes it complies with all applicable provincial, state, local and applicable international laws governing nondiscrimination in employment in every location in which the Company operates.
Removed
The terms of the license require advance approval from the Authority should FGRe wish to enter into any reinsurance agreements which are not fully collateralized. As of December 31, 2023, the Company had eight active reinsurance contracts, including participating in a Funds at Lloyds (“FAL”) syndicate covering risks written by the syndicate during the 2021, 2022 and 2023 calendar years.
Added
All applicants and employees are treated with the same high level of respect regardless of their gender, ethnicity, religion, national origin, age, marital status, political affiliation, sexual orientation, gender identity, disability or protected veteran status.
Removed
In addition, during 2023, the Company began to focus on growing fee-based revenue through FG Re Solutions, Ltd. 3 Asset Management FG Strategic Consulting, LLC, (“FGSC”) a wholly owned subsidiary of the Company, provides investment advisory services, including identifying, analyzing and recommending potential investments, advising as to existing investments and investment optimization, recommending investment dispositions, and providing advice regarding macro-economic conditions.
Added
We continue to monitor our demand for skilled and unskilled labor and provide training and competitive compensation packages in an effort to attract and retain skilled employees. Our managed services business remains deeply rooted in cinema and other entertainment venue-focused services.
Added
In this regard, we continuously drive our efforts to be the best partner for our customers, investment for our shareholders, neighbor in our community and to provide an empowering work environment for our employees. 4

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur investment in FG Acquisition Corp. consists of approximately 819,000 shares of FG Acquisition’s common stock, approximately 1,400,000 warrants with an $11.50 exercise price and 5-year expiration (the “FGAC Warrants”), approximately 440,000 warrants with a $15 exercise price and 10-year expiration, and either (i) up to approximately an additional 1,600,000 FGAC Warrants, or (ii) up to approximately $2 million in cash, or (iii) a pro-rata combination of such FGAC Warrants and cash, based on certain adjustment provisions and the level of redemptions of FG Acquisition’s publicly traded warrants at the time of a business combination.
Biggest change(“Aldel II”) had not yet completed a business combination agreement. Our holdings in Aldel II consists of approximately 382,000 shares of Aldel II’s common stock, approximately 14,000 warrants with an $11.50 exercise price and 5-year expiration (the “Aldel II Warrants”), approximately 33,000 warrants with a $15 exercise price and 10-year expiration.
Members of our management and companies with which they are affiliated in the past have been, and may in the future be, involved in civil disputes and litigation and governmental investigations relating to their business affairs unrelated to our company.
Members of our management and companies with which they are affiliated in the past have been, and may in the future be, involved in civil disputes and litigation and governmental investigations relating to their business affairs unrelated to the Company.
As a result, at times, fewer attractive targets may be available to consummate an initial business combination. 8 In addition, because there are more SPACs seeking to enter into an initial business combination with available targets, the competition for available targets with attractive fundamentals or business models may increase, which could cause target companies to demand improved financial terms.
As a result, at times, fewer attractive targets may be available to consummate an initial business combination. In addition, because there are more SPACs seeking to enter into an initial business combination with available targets, the competition for available targets with attractive fundamentals or business models may increase, which could cause target companies to demand improved financial terms.
Holders of our Series A Preferred Stock are entitled to receive, when, as and if declared by our Board of Directors cumulative cash dividends from and including the original issue date at the rate of 8.00% of the $25.00 per share liquidation preference per annum (equivalent to $2.00 per annum per share).
Holders of our Series A Preferred Stock are entitled to receive, when, as and if declared by our Board cumulative cash dividends from and including the original issue date at the rate of 8.00% of the $25.00 per share liquidation preference per annum (equivalent to $2.00 per annum per share).
For these reasons and others, delisting could adversely affect the price of our stock and our business, financial condition and results of operations. 11 Technology and Operational Risks Our information technology systems may fail or suffer a loss of security which may have a material adverse effect on our business.
For these reasons and others, delisting could adversely affect the price of our stock and our business, financial condition and results of operations. Technology and Operational Risks Our information technology systems may fail or suffer a loss of security which may have a material adverse effect on our business.
A sustained business interruption or system failure could adversely impact our ability to perform necessary business operations in a timely manner, hurt our relationships with our business partners and customers and have a material adverse effect our financial condition and results of operations.
A sustained business interruption or system failure could adversely impact our ability to perform necessary business operations in a timely manner, hurt our relationships with our business partners and customers and have a material adverse effect on our financial condition and results of operations.
Our executive officers and directors are not required to, and will not, commit their full time to our affairs, which may result in conflicts of interest in allocating their time between our operations and those other businesses in which they are involved.
Certain of our executive officers and directors are not required to, and will not, commit their full time to our affairs, which may result in conflicts of interest in allocating their time between our operations and those other businesses in which they are involved.
Our Board of Directors has the authority to designate and issue additional preferred shares with liquidation, dividend and other rights that are senior to those of our common shares, similar or senior to the rights of the holders of our Series A Preferred Stock.
Our Board has the authority to designate and issue additional preferred shares with liquidation, dividend and other rights that are senior to those of our common shares, similar or senior to the rights of the holders of our Series A Preferred Stock.
There may be potential conflicts of interest if our Company and one or more of these other companies pursue acquisitions, investments and other business opportunities that may be suitable for each of us.
There may be potential conflicts of interest if our Company and one or more of these other companies pursue acquisitions and other business opportunities that may be suitable for each of us.
If a SPAC fails to complete its initial business transaction within the required time period, it will never generate any operating revenues and our SPAC investment may receive only a fixed dollar amount per share upon redemption, or less than such fixed amount in certain circumstances which could significantly affect our operating results and shareholders’ equity.
If a SPAC fails to complete its initial business transaction within the required time period, it will never generate any operating revenues and our SPAC holding may receive only a fixed dollar amount per share upon redemption, or less than such fixed amount in certain circumstances which could significantly affect our operating results and shareholders’ equity.
Our executive officers and directors will allocate their time to our and other businesses in which they are involved, at their discretion, potentially to the detriment of the Company.
Our executive officers and directors allocate their time to our and other businesses in which they are involved, at their discretion, potentially to the detriment of the Company.
We are subject to the risk of inadvertently becoming an investment company, which would require us to register under the Investment Company Act of 1940, as amended (the “Investment Company Act”). Registered investment companies are subject to extensive, restrictive and potentially adverse regulations relating to, among other things, operating methods, management, capital structure, dividends and transactions with affiliates.
We are subject to the risk of inadvertently becoming an investment company, which could require us to register under the Investment Company Act of 1940, as amended (the “Investment Company Act”). Registered investment companies are subject to extensive, restrictive and potentially adverse regulations relating to, among other things, operating methods, management, capital structure, dividends and transactions with affiliates.
Failure to do so could jeopardize our status as a public company, and the loss of such status may have a material adverse effect on us and our stockholders. 9 In addition, as a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Act, and Nasdaq rules, including those promulgated in response to the Sarbanes-Oxley Act.
Failure to do so could jeopardize our status as a public company, and the loss of such status may have a material adverse effect on us and our stockholders. 12 In addition, as a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Act, and Nasdaq rules, including those promulgated in response to the Sarbanes-Oxley Act.
Through our SPAC sponsorships, we may be subject to lock-up agreements, and our ability to access the capital used to sponsor SPACs may be limited for a defined period, which may increase a risk of loss of all or a significant portion of value. Our investments may also become concentrated.
Through our SPAC sponsorships, we may be subject to lock-up agreements, and our ability to access the capital used to sponsor SPACs may be limited for a defined period, which may increase a risk of loss of all or a significant portion of value. Our holdings may also become concentrated.
Section 404 of the Sarbanes-Oxley Act requires public companies to conduct an annual review and evaluation of their internal controls and attestations of the effectiveness of internal controls by independent auditors. We currently qualify as a smaller reporting company under the regulations of the SEC.
Section 404 of the Sarbanes-Oxley Act requires public companies to conduct an annual review and evaluation of their internal controls and attestations of the effectiveness of internal controls by independent auditors. We currently qualify as a smaller reporting company and nonaccelerated filer under the regulations of the SEC.
