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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
January
3, 2024
Date
of Report (Date of earliest event reported)
FG
GROUP HOLDINGS INC.
(Exact
name of registrant as specified in its charter)
| Nevada
|
|
1-13906
|
|
47-0587703
|
| (State
or other jurisdiction of |
|
(Commission
|
|
(IRS
Employer |
| incorporation
or organization) |
|
File
No.) |
|
Identification
Number) |
| 5960
Fairview Road, Suite 275 |
|
|
| Charlotte,
North Carolina |
|
28210
|
| (Address
of principal executive offices) |
|
(Zip
Code) |
(704)
994-8279
(Registrant’s
telephone number including area code)
N/A
(Former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions (see General Instruction A.2. below):
| ☐ |
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| |
|
| ☒ |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| |
|
| ☐ |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| |
|
| ☐ |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities
registered pursuant to Section 12(b) of the Act:
| Title
of Each Class |
|
Trading
Symbol(s) |
|
Name
of Each Exchange on Which Registered |
| Common
Stock, $0.01 par value |
|
FGH |
|
NYSE
American |
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company ☐
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item
1.01 Entry into a Material Definitive Agreement.
On
January 3, 2024, FG Group Holdings Inc., a Nevada corporation (the “Company,” “FGH” or “FG Group Holdings”)
entered into a definitive plan of merger (the “Plan of Merger”) with FG Financial Group, Inc., a Nevada corporation (“FGF”
or “FG Financial”), and FG Group LLC, a Nevada limited liability company and wholly-owned subsidiary of FGF (the “Merger
Sub”). Pursuant to the Plan of Merger, the Company will merge with and into the Merger Sub (the “Merger”), with the
Merger Sub as the surviving entity and wholly owned subsidiary of FGF. Following (and contingent upon consummation of) the Merger, FGF
will amend its amended and restated articles of incorporation to change the name of FGF to “Fundamental Global Inc.” As a
result of the Merger, stockholders of the Company will receive consideration in the form of shares of FGF’s common stock, par value
$0.001 per share (the “FGF Common Stock”). In connection with the Merger, and without any further action on the part of any
party, each share of common stock, par value $0.01 per share, of the Company (the “FGH Common Stock”) will be converted into
one (1) (the “Exchange Ratio”) share of FGF Common Stock. The disinterested members of the Company’s Board of Directors
(the “Board”) approved the Merger and the Plan of Merger and recommended that
the Company’s stockholders approve and adopt the Plan of Merger and approve the Merger. The holder of a majority of the outstanding
FGF Common Stock, acting by written consent in lieu of a meeting, has approved and adopted the Plan of Merger and approved the Merger.
Pursuant to the Plan of Merger, the Merger is contingent upon customary closing conditions, including the approval of the Merger and
adoption of the Plan of Merger by FGH stockholders, receipt of regulatory approvals (if any), and that a Registration Statement on Form
S-4 shall have become effective under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder, and
shall not be subject to any stop order or proceeding by the Securities and Exchange Commission seeking a stop order.
The
foregoing description of the Plan of Merger does not purport to be complete and is qualified in its entirety by reference to the Plan
of Merger, a copy of which is filed as Exhibit 2.1 hereto and is incorporated herein by reference. The Plan of Merger has been included
to provide investors and security holders with information regarding its terms. It is not intended to provide any other factual information
about the Company, FGF, the Merger Sub or their respective subsidiaries and affiliates. The Plan of Merger contains representations and
warranties by each of the Company, FGF and the Merger Sub, made solely for the benefit of the parties to the Plan of Merger. The assertions
embodied in those representations and warranties are subject to qualifications and limitations agreed to by the respective parties in
negotiating the terms of the Plan of Merger, including information in confidential disclosures delivered in connection with the signing
of the Plan of Merger. Moreover, certain representations and warranties in the Plan of Merger were made as of a specified date, may be
subject to a contractual standard of materiality different from what might be viewed as material to investors, or may have been used
for the purpose of allocating risk between the Company, on the one hand, and FGF and the Merger Sub, on the other hand, rather than establishing
matters as facts. Accordingly, the representations and warranties in the Plan of Merger should not be relied on by any persons as characterizations
of the actual state of facts about the Company, FGF, the Merger Sub or their respective subsidiaries or affiliates at the time they were
made or otherwise. In addition, information concerning the subject matter of the representations and warranties may change after the
date of the Plan of Merger, which subsequent information may or may not be fully reflected in the Company’s public disclosures.
Item
7.01 Financial Statements and Exhibits.
On
January 3, 2024, the Company and FGF issued a joint press release announcing the Plan of Merger and planned Merger. A copy of that press
release is furnished on Exhibit 99.1 hereto and is incorporated herein by reference.
The
information in this Item 7.01 and in Exhibit 99.1 attached hereto is furnished pursuant to the rules and regulations of the Securities
and Exchange Commission and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated
by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth
by specific reference in such a filing.
Item
9.01 Financial Statements and Exhibits.
(d)
Exhibits.
†
Exhibits and schedules to this Exhibit have been omitted pursuant to Regulation S-K Item 601(a)(5). The Registrant agrees to furnish
supplementally a copy of any omitted schedule or exhibit to the SEC upon request.
Additional
Information and Where to Find It
This
Current Report on Form 8-K does not constitute an offer to sell or the solicitation of an offer to buy the securities of either FG Financial
or FG Group Holdings, nor does it constitute a solicitation of any vote or approval. The proposed Merger described above will be submitted
to FG Group Holdings’ stockholders for their consideration and approval via written consent. In connection therewith, and the prior
approval by FG Financial’s stockholders holding a majority of the voting power of FG Financial, FG Financial and FG Group Holdings
plan to file relevant materials with the United States Securities and Exchange Commission (the “SEC”), including a joint
consent solicitation, information statement, and registration statement on Form S-4 (the “Joint Registration and Information Statement”).
Promptly after filing the Joint Registration and Information Statement with the SEC, FG Group Holdings will mail the definitive Joint
Registration and Information Statement to each stockholder entitled to execute and deliver a written consent relating to the proposed
Merger. STOCKHOLDERS OF BOTH FG GROUP HOLDINGS AND FG FINANCIAL ARE URGED TO CAREFULLY READ THE JOINT REGISTRATION AND INFORMATION
STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO AND ANY DOCUMENTS INCORPORATED BY REFERENCE THEREIN) AND ANY OTHER RELEVANT
DOCUMENTS IN CONNECTION WITH THE TRANSACTION THAT ARE FILED WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE TRANSACTION AND THE PARTIES TO THE TRANSACTION. The Joint Registration and Information Statement and other
relevant materials in connection with the transaction (when they become available) and any other documents filed by the Company with
the SEC, may be obtained free of charge at the SEC’s website (www.sec.gov), at FG Group Holdings’ website (https://fg.group/investor-relations/),
and at FG Financial’s website (https://www.fgfinancial.com/). In addition, FG Group Holdings security holders will be able to obtain
free copies of the Joint Registration and Information Statement from FG Group Holdings by contacting the FG Group Holdings’ Secretary
at IR@FG.Group or investors@fundamentalglobal.com, and FG Financial security holders will be able to obtain free copies of the Joint
Registration and Information Statement from FG Financial by contacting FG Financial’s Secretary at ir@fgfinancial.com or investors@fundamentalglobal.com.
