Core Viewpoint - Fundamental Global Inc. is transitioning to FG Nexus Inc. and has filed a $5 billion shelf registration statement with the SEC, aiming to become the largest corporate holder of Ethereum (ETH) [1][2][3] Financial Flexibility - The shelf registration provides significant financial flexibility for opportunistic capital raises, enhancing the company's ability to deploy capital effectively [2][3] - The registration allows the company to offer and sell up to $5 billion of its securities, subject to market conditions and capital needs [5] Strategic Positioning - FG Nexus aims to capture the growing institutional adoption in the digital asset treasury market, leveraging its focused Ethereum strategy and substantial capital framework [4][8] - The company targets a 10% stake in the Ethereum Network, positioning itself as a well-capitalized player in the digital asset treasury sector [3][4] Market Context - Recent market activity indicates strong institutional appetite for digital asset exposure, creating opportunities for companies like FG Nexus with strategic capital deployment capabilities [3]

Core Viewpoint - Fundamental Global Inc. is positioning itself as a leading Ethereum treasury company by filing a $5 billion shelf registration statement with the SEC, which will enhance its capital-raising capabilities and support its goal of becoming the largest corporate holder of Ethereum [1][2][3]. Group 1: Financial Flexibility and Capital Framework - The $5 billion shelf registration will provide significant financial flexibility for opportunistic capital raises, allowing the company to accelerate its mission [2][3]. - The filing includes an "at the market offering" prospectus for the issuance and sale of $4 billion shares of common stock [1][5]. - This capital framework positions the company as one of the most well-capitalized players in the digital asset treasury sector, enabling it to capitalize on ETH accumulation opportunities [3][4]. Group 2: Market Position and Strategy - The digital asset treasury market is experiencing unprecedented institutional adoption, and the company is uniquely positioned to capture this opportunity due to its focused Ethereum strategy [4]. - The company aims to achieve a 10% stake in the Ethereum Network, leveraging its capital framework to enhance ETH yield through staking and access to tokenized real-world assets [3][8]. - Recent market activity indicates strong institutional appetite for digital asset exposure, creating significant opportunities for companies with strategic capital deployment capabilities like the company [3].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended June 30, 2025 Or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 001-36366 Fundamental Global Inc. (Exact name of registrant as specified in its charter) Nevada 46-1119100 (State or other jurisdiction of incorporation or organization) (Mark O ...

Core Viewpoint - Fundamental Global Inc. is forming a CVR Trust for its common shareholders, providing a special distribution of Contingent Value Rights (CVR) that will entitle holders to future cash distributions and other benefits as the trust liquidates its assets [1][2][3] Group 1: Special Distribution and Trust Formation - Approximately 1.3 million common shareholders will receive a non-transferable CVR, entitling them to an initial cash distribution of $10.00 per common share, expected in September 2025 [2][9] - The CVR Trust will include cash, cash equivalents, and net assets from various operating businesses and equity holdings [6][9] - Future distributions from the CVR Trust may be in cash or in-kind securities as assets are monetized over time [3][9] Group 2: Strategic Transformation - The company has entered a definitive agreement for a $200 million private placement to support its strategic transformation, which includes a name change to FG Nexus Inc. and the implementation of an Ethereum Treasury Strategy [5][7] - The strategic direction focuses on blockchain innovation and the tokenization of real-world assets [5][7] - The company aims to retain approximately $5.00 per share in net asset value through retained holdings and the launch of its new strategy [9]

Company Overview - Akero Therapeutics (NASDAQ: AKRO) is actively developing its FGF21 drug efruxifermin, aimed at treating patients with compensated cirrhosis due to MASH and pre-cirrhotic MASH patients [2]. Product Development - The development of efruxifermin is a key focus for Akero Therapeutics, indicating strong progress in addressing significant medical needs within the liver disease space [2].

