FG Communities Holdings Inc.
For the period ended Dec 31, 2024. Filed Mar 31, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 31, 2025
FGNXP$25.99+4.4%Stored close · as of Sep 25, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-03-14.
0001493152-24-009954
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-31.
0001641172-25-001679
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 92 previous paragraphs and 52 current paragraphs.
13 unchanged; 6 reworded; 33 added; 72 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 11 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (33)
Current report
On May 3, 2024, Strong Global Entertainment, Inc. (“Strong Global Entertainment”) entered into an acquisition agreement (the “Acquisition Agreement”) with FG Acquisition Corp., a special purpose acquisition company (“FGAC”), Strong/MDI Screen Systems, Inc. (“Strong/MDI”), FGAC Investors LLC, and CG Investments VII Inc. The transaction closed on September 25, 2024. 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.
Current report
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 consolidated financial statements included in this Form 10-K.
Current report
On October 10, 2024, the Company’s Board of Directors approved a reverse stock split of the Company’s authorized, issued and outstanding shares of common stock at a ratio of one (1)-for-twenty-five (25) (the “Reverse Stock Split”). The Reverse Stock Split became effective on October 31, 2024 (the “Effective Date”), at 5:00 p.m., Eastern Time. The Company’s common shares began trading on a split-adjusted basis at the commencement of trading on November 1, 2024. All equity awards outstanding immediately prior to the Reverse Stock Split were adjusted to reflect the Reverse Stock Split. As a result of the Reverse Stock Split, all references to the Company’s common stock (“Common Stock”) in this Form 10-K have been adjusted to reflect the Reverse Stock Split.
Current report
Fundamental Global Inc. is a holding company incorporated in the state of Nevada. On December 9, 2022, we completed our reincorporation from a Delaware corporation to a Nevada corporation. Our Common Stock and Series A Preferred are currently listed on Nasdaq under the symbols “FGF” and “FGFPP,” respectively.
Current report
As a result of the reverse merger of FGF and FGH, the consolidated financial statements for the periods prior to the merger represent the results of FGH, as the accounting acquirer. For periods subsequent to the merger, the consolidated financial statements represent the combined results of FGH and FGF. As a result, the current contain years presents twelve months of activity related to the FGH operations and ten months of activity related to the FGF operations, whereas the prior year only contains the activity related to FGH and does not reflect the operations of the FGF legacy business. Accordingly, the results of the current year and the prior year may not be directly comparable. In addition, Strong Studios, Strong/MDI and our reinsurance business are presented as discontinued operations in the accompanying consolidated financial statements.
Current report
We sold Strong Studios and Strong/MDI during 2024 and intend to sell our reinsurance operations in 2025. The results of those business units are presented as Discontinued Operations in the accompanying consolidated financial statements. Management’s discussion and analysis of financial condition and results of operations that follows reflects the continuing operations of the Company.
Current report
Other Holdings
Current report
Current Expected Credit Loss
Current report
Trade accounts receivable are recorded at the invoiced amount and do not bear interest. Management determines the allowance for expected credit losses based on several factors, including overall customer credit quality, historical write-off experience and a specific analysis that projects the ultimate collectability of the account. As such, these factors may change over time causing the allowance level and provision for expected credit losses to be adjusted accordingly. Past due accounts are written off when our efforts have been unsuccessful in collecting amounts due.
Current report
Revenue Recognition for Products and Services
Current report
The Company accounts for revenue using the following steps:
Current report
We combine contracts with the same customer into a single contract for accounting purposes when the contracts are entered into at or near the same time and the contracts are negotiated as a single commercial package, consideration in one contract depends on the other contract, or the services are considered a single performance obligation. 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. We estimate the amount of total contract consideration we expect to receive for variable arrangements by determining the most likely amount we expect to earn from the arrangement based on the expected quantities of services we expect to provide and the contractual pricing based on those quantities. We only include some or a portion of variable consideration in the transaction price when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur or when the uncertainty associated with the variable consideration is subsequently resolved. We consider the sensitivity of the estimate, our relationship and experience with the client and variable services being performed, the range of possible revenue amounts and the magnitude of the variable consideration to the overall arrangement.
Current report
As discussed in more detail below, revenue is recognized when a customer obtains control of promised goods or services under the terms of a contract and is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services. We typically do not have any material extended payment terms, as payment is due at or shortly after the time of the sale. Sales, value-added and other taxes collected concurrently with revenue producing activities are excluded from revenue.
