| Filed
Pursuant to Rule 424(b)(5) |
Registration
No. 333-253285 |
The
information in this preliminary prospectus supplement, relating to an effective registration statement under the Securities Act of 1933,
as amended, is not complete and may be changed. This preliminary prospectus supplement and the accompanying prospectus are not an offer
to sell these securities and we are not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not
permitted.
| PRELIMINARY
PROSPECTUS SUPPLEMENT |
SUBJECT
TO COMPLETION |
DATED
MAY 26, 2023 |
(to
Prospectus Dated April 9, 2021)
Shares
of Common Stock
FG
Financial Group, Inc.
We
are offering shares of our common stock, par value $0.001 per share, at an offering price
of $ per share, pursuant to this prospectus supplement and the accompanying base
prospectus.
Our
common stock is traded on The Nasdaq Global Market, or Nasdaq, under the symbol “FGF.” On May 25,
2023, the last reported sale price of our common stock was $2.24 per
share.
As
of the date of this prospectus supplement, the aggregate market value of our outstanding common stock held by non-affiliates, or our
public float, was approximately $9,778,250 based on 3,621,574 outstanding shares of common stock held by non-affiliates and a per share
price of $2.70, the closing price of our common stock on March 30, 2023, which is the highest closing sale price of our common stock
within the prior 60 days. We have sold $73,974.79 of securities pursuant to General Instruction I.B.6. of Form S-3 during the prior 12
calendar month period that ends on and includes the date of this prospectus supplement. We are thus currently eligible to offer and sell
up to an aggregate of approximately $3,185,441 of our common stock pursuant to General Instruction I.B.6 of Form S-3.
We
are a smaller reporting company under Rule 405 of the Securities Act and, as such, have elected to comply with certain reduced public
company reporting requirements for this prospectus supplement, the accompanying base prospectus and the documents incorporated by reference
herein and therein and future filings.
INVESTING
IN OUR SECURITIES INVOLVES A VERY HIGH DEGREE OF RISK. YOU SHOULD REVIEW CAREFULLY THE RISKS DESCRIBED IN “RISK
FACTORS” BEGINNING ON PAGE S- OF THIS PROSPECTUS
SUPPLEMENT AND INFORMATION INCLUDED AND INCORPORATED BY REFERENCE, INCLUDING, BUT NOT LIMITED TO, THE RISK FACTORS SPECIFIED IN OUR MOST
RECENT ANNUAL REPORT ON FORM 10-K BEFORE INVESTING IN OUR SECURITIES.
Neither
the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined
if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
| | |
Per Share | | |
Total | |
| Public offering price | |
$ | | | |
$ | | |
| Underwriting
discount and commissions(1) | |
$ | | | |
$ | | |
| Proceeds, before expenses, to us | |
$ | | | |
$ | | |
| (1) |
We
refer you to “Underwriting” beginning on page S- for additional information regarding underwriters’
compensation. |
We
have granted a 45-day option to the representative of the underwriters to purchase up to
additional shares of common stock solely to cover over-allotments, if any.
The
underwriters expect to deliver the shares to purchasers on or about , 2023.
ThinkEquity
The
date of this prospectus supplement is , 2023
Table
of Contents
Prospectus
Supplement
Prospectus
ABOUT
THIS PROSPECTUS SUPPLEMENT
This
prospectus supplement and the accompanying base prospectus relate to the offering of shares of our common stock. Before purchasing any
shares of our common stock offered hereby, you should carefully read both this prospectus supplement and the accompanying base prospectus,
together with the additional information described under the headings, “Where You Can Find More Information” and “Incorporation
by Reference.”
On
February 19, 2021, we filed with the U.S. Securities and Exchange Commission (the SEC) a registration statement on Form S-3, which was
amended on March 24, 2021 (File No. 333-253285), utilizing a shelf registration process relating to the securities described in this
prospectus supplement, which registration statement became effective on April 9, 2021. Under the shelf registration process, we may offer
and sell any combination of securities described in the accompanying prospectus in one or more offerings. The purpose of this prospectus
supplement is to provide supplemental information regarding us in connection with this offering of common stock.
This
document is in two parts. The first part is this prospectus supplement, which describes the specific terms of this offering of common
stock and also adds to and updates information contained in the accompanying base prospectus and the documents incorporated by reference
into the base prospectus and this prospectus supplement. The second part, the accompanying base prospectus dated April 9, 2021, including
the documents incorporated by reference therein, gives more general information, some of which does not apply to this offering. Generally,
when we refer to this prospectus, we are referring to both parts of this document combined.
If
the description of the offering varies between this prospectus supplement and the accompanying base prospectus, you should rely on the
information contained in this prospectus supplement. However, if any statement in one of these documents is inconsistent with a statement
in another document having a later date — for example, a document incorporated by reference — the statement in the document
having the later date modifies or supersedes the earlier statement. In particular, with respect to any information contained in this
prospectus supplement, on the one hand, and information in the accompanying base prospectus or documents incorporated by reference, on
the other hand, the information in this prospectus supplement shall control.
We
further note that the representations, warranties and covenants made by us in any agreement that is filed as an exhibit to any document
that is incorporated by reference in this prospectus supplement or the accompanying base prospectus were made solely for the benefit
of the parties to such agreement, including, in some cases, for the purpose of allocating risk among the parties to such agreements,
and should not be deemed to be a representation, warranty or covenant to you. Moreover, such representations, warranties or covenants
were accurate only as of the date when made. Accordingly, such representations, warranties and covenants should not be relied on as accurately
representing the current state of our affairs.
Neither
we nor the underwriter have authorized any other person to provide you with any information or to make any representations other than
those contained in this prospectus supplement or the accompanying base prospectus. We take no responsibility for, and can provide no
assurance as to the reliability of, any other information that others may give you. We will not make an offer to sell these securities
in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus supplement
and the accompanying base prospectus is accurate only as of the date on its cover and that any information incorporated by reference
is accurate only as of the date of the document incorporated by reference, unless we indicate otherwise. Our business, financial condition,
results of operations and prospects may have changed since those dates. This prospectus supplement and the accompanying base prospectus
incorporate by reference market data and industry statistics and forecasts that are based on independent industry publications and other
publicly available information. Although we believe these sources are reliable, we do not guarantee the accuracy or completeness of this
information and we have not independently verified this information. In addition, the market and industry data and forecasts that may
be included or incorporated by reference in this prospectus supplement, or the accompanying base prospectus may involve estimates, assumptions
and other risks and uncertainties and are subject to change based on various factors, including those discussed under the heading “Risk
Factors” contained in this prospectus supplement and the accompanying base prospectus and under similar headings in other documents
that are incorporated by reference into this prospectus supplement or the accompanying base prospectus. Accordingly, investors should
not place undue reliance on this information.
Unless
otherwise expressly indicated or the context otherwise requires, we use the terms “FG Financial Group, Inc.,” the “Company,”
“we,” “us,” “our” or similar references to refer to FG Financial Group, Inc., a Nevada corporation,
together with its consolidated subsidiaries.
SUMMARY
This
summary description about us and our business highlights selected information contained elsewhere in this prospectus supplement and the
accompanying base prospectus or incorporated by reference into this prospectus supplement and the accompanying base prospectus. It does
not contain all the information you should consider before investing in our securities. Important information is incorporated by reference
into this prospectus. To understand this offering fully, you should read carefully this prospectus supplement and the accompanying base
prospectus and the documents incorporated by reference in their entirety, including “Risk Factors” included in this prospectus
and incorporated by reference, “Cautionary Statement Regarding Forward-Looking Statements,” and “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” and the financial statements and the notes to those financial
statements incorporated by reference in this prospectus supplement and the accompanying base prospectus, together with the additional
information described under “Incorporation by Reference.”
Overview
FG
Financial Group, Inc. is a reinsurance, merchant banking and asset management holding company. We focus on opportunistic collateralized
and loss capped reinsurance, while allocating capital in partnership with Fundamental Global®, and from time to time,
other strategic investors, to merchant banking activities. The Company’s principal business operations are conducted through its
subsidiaries and affiliates. The Company also provides asset management services. From our inception in October 2012 through December
2019, we operated as an insurance holding company, writing property and casualty insurance throughout the states of Louisiana, Florida,
and Texas. On December 2, 2019, we sold our three former insurance subsidiaries, and embarked upon our current strategy focused on reinsurance,
merchant banking and asset management.
As
of the date of this prospectus supplement, Fundamental Global GP, LLC (“FG”), a private partnership focused on long-term
strategic holdings, and its affiliated entity, collectively beneficially owns approximately 60.0% of our common stock. D. Kyle Cerminara,
Chairman of our Board of Directors, serves as Chief Executive Officer, Co-Founder and Partner of FG.
Reincorporation
Effective
at 5:01 p.m. ET on December 9, 2022, the Company completed its reincorporation from a Delaware corporation to a Nevada corporation (the
“Reincorporation”). The Reincorporation was accomplished by means of a merger by and between the Company and its former wholly
owned subsidiary FG Financial Group, Inc., a Nevada corporation. As of December 9, 2022, the rights of the Company’s stockholders
began to be governed by the Nevada corporation laws, our Amended and Restated Nevada Articles of Incorporation and our Nevada Bylaws.
The Reincorporation was approved by the Company’s stockholders at a special meeting held on December 6, 2022.
Other
than the change in the state of incorporation, the Reincorporation did not result in any change in the business, physical location, management,
assets, liabilities or net worth of the Company, nor did it result in any change in location of the Company’s employees, including
the Company’s management.
The
Reincorporation did not alter any stockholder’s percentage ownership interest or number of shares owned in the Company and the
Company’s common stock continues to be quoted on the Nasdaq Global Market under the same symbol “FGF” and the 8.00%
Cumulative Preferred Stock, Series A of the Company continues to be quoted on the Nasdaq Global Market under the same symbol, “FGFPP.”
Sale
of the Insurance Business
On
December 2, 2019, we completed the sale of our insurance subsidiaries to FedNat Holding Company for a combination of cash and FedNat
common stock (the “Asset Sale”). The Company sold the remaining FedNat common stock shares held in October 2022.
Current
Business
Our
strategy has evolved to focus on opportunistic collateralized and loss-capped reinsurance, with capital allocation to merchant banking
activities with asymmetrical risk/reward opportunities. As part of our refined focus, we have adopted the following capital allocation
philosophy:
“Grow
intrinsic value per share with a long-term focus using fundamental research, allocating capital to
asymmetric risk/reward opportunities.”
Currently,
the business operates as a diversified holding company of insurance, reinsurance, asset management, our Special Purpose Acquisition Corporation
(“SPAC”) Platform businesses, and merchant banking division.
Insurance
Sponsor
Protection Coverage and Risk, Inc. is being formed as a special purpose captive in South Carolina to provide reinsurance coverage for
Sides A, B, & C Directors and Officers Liability insurance coverage for related and unrelated entities of Fundamental Global Reinsurance
Ltd. (“FGRe”). These will include SPAC entities engaged in the services or business of taking companies public, as well as
small cap businesses performing an initial public offering.
Reinsurance
The
Company’s wholly owned reinsurance subsidiary, FGRe, a Cayman Islands limited liability company, provides specialty property and
casualty reinsurance. FGRe has been granted a Class B (iii) insurer license in accordance with the terms of The Insurance Act (as revised)
of the Cayman Islands and underlying regulations thereto and is subject to regulation by the Cayman Islands Monetary Authority (the “Authority”).
The terms of the license require advance approval from the Authority should FGRe wish to enter into any reinsurance agreements which
are not fully collateralized. FGRe participates in a Funds at Lloyds (“FAL”) syndicate covering risks written by the syndicate
during the 2021 and 2022 calendar years, and on December 10, 2022 agreed to cover risks written by the syndicate during the calendar
year 2023. On April 1, 2021, FGRe entered its second reinsurance contract with a leading insurtech company that provides automotive insurance
utilizing driver monitoring to predictively segment and price drivers. The Company added a second agreement with the automotive insurance
provider as of April 1, 2022. Beginning January 1, 2022, FGRe participates in a quota share reinsurance contract with a startup homeowners’
insurance company. On April 1, 2022, FGRe entered a homeowners’ property catastrophe excess of loss reinsurance contract with a
specialty insurance company covering loss occurrences from named tropical storms arising out of the Atlantic. On July 1, 2022, FGRe entered
a contract with a specialty insurance company that provides hired and non-owned automotive insurance. These agreements limit exposure
by loss-caps stipulated within the reinsurance contracts.
Asset
Management
FG
Strategic Consulting, LLC (“FGSC”), a wholly-owned subsidiary of the Company, provides investment advisory services, including
identifying, analyzing and recommending potential investments, advising as to existing investments and investment optimization, recommending
investment dispositions, and providing advice regarding macro-economic conditions.
SPAC
Platform
On
December 21, 2020, we formed FG Management Solutions LLC (“FGMS”), formerly known as FG SPAC Solutions, LLC, a Delaware company,
to facilitate the launch of our “SPAC Platform”. Under the SPAC Platform, we provide various strategic, administrative, and
regulatory support services to newly formed SPACs for a monthly fee. Additionally, the Company co-founded a partnership, FG Merchant
Partners, LP (“FGMP”), formerly known as FG SPAC Partners, LP, to participate as a co-sponsor for newly formed SPACs. The
Company also participates in the risk capital investments associated with the launch of such SPACs through its Asset Management business,
specifically FG Special Situations Fund, LP (“Fund”). As discussed in Note 4 to the financial statements included in our
Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, the Company had consolidated the results of the Fund through
November 30, 2021; however, effective December 1, 2021, the Company began accounting for its investment in the Fund under the equity
method. The first transaction entered under the SPAC Platform occurred on January 11, 2021, by and among FGMS and Aldel Investors, LLC,
the sponsor of Aldel Financial, Inc. (“Aldel”), a special purpose acquisition company which completed its business combination
with Hagerty (NYSE: HGTY) on December 2, 2021. Under the services agreement between FGMS and Aldel Investors, LLC (the “Agreement”),
FGMS provided accounting, regulatory, strategic advisory, and other administrative services to Aldel, which included assistance with
negotiations with potential merger targets for the SPAC as well as assistance with the de-SPAC process.
In
March and April 2022, the Company continued to build upon its SPAC Platform strategy. On March 3, 2022, FG Merger Corp. (“FG Merger”)
(Nasdaq: FGMCU) announced the closing of an $80.5 million IPO in the United States, including the exercise of the over-allotment option
granted to the underwriters in the offering. Similarly, on April 5, 2022, FG Acquisition Corp. (“FG Acquisition”) (TSX:FGAA.V),
announced the closing of a $115 million IPO in Canada, including the exercise of the over-allotment option granted to the underwriters
in the offering. The Company participated in the risk capital associated with the launch of the SPACs through its asset management business,
specifically FG Special Situations Fund, LP. Mr. Cerminara, our Chairman, Larry G. Swets, Jr., our Director and Chief Executive Officer,
and Hassan R. Baqar, our Executive Vice President and Chief Financial Officer, also hold financial interests in the SPACs and/or their
sponsor companies. Additionally, Messrs. Cerminara, Swets, and Baqar are managers of the sponsor companies of FG Merger and FG Acquisition.
Mr. Swets serves as Chairman of FG Merger, while Messrs. Baqar and Cerminara serve as Director and Senior Advisor of FG Merger, respectively.
Mr. Swets serves as Chief Executive Officer and Director of FG Acquisition. Mr. Baqar serves as Chief Financial Officer, Secretary and
Director of FG Acquisition. Mr. Cerminara serves as Chairman of FG Acquisition.
