# EDGAR Filing Document

**Accession Number:** 0001591890
**File Stem:** 0001493152-26-013032
**Filing Date:** 2026-3
**Character Count:** 459213
**Document Hash:** 00296a147319537be61e28fb067b2992
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001493152-26-013032.hdr.sgml**: 20260327

**ACCESSION NUMBER**: 0001493152-26-013032

**CONFORMED SUBMISSION TYPE**: 10-K

**PUBLIC DOCUMENT COUNT**: 102

**CONFORMED PERIOD OF REPORT**: 20251231

**FILED AS OF DATE**: 20260327

**DATE AS OF CHANGE**: 20260326

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** FG Nexus Inc.
- **CENTRAL INDEX KEY:** 0001591890
- **STANDARD INDUSTRIAL CLASSIFICATION:** FINANCE SERVICES [6199]
- **ORGANIZATION NAME:** 09 Crypto Assets
- **EIN:** 461119100
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-36366
- **FILM NUMBER:** 26800543

**BUSINESS ADDRESS:**
- **STREET 1:** 6408 BANNINGTON ROAD
- **CITY:** CHARLOTTE
- **STATE:** NC
- **ZIP:** 28226
- **BUSINESS PHONE:** (704) 994-8279

**MAIL ADDRESS:**
- **STREET 1:** 6408 BANNINGTON ROAD
- **CITY:** CHARLOTTE
- **STATE:** NC
- **ZIP:** 28226

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Fundamental Global Inc.
- **DATE OF NAME CHANGE:** 20240229

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** FG Financial Group, Inc.
- **DATE OF NAME CHANGE:** 20201214

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** 1347 Property Insurance Holdings, Inc.
- **DATE OF NAME CHANGE:** 20131113

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**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-K**

☒ **ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** 

For the fiscal year ended December 31, 2025

or

☐ **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

For the transition period from _____________________ to _______________________

**Commission file number 001-36366**

**<u>FG Nexus Inc.</u>**

(Exact name of registrant as specified in its charter)

---

| | |
|:---|:---|
| **Nevada** | **46-1119100** |
| (State of incorporation) | (I.R.S Employer Identification No.) |
| **6408 Bannington Road Charlotte, NC** | **28226** |
| (Address of principal executive offices) | (Zip Code) |

---

**<u>(704) 994-8279</u>**

(Registrant's telephone number)

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| **Title of Each Class** | **Trading Symbol(s)** | **Name of Each Exchange on Which Registered** |
| Common Stock, par value $0.001 per share | FGNX | The Nasdaq Stock Market LLC |
| 8.00% Cumulative Preferred Stock, Series A, par value $25.00 per share | FGNXP | The Nasdaq Stock Market LLC |

---

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act of 1933. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (the "Act") during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Act.:

Large Accelerated Filer ☐ Accelerated Filer ☐ <br> Non-Accelerated Filer ☒ Smaller Reporting Company ☒ <br> Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

On June 30, 2025, the aggregate market value of the Registrant's common stock held by non-affiliates was approximately $13.2 million, computed on the basis of the closing sale price of the Registrant's common stock on that date.

As of March 23, 2026, the total number of shares outstanding of the Registrant's common stock was 6,530,207.

**DOCUMENTS INCORPORATED BY REFERENCE**

Portions of the Company's Proxy Statement for its 2026 Annual Meeting of Stockholders are incorporated by reference in Part III, Items 10, 11, 12, 13 and 14.

**FG NEXUS INC.**

**Table of Contents**

---

| | |
|:---|:---|
| [PART I](#mj_001) | 2 |
| &nbsp;&nbsp;&nbsp;[ITEM 1. BUSINESS](#mj_002) | 3 |
| &nbsp;&nbsp;&nbsp;[ITEM 1A. RISK FACTORS](#mj_003) | 9 |
| &nbsp;&nbsp;&nbsp;[ITEM 1B. UNRESOLVED STAFF COMMENTS](#mj_004) | 23 |
| &nbsp;&nbsp;&nbsp;[ITEM 1C. CYBERSECURITY](#mj_005) | 23 |
| &nbsp;&nbsp;&nbsp;[ITEM 2. PROPERTIES](#mj_006) | 23 |
| &nbsp;&nbsp;&nbsp;[ITEM 3. LEGAL PROCEEDINGS](#mj_007) | 23 |
| &nbsp;&nbsp;&nbsp;[ITEM 4. MINE SAFETY DISCLOSURES](#mj_008) | 23 |
| [PART II](#mj_009) | 24 |
| &nbsp;&nbsp;&nbsp;[ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES](#mj_010) | 24 |
| &nbsp;&nbsp;&nbsp;[ITEM 6. \[RESERVED\]](#mj_011) | 25 |
| &nbsp;&nbsp;&nbsp;[ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](#mj_012) | 25 |
| &nbsp;&nbsp;&nbsp;[ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK](#mj_013) | 34 |
| &nbsp;&nbsp;&nbsp;[ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA](#mj_014) | 35 |
| &nbsp;&nbsp;&nbsp;[ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE](#Rma_001) | 71 |
| &nbsp;&nbsp;&nbsp;[ITEM 9A. CONTROLS AND PROCEDURES](#Rma_002) | 71 |
| &nbsp;&nbsp;&nbsp;[ITEM 9B. OTHER INFORMATION](#Rma_003) | 71 |
| &nbsp;&nbsp;&nbsp;[ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS](#Rma_004) | 71 |
| [PART III](#Rma_005) | 72 |
| &nbsp;&nbsp;&nbsp;[ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE](#Rma_006) | 72 |
| &nbsp;&nbsp;&nbsp;[ITEM 11. EXECUTIVE COMPENSATION](#Rma_007) | 72 |
| &nbsp;&nbsp;&nbsp;[ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS](#Rma_008) | 72 |
| &nbsp;&nbsp;&nbsp;[ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE](#Rma_009) | 72 |
| &nbsp;&nbsp;&nbsp;[ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES](#Rma_010) | 72 |
| [PART IV](#Rma_011) | 73 |
| &nbsp;&nbsp;&nbsp;[ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES](#Rma_012) | 73 |
| &nbsp;&nbsp;&nbsp;[ITEM 16. FORM 10-K SUMMARY](#Rma_013) | 74 |
| [SIGNATURES](#Rma_015) | 75 |

---

**FG NEXUS INC.**

**PART I**

This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These statements are therefore entitled to the protection of the safe harbor provisions of these laws. These statements may be identified by the use of forward-looking terminology such as "anticipate," "believe," "budget," "can," "contemplate," "continue," "could," "envision," "estimate," "expect," "evaluate," "forecast," "goal," "guidance," "indicate," "intend," "likely," "may," "might," "outlook," "plan," "possibly," "potential," "predict," "probable," "probably," "pro-forma," "project," "seek," "should," "target," "view," "will," "would," "will be," "will continue," "will likely result" or the negative thereof or other variations thereon or comparable terminology. In particular, discussions and statements regarding the Company's future business plans and initiatives are forward-looking in nature. We have based these forward-looking statements on our current expectations, assumptions, estimates, and projections. While we believe these to be reasonable, such forward-looking statements are only predictions and involve a number of risks and uncertainties, many of which are beyond our control. These and other important factors may cause our actual results, performance, or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements and may impact our ability to implement and execute on our future business plans and initiatives. Management cautions that the forward-looking statements in this Annual Report on Form 10-K are not guarantees of future performance, and we cannot assume that such statements will be realized or the forward-looking events and circumstances will occur. Factors that might cause such a difference include, without limitation, the Company's ability to execute its business plans which are contemplated to include increasing the Company's scale through acquisition, fluctuations in the market price of ETH and other digital assets and any associated mark to market charges that the Company may incur as a result of a decrease in the market price of ETH below the value at which the Company's ETH are carried on its balance sheet, changes in the accounting treatment relating to the Company's ETH holdings, the Company's ability to achieve profitable operations, government regulation of digital assets, changes in securities laws or regulations such as accounting rules as discussed below, customer acceptance of new products and services including the Company's real world tokenization and ETH treasury strategies, general conditions in the global economy; risks associated with operating in the merchant banking industry; risks of not being able to execute on our asset management strategy and potential loss of value of our holdings; risk of becoming an investment company; fluctuations in our short-term results as we implement our business strategies; 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; and potential conflicts of interest between us and our directors and executive officers.

Our expectations and future plans and initiatives may not be realized. If one of these risks or uncertainties materializes, or if our underlying assumptions prove incorrect, actual results may vary materially from those expected, estimated or projected. You are cautioned not to place undue reliance on forward-looking statements. The forward-looking statements included or incorporated by reference to the Form 10-K are made only as of the date hereof and do not necessarily reflect our outlook at any other point in time. We do not undertake and specifically decline any obligation to update any such statements or to publicly announce the results of any revisions to any such statements to reflect new information, future events or developments.

**FG NEXUS INC.**

**ITEM 1. BUSINESS**

FG Nexus Inc., formerly known as Fundamental Global Inc. ("FGNX", the "Company", "we", or "us"), is a holding company incorporated in the state of Nevada. On December 9, 2022, we completed our reincorporation from a Delaware corporation to a Nevada corporation. On September 5, 2025, we changed our name from "Fundamental Global Inc." to "FG Nexus Inc." Our common stock and Series A preferred shares are currently listed on Nasdaq under the symbols "FGNX" and "FGNXP," respectively. We currently conduct business through our business segments including digital assets and merchant banking. The address of our principal executive offices is 6408 Bannington Road, Charlotte, North Carolina 28226, and our telephone number is (704) 994-8279.

**Recent Developments**

*Reverse Stock Split*

On January 21, 2026, our Board of Directors approved a reverse stock split of the authorized, issued and outstanding shares of our common stock, par value $0.001 per share (the "Common Stock") at a ratio of one (1)-for-five (5) (the "Reverse Stock Split"). The Reverse Stock Split became effective on February 13, 2026 (the "Effective Date"), at 9:30 a.m., Eastern Time, and our common shares began trading on a split-adjusted basis at the commencement of trading on the same day. No fractional shares were issued in connection with the Reverse Stock Split, rather stockholders who would have otherwise received fractional shares received cash payments in lieu of such fractional shares. After the Reverse Stock Split, we had 6,555,124 shares of Common Stock outstanding. All equity awards outstanding immediately prior to the Reverse Stock Split were adjusted to reflect the Reverse Stock Split. As a result of the Reverse Stock Split, all references to Common Stock in this Annual Report on Form 10-K (this "Form 10-K") have been adjusted to reflect the Reverse Stock Split.

*Letter of Intent to Sell Quebec Real Estate*

 

In October 2025, we signed a non-binding letter of intent to sell our Quebec property for $15.0 million CAD, or approximately $11.0 million USD. Following repayment of the existing installment loan, the transaction is expected to generate approximately $8.0-$9.0 million USD in net pretax proceeds. The letter of intent does not constitute a binding agreement, and there can be no assurance that a definitive sale agreement will be reached or that the transaction will be completed. The transaction, if completed, is expected to close during the first half of 2026, subject to the execution of definitive agreements, completion of due diligence, and satisfaction of customary closing conditions.

*Agreement to Sell Reinsurance Business*

 

In October 2025, we entered into an agreement to sell the remaining portion of our reinsurance business. On January 2, 2026, we completed the initial closing of the sale of our reinsurance business in exchange for (1) the release of $3.3 million of collateral that we had posted in connection with certain reinsurance contracts; and (2) a 40% equity interest in the entity purchasing the reinsurance business. Pursuant to the agreement, we agreed to leave approximately $1.3 million in cash in the reinsurance business in exchange for a promissory note in the amount of approximately $1.3 million that accrues interest at a rate of 6% per annum with all principal and accrued interest due and payable on June 30, 2027.

An additional closing of the sale of our reinsurance business occurred on March 23, 2026, when the purchaser tendered the $1.0 million cash payment to us, which the purchaser obtained through a loan from Saltire Capital Ltd.

*Share Repurchase Programs*

In September 2025, our Board adopted a share repurchase program to acquire up to $200 million of our outstanding Common Stock (the "Common Stock Repurchase Program"). The Common Stock Repurchase Program, which is open-ended, allows us to repurchase our Common Stock from time to time in the open market and in negotiated transactions. Any repurchases conducted pursuant to the Common Stock Repurchase Program will be in accordance with Rule 10b-18 of the Exchange Act and will be made in accordance with applicable laws and regulations in effect from time to time. Subject to applicable rules and regulations, the shares of common stock may be purchased from time to time in the open market transactions and in amounts as we deem appropriate, based on factors such as market conditions, legal requirements, and other business considerations.

Commencing on October 23, 2025, and through March 23, 2026, we have purchased a total of approximately 2.2 million shares of our Common Stock at a total cost (including commissions) of approximately $34.9 million. Through March 23, 2026, we have repurchased approximately 25.8% of our Common Stock outstanding immediately prior to implementation of the program. All shares repurchased under the Common Stock Repurchase Program are recorded as treasury stock.

In December 2025, our Board approved a preferred share repurchase program to acquire up to 894,580 shares of our outstanding preferred shares (the "Preferred Share Repurchase Program"). The Preferred Share Repurchase Program, which is open-ended, allows the Company to repurchase its preferred shares from time to time in the open market and in negotiated transactions. Any repurchases conducted pursuant to the Preferred Share Repurchase Program will be in accordance with Rule 10b-18 of the Exchange Act and will be made in accordance with applicable laws and regulations in effect from time to time. Commencing on December 12, 2025 and through March 23, 2026, we have purchased approximately 202 thousand shares of our Series A Preferred Stock at a total cost (including commissions) of approximately $5.0 million. Through March 23, 2026, we have repurchased approximately 22.6% of our Series A Preferred Stock outstanding immediately prior to implementation of the program. All repurchased Series A Preferred Stock are recorded as a reduction to the liquidation value of the Preferred Stock.

*ATM Offering*

 

On August 7, 2025, we entered into a Sales Agreement (the "Sales Agreement") with ThinkEquity LLC (the "Sales Agent"), pursuant to which we may offer and sell, from time to time through the Sales Agent, up to such number or dollar amount of shares that would not (a) exceed the number or dollar amount of shares of Common Stock registered on the effective registration statement pursuant to which the offering is being made, (b) exceed the number of authorized but unissued shares of Common Stock (less shares of Common Stock issuable upon exercise, conversion or exchange of any outstanding securities of the Company or otherwise reserved from our authorized capital stock), (c) exceed the number or dollar amount of shares of Common Stock permitted to be sold under Form S-3 or (d) exceed the number or dollar amount of shares of Common Stock for which the Company has filed a Prospectus Supplement (defined below) (the lesser of (a), (b), (c) and (d), the "Shares") of our Common Stock, subject to the terms and conditions of the Sales Agreement. We filed a Registration Statement on Form S-3 offering up to $5 billion of the Shares. Under the Sales Agreement, the Sales Agent may 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 "Securities Act"), including sales made directly on or through The Nasdaq Global Market or any other existing trading market for the Common Stock, in negotiated transactions at market prices prevailing at the time of sale or at prices related to such prevailing market prices, and/or any other method permitted by law. We may instruct the Sales Agent not to sell the Shares if the sales cannot be effected at or above the price designated by us from time to time. Through December 31, 2025, we sold a total of approximately 0.4 million shares of Common Stock pursuant to the Sales Agreement, which generated gross proceeds of approximately $15.5 million, or approximately $14.1 million after offering costs. As of October 13, 2025, we suspended the ATM. While we plan to reinstate the ATM and to sell additional Shares, as of the date of this Form 10-K, the reinstatement of the ATM has not yet occurred.

*Private Placement Offering*

 

In July 2025, we entered into securities purchase agreement with certain accredited investors (the "Purchasers") pursuant to which we agreed to sell and issue to the Purchasers in a private placement offering (the "Private Placement Offering") pre-funded warrants (the "Pre-Funded Warrants") to purchase up to an aggregate of 8.0 million shares (the "Pre-Funded Warrant Shares,") of our Common Stock at an offering price of $25.00 per Pre-Funded Warrant payable at the option of the Purchaser in cash, Bitcoin, USDC or ETH. The Private Placement Offering closed in August 2025, and we received gross cash proceeds of approximately $176.0 million, or $168.6 million after offering costs, and cryptocurrency totaling approximately $24.0 million. Upon the effectiveness of the September Charter Amendment (as defined below), approximately 6.8 million Pre-Funded Warrants automatically converted into shares of our Common Stock. As of December 31, 2025, all Pre-Funded Warrants have been converted into our Common Stock.

*Charter Amendments*

 

As approved by a majority of its stockholders by written consent, dated July 23, 2025, we filed a certificate of amendment to our amended and restated articles of incorporation with the Nevada Secretary of State on September 5, 2025 to (i) increase the total number of authorized shares of Common Stock from 0.8 million to 200.0 million, (ii) increase the total number of authorized shares of preferred stock, par value $.001 per share (the "Undesignated Preferred Stock") from 100.0 million to 500.0 million, (iii) increase the total number of authorized shares of 8% cumulative preferred stock, Series A (the "Series A Preferred Stock") from 1.0 million to 15.0 million and (iv) change the name of the Company to "FG Nexus Inc." (the "September Charter Amendment"). The September Charter Amendment was declared effective on September 5, 2025.

A majority of our stockholders approved, by written consent dated September 4, 2025, a certificate of amendment to our amended and restated articles of incorporation to (a) increase the total number of authorized shares of Common Stock from 200.0 million shares to 180.0 billion shares and the total number of authorized shares of preferred stock from 500.0 million shares to 100.0 billion shares (collectively, the "Preferred Stock"), of which (i) 10.0 billion shares of Preferred Stock (increased from 15.0 million) are designated 8% cumulative preferred stock, Series A, par value $25.00 (the "Series A Preferred Stock"), and (ii) 90.0 billion shares of Preferred Stock (increased from 485.0 million shares) are undesignated preferred stock, par value $0.001 per share (the "Undesignated Preferred Stock"), (b) require that certain "Concurrent Jurisdiction Actions" and "Internal Actions" (as such terms are defined in NRS 78.046, collectively, the "Internal Actions") must be brought solely or exclusively in the Eighth Judicial District Court of Clark County in the State of Nevada and that such Internal Actions should be tried before a judge rather than a jury, in accordance with NRS 78.046(4); (c) clarify that any change of the Company's name shall not require consent of the Company's stockholders, in accordance with NRS 78.390(8); (d) have the Company "opt out" of the interested stockholder combination provisions set forth in NRS Sections 78.411 to 78.444, inclusive; and (e) have the Company "opt out" of the control share provisions set forth in NRS Sections 78.378 to 78.3793, inclusive (the "Additional Charter Amendment"). In connection with the Additional Charter Amendment, we also amended our By-laws to clarify the applicable voting thresholds for proposed amendments to the By-Laws. The Additional Charter Amendment was filed with and declared effective by the Secretary of State of the State of Nevada, on October 7, 2025.

*Asset Transfer and CVR Trust*

 

In August 2025, in connection with the Private Placement Offering and the launch of our treasury strategy, we transferred a significant portion of our legacy assets (the "Asset Transfer") to a trust (the "CVR Trust") established in connection with the creation of contingent value rights ("CVRs") for the benefit of our stockholders as of August 8, 2025. We distributed the CVRs prior to the effectiveness of the Charter Amendment and the exercise of any of the Pre-Funded Warrants sold in the Private Placement Offering. The CVRs represent the contractual right to receive a pro rata portion of the net proceeds received by the CVR Trust upon the future disposition, if any, of the assets transferred to the CVR Trust by the Company. See Item 8, Note 6, in the Notes to the Consolidated Financial Statements included in this 10-K for additional details.

*Prior Year Developments and Transactions*

 

On February 29, 2024, FG and FG Group Holdings, Inc. ("FGH") closed a plan of merger to combine the companies in an all-stock transaction (the "Merger"). In connection with the Merger, FGH common stockholders received one share of FG common stock for each share of common stock of FGH held by such stockholder. Upon completion of the Merger, the combined company was renamed to Fundamental Global Inc.

On May 3, 2024, Strong Global Entertainment, Inc. ("Strong Global Entertainment" or "SGE"), a majority owned subsidiary of the Company, entered into an acquisition agreement (the "Acquisition Agreement") with FG Acquisition Corp. ("FGAC"), a special purpose acquisition company ("SPAC"), Strong/MDI Screen Systems, Inc. ("Strong/MDI"), FGAC Investors LLC, and CG Investments VII Inc. The transaction closed on September 25, 2024. As part of the closing, FGAC was renamed Saltire Holdings, Ltd ("Saltire"), and Saltire acquired all of the outstanding shares of one of the Company's indirect wholly-owned subsidiaries, Strong/MDI. As a result of the acquisition, Strong/MDI became a wholly-owned subsidiary of Saltire.

On May 30, 2024, the Company and Strong Global Entertainment, an operating company in which we held approximately 76% of the Class A common shares, entered into a definitive arrangement agreement and plan of arrangement to combine the companies in an all-stock transaction (the "Arrangement"). Upon completion of the Arrangement, the stockholders of Strong Global Entertainment received 1.5 common shares of the Company for each share of Strong Global Entertainment. The transaction closed on September 30, 2024. Following the closing, Strong Global Entertainment ceased to exist, and its common shares were delisted from NYSE American LLC and deregistered under the Securities Exchange Act of 1934.

In April 2024, we sold our Digital Ignition technology incubator and co-working facility in Alpharetta, Georgia for gross proceeds of $6.5 million. In connection with the sale of the land and building, we recorded a non-cash impairment charge of approximately $1.4 million during the first quarter of 2024 to adjust the carrying value of the assets to the fair market value less costs to sell.

**Overview and Business Operations**

We currently have two primary operating segments, digital assets and merchant banking.

*Digital Assets*

Following the private placement in July 2025, the Company transitioned its operations to focus primarily on operating as a digital asset treasury focused on ETH and tokenization opportunities, particularly the tokenization of real-world assets. Ethereum and other Ether related digital assets serve as our primary treasury assets, Ethereum is the foundation of digital finance and settlement layer for the majority of stablecoins, Decentralized Finance (DeFi), and tokenized assets. ETH is the native token of the Ethereum network, which we purchased ETH as our initial treasury asset following the private placement.

Our treasury strategy is focused on commercializing and expanding the tokenization of real-world assets, potentially including affordable housing, reinsurance, real estate and other asset classes. As of December 31, 2025, our digital asset portfolio included 40,093 ETH, with an estimated fair value of $119.4 million. As of March 23, 2026, our digital asset portfolio had expanded and was comprised of a combination of ETH and wrapped staked ETH ("WSETH"), with an estimated combined fair value of approximately $64.6 million.

We utilize third-party custodians, including Anchorage and BitGo as well as third-party treasury management services including Galaxy Digital (as defined below) to facilitate our treasury strategies.

*Merchant Banking*

Merchant banking services include various strategic, administrative, and regulatory support services to newly formed SPACs (our SPAC platform). 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 and other merchant banking clients.

In addition, our merchant banking division has facilitated the launch of several new companies, including FG Communities, Inc. ("FGC"), a self-managed real estate company focused on a growing portfolio of manufactured housing communities which are owned and operated by FGC, and Craveworthy LLC ("Craveworthy"), an innovative fast casual restaurant platform company.

*Discontinued Operations*

We operated a reinsurance business, which has been classified as assets held for sale since as of December 31, 2024. We sold a portion of our reinsurance business in the first half of 2025 and sold the remaining portion of the reinsurance business in early 2026.

Our wholly-owned subsidiary and managed services business, Strong Technical Services ("STS"), a leader in the entertainment industry providing mission critical products and services to cinema exhibitors and entertainment venues for over 90 years was transferred to the CVR Trust in August 2025. STS provides comprehensive managed service offerings including remote network operating center support, on-site field service, content delivery, installation and other services designed to support cinema and entertainment operators.

We previously operated Strong Studios, Inc. and Strong/MDI Screen Systems, Inc. Those business units were sold in 2024 and are no longer part of our operations as of December 31, 2025.

These discontinued business units are more fully described in Item 8, Note 7, in the Notes to the Consolidated Financial Statements included in this Form 10-K.