Current report
We recognize 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.
Current report
We defer costs to acquire contracts, including commissions, incentives and payroll taxes, if they are incremental and recoverable costs of obtaining a customer contract with a term exceeding one year. Deferred contract costs are reported within other assets and amortized to selling expense over the contract term, which generally ranges from one to five years. The Company has elected to recognize the incremental costs of obtaining a contract with a term of less than one year as a selling expense when incurred. We did not have any deferred contract costs as of December 31, 2024 or December 31, 2023.
Current report
Stock-Based Compensation Expense
Current report
The Company uses the fair-value method of accounting for stock-based compensation awards granted. The Company has determined the fair value of its outstanding stock options on their grant date using the Black-Scholes option pricing model along with multiple Monte Carlo simulations to determine a derived service period as the options vest based upon meeting certain performance conditions. The Company determines the fair value of restricted stock units (“RSUs”) on their grant date using the fair value of the Company’s common stock on the date the RSUs were issued (for those RSUs which vest solely based upon the passage of time). The fair value of these awards is recorded as compensation expense over the requisite service period, which is generally the expected period over which the awards will vest, with a corresponding increase to additional paid-in capital. When the stock options are exercised, or correspondingly, when the RSUs vest, the amount of proceeds together with the amount recorded in additional paid-in capital is recorded in shareholders’ equity.
Current report
Year Ended December 31, 2024 Compared with Year Ended December 31, 2023
Current report
Revenue
Current report
Total revenue during 2024 increased $0.3 million or 1.5% from 2023 with growth in our managed services business partially offset by non-cash losses from our equity method holdings.
Current report
Revenue from products and services, which primarily includes our managed services segment, increased $5.5 million or 20.7% to $32.0 million in 2024 from $26.5 million during 2023. Revenue growth in our managed services business was due to a combination of increasing demand for our services from cinema operators and the contributions from the acquisition of the net assets of Innovative Cinema Solutions (“ICS”) in late 2023.
Current report
The increase in revenue from managed services was partially offset by an increase in losses from our equity and other holdings as the Company’s non-cash equity method losses were higher in the current year period.
Current report
Expenses
Current report
Total expenses increased $8.8 million or 26.5% to $42.2 million during 2024 from $33.4 million during 2023. Expenses are comprised of cost of sales related to managed services, costs of the asset management business and selling, general and administrative expenses.
Current report
The increase in total expenses was primarily due to the addition of the FGF business operations as a result of the Merger in February 2024, which are not reflected in the prior year results and which added approximately $3.0 million in general and administrative expenses during 2024. In addition, the Company’s costs of revenue and selling, general and administrative expenses increased with growth in managed services and as a result of operating Strong Entertainment as a separate public company for nine months of the year. Strong Global Entertainment was merged into FGF in the third quarter of 2024 to reduce operating expenses going forward. The Company also recognized a $1.4 million non-cash impairment related to the sale of the Digital Ignition building.
Current report
If FGF and FGH were presented on a combined basis for both years, total general and administrative expenses would have been $18.7 million in 2023 as compared with $15.7 million in 2024, decreasing due to the merger and cost reduction initiatives.
Current report
Loss from Operations
Current report
Loss from operations increased $8.6 million or 52.7% to $24.9 million during 2024 from $16.3 million during 2023. Improved gross profit contributions in managed services were offset by higher losses from our equity other holdings, increased general and administrative costs related to both operating Strong Global Entertainment as a separate public company for a portion of the year and the addition of FGF, which is not included in the prior period comparisons, as well as a non-cash impairment loss of $1.4 million related to the sale of Digital Ignition.
Current report
Net Loss from Continuing Operations
Current report
Net loss from continuing operations increased $10.6 million or 85.7% to $22.9 million during 2024 from $12.3 million during 2023. Improved gross profit contributions from managed services and a $2.3 million gain related to the FGF merger transaction were offset by higher losses from our equity other holdings, increased general and administrative costs related to both operating Strong Entertainment as a separate public company for a portion of the year and the addition of FGF which is not included in the prior period comparisons as well as a non-cash impairment loss of $1.4 million related to the sale of Digital Ignition.
Current report
For the year ended December 31, 2024, net cash used in operating activities from continuing operations was approximately $4.0 million, compared to cash provided by operating activities of $1.6 million for the year ended December 31, 2023. Cash from operations decreased primarily due to higher overhead expenses as a result of the merger of FGF and FGH and operating Strong Entertainment as a separate public company for nine months of the year.
