FG Communities Holdings Inc.

Condensed Consolidated Balance Sheets

(in thousands, except share and per share data)

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

Condensed Consolidated Statements of Comprehensive Loss

Condensed Consolidated Statements of Stockholders’ Equity

Condensed Consolidated Statements of Cash Flows

Notes to Condensed Consolidated Financial Statements

Note 1. Nature of Business

FG Communities Holdings Inc. (formerly FG Nexus Inc.) (“FG Communities Holdings”, the “Company”, “we”, or “us”), is a Nevada corporation focused on the acquisition, ownership and operation of income-producing real estate, with an emphasis on manufactured housing communities. The Company also conducts merchant banking activities, including advisory services, capital formation and investments in other businesses.

Real Estate Strategy and Operations

In June 2026, the Company’s Board of Directors (the “Board”) authorized management to allocate capital to direct real estate acquisitions in connection with the Company’s exit from its digital asset business. The Company’s real estate strategy focuses on acquiring and operating manufactured housing communities that provide affordable housing.

As of September 30, 2026, the Company’s directly owned real estate consisted of a property in Quebec, Canada, leased under a long-term triple-net operating lease. In October 2026, the Company acquired its initial manufactured housing communities. These acquisitions will be included in the Company’s real estate segment beginning in the fourth quarter of 2026.

Separately, during September 2026, the Company invested $10.0 million in common shares of FG Communities, Inc. (“FGCI”), a privately held company that owns and operates manufactured housing communities. FGCI remains a separate, independently operated company. The Company’s investment in FGCI is distinct from its direct ownership of real estate and is reported within its merchant banking segment. See Notes 4 and 10.

Operating Segments

As of September 30, 2026, the Company had two primary operating segments. See Note 14 for segment financial information.

Real Estate

The real estate segment includes rental income and expenses associated with the Company’s Quebec property. Directly owned manufactured housing communities acquired after September 30, 2026 will be included in the real estate segment in future financial statements.

Merchant Banking

The merchant banking segment includes advisory and support services provided through FG Management Solutions LLC, special purpose acquisition company (“SPAC”) sponsorship activities and the Company’s equity holdings. Services provided include strategic, administrative and regulatory support for SPACs and other merchant banking clients. The Company also co-founded FG Merchant Partners, LP (“FGMP”) to participate in SPAC sponsorships and other merchant banking activities.

Discontinued Operations

The Company exited its digital asset business during the second quarter of 2026 and sold all of its remaining digital assets before June 30, 2026. The Company also completed the sale of its remaining reinsurance business during the first quarter of 2026 and transferred its managed services business to the CVR Trust during August 2025.

The results of these businesses are presented as discontinued operations for the applicable periods. See Note 3.

Recent Developments and Transactions

Reverse Stock Split

On January 21, 2026, our Board approved a reverse stock split of the authorized, issued and outstanding shares of our common stock, par value $0.001 per share (the “Common Stock”) at a ratio ofone (1)-for-five (5) (the “Reverse Stock Split”). The Reverse Stock Split became effective on February 13, 2026 (the “Effective Date”) and our 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, we 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 in this Quarterly Report on Form 10-Q (this “Form 10-Q”) have been adjusted to reflect the Reverse Stock Split.

Agreement to Sell Reinsurance Business

In October 2025, the Company entered into an agreement to sell the remaining portion of its reinsurance business. Pursuant to the agreements, the Company received (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 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 January 1, 2028. The sale transaction closed in early 2026. See Note 3 for additional details.

Letter of Intent to Sell Quebec Real Estate

In October 2025, the Company signed a non-binding letter of intent to sell its Quebec property for $15.0 million CAD, or approximately $11.0 million USD. The letter of intent did not constitute a binding agreement. The Company no longer expects to sell the Quebec property under the previous letter of intent. The Company continues to hold the real estate as part of its ongoing real estate operations and the property is classified as held and used.

Asset Transfer and CVR Trust

In August 2025, 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 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.

Note 2. Significant Accounting Policies

Basis of Presentation

The condensed consolidated financial statements include the accounts of the Company and all controlled domestic and foreign subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Unless specifically indicated otherwise, references to the “Company” include the Company and its controlled domestic and foreign subsidiaries.