PART I. FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) The company's Q1 2025 results show a sharp revenue drop to $0.39 million and a net loss of $8.8 million, impacted by equity losses and discontinued operations [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets decreased to $100.3 million and stockholders' equity fell to $64.2 million, driven by a higher accumulated deficit Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 (unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $5,669 | $7,794 | | Equity holdings, at fair value | $4,720 | $5,763 | | Other equity holdings and other holdings | $47,300 | $54,310 | | Assets of discontinued operations | $31,961 | $31,626 | | **Total assets** | **$100,309** | **$109,469** | | Total liabilities | $36,156 | $35,272 | | **Total stockholders' equity** | **$64,153** | **$74,197** | | **Total liabilities and stockholders' equity** | **$100,309** | **$109,469** | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q1 2025 revenue fell to $0.39 million from $4.48 million year-over-year, widening the net loss from continuing operations to $8.8 million Condensed Consolidated Statements of Operations (in thousands, except per share data) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Total revenue | $392 | $4,480 | | Net loss on equity holdings and other holdings | $(6,419) | $(3,399) | | Net product sales | $3,516 | $4,637 | | Loss from operations | $(8,850) | $(6,811) | | Net loss from continuing operations | $(8,797) | $(5,076) | | Net loss attributable to common shareholders | $(10,202) | $(4,497) | | Basic and diluted net loss per common share | $(8.03) | $(6.71) | [Condensed Consolidated Statement of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) Net cash used in operating activities increased to $2.9 million in Q1 2025, contributing to a $2.1 million overall decrease in cash and cash equivalents Summary of Cash Flows (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(2,923) | $(1,030) | | Net cash provided by investing activities | $1,519 | $2,234 | | Net cash used in financing activities | $(720) | $(634) | | **Net (decrease) increase in cash and cash equivalents** | **$(2,125)** | **$565** | | **Cash and cash equivalents at end of period** | **$5,669** | **$7,209** | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the company's two-segment structure, the reverse acquisition merger with FGH, and the classification of its reinsurance business as a discontinued operation - The company operates through two business segments: Merchant Banking (advisory, capital formation, SPAC platform) and Managed Services (technical services for entertainment venues via its subsidiary STS)[24](index=24&type=chunk)[25](index=25&type=chunk)[27](index=27&type=chunk) - On February 29, 2024, FGF and FGH merged in an all-stock transaction, which was accounted for as a **reverse acquisition** with FGH as the accounting acquirer, resulting in a **bargain purchase gain of $1.8 million**[21](index=21&type=chunk)[75](index=75&type=chunk)[77](index=77&type=chunk) - The company's reinsurance business has been classified as a **discontinued operation**, with a portion agreed to be sold for **$5.6 million** in Q2 2025, with the remainder intended for sale in the second half of 2025[29](index=29&type=chunk)[84](index=84&type=chunk)[85](index=85&type=chunk) Total Equity and Other Holdings (in thousands) | Method | As of March 31, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Fair Value Method | $4,720 | $5,763 | | Cost Method | $15,429 | $15,429 | | Equity Method | $31,871 | $38,881 | | **Total** | **$52,020** | **$60,073** | - The company has a Shared Services Agreement with Fundamental Global Management, LLC (FGM), an affiliate of the CEO, for management services, paying a fee of **$456,000 per quarter**[139](index=139&type=chunk)[141](index=141&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=32&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management attributes the Q1 2025 revenue decline to non-cash equity losses and lower managed services revenue, while noting that G&A costs remain too high Q1 2025 vs Q1 2024 Results of Operations (in thousands) | Metric | Q1 2025 | Q1 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Total revenue | $392 | $4,480 | $(4,088) | (91.3)% | | Revenue from products and services | $6,811 | $7,879 | $(1,068) | (13.6)% | | Loss from operations | $(8,850) | $(6,811) | $(2,039) | 29.9% | | Net loss from continuing operations | $(8,797) | $(5,076) | $(3,721) | 73.3% | - The decrease in revenue from products and services was primarily due to lower product sales as **cinema customers delayed projects** amid macroeconomic uncertainties and a soft box office schedule in early 2025[183](index=183&type=chunk) - Higher losses on equity holdings were driven by **market value declines** in the common stock of Saltire and GreenFirst Forest Products during the quarter[184](index=184&type=chunk) - Management acknowledges that **general and administrative costs remain too high** for the company's current scale and is considering additional actions to simplify the organization[189](index=189&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section is not applicable for the current reporting period - The company has indicated that quantitative and qualitative disclosures about market risk are **not applicable**[210](index=210&type=chunk) [Controls and Procedures](index=37&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes in internal controls - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were **effective** as of March 31, 2025[211](index=211&type=chunk) - **No changes occurred** during the quarter ended March 31, 2025, that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[212](index=212&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=38&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company is involved in ordinary course legal disputes, including asbestos and landfill claims, with a loss contingency reserve of $0.3 million - The company is a defendant in personal injury lawsuits alleging exposure to **asbestos-containing materials** in commercial lighting products distributed in the past[152](index=152&type=chunk) - A subsidiary was named as a defendant in a civil action for cost recovery related to **hazardous substance release** from the BKK Class 1 Landfill in Los Angeles County for periods prior to 1987[153](index=153&type=chunk) - The company has a loss contingency reserve of approximately **$0.3 million** as of March 31, 2025, for various open proceedings and claims[155](index=155&type=chunk) [Risk Factors](index=38&type=section&id=ITEM%201A.