Certain
Information Regarding Participants
FG
Group Holdings, FG Financial, and their respective directors, executive officers, and other members of management and employees may be
deemed, under SEC rules, to be participants in the solicitation of consents from FG Group Holdings’ stockholders in connection
with the proposed Merger. Information about the directors and executive officers of FG Group Holdings is set forth in its proxy statement
for the FG Group Holdings annual meeting of stockholders held on December 6, 2023, which was filed with the SEC on October 18, 2023.
To the extent holdings of such directors and executive officers in FG Group Holdings’ securities are not reported, or have changed
since the amounts described in the proxy statement for FG Group Holdings’ annual meeting of stockholders, such changes may be reflected
on Initial Statements of Beneficial Ownership on Form 3 or Statements of Change in Ownership on Form 4 filed with the SEC. Information
about the directors and executive officers of FG Financial is set forth in its proxy statement for the FG Financial annual meeting of
stockholders held on December 6, 2023, which was filed with the SEC on November 1, 2023. To the extent holdings of such directors and
executive officers in FG Financial’s securities are not reported, or have changed since the amounts described in the proxy statement
for FG Financial’s annual meeting of stockholders, such changes may be reflected on Initial Statements of Beneficial Ownership
on Form 3 or Statements of Change in Ownership on Form 4 filed with the SEC. Other information regarding the participants in the consent
solicitations and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the Joint
Registration and Information Statement and other relevant materials to be filed with the SEC regarding the proposed transaction when
they become available.
Forward-Looking
Statements
In
addition to the historical information included herein, this Current Report on Form 8-K includes forward-looking statements, such as
management’s expectations regarding the timing and benefits of the proposed Merger, which involve a number of risks and uncertainties,
including but not limited to those discussed in the “Risk Factors” section contained in Item 1A in the FG Group Holdings’
Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 16, 2023, FG Financial’s Annual Report
on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 24, 2023, and in the subsequent filings (including quarterly
reports on Form 10-Q) with the SEC by FG Group Holdings and FG Financial, and the following risks and uncertainties: the risk that the
cost savings and any revenue synergies from the proposed Merger may not be fully realized or may take longer than anticipated to be realized;
disruption to the parties’ businesses as a result of the announcement and pendency of the proposed Merger; the risk that the integration
of each party’s operations will be materially delayed or will be more costly or difficult than expected or that the parties are
otherwise unable to successfully integrate each party’s businesses into the other’s businesses; the failure to obtain the
necessary approvals of the FG Group Holdings stockholders; the amount of the costs, fees, expenses and charges related to the proposed
Merger; reputational risk and the reaction of each company’s customers, suppliers, employees or other business partners to the
proposed Merger; any unexpected delay in closing the proposed Merger; the possibility that the proposed Merger may be more expensive
to complete than anticipated, including as a result of unexpected factors or events; the dilution caused by FG Financial’s issuance
of additional shares of FGF Common Stock in the proposed Merger; a material adverse change in the financial condition of either company;
general competitive, economic, political and market conditions; major catastrophes such as earthquakes, floods or other natural or human
disasters, including pandemics and infectious disease outbreaks, and any related disruption to local, regional and global economic activity
and financial markets, and the impact of the foregoing on either company, or the ability to complete the proposed Merger, or any of the
other risks described herein or in the parties’ SEC filings; the outcome of any legal proceedings that may be instituted against
either company, related to the proposed Merger or otherwise; other factors that may affect future results of the companies during the
pendency of the proposed Merger or of the combined company post-Merger, including changes in asset quality and credit risk; the inability
to sustain revenue and earnings growth; changes in interest rates and capital markets; inflation; the impact, extent and timing of technological
changes; capital management activities; and actions of the Federal Reserve Board and legislative and regulatory actions and reforms.
Given the risks and uncertainties, readers should not place undue reliance on any forward-looking statement and should recognize that
the statements are predictions of future results which may not occur as anticipated. Actual results could differ materially from those
anticipated in the forward-looking statements and from historical results, due to the risks and uncertainties described herein, as well
as others not now anticipated. New risk factors emerge from time to time and it is not possible for management of either company to predict
all such risk factors, nor can it assess the impact of all such factors on either company’s business or the extent to which any
factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
Except where required by law, neither FG Group Holdings nor FG Financial assumes an obligation to update forward-looking statements to
reflect actual results or changes in factors or assumptions affecting such forward-looking statements.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
| |
FG
GROUP HOLDINGS INC. |
| |
|
|
| Date:
January 4, 2024 |
By: |
/s/
Todd R. Major |
| |
|
Todd
R. Major |
| |
|
Chief
Financial Officer |
Exhibit
2.1
PLAN
OF MERGER
AMONG
FG
FINANCIAL GROUP, INC.,
a
Nevada Corporation
FG
GROUP LLC,
a
Nevada limited liability company;
AND
FG
GROUP HOLDINGS INC.,
a
Nevada corporation.
Dated:
January 3, 2024
PLAN
OF MERGER
This
PLAN OF MERGER (this “Plan”), dated January 3, 2024, is made and entered into by and among FG GROUP LLC,
a Nevada limited liability company (the “Acquirer”) having its principal place of business at 104 S. Walnut
Street, Unit 1A, Itasca, IL 60143, FG FINANCIAL GROUP, INC., a Nevada corporation (“Parent”) having its principal
place of business at 104 S. Walnut Street, Unit 1A, Itasca, IL 60143, and FG GROUP HOLDINGS INC.,
a Nevada corporation (the “Company”) having its principal place of business at 5960 Fairview Road, Suite 275,
Charlotte, NC 28210. The Acquirer, Parent, and the Company are sometimes referred to herein collectively as the “Parties”
and each individually as a “Party.”