Background on Digital Assets and Ethereum

Ethereum is an open-source, decentralized blockchain that went live on July 30, 2015; its native digital asset, ether ("ETH"), is required to pay transaction fees and for computation on the network (often called "gas," commonly quoted in gwei, where 10^9 gwei = 1 ETH). The Ethereum network's software is maintained by multiple independent client teams and upgraded through the public Ethereum Improvement Proposal ("EIP") process; developers publish proposed changes in the open, and upgrades are only activated if node operators and validators voluntarily download and run client releases implementing them—no single entity controls the protocol. In practice, community consensus among client teams, researchers, node operators, validators, application developers and users drive adoption of upgrades; updates are not "automatically" adopted and take effect only to the extent validators and nodes choose to run the new code.

At genesis, 72.0 million ETH were created and distributed as follows: 60.0 million ETH (≈83.33%) sold to the public in a 2014 crowd sale; 6.0 million ETH (≈8.33%) to the Ethereum Foundation; 3.0 million ETH (≈4.17%) to developers; and 3.0 million ETH (≈4.17%) to a developer purchase program. Subsequent supply growth was originally driven by issuance to miners under proof-of-work; in August 2021, the EIP-1559 upgrade introduced a protocol-set base fee that is burned (permanently removed from supply) plus a separate priority fee (tip) to compensate block producers. On September 15, 2022, Ethereum completed "the Merge," transitioning to proof-of-stake, under which validators stake ETH (a full validator currently requires a 32-ETH deposit) to propose and attest to blocks and earn protocol rewards, subject to penalties and potential slashing (loss of a portion of staked ETH) for malicious behavior or certain faults. On March 13, 2024, the Dencun upgrade (including EIP-4844) added "blob" data space intended to reduce data costs for Layer-2 rollups that settle to Ethereum, improving throughput economics for those systems.

ETH serves as: (i) gas to pay for transactions and smart-contract computation on the base layer (the required base fee is burned; users may add a priority tip); (ii) economic security for the network via staking by validators; and (iii) widely used collateral and medium of exchange across decentralized finance ("DeFi") applications and for purchasing or minting non-fungible tokens ("NFTs") on Ethereum.

ETH does not have a fixed maximum supply under the protocol; net supply varies over time based on issuance (primarily to validators) less burns under EIP-1559, and has at times been net-inflationary and at other times net-deflationary depending on network activity. As of March 23, 2026, ETH's circulating supply was approximately 121 million ETH. ETH's market capitalization was approximately $260 billion; 24-hour spot trading volume was approximately $30 billion; and 30-day cumulative spot volume was approximately $411 billion, implying a 30-day average daily volume of about $14 billion/day; figures are sourced from a widely used third-party aggregator and are volatile.

Ethereum's base-layer protocol is open-source and developed through the EIP process (see EIP-1), with public discussion and review among core developers, independent client teams, researchers, node operators, validators, and users; upgrades are implemented in client software and become effective on-chain only as operators and validators elect to run the upgraded clients. This decentralized, opt-in governance model means no central authority can unilaterally impose changes to the network. Of additional note, transaction fees on Ethereum are only payable in ETH, and gas prices are often quoted in gwei (1 ETH = 1,000,000,000 gwei). Staking exposes validators to potential slashing penalties (e.g., for double-signing or extended downtime) under protocol rules.

During the year, we staked a portion of our ETH to generate yield, however, all of our ETH is currently not staked in order to maximize operational flexibility and liquidity. Staking rewards are issued natively by the Ethereum protocol and are deposited into our custodial wallet in the form of additional ETH. Reward amounts are determined based on the staked amount, validator performance (particularly uptime and attestation accuracy), overall network participation, and the protocol's random selection process for block proposals.

When we do stake our ETH, it is staked directly in the Ethereum protocol through institutional-grade validator infrastructure, participating in both block validation and attestations to secure the network and support consensus. We earn rewards denominated in ETH for these activities.

In addition to direct staking, we continue to evaluate yield-generation strategies, which may include leveraging institutional lending desks (e.g. Galaxy), liquid staking, re-staking mechanisms, wrapped instruments and utilizing other vetted institutional managers. During the first quarter of 2026, for example, we purchased WSETH which is intended to provide additional yield enhancement while maintaining flexibility and liquidity.

Agreements with Custodians

Our ETH is currently held with two institutional custodian platforms, pursuant to written agreements, which include Anchorage Digital Bank N.A., a national trust bank regulated by the Office of the Controller of the Currency ("Anchorage Digital") and BitGo Trust Company, Inc., a South Dakota Trust chartered under the South Dakota Consolidated Laws and is supervised by the South Dakota Division of Banking ("BitGo"). All of our digital assets are in proprietary cold storage solutions at Anchorage and BitGo.

We maintain internal controls requiring multiple levels of approval for access, initiation and approval of all transactions related to those assets. We also monitor and evaluate the internal controls of our third-party custodians, whose control environments and control procedures are subject to external audits. One element of our control procedures includes obtaining and evaluating the SOC-1 and SOC-2 reports issued by the custodians' external auditors.

Our digital assets held by the custodians are fully segregated on-chain accounts, and as such they are not comingled with any of the custodians' clients, or the custodians' own balance sheet assets. Only we and our asset manager, Galaxy Digital (as defined below), have access to our ETH held by the custodians. Our custodians maintain insurance policies ranging from $100 million to $250 million for loss of property due to theft, robbery or burglary, as well as third-party computer and funds transfer fraud. However it is unlikely any form of insurance would cover 100% of our loss in the event of a total loss scenario. Our digital assets held by the custodians are not accessible by the custodians' creditors and would never be used in the case of insolvency. As regulated entities, in the unlikely event of a custodian's insolvency, the custodian would be liquidated by its regulator who would protect assets designated for the benefit of customers. Our digital assets are held by the custodians, such that our assets are our assets and not the assets of the custodian. Each of our custodial agreements are for a term of 1 year, with an automatic renewal if the agreement is not terminated in advance of the ending of the initial term of the agreements.

The foregoing summary of The Master Custody Service Agreement, dated July 17, 2025, between the Company and Anchorage Digital Bank N.A. and the BitGo Custodial Services Agreement, dated August 1, 2025, between the Company and BitGo Trust Company, Inc. do not purport to be complete and readers are referred to the complete text of the actual agreements, copies of which are attached hereto as Exhibits 10.25 and 10.26, respectively, and are herein incorporated by reference.

Galaxy Asset Management Agreement

We entered into an Asset Management Agreement, dated July 23, 2025 (the "Asset Management Agreement") with Galaxy Digital Capital Management LP ("Galaxy Digital"). Galaxy Digital shall provide discretionary investment management services with respect to, among other assets (including without limitation certain subsequently raised funds), our proceeds from the Price Placement Offering (the "Account Assets") in accordance with the terms of the Asset Management Agreement. Galaxy Digital will pursue a long-only investment strategy investing in ETH only, which strategy may include staking, restaking and liquid staking ETH to improve returns (the "ETH Strategy"). The ETH Strategy (and its risk-adjusted returns) will be overseen by our designated authorized persons. The custodian under the Asset Management Agreements will consist of Anchorage, BitGo and potentially other cryptocurrency custodians agreed to by us and Galaxy Digital.

The Company shall pay Galaxy Digital a tiered asset-based fee (the "Asset-based Fee") ranging from 0.75% to 1.25% per annum of the Galaxy Digital's Account Assets under management; provided, however, that the minimum Asset-based Fee payable to Galaxy Digital in any given month shall be $83,333.33 ($1 million per annum). However, the Company and Galaxy Digital have agreed to eliminate the minimum fee for the period of December 1, 2025 through March 31, 2026 and to revisit the appropriateness of the minimum based on the current scale and level of digital assets held currently. We expect, but cannot provide assurance, that we will eliminate or significantly reduce the contractual minimum fee based on the level of digital assets held and services provided.

The Asset Management Agreement was effective on July 23, 2025 and will, unless early terminated in accordance with the provisions of the Asset Management Agreement, continue in effect until the July 23, 2028, and, unless terminated in accordance with its terms, shall thereafter continue for successive one-year renewal periods upon the mutual agreement of the Galaxy Digital and us (each, a "<u>Renewal Period</u>", and the period during which this Agreement is in effect, the "<u>Term</u>"). This Asset Management Agreement may be terminated at any time for Cause by us or Galaxy Digital upon at least thirty (30) days prior written notice to the other Party. In addition, at any time after the date that is three years after the Effective Date, this Agreement may be terminated at any time by us, by providing 90 days' written notice to Galaxy Digital. The Asset Management Agreement defines the term "<u>Cause</u>" as (i) with respect to the Galaxy Digital, (a)(1) fraud, (2) material breach of its obligations under this Agreement, or (3) any action or omission constituting gross negligence in performing its obligations under this Agreement; *provided*, that Galaxy Digital shall have a cure period of thirty (30) days following notice of an occurrence of (1) or (2) if such breach, action or omission, as applicable is curable), (b) an act of insolvency, as defined in the Asset Management Agreement, occurring with respect to the Galaxy Digital; *provided* that an act of insolvency shall not be deemed to occur if Galaxy Digital assigns its obligations under this Agreement to an affiliate that is not subject to an Act of Insolvency, and (c) is dissolved; *provided* that such dissolution shall not be deemed to occur if the Galaxy Digital assigns its obligations under this Agreement to an affiliate that is not subject to dissolution; and (ii) with respect to us (a) a material breach by us of our obligations under the Asset Management Agreement (provided, that we shall have a cure period of thirty (30) days following notice of breach in the case of any such breach that is susceptible of cure) or (b) it becomes unlawful under any applicable law (as determined by Galaxy Digital in its sole discretion) for Galaxy Digital to perform its obligations under the Asset Management Agreement, in which case Galaxy Digital may immediately suspend its performance of all obligations under this Agreement and may terminate the Asset Management Agreement with three days prior written notice. Termination shall not affect liabilities or obligations incurred or arising from transactions initiated under the Asset Management Agreement prior to such termination, including the provisions regarding arbitration, which shall survive any expiration or termination of the Asset Management Agreement.

The foregoing summary of the Asset Management Agreement does not purport to be complete and readers are referred to the complete text of the Asset Management Agreement, which is attached hereto as Exhibit 10.12 and is herein incorporated by reference.

**Website**

Our corporate website is <u>www.fgnexus.io.</u> A copy of our Code of Business Conduct and Ethics can be found in the Governance Documents section of our website and is attached hereto as Exhibit 14.1 and is herein incorporated by reference. Information contained at the website is not a part of this report.

**Human Capital Resources**

We employed 15 persons at December 31, 2025, all of which were full-time. We are not a party to any collective bargaining agreement.

We believe we comply with all applicable provincial, state, local and applicable international laws governing nondiscrimination in employment in every location in which we operate. All applicants and employees are treated with the same high level of respect regardless of their gender, ethnicity, religion, national origin, age, marital status, political affiliation, sexual orientation, gender identity, disability or protected veteran status. We continue to monitor our demand for skilled and unskilled labor and provide training and competitive compensation packages in an effort to attract and retain skilled employees.

**ITEM 1A. RISK FACTORS**

**Risks Related to Cryptocurrencies**

***The further development and acceptance of cryptocurrency networks, including the ETH network, which represent a relatively new and rapidly changing industry, are subject to a variety of factors that are difficult to evaluate. The slowing or stopping of the development or acceptance of cryptocurrency networks, including the ETH network, may adversely affect an investment in the Company.***

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Cryptocurrency such as ETH may be used, among other things, to buy and sell goods and services or to transfer and store value by users. The cryptocurrency networks are a new and rapidly evolving industry of which the ETH network is a prominent, but not unique, part. The growth of the cryptocurrency industry in general, and the ETH network in particular, is subject to a high degree of uncertainty. The factors affecting the further development of the cryptocurrency industry, as well as the ETH network, include:

● continued worldwide growth in the adoption and use of ETH and other cryptocurrencies, including those competitive with ETH;

● government and quasi-government regulation of ETH and other cryptocurrencies and their use, or restrictions on or regulation of access to and operation of the ETH network or similar cryptocurrency systems;

● the maintenance and development of the open-source software protocol of the ETH network;

● changes in consumer demographics and public tastes and preferences;

● the availability and popularity of other forms or methods of buying and selling goods and services, including new means of using fiat currencies; and

● general economic conditions and the regulatory environment relating to cryptocurrencies and cryptocurrency service providers.

A decline in the popularity or acceptance of the ETH network and other cryptocurrency networks may harm the price of our Common Stock. There is no assurance that the ETH network, or the service providers necessary to accommodate it, will continue in existence or grow. Furthermore, there is no assurance that the availability of and access to cryptocurrency service providers will not be negatively affected by government regulation or supply and demand of ETH.

***The digital asset trading platforms on which cryptocurrency trades are relatively new and largely unregulated or may not be complying with existing regulations.***

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Cryptocurrency markets, including the spot market for ETH, are growing rapidly. The digital asset trading platforms through which ETH and other cryptocurrencies trade are new and largely unregulated or may not be complying with existing regulations. These markets are local, national and international and include a broadening range of cryptocurrencies and participants. Significant trading may occur on systems and platforms with minimum predictability. Spot markets may impose daily, weekly, monthly or customer-specific transaction or withdrawal limits or suspend withdrawals entirely, rendering the exchange of ETH for fiat currency difficult or impossible. Participation in spot markets requires users to take on credit risk by transferring ETH or another cryptocurrency from a personal account to a third-party's account.

Digital asset trading platforms do not appear to be subject to, or may not comply with, regulation in a manner similar to other regulated trading platforms, such as national securities exchanges or designated contract markets. Many digital asset trading platforms are unlicensed, are unregulated, operate without extensive supervision by governmental authorities, and do not provide the public with significant information regarding their ownership structure, management team, corporate practices, cybersecurity, and regulatory compliance. In particular, those located outside the United States may be subject to significantly less stringent regulatory and compliance requirements in their local jurisdictions. Digital asset trading platforms may be out of compliance with existing regulations.

As a result, trading activity on or reported by these digital asset trading platforms is generally significantly less regulated than trading in regulated U.S. securities and commodities markets and may reflect behavior that would be prohibited in regulated U.S. trading venues. Furthermore, many digital asset trading platforms lack certain safeguards put in place by more traditional exchanges to enhance the stability of trading on the platform and prevent flash crashes, such as limit-down circuit breakers. As a result, the prices of cryptocurrencies such as ETH on digital asset trading platforms may be subject to larger and/or more frequent sudden declines than assets traded on more traditional exchanges. Tools to detect and deter fraudulent or manipulative trading activities (such as market manipulation, front-running of trades, and wash-trading) may not be available to or employed by digital asset trading platforms or may not exist at all. As a result, the marketplace may lose confidence in, or may experience problems relating to, these venues.

No digital asset trading platform on which cryptocurrency trades is immune from these risks. The closure or temporary shutdown of digital asset trading platforms due to fraud, business failure, hackers or malware, or government-mandated regulation may reduce confidence in cryptocurrency and can slow down the mass adoption of it. Further, digital asset trading platform failures can have an adverse effect on cryptocurrency markets and the price of cryptocurrency and could therefore have a negative impact on the performance of the Common Stock.

Negative perception, a lack of stability in the digital asset trading platforms, manipulation of cryptocurrency trading platforms by customers and/or the closure or temporary shutdown of such trading platforms due to fraud, business failure, hackers or malware, or government-mandated regulation may reduce confidence in cryptocurrency generally and result in greater volatility in the market price of ETH and other cryptocurrency and our Common Stock. Furthermore, the closure or temporary shutdown of a cryptocurrency trading platform may impact the Company's ability to determine the value of its cryptocurrency holdings.

***A disruption of the Internet may affect the operation of the cryptocurrency networks, which may adversely affect the cryptocurrency industry and an investment in the Company.***

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The cryptocurrency networks rely on the Internet. A significant disruption of Internet connectivity could disrupt the cryptocurrency networks' functionality until such disruption is resolved. A disruption in the Internet could adversely affect an investment in the Company. In particular, some variants of cryptocurrencies have experienced a number of denial-of-service attacks, which have led to temporary delays in block creation and cryptocurrency transfers.

Cryptocurrencies are also susceptible to border gateway protocol hijacking ("BGP hijacking"). Such an attack can be a very effective way for an attacker to intercept traffic en route to a legitimate destination. BGP hijacking impacts the way different nodes and miners are connected to one another to isolate portions of them from the remainder of the network, which could lead to a risk of the network allowing double-spending and other security issues. If BGP hijacking occurs on any cryptocurrency network, participants may lose faith in the security of cryptocurrency, which could affect cryptocurrency's value and consequently the value of our Common Stock.

Any Internet failures or Internet connectivity-related attacks that impact the ability to transfer cryptocurrency could have a material adverse effect on the price of cryptocurrency and the value of an investment in the Company.

***Our Common Stock may trade at a substantial premium or discount to the value of the ETH and other assets we hold, and our stock price may be more volatile than the price of ETH.***

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The market price of our Common Stock reflects many factors that do not affect the spot price of ETH and may therefore diverge materially—positively or negatively—from the per-share value of our ETH holdings (net of cash, other assets and liabilities). These factors include, among others: our corporate-level expenses; taxes; the timing, size and pricing of equity or debt financings (including at-the-market offerings or convertible securities), equity awards and other sources of dilution; expectations about our future purchases or sales of ETH, staking activity, or special distributions; our liquidity, public float, short interest and securities lending/borrow dynamics; the availability and pricing of exchange-listed alternatives (such as exchange-traded products holding ETH) and differences between those vehicles and a corporate issuer (including the absence in our case of an in-kind creation/redemption mechanism that can reduce premiums/discounts); differences in trading hours and market microstructure between our Common Stock and spot markets for ETH; changes in index inclusion, analyst coverage or investor sentiment toward us as an operating company; our corporate governance, financial reporting, and any actual or perceived operational, custody, technology or regulatory risks specific to us; and broader equity-market conditions independent of crypto-asset markets. As a result, our stock may trade at a premium or discount to the value of our ETH holdings for extended periods, and may be more volatile than the price of ETH. Accordingly, investors could lose all or a substantial part of their investment even if the market price of ETH does not decline, and may not benefit commensurately from increases in the market price of ETH.

***The market price of ETH is highly volatile and may be adversely affected by factors beyond our control, including competition from other crypto assets and relative-adoption trends, any of which could negatively affect the value of our ETH holdings and our Common Stock price.***

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The price of ETH depends on supply-and-demand dynamics in global, largely unregulated or differently regulated markets and is subject to extreme volatility. ETH competes for users, developers, capital and transaction "blockspace" with other crypto assets and networks (including Bitcoin and alternative Layer-1 and Layer-2 protocols), with stablecoins and their underlying settlement rails, and with non-blockchain payment and computing systems. If users, developers, liquidity providers, applications, or institutions favor other networks or assets—whether due to perceived performance, scalability, fees, user experience, security, programmability, available applications, token incentives, or business/regulatory considerations—the relative demand for ETH could decline. Adoption metrics relevant to ETH's value (e.g., active addresses, developer activity, validator participation and staking yields, Layer-2 usage, stablecoin and DeFi activity on Ethereum, and enterprise or government use) may increase or decrease over time and may do so at different rates than comparable metrics on other networks. ETH's price may also be adversely affected by protocol-level changes (including Ethereum Improvement Proposals that alter issuance, burn, fees or economics), hard forks or chain splits, software bugs or vulnerabilities, validator/slashing events, material disruptions or exploits in applications or Layer-2 systems that depend on Ethereum, changes in MEV (maximal extractable value) dynamics, changes in transaction fees or demand for blockspace, actions by large holders or market makers, market manipulation, exchange or stablecoin failures, changes in interest rates or macroeconomic conditions, regulatory or enforcement developments (including with respect to staking, custody, market structure or the legal classification of ETH), tax treatment, and changes in access to banking or payment services for crypto market participants. Any of these factors—especially if they lead to faster growth or improved economics for competing crypto assets relative to ETH—could cause the price of ETH to decline or underperform other crypto assets. A decline in the price of ETH, or underperformance relative to other assets, would reduce the value of our ETH holdings and could adversely affect the market price of our Common Stock.

***The trading prices of many cryptocurrencies, including ETH, have experienced extreme volatility in recent periods and may continue to do so. Extreme volatility in the future, including further declines in the trading price of ETH, could have a material adverse effect on the value of our Common Stock and our Common Stock could lose all or substantially all of its value.***

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The trading prices of many cryptocurrencies, including ETH, have experienced extreme volatility in recent periods and may continue to do so. For instance, there were steep increases in the value of certain cryptocurrencies, including ETH, over the course of 2017, followed by steep drawdowns throughout 2018 in cryptocurrency trading prices. These drawdowns notwithstanding, cryptocurrency prices, including for ETH, increased significantly again during 2019, decreased significantly again in the first quarter of 2020 amidst broader market declines as a result of the novel coronavirus outbreak, and increased significantly again over the remainder of 2020 and the first quarter of 2021. Cryptocurrency prices, including ETH, experienced significant and sudden changes throughout 2021 followed by steep drawdowns in the fourth quarter of 2021 and throughout 2022. Cryptocurrency prices again experienced steep increases in value in 2024 before suffering steep drawdowns in early 2025 and again in late 2025, and continue to be volatile in early 2026.

Extreme volatility in the future, including further declines in the trading price of ETH or related cryptocurrencies, could have a material adverse effect on the value of our Common Stock, and our Common Stock could lose all or substantially all of its value. Furthermore, negative perception and a lack of stability and standardized regulation in the cryptocurrency economy may reduce confidence in the cryptocurrency economy and may result in greater volatility in the price of ETH and other cryptocurrencies, including a depreciation in value.

***We may be subject to regulatory developments related to cryptocurrencies and cryptocurrency markets, which could adversely affect our business, financial condition, and results of operations.***

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As cryptocurrencies are relatively novel and the application of state and federal securities laws and other laws and regulations to cryptocurrencies are unclear in certain respects, it is possible that regulators in the United States or foreign countries may interpret or apply existing laws and regulations in a manner that adversely affects the price of cryptocurrencies. The U.S. federal government, states, regulatory agencies, and foreign countries may also enact new laws and regulations, or pursue regulatory, legislative, enforcement or judicial actions, that could materially impact the price of cryptocurrencies or the ability of individuals or institutions such as us to own or transfer cryptocurrencies.

If cryptocurrencies are determined to constitute a security for purposes of the federal securities laws, the additional regulatory restrictions imposed by such a determination could adversely affect the market price of cryptocurrencies and in turn adversely affect the market price of our Common Stock. Moreover, the risks of our engaging in a Ethereum treasury strategy have created, and could continue to create complications due to the lack of experience that third parties have with companies engaging in such a strategy, such as increased costs of director and officer liability insurance or the potential inability to obtain such coverage on acceptable terms in the future.

***The lack of full insurance exposes the Company and its stockholders to the risk of loss of the Company's crypto assets for which no person or entity is liable.***

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The Company's crypto assets are not covered by any specific insurance maintained by the Company. Instead, the Company's custodians maintain insurance policies ranging from $100 million to $250 million for loss of property due to theft, robbery, or burglary, as well as third-party computer and funds transfer fraud. These insurance policies are shared among all of the custodians' clients and are not specific to the Company or to any particular assets held by the Company. Consequently, the availability of insurance proceeds to the Company may be reduced if multiple claims are made by other customers.

In addition, the aggregate insurance coverage provided by the Company's custodians may not be sufficient to cover all potential losses. The total coverage amount may be significantly lower than the value of the crypto assets under custody, exposing the Company to the risk that, in the event of a loss, the insurance policy will not cover the full extent of the Company's assets. Furthermore, the types of risks covered by the crypto custodians' insurance may not include all risks faced by the Company, and losses could arise from other sources for which there is no insurance coverage.

Lastly, even though the crypto custodians maintain capital reserve requirements depending on the assets under custody, there is no assurance that these reserves will be sufficient to cover potential losses or that insurance proceeds will be available in a timely manner in the event of a claim. Therefore, the Company and its stockholders remain exposed to risks of loss that may not be fully mitigated by insurance or other financial safeguards.