%20RISK%20FACTORS) No material changes to risk factors were reported since the company's 2024 Annual Report on Form 10-K - **No material changes** to risk factors were reported since the last annual report on Form 10-K[214](index=214&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=38&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) The company reported no unregistered sales of equity securities during the period - **None reported**[215](index=215&type=chunk) [Defaults Upon Senior Securities](index=38&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) The company reported no defaults upon senior securities - **None reported**[216](index=216&type=chunk) [Mine Safety Disclosures](index=38&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This section is not applicable to the company's operations - **Not applicable**[217](index=217&type=chunk) [Other Information](index=39&type=section&id=ITEM%205.%20OTHER%20INFORMATION) The company reported no other information for the period - **None reported**[218](index=218&type=chunk) [Exhibits](index=39&type=section&id=ITEM%206.%20EXHIBITS) This section lists the exhibits filed with the Form 10-Q, including officer certifications and iXBRL data files - The report includes a list of filed exhibits, such as officer certifications (31.1, 31.2, 32.1, 32.2) and an agreement related to FG Reinsurance Holdings, LLC (10.1)[219](index=219&type=chunk)

[Fundamental Global Inc. Fourth Quarter and Full Year 2024 Financial Results](index=1&type=section&id=Fundamental%20Global%20Inc.%20Fourth%20Quarter%20and%20Full%20Year%202024%20Financial%20Results) This report provides a comprehensive overview of Fundamental Global Inc.'s financial performance and strategic initiatives for the fourth quarter and full year ended 2024 [CEO Commentary & Strategic Overview](index=1&type=section&id=CEO%20Commentary%20%26%20Strategic%20Overview) The CEO highlighted a year of strategic consolidation through three mergers, monetization of real estate, and improved operating profit in the managed services business, maintaining a strong balance sheet with $109 million in assets and minimal debt, and planning to continue streamlining operations and allocating capital to cash-flow-producing assets - In 2024, the company focused on consolidating public companies and simplifying its operating structure, successfully completing three merger transactions[2](index=2&type=chunk) - The company monetized a real estate holding and announced an agreement to sell a portion of its reinsurance business for **$5.6 million**, expected to close in H1 2025[2](index=2&type=chunk) Balance Sheet Strength as of Dec 31, 2024 | Metric | Value | | :--- | :--- | | Total Assets | $109 million | | Stockholders' Equity | $74 million | | Long-term Debt | Nominal | [Key Operational Highlights](index=1&type=section&id=Key%20Operational%20Highlights) Throughout 2024 and into early 2025, the company executed several key strategic actions including mergers with FG Group Holdings and Strong Global Entertainment to reduce costs, the sale of its Digital Ignition facility and Strong/MDI subsidiary, and supporting IPOs for two SPAC clients, alongside a signed sale agreement for part of its reinsurance business - Completed a merger with FG Group Holdings Inc. in February 2024 to consolidate and streamline operations[5](index=5&type=chunk) - Sold its Digital Ignition facility in April 2024, significantly reducing G&A expenses and long-term debt[5](index=5&type=chunk) - Sold its Strong/MDI Screen Systems, Inc. operating subsidiary for approximately **$30 million** in September 2024[5](index=5&type=chunk) - Executed an agreement in March 2025 to sell a portion of its reinsurance business for **$5.6 million**[5](index=5&type=chunk) [Financial Performance Analysis](index=1&type=section&id=Financial%20Performance%20Analysis) For the full year 2024, total revenue remained stable at $17.3 million, supported by a 20.7% increase in managed services revenue, offset by non-cash equity method losses, while net loss attributable to common shareholders significantly improved to $2.6 million from $14.1 million in the prior year, primarily due to a $21.8 million gain on the sale of Strong/MDI, though net loss from continuing operations widened to $22.9 million due to merger-related expenses and increased equity method losses Full Year 2024 vs 2023 Key Metrics | Metric | FY 2024 | FY 2023 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $17.3M | $17.1M | +1.5% | | Managed Services Revenue | $32.0M | $26.5M | +20.7% | | Net Loss (to common shareholders) | ($2.6M) | ($14.1M) | Improvement | | Net Loss from Continuing Ops | ($22.9M) | ($12.3M) | Worsened | | Net Loss per Share | ($2.43) | ($35.22) | Improvement | - The significant improvement in net loss was primarily driven by a **$21.8 million** gain from the sale of the Strong/MDI subsidiary, which is classified under discontinued operations[8](index=8&type=chunk)[9](index=9&type=chunk) - Financial results are impacted by a