In
the aggregate, the Company’s indirect exposure to FG Merger represents potential beneficial ownership of approximately 820,000
shares of FG Merger’s common stock, approximately 989,000 warrants with an $11.50 exercise price and 5-year expiration, and approximately
85,000 warrants with a $15.00 exercise price and 10-year expiration. The Company has invested approximately $2.6 million in FG Merger.
In addition, the Company may invest up to $805,000 in a promissory note in connection with the extension of business combination
period of FG Merger.
The
Company’s indirect exposure in FG Acquisition through its subsidiaries represents potential beneficial ownership of approximately
819,000 shares of FG Acquisition’s common stock, approximately 1,400,000 warrants with an $11.50 exercise price and 5-year expiration
(the “FGAC Warrants”), approximately 440,000 warrants with a $15 exercise price and 10-year expiration, and either (i) up
to approximately an additional 1,600,000 FGAC Warrants, or (ii) up to approximately $2 million in cash, or (iii) a pro-rata combination
of such FGAC Warrants and cash, based on certain adjustment provisions and the level of redemptions of FG Acquisition’s publicly
traded warrants at the time of a business combination. The Company has invested approximately $3.4 million in FG Acquisition through
its subsidiaries.
Merchant
Banking
In
Q3 2022, the Company announced the expansion of its growth strategy through the formation of a merchant banking division. The Company
invested $2.0 million into its first project launched under the platform, FG Communities, Inc (“FGC”). FGC is a self-managed
real estate company focused on a growing portfolio of manufactured housing communities which are owned and operated by FGC. As discussed
further in Note 4 to the financial statements included in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023,
the Company will hold this investment at cost, subject to any adjustment from time to time due to impairment or observable price
changes in orderly transactions.
Recent
Developments
On
November 3, 2022, the Company entered into a Sales Agreement with ThinkEquity LLC, pursuant to which the Company was able to offer and
sell, from time to time through ThinkEquity LLC, as its agent, shares of the Company’s common stock, having an aggregate
offering price of up to $2,575,976, subject to the terms and conditions of the Sales Agreement. Under the Sales Agreement, the ThinkEquity
LLC was able to sell the shares in sales deemed to be an “at-the-market offering” as defined in Rule 415(a)(4) promulgated
under the Securities Act of 1933, as amended. The Company filed a prospectus supplement dated November 3, 2022 to its registration statement
on Form S-3 in connection with the “at-the-market offering”. Through May[ __], 2023, the Company sold an aggregate of $73,974.79
of common stock pursuant to the “at-the-market offering. On May [__], 2023, the Company and ThinkEquity LLC terminated the Sales
Agreement and the related “at-the-market offering”. The Company filed a supplement dated May[ __], 2023 to the November
3, 2023 prospectus supplement with respect to the termination of the “at-the-market offering”.
Corporate
Information
We
are a Nevada corporation. Our principal executive offices are located at 104 S. Walnut Street, Unit 1A, Itasca, IL 60143, and our telephone
number at this address is (847) 773-1665. Our website is www.fgfinancial.com. Information contained on, or that may be accessible
through, our website is not a part of, and is not incorporated into, this prospectus supplement and the accompanying base prospectus.
THE
OFFERING
| Shares
of Common Stock Offered |
|
shares of common stock |
| |
|
|
| Public
Offering Price |
|
$
per share of common stock. |
| |
|
|
| Shares
of Common Stock Outstanding Prior to this Offering |
|
9,438,739
shares of common stock |
| |
|
|
| Shares
of Common Stock Outstanding Following this Offering |
|
shares of common stock. |
| |
|
|
| Use
of Proceeds |
|
We
currently intend to use the net proceeds that we receive from this offering for general corporate purposes and working capital.
See “Use of Proceeds” for additional information. |
| |
|
|
| Nasdaq
Global Market Ticker Symbol |
|
Our
common stock is listed on The Nasdaq Global Market under the symbol “FGF.” |
| |
|
|
| Risk
Factors |
|
An
investment in our common stock involves a high degree of risk. See the section entitled “Risk Factors” included in this
prospectus supplement, the accompanying base prospectus and our Annual Report on Form 10-K for the fiscal year ended December 31,
2022, incorporated by reference herein, and any other risk factors described in the documents incorporated by reference herein, for
a discussion of certain factors to consider carefully before deciding to invest in our common stock. |
The
number of shares of our common stock to be outstanding after this offering is based on 9,438,739 shares of our common stock outstanding
as of the date of this prospectus supplement, excludes the following:
| |
● |
130,000
shares of common stock issuable upon exercise of options to purchase shares of common stock outstanding as of the date of this prospectus,
with a weighted-average exercise price of $3.38 per share |
| |
|
|
| |
● |
670,303
shares of common stock reserved for future issuance
as of the date of this prospectus under our amended and restated 2014 equity incentive plan, our 2018 equity incentive plan, our
2021 equity incentive plan, and our 2023 employee stock purchase plan; and |
| |
|
|
| |
● |
370,000
restricted stock units issuable to our Chief
Executive Officer pursuant to an Equity Award Letter Agreement entered into on January 18, 2021, between us and the Company’s
Chief Executive Officer, Mr. Swets. |
| |
|
|
| |
● |
25,000
shares of restricted common stock reserved for issuance (but not yet issued) under
our 2021 equity incentive plan to an executive officer of FG Re Solutions Ltd, our wholly owned subsidiary. |
Unless
otherwise indicated, this prospectus supplement reflects and assumes no exercise of outstanding options.
CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus supplement, the accompanying base prospectus and the documents incorporated by reference herein may contain forward-looking
statements regarding the Company and represents our expectations and beliefs concerning future events that are, or may be considered
to be, “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the “Securities
Act,” and Section 21E of the Securities Exchange Act of 1934, as amended, or the “Exchange Act.” These forward-looking
statements are intended to be covered by the safe harbor for forward-looking statements provided by the Private Securities Litigation
Reform Act of 1995. The forward-looking statements included herein or incorporated herein by reference include or may include, but are
not limited to, (and you should read carefully) statements that are predictive in nature, depend upon or refer to future events or conditions,
or use or contain words, terms, phrases, or expressions such as “achieve,” “forecast,” “plan,” “propose,”
“strategy,” “envision,” “hope,” “will,” “continue,” “potential,”
“expect,” “believe,” “anticipate,” “project,” “estimate,” “predict,”
“intend,” “should,” “could,” “may,” “might,” or similar words, terms, phrases,
or expressions or the negative of any of these terms. Any statements in this prospectus supplement and the accompanying base prospectus
or incorporated herein by reference that are not based upon historical fact are forward-looking statements and represent our best judgment
as to what may occur in the future. Forward-looking statements involve a number of known and unknown risks and uncertainties, including
but not limited to those discussed in the “Risk Factors” section contained in Item 1A in our most recent Annual Report on
Form 10-K and the other documents incorporated by reference herein and the following risks and uncertainties: market conditions and general
conditions in the global economy; 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 SPACs; potential loss of
value of investments; risk of becoming an investment company; fluctuations in our short-term results as we implement our business strategy;
risks of not being able to attract and retain qualified management and personnel to implement and execute on our business and growth
strategy; failure of our information technology systems, data breaches and cyber-attacks; our ability to establish and maintain an effective
system of internal controls; the requirements of being a public company and losing our status as a smaller reporting company or becoming
an accelerated filer; any potential conflicts of interest between us and our controlling stockholders and different interests of controlling
stockholders; 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.
Although
we believe the expectations reflected in our forward-looking statements are reasonable, in reading this prospectus and the documents
incorporated into this prospectus by reference, you should consider the factors discussed under the heading “Risk Factors”
contained in this prospectus in evaluating any forward-looking statements and you are cautioned not to place undue reliance on any forward-looking
statements. Each forward-looking statement is made and applies only as of the date of the particular statement, and we are not obligated
to update, withdraw, or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You
should consider these risks when reading any forward-looking statements. All forward-looking statements attributed or attributable to
us or to persons acting on our behalf are expressly qualified in their entirety by this section entitled “Cautionary Statement
Regarding Forward-Looking Statements.”
RISK
FACTORS
An
investment in our common stock involves a high degree of risk. Before making an investment in our common stock, you should carefully
consider the risks discussed under the heading “Risk Factors” in our most recent Annual Report on Form 10-K, which are incorporated
herein by reference (other than, in each case, information furnished, rather than filed), as well as the information contained in this
prospectus supplement and the accompanying base prospectus relating to this offering. Any of those risk factors could significantly and
adversely affect our business, prospects, financial condition and results of operations, and the trading price of our common stock. Although
we describe, and will describe, what we believe to be the principal risks related to our Company and the securities we offer, we can
also be affected by risks we do not anticipate or do not think will have a material effect upon us. Please also read carefully the section
entitled “Cautionary Statement Regarding Forward-Looking Statements.”
Risks
Related to This Offering
Our
share price may be volatile and could decline substantially.
The
market price of our common stock could be subject to significant fluctuations due to changes in sentiment in the market regarding our
operations or business prospects. Many factors may cause the market price for our common stock to decline, including:
| |
● |
shortfalls
in revenues, cash flows or continued losses from operations; |
| |
|
|
| |
● |
our
failure to effectively compete in the insurance and reinsurance industries; |
| |
|
|
| |
● |
our
inability to carry out our investment and investment management strategy; |
| |
|
|
| |
● |
potential
losses from our investments in special purpose acquisition companies; |
| |
|
|
| |
● |
government
action or regulation; and |
| |
|
|
| |
● |
unfavorable
outcomes from litigation. |
In
addition, the stock market experiences extreme fluctuations in price and volume that particularly affect the market price of shares of
companies like ours. These price and volume fluctuations are often unrelated or disproportionate to the operating performance of the
affected companies. Because of this volatility, we may fail to meet the expectations of our stockholders or of securities analysts, and
our stock price could decline as a result. Declines in our stock price for any reason, as well as broad-based market fluctuations or
fluctuations related to our financial results or other developments, may adversely affect your ability to sell your shares at a price
equal to or above the price at which you purchased them. Decreases in the price of our common stock may also lead to de-listing of our
common Stock.
Management
will have broad discretion as to the use of the proceeds from this offering, and we may not use the proceeds effectively.
We
have not allocated specific amounts of the net proceeds from this offering for any specific purpose. Accordingly, our management will
have broad discretion in the application of the net proceeds from this offering and could spend the proceeds in ways that you do not
agree with or that do not improve our results of operations or enhance the value of our common stock. See “Use of Proceeds.”
Our failure to apply these funds effectively could have a material adverse effect on our business, financial results, operating results
and/or cash flow and could cause the price of our common stock to decline.
Our
outstanding options, and the availability for resale of certain of the underlying shares, may adversely affect the trading price of our
common stock.
Our
outstanding options could adversely affect our ability to obtain future financing or engage in certain mergers or other transactions,
since the holders thereof may exercise them at a time when we may be able to obtain additional capital through a new offering of securities
on terms more favorable to us than the terms of outstanding securities. For the life of the options, the holders have the opportunity
to profit from a rise in the market price of our common stock without assuming the risk of ownership. The issuance of shares upon the
exercise of outstanding options would also dilute the ownership interests of our existing stockholders.
Additional
financing or future equity issuances may result in future dilution to our stockholders.
We
expect that we will need to raise additional funds in the future to finance our growth, our current and planned initiatives, investment
activities, and for other reasons. Any required additional financing may not be available on terms acceptable to us, or at all. If we
raise additional funds by issuing equity securities, you may experience significant dilution of your ownership interest and the newly
issued securities may have rights senior to those of the holders of our common stock. The price per share at which we sell additional
securities in future transactions may be higher or lower than the price per share in this offering. Alternatively, if we raise additional
funds by obtaining loans from third parties, the terms of those financing arrangements may include negative covenants or other restrictions
on our business that could impair our operational flexibility and would also require us to fund additional interest expense. If adequate
additional financing is not available when required or is not available on acceptable terms, we may be unable to successfully execute
our business plan.
Because
we do not currently intend to pay cash dividends on our common stock, stockholders will primarily benefit from an investment in our stock
only if it appreciates in value.
We
do not anticipate declaring or paying any cash dividends on our shares of common stock. We currently intend to retain all future earnings,
if any, for use in the operations and expansion of the business. As a result, we do not anticipate paying cash dividends in the foreseeable
future. Any future determination as to the declaration and payment of cash dividends or non-cash dividends will be at the discretion
of our board of directors and will depend on factors the board of directors deems relevant, including among others, our results of operations,
financial condition and cash requirements, business prospects, and the terms of any of our financing arrangements. Accordingly, realization
of a gain on stockholders’ investments will primarily depend on the appreciation of the price of our stock. There is no guarantee
that our stock will appreciate in value.
You
will experience immediate and substantial dilution.
The
offering price per share in this offering may exceed the net tangible book value per share of our common stock outstanding prior to
this offering. After giving effect to the sale by us of shares of
common stock at a price of $ per share, and after deducting commissions
and estimated aggregate offering expenses payable by us, you will experience immediate dilution of $
per share, representing the difference between our as adjusted net
tangible book value per share as of March 31, 2023, after giving effect to this offering and the offering price. In
addition, we are not restricted from issuing additional securities in the future, including shares of common stock, securities that
are convertible into or exchangeable for, or that represent the right to receive, common stock or substantially similar securities.
The issuance of these securities may cause further dilution to our stockholders. The exercise of outstanding warrants, stock options
and the vesting of outstanding restricted stock units may also result in further dilution of your investment. See the section
entitled “Dilution” on page S-[_] below for a more detailed illustration of the dilution you may incur if you
participate in this offering.
USE
OF PROCEEDS
The
net proceeds to us from the sale of our common stock will be approximately $
million after deducting underwriting discounts and offering expenses
payable by us. We currently intend to use the net proceeds from this offering for general corporate purposes and working capital.
Our management will retain broad discretion in the allocation and use of the net proceeds of this offering, and investors will be
relying on the judgment of our management with regard to the use of these net proceeds. The precise amount, use and timing of the
application of such proceeds will depend upon our funding requirements and the availability and cost of other capital.
DIVIDEND
POLICY
We
do not anticipate declaring or paying any cash dividends to holders of our common stock in the foreseeable future. We currently intend
to retain future earnings, if any, to finance the growth of our business. If we decide to pay cash dividends in the future, the declaration
and payment of such dividends will be at the sole discretion of our board of directors and may be discontinued at any time. In determining
the amount of any future dividends, our board of directors will take into account any legal or contractual limitations, our actual and
anticipated future earnings, cash flow, debt service and capital requirements and other factors that our board of directors may deem
relevant.
Our
outstanding Series A Preferred Stock ranks senior to the shares of our common stock with respect to dividend rights. Holders of shares
of our Series A Preferred Stock are entitled to receive, when, as and if declared by our board of directors, out of lawfully available
funds for the payment of dividends, cumulative cash dividends at a rate of 8.00% per annum of the $25.00 per share liquidation preference
(equivalent to $2.00 per annum per share). All accrued dividends on the Series A Preferred Stock shall be paid in cash only when, as
and if declared by our board of directors out of lawfully available funds therefor or upon a liquidation or redemption of the Series
A Preferred Stock.
