FGH FG Group Holdings Inc

 

 

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

 

February 29, 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. ☐

 

 

 

INTRODUCTORY NOTE

 

On February 29, 2024, FG Financial Group, Inc., a Nevada corporation (“FGF”), and FG Group Holdings Inc., a Nevada corporation (the “Company” or “FGH”), completed the previously announced merger transaction pursuant to the Plan of Merger, dated as of January 3, 2024 (the “Merger Agreement”), by and among the Company, FGF and FG Group LLC, a Nevada limited liability company and wholly owned subsidiary of FGF (the “Merger Sub”). Pursuant to the terms of the Merger Agreement and in accordance with the Nevada Revised Statutes, the Company merged with and into the Merger Sub (the “Merger”), with the Merger Sub as the surviving entity and wholly owned subsidiary of FGF. Following the Merger, FGF changed its name to Fundamental Global Inc.

 

Item 2.01

Completion of Acquisition or Disposition of Assets.

 

The information set forth in the Introductory Note above is incorporated herein by reference.

 

In the Merger, each share of common stock, par value $0.01 per share, of the Company (the “FGH Common Stock”) that was issued and outstanding immediately prior to the effective time of the Merger (the “Effective Time”) was converted into one (the “Exchange Ratio”) share of common stock, par value $0.001 per share, of FGF (the “FGF Common Stock”).

 

In addition, pursuant to the terms of the Merger Agreement, at the Effective Time:

 

	●	each outstanding option to purchase shares of FGH Common Stock (each, an “Existing Rollover Stock Option”) automatically converted into an option to acquire the number of shares of FGF Common Stock (rounded down to the nearest whole share) equal to the product obtained by multiplying (i) the number of shares subject to the Existing Rollover Stock Option immediately prior to the Effective Time, by (ii) the Exchange Ratio, with such option having an exercise price per share of FGF Common Stock equal to the quotient (rounded up to the nearest whole cent) obtained by dividing (x) the exercise price per share of FGH Common Stock of such Existing Rollover Stock Option in effect immediately prior to the Effective Time by (y) the Exchange Ratio; and
	●	each outstanding restricted share unit of FGH (each, an “FGH RSU”) automatically converted into and became rights with respect to FGF Common Stock, and FGF assumed the FGH 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 FGH RSU is evidenced), except that from and after the Effective Time, (i) FGF and the compensation committee of the board of directors of FGF, respectively, were substituted for FGH and the compensation committee of the board of directors of FGH (the “FGH Board”) administering FGH’s 2017 Omnibus Equity Compensation Plan (the “FGH Stock Plan”), (ii) the FGH RSUs assumed by FGF represent the right to receive FGF Common Stock upon settlement of such FGH 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 FGF Common Stock subject to each award of FGH RSUs assumed by FGF is equal to the number of shares of FGH 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 will any vesting restrictions applicable to an FGH RSU be accelerated unless so provided under the terms of such FGH RSU or the FGH Stock Plan).

 

The Company’s consent solicitation statement, filed with the Securities and Exchange Commission (“SEC”) on January 29, 2024, contains a description of certain relationships and related transactions in the section entitled “The Merger – Interests of FGH’s Directors and Executive Officers in the Merger” beginning on page 46 and a description of the evaluation of the Exchange Ratio in the section entitled “The Merger – Background of the Merger” beginning on page 31 and “– FGH’s Reasons for the Merger; Recommendation of the FGH Board” beginning on page 33, which descriptions are incorporated herein by reference.

 

The foregoing descriptions of the Merger and the Merger Agreement do not purport to be complete and are qualified in their entirety by reference to the full text of the Merger Agreement, a copy of which was filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K, filed with the SEC on January 4, 2024, which is incorporated herein by reference.

 

 

Item 3.01

Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.

 

Following the consummation of the Merger on February 29, 2024, the Company notified NYSE American that the Merger had been consummated and requested that NYSE American suspend trading of shares of FGH Common Stock effective prior to the opening of the market on March 1, 2024, and that the listing of the shares of FGH Common Stock be withdrawn. In addition, the Company requested that NYSE American file with the SEC a notification on Form 25 to report the delisting of shares of FGH Common Stock from NYSE American and to deregister the shares under Section 12(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

 

The Company also intends to file with the SEC a certification on Form 15 requesting the deregistration of the FGH Common Stock under Section 12(g) of the Exchange Act and the suspension of the Company’s obligations under Sections 13 and 15(d) of the Exchange Act.

