FG Nexus Inc.

Notes to Consolidated Financial Statements

Note 1. Nature of Business

FG Nexus Inc. (“FG Nexus”, the “Company”, “we”, or “us”), a Nevada corporation, undertook a significant strategic shift during 2025, adopting Ether, the native cryptocurrency of the Ethereum blockchain (“Ether” or “ETH”) as its primary treasury asset. This strategy reflects the Company’s commitment to align the corporate treasury with the future of programmable finance, digital capital markets and decentralized infrastructure. In connection with the strategic shift, the Company distributed certain assets to a trust, which are no longer part of the consolidated group, as described in more detail below. In addition to operating a digital asset treasury, the Company continues to operate its merchant banking business and holds real estate and equity holdings.

Recent Developments and Transactions

On January 21, 2026, the Company’s Board of Directors (the “Board”) approved a reverse stock split of the authorized, issued and outstanding shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”) at a ratio of one(1)-for-five (5) (the “Reverse Stock Split”). The Reverse Stock Split became effective on February 13, 2026 (the “Effective Date”), at 9:30 a.m., Eastern Time, and the Company’s common shares began trading on a split-adjusted basis at the commencement of trading on the same day. No fractional shares were issued in connection with the Reverse Stock Split, rather stockholders who would have otherwise received fractional shares received cash payments in lieu of such fractional shares. After the Reverse Stock Split, the Company had 6,555,124 shares of Common Stock outstanding. All equity awards outstanding immediately prior to the Reverse Stock Split were adjusted to reflect the Reverse Stock Split. As a result of the Reverse Stock Split, all references to Common Stock herein have been adjusted to reflect the Reverse Stock Split.

In October 2025, the Company entered into an agreement to sell the remaining portion of its reinsurance business. Pursuant to the agreements, the Company will receive (1) the release of $3.3 million of collateral that the Company had posted in connection with certain reinsurance contracts; (2) the payment of $1.0 million in cash; and (3) a 40% equity interest in the entity purchasing the reinsurance business. Additionally, pursuant to the agreements, the Company agreed to leave $1.3 million dollars in cash in the reinsurance business in exchange for a promissory note in the amount of $1.3 million that accrues interest at a rate of 6% per annum with all principal and accrued interest due and payable on June 30, 2027. The sale transaction closed in early 2026.

The Company signed a non-binding letter of intent to sell its Quebec property for $15.0 million CAD. Following repayment of the existing installment loan, the transaction is expected to generate approximately $8.0-$9.0 million USD in net pretax proceeds. The letter of intent does not constitute a binding agreement, and there can be no assurance that a definitive sale agreement will be reached or that the transaction will be completed. The transaction, if completed, is expected to close during the first half of 2026, subject to the execution of definitive agreements, completion of due diligence, and satisfaction of customary closing conditions.

Loan Agreement

On October 29, 2025, the Company entered into a master digital currency loan agreement (the “MLA”) with [*] (the “Lender”). Pursuant to the MLA the Company may deliver to Lender a lending request for a borrowed asset from the Lender. If Lender agrees to make a loan (each a “Loan”), then the Lender shall transmit to the Company either (a) digital currency to the Company’s digital currency address or (b) cash via the Company’s wire instructions. The specific and final terms of a Loan shall be memorialized in a loan term sheet (the “Loan Term Sheet”). In the event of any conflict of the terms between the MLA and the terms of the applicable Loan Term Sheet, the terms of the relevant Loan Term Sheet shall govern. All Loans under the MLA are callable by Lender and may be pre-paid by the Company. Loans under the MLA shall terminate upon the maturity date or the exercise by the Company or the Lender of the callable option. The MLA requires that the Company provide collateral for all Loans in an amount to be agreed upon by the Company and the Lender as set forth in the applicable Loan Term Sheet. The Company’s collateral for a Loan is subject to margin calls and fees, the particulars of which are delineated in the applicable Loan Term Sheet.

In connection with the MLA, the Company entered into an account control agreement, dated October 29, 2025 (the “ACA”) by and between [*] (the “Custodian”), the Company and the Lender. The Company maintains some of its ETH holdings with the Custodian. The ACA provides the Custodian will acknowledge the MLA between the Company and Lender and that the Custodian will recognize that the Lender may have a security interest in certain assets of the Company maintained at Custodian.

On October 30, 2025, the Company and Lender executed a Loan Term Sheet (the “October 2025 LTS”). The October 2025 LTS provided for a $10.0 million loan with a fee of 7.9% (the “October Loan”). The October Loan was repaid in December 2025. The collateral for the October Loan was Staked ETH and the Initial Collateral Level was 170%. The margin call rate was 140%. The October 2025 LTS also provided that the following additional terms shall also apply to the October Loan: (a) post-default hedging costs and (b) certain additional remedies in the event of a default under the MLA.

In September 2025, the Board adopted a share repurchase program to acquire up to $200 million of the Company’s outstanding Common Stock (the “Common Stock Repurchase Program”). The Common Stock Repurchase Program, which is open-ended, allows the Company to repurchase its Common Stock from time to time in the open market and in negotiated transactions. Any repurchases conducted pursuant to the Common Stock Repurchase Program will be in accordance with Rule 10b-18 of the Exchange Act and will be made in accordance with applicable laws and regulations in effect from time to time. Subject to applicable rules and regulations, the shares of common stock may be purchased from time to time in the open market transactions and in amounts as we deem appropriate, based on factors such as market conditions, legal requirements, and other business considerations. Commencing on October 23, 2025, and through December 31, 2025, the Company purchased a total of approximately 1.6 million shares of its Common Stock at a total cost (including commissions) of approximately $26.1 million. Subsequent to December 31, 2025 and through March 23, 2026, the Company purchased an additional 0.6 million shares of its Common Stock at a total cost (including commissions) of approximately $8.7 million. Through March 23, 2026, the Company has repurchased approximately 25.8% of its Common Stock outstanding immediately prior to implementation of the program. All shares repurchased under the Common Stock Repurchase Program are recorded as treasury stock.

In December 2025, the Board approved a preferred share repurchase program to acquire up to 894,580 shares of the Company’s outstanding preferred shares (the “Preferred Share Repurchase Program”). The Preferred Share Repurchase Program, which is open-ended, allows the Company to repurchase its preferred shares from time to time in the open market and in negotiated transactions. Any repurchases conducted pursuant to the Preferred Share Repurchase Program will be in accordance with Rule 10b-18 of the Exchange Act and will be made in accordance with applicable laws and regulations in effect from time to time. Commencing on December 12, 2025 and through December 31, 2025 the Company purchased a total of approximately 6 thousand shares of its outstanding Series A Preferred Stock at a total of (including commissions) of approximately $0.1 million. Subsequent to December 31, 2025 and through March 23, 2026, the Company purchased an additional approximately 202 thousand shares of its Series A Preferred Stock at a total cost (including commissions) of approximately $5.0 million. Through March 23, 2026, the Company has repurchased approximately 22.6% of its Series A Preferred Stock outstanding immediately prior to implementation of the program. All repurchased Series A Preferred Stock are recorded as a reduction to the liquidation value of the Preferred Stock.

On August 7, 2025, the Company entered into a Sales Agreement (the “Sales Agreement”) with ThinkEquity LLC (the “Sales Agent”), pursuant to which the Company may offer and sell, from time to time through the Sales Agent, up to such number or dollar amount of shares that would (a) exceed the number or dollar amount of shares of Common Stock registered on the effective registration statement pursuant to which the offering is being made, (b) exceed the number of authorized but unissued shares of Common Stock (less shares of Common Stock issuable upon exercise, conversion or exchange of any outstanding securities of the Company or otherwise reserved from the Company’s authorized capital stock), (c) exceed the number or dollar amount of shares of Common Stock permitted to be sold under Form S-3 or (d) exceed the number or dollar amount of shares of Common Stock for which the Company has filed a Prospectus Supplement (defined below) (the lesser of (a), (b), (c) and (d), the “Shares”) of the Company’s Common Stock, subject to the terms and conditions of the Sales Agreement. The Company filed a Registration Statement on Form S-3 offering up to $5 billion of the Shares. Under the Sales Agreement, the Sales Agent may sell the Shares in sales deemed to be an “at-the-market offering” as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended (the “Securities Act”), including sales made directly on or through The Nasdaq Global Market or any other existing trading market for the Common Stock, in negotiated transactions at market prices prevailing at the time of sale or at prices related to such prevailing market prices, and/or any other method permitted by law. The Company may instruct the Sales Agent not to sell the Shares if the sales cannot be effected at or above the price designated by the Company from time to time. Through December 31, 2025, the Company sold a total of approximately 0.4 million shares of Common Stock pursuant to the Sales Agreement, which generated gross proceeds of approximately $15.5 million, or approximately $14.1 million after offering costs. As of October 13, 2025, the Company suspended the ATM. While the Company plans to reinstate the ATM and to sell additional Shares, as of the date of this Annual Report on Form 10-K (this “Form 10-K”), the reinstatement of the ATM has not yet occurred.