reverse merger completed on February 29, 2024, where prior period results reflect only FG Group Holdings, while subsequent results are for the combined company, and Strong/MDI and reinsurance operations are reclassified as discontinued operations[4](index=4&type=chunk) [Financial Statements](index=4&type=section&id=Financial%20Statements) The consolidated financial statements detail the company's financial position as of December 31, 2024, and its performance for the year, with the balance sheet showing increased assets and equity alongside reduced debt due to merger activities, the statement of operations highlighting the material impact of discontinued operations, and the cash flow statement outlining cash sources and uses across operating, investing, and financing activities [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) As of December 31, 2024, total assets increased to $109.5 million from $62.1 million in 2023, driven by merger activities, with total stockholders' equity more than doubling to $74.2 million from $37.0 million, and total debt significantly reduced to $2.4 million from $7.8 million in the prior year Consolidated Balance Sheet Highlights ($ in thousands) | Account | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | **Total Assets** | **$109,469** | **$62,143** | | Cash and cash equivalents | $7,794 | $5,995 | | Equity holdings and other holdings | $60,073 | $28,021 | | Assets of discontinued operations | $31,626 | $9,886 | | **Total Liabilities** | **$35,272** | **$25,136** | | Short-term & Long-term debt | $2,369 | $7,755 | | Liabilities of discontinued operations | $22,436 | $6,799 | | **Total Stockholders' Equity** | **$74,197** | **$37,007** | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) For the year ended December 31, 2024, the company reported a net loss from continuing operations of $22.9 million, wider than the $12.3 million loss in 2023, but due to a significant net income from discontinued operations of $21.5 million, the total net loss attributable to common shareholders improved dramatically to $2.6 million, or ($2.43) per share, compared to a loss of $14.1 million, or ($35.22) per share, in the prior year Consolidated Statement of Operations Highlights - Year Ended Dec 31 ($ in thousands) | Account | 2024 | 2023 | | :--- | :--- | :--- | | Total Revenue | $17,348 | $17,093 | | Loss from operations | ($24,876) | ($16,286) | | Net (loss) income from continuing operations | ($22,859) | ($12,307) | | Net (loss) income from discontinued operations | $21,544 | ($2,334) | | **Net loss attributable to common shareholders** | **($2,565)** | **($14,077)** | | **Net loss per common share** | **($2.43)** | **($35.22)** | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the year ended December 31, 2024, net cash used in operating activities was $4.7 million, a reversal from $0.2 million provided in 2023, while investing activities provided $13.1 million primarily from asset sales, and financing activities used $6.9 million largely for debt repayments and preferred dividend payments, resulting in an overall cash increase of $1.5 million Consolidated Statement of Cash Flows Highlights - Year Ended Dec 31 ($ in thousands) | Cash Flow Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | ($4,714) | $156 | | Net cash provided by (used in) investing activities | $13,148 | ($695) | | Net cash (used in) provided by financing activities | ($6,858) | $3,383 | | **Net increase in cash and cash equivalents** | **$1,529** | **$2,960** | - Key cash inflows from investing activities included **$6.2 million** from sales of property and equipment and **$5.0 million** from sales of equity securities[20](index=20&type=chunk) - Key cash outflows from financing activities included **$5.8 million** in principal payments on short-term and long-term debt and **$1.4 million** in preferred dividend payments[20](index=20&type=chunk)

Core Viewpoint - Fundamental Global Inc. has made significant strides in consolidating its operations and improving its financial performance through strategic mergers and asset sales in 2024 [2][4]. Financial Highlights - Total assets increased to $109.5 million as of December 31, 2024, up by $47.3 million from the previous year [5]. - Stockholders' equity rose to $74.2 million, reflecting an increase of $37.2 million from December 31, 2023 [6]. - Revenue for 2024 was $17.3 million, a 1.5% increase from the previous year, with managed services revenue growing by 20.7% to $32.0 million [7]. - The net loss attributable to common shareholders improved to $2.6 million from a loss of $14.1 million in the prior year, primarily due to a $21.8 million gain on the sale of Strong/MDI [8][9]. Operational Highlights - The company completed three merger transactions in 2024, including the merger with FG Group Holdings Inc. and Strong Global Entertainment, aimed at reducing operating costs and streamlining operations [5]. - A portion of the reinsurance business was agreed to be sold for $5.6 million, expected to close in the first half of 2025 [2]. - The company successfully monetized its Digital Ignition facility and sold its Strong/MDI Screen Systems subsidiary for approximately $30 million [5]. Balance Sheet Overview - As of December 31, 2024, total liabilities were $35.3 million, an increase from $25.1 million in the previous year [15]. - Short- and long-term debt decreased to $2.4 million, down by $5.4 million from December 31, 2023 [7]. - Cash and cash equivalents increased to $7.8 million from $6.0 million in the previous year [21]. Shareholder Information - The weighted average common shares outstanding increased to 1,265 million due to the merger with FG Group Holdings [19]. - The net loss per common share improved to $2.43 from $35.22 in the prior year, reflecting the company's improved financial performance [9].