Registered investment companies are not permitted to operate their business in the manner in which we currently operate and plan to operate our business in the future. We plan to monitor the value of our investments and structure our operations and transactions to qualify for exemptions under the Investment Company Act.
Registered investment companies are not permitted to operate their business in the manner in which we currently operate and plan to operate our business in the future. We plan to monitor the value of our holdings and structure our operations and transactions to qualify for exemptions under the Investment Company Act.
Our investments in special purpose acquisition companies as well as the sponsors of special purpose acquisition companies involve a high degree of risk. We have invested in initial public offerings (“IPOs”) of special purpose acquisition companies, including SPACs that are sponsored by our affiliates.
Our holdings in special purpose acquisition companies as well as the sponsors of special purpose acquisition companies involve a high degree of risk. We have invested in initial public offerings (“IPOs”) of special purpose acquisition companies, including SPACs that are sponsored by our affiliates.
As of December 31, 2023, we have issued and outstanding 894,580 shares of preferred stock designated as 8.00% Cumulative Preferred Stock, Series A, par value $25.00 per share (the “Series A Preferred Stock”).
As of December 31, 2024, we have issued and outstanding 894,580 shares of preferred stock designated as 8.00% Cumulative Preferred Stock, Series A, par value $25.00 per share (the “Series A Preferred Stock”).
Accordingly, we may structure transactions in manners less advantageous than if we did not have Investment Company Act concerns, or we may avoid otherwise economically desirable transactions due to those concerns.
Accordingly, we may structure transactions in manners less advantageous than if we did not have Investment Company Act considerations, or we may avoid otherwise economically desirable transactions due to those considerations.
Risks Related to Our Significant Shareholder FG Financial Holdings, LLC (“FG”) and its affiliated entity control a substantial interest in us and thus may exert substantial influence on actions requiring a stockholder vote, potentially in a manner that you do not support.
Risks Related to Our Significant Shareholder FG Financial Holdings, LLC (“FG Holdings”) and its affiliated entity control a substantial interest in us and thus may exert substantial influence on actions requiring a stockholder vote, potentially in a manner that you do not support.
From time to time, we may enter into transactions with or participate jointly in investments with those other entities or their affiliates. We may create new situations in the future in which our directors serve as directors or executive officers in future investment holdings of such entities.
From time to time, we may enter into transactions with or participate jointly in ventures with those other entities or their affiliates. We may create new situations in the future in which our directors serve as directors or executive officers in future holdings of such entities.
As a smaller reporting company, we are exempt from the requirement to include the auditor’s report of the effectiveness of internal control over financial reporting until such time as we no longer qualify as a smaller reporting company, based on our public float and reporting more than $100 million in annual revenues in a fiscal year.
As a nonaccelerated filer, we are exempt from the requirement to include the auditor’s report of the effectiveness of internal control over financial reporting until such time as we no longer qualify as a nonaccelerated filer, based on our public float and reporting more than $100 million in annual revenues in a fiscal year.
We have a limited operating history as a publicly traded company. As a publicly traded company, we are required to develop and implement substantial control systems, policies and procedures to satisfy our periodic SEC reporting and Nasdaq obligations. Management’s previous experience may not be sufficient to successfully develop and implement these systems, policies and procedures and to operate our Company.
As a publicly traded company, we are required to develop and implement substantial control systems, policies and procedures to satisfy our periodic SEC reporting and Nasdaq obligations. Management’s previous experience may not be sufficient to successfully develop and implement these systems, policies and procedures and to operate our Company.
Additionally, as of December 31, 2023, we have acquired equity interests in various sponsors of SPACs (“Sponsor”) and expect to acquire additional interests in sponsors of SPACs in the future. By investing in a Sponsor, we have provided at-risk capital which allows the Sponsor to launch the IPO of the SPAC.
Additionally, we have acquired equity interests in various sponsors of SPACs (“Sponsor”) and expect to acquire additional interests in sponsors of SPACs in the future. By investing in a Sponsor, we have provided at-risk capital which allows the Sponsor to launch the IPO of the SPAC.
If our executive officers’ and directors’ elect to devote substantial amounts of time to the affairs of other businesses, in excess of current levels, they might not assign sufficient attention to the Company, potentially impairing our results of operations, financial condition, and prospects and the value of our securities.
If those executive officers and directors elect to devote substantial amounts of time to the affairs of other businesses, in excess of current levels, they might not assign sufficient attention to the Company, potentially impairing our results of operations, financial condition, and prospects and the value of our securities.
The capital requirements of our businesses depend on many factors, including regulatory requirements, the performance of our investment portfolio, our ability to write new business successfully, the frequency and severity of catastrophe events and our ability to establish premium rates and reserves at levels sufficient to cover losses.
The capital requirements of our businesses depend on many factors, including regulatory requirements, the performance of our portfolio of equity and other holdings, our ability to write new business successfully, the frequency and severity of catastrophe events and our ability to establish premium rates and reserves at levels sufficient to cover losses. 17
As of December 31, 2023, FG and its affiliates own approximately 54.6% of our issued and outstanding common stock. Accordingly, they may exert a substantial influence on actions requiring a stockholder vote, including election of directors, potentially in a manner that you do not support. D.
As of December 31, 2024, FG Holdings and its affiliates own approximately 26.0% of our issued and outstanding common stock. Accordingly, they may exert a substantial influence on actions requiring a stockholder vote, including election of directors, potentially in a manner that you do not support. D.
Our investment consists of approximately 715,000 preferred shares of ICCT as well as approximately 1,240,000 warrants to purchase preferred shares of ICCT at a price of $11.50 per share, and approximately 190,000 warrants to purchase preferred shares of ICCT at a price of $15.00 per share.
Our holdings consists of approximately 45,000 common shares of ICCT as well as approximately 1,240,000 warrants to purchase preferred shares of ICCT at a price of $11.50 per share, and approximately 190,000 warrants to purchase preferred shares of ICCT at a price of $15.00 per share.
Any such claims or investigations may divert management’s attention from our business or be detrimental to our reputation, resulting in adverse effects upon our results of operations, financial condition, and prospects and the value of our securities held by investors.
Any such claims or investigations may divert management’s attention from our business or be detrimental to our reputation, resulting in adverse effects upon our results of operations, financial condition, and prospects and the value of our securities held by investors. 16 General Risk Factors Unfavorable global economic conditions could adversely affect our business, financial condition or results of operations.
In the event of a major disruption caused by the pandemic, we may lose the services of our employees, experience system interruptions or face challenges accessing the capital or credit markets, which could lead to diminishment of our business operations.
In the event of a major disruption, we may lose the services of our employees, experience system interruptions or face challenges accessing the capital or credit markets, which could lead to diminishment of our business operations. Any of the foregoing could harm our business and delay the implementation of our business strategy.
(TSX: FGAA.U) 12 Our executive officers and members of our Company’s Board of Directors have fiduciary duties to our stockholders; likewise, persons who serve in similar capacities at the public companies have fiduciary duties to those companies’ investors.
Certain of our executive officers and members of our Board have fiduciary duties to our stockholders; likewise, persons who serve in similar capacities at other public companies have fiduciary duties to those companies’ investors.
We have a limited operating history as a publicly traded company. Our inexperience as a public company and the requirements of being a public company may strain our resources, divert management’s attention, affect our ability to attract and retain qualified board members and have a material adverse effect on us and our stockholders.
Legal and Regulatory Risks The requirements of being a public company may strain our resources, divert management’s attention, affect our ability to attract and retain qualified board members and have a material adverse effect on us and our stockholders.
Furthermore, the strength of the market for SPAC IPOs has fluctuated substantially from year to year and has experienced cycles of relative strength and weakness. There can be no assurance that the SPAC market will be strong in the future.
Furthermore, the strength of the market for SPAC IPOs has fluctuated substantially from year to year and has experienced cycles of relative strength and weakness. There can be no assurance that the SPAC market will be strong in the future. Our results of operations will fluctuate from period to period and may not be indicative of our long-term prospects.
These activities may divert management’s attention from other business concerns, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.
These activities may divert management’s attention from other business concerns, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. We are subject to the risk of becoming an investment company under the Investment Company Act.
Accordingly, an investment in a Sponsor is subject to a much higher degree of risk than an investment directly in a SPAC’s IPO because the entire investment may be lost if the SPAC is not successful in consummating a business combination. Such potential loss could have a material effect on our financial results and shareholders’ equity.