The condensed consolidated financial statements included in this report are presented in accordance with the requirements of Form 10-Q and consequently do not include all of the disclosures normally required by accounting principles generally accepted in the United States of America (also referred to as “GAAP”) for annual reporting purposes or those made in the Company’s Annual Report on Form 10-K. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

In addition, the current and historical financial results of managed services, reinsurance and digital assets are presented as discontinued operations and are excluded from results from continuing operations in the accompanying condensed consolidated financial statements. The proceeds received from the sale of Ethereum (“ETH”) have been presented as inflows from continuing operations as those funds are expected to be used to fund the Company’s ongoing operations.

The condensed consolidated balance sheet as of December 31, 2025, was derived from the Company’s audited consolidated balance sheet as of that date. All other condensed consolidated financial statements contained herein are unaudited and, in the opinion of management, reflect all adjustments of a normal recurring nature necessary to present a fair statement of the financial position and the results of operations and cash flows for the respective interim periods. Certain prior period balances have been reclassified to conform to current period presentation. The results for interim periods are not necessarily indicative of trends or results expected for a full year.

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

Use of Management Estimates

The preparation of condensed 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 condensed 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.

Consolidation Policies

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

The condensed 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. There have been no changes to the legal entities that are consolidated during the nine months ended September 30, 2026. The Company does not have any non-consolidated VIEs as of September 30, 2026.

Digital Assets

As discussed above, the Company sold all of its digital assets prior to June 30, 2026. Prior to the sale of the digital assets and exiting the digital asset business, the Company held ETH and wrapped staked ETH (“wstETH”). ETH and wstETH were presented separately on the condensed consolidated balance sheets under the captions “ETH digital assets” and “Digital intangible assets, at cost less impairment” respectively. The Company had ownership of and control over its digital assets which were held through custodial arrangements with qualified third-party custodians.

ETH Digital Assets

The Company’s ETH digital assets fell within the scope of Accounting Standards Codification (“ASC”) 350-60, Intangible – Goodwill and Other – Crypto Assets. The Company elected to measure its ETH digital assets at fair value, with changes in fair value recognized in earnings.

In determining the fair value of the ETH in accordance with ASC 820, Fair Value Measurement, the Company utilized Coinbase as the principal market. The activity from remeasurement of ETH at fair value was reflected in the condensed consolidated statements of operations within Unrealized measurement of fair value of ETH digital assets. The Company used 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 were reflected as cash flows from investing activities in the condensed consolidated statements of cash flows.

Digital Intangible Assets, at Cost Less Impairment

Digital intangible assets, at cost less impairment are recognized at fair value on the date received, which represented their cost basis. Digital intangible assets, at cost less impairment, such as wstETH, do not fall in the scope of ASC 350-60 for subsequent measurement. wstETH represents a receipt token, which in general and by design, grants the holder an enforceable right to redeem ETH for which it was exchanged. Therefore, it fails the ‘other goods and services criterion’ in ASC 350-60-15-1(b) and is outside the scope of ASC 350-60. Digital intangible assets, at cost less impairment were therefore subsequently measured at cost, net of any impairment losses incurred since acquisition, in accordance with ASC 350-30, Intangibles—Goodwill and Other—General Intangibles Other Than Goodwill.

The Company performed an analysis each quarter to identify whether events or changes in circumstances, principally decreases in the quoted (unadjusted) prices in the Company’s principal market, indicated that it is more likely than not that any of the assets are impaired. The quoted (unadjusted) prices on the Coinbase exchange, the active exchange that the Company determined as its principal market, were used in the analysis. In determining if an impairment has occurred, the Company considered the lowest price of one wstETH quoted on the Coinbase exchange, at any time since acquiring the specific wstETH held by the Company. If the carrying value of a wstETH exceeded that lowest intraday price, an impairment loss occurred with respect to that wstETH in the amount equal to the difference between its carrying value and such lowest price. Impairment losses were recognized in the period in which the impairment occurs and are reflected within Impairment of digital assets in the Company’s condensed consolidated statements of operations. The impaired digital assets were written down to their fair value at the time of impairment, which became the new cost basis for those assets. The cost basis of wstETH was not adjusted upward for any subsequent increase in fair value.

Staking

Native 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, which continued through December 2025. The Company did not engage in native staking activities during the nine months ended September 30, 2026.

The Company utilized a third-party asset manager to manage and stake ETH on its behalf. Through its agreement with the asset manager, the Company’s ETH was 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 earned staking rewards and transaction fees proportional to the amount of stake delegated to them. The Company recognized rewards from native staking as revenue in accordance with ASC 606,Revenue from Contracts with Customers. However, since the amount of rewards were not known by the Company until a validation activity is completed, and the Company received rewards in their custodial account, the staking rewards were constrained under the Topic 606 guidance on variable consideration until such time.