 

Item 3.03

Material Modification to Rights of Security Holders.

 

The information set forth in the Introductory Note and Items 2.01, 3.01 and 5.01 is incorporated herein by reference.

 

Item 5.01

Changes in Control of Registrant.

 

The information set forth in the Introductory Note and Item 2.01 is incorporated herein by reference.

 

Item 5.07

Submission of Matters to a Vote of Security Holders.

 

On January 31, 2024, the Company commenced a solicitation of written consents from the holders of outstanding shares of FGH Common Stock as of the record date of January 3, 2024 to adopt and approve the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement. The target final date for receipt of written consents was February 23, 2024. The results of the consent solicitation are set forth below:

 

For		Withhold Consent		Abstain
12,438,862		11,220		9,349

 

As of February 23, 2024, the Company received affirmative consents from the holders of FGH Common Stock holding an aggregate of 12,438,862, or 63.2% of, shares of FGH Common Stock, representing a majority of the Company’s outstanding shares of voting capital stock, which was sufficient to approve the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement.

 

Item 7.01

Regulation FD Disclosure.

 

On February 29, 2024, the Company and FGF issued a joint press release in connection with the completion of the 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 SEC and shall not be deemed “filed” for purposes of Section 18 of 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.

 

Exhibit No.		Description
2.1†		Plan of Merger by and between FG Financial Group, Inc., FG Group Holdings Inc. and FG Group LLC, dated January 3, 2024 (incorporated by reference to Exhibit 2.1 to FG Group Holdings Inc.’s Current Report on Form 8-K filed with the SEC on January 4, 2024).
99.1		Joint Press Release of Fundamental Global Inc. and FG Group Holdings Inc., dated February 29, 2024.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

† 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.

 

 

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: February 29, 2024	By:	/s/ Todd R. Major
		Todd R. Major
		Chief Financial Officer

 

 

 

Exhibit 99.1

 

 

FG Financial Group, Inc. and FG Group Holdings Inc. Complete Merger

 

FG Financial Group, Inc. Renamed to Fundamental Global Inc.

New Leadership and Governance Structure in Place

 

Mooresville, NC – February 29, 2024 – FG Financial Group, Inc. (Nasdaq: FGF, FGFPP) (“FG Financial”) and FG Group Holdings Inc. (“FG Group Holdings”) today announced that they have completed the previously announced merger pursuant to which FG Group Holdings merged with and into FG Group LLC, with FG Group LLC surviving as a wholly-owned subsidiary of FG Financial. In connection with the merger, FG Group Holdings’ stockholders received one share of FG Financial common stock in exchange for each share of FG Group Holdings common stock. Following the merger, FG Financial changed its name to Fundamental Global Inc. (“Fundamental Global” or the “Company”). The Company’s common stock and Series A cumulative preferred stock will continue to trade on the Nasdaq under the tickers “FGF” and “FGFPP,” respectively.

 

D. Kyle Cerminara, Chairman and CEO of Fundamental Global, commented, “We are pleased to announce the completion of the merger and the resulting creation of Fundamental Global Inc. as a unified public company. Our goal is to consolidate and simplify all of our operations, reduce public company costs and focus our efforts on a few highly scalable and high ROIC businesses. FG Group Holdings shareholders were resoundingly in favor of this transaction, with 99.9% of the consents returned voting in favor of the plan of merger. We look forward to implementing our plans with a focus on shareholder returns.”

 

Business Post Combination:

 

With the completion of the merger, Fundamental Global operates in the following primary lines of business:

 

	●	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 Global”): Strong Global is a leader in the entertainment industry providing mission critical products and services to entertainment venues for over 90 years.
	●	Merchant Banking and SPACs: Fundamental Global 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:

 

Following the merger, the Board of Directors of Fundamental Global consists of seven members, with Mr. Cerminara serving as chair, along with three legacy FG Financial directors, Richard E. Govignon, Jr., Rita Hayes, and Scott D. Wollney, and three legacy FG Group Holdings directors, Michael C. Mitchell, Ndamukong Suh, and Robert J. Roschman, all of whom are expected to serve until the next annual meeting of stockholders of Fundamental Global.

 

The management team is as follows:

 

	●	CEO: D. Kyle Cerminara
	●	CFO: Mark D. Roberson
	●	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 Global.

 

 

About Fundamental Global Inc.

 

Fundamental Global Inc. (Nasdaq: FGF, FGFPP) and its subsidiaries engage in diverse business activities including reinsurance, asset management, merchant banking, manufacturing and managed services.

