Company: FGMCU
Filing Date: 2025-12-30
Form Type: S-4/A
Source: 0001104659-25-124947
Chunk: 589

Company: FG Merger II Corp.
Filing Date: 2025-12-30
Form: S-4/A
Chunk 589
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ivable, current, and $94 thousand applied as a credit loss allowance to the Accounts receivable balance. This has been recognized as a contra receivable balance in accordance with ASC 326 (ASU 2016-13), Current Expected Credit Losses (“ CECL ”) as of September 30, 2025. For the three months ended September 30, 2025, the Company has estimated a portion of its receivables to have doubts about collectability, which is recorded as a credit loss provision of $935 thousand, comprised of $508 thousand applied as a credit loss allowance to the Loan receivable, non-current, $333 thousand applied as a credit loss allowance to the Loan receivable, current, and $94 thousand applied as a credit loss allowance to the Accounts receivable balance. This has been recognized as a contra receivable balance in accordance with ASC 326 (ASU 2016-13), Current Expected Credit Losses (“ CECL ”) as of September 30, 2025. The Company has initiated loans to specific customers to assist them in their financing. The loans were negotiated on an arm’s length basis, accrue interest income, and were originated at market rates. Accordingly, there are no ASC 606 impacts related to a financing component embedded in the loan. The Company has an on-going business relationship with these Customers and expects to deliver additional units in the future. However, as mentioned above, a portion of these loan receivables carry doubts about collectability. Consequently, the Company recorded its first CECL reserve in the second quarter of 2025 and another reserve in the third quarter of 2025.

F- 74

An aging analysis was performed using historical and forecasted credit loss rates across various delinquency buckets, resulting in a total expected credit loss estimate of $375 thousand, which was recorded as a CECL reserve as of June 30, 2025. This included specific reserves of $300 thousand related to two delinquent loans, and a general reserve of $75 thousand. In the third quarter of 2025, the Company recorded a reserve of $935 thousand, related to 4 delinquent loans. This was comprised of a total general reserve of $14 thousand and specific reserves of $921 thousand. Previously, the Company had concluded that no CECL reserve was required as of December 31, 2024. During the third quarter of 2025, the Company undertook additional collections efforts related to its delinquent loans