Because the Company was not the principal to the block validation service, it did 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 presented staking revenue on a net basis, reflecting only the portion of protocol rewards to which it was entitled. Asset management and other fees were presented as separate operating expenses within General and administrative expenses on the condensed consolidated statements of operations.

Liquid Staking

The Company also participated in liquid staking through a liquid staking protocol. One key difference and intended benefit of liquid staking versus native staking is that it allowed the Company to earn staking rewards, like native staking, but provides liquidity and the ability to enter into other transactions through the use of receipt token. Instead of directly locking ETH into Ethereum’s staking deposit contract, the Company deposited ETH through its custodian into the liquid staking protocol’s smart contract. The liquid staking protocol then controlled the ETH for deposit into the Ethereum’s staking deposit contract and further delegation to its chosen validators. In exchange for staking its ETH, the Company received wstETH, a freely transferable ERC-20 liquid staking receipt token, which enables participation in decentralized finance (DeFi) and other crypto markets while the underlying ETH remained staked on Ethereum. Upon staking ETH through the liquid staking protocol, the ETH was derecognized because the liquid staking protocol obtains the ability to deploy and direct its use, and the wstETH token received concurrently was then recognized. Any gain or loss on the derecognition of ETH and the recognition of the wstETH was recognized in accordance with ASC 610-20, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (“ASC 610-20”) based on the difference between the carrying amount of the ETH staked and the fair value of the wstETH received; and included in Realized loss on digital assets in the Company’s condensed consolidated statements of operations.

The liquid staking protocol uses a floating conversion rate, or protocol conversion rate, between the receipt token and staked tokens, reflecting the value of accrued network rewards, penalties, and fees associated with the staked ETH. The conversion rate between wstETH and ETH increases over time as staking rewards accrue to the protocol; no new wstETH are received. Staking rewards in the form of ETH are only received upon redemption of wstETH.

Since wstETH is accounted for under ASC 350-30, increases in wstETH fair value while the Company remains staked with the liquid staking protocols, were not recognized. There was no ongoing performance obligation following the staking of ETH through the liquid staking protocol. Additionally, wstETH is a non-rebasing token, meaning its quantity remains fixed over time. Staking rewards are not continuously reflected in token balances but are instead realized separately. Staking rewards are therefore recognized only when the wstETH is redeemed, measured at the fair value of ETH at contract inception, which is when the ETH were staked. The Company redeemed its wstETH during the second quarter of 2026. Accordingly, the Company recognized revenue from staking rewards on its wstETH during the nine months ended September 30, 2026, which is included as part of net loss from discontinued operations.

Derivatives – Option Contracts

During the first quarter of 2026, the Company began entering into ETH-denominated option contracts, primarily through the sale of put and call options, as part of its digital asset treasury strategy. These contracts meet the definition of derivative instruments under ASC 815, Derivatives and Hedging. The Company does not designate any derivative instruments as hedging instruments for accounting purposes.

Upon execution of an option contract, premiums received are recorded as a derivative liability on the condensed consolidated balance sheet. Derivative assets and liabilities are subsequently measured at fair value at each reporting date, with changes in fair value recognized in earnings. If an option is exercised, the derivative liability is derecognized upon settlement. If an option expires unexercised, the related derivative liability is derecognized, with the resulting premium recorded in income.

Gains and losses related to ETH option contracts, including the effects of fair value remeasurement and settlements, are recorded within Gain on financial instruments on the condensed consolidated statements of operations.

The fair value of ETH option contracts is determined using observable market inputs where available, including quoted prices for similar instruments, ETH spot prices, implied volatility, time to expiration, and counterparty credit considerations. These inputs are classified within Level 2 of the fair value hierarchy.

As of September 30, 2026, the Company did not have any outstanding ETH option contracts. For the three and nine months ended September 30, 2026, the Company recognized a net realized gain of $0 and $0.4 million, respectively, attributable to options trades. The Company had no derivative trading during the three or nine months ended September 30, 2025. As a result of exiting the digital asset business, the Company does not expect to enter into ETH-denominated option contracts in the future.

Holdings in Equity Securities

Prior to the distribution of assets to the CVR Trust, the Company’s equity and 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 increases or decreases the carrying amount of the holding by our proportionate share of the net earnings or losses and other comprehensive income of the investee. The Company records 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 the Company has 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 consist of equity we have purchased in a corporation for which there does not exist a readily determinable fair value. The Company accounts 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 observes an orderly transaction of an investee’s identical or similar equity securities, the Company adjusts 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 Gain (loss) on equity holdings.

