Fundamental Global Inc.
For the period ended Jun 30, 2025. Filed Aug 7, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 7, 2025
FGCPP$25.00-2.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-14.
0001641172-25-010388
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-07.
0001641172-25-022608
ITEM 2. 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 60 previous paragraphs and 84 current paragraphs.
42 unchanged; 15 reworded; 23 added; 3 removed; 0 previous and 4 current paragraphs rearranged.
Tables are not compared: 3 previous and 4 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 (23)
Current report
Recent Developments
Current report
Closing of Private Placement Offering
Current report
On July 29, 2025, we entered into a securities purchase agreement with certain accredited investors (the “Purchasers”) pursuant to which we agreed to sell and issue to the Purchasers in a private placement offering (the “Offering”) pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to an aggregate of 40,000,000 shares of our common stock (the “Pre-Funded Warrant Shares”) at an offering price of $5.00 per Pre-Funded Warrant, payable at the option of the Purchaser in cash, Bitcoin or ETH, the native token of the Ethereum network.
Current report
Each of the Pre-Funded Warrants is exercisable, following the effectiveness of the Charter Amendment, for one share of the Company’s common stock with an exercise price of $0.001 per Pre-Funded Warrant Share and may be exercised at any time until all of the Pre-Funded Warrants issued in the Offering are exercised in full. Certain Pre-Funded Warrants were issued with an automatic exercise feature, which will result in the automatic exercise of such Pre-Funded Warrant upon the effectiveness of the Charter Amendment. Each Purchaser’s ability to exercise its Pre-Funded Warrants in exchange for shares of Common Stock is subject to certain beneficial ownership limitations set forth therein.
Current report
On August 4, 2025, we closed on the Offering for expected aggregate gross proceeds of $200 million before deducting placement agent fees and other offering expenses (funded in a combination of cash and cryptocurrencies) to launch our Ethereum treasury strategy. We intend to use the net proceeds from the Offering to fund the acquisition of cryptocurrency, the establishment of our cryptocurrency treasury operations as well as pay all transaction fees, expenses, professional fees and other costs incurred in connection with the Offering and for general corporate purposes.
Current report
The Pre-Funded Warrants and the Pre-Funded Warrant Shares were offered in reliance upon the exemption from the registration requirement of the Securities Act pursuant to Section 4(a)(2) thereof and/or Rule 506(b) of Regulation D promulgated thereunder, and applicable state securities laws.
Current report
Charter Amendment
Current report
On July 23, 2025, our board of directors (the “Board”) and stockholders holding at least a majority of our outstanding voting shares (the “Consenting Stockholders”) approved an amendment to our Articles of Incorporation to, among other things, increase our authorized capital stock and to change our name (the “Charter Amendment”). The Charter Amendment includes (i) an increase in the total number of authorized shares of common stock from 4,000,000 to 1,000,000,000, the number of authorized shares of preferred stock, par value $.0001 per share, from 99,000,000 to 500,000,000, and the number of authorized shares of 8% cumulative preferred stock, Series A from 1,000,000 to 15,000,000 and (ii) a change in the name of the Company to “FG Nexus Inc.” We filed a preliminary information statement on Schedule 14C (the “Information Statement”) with the Securities and Exchange Commission (the “SEC”) on July 30, 2025 to provide notice to its stockholders of the approval of certain corporate actions, including the Charter Amendment. The Charter Amendment is expected to be filed by the Company as soon as practicable after the required 20-calendar day waiting period following the mailing of the definitive Information Statement to stockholders.
Current report
Asset Transfer
Current report
The Company intends to transfer a significant portion of its current assets (the “Asset Transfer”) to a trust (the “CVR Trust”) to be established in connection with the creation of contingent value rights (“CVRs”) for the benefit of the Company’s current stockholders. The Company will distribute the CVRs to the Company’s existing stockholders prior to the effectiveness of the Charter Amendment and the exercise of any of the Pre-Funded Warrants sold in the Offering. The CVRs represent the contractual right to receive a pro rata portion of the net proceeds received by the CVR Trust upon the future disposition, if any, of the assets transferred to the CVR Trust by the Company. The Company has fixed August 8, 2025 as the record date for the Company stockholders who will receive the CVRs and the CVRs will be distributed to the Company’s stockholders shortly thereafter.