Current report
For the year ended December 31, 2024, net cash provided by investing activities from continuing operations was approximately $13.2 million, compared to $0.1 million for the year ended December 31, 2023. Cash provided by investing activities during the year ended December 31, 2024 included $1.9 million of an increase in cash as a result of the Merger of FGF and FGH, $5.0 million of proceeds from the sale of equity securities and $6.1 million from the sale of the Digital Ignition building. Investing cash flows during each of the year ended December 31, 2024 and 2023 included approximately $46,000 million and $0.2 million, respectively, of capital expenditures in the managed services business.
Current report
For the year ended December 31, 2024, net cash used in financing activities from continuing operations was approximately $7.4 million, compared to cash provided by financing activities of $1.2 million for the year ended December 31, 2023. Cash used in financing activities during the year ended December 31, 2024 included $6.0 million of principal payments on debt and finances leases and $1.4 million of payments of dividends on our Series A Preferred Shares. Cash by financing activities during the year ended December 31, 2023 included $2.4 million of net proceeds from the IPO of Strong Global Entertainment, partially offset by $1.0 million of principal payments on debt and finances leases.
Removed paragraphs (72)
Previous report
On February 29, 2024, FGF and FGH completed the previously announced merger transaction pursuant to the Plan of Merger, dated as of January 3, 2024 (the “Merger Agreement”), by and among FGF, FGH and FG Group LLC, a Nevada limited liability company and wholly owned subsidiary of FGF (the “Merger Sub”). Pursuant to the terms of the Merger Agreement and in accordance with the Nevada Revised Statutes, FGH merged with and into the Merger Sub (the “Merger”), with the Merger Sub as the surviving entity and wholly owned subsidiary of FGF. Following the Merger, on February 29, 2024, the Company amended its Amended and Restated Articles of Incorporation to change its name to Fundamental Global Inc.
Previous report
Effective immediately following the closing of the Merger, the Board of Directors of the Company (the “Board”) increased in size from six to seven directors. In connection with the closing of the Merger, E. Gray Payne and Larry G. Swets, Jr., resigned from the Board. In addition, in accordance with the terms of the Plan of Merger and effective immediately following the closing of the Merger each of Michael C. Mitchell, Ndamukong Suh, and Robert J. Roschman were appointed to the Board. The Board has determined that all of its directors, except for D. Kyle Cerminara, are “independent directors” as such term is defined by the applicable rules and regulations of the SEC and Nasdaq.
Previous report
In connection with the Merger, Larry G. Swets, President and Chief Executive Officer of FGF prior to the closing of the Merger, and Hassan R. Baqar, Executive Vice President and Chief Financial Officer of FGF prior to the closing of the Merger, resigned from their respective positions with the combined company. Messrs. Swets and Baqar will remain with the combined company leading the merchant banking and SPAC businesses.
Previous report
Unless stated otherwise, all information included within this Annual Report relates to information that precedes the Merger with FGH.
Previous report
Fundamental Global Inc. (“FGF”, the “Company”, “we”, or “us”), formerly known as FG Financial Group, Inc., is a reinsurance, merchant banking and asset management holding company. We focus on opportunistic collateralized and loss-capped reinsurance, while allocating capital to merchant banking activities. The Company’s principal business operations are conducted through its subsidiaries and affiliates.
Previous report
As of December 31, 2023, FG Financial Holdings, LLC (“FG”), a private partnership focused on long-term strategic holdings, and its affiliated entity collectively beneficially owned approximately 54.6% of our common stock. D. Kyle Cerminara, Chairman of our Board of Directors, serves as Chief Executive Officer, Co-Founder and Partner of FG.
Previous report
Other Investments
Previous report
Premium Revenue Recognition
Previous report
The Company participates in reinsurance quota-share contracts and estimates the ultimate premiums for the contract period. These estimates are based on information received from the ceding companies, whereby premiums are recorded as written in the same periods in which the underlying insurance contracts are written and are based on cession statements from cedents. These statements are received quarterly and in arrears, and thus, for any reporting lag, premiums written are estimated based on the portion of the ultimate estimated premiums relating to the risks underwritten during the lag period.