Accordingly, an investment in a Sponsor is subject to a much higher degree of risk than an investment directly in a SPAC’s IPO because the entire investment may be lost if the SPAC is not successful in consummating a business combination.
Any delisting of our stock from Nasdaq could: ● adversely affect our ability to attract new investors; ● decrease the liquidity of our outstanding stock; ● reduce our flexibility to raise additional capital; ● reduce the price at which our stocks trade; and ● increase the transaction costs inherent in trading our stock, with overall negative effects for our stockholders.
Any delisting of our stock from Nasdaq could: ● adversely affect our ability to attract new investors; ● decrease the liquidity of our outstanding stock; ● reduce our flexibility to raise additional capital; ● reduce the price at which our stocks trade; and ● increase the transaction costs inherent in trading our stock, with overall negative effects for our stockholders. 14 In addition, delisting our stock could deter broker-dealers from making a market in or otherwise seeking or generating interest in our stock and might deter some institutions or others from investing in our securities at all.
Our investment consists of approximately 299,000 warrants to purchase common shares of HGTY at a price of $15.00 per share. FG Merger Corp completed its business combination in August 2023 and now operates as iCoreConnect, Inc. (NASDAQ: ICCT).
FG New America Acquisition Corp. completed its business combination in July 2021 and now operates as OppFi, Inc. (NYSE: OPFI). Our holdings consists of approximately 358,000 warrants to purchase common shares of OPFI at a price of $11.50 per share. FG Merger Corp completed its business combination in August 2023 and now operates as iCoreConnect, Inc. (NASDAQ: ICCT).
Depending on market conditions, we could incur additional realized and unrealized losses on our investment portfolio in future periods, which could have a material adverse effect on our results of operations, financial condition and business. Economic conditions could also have a material impact on the frequency and severity of claims and therefore could negatively impact our underwriting returns.
Depending on market conditions, we could incur additional realized and unrealized losses on our portfolio of equity and other holdings in future periods, which could have a material adverse effect on our results of operations, financial condition and business.
In recent years, the number of SPACs that have been formed has increased substantially. Many potential targets for special purpose acquisition companies have already entered into an initial business combination.
This could increase the cost of an initial business combination and it could even result in an inability to find a target or to consummate an initial business combination. In recent years, the number of SPACs that have been formed has increased substantially. Many potential targets for special purpose acquisition companies have already entered into an initial business combination.
So long as we qualify as a smaller reporting company, based on our public float, and report less than $100 million in annual revenues in a fiscal year, we are permitted, and we intend, to omit the auditor’s attestation on internal control over financial reporting that would otherwise be required by the Sarbanes-Oxley Act. 10 Until such time that we lose smaller reporting company status, it is unclear if investors will find our stock less attractive because we may rely on certain disclosure exemptions.
So long as we qualify as a nonaccelerated filer, based on our public float, and report less than $100 million in annual revenues in a fiscal year, we are permitted, and we intend, to omit the auditor’s attestation on internal control over financial reporting that would otherwise be required by the Sarbanes-Oxley Act.
General Risk Factors Unfavorable global economic conditions, including as a result of health and safety concerns, could adversely affect our business, financial condition or results of operations. Our results of operations and the implementation of our new business strategy could be adversely affected by general conditions in the global economy, including conditions that are outside of our control.
Our results of operations and the implementation of our business strategies could be adversely affected by general conditions in the global economy, including conditions that are outside of our control. A severe or prolonged economic downturn could result in a variety of risks to our business and could delay the implementation of our new business strategy.
As a result, actual losses and loss adjustment expenses paid can deviate, perhaps substantially, from the reserve estimates reflected in our financial statements. 6 If our loss reserves are determined to be inadequate, we will be required to increase loss reserves at the time of such determination with a corresponding reduction in our net income in the period when the deficiency becomes known.
If our loss reserves are determined to be inadequate, we would be required to increase loss reserves at the time of such determination with a corresponding reduction in our net income in the period when the deficiency becomes known.
In addition, because we plan to underwrite products and make investments to achieve favorable return on equity over the long-term, our short-term results of operations may not be indicative of our long-term prospects. Our results of operations may also be adversely impacted by general economic conditions and the conditions and outlook of the reinsurance markets and capital markets.
We anticipate that the performance of our merchant banking and managed services will fluctuate from period to period. In addition, because we plan to underwrite products and make investments to achieve favorable return on equity over the long-term, our short-term results of operations may not be indicative of our long-term prospects.
Consequently, as a reinsurer, we expect to assume a degree of credit risk associated with the brokers that we intend to do business with. We may not be successful in carrying out our asset management strategy, and the fair value of our investments will be subject to a loss in value.
We may not be successful in carrying out our asset management strategy, and the fair value of our holdings will be subject to a loss in value.
A significant decline in the values of these investments may produce a large decrease in our consolidated shareholders’ equity and can have a material adverse effect on our consolidated book value per share and earnings. The insurance and reinsurance businesses are highly competitive, and we may not be able to compete successfully in those industries.
A significant decline in the values of these holdings may produce a large decrease in our consolidated shareholders’ equity and can have a material adverse effect on our consolidated book value per share and earnings. We have no assurance of future business from our managed services customers.
While we currently qualify as a smaller reporting company under SEC regulations, we cannot be certain, if we take advantage of the reduced disclosure requirements applicable to these companies, that we will not make our stock less attractive to investors. Once we lose smaller reporting company status, the costs and demands placed upon our management are expected to increase.
This may have a material adverse effect on our business, financial condition and results of operations and could also lead to a decline in the price of our common stock. 13 While we currently qualify as a smaller reporting company under SEC regulations, we cannot be certain, if we take advantage of the reduced disclosure requirements applicable to these companies, that we will not make our stock less attractive to investors.
Changes in the value of the investments we directly own, or indirectly own through our ownership of equity method investees, could materially affect our income and increase the volatility of our earnings. As of December 31, 2023, our consolidated balance sheet includes approximately $30.9 million related to investments held directly by us or indirectly through equity method investees.
Changes in the value of the holdings we directly own, or indirectly own through our ownership of equity method holdings, could materially affect our income and increase the volatility of our earnings.
The SEC’s rules exempt smaller reporting companies, like us, from various reporting requirements applicable to public companies that are not smaller reporting companies.
If we lose smaller reporting company status, the costs and demands placed upon our management would be expected to increase. The SEC’s rules exempt smaller reporting companies, like us, from various reporting requirements applicable to public companies that are not smaller reporting companies.
Failure to receive or maintain the licenses necessary to execute on our strategy or receive necessary approvals may have a material adverse effect on our future business. We are subject to the risk of becoming an investment company under the Investment Company Act.
Failure to receive or maintain the licenses necessary to execute on our strategy or receive necessary approvals may have a material adverse effect on our future business. If we were unable to maintain those approvals or manage our reinsurance risks, the value of our reinsurance assets could be significantly impacted.
In addition to the investments noted above, the Company also holds interests in FG Communities and Craveworthy LLC, both of which are private companies. 7 The change in value of any of the investments noted above, which primarily make up the $30.9 million on our consolidated balance sheet at December 31, 2023, could significantly impact our reported results and shareholders’ equity.
In addition to the holdings noted above, we also hold interests in FGC and Craveworthy LLC, an innovative fast casual restaurant platform company (“Craveworthy”), both of which are private companies. 7 The change in value of any of the holdings noted above, could significantly impact our reported results and shareholders’ equity.
The volatility in the financial markets could continue to significantly affect our investment returns, reported results, and shareholders’ equity.
Economic conditions could also have a material impact on the frequency and severity of claims and therefore could negatively impact our underwriting returns. The volatility in the financial markets could continue to significantly affect the returns on our equity and other holdings, reported results, and shareholders’ equity.
Cerminara is also the Chairman of FG Acquisition Corp (TSX:FGAA.U). Scott D. Wollney, one of our directors, serves as an executive officer and director of Atlas Financial Holdings, Inc. (Nasdaq: AFH) (“Atlas”), a commercial automobile managing general agency. Our chief executive officer and director, Mr. Swets, serves as director of GreenFirst Forest Products Inc. (TSXV: GFP), FG Group Holdings, Inc.