See Note 4 for additional information regarding the Company’s equity holdings.

Cash and Cash Equivalents

Cash and cash equivalents include cash and short-term, highly liquid financial instruments 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 September 30, 2026 or December 31, 2025.

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 and cash.

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 September 30, 2026, 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.

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 September 30, 2026.

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 historical cost. See Note 5 for further information on the fair value of the Company’s financial instruments.

Income (Loss) Per Common Share

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

Diluted income (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 income (loss) per share if their effect is anti-dilutive.

Recently Issued Accounting Pronouncements

In November 2024, the Financial Accounting Standards Board (“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 3. Discontinued Operations

Digital Assets

Following the private placement that closed in August 2025, the Company previously transitioned its operations to focus primarily on the tokenization of real-world assets supported by a digital asset treasury model with ETH as the Company’s initial primary treasury asset. The Company’s treasury strategy was focused on commercializing and expanding the tokenization of real-world assets, potentially including affordable housing, reinsurance, real estate and other asset classes. The Company’s digital asset portfolio was comprised of a combination of ETH and wrapped staked ETH (“wstETH”).

In June 2026, the Company’s Board authorized management to exit the Company’s digital asset business. As a result, the Company sold all of its cryptocurrency assets prior to the end of the second quarter of 2026.

Reinsurance

The Company’s former wholly owned reinsurance subsidiary, FG Reinsurance Ltd (“FGRe”), a Cayman Islands limited liability company, provides specialty property and casualty reinsurance. 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, which closed during the first quarter of 2026. Pursuant to the agreements, the Company received (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 Devondale Holdings, LLC (“Devondale”), 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 January 1, 2028.

During the first quarter of 2026, the Company recorded a $1.6 million gain on the sale of the remaining portion of its reinsurance business.

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 of 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.

The major line items constituting the net (loss) income from discontinued operations during the three and nine months ended September 30, 2026 and September 30, 2025 are as follows (in thousands):

The liabilities of discontinued operations as of September 30, 2026 relate to obligations in connection with exiting the digital asset business. The major line items constituting the assets and liabilities of discontinued operations as of December 31, 2025 are as follows (in thousands):

Note 4. Equity Holdings

As of September 30, 2026 and December 31, 2025, the Company’s equity holdings consisted of the following ($ in thousands):

Gain (loss) on equity holdings for the three and nine months ended September 30, 2026 and September 30, 2025 were as follows (in thousands):

During the three and nine months ended September 30, 2026, the Company recorded an equity method gain on the shares of Saltire (as defined below) of $0.8 million and $2.4 million, respectively. During the second quarter of 2026, Saltire issued common shares in connection with an acquisition at a price below the Company’s carrying value. As a result, management evaluated whether the observed transaction was an indicator of an other than temporary impairment. Management considered many factors, including a prolonged period during which the trading price of Saltire’s common shares remained at a level below the investor’s cost and determined an other-than-temporary impairment existed. The Company used the trading price of Saltire’s common shares as of June 30, 2026 to determine the fair value of its equity method holding in Saltire and recorded an impairment charge of $11.2 million during the second quarter of 2026, which is included in (loss) gain on equity method holdings in the table above.

During the three and nine months ended September 30, 2025, the Company recorded an equity method loss on the shares of Saltire of $6.6 million and $4.6 million, respectively. The remainder of the net loss on equity holdings and other holdings for the three and nine months ended September 30, 2025 related to holdings distributed to the CVR Trust in August 2025.

Equity Method Holdings

Saltire Capital Ltd.

As of September 30, 2026, the Company held approximately 22.6% of the outstanding common shares of Saltire Capital Ltd. (“Saltire”). Based on quoted market prices, the market value of the Company’s ownership in common shares of Saltire was $4.3 million at September 30, 2026.

Devondale Holdings LLC

As discussed in Note 3, the Company entered into an agreement for the sale of its reinsurance business to Devondale. As a result of the transaction, the Company received a 40% equity interest in Devondale. The Company recorded an equity method loss of $0.4 million during the three months ended September 30, 2026 and a gain of $9 thousand during the nine months ended September 30, 2026 related to its equity interest in Devondale.