Previous report
Premium estimates are reviewed by management periodically. Such review includes a comparison of actual reported premiums to expected ultimate premiums. Based on management’s review, the appropriateness of the premium estimates is evaluated, and any adjustments to these estimates are recorded in the period in which they are determined. Changes in premium estimates, including premiums receivable, are not unusual and may result in significant adjustments in any period. A significant portion of amounts included in the caption “Reinsurance balances receivable” in the Company’s consolidated balance sheets represent estimated premiums written, net of commissions, brokerage, and loss and loss adjustment expense, and are not currently due based on the terms of the underlying contracts.
Previous report
Premiums written are generally recognized as earned over the contract period in proportion to the risk covered. Additional premiums due on a contract that has no remaining coverage period are earned in full when written. Unearned premiums represent the unexpired portion of reinsurance provided.
Previous report
Loss and Loss Adjustment Expense Reserves
Previous report
Loss and loss adjustment expense reserve estimates are based on estimates derived from reports received from ceding companies. These estimates are periodically reviewed by the Company’s management and adjusted as necessary. Since reserves are estimates, the final settlement of losses may vary from the reserves established and any adjustments to the estimates, which may be material, are recorded in the period they are determined.
Previous report
Loss estimates may also be based upon actuarial and statistical projections, an assessment of currently available data, predictions of future developments, estimates of future trends and other factors. Significant assumptions used by the Company’s management and third-party actuarial specialists include loss development factor selections, initial expected loss ratio selections, and weighting of methods used. The final settlement of losses may vary, perhaps materially, from the reserves recorded. All adjustments to the estimates are recorded in the period in which they are determined. U.S. GAAP does not permit establishing loss reserves, which include case reserves and IBNR loss reserves, until the occurrence of an event which may give rise to a claim. As a result, only loss reserves applicable to losses incurred up to the reporting date are established, with no allowance for the establishment of loss reserves to account for expected future loss events.
Previous report
Generally, the Company obtains regular updates of premium and loss related information for the current and historical periods, which are utilized to update the initial expected loss ratio. We also experience lag between (i) claims being reported by the underlying insured to the Company’s cedent and (ii) claims being reported by the Company’s cedent to the Company. This lag may impact the Company’s loss reserve estimates. Cedent reports have pre-determined due dates (for example, thirty days after each month end). As a result, the lag depends in part upon the terms of the specific contract. The timing of the reporting requirements is designed so that the Company receives premium and loss information as soon as practicable once the cedent has closed its books. Accordingly, there should be a short lag in such reporting. Additionally, most of the contracts that have the potential for large single event losses have provisions that such loss notifications are provided to the Company immediately upon the occurrence of an event.
Previous report
Analysis of Financial Condition
Previous report
As of December 31, 2023 compared to December 31, 2022
Previous report
Investments
Previous report
The table below summarizes, by type, the Company’s investments held at fair value as of December 31, 2023 and 2022.
Previous report
OppFi Common Stock
Previous report
As a result of FG Special Situations Fund, LP (“The Fund”) unwinding the Company received approximately 860,000 common shares of OppFi common stock and approximately 360,000 $11.50 strike warrants. On the date of the distribution, the securities had an aggregate fair value of approximately $1.9 million.
Previous report
Hagerty Common Stock
Previous report
On December 15, 2022, FGMP distributed 99,999 common shares of Hagerty to the Company. On the date of distribution, the common shares had an aggregate fair value of approximately $889,000. The Company sold the common shares during the first quarter of 2023 for a realized loss of approximately $16,000.
Previous report
Equity Method Investments
Previous report
Other investments on the Company’s consolidated balance sheets include our equity method investments. Below is a summary of the carrying values on the consolidated balance sheets:
Previous report
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 is the sole managing member of the general partner of FGMP and holds a limited partner interest of approximately 46% in FGMP. FGMP participates as a co-sponsor of the SPACs launched under our SPAC Platform as well as merchant banking initiatives.
Previous report
For the year ended December 31, 2023, the Company contributed $0.1 million into FGMP and has recorded equity method gains of approximately $3.0 million. Of the $8.8 million carrying value of our investment in FGMP at December 31, 2023 the Company may allocate up to approximately $0.4 million to incentivize and compensate individuals and entities for the successful merger of SPACs launched under our platform.