**Additional Risks Related to Investing in ETH**

***Given we are solely invested in ETH, we are particularly subject to ETH-related risks.***

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Given we are solely invested in ETH, we are particularly subject to risks related to ETH holdings and exposure, such as, but not limited to, the risk factors listed above, including extreme volatility in the trading price of ETH. We may have less protection from these risks, as we do not plan on hedging our ETH exposure. Further, and relatedly, given that we also do not maintain insurance coverage on our ETH holdings, and instead rely solely on the insurance coverage maintained by our third party custodians, we may have further limited protection from risks related to our ETH holdings and exposure.

***We have shifted our business strategy towards a focus on ETH, and we may be unable to successfully implement this new strategy.***

We have shifted our business strategy towards ETH and tokenization. We currently hold primarily ETH and in the future may engage in staking, restaking, liquid staking and other decentralized finance activities. There is no assurance that we will be able to successfully implement this new strategy or operate ETH-related activities at the scale or profitability currently anticipated. The ETH network operates with a Proof-of-Stake consensus mechanism, which differs significantly from BTC's Proof-of-Work mining mechanism. This strategic shift requires specialized employee skillsets and operational, technical and compliance infrastructure to support ETH and related staking activities. This also requires that we implement different security protocols, and treasury management practices. There is no assurance that we will be able to execute this strategy by building out the needed infrastructure within the timeframe that we currently anticipate. Errors in key management could result in significant loss of funds and reduced rewards. As a result, our shift towards ETH could have a material adverse effect on our business and financial condition.

***Our shift towards an ETH-focused strategy requires substantial changes in our day-to-day operations and exposes us to significant operational risks.***

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Our shift towards an ETH-focused strategy potentially exposes us to operational risks. ETH's Proof-of-Stake consensus mechanism requires the operation of validator nodes, secure key management and slashing protection. It also requires that we maintain constant up time to ensure that we are eligible for staking rewards and to avoid penalties. In addition, the ETH ecosystem rapidly evolves, with frequent upgrades and protocol changes that may require significant adjustments to our operational setup. The upgrades and protocol changes may require that we incur unanticipated costs and it could cause temporary service disruptions. We may also need to employ third-party service providers in our operations, which may introduce risks outside of our control, including significant cybersecurity risks. Any of these operational risks could materially and adversely affect our ability to execute our ETH strategy and may prevent us from realizing positive returns and could severely hurt our financial condition.

***In connection with our focus on ETH, we expect to interact with various smart contracts deployed on the ETH network, which may expose us to risks and technical vulnerabilities.***

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In connection with our ETH strategy, including currently, through staking, but potentially in the future, through restaking, liquid staking, and other decentralized finance activities, we expect to interact with various smart contracts deployed on the ETH network in order to optimize our strategy. Smart contracts are self-executing code that operate without human intervention once deployed. Although smart contracts are integral to the functionality of staking deposit contracts, liquid staking protocols, restaking platforms, and decentralized finance applications, they are subject to many known risks such as technical vulnerabilities, coding errors, security flaws, and exploits. Any vulnerability in a smart contract we interact with could result in the loss or theft of ETH or other digital assets, which could have a materially adverse impact on our business. A vulnerability in a smart contract could create an unintended and unforeseeable consequence that has adverse financial consequences, such as the inability to access funds. There is no assurance that the smart contracts we integrate with or rely upon will function as intended or remain secure. Exploitation of such vulnerabilities could have a material adverse effect on our business and financial condition.

***Transactions using ETH require the payment of "gas fees," which are subject to fluctuations that may result in high transaction fees.***

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Transactions using ETH, including purchases, sales and staking, require the payment of "gas fees" in ETH. Gas fees are payments made by the user to compensate for the computational energy required to process and validate transactions, such as purchases, sales and staking, on the ETH network. These fees can fluctuate and can be very expensive relative to the cost of the transaction depending upon congestion and demand on the network. If fees are high, the cost of a transaction will potentially decrease the return of the investment, which could be negative. High gas fees may also cause delays in the execution of a transaction, which could affect the preferred timing of execution and may lead to execution of a transaction during inopportune times. In addition, gas fees are paid in ETH itself, which would require that sufficient ETH balances are maintained. Future upgrades to the Ethereum protocol, regulatory changes, or technical issues could also adversely impact the cost of gas fees and could have a material adverse effect on our business, results of operations, financial condition, treasury and prospects.

***There is a possibility that ETH may be classified as a "security." If ETH is classified as a "security," that would subject us to additional regulation and could materially impact the operations of our treasury strategy and our business.***

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Neither the SEC nor any other U.S. federal or state regulator has publicly stated whether they agree that ETH is a "security," and ETH has not yet been classified with respect to the U.S. federal securities laws. Although we believe that ETH is not a "security" within the meaning of the U.S. federal securities laws, and that registration of the Company or our treasury under the Investment Company Act of 1940, as amended (the "Investment Company Act"), is therefore not required under applicable securities laws, we acknowledge the uncertainty that a regulatory body or federal court may determine otherwise in the future. If this occurs, we may face legal or regulatory action, even if our beliefs were reasonable under the circumstances, and we could be required to register as an investment company under the Investment Company Act.

As part of our ongoing review of applicable securities laws, we take into account a number of factors, including the various definitions of "security" under such laws and federal court decisions interpreting the elements of these definitions, such as the U.S. Supreme Court's decisions in the *Howey* and *Reves* cases, and we also consider court rulings, reports, orders, press releases, public statements, and speeches by the SEC Commissioners and SEC Staff providing guidance on when a digital asset or a transaction to which a digital asset may relate may be a security for purposes of U.S. federal securities laws. Our position that ETH is not a "security" is premised, among other reasons, on our conclusion that ETH does not appear to meet certain elements of the Howey test, such as that holders of ETH do not have a reasonable expectation of profits from our efforts in respect of their holding of ETH. Also, ETH ownership does not convey the right to receive any interest, rewards, or other returns.

We acknowledge, however, that the SEC, a federal court or another relevant entity could take a different view. The regulatory treatment of ETH is such that it has drawn significant attention from legislative and regulatory bodies, in particular the SEC, which has previously stated it deemed ETH a security. The application of securities laws to the specific facts and circumstances of digital assets is complex and subject to change. Our conclusion, even if reasonable under the circumstances, would not preclude legal or regulatory action based on a finding that Ether, or any other digital asset we might hold, is a "security." Therefore, we are at risk of enforcement proceedings against us, which could result in potential injunctions, cease-and-desist orders, fines and penalties or other actions, if ETH or components of the Ethereum blockchain was determined to be a security by a regulatory body or a court. Such developments could subject us to fines, penalties and other damages, and adversely affect our business, results of operations, financial condition, treasury operations and prospects.

***If we were deemed to be an investment company under the Investment Company Act, applicable restrictions likely would make it impractical for us to continue segments of our business as currently contemplated.***

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Under Sections 3(a)(1)(A) and (C) of the Investment Company Act, a company generally will be deemed to be an "investment company" if (i) it is, or holds itself out as being, engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting, or trading in securities or (ii) it engages, or proposes to engage, in the business of investing, reinvesting, owning, holding, or trading in securities and it owns or proposes to acquire investment securities having a value exceeding 40% of the value of its total assets (exclusive of U.S. government securities, shares of registered money market funds under Rule 2a-7 of the Investment Company Act, and cash items) on an unconsolidated basis. Rule 3a-1 under the Investment Company Act generally provides that notwithstanding the Section 3(a)(1)(C) test described in clause (ii) above, an entity will not be deemed to be an "investment company" for purposes of the Investment Company Act if no more than 45% of the value of its assets (exclusive of U.S. government securities, shares of registered money market funds under Rule 2a-7 of the Investment Company Act, and cash items) consists of, and no more than 45% of its net income after taxes (for the past four fiscal quarters combined) is derived from, securities other than U.S. government securities, shares of registered money market funds under Rule 2a-7 of the Investment Company Act, securities issued by employees' securities companies, securities issued by qualifying majority owned subsidiaries of such entity, and securities issued by qualifying companies that are controlled primarily by such entity. We do not believe that we are an "investment company" as such term is defined in either Section 3(a)(1)(A) or Section 3(a)(1)(C) of the Investment Company Act.

With respect to Section 3(a)(1)(A), the substantial majority of the proceeds from our recent PIPE Offering were used to acquire ETH, which is an amount in excess of 40% of our total assets. Since we believe ETH is not an investment security, we do not hold ourselves out as being engaged primarily, or propose to engage primarily, in the business of investing, reinvesting, or trading in securities within the meaning of Section 3(a)(1)(A) of the Investment Company Act. With respect to Section 3(a)(1)(C), we believe we satisfy the elements of Rule 3a-1 and therefore are deemed not to be an investment company under, and we intend to conduct our operations such that we will not be deemed an investment company under, Section 3(a)(1)(C). We believe that we are not an investment company pursuant to Rule 3a-1 under the Investment Company Act because, on a consolidated basis with respect to wholly-owned subsidiaries but otherwise on an unconsolidated basis, no more than 45% of the value of our total assets (exclusive of U.S. government securities, shares of registered money market funds under Rule 2a-7 of the Investment Company Act, and cash items) consists of, and no more than 45% of our net income after taxes (for the last four fiscal quarters combined) is derived from, securities other than U.S. government securities, shares of registered money market funds under Rule 2a-7 of the Investment Company Act, securities issued by employees' securities companies, securities issued by qualifying majority owned subsidiaries of the Company, and securities issued by qualifying companies that are controlled primarily by the Company.

ETH and other digital assets, as well as new business models and transactions enabled by blockchain technologies, present novel interpretive questions under the Investment Company Act. There is a risk that assets or arrangements that we have concluded are not securities could be deemed to be securities by the SEC or another authority for purposes of the Investment Company Act, which would increase the percentage of securities held by us for Investment Company Act purposes. The SEC has requested information from a number of participants in the digital assets ecosystem, regarding the potential application of the Investment Company Act to their businesses. For example, in an action unrelated to the Company, in February 2022, the SEC issued a cease-and-desist order under the Investment Company Act to BlockFi Lending LLC, in which the SEC alleged that BlockFi was operating as an unregistered investment company because it issued securities and also held more than 40% of its total assets, excluding cash, in investment securities, including the loans of digital assets made by BlockFi to institutional borrowers.

If we were deemed to be an investment company, Rule 3a-2 under the Investment Company Act is a safe harbor that provides a one-year grace period for transient investment companies that have a bona fide intent to be engaged primarily, as soon as is reasonably possible (in any event by the termination of such one-year period), in a business other than that of investing, reinvesting, owning, holding or trading in securities, with such intent evidenced by the company's business activities and an appropriate resolution of its board of directors. The grace period is available not more than once every three years and runs from the earlier of (i) the date on which the issuer owns securities and/or cash having a value exceeding 50% of the issuer's total assets on either a consolidated or unconsolidated basis or (ii) the date on which the issuer owns or proposes to acquire investment securities having a value exceeding 40% of the value of such issuer's total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. Accordingly, the grace period may not be available at the time that we seek to rely on Rule 3a-2; however, Rule 3a-2 is a safe harbor and we may rely on any exemption or exclusion from investment company status available to us under the Investment Company Act at any given time. Furthermore, reliance on Rule 3a-2, Section 3(a)(1)(C), or Rule 3a-1 could require us to take actions to dispose of securities, limit our ability to make certain investments or enter into joint ventures, or otherwise limit or change our service offerings and operations. If we were to be deemed an investment company in the future, restrictions imposed by the Investment Company Act — including limitations on our ability to issue different classes of stock and equity compensation to directors, officers, and employees and restrictions on management, operations, and transactions with affiliated persons — likely would make it impractical for us to continue our business as contemplated, and could have a material adverse effect on our business, results of operations, financial condition, treasury and prospects.

***ETH is created and transmitted through the operations of the peer-to-peer ETH network, a decentralized network of computers running software following the ETH protocol. If the ETH network is disrupted or encounters any unanticipated difficulties, the value of ETH could be negatively impacted.***

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If the ETH network is disrupted or encounters any unanticipated difficulties, then the processing of transactions on the ETH network may be disrupted, which in turn may prevent us from depositing or withdrawing ETH from our accounts with our custodians or otherwise effecting ETH transactions. Such disruptions could include, for example: the price volatility of ETH; the insolvency, business failure, interruption, default, failure to perform, security breach, or other problems of participants, custodians, or others; the closing of ETH trading platforms due to fraud, failures, security breaches or otherwise; or network outages or congestion, power outages, or other problems or disruptions affecting the ETH network.

In addition, although we do not currently intend to mine ETH, digital asset validating operations can consume significant amounts of electricity, which may have a negative environmental impact and give rise to public opinion against allowing, or government regulations restricting, the use of electricity for validating operations. Additionally, validators may be forced to cease operations during an electricity shortage or power outage.

***We face risks relating to the custody of our ETH, including the loss or destruction of private keys required to access our ETH and cyberattacks or other data loss relating to our ETH, including smart contract related losses and vulnerabilities.***

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We currently hold our ETH with Anchorage Digital Bank N.A. and BitGo Trust Company, Inc., as custodians (the "Custodians") that have duties to safeguard our private keys, and use multisignature keys to prevent unauthorized access in accordance with our treasury operations. Our custodial services contracts do not restrict the asset manager's ability to reallocate our ETH among other custodians, provided, however that our ETH holdings may be concentrated with a single custodian from time to time. In light of the significant amount of ETH we expect to hold, we may seek to engage additional custodians to achieve a greater degree of diversification in the custody of our ETH as the extent of potential risk of loss is dependent, in part, on the degree of diversification. However, multiple custodians may utilize similar wallet infrastructure, cloud service providers or software systems, which could increase systemic technology risk.

If there is a decrease in the availability of digital asset custodians that we believe can safely custody our ETH, for example, due to regulatory developments or enforcement actions that cause custodians to discontinue or limit their services in the United States, we may need to enter into agreements that are less favorable than our current agreements or take other measures to custody our ETH, and our ability to seek a greater degree of diversification in the use of custodial services would be materially adversely affected. While we conduct due diligence on our custodians and any smart contract platforms we may use, there can be no assurance that such diligence will uncover all risks, including operational deficiencies, hidden vulnerabilities or legal noncompliance.

Our use of a custodian exposes us to the risk that the ETH our custodian holds on our behalf could be subject to insolvency proceedings and we could be treated as a general unsecured creditor of the custodian, inhibiting our ability to exercise ownership rights with respect to such ETH. Any loss associated with such insolvency proceedings is unlikely to be covered by any insurance coverage that we might purchase or maintain related to our ETH. The legal framework governing digital asset ownership and rights in custodial or insolvency contexts remains uncertain and continues to evolve, which could result in unexpected losses, protracted recovery processes or adverse treatment in insolvency proceedings.

ETH is controllable only by the possessor of both the unique public key and private key(s) relating to the local or online digital wallet in which the ETH is held. While the Ethereum blockchain ledger requires a public key relating to a digital wallet to be published when used in a transaction, private keys must be safeguarded and kept private in order to prevent a third party from accessing the ETH held in such wallet. To the extent the private key(s) for a digital wallet are lost, destroyed, or otherwise compromised and no backup of the private key(s) is accessible, neither we nor our custodians will be able to access the ETH held in the related digital wallet. Furthermore, we cannot provide assurance that our digital wallets, nor the digital wallets of our custodians held on our behalf, will not be compromised as a result of a cyberattack. The Ethereum and blockchain ledger, as well as other digital assets and blockchain technologies, have been, and may in the future be, subject to security breaches, cyberattacks, or other malicious activities.

As part of our treasury management strategy, we may engage in staking, restaking, or other permitted activities that involve the use of "smart contracts" or decentralized applications. The use of smart contracts or decentralized applications entails certain risks including risks stemming from the existence of an "admin key" or coding flaws that could be exploited, potentially allowing a bad actor to issue or otherwise compromise the smart contract or decentralized application, potentially leading to a loss of our ETH. Like all software code, smart contracts are exposed to risk that the code contains a bug or other security vulnerability, which can lead to loss of assets that are held on or transacted through the contract or decentralized application. Smart contracts and decentralized applications may contain bugs, security vulnerabilities or poorly designed permission structures that could result in the irreversible loss of ETH or other digital assets. Exploits, including those stemming from admin key misuse, admin key compromise, or protocol flaws, have occurred in the past and may occur in the future.

***The launch of central bank digital currencies ("CBDCs") may adversely impact our business.***

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The introduction of any government-issued digital currency could eliminate or reduce the need or demand for private-sector issued crypto currencies, or significantly limit their utility. National governments around the world could introduce CBDCs, which could in turn limit the size of the market opportunity for cryptocurrencies, including ETH.

**Operational Risk Factors**

***Our capital allocation strategy may not be successful, which could adversely impact our financial condition.***

We intend to continue allocating part of our cash balances to companies and real estate and may engage in mergers, acquisitions and divestitures. These types of holdings are riskier than holding our cash balances as bank deposits or, for example, conservative options such as treasury bonds or money market funds. There can be no assurance that we will be able to maintain or enhance the value or the performance of the companies in which we have invested or may invest in the future, or that we will achieve returns or benefits from these holdings. Under certain circumstances, significant declines in the fair values of these holdings may require the recognition of other-than-temporary impairment losses. We may lose all or part of our holdings relating to such companies if their value decreases as a result of their financial performance or for any other reason. If our interests differ from those of other investors in companies over which we do not have control, we may be unable to effect any change at those companies. We are not required to meet any diversification standards, and our holdings may continue to remain concentrated. In addition, we may seek to sell some or all of our existing businesses as part of our holding company strategy.

If our capital allocation strategy is not successful or we achieve less than expected returns from these holdings, it could have a material adverse effect on us. The Board may also change our capital allocation strategy at any time, and such changes could further increase our exposure, which could adversely impact us.

***Any potential future acquisitions, strategic investments, entry into new lines of business, divestitures, mergers or joint ventures may subject us to significant risks, any of which could harm our business.***

Our long-term strategy may include identifying and acquiring, investing in or merging with suitable candidates on acceptable terms, entry into new lines of business and markets or divesting of certain business lines or activities. Mergers, acquisitions, divestitures and entries into new lines of business include a number of risks and present financial, managerial and operational challenges, including but not limited to:

● diversion of management attention from running our existing business;

● possible material weaknesses in internal control over financial reporting;

● increased expenses including legal, administrative and compensation expenses related to newly hired or terminated employees;

● increased costs to integrate, develop or, in the case of a divestiture, separate the technology, personnel, customer base and business practices of the acquired, new or divested business or assets;

● potential exposure to material liabilities not discovered in the due diligence process;

● potential adverse effects on reported results of operations due to possible write-down of goodwill and other intangible assets associated with acquisitions;

● potential damage to customer relationships or loss of synergies in the case of divestitures; and

● unavailability of acquisition financing or inability to obtain such financing on reasonable terms.

Any acquired business, technology, service or product, or entry into a new line of business could significantly under-perform relative to our expectations and may not achieve the benefits we expect. For all these reasons, our pursuit of an acquisition, investment, new line of business, divestiture, merger or joint venture could cause our actual results to differ materially from those anticipated.

***Our holdings in special purpose acquisition companies as well as the sponsors of special purpose acquisition companies involve a high degree of risk.***

We have invested in initial public offerings ("IPOs") of special purpose acquisition companies, including SPACs that are sponsored by our affiliates. In general, a SPAC is a special purpose vehicle that is formed to raise capital from the public through an IPO with the purpose, usually, of using the proceeds to acquire a single unspecified business or assets to be identified after the IPO. The IPO proceeds are held in a trust account until released to fund a business combination or used to redeem shares sold in the IPO. SPACs are required to either consummate a business combination or liquidate within a set period of time following their IPO. Because, at the time of the IPO, the SPAC has no operating history or any plans, arrangements or understandings with any prospective investment targets, we will have no basis upon which to evaluate the SPAC's ability to achieve its business objectives. If a SPAC fails to complete its initial business transaction within the required time period, it will never generate any operating revenues and our SPAC holding may receive only a fixed dollar amount per share upon redemption, or less than such fixed amount in certain circumstances which could significantly affect our operating results and stockholders' equity.

Additionally, we have acquired equity interests in various sponsors of SPACs ("Sponsor") and expect to acquire additional interests in sponsors of SPACs in the future. By investing in a Sponsor, we have provided at-risk capital which allows the Sponsor to launch the IPO of the SPAC. In exchange for this investment, we own interests in the Sponsor that entitle us to receive distributions of shares and warrants in the SPAC. These Sponsor interests do not have redemption rights to receive any portion of our original investment back from the trust account of the SPAC, as is normally associated with an IPO investment directly into a SPAC. Accordingly, an investment in a Sponsor is subject to a much higher degree of risk than an investment directly in a SPAC's IPO because the entire investment may be lost if the SPAC is not successful in consummating a business combination. Such potential loss could have a material effect on our financial results and stockholders' equity.

***As the number of SPACs evaluating targets increases, attractive targets may become more scarce, and there may be increased competition for attractive targets. This could increase the cost of an initial business combination and it could even result in an inability to find a target or to consummate an initial business combination.***

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In recent years, the number of SPACs that have been formed has increased substantially. Many potential targets for special purpose acquisition companies have already entered into an initial business combination. As a result, at times, fewer attractive targets may be available to consummate an initial business combination.

In addition, because there are more SPACs seeking to enter into an initial business combination with available targets, the competition for available targets with attractive fundamentals or business models may increase, which could cause target companies to demand improved financial terms. Attractive deals could also become more scarce for other reasons, such as economic or industry sector downturns, geopolitical tensions, or increases in the cost of additional capital needed to close business combinations or operate targets post-business combination. Together, this could increase the cost of, delay or otherwise complicate or frustrate the ability of a SPAC to find and consummate an initial business combination and may result in an inability to consummate an initial business combination on terms favorable to investors altogether.

Furthermore, the strength of the market for SPAC IPOs has fluctuated substantially from year to year and has experienced cycles of relative strength and weakness. There can be no assurance that the SPAC market will be strong in the future.

***We may not be successful in carrying out our merchant banking strategy, and the fair value of our holdings will be subject to a loss in value.***

Through our SPAC sponsorships, we may be subject to lock-up agreements, and our ability to access the capital used to sponsor SPACs may be limited for a defined period, which may increase a risk of loss of all or a significant portion of value. Our holdings may also become concentrated. A significant decline in the values of these holdings may produce a large decrease in our consolidated stockholders' equity and can have a material adverse effect on our consolidated book value per share and earnings.

***If we are unable to maintain our brand and reputation, our business, results of operations and prospects could be materially harmed.***

Our business, results of operations and prospects depend, in part, on maintaining and strengthening our brand and reputation for providing high quality products and services. Reputational value is based in large part on perceptions. Although reputations may take decades to build, any negative incidents can quickly erode trust and confidence, particularly if they result in adverse publicity, governmental investigations or litigation. If problems with our products cause operational disruption or other difficulties, or there are delays or other issues with the delivery of our products or services, our brand and reputation could be diminished. Damage to our reputation could also arise from actual or perceived legal violations, product safety issues, data security breaches, actual or perceived poor employee relations, actual or perceived poor service, actual or perceived poor privacy practices, operational or sustainability issues, actual or perceived ethical issues or other events within or outside of our control that generate negative publicity with respect to us. Any event that has the potential to negatively impact our reputation could lead to lost sales, loss of new opportunities and retention and recruiting difficulties. If we fail to promote and maintain our brand and reputation successfully, our business, results of operations and prospects could be materially harmed.

***The insurance that we maintain may not fully cover all potential exposures.***

We maintain property, business interruption and casualty insurance but such insurance may not cover all risks associated with the hazards of our business and is subject to limitations, including deductibles and maximum liabilities covered. We are potentially at risk if one or more of our insurance carriers fail. Additionally, severe disruptions in the domestic and global financial markets could adversely impact the ratings and survival of some insurers. In the future, we may not be able to obtain coverage at current levels, and our premiums may increase significantly on coverage that we maintain.