In July 2025, the Company entered into securities purchase agreement with certain accredited investors (the “Purchasers”) pursuant to which the Company agreed to sell and issue to the Purchasers in a private placement offering (the “Private Placement Offering”) pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to an aggregate of 8.0 million shares (the “Pre-Funded Warrant Shares,”) of the Company’s common stock, par value $0.001 per share (the “Common Stock”) at an offering price of $25.00 per Pre-Funded Warrant payable at the option of the Purchaser in cash, Bitcoin, USDC or ETH. The Private Placement Offering closed in August 2025, and the Company received gross cash proceeds of approximately $176.0 million, or $168.6 million after offering costs, and cryptocurrency totaling approximately $24.0 million. Upon the effectiveness of the September Charter Amendment (as defined below), approximately 6.8 million Pre-Funded Warrants automatically converted into shares of the Company’s Common Stock. As of December 31, 2025, all Pre-Funded Warrants have been converted into the Company’s Common Stock.

As approved by a majority of its stockholders by written consent, dated July 23, 2025, the Company filed a certificate of amendment to its amended and restated articles of incorporation with the Nevada Secretary of State on September 5, 2025 to (i) increase the total number of authorized shares of Common Stock from 0.8 million to 200.0 million, (ii) increase the total number of authorized shares of preferred stock, par value $.001 per share (the “Undesignated Preferred Stock”) from 100.0 million to 500.0 million, (iii) increase the total number of authorized shares of 8% cumulative preferred stock, Series A (the “Series A Preferred Stock”) from 1.0 million to 15.0 million and (iv) change the name of the Company to “FG Nexus Inc.” (the “September Charter Amendment”). The September Charter Amendment was declared effective on September 5, 2025.

A majority of the stockholders of Company approved, by written consent dated September 4, 2025, a certificate of amendment to its amended and restated articles of incorporation to (a) increase the total number of authorized shares of Common Stock from 200.0 million shares to 180.0 billion shares and the total number of authorized shares of preferred stock from 500.0 million shares to 100.0 billion shares (collectively, the “Preferred Stock”), of which (i)10.0 billion shares of Preferred Stock (increased from 15.0 million) are designated 8% cumulative preferred stock, Series A, par value $25.00 (the “Series A Preferred Stock”), and (ii)90.0 billion shares of Preferred Stock (increased from 485.0 million shares) are undesignated preferred stock, par value $.001 per share (the “Undesignated Preferred Stock”), (b) require that certain “Concurrent Jurisdiction Actions” and “Internal Actions”(as such terms are defined in NRS 78.046, collectively, the “Internal Actions”) must be brought solely or exclusively in the Eighth Judicial District Court of Clark County in the State of Nevada and that such Internal Actions should be tried before a judge rather than a jury, in accordance with NRS 78.046(4); (c) clarify that any change of the Company’s name shall not require consent of the Company’s stockholders, in accordance with NRS 78.390(8); (d) have the Company “opt out” of the interested stockholder combination provisions set forth in NRS Sections 78.411 to 78.444, inclusive; and (e) have the Company “opt out” of the control share provisions set forth in NRS Sections 78.378 to 78.3793, inclusive (the “Additional Charter Amendment”). In connection with the Additional Charter Amendment, we also amended our By-laws to clarify the applicable voting thresholds for proposed amendments to the By-Laws. The Additional Charter Amendment was filed with and declared effective by the Secretary of State of the State of Nevada, on October 7, 2025.

In August 2025, in connection with the Private Placement Offering and the launch of our treasury strategy, the Company transferred a significant portion of its legacy assets (the “Asset Transfer”) to a trust (the “CVR Trust”) established in connection with the creation of contingent value rights (“CVRs”) for the benefit of the Company’s stockholders as of August 8, 2025. The Company distributed the CVRs prior to the effectiveness of the Charter Amendment and the exercise of any of the Pre-Funded Warrants sold in the Private Placement Offering. The CVRs represent the contractual right to receive a pro rata portion of the net proceeds received by the CVR Trust upon the future disposition, if any, of the assets transferred to the CVR Trust by the Company. See Note 6 for additional details.

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. Upon completion of the Merger, the combined company was renamed to Fundamental Global Inc.

On May 3, 2024, Strong Global Entertainment, Inc. (“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. 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.

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”). 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. 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”). 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 condensed consolidated financial statements included in this Form 10-K.

In April 2024, the Company sold its Digital Ignition technology incubator and co-working facility in Alpharetta, Georgia for gross proceeds of $6.5 million. In connection with the sale of the land and building, the Company recorded a non-cash impairment charge of approximately $1.4 million during the first quarter of 2024 to adjust the carrying value of the assets to the fair market value less costs to sell.

On October 10, 2024, the Company’s 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 “2024 Reverse Stock Split”). The 2024 Reverse Stock Split became effective on October 31, 2024, at 5:00 p.m., Eastern Time. 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 2024 Reverse Stock Split were adjusted to reflect the 2024 Reverse Stock Split.

Business Segments

The Company currently has two primary operating segments, digital assets and merchant banking.

Digital Assets and Real World Asset Tokenization

Following the private placement in July 2025, the Company transitioned its operations to focus primarily on the tokenization of real world assets supported by a digital asset treasury model with ETH currently as our initial primary treasury asset. Ethereum is the foundation of digital finance and settlement layer for the majority of stablecoins, Decentralized Finance (DeFi), and tokenized assets. ETH is the native token of the Ethereum network, which we purchased ETH as our initial treasury asset.

The Company’s treasury strategy is focused on commercializing and expanding the tokenization of real world assets, potentially including affordable housing, reinsurance, real estate and other asset classes. As of December 31, 2025, the Company held 40,093 ETH. All of the Company’s ETH is held in custodial accounts at Anchorage and BitGo (both as defined below) and is currently un-staked for maximum financial flexibility and liquidity.

The Company utilizes third-party custodians, including Anchorage and BitGo as well as third-party treasury management services including Galaxy Digital (as defined below) to facilitate our treasury strategies.

We manage our merchant banking and asset management activities through FG Management Solutions LLC (“FGMS”), which provides 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”), 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. 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. (“FGC”), a self-managed real estate company focused on a growing portfolio of manufactured housing communities that are owned and operated by FGC, and Craveworthy LLC (“Craveworthy”), an innovative fast casual restaurant platform company. Saltire Holdings Ltd. (“Saltire”), a Canadian public company that allocates capital to equity, debt and/or hybrid securities of high-quality private companies, among others.

Other

The Company owns real estate in Quebec, Canada that is leased pursuant to a long-term operating lease. The Company also owned and operated its Digital Ignition technology incubator and co-working facility in Alpharetta, Georgia, which was sold in April 2024.

The Company previously reported managed services and reinsurance as operating segments, both of which were reclassified to discontinued operations during the current year. The Company also previously operated Strong/MDI Screen Systems, Inc. (“Strong/MDI”) and Strong Studios, Inc. (“Strong Studios”), which were sold in the previous year. Discontinued operations are more fully described in Note 7.

Note 2. Significant Accounting Policies

Basis of Presentation

The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company and all majority-owned and controlled domestic and foreign subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Unless the context indicates otherwise, references to the “Company” include the Company and its majority-owned and controlled domestic and foreign subsidiaries.

As a result of the reverse merger of FGF and FGH (see Note 5), 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. In addition, the current and historical financial results of Strong Studios, Strong/MDI, the managed services segment and the reinsurance segment are presented as discontinued operations and are excluded from results from continuing operations in the accompanying consolidated financial statements.

Unless otherwise indicated, all references to “dollars” and “$” in this Form 10-K are to, and amounts are presented in, U.S. dollars.

Consolidation Policies

The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany balances and transactions have been eliminated upon consolidation.

The consolidated financial statements include the accounts of the Company and entities in which it is required to consolidate under either the Variable Interest Entity (“VIE”) or Voting Interest Entity (“VOE”) models. Both models require the reporting entity to identify whether it has a controlling financial interest in a legal entity and is therefore required to consolidate the legal entity. Under the VOE model, a reporting entity with ownership of a majority of the voting interest of a legal entity is generally considered to have a controlling financial interest. The VIE model was established for situations in which control may be demonstrated other than by the possession of voting rights in a legal entity and instead focuses on the power to direct the activities that most significantly impact the legal entity’s economic performance, as well as the rights to receive benefits and obligations to absorb losses that could potentially be significant to the legal entity.

The determination of whether a legal entity is consolidated under either model is reassessed where there is a substantive change in the governing documents or contractual arrangements of the entity, to the capital structure of the entity or in the activities of the entity. Management continuously reassesses whether it should consolidate under either model. As a result of the transfer of STS to the CVR Trust (see Note 6), the entity is no longer consolidated into the Company’s financial statements. There have been no other changes to the legal entities that are consolidated during the year ended December 31, 2025.

As a result of the transfer of assets to the CVR Trust, the Company does not have any non-consolidated VIEs as of December 31, 2025.

See Note 8 for further information regarding the Company’s equity holdings.

The Use of Estimates in the Preparation of Consolidated Financial Statements

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results and changes in facts and circumstances may alter such estimates and affect results of operations and financial position in future periods. Estimates and their underlying assumptions are reviewed on an ongoing basis. Changes in estimates are recorded in the accounting period in which they are determined.

Our business and the businesses of our equity holdings are subject to general political and economic risks, including the adverse impact of changes to international trade and tariff policies, which we are closely monitoring. The uncertainty as to the extent and duration of additional tariffs that have or may be imposed could impact estimates we have made, including those for credit losses and valuation of our equity securities and other holdings.