 

The FG® logo and Fundamental Global® are registered trademarks of Fundamental Global LLC.

 

Forward-Looking Statements

 

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements are therefore entitled to the protection of the safe harbor provisions of these laws. These statements may be identified by the use of forward-looking terminology such as “anticipate,” “believe,” “budget,” “can,” “contemplate,” “continue,” “could,” “envision,” “estimate,” “expect,” “evaluate,” “forecast,” “goal,” “guidance,” “indicate,” “intend,” “likely,” “may,” “might,” “outlook,” “plan,” “possibly,” “potential,” “predict,” “probable,” “probably,” “pro-forma,” “project,” “seek,” “should,” “target,” “view,” “will,” “would,” “will be,” “will continue,” “will likely result” or the negative thereof or other variations thereon or comparable terminology. In particular, discussions and statements regarding the Company’s future business plans and initiatives are forward-looking in nature. We have based these forward-looking statements on our current expectations, assumptions, estimates, and projections. While we believe these to be reasonable, such forward-looking statements are only predictions and involve a number of risks and uncertainties, many of which are beyond our control. These and other important factors may cause our actual results, performance, or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements, and may impact our ability to implement and execute on our future business plans and initiatives. Management cautions that the forward-looking statements in this release are not guarantees of future performance, and we cannot assume that such statements will be realized or the forward-looking events and circumstances will occur. Factors that might cause such a difference include, without limitation: risks associated with our inability to identify and realize business opportunities, and the undertaking of any new such opportunities; our lack of operating history or established reputation in the reinsurance industry; our inability to obtain or maintain the necessary approvals to operate reinsurance subsidiaries; risks associated with operating in the reinsurance industry, including inadequately priced insured risks, credit risk associated with brokers we may do business with, and inadequate retrocessional coverage; our inability to execute on our investment and investment management strategy, including our strategy to invest in the risk capital of special purpose acquisition companies (SPACs); our ability to maintain and expand our revenue streams to compensate for the lower demand for our digital cinema products and installation services; potential interruptions of supplier relationships or higher prices charged by suppliers in connection with our Strong Global business; our ability to successfully compete and introduce enhancements and new features that achieve market acceptance and that keep pace with technological developments; our ability to maintain Strong Global’s brand and reputation and retain or replace its significant customers; challenges associated with Strong Global’s long sales cycles; the impact of a challenging global economic environment or a downturn in the markets; the effects of economic, public health, and political conditions that impact business and consumer confidence and spending, including rising interest rates, periods of heightened inflation and market instability; potential loss of value of investments; risk of becoming an investment company; fluctuations in our short-term results as we implement our new business strategy; risks of being unable to attract and retain qualified management and personnel to implement and execute on our business and growth strategy; failure of our information technology systems, data breaches and cyber-attacks; our ability to establish and maintain an effective system of internal controls; our limited operating history as a public company; the requirements of being a public company and losing our status as a smaller reporting company or becoming an accelerated filer; any potential conflicts of interest between us and our controlling stockholders and different interests of controlling stockholders; potential conflicts of interest between us and our directors and executive officers; risks associated with our related party transactions and investments; and risks associated with our investments in SPACs, including the failure of any such SPAC to complete its initial business combination. Our expectations and future plans and initiatives may not be realized. If one of these risks or uncertainties materializes, or if our underlying assumptions prove incorrect, actual results may vary materially from those expected, estimated or projected. You are cautioned not to place undue reliance on forward-looking statements. The forward-looking statements are made only as of the date hereof and do not necessarily reflect our outlook at any other point in time. We do not undertake and specifically decline any obligation to update any such statements or to publicly announce the results of any revisions to any such statements to reflect new information, future events or developments.

 

Investor Contact:

 

investors@fundamentalglobal.com

 

 

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Cover	Feb. 29, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Feb. 29, 2024
Entity File Number	1-13906
Entity Registrant Name	FG GROUP HOLDINGS INC.
Entity Central Index Key	0000946454
Entity Tax Identification Number	47-0587703
Entity Incorporation, State or Country Code	NV
Entity Address, Address Line One	5960 Fairview Road
Entity Address, Address Line Two	Suite 275
Entity Address, City or Town	Charlotte
Entity Address, State or Province	NC
Entity Address, Postal Zip Code	28210
City Area Code	(704)
Local Phone Number	994-8279
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $0.01 par value
Trading Symbol	FGH
Security Exchange Name	NYSEAMER
Entity Emerging Growth Company	false

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