Mr. Cerminara serves as an executive officer of FG Holdings and its affiliated entity, which together, as of December 31, 2024, beneficially owned approximately 29.0% of our outstanding shares of common stock. Scott D. Wollney, one of our directors, serves as an executive officer and director of Atlas Financial Holdings, Inc. (Nasdaq: AFH) (“Atlas”), a commercial automobile managing general agency.
Our investment consists of approximately 860,000 common shares of OPFI as well as approximately 358,000 warrants to purchase common shares of OPFI at a price of $11.50 per share. Aldel Financial Inc. completed its business combination in December 2021 and now operates as Hagerty, Inc. (NYSE: HGTY).
Our holdings consists of approximately 2,600,000 common shares of Saltire and 750,000 preferred shares of Saltire as well as approximately 3,000,000 warrants to purchase common shares of Saltire at a price of $11.50 per share, and approximately 440,000 warrants to purchase common shares of Saltire at a price of $15.00 per share As of December 31, 2024, Aldel Financial II Inc.
Legal and Regulatory Risks Our failure to obtain or maintain approval of insurance regulators and other regulatory authorities as required for the operations of our reinsurance subsidiary may have a material adverse effect on our future business, financial condition, results of operations and prospects.
In the future, we may not be able to obtain coverage at current levels, and our premiums may increase significantly on coverage that we maintain. 11 Risks Relating to Our Reinsurance Business Failure to complete the sale of all or a substantial portion of our reinsurance business may have a material adverse effect on our future business, financial condition, results of operations and prospects.
Kyle Cerminara, Chairman of our Board of Directors, serves as Chief Executive Officer, Co-Founder and Partner of FG. Due to his position as a member of our Board of Directions as well as his positions at FG, he has considerable influence on actions requiring a stockholder vote.
Kyle Cerminara, our Chief Executive Officer and Chairman of our Board, serves as Chief Executive Officer, Co-Founder and Partner of FG Holdings.
As the number of SPACs evaluating targets increases, attractive targets may become more scarce, and there may be increased competition for attractive targets. This could increase the cost of an initial business combination and it could even result in an inability to find a target or to consummate an initial business combination.
Such potential loss could have a material effect on our financial results and shareholders’ equity. 6 As the number of SPACs evaluating targets increases, attractive targets may become more scarce, and there may be increased competition for attractive targets.
Some of our directors and officers also serve as directors and/or executive officers for other public companies or for our controlling stockholders or their affiliates, which may lead to conflicting interests. Our Chairman, D.
Due to his position as a member of our Board as well as his positions at FG Holdings, he has considerable influence on actions requiring a stockholder vote, including decisions regarding mergers, acquisitions, going private and other extraordinary transactions, and he may significantly influence the terms of any of these transactions. 15 Some of our directors and officers also serve as directors and/or executive officers for other public companies or for our controlling stockholders or their affiliates, which may lead to conflicting interests.
If we lose the service of qualified management or other personnel or are unable to attract and retain the necessary members of management or personnel, we may not be able to successfully execute on our business strategy, which could have an adverse effect on our business.
The loss of any one or more of our suppliers could have an adverse effect on our business, and we may be unable to secure alternative manufacturing arrangements.
Removed
ITEM 1A. RISK FACTORS Risks Relating to Our Industry, Business and Operations We have had limited operations upon which to predict our future performance, since the sale of our former insurance business. At the end of 2019, we sold our former insurance business, and began to transition to operate as a reinsurance, merchant banking and asset management holding company.
Added
ITEM 1A. RISK FACTORS The Company is engaged in mergers and acquisition activity and may incur significant costs or risks related to execution and integration.
Removed
Accordingly, our historical financial statements provide little basis upon which to predict our future performance. Our revenue has been reduced, as we have limited assets with which to generate revenue. Our failure to secure additional sources of revenue may have a material impact on our results of operations and financial condition.
Added
The Company has completed several transactions, including the merger of FGF and FGH and the merger of FGF and Strong Global Entertainment, and is continuing to implement initiatives to streamline and simplify its holding company operations, which may include additional acquisitions or divestitures. We also recently announced an agreement for the sale of a signification portion of our reinsurance business.
Removed
In addition, the uncertainty surrounding our future operations and business prospects may negatively impact the value and liquidity of our stock. If we are unable to implement our business plans successfully, our financial condition and results of operations will be impaired, and your investment in our Company will be at risk.
Added
We may incur significant legal, financial advisory, accounting, consulting and other advisory fees, insurance, internal overhead, public company filing fees, and other regulatory fees, printing costs and other related costs. We may also incur expenses in connection with the integration of operations. There are many factors that could affect the total amount or the timing of the integration costs.
Removed
We do not have an operating history or established reputation in the reinsurance industry, and our lack of an established operating history and reputation may make it difficult for us to attract or retain business. We provide property and casualty reinsurance through FGRe.
Added
Moreover, many of the costs that will be incurred are, by their nature, difficult to estimate accurately. These costs may result in the Company taking charges against earnings in future periods. We are integrating multiple mergers, which may be more difficult, costly or time-consuming than expected and the Company may fail to realize the anticipated benefits.
Removed
We do not have a prolonged operating history on which we can base an estimate of our future earnings prospects. We also do not have an established reputation in the reinsurance industry. Reputation is a very important factor in the reinsurance industry, and competition for business is, in part, based on reputation.
Added
The success of the Company will depend, in part, on the Company’s ability to successfully combine and integrate the businesses of FGF and FGH and Strong Global Entertainment in a manner that does not materially disrupt existing operations or result in decreased revenue or reputational harm.
Removed
Although we expect that our reinsurance policies will be fully collateralized, we are a relatively newly formed reinsurance company and do not yet have a well-established reputation in the industry. Our lack of an established reputation may make it difficult for us to attract or retain business.
Added
It is possible that the integration process could result in the loss of key employees, the disruption of either company’s ongoing businesses, difficulties in integrating operations and systems, including communications systems, administrative and information technology infrastructure and financial reporting and internal control systems, or inconsistencies in standards, controls, procedures and policies that adversely affect the companies’ ability to maintain relationships with clients, customers and employees or to achieve the anticipated benefits and cost savings of the Merger.
Removed
We will compete with major reinsurers, all of which have substantially greater financial marketing and management resources than we do, which may make it difficult for us to effectively market our products or offer our products at a profit.
Added
Integration efforts may also divert management attention and resources. These integration matters could have an adverse effect on the Company. The Company’s future results may suffer if the Company does not effectively manage the combined operations from the mergers.
Removed
In addition, we do not have or currently intend to obtain financial strength ratings, which may discourage certain counterparties from entering into reinsurance contracts with us. 4 As a reinsurer, we will depend on our cedents’ evaluations of the risks associated with their insurance underwriting, which may subject us to reinsurance losses.
Added
The Company’s future success will depend, in part, upon its ability to manage the combined businesses, which may pose challenges for management, including challenges related to the management and monitoring of new operations and associated increased costs and complexity.
Removed
In the proportional reinsurance business, in which we will assume an agreed percentage of each underlying insurance contract being reinsured, or quota-share contracts, we do not plan to separately evaluate each of the original individual risks assumed under these reinsurance contracts.
Added
There can be no assurances that the Company will be successful or that it will realize the expected operating efficiencies, cost savings, revenue enhancements or other benefits currently anticipated from the Merger. The Company may be unable to retain current personnel.
Removed
We will therefore be largely dependent on the original underwriting decisions made by ceding companies, which will subject us to the risk that the cedents may not have adequately evaluated the insured risks and that the premiums ceded may not adequately compensate us for the risks we assume.
Added
The success of the Company will depend in part on its ability to retain the talents and dedication of key employees and officers. It is possible that these employees and officers may decide not to remain with the Company.
Removed
We also do not plan to separately evaluate each of the individual claims made on the underlying insurance contracts under quota-share arrangements, in which case we will be dependent on the original claims decisions made by our cedents. The involvement of reinsurance brokers may subject us to their credit risk.