The Company’s digital assets as of December 31, 2025 is solely comprised of ETH, which falls within the scope of Accounting Standards Codification (“ASC”) 350-60,Intangible – Goodwill and Other – Crypto Assets. The Company does not hold any digital assets that do not fall into the scope of ASC 350-60.

As of December 31, 2025, the Company held $119.4 million of ETH, which are held at fair value and are included as part of the ETH digital assets line on the condensed consolidated balance sheets. In determining the fair value of the ETH in accordance with ASC 820,Fair Value Measurement, the Company utilizes Coinbase as the principal market. The activity from remeasurement of ETH at fair value is reflected in the consolidated statements of operations within Unrealized measurement of fair value of ETH digital assets. As part of the Private Placement Offering, certain investors contributed cryptocurrency assets (ETH, Bitcoin and USDC). The Company converted the Bitcoin and USDC received to ETH. Realized gains and losses from the derecognition of digital assets are included in Realized gain (loss) on digital assets, net in the consolidated statements of operations. The Company uses a first-in, first-out methodology to assign costs to digital assets for purposes of the digital assets held and realized gains and losses. Sales and purchases of digital assets are reflected as cash flows from investing activities in the consolidated statements of cash flows. Contributions of digital assets received as part of the consideration received in the Private Placement Offering are presented as noncash financing activities in the consolidated statements of cash flows.

ETH Staking

Beginning in the third quarter of 2025, the Company used the proceeds from its capital raising activities to acquire and deploy ETH in native staking activities. The Company has entered into separate contractual agreements with various third-party entities to facilitate its ETH staking activities. The Company commenced native staking in August of 2025.

The Company utilizes a third-party asset manager to manage and stake ETH on its behalf. Through its agreement with the asset manager, the Company’s ETH is held by qualified custodians, staked in the Ethereum protocol, and the stake is delegated to third party validators. When chosen as validators by the Ethereum network, these validators earn staking rewards and transaction fees proportional to the amount of stake delegated to them. The Company recognizes rewards from native staking as revenue in accordance with ASC 606,Revenue from Contracts with Customers. However, since the amount of rewards are not known by the Company until a validation activity is completed, and the Company receives rewards in their custodial account, the staking rewards are constrained under the Topic 606 guidance on variable consideration until such time.

Because the Company is not the principal to the block validation service, it does not control the full output of the reward-generating activity, and instead receives net staking rewards, after validator commissions are deducted. As such, the Company presents staking revenue on a net basis, reflecting only the portion of protocol rewards to which it is entitled. Asset management and other fees are presented as separate operating expenses within General and administrative expenses on the condensed consolidated statements of operations.

Holdings in Equity Securities and Other Holdings

Prior to the distribution of assets to the CVR Trust (see Note 6 for additional details), Other holdings consisted, in part, of equity holdings made in privately held companies accounted for under the equity method. The Company utilizes the equity method to account for holdings when it possesses the ability to exercise significant influence, but not control, over the operating and financial policies of the investee. The ability to exercise significant influence is presumed when the holder possesses more than 20% of the voting interests of the investee. This presumption may be overcome based on specific facts and circumstances that demonstrate that the ability to exercise significant influence is restricted. The Company applies the equity method to holdings in common stock and to other holdings when such other holdings possess substantially identical subordinated interests to common stock.

In applying the equity method, the Company records the holding at cost and subsequently increase or decrease the carrying amount of the holding by its proportionate share of the net earnings or losses and other comprehensive income of the investee. The Company’s share of the entity’s income or loss is recorded on a one quarter lag for its equity method holdings. We record dividends or other equity distributions as reductions in the carrying value of the holding. Should net losses of the investee reduce the carrying amount of the holding to zero, additional net losses may be recorded if other holdings in the investee are at-risk, even if we have not committed to provide financial support to the investee. Such additional equity method losses, if any, are based upon the change in our claim on the investee’s book value.

When the Company receives distributions from its equity method holdings, it utilizes the cumulative earnings approach. When classifying the related cash flows under this approach, the Company compares the cumulative distributions received, less distributions received in prior periods, with the Company’s cumulative equity in earnings. Cumulative distributions that do not exceed cumulative equity in earnings represent returns on holdings and are classified as cash inflows from operating activities. Cumulative distributions in excess of cumulative equity in earnings represent returns on holdings and are classified as cash inflows from investing activities.

In addition to holdings accounted for under the equity method of accounting, other holdings also consisted of equity the Company has purchased in a limited partnership, a limited liability company, and a corporation for which there does not exist a readily determinable fair value. The Company accounted for these holdings at their cost, minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar holdings by the same issuer. When the Company observed an orderly transaction of an investee’s identical or similar equity securities, it adjusted the carrying value based on the observable price as of the transaction date. Once the Company records such an adjustment, the holding is considered an asset measured at fair value on a nonrecurring basis. Any profit distributions the Company receives on these holdings are included in net holdings income.

See Note 8 for additional information regarding the Company’s equity holdings.

Cash and Cash Equivalents

Cash and cash equivalents include cash and highly liquid investments with original maturities of 90 days or less.

Revenue Recognition

The Company accounts for revenue for rental income and merchant banking advisory services using the following steps:

The Company combines 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. 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. 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. Management estimates the amount of total contract consideration the Company expects 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 the Company expects to provide and the contractual pricing based on those quantities. The Company only includes 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. Management considers the sensitivity of the estimate, the Company’s 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.

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 providing services. The Company typically does 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.

The Company recognizes contract assets or unbilled receivables related to revenue recognized for services completed but not yet invoiced to the clients. 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.

The Company defers 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. 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. The Company did not have any deferred contract costs as of December 31, 2025 or December 31, 2024.

Property, Plant and Equipment

Significant expenditures for the replacement or expansion of property, plant and equipment are capitalized. Depreciation of property, plant and equipment is provided over the estimated useful lives of the respective assets using the straight-line method. For financial reporting purposes, assets are depreciated over the estimated useful lives of 20 years for buildings and improvements, the lesser of the lease term or the estimated useful life for leasehold improvements, three toten years for machinery and equipment, seven years for furniture and fixtures andthree years for computers and accessories. The Company generally uses accelerated methods of depreciation for income tax purposes. The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The recoverability of property, plant and equipment is based on management’s estimates of future undiscounted cash flows and these estimates may vary due to a number of factors, some of which may be outside of management’s control. To the extent that the Company is unable to achieve management’s forecasts of future income, it may become necessary to record impairment losses for any excess of the net book value of property, plant and equipment over their fair value.

The Company incurs maintenance costs on all of its major equipment. Repair and maintenance costs are expensed as incurred.

Business Combinations

The Company uses the acquisition method of accounting for acquired businesses. Under the acquisition method, the financial statements reflect the operations of an acquired business starting from the completion of the acquisition. The assets acquired and liabilities assumed are recorded at their respective estimated fair values at the date of the acquisition. Any excess of the purchase price over the estimated fair values of the identifiable net assets acquired is recorded as goodwill. Significant judgment is often required in estimating the fair value of assets acquired, particularly intangible assets. As a result, in the case of significant acquisitions, the Company normally obtains the assistance of third-party valuation specialists in estimating fair values of tangible and intangible assets. The fair value estimates are based on available historical information and on expectations and assumptions about the future, considering the perspective of marketplace participants. While management believes those expectations and assumptions are reasonable, they are inherently uncertain. Unanticipated market or macroeconomic events and circumstances may occur, which could affect the accuracy or validity of the estimates and assumptions.

Income Taxes

The Company follows the asset and liability method of accounting for income taxes, whereby deferred income tax assets and liabilities are recognized for (i) the differences between the financial statement carrying amount of existing assets and liabilities and their respective tax bases and (ii) loss and tax credit carry-forwards. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the date of enactment. Future tax benefits are recognized to the extent that realization of such benefits is more likely than not and a valuation allowance is established for any portion of a deferred tax asset that management believes will not be realized. Current federal income taxes are charged or credited to operations based upon amounts estimated to be payable or recoverable as a result of taxable operations for the current year. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in income tax expense (benefit).

Concentration of Credit Risk

Financial instruments which potentially expose the Company to concentrations of credit risk include holdings in equity securities, cash, and ETH digital assets.

The Company maintains its cash with a major U.S. domestic banking institution which is insured by the Federal Deposit Insurance Corporation (“FDIC”) for up to $250,000. As of December 31, 2025, the Company held funds in excess of these FDIC insured amounts. The terms of these deposits are on demand to mitigate some of the associated risk. The Company has not incurred losses related to these deposits. The Company sells its products to a large number of customers in many different geographic regions. To minimize credit risk related to accounts receivable, management performs ongoing credit evaluations of its customers’ financial condition.

As of December 31, 2025, the Company’s digital assets were comprised solely of ETH. The fair value of the Company’s ETH holdings is subject to significant volatility. Adverse movements in ETH prices could result in mark to market adjustments under applicable accounting policies and materially affect the Company’s results of operations and stockholders’ equity. As of December 31, 2025, the Company, did not employ derivative hedges to mitigate ETH price risk, and any such strategies, if adopted, would introduce additional basis, liquidity, counterparty and operational risks.

The Company’s ETH digital assets are held with qualified custodians. Concentration with any custodian increases the impact of a counterparty failure or operational disruption. Management evaluates the financial condition, controls, and insurance arrangements of key providers and monitors concentration exposures.