Current report
The transferred assets will include: (i) all interests in Strong Technical Services, Inc., (ii) the preferred shares of Saltire Capital Ltd. plus all accumulated dividends, (iii) all shares or other interests in FG Merchant Partners, (iv) all interests in Firefly Systems Inc., (v) all interests in Green First Forest Products Ltd., (vi) all interests in FG Communities Inc., (vii) all interests in Craveworthy Brands, (viii) all interests in FG Merger II Corp., (ix) all interests in Aldel Financial II Inc., (x) all interests in Greenland Exploration Limited, (xi) all interests in Argo Holdings, (xii) all interests in Think Markets, (xiii) all interests in Pivotal Capital, (xiv) all interests in B-Scada Inc. and (xv) all current cash and cash equivalents of the Company as of the establishment of the CVR Trust.
Current report
Following the Asset Transfer, the Company will retain assets relating to, among other things, its reinsurance business segment, its merchant banking business segment, certain real estate assets, and certain equity holdings. The Company expects to enhance and expand its existing financial industry segments through its adoption of an Ethereum treasury, staking and RWA tokenization strategy that will be implemented following the closing of the Offering.
Current report
Additional Approvals in connection with the Offering
Current report
In connection with the Offering and in accordance with Nasdaq listing rules, our Board and Consenting Stockholders also approved the issuance of: (i) greater than 19.9% of the Company’s outstanding common stock and the related possible change in control of the Company (as defined by Nasdaq listing rules) as a result of the potential issuance to an institutional investor (the “Investor”) of such number of shares as would result in the Investor being the largest beneficial owner of our common stock following the consummation of the Offering and the effectiveness of the Charter Amendment, and (ii) an aggregate of 1,360,000 warrants to strategic advisors and FG Merchant Partners LP concurrently with the closing of the Offering at a price below Nasdaq’s minimum price.
Current report
Management’s discussion and analysis of financial condition and results of operations reflects the continuing operations of the Company as they existed of June 30, 2025. However, as a result of the recent developments described above, the results reported for the current quarterly period are not indicative of the Company’s future plans or expected future operating results or financial position.
Current report
The decrease in total expenses during the second quarter of 2025 compared to the prior year period is comprised of a $1.3 million reduction in general and administrative expenses, partially offset by a $0.5 million increase in costs of products sold and services provided to our customers in connection with year-over-year increase in revenue. The decrease in general and administrative expenses was primarily due to our cost reduction initiatives.
Current report
Income from Operations
Current report
Income from operations increased $11.9 million or 180.5% to $5.3 million for the three months ended June 30, 2025 from a loss from operations of $6.6 million during the three months ended June 30, 2024. The increase in the income from operations was primarily due to the higher non-cash gains on equity holdings, an increase in gross profit from STS, and lower general and administrative expenses.
Current report
Net Income from Continuing Operations
Current report
Net income from continuing operations increased $11.6 million to $5.0 million for the three months ended June 30, 2025 from a net loss from continuing operations of $6.6 million during the three months ended June 30, 2024. The increase in net loss from continuing operations was due to the increase in income from operations in the second quarter of 2025, partially offset by higher income tax expense in the current year.
Current report
Six Months Ended June 30, 2025 Compared with Six Months Ended June 30, 2024
Current report
Revenue
Removed paragraphs (3)
Previous 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 2025.
Previous report
If FGF and FGH were presented on a combined basis for the first quarter of 2025 and 2024, total general and administrative expenses would have been $5.3 million in 2024 as compared with $3.3 million in 2025, decreasing due to the merger and cost reduction initiatives.
Previous report
While significant cost reductions have been achieved as a result of the mergers and restructuring activities, management believes that general and administrative costs continue to be too high for the current scale of the company, particularly the compliance, legal, tax, audit and other costs of operating as a small public company. We are evaluating additional actions to further simplify our organization, reduce our general and administrative burden, and increase long term value creation.