CAPITALIZATION
The
following table sets forth our capitalization as of March 31, 2023:
| |
● |
on
an actual basis; |
| |
|
|
| |
● |
on
an as adjusted basis to reflect the issuance and sale by us of shares
of our common stock at an offering price of $ per share in this
offering, after deducting underwriting fees and estimated offering expenses payable by us. |
You
should read this information together with the section titled “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2022 and our Quarterly Report on Form
10-Q for the quarter ended March 31, 2023, which are incorporated by reference in this prospectus supplement and the accompanying base
prospectus, and our consolidated financial statements and related notes incorporated by reference in this prospectus supplement and the
accompanying base prospectus.
| | |
As of March 31, 2023 (In thousands) | |
| | |
Actual | | |
As Adjusted | |
| | |
| | |
(unaudited) | |
| Cash and cash equivalents | |
$ | 4,304 | | |
$ | | |
| Stockholders’ equity: | |
| | | |
| | |
| Series A preferred shares, $25.00 par and liquidation value; 1,000,000 shares authorized, 894,580 shares issued and outstanding | |
| 22,365 | | |
| | |
| Common stock, $0.001 par value; 100,000,000 shares authorized; 9,438,739 shares issued and outstanding (actual); shares issued and outstanding (as-adjusted) | |
| 9 | | |
| | |
| Additional paid-in capital | |
| 50,736 | | |
| | |
| Accumulated deficit | |
| (34,303 | ) | |
| | |
| Total shareholders’ equity | |
$ | 38,807 | | |
$ | | |
The
above table and discussion are based on 9,438,739 shares of common stock outstanding as of March 31, 2023 and excludes the
following:
| |
● |
130,000
shares of common stock issuable upon exercise of options to purchase shares of common stock outstanding as of the date of this prospectus,
with a weighted-average exercise price of $3.38 per share |
| |
|
|
| |
● |
670,303
shares of common stock reserved for future issuance
as of the date of this prospectus under our amended and restated 2014 equity incentive plan, our 2018 equity incentive plan, our
2021 equity incentive plan, and our 2023 employee stock purchase plan; and |
| |
|
|
| |
● |
370,000
restricted stock units issuable to our Chief
Executive Officer pursuant to an Equity Award Letter Agreement entered into on January 18, 2021, between us and the Company’s
Chief Executive Officer, Mr. Swets. |
| |
|
|
| |
● |
25,000
shares of restricted common stock reserved for issuance (but not yet issued) under
our 2021 equity incentive plan to an executive officer of FG Re Solutions Ltd, our wholly owned subsidiary. |
DILUTION
If
you invest in this offering, your ownership interest will be immediately diluted to the extent of the difference between the public offering
price per share and the as adjusted net tangible book value per share after giving effect to this offering. We calculate net tangible
book value per share by dividing the net tangible book value, which is the total tangible assets less total liabilities, by the number
of outstanding shares of our common stock. Dilution represents the difference between the portion of the amount per share paid by purchasers
of shares in this offering and the as adjusted net tangible book value per share of our common stock immediately after giving effect
to this offering. Our net tangible book value as of March 31, 2023 was $16,442, or $1.74 per share.
After
giving effect to the adjustments described in the “Capitalization” section including the sale of our common stock in this
offering at an offering price of $ per share, and after deducting underwriting fees and estimated aggregate offering expenses
payable by us, on an as-adjusted basis assuming [_] outstanding common shares, consisting of shares outstanding as of March 31, 2023,
our net tangible book value as of March 31, 2023, would have been approximately $ , or approximately $ per share of common stock. This
represents an immediate increase in the net tangible book value of approximately $ per share to our existing stockholders and an immediate
dilution in net tangible book value of approximately $ per share to new investors.
The
following table illustrates this per share dilution based on shares outstanding as of March 31, 2023:
| Public offering price per common stock | |
$ | [ ] | |
| Net tangible book value per common stock at March 31, 2023 | |
$ | 1.74 | |
| Increase in net tangible book value per common stock as a result of this offering | |
$ | [ ] | |
| As Adjusted Net tangible book value per common stock as of March 31, 2023 after this offering | |
$ | [
] | |
| Dilution in net tangible book value per common share to new investors in this offering | |
$ | [ ] | |
The
above table and discussion excludes the following:
| |
● |
130,000
shares of common stock issuable upon exercise of options to purchase shares of common stock outstanding as of the date of this prospectus,
with a weighted-average exercise price of $3.38 per share |
| |
|
|
| |
● |
670,303
shares of common stock reserved for future issuance
as of the date of this prospectus under our amended and restated 2014 equity incentive plan, our 2018 equity incentive plan, our
2021 equity incentive plan, and our 2023 employee stock purchase plan; and |
| |
|
|
| |
● |
370,000
restricted stock units issuable to our Chief
Executive Officer pursuant to an Equity Award Letter Agreement entered into on January 18, 2021, between us and the Company’s
Chief Executive Officer, Mr. Swets. |
| |
|
|
| |
● |
25,000
shares of restricted common stock reserved for issuance (but not yet issued) under
our 2021 equity incentive plan to an executive officer of FG Re Solutions Ltd, our wholly owned subsidiary. |
DESCRIPTION
OF SECURITIES WE ARE OFFERING
We
are offering shares of common stock. The following description of our shares of common stock summarizes the material terms and provisions
thereof, including the material terms of the shares of common stock we are offering under this prospectus supplement and the accompanying
prospectus.
Common
Stock
For
a description of the rights associated with the common stock, see “Description of Securities” filed as Exhibit 4.4 to our
Annual Report on Form 10-K for the year ended December 31, 2022, which is incorporated herein by reference. Our common stock is listed
on The Nasdaq Global Market under the symbol “FGF”.
UNDERWRITING
ThinkEquity
LLC, is acting as the representative (the “Representative”) of the underwriters of the offering. We have entered into an
underwriting agreement dated , 2023 with the Representative. Subject to the terms and conditions of the underwriting agreement, we have
agreed to sell to each underwriter named below, and each underwriter named below has severally agreed to purchase, at the public offering
price less the underwriting discounts set forth on the cover page of this prospectus supplement, the number of shares of common stock
at the public offering price, less the underwriting discounts and commissions, as set forth on the cover page of this prospectus supplement,
the number of shares of common stock listed next to its name in the following table:
| Underwriter |
|
Number
of Shares of Common Stock |
| ThinkEquity
LLC |
|
|
| |
|
|
| Total |
|
|
The
underwriters are committed to purchase all the shares of common stock offered by the Company, other than those covered by the over-allotment
option to purchase additional shares of common stock described below. The obligations of the underwriters may be terminated upon the
occurrence of certain events specified in the underwriting agreement. Furthermore, the underwriting agreement provides that the obligations
of the underwriters to pay for and accept delivery of the shares offered by us in this prospectus are subject to various representations
and warranties and other customary conditions specified in the underwriting agreement, such as receipt by the underwriters of officers’
certificates and legal opinions.
We
have agreed to indemnify the underwriters against specified liabilities, including liabilities under the Securities Act, and to contribute
to payments the underwriters may be required to make in respect thereof.
The
underwriters are offering the shares of common stock subject to prior sale, when, as and if issued to and accepted by them, subject to
approval of legal matters by their counsel and other conditions specified in the underwriting agreement. The underwriters reserve the
right to withdraw, cancel or modify offers to the public and to reject orders in whole or in part.
We
have granted the Representative an over-allotment option. This option, which is exercisable for up to 45 days after the date of this
prospectus supplement, permits the underwriters to purchase up to an aggregate of additional shares of common stock (equal to 15% of
the total number of shares of common stock sold in this offering) at the public offering price per share, less underwriting discounts
and commissions, solely to cover over-allotments, if any. If the underwriters exercise this option in whole or in part, then the underwriters
will be severally committed, subject to the conditions described in the underwriting agreement, to purchase the additional shares of
common stock in proportion to their respective commitments set forth in the prior table.
Discounts,
Commissions and Reimbursement
The
Representative has advised us that the underwriters propose to offer the shares of common stock to the public at the public offering
price per share set forth on the cover page of this prospectus supplement. The underwriters may offer securities to securities dealers
at that price less a concession of not more than $
per share of which up to $ per share may be
reallowed to other dealers. After the initial offering to the public, the public offering price and other selling terms may be changed
by the representative.
The
following table summarizes the underwriting discounts and commissions and proceeds, before expenses, to us assuming both no exercise
and full exercise by the underwriters of their over-allotment option:
| | |
| | |
Total | |
| | |
Per Share | | |
Without Option | | |
With Option | |
| Public offering price | |
$ | | | |
$ | | | |
$ | | |
| Underwriting discounts and commissions (7.0%) | |
$ | | | |
$ | | | |
$ | | |
| Proceeds, before expenses, to us | |
$ | | | |
$ | | | |
$ | |
We
have paid an expense deposit of $30,000 (the “Advance”) to the Representative, which will be applied against the actual
out-of-pocket accountable expenses that will be paid by us to the underwriters in connection with this offering and will be reimbursed
to us to the extent not incurred.
In
addition, we have also agreed to pay all the expenses relating to the offering, including, without limitation: (a) all filing fees and
communication expenses relating to the registration of the shares to be sold in the offering (including the over-allotment shares) with
the SEC; (b) all filing fees and expenses associated with the review of the offering by FINRA; (c) all fees and expenses relating to
the listing of the shares offered hereby on The Nasdaq Global Market and (d) the legal fees and expenses of the Company. We also agreed
to reimburse ThinkEquity for its accountable out-of-pocket expenses incurred in connection with the offering, including any fees and
disbursements of ThinkEquity’s legal counsel, up to $100,000 (which includes the Advance).
We
estimate the expenses of this offering payable by us, not including underwriting discounts and commissions, will be approximately $ .
Pricing
of the Offering
The
public offering price was determined by negotiations among us and the Representative. In addition to prevailing market conditions, among
the factors considered in determining the public offering price of our common stock were:
| ● |
the
information included in this prospectus and otherwise available to the Representative; |
| |
|
| ● |
our
historical performance; |
| |
|
| ● |
estimates
of our business potential and our earnings prospects; |
| |
|
| ● |
an
assessment of our management; |
| |
|
| ● |
and
the consideration of the above factors in relation to market valuation of companies in related businesses. |
Our
common stock is listed on The Nasdaq Global Market under the symbol “FGF”. It is possible that the shares will not trade
in the public market at or above the public offering price following the closing of this offering.
Right
of First Refusal
Until
, 2024 (twelve (12) months
from the date of the completion of this offering) the representative shall have an irrevocable right of first refusal to act as
sole investment banker, sole book-runner and/or sole placement agent, at the representative sole discretion, for each and every future
public and private equity and debt offerings for the Company, or any successor to or any subsidiary of the Company, including all equity
linked financings, on terms agreed to by the Company and the Representative in good faith. The Representative shall have
the sole right to determine whether or not any other broker-dealer shall have the right to participate in any such offering and the economic
terms of any such participation.
Lock-Up
Agreements
Pursuant
to “lock-up” agreements, our directors and officers have agreed, subject to limited exceptions, for a period of three (3)
months from the date of the underwriting agreement, without the prior written consent of the Representative, that they will not offer,
issue, sell, contract to sell, encumber, grant any option for the sale of or otherwise dispose of any of our securities.
In
addition, pursuant to the underwriting agreement, we and any of our successors have agreed, for a period of three (3) months from the
date of the underwriting agreement, that each will not (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly
or indirectly, any shares of our capital stock or any securities convertible into or exercisable or exchangeable for shares of our capital
stock; (ii) file or caused to be filed any registration statement with the SEC relating to the offering of any shares of our capital
stock or any securities convertible into or exercisable or exchangeable for shares of our capital stock; (iii) complete any offering
of our debt securities, other than entering into a line of credit with a traditional bank or (iv) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences of ownership of our capital stock, whether any such
transaction described in clause (i), (ii), (iii) or (iv) above is to be settled by delivery of shares of our capital stock or such other
securities, in cash or otherwise.
In
addition, for a period of 12 months after the date of the underwriting agreement, the Company will not directly or indirectly enter into
an agreement to engage in any “at-the-market”, continuous equity or variable rate transaction without the prior written consent
of the Representative.
Electronic
Offer, Sale and Distribution of Securities
A
prospectus in electronic format may be made available on the websites maintained by one or more of the underwriters or selling group
members. The Representative may agree to allocate a number of securities to underwriters and selling group members for sale to
its online brokerage account holders. Internet distributions will be allocated by the underwriters and selling group members that will
make internet distributions on the same basis as other allocations. Other than the prospectus in electronic format, the information on
these websites is not part of, nor incorporated by reference into, this prospectus or the registration statement of which this prospectus
forms a part, has not been approved or endorsed by us, and should not be relied upon by investors.
Stabilization
In
connection with this offering, the underwriters may engage in stabilizing transactions, over-allotment transactions, syndicate-covering
transactions, penalty bids and purchases to cover positions created by short sales.
Stabilizing
transactions permit bids to purchase securities so long as the stabilizing bids do not exceed a specified maximum, and are engaged in
for the purpose of preventing or retarding a decline in the market price of the securities while the offering is in progress.
Over-allotment
transactions involve sales by the underwriters of securities in excess of the number of securities the underwriters are obligated to
purchase. This creates a syndicate short position which may be either a covered short position or a naked short position. In a covered
short position, the number of securities over-allotted by the underwriters is not greater than the number of securities that they may
purchase in the over-allotment option. In a naked short position, the number of securities involved is greater than the number of securities
in the over-allotment option. The underwriters may close out any short position by exercising their over-allotment option and/or purchasing
securities in the open market.
Syndicate
covering transactions involve purchases of securities in the open market after the distribution has been completed in order to cover
syndicate short positions. In determining the source of securities to close out the short position, the underwriters will consider, among
other things, the price of securities available for purchase in the open market as compared with the price at which they may purchase
securities through exercise of the over-allotment option. If the underwriters sell more securities than could be covered by exercise
of the over-allotment option and, therefore, have a naked short position, the position can be closed out only by buying securities in
the open market. A naked short position is more likely to be created if the underwriters are concerned that after pricing there could
be downward pressure on the price of the securities in the open market that could adversely affect investors who purchase in the offering.
Penalty
bids permit the representative to reclaim a selling concession from a syndicate member when the securities originally sold by that syndicate
member are purchased in stabilizing or syndicate covering transactions to cover syndicate short positions.
These
stabilizing transactions, syndicate covering transactions and penalty bids may have the effect of raising or maintaining the market price
of our securities of common stock or preventing or retarding a decline in the market price of our securities of common stock. As a result,
the price of our common stock in the open market may be higher than it would otherwise be in the absence of these transactions. Neither
we nor the underwriters make any representation or prediction as to the effect that the transactions described above may have on the
price of our common stock. These transactions may be effected on The Nasdaq Global Market, in the over-the-counter market or otherwise
and, if commenced, may be discontinued at any time.
Other
Relationships
Certain
of the underwriters and their affiliates may in the future provide various investment banking, commercial banking and other financial
services for us and our affiliates for which they may in the future receive customary fees.
On
November 3, 2022, the Company entered into a Sales Agreement with the Representative, pursuant to which the Company was able to
offer and sell, from time to time through the Representative, as its agent, shares of the Company’s common stock, having an
aggregate offering price of up to $2,575,976, subject to the terms and conditions of the Sales Agreement. Under the Sales Agreement,
the Representative was able to sell the shares in sales deemed to be an “at-the-market offering” as defined in Rule
415(a)(4) promulgated under the Securities Act of 1933, as amended. The Company filed a prospectus supplement dated November 3, 2022
to its registration statement on Form S-3 in connection with the “at-the-market offering”. Through May 26, 2023, the
Company sold an aggregate of $73,974.79 of common stock pursuant to the “at-the-market offering. On May 26, 2023, the
Company and the Representative terminated the Sales Agreement and the related “at-the-market offering”. The Company
filed a supplement dated May 26, 2023 to the November 3, 2023 prospectus supplement with respect to the termination of the
“at-the-market offering”.