[Part I](index=3&type=section&id=PART%20I) [Business Overview](index=4&type=section&id=ITEM%201.%20BUSINESS) Fundamental Global Inc. is a holding company with merchant banking and managed services segments, undergoing significant mergers and divestitures in 2024 - The company operates as a holding company with two main business segments: **merchant banking** and **managed services**[19](index=19&type=chunk)[20](index=20&type=chunk) - On February 29, 2024, the company merged with FG Group Holdings, Inc. (FGH) in an all-stock transaction and was renamed Fundamental Global Inc.[15](index=15&type=chunk) - The company combined with Strong Global Entertainment in an all-stock transaction that closed on September 30, 2024, consolidating its financials as a majority shareholder[17](index=17&type=chunk) - The company sold its indirect wholly-owned subsidiary, Strong/MDI, to Saltire Holdings, Ltd (formerly FGAC) in a transaction that closed on September 25, 2024[16](index=16&type=chunk) - The company's reinsurance business is classified as assets held for sale as of December 31, 2024, with an expected sale in the first half of 2025, while Strong Studios and Strong/MDI were sold in 2024 and treated as discontinued operations[25](index=25&type=chunk)[26](index=26&type=chunk) - As of December 31, 2024, the company employed **130 full-time persons**, with **67** in service-related roles, **31** in operations, and **32** in sales and administration[28](index=28&type=chunk) [Risk Factors](index=6&type=section&id=ITEM%201A.%20RISK%20FACTORS) The company faces significant risks from M&A integration, capital allocation in SPACs, equity valuation, customer concentration, and regulatory compliance - The company faces risks in integrating multiple mergers (FGF, FGH, Strong Global Entertainment), which could be costly, time-consuming, and disrupt operations[32](index=32&type=chunk)[33](index=33&type=chunk) - The capital allocation strategy, including investments in SPACs and their sponsors, involves a **high degree of risk**, with the potential for a total loss of investment if a SPAC fails to complete a business combination[36](index=36&type=chunk)[41](index=41&type=chunk)[42](index=42&type=chunk) - Equity holdings comprise a significant portion of assets (**$60.1 million** as of Dec 31, 2024), and their valuation is subjective, with changes potentially affecting earnings and earnings volatility[48](index=48&type=chunk)[49](index=49&type=chunk) - The company is substantially dependent on its top ten customers, who accounted for **41% of consolidated products and services revenues in 2024**, with one customer representing over **10%** of both revenue and receivables[64](index=64&type=chunk) - The company is subject to the risk of being classified as an investment company under the Investment Company Act of 1940, which would subject it to extensive and restrictive regulations[79](index=79&type=chunk)[80](index=80&type=chunk) - FG Financial Holdings, LLC and its affiliates control approximately **26.0%** of the company's common stock, giving them substantial influence, and the CEO also serves as CEO of FG Holdings, creating potential conflicts of interest[93](index=93&type=chunk)[94](index=94&type=chunk) [Unresolved Staff Comments](index=19&type=section&id=ITEM%201B.%20UNRESOLVED%20STAFF%20COMMENTS) The company reports no unresolved staff comments from the SEC - None[104](index=104&type=chunk) [Cybersecurity](index=19&type=section&id=ITEM%201C.%20CYBERSECURITY) The company integrates cybersecurity risk management into its overall risk program, with Audit Committee oversight, and has not experienced material incidents - Cybersecurity risk management is integrated into the company's overall risk program, with oversight from the Audit Committee, senior management, and the IT team[105](index=105&type=chunk)[109](index=109&type=chunk) - The company has not experienced any **material cybersecurity incidents** to date[109](index=109&type=chunk) [Properties](index=19&type=section&id=ITEM%202.%20PROPERTIES) The company leases its executive offices and warehouse facilities, with plans to transition from some locations in 2025 - The company leases its executive offices and warehouse facilities[110](index=110&type=chunk)[111](index=111&type=chunk) - The company plans to move from its leased executive office in Mooresville and the STS warehouse in Kansas during 2025[112](index=112&type=chunk) [Legal Proceedings](index=20&type=section&id=ITEM%203.