Stock-Based Compensation

The Company has accounted for stock-based compensation under the provisions of ASC Topic 718 – Stock Compensation, which requires the use of the fair-value based method to determine compensation for all arrangements under which employees and others receive shares of stock or equity instruments. The fair value of each stock option award is estimated on the date of grant using the Black-Scholes valuation model using assumptions for expected volatility, expected dividends, expected term, and the risk-free interest rate along with multiple Monte Carlo simulations to determine a derived service period as the options vest based upon meeting certain performance conditions. The fair value of each stock option award is recorded as compensation expense on a straight-line basis over the requisite service period, which is generally the period in which the stock options vest, with a corresponding increase to additional paid-in capital.

The Company has also issued restricted stock units (“RSUs”) to certain of its employees and directors which have been accounted for as equity-based awards since, upon vesting, they are required to be settled in the Company’s common shares. We have used the fair value of the Company’s common stock on the date the RSUs were issued to estimate the grant date fair value of those RSUs which vest solely based upon the passage of time. The fair value of each RSU is recorded as compensation expense over the requisite service period, which is generally the expected period over which the awards will vest.

Based upon the Company’s historical forfeiture rates relating to stock options and RSUs, the Company has not made any adjustment to stock compensation expense for expected forfeitures as of December 31, 2025 or during the years ended December 31, 2025 and 2024.

Foreign Currency Translation

For the Company’s foreign subsidiary, the environment in which the business conducts operations is considered the functional currency, generally the local currency. The assets and liabilities of the foreign subsidiary are translated into the United States dollar at the foreign exchange rates in effect at the end of the period. Revenue and expenses of the Company’s foreign subsidiary are translated using an average of the foreign exchange rates in effect during the period. Translation adjustments are not included in determining net earnings but are presented in comprehensive loss within the consolidated statements of comprehensive loss. Transaction gains and losses that arise from foreign exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the consolidated statements of operations as incurred. If the Company disposes of its holding in a foreign entity, any gain or loss on currency translation balance recorded in accumulated other comprehensive loss would be recognized as part of the gain or loss on disposition.

Contingencies

The Company accrues for contingencies when its assessments indicate that it is probable that a liability has been incurred and an amount can be reasonably estimated. The Company’s estimates are based on currently available facts and its estimates of the ultimate outcome or resolution. Actual results may differ from the Company’s estimates, resulting in an impact, positive or negative, on earnings.

Fair Value of Financial Instruments

The carrying values of certain financial instruments, including cash, accounts receivable, short-term holdings, deposits held, accounts payable, other accrued expenses, and short-term debt, approximate fair value due to their short-term nature. The Company measures the fair value of financial instruments in accordance with GAAP which defines fair value as the exchange price that would be received for an asset (or paid to transfer a liability) in the principal or most advantageous market for the asset (or liability) in an orderly transaction between market participants on the measurement date. GAAP also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company’s short-term debt is recorded at amortized cost. See Note 8 for further information on the fair value of the Company’s financial instruments.

Earnings (Loss) Per Common Share

Basic earnings (loss) per common share is computed using the weighted average number of shares outstanding during the respective period.

Diluted earnings (loss) per common share assumes conversion of all potentially dilutive outstanding stock options, restricted stock units, warrants or other convertible financial instruments. Potential common shares outstanding are excluded from the calculation of diluted earnings (loss) per share if their effect is anti-dilutive.

Note 3. Recently Adopted and Issued Accounting Standards

Recently Adopted Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-08, which changes the accounting and disclosure requirements for certain cryptocurrency assets that meet specific criteria (e.g., fungible intangible assets secured with cryptography that do not provide the holder with rights to underlying goods or services). This ASU mandates that in-scope crypto assets be measured at fair value at each reporting period, with changes in fair value recorded in net income. It also requires additional disclosures regarding significant holdings, activity rollforward, and any sale restrictions. The standard is effective for fiscal years beginning after December 15, 2024, including interim periods. The Company implemented ASU 2023-08 effective with the implementation of its ETH treasury operations in 2025.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. ASU 2023-09 is effective on a prospective basis for annual periods beginning after December 15, 2024, with early adoption permitted. The Company adopted ASU 2023-09 for the annual period ended December 31, 2025. The adoption of ASU 2023-09 did not impact amounts recorded in the Company’s financial statements but, instead, required more detailed disclosures in the notes to the financial statements.

Recently Issued Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (“ASU 2024-03”). ASU 2024-03 requires the disaggregated disclosure of specific expense categories, including purchases of inventory, employee compensation, depreciation, and amortization, within relevant income statement captions. ASU 2024-03 also requires disclosure of the total amount of selling expenses along with the definition of selling expenses. ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Adoption of ASU 2024-03 can either be applied prospectively to consolidated financial statements issued for reporting periods after the effective date of ASU 2024-03 or retrospectively to any or all prior periods presented in the consolidated financial statements. While early adoption is permitted, the Company does not plan to adopt ASU 2024-03 early. ASU 2024-03 will likely result in additional disclosures being included in the Company’s financial statements once adopted. The Company is currently evaluating the provisions of ASU 2024-03.

Note 4. Digital Assets

The following table sets forth the units held, cost basis, and fair value of ETH digital assets held, as shown on the consolidated balance sheet as of December 31, 2025 ($ in thousands):

Cost basis is equal to the cost of the ETH digital assets net of any transaction fees, if any, at the time of purchase or upon receipt. Fair value represents the quoted ETH prices within the Company’s principal market at the time of measurement (5:00pm Eastern Time). As of December 31, 2024, the Company did not hold any ETH digital assets.

The following table represents a reconciliation of ETH digital assets held (in thousands):

Additions are the result of purchases and receipts of ETH, BTC and USDC in connection with the Private Placement Offering (see Note 1). The receipts of ETH from native staking represent the rewards earned from native staking.

Note 5. Merger of FG and FGH

On February 29, 2024, FG and FGH completed a merger transaction pursuant to which FGH common stockholders received one share of FG common stock for each share of common stock of FGH held by such stockholder.

The merger involved a change of control between two businesses and was accounted for as a reverse acquisition in accordance with ASC 805 Business Combinations (“ASC 805”). A reverse acquisition occurs when the entity that issues securities (the legal acquirer) is identified as the acquiree for accounting purposes and the entity whose equity interests are acquired (the legal acquiree) is identified as the acquirer for accounting purposes. FGH was determined to be the accounting acquirer.

Per ASC 805, the acquirer measures the identifiable assets acquired and the liabilities assumed at their acquisition-date fair values. The Company determined the fair value of the FGF assets and liabilities as of February 29, 2024 was approximately $17.9 million. In a reverse acquisition, generally the legal acquirer (accounting acquiree) issues consideration in the transaction. As such, the fair value of the consideration transferred is determined based on the number of equity interests the accounting acquirer (legal acquiree) would have had to issue to the owners of the legal acquirer (accounting acquiree) in order to provide the same ratio of ownership of equity interests in the combined entity as a result of the reverse acquisition. Management determined total consideration was $15.6 million The value of the net assets acquired exceeded the purchase price by approximately $2.3 million. As a result, the Company recorded a gain on the bargain purchase during 2024, which is recorded within bargain purchase on acquisition and other (expense) income, net on the consolidated statement of operations. Management evaluated the bargain purchase gain and revisited the value of the individual assets acquired and liabilities assumed in the merger and determined that no adjustments to reduce the fair value of the assets or increase the fair value of the liabilities assumed were necessary.

The table below represents the pro forma consolidated income statement as if FG had been included in the consolidated results of the Company for the year ended December 31, 2024. The revenue amounts below exclude revenue generated by our discontinued operations.

Note 6. Distribution of Assets to CVR Trust

As discussed above, the Company distributed a significant portion of its legacy assets to the CVR Trust in connection with the creation of CVRs for the benefit of the Company’s stockholders as of August 8, 2025. The CVR Trust is a Delaware statutory trust. The Management Committee of the CVR Trust will manage the liquidation and monetization of the CVR Trust’s assets, whether such assets are held directly by the CVR Trust or indirectly through the CVR Trust’s wholly-owned subsidiary, FG CVR SpinCo, LLC, a Delaware limited liability company (the “SpinCo”). The CVR Trust is the sole member and manager of SpinCo.

Management evaluated whether the Company is required to consolidate the CVR Trustunder ASC 810. Management concluded that although the CVR Trust qualifies as a variable interest entity (“VIE”) pursuant to ASC 810, the Company is not the primary beneficiary as the Company does not hold a variable interest and does not possess both (1) power over significant activities and (2) exposure to potentially significant benefits or losses. Accordingly, consolidation is not required.

The transferred assets included: (i) all interests in STS, (ii) the preferred shares of Saltire Capital Ltd. (“Saltire”) plus all accumulated dividends, (iii) all shares or other interests in FG Merchant Partners, (iv) all interests in Firefly Systems Inc., (v) all interests in GreenFirst Forest Products Ltd., (vi) all interests in FG Communities Inc., (vii) all interests in Craveworthy Brands, (viii) all interests in FG Merger II Corp., (ix) all interests in Aldel Financial II Inc., (x) all interests in Greenland Exploration Limited, (xi) all interests in Argo Holdings, (xii) all interests in Think Markets, (xiii) all interests in Pivotal Capital, (xiv) all interests in B-Scada Inc. and (xv) all current cash and cash equivalents of the Company as of the establishment of the CVR Trust. The following table summarizes the book values of the assets transferred to the CVR Trust (in thousands):

Note 7. Discontinued Operations

Reinsurance

The Company’s wholly owned reinsurance subsidiary, FG Reinsurance Ltd (“FGRe”), a Cayman Islands limited liability company, provides specialty property and casualty reinsurance. 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”). 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.