On
June 15, 2022, the Company entered into an underwriting agreement with the Representative, which provided for the issuance and sale by
the Company and the purchase by the underwriters, in a firm commitment underwritten public offering (the “June 2022 Offering”),
of 2,750,000 shares of the Company’s common stock at a public offering price of $1.58 per share, less certain underwriting commissions.
The Company paid the underwriter a commission equal to 7% of the proceeds ($304,150). In
addition, for a period of twelve (12) months from the date of the closing of the offering, the Company granted to the Representative
an irrevocable right of first refusal to act as sole investment banker, sole book-runner and/or sole placement agent, at the Representative’s
sole discretion, for each and every future public and private equity and debt offering, including all equity linked financings, during
such twelve (12) month period for us, or any successor to or any subsidiary of the Company, on terms agreed to by both the Company and
the Representative.
The
Representative also served as the underwriter for the Company’s public offerings that were completed in October 2021 and May 2021.
Offer
restrictions outside the United States
Other
than in the United States, no action has been taken by us or the underwriters that would permit a public offering of the securities offered
by this prospectus in any jurisdiction where action for that purpose is required. The securities offered by this prospectus may not be
offered or sold, directly or indirectly, nor may this prospectus or any other offering material or advertisements in connection with
the offer and sale of any such securities be distributed or published in any jurisdiction, except under circumstances that will result
in compliance with the applicable rules and regulations of that jurisdiction. Persons into whose possession this prospectus comes are
advised to inform themselves about and to observe any restrictions relating to the offering and the distribution of this prospectus.
This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities offered by this prospectus in
any jurisdiction in which such an offer or a solicitation is unlawful.
Australia
This
prospectus is not a disclosure document under Chapter 6D of the Australian Corporations Act, has not been lodged with the Australian
Securities and Investments Commission and does not purport to include the information required of a disclosure document under Chapter
6D of the Australian Corporations Act. Accordingly, (i) the offer of the securities under this prospectus is only made to persons to
whom it is lawful to offer the securities without disclosure under Chapter 6D of the Australian Corporations Act under one or more exemptions
set out in section 708 of the Australian Corporations Act, (ii) this prospectus is made available in Australia only to those persons
as set forth in clause (i) above, and (iii) the offeree must be sent a notice stating in substance that by accepting this offer, the
offeree represents that the offeree is such a person as set forth in clause (i) above, and, unless permitted under the Australian Corporations
Act, agrees not to sell or offer for sale within Australia any of the securities sold to the offeree within 12 months after its transfer
to the offeree under this prospectus.
China
The
information in this document does not constitute a public offer of the securities, whether by way of sale or subscription, in the People’s
Republic of China (excluding, for purposes of this paragraph, Hong Kong Special Administrative Region, Macau Special Administrative Region
and Taiwan). The securities may not be offered or sold directly or indirectly in the PRC to legal or natural persons other than directly
to “qualified domestic institutional investors.”
European
Economic Area—Belgium, Germany, Luxembourg and Netherlands
The
information in this document has been prepared on the basis that all offers of securities will be made pursuant to an exemption under
the Directive 2003/71/EC (“Prospectus Directive”), as implemented in Member States of the European Economic Area (each, a
“Relevant Member State”), from the requirement to produce a prospectus for offers of securities.
An
offer to the public of securities has not been made, and may not be made, in a Relevant Member State except pursuant to one of the following
exemptions under the Prospectus Directive as implemented in that Relevant Member State:
| |
● |
to
legal entities that are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose
corporate purpose is solely to invest in securities; |
| |
|
|
| |
● |
to
any legal entity that has two or more of (i) an average of at least 250 employees during its last fiscal year; (ii) a total balance
sheet of more than €43,000,000 (as shown on its last annual unconsolidated or consolidated financial statements) and (iii) an
annual net turnover of more than €50,000,000 (as shown on its last annual unconsolidated or consolidated financial statements); |
| |
|
|
| |
● |
to
fewer than 100 natural or legal persons (other than qualified investors within the meaning of Article 2(1)(e) of the Prospectus Directive)
subject to obtaining the prior consent of the Company or any underwriter for any such offer; or |
| |
|
|
| |
● |
in
any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of securities shall
result in a requirement for the publication by the Company of a prospectus pursuant to Article 3 of the Prospectus Directive. |
France
This
document is not being distributed in the context of a public offering of financial securities (offre au public de titres financiers)
in France within the meaning of Article L.411-1 of the French Monetary and Financial Code (Code Monétaire et Financier) and Articles
211-1 et seq. of the General Regulation of the French Autorité des marchés financiers (“AMF”). The securities
have not been offered or sold and will not be offered or sold, directly or indirectly, to the public in France.
This
document and any other offering material relating to the securities have not been, and will not be, submitted to the AMF for approval
in France and, accordingly, may not be distributed or caused to distributed, directly or indirectly, to the public in France.
Such
offers, sales and distributions have been and shall only be made in France to (i) qualified investors (investisseurs qualifiés)
acting for their own account, as defined in and in accordance with Articles L.411-2-II-2° and D.411-1 to D.411-3, D.744-1, D.754-1
;and D.764-1 of the French Monetary and Financial Code and any implementing regulation and/or (ii) a restricted number of non-qualified
investors (cercle restreint d’investisseurs) acting for their own account, as defined in and in accordance with Articles L.411-2-II-2°
and D.411-4, D.744-1, D.754-1; and D.764-1 of the French Monetary and Financial Code and any implementing regulation.
Pursuant
to Article 211-3 of the General Regulation of the AMF, investors in France are informed that the securities cannot be distributed (directly
or indirectly) to the public by the investors otherwise than in accordance with Articles L.411-1, L.411-2, L.412-1 and L.621-8 to L.621-8-3
of the French Monetary and Financial Code.
Ireland
The
information in this document does not constitute a prospectus under any Irish laws or regulations and this document has not been filed
with or approved by any Irish regulatory authority as the information has not been prepared in the context of a public offering of securities
in Ireland within the meaning of the Irish Prospectus (Directive 2003/71/EC) Regulations 2005 (the “Prospectus Regulations”).
The securities have not been offered or sold, and will not be offered, sold or delivered directly or indirectly in Ireland by way of
a public offering, except to (i) qualified investors as defined in Regulation 2(l) of the Prospectus Regulations and (ii) fewer than
100 natural or legal persons who are not qualified investors.
Israel
The
securities offered by this prospectus have not been approved or disapproved by the Israeli Securities Authority (the ISA), or ISA, nor
have such securities been registered for sale in Israel. The securities may not be offered or sold, directly or indirectly, to the public
in Israel, absent the publication of a prospectus. The ISA has not issued permits, approvals or licenses in connection with the offering
or publishing the prospectus; nor has it authenticated the details included herein, confirmed their reliability or completeness, or rendered
an opinion as to the quality of the securities being offered. Any resale in Israel, directly or indirectly, to the public of the securities
offered by this prospectus is subject to restrictions on transferability and must be effected only in compliance with the Israeli securities
laws and regulations.
Italy
The
offering of the securities in the Republic of Italy has not been authorized by the Italian Securities and Exchange Commission (Commissione
Nazionale per le Societ—$$—Aga e la Borsa, “CONSOB” pursuant to the Italian securities legislation and, accordingly,
no offering material relating to the securities may be distributed in Italy and such securities may not be offered or sold in Italy in
a public offer within the meaning of Article 1.1(t) of Legislative Decree No. 58 of 24 February 1998 (“Decree No. 58”), other
than:
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to
Italian qualified investors, as defined in Article 100 of Decree no.58 by reference to Article 34-ter of CONSOB Regulation no. 11971
of 14 May 1999 (“Regulation no. 1197l”) as amended (“Qualified Investors”); and |
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|
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in
other circumstances that are exempt from the rules on public offer pursuant to Article 100 of Decree No. 58 and Article 34-ter of
Regulation No. 11971 as amended. |
Any
offer, sale or delivery of the securities or distribution of any offer document relating to the securities in Italy (excluding placements
where a Qualified Investor solicits an offer from the issuer) under the paragraphs above must be:
| |
● |
made
by investment firms, banks or financial intermediaries permitted to conduct such activities in Italy in accordance with Legislative
Decree No. 385 of 1 September 1993 (as amended), Decree No. 58, CONSOB Regulation No. 16190 of 29 October 2007 and any other applicable
laws; and |
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in
compliance with all relevant Italian securities, tax and exchange controls and any other applicable laws. |
Any
subsequent distribution of the securities in Italy must be made in compliance with the public offer and prospectus requirement rules
provided under Decree No. 58 and the Regulation No. 11971 as amended, unless an exception from those rules applies. Failure to comply
with such rules may result in the sale of such securities being declared null and void and in the liability of the entity transferring
the securities for any damages suffered by the investors.
Japan
The
securities have not been and will not be registered under Article 4, paragraph 1 of the Financial Instruments and Exchange Law of Japan
(Law No. 25 of 1948), as amended (the “FIEL”) pursuant to an exemption from the registration requirements applicable to a
private placement of securities to Qualified Institutional Investors (as defined in and in accordance with Article 2, paragraph 3 of
the FIEL and the regulations promulgated thereunder). Accordingly, the securities may not be offered or sold, directly or indirectly,
in Japan or to, or for the benefit of, any resident of Japan other than Qualified Institutional Investors. Any Qualified Institutional
Investor who acquires securities may not resell them to any person in Japan that is not a Qualified Institutional Investor, and acquisition
by any such person of securities is conditional upon the execution of an agreement to that effect.
Portugal
This
document is not being distributed in the context of a public offer of financial securities (oferta pública de valores mobiliários)
in Portugal, within the meaning of Article 109 of the Portuguese Securities Code (Código dos Valores Mobiliários). The
securities have not been offered or sold and will not be offered or sold, directly or indirectly, to the public in Portugal. This document
and any other offering material relating to the securities have not been, and will not be, submitted to the Portuguese Securities Market
Commission (Comissăo do Mercado de Valores Mobiliários) for approval in Portugal and, accordingly, may not be distributed
or caused to distributed, directly or indirectly, to the public in Portugal, other than under circumstances that are deemed not to qualify
as a public offer under the Portuguese Securities Code. Such offers, sales and distributions of securities in Portugal are limited to
persons who are “qualified investors” (as defined in the Portuguese Securities Code). Only such investors may receive this
document and they may not distribute it or the information contained in it to any other person.
Sweden
This
document has not been, and will not be, registered with or approved by Finansinspektionen (the Swedish Financial Supervisory Authority).
Accordingly, this document may not be made available, nor may the securities be offered for sale in Sweden, other than under circumstances
that are deemed not to require a prospectus under the Swedish Financial Instruments Trading Act (1991:980) (Sw. lag (1991:980) om handel
med finansiella instrument). Any offering of securities in Sweden is limited to persons who are “qualified investors” (as
defined in the Financial Instruments Trading Act). Only such investors may receive this document and they may not distribute it or the
information contained in it to any other person.
Switzerland
The
securities may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange (“SIX”) or on any
other stock exchange or regulated trading facility in Switzerland. This document has been prepared without regard to the disclosure standards
for issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure standards for listing prospectuses
under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland.
Neither this document nor any other offering material relating to the securities may be publicly distributed or otherwise made publicly
available in Switzerland.
Neither
this document nor any other offering material relating to the securities have been or will be filed with or approved by any Swiss regulatory
authority. In particular, this document will not be filed with, and the offer of securities will not be supervised by, the Swiss Financial
Market Supervisory Authority (FINMA).
This
document is personal to the recipient only and not for general circulation in Switzerland.
United
Arab Emirates
Neither
this document nor the securities have been approved, disapproved or passed on in any way by the Central Bank of the United Arab Emirates
or any other governmental authority in the United Arab Emirates, nor has the Company received authorization or licensing from the Central
Bank of the United Arab Emirates or any other governmental authority in the United Arab Emirates to market or sell the securities within
the United Arab Emirates. This document does not constitute and may not be used for the purpose of an offer or invitation. No services
relating to the securities, including the receipt of applications and/or the allotment or redemption of such securities, may be rendered
within the United Arab Emirates by the Company.
No
offer or invitation to subscribe for securities is valid or permitted in the Dubai International Financial Centre.
United
Kingdom
Neither
the information in this document nor any other document relating to the offer has been delivered for approval to the Financial Services
Authority in the United Kingdom and no prospectus (within the meaning of section 85 of the Financial Services and Markets Act 2000, as
amended (“FSMA”) has been published or is intended to be published in respect of the securities. This document is issued
on a confidential basis to “qualified investors” (within the meaning of section 86(7) of FSMA) in the United Kingdom, and
the securities may not be offered or sold in the United Kingdom by means of this document, any accompanying letter or any other document,
except in circumstances which do not require the publication of a prospectus pursuant to section 86(1) FSMA. This document should not
be distributed, published or reproduced, in whole or in part, nor may its contents be disclosed by recipients to any other person in
the United Kingdom.
Any
invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) received in connection with the
issue or sale of the securities has only been communicated or caused to be communicated and will only be communicated or caused to be
communicated in the United Kingdom in circumstances in which section 21(1) of FSMA does not apply to the Company.
In
the United Kingdom, this document is being distributed only to, and is directed at, persons (i) who have professional experience in matters
relating to investments falling within Article 19(5) (investment professionals) of the Financial Services and Markets Act 2000 (Financial
Promotions) Order 2005 (“FPO”), (ii) who fall within the categories of persons referred to in Article 49(2)(a) to (d) (high
net worth companies, unincorporated associations, etc.) of the FPO or (iii) to whom it may otherwise be lawfully communicated (together
“relevant persons”). The investments to which this document relates are available only to, and any invitation, offer or agreement
to purchase will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document
or any of its contents.
Canada
The
securities may be sold in Canada only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors,
as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted
clients, as defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any resale
of the securities must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements
of applicable securities laws. Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies
for rescission or damages if this prospectus (including any amendment thereto) contains a misrepresentation, provided that the remedies
for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s
province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s
province or territory for particulars of these rights or consult with a legal advisor. Pursuant to section 3A.3 of National Instrument
33-105 Underwriting Conflicts (NI 33-105), the underwriters are not required to comply with the disclosure requirements of NI33-105 regarding
underwriter conflicts of interest in connection with this offering.
LEGAL
MATTERS
The
validity of the shares of common stock offered by this prospectus supplement will be passed on for us by Loeb & Loeb LLP, New York,
New York. Certain legal matters in connection with this offering will be passed on for the underwriters by Blank Rome LLP, New York,
New York.
EXPERTS
The
consolidated financial statements of the Company as of December 31, 2022 and 2021 and for the years ended December 31, 2022 and 2021,
incorporated in this prospectus supplement and the accompanying prospectus by reference to the Company’s Annual Report on Form
10-K for the year ended December 31, 2022, have been so incorporated in reliance on the report of BDO USA, LLP, an independent registered
public accounting firm, incorporated herein by reference, given on the authority of said firm as experts in accounting and auditing.
DISCLOSURE
OF COMMISSION POSITION ON INDEMNIFICATION
FOR
SECURITIES ACT LIABILITIES
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons
of the Company pursuant to the foregoing provisions, we have been advised that in the opinion of the SEC such indemnification is against
public policy as expressed in the Securities Act and is therefore unenforceable.
WHERE
YOU CAN FIND MORE INFORMATION
We
are subject to the information reporting requirements of the Exchange Act and, in accordance with these requirements, we file, electronically,
with the SEC, annual, quarterly and current reports, proxy statements, information statements, and other information. Our SEC filings
are available to the public over the Internet at the SEC’s website at www.sec.gov. In addition, we provide free access to these
materials through our website, www.fgfinancial.com, as soon as reasonably practicable after they are filed with or furnished to the SEC.