Previous report
Equity method investments previously included our investment in the Fund. However, during the first quarter of 2023, it was determined that the Fund would begin the process of winding down, and all investment holdings held in the name of the Fund would be transferred and distributed to members within the Fund based on their ownership percentage of each respective holding. Prior to the unwinding, through the Fund, the Company held underlying investments in FGAC Investors LLC, FG Merger Investors LLC, and Greenfirst Forest Products Holdings LLC. The Fund, an investment company, carried each of these investments at fair value. In June 2023, all transfers were completed, resulting in the Company being transferred direct limited partner interests in FGAC Investors LLC, with a carrying value of $8.9 million, FG Merger Investors LLC, with a carrying value of $3.4 million, and Greenfirst Forest Products Holdings, LLC, with a carrying value of $1.4 million. The Company determined that it has the ability to exercise significant influence over FGAC Investors LLC, FG Merger Investors LLC and Greenfirst Forest Products Holdings LLC, and thus will account for each of these investments under the equity method of accounting. After taking into account second quarter equity pickups, the combined carrying value of these investments at June 30, 2023 was approximately $11.9 million. Subsequent to June 30, 2023, the Company contributed $0.4 million into FG Merger Investors LLC, and recorded an equity method gain of approximately $2.4 million. In addition, the Company recorded an equity method loss from Greenfirst Forest Products Holdings LLC of approximately $0.1 million and a gain of $0.1 million from FGAC Investors LLC.
Previous report
Investments without Readily Determinable Fair Value
Previous report
In addition to our equity method investments, other investments, as listed on our consolidated balance sheets, consist of equity we have purchased in companies for which there does not exist a readily determinable fair value. The Company accounts for these investments 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 investments are included in net investment income.
Previous report
The carrying value of investments without readily determinable fair value was increased by $0.3 million for the year ended December 31, 2023, as compared to zero for the year ended December 31, 2022. The increase was due to an observable price change in FG Communities (“FGC”) during the second quarter of 2023. This amount is included in net investment income on the Company’s consolidated statements of operations. For the year ended December 31, 2023, the Company received distributions from investments without readily determinable fair values in the amount of $0.3 million, as compared to $0.2 million for the year ended December 31, 2022.
Previous report
A summary of changes in investments without a readily determinable fair value for the year ended December 31, 2023, and 2022, is as follows:
Previous report
See Item 8, Note 4, Investments and Fair Value Disclosures, for further information regarding the Company’s investments.
Previous report
Funds Deposited for Benefit of Reinsured Companies
Previous report
“Funds Deposited with Reinsured Companies” on the Company’s consolidated balance sheets includes amounts held to support our reinsurance contracts. As of December 31, 2023 and December 31, 2022, the total cash collateral posted to support all of our reinsurance treaties was approximately $8.0 million and $9.3 million, respectively.
Previous report
Reinsurance Balances Receivable
Previous report
Reinsurance balances receivable were $21.6 million as of December 31, 2023, compared to $9.3 million as of December 31, 2022, representing net amounts due to the Company under our quota-share agreements. The increase in balance is primarily due to additional reinsurance contracts that the Company entered into during 2023.
Previous report
As the Company estimates the ultimate premiums, loss expenses and other costs associated with some of these contracts, based on information received by us from the ceding companies, a significant portion of this balance is based on estimates and, ultimately, may not be collected by the Company.
Previous report
Net Deferred Taxes
Previous report
Deferred income taxes reflect the net tax effects of temporary differences between carrying amounts of assets and liabilities for financial reporting purposes, as compared to the amounts used for income tax purposes. The Company’s gross deferred tax assets and liabilities are $8.5 million and $3.8 million, respectively, as of December 31, 2023, and $9.1 million and $3.6 million, respectively, as of December 31, 2022. The Company has recorded a valuation allowance against its deferred tax assets of $4.7 million and $5.5 million, as of December 31, 2023 and December 31, 2022, respectively, due to the uncertain nature surrounding our ability to realize these tax benefits in the future. Significant components of the Company’s net deferred taxes are as follows:
Showing the first 40 of 72 passages. Open the source sections for the rest.
Reworded paragraphs (6)
Previous wording
You should read the following discussion in conjunction with our consolidated financial statements and related notes and information included elsewhere in this annual report on Form 10-K. You should review the “Risk Factors” section of this annual report for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. Some of the information contained in this discussion and analysis and set forth elsewhere in this annual report on Form 10-K includes forward-looking statements that involve risks and uncertainties.
