Company: FGMCU
Filing Date: 2025-12-30
Form Type: S-4/A
Source: 0001104659-25-124947
Chunk: 439

Company: FG Merger II Corp.
Filing Date: 2025-12-30
Form: S-4/A
Chunk 439
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, and utilities. The increase in general and administrative expenses was primarily related to the addition of $4.0 million of legal settlement expense reflecting the value of Series A-1 Preferred Stock issued in the settlements, higher third party legal costs related to the proposed Mergers and related preparatory work and higher compensation and benefits for additional staff in IT, Legal, and Accounting. Offsetting this increase was lower compensation expense due to reduced headcount overall as well as $265,000 of stock-based compensation recaptured in general and administrative expenses in the nine months ended September 30, 2025, compared to $1.5 million of stock-based compensation expense recognized in the three months ended September 30, 2024.

We also incurred higher sales and marketing expenses in the nine months ended September 30, 2025 compared to the prior period, reflecting increased advertising as discussed above. Research and development activity declined following our obtaining state approvals under modular housing programs in several states. Impairment loss in the 2024 period reflects the impairment loss of deposits on equipment and fixed assets for assets and customized equipment for the Company’s originally planned generation 2.0 Casita, which were never delivered to the Company. The matter is currently the subject of litigation.

Stock-based Compensation Expense

For the nine-months ended September 30, 2025 and 2024, the Company recaptured $3.6 million and recognized $6.7 million in stock-based compensation, respectively. The decrease is attributable to employee forfeitures upon terminations in 2025, offset by the vesting of stock options under the Company’s Amended 2021 stock incentive plan. See “Note 12. Stockholders’ Equity – Stock-based Compensation” for further discussion.

Total Other Income

For the nine months ended September 30, 2025 and 2024, our total other income was $1.3 million as compared to $1.6 million, respectively, primarily due to lower balances of interest-bearing deposits.

Liquidity and Capital Resources

Going Concern

The Company’s unaudited interim condensed consolidated financial statements have been prepared under the assumption that the Company will be able to continue as a going concern. The going concern assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business. However, substantial doubt about the Company’s ability to continue as a going concern is probable. Primarily due to slower sales associated with delays in obtaining US statewide modular approvals and customer readiness, the Company reported a net loss