Cost Method Holdings without Readily Determinable Fair Value

In addition to our equity method holdings, other holdings which do not have a readily determinable fair value are 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 observes an orderly transaction of an investee’s identical or similar equity securities, the Company adjusts the carrying value based on the observable price as of the transaction date. Any profit distributions the Company receives on these holdings are included in Gain (loss) on equity holdings.

USFM Corporation

During the first quarter of 2026, the Company entered into a subscription agreement with USFM Corporation (“USFM”) pursuant to which the Company purchased 7,500 common shares of USFM at a total cost of $0.5 million. During the second quarter of 2026, the Company entered into a subscription agreement with USFM pursuant to which the Company purchased an additional 6,924 common shares of USFM at a total cost of $1.0 million. The common shares purchased during the second quarter of 2026 are identical to the common shares the Company purchased during the first quarter of 2026. As a result, the Company adjusted the carrying value of the shares purchased during the first quarter of 2026 and recorded a gain on cost method holdings of $0.6 million during the second quarter of 2026. USFM, a private entity, is a mineral exploration company. Management is not aware of any issuances of identical or similar equity securities after the Company’s purchase of USFM’s common stock during the second quarter of 2026.

FG Communities Inc.

During the third quarter of 2026, the Company entered into a subscription agreement with FGCI pursuant to which the Company purchased approximately 1.8 million common shares of FGCI at a total cost of $10.0 million. FGCI is a privately held self-administered and self-managed real estate company focused on preserving and improving affordable housing through the acquisition and operation of manufactured housing communities. The Company’s investment represents approximately 8.2% of the outstanding common stock of FGCI as of September 30, 2026, however the investment represents approximately 1.5% of the effective voting securities of FGCI as of September 30, 2026. Management is not aware of any issuances of identical or similar equity securities after the Company’s purchase of FGCI’s common stock during the third quarter of 2026 that would result in potential adjustments to the Company’s carrying value. The Board of Directors of FGCI has declared a cash dividend on the common shares of 4.0% of the original issue price ($5.50 per share). The dividend is paid monthly, and unless the Company has affirmatively elected to receive cash, all dividends paid on the common shares will be automatically reinvested in additional common shares of FGCI. The Company has not elected to receive cash dividends in lieu of additional common shares. As a result, the Company expects to receive additional shares of FGCI as the dividends are paid.

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:

As discussed above, the Company recorded an $11.2 million impairment on its Saltire equity method holding during the second quarter of 2026. The Company did not record an impairment on its cost method holding during the nine months ended September 30, 2026.

Fair Value Method Holding

During the second quarter of 2026, pursuant to the Forward Purchase Agreement (as defined below) the Company purchased approximately 1.5 million shares of FG Merger II Corp (“FGMC”) at a total cost of approximately $15.5 million. Based on the quoted market price of FGMC’s common shares as of June 30, 2026, the Company recorded an unrealized loss on fair value holdings of $0.5 million during the second quarter of 2026. In July 2026, as a result of the completion of the merger of FGMC and BOXABL, the Company’s shares of FGMC were redeemed for approximately $15.5 million in cash. Since the Company received cash equal to its initial investment during the third quarter of 2026, the Company adjusted the unrealized loss recorded during the second quarter of 2026.

Note 5. 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:

Forward Purchase Agreement

In May 2026, the Company entered into an Assignment and Novation Agreement with Atsion Opportunity Fund LLC – Series 2 (“Atsion”), FGMC and BOXABL, Inc. (“BOXABL”) (the “Forward Purchase Agreement”) pursuant to which the Company assumed 50% of certain rights and obligations under an OTC Equity Prepaid Forward Transaction originally entered into between Atsion, FGMC and BOXABL. Prior to its merger with BOXABL in July 2026, FGMC was a SPAC.

The Forward Purchase Agreement relates to shares of FGMC’s Class A common stock prior to the consummation of the business combination with BOXABL and, following consummation of the business combination, shares of Class A common stock of the combined company. The maximum number of shares subject to the Forward Purchase Agreement allocated to the Company is 1.5 million shares.

Following consummation of the business combination, the Forward Purchase Agreement is subject to cash settlement based principally on the daily volume-weighted average price of the underlying shares during the applicable valuation period, subject to the contractual settlement amount adjustment and other provisions of the Forward Purchase Agreement.