%20LEGAL%20PROCEEDINGS) The company is involved in asbestos-related lawsuits, a landfill cost recovery action, and a defaulted guarantee, with a $0.3 million loss contingency reserve - A subsidiary is a defendant in personal injury lawsuits alleging exposure to asbestos-containing materials in past products[114](index=114&type=chunk) - The company is a defendant in a civil action for cost recovery related to hazardous substance release from the BKK Class 1 Landfill for periods prior to 1987[114](index=114&type=chunk) - A loss contingency reserve of approximately **$0.3 million** was recorded as of December 31, 2024, for various open proceedings and claims[116](index=116&type=chunk) [Mine Safety Disclosures](index=20&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This item is not applicable to the company - Not applicable[117](index=117&type=chunk) [Part II](index=21&type=section&id=PART%20II) [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=21&type=section&id=ITEM%205.%20MARKET%20FOR%20REGISTRANT%27S%20COMMON%20EQUITY%2C%20RELATED%20STOCKHOLDER%20MATTERS%20AND%20ISSUER%20PURCHASES%20OF%20EQUITY%20SECURITIES) The company's common and preferred stock trade on Nasdaq, with no common stock dividends planned but regular preferred stock dividends intended - Common stock (FGF) and Series A Preferred Stock (FGFPP) trade on the Nasdaq Global Market[118](index=118&type=chunk) - The company has never paid cash dividends on common stock and does not anticipate doing so, preferring to retain earnings for growth[119](index=119&type=chunk) - The company intends to declare and pay regular quarterly dividends on its **8.00% Cumulative Preferred Stock, Series A**, equivalent to **$2.00 per annum per share**[120](index=120&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=ITEM%207.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section discusses the company's financial performance, highlighting the significant impact of recent mergers and divestitures [Results of Operations](index=25&type=section&id=Results%20of%20Operations) For FY2024, total revenue remained flat, but net loss from continuing operations widened significantly due to higher expenses and impairment charges Comparison of Results of Operations (in thousands) | | Year Ended December 31, 2024 | Year Ended December 31, 2023 | $ Change | % Change | |:---|---:|---:|---:|---:| | Net loss on equity securities and other holdings | $ (14,675) | $ (9,437) | $ (5,238) | 55.5% | | Revenue from products and services | 32,023 | 26,530 | 5,493 | 20.7% | | **Total revenue** | **17,348** | **17,093** | **255** | **1.5%** | | Total expenses | 42,224 | 33,379 | 8,845 | 26.5% | | **Loss from operations** | **(24,876)** | **(16,286)** | **(8,590)** | **52.7%** | | **Net loss from continuing operations** | **(22,859)** | **(12,307)** | **(10,552)** | **85.7%** | - Revenue from products and services increased by **$5.5 million (20.7%)** to **$32.0 million** in 2024, driven by growing demand in the managed services business and contributions from the ICS acquisition[147](index=147&type=chunk) - Total expenses rose by **$8.8 million (26.5%)**, primarily due to the inclusion of FGF's business operations post-merger (adding ~**$3.0 million** in G&A), increased costs from operating Strong Entertainment as a public company, and a **$1.4 million** non-cash impairment on the Digital Ignition building[150](index=150&type=chunk) [Liquidity and Capital Resources](index=26&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity shifted to negative operating cash flow in 2024, offset by significant cash from investing activities, and believes it has sufficient liquidity for the next twelve months Consolidated Cash Flows Summary (in thousands) | | Year Ended December 31, 2024 | Year Ended December 31, 2023 | |:---|---:|---:| | Net cash (used in) provided by operating activities | $ (4,049) | $ 1,579 | | Net cash provided by investing activities | 13,242 | 92 | | Net cash (used in) provided by financing activities | (7,383) | 1,240 | | **Net increase in cash and cash equivalents** | **1,799** | **2,932** | - Cash from operations decreased primarily due to higher overhead expenses from the FGF/FGH merger and operating Strong Entertainment as a separate public company for nine months[156](index=156&type=chunk) - Investing activities were a significant source of cash in 2024, providing **$13.2 million** from proceeds from the sale of equity securities (**$5.0 million**), sale of the Digital Ignition building (**$6.1 million**), and cash acquired in the FGF/FGH Merger (**$1.9 million**)[157](index=157&type=chunk) - Financing activities used **$7.4 million** in 2024, including **$6.0 million** for principal payments on debt and finance leases and **$1.4 million** for dividends on Series A Preferred Shares[158](index=158&type=chunk) [Quantitative and Qualitative Disclosure About Market Risk](index=26&type=section&id=ITEM%207A.