WHEREAS,
the Parties intend that the Company be merged with and into the Acquirer, with the Acquirer surviving that merger on the terms and subject
to the conditions set forth herein (the “Merger”);
WHEREAS,
the manager and member of the Acquirer has (a) determined that this Plan and the transaction contemplated hereby, including the Merger,
are in the best interests of the Acquirer and its member and (b) approved and declared advisable this Plan and the transactions hereby,
including the Merger, in accordance with Chapter 92A of the Nevada Revised Statutes (the “Merger Statutes”);
WHEREAS,
the Board of Directors of Parent (the “Parent Board”) has (a) determined that this Plan and the transaction contemplated
hereby, including the Merger, are in the best interests of the Parent and its stockholders, (b) approved and declared advisable this
Plan and the transactions hereby, including the Merger, and (c) resolved to recommend adoption of this Plan by the stockholders of Parent
in accordance with the Merger Statutes;
WHEREAS,
the Board of Directors of the Company (the “Company Board”) has (a) determined that this Plan and the transaction
contemplated hereby, including the Merger, are in the best interests of the Company and its stockholders, (b) approved and declared advisable
this Plan and the transactions hereby, including the Merger, and (c) resolved to recommend adoption of this Plan by the stockholders
of Company in accordance with the Merger Statutes;
WHEREAS,
following the execution of this Plan, the Company shall seek to obtain, in accordance with the Company’s Bylaws and the Merger
Statutes, the written consent of its stockholders approving this Plan, the Merger, and the transactions contemplated hereby;
WHEREAS,
on the effective date of the Merger (the “Effective Date”), all of the outstanding shares of the common stock of the
Company, par value $0.01 per share (the “Company Common Stock”), will be converted into common stock of Parent on
the terms and subject to the conditions set forth in this Plan; and
WHEREAS,
the Parties desire that the Merger be made on the terms and subject to the conditions set forth in this Plan, that the Merger qualify
as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”),
and that this Plan constitute the “plan of reorganization” within the meaning of Treasury Regulations Section 1.368-2(g).
NOW,
THEREFORE, the Parties agree as follows:
Article
I.
MERGER
On
the Effective Date, the Company will merge with and into the Acquirer in accordance with the Merger Statutes.
1.1
Effect of Merger.
1.1.1
The consummation of the Merger (the “Closing”) shall take place on the Effective Date at the offices of Holland &
Hart LLP, outside counsel to Parent, on a date to be designated jointly by Parent and the Company. Following approval of this Plan and
the Merger by the Company Stockholders (defined below), the Parties shall cause to be filed articles of merger (the “Articles
of Merger”) with the Secretary of State of the State of Nevada. The Merger shall become effective on the Effective Date at
the time of the filing of the Articles of Merger with the Secretary of State of the State of Nevada (or at such later time as may be
designated jointly by Parent, Acquirer, and the Company and specified in the Articles of Merger). The time when the Merger becomes effective
is the “Effective Time.”
1.1.2
At the Effective Time, the Company shall be merged with and into the Acquirer, the separate existence of the Company shall cease, and
the Acquirer shall continue as the surviving entity in the merger and as a wholly owned subsidiary of Parent. The Acquirer as the surviving
entity after the Merger is referred to as the “Surviving Company.” The Articles of Organization and Operating Agreement
of the Acquirer, as in effect immediately prior to the Effective Date, shall be the Articles of Organization and Operating Agreement
of the Surviving Company, until amended as provided in the Articles of Organization and Operating Agreement of the Surviving Company
and in accordance with applicable law. The manager of the Acquirer immediately prior to the Effective Date will be the manager of the
Surviving Company, until its successor is duly elected or appointed and shall qualify.
1.1.3
As of and after the Effective Time, the Surviving Company shall be responsible and liable for all the liabilities, debts, obligations,
and penalties of the Acquirer and the Company.
1.1.4
As of and after the Effective Time, the Surviving Company shall possess all the rights, privileges, immunities and franchises, of a public
as well as of a private nature, of the Acquirer and the Company; all property, real, personal and mixed, and all debts due on whatever
account, and all and every other interest, of or belonging to or due to the Acquirer and the Company, shall be taken and deemed to be
transferred to and vested in the Surviving Company without further act or deed; and the title to any real estate or any interest in any
real estate, vested in the Acquirer or the Company, shall not revert or be in any way impaired by reason of the Merger.
1.1.5
As of and after the Effective Time, the Parent Board will have seven (7) members, consisting of D. Kyle Cerminara, an additional three
(3) legacy Parent directors, and three (3) legacy Company directors.
1.1.6
At, or promptly following, the Effective Time, Parent will file articles of amendment to its amended and restated articles of incorporation
to change its name to “Fundamental Global Inc.”
1.1.7
As of and after the Effective Time and in addition to the effects provided in the foregoing subsections of this Section 1.1, the Merger
will have the additional effects provided in the Merger Statutes.
1.2
Conversion of Company Common Stock.
1.2.1
Subject to the terms and conditions of the Plan, at the Effective Time, by virtue of the Merger and without any further action on the
part of Acquiror, Company, or any stockholder of Company:
1.2.1.1
any shares of Company Common Stock held immediately prior to the Effective Time by (a) the Company (or held in the Company’s treasury)
or (b) Parent or any wholly owned subsidiary of Parent shall be cancelled, and no consideration shall be paid or payable in respect thereof;
and
1.2.1.2
except as provided in Section 1.2.1.1 above, and subject to Section 1.2.2, each share of Company Common Stock issued and outstanding
immediately prior to the Effective Time shall be converted into one (1) share (the “Exchange Ratio”) of common stock,
par value $0.001 per share, of Parent (“Parent Common Stock”), such shares of Parent Common Stock into which shares
of Company Common Stock are converted pursuant to this Section 1.2.1.2, the “Merger Consideration”.
1.2.2
No fractional shares of Parent Common Stock shall be issued in connection with the Merger, and no certificates or scrip for any such
fractional shares shall be issued. With respect to each holder of Company Common Stock (the “Company Stockholders”),
the Merger Consideration to which such stockholder is entitled shall be rounded up to the nearest whole share of Parent Common Stock.
1.2.3
At the Effective Time, except as provided in Section 1.2.1.1, all shares of Company Common Stock outstanding immediately prior to the
Effective Time shall automatically be canceled and retired and shall cease to exist, and all Company Stockholders shall cease to have
any rights with respect to such Company Common Stock, except the right to receive their respective portion of the Merger Consideration.
1.3
Membership Interest of Acquirer. As of and after the Effective Date, the Membership Interests
(as defined in Acquirer’s Operating Agreement) of the Acquirer issued and outstanding immediately prior to the Effective Date shall
remain issued and existing and shall not be affected by the Merger.
1.4
Payment for Company Common Stock.
1.4.1
Prior to the Effective Time, Parent shall engage Vstock Transfer, LLC, Parent’s transfer agent, or another bank or trust company
reasonably satisfactory to Parent and the Company, to act as exchange agent in the Merger (the “Exchange Agent”) and
shall enter into an agreement reasonably acceptable to the Parent and the Company with the Exchange Agent relating to the services to
be performed by the Exchange Agent, including for the payment of the Merger Consideration to the holders of the uncertificated shares
of Company Common Stock (the “Book Entry Shares”). At the Effective Time, there shall be no further registration of
transfers of shares of Company Common Stock thereafter on the stock transfer records of the Company.