The Forward Purchase Agreement is accounted for as a derivative financial instrument under ASC 815 and is measured at fair value with changes in fair value recognized in earnings. The Company evaluates the derivative at each reporting date and recognizes changes in fair value in its condensed consolidated statement of operations. During the three and nine months ended September 30, 2026, the Company recorded a $0.2 million and $0.9 million gain, respectively, on the derivative, which is included in Gain on financial instruments on the condensed consolidated statements of operations. As of September 30, 2026, the Company recorded a derivative asset of $0.6 million related to the Forward Purchase Agreement, which is included in Other assets on the condensed consolidated balance sheet. The derivative was classified as a Level 3 financial instrument within the fair value hierarchy since its valuation incorporates significant inputs that are not directly observable in the market.

The Company applies ASC 820 in the valuation of the derivative related to the Forward Purchase Agreement for financial statement purposes. The fair value of the derivative asset was determined using a Monte Carlo simulation model that incorporates the reference price (as defined in the Forward Purchase Agreement) as of September 30, 2026 ($3.25), the closing price of BOXABL common stock as of September 30, 2026 ($3.27), and the projected volatility of BOXABL common stock (122.6%). Accordingly, the asset is classified within Level 3 of the fair value hierarchy.

ETH Digital Assets

The Company applies ASC 820 in the valuation of ETH held by the Company for financial statement purposes. The fair value of ETH uses Level 1 inputs to reflect the price that would be received for ETH in a current sale, which assumes an orderly transaction between market participants on the measurement date in the Company’s principal market, or in the absence of a principal market, the most advantageous market. Market participants are defined as buyers and sellers in the principal or most advantageous market that are independent, knowledgeable, and willing and able to transact. The Company determines its principal market (or in the absence of a principal market, the most advantageous market) on a periodic basis to determine which market is its principal market for the purpose of calculating fair value for the creation of quarterly and annual financial statements. Issuer-specific events, market trends, bid/ask quotes of brokers and information providers and other data may be reviewed in the course of making a good faith determination of the digital asset’s fair value.

Financial instruments measured, on a recurring basis, at fair value in accordance with the guidance promulgated by the FASB as of September 30, 2026 and December 31, 2025 are as follows (in thousands):

A rollforward of the assets classified within Level 3 of the fair value hierarchy for the nine months ended September 30, 2026 is as follows (in thousands):

Note 6. 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 $1.9 million and $2.2 million as of September 30, 2026 and December 31, 2025, respectively. Depreciation expense from continuing operations was $0.1 million for each of the three months ended September 30, 2026 and 2025 and $0.2 million for each of the nine months ended September 30, 2026 and 2025.

As discussed in Note 1, subsequent to September 30, 2026, the Company acquired its initial manufactured housing communities. In October 2026, the Company acquired two manufactured housing communities in North Carolina with a total of 78 homesites. Both of the manufactured housing communities were purchased from an unaffiliated third party and were paid for by the Company using cash on hand.

Note 7. Income Taxes

The Company recorded a consolidated income tax benefit of $0.1 million and income tax expense of $0.1 million during the three and nine months ended September 30, 2026, respectively. For the three months ended September 30, 2026, the Company recorded Canadian current tax expense and Canadian deferred tax benefit related to provincial and federal operational activity. Additionally, the Company recognized a discrete quarterly withholding deferred tax benefit resulting from a decrease in the Canadian withholding-related deferred tax liability associated with the expected future repatriation of net proceeds from Canadian assets. This quarterly benefit serves to reduce the cumulative year-to-date withholding deferred tax expense recognized during the nine months ended September 30, 2026. No U.S. federal or state current income tax expense was recorded, and no U.S. deferred tax benefit was recognized because the Company maintains a full valuation allowance against its U.S. deferred tax assets. For U.S. reporting under the interim tax provision methodology, tax effects related to ordinary operations are reflected using the year-to-date actual effective tax rate approach in accordance with ASC 740-270-30-18, as a reliable estimate of the full-year annual effective tax rate could not be determined due to uncertainty of forecasted results as a result of recent business shifts, including the sale of its reinsurance business and the exit from the digital assets business. The tax effects of discrete items are recognized in the period in which they occur. As of September 30, 2026, the Company was in an overall U.S. taxable loss position; accordingly, no U.S. current tax provision was required. In addition, although these losses would otherwise give rise to deferred tax assets, no U.S. deferred tax benefit or expense was recognized because such tax attributes remain fully offset by a valuation allowance.

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 tax 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 should be recorded against all of the Company’s U.S. tax jurisdiction deferred tax assets as of September 30, 2026 and December 31, 2025. The Canadian deferred tax benefit remains recorded for the period ended September 30, 2026, there is no valuation allowance in Canada and the benefit is a result of the decrease in the deferred tax liability during the quarter.