Current wording
You should read the following discussion in conjunction with our consolidated financial statements and related notes and information included elsewhere in this Form 10-K. You should review the “Risk Factors” section of this Form 10-K for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. Some of the information contained in this discussion and analysis and set forth elsewhere in this Form 10-K includes forward-looking statements that involve risks and uncertainties.
Previous wording
Unless context denotes otherwise, the terms “Company,” “FGF,” “we,” “us,” and “our,” refer to FG Financial Group, Inc., and its subsidiaries.
Current wording
Unless context denotes otherwise, the terms “Company,” “FGF,” “we,” “us,” and “our,” refer to Fundamental Global Inc. (formerly known as FG Financial Group, Inc.), and its subsidiaries.
Previous wording
On January 3, 2024, FG Financial Group, Inc. (“FGF”) and FG Group Holdings, Inc. (NYSE American: FGH) (“FGH”), signed a definitive plan of merger to combine the companies in an all-stock transaction. The plan of merger and transaction were unanimously approved by the independent members of the Board of Directors of both FGF and FGH. Under the plan of the merger, FGH common stockholders would receive one share of FGF common stock for each share of common stock of FGH held by such stockholder. Upon completion of the merger, the combined company would be renamed to Fundamental Global Inc. and the common stock and Series A cumulative preferred stock of the combined company would continue to trade on the Nasdaq under the tickers “FGF” and “FGFPP,” respectively.
Current wording
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, and the common stock and Series A cumulative preferred stock of the combined company continued to trade on the Nasdaq Stock Market LLC (the “Nasdaq”) under the tickers “FGF” and “FGFPP,” respectively.
Previous wording
Other investments consist, in part, of equity investments made in privately held companies accounted for under the equity method. The carrying values of investments accounted for under the equity method of accounting, and the corresponding gains and losses resulting from equity pickups, are significantly impacted by certain investments held by equity method investees. As discussed further in Note 4, these investments held by our equity method investees are valued using Monte-Carlo simulation and option pricing models. Inherent in Monte-Carlo simulation and option pricing models are assumptions related to expected volatility and discount for lack of marketability of the underlying investment. Our investees estimate the volatility of these investments based on the historical performance of various broad market indices blended with various peer companies which they consider as having similar characteristics to the underlying investment, as well as consideration of price and volatility of relevant publicly traded securities such as SPAC warrants. Our investees also consider the probability of a successful merger when valuing equity for SPACs that have not yet completed a business combination.
Current wording
Other holdings consist, in part, of equity holdings made in privately held companies accounted for under the equity method. As discussed further in Note 6, certain holdings held by our equity method investees are valued using Monte-Carlo simulation and option pricing models. 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 investees estimate the volatility of these holdings based on the historical performance of various broad market indices blended with various peer companies which they consider as having similar characteristics to the underlying holding, as well as consideration of price and volatility of relevant publicly traded securities such as SPAC warrants. Our investees also consider the probability of a successful merger when valuing equity for SPACs that have not yet completed a business combination.
Previous wording
The purpose of liquidity management is to ensure that there is sufficient cash to meet all financial commitments and obligations as they fall due. The liquidity requirements of the Company and its subsidiaries have been met primarily by funds generated from operations and from the proceeds from the sales of our common stock. Cash provided from these sources has historically been used for making investments, loss and LAE payments, as well as other operating expenses.
Current wording
The purpose of liquidity management is to ensure that there is sufficient cash to meet all financial commitments and obligations as they fall due. The liquidity requirements of the Company and its subsidiaries have been met primarily by funds generated from operations, proceeds from the sales of our common stock and credit facilities. We believe that we have sufficient liquidity through our operations, our holdings, access to credit and other sources to meet our operating requirements for the next twelve months.
Previous wording
The following table summarizes the Company’s consolidated cash flows for the years ended December 31, 2023 and 2022:
Current wording
The following table summarizes the Company’s consolidated cash flows for the year ended December 31, 2024 and 2023 (in thousands).
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Certain investments held by our equity method investees are valued using Monte-Carlo simulation and option pricing models. Inherent in Monte-Carlo simulation and option pricing models are assumptions related to expected volatility and discount for lack of marketability of the underlying investment. Our investees estimate the volatility of these investments based on the historical performance of various broad market indices blended with various peer companies which they consider as having similar characteristics to the underlying investment, as well as consideration of price and volatility of relevant publicly traded securities such as SPAC warrants. Our investees also consider the probability of a successful merger when valuing SPAC equity.