***Unfavorable global economic conditions could adversely affect our business, financial condition or results of operations.***

Our results of operations and the implementation of our business strategies could be adversely affected by general conditions in the global economy, including conditions that are outside of our control. A severe or prolonged economic downturn could result in a variety of risks to our business and could delay the implementation of our new business strategy.

In the event of a major disruption, we may lose the services of our employees, experience system interruptions or face challenges accessing the capital or credit markets, which could lead to diminishment of our business operations. Any of the foregoing could harm our business and delay the implementation of our business strategy.

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***Adverse developments in the financial markets could have a material adverse effect on our results of operations, financial position and our businesses, and may also limit our access to capital.***

Adverse developments in the financial markets, such as disruptions, uncertainty or volatility in the capital and credit markets, may result in realized and unrealized capital losses that could have a material adverse effect on our results of operations, financial position and our businesses, and may also limit our access to capital required to operate our business. Depending on market conditions, we could incur additional realized and unrealized losses on our portfolio of equity and other holdings in future periods, which could have a material adverse effect on our results of operations, financial condition and business. Economic conditions could also have a material impact on the frequency and severity of claims and therefore could negatively impact our underwriting returns. The volatility in the financial markets could continue to significantly affect the returns on our equity and other holdings, reported results, and stockholders' equity.

The capital requirements of our businesses depend on many factors, including regulatory requirements, the performance of our portfolio of equity and other holdings, our ability to write new business successfully, the frequency and severity of catastrophe events and our ability to establish premium rates and reserves at levels sufficient to cover losses.

**Legal and Regulatory Risks**

***The requirements of being a public company may strain our resources, divert management's attention, affect our ability to attract and retain qualified board members and have a material adverse effect on us and our stockholders.***

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As a publicly traded company, we are required to develop and implement substantial control systems, policies and procedures to satisfy our periodic SEC reporting and Nasdaq obligations. Management's previous experience may not be sufficient to successfully develop and implement these systems, policies and procedures and to operate our Company. Failure to do so could jeopardize our status as a public company, and the loss of such status may have a material adverse effect on us and our stockholders.

In addition, as a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Act, and Nasdaq rules, including those promulgated in response to the Sarbanes-Oxley Act. The requirements of these rules and regulations increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and increase demand on our systems and resources. The Exchange Act requires, among other things, that we file annual, quarterly and current reports with respect to our business and financial condition. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal controls for financial reporting. To maintain and improve the effectiveness of our disclosure controls and procedures, we need to continually commit significant resources, maintain staff and provide additional management oversight. In addition, implementing our business strategy and sustaining our growth will require us to commit additional management, operational and financial resources to identify new professionals to join our organization and to maintain appropriate operational and financial systems to adequately support expansion. These activities may divert management's attention from other business concerns, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

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***If we fail to establish and maintain an effective system of integrated internal controls, we may not be able to report our financial results accurately, which could have a material adverse effect on our business, financial condition and results of operations.***

Ensuring that we have adequate internal financial and accounting controls and procedures in place so that we can produce accurate financial statements on a timely basis is a costly and time-consuming effort that we will need to evaluate frequently. Section 404 of the Sarbanes-Oxley Act requires public companies to conduct an annual review and evaluation of their internal controls and attestations of the effectiveness of internal controls by independent auditors. We currently qualify as a smaller reporting company and nonaccelerated filer under the regulations of the SEC. As a nonaccelerated filer, we are exempt from the requirement to include the auditor's attestation on the effectiveness of our internal controls over financial reporting until such time as we no longer qualify as a nonaccelerated filer, based on our public float and reporting more than $100 million in annual revenues in a fiscal year. Regardless of our qualification status, we have implemented control systems and procedures to satisfy the reporting requirements under the Exchange Act and applicable requirements of Nasdaq, among other items. Maintaining these internal controls is costly and may divert management's attention.

Our evaluation of our internal controls over financial reporting may identify material weaknesses that may cause us to be unable to report our financial information on a timely basis and thereby subject us to adverse regulatory consequences, including sanctions by the SEC, or violations of Nasdaq's listing rules. There also could be a negative reaction in the financial markets due to a loss of investor confidence in us and the reliability of our financial statements. Confidence in the reliability of our financial statements also could suffer if we or our independent registered public accounting firm were to report a material weakness in our internal controls over financial reporting. This may have a material adverse effect on our business, financial condition and results of operations and could also lead to a decline in the price of our common stock.

***While we currently qualify as a smaller reporting company under SEC regulations, we cannot be certain, if we take advantage of the reduced disclosure requirements applicable to these companies, that we will not make our stock less attractive to investors. If we lose smaller reporting company status, the costs and demands placed upon our management would be expected to increase.***

The SEC's rules exempt smaller reporting companies, like us, from various reporting requirements applicable to public companies that are not smaller reporting companies. So long as we qualify as a nonaccelerated filer, based on our public float, and report less than $100 million in annual revenues in a fiscal year, we are permitted, and we intend, to omit the auditor's attestation on internal control over financial reporting that would otherwise be required by the Sarbanes-Oxley Act.

Until such time that we lose smaller reporting company status, it is unclear if investors will find our stock less attractive because we may rely on certain disclosure exemptions. If some investors find our stock less attractive as a result, there may be a less active trading market for the stock, and our stock price may be more volatile and could cause our stock price to decline. Even if we remain a smaller reporting company, if our public float exceeds $75 million and we report $100 million or more in annual revenues in a fiscal year, we will become subject to the provisions of Section 404(b) of the Sarbanes-Oxley Act, requiring our independent registered public accounting firm to provide an attestation report on the effectiveness of our internal control over financial reporting, making the public reporting process more costly.

***Holders of our outstanding shares of 8.00% Cumulative Preferred Stock, Series A, have dividend, liquidation and other rights that are senior to the rights of holders of our common shares.***

As of March 23, 2026, we have 692,806 shares of preferred stock outstanding designated as 8.00% Cumulative Preferred Stock, Series A, par value $25.00 per share (the "Series A Preferred Stock"). The aggregate liquidation preference with respect to the outstanding shares of Series A Preferred Stock is approximately $17.3 million, and annual dividends on the outstanding shares of Series A Preferred Stock are approximately $1.4 million. Holders of our Series A Preferred Stock are entitled to receive, when, as and if declared by our Board cumulative cash dividends from and including 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). Upon our voluntary or involuntary liquidation, dissolution or winding up, before any payment is made to holders of our common shares, holders of these preferred shares are entitled to receive, for each share held, an amount equal to the $25.00 liquidation preference and unpaid dividends. This would reduce the remaining amount of our assets, if any, available to distribute to holders of our common shares.

Our Board has the authority to designate and issue additional preferred shares with liquidation, dividend and other rights that are senior to those of our common shares, similar or senior to the rights of the holders of our Series A Preferred Stock. Because our decision to issue additional securities will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of any future offerings. Thus, our stockholders bear the risk that future securities issuances might dilute their interests and reduce the market price of our stock.

***We may fail to satisfy the continued listing standards of Nasdaq, in which case our stock might be delisted.***

Even though we currently satisfy the continued listing standards for Nasdaq and expect to continue to do so, we can provide no assurance that we will continue to satisfy the continued listing standards in the future. In the event that we are unable to satisfy the continued listing standards of Nasdaq, our stock may be delisted from that market. Any delisting of our stock from Nasdaq could:

● adversely affect our ability to attract new investors;

● decrease the liquidity of our outstanding stock;

● reduce our flexibility to raise additional capital;

● reduce the price at which our stocks trade; and

● increase the transaction costs inherent in trading our stock, with overall negative effects for our stockholders.

In addition, delisting our stock could deter broker-dealers from making a market in or otherwise seeking or generating interest in our stock and might deter some institutions or others from investing in our securities at all. For these reasons and others, delisting could adversely affect the price of our stock and our business, financial condition and results of operations.

**Technology and Operational Risks**

***Our information technology systems may fail or suffer a loss of security which may have a material adverse effect on our business.***

Our business is highly dependent upon the successful and uninterrupted functioning of our computer and data processing systems. Our operations are dependent upon our ability to process our business timely and efficiently and protect our information systems from physical loss or unauthorized access. In the event that our systems cannot be accessed due to a natural catastrophe, terrorist attack or power outage, or systems and telecommunications failures or outages, external attacks such as computer viruses, malware or cyber-attacks, or other disruptions occur, our ability to perform business operations on a timely basis could be significantly impaired and may cause our systems to be inaccessible for an extended period of time. A sustained business interruption or system failure could adversely impact our ability to perform necessary business operations in a timely manner, hurt our relationships with our business partners and customers and have a material adverse effect on our financial condition and results of operations.

Our operations also depend on the reliable and secure processing, storage and transmission of confidential and other information in our computer systems and networks. From time to time, we may experience threats to our data and systems, including malware and computer virus attacks, unauthorized access, systems failures and disruptions. Computer viruses, hackers, phishing attacks, social engineering schemes, ransomware, employee misconduct and other external hazards could expose our data systems to security breaches, cyber-attacks or other disruptions. In addition, we routinely transmit and receive personal, confidential and proprietary information by electronic means. Our systems and networks may be subject to breaches or interference. Any such event may result in operational disruptions as well as unauthorized access to or the disclosure or loss of our proprietary information or our customers' information or theft of funds and other monetary loss, which in turn may result in legal claims, regulatory scrutiny and liability, damage to our reputation, the incurrence of costs to eliminate or mitigate further exposure, the loss of customers or affiliated advisers or other damage to our business.

**Risks Related to Our Officers and Directors**

***The Company may be unable to retain current personnel.***

The success of the Company will depend in part on its ability to retain the talents and dedication of key employees and officers. It is possible that these employees and officers may decide not to remain with the Company. If we are unable to retain key employees, including management, who are critical to the successful integration and future operations of the companies, the Company could face disruptions in their operations, loss of existing customers, loss of key information, expertise or know-how and unanticipated additional recruitment costs. In addition, if key employees terminate their employment, the Company's business activities may be adversely affected and management's attention may be diverted from successfully integrating the businesses to hiring suitable replacements, all of which may cause the Company's business to suffer. In addition, the Company may not be able to locate or retain suitable replacements for any key employees who leave either company.

***Some of our directors and officers also serve as directors and/or executive officers for other public companies or for our controlling stockholders or their affiliates, which may lead to conflicting interests.***

Certain of our executive officers and members of our Board have fiduciary duties to our stockholders; likewise, persons who serve in similar capacities at other public companies have fiduciary duties to those companies' investors. There may be potential conflicts of interest if our Company and one or more of these other companies pursue acquisitions and other business opportunities that may be suitable for each of us. Our directors who find themselves in these multiple roles may, as a result, have conflicts of interest or the appearance of conflicts of interest with respect to matters involving or affecting more than one of the companies to which they owe fiduciary duties. Furthermore, our directors who find themselves in these multiple roles own stock options, shares of common stock and other securities in some of these entities. These ownership interests could create, or appear to create, potential conflicts of interest when the applicable individuals are faced with decisions that could have different implications for our Company and these other entities. From time to time, we may enter into transactions with or participate jointly in ventures with those other entities or their affiliates. We may create new situations in the future in which our directors serve as directors or executive officers in future holdings of such entities.

***Our executive officers and directors allocate their time to our and other businesses in which they are involved, at their discretion, potentially to the detriment of the Company.***

Certain of our executive officers and directors are not required to, and will not, commit their full time to our affairs, which may result in conflicts of interest in allocating their time between our operations and those other businesses in which they are involved. If those executive officers and directors elect to devote substantial amounts of time to the affairs of other businesses, in excess of current levels, they might not assign sufficient attention to the Company, potentially impairing our results of operations, financial condition, and prospects and the value of our securities.

Members of our management and companies with which they are affiliated in the past have been, and may in the future be, involved in civil disputes and litigation and governmental investigations relating to their business affairs unrelated to the Company. Any such claims or investigations may divert management's attention from our business or be detrimental to our reputation, resulting in adverse effects upon our results of operations, financial condition, and prospects and the value of our securities held by investors.

**ITEM 1B. UNRESOLVED STAFF COMMENTS**

None.

**ITEM 1C. CYBERSECURITY**

Risks from cybersecurity threats are managed across the Company, third-party suppliers and vendors. Monitoring such risks and threats is integrated into the Company's overall risk management program.

The Company regularly assesses risks from cybersecurity and technology threats and monitors information systems for potential vulnerabilities. The Company maintains technical and organizational safeguards and also leverages third-party specialists in risk management to assist in implementing processes to oversee and identify material risks from cybersecurity threats associated with third-party service providers.

Our operations depend on our ability to process our business timely and efficiently and protect our information systems from physical loss or unauthorized access. A sustained business interruption or system failure could adversely impact our ability to perform necessary business operations promptly, hurt our relationships with our business partners and customers, and have a material adverse effect on our financial condition and results of operations.

In the event of an incident, the Company focuses on responding to and containing the threat and minimizing any business impact, as appropriate. In the event of an incident, senior management assesses, among other factors, safety impact, data loss, business operations disruption, projected cost and potential for reputational harm.

To date, the Company has not experienced any material cybersecurity incidents. For a discussion of whether any risks from cybersecurity threats are reasonably likely to materially affect the Company, including its business strategy, results of operations or financial condition, see "Item 1A. Risk Factors — Technology and Operational Risks**."**

The Company's Chief Financial Officer, Chief Accounting Officer, and senior management lead the implementation of information system controls and are responsible for monitoring the controls to ensure they remain appropriate. The Audit Committee of the Board, with input from senior management, assesses the Company's cybersecurity, other information technology risks, threats, and the measures implemented by the Company to mitigate and prevent cyberattacks. The Audit Committee will elevate any issues identified as potential threats to the attention of the Board. In addition, the Board oversees our annual enterprise risk assessment and receives periodic reports on the Company's cybersecurity controls.

**ITEM 2. PROPERTIES**

Our executive offices are located at 6408 Bannington Road, Charlotte, North Carolina 28226, where we share executive offices with an affiliated entity. The lease term expires in March 2028. We believe our facilities are adequate for future needs.

**ITEM 3. LEGAL PROCEEDINGS**

We are involved, from time to time, in certain legal disputes in the ordinary course of business. No such disputes, individually or in the aggregate, are expected to have a material effect on our business or financial condition.

One of our subsidiaries is named as a defendant in personal injury lawsuits based on alleged exposure to asbestos-containing materials. A majority of the cases involve product liability claims based principally on allegations of past distribution of commercial lighting products containing wiring that may have contained asbestos. Each case names dozens of corporate defendants in addition to FG Nexus. In our experience, a large percentage of these types of claims have never been substantiated and have been dismissed by the courts. FG Nexus has not suffered any adverse verdict in a trial court proceeding related to asbestos claims and intends to continue to defend these lawsuits.

On July 16, 2024, we received notice that we were named as a defendant, along with over 500 other companies, in a civil action filed for cost recovery and contributions related to the release and/or threatened release of hazardous substances from a facility known as the BKK Class 1 Landfill in Los Angeles County California from periods prior to 1987. The action alleges that FGH is a successor to Pichel Industries, Inc. ("Pichel Industries") and that Pichel Industries contributed waste to the landfill. We are not aware of any successor relationship between the Company and Pichel. There have no further actions in this case since the initial filing in 2024, and we intend to defend ourselves vigorously in the event the plaintiffs choose to pursue action against the Company.

As of December 31, 2025, we have a loss contingency reserve of approximately $0.9 million, which represents management's aggregate estimate of the potential losses related to the settlement of various open proceedings and claims. Management does not expect the resolution of these proceedings and claims to have a material adverse effect on the Company's consolidated financial condition, results of operations or cash flows.

**ITEM 4. MINE SAFETY DISCLOSURES**

Not applicable.

**PART II**

**ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES**

**Market for Registrant's Common Stock**

Our common stock is traded on the Nasdaq Global Market tier of the Nasdaq Stock Market, LLC under the symbol "FGNX." Our Series A Preferred Stock is also traded on the Nasdaq Global Market tier of the Nasdaq Stock Market under the symbol "FGNXP."

**Number of Common Stockholders**

As of December 31, 2025, we had 7,080,747 shares of common stock outstanding, which were held by 177 stockholders of record, including Cede & Co., which holds shares on behalf of the beneficial owners of the Company's common stock. Because brokers and other institutions hold many of our shares on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders. As of March 23, 2026, we had 6,530,207 common shares outstanding.

**Stock Repurchases**

*Common Stock*

 

In September 2025, the Company's Board of Directors adopted a share repurchase program to acquire up to $200 million of the Company's outstanding common stock (the "Share Repurchase Program"). The Stock Repurchase Program, which is open-ended, allows the Company to repurchase its Common Stock from time to time in the open market and in negotiated transactions. Any repurchases conducted pursuant to the Share Repurchase Program will be in accordance with Rule 10b-18 of the Exchange Act and will be made in accordance with applicable laws and regulations in effect from time to time. Subject to applicable rules and regulations, the shares of common stock may be purchased from time to time in the open market transactions and in amounts as the Company deems appropriate, based on factors such as market conditions, legal requirements, and other business considerations.

The following table provides information about purchases made by us of our common stock for each month included in the fourth quarter of 2025:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Period** | **Total number of shares purchased** | **Average price paid per share** | **Total number of shares purchased as part of publicly announced plans or programs** | **Approximate dollar value of shares that may yet be purchased under the plans or programs** |
|  | (in thousands, except per share amounts) | (in thousands, except per share amounts) | (in thousands, except per share amounts) | (in thousands, except per share amounts) |
| October 2025 | 319 | $20.10 | 319 | $193595 |
| November 2025 | 648 | $14.95 | 648 | $183898 |
| December 2025 | 651 | $15.40 | 651 | $173867 |
| &nbsp;&nbsp;&nbsp;Quarter Ended December 31, 2025 | 1618 | $16.15 | 1618 | $173867 |

---

 

*Preferred Stock*

As of December 31, 2025, we had 888,884 preferred shares outstanding, and as of March 23, 2026, we had 692,806 preferred shares outstanding.

In December 2025, the Company's Board of Directors approved a preferred share repurchase program to acquire up to 894,580 shares of the Company's outstanding preferred shares (the "Preferred Share Repurchase Program"). The Preferred Share Repurchase Program, which is open-ended, allows the Company to repurchase its preferred shares from time to time in the open market and in negotiated transactions. Any repurchases conducted pursuant to the Preferred Share Repurchase Program will be in accordance with Rule 10b-18 of the Exchange Act and will be made in accordance with applicable laws and regulations in effect from time to time.

The following table provides information about purchases made by us of our preferred stock for each month included in the fourth quarter of 2025:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Period** | **Total number of shares purchased** | **Average price paid per share** | **Total number of shares purchased as part of publicly announced plans or programs** | **The maximum number of shares that may still be purchased under the plans or programs** |
|  | (in thousands, except per share amounts) | (in thousands, except per share amounts) | (in thousands, except per share amounts) | (in thousands, except per share amounts) |
| October 2025 |  | $- |  |  |
| November 2025 |  | $- |  |  |
| December 2025 | 6 | $22.14 | 6 | 889 |
| &nbsp;&nbsp;&nbsp;Quarter Ended December 31, 2025 | 6 | $22.14 | 6 | 889 |

---

**Dividends**

We have never declared or paid any cash dividends on our common stock and do not anticipate paying any cash dividends on our common stock in the foreseeable future. It is the present policy of our Board of Directors to retain earnings, if any, for use in developing and expanding our business. In the future, our payment of dividends on our common stock will also depend on the amount of funds available, our financial condition, capital requirements and such other factors as our Board of Directors may consider.

Holders of our Series A Preferred Stock are entitled to receive quarterly 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). We intend to declare regular quarterly dividends on the shares of Series A Preferred Stock.

**Securities Authorized for Issuance Under Equity Compensation Plans**

See Item 12 of this Form 10-K.

**ITEM 6. [RESERVED]**

**ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

*You should read the following discussion in conjunction with our consolidated financial statements and related notes and information included elsewhere in this Form 10-K. You should review the "Risk Factors" section of this Form 10-K for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. Some of the information contained in this discussion and analysis and set forth elsewhere in this Form 10-K includes forward-looking statements that involve risks and uncertainties.*

Unless context denotes otherwise, the terms "Company," "FG Nexus," "we," "us," and "our," refer to FG Nexus Inc. (formerly known as Fundamental Global Inc.), and its subsidiaries.

**Overview**

FG Nexus, formerly known as Fundamental Global Inc., is a holding company incorporated in the state of Nevada. On December 9, 2022, we completed our reincorporation from a Delaware corporation to a Nevada corporation. On September 5, 2025, we changed our name from "Fundamental Global Inc." to "FG Nexus Inc." Our common stock and Series A preferred shares are currently listed on Nasdaq under the symbols "FGNX" and "FGNXP," respectively. We currently conduct business through our primary business segments including digital assets and merchant banking.

*Digital Assets*

 

Following the private placement in July 2025, the Company transitioned its operations to focus primarily on operating as a digital asset treasury focused on ETH and tokenization opportunities, particularly the tokenization of real-world assets. Ethereum and other Ether related digital assets serve as our primary treasury assets, Ethereum is the foundation of digital finance and settlement layer for the majority of stablecoins, Decentralized Finance (DeFi), and tokenized assets. ETH is the native token of the Ethereum network, which we purchased ETH as our initial treasury asset following the private placement.

Our treasury strategy is focused on commercializing and expanding the tokenization of real-world assets, potentially including affordable housing, reinsurance, real estate and other asset classes. As of December 31, 2025, our digital asset portfolio included 40,093 ETH, with an estimated fair value of $119.4 million. As of March 23, 2026, our digital asset portfolio had expanded and was comprised of a combination of ETH and wrapped staked ETH ("WSETH"), with an estimated combined fair value of approximately $64.6 million. All of our digital assets are held in our custodial accounts at Anchorage and BitGo (both as defined below) and is currently un-staked for maximum financial flexibility and liquidity.

We utilize third-party custodians, including Anchorage and BitGo as well as third-party treasury management services including Galaxy Digital (as defined below) to facilitate our treasury strategies.

*Merchant Banking*

 

Merchant banking services include various strategic, administrative, and regulatory support services to newly formed SPACs (our SPAC platform). 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 and other merchant banking clients.

In addition, our merchant banking division has facilitated the launch of several new companies, including FG Communities, Inc. ("FGC"), a self-managed real estate company focused on a growing portfolio of manufactured housing communities which are owned and operated by FGC, and Craveworthy LLC ("Craveworthy"), an innovative fast casual restaurant platform company.

*Discontinued Operations*

We operated a reinsurance business, which has been classified as assets held for sale since as of December 31, 2024. We sold a portion of our reinsurance business in the first half of 2025 and sold the remaining portion of the reinsurance business in early 2026.

Our wholly-owned subsidiary and managed services business, Strong Technical Services ("STS"), a leader in the entertainment industry providing mission critical products and services to cinema exhibitors and entertainment venues for over 90 years was transferred to the CVR Trust in August 2025. STS provides comprehensive managed service offerings including remote network operating center support, on-site field service, content delivery, installation and other services designed to support cinema and entertainment operators.

We previously operated Strong Studios, Inc. and Strong/MDI Screen Systems, Inc. Those business units were sold in 2024 and are no longer part of our operations as of December 31, 2025.

These discontinued business units are more fully described in Item 8, Note 7, in the Notes to the Consolidated Financial Statements included in this Form 10-K.

**Recent Developments and Transactions**

*Reverse Stock Split*

On January 21, 2026, our Board of Directors approved a reverse stock split of the authorized, issued and outstanding shares of our common stock, par value $0.001 per share (the "Common Stock") at a ratio of one (1)-for-five (5) (the "Reverse Stock Split") by filing a certificate of amendment to our amended and restated articles of incorporation with the Nevada Secretary of State on February 10, 2026 ("2026 RSS Charter Amendment"). The Reverse Stock Split became effective on February 13, 2026 (the "Effective Date"), at 9:30 a.m., Eastern Time, and our common shares began trading on a split-adjusted basis at the commencement of trading on the same day. No fractional shares were issued in connection with the Reverse Stock Split, rather stockholders who would have otherwise received fractional shares received cash payments in lieu of such fractional shares. After the Reverse Stock Split, the Company had 6,555,124 shares of Common Stock outstanding. All equity awards outstanding immediately prior to the Reverse Stock Split were adjusted to reflect the Reverse Stock Split. As a result of the Reverse Stock Split, all references to Common Stock in this Annual Report on Form 10-K (this "Form 10-K") have been adjusted to reflect the Reverse Stock Split.