Added
If we are unable to retain key employees, including management, who are critical to the successful integration and future operations of the companies, the Company could face disruptions in their operations, loss of existing customers, loss of key information, expertise or know-how and unanticipated additional recruitment costs.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Chief Financial Officer has the proper credentials and relevant experience given the environment in which the Company operates, The Audit Committee of the Board, with input from Senior Management, primarily the Chief Financial Officer, assesses the Company’s cybersecurity, other information technology risks, threats, and the measures implemented by the Company to mitigate and prevent cyberattacks.
Biggest changeThe Audit Committee of the Board, with input from senior management, assesses the Company’s cybersecurity, other information technology risks, threats, and the measures implemented by the Company to mitigate and prevent cyberattacks . The Audit Committee will elevate any issues identified as potential threats to the attention of the Board.
ITEM 1C. CYBERSECURITY Material risks from cybersecurity threats are managed across the Company, third-party suppliers and vendors. Monitoring such risks and threats is integrated into the Company’s overall risk management program. The Company regularly assesses risks from cybersecurity and technology threats and monitors information systems for potential vulnerabilities.
ITEM 1C. CYBERSECURITY Risks from cybersecurity threats are managed across the Company, third-party suppliers and vendors. Monitoring such risks and threats is integrated into the Company’s overall risk management program . The Company regularly assesses risks from cybersecurity and technology threats and monitors information systems for potential vulnerabilities.
In the event of an incident, the Company focuses on responding to and containing the threat and minimizing any business impact, as appropriate. In the event of an incident, Senior Management assesses, among other factors, safety impact, data loss, business operations disruption, projected cost and potential for reputational harm. To date, the Company has not experienced any material cybersecurity incidents.
In the event of an incident, the Company focuses on responding to and containing the threat and minimizing any business impact, as appropriate. In the event of an incident, senior management assesses, among other factors, safety impact, data loss, business operations disruption, projected cost and potential for reputational harm.
For a discussion of whether any risks from cybersecurity threats are reasonably likely to materially affect the Company, including its business strategy, results of operations or financial condition, See “Item 1A.
To date, the Company has no t experienced any material cybersecurity incidents. For a discussion of whether any risks from cybersecurity threats are reasonably likely to materially affect the Company, including its business strategy, results of operations or financial condition, see “Item 1A.
Risk Factors — Technology and Operational Risks .” The Chief Financial Officer leads the implementation of information system controls and is responsible for monitoring the controls to ensure they remain appropriate.
Risk Factors — Technology and Operational Risks .” The Company’s Chief Financial Officer, Chief Accounting Officer and information technology team (the “IT Team”) lead the implementation of information system controls and are responsible for monitoring the controls to ensure they remain appropriate .
The Audit Committee will elevate any issues identified as potential threats to the attention of the Board. In addition, the Board of the Company oversees our annual enterprise risk assessment and receives periodic reports on the Company’s cybersecurity controls. 14
In addition, the Board oversees our annual enterprise risk assessment and receives periodic reports on the Company’s cybersecurity controls .
Our operations depend on our ability to process our business timely and efficiently and protect our information systems from physical loss or unauthorized access.
The Company maintains technical and organizational safeguards and also leverages third-party specialists in risk management to assist in implementing processes to oversee and identify material risks from cybersecurity threats associated with third-party service providers. Our operations depend on our ability to process our business timely and efficiently and protect our information systems from physical loss or unauthorized access.
Removed
The Company maintains technical and organizational safeguards, including risk awareness education, employee training, incident response capability exercises, and cybersecurity insurance for the protection of the Company’s assets.
Removed
With the goal of minimizing disruption, the Company also leverages a third-party specialist to identify, prioritize, assess, mitigate, and remediate risks within our network and to assist in implementing processes to oversee and identify material risks from cybersecurity threats associated with third-party service providers.

Item 2. Properties

Properties — owned and leased real estate

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Removed
ITEM 2. PROPERTIES Our executive offices are located at 104 S Walnut, Unit 1A, Itasca, IL 60143. Our lease term expires in December 2025. Total minimum rent over the next twelve months is expected to be $21,000. In the opinion of the Company’s management, our executive offices are suitable for our current business and are adequately maintained.
Added
ITEM 2. PROPERTIES Our executive offices are located at 108 Gateway Boulevard, Suite 204, Mooresville, NC 28117. The lease term expires in May 2025, and we intend to transition from this facility during 2025. STS leases a combined office and warehouse facility in Omaha, Nebraska, which is primarily used for the storage and distribution of third-party products.
Added
The lease for this facility expires in February 2027. STS also leases a warehouse facility in Shawnee, Kansas, which is primarily used for the storage and distribution of third-party products. The lease for this facility expires in May 2025. We believe our facilities and our access to replacement facilities are adequate for future needs.
Added
We are evaluating our space needs and currently intend to move from our leased executive office in Mooresville and the STS warehouse in Kansas during 2025. We do not anticipate any difficulty in retaining occupancy of our leased facilities or moving and replacing them with alternative facilities in the future. 18

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS As of December 31, 2023, the Company was not a party to any legal proceedings and was not aware of any material claims or actions pending or threatened against us. From time to time, we are involved in legal proceedings and litigation arising in the ordinary course of business.
Biggest changeITEM 3. LEGAL PROCEEDINGS The Company is involved, from time to time, in certain legal disputes in the ordinary course of business. No such disputes, individually or in the aggregate, are expected to have a material effect on the Company’s business or financial condition.
Removed
Currently, it is not possible to predict legal outcomes and their impact on the future development of claims. Any such development will be affected by future court decisions and interpretations. Because of these uncertainties, additional liabilities may arise for amounts in excess of the Company’s current reserves. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. PART II
Added
A Fundamental Global subsidiary is named as a defendant in personal injury lawsuits based on alleged exposure to asbestos-containing materials. A majority of the cases involve product liability claims based principally on allegations of past distribution of commercial lighting products containing wiring that may have contained asbestos. Each case names dozens of corporate defendants in addition to Fundamental Global.
Added
In our experience, a large percentage of these types of claims have never been substantiated and have been dismissed by the courts.
Added
Fundamental Global has not suffered any adverse verdict in a trial court proceeding related to asbestos claims and intends to continue to defend these lawsuits On July 16, 2024, we received notice that we were named as a defendant, along with over 500 other companies, in a civil action filed for cost recovery and contributions related to the release and/or threatened release of hazardous substances from a facility known as the BKK Class 1 Landfill in Los Angeles County California from periods prior to 1987.
Added
The action alleges that FGH is a successor to Pichel Industries, Inc. (“Pichel Industries”) and that Pichel Industries contributed waste to the landfill. We are in the early stages of evaluating the claim and determining our response. We are a guarantor of the obligations of an entity that was previously sold and no longer part of the consolidated group.
Added
We have been notified that the primary obligor has not met the obligations for which it is liable, and the third party has requested that we satisfy the obligations on behalf of the buyer under the guaranty. We are evaluating its obligations and determining our response.
Added
As of December 31, 2024, the Company has a loss contingency reserve of approximately $0.3 million, which represents our estimate of the potential losses related to the settlement of various open proceedings and claims.
Added
Management does not expect the resolution of these proceedings and claims to have a material adverse effect on the Company’s consolidated financial condition, results of operations or cash flows. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 19 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeSecurities Authorized for Issuance Under Equity Compensation Plans See Item 12. 15 ITEM 6. [RESERVED]
Biggest changeSecurities Authorized for Issuance Under Equity Compensation Plans See Item 12 of this Form 10-K.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market for Registrant’s Common Stock Our common stock is traded on the Nasdaq Global Market tier of the Nasdaq Stock Market, LLC under the symbol “FGF.” Our Series A Preferred Stock is also traded on the Nasdaq Global Market tier of the Nasdaq Stock Market under the symbol “FGFPP.” Number of Common Stockholders As of December 31, 2023, we had 10,558,931 shares of common stock outstanding, which were held by 9 stockholders of record, including Cede & Co., which holds shares on behalf of the beneficial owners of the Company’s common stock.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market for Registrant’s Common Stock Our common stock is traded on the Nasdaq Global Market tier of the Nasdaq Stock Market, LLC under the symbol “FGF.” Our Series A Preferred Stock is also traded on the Nasdaq Global Market tier of the Nasdaq Stock Market under the symbol “FGFPP.” Number of Common Stockholders As of December 31, 2024, we had 1,267,904 shares of common stock outstanding, which were held by 135 stockholders of record, including Cede & Co., which holds shares on behalf of the beneficial owners of the Company’s common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeFor the year ended December 31, 2022, the Company’s net cash used by operating activities was approximately $11.0 million, primarily driven by our net income of approximately $1.1 million for the year, approximately $13.0 million for a non-cash charge related to the change in unrealized holding loss on our equity investments, and approximately $7.6 for a non-cash charge related to income from equity method investments.