Reworded paragraphs (15)
Previous wording
Management cautions that the forward-looking statements in this Annual Report on Form 10-K are not guarantees of future performance, and we cannot assume that such statements will be realized or the forward-looking events and circumstances will occur. Factors that might cause such a difference include, without limitation, general conditions in the global economy; risks associated with operating in the merchant banking and managed services industries, including inadequately priced insured risks and credit risk; risks of being unable to close the sale of our reinsurance business in a reasonable time period or at all; risks of not being able to execute on our asset management strategy and potential loss of value of our holdings; risk of becoming an investment company; fluctuations in our short-term results as we implement our business strategies; risks of not being able to attract and retain qualified management and personnel to implement and execute on our business and growth strategy; failure of our information technology systems, data breaches and cyber-attacks; our ability to establish and maintain an effective system of internal controls; the requirements of being a public company and losing our status as a smaller reporting company or becoming an accelerated filer; any potential conflicts of interest between us and our controlling stockholders and different interests of controlling stockholders; and potential conflicts of interest between us and our directors and executive officers.
Current wording
Management cautions that the forward-looking statements in this Annual Report on Form 10-K are not guarantees of future performance, and we cannot assume that such statements will be realized or the forward-looking events and circumstances will occur. Factors that might cause such a difference include, without limitation, general conditions in the global economy; risks associated with operating in the merchant banking and managed services industries, including inadequately priced insured risks and credit risk; risks of not being able to execute on our asset management strategy and potential loss of value of our holdings; risk of becoming an investment company; fluctuations in our short-term results as we implement our business strategies; risks of not being able to attract and retain qualified management and personnel to implement and execute on our business and growth strategy; failure of our information technology systems, data breaches and cyber-attacks; our ability to establish and maintain an effective system of internal controls; the requirements of being a public company and losing our status as a smaller reporting company or becoming an accelerated filer; any potential conflicts of interest between us and our controlling stockholders and different interests of controlling stockholders; and potential conflicts of interest between us and our directors and executive officers.
Previous wording
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 three months ended March 31, 2024 presents three months of activity related to the FGH operations and one month of activity related to the FGF operations. Accordingly, the results of the current period and the prior period 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 wording
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 six months ended June 30, 2024 presents six months of activity related to the FGH operations and four months of activity related to the FGF operations. Accordingly, the results of the current period and the prior period 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.
Previous wording
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 wording
We sold Strong Studios and Strong/MDI during 2024. The results of those business units are presented as Discontinued Operations in the accompanying consolidated financial statements. We entered into an agreement for the sale of a portion of our reinsurance business for $5.6 million, which closed in the second quarter of 2025. Our original intent was to sell all of the reinsurance business and that remained the case as of June 30, 2025. In connection with the transactions occurring in July 2025, we will reassess those plans as part of our new strategy (see Recent Developments).
Previous wording
Management’s discussion and analysis of financial condition and results of operations that follows reflects the continuing operations of the Company.
Current wording
Management’s discussion and analysis of financial condition and results of operations reflects the continuing operations of the Company as they existed of June 30, 2025. However, as a result of the recent developments described below, the results reported for the current quarterly period are not indicative of the Company’s future plans or expected future operating results or financial position.
Previous wording
Because of the reverse merger transaction, the first quarter of 2024 includes one month of revenue, expenses and cash flows from FGF whereas the first quarter of 2025 reflects three full months of consolidated operating activities. Accordingly, comparisons between periods may not be comparable.
Current wording
Because of the reverse merger transaction, the first half of 2024 includes four months of revenue, expenses and cash flows from FGF whereas the first half of 2025 reflects six full months of consolidated operating activities. Accordingly, comparisons between periods may not be comparable.
Previous wording
Total revenue during the three months ended March 31, 2025 decreased $4.1 million from the prior year as a result of a decrease in product sale revenues in our managed services business combined with higher non-cash equity method adjustments the current quarter.
Current wording
Total revenue during the three months ended June 30, 2025 increased $11.0 million from the prior year period as a result of higher non-cash equity method adjustments in the current quarter combined with an increase in product and services revenues in our managed services business.
Previous wording
Total expenses decreased $2.1 million or 18.2% to $9.2 million for the three months ended March 31, 2025 from $11.3 million for the three months ended March 31, 2024. Expenses are comprised of cost of sales related to managed services, costs of the asset management business and selling, general and administrative expenses.