Information contained on, or (other than our SEC filings) that may be accessible through, our website is not a part of, and is not incorporated
into, this prospectus.
We
have filed with the SEC a registration statement on Form S-3, of which this prospectus supplement is a part, with respect to the common
stock that we will offer. This prospectus supplement and the accompanying base prospectus do not contain all the information contained
in the registration statement, including its exhibits and schedules. You should refer to the registration statement, including the exhibits
and schedules, for further information about us and the common stock we may offer. Statements we make in this prospectus supplement and
the accompanying base prospectus about certain contracts or other documents are not necessarily complete. When we make such statements,
we refer you to the copies of the contracts or documents that are filed as exhibits to the registration statement, because those statements
are qualified in all respects by reference to those exhibits. The registration statement, including exhibits and schedules, is on file
at the office of the SEC and may be inspected without charge at the SEC’s website.
INCORPORATION
BY REFERENCE
The
SEC allows us to incorporate by reference information in this document. This means that we can disclose important information to you
by referring you to documents that we have previously filed with the SEC or documents that we will file with the SEC in the future. The
information incorporated by reference is considered to be an important part of this prospectus, except for any information that is superseded
by information that is included directly in this document.
We
are incorporating by reference in this prospectus the following documents which we have previously filed with the SEC (other than any
portions of the Current Reports on Form 8-K that were furnished pursuant to Item 2.02 or 7.01 of Form 8-K):
| ● |
Our
Annual Report on Form 10-K for the year ended December 31, 2022 (our “Annual Report”), filed with the SEC on March 24,
2023. |
| ● |
Our
Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, filed on May 12, 2023; |
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|
| ● |
Our
Current Reports on Form 8-K filed with the SEC on January 26, 2023, May
17, 2023 and May 25, 2023; |
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|
| ● |
Our
Information Statement on Schedule 14C filed with the SEC on April 20, 2023; |
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|
| ● |
the
description of our shares of common stock contained in (i) our Registration Statement on Form 8-A, as filed with the SEC on March 19,
2014, including any amendment or report filed for the purpose of updating such description and (ii) Exhibit 4.4—Description of
Securities to our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 24, 2023; and |
| |
|
| ● |
the
description of our shares of 8.00% Cumulative Preferred Stock, Series A contained in (i) our Registration Statement on Form 8-A,
as filed with the SEC on February 26, 2018, and (ii) Exhibit 4.4—Description of Securities to our Annual Report on Form 10-K
for the year ended December 31, 2022, filed with the SEC on March 24, 2023. |
Whenever
after the date of filing the registration statement of which this prospectus supplement and the accompanying base prospectus are a part,
and until all of the securities to which this prospectus supplement relates have been sold or the offering is otherwise terminated, we
file reports or documents under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, those reports and documents will be deemed to
be part of this prospectus supplement from the time they are filed. Any statements made in this prospectus supplement or the accompanying
base prospectus or in a document incorporated or deemed to be incorporated by reference in this prospectus supplement or the accompanying
base prospectus will be deemed to be modified or superseded for purposes of this prospectus supplement to the extent that a statement
contained in this prospectus supplement or in any subsequently filed document that is also incorporated or deemed to be incorporated
by reference in this prospectus supplement modifies or supersedes the statement. Nothing in this prospectus supplement will be deemed
to incorporate information furnished by us on Form 8-K that under the rules of the SEC, is not deemed “filed” for purposes
of the Exchange Act.
We
will provide to each person, including any beneficial owner, to whom a prospectus supplement is delivered, a copy of any or all of the
information that has been incorporated by reference in the prospectus supplement, but not delivered with the prospectus supplement, upon
oral or written request, free of charge. Any requests for this information should be made by calling or sending a letter to our principal
executive offices at the following address:
FG
Financial Group, Inc.
Attention:
Investor Relations
104
S. Walnut Street, Unit 1A
Itasca,
IL 60143
Telephone:
(847) 773-1665
PROSPECTUS
$150,000,000
FG
Financial Group, Inc.
Common
Stock
Preferred
Stock
Debt
Securities
Warrants
Units
We
may from time to time offer up to $150,000,000 of the securities listed above in one or more offerings in amounts, at prices and
on terms determined at the time of such offering or offerings. When we use the term “securities” in this prospectus,
we mean any of the securities we may offer with this prospectus, unless we say otherwise.
This
prospectus provides you with a general description of the securities and the general manner in which such securities may be offered.
The specific terms of any securities to be offered, and the specific manner in which they may be offered, will be described in
a supplement to this prospectus or incorporated into this prospectus by reference.
We
may offer and sell the securities described in this prospectus and any prospectus supplement to or through one or more underwriters,
dealers and agents, or directly to purchasers, or through a combination of these methods. If any underwriters, dealers or agents
are involved in the sale of any of the securities, their names and any applicable purchase price, fee, commission or discount
arrangement between or among them will be set forth, or will be calculable from the information set forth, in the applicable prospectus
supplement.
INVESTING
IN OUR SECURITIES INVOLVES RISKS. WE STRONGLY RECOMMEND THAT YOU READ CAREFULLY THE RISKS WE DESCRIBE IN THIS PROSPECTUS AND IN
ANY ACCOMPANYING PROSPECTUS SUPPLEMENT, AS WELL AS THE RISK FACTORS THAT ARE INCORPORATED BY REFERENCE INTO THIS PROSPECTUS FROM
OUR FILINGS MADE WITH THE SECURITIES AND EXCHANGE COMMISSION. SEE “RISK FACTORS” ON PAGE 3 OF THIS PROSPECTUS.
Our
common stock and Series A preferred shares are listed on the Nasdaq Global Market under the symbols “FGF” and “FGFPP,”
respectively. On March 22, 2021 the last reported sale price of our common stock on the Nasdaq Global Market was $5.02
per share.
The
aggregate market value of the Registrant’s outstanding voting and nonvoting common equity held by non-affiliates was $9,937,858
on March 22, 2021, computed on the basis of the closing sale price of the Registrant’s common stock on that date. There
have been no sales of securities by or on behalf of the Registrant pursuant to Instruction I.B.6. during the 12 calendar months
immediately prior to, and including, the date of this prospectus.
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved the securities we may be
offering or determined that this prospectus is accurate or complete. Any representation to the contrary is a criminal offense.
The
date of this prospectus is , 2021
TABLE OF CONTENTS
ABOUT
THIS PROSPECTUS
This
prospectus is part of a registration statement that we filed with the U.S. Securities and Exchange Commission, or the SEC, using
a “shelf” registration process. By using a shelf registration statement, we may sell securities from time to time
and in one or more offerings up to a total dollar amount of $150,000,000 as described in this prospectus. Each time that we offer
and sell securities, we will provide a prospectus supplement to this prospectus that contains specific information about the securities
being offered and sold and the specific terms of that offering. We may also authorize one or more free writing prospectuses to
be provided to you that may contain material information relating to these offerings. The prospectus supplement or free writing
prospectus may also add, update or change information contained in this prospectus with respect to that offering. If there is
any inconsistency between the information in this prospectus and the applicable prospectus supplement or free writing prospectus,
you should rely on the prospectus supplement or free writing prospectus, as applicable. Before purchasing any securities, you
should carefully read both this prospectus and the applicable prospectus supplement (and any applicable free writing prospectuses),
together with the additional information described under the headings, “Where You Can Find More Information,” and
“Incorporation by Reference.”
We
have not authorized any other person to provide you with any information or to make any representations other than those contained
in this prospectus, any applicable prospectus supplement or any free writing prospectuses prepared by or on behalf of us or to
which we have referred you. We take no responsibility for, and can provide no assurance as to the reliability of, any other information
that others may give you. We will not make an offer to sell these securities in any jurisdiction where the offer or sale is not
permitted. You should assume that the information appearing in this prospectus and the applicable prospectus supplement to this
prospectus is accurate only as of the date on its cover, that the information appearing in any applicable free writing prospectus
is accurate only as of the date of that free writing prospectus, and that any information incorporated by reference is accurate
only as of the date of the document incorporated by reference, unless we indicate otherwise. Our business, financial condition,
results of operations and prospects may have changed since those dates. This prospectus incorporates by reference, and any prospectus
supplement or free writing prospectus may contain and incorporate by reference, market data and industry statistics and forecasts
that are based on independent industry publications and other publicly available information. Although we believe these sources
are reliable, we do not guarantee the accuracy or completeness of this information and we have not independently verified this
information. In addition, the market and industry data and forecasts that may be included or incorporated by reference in this
prospectus, any prospectus supplement or any applicable free writing prospectus may involve estimates, assumptions and other risks
and uncertainties and are subject to change based on various factors, including those discussed under the heading “Risk
Factors” contained in this prospectus, the applicable prospectus supplement and any applicable free writing prospectus,
and under similar headings in other documents that are incorporated by reference into this prospectus. Accordingly, investors
should not place undue reliance on this information.
Unless
we state otherwise or the context otherwise requires, references in this prospectus to “we,” “our,” “us,”
or “the Company” are to FG Financial Group, Inc., a Delaware corporation, together with our consolidated subsidiaries.
CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus and the documents incorporated by reference into it may contain forward-looking statements regarding the Company and
represents our expectations and beliefs concerning future events that are, or may be considered to be, “forward-looking
statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section
21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These forward-looking statements are intended to
be covered by the safe harbor for forward-looking statements provided by the Private Securities Litigation Reform Act of 1995.
The forward-looking statements included herein or incorporated herein by reference include or may include, but are not limited
to, (and you should read carefully) statements that are predictive in nature, depend upon or refer to future events or conditions,
or use or contain words, terms, phrases, or expressions such as “achieve,” “forecast,” “plan,”
“propose,” “strategy,” “envision,” “hope,” “will,” “continue,”
“potential,” “expect,” “believe,” “anticipate,” “project,” “estimate,”
“predict,” “intend,” “should,” “could,” “may,” “might,”
or similar words, terms, phrases, or expressions or the negative of any of these terms. Any statements in this prospectus or incorporated
herein by reference that are not based upon historical fact are forward-looking statements and represent our best judgment as
to what may occur in the future. Forward-looking statements involve a number of known and unknown risks and uncertainties, including
but not limited to those discussed in the “Risk Factors” section contained in Item 1A in our Annual Report on Form
10-K for the fiscal year ended December 31, 2020 and the following risks and uncertainties: risks associated with our limited
business operations since the closing of our Maison Business (the “Asset Sale”); risks associated with our inability
to identify and realize business opportunities, and the undertaking of any new such opportunities, following the Asset Sale; our
ability to spend or invest the net proceeds from the Asset Sale in a manner that yields a favorable return; general conditions
in the global economy, including the impact of health and safety concerns from the current COVID-19 pandemic and the impact of
governmental measures taken in response thereto; the uncertainty and difficulty in predicting the ultimate impact of the COVID-19
pandemic on our business; 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 real estate assets and the risk capital of special purpose acquisition companies; 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 not 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 publicly traded 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; the impact of the COVID-19 pandemic on the business of FedNat
Holding Company; continued volatility or further decline in the value of the shares of FedNat Holding Company common stock received
by us as consideration in the Asset Sale or limitations and restrictions with respect to our ownership of such shares; risks of
being a minority stockholder of FedNat Holding Company; risks associated with our related party transactions and investments;
and risks associated with our inability to continue to satisfy the listing standards of the Nasdaq following completion of the
Asset Sale. Our expectations and future plans and initiatives may not be realized. If one of these risks or uncertainties materialize,
or if our underlying assumptions prove incorrect, actual results may vary materially from those expected, estimated or projected.
Although
we believe the expectations reflected in our forward-looking statements are reasonable, in reading this prospectus and the documents
incorporated into this prospectus by reference, you should consider the factors discussed under the heading “Risk Factors”
contained in this prospectus in evaluating any forward-looking statements and you are cautioned not to place undue reliance on
any forward-looking statements. Each forward-looking statement is made and applies only as of the date of the particular statement,
and we are not obligated to update, withdraw, or revise any forward-looking statements, whether as a result of new information,
future events or otherwise. You should consider these risks when reading any forward-looking statements. All forward-looking statements
attributed or attributable to us or to persons acting on our behalf are expressly qualified in their entirety by this section
entitled “Cautionary Statement Regarding Forward-Looking Statements.”
FG
FINANCIAL GROUP, INC.
FG
Financial Group, Inc. is a reinsurance and investment management holding company focused on opportunistic collateralized and
loss capped reinsurance, while allocating capital to SPAC and SPAC sponsor-related businesses. The Company’s principal
business operations are conducted through its subsidiaries and affiliates.
On December 17, 2020 we changed our corporate name from 1347 Property Insurance Holdings, Inc., to FG Financial Group, Inc., to
better align with our future business plans.
Our
strategy has evolved to focus on opportunistic collateralized and loss capped reinsurance, while allocating capital to special
purpose acquisition companies (“SPACs”) and SPAC sponsor-related businesses. Accordingly, in the first quarter 2021,
we have launched our “SPAC Platform,” as further discussed below. As part of our refined focus, we have adopted the
following capital allocation philosophy:
“Grow
intrinsic value per share with a long-term focus using fundamental research, allocating capital
to asymmetric risk/reward opportunities.”
Historically,
the Company has operated a real estate business through its subsidiary, FGI Metrolina Property Income Fund, LP, however, the Company
does not anticipate that its real estate business will be a significant component of its future business plans.
Reinsurance:
The
Company has formed a wholly-owned reinsurance subsidiary, Fundamental Global Reinsurance Ltd. (“FGRe”), a Cayman Islands
limited liability company, to provide specialty property and casualty reinsurance. FGRe has been granted a Class B (iii) insurer
license in accordance with the terms of The Insurance Law, 2010 and underlying regulations thereto and is subject to regulation
by the Cayman Islands Monetary Authority (the “Authority”). FGRe entered into its first reinsurance transaction effective
January 1, 2021. The agreement is collateralized through a funds at Lloyds transaction. The Company’s maximum exposure
to loss in the transaction is approximately $2,900,000 and will cover all risks written by the syndicates during the 2021 insurance
year. On November 12, 2020, FGRe initially funded a trust account at Lloyd’s with approximately $2,400,000 to collateralize
its obligations.
Asset
Management:
The
Company has formed a wholly owned subsidiary, FG Strategic Consulting, LLC (“FGSC”), to serve as an investment
advisor to FedNat Holding Company under the investment advisory agreement entered into on December 2, 2019. The Company has
also formed Fundamental Global Asset Management, LLC, a joint venture with a wholly owned subsidiary of FGI, to sponsor investment
advisors that will manage private funds ranging the full spectrum of alternative equities, fixed income, private equity and real
estate. In September 2020, the joint venture sponsored the launch of FG Special Situations Fund via an investment of $5.0 million.
Approximately $4.0 million of this investment represented the sponsorship of our first special purpose acquisition company, or
“SPAC”.
Insurance
FGRe
is currently in the process of establishing and seeking regulatory approvals for a Risk Retention Group (“RRG”) to
be domiciled in the state of Vermont for the purpose of providing directors and officers insurance coverage to special purpose
acquisition vehicles. The Company expects to begin operation of the RRG in the 4th quarter of 2021. FGRe would anticipate providing
capital, along with others, to facilitate the underwriting of such insurance coverage. The Company will focus on fee income derived
from originating, underwriting, and servicing the insurance business, while mitigating our financial risk with external reinsurance
partners.