Biggest changeYear Ended December 31, 2024 2023 Cash and cash equivalents from continuing operations – beginning of year $ 5,995 $ 3,063 Net cash (used in) provided by operating activities from continuing operations (4,049 ) 1,579 Net cash provided by investing activities from continuing operations 13,242 92 Net cash (used in) provided by financing activities from continuing operations (7,383 ) 1,240 Effect of exchange rate changes on cash and cash equivalents (11 ) 21 Net increase in cash and cash equivalents from continuing operations 1,799 2,932 Cash and cash equivalents from continuing operations – end of year $ 7,794 $ 5,995 For the year ended December 31, 2024, net cash used in operating activities from continuing operations was approximately $4.0 million, compared to cash provided by operating activities of $1.6 million for the year ended December 31, 2023.
Inherent in Monte-Carlo simulation and option pricing models are assumptions related to expected volatility and discount for lack of marketability of the underlying investment.
Inherent in Monte-Carlo simulation and option pricing models are assumptions related to expected volatility and discount for lack of marketability of the underlying holding.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS You should read the following discussion in conjunction with our consolidated financial statements and related notes and information included elsewhere in this annual report on Form 10-K.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS You should read the following discussion in conjunction with our consolidated financial statements and related notes and information included elsewhere in this Form 10-K.
Our investees estimate the volatility of these investments based on the historical performance of various broad market indices blended with various peer companies which they consider as having similar characteristics to the underlying investment, as well as consideration of price and volatility of relevant publicly traded securities such as SPAC warrants.
Our investees estimate the volatility of these holdings based on the historical performance of various broad market indices blended with various peer companies which they consider as having similar characteristics to the underlying holding, as well as consideration of price and volatility of relevant publicly traded securities such as SPAC warrants.
You should review the “Risk Factors” section of this annual report for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
You should review the “Risk Factors” section of this Form 10-K for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
Some of the information contained in this discussion and analysis and set forth elsewhere in this annual report on Form 10-K includes forward-looking statements that involve risks and uncertainties. Unless context denotes otherwise, the terms “Company,” “FGF,” “we,” “us,” and “our,” refer to FG Financial Group, Inc., and its subsidiaries. Recent Developments On January 3, 2024, FG Financial Group, Inc.
Some of the information contained in this discussion and analysis and set forth elsewhere in this Form 10-K includes forward-looking statements that involve risks and uncertainties. Unless context denotes otherwise, the terms “Company,” “FGF,” “we,” “us,” and “our,” refer to Fundamental Global Inc. (formerly known as FG Financial Group, Inc.), and its subsidiaries.
Upon completion of the merger, the combined company would be renamed to Fundamental Global Inc. and the common stock and Series A cumulative preferred stock of the combined company would continue to trade on the Nasdaq under the tickers “FGF” and “FGFPP,” respectively.
Upon completion of the Merger, the combined company was renamed to Fundamental Global, and the common stock and Series A cumulative preferred stock of the combined company continued to trade on the Nasdaq Stock Market LLC (the “Nasdaq”) under the tickers “FGF” and “FGFPP,” respectively. On May 3, 2024, Strong Global Entertainment, Inc.
To the extent a valuation allowance is established in a period, an expense must be recorded within the income tax provision in the consolidated statements of income and comprehensive income. Premium Revenue Recognition The Company participates in reinsurance quota-share contracts and estimates the ultimate premiums for the contract period.
To the extent a valuation allowance is established in a period, an expense must be recorded within the income tax provision in the consolidated statements of income and comprehensive income.
In determining its provision for income taxes, the Company interprets tax legislation in a variety of jurisdictions and makes assumptions about the expected timing of the reversal of deferred income tax assets and liabilities and the valuation of net deferred income taxes. 17 The ultimate realization of the deferred income tax asset balance is dependent upon the generation of future taxable income during the periods in which the Company’s temporary differences reverse and become deductible.
In determining its provision for income taxes, the Company interprets tax legislation in a variety of jurisdictions and makes assumptions about the expected timing of the reversal of deferred income tax assets and liabilities and the valuation of net deferred income taxes.
A valuation allowance is established when it is more likely than not that all or a portion of the deferred income tax asset balance will not be realized.
The ultimate realization of the deferred income tax asset balance is dependent upon the generation of future taxable income during the periods in which the Company’s temporary differences reverse and become deductible. A valuation allowance is established when it is more likely than not that all or a portion of the deferred income tax asset balance will not be realized.
The liquidity requirements of the Company and its subsidiaries have been met primarily by funds generated from operations and from the proceeds from the sales of our common stock.
Liquidity and Capital Resources The purpose of liquidity management is to ensure that there is sufficient cash to meet all financial commitments and obligations as they fall due. The liquidity requirements of the Company and its subsidiaries have been met primarily by funds generated from operations, proceeds from the sales of our common stock and credit facilities.
Our investees also consider the probability of a successful merger when valuing equity for SPACs that have not yet completed a business combination. Valuation of Net Deferred Income Taxes The provision for income taxes is calculated based on the expected tax treatment of transactions recorded in the Company’s consolidated financial statements.
Past due accounts are written off when our efforts have been unsuccessful in collecting amounts due. Valuation of Net Deferred Income Taxes The provision for income taxes is calculated based on the expected tax treatment of transactions recorded in the Company’s consolidated financial statements.
As discussed further in Note 4, these investments held by our equity method investees are valued using Monte-Carlo simulation and option pricing models. Inherent in Monte-Carlo simulation and option pricing models are assumptions related to expected volatility and discount for lack of marketability of the underlying investment.
Other Holdings Other holdings consist, in part, of equity holdings made in privately held companies accounted for under the equity method. As discussed further in Note 6, certain holdings held by our equity method investees are valued using Monte-Carlo simulation and option pricing models.
For the year ended December 31, 2023, the Company’s net cash provided by financing activities consist of proceeds of approximately $1.3 million from the issuance of common stock, offset by the payments of dividends in the amount of $1.8 million on our Series A Preferred Shares.
Cash used in financing activities during the year ended December 31, 2024 included $6.0 million of principal payments on debt and finances leases and $1.4 million of payments of dividends on our Series A Preferred Shares.
(“FGF”) and FG Group Holdings, Inc. (NYSE American: FGH) (“FGH”), signed a definitive plan of merger to combine the companies in an all-stock transaction. The plan of merger and transaction were unanimously approved by the independent members of the Board of Directors of both FGF and FGH.
Recent Developments On February 29, 2024, FGF and FG Group Holdings, Inc. (“FGH”) closed a plan of merger to combine the companies in an all-stock transaction (the “Merger”). In connection with the Merger, FGH common stockholders received one share of FGF common stock for each share of common stock of FGH held by such stockholder.
For the year ended December 31, 2023, the Company’s net cash provided by investing activities was $4.1 million, primarily related to the sale of iCoreConnect securities, offset by our investments into convertible notes and equity method investments.
For the year ended December 31, 2024, net cash used in financing activities from continuing operations was approximately $7.4 million, compared to cash provided by financing activities of $1.2 million for the year ended December 31, 2023.
Removed
Under the plan of the merger, FGH common stockholders would receive one share of FGF common stock for each share of common stock of FGH held by such stockholder.
Added
(“Strong Global Entertainment”) entered into an acquisition agreement (the “Acquisition Agreement”) with FG Acquisition Corp., a special purpose acquisition company (“FGAC”), Strong/MDI Screen Systems, Inc. (“Strong/MDI”), FGAC Investors LLC, and CG Investments VII Inc. The transaction closed on September 25, 2024.
Removed
On February 29, 2024, FGF and FGH completed the previously announced merger transaction pursuant to the Plan of Merger, dated as of January 3, 2024 (the “Merger Agreement”), by and among FGF, FGH and FG Group LLC, a Nevada limited liability company and wholly owned subsidiary of FGF (the “Merger Sub”).