The foregoing summary of 2026 RSS Charter Amendment does not purport to be complete and readers are referred to the complete text of the 2026 RSS Charter Amendment, a copy of which is attached hereto as Exhibit 3.9 and is herein incorporated by reference.

*Letter of Intent to Sell Quebec Real Estate*

 

We signed a non-binding letter of intent to sell our Quebec property for $15.0 million CAD, or approximately $11.0 million USD. Following repayment of the existing installment loan, the transaction is expected to generate approximately $8.0-$9.0 million USD in net pretax proceeds. The letter of intent does not constitute a binding agreement, and there can be no assurance that a definitive sale agreement will be reached or that the transaction will be completed. The transaction, if completed, is expected to close during the first half of 2026, subject to the execution of definitive agreements, completion of due diligence, and satisfaction of customary closing conditions.

*Agreement to Sell Reinsurance Business*

 

We operated a reinsurance business, which has been classified as assets held for sale since December 31, 2024. We sold a portion of our reinsurance business in the first half of 2025. On January 2, 2026, Company consummated the initial closing (the "First Closing") of the transaction contemplated by a transaction agreement (the "Transaction Agreement"), initially dated June 27, 2025 and ultimately executed and delivered on October 22, 2025, by and among FG Reinsurance Holdings, LLC, a wholly owned subsidiary of the Company, ("FGRH"), Thomas Heise, FG RE Corporate Member Limited, a company incorporated and registered in England and Wales, FG Reinsurance Ltd., a Cayman Islands limited liability company, ("FG Re"), and a reinsurance investor (the "Reinsurance Investor"), which provided for the sale by FGRH of 100% of the equity of FG Re and FG Solutions Ltd. a Bermuda service company ("FG Solutions") (FG Solutions collectively with FG Re the "FG Reinsurance Division") to Thomas Heise. On September 16, 2025, Thomas Heise assigned all of his rights and obligations under the Transaction Agreement to Devondale Holdings, LLC ("Devondale"). This transaction was previously disclosed in the Company's Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission on October 28, 2025.

At the First Closing, in accordance with the terms of the Transaction Agreement, the Company completed the sale of the equity of FG Re and FG Solutions to Devondale in exchange for (1) the release of $3.3 million of collateral that FGRH had posted in connection with certain reinsurance contracts of the FG Reinsurance Division; and (2) 40% of the Class A voting units of Devondale (collectively the "Consideration"). Pursuant to the Transaction Agreement, FGRH agreed to leave $1.3 million in cash in FG Re in exchange for a promissory note in the amount of $1.3 million that accrues interest at a rate of 6% per annum with all principal and accrued interest due and payable on June 30, 2027.

The foregoing summary of Transaction Agreement does not purport to be complete and readers are referred to the complete text of the Transaction Agreement, a copy of which is attached hereto as Exhibit 10.27 and is herein incorporated by reference.

An additional closing (the "Second Closing") occurred on March 23, 2026 whereby Saltire Capital Ltd, a company traded on the Toronto Stock Exchange, through one of its subsidiaries advanced Devondale $1.0 million to fund Devondale's $1.0 million cash payment obligation to FGRH in exchange for (1) a promissory note in the amount of $1.0 million that accrues interest with principal and interest, based on a 5-year amortization schedule commencing on September 30, 2027, with a balloon payment of all remaining principal and accrued interest on June 30, 2030, and (2) 40% of the Class A voting units of Devondale. Devondale's obligation to make a cash payment of $1.0 million to FGRH is set forth in the agreement, dated October 25, 2025, by and between FGRH, Thomas Heise and Devondale (the "October 25, 2025 Agreement").

The foregoing summary of October 25, 2025 Agreement does not purport to be complete and readers are referred to the complete text of the October 25, 2025 Agreement, a copy of which is attached hereto as Exhibit 10.28 and is herein incorporated by reference.

*Loan Agreement*

On October 29, 2025, the Company entered into a master digital currency loan agreement (the "MLA") with [\*] (the "Lender"). Pursuant to the MLA the Company may deliver to Lender a lending request for a borrowed asset from the Lender. If Lender agrees to make a loan (each a "Loan"), then the Lender shall transmit to the Company either (a) digital currency to the Company's digital currency address or (b) cash via the Company's wire instructions. The specific and final terms of a Loan shall be memorialized in a loan term sheet (the "Loan Term Sheet"). In the event of any conflict of the terms between the MLA and the terms of the applicable Loan Term Sheet, the terms of the relevant Loan Term Sheet shall govern. All Loans under the MLA are callable by Lender and may be pre-paid by the Company. Loans under the MLA shall terminate upon the maturity date or the exercise by the Company or the Lender of the callable option. The MLA requires that the Company provide collateral for all Loans in an amount to be agreed upon by the Company and the Lender as set forth in the applicable Loan Term Sheet. The Company's collateral for a Loan is subject to margin calls and fees, the particulars of which are delineated in the applicable Loan Term Sheet.

In connection with the MLA, the Company entered into an account control agreement, dated October 29, 2025 (the "ACA") by and between [\*] (the "Custodian"), the Company and the Lender. The Company maintains some of its ETH holdings with the Custodian. The ACA provides the Custodian will acknowledge the MLA between the Company and Lender and that the Custodian will recognize that the Lender may have a security interest in certain assets of the Company maintained at Custodian.

On October 30, 2025, the Company and Lender executed a Loan Term Sheet (the "October 2025 LTS"). The October 2025 LTS provided for a $10.0 million loan with a fee of 7.9% (the "October Loan"). The October Loan was repaid in December 2025. The collateral for the October Loan was Staked ETH and the Initial Collateral Level was 170%. The margin call rate was 140%. The October 2025 LTS also provided that the following additional terms shall also apply to the October Loan: (a) post-default hedging costs and (b) certain additional remedies in the event of a default under the MLA.

The foregoing summary of the MLA, the ACA and the October 2025 LTS do not purport to be complete and are qualified in their entirety by reference to the actual MLA, the ACA and the October 2025 LTS copies of which are attached hereto as Exhibits 10.29, 10.30 and 10.31, respectively, and are incorporated herein by reference.

*Share Repurchase Programs*

In September 2025, our Board adopted a share repurchase program to acquire up to $200 million of our outstanding Common Stock (the "Common Stock Repurchase Program"). The Common Stock Repurchase Program, which is open-ended, allows us to repurchase our Common Stock from time to time in the open market and in negotiated transactions. Any repurchases conducted pursuant to the Common Stock Repurchase Program will be in accordance with Rule 10b-18 of the Exchange Act and will be made in accordance with applicable laws and regulations in effect from time to time. Subject to applicable rules and regulations, the shares of common stock may be purchased from time to time in the open market transactions and in amounts as we deem appropriate, based on factors such as market conditions, legal requirements, and other business considerations. Commencing on October 23, 2025, and through March 23, 2026, we have purchased a total of approximately 2.2 million shares of our Common Stock at a total cost (including commissions) of approximately $34.9 million. Through March 23, 2026, we have repurchased approximately 25.8% of our Common Stock outstanding immediately prior to implementation of the program. All shares repurchased under the Common Stock Repurchase Program are recorded as treasury stock.

In December 2025, our Board approved a preferred share repurchase program to acquire up to 894,580 shares of our outstanding preferred shares (the "Preferred Share Repurchase Program"). The Preferred Share Repurchase Program, which is open-ended, allows the Company to repurchase its preferred shares from time to time in the open market and in negotiated transactions. Any repurchases conducted pursuant to the Preferred Share Repurchase Program will be in accordance with Rule 10b-18 of the Exchange Act and will be made in accordance with applicable laws and regulations in effect from time to time. Commencing on December 12, 2025 and through March 23, 2026, we have purchased approximately 202 thousand shares of our Series A Preferred Stock at a total cost (including commissions) of approximately $5.0 million. Through March 23, 2026, we have repurchased approximately 22.6% of our Series A Preferred Stock outstanding immediately prior to implementation of the program. All repurchased Series A Preferred Stock are recorded as a reduction to the liquidation value of the Preferred Stock.

*ATM Offering*

 

On August 7, 2025, we entered into a Sales Agreement (the "Sales Agreement") with ThinkEquity LLC (the "Sales Agent"), pursuant to which we may offer and sell, from time to time through the Sales Agent, up to such number or dollar amount of shares that would (a) exceed the number or dollar amount of shares of Common Stock registered on the effective registration statement pursuant to which the offering is being made, (b) exceed the number of authorized but unissued shares of Common Stock (less shares of Common Stock issuable upon exercise, conversion or exchange of any outstanding securities of the Company or otherwise reserved from our authorized capital stock), (c) exceed the number or dollar amount of shares of Common Stock permitted to be sold under Form S-3 or (d) exceed the number or dollar amount of shares of Common Stock for which the Company has filed a Prospectus Supplement (defined below) (the lesser of (a), (b), (c) and (d), the "Shares") of our Common Stock, subject to the terms and conditions of the Sales Agreement. We filed a Registration Statement on Form S-3 offering up to $5 billion of the Shares. Under the Sales Agreement, the Sales Agent may 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 "Securities Act"), including sales made directly on or through The Nasdaq Global Market or any other existing trading market for the Common Stock, in negotiated transactions at market prices prevailing at the time of sale or at prices related to such prevailing market prices, and/or any other method permitted by law. We may instruct the Sales Agent not to sell the Shares if the sales cannot be effected at or above the price designated by us from time to time. Through December 31, 2025, we sold a total of approximately 0.4 million shares of Common Stock pursuant to the Sales Agreement, which generated gross proceeds of approximately $15.5 million, or approximately $14.1 million after offering costs. As of October 13, 2025, we suspended the ATM. While we plan to reinstate the ATM and to sell additional Shares, as of the date of this Form 10-K, the reinstatement of the ATM has not yet occurred.

The foregoing summary of Sales Agreement does not purport to be complete and readers are referred to the complete text of the Sales Agreement, a copy of which is attached hereto as Exhibit 10.24 and is herein incorporated by reference.

*Private Placement Offering*

 

In July 2025, we entered into securities purchase agreement with certain accredited investors (the "Purchasers") pursuant to which we agreed to sell and issue to the Purchasers in a private placement offering (the "Private Placement Offering") pre-funded warrants (the "Pre-Funded Warrants") to purchase up to an aggregate of 8.0 million shares (the "Pre-Funded Warrant Shares,") of our Common Stock at an offering price of $25.00 per Pre-Funded Warrant payable at the option of the Purchaser in cash, Bitcoin, USDC or ETH. The Private Placement Offering closed in August 2025, and we received gross cash proceeds of approximately $176.0 million, or $168.6 million after offering costs, and cryptocurrency totaling approximately $24.0 million. Upon the effectiveness of the September Charter Amendment (as defined below), approximately 6.8 million Pre-Funded Warrants automatically converted into shares of our Common Stock. As of December 31, 2025, all Pre-Funded Warrants have been converted into our Common Stock.

The foregoing summary of Private Placement Offering and the Pre-Funded Warrants do not purport to be complete and readers are referred to the complete text of the (1) Form of Securities Purchase Agreement, dated as of July 29, 2025, between Fundamental Global Inc. and each Purchaser (as defined therein); (2) Placement Agency Agreement, dated July 29, 2025, between Fundamental Global Inc. and ThinkEquity LLC; ; (3) Form of Registration Rights Agreement, dated as of July 29, 2025; (4) Form of Optionally Exercisable Pre-Funded Warrant; (5) Form of Automatically Exercisable Pre-Funded Warrant; and (6) Form of Placement Agent Warrant, between Fundamental Global Inc. and each Purchaser (as defined therein), copies of which are attached hereto as Exhibits 10.9, 10.10, 10.11, 4.5, 4.6 and 4.7, respectively, and are herein incorporated by reference.

*Charter Amendments*

 

As approved by a majority of its stockholders by written consent, dated July 23, 2025, we filed a certificate of amendment to our amended and restated articles of incorporation with the Nevada Secretary of State on September 5, 2025 to (i) increase the total number of authorized shares of Common Stock from 0.8 million to 200.0 million, (ii) increase the total number of authorized shares of preferred stock, par value $.001 per share (the "Undesignated Preferred Stock") from 100.0 million to 500.0 million, (iii) increase the total number of authorized shares of 8% cumulative preferred stock, Series A (the "Series A Preferred Stock") from 1.0 million to 15.0 million and (iv) change the name of the Company to "FG Nexus Inc." (the "September Charter Amendment"). The September Charter Amendment was declared effective on September 5, 2025.

The foregoing summary of September Charter Amendment does not purport to be complete and readers are referred to the complete text of the September Charter Amendment, a copy of which is attached hereto as Exhibit 3.7 and is herein incorporated by reference.

A majority of our stockholders approved, by written consent dated September 4, 2025, a certificate of amendment to our amended and restated articles of incorporation to (a) increase the total number of authorized shares of Common Stock from 200.0 million shares to 180.0 billion shares and the total number of authorized shares of preferred stock from 500.0 million shares to 100.0 billion shares (collectively, the "Preferred Stock"), of which (i) 10.0 billion shares of Preferred Stock (increased from 15.0 million) are designated 8% cumulative preferred stock, Series A, par value $25.00 (the "Series A Preferred Stock"), and (ii) 90.0 billion shares of Preferred Stock (increased from 485.0 million shares) are undesignated preferred stock, par value $0.001 per share (the "Undesignated Preferred Stock"), (b) require that certain "Concurrent Jurisdiction Actions" and "Internal Actions" (as such terms are defined in NRS 78.046, collectively, the "Internal Actions") must be brought solely or exclusively in the Eighth Judicial District Court of Clark County in the State of Nevada and that such Internal Actions should be tried before a judge rather than a jury, in accordance with NRS 78.046(4); (c) clarify that any change of the Company's name shall not require consent of the Company's stockholders, in accordance with NRS 78.390(8); (d) have the Company "opt out" of the interested stockholder combination provisions set forth in NRS Sections 78.411 to 78.444, inclusive; and (e) have the Company "opt out" of the control share provisions set forth in NRS Sections 78.378 to 78.3793, inclusive (the "Additional Charter Amendment"). In connection with the Additional Charter Amendment, we also amended our By-laws to clarify the applicable voting thresholds for proposed amendments to the By-Laws. The Additional Charter Amendment was filed with and declared effective by the Secretary of State of the State of Nevada, on October 7, 2025.

The foregoing summary of Additional Charter Amendment does not purport to be complete and readers are referred to the complete text of the Additional Charter Amendment, a copy of which is attached hereto as Exhibit 3.8 and is herein incorporated by reference.

*Asset Transfer and CVR Trust*

 

In August 2025, in connection with the Private Placement Offering and the launch of our treasury strategy, we transferred a significant portion of our legacy assets (the "Asset Transfer") to a trust (the "CVR Trust") established in connection with the creation of contingent value rights ("CVRs") for the benefit of our stockholders as of August 8, 2025. We distributed the CVRs prior to the effectiveness of the September Charter Amendment and the exercise of any of the Pre-Funded Warrants sold in the Private Placement Offering. The CVRs represent the contractual right to receive a pro rata portion of the net proceeds received by the CVR Trust upon the future disposition, if any, of the assets transferred to the CVR Trust by the Company. See Item 8, Note 6, in the Notes to the Consolidated Financial Statements included in this 10-K for additional details.

*Prior Year Developments and Transactions*

 

On February 29, 2024, FG and FG Group Holdings, Inc. ("FGH") closed a plan of merger to combine the companies in an all-stock transaction (the "Merger"). In connection with the Merger, FGH common stockholders received one share of FG common stock for each share of common stock of FGH held by such stockholder. Upon completion of the Merger, the combined company was renamed to Fundamental Global Inc.

On May 3, 2024, Strong Global Entertainment, Inc. ("Strong Global Entertainment" or "SGE"), a majority owned subsidiary of the Company, entered into an acquisition agreement (the "Acquisition Agreement") with FG Acquisition Corp. ("FGAC"), a special purpose acquisition company ("SPAC"), Strong/MDI Screen Systems, Inc. ("Strong/MDI"), FGAC Investors LLC, and CG Investments VII Inc. The transaction closed on September 25, 2024. As part of the closing, FGAC was renamed Saltire Holdings, Ltd ("Saltire"), and Saltire acquired all of the outstanding shares of one of the Company's indirect wholly-owned subsidiaries, Strong/MDI. As a result of the acquisition, Strong/MDI became a wholly-owned subsidiary of Saltire.

On May 30, 2024, the Company and Strong Global Entertainment, an operating company in which we held approximately 76% of the Class A common shares, entered into a definitive arrangement agreement and plan of arrangement to combine the companies in an all-stock transaction (the "Arrangement"). Upon completion of the Arrangement, the stockholders of Strong Global Entertainment received 1.5 common shares of the Company for each share of Strong Global Entertainment. The transaction closed on September 30, 2024. Following the closing, Strong Global Entertainment ceased to exist, and its common shares were delisted from NYSE American LLC and deregistered under the Securities Exchange Act of 1934.

In April 2024, we sold our Digital Ignition technology incubator and co-working facility in Alpharetta, Georgia for gross proceeds of $6.5 million. In connection with the sale of the land and building, we recorded a non-cash impairment charge of approximately $1.4 million during the first quarter of 2024 to adjust the carrying value of the assets to the fair market value less costs to sell.

**Critical Accounting Estimates**

Critical accounting estimates are those estimates made in accordance with generally accepted accounting principles that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition or results of operations. Actual results may differ materially from these estimates. Set forth below is qualitative and quantitative information necessary to understand the estimation uncertainty and the impact the critical accounting estimate has had or is reasonably likely to have on financial condition or results of operations, to the extent the information is material and reasonably available.

*Digital Assets*

The Company's digital assets as of December 31, 2025 is solely comprised of ETH, which falls within the scope of ASC 350-60. The Company does not hold any digital assets that do not fall into the scope of ASC 350-60.

As of December 31, 2025, the Company held $119.4 million of ETH, which are held at fair value and are included as part of the ETH digital assets line on the consolidated balance sheets. In determining the fair value of the crypto assets in accordance with ASC 820, the Company utilizes Coinbase as the principal market. The activity from remeasurement of ETH at fair value is reflected in the condensed consolidated statements of operations within Unrealized gain (loss) on ETH digital assets. As part of the Private Placement Offering, certain investors contributed cryptocurrency assets (ETH, Bitcoin and USDC). The Company converted the Bitcoin and USDC received to ETH. Realized gains and losses from the derecognition of cryptocurrency assets are included in Realized gain (loss) on cryptocurrency assets, net in the consolidated statements of operations. We use a first-in, first-out methodology to assign costs to cryptocurrency assets for purposes of the cryptocurrency assets held and realized gains and losses. Sales and purchases of cryptocurrency assets are reflected as cash flows from investing activities in the condensed consolidated statements of cash flows. Contributions of cryptocurrency assets received as part of the consideration received in the Private Placement Offering are presented as noncash financing activities in the consolidated statements of cash flows.

 

*ETH Staking*

Beginning in the third quarter of 2025, the Company used the proceeds from its capital raising activities to acquire and deploy ETH in native staking activities. The Company has entered into separate contractual agreements with various third-party entities to facilitate its ETH staking activities. The Company commenced native staking in August of 2025.

The Company utilizes a third-party asset manager to manage and stake ETH on its behalf. Through its agreement with the asset manager, the Company's ETH is held by qualified custodians, staked in the Ethereum protocol, and the stake is delegated to third party validators. When chosen as validators by the Ethereum network, these validators earn staking rewards and transaction fees proportional to the amount of stake delegated to them. The Company recognizes rewards from native staking as revenue in accordance with ASC 606. However, since the amount of rewards are not known by the Company until a validation activity is completed, and the Company receives rewards in their custodial account, the staking rewards are constrained under the Topic 606 guidance on variable consideration until such time.

Because the Company is not the principal to the block validation service, it does not control the full output of the reward-generating activity, and instead receives net staking rewards, after validator commissions are deducted. As such, the Company presents staking revenue on a net basis, reflecting only the portion of protocol rewards to which it is entitled. Asset manager fees are presented as separate operating expenses within General and administrative expenses on the condensed consolidated statements of operations.

*Other Holdings*

Other holdings consist, in part, of equity holdings made in privately held companies accounted for under the equity method. As discussed further in Note 8 to the accompanying consolidated financial statements, certain holdings held by our equity method investees are valued using Monte-Carlo simulation and option pricing models. Inherent in Monte-Carlo simulation and option pricing models are assumptions related to expected volatility and discount for lack of marketability of the underlying holding. Our investees estimate the volatility of these holdings based on the historical performance of various broad market indices blended with various peer companies which they consider as having similar characteristics to the underlying holding, as well as consideration of price and volatility of relevant publicly traded securities such as SPAC warrants. Our investees also consider the probability of a successful merger when valuing equity for SPACs that have not yet completed a business combination.

*Valuation of Net Deferred Income Taxes*

The provision for income taxes is calculated based on the expected tax treatment of transactions recorded in the Company's consolidated financial statements. In determining its provision for income taxes, the Company interprets tax legislation in a variety of jurisdictions and makes assumptions about the expected timing of the reversal of deferred income tax assets and liabilities and the valuation of net deferred income taxes.

The ultimate realization of the deferred income tax asset balance is dependent upon the generation of future taxable income during the periods in which the Company's temporary differences reverse and become deductible. A valuation allowance is established when it is more likely than not that all or a portion of the deferred income tax asset balance will not be realized. In determining whether a valuation allowance is needed, management considers all available positive and negative evidence affecting specific deferred income tax asset balances, including the Company's past and anticipated future performance, the reversal of deferred income tax liabilities, and the availability of tax planning strategies. To the extent a valuation allowance is established in a period, an expense must be recorded within the income tax provision in the consolidated statements of income and comprehensive income.

 

*Revenue Recognition*

The Company accounts for revenue for rental income and merchant banking advisory services using the following steps:

● Identify the contract, or contracts, with a customer;

● Identify the performance obligations in the contract;

● Determine the transaction price;

● Allocate the transaction price to the identified performance obligations; and

● Recognize revenue when, or as, the Company satisfies the performance obligations.

The Company combines contracts with the same customer into a single contract for accounting purposes when the contracts are entered into at or near the same time and the contracts are negotiated as a single commercial package, consideration in one contract depends on the other contract, or the services are considered a single performance obligation. If an arrangement involves multiple performance obligations, the items are analyzed to determine the separate units of accounting, whether the items have value on a standalone basis and whether there is objective and reliable evidence of their standalone selling price. The total contract transaction price is allocated to the identified performance obligations based upon the relative standalone selling prices of the performance obligations. The standalone selling price is based on an observable price for services sold to other comparable customers, when available, or an estimated selling price using a cost plus margin approach. Management estimates the amount of total contract consideration the Company expects to receive for variable arrangements by determining the most likely amount we expect to earn from the arrangement based on the expected quantities of services the Company expects to provide and the contractual pricing based on those quantities. The Company only includes some or a portion of variable consideration in the transaction price when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur or when the uncertainty associated with the variable consideration is subsequently resolved. Management considers the sensitivity of the estimate, the Company's relationship and experience with the client and variable services being performed, the range of possible revenue amounts and the magnitude of the variable consideration to the overall arrangement.

As discussed in more detail below, revenue is recognized when a customer obtains control of promised goods or services under the terms of a contract and is measured as the amount of consideration the Company expects to receive in exchange for providing services. The Company typically does not have any material extended payment terms, as payment is due at or shortly after the time of the sale. Sales, value-added and other taxes collected concurrently with revenue producing activities are excluded from revenue.