SPAC
Platform
On
December 21, 2020 we formed FG SPAC Solutions LLC (“FGSS”), a Delaware company, to facilitate the launch of our “SPAC
Platform”. Under the SPAC Platform, we plan to provide various strategic, administrative, and regulatory support services
to newly formed SPACs for a monthly fee. The Company co-founded a partnership to participate as a co-sponsor for newly formed
SPACs. The Company also participates in the risk capital investments associated with the launch of such SPACs through its Asset
Management business, specifically FG Special Situations Fund, LP. The first transaction entered into under the SPAC Platform occurred
on January 11, 2021 by and among FGSS and Aldel Investors, LLC, the sponsor of Aldel Financial, Inc. (“Aldel”), a
special purpose acquisition company which filed its initial registration statement with the Securities and Exchange Commission
on February 16, 2021. Under the agreement between FGSS and Aldel Investors, LLC (the “Agreement”), FGSS has agreed
to provide certain accounting, regulatory, strategic advisory, and other administrative services to Aldel, which include assistance
with negotiations with a potential merger target for the SPAC as well as assistance with the de-SPAC process.
We
are a Delaware corporation. Our principal executive offices are located at 970 Lake Carillon Dr, Suite 318, St. Petersburg, Florida,
33716, and our telephone number at this address is (727) 304-5666. Our website is www.fgfinancial.com. Information
contained on, or that may be accessible through, our website is not a part of, and is not incorporated into, this prospectus.
RISK
FACTORS
An
investment in our securities involves a high degree of risk. Before making an investment in our securities, you should carefully
consider the risks discussed under the heading “Risk Factors” in our most recent Annual Report on Form 10-K, and any
subsequently filed Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, which are incorporated herein by reference
(other than, in each case, information furnished, rather than filed), as well as the information contained in this prospectus
and in any prospectus supplements relating to particular offers of securities. Any of those risk factors could significantly and
adversely affect our business, prospects, financial condition and results of operations, and the trading price of our securities.
Although we describe, and will describe, what we believe to be the principal risks related to our Company and the securities we
offer, we can also be affected by risks we do not anticipate or do not think will have a material effect upon us. Please also
read carefully the section entitled “Cautionary Statement Regarding Forward-Looking Statements.”
USE
OF PROCEEDS
Unless
otherwise indicated in a prospectus supplement relating to a specific offering, we intend to use the net proceeds from the sale
of securities by us under this prospectus for general corporate purposes, which may include working capital, capital expenditures,
operational purposes and potential acquisitions.
The
intended application of proceeds from the sale of any particular offering of securities using this prospectus will be described
in the accompanying prospectus supplement relating to such offering. The precise amount and timing of the application of these
proceeds will depend on our funding requirements and the availability and costs of other funds.
DESCRIPTION
OF CAPITAL STOCK
The
following summary of the material terms of our securities is not intended to be a complete summary of the rights and preferences
of such securities. We urge you to read our certificate of incorporation (the “Certificate of Incorporation”) and
bylaws (the “Bylaws”) in their entirety for a complete description of the rights and preferences of our securities,
copies of which have been filed with the SEC. These documents are also incorporated by reference into the registration statement
of which this prospectus forms a part.
Authorized
Capital
The
Company’s authorized capital stock consists of 10,000,000 shares of common stock, $0.001 par value per share (the “Common
Stock”), and 1,000,000 shares of preferred stock (the “Preferred Stock”).
Under
Delaware law, stockholders generally are not personally liable for a corporation’s acts or debts.
Exchange
and Trading Symbol
The
Common Stock and Preferred Stock are listed for trading on the Nasdaq Global Market under the trading symbols “FGF”
and “FGFPP” respectively.
Rights
and Preferences
All
outstanding shares of Common Stock are duly authorized, fully paid and nonassessable. Holders of shares of Common Stock have no
conversion, preemptive or subscription rights, and there are no redemption or sinking fund provisions applicable to the Common
Stock. The rights, preferences and privileges of the holders of Common Stock are subject to, and may be adversely affected by,
the rights of the holders of shares of any series of Preferred Stock that the Company may designate and issue in the future.
In
the event of the Company’s liquidation, dissolution or winding up, the holders of Common Stock are entitled to share ratably
in the assets legally available for distribution to stockholders after the payment of all of the Company’s known debts and
liabilities and after adequate provision has been made for each class of stock having preference over the Common Stock, if any.
Voting
Rights
Holders
of Common Stock are entitled to one vote for each share held of record on all matters to be voted on by the stockholders. There
is no cumulative voting with respect to the election of directors. Directors are elected by a plurality of the votes cast by the
holders of Common Stock. Except as otherwise required by law, all other matters brought to a vote of the holders of Common Stock
are determined by a majority of the votes cast, and, except as may be provided with respect to any other outstanding class or
series of the Company’s stock, the holders of shares of Common Stock possess the exclusive voting power.
Dividends
Subject
to preferences that may be applicable to any then outstanding shares of Preferred Stock, the holders of Common Stock are entitled
to receive dividends, if any, as may be declared from time to time by the Company’s Board of Directors out of legally available
funds.
Preferred
Stock
As
of December 31, 2020, the Company has 700,000 outstanding shares of 8.00% Cumulative Preferred Stock, Series A, $25.00 liquidation
preference per share (the “Series A Preferred Stock”).
General
Provisions of Series A Preferred Stock
Our
Fourth Amended and Restated Certificate of Incorporation permits us to authorize the issuance of up to 1,000,000 shares of preferred
stock, in one or more series without stockholder action. The Series A Preferred Stock constitutes a series of our authorized preferred
stock. We may from time to time, without notice to or the consent of holders of the Preferred Stock, issue shares of preferred
stock that rank equally with or junior to the Preferred Stock.
The
Series A Preferred Stock is fully paid and non-assessable. Holders of the Series A Preferred Stock do not have preemptive or similar
rights to acquire any of our capital stock. Holders do not have the right to convert Series A Preferred Stock into, or exchange
Series A Preferred Stock for, shares of any other class or series of shares or other securities of ours. The Series A Preferred
Stock has no stated maturity and will not be subject to any sinking fund, retirement fund or purchase fund or other obligation
of the Company to redeem or purchase the Series A Preferred Stock. The Series A Preferred Stock is not redeemable prior to February
28, 2023.
Ranking
of Series A Preferred Stock
The
Series A Preferred Stock ranks senior to our Common Stock with respect to the payment of dividends and distributions of assets
upon liquidation, dissolution or winding up, equally with each other series of our preferred stock that we may issue the terms
of which provide that they rank equally with the Series A Preferred Stock with respect to the payment of dividends and distributions
of assets upon liquidation, dissolution or winding-up and junior to each other series of our preferred stock that we may issue
in the future the terms of which provide that they rank senior to the Series A Preferred Stock with respect to the payment of
dividends and distributions of assets upon our liquidation, dissolution or winding-up.
Dividends
on Series A Preferred Stock
Holders
of Series A Preferred Stock are entitled to receive, when, as and if declared by the Board of Directors of the Company or a duly
authorized committee thereof, out of lawfully available funds for the payment of dividends, cumulative cash dividends from the
original issue date at the rate of 8.00% of the $25.00 per share liquidation preference per annum (equivalent to $2.00 per annum
per share). Dividends on the Series A Preferred Stock shall be payable quarterly on the 15th day of March, June, September and
December of each year. In the event that we issue additional Series A Preferred Stock after the original issue date, dividends
on such additional shares may accrue from the original issue date or any other date that we specify at the time such additional
shares are issued.
Dividends
on the Series A Preferred Stock will accrue whether or not we have earnings, whether or not there are funds legally available
for the payment of those dividends and whether or not those dividends are declared by our Board of Directors. No interest, or
sum in lieu of interest, will be payable in respect of any dividend payment or payments on the Preferred Stock that may be in
arrears, and holders of the Preferred Stock will not be entitled to any dividends in excess of full cumulative dividends described
above. Any dividend payment made on the Preferred Stock shall first be credited against the earliest accumulated but unpaid dividend
due with respect to those shares.
Liquidation
Rights of Series A Preferred Stock
Upon
our voluntary or involuntary liquidation, dissolution or winding up, holders of the Series A Preferred Stock and any parity stock
are entitled to receive out of our assets available for distribution to stockholders, after satisfaction of liabilities to creditors,
if any, and subject to the preferential rights of the holders of any class or series of capital stock that we may issue ranking
senior to the Series A Preferred Stock with respect to the distribution of assets upon liquidation, dissolution or winding up,
a liquidating distribution in the amount equal to the liquidation preference of $25.00 per share of Series A Preferred Stock,
plus an amount equal to any accumulated and unpaid dividends to, but not including, the date of payment, but before any distribution
of assets is made to holders of our common stock or any class or series of our capital stock we may issue that ranks junior to
the Series A Preferred Stock as to liquidation rights.
Redemption
of Series A Preferred Stock
The
Preferred Stock is not redeemable prior to February 28, 2023. On and after that date, the Series A Preferred Stock will be redeemable
at our option, in whole or in part, at a redemption price equal to $25.00 per share, plus any accumulated and unpaid dividends
thereon, including accumulated but unpaid dividends for the then-current dividend period, to, but not including, the redemption
date. Holders of the Preferred Stock will have no right to require the redemption of the Preferred Stock.
Notwithstanding
the foregoing, we may, at our option, upon not less than 30 nor more than 60 days’ written notice, redeem the Series A Preferred
Stock, in whole or in part, within 120 days after a change in control, at a redemption price equal to $25.00 per share plus accumulated
and unpaid dividends thereon, including accumulated but unpaid dividends for the then-current dividend period, to, but not including,
the redemption date. Holders of the Preferred Stock will have no right to require the redemption of the Preferred Stock.
Voting
Rights of Series A Preferred Stock Holders
The
holders of Series A Preferred Stock will not have any voting rights, except as set forth below or as otherwise from time to time
provided by law, nor will the holders of the Series A Preferred Stock be given any notice of a meeting or vote by the Company’s
stockholders.
In
any matter on which holders of Preferred Stock are entitled to vote, each share of Preferred Stock will be entitled to one vote
for each $25.00 of liquidation preference.
So
long as any shares of Preferred Stock remain outstanding, we will not, without the affirmative vote or consent of the holders
of at least two-thirds of the votes entitled to be cast by the holders of the Series A Preferred Stock and each other class or
series of voting parity stock outstanding at the time, given in person or by proxy, either in writing or at a meeting (voting
together as a single class) (a) authorize, create, or issue, or increase the authorized or issued amount of, any class or series
of stock ranking senior to the Series A Preferred Stock with respect to payment of dividends or the distribution of assets upon
liquidation, dissolution or winding up of the affairs of the Company or reclassify any authorized shares of capital stock of the
Company into such stock, or create, authorize or issue any obligation or security convertible into or evidencing the right to
purchase any such stock; or (b) amend, alter or repeal our Certificate of Incorporation, whether by way of a merger, consolidation,
transfer or conveyance of all or substantially all of our assets or otherwise (an “Event”), so as to materially and
adversely affect any right, preference, privilege or voting power of the Series A Preferred Stock or the holders thereof; provided,
however, with respect to the occurrence of any of the Events set forth in (b) above, so long as any shares of Series A Preferred
Stock remain outstanding with the terms thereof unchanged, or the holders of shares of Series A Preferred Stock receive capital
stock of the successor with substantially identical rights (taken as a whole), taking into account that, upon the occurrence of
an Event, we may not be the surviving entity, the occurrence of such Event shall not be deemed to adversely affect such rights,
preferences, privileges or voting power of holders of Series A Preferred Stock, and in such case such holders shall not have any
voting rights with respect to the occurrence of any of the Events. In addition, if the holders of the Series A Preferred Stock
receive the greater of the full trading price of the Series A Preferred Stock on the date of an Event set forth in (b) above or
the $25.00 liquidation preference per share of the Series A Preferred Stock pursuant to the occurrence of any of the Events, then
such holders will not have any voting rights with respect to the Events. Moreover, if any Event above would adversely affect any
right, preference, privilege or voting power of the Series A Preferred Stock disproportionately relative to other classes or series
of parity stock, the affirmative vote of the holders of at least two-thirds of the outstanding shares of Preferred Stock, voting
separately as a class, will also be required.
Anti-Takeover
Effects of Provisions of Delaware Law and the Company’s Certificate of Incorporation and Bylaws
Delaware
Anti-Takeover Law
The
Company is subject to Section 203 of the Delaware General Corporation Law (“Section 203”). Section 203 generally prohibits
a public Delaware corporation from engaging in a “business combination” with an “interested stockholder”
for a period of three years after the date of the transaction in which the person became an interested stockholder unless:
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prior
to the date of the transaction, the board of directors of the corporation approved either the business combination or the
transaction which resulted in the stockholder becoming an interested stockholder; |
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upon
consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder
owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for
purposes of determining the number of shares outstanding (but not the outstanding voting stock owned by the interested stockholder)
those shares owned by (i) persons who are directors and also officers and (ii) employee stock plans in which employee participants
do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or
exchange offer; or |
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at
or subsequent to such time the business combination is approved by the board of directors and authorized at an annual or special
meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting
stock which is not owned by the interested stockholder. |
Section
203 defines a “business combination” to generally include:
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any
merger or consolidation of the corporation or any direct or indirect majority-owned subsidiary of the corporation with the
interested stockholder; |
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any
sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), except
proportionately as a stockholder of such corporation, to or with the interested stockholder of assets of the corporation or
of any direct or indirect majority-owned subsidiary of the corporation which assets have an aggregate market value equal to
10% or more of either the aggregate market value of all the assets of the corporation determined on a consolidated basis or
the aggregate market value of all the outstanding stock of the corporation; |
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subject
to certain exceptions, any transaction which results in the issuance or transfer by the corporation or by any direct or indirect
majority-owned subsidiary of the corporation of any stock of the corporation or of such subsidiary to the interested stockholder; |
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subject
to certain exceptions, any transaction involving the corporation or any direct or indirect majority-owned subsidiary of the
corporation that has the effect, directly or indirectly, of increasing the interested stockholder’s proportionate share
of the stock of any class or series of securities, or securities convertible into the stock of any class or series, of the
corporation or of any such subsidiary; and |
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any
receipt by the interested stockholder of the benefit, directly or indirectly (except proportionately as a stockholder of such
corporation), of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation
or any direct or indirect majority-owned subsidiary. |
In
general, Section 203 defines an interested stockholder as any entity or person that (i) is the owner of 15% or more of the outstanding
voting stock of the corporation, or (ii) is an affiliate or associate of the corporation and was the owner of 15% or more of the
outstanding voting stock of the corporation at any time within the three-year period immediately prior to the date on which it
is sought to be determined whether such person is an interested stockholder, and the affiliates and associates of such person.
Certificate
of Incorporation and Bylaws
The
Company’s Fourth Amended and Restated Certificate of Incorporation and Bylaws include anti-takeover provisions that:
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authorize
the Board of Directors, without further action by the stockholders, to issue shares of Preferred Stock in one or more series,
and with respect to each series, to fix the number of shares constituting that series, and establish the rights and terms
of that series; |
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establish
advance notice procedures for stockholders to submit nominations of candidates for election to the Board of Directors to be
brought before a stockholders meeting; |
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allow
the Company’s directors to establish the size of the Board of Directors and fill vacancies on the Board created by an
increase in the number of directors (subject to the rights of the holders of any series of Preferred Stock to elect additional
directors under specified circumstances); |
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require
the affirmative vote of the holders of the majority of the voting power of all of the then-outstanding shares of capital stock
of the Company entitled to vote generally in the election of directors in order to remove a director or the entire Board of
Directors for cause; |
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do
not provide stockholders cumulative voting rights with respect to director elections; and |
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provide
that the Company’s Bylaws may be amended by the Board of Directors without stockholder approval; provided, however,
that the stockholders may amend the Bylaws only with the affirmative vote of the holders of at least 66 2/3% of the voting
power of all of the then-outstanding shares of capital stock of the Company entitled to vote generally in the election of
directors. |
Provisions
of the Company’s Certificate of Incorporation and Bylaws may delay or discourage transactions involving an actual or potential
change in the Company’s control or change in the Company’s Board of Directors or management, including transactions
in which stockholders might otherwise receive a premium for their shares or transactions that the Company’s stockholders
might otherwise deem to be in their best interests. Therefore, these provisions could adversely affect the price of the Common
Stock.