Added
As part of the closing, FGAC was renamed Saltire Holdings, Ltd (“Saltire”), and Saltire acquired, all of the outstanding shares of one of the Company’s indirect wholly-owned subsidiaries, Strong/MDI. As a result of the acquisition, Strong/MDI became a wholly-owned subsidiary of Saltire.
Removed
Pursuant to the terms of the Merger Agreement and in accordance with the Nevada Revised Statutes, FGH merged with and into the Merger Sub (the “Merger”), with the Merger Sub as the surviving entity and wholly owned subsidiary of FGF.
Added
On May 30, 2024, the Company and Strong Global Entertainment, an operating company in which we held approximately 76% of the Class A common shares, entered into a definitive arrangement agreement and plan of arrangement to combine the companies in an all-stock transaction (the “Arrangement”).
Removed
Following the Merger, on February 29, 2024, the Company amended its Amended and Restated Articles of Incorporation to change its name to Fundamental Global Inc. Effective immediately following the closing of the Merger, the Board of Directors of the Company (the “Board”) increased in size from six to seven directors. In connection with the closing of the Merger, E.
Added
Upon completion of the Arrangement, the stockholders of Strong Global Entertainment received 1.5 common shares of the Company for each share of Strong Global Entertainment. The transaction closed on September 30, 2024.
Removed
Gray Payne and Larry G. Swets, Jr., resigned from the Board. In addition, in accordance with the terms of the Plan of Merger and effective immediately following the closing of the Merger each of Michael C. Mitchell, Ndamukong Suh, and Robert J. Roschman were appointed to the Board. The Board has determined that all of its directors, except for D.
Added
Following the closing, Strong Global Entertainment ceased to exist, and its common Shares were delisted from NYSE American LLC “(NYSE American”) and deregistered under the Securities Exchange Act of 1934 (the “Exchange Act”).
Removed
Kyle Cerminara, are “independent directors” as such term is defined by the applicable rules and regulations of the SEC and Nasdaq. In connection with the Merger, Larry G. Swets, President and Chief Executive Officer of FGF prior to the closing of the Merger, and Hassan R.
Added
As the Company was the majority shareholder of Strong Global Entertainment, the financial results of Strong Global Entertainment are presented on a consolidated basis in the Company’s consolidated financial statements included in this Form 10-K.
Removed
Baqar, Executive Vice President and Chief Financial Officer of FGF prior to the closing of the Merger, resigned from their respective positions with the combined company. Messrs. Swets and Baqar will remain with the combined company leading the merchant banking and SPAC businesses. Effective as of the closing of the Merger, the Board appointed D.
Added
On October 10, 2024, the Company’s Board of Directors approved a reverse stock split of the Company’s authorized, issued and outstanding shares of common stock at a ratio of one (1)-for-twenty-five (25) (the “Reverse Stock Split”). The Reverse Stock Split became effective on October 31, 2024 (the “Effective Date”), at 5:00 p.m., Eastern Time.
Removed
Kyle Cerminara as Chief Executive Officer and Mark D. Roberson as Chief Financial Officer of Fundamental Global Inc. 16 Unless stated otherwise, all information included within this Annual Report relates to information that precedes the Merger with FGH. Overview Fundamental Global Inc.
Added
The Company’s common shares began trading on a split-adjusted basis at the commencement of trading on November 1, 2024. All equity awards outstanding immediately prior to the Reverse Stock Split were adjusted to reflect the Reverse Stock Split.
Removed
(“FGF”, the “Company”, “we”, or “us”), formerly known as FG Financial Group, Inc., is a reinsurance, merchant banking and asset management holding company. We focus on opportunistic collateralized and loss-capped reinsurance, while allocating capital to merchant banking activities. The Company’s principal business operations are conducted through its subsidiaries and affiliates.
Added
As a result of the Reverse Stock Split, all references to the Company’s common stock (“Common Stock”) in this Form 10-K have been adjusted to reflect the Reverse Stock Split. Overview Fundamental Global Inc. is a holding company incorporated in the state of Nevada.
Removed
As of December 31, 2023, FG Financial Holdings, LLC (“FG”), a private partnership focused on long-term strategic holdings, and its affiliated entity collectively beneficially owned approximately 54.6% of our common stock. D. Kyle Cerminara, Chairman of our Board of Directors, serves as Chief Executive Officer, Co-Founder and Partner of FG.
Added
On Decem ber 9, 2022, we completed our reincorporation from a Delaware corporation to a Nevada corporation. Our Common Stock and Series A Preferred are currently listed on Nasdaq under the symbols “FGF” and “FGFPP,” respectively.
Removed
Other Investments Other investments consist, in part, of equity investments made in privately held companies accounted for under the equity method. The carrying values of investments accounted for under the equity method of accounting, and the corresponding gains and losses resulting from equity pickups, are significantly impacted by certain investments held by equity method investees.
Added
As a result of the reverse merger of FGF and FGH, the consolidated financial statements for the periods prior to the merger represent the results of FGH, as the accounting acquirer. For periods subsequent to the merger, the consolidated financial statements represent the combined results of FGH and FGF.
Removed
These estimates are based on information received from the ceding companies, whereby premiums are recorded as written in the same periods in which the underlying insurance contracts are written and are based on cession statements from cedents.
Added
As a result, the current contain years presents twelve months of activity related to the FGH operations and ten months of activity related to the FGF operations, whereas the prior year only contains the activity related to FGH and does not reflect the operations of the FGF legacy business.
Removed
These statements are received quarterly and in arrears, and thus, for any reporting lag, premiums written are estimated based on the portion of the ultimate estimated premiums relating to the risks underwritten during the lag period. Premium estimates are reviewed by management periodically. Such review includes a comparison of actual reported premiums to expected ultimate premiums.
Added
Accordingly, the results of the current year and the prior year may not be directly comparable. In addition, Strong Studios, Strong/MDI and our reinsurance business are presented as discontinued operations in the accompanying consolidated financial statements. 21 We sold Strong Studios and Strong/MDI during 2024 and intend to sell our reinsurance operations in 2025.
Removed
Based on management’s review, the appropriateness of the premium estimates is evaluated, and any adjustments to these estimates are recorded in the period in which they are determined. Changes in premium estimates, including premiums receivable, are not unusual and may result in significant adjustments in any period.
Added
The results of those business units are presented as Discontinued Operations in the accompanying consolidated financial statements. Management’s discussion and analysis of financial condition and results of operations that follows reflects the continuing operations of the Company.
Removed
A significant portion of amounts included in the caption “Reinsurance balances receivable” in the Company’s consolidated balance sheets represent estimated premiums written, net of commissions, brokerage, and loss and loss adjustment expense, and are not currently due based on the terms of the underlying contracts.
Added
Our investees also consider the probability of a successful merger when valuing equity for SPACs that have not yet completed a business combination. Current Expected Credit Loss Trade accounts receivable are recorded at the invoiced amount and do not bear interest.
Removed
Premiums written are generally recognized as earned over the contract period in proportion to the risk covered. Additional premiums due on a contract that has no remaining coverage period are earned in full when written. Unearned premiums represent the unexpired portion of reinsurance provided.
Added
Management determines the allowance for expected credit losses based on several factors, including overall customer credit quality, historical write-off experience and a specific analysis that projects the ultimate collectability of the account. As such, these factors may change over time causing the allowance level and provision for expected credit losses to be adjusted accordingly.
Removed
Loss and Loss Adjustment Expense Reserves Loss and loss adjustment expense reserve estimates are based on estimates derived from reports received from ceding companies. These estimates are periodically reviewed by the Company’s management and adjusted as necessary.
Added
Revenue Recognition for Products and Services The Company accounts for revenue using the following steps: ● Identify the contract, or contracts, with a customer; ● Identify the performance obligations in the contract; ● Determine the transaction price; ● Allocate the transaction price to the identified performance obligations; and ● Recognize revenue when, or as, the Company satisfies the performance obligations. 22 We combine contracts with the same customer into a single contract for accounting purposes when the contracts are entered into at or near the same time and the contracts are negotiated as a single commercial package, consideration in one contract depends on the other contract, or the services are considered a single performance obligation.