The Company recognizes contract assets or unbilled receivables related to revenue recognized for services completed but not yet invoiced to the clients. Unbilled receivables are recorded as accounts receivable when we have an unconditional right to contract consideration. A contract liability is recognized as deferred revenue when we invoice clients, or receive cash, in advance of performing the related services under the terms of a contract. Deferred revenue is recognized as revenue when we have satisfied the related performance obligation.

The Company defers costs to acquire contracts, including commissions, incentives and payroll taxes, if they are incremental and recoverable costs of obtaining a customer contract with a term exceeding one year. Deferred contract costs are reported within other assets and amortized to selling expense over the contract term, which generally ranges from one to five years. The Company has elected to recognize the incremental costs of obtaining a contract with a term of less than one year as a selling expense when incurred. The Company did not have any deferred contract costs as of December 31, 2025 or December 31, 2024.

*Stock-Based Compensation Expense*

The Company uses the fair-value method of accounting for stock-based compensation awards granted. The Company has determined the fair value of its outstanding stock options on their grant date using the Black-Scholes option pricing model along with multiple Monte Carlo simulations to determine a derived service period as the options vest based upon meeting certain performance conditions. The Company determines the fair value of restricted stock units ("RSUs") on their grant date using the fair value of the Company's common stock on the date the RSUs were issued (for those RSUs which vest solely based upon the passage of time). The fair value of these awards is recorded as compensation expense over the requisite service period, which is generally the expected period over which the awards will vest, with a corresponding increase to additional paid-in capital. When the stock options are exercised, or correspondingly, when the RSUs vest, the amount of proceeds together with the amount recorded in additional paid-in capital is recorded in stockholders' equity.

**Recent Accounting Pronouncements**

See Item 8, Note 3 – Recently Adopted and Issued Accounting Standards in the Notes to the Consolidated Financial Statements for a discussion of recent accounting pronouncements and their effect on the Company.

**Results of Operations**

As a result of the reverse merger of FGF and FGH, the condensed consolidated financial statements for the periods prior to the merger represent the results of FGH, as the accounting acquirer. For periods subsequent to the merger, the condensed consolidated financial statements represent the combined results of FGH and FGF. Because of the reverse merger transaction, 2024 includes ten months of revenue, expenses and cash flows from FGF whereas 2025 reflects a full year of consolidated operating activities. Accordingly, results between periods may not be comparable.

We operated a reinsurance business, which has been classified as assets held for sale since December 31, 2024. We sold a portion of our reinsurance business in the first half of 2025 and sold the remaining portion of the reinsurance business in early 2026.

Our former wholly-owned subsidiary and managed services business, Strong Technical Services ("STS"), was transferred to the CVR Trust in August 2025. We also previously operated Strong Studios, Inc. ("Strong Studios") and Strong/MDI Screen Systems Inc. ("Strong/MDI"). Those business units were sold in 2024 and are no longer part of our operations as of December 31, 2025. The reinsurance business, the managed services business, Strong/MDI, and Strong Studios are all presented as discounted operations in our consolidated financial statements.

Management's discussion and analysis of financial condition and results of operations reflects the continuing operations of the Company as they existed as of December 31, 2025.

**Year Ended December 31, 2025 Compared with Year Ended December 31, 2024**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2025** | **2024** | **$ Change** | **% Change** |
| Total revenue | $2413 | $779 | $1634 | 209.8% |
| General and administrative expenses | (14506) | (9395) | (5111) | 54.4% |
| Stock-based compensation | (7760) | (1618) | (6142) | 379.6% |
| Realized loss on digital assets | (5815) |  | (5815) | 100.0% |
| Unrealized measurement of fair value of ETH digital assets | (38327) |  | (38327) | 100.0% |
| Impairment and other | (5) | (1475) | 1470 | -99.7% |
| &nbsp;&nbsp;&nbsp;Loss from operations | (64000) | (11709) | (52291) | 446.6% |
| Loss on equity holdings | (5503) | (14675) | 9172 | -62.5% |
| Foreign currency translation gain (loss) | 1936 | (2) | 1938 | n/m |
| Bargain purchase on acquisition and other expense, net | (140) | 2017 | (2157) | -106.9% |
| Loss from continuing operations before income taxes | (67707) | (24369) | (43338) | 177.8% |
| Income tax benefit | 73 | 92 | (19) | -20.7% |
| Net loss from continuing operations | $(67634) | $(24277) | $(43357) | 178.6% |

---

Total revenue of $2.4 million during 2025 increased $1.6 million or 209.8% as compared to total revenue of $0.8 million in 2024. Total revenue during 2025 included $1.5 million of ETH staking rewards, $0.5 million of merchant banking advisory fees, and $0.4 million of rental income. Total revenue during 2024 consisted of $0.7 million of rental income and $0.1 million of merchant banking advisory fees. The increase in revenue during 2025 was attributable to the launch of our ETH staking activities in August 2025 and the advisory fees generated by our merchant banking team, which commenced during the fourth quarter of 2024, partially offset by the reduction of rental income as a result of the sale of our Digital Ignition building in early 2024.

Loss from operations increased to $64.0 million during 2025 as compared to $11.7 million during 2024. Loss from operations during 2025 included a $38.3 million unrealized mark to market adjustment on the valuation of our ETH digital assets, as well as realized losses on the sale of ETH totaling $5.8 million. Stock compensation expense of $7.8 million during 2025 increased over the prior year as a result of warrants issued in connection with the Private Placement Offering during the third quarter of 2025. The $5.1 million increase in general and administrative expenses during 2025 as compared to the prior year period was primarily due to higher compensation costs, professional fees and public relations expenses incurred as we launched our new ETH treasury operations, partially offset by lower expenses resulting from cost reduction initiatives following the prior year M&A transactions. We also recorded a $1.4 million non-cash impairment related to the sale of the Digital Ignition building in the prior year period.

Losses on our equity holdings were lower during 2025 as compared to the prior year period primarily as a result of lower equity method losses on the common shares of Saltire and other equity method holdings, partially offset by dividend income from Saltire recorded during 2025. Results of equity holdings are impacted by many factors including market volatility, which can be amplified in any given short term measurement period.

Interest expense during 2025 decreased as a result of the sale of the Digital Ignition building in April 2024 and the repayment of the mortgage. The year ended December 31, 2024 included a bargain purchase gain of $2.3 million as a result of the merger of FGF and FGH.

Net loss from continuing operations increased to $67.6 million during 2025 from $24.2 million during 2024 primarily due to the unrealized mark to market adjustments during the current year due to fluctuations in the value of our ETH as well as the increased operating expenses and other costs associated with launching our digital asset treasury operations.

**Liquidity and Capital Resources**

As of December 31, 2025, we had cash and cash equivalents of $13.4 million and ETH digital assets with a fair value of $119.4 million.

The purpose of liquidity management is to ensure that there is sufficient cash to meet all financial commitments and obligations as they fall due. The liquidity requirements of the Company and its subsidiaries have been met primarily by funds generated from operations, proceeds from capital raises, sales of ETH digital assets and certain equity holdings and credit facilities. Our ETH digital assets are not subject to any trading restrictions and are not pledged as collateral. We believe our ETH digital assets are readily convertible into cash, and we may convert ETH to cash periodically to fund operations.

We believe that we have sufficient liquidity through our cash on hand, ETH digital asset holdings, access to credit and other sources to meet our operating and other cash requirements for the next twelve months.

**Cash Flows**

The following table summarizes the Company's consolidated cash flows for the year ended December 31, 2025 and 2024 (in thousands).

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2025** | **2024** |
| Cash and cash equivalents – beginning of year | $6562 | $4558 |
| Net cash (used in) provided by operating activities from continuing operations | (6663) | (3940) |
| Net cash provided by investing activities from continuing operations | (128147) | 13288 |
| Net cash (used in) provided by financing activities from continuing operations | 136022 | (6856) |
| Effect of exchange rate changes on cash and cash equivalents | 24 | (11) |
| Net increase in cash and cash equivalents from continuing operations | 1236 | 2481 |
| Net increase in cash and cash equivalents from discontinued operations | 5597 | (477) |
| Cash and cash equivalents – end of year | $13395 | $6562 |

---

Net cash used in operating activities from continuing operations during 2025 was approximately $6.7 million, compared to $3.9 million during 2024. Cash used in operations increased primarily due to general and administrative expenses, including higher compensation costs, professional fees and public relations expenses, incurred as we launched our new ETH treasury operations, partially offset by lower expenses resulting from cost reduction initiatives following the prior year M&A transactions, partially offset by an increase in working capital.

Net cash used in investing activities from continuing operations during 2025 was approximately $128.1 million, compared to $13.3 million of cash provided by investing activities during 2024. Cash used in investing activities during 2025 primarily included $138.0 million of net ETH purchases, partially offset by $2.3 million of a net inflow from the sale of equity holdings and $7.5 million of principal received as a result of the redemption of Saltire preferred shares. Cash provided by investing activities during 2024 included $1.9 million of an increase in cash as a result of the Merger of FGF and FGH, $6.2 million of proceeds from the sale of the building in Alpharetta and $5.0 million of proceeds from the sale of equity holdings.

Net cash provided by financing activities from continuing operations during 2025 was approximately $136.0 million compared to net cash used in financings activities of $6.9 million during 2024. Cash provided by financing activities during 2025 included $168.6 million of net proceeds received as part of the Private Placement Offering and $14.1 million of net proceeds received under the ATM Offering, partially offset by $18.0 million of cash distributed to the CVR Trust, $26.2 million of purchases under our common and preferred share buyback programs, $0.2 million of principal payments on debt, $1.8 million of payments of dividends on our Series A Preferred Shares and $0.4 million of withholding taxes paid related to the net settlement of the vesting of RSUs. Cash used in financing activities during 2024 included $5.5 million of principal payments on debt and $1.4 million of payments of dividends on our Series A Preferred Shares.

**ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK**

Not applicable.

**ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA**

**Index to the Consolidated Financial Statements**

---

| | |
|:---|:---|
| [Report of Independent Registered Public Accounting Firm](#mj_015) (PCAOB ID: 207) | 36 |
| [Report of Independent Registered Public Accounting Firm](#aR_001) (PCAOB ID: 200) | 37 |
| [Consolidated Balance Sheets](#mj_016) | 38 |
| [Consolidated Statements of Operations](#mj_017) | 39 |
| [Consolidated Statements of Comprehensive Loss](#mj_018) | 40 |
| [Consolidated Statements of Stockholders' Equity](#mj_019) | 41 |
| [Consolidated Statements of Cash Flows](#mj_020) | 42 |
| [Notes to the Consolidated Financial Statements](#mj_021) | 43 |

---

**Report of Independent Registered Public Accounting Firm**

To the Stockholders and Board of Directors

FG Nexus Inc.

**Opinion on the Consolidated Financial Statements**

We have audited the accompanying consolidated balance sheet of FG Nexus Inc. (the "Company") as of December 31, 2025, and the related consolidated statements of operations, comprehensive loss, stockholders' equity, and cash flows for the year ended December 31, 2025, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the 2025 consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and the results of its operations and its cash flows for the year ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America.

We also have audited the adjustments to retrospectively apply the one-for-five reverse stock split effected on February 13, 2026, and to retrospectively reflect the discontinued operations to the 2024 consolidated financial statements as described in Note 1 and Note 7, respectively. In our opinion, such adjustments and related disclosures are appropriate and have been properly applied. We were not engaged to audit, review, or apply any procedures to the 2024 consolidated financial statements of the Company other than with respect to such adjustments and, accordingly, we do not express an opinion or any other form of assurance on the 2024 consolidated financial statements taken as a whole.

**Basis for Opinion**

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.

**Critical Audit Matters**

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

 

*Evaluation of Audit Evidence Pertaining to the Existence and Control of Digital Assets*

As described in Note 4 to the consolidated financial statements, the Company records digital assets at cost and subsequently measures at fair value, with changes in fair value recognized in change in fair value of digital assets. As of December 31, 2025, the fair value of the Company's digital assets was $119.4 million. The Company's digital asset holdings are custodied by two third-party institutional custodians under multi-signature arrangements.

We identified the evaluation of audit evidence pertaining to the existence of the digital assets and whether the Company controls the digital assets as a critical audit matter. Auditing digital assets involved especially challenging auditor judgment due to the nature of blockchain-based assets, the reliance on cryptographic private keys for control, and the need to obtain sufficient audit evidence over assets custodied through third-party institutional custodians. Control over the digital assets is provided through private keys stored using third-party custodial services located in multiple geographically dispersed locations. In addition, information technology ("IT") professionals with specialized skills and knowledge in blockchain technology were needed to assist in evaluating certain aspects of the audit procedures performed.

Addressing the critical audit matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. Our procedures included, among others, evaluated the design and implementation of certain internal controls over the digital assets process, including a control over the comparison of the Company's records of digital assets held to the custodial records. We involved IT professionals with specialized skills and knowledge in blockchain technology to assist in evaluating certain aspects of the digital asset custody process. We obtained confirmations from the Company's custodians of the digital assets held in custody as of December 31, 2025 and compared the amounts confirmed to the Company's records. We also performed procedures to verify ownership and movement of digital assets by tracing selected transactions recorded by the Company to the public blockchain ledger.

 

*Evaluation of Distribution of Assets to CVR Trust*

As described in Note 6 to the consolidated financial statements, the Company distributed a significant portion of its legacy assets to a contingent value rights trust (the "CVR Trust"). The transfer was completed as part of a strategic transaction to distribute certain legacy assets to stockholders through contingent value rights. The Company recorded the transaction as a distribution to stockholders, reflected as a reduction to additional paid-in capital ("APIC") and a corresponding reduction to the net assets transferred, totaling approximately $48.2 million.

We identified the evaluation of audit evidence related to the accounting for the transfer of assets to the CVR Trust, the completeness and accuracy of the assets transferred, and the appropriate presentation of the transaction as a distribution to stockholders as a critical audit matter. Auditing the accounting for this transaction involved especially challenging auditor judgment due to the complexity of the transaction structure, the need to evaluate the legal and economic substance of the transfer to the trust, and the significance of the assets transferred to the consolidated financial statements. Significant audit effort was required to assess whether the accounting treatment as an equity distribution was appropriate and whether the assets transferred were complete and accurately measured at their carrying values at the date of transfer.

Addressing this critical audit matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. Our procedures included, among others, evaluated the design and implementation of controls over management's process for identifying and accounting for the transfer of the net assets and the classification of the transaction as an equity distribution. We inspected the transaction agreements, including the CVR Trust agreement and related legal documentation, to obtain an understanding of the structure and terms of the transaction and to evaluate whether the accounting treatment as a distribution to stockholders recorded in APIC was appropriate. We reviewed Board of Directors' meeting minutes and approvals supporting the authorization of the transfer of the net assets to the CVR Trust.

We also tested the completeness and accuracy of the assets and liabilities transferred by agreeing the balances included in the disposal group to the Company's underlying accounting records and supporting documentation. In addition, we tested the carrying value of significant assets and liabilities transferred, including reconciling the amounts recorded in the distribution entry to the Company's general ledger and subsidiary records. Finally, we assessed the adequacy of the related consolidated financial statement disclosures, including the presentation and the description of the CVR Trust transaction in the notes to the consolidated financial statements.

/s/ BPM LLP

We have served as the Company's auditor since 2025.

Santa Rosa, California

March 26, 2026

**Report of Independent Registered Public Accounting Firm**

To the Stockholders and Board of Directors

Fundamental Global Inc.

***Opinion on the Consolidated Financial Statements***

We have audited, before the effects of the adjustments to retrospectively apply the one-for-five reverse stock split effected on February 13, 2026, and to retrospectively reflect the discontinued operations to the 2024 consolidated financial statements as described in Note 1 and Note 7, respectively, the accompanying consolidated balance sheet of Fundamental Global Inc. (the "Company") as of December 31, 2024, the related consolidated statements of operations, comprehensive loss, shareholders' equity, and cash flows for the year then ended, and the related notes (collectively, the "consolidated financial statements") (the December 31, 2024 consolidated financial statements before the effects of the retrospective adjustments described above are not presented herein). In our opinion, the consolidated financial statements, before the effects of the adjustments described above, present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2024, and the consolidated results of its operations and its cash flows for the year then ended, in conformity with U.S. generally accepted accounting principles.

We were not engaged to audit, review, or apply any procedures to the adjustments to retrospectively apply the one-for-five reverse stock split effected on February 13, 2026, and to retrospectively reflect the discontinued operations to the 2024 consolidated financial statements as described in Note 1 and Note 7, respectively, and accordingly, we do not express an opinion or any other form of assurance about whether such retrospective adjustments, presentation, and disclosures are appropriate and have been properly applied. Those retrospective adjustments, presentation, and disclosures were audited by the successor auditor.

***Emphasis-of-Matters***

As summarized in Note 5 to the consolidated financial statements, FG Financial Group, Inc. ("FGF") completed a merger transaction with FG Group Holdings, Inc. ("FGH") on February 29, 2024, pursuant to which FGH common stockholders received one share of FGF's common stock for each share of common stock of FGH held by such stockholder. The merger was accounted for as a reverse acquisition in accordance with ASC 805 Business Combinations ("ASC 805"). As a result, FGF was identified as the acquiree for accounting purposes and FGH was identified as the acquirer for accounting purposes. FGH's assets, liabilities and results of operations are included in the consolidated financial statements at their historical carrying values since incorporation. FGF's assets, liabilities and results of operations have been included from February 29, 2024. Upon completion of the merger, the combined company was renamed Fundamental Global Inc.

 ****

As summarized in Note 1 to the consolidated financial statements, the Company and Strong Global Entertainment, Inc. ("SGE") entered into a definitive arrangement agreement to combine the companies in an all-stock transaction. Upon completion of the arrangement, the stockholders of SGE received 1.5 common shares of the Company for each share of SGE. The transaction closed on September 30, 2024. The financial results of SGE are presented on a consolidated basis in the Company's consolidated financial statements.

As summarized in Note 7 to the consolidated financial statements, the Company sold one of its indirect wholly-owned subsidiaries, Strong/MDI Screen Systems, Inc. ("Strong/MDI") and completed the transaction on September 25, 2024. Management evaluated and determined that all of the criteria to report the transaction as a discontinued operation were met. As a result, the financial results for Strong/MDI have been presented as discontinued operations for all periods presented in the consolidated financial statements.

As summarized in Note 7 to the consolidated financial statements, the board of directors of the Company approved the Company's plan to sell its reinsurance business on December 31, 2024 and authorized management to proceed with such plan. Management evaluated and determined that all of the criteria to report the transaction as a discontinued operation were met. As a result, the financial results for the reinsurance business have been presented as discontinued operations for all periods presented in the consolidated financial statements.

As summarized in Note 1 to the consolidated financial statements, the Company effected a reverse stock split of the Company's authorized, issued and outstanding shares of common stock at a ratio of one (1)-for-twenty-five (25) on October 31, 2024. All share information presented in the consolidated financial statements have been appropriately retrospectively adjusted to reflect the effects of the reverse stock split.

 ****

***Basis for Opinion***

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.

HASKELL & WHITE LLP

We have served as the Company's auditor since 2019. In 2025, we became the predecessor auditor.

Irvine, California

March 31, 2025

**FG NEXUS INC.**

**Consolidated Balance Sheets**

**($ in thousands, except share and per share data)**

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| | | |
|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** |
| **ASSETS** |  |  |
| Cash and cash equivalents | $13395 | $6562 |
| ETH digital assets | 119384 |  |
| Equity securities, at fair value (cost basis of $0 and $8,679) |  | 5763 |
| Other equity securities and other holdings | 14670 | 54310 |
| Property, plant and equipment, net | 2208 | 2404 |
| Assets of discontinued operations | 13883 | 39824 |
| Other assets | 304 | 606 |
| Total assets | $163844 | $109469 |
| **LIABILITIES** |  |  |
| Accounts payable and accrued expenses | $5338 | $842 |
| Short-term debt, net of issuance costs | 1923 | 2068 |
| Deferred income taxes, net | 365 | 2412 |
| Liabilities of discontinued operations | 9427 | 29722 |
| Other liabilities | 3300 | 228 |
| Total liabilities | 20353 | 35272 |
| Commitments and contingencies (Note 16) |  |  |
| **STOCKHOLDERS' EQUITY** |  |  |
| Series A Preferred Shares, $25.00 par and liquidation value, 10,000,000,000 shares authorized and 888,884 shares issued and outstanding as of December 31, 2025 and 1,000,000 shares authorized and 894,580 shares issued and outstanding as of December 31, 2024 | 22223 | 22365 |
| Common stock, $0.001 par value; 180,000,000,000 shares authorized, 8,698,994 issued, and 7,080,747 outstanding as of December 31, 2025, and 800,000 shares authorized and 253,581 shares issued and outstanding as of December 31, 2024 | 70 | 29 |
| Treasury stock (1,618,248 shares at cost) | (26133) |  |
| Additional paid-in capital | 216682 | 50924 |
| Accumulated deficit | (68743) | (229) |
| Accumulated other comprehensive (loss) income | (608) | 1108 |
| Total stockholders' equity | 143491 | 74197 |
| Total liabilities and stockholders' equity | $163844 | $109469 |

---

*See accompanying notes to consolidated financial statements.*

**FG NEXUS INC.**

**Consolidated Statements of Operations**

**($ in thousands, except per share data)**

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2025** | **2024** |
| Revenue: |  |  |
| &nbsp;&nbsp;&nbsp;ETH staking rewards | $1475 | $- |
| &nbsp;&nbsp;&nbsp;Rental income | 415 | 704 |
| &nbsp;&nbsp;&nbsp;Merchant banking advisory fees | 523 | 75 |
| Total revenue | 2413 | 779 |
| Expenses: |  |  |
| &nbsp;&nbsp;&nbsp;General and administrative expenses | (14506) | (9395) |
| &nbsp;&nbsp;&nbsp;Stock-based compensation | (7760) | (1618) |
| &nbsp;&nbsp;&nbsp;Realized loss on digital assets | (5815) |  |
| &nbsp;&nbsp;&nbsp;Unrealized measurement of fair value of ETH digital assets | (38327) |  |
| &nbsp;&nbsp;&nbsp;Impairment and other | (5) | (1475) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss from operations | (64000) | (11709) |
| Other income (expense): |  |  |
| &nbsp;&nbsp;&nbsp;Interest expense, net | (132) | (303) |
| &nbsp;&nbsp;&nbsp;Loss on equity holdings | (5503) | (14675) |
| &nbsp;&nbsp;&nbsp;Foreign currency transaction gain (loss) | 1936 | (2) |
| &nbsp;&nbsp;&nbsp;Bargain purchase on acquisition and other (expense) income, net | (8) | 2320 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other expense, net | (3707) | (12660) |
| Loss from continuing operations before income taxes | (67707) | (24369) |
| Income tax benefit | 73 | 92 |
| Net loss from continuing operations | (67634) | (24277) |
| Net income from discontinued operations (Note 7) | 892 | 22962 |
| Net loss | (66742) | (1315) |
| &nbsp;&nbsp;&nbsp;Net loss attributable to non-controlling interest |  | (160) |
| &nbsp;&nbsp;&nbsp;Discount on repurchase of Series A Preferred Shares | 16 |  |
| &nbsp;&nbsp;&nbsp;Dividends declared on Series A Preferred Shares | (1788) | (1410) |
| Net loss attributable to common shareholders | $(68514) | $(2565) |
| Basic and diluted net (loss) income per common share: |  |  |
| &nbsp;&nbsp;&nbsp;Continuing operations | $(26.02) | $(120.98) |
| &nbsp;&nbsp;&nbsp;Discontinued operations | 0.33 | 108.82 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $(25.69) | $(12.16) |
| Weighted average common shares outstanding: |  |  |
| &nbsp;&nbsp;&nbsp;Basic and diluted | 2667 | 211 |

---

*See accompanying notes to consolidated financial statements.*

 