1.4.2
Each share of Company Common Stock issued and outstanding immediately prior to the Effective Time will be automatically surrendered and
shall cease to exist, and automatically without further action by the Company Stockholder be exchanged for the pro rata share of the
Merger Consideration, in each case in accordance with the terms of this Plan. From and after the Effective Time, such Company Stockholder
that, immediately prior to the Effective Time, was registered as a holder of Book Entry Shares on the share transfer books of the Company
shall thereafter cease to be a stockholder of the Company and shall receive its pro rata share of the Merger Consideration in accordance
with the terms of this Plan. All shares of Parent Common Stock issued pursuant to this Plan shall be deemed issued and outstanding as
of the Effective Time.
1.5
Company Equity Awards.
1.5.1
Each option to purchase shares of Company Common Stock (each such option, an “Existing Rollover Stock Option,” and
collectively, the “Existing Rollover Stock Options”) granted pursuant to the terms of the Company’s 2017 Omnibus
Equity Compensation Plan (as amended, the “Company Stock Plan”) that is outstanding immediately prior to the Effective
Time, shall, as of the Effective Time, be converted into an option (an “Assumed Stock Option”) to acquire the number
of shares of Parent Common Stock (rounded down to the nearest whole share) that is equal to the product obtained by multiplying (i) the
number of shares subject to the holder’s Existing Rollover Stock Option immediately prior to the Effective Time, by (ii) the Exchange
Ratio, which option shall have an exercise price per share of Parent Common Stock equal to the quotient (rounded up to the nearest whole
cent) obtained by dividing (x) the exercise price per share of Company Common Stock of such Existing Rollover Stock Option in effect
immediately prior to the Effective Time by (y) the Exchange Ratio. The term, vesting schedule and all of the other terms of each Assumed
Stock Option shall otherwise remain unchanged and identical, subject to the rights of Parent to amend or modify any such Assumed Stock
Option in accordance with the terms of the corresponding Existing Rollover Stock Option and applicable Law.
1.5.2
Each award of restricted share units granted pursuant to the terms of any Company Stock Plan or agreement (each award of restricted stock
units, a “Company RSU,” and collectively, the “Company RSUs”) that is outstanding as of immediately
prior to the Effective Time, shall, as of the Effective Time cease to represent the right to receive Company Common Stock and shall be
converted into and become rights with respect to Parent Common Stock, and Parent shall assume the Company RSUs, on the same terms and
conditions (including any forfeiture provisions or repurchase rights, and treating for this purpose any performance-based vesting conditions
as provided for in the award agreement by which each Company RSU is evidenced), except that from and after the Effective Time, (i) Parent
and the compensation committee of the Parent Board shall be substituted for Company and the compensation committee of the Company Board
administering the Company Stock Plan, (ii) the Company RSUs assumed by Parent shall represent the right to receive Parent Common Stock
upon settlement of such Company RSU promptly after vesting (except to the extent the terms of the applicable restricted share unit agreement
provide for deferred settlement, in which case settlement shall be in accordance with the specified terms), and (iii) the number of shares
of Parent Common Stock subject to each award of Company RSUs assumed by Parent shall be equal to the number of shares of Company Common
Stock subject to such award immediately prior to the Effective Time multiplied by the Exchange Ratio, rounded down to the nearest whole
share (except that in no event shall any vesting restrictions applicable to a Company RSU be accelerated unless so provided under the
terms of such Company RSU or the Company Stock Plan).
1.5.3
Prior to the Effective Time, the Company shall take all necessary or appropriate action to effectuate the provisions of this Section
1.5. As of the Effective Time, Parent shall assume the obligations and succeed to the rights of the Company under the Company Stock Plan
with respect to the Existing Rollover Stock Options (as converted into Assumed Stock Options).
1.5.4
All of the conversions and adjustments made pursuant to Section 1.5.1 or Section 1.5.2 shall be made in a manner consistent with the
requirements of Section 409A of the Code.
1.5.5
Prior to the Effective Time, the Company Board (or, any committee administering the Company Stock Plan), shall adopt such resolutions
or take such other action as may be necessary to provide for the transactions contemplated by this Section 1.5.
Article
II.
REPRESENTATIONS AND WARRANTIES OF PARENT AND THE ACQUIRER
Parent
and the Acquirer represent and warrant to the Company:
2.1
Organization and Qualification of Parent. Parent is a corporation duly organized, validly
existing and in good standing under the laws of the State of Nevada and has the requisite corporate power to carry on its business as
now conducted.
2.2
Parent Authority Relative to this Plan; Non-Contravention. Parent has the corporate power
and authority to enter into this Plan and to perform its obligations under this Plan. The execution and delivery of this Plan by Parent
and the consummation by Parent of the transactions contemplated by this Plan, including the Merger and issuance of the Merger Consideration,
have been duly authorized by the board of directors and the stockholders of Parent; and no other corporate proceedings on the part of
Parent are necessary to authorize this Plan or the Merger. This Plan has been duly executed and delivered by Parent and constitutes a
valid and binding obligation of Parent, enforceable in accordance with its terms. Parent is not subject to, or obligated under, any provision
of (a) its Articles of Incorporation, as amended, or Bylaws, as amended, (b) any agreement, arrangement or understanding, (c) any license,
franchise or permit or (d) any law, regulation, order, judgment or decree, which would be breached or violated, or in respect of which
a right of termination or acceleration or any encumbrance on any of its assets would be created, by its execution, delivery and performance
of this Plan or the consummation by it of the Merger. Other than (i) the consent, if any, from the Cayman Islands Monetary Authority
(“CIMA”), and (ii) the filing of the Articles of Merger with the Secretary of State of Nevada, no authorization, consent
or approval of, or filing with, any public body, court or authority is necessary on the part of Parent for the consummation by it of
the Merger.
2.3
Capitalization of Parent. The entire authorized capital stock of Parent (“Parent
Stock”) consists of (i) 100,000,000 shares of Parent Common Stock, of which 10,558,930 shares are issued and outstanding, (ii)
99,000,000 shares of preferred stock, par value $0.001 per share, of which none are issued and outstanding, and (iii) 1,000,000 shares
of preferred stock, par value $25.00 per share, 8.00% Cumulative Preferred Stock, Series A, of which 894,580 shares are issued and outstanding.
The issued shares of Parent Stock have been duly authorized, validly issued, are fully paid and non-assessable and free and clear of
any lien, pledge, security interest, encumbrance or charge of any kind.