Current wording
Total expenses decreased $0.8 million or 7.5% to $10.0 million for the three months ended June 30, 2025 from $10.9 million for the three months ended June 30, 2024. Expenses are comprised of cost of sales related to managed services, costs of the asset management business and selling, general and administrative expenses.
Previous wording
Revenue from products and services, which primarily includes our managed services segment, decreased $1.1 million or 13.6% to $6.8 million during the three months ended March 31, 2025 from $7.9 million during the three months ended March 31, 2024. The decrease in revenue during the first quarter of 2025 was primarily related to lower product sales as we saw cinema customers delay projects partly due to a softer first quarter release schedule and box office, combined with a reaction to the overall macroeconomic uncertainties in early 2025. We saw order volumes and revenues trend upward as the quarter progressed and expect those trends to continue looking to the remainder of the year, however, we are monitoring the economic environment and customer order trends closely as the year progresses.
Current wording
Revenue from products and services, which primarily includes our managed services segment, decreased $0.4 million or 2.4% to $15.9 million during the six months ended June 30, 2025 from $16.3 million during the six months ended June 30, 2024. The decrease in revenue during the first half of 2025 was primarily related to lower product sales as we saw cinema customers delay projects partly due to a softer first quarter release schedule and box office, combined with a reaction to the overall macroeconomic uncertainties in early 2025. We saw order volumes and revenues rebound in the second quarter and expect those trends to continue in the remainder of the year, however, we are monitoring the economic environment and customer order trends closely as the year progresses.
Previous wording
Losses on our equity holdings were higher during the first quarter of 2025 as compared to the prior year primarily as a result of declines in the market value of the common stock of Saltire and GreenFirst Forest Products. Our results of equity holdings are impacted by many factors including market volatility, which can be amplified in any given short term measurement period. The market value of Saltire, for example, recovered significantly following the quarterly reporting period.
Current wording
Gains on our equity holdings were $7.2 million higher during the first half of 2025 as compared to the prior year period primarily as a result of increases in the market value of the common stock of Saltire. Our results of equity holdings are impacted by many factors including market volatility, which can be amplified in any given short term measurement period.
Previous wording
The decrease in total expenses during the first quarter of 2025 compared to the prior year is comprised of a $0.8 million reduction in costs of products sold as a result of lower revenue in the current year and a $1.5 million non-cash impairment related to the sale of the Digital Ignition building recognized in the prior year.
Current wording
The decrease in total expenses during the first half of 2025 compared to the prior year period is comprised of a $1.4 million reduction in general and administrative costs and a $1.5 million non-cash impairment related to the sale of the Digital Ignition building recognized in the prior year period. The decrease in general and administrative expenses was primarily due to the mergers and our cost reduction initiatives.
Previous wording
Loss from operations increased $2.0 million or 29.9% to $8.8 million for the three months ended March 31, 2025 from $6.8 million during the three months ended March 31, 2024. The increase in the loss from operations was primarily due to lower gross profit from STS and higher non-cash losses on equity holdings, partially offset by the $1.5 million non-cash impairment related to the sale of the Digital Ignition building recognized in the prior year.
Current wording
Loss from operations decreased $10.0 million or 73.7% to $3.6 million for the six months ended June 30, 2025 from $13.5 million during the six months ended June 30, 2024. The improvement in the loss from operations was primarily due to lower general and administrative expenses and higher non-cash gains on equity holdings, partially offset by lower gross profit from STS, and the $1.5 million non-cash impairment related to the sale of the Digital Ignition building recognized in the prior year period.
Previous wording
Net loss from continuing operations increased $3.8 million to $8.9 million for the three months ended March 31, 2025 from $5.1 million during the three months ended March 31, 2024. The increase in net loss from continuing operations was due to the increase in loss from operations in the first quarter of 2025 as well as a $1.8 million gain related to the FGF merger transaction that closed in the first quarter of 2024. Excluding the prior year gain, net loss from continuing operations increased $1.9 million with three months of FGF expenses in the current period as compared with one month in the prior year period due to timing of the reverse merger.