Removed
Since reserves are estimates, the final settlement of losses may vary from the reserves established and any adjustments to the estimates, which may be material, are recorded in the period they are determined.
Added
If an arrangement involves multiple performance obligations, the items are analyzed to determine the separate units of accounting, whether the items have value on a standalone basis and whether there is objective and reliable evidence of their standalone selling price.
Removed
Loss estimates may also be based upon actuarial and statistical projections, an assessment of currently available data, predictions of future developments, estimates of future trends and other factors. Significant assumptions used by the Company’s management and third-party actuarial specialists include loss development factor selections, initial expected loss ratio selections, and weighting of methods used.
Added
The total contract transaction price is allocated to the identified performance obligations based upon the relative standalone selling prices of the performance obligations. The standalone selling price is based on an observable price for services sold to other comparable customers, when available, or an estimated selling price using a cost plus margin approach.
Removed
The final settlement of losses may vary, perhaps materially, from the reserves recorded. All adjustments to the estimates are recorded in the period in which they are determined. U.S. GAAP does not permit establishing loss reserves, which include case reserves and IBNR loss reserves, until the occurrence of an event which may give rise to a claim.
Added
We estimate the amount of total contract consideration we expect to receive for variable arrangements by determining the most likely amount we expect to earn from the arrangement based on the expected quantities of services we expect to provide and the contractual pricing based on those quantities.
Removed
As a result, only loss reserves applicable to losses incurred up to the reporting date are established, with no allowance for the establishment of loss reserves to account for expected future loss events.
Added
We only include some or a portion of variable consideration in the transaction price when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur or when the uncertainty associated with the variable consideration is subsequently resolved.
Removed
Generally, the Company obtains regular updates of premium and loss related information for the current and historical periods, which are utilized to update the initial expected loss ratio. We also experience lag between (i) claims being reported by the underlying insured to the Company’s cedent and (ii) claims being reported by the Company’s cedent to the Company.
Added
We consider the sensitivity of the estimate, our relationship and experience with the client and variable services being performed, the range of possible revenue amounts and the magnitude of the variable consideration to the overall arrangement.
Removed
This lag may impact the Company’s loss reserve estimates. Cedent reports have pre-determined due dates (for example, thirty days after each month end). As a result, the lag depends in part upon the terms of the specific contract.
Added
As discussed in more detail below, revenue is recognized when a customer obtains control of promised goods or services under the terms of a contract and is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services.
Removed
The timing of the reporting requirements is designed so that the Company receives premium and loss information as soon as practicable once the cedent has closed its books. Accordingly, there should be a short lag in such reporting.
Added
We typically do not have any material extended payment terms, as payment is due at or shortly after the time of the sale. Sales, value-added and other taxes collected concurrently with revenue producing activities are excluded from revenue. We recognize contract assets or unbilled receivables related to revenue recognized for services completed but not yet invoiced to the clients.
Removed
Additionally, most of the contracts that have the potential for large single event losses have provisions that such loss notifications are provided to the Company immediately upon the occurrence of an event. 18 Recent Accounting Pronouncements See Item 8, Note 3 – Recently Adopted and Issued Accounting Standards in the Notes to the Consolidated Financial Statements for a discussion of recent accounting pronouncements and their effect on the Company.
Added
Unbilled receivables are recorded as accounts receivable when we have an unconditional right to contract consideration. A contract liability is recognized as deferred revenue when we invoice clients, or receive cash, in advance of performing the related services under the terms of a contract. Deferred revenue is recognized as revenue when we have satisfied the related performance obligation.
Removed
Analysis of Financial Condition As of December 31, 2023 compared to December 31, 2022 Investments The table below summarizes, by type, the Company’s investments held at fair value as of December 31, 2023 and 2022.
Added
We defer costs to acquire contracts, including commissions, incentives and payroll taxes, if they are incremental and recoverable costs of obtaining a customer contract with a term exceeding one year. Deferred contract costs are reported within other assets and amortized to selling expense over the contract term, which generally ranges from one to five years.
Removed
($ in thousands) As of December 31, 2023 Cost Basis Gross Unrealized Gains Gross Unrealized Losses Carrying Amount OppFi common stock and warrants $ 1,916 $ 2,636 $ - $ 4,552 Total investments $ 1,916 $ 2,636 $ - $ 4,552 As of December 31, 2022 Cost Basis Gross Unrealized Gains Gross Unrealized Losses Carrying Amount Hagerty common stock $ 889 $ – $ 48 $ 841 Total investments $ 889 $ – $ 48 $ 841 OppFi Common Stock As a result of FG Special Situations Fund, LP (“The Fund”) unwinding the Company received approximately 860,000 common shares of OppFi common stock and approximately 360,000 $11.50 strike warrants.
Added
The Company has elected to recognize the incremental costs of obtaining a contract with a term of less than one year as a selling expense when incurred. We did not have any deferred contract costs as of December 31, 2024 or December 31, 2023. Stock-Based Compensation Expense The Company uses the fair-value method of accounting for stock-based compensation awards granted.
Removed
On the date of the distribution, the securities had an aggregate fair value of approximately $1.9 million. Hagerty Common Stock On December 15, 2022, FGMP distributed 99,999 common shares of Hagerty to the Company. On the date of distribution, the common shares had an aggregate fair value of approximately $889,000.
Added
The Company has determined the fair value of its outstanding stock options on their grant date using the Black-Scholes option pricing model along with multiple Monte Carlo simulations to determine a derived service period as the options vest based upon meeting certain performance conditions.
Removed
The Company sold the common shares during the first quarter of 2023 for a realized loss of approximately $16,000. Equity Method Investments Other investments on the Company’s consolidated balance sheets include our equity method investments.
Added
The Company determines the fair value of restricted stock units (“RSUs”) on their grant date using the fair value of the Company’s common stock on the date the RSUs were issued (for those RSUs which vest solely based upon the passage of time).
Removed
Below is a summary of the carrying values on the consolidated balance sheets: (in thousands) Year ended December 31, 2023 2022 FG Merchant Partners, LP $ 8,812 $ 5,772 FGAC Investors LLC 8,835 - FG Merger Investors LLC 4,977 - Greenfirst Forest Products Holdings LLC 908 - FG Special Situations Fund, LP - 16,814 Balance, December 31 $ 23,532 $ 22,586 On January 4, 2021, FGMP was formed as a Delaware limited partnership to co-sponsor newly formed SPACs with their founders or partners, as well as other merchant banking interests.
Added
The fair value of these awards is recorded as compensation expense over the requisite service period, which is generally the expected period over which the awards will vest, with a corresponding increase to additional paid-in capital.
Removed
The Company is the sole managing member of the general partner of FGMP and holds a limited partner interest of approximately 46% in FGMP. FGMP participates as a co-sponsor of the SPACs launched under our SPAC Platform as well as merchant banking initiatives.
Added
When the stock options are exercised, or correspondingly, when the RSUs vest, the amount of proceeds together with the amount recorded in additional paid-in capital is recorded in shareholders’ equity.
Removed
For the year ended December 31, 2023, the Company contributed $0.1 million into FGMP and has recorded equity method gains of approximately $3.0 million.
Added
Recent Accounting Pronouncements See Item 8, Note 3 – Recently Adopted and Issued Accounting Standards in the Notes to the Consolidated Financial Statements for a discussion of recent accounting pronouncements and their effect on the Company. 23 Results of Operations Year Ended December 31, 2024 Compared with Year Ended December 31, 2023 Year Ended December 31, 2024 2023 $ Change % Change (dollars in thousands) Net loss on equity securities and other holdings $ (14,675 ) $ (9,437 ) $ (5,238 ) 55.5 % Revenue from products and services 32,023 26,530 5,493 20.7 % Total revenue 17,348 17,093 255 1.5 % Expenses 42,224 33,379 8,845 26.5 % Loss from operations (24,876 ) (16,286 ) (8,590 ) 52.7 % Bargain purchase on acquisition and other income, net 1,877 2,981 (1,104 ) (37.0 )% Net loss from continuing operations (22,859 ) (12,307 ) (10,552 ) 85.7 % Revenue Total revenue during 2024 increased $0.3 million or 1.5% from 2023 with growth in our managed services business partially offset by non-cash losses from our equity method holdings.

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