2.4
Organization and Qualification of Acquirer. The Acquirer is a limited liability company
duly organized, validly existing and in good standing under the laws of the State of Nevada and has the requisite power to carry on its
business as now conducted.
2.5
Acquirer Authority Relative to this Plan; Non-Contravention. The Acquirer has the power
and authority to enter into this Plan and to perform its obligations under this Plan. The execution and delivery of this Plan by the
Acquirer and the consummation by the Acquirer of the Merger have been duly authorized by the manager and sole member of Acquirer; and
no other proceedings on the part of the Acquirer are necessary to authorize this Plan or the Merger. This Plan has been duly executed
and delivered by the Acquirer and constitutes a valid and binding obligation of the Acquirer, enforceable in accordance with its terms.
The Acquirer is not subject to, or obligated under, any provision of (a) its Articles of Organization or Operating Agreement, (b) any
agreement, arrangement or understanding, (c) any license, franchise or permit or (d) any law, regulation, order, judgment or decree,
which would be breached or violated, or in respect of which a right of termination or acceleration or any encumbrance on any of its assets
would be created, by its execution, delivery and performance of this Plan or the consummation by it of the Merger. Other than the filing
of the Articles of Merger with the Secretary of State of Nevada, no authorization, consent or approval of, or filing with, any public
body, court or authority is necessary on the part of the Acquirer for the consummation by it of the Merger.
2.6
Capitalization of Acquirer. Parent owns 100% of the issued and outstanding Membership Interest
of the Acquirer. There are no outstanding or authorized options, warrants, purchase rights, subscription agreements, conversion rights,
exchange rights, or other contracts or commitments that could require the Acquirer to issue, sell or otherwise cause to become outstanding
any of its Membership Interest. There are no outstanding or authorized unit appreciation, profit participation, or similar rights with
respect to the Acquirer.
Article
III.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The
Company represents and warrants to the Acquirer and Parent as follows:
3.1
Organization and Qualification. The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Nevada and has the requisite corporate power to carry on its business as now conducted.
3.2
Authority Relative to this Plan; Non-Contravention. The Company has the corporate power
and authority to enter into this Plan and to perform its obligations under this Plan. The execution and delivery of this Plan by the
Company and the consummation by the Company of the Merger have been duly authorized by the board of directors of the Company; and no
other corporate proceedings on the part of the Company are necessary to authorize this Plan or the Merger other than the approval of
the Company Stockholders. This Plan has been duly executed and delivered by the Company and constitutes a valid and binding obligation
of the Company, enforceable in accordance with its terms. The Company is not subject to, or obligated under, any provision of (a) its
Articles of Incorporation, as amended, or Bylaws, as amended, (b) any agreement, arrangement or understanding, (c) any license, franchise
or permit or (d) any law, regulation, order, judgment or decree, which would be breached or violated, or in respect of which a right
of termination or acceleration or any encumbrance on any of its assets would be created, by its execution, delivery and performance of
this Plan or the consummation by it of the Merger. Other than the filing of the Articles of Merger with the Secretary of State of Nevada,
no authorization, consent or approval of, or filing with, any public body, court or authority is necessary on the part of the Company
for the consummation by it of the Merger.
3.3
Capitalization. The entire authorized capital stock of the Company consists of (i) 50,000,000
shares of Company Common Stock, of which 19,708,184 shares are issued and outstanding, and (ii) 1,000,000 shares of preferred stock,
par value $0.01 per share, of which none are issued and outstanding. The issued shares of the Company Common Stock have been duly authorized,
validly issued, are fully paid and non-assessable and free and clear of any lien, pledge, security interest, encumbrance or charge of
any kind. All of the Company Common Stock is uncertificated and in electronic book entry form. Schedule 3.3 to this Plan sets forth,
as of the date hereof, a schedule of (i) all holders of options to purchase Company Common Stock or any other security of the Company,
including the date of grant, the expiration date, the number of shares, the price per share at which the option may be exercised, an
indication of whether or not such stock option is intended to qualify as an “incentive stock option” under Section 422 of
the Code, the vesting schedule, and the company stock plan under which issued, and (ii) all holders of restricted stock units, the date
of grant, the number owned by each holder, the vesting schedule and the company stock plan under which issued. Excepts as set forth in
Schedule 3.3 to this Plan, there are no (a) outstanding or authorized options, warrants, purchase rights, subscription agreements, conversion
rights, exchange rights, or other contracts or commitments that could require the Company to issue, sell or otherwise cause to become
outstanding any of its capital stock or (b) outstanding or authorized stock appreciation, phantom stock, profit participation, or similar
rights with respect to the Company.
Article
IV.
GENERAL PROVISIONS
4.1
Notices. All notices and other communications under this Plan shall be in writing and shall
be mailed (registered or certified mail, return receipt requested), personally delivered or sent by e-mail and confirmed and shall be
deemed given when so delivered or e-mailed and confirmed or if mailed, two (2) days after such mailing.
If
to the Company:
FG
Group Holdings Inc.
5960
Fairview Road, Suite 275
Charlotte,
North Carolina, 28210
Attn:
Mark D. Roberson
e-mail:
mark.roberson@fg.group
with
copies (which shall not constitute notice) to:
Snell
& Wilmer
Hughes
Center
3883
Howard Hughes Parkway, Suite 1100
Las
Vegas, NV 89169-5958
Attn:
Brian Blaylock
Email:
bblaylock@swlaw.com
If
to Parent, the Acquirer or the Surviving Company:
FG
Financial Group, Inc.
104
S. Walnut Street, Unit 1A
Itasca,
IL 60143
Attention:
Hassan Baqar
E-mail:
hbaqar@sequoiafin.com
with
a copy (which shall not constitute notice) to:
Holland
& Hart LLP
222
South Main Street, Suite 2200
Salt
Lake City, UT 84101
Attn:
S. Chase Dowden
Email:
SCDowden@hollandhart.com
4.2
Severability. If any term, provision, covenant or restriction of this Plan is held by a
court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions
of this Plan shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the Parties shall negotiate
in good faith to modify this Plan and to preserve each Party’s anticipated benefits under this Plan.
4.3
Conditions Precedent; Termination.
4.3.1
The respective obligations of each Party to effect the Merger is subject to the satisfaction (or, if legally permissible, waiver) at
or prior to the Effective Time of the following conditions:
4.3.1.1
the approval of the Company Stockholders;
4.3.1.2
receipt of consent from CIMA;
4.3.1.3
the Form S-4 shall have become effective under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder,
and shall not be subject to any stop order or proceeding by the Securities and Exchange Commission seeking a stop order;
4.3.1.4
the shares of Parent Common Stock to be issued in the Merger shall have been approved for listing on The Nasdaq Stock Market LLC, subject
to official notice of issuance;
4.3.1.5
no temporary restraining order, preliminary or permanent injunction, or other order issued by any court or agency of competent jurisdiction
or other legal restraint or prohibition having the effect of preventing the consummation of the Merger shall be in effect or threatened,
and no law shall have been enacted or promulgated by any governmental authority that prohibits or makes illegal consummation of the Merger;
and
4.3.1.6
there shall be no pending or threatened action by or before any Governmental Authority or arbitrator seeking to restrain, prohibit or
invalidate any of the transactions contemplated by this Agreement, and there shall not be in effect any Order, writ, judgment, injunction,
or decree issued by any Governmental Authority that has that effect.