Current wording
Net loss from continuing operations decreased $8.1 million to $3.7 million for the six months ended June 30, 2025 from $11.8 million during the six months ended June 30, 2024. The improvement in net loss from continuing operations was due to the improvement in loss from operations in the first half of 2025, partially offset by a $1.8 million gain related to the FGF merger transaction that closed in the first quarter of 2024.
Previous wording
For the three months ended March 31, 2025, net cash used in operating activities from continuing operations was approximately $2.2 million, compared to $1.2 million for the three months ended March 31, 2024. Cash from operations decreased primarily due to lower operating earnings in our managed services division and increased working capital.
Current wording
For the six months ended June 30, 2025, net cash used in operating activities from continuing operations was approximately $3.4 million, compared to $3.2 million for the six months ended June 30, 2024. Cash from operations decreased primarily due to increased working capital.
Previous wording
For the three months ended March 31, 2025, net cash provided by investing activities from continuing operations was approximately $1.5 million, compared to $2.2 million for the three months ended March 31, 2024. Cash provided by investing activities during the three months ended March 31, 2025 primarily included $1.5 million of a net inflow from the sale of equity holdings. Cash provided by investing activities during the three months ended March 31, 2024 included $1.9 million of an increase in cash as a result of the Merger of FGF and FGH and $0.4 million of proceeds from the sale of equity holdings.
Current wording
For the six months ended June 30, 2025, net cash provided by investing activities from continuing operations was approximately $3.5 million, compared to $4.3 million for the six months ended June 30, 2024. Cash provided by investing activities during the six months ended June 30, 2025 primarily included $3.4 million of a net inflow from the sale of equity holdings. Cash provided by investing activities during the six months ended June 30, 2024 included $1.9 million of an increase in cash as a result of the Merger of FGF and FGH, $1.3 million of net proceeds from the sale of the building in Alpharetta and $1.2 million of proceeds from the sale of equity holdings.
Previous wording
For each of the three months ended March 31, 2025 and March 31, 2024, net cash used in financing activities from continuing operations was approximately $0.7 million. Cash used in financing activities during each of the three months ended March 31, 2025 and March 31, 2024 included $0.3 million of principal payments on debt and finance leases and $0.4 million of payments of dividends on our Series A Preferred Shares.
Current wording
For the six months ended June 30, 2025, net cash used in financing activities from continuing operations was approximately $1.7 million compared to $1.3 million for the six months ended June 30, 2024. Cash used in financing activities during the six months ended June 30, 2025 included $0.5 million of principal payments on debt and finance leases, $0.9 million of payments of dividends on our Series A Preferred Shares and $0.3 million of withholding taxes paid related to the net settlement of the vesting of RSUs. Cash used in financing activities during the six months ended June 30, 2024 included $0.4 million of principal payments on debt and finance leases and $0.9 million of payments of dividends on our Series A Preferred Shares.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
Revenue from products and services, which primarily includes our managed services segment, increased $0.8 million or 9.4% to $9.1 million during the three months ended June 30, 2025 from $8.3 million during the three months ended June 30, 2024. The increase in revenue during the second quarter of 2025 was primarily related to higher digital equipment sales, as well as installation services, as the industry momentum that started towards the end of the first quarter of 2025 continued into the second quarter. We expect those trends to continue in the remainder of the year, however, we are monitoring the economic environment and customer order trends closely as the year progresses.
Current report — wording carried from elsewhere
Gains on our equity holdings were higher during the second quarter of 2025 as compared to the prior year period primarily as a result of increases in the market value of the common stock of Saltire, as well as equity method gains on the common shares of Saltire we directly hold. Our results of equity holdings are impacted by many factors including market volatility, which can be amplified in any given short term measurement period.
Current report — wording carried from elsewhere
Total revenue during the six months ended June 30, 2025 increased $6.8 million or 77.0% from the prior year period as a result of higher non-cash equity method adjustments in the current quarter, partially offset by a decrease in product sale revenues in our managed services business.
Current report — wording carried from elsewhere
Total expenses decreased $3.1 million or 14.0% to $19.3 million for the six months ended June 30, 2025 from $22.4 million for the six months ended June 30, 2024. Expenses are comprised of cost of sales related to managed services, costs of the asset management business and selling, general and administrative expenses.