Authorized
and Unissued Shares
The
Company’s authorized and unissued shares of Common Stock are available for future issuance without stockholder approval
except as may otherwise be required by applicable stock exchange rules or Delaware law. The Company may issue additional shares
for a variety of purposes, including future offerings to raise additional capital, to fund acquisitions and as employee and consultant
compensation. The existence of authorized but unissued shares of Common Stock could render more difficult, or discourage an attempt,
to obtain control of the Company by means of a proxy contest, tender offer, merger or otherwise.
The
issuance of shares of Preferred Stock by the Company could have certain anti-takeover effects under certain circumstances, and
could enable the Board of Directors to render more difficult or discourage an attempt to obtain control of the Company by means
of a merger, tender offer, or other business combination transaction directed at the Company by, among other things, placing shares
of Preferred Stock with investors who might align themselves with the Board of Directors.
Transfer
Agent and Registrar
The
transfer agent for the shares of the Company’s common stock and Series A Preferred Stock is Vstock Transfer, LLC.
DESCRIPTION
OF DEBT SECURITIES
General
We
will issue the debt securities offered by this prospectus and any accompanying prospectus supplement under an indenture to be
entered into between us and the trustee identified in the applicable prospectus supplement. The terms of the debt securities will
include those stated in the indenture and those made part of the indenture by reference to the Trust Indenture Act of 1939, as
in effect on the date of the indenture. We have filed a copy of the form of indenture as an exhibit to the registration statement
in which this prospectus is included. The indenture will be subject to and governed by the terms of the Trust Indenture Act of
1939.
We
may offer under this prospectus up to an aggregate principal amount of $150,000,000 in debt securities, or if debt securities
are issued at a discount, or in a foreign currency, foreign currency units or composite currency, the principal amount as may
be sold for an aggregate public offering price of up to $150,000,000. Unless otherwise specified in the applicable prospectus
supplement, the debt securities will represent our direct, unsecured obligations and will rank equally with all of our other unsecured
indebtedness.
The
debt securities, if and when issued, will be direct, unsecured obligations of our company and may be either senior debt securities
or subordinated debt securities. We may issue debt securities in one or more issuances or series. An indenture, or a supplemental
indenture, will set forth specific terms of each issue or series of debt securities. There will be prospectus supplements relating
to particular issues or series of debt securities. Each prospectus supplement will describe:
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the
title of the debt securities and whether the debt securities are senior or subordinated debt securities; |
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the
total principal amount of the debt securities we are offering by that prospectus supplement; |
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the
date or dates on which principal of the debt securities will be payable and the amount of principal which will be payable; |
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the
rate or rates (which may be fixed or variable) at which the debt securities will bear interest, if any, or contingent interest,
if any, as well as the dates from which interest will accrue, the dates on which interest will be payable, the persons to
whom interest will be payable, if other than the registered holders on the record date, and the record date for the interest
payable on any payment date; |
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the
currency in which principal and interest, and any premium, will be payable; |
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the
place or places where principal, premium, if any, and interest, if any, on the debt securities will be payable and where debt
securities which are in registered form can be presented for registration of transfer or exchange; |
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any
provisions regarding our right to prepay debt securities or of holders to require us to prepay debt securities; |
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the
right, if any, of holders of the debt securities to convert them into common stock or other securities, including any contingent
conversion provisions; |
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any
provisions requiring or permitting us to make payments to a sinking fund which will be used to redeem debt securities or a
purchase fund which will be used to purchase debt securities; |
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the
percentage of the principal amount of the debt securities which is payable if maturity of the debt securities is accelerated
because of a default; |
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any
special or modified events of default or covenants with respect to the debt securities; and |
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any
other material terms of the debt securities. |
We
may issue discount debt securities that provide for an amount less than the stated principal amount to be due and payable upon
acceleration of the maturity of such debt securities in accordance with the terms of the indenture. We may also issue debt securities
in bearer form, with or without coupons. If we issue discount debt securities or debt securities in bearer form, we will describe
material U.S. federal income tax considerations and other material special considerations which apply to these debt securities
in the applicable prospectus supplement.
We
may issue debt securities denominated in or payable in a foreign currency or currencies or a foreign currency unit or units. If
we do, we will describe the restrictions, elections, and general tax considerations relating to the debt securities and the foreign
currency or currencies or foreign currency unit or units in the applicable prospectus supplement.
Registrar
and Paying Agent
The
debt securities may be presented for registration of transfer or for exchange at the corporate trust office of the security registrar
or at any other office or agency that we maintain for those purposes. In addition, the debt securities may be presented for payment
of principal, interest and any premium at the office of the paying agent or at any office or agency that we maintain for those
purposes.
Conversion
or Exchange Rights
Debt
securities may be convertible into or exchangeable for shares of our common stock. The terms and conditions of conversion or exchange
will be stated in the applicable prospectus supplement. The terms will include, among others, the following:
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the
conversion or exchange price; |
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the
conversion or exchange period; |
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provisions
regarding the convertibility or exchangeability of the debt securities, including who may convert or exchange; |
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events
requiring adjustment to the conversion or exchange price; |
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provisions
affecting conversion or exchange in the event of our redemption of the debt securities; and |
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any
anti-dilution provisions, if applicable. |
Registered
Global Securities
If
we decide to issue debt securities in the form of one or more global securities, then we will register the global securities in
the name of the depositary for the global securities or the nominee of the depositary, and the global securities will be delivered
by the trustee to the depositary for credit to the accounts of the holders of beneficial interests in the debt securities.
The
prospectus supplement will describe the specific terms of the depositary arrangement for debt securities of a series that are
issued in global form. None of us, the trustee, any payment agent or the security registrar will have any responsibility or liability
for any aspect of the records relating to or payments made on account of beneficial ownership interests in a global debt security
or for maintaining, supervising or reviewing any records relating to these beneficial ownership interests.
No
Protection in the Event of a Change of Control
The
indenture does not have any covenants or other provisions providing for a put or increased interest or otherwise that would afford
holders of our debt securities additional protection in the event of a recapitalization transaction, a change of control or a
highly leveraged transaction. If we offer any covenants or provisions of this type with respect to any debt securities covered
by this prospectus, we will describe them in the applicable prospectus supplement.
Covenants
Unless
otherwise indicated in this prospectus or the applicable prospectus supplement, our debt securities will not have the benefit
of any covenants that limit or restrict our business or operations, the pledging of our assets or the incurrence by us of indebtedness.
We will describe in the applicable prospectus supplement any material covenants in respect of a series of debt securities.
Merger,
Consolidation or Sale of Asset
The
form of indenture provides that we will not consolidate with or merge into any other person or convey, transfer, sell or lease
our properties and assets substantially as an entirety to any person, unless:
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we
are the surviving person of such merger or consolidation, or, if we are not the surviving person, the person formed by the
consolidation or into or with which we are merged or the person to which our properties and assets are conveyed, transferred,
sold or leased, is a corporation organized and existing under the laws of the U.S., any state or the District of Columbia
or a corporation or comparable legal entity organized under the laws of a foreign jurisdiction and has expressly assumed all
of our obligations, including the payment of the principal of and, premium, if any, and interest on the debt securities and
the performance of the other covenants under the indenture; and |
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immediately
before and immediately after giving effect to the transaction on a pro forma basis, no event of default, and no event which,
after notice or lapse of time or both, would become an event of default, has occurred and is continuing under the indenture. |
Events
of Default and Remedies
Unless
otherwise specified in the applicable prospectus supplement, the following events will be events of default under the indenture
with respect to debt securities of any series:
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we
fail to pay any principal or premium, if any, when it becomes due; |
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fail to pay any interest within 30 days after it becomes due; |
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we
fail to observe or perform any other covenant in the debt securities or the indenture for 60 days after written notice specifying
the failure from the trustee or the holders of not less than 25% in aggregate principal amount of the outstanding debt securities
of that series; and |
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certain
events involving bankruptcy, insolvency or reorganization of us or any of our significant subsidiaries. |
The
trustee may withhold notice to the holders of the debt securities of any series of any default, except in payment of principal
of or premium, if any, or interest on the debt securities of a series, if the trustee considers it to be in the best interest
of the holders of the debt securities of that series to do so.
If
an event of default (other than an event of default resulting from certain events of bankruptcy, insolvency or reorganization)
occurs, and is continuing, then the trustee or the holders of not less than 25% in aggregate principal amount of the outstanding
debt securities of any series may accelerate the maturity of the debt securities. If this happens, the entire principal amount,
plus the premium, if any, of all the outstanding debt securities of the affected series plus accrued interest to the date of acceleration
will be immediately due and payable. At any time after the acceleration, but before a judgment or decree based on such acceleration
is obtained by the trustee, the holders of a majority in aggregate principal amount of outstanding debt securities of such series
may rescind and annul such acceleration if:
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all
events of default (other than nonpayment of accelerated principal, premium or interest) have been cured or waived; |
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all
lawful interest on overdue interest and overdue principal has been paid; and |
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the
rescission would not conflict with any judgment or decree. |
In
addition, if the acceleration occurs at any time when we have outstanding indebtedness that is senior to the debt securities,
the payment of the principal amount of outstanding debt securities may be subordinated in right of payment to the prior payment
of any amounts due under the senior indebtedness, in which case the holders of debt securities will be entitled to payment under
the terms prescribed in the instruments evidencing the senior indebtedness and the indenture.
If
an event of default resulting from certain events of bankruptcy, insolvency or reorganization occurs, the principal, premium and
interest amount with respect to all of the debt securities of any series will be due and payable immediately without any declaration
or other act on the part of the trustee or the holders of the debt securities of that series.
The
holders of a majority in principal amount of the outstanding debt securities of a series will have the right to waive any existing
default or compliance with any provision of the indenture or the debt securities of that series and to direct the time, method
and place of conducting any proceeding for any remedy available to the trustee, subject to certain limitations specified in the
indenture.
No
holder of any debt security of a series will have any right to institute any proceeding with respect to the indenture or for any
remedy under the indenture, unless:
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the
holder gives to the trustee written notice of a continuing event of default; |
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the
holders of at least 25% in aggregate principal amount of the outstanding debt securities of the affected series make a written
request and offer reasonable indemnity to the trustee to institute a proceeding as trustee; |
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the
trustee fails to institute a proceeding within 60 days after such request; and |
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the
holders of a majority in aggregate principal amount of the outstanding debt securities of the affected series do not give
the trustee a direction inconsistent with such request during such 60-day period. |
These
limitations do not, however, apply to a suit instituted for payment on debt securities of any series on or after the due dates
expressed in the debt securities.
We
will periodically deliver certificates to the trustee regarding our compliance with our obligations under the indenture.
Modification
of an Indenture
From
time to time, we and the trustee may, without the consent of holders of the debt securities of one or more series, amend the indenture
or the debt securities of one or more series, or supplement the indenture, for certain specified purposes, including:
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● |
to
provide that the surviving entity following a change of control permitted under the indenture will assume all of our obligations
under the indenture and debt securities; |
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|
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● |
to
provide for certificated debt securities in addition to uncertificated debt securities; |
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to
comply with any requirements of the SEC under the Trust Indenture Act of 1939; |
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|
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to
provide for the issuance of and establish the form and terms and conditions of debt securities of any series as permitted
by the indenture; |
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|
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● |
to
cure any ambiguity, defect or inconsistency, or make any other change that does not materially and adversely affect the rights
of any holder; and |
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● |
to
appoint a successor trustee under the indenture with respect to one or more series. |
From
time to time we and the trustee may, with the consent of holders of at least a majority in principal amount of an outstanding
series of debt securities, amend or supplement the indenture or the debt securities series, or waive compliance in a particular
instance by us with any provision of the indenture or the debt securities. We may not, however, without the consent of each holder
affected by such action, modify or supplement the indenture or the debt securities or waive compliance with any provision of the
indenture or the debt securities in order to:
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● |
reduce
the amount of debt securities whose holders must consent to an amendment, supplement, or waiver to the indenture or such debt
security; |
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|
|
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● |
reduce
the rate of or change the time for payment of interest or reduce the amount of or postpone the date for payment of sinking
fund or analogous obligations; |
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|
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● |
reduce
the principal of or change the stated maturity of the debt securities; |
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● |
make
any debt security payable in money other than that stated in the debt security; |
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● |
change
the amount or time of any payment required or reduce the premium payable upon any redemption, or change the time before which
no such redemption may be made; |
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● |
waive
a default in the payment of the principal of, premium, if any, or interest on the debt securities or a redemption payment; |
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● |
waive
a redemption payment with respect to any debt securities or change any provision with respect to redemption of debt securities;
or |
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● |
take
any other action otherwise prohibited by the indenture to be taken without the consent of each holder affected by the action. |
Defeasance
of Debt Securities and Certain Covenants in Certain Circumstances
The
indenture permits us, at any time, to elect to discharge our obligations with respect to one or more series of debt securities
by following certain procedures described in the indenture. These procedures will allow us either:
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● |
to
defease and be discharged from any and all of our obligations with respect to any debt securities except for the following
obligations (which discharge is referred to as “legal defeasance”); |
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● |
to
register the transfer or exchange of such debt securities; |
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to
replace temporary or mutilated, destroyed, lost or stolen debt securities; |
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● |
to
compensate and indemnify the trustee; |
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● |
to
maintain an office or agency in respect of the debt securities and to hold monies for payment in trust; or |
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to
be released from our obligations with respect to the debt securities under certain covenants contained in the indenture, as
well as any additional covenants which may be contained in the applicable supplemental indenture (which release is referred
to as “covenant defeasance”). |
In
order to exercise either defeasance option, we must irrevocably deposit with the trustee or other qualifying trustee, in trust
for that purpose:
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money; |
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|
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● |
U.S.
Government Obligations (as described below) or Foreign Government Obligations (as described below) that through the scheduled
payment of principal and interest in accordance with their terms will provide money; or |
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|
|
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● |
a
combination of money and/or U.S. Government Obligations and/or Foreign Government Obligations sufficient in the written opinion
of a nationally-recognized firm of independent accountants to provide money; |
that,
in each case specified above, provides a sufficient amount to pay the principal of, premium, if any, and interest, if any, on
the debt securities of the series, on the scheduled due dates or on a selected date of redemption in accordance with the terms
of the indenture.