4.3.2
This Plan may be terminated and the Merger may be abandoned at any time prior to the Effective Time, whether before or after the approval
of the Company Stockholders has been obtained:
4.3.2.1
by mutual written agreement of the Company, Parent and Acquirer, duly authorized by the respective board of directors or managers, as
applicable, of each;
4.3.2.2
by either the Company or Parent if (i) the Company Board or the Parent Board, as applicable, determines in good faith, after consultation
with its outside legal counsel that the consummation of the Merger or other transactions contemplated by this Plan is reasonably likely
to result in a breach of its fiduciary duties to the stockholders of the Company or Parent, as applicable, under applicable law; (ii)
the other Party has materially breached of any of the obligations, covenants, or other agreements or any of the representations or warranties
(or any such representation or warranty ceases to be true) set forth in this Plan (provided that the terminating party is not then in
material breach of any representation, warranty, obligation, covenant, or other agreement contained herein); or (iii) any court of competent
jurisdiction or other governmental authority shall have issued an order, or taken any other action restraining, enjoining or otherwise
prohibiting the transactions contemplated by this Plan and such order or other action shall have become final and non-appealable;
The
Party desiring to terminate this Plan pursuant to Section 4.3.2.2 shall give written notice of such termination to the other Party, specifying
the provision or provisions hereof pursuant to which such termination is effected.
4.3.3
If this Plan is terminated and the Merger is abandoned pursuant to Section 4.3.2, this Plan shall forthwith become void and have no effect,
without any liability or obligation on the part of Parent, Acquirer or the Company, except for any material breach by a Party of any
of its representations, warranties, covenants, or agreements set forth in this Plan, which material breach and liability therefor shall
not be affected by termination of this Plan.
4.4
Amendment. This Plan may only be amended by a written instrument executed by each of the
Parties.
4.5
Nonsurvival of Representations and Warranties. None of the representations and warranties
in this Plan or in any instrument delivered pursuant to this Plan shall survive the Effective Time. This Section 4.5 shall not limit
any covenant or agreement of the Parties which by its terms contemplates performance after the Effective Time.
4.6
Governing Law. This Plan shall be governed by and construed in accordance with the laws
of the State of Nevada.
4.7
Tax Treatment. Each Party shall use its respective best efforts to cause the Merger to
qualify as a reorganization under Code Section 368(a), and no party shall take any action or fail to take any action after completion
of the Merger that would cause the Merger to cease to so qualify. Each Party shall report the Merger as a reorganization under Code Section
368(a) for all relevant tax purposes and shall adopt no tax reporting position inconsistent with the treatment of the Merger as a reorganization
under Code Section 368(a) unless otherwise required by applicable Law.
4.8
Miscellaneous. This Plan (together with all other documents and instruments referred to
in this Plan): (a) constitutes the entire agreement, and supersedes all other prior agreements and undertakings, both written and oral,
among the Parties, with respect to the subject matter of this Plan; (b) is not intended to confer upon any person other than the Parties
to this Plan any rights or remedies under this Plan; and (c) shall not be assigned by operation of law or otherwise. This Plan may be
executed in one or more counterparts, and by the different Parties hereto in separate counterparts, each of which shall be deemed to
be an original, but all of which taken together shall constitute one and the same document, and shall become effective when one or more
counterparts has been signed by each of the Parties and delivered to each of the other Parties. Delivery of a signed counterpart of this
Plan by facsimile or email/pdf transmission shall constitute valid and sufficient delivery thereof.
(Signature
page follows)
IN
WITNESS WHEREOF, the Parties have executed this Plan as of the Effective Date.
| COMPANY: |
|
ACQUIRER: |
| |
|
|
|
|
| FG
GROUP HOLDINGS INC. |
|
FG
GROUP LLC |
| |
|
|
|
|
| |
|
|
By: |
FG
Financial Group, Inc. |
| |
|
|
Its: |
Manager |
| |
|
|
|
|
| By: |
/s/
Mark D. Roberson |
|
By: |
/s/
Hassan R. Baqar |
| Name: |
Mark
D. Roberson |
|
Name: |
Hassan
R. Baqar |
| Title: |
Chief
Executive Officer |
|
Title: |
Chief
Financial Officer |
| COMPANY: |
|
| |
|
|
| FG
FINANCIAL GROUP, INC. |
|
| |
|
|
| By: |
/s/
Larry G. Swets, Jr. |
|
| Name:
|
Larry
G. Swets, Jr. |
|
| Title:
|
Chief
Executive Officer |
|
Exhibit
99.1
FG
Financial Group, Inc. and FG Group Holdings Inc. Sign Definitive
Plan
of Merger to form Fundamental Global Inc.
Combined
Company to Benefit from Anticipated Significant Expense Savings,
Improved
Scale and Capital Efficiency
Represents
Over $110 Million in Combined Total Assets and
$65
Million in Combined Annual Revenue1
Charlotte,
NC – January 3, 2024 – FG Financial Group, Inc. (Nasdaq: FGF, FGFPP) (“FG Financial”) and FG Group Holdings
Inc. (NYSE American: FGH) (“FG Group Holdings”) today announced that they have signed a definitive plan of merger to combine
the companies in an all-stock transaction. Upon completion of the merger, the combined company will be renamed to Fundamental Global
Inc. and the common stock and Series A cumulative preferred stock of the combined company will continue to trade on the Nasdaq under
the tickers “FGF” and “FGFPP,” respectively.
With
combined assets of over $110 million and combined annual revenue of over $65 million 1, the merger is anticipated to
create significantly enhanced public company scale and capital efficiency and is expected to result in over $3 million of expense
savings in the first year following the closing of the transaction with the objective of additional savings beyond $3 million in the
following 12-24 months post-closing.
Kyle
Cerminara, Chairman of the Board of FG Financial and FG Group Holdings, who will be CEO of the combined company at closing, commented,
“Creating one public company with expanded scale, cost efficiencies and streamlined operations should benefit stockholders of both
companies. Our goal will be to focus on a few highly scalable and high ROIC businesses and simplify our organizational structure with
a focus on stockholder returns.”