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURE%20ABOUT%20MARKET%20RISK) This item is not applicable to the company - Not applicable[159](index=159&type=chunk) [Financial Statements and Supplementary Data](index=27&type=section&id=ITEM%208.%20FINANCIAL%20STATEMENTS%20AND%20SUPPLEMENTARY%20DATA) This section contains the company's audited consolidated financial statements and the independent auditor's report, detailing significant corporate transactions and accounting policies [Report of Independent Registered Public Accounting Firm](index=28&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) HASKELL & WHITE LLP issued an unqualified opinion on the financial statements, emphasizing significant corporate transactions and identifying critical audit matters - The auditor issued an **unqualified opinion** on the consolidated financial statements[164](index=164&type=chunk) - The report highlights several significant transactions as "Emphasis-of-Matters," including the FGF/FGH reverse merger, the SGE merger, discontinued operations, and the reverse stock split[165](index=165&type=chunk)[166](index=166&type=chunk)[167](index=167&type=chunk)[168](index=168&type=chunk) - Critical Audit Matters identified were the **Valuation of Equity Holdings** and the **Valuation of Reinsurance Loss and Loss Adjustment Expense Reserves**, due to the significant judgment and subjectivity involved[173](index=173&type=chunk)[174](index=174&type=chunk)[176](index=176&type=chunk) [Consolidated Financial Statements](index=30&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements show a significant increase in total assets and shareholders' equity in 2024, with a reduced net loss driven by discontinued operations Consolidated Balance Sheet Highlights (in thousands) | | Dec 31, 2024 | Dec 31, 2023 | |:---|---:|---:| | Total Assets | $109,469 | $62,143 | | Total Liabilities | $35,272 | $25,136 | | Total Stockholders' Equity | $74,197 | $37,007 | Consolidated Statement of Operations Highlights (in thousands) | | Year Ended Dec 31, 2024 | Year Ended Dec 31, 2023 | |:---|---:|---:| | Total Revenue | $17,348 | $17,093 | | Net loss from continuing operations | $(22,859) | $(12,307) | | Net income (loss) from discontinued operations | $21,544 | $(2,334) | | **Net loss** | **$(1,315)** | **$(14,641)** | [Notes to the Consolidated Financial Statements](index=36&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) The notes detail accounting for the FGH reverse merger, discontinued operations, equity holdings, related party transactions, and segment performance - The merger with FGH was accounted for as a reverse acquisition, with FGH as the accounting acquirer, resulting in a **bargain purchase gain of $2.3 million**[263](index=263&type=chunk)[264](index=264&type=chunk) - The sale of Strong/MDI resulted in a net gain of approximately **$21.8 million**, which is presented in discontinued operations[270](index=270&type=chunk) - The company plans to sell its reinsurance business in 2025 and has recorded a **$2.1 million impairment charge** to adjust the disposal group to its fair value less cost to sell[273](index=273&type=chunk)[274](index=274&type=chunk) - As of December 31, 2024, the company held **$60.1 million** in equity and other holdings, accounted for via fair value, equity, and cost methods[286](index=286&type=chunk) - The company has a Shared Services Agreement with Fundamental Global Management, LLC (FGM), an affiliate of the CEO, for which it paid **$1.8 million** in both 2024 and 2023[348](index=348&type=chunk)[350](index=350&type=chunk) Segment Performance for Year Ended Dec 31, 2024 (in thousands) | Segment | Total Revenue | Segment (Loss) Income Before Taxes | |:---|---:|---:| | Merchant Banking | $ (14,600) | $ (15,788) | | Managed Services | 31,574 | 1,371 | | Other | 374 | (2,085) | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=68&type=section&id=ITEM%209.%20CHANGES%20IN%20AND%20DISAGREEMENTS%20WITH%20ACCOUNTANTS%20ON%20ACCOUNTING%20AND%20FINANCIAL%20DISCLOSURE) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[381](index=381&type=chunk) [Controls and Procedures](index=68&type=section&id=ITEM%209A.