In
addition, defeasance may be effected only if, among other things:
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● |
in
the case of either legal or covenant defeasance, we deliver to the trustee an opinion of counsel, as specified in the indenture,
stating that as a result of the defeasance neither the trust nor the trustee will be required to register as an investment
company under the Investment Company Act of 1940; |
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in
the case of legal defeasance, we deliver to the trustee an opinion of counsel stating that we have received from, or there
has been published by, the Internal Revenue Service a ruling to the effect that, or there has been a change in any applicable
federal income tax law with the effect that (and the opinion shall confirm that), the holders of outstanding debt securities
will not recognize income, gain or loss for U.S. federal income tax purposes solely as a result of such legal defeasance and
will be subject to U.S. federal income tax on the same amounts, in the same manner, including as a result of prepayment, and
at the same times as would have been the case if legal defeasance had not occurred; |
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● |
in
the case of covenant defeasance, we deliver to the trustee an opinion of counsel to the effect that the holders of the outstanding
debt securities will not recognize income, gain or loss for U.S. federal income tax purposes as a result of covenant defeasance
and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have
been the case if covenant defeasance had not occurred; and |
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certain
other conditions described in the indenture are satisfied. |
If
we fail to comply with our remaining obligations under the indenture and applicable supplemental indenture after a covenant defeasance
of the indenture and applicable supplemental indenture, and the debt securities are declared due and payable because of the occurrence
of any undefeased event of default, the amount of money or U.S. Government Obligations or Foreign Government Obligations on deposit
with the trustee could be insufficient to pay amounts due under the debt securities of the affected series at the time of acceleration.
We will, however, remain liable in respect of these payments.
The
term “U.S. Government Obligations” as used in the above discussion means securities that are direct obligations of
or non-callable obligations guaranteed by the United States of America for the payment of which obligation or guarantee the full
faith and credit of the United States of America is pledged.
The
term “Foreign Government Obligations” as used in the above discussion means, with respect to debt securities of any
series that are denominated in a currency other than U.S. dollars, (1) direct obligations of the government that issued or caused
to be issued such currency for the payment of which obligations its full faith and credit is pledged or (2) obligations of a person
controlled or supervised by or acting as an agent or instrumentality of such government the timely payment of which is unconditionally
guaranteed as a full faith and credit obligation by that government, which in either case under clauses (1) or (2), are not callable
or redeemable at the option of the issuer.
Regarding
the Trustee
We
will identify the trustee with respect to any series of debt securities in the prospectus supplement relating to the applicable
debt securities. You should note that if the trustee becomes a creditor of ours, the indenture and the Trust Indenture Act of
1939 limit the rights of the trustee to obtain payment of claims in certain cases, or to realize on certain property received
in respect of any such claim, as security or otherwise. The trustee and its affiliates may engage in, and will be permitted to
continue to engage in, other transactions with us and our affiliates. If, however, the trustee acquires any “conflicting
interest” within the meaning of the Trust Indenture Act of 1939, it must eliminate such conflict or resign.
The
holders of a majority in principal amount of the then outstanding debt securities of any series may direct the time, method and
place of conducting any proceeding for exercising any remedy available to the trustee. If an event of default occurs and is continuing,
the trustee, in the exercise of its rights and powers, must use the degree of care and skill of a prudent person in the conduct
of his or her own affairs. Subject to that provision, the trustee will be under no obligation to exercise any of its rights or
powers under the indenture at the request of any of the holders of the debt securities, unless they have offered to the trustee
reasonable indemnity or security.
No
Individual Liability of Incorporators, Stockholders, Officers or Directors
Each
indenture provides that no incorporator and no past, present or future stockholder, officer or director of our Company or any
successor corporation in those capacities will have any individual liability for any of our obligations, covenants or agreements
under the debt securities or such indenture.
Governing
Law
The
indentures and the debt securities will be governed by, and construed in accordance with, the laws of the State of New York.
DESCRIPTION
OF WARRANTS
We
may issue warrants to purchase common stock, preferred stock, debt securities or units. Each issue of warrants will be the subject
of a warrant agreement which will contain the terms of the warrants. In the event that we issue warrants, we will distribute a
prospectus supplement with regard to each issue of warrants. Each prospectus supplement will describe, as to the warrants to which
it relates:
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● |
the
securities which may be purchased by exercising the warrants (which may be common stock, preferred stock, depositary shares,
debt securities or units consisting of two or more of those types of securities); |
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● |
the
exercise price of the warrants (which may be wholly or partly payable in cash or wholly or partly payable with other types
of consideration); |
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● |
the
period during which the warrants may be exercised; |
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● |
any
provision adjusting the securities which may be purchased on exercise of the warrants and the exercise price of the warrants
in order to prevent dilution or otherwise; |
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|
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● |
the
place or places where warrants can be presented for exercise or for registration of transfer or exchange; and |
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● |
any
other material terms of the warrants. |
Exercise
of Warrants
Each
warrant will entitle the holder of the warrant to purchase for cash the amount of common stock, preferred stock, depositary shares,
debt securities or units at the exercise price stated or determinable in the applicable prospectus supplement for the warrants.
Warrants may be exercised at any time up to the close of business on the expiration date shown in the applicable prospectus supplement,
unless otherwise specified in such prospectus supplement. After the close of business on the expiration date, unexercised warrants
will become void. Warrants may be exercised as described in the applicable prospectus supplement.
Until
a holder exercises the warrants to purchase any securities underlying the warrants, the holder will not have any rights as a holder
of the underlying securities by virtue of ownership of warrants.
DESCRIPTION
OF UNITS
We
may issue securities in units, each consisting of two or more types of securities. For example, we might issue units consisting
of a combination of debt securities and warrants to purchase common stock. If we issue units, the prospectus supplement relating
to the units will contain the information described above with regard to each of the securities that is a component of the units.
In addition, each prospectus supplement relating to units will:
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● |
state
how long, if at all, the securities that are components of the units must be traded in units, and when they can be traded
separately; |
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● |
state
whether we will apply to have the units traded on a securities exchange or securities quotation system; and |
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● |
describe
how, for U.S. federal income tax purposes, the purchase price paid for the units is to be allocated among the component securities. |
PLAN
OF DISTRIBUTION
We
may sell the securities offered through this prospectus and applicable prospectus supplements in one or more of the following
ways from time to time: (i) to or through underwriters or dealers, (ii) directly to one or more purchasers, including our affiliates,
(iii) through agents, (iv) through a combination of any these methods, or (v) through any other method permitted by applicable
law.
In
addition, the manner in which we may sell some or all of the securities covered by this prospectus, includes, without limitation,
through:
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● |
an
“at the market” offering, within the meaning of Rule 415(a)(4) of the Securities Act of 1933, as amended, or the
“Securities Act,” to or through a market maker or into an existing trading market on an exchange or otherwise; |
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● |
a
block trade in which a broker-dealer will attempt to sell as agent, but may position or resell a portion of the block, as
principal, in order to facilitate the transaction; |
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● |
purchases
by a broker-dealer, as principal, and resale by the broker-dealer for its account; |
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|
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● |
ordinary
brokerage transactions and transactions in which a broker solicits purchasers; or |
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● |
privately
negotiated transactions. |
The
securities may be distributed at a fixed price or prices, which may be changed, based on market prices prevailing at the time
of sale, prices related to the prevailing market prices, or negotiated prices. The prospectus supplement relating to an offering
of securities will set forth the terms of such offering, including:
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● |
the
name or names of any underwriters or agents; |
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|
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● |
the
name or names of any managing underwriter or underwriters; |
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● |
the
name or names of any broker/dealers or placement agents; |
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● |
the
purchase price of the securities; |
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|
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● |
any
over-allotment options under which underwriters may purchase additional securities; |
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|
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● |
the
net proceeds from the sale of the securities; |
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● |
any
delayed delivery arrangements; |
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● |
any
underwriting discounts, commissions and other items constituting underwriters’ compensation; |
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|
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● |
any
initial public offering price; |
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● |
any
discounts or concessions allowed or reallowed or paid to dealers; |
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● |
any
commissions paid to agents; and |
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● |
any
securities exchange or market on which the securities may be listed. |
Sale
Through Underwriters or Dealers
Only
underwriters named in a prospectus supplement are underwriters of the securities offered by such prospectus supplement.
If
underwriters are used in the sale, the underwriters will acquire the securities for their own account, including through underwriting,
purchase, security lending or repurchase agreements with us. The underwriters may resell the securities from time to time in one
or more transactions, including negotiated transactions. Underwriters may sell the securities in order to facilitate transactions
in any of our other securities (described in this prospectus or otherwise), including other public or private transactions and
short sales. Underwriters may offer securities to the public either through underwriting syndicates represented by one or more
managing underwriters or directly by one or more firms acting as underwriters without a syndicate. Unless otherwise indicated
in a prospectus supplement, the obligations of the underwriters to purchase the securities will be subject to certain conditions,
and the underwriters will be obligated to purchase all the offered securities if they purchase any of them. The underwriters may
change from time to time any public offering price and any discounts or concessions allowed or reallowed or paid to dealers.
If
dealers are used in the sale of securities offered through this prospectus, we will sell the securities to them as principals.
The dealers may then resell those securities to the public at varying prices determined by the dealers at the time of resale.
The prospectus supplement will include the names of the dealers and the terms of the transaction.
The
maximum compensation or discount to be received by any FINRA member or independent broker-dealer will not be greater than 8% for
the sale of any securities being registered hereunder pursuant to Rule 415 of the Securities Act.
Direct
Sales and Sales Through Agents
We
may sell the securities offered through this prospectus directly. In this case, no underwriters or agents would be involved. Such
securities may also be sold through agents designated from time to time. Any applicable prospectus supplement will name any agent
involved in the offer or sale of the offered securities and will describe any commissions payable to the agent. Unless otherwise
indicated in the prospectus supplement, any agent will agree to use its reasonable best efforts to solicit purchases for the period
of its appointment.
We
may sell the securities directly to institutional investors or others who may be deemed to be underwriters within the meaning
of the Securities Act with respect to any sale of those securities. The terms of any such sales will be described in a prospectus
supplement.
Delayed
Delivery Contracts
If
an applicable prospectus supplement indicates, we may authorize agents, underwriters or dealers to solicit offers from certain
types of institutions to purchase securities at the public offering price under delayed delivery contracts. These contracts would
provide for payment and delivery on a specified date in the future. The contracts would be subject only to those conditions described
in the prospectus supplement. The applicable prospectus supplement will describe the commission payable for solicitation of those
contracts.
Market
Making, Stabilization and Other Transactions
We
may elect to list offered securities on an exchange or in the over-the-counter market. Any underwriters that we use in the sale
of offered securities may make a market in such securities, but may discontinue such market making at any time without notice.
Therefore, we cannot assure you that the securities will have a liquid trading market.
Certain
persons participating in an offering may engage in overallotment, stabilizing transactions, syndicate covering transactions and
penalty bids in accordance with rules and regulations under the Exchange Act. Overallotment involves the sale in excess of the
offering size, which create a short position. Stabilizing transactions involve bids to purchase the underlying security in the
open market for the purpose of pegging, fixing or maintaining the price of the securities. Syndicate covering transactions involve
purchases of the securities in the open market after the distribution has been completed in order to cover syndicate short positions.
Penalty
bids permit the underwriters to reclaim a selling concession from a syndicate member when the securities originally sold by the
syndicate member are purchased in a syndicate covering transaction to cover syndicate short positions. Stabilizing transactions,
syndicate covering transactions and penalty bids may cause the price of the securities to be higher than it would be in the absence
of the transactions. The underwriters may, if they commence these transactions, discontinue them at any time.
General
Information
Agents,
underwriters, and dealers may be entitled, under agreements entered into with us, to indemnification by us against certain liabilities,
including liabilities under the Securities Act. Our agents, underwriters, and dealers, or their affiliates, may be customers of,
engage in transactions with or perform services for us in the ordinary course of business.
LEGAL
MATTERS
Loeb
& Loeb LLP, New York, New York, or other counsel selected by the Company with regard to a particular offering, who will be
named in the prospectus supplement relating to that offering, will pass upon the validity of any securities we offer by this prospectus.
If the validity of any securities is also passed upon by counsel for the underwriters of an offering of those securities, that
counsel will be named in the prospectus supplement relating to that offering.
EXPERTS
The
consolidated financial statements of the Company as of December 31, 2020 and 2019 and for the years ended December
31, 2020 and 2019, incorporated in this prospectus by reference to the Company’s Annual Report on Form 10-K
for the year ended December 31, 2020, have been so incorporated in reliance on the report of BDO USA, LLP, an independent
registered public accounting firm, incorporated herein by reference, given on the authority of said firm as experts in accounting
and auditing.
DISCLOSURE
OF COMMISSION POSITION ON INDEMNIFICATION
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions or otherwise, the registrant has been advised that in the opinion
of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of
1933 and is therefore unenforceable.
WHERE
YOU CAN FIND MORE INFORMATION
We
are subject to the information reporting requirements of the Exchange Act and, in accordance with these requirements, we file,
electronically, with the SEC, annual, quarterly and current reports, proxy statements, information statements, and other information.
Our SEC filings are available to the public over the Internet at the SEC’s website at www.sec.gov. In addition, we provide
free access to these materials through our website, www.fgfinancial.com, as soon as reasonably practicable after they are
filed with or furnished to the SEC. Information contained on, or (other than our SEC filings) that may be accessible through,
our website is not a part of, and is not incorporated into, this prospectus.
We
have filed with the SEC a registration statement on Form S-3 relating to the securities covered by this prospectus and any prospectus
supplement. This prospectus is a part of the registration statement and does not contain all the information in the registration
statement. Whenever a reference is made in this prospectus or any prospectus supplement to a contract or other document, the reference
is only a summary and you should refer to the exhibits that are a part of the registration statement for a copy of the contract
or other document. You may review a copy of the registration statement through the SEC’s website.
INCORPORATION
BY REFERENCE
The
SEC allows us to incorporate by reference information in this document. This means that we can disclose important information
to you by referring you to documents that we have previously filed with the SEC or documents that we will file with the SEC in
the future. The information incorporated by reference is considered to be an important part of this prospectus, except for any
information that is superseded by information that is included directly in this document.
We
are incorporating by reference in this prospectus the following documents which we have previously filed with the SEC (other than
any portions of the Current Reports on Form 8-K that were furnished pursuant to Item 2.02 or 7.01 of Form 8-K or other applicable
SEC rules):
| (1) |
Annual
Report on Form 10-K for the year ended December 31, 2020, filed on March 18, 2021; |
| (2) |
Current
Report on Form 8-K filed on March 18, 2021; |
| |
|
| (3) |
the
description of our shares of common stock contained in our Registration Statement on Form 8-A, as filed with the SEC on March
19, 2014, including any amendment or report filed for the purpose of updating such description; and |
| |
|
| (4) |
the
description of our shares of 8.00% Cumulative Preferred Stock, Series A contained in our Registration Statement on Form 8-A,
as filed with the SEC on February 26, 2018. |
Whenever
after the date of filing the registration statement of which this prospectus is a part, and until all of the securities to which
this prospectus relates have been sold or the offering is otherwise terminated, we file reports or documents under Section 13(a),
13(c), 14 or 15(d) of the Exchange Act, those reports and documents will be deemed to be part of this prospectus from the time
they are filed. Any statements made in this prospectus or in a document incorporated or deemed to be incorporated by reference
in this prospectus will be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement
contained in this prospectus or in any subsequently filed document that is also incorporated or deemed to be incorporated by reference
in this prospectus modifies or supersedes the statement. Nothing in this prospectus will be deemed to incorporate information
furnished by us on Form 8-K that under the rules of the SEC, is not deemed “filed” for purposes of the Exchange Act.
We
will provide to each person, including any beneficial owner, to whom a prospectus is delivered, a copy of any or all of the information
that has been incorporated by reference in the prospectus, but not delivered with the prospectus, upon oral or written request,
free of charge. Any requests for this information should be made by calling or sending a letter at our principal executive offices
at the following address:
FG
Financial Group, Inc.
Attention:
Investor Relations
970
Lake Carillon Dr., Suite 318
St.
Petersburg, FL 33716
Telephone:
(727)-304-5666
Shares
Common Stock
FG
Financial Group, Inc.
PROSPECTUS
SUPPLEMENT
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