Larry
Swets, Chief Executive Officer of FG Financial, commented, “This combination is a major step in our strategy. We anticipate that
our combined teams will be able to focus time and resources on growing our reinsurance and merchant banking businesses, and we believe
the strategic combination of our companies will provide a strong platform to drive long term stockholder value.”
Mark
Roberson, Chief Executive Officer of FG Group Holdings, commented, “FG Financial has successfully grown its reinsurance business
over the past few years, and its merchant banking platform includes several attractive businesses that complement the holdings at FG
Group Holdings. We believe the merger will create an organization with greater scale and resources, and we expect to realize additional
efficiencies by operating as a combined company.”
The
plan of merger and transaction was unanimously approved by the independent members of the Board of Directors of each of FG Financial
and FG Group Holdings. Additionally, the plan of merger and transaction were approved by the majority stockholder of FG Financial. The
transaction is expected to close in early 2024, subject to customary closing conditions, including the approval of the transaction by
the stockholders of FG Group Holdings.
Proposed
Merger Details:
|
● |
FG Group Holdings common stockholders will receive one share
of FG Financial common stock for each share of common stock of FG Group Holdings held by such stockholder. The combined company will
be renamed Fundamental Global Inc. at closing and the common stock and Series A cumulative preferred stock of the combined company will
continue to trade on the Nasdaq under the tickers “FGF” and “FGFPP,” respectively. |
|
● |
It is anticipated that legacy stockholders of FG Group Holdings
will own 72% of the outstanding shares of Fundamental Global Inc. common stock and legacy FG Financial common stockholders will own 28%
of the outstanding shares of Fundamental Global Inc. common stock following the closing of the transaction. |
1
Combined annual revenues were derived from the most recent four quarterly periods ended September 30, 2023, and combined total
assets were derived as of September 30, 2023, from the unaudited consolidated financial statements of FG Group Holdings and FG Financial,
as filed with the Securities and Exchange Commission.
Business
Post Combination:
|
● |
FG Reinsurance, Ltd. (“FGRe”): FGRe is a
licensed insurance company domiciled in the Cayman Islands that participates in the global reinsurance market through the Funds at Lloyds
syndicate, traditional reinsurance contracts and industry loss warranties. |
| |
|
|
| |
● |
Strong Global Entertainment Inc. (“Strong”): Strong is a leader in the entertainment
industry providing mission critical products and services to entertainment venues for over 90 years. |
| |
|
|
| |
● |
Merchant Banking and SPACs: FG Financial co-sponsors newly formed SPACs and other merchant banking interests and provides strategic,
administrative, and regulatory support services in exchange for both ownership and cash fees. |
| |
|
|
| |
● |
Asset Management: Asset Management consists of activities that generate net investment income
(loss), the management of third-party reinsurance capital and other future asset management activities. |
Governance
and Leadership:
The
Board of Directors of the combined company is expected to be comprised of seven members, consisting of Kyle Cerminara as the Chairman,
three members designated from the FG Group Holdings Board of Directors, and three members from the FG Financial Board of Directors.
|
● |
CEO: Kyle Cerminara will serve as CEO of Fundamental
Global Inc. |
| |
|
|
| |
● |
Merchant Banking and SPACs: Larry Swets and Hassan Baqar will lead Merchant Banking and SPACs. |
| |
|
|
| |
● |
Reinsurance: Tom Heise will continue to serve as CEO of FGRe. |
| |
|
|
| |
● |
Strong Global: Mark Roberson and Todd Major will continue to serve as CEO and CFO, respectively, of Strong. |
Additional
information about the transaction will be provided in a joint consent solicitation, information statement, and registration statement
on Form S-4 that will be filed by FG Group Holdings and FG Financial with the Securities and Exchange Commission (the “SEC”).
This
communication does not constitute an offer to sell or the solicitation of an offer to buy the securities of either FG Financial or FG
Group Holdings, nor does it constitute a solicitation of any vote or approval. The proposed merger described above will be submitted
to FG Group Holdings’ stockholders for their consideration and approval via written consent. In connection therewith, and the prior
approval by FG Financial’s stockholders holding a majority of the voting power of FG Financial, FG Financial and FG Group Holdings
plans to file relevant materials with the SEC, including a joint consent solicitation, information statement, and registration statement
on Form S-4 (the “Joint Registration and Information Statement”). Promptly after filing the Joint Registration and Information
Statement with the SEC, FG Group Holdings will mail the definitive Joint Registration and Information Statement to each stockholder entitled
to consent relating to the transaction. STOCKHOLDERS OF BOTH FG GROUP HOLDINGS AND FG FINANCIAL ARE URGED TO CAREFULLY READ THE JOINT
REGISTRATION AND INFORMATION STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO AND ANY DOCUMENTS INCORPORATED BY REFERENCE THEREIN)
AND ANY OTHER RELEVANT DOCUMENTS IN CONNECTION WITH THE TRANSACTION THAT ARE FILED WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY
WILL CONTAIN IMPORTANT INFORMATION ABOUT THE TRANSACTION AND THE PARTIES TO THE TRANSACTION. The Joint Registration and Information
Statement and other relevant materials in connection with the transaction (when they become available) and any other documents filed
by the Company with the SEC, may be obtained free of charge at the SEC’s website (www.sec.gov), at the FG Group Holdings’
website (https://fg.group/investor-relations/), and at FG Financial’s website (https://www.fgfinancial.com/). In addition, FG Group
Holdings security holders will be able to obtain free copies of the Joint Registration and Information Statement from FG Group Holdings
by contacting the FG Group Holdings’ Secretary at IR@FG.Group or investors@fundamentalglobal.com, and FG Financial security holders
will be able to obtain free copies of the Joint Registration and Information Statement from FG Financial by contacting FG Financial’s
Secretary at ir@fgfinancial.com or investors@fundamentalglobal.com.
Certain
Information Regarding Participants
FG
Group Holdings, FG Financial, and their respective directors, executive officers, and other members of management and employees may be
deemed, under SEC rules, to be participants in the solicitation of consents from FG Group Holdings’ stockholders in connection
with the proposed transaction. Information about the directors and executive officers of FG Group Holdings is set forth in its proxy
statement for the FG Group Holdings annual meeting of stockholders held on December 6, 2023, which was filed with the SEC on October
18, 2023. To the extent holdings of such directors and executive officers in FG Group Holdings’ securities are not reported, or
have changed since the amounts described in the proxy statement for FG Group Holdings’ annual meeting of stockholders, such changes
may be reflected on Initial Statements of Beneficial Ownership on Form 3 or Statements of Change in Ownership on Form 4 filed with the
SEC. Information about the directors and executive officers of FG Financial is set forth in its proxy statement for the FG Financial
annual meeting of stockholders held on December 6, 2023, which was filed with the SEC on November 1, 2023. To the extent holdings of
such directors and executive officers in FG Financial’s securities are not reported, or have changed since the amounts described
in the proxy statement for FG Financial’s annual meeting of stockholders, such changes may be reflected on Initial Statements of
Beneficial Ownership on Form 3 or Statements of Change in Ownership on Form 4 filed with the SEC. Other information regarding the participants
in the consent solicitations and a description of their direct and indirect interests, by security holdings or otherwise, will be contained
in the Joint Registration and Information Statement and other relevant materials to be filed with the SEC regarding the proposed transaction
when they become available.