During the fourth quarter of 2024, the Board approved a plan to evaluate the potential sale of the Company’s reinsurance business. As a result, management evaluated the classification of its reinsurance business as a discontinued operation as of December 31, 2024 and determined the reinsurance business is a component of an entity and represented a discontinued operation. Accordingly, the reinsurance business has been included as part of discontinued operations for all periods presented.

On March 14, 2025, the Company entered into an agreement for the sale of the entire issued share capital of FG RE Corporate Member Limited and for the planned commutation of its Lloyds of London reinsurance treaties UHA 251 22, B1868HT2300259, and B1868HT2400259. The transaction closed during the second quarter of 2025, and the Company received consideration of $5.6 million. In October 2025, the Company entered into an agreement to sell the remaining portion of its reinsurance business. Pursuant to the agreements, the Company will receive (1) the release of $3.3 million of collateral that the Company had posted in connection with certain reinsurance contracts; (2) the payment of $1.0 million in cash; and (3) a 40% equity interest in the entity purchasing the reinsurance business. Additionally, pursuant to the agreements, the Company agreed to leave $1.3 million dollars in cash in the reinsurance business in exchange for a promissory note in the amount of $1.3 million that accrues interest at a rate of 6% per annum with all principal and accrued interest due and payable on June 30, 2027.

During the fourth quarter of 2024, the Company recorded an impairment charge of approximately $2.1 million to adjust the carrying amount of the disposal group to its fair value less cost to sell. The Company adjusted the impairment charge in 2025 and recorded an additional impairment charge of $0.1 million.

Strong Technical Services, Inc.

On August 8, 2025, the Company transferred its ownership of Strong Technical Services, Inc. (its managed services operating segment) to the CVR Trust, as described above. Management evaluated the classification Strong Technical Services as a discontinued operation and determined it is a component of an entity and represented a discontinued operation. Accordingly, the managed services segment. is included as part of discontinued operations in the accompanying consolidated financial statements.

Strong/MDI

On May 3, 2024, Strong Global Entertainment entered into the Acquisition Agreement with FGAC, Strong/MDI, FGAC Investors LLC, and CG Investments VII Inc. On September 25, 2024, Strong Global Entertainment completed the transaction. As part of the closing, FGAC was renamed Saltire. Pursuant to the Acquisition Agreement, Strong Global Entertainment received the equivalent of approximately $29.5 million in cash and preferred and common shares of Saltire, consisting of: (i) cash consideration in an amount equal to 25% of the net proceeds of a concurrent private placement (or $0.8 million), (ii) the issuance of preferred shares with an initial preferred share redemption amount of $9.0 million, and (iii) the issuance of $19.7 million of Saltire common shares. In connection with the transaction, and after including the impact of the reclassification of approximately $5.4 million from accumulated other comprehensive income to realized loss on foreign exchange, the Company recorded a net gain on the sale of Strong/MDI of approximately $21.8 million during the third quarter of 2024. Upon completion of the transaction, Strong Global Entertainment held an ownership interest of approximately 37.3% in Saltire, which is 23.8% as of December 31, 2025.

Management evaluated the classification of Strong/MDI as a discontinued operation and determined Strong/MDI is a component of an entity and represented a discontinued operation. Accordingly, Strong/MDI has been included as part of discontinued operations for the year ended December 31, 2024.

Strong Studios

In March 2022, Strong Studios acquired, from Landmark Studio Group LLC (“Landmark”), the rights to original feature films and television series, and was assigned third party rights to content for global multiplatform distribution.

In September 2023, the Company acquired all of the outstanding capital stock of Unbounded Media Corporation (“Unbounded”), an independent media and creative production company.

As of December 31, 2023, the board of directors of Strong Global Entertainment approved the Company’s plan to exit its content business, including Strong Studios and Unbounded and authorized management to proceed with such plan. As a result, management evaluated the classification of Strong Studios as a discontinued operation as of December 31, 2023 and determined Strong Studios is a component of an entity and represented a discontinued operation. Accordingly, Strong Studios has been included as part of discontinued operations for all periods presented.

The Company determined that the disposal of the entities described above are considered a strategic shift that will have a major effect on the Company’s operations and financial results because these businesses historically represented a significant portion of the Company’s revenues and assets and operated as distinct lines of business.

The assets and liabilities included as part of discontinued operations as of December 31, 2025 and December 31, 2024 related to the Company’s managed services and reinsurance businesses. The major classes of assets and liabilities are as follows (in thousands):

The major line items constituting the net income (loss) from discontinued operations are as follows (in thousands):

Note 8. Equity Holdings and Fair Value Disclosures

The Company accounts for each of its equity holdings using either the fair value method, the equity method or the cost method.

As of December 31, 2025, following the transfer of assets to the CVR Trust, the Company’s equity holdings consisted solely common shares of Saltire carried at $14.7 million, which is accounted for under the equity method.

As of December 31, 2024, the Company held approximately $60.1 million in holdings in equity securities and other holdings. The Company accounts for each of its equity holdings using either the fair value method, the equity method or the cost method as summarized below as of December 31, 2024 (in thousands):

Equity Method Holdings

As of December 31, 2025, the Company held approximately 23.8% of the outstanding common shares of Saltire. During the year ended December 31, 2025 and December 31, 2024, the Company recorded an equity method loss on the shares of $2.9 million and an equity method gain of $13 thousand, respectively. Based on quoted market prices, the market value of the Company’s ownership in common shares of Saltire was $9.0 million at December 31, 2025.

The summarized financial information presented below reflects the underlying financial information for Saltire, the Company’s sole holding accounted for under the equity method on December 31, 2025, (in thousands):

Each of the following equity method holdings were transferred to the CVR Trust in August 2025 and are no longer held by the Company. See Note 6 for additional details.

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. The Company was the sole managing member of the general partner of FGMP and held a limited partner interest of approximately 50% in FGMP directly and through its subsidiaries. FGMP participates as a co-sponsor of the SPACs launched under our SPAC Platform as well as merchant banking initiatives.

The Company recorded an equity method gain of $0.1 million and an equity method loss of $2.7 million during the year ended December 31, 2025 and December 31, 2024, respectively. The Company made capital contributions of approximately $22 thousand to FGMP during the year ended December 31, 2025.

The Company held direct limited liability company interests in FGAC Investors LLC, which holds equity interests in (i) FG Acquisition Corp., (ii) FG Merger Investors LLC, which maintains holdings in iCoreConnect (as defined below), and (iii) GreenFirst Forest Products Holdings, LLC, which holds equity securities in GreenFirst (as defined below). Management determined that it had the ability to exercise significant influence over FGAC Investors LLC, FG Merger Investors LLC and GreenFirst Forest Products Holdings, LLC, and accounted for each of these holdings under the equity method of accounting.

For the year ended December 31, 2025 and December 31, 2024, the Company recorded an equity method loss on FG Merger Investors LLC of approximately $25 thousand and $3.8 million, respectively. The Company recorded an equity method loss from GreenFirst Forest Products Holdings, LLC of approximately $0.1 million and $0.3 million for the year ended December 31, 2025 and December 31, 2024, respectively, and a loss of $2.3 million and $4.6 million from FGAC Investors LLC for the year ended December 31, 2025 and December 31, 2024, respectively.

The Company recorded an equity method gain from FG Merger Investors II LLC (“FGMI”) of approximately $0.2 million and $0 during the year ended December 31, 2025 and December 31, 2024, respectively. The Company made capital contributions of approximately $0.3 million to FGMI during the year ended December 31, 2025. For the year ended December 31, 2025, the Company recorded an equity method gain on Aldel II LLC of approximately $0.1 million.

Certain holdings owned by our former equity method investees were 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 holding. Our former investees estimated the volatility of these holdings based on the historical performance of various broad market indices blended with various peer companies which they considered 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. Our former investees also considered the probability of a successful merger when valuing equity for SPACs that had not yet closed.

Fair Value Method Holdings

The carrying value of fair value method holdings is determined based on the security’s trading price multiplied by the number of shares held. The following table summarizes the Company’s fair value method holdings as of December 31, 2024 (in thousands):

GreenFirst Forest Products Inc. (“GreenFirst”) is a publicly-traded Canadian company focused on environmentally sustainable forest management and lumber production. The Company held shares of GreenFirst directly that were accounted for at fair value based on observable quoted market prices. The Company also held GreenFirst common shares through an equity method holding in GreenFirst Forest Products Holdings LLC (see Equity Method Holdings below).

iCoreConnect Inc. (“iCoreConnect”) is a cloud-based software and technology company focused on increasing workflow productivity and customer profitability through its enterprise platform of applications and services. The Company held shares of iCoreConnect directly that are accounted for at fair value based on observable quoted market prices. The Company also held iCoreConnect shares and warrants through an equity method holding in FGMP (see Equity Method Holdings below).

OppFi Inc. (“OppFi”) is a publicly-traded tech-enabled, mission-driven specialty finance platform that broadens the reach of community banks to extend credit access to everyday Americans. The Company accounted for its common shares and warrants of OppFi using the fair value method based on observable quoted market prices.