For taxable years beginning after December 31, 2025, the One Big Beautiful Bill Act renamed and modified the GILTI regime as net CFC tested income (“NCTI”). Under Section 951A of the Internal Revenue Code, U.S. shareholders generally include their pro rata share of CFC tested income, without the former deduction for a deemed return on qualified business asset investment. A high-tax exception may be available for income subject to an effective foreign tax rate greater than 18.9%, subject to applicable requirements. Domestic corporations may generally deduct 40% of NCTI under Section 250, subject to limitations. The Company considered these provisions in determining its income tax provision and estimated an NCTI inclusion for the nine months ended September 30, 2026. After giving effect to the estimate, the Company would remain in a net loss position and would have no taxable income for the period.

Changes in tax laws may affect recorded deferred tax assets and liabilities and the Company’s effective tax rate in the future. In July of 2025, the One Big Beautiful Bill Act was enacted and made significant changes to Federal tax laws. The effects of these changes relate to deferred tax assets and net operating losses; all of which are offset by valuation allowance. There were no material income tax consequences of the recently enacted laws 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 2023, 2024, or 2025. The returns were filed in October 2024, October 2025, and October 2026, respectively, and generally remain open to assessment until the corresponding filing-date anniversaries in October 2027, October 2028, and October 2029, subject to applicable extensions and statutory exceptions. The Company is also subject to possible examinations for state and local purposes. In most cases, these examinations in the state and local jurisdictions remain open based on the particular jurisdiction’s statute of limitations. There were no material changes to unrecognized tax benefits during the first nine months of 2026.

Note 8. Equity Incentive Plans and Stock-Based Compensation

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 September 4, 2025, to increase the number of shares authorized for issuance under the 2021 Plan to 8.0 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 September 30, 2026, there were approximately 7.9 million shares remaining available for future issuance.

In addition, on March 24, 2023, the Board approved an employee stock purchase plan (“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.

Stock-based compensation expense for the three months ended September 30, 2026 and September 30, 2025 was approximately $0.1 million and $7.4 million, respectively. Stock-based compensation expense from continuing operations for the nine months ended September 30, 2026 and September 30, 2025 was approximately $0.4 million and $7.8 million, respectively. The stock-based compensation expense in the prior year period was primarily related to the issuance of warrants in connection with the Private Placement Offering that closed in August 2025. As of September 30, 2026, total unrecognized stock compensation expense of approximately $0.3 million remained, which primarily related to RSUs and will be recognized through June 2031.

Restricted Stock Units

The following table summarizes activity for RSUs for the nine months ended September 30, 2026:

In April 2026, the Company granted a total of 72,611 RSUs to the members of its Board pursuant to the Company’s director compensation policy.

Stock Options

The following table summarizes activity for stock options for the nine months ended September 30, 2026:

Note 9. Stockholders’ Equity

8.00% Cumulative Preferred Stock, Series A

As of September 30, 2026, the Company had 601,412 Series A Preferred Stock shares outstanding, compared to 888,884 outstanding as of December 31, 2025. As of November 4, 2026, there were 598,547 shares of Series A Preferred Stock outstanding.

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 “FGCPP”.

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.

During the nine months ended September 30, 2026, the Company purchased a total of approximately 288 thousand shares of its Series A Preferred Stock at a total cost (including commissions) of approximately $7.2 million. Subsequent to September 30, 2026 and through November 4, 2026, the Company purchased an additional approximately 3 thousand shares of its Series A Preferred Stock at a total cost (including commissions) of approximately $0.1 million. Through November 4, 2026, the Company has repurchased approximately 33% 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 September 30, 2026 was 4,594,068, compared to 7,080,747 as of December 31, 2025. As of November 4, 2026, there were 4,575,300 shares of common stock outstanding. Shares of the Company’s common stock trade on the Nasdaq Stock Market under the symbol “FGC”.

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 Share 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.

During the nine months ended September 30, 2026, the Company purchased a total of approximately 2.5 million shares of its Common Stock at a total cost (including commissions) of approximately $22.8 million. Subsequent to September 30, 2026 and through November 4, 2026, the Company purchased an additional approximately 19 thousand shares of its Common Stock at a total cost (including commissions) of approximately $0.1 million. Through November 4, 2026, the Company has repurchased approximately 48% of its Common Stock outstanding immediately prior to implementation of the program. All repurchased shares are recorded as treasury stock.