**FG NEXUS INC.**

**Consolidated Statements of Comprehensive Loss**

**($ in thousands)**

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2025** | **2024** |
| Net loss | $(66742) | $(1315) |
| Adjustment to postretirement benefit obligation | 109 | (76) |
| Unrealized currency translation loss of equity method holdings | (72) |  |
| Currency translation adjustment | 196 | (1068) |
| Total other comprehensive income (loss) | 233 | (1144) |
| Comprehensive loss | $(66509) | $(2459) |

---

*See accompanying notes to consolidated financial statements.*

**FG NEXUS INC.**

**Consolidated Statements of Stockholders' Equity**

**(in thousands)**

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Preferred Stock** | **Preferred Stock** | **Common Stock** | **Common Stock** | | | | | | | |
|  | **Shares Outstanding** | **Amount** | **Shares Outstanding** | **Amount** | **Additional**<br>**Paid-In Capital** | **Retained Earnings**<br>**(Accumulated Deficit)** |<br>**Treasury Stock** | **Accumulated Other**<br>**Comprehensive (Loss) Income** | **Total FG Nexus**<br>**Stockholders' Equity** | **Non-**<br>**controlling Interest** | **Total**<br> **Stockholders' Equity** |
| **Balance at December 31, 2023** | **-** | $**-** | **180** | $**225** | $**55856** | $**2336** | $**(18586)** | $**(4682)** | $**35149** | $**1858** | $**37007** |
| Retirement of treasury stock |  |  | (22) |  | (18586) |  | 18586 |  |  |  |  |
| Exchange of FGH common stock |  |  | (158) | (225) | 225 |  |  |  |  |  |  |
| FGF preferred and common stock outstanding at merger date | 895 | 22365 | 92 | 11 | 15576 |  |  |  | 37952 |  | 37952 |
| Retirement of FGF common stock held by FGH prior to merger |  |  | (22) | (3) | (3692) |  |  |  | (3695) |  | (3695) |
| Issuance of common stock in connection with merger |  |  | 157 | 20 |  |  |  |  | 20 |  | 20 |
| Acquisition of remaining shares of Strong Global Entertainment |  |  | 23 |  |  |  |  |  |  | (1696) | (1696) |
| Vesting of restricted stock |  |  | 4 | 1 | 4 |  |  |  | 5 |  | 5 |
| Non-controlling interest allocation |  |  |  |  | (78) |  |  |  | (78) | 78 |  |
| Dividends on Series A Preferred Shares ($2.00 per share) |  |  |  |  |  | (1410) |  |  | (1410) |  | (1410) |
| Release of cumulative translation adjustments in connection with sale of Strong/MDI |  |  |  |  |  |  |  | 6854 | 6854 |  | 6854 |
| Net loss |  |  |  |  |  | (1155) |  |  | (1155) | (160) | (1315) |
| Net other comprehensive loss |  |  |  |  |  |  |  | (1064) | (1064) | (80) | (1144) |
| Stock-based compensation | - | - | - | - | 1619 | - | - | - | 1619 | - | 1619 |
| **Balance at December 31, 2024** | **895** | **22365** | **254** | **29** | **50924** | **(229)** | **-** | **1108** | **74197** | **-** | **74197** |
| Proceeds from private placement, net of offering costs |  |  | 8000 | 39 | 192568 |  |  |  | 192607 |  | 192607 |
| Proceeds from ATM, net of offering costs |  |  | 428 | 2 | 14050 |  |  |  | 14052 |  | 14052 |
| Transfer of assets to CVR Trust (Note 6) |  |  |  |  | (48225) |  |  |  | (48225) |  | (48225) |
| Repurchase of common stock |  |  | (1618) |  |  |  | (26133) |  | (26133) |  | (26133) |
| Repurchase of Series A Preferred Shares | (6) | (142) |  |  |  | 16 |  |  | (126) |  | (126) |
| Vesting of restricted stock and payment of withholding taxes |  |  | 17 |  | (397) |  |  |  | (397) |  | (397) |
| Dividends on Series A Preferred Shares ($2.00 per share) |  |  |  |  |  | (1788) |  |  | (1788) |  | (1788) |
| Release of cumulative translation adjustments in connection with settlement of intercompany note |  |  |  |  |  |  |  | (1949) | (1949) |  | (1949) |
| Net loss |  |  |  |  |  | (66742) |  |  | (66742) |  | (66742) |
| Net other comprehensive income |  |  |  |  |  |  |  | 233 | 233 |  | 233 |
| Stock-based compensation | - | - | - | - | 7762 | - | - | - | 7762 | - | 7762 |
| **Balance at December 31, 2025** | **889** | $**22223** | **7081** | $**70** | $**216682** | $**(68743)** | $**(26133)** | $**(608)** | $**143491** | $**-** | $**143491** |

---

*See accompanying notes to consolidated financial statements.*

**FG NEXUS INC.**

**Consolidated Statements of Cash Flows**

**($ in thousands)**

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2025** | **2024** |
| **Cash flows from operating activities:** |  |  |
| Net loss from continuing operations | $(67634) | $(24277) |
| Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;Net unrealized holding loss on equity holdings | 2538 | 5039 |
| &nbsp;&nbsp;&nbsp;Loss from equity method holdings | 4938 | 10713 |
| &nbsp;&nbsp;&nbsp;Loss on disposal of fixed assets | 5 |  |
| &nbsp;&nbsp;&nbsp;Net realized gain on sale of equity holdings | (1056) | (306) |
| &nbsp;&nbsp;&nbsp;Realized loss on digital assets | 5815 |  |
| &nbsp;&nbsp;&nbsp;Unrealized measurement of fair value of ETH digital assets | 38327 |  |
| &nbsp;&nbsp;&nbsp;ETH rewards for staking | (1543) |  |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 304 | 408 |
| &nbsp;&nbsp;&nbsp;Amortization and accretion of operating leases |  | 75 |
| &nbsp;&nbsp;&nbsp;Impairment of property and equipment |  | 1422 |
| &nbsp;&nbsp;&nbsp;Gain on merger of FGF and FGH (Note 5) |  | (2321) |
| &nbsp;&nbsp;&nbsp;Deferred income taxes | (2059) | (639) |
| &nbsp;&nbsp;&nbsp;Stock compensation expense | 7762 | 1619 |
| Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Other assets | 316 | 1080 |
| &nbsp;&nbsp;&nbsp;Current income taxes | (148) | 58 |
| &nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | 5772 | 3212 |
| &nbsp;&nbsp;&nbsp;Operating lease obligations | - | (23) |
| Net cash used in operating activities from continuing operations | (6663) | (3940) |
| Net cash (used in) provided by operating activities from discontinued operations | 413 | (299) |
| Net cash used in operating activities | (6250) | (4239) |
| **Cash flows from investing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from sales of equity securities | 3214 | 5021 |
| &nbsp;&nbsp;&nbsp;Proceeds from redemption of Saltire preferred shares | 7500 |  |
| &nbsp;&nbsp;&nbsp;Purchases of ETH, net of sales | (137977) |  |
| &nbsp;&nbsp;&nbsp;Purchases of equity securities | (887) |  |
| &nbsp;&nbsp;&nbsp;Proceeds from sales of property and equipment |  | 6161 |
| &nbsp;&nbsp;&nbsp;Collection of note receivable, net | 3 | 203 |
| &nbsp;&nbsp;&nbsp;Cash acquired in Merger of FGF and FGH | - | 1903 |
| Net cash (used in) provided by investing activities from continuing operations | (128147) | 13288 |
| Net cash provided by (used in) investing activities from discontinued operations | 5592 | (140) |
| Net cash (used in) provided by investing activities | (122555) | 13148 |
| **Cash flows from financing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;Payment of withholding taxes in connection with vesting of RSUs | (397) | (21) |
| &nbsp;&nbsp;&nbsp;Proceeds from Private Placement Offering, net of costs | 168621 |  |
| &nbsp;&nbsp;&nbsp;Proceeds from sales under ATM Offering, net of costs | 14050 |  |
| &nbsp;&nbsp;&nbsp;Payment of dividends on preferred shares | (1788) | (1410) |
| &nbsp;&nbsp;&nbsp;Distribution of cash to CVR Trust | (17957) |  |
| &nbsp;&nbsp;&nbsp;Net borrowings on credit facility |  | 97 |
| &nbsp;&nbsp;&nbsp;Purchases of common shares | (26133) |  |
| &nbsp;&nbsp;&nbsp;Purchases of Series A preferred shares | (127) |  |
| &nbsp;&nbsp;&nbsp;Principal payments on long-term debt |  | (4919) |
| &nbsp;&nbsp;&nbsp;Principal payments on short-term debt | (247) | (603) |
| Net cash provided by (used in) financing activities from continuing operations | 136022 | (6856) |
| Net cash (used in) provided by financing activities from discontinued operations | (408) | (2) |
| Net cash provided by (used in) financing activities | 135614 | (6858) |
| Effect of exchange rate changes on cash and cash equivalents from continuing operations | 24 | (11) |
| Effect of exchange rate changes on cash and cash equivalents from discontinued operations | - | (36) |
| Net decrease in cash and cash equivalents from continuing operations | 1236 | 2481 |
| Net increase in cash and cash equivalents from discontinued operations | 5597 | (477) |
| Net increase in cash and cash equivalents | 6833 | 2004 |
| Cash and cash equivalents at beginning of year | 6562 | 4558 |
| Cash and cash equivalents at end of year | $13395 | $6562 |
| Supplemental disclosure of non-cash financing activities: |  |  |
| &nbsp;&nbsp;&nbsp;Digital assets received as part of Private Placement Offering (Note 1) | $24006 | $- |

---

*See accompanying notes to consolidated financial statements.*

 

**FG NEXUS INC.**

**Notes to Consolidated Financial Statements**

**Note 1. Nature of Business**

FG Nexus Inc. ("FG Nexus", the "Company", "we", or "us"), a Nevada corporation, undertook a significant strategic shift during 2025, adopting Ether, the native cryptocurrency of the Ethereum blockchain ("Ether" or "ETH") as its primary treasury asset. This strategy reflects the Company's commitment to align the corporate treasury with the future of programmable finance, digital capital markets and decentralized infrastructure. In connection with the strategic shift, the Company distributed certain assets to a trust, which are no longer part of the consolidated group, as described in more detail below. In addition to operating a digital asset treasury, the Company continues to operate its merchant banking business and holds real estate and equity holdings.

**Recent Developments and Transactions**

 

*Reverse Stock Split*

On January 21, 2026, the Company's Board of Directors (the "Board") approved a reverse stock split of the authorized, issued and outstanding shares of the Company's common stock, par value $0.001 per share (the "Common Stock") at a ratio of one (1)-for-five (5) (the "Reverse Stock Split"). The Reverse Stock Split became effective on February 13, 2026 (the "Effective Date"), at 9:30 a.m., Eastern Time, and the Company's common shares began trading on a split-adjusted basis at the commencement of trading on the same day. No fractional shares were issued in connection with the Reverse Stock Split, rather stockholders who would have otherwise received fractional shares received cash payments in lieu of such fractional shares. After the Reverse Stock Split, the Company had 6,555,124 shares of Common Stock outstanding. All equity awards outstanding immediately prior to the Reverse Stock Split were adjusted to reflect the Reverse Stock Split. As a result of the Reverse Stock Split, all references to Common Stock herein have been adjusted to reflect the Reverse Stock Split.

*Agreement to Sell Reinsurance Business*

 

In October 2025, the Company entered into an agreement to sell the remaining portion of its reinsurance business. Pursuant to the agreements, the Company will receive (1) the release of $3.3 million of collateral that the Company had posted in connection with certain reinsurance contracts; (2) the payment of $1.0 million in cash; and (3) a 40% equity interest in the entity purchasing the reinsurance business. Additionally, pursuant to the agreements, the Company agreed to leave $1.3 million dollars in cash in the reinsurance business in exchange for a promissory note in the amount of $1.3 million that accrues interest at a rate of 6% per annum with all principal and accrued interest due and payable on June 30, 2027. The sale transaction closed in early 2026.

*Letter of Intent to Sell Quebec Real Estate*

 

The Company signed a non-binding letter of intent to sell its Quebec property for $15.0 million CAD. Following repayment of the existing installment loan, the transaction is expected to generate approximately $8.0-$9.0 million USD in net pretax proceeds. The letter of intent does not constitute a binding agreement, and there can be no assurance that a definitive sale agreement will be reached or that the transaction will be completed. The transaction, if completed, is expected to close during the first half of 2026, subject to the execution of definitive agreements, completion of due diligence, and satisfaction of customary closing conditions.

*Loan Agreement*

 

On October 29, 2025, the Company entered into a master digital currency loan agreement (the "MLA") with [\*] (the "Lender"). Pursuant to the MLA the Company may deliver to Lender a lending request for a borrowed asset from the Lender. If Lender agrees to make a loan (each a "Loan"), then the Lender shall transmit to the Company either (a) digital currency to the Company's digital currency address or (b) cash via the Company's wire instructions. The specific and final terms of a Loan shall be memorialized in a loan term sheet (the "Loan Term Sheet"). In the event of any conflict of the terms between the MLA and the terms of the applicable Loan Term Sheet, the terms of the relevant Loan Term Sheet shall govern. All Loans under the MLA are callable by Lender and may be pre-paid by the Company. Loans under the MLA shall terminate upon the maturity date or the exercise by the Company or the Lender of the callable option. The MLA requires that the Company provide collateral for all Loans in an amount to be agreed upon by the Company and the Lender as set forth in the applicable Loan Term Sheet. The Company's collateral for a Loan is subject to margin calls and fees, the particulars of which are delineated in the applicable Loan Term Sheet.

In connection with the MLA, the Company entered into an account control agreement, dated October 29, 2025 (the "ACA") by and between [\*] (the "Custodian"), the Company and the Lender. The Company maintains some of its ETH holdings with the Custodian. The ACA provides the Custodian will acknowledge the MLA between the Company and Lender and that the Custodian will recognize that the Lender may have a security interest in certain assets of the Company maintained at Custodian.

On October 30, 2025, the Company and Lender executed a Loan Term Sheet (the "October 2025 LTS"). The October 2025 LTS provided for a $10.0 million loan with a fee of 7.9% (the "October Loan"). The October Loan was repaid in December 2025. The collateral for the October Loan was Staked ETH and the Initial Collateral Level was 170%. The margin call rate was 140%. The October 2025 LTS also provided that the following additional terms shall also apply to the October Loan: (a) post-default hedging costs and (b) certain additional remedies in the event of a default under the MLA.

*Share Repurchase Programs*

In September 2025, the Board adopted a share repurchase program to acquire up to $200 million of the Company's outstanding Common Stock (the "Common Stock Repurchase Program"). The Common Stock Repurchase Program, which is open-ended, allows the Company to repurchase its Common Stock from time to time in the open market and in negotiated transactions. Any repurchases conducted pursuant to the Common Stock Repurchase Program will be in accordance with Rule 10b-18 of the Exchange Act and will be made in accordance with applicable laws and regulations in effect from time to time. Subject to applicable rules and regulations, the shares of common stock may be purchased from time to time in the open market transactions and in amounts as we deem appropriate, based on factors such as market conditions, legal requirements, and other business considerations. Commencing on October 23, 2025, and through December 31, 2025, the Company purchased a total of approximately 1.6 million shares of its Common Stock at a total cost (including commissions) of approximately $26.1 million. Subsequent to December 31, 2025 and through March 23, 2026, the Company purchased an additional 0.6 million shares of its Common Stock at a total cost (including commissions) of approximately $8.7 million. Through March 23, 2026, the Company has repurchased approximately 25.8% of its Common Stock outstanding immediately prior to implementation of the program. All shares repurchased under the Common Stock Repurchase Program are recorded as treasury stock.

In December 2025, the Board approved a preferred share repurchase program to acquire up to 894,580 shares of the Company's outstanding preferred shares (the "Preferred Share Repurchase Program"). The Preferred Share Repurchase Program, which is open-ended, allows the Company to repurchase its preferred shares from time to time in the open market and in negotiated transactions. Any repurchases conducted pursuant to the Preferred Share Repurchase Program will be in accordance with Rule 10b-18 of the Exchange Act and will be made in accordance with applicable laws and regulations in effect from time to time. Commencing on December 12, 2025 and through December 31, 2025 the Company purchased a total of approximately 6 thousand shares of its outstanding Series A Preferred Stock at a total of (including commissions) of approximately $0.1 million. Subsequent to December 31, 2025 and through March 23, 2026, the Company purchased an additional approximately 202 thousand shares of its Series A Preferred Stock at a total cost (including commissions) of approximately $5.0 million. Through March 23, 2026, the Company has repurchased approximately 22.6% of its Series A Preferred Stock outstanding immediately prior to implementation of the program. All repurchased Series A Preferred Stock are recorded as a reduction to the liquidation value of the Preferred Stock.

*ATM Offering*

 

On August 7, 2025, the Company entered into a Sales Agreement (the "Sales Agreement") with ThinkEquity LLC (the "Sales Agent"), pursuant to which the Company may offer and sell, from time to time through the Sales Agent, up to such number or dollar amount of shares that would (a) exceed the number or dollar amount of shares of Common Stock registered on the effective registration statement pursuant to which the offering is being made, (b) exceed the number of authorized but unissued shares of Common Stock (less shares of Common Stock issuable upon exercise, conversion or exchange of any outstanding securities of the Company or otherwise reserved from the Company's authorized capital stock), (c) exceed the number or dollar amount of shares of Common Stock permitted to be sold under Form S-3 or (d) exceed the number or dollar amount of shares of Common Stock for which the Company has filed a Prospectus Supplement (defined below) (the lesser of (a), (b), (c) and (d), the "Shares") of the Company's Common Stock, subject to the terms and conditions of the Sales Agreement. The Company filed a Registration Statement on Form S-3 offering up to $5 billion of the Shares. Under the Sales Agreement, the Sales Agent may 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 "Securities Act"), including sales made directly on or through The Nasdaq Global Market or any other existing trading market for the Common Stock, in negotiated transactions at market prices prevailing at the time of sale or at prices related to such prevailing market prices, and/or any other method permitted by law. The Company may instruct the Sales Agent not to sell the Shares if the sales cannot be effected at or above the price designated by the Company from time to time. Through December 31, 2025, the Company sold a total of approximately 0.4 million shares of Common Stock pursuant to the Sales Agreement, which generated gross proceeds of approximately $15.5 million, or approximately $14.1 million after offering costs. As of October 13, 2025, the Company suspended the ATM. While the Company plans to reinstate the ATM and to sell additional Shares, as of the date of this Annual Report on Form 10-K (this "Form 10-K"), the reinstatement of the ATM has not yet occurred.

*Private Placement Offering*

 

In July 2025, the Company entered into securities purchase agreement with certain accredited investors (the "Purchasers") pursuant to which the Company agreed to sell and issue to the Purchasers in a private placement offering (the "Private Placement Offering") pre-funded warrants (the "Pre-Funded Warrants") to purchase up to an aggregate of 8.0 million shares (the "Pre-Funded Warrant Shares,") of the Company's common stock, par value $0.001 per share (the "Common Stock") at an offering price of $25.00 per Pre-Funded Warrant payable at the option of the Purchaser in cash, Bitcoin, USDC or ETH. The Private Placement Offering closed in August 2025, and the Company received gross cash proceeds of approximately $176.0 million, or $168.6 million after offering costs, and cryptocurrency totaling approximately $24.0 million. Upon the effectiveness of the September Charter Amendment (as defined below), approximately 6.8 million Pre-Funded Warrants automatically converted into shares of the Company's Common Stock. As of December 31, 2025, all Pre-Funded Warrants have been converted into the Company's Common Stock.

*Charter Amendments*

 

As approved by a majority of its stockholders by written consent, dated July 23, 2025, the Company filed a certificate of amendment to its amended and restated articles of incorporation with the Nevada Secretary of State on September 5, 2025 to (i) increase the total number of authorized shares of Common Stock from 0.8 million to 200.0 million, (ii) increase the total number of authorized shares of preferred stock, par value $.001 per share (the "Undesignated Preferred Stock") from 100.0 million to 500.0 million, (iii) increase the total number of authorized shares of 8% cumulative preferred stock, Series A (the "Series A Preferred Stock") from 1.0 million to 15.0 million and (iv) change the name of the Company to "FG Nexus Inc." (the "September Charter Amendment"). The September Charter Amendment was declared effective on September 5, 2025.

A majority of the stockholders of Company approved, by written consent dated September 4, 2025, a certificate of amendment to its amended and restated articles of incorporation to (a) increase the total number of authorized shares of Common Stock from 200.0 million shares to 180.0 billion shares and the total number of authorized shares of preferred stock from 500.0 million shares to 100.0 billion shares (collectively, the "Preferred Stock"), of which (i) 10.0 billion shares of Preferred Stock (increased from 15.0 million) are designated 8% cumulative preferred stock, Series A, par value $25.00 (the "Series A Preferred Stock"), and (ii) 90.0 billion shares of Preferred Stock (increased from 485.0 million shares) are undesignated preferred stock, par value $.001 per share (the "Undesignated Preferred Stock"), (b) require that certain "Concurrent Jurisdiction Actions" and "Internal Actions" (as such terms are defined in NRS 78.046, collectively, the "Internal Actions") must be brought solely or exclusively in the Eighth Judicial District Court of Clark County in the State of Nevada and that such Internal Actions should be tried before a judge rather than a jury, in accordance with NRS 78.046(4); (c) clarify that any change of the Company's name shall not require consent of the Company's stockholders, in accordance with NRS 78.390(8); (d) have the Company "opt out" of the interested stockholder combination provisions set forth in NRS Sections 78.411 to 78.444, inclusive; and (e) have the Company "opt out" of the control share provisions set forth in NRS Sections 78.378 to 78.3793, inclusive (the "Additional Charter Amendment"). In connection with the Additional Charter Amendment, we also amended our By-laws to clarify the applicable voting thresholds for proposed amendments to the By-Laws. The Additional Charter Amendment was filed with and declared effective by the Secretary of State of the State of Nevada, on October 7, 2025.

*Asset Transfer and CVR Trust*

 

In August 2025, in connection with the Private Placement Offering and the launch of our treasury strategy, the Company transferred a significant portion of its legacy assets (the "Asset Transfer") to a trust (the "CVR Trust") established in connection with the creation of contingent value rights ("CVRs") for the benefit of the Company's stockholders as of August 8, 2025. The Company distributed the CVRs prior to the effectiveness of the Charter Amendment and the exercise of any of the Pre-Funded Warrants sold in the Private Placement Offering. The CVRs represent the contractual right to receive a pro rata portion of the net proceeds received by the CVR Trust upon the future disposition, if any, of the assets transferred to the CVR Trust by the Company. See Note 6 for additional details.

*Prior Year Developments and Transactions*

 

On February 29, 2024, FGF and FG Group Holdings, Inc. ("FGH") closed a plan of merger to combine the companies in an all-stock transaction (the "Merger"). In connection with the Merger, FGH common stockholders received one share of FGF common stock for each share of common stock of FGH held by such stockholder. Upon completion of the Merger, the combined company was renamed to Fundamental Global Inc.

On May 3, 2024, Strong Global Entertainment, Inc. ("Strong Global Entertainment" or "SGE") entered into an acquisition agreement (the "Acquisition Agreement") with FG Acquisition Corp. ("FGAC"), a special purpose acquisition company ("SPAC"), Strong/MDI Screen Systems, Inc. ("Strong/MDI"), FGAC Investors LLC, and CG Investments VII Inc. The transaction closed on September 25, 2024. As part of the closing, FGAC was renamed Saltire Holdings, Ltd ("Saltire"), and Saltire acquired all of the outstanding shares of one of the Company's indirect wholly-owned subsidiaries, Strong/MDI. As a result of the acquisition, Strong/MDI became a wholly-owned subsidiary of Saltire.