Cost Method Holdings without Readily Determinable Fair Value

Each of the Company’s cost method holdings were transferred to the CVR Trust in August 2025 and are no longer held by the Company. See Note 6 for additional details.

In addition to our equity method and fair value method holdings, other holdings which do not have a readily determinable fair value were accounted for at their cost, subject to any adjustment from time to time due to impairment or observable price changes in orderly transactions. When the Company observed an orderly transaction of an investee’s identical or similar equity securities, the Company adjusted the carrying value based on the observable price as of the transaction date. Any profit distributions the Company received on these holdings were included in net holdings income. Management was not aware of any issuances of identical or similar equities during 2025. As a result, the carrying value of holdings without readily determinable fair value did not change during 2025.

Other

The Company’s other holdings included a convertible promissory note and a senior unsecured promissory note.

On September 29, 2023, the Company invested $250,000 in a convertible promissory note with ThinkMarkets, all of which was repaid during 2025.

On March 16, 2023, the Company invested $200,000 in a senior unsecured loan to Craveworthy LLC (“Craveworthy”). The loan had an interest rate of 13% and a maturity of March 15, 2024. The senior unsecured note was amended to a convertible bridge loan on October 17, 2023, and the maturity date was changed to October 16, 2024. In November 2024, the Company and Craveworthy extended the maturity date to April 16, 2025. The Company expected the maturity date would be extended again, however, the loan was transferred to the CVR Trust in August 2025.

Impairment

For equity securities without readily determinable fair values, impairment is determined via a qualitative assessment which considers indicators to evaluate whether the holding is impaired. Some of these indicators include a significant deterioration in the earnings performance or asset quality of the investee, a significant adverse change in regulatory, economic or general market conditions in which the investee operates, or doubt over an investee’s ability to continue as a going concern. If the holding is deemed to be impaired after conducting this analysis, management would estimate the fair value of the holding to determine the amount of impairment loss.

For equity method holdings, evidence of a loss in value might include a series of operating losses of an investee, the absence of an ability to recover the carrying amount of the holding, or a deterioration in the value of the investee’s underlying assets. If these, or other indicators, lead to the conclusion that there is a decrease in the value of the holding that is other than temporary, the Company would recognize that decrease in value even though the decrease may be in excess of what would otherwise be recognized under the equity method of accounting.

The risks and uncertainties inherent in the assessment methodology used to determine impairment include, but may not be limited to, the following:

The Company did not record an impairment on its holdings during 2025.

Net holdings loss for the year ended December 31, 2025 and December 31, 2024 are as follows (in thousands):

Fair Value Measurements

The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. The FASB has issued guidance that defines fair value as the exchange price that would be received for an asset (or paid to transfer a liability) in the principal, or most advantageous market in an orderly transaction between market participants. This guidance also establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The guidance categorizes assets and liabilities at fair value into one of three different levels depending on the observation of the inputs employed in the measurements, as follows:

The availability of valuation techniques and observable inputs can vary from holding to holding and are affected by a variety of factors, including the type of holding, whether the holding is new and not yet established in the marketplace, the liquidity of markets and other characteristics specific to the individual holding. In some cases, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the hierarchy based on the lowest level input that is significant to the fair value measurement. When determining fair value, the Company uses valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs.

Financial instruments measured, on a recurring basis, at fair value in accordance with the guidance promulgated by the FASB as of December 31, 2025 and December 31, 2024 are as follows (in thousands):

Holdings without a readily determinable fair value are measured at fair value on a nonrecurring basis. During the year ended December 31, 2025, the Company did not record any adjustments due to impairment or observable price changes in orderly transactions.

The following table provides a rollforward of nonrecurring Level 3 fair value measurements for the year ended December 31, 2025 (in thousands):

Note 9. Property, Plant and Equipment

Property, plant and equipment primarily consists of the Company’s real estate and is presented net of accumulated depreciation for a net book value of $2.2 million and $2.4 million as of December 31, 2025 and December 31, 2024, respectively. Depreciation expense from continuing operations for the year ended December 31, 2025 and 2024 was $0.2 million and $0.3 million, respectively.

The Company signed a non-binding letter of intent to sell its Quebec property for $15.0 million CAD. Following repayment of the installment note, the transaction is expected to generate approximately $8.0-$9.0 million USD in net pretax proceeds. The letter of intent does not constitute a binding agreement, and there can be no assurance that a definitive sale agreement will be reached or that the transaction will be completed. The transaction, if completed, is expected to close during the first half of 2026, subject to the execution of definitive agreements, completion of due diligence, and satisfaction of customary closing conditions.

Note 10. Income Taxes

Net loss from continuing operations before income taxes consists of (in thousands):

Income tax benefit from continuing operations consists of (in thousands):

Income tax benefit from continuing operations differed from the amounts computed by applying the U.S. Federal income tax rate to pretax loss from continuing operations as follows (in thousands):

Deferred tax assets and liabilities were comprised of the following (in thousands):

Income tax paid (net of refunds) by jurisdiction (in thousands):

The majority of state payments in 2024 were to Georgia and Illinois. All foreign tax payments were related to Canada, for 2025 $0.8 million was related to withholding tax for remitting Canadian earnings to the U.S. and the remaining $0.4 million was related to annual Canadian income tax returns. In 2024, all of the foreign payments were related to annual Canadian income tax returns.

The tax expense/benefit related to the managed services and reinsurance businesses has been allocated to discontinued operation. The Company has sufficient net operating losses to offset materially the taxable income/loss from these discontinued operations, all of which is offset by valuation allowance.

As a result of the Private Placement Offering, the Company underwent an ownership change as defined under Internal Revenue Code Section 382 (“Section 382”). As a result, the Company’s ability to utilize its Federal net operating loss and capital loss carryforwards in future years is subject to an annual limitation. The estimated base limitation under Section 382 on the future utilization of net operating losses generated prior to the ownership change is approximately $0.5 million per year. This limitation is calculated based on the value of the Company’s stock immediately before the deemed ownership change, multiplied by the applicable long-term tax-exempt rate, and may be subject to further adjustment as provided under Section 382 and related regulations. Due to the application of these limitations and the carryforward periods for Federal net operating loss and capital loss carryforwards, the gross deferred tax asset related to net operating losses has been reduced by $1.9 million, and the gross deferred tax asset related to capital losses has been reduced by $10.0 million.

In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income. The Company considers the scheduled reversal of taxable temporary differences, projected future taxable income and tax planning strategies in making this assessment. A cumulative loss in a particular jurisdiction in recent years is a significant piece of evidence with respect to the realizability that is difficult to overcome. Based on the available objective evidence including recent updates to the taxing jurisdictions generating income, the Company concluded that a valuation allowance of $28.3 million should be recorded against the Company’s U.S. tax jurisdiction deferred tax assets as of December 31, 2025. The valuation allowance covers substantially all U.S. net deferred tax assets. The remaining deferred items that are realizable are the deferred tax liabilities for Canadian withholding tax and Canadian fixed assets. The overall change in valuation allowance is driven primarily by deferred tax impacts of unrealized fair value changes in ETH holdings and the increase in current year net operating losses. The effective tax rate above relates only to continuing operations.

The Company recorded a deferred tax liability related to withholding tax on the repatriation of earnings from its Canadian subsidiary of $0.1 million and $2.2 million at December 31, 2025 and December 31, 2024, respectively. The change in liability during 2025 was due to distributions and withholding tax accrued and paid in 2025. This Canadian withholding tax expense is reported in the foreign tax effects section of the summary of tax expense and rate reconciliation.

A provision of Tax Cuts and Jobs Act of 2017 (the “2017 Tax Act”) was the implementation of the Global Intangible-Low Taxed Income Tax, or “GILTI.” The Company has elected to account for the impact of GILTI in the period in which the tax actually applies to the Company. U.S. GAAP does not prescribe a single required approach for GILTI under ASC Topic 740; entities may either recognize deferred taxes for temporary differences expected to reverse as GILTI or treat GILTI as a period cost. During the year ended December 31, 2025, the Company did not incur any additional taxable income as a result of this provision.

As of December 31, 2025, the Company had net operating loss carryforwards for federal and state income tax purposes of approximately $50.7 million and $56.7 million, respectively. Federal net operating losses of $5.0 million expire in 2037 for Federal losses generated through December 31, 2017. The federal net operating losses generated in 2018 and future years will be carried forward indefinitely.

In July 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted and effective and made significant changes to Federal tax laws, including certain changes that were effective for the 2025 tax year. Changes in tax laws are accounted for in the period of enactment and the retroactive effects are recognized in these financial statements. There were no material income tax consequences of this enacted legislation on the reporting period of these financial statements.

The Company is subject to possible examinations not yet initiated for Federal purposes for the fiscal years 2022, 2023, and 2024. In most cases, the Company has examinations open for state or local jurisdictions based on the particular jurisdiction’s statute of limitations.

Estimated amounts related to underpayment of income taxes, including interest and penalties, were not material for the years ended December 31, 2025 and 2024. Amounts accrued for estimated underpayment of income taxes were zero as of December 31, 2025 and 2024.