About
FG Group Holdings Inc.
FG
Group Holdings Inc. (NYSE American: FGH) is a diversified holding company with operations and equity holdings across a broad range of
industries. The Company has a majority ownership in Strong Global Entertainment, Inc. (NYSE American: SGE), which includes STRONG/MDI
Screen Systems, Inc. (www.strongmdi.com), the leading premium screen and projection coatings supplier in the world and Strong Technical
Services, Inc. (www.strong-tech.com), which provides comprehensive managed service offerings with 24/7/365 support nationwide to ensure
solution uptime and availability. FG Group Holdings also holds equity stakes in GreenFirst Forest Products Inc., Firefly Systems, Inc.,
and FG Financial Group, Inc., as well as real estate through its Digital Ignition operating business.
About
FG Financial Group, Inc.
FG
Financial Group, Inc. (Nasdaq: FGF, FGFPP) is a reinsurance and asset management holding company focused on collateralized and loss capped
reinsurance and merchant banking. The Company’s principal business operations are conducted through its subsidiaries and affiliates.
The
FG® logo is a registered trademark of Fundamental Global®.
Forward-Looking
Statements
In
addition to the historical information included herein, this press release includes forward-looking statements, such as management’s
expectations regarding the timing and benefits of the proposed transaction, which involve a number of risks and uncertainties, including
but not limited to those discussed in the “Risk Factors” section contained in Item 1A in the FG Group Holdings’ Annual
Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 16, 2023, FG Financial’s Annual Report on
Form 10-K for the year ended December 31, 2022 filed with the SEC on March 24, 2023, and in the subsequent filings (including quarterly
reports on Form 10-Q) with the SEC by FG Group Holdings and FG Financial, and the following risks and uncertainties: the risk that the
cost savings and any revenue synergies from the proposed merger may not be fully realized or may take longer than anticipated to be realized;
disruption to the parties’ businesses as a result of the announcement and pendency of the proposed merger; the risk that the integration
of each party’s operations will be materially delayed or will be more costly or difficult than expected or that the parties are
otherwise unable to successfully integrate each party’s businesses into the other’s businesses; the failure to obtain the
necessary approvals of the FG Group Holdings stockholders; the amount of the costs, fees, expenses and charges related to the proposed
merger; reputational risk and the reaction of each company’s customers, suppliers, employees or other business partners to the
proposed merger; any unexpected delay in closing the proposed merger; the possibility that the proposed merger may be more expensive
to complete than anticipated, including as a result of unexpected factors or events; the dilution caused by FG Financial’s issuance
of additional shares of its Common Stock in the proposed merger; a material adverse change in the financial condition of either company;
general competitive, economic, political and market conditions; major catastrophes such as earthquakes, floods or other natural or human
disasters, including pandemics and infectious disease outbreaks, and any related disruption to local, regional and global economic activity
and financial markets, and the impact of the foregoing on either company, or the ability to complete the proposed merger, or any of the
other risks described herein or in the parties’ SEC filings; the outcome of any legal proceedings that may be instituted against
either company, related to the proposed merger or otherwise; other factors that may affect future results of the companies during the
pendency of the proposed merger or of the combined company post-merger, including changes in asset quality and credit risk; the inability
to sustain revenue and earnings growth; changes in interest rates and capital markets; inflation; the impact, extent and timing of technological
changes; capital management activities; and actions of the Federal Reserve Board and legislative and regulatory actions and reforms.
Given the risks and uncertainties, readers should not place undue reliance on any forward-looking statement and should recognize that
the statements are predictions of future results which may not occur as anticipated. Actual results could differ materially from those
anticipated in the forward-looking statements and from historical results, due to the risks and uncertainties described herein, as well
as others not now anticipated. New risk factors emerge from time to time and it is not possible for management to predict all such risk
factors, nor can it assess the impact of all such factors on our business or the extent to which any factor, or combination of factors,
may cause actual results to differ materially from those contained in any forward-looking statements. Except where required by law, neither
FG Group Holdings nor FG Financial assumes an obligation to update forward-looking statements to reflect actual results or changes in
factors or assumptions affecting such forward-looking statements.
Investor
Contact:
investors@fundamentalglobal.com
v3.23.4
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-Section 12
-Subsection b-2
| Name: |
dei_EntityCentralIndexKey |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:centralIndexKeyItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionIndicate if registrant meets the emerging growth company criteria. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
| Name: |
dei_EntityEmergingGrowthCompany |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionCommission file number. The field allows up to 17 characters. The prefix may contain 1-3 digits, the sequence number may contain 1-8 digits, the optional suffix may contain 1-4 characters, and the fields are separated with a hyphen.
| Name: |
dei_EntityFileNumber |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:fileNumberItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionTwo-character EDGAR code representing the state or country of incorporation.
| Name: |
dei_EntityIncorporationStateCountryCode |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:edgarStateCountryItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionThe exact name of the entity filing the report as specified in its charter, which is required by forms filed with the SEC. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
| Name: |
dei_EntityRegistrantName |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionThe Tax Identification Number (TIN), also known as an Employer Identification Number (EIN), is a unique 9-digit value assigned by the IRS. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
| Name: |
dei_EntityTaxIdentificationNumber |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:employerIdItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionLocal phone number for entity.
| Name: |
dei_LocalPhoneNumber |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 13e
-Subsection 4c
| Name: |
dei_PreCommencementIssuerTenderOffer |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 14d
-Subsection 2b
| Name: |
dei_PreCommencementTenderOffer |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionTitle of a 12(b) registered security. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b
| Name: |
dei_Security12bTitle |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:securityTitleItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionName of the Exchange on which a security is registered. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection d1-1
| Name: |
dei_SecurityExchangeName |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:edgarExchangeCodeItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as soliciting material pursuant to Rule 14a-12 under the Exchange Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Section 14a
-Number 240
-Subsection 12
| Name: |
dei_SolicitingMaterial |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionTrading symbol of an instrument as listed on an exchange.
| Name: |
dei_TradingSymbol |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:tradingSymbolItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as written communications pursuant to Rule 425 under the Securities Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Securities Act
-Number 230
-Section 425
| Name: |
dei_WrittenCommunications |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
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