%20CONTROLS%20AND%20PROCEDURES) Management concluded that the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2024 - Management concluded that the company's disclosure controls and procedures were **effective** as of December 31, 2024[382](index=382&type=chunk) - Management concluded that the company's internal control over financial reporting was **effective** as of December 31, 2024, based on the COSO 2013 framework[383](index=383&type=chunk) - There were no changes in internal control over financial reporting during the year that materially affected, or are reasonably likely to materially affect, internal controls[385](index=385&type=chunk) [Other Information](index=68&type=section&id=ITEM%209B.%20OTHER%20INFORMATION) The company reports no other information - None[386](index=386&type=chunk) [Part III](index=69&type=section&id=PART%20III) [Directors, Executive Officers, and Corporate Governance](index=69&type=section&id=ITEM%2010.%20DIRECTORS%2C%20EXECUTIVE%20OFFICERS%2C%20AND%20CORPORATE%20GOVERNANCE) Information for this item is incorporated by reference from the company's 2025 Annual Meeting of Stockholders proxy statement - Information is incorporated by reference from the 2025 Proxy Statement[391](index=391&type=chunk) [Executive Compensation](index=69&type=section&id=ITEM%2011.%20EXECUTIVE%20COMPENSATION) Information for this item is incorporated by reference from the company's 2025 Annual Meeting of Stockholders proxy statement - Information is incorporated by reference from the 2025 Proxy Statement[392](index=392&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=69&type=section&id=ITEM%2012.%20SECURITY%20OWNERSHIP%20OF%20CERTAIN%20BENEFICIAL%20OWNERS%20AND%20MANAGEMENT%20AND%20RELATED%20STOCKHOLDER%20MATTERS) This section details securities authorized for issuance under equity compensation plans and incorporates security ownership information by reference Equity Compensation Plan Information as of December 31, 2024 | Plan Category | Number of securities to be issued upon exercise (a) | Weighted average exercise price of outstanding options, warrants and rights (b) | Number of securities remaining available for future issuance (c) | |:---|---:|---:|---:| | Equity compensation plans approved by security holders | 58,121 | $ - | 104,168 | | Equity compensation plans not approved by security holders | - | $ - | - | | **Total** | **58,121** | **$ -** | **104,168** | - Information regarding security ownership of beneficial owners and management is incorporated by reference from the 2025 Proxy Statement[394](index=394&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=69&type=section&id=ITEM%2013.%20CERTAIN%20RELATIONSHIPS%20AND%20RELATED%20TRANSACTIONS%2C%20AND%20DIRECTOR%20INDEPENDENCE) Information for this item is incorporated by reference from the company's 2025 Annual Meeting of Stockholders proxy statement - Information is incorporated by reference from the 2025 Proxy Statement[395](index=395&type=chunk) [Principal Accountant Fees and Services](index=69&type=section&id=ITEM%2014.%20PRINCIPAL%20ACCOUNTANT%20FEES%20AND%20SERVICES) Information for this item is incorporated by reference from the company's 2025 Annual Meeting of Stockholders proxy statement - Information is incorporated by reference from the 2025 Proxy Statement[396](index=396&type=chunk) [Part IV](index=70&type=section&id=PART%20IV) [Exhibits and Financial Statement Schedules](index=70&type=section&id=ITEM%2015.%20EXHIBITS%20AND%20FINANCIAL%20STATEMENT%20SCHEDULES) This section lists the documents filed as part of the Form 10-K, including consolidated financial statements and a comprehensive list of exhibits - This item lists the financial statements, financial statement schedules, and exhibits filed with the Form 10-K[398](index=398&type=chunk)[400](index=400&type=chunk) [Form 10-K Summary](index=71&type=section&id=ITEM%2016.%20FORM%2010-K%20SUMMARY) The company reports no Form 10-K summary - None[401](index=401&type=chunk)

Core Points - Fundamental Global Inc. has declared a quarterly cash dividend of $0.50 per share on its 8.00% Cumulative Preferred Stock, Series A, for the period from December 15, 2024, to March 14, 2025 [1][2] - The dividend is payable on March 17, 2025, to shareholders on record as of March 3, 2025 [2] - The Preferred Stock is listed on the Nasdaq Stock Market under the ticker symbol "FGFPP" [2] Company Overview - Fundamental Global Inc. engages in diverse business activities including reinsurance, asset management, merchant banking, and managed services [3]