Note 11. Equity Incentive Plans

The Company’s 2021 Equity Incentive Plan (the “2021 Plan”) was originally approved by the Company’s stockholders on October 1, 2021, and has subsequently been amended, most recently pursuant to Amendment No. 3 approved by stockholders on July 23, 2025, to increase the number of shares authorized for issuance under the 2021 Plan to 2.0 million shares. The purpose of the 2021 Plan is to attract and retain directors, consultants, officers and other key employees of the Company and its subsidiaries and to provide to such persons incentives and rewards for superior performance. The 2021 Plan is administered by the Compensation and Management Resources Committee of the Board and has a term of ten years. The 2021 Plan awards may be in the form of stock options (which may be incentive stock options or nonqualified stock options), stock appreciation rights (“SARs”), restricted shares, RSUs, and other share-based awards. As of December 31, 2025, there were approximately 2.0 million shares remaining available for future issuance.

In addition, on March 24, 2023, the Board approved an employee stock purchase plan (“FGF ESPP Plan”) whereby qualifying employees can choose each year to have up to 5% of their annual base earnings withheld to purchase the Company’s common shares in the open market. The Company matches 100% of the employee’s contribution amount after thirty days of employment.

Total stock-based compensation expense for the years ended December 31, 2025 and December 31, 2024 was approximately $7.8 million and $1.6 million, respectively. The increase in stock-based compensation expense in the current period is primarily related to the issuance of warrants in connection with the Private Placement Offering. See Note 12 for additional details. Effective July 31, 2025, the Compensation and Management Resources Committee of the Board of Directors also approved the acceleration of all unvested restricted stock units.

As of December 31, 2025, total unrecognized stock compensation expense of approximately $18 thousand remained, all of which related to stock options, and will be recognized through June 2028. Stock compensation expense has been reflected in the Company’s financial statements as part of general and administrative expense.

Restricted Stock Units

The following table summarizes RSU activity for the year ended December 31, 2025:

In May 2025, the Company granted a total of 4,116 RSUs to the members of its Board of Directors pursuant to the Company’s director compensation policy.

Stock Options

The following table summarizes activity for stock options issued for the year ended December 31, 2025:

Note 12. Stockholders’ Equity

8.00% Cumulative Preferred Stock, Series A

As of December 31, 2025, the Company had 888,884 Series A Preferred Stock shares outstanding, compared to 894,580 outstanding as of December 31, 2024.

Dividends on the Series A Preferred Stock are cumulative from the date of original issue and are payable quarterly on the 15th day of March, June, September and December of each year, when, as and if declared by our Board of Directors or a duly authorized committee thereof. Dividends are payable out of amounts legally available therefore at a rate equal to 8.00% per annum per $25.00 of stated liquidation preference per share, or $2.00 per share of Series A Preferred Stock per year. The Series A Preferred Stock shares trade on the Nasdaq Stock Market under the symbol “FGNXP”.

Preferred Stock Share Repurchase Program

In December 2025, the Company’s Board of Directors approved a preferred share repurchase program to acquire up to 894,580 shares of the Company’s outstanding Series A Preferred Stock shares (the “Preferred Share Repurchase Program”). The Preferred Share Repurchase Program, which is open-ended, allows the Company to repurchase its preferred shares from time to time in the open market and in negotiated transactions. Any repurchases conducted pursuant to the Preferred Share Repurchase Program will be in accordance with Rule 10b-18 of the Exchange Act and will be made in accordance with applicable laws and regulations in effect from time to time.

Commencing on December 12, 2025, and through December 31, 2025, the Company purchased a total of approximately 6 thousand shares of its Series A Preferred Stock at a total cost (including commissions) of approximately $0.1 million. Subsequent to December 31, 2025 and through March 23, 2026, the Company purchased an additional approximately 202 thousand of its Series A Preferred Stock at a total cost (including commissions) of approximately $5.0 million. Through March 23, 2026, the Company has repurchased approximately 22.6% of its Series A Preferred Stock outstanding immediately prior to implementation of the program. All repurchased Series A Preferred Stock are recorded as a reduction to the liquidation value of the Preferred Stock.

Common Stock

The total number of shares of common stock outstanding as of December 31, 2025 was 7,080,747, compared to 253,581 as of December 31, 2024.

Common Stock Share Repurchase Program

In September 2025, the Company’s Board adopted a share repurchase program to acquire up to $200 million of the Company’s outstanding common stock (the “Share Repurchase Program”). The Stock Repurchase Program, which is open-ended, allows the Company to repurchase its Common Stock from time to time in the open market and in negotiated transactions. Any repurchases conducted pursuant to the Share Repurchase Program will be in accordance with Rule 10b-18 of the Exchange Act and will be made in accordance with applicable laws and regulations in effect from time to time. Subject to applicable rules and regulations, the shares of common stock may be purchased from time to time in the open market transactions and in amounts as the Company deems appropriate, based on factors such as market conditions, legal requirements, and other business considerations.

Commencing on October 23, 2025, and through December 31, 2025, the Company purchased a total of approximately 1.6 million shares of its Common Stock at a total cost (including commissions) of approximately $26.1 million. Subsequent to December 31, 2025 and through March 23, 2026, the Company purchased an additional approximately 0.6 million shares of its Common Stock at a total cost (including commissions) of approximately $8.7 million. Through March 23, 2026, the Company has repurchased approximately 25.8% of its Common Stock outstanding immediately prior to implementation of the program. All repurchased shares are recorded as treasury stock.

Transactions During 2024

As discussed in Notes 1 and 5, on February 29, 2024, FGF and FGH closed the plan of merger to combine the companies in an all-stock transaction. 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. As a result, the Company issued approximately 0.8 million of its common shares to common stockholders of FGH.

As discussed in Note 1, on September 30, 2024, the Company and Strong Global Entertainment completed the Arrangement to combine the companies in an all-stock transaction. In connection with the transaction, stockholders of Strong Global Entertainment received 1.5 common shares of the Company for each share of Strong Global Entertainment. As a result, the Company issued approximately 0.1 million of its common shares to stockholders of Strong Global Entertainment.

Warrants

In connection with the Private Placement Offering, the Company entered into a Placement Agency Agreement (the “Placement Agency Agreement”) with ThinkEquity, dated July 29, 2025, pursuant to which ThinkEquity served as placement agent in connection with the Private Placement Offering. The Company paid ThinkEquity a cash placement fee of $6,000,000, or 3.0% of the aggregate purchase price paid by the PIPE Purchasers (as defined below) in the Private Placement Offering. The Company also issued ThinkEquity warrants (the “Placement Agent Warrants”) to purchase up 0.6 million shares of Common Stock, at a price per share equal to $27.50.

In August 2025, the Company entered into side letter agreement (the “Side Letter Agreement”) with OGroup LLC to induce certain members of OGroup LLC to execute employment agreements with the Company. Pursuant to the Side Letter Agreement the Company issued warrants to purchase a total of 0.1 million shares of Common Stock at a price per share of $25.00 to certain individuals affiliated with OGroup LLC.

In connection with the Private Placement Offering and the Company’s establishment of the Company’s cryptocurrency treasury operations warrants to purchase an aggregate of 0.1 million shares of Common Stock at a price per share of $25.00 were issued to certain entities affiliated with FG Merchant Partners.

The weighted average grant date fair value of warrants issued during 2025 was $22.47. The fair value of each warrant issued was estimated on the date of grant using a lattice valuation model with the following assumptions:

The risk-free interest rate assumptions were based on the interpolated U.S. Treasury yield curve in effect at the time of the issuance. Interpolated risk-free rate based upon the years to expiration. The expected volatility was based on historical volatility of comparable companies. The expected life is based on the term of the warrant agreements.

The following table summarizes activity for warrants for the year ended December 31, 2025:

Note 13. Related Party Transactions

Related party transactions are carried out in the normal course of operations and are measured in part by the amount of consideration paid or received, as established and agreed by the parties. Except where disclosed elsewhere in these consolidated financial statements, the following is a summary of related party transactions.

Limited Liability Company Interests

The Company participated as a limited partner in a fund that was unwound during 2023.

As a result of the winddown, the Company held a direct limited liability company interests in FGAC Investors LLC, FG Merger Investors LLC, and GreenFirst Forest Products Holdings, LLC. Mr. Cerminara and Mr. Swets, the head of the Company’s merchant banking business, serve as managers of FGAC Investors LLC and FG Merger Investors LLC, while Mr. Cerminara ultimately controls GreenFirst Forest Products Holdings, LLC. The Company’s interest in each of these LLC’s was transferred to the CVR Trust in August 2025.

FG Merchant Partners

FGMP was formed to co-sponsor newly formed SPACs and other merchant banking clients with their founders or partners. Certain of our directors and officers also hold limited partner interests in FGMP. Mr. Swets holds a limited partner interest through Itasca Financial LLC, an advisory and investment firm for which Mr. Swets is managing member. Mr. Cerminara also holds a limited partner interest through Fundamental Global, LLC (“FG LLC”), a holding company for which Mr. Cerminara is the manager and one of the members.

FGMP has invested in the founder shares and warrants of Aldel Financial Inc., FG Merger Corp, FG Acquisition Corp, Aldel Financial II Inc., FGC and Craveworthy. Certain of our directors and officers are affiliated with these entities. The Company’s ownership interest in each of these entities was distributed to the CVR Trust in August 2025.

FG Communities

In October 2022, the Company directly invested $2.0 million into FGC, which was included in other holdings on the consolidated balance sheet as of December 31, 2024. The Company also held an interest through its ownership in FGMP. As noted above, the Company’s ownership interest in FGC was distributed to the CVR Trust in August 2025. FGC is a self-managed real estate company focused on a growing portfolio of manufactured housing communities which are owned and operated by FGC. Mr. Cerminara is the President and a director of FGC.