Warrants

The following table summarizes activity for warrants for the nine months ended September 30, 2026:

In June 2026, the Company granted 25,000 warrants to a former employee in the digital assets segment. The stock-based compensation expense related to the grant has been allocated to discontinued operations. The grant date fair value of warrants issued during 2026 was $4.24. The fair value of each warrant issued was estimated on the date of grant using a lattice valuation model with the following assumptions:

Note 10. 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 condensed 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, LP

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., FG Communities 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, Inc.

In October 2022, the Company directly invested $2.0 million into FGCI, 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 FGCI was distributed to the CVR Trust in August 2025.

As discussed in Note 4, in the third quarter of 2026, the Company invested $10.0 million into FGCI. Mr. Cerminara is the President and Chairman of FGCI. The September 2026 investment followed a review of strategic alternatives by the Company’s Board and a special committee composed of independent directors. The special committee retained an independent financial advisor to assist in its evaluation.

During the nine months ended September 30 2026, certain employees of the Company provided administrative services for FGCI. The Company invoiced FGCI $0.1 million during the third quarter of 2026 for the administrative services provided, which was paid by FGCI during the fourth quarter of 2026.

Craveworthy Brands LLC

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 LLC

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 Capital Ltd.

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 previously served as the Executive Chair and is currently the interim Chief Executive Officer and a member of the Board of Directors of Saltire. Mr. Cerminara, the Chief Executive Officer and Chairman of the Company’s Board of Directors currently serves as Executive Chairman of the Board of Directors of Saltire. Richard Govignon, a member of the Company’s Board of Directors, serves as a member of the Board of Directors of Saltire.

FG Merger II Corp

During the second quarter of 2026, the Company purchased approximately 1.5 million shares of FGMC at a total cost of approximately $15.5 million. In July 2026, as a result of the completion of the merger of FGMC and BOXABL, the Company’s shares of FGMC were redeemed for approximately $15.5 million in cash. Prior to its merger with BOXABL, certain of the Company’s directors were also directors of FGMC.

Shared Services Agreement

In 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 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 $0.5 million and $1.4 million, respectively, to FGM under the Shared Services Agreement for each of the three and nine months ended September 30, 2026 and September 30, 2025, respectively. This amount is included in General and administrative expenses on the condensed consolidated statement of operations.

Note 11. Net Earnings Per Share

Net earnings per share is computed by dividing net income 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 three and nine months ended September 30, 2026 and 2025 (in thousands, except per share amounts).

The following potentially dilutive securities outstanding as of September 30, 2026 and 2025 have been excluded from the computation of diluted weighted-average shares outstanding as their effect would be anti-dilutive.

Note 12. Debt

The Company’s short-term debt 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 initial public offering (“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 CAD$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 September 30, 2026. The Company was in compliance with its debt covenants as of September 30, 2026.

Note 13. Commitments and Contingencies

Legal Proceedings

The Company is involved, from time to time, in certain legal disputes in the ordinary course of business. No such disputes, individually or in the aggregate, are expected to have a material effect on its business or financial condition.

One of the Company’s subsidiaries 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 FG Communities Holdings. In our experience, a large percentage of these types of claims have never been substantiated and have been dismissed by the courts. FG Communities Holdings 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 a former subsidiary of the Company 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 been 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 the Company.

As of September 30, 2026, the Company has a loss contingency reserve of approximately $0.2 million, which represents management’s aggregate estimate of the 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 14. Segment Reporting

The Company hastwo operating segments – merchant banking and real estate. 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 merchant banking segment includes our equity and other holdings. The real estate segment includes rental income and expenses related to the Company’s real estate in Canada.

The following tables present the financial information for each segment that is specifically identifiable or based on allocations using internal methodology for the three and nine months ended September 30, 2026 and 2025 (in thousands):

The following table presents the Company’s specifically identifiable assets for each of the Company’s segments as of September 30, 2026 and December 31, 2025 (in thousands):

The “Corporate & Discontinued Operations” segment assets as of December 31, 2025 includes $13.9 million of assets of discontinued operations related to the Company’s reinsurance business, which was sold during the first quarter of 2026 and $119.4 million of assets of discontinued operations related to the Company’s digital assets business, which the Company exited during the second quarter of 2026.

Note 15. Subsequent Events

The Company’s management has evaluated subsequent events after the consolidated balance sheet dated as of September 30, 2026, through the date of filing of this Form 10-Q. 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 condensed consolidated financial statements or disclosure in the notes thereto.