Craveworthy

On March 16, 2023, the Company invested $0.2 million in a senior unsecured loan to Craveworthy. Mr. Swets has an indirect interest in Craveworthy, independent from the interests held by the Company through its ownership in FGMP. As noted above, the Company’s ownership interest in Craveworthy was distributed to the CVR Trust in August 2025.

FG Imperii Investors

During the third quarter of 2025, the Company entered into a promissory note with FG Imperii Investors LLC (“FGII”) pursuant to which the Company agreed to loan approximately $0.2 million to FGII. FGII is the sponsor of FG Imperii Acquisition Corp., a SPAC in the process of completing its initial public offering. The promissory note was payable on the date FG Imperii Acquisition Corp. consummates its initial public offering, which occurred during January 2026. Certain of our directors and officers are affiliated with FGII.

Saltire

The Company owns real estate in Canada that it leases to a wholly-owned subsidiary of Saltire. Pursuant to the terms of the lease, the Company receives annual rental income of $0.4 million. Mr. Swets, the head of the Company’s merchant banking business, serves as the Executive Chair and is a member of the Board of Directors of Saltire. Mr. Cerminara, the Company’s Chief Executive Officer and Chairman of the Company’s Board of Directors, and Richard Govignon, a member of the Company’s Board of Directors, serve as members of the Board of Directors of Saltire.

Shared Services Agreement

On March 31, 2020, the Company entered into a Shared Services Agreement (the “Shared Services Agreement”) with Fundamental Global Management, LLC (“FGM”), an affiliate of FG LLC, pursuant to which FGM provides the Company with certain services related to the day-to-day management of the Company, including assisting with regulatory compliance, evaluating the Company’s financial and operational performance, providing a management team to supplement the executive officers of the Company, and such other services consistent with those customarily performed by executive officers and employees of a public company. In exchange for these services, the Company pays FGM a fee of $456,000 per quarter (the “Shared Services Fee”), plus reimbursement of expenses incurred by FGM in connection with the performance of the services, subject to certain limitations approved by the Board or Compensation and Management Resources Committee from time to time.

The Shared Services Agreement has an initial term of three years, and thereafter renews automatically for successive one-year terms unless terminated in accordance with its terms. The Shared Services Agreement may be terminated by FGM or by the Company, by a vote of the Company’s independent directors, at the end of the initial or automatic renewal term upon 120 days’ notice, subject to payment by the Company of certain costs incurred by FGM to wind down the provision of services and, in the case of a termination by the Company without cause, payment of a termination fee equal to the Shared Services Fee paid for the two quarters preceding termination. In the third quarter of 2022, the Shared Services Agreement was amended to eliminate termination fees and to increase the termination notice from 120 days to 365 days.

The Company paid $2.5 million and $1.8 million to FGM under the Shared Services Agreement during the year ended December 31, 2025 and December 31, 2024, respectively. Payments made during the year ended December 31, 2025 included reimbursement of $0.7 million of certain expenses incurred by FGM in connection with the Private Placement. These amounts are included in General and administrative expenses on the consolidated statements of operations.

Note 14. Earnings Per Share

Net earnings per share is computed by dividing net income (loss) by the weighted average number of common shares and common share equivalents outstanding during the periods presented. In calculating diluted earnings per share, those potential common shares that are found to be anti-dilutive are excluded from the calculation. The table below provides a summary of the numerators and denominators used in determining basic and diluted earnings per share for the year ended December 31, 2025 and 2024 (in thousands, except per share amounts).

The following potentially dilutive securities outstanding as of December 31, 2025 and 2024 have been excluded from the computation of diluted weighted-average shares outstanding as their effect would be anti-dilutive under the treasury stock method.

Note 15. Retirement Plans

The Company sponsors a defined contribution 401(k) plan (the “FGH Plan”) for all eligible employees. Pursuant to the provisions of the FGH Plan, employees may defer up to 100% of their compensation. The Company will match 50% of the amount deferred up to 6% of their compensation. The contributions made to the Plan by the Company were approximately $0.1 million for each of the years ended December 31, 2025 and December 31, 2024.

As noted above, on March 24, 2023, the Board approved the FGF ESPP Plan whereby qualifying employees can choose each year to have up to 5% of their annual base earnings withheld to purchase the Company’s common shares in the open market. The Company matches 100% of the employee’s contribution amount after thirty days of employment. The Company’s contribution is expensed as paid, and for the year ended December 31, 2025 and December 31, 2024 totaled approximately $37 thousand and $32 thousand, respectively. The FGF ESPP Plan matching contributions are included within general and administrative expenses on the consolidated statement of operations.

Note 16. Commitments and Contingencies

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.

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. In the Company’s experience, a large percentage of these types of claims have never been substantiated and have been dismissed by the courts. The Company 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, the Company received notice that it was 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. The action alleges that FGH is a successor to Pichel Industries, Inc. (“Pichel Industries”) and that Pichel Industries contributed waste to the landfill. The Company is not aware of any successor relationship between it and Pichel. There have no further actions in this case since the initial filing in 2024, and the Company intends to defend itself vigorously in the event the plaintiffs choose to pursue action against us.

The Company is a guarantor of the obligations of an entity that was previously sold and is no longer part of the consolidated group. The Company has been notified that the primary obligor has not met the obligations for which it is liable, and the third party has requested that the Company satisfy the obligations on behalf of the buyer under the guaranty. The Company is evaluating its obligations and determining its response.

As of December 31, 2025, the Company has recorded a loss contingency reserve of approximately $0.9 million, which represents the Company’s estimate of its potential losses related to the settlement of various open proceedings and claims. 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.

Note 17. Debt

The Company’s short-term consists of the following (in thousands):

Installment Loan and Revolving Credit Facility

In January 2023, Strong/MDI and Canadian Imperial Bank of Commerce (“CIBC”) entered into a demand credit agreement (the “2023 Credit Agreement”), which amended and restated the prior credit agreement entered into in 2021. The 2023 Credit Agreement consists of a revolving line of credit for up to CAD$5.0 million and a 20-year installment loan for up to CAD$3.1 million.

Under the 2023 Credit Agreement:(i) the amount outstanding under the line of credit is payable on demand and bears interest at the lender’s prime rate plus 1.0% and (ii) the amount outstanding under the 20-year installment loan bears interest at the lender’s prime rate plus 0.5% and is payable in monthly installments, including interest, over their respective borrowing periods. The lender may also demand repayment of the 20-year installment loan at any time. The 2023 Credit Agreement is secured by a lien on the manufacturing facility in Quebec, Canada that is leased to Strong/MDI. The 2023 Credit Agreement requires our subsidiary in Canada to maintain a ratio of liabilities to “effective equity” (tangible stockholders’ equity, less amounts receivable from affiliates and equity holdings) not exceeding 2.5 to 1 and a fixed charge coverage ratio of not less than 1.1 times earnings before interest, income taxes, depreciation and amortization. In connection with the IPO of Strong Global Entertainment, the 20-year installment note did not transfer to the Company. In May 2023, Strong/MDI and CIBC entered into an amendment to the 2023 Credit Agreement which reduced the amount available under the revolving line of credit to CAD$3.4 million, and CIBC provided an undertaking to Strong/MDI to a release of CIBC’s security interest in certain assets to be transferred to a subsidiary in connection with transactions related to the IPO of Strong Global Entertainment. On January 19, 2024, the Company and CIBC entered into a second amendment to the 2023 Credit Agreement. Pursuant to the amendment, the credit limit for the revolving line of credit was reduced to CDN$1.4 million. The revolving line of credit was terminated in January 2026.

The 20-year installment note bears variable interest at 4.95% as of December 31, 2025. The Company was in compliance with its debt covenants as of December 31, 2025.

As noted above, the Company signed a non-binding letter of intent to sell its Quebec property. The Company will utilize a portion of the proceeds generated from the sale of the facility to repay the installment loan, at which time the credit facility will be terminated.

Note 18. Segment Reporting

The Company hastwo operating segments – digital assets and merchant banking. The chief operating decision maker (“CODM”) is the Company’s Chief Executive Officer. The measure of profit or loss used by the CODM to identify and measure the Company’s reportable segments is income before income tax. The Company’s digital assets segment includes the operations related to the ETH treasury strategy. Our merchant banking segment includes our equity and other holdings. The “other” category primarily includes rental income and expenses related to the Company’s real estate in Canada and the land and building previously owned and operated by Digital Ignition.

The following tables present the financial information for each segment that is specifically identifiable or based on allocations using internal methodology for the years ended December 31, 2025 and 2024 (in thousands):

The following table presents the Company’s specifically identifiable assets for each of the Company’s segments as of December 31, 2024 (in thousands).

The “other” segment assets includes $13.9 million and $39.8 million of assets of discontinued operations as of December 31, 2025 and December 31, 2024, respectively, which are related to the Company’s reinsurance and managed services businesses.

There were no capital expenditures during 2025 or 2024.

Note 19. Subsequent Events

The Company’s management has evaluated subsequent events after the consolidated balance sheet dated as of December 31, 2025, through the date of filing of this Form 10-K. Based on the evaluation, management has determined that, other than as disclosed in the accompanying notes, no subsequent events have occurred that would require recognition in the accompanying consolidated financial statements or disclosure in the notes thereto.