On May 30, 2024, the Company and Strong Global Entertainment, an operating company in which we held approximately 76% of the Class A common shares, entered into a definitive arrangement agreement and plan of arrangement to combine the companies in an all-stock transaction (the "Arrangement"). Upon completion of the Arrangement, the stockholders of Strong Global Entertainment received 1.5 common shares of the Company for each share of Strong Global Entertainment. The transaction closed on September 30, 2024. Following the closing, Strong Global Entertainment ceased to exist, and its common shares were delisted from NYSE American LLC ("NYSE American") and deregistered under the Securities Exchange Act of 1934 (the "Exchange Act"). As the Company was the majority shareholder of Strong Global Entertainment, the financial results of Strong Global Entertainment are presented on a consolidated basis in the Company's condensed consolidated financial statements included in this Form 10-K.

In April 2024, the Company sold its Digital Ignition technology incubator and co-working facility in Alpharetta, Georgia for gross proceeds of $6.5 million. In connection with the sale of the land and building, the Company recorded a non-cash impairment charge of approximately $1.4 million during the first quarter of 2024 to adjust the carrying value of the assets to the fair market value less costs to sell.

On October 10, 2024, the Company's Board approved a reverse stock split of the Company's authorized, issued and outstanding shares of the Company's common stock at a ratio of one (1)-for-twenty-five (25) (the "2024 Reverse Stock Split"). The 2024 Reverse Stock Split became effective on October 31, 2024, at 5:00 p.m., Eastern Time. The Company's common shares began trading on a split-adjusted basis at the commencement of trading on November 1, 2024. All equity awards outstanding immediately prior to the 2024 Reverse Stock Split were adjusted to reflect the 2024 Reverse Stock Split.

**Business Segments**

The Company currently has two primary operating segments, digital assets and merchant banking.

*Digital Assets and Real World Asset Tokenization*

 

Following the private placement in July 2025, the Company transitioned its operations to focus primarily on the tokenization of real world assets supported by a digital asset treasury model with ETH currently as our initial primary treasury asset. Ethereum is the foundation of digital finance and settlement layer for the majority of stablecoins, Decentralized Finance (DeFi), and tokenized assets. ETH is the native token of the Ethereum network, which we purchased ETH as our initial treasury asset.

The Company's treasury strategy is focused on commercializing and expanding the tokenization of real world assets, potentially including affordable housing, reinsurance, real estate and other asset classes. As of December 31, 2025, the Company held 40,093 ETH. All of the Company's ETH is held in custodial accounts at Anchorage and BitGo (both as defined below) and is currently un-staked for maximum financial flexibility and liquidity.

The Company utilizes third-party custodians, including Anchorage and BitGo as well as third-party treasury management services including Galaxy Digital (as defined below) to facilitate our treasury strategies.

*Merchant Banking*

We manage our merchant banking and asset management activities through FG Management Solutions LLC ("FGMS"), which provides strategic, administrative, and regulatory support services to newly formed SPACs (our "SPAC Platform"). Additionally, the Company co-founded a partnership, FG Merchant Partners, LP ("FGMP"), to participate as a co-sponsor for newly formed SPACs and other merchant banking clients.

Our merchant banking group provides advisory services, facilitates capital formation and allocates capital to equity holdings. In our SPAC Platform, this also includes launching, sponsoring and providing strategic, administrative, and regulatory support services to newly formed SPACs. Our merchant banking division has facilitated the launch of several new companies, including FG Communities, Inc. ("FGC"), a self-managed real estate company focused on a growing portfolio of manufactured housing communities that are owned and operated by FGC, and Craveworthy LLC ("Craveworthy"), an innovative fast casual restaurant platform company. Saltire Holdings Ltd. ("Saltire"), a Canadian public company that allocates capital to equity, debt and/or hybrid securities of high-quality private companies, among others.

*Other*

 

The Company owns real estate in Quebec, Canada that is leased pursuant to a long-term operating lease. The Company also owned and operated its Digital Ignition technology incubator and co-working facility in Alpharetta, Georgia, which was sold in April 2024.

*Discontinued Operations*

The Company previously reported managed services and reinsurance as operating segments, both of which were reclassified to discontinued operations during the current year. The Company also previously operated Strong/MDI Screen Systems, Inc. ("Strong/MDI") and Strong Studios, Inc. ("Strong Studios"), which were sold in the previous year. Discontinued operations are more fully described in Note 7.

**Note 2. Significant Accounting Policies**

*Basis of Presentation*

The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP") and include the accounts of the Company and all majority-owned and controlled domestic and foreign subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Unless the context indicates otherwise, references to the "Company" include the Company and its majority-owned and controlled domestic and foreign subsidiaries.

As a result of the reverse merger of FGF and FGH (see Note 5), the consolidated financial statements for the periods prior to the merger represent the results of FGH, as the accounting acquirer. For periods subsequent to the merger, the consolidated financial statements represent the combined results of FGH and FGF. In addition, the current and historical financial results of Strong Studios, Strong/MDI, the managed services segment and the reinsurance segment are presented as discontinued operations and are excluded from results from continuing operations in the accompanying consolidated financial statements.

Unless otherwise indicated, all references to "dollars" and "$" in this Form 10-K are to, and amounts are presented in, U.S. dollars.

*Consolidation Policies*

The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany balances and transactions have been eliminated upon consolidation.

The consolidated financial statements include the accounts of the Company and entities in which it is required to consolidate under either the Variable Interest Entity ("VIE") or Voting Interest Entity ("VOE") models. Both models require the reporting entity to identify whether it has a controlling financial interest in a legal entity and is therefore required to consolidate the legal entity. Under the VOE model, a reporting entity with ownership of a majority of the voting interest of a legal entity is generally considered to have a controlling financial interest. The VIE model was established for situations in which control may be demonstrated other than by the possession of voting rights in a legal entity and instead focuses on the power to direct the activities that most significantly impact the legal entity's economic performance, as well as the rights to receive benefits and obligations to absorb losses that could potentially be significant to the legal entity.

The determination of whether a legal entity is consolidated under either model is reassessed where there is a substantive change in the governing documents or contractual arrangements of the entity, to the capital structure of the entity or in the activities of the entity. Management continuously reassesses whether it should consolidate under either model. As a result of the transfer of STS to the CVR Trust (see Note 6), the entity is no longer consolidated into the Company's financial statements. There have been no other changes to the legal entities that are consolidated during the year ended December 31, 2025.

As a result of the transfer of assets to the CVR Trust, the Company does not have any non-consolidated VIEs as of December 31, 2025.

See Note 8 for further information regarding the Company's equity holdings.

*The Use of Estimates in the Preparation of Consolidated Financial Statements*

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results and changes in facts and circumstances may alter such estimates and affect results of operations and financial position in future periods. Estimates and their underlying assumptions are reviewed on an ongoing basis. Changes in estimates are recorded in the accounting period in which they are determined.

Our business and the businesses of our equity holdings are subject to general political and economic risks, including the adverse impact of changes to international trade and tariff policies, which we are closely monitoring. The uncertainty as to the extent and duration of additional tariffs that have or may be imposed could impact estimates we have made, including those for credit losses and valuation of our equity securities and other holdings.

*Digital Assets*

The Company's digital assets as of December 31, 2025 is solely comprised of ETH, which falls within the scope of Accounting Standards Codification ("ASC") 350-60, *Intangible – Goodwill and Other – Crypto Assets*. The Company does not hold any digital assets that do not fall into the scope of ASC 350-60.

As of December 31, 2025, the Company held $119.4 million of ETH, which are held at fair value and are included as part of the ETH digital assets line on the condensed consolidated balance sheets. In determining the fair value of the ETH in accordance with ASC 820, *Fair Value Measurement*, the Company utilizes Coinbase as the principal market. The activity from remeasurement of ETH at fair value is reflected in the consolidated statements of operations within Unrealized measurement of fair value of ETH digital assets. As part of the Private Placement Offering, certain investors contributed cryptocurrency assets (ETH, Bitcoin and USDC). The Company converted the Bitcoin and USDC received to ETH. Realized gains and losses from the derecognition of digital assets are included in Realized gain (loss) on digital assets, net in the consolidated statements of operations. The Company uses a first-in, first-out methodology to assign costs to digital assets for purposes of the digital assets held and realized gains and losses. Sales and purchases of digital assets are reflected as cash flows from investing activities in the consolidated statements of cash flows. Contributions of digital assets received as part of the consideration received in the Private Placement Offering are presented as noncash financing activities in the consolidated statements of cash flows.

*ETH Staking*

Beginning in the third quarter of 2025, the Company used the proceeds from its capital raising activities to acquire and deploy ETH in native staking activities. The Company has entered into separate contractual agreements with various third-party entities to facilitate its ETH staking activities. The Company commenced native staking in August of 2025.

The Company utilizes a third-party asset manager to manage and stake ETH on its behalf. Through its agreement with the asset manager, the Company's ETH is held by qualified custodians, staked in the Ethereum protocol, and the stake is delegated to third party validators. When chosen as validators by the Ethereum network, these validators earn staking rewards and transaction fees proportional to the amount of stake delegated to them. The Company recognizes rewards from native staking as revenue in accordance with ASC 606, *Revenue from Contracts with Customers*. However, since the amount of rewards are not known by the Company until a validation activity is completed, and the Company receives rewards in their custodial account, the staking rewards are constrained under the Topic 606 guidance on variable consideration until such time.

Because the Company is not the principal to the block validation service, it does not control the full output of the reward-generating activity, and instead receives net staking rewards, after validator commissions are deducted. As such, the Company presents staking revenue on a net basis, reflecting only the portion of protocol rewards to which it is entitled. Asset management and other fees are presented as separate operating expenses within General and administrative expenses on the condensed consolidated statements of operations.

*Holdings in Equity Securities and Other Holdings*

Prior to the distribution of assets to the CVR Trust (see Note 6 for additional details), Other holdings consisted, in part, of equity holdings made in privately held companies accounted for under the equity method. The Company utilizes the equity method to account for holdings when it possesses the ability to exercise significant influence, but not control, over the operating and financial policies of the investee. The ability to exercise significant influence is presumed when the holder possesses more than 20% of the voting interests of the investee. This presumption may be overcome based on specific facts and circumstances that demonstrate that the ability to exercise significant influence is restricted. The Company applies the equity method to holdings in common stock and to other holdings when such other holdings possess substantially identical subordinated interests to common stock.

In applying the equity method, the Company records the holding at cost and subsequently increase or decrease the carrying amount of the holding by its proportionate share of the net earnings or losses and other comprehensive income of the investee. The Company's share of the entity's income or loss is recorded on a one quarter lag for its equity method holdings. We record dividends or other equity distributions as reductions in the carrying value of the holding. Should net losses of the investee reduce the carrying amount of the holding to zero, additional net losses may be recorded if other holdings in the investee are at-risk, even if we have not committed to provide financial support to the investee. Such additional equity method losses, if any, are based upon the change in our claim on the investee's book value.

When the Company receives distributions from its equity method holdings, it utilizes the cumulative earnings approach. When classifying the related cash flows under this approach, the Company compares the cumulative distributions received, less distributions received in prior periods, with the Company's cumulative equity in earnings. Cumulative distributions that do not exceed cumulative equity in earnings represent returns on holdings and are classified as cash inflows from operating activities. Cumulative distributions in excess of cumulative equity in earnings represent returns on holdings and are classified as cash inflows from investing activities.

In addition to holdings accounted for under the equity method of accounting, other holdings also consisted of equity the Company has purchased in a limited partnership, a limited liability company, and a corporation for which there does not exist a readily determinable fair value. The Company accounted for these holdings at their cost, minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar holdings by the same issuer. When the Company observed an orderly transaction of an investee's identical or similar equity securities, it adjusted the carrying value based on the observable price as of the transaction date. Once the Company records such an adjustment, the holding is considered an asset measured at fair value on a nonrecurring basis. Any profit distributions the Company receives on these holdings are included in net holdings income.

See Note 8 for additional information regarding the Company's equity holdings.

*Cash and Cash Equivalents*

Cash and cash equivalents include cash and highly liquid investments with original maturities of 90 days or less.

*Revenue Recognition*

The Company accounts for revenue for rental income and merchant banking advisory services using the following steps:

● Identify the contract, or contracts, with a customer;

● Identify the performance obligations in the contract;

● Determine the transaction price;

● Allocate the transaction price to the identified performance obligations; and

● Recognize revenue when, or as, the Company satisfies the performance obligations.

The Company combines contracts with the same customer into a single contract for accounting purposes when the contracts are entered into at or near the same time and the contracts are negotiated as a single commercial package, consideration in one contract depends on the other contract, or the services are considered a single performance obligation. If an arrangement involves multiple performance obligations, the items are analyzed to determine the separate units of accounting, whether the items have value on a standalone basis and whether there is objective and reliable evidence of their standalone selling price. The total contract transaction price is allocated to the identified performance obligations based upon the relative standalone selling prices of the performance obligations. The standalone selling price is based on an observable price for services sold to other comparable customers, when available, or an estimated selling price using a cost plus margin approach. Management estimates the amount of total contract consideration the Company expects to receive for variable arrangements by determining the most likely amount we expect to earn from the arrangement based on the expected quantities of services the Company expects to provide and the contractual pricing based on those quantities. The Company only includes some or a portion of variable consideration in the transaction price when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur or when the uncertainty associated with the variable consideration is subsequently resolved. Management considers the sensitivity of the estimate, the Company's relationship and experience with the client and variable services being performed, the range of possible revenue amounts and the magnitude of the variable consideration to the overall arrangement.

As discussed in more detail below, revenue is recognized when a customer obtains control of promised goods or services under the terms of a contract and is measured as the amount of consideration the Company expects to receive in exchange for providing services. The Company typically does not have any material extended payment terms, as payment is due at or shortly after the time of the sale. Sales, value-added and other taxes collected concurrently with revenue producing activities are excluded from revenue.

The Company recognizes contract assets or unbilled receivables related to revenue recognized for services completed but not yet invoiced to the clients. Unbilled receivables are recorded as accounts receivable when we have an unconditional right to contract consideration. A contract liability is recognized as deferred revenue when we invoice clients, or receive cash, in advance of performing the related services under the terms of a contract. Deferred revenue is recognized as revenue when we have satisfied the related performance obligation.

The Company defers costs to acquire contracts, including commissions, incentives and payroll taxes, if they are incremental and recoverable costs of obtaining a customer contract with a term exceeding one year. Deferred contract costs are reported within other assets and amortized to selling expense over the contract term, which generally ranges from one to five years. The Company has elected to recognize the incremental costs of obtaining a contract with a term of less than one year as a selling expense when incurred. The Company did not have any deferred contract costs as of December 31, 2025 or December 31, 2024.

 

 

*Property, Plant and Equipment*

 

Significant expenditures for the replacement or expansion of property, plant and equipment are capitalized. Depreciation of property, plant and equipment is provided over the estimated useful lives of the respective assets using the straight-line method. For financial reporting purposes, assets are depreciated over the estimated useful lives of 20 years for buildings and improvements, the lesser of the lease term or the estimated useful life for leasehold improvements, three to ten years for machinery and equipment, seven years for furniture and fixtures and three years for computers and accessories. The Company generally uses accelerated methods of depreciation for income tax purposes. The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The recoverability of property, plant and equipment is based on management's estimates of future undiscounted cash flows and these estimates may vary due to a number of factors, some of which may be outside of management's control. To the extent that the Company is unable to achieve management's forecasts of future income, it may become necessary to record impairment losses for any excess of the net book value of property, plant and equipment over their fair value.

The Company incurs maintenance costs on all of its major equipment. Repair and maintenance costs are expensed as incurred.

*Business Combinations*

 

The Company uses the acquisition method of accounting for acquired businesses. Under the acquisition method, the financial statements reflect the operations of an acquired business starting from the completion of the acquisition. The assets acquired and liabilities assumed are recorded at their respective estimated fair values at the date of the acquisition. Any excess of the purchase price over the estimated fair values of the identifiable net assets acquired is recorded as goodwill. Significant judgment is often required in estimating the fair value of assets acquired, particularly intangible assets. As a result, in the case of significant acquisitions, the Company normally obtains the assistance of third-party valuation specialists in estimating fair values of tangible and intangible assets. The fair value estimates are based on available historical information and on expectations and assumptions about the future, considering the perspective of marketplace participants. While management believes those expectations and assumptions are reasonable, they are inherently uncertain. Unanticipated market or macroeconomic events and circumstances may occur, which could affect the accuracy or validity of the estimates and assumptions.

*Income Taxes*

The Company follows the asset and liability method of accounting for income taxes, whereby deferred income tax assets and liabilities are recognized for (i) the differences between the financial statement carrying amount of existing assets and liabilities and their respective tax bases and (ii) loss and tax credit carry-forwards. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the date of enactment. Future tax benefits are recognized to the extent that realization of such benefits is more likely than not and a valuation allowance is established for any portion of a deferred tax asset that management believes will not be realized. Current federal income taxes are charged or credited to operations based upon amounts estimated to be payable or recoverable as a result of taxable operations for the current year. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in income tax expense (benefit).

*Concentration of Credit Risk*

Financial instruments which potentially expose the Company to concentrations of credit risk include holdings in equity securities, cash, and ETH digital assets.

The Company maintains its cash with a major U.S. domestic banking institution which is insured by the Federal Deposit Insurance Corporation ("FDIC") for up to $250,000. As of December 31, 2025, the Company held funds in excess of these FDIC insured amounts. The terms of these deposits are on demand to mitigate some of the associated risk. The Company has not incurred losses related to these deposits. The Company sells its products to a large number of customers in many different geographic regions. To minimize credit risk related to accounts receivable, management performs ongoing credit evaluations of its customers' financial condition.

As of December 31, 2025, the Company's digital assets were comprised solely of ETH. The fair value of the Company's ETH holdings is subject to significant volatility. Adverse movements in ETH prices could result in mark to market adjustments under applicable accounting policies and materially affect the Company's results of operations and stockholders' equity. As of December 31, 2025, the Company, did not employ derivative hedges to mitigate ETH price risk, and any such strategies, if adopted, would introduce additional basis, liquidity, counterparty and operational risks.

The Company's ETH digital assets are held with qualified custodians. Concentration with any custodian increases the impact of a counterparty failure or operational disruption. Management evaluates the financial condition, controls, and insurance arrangements of key providers and monitors concentration exposures.

*Stock-Based Compensation*

The Company has accounted for stock-based compensation under the provisions of ASC Topic 718 – Stock Compensation, which requires the use of the fair-value based method to determine compensation for all arrangements under which employees and others receive shares of stock or equity instruments. The fair value of each stock option award is estimated on the date of grant using the Black-Scholes valuation model using assumptions for expected volatility, expected dividends, expected term, and the risk-free interest rate along with multiple Monte Carlo simulations to determine a derived service period as the options vest based upon meeting certain performance conditions. The fair value of each stock option award is recorded as compensation expense on a straight-line basis over the requisite service period, which is generally the period in which the stock options vest, with a corresponding increase to additional paid-in capital.

The Company has also issued restricted stock units ("RSUs") to certain of its employees and directors which have been accounted for as equity-based awards since, upon vesting, they are required to be settled in the Company's common shares. We have used the fair value of the Company's common stock on the date the RSUs were issued to estimate the grant date fair value of those RSUs which vest solely based upon the passage of time. The fair value of each RSU is recorded as compensation expense over the requisite service period, which is generally the expected period over which the awards will vest.

Based upon the Company's historical forfeiture rates relating to stock options and RSUs, the Company has not made any adjustment to stock compensation expense for expected forfeitures as of December 31, 2025 or during the years ended December 31, 2025 and 2024.

 

*Foreign Currency Translation*

 

For the Company's foreign subsidiary, the environment in which the business conducts operations is considered the functional currency, generally the local currency. The assets and liabilities of the foreign subsidiary are translated into the United States dollar at the foreign exchange rates in effect at the end of the period. Revenue and expenses of the Company's foreign subsidiary are translated using an average of the foreign exchange rates in effect during the period. Translation adjustments are not included in determining net earnings but are presented in comprehensive loss within the consolidated statements of comprehensive loss. Transaction gains and losses that arise from foreign exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the consolidated statements of operations as incurred. If the Company disposes of its holding in a foreign entity, any gain or loss on currency translation balance recorded in accumulated other comprehensive loss would be recognized as part of the gain or loss on disposition.

*Contingencies*

 

The Company accrues for contingencies when its assessments indicate that it is probable that a liability has been incurred and an amount can be reasonably estimated. The Company's estimates are based on currently available facts and its estimates of the ultimate outcome or resolution. Actual results may differ from the Company's estimates, resulting in an impact, positive or negative, on earnings.

 

*Fair Value of Financial Instruments*

The carrying values of certain financial instruments, including cash, accounts receivable, short-term holdings, deposits held, accounts payable, other accrued expenses, and short-term debt, approximate fair value due to their short-term nature. The Company measures the fair value of financial instruments in accordance with GAAP which defines fair value as the exchange price that would be received for an asset (or paid to transfer a liability) in the principal or most advantageous market for the asset (or liability) in an orderly transaction between market participants on the measurement date. GAAP also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company's short-term debt is recorded at amortized cost. See Note 8 for further information on the fair value of the Company's financial instruments.

*Earnings (Loss) Per Common Share*

Basic earnings (loss) per common share is computed using the weighted average number of shares outstanding during the respective period.

Diluted earnings (loss) per common share assumes conversion of all potentially dilutive outstanding stock options, restricted stock units, warrants or other convertible financial instruments. Potential common shares outstanding are excluded from the calculation of diluted earnings (loss) per share if their effect is anti-dilutive.

 

**Note 3. Recently Adopted and Issued Accounting Standards**

*Recently Adopted Accounting Pronouncements*

 

In December 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-08, which changes the accounting and disclosure requirements for certain cryptocurrency assets that meet specific criteria (e.g., fungible intangible assets secured with cryptography that do not provide the holder with rights to underlying goods or services). This ASU mandates that in-scope crypto assets be measured at fair value at each reporting period, with changes in fair value recorded in net income. It also requires additional disclosures regarding significant holdings, activity rollforward, and any sale restrictions. The standard is effective for fiscal years beginning after December 15, 2024, including interim periods. The Company implemented ASU 2023-08 effective with the implementation of its ETH treasury operations in 2025.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures ("ASU 2023-09"). ASU 2023-09 requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as additional information on income taxes paid. ASU 2023-09 is effective on a prospective basis for annual periods beginning after December 15, 2024, with early adoption permitted. The Company adopted ASU 2023-09 for the annual period ended December 31, 2025. The adoption of ASU 2023-09 did not impact amounts recorded in the Company's financial statements but, instead, required more detailed disclosures in the notes to the financial statements.

*Recently Issued Accounting Pronouncements*

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses ("ASU 2024-03"). ASU 2024-03 requires the disaggregated disclosure of specific expense categories, including purchases of inventory, employee compensation, depreciation, and amortization, within relevant income statement captions. ASU 2024-03 also requires disclosure of the total amount of selling expenses along with the definition of selling expenses. ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Adoption of ASU 2024-03 can either be applied prospectively to consolidated financial statements issued for reporting periods after the effective date of ASU 2024-03 or retrospectively to any or all prior periods presented in the consolidated financial statements. While early adoption is permitted, the Company does not plan to adopt ASU 2024-03 early. ASU 2024-03 will likely result in additional disclosures being included in the Company's financial statements once adopted. The Company is currently evaluating the provisions of ASU 2024-03.

**Note 4. Digital Assets**

The following table sets forth the units held, cost basis, and fair value of ETH digital assets held, as shown on the consolidated balance sheet as of December 31, 2025 ($ in thousands):

Schedule of ETH Digital Assets

---

| | | | |
|:---|:---|:---|:---|
|  | **Units** | **Cost Basis** | **Fair Value** |
| ETH | 40093 | $157711 | $119384 |
| Total | 40093 | $157711 | $119384 |

---

Cost basis is equal to the cost of the ETH digital assets net of any transaction fees, if any, at the time of purchase or upon receipt. Fair value represents the quoted ETH prices within the Company's principal market at the time of measurement (5:00pm Eastern Time). As of December 31, 2024, the Company did not hold any ETH digital assets.

The following table represents a reconciliation of ETH digital assets held (in thousands):

Schedule of Reconciliation of ETH Digital Assets

---

| | |
|:---|:---|
| Fair value, December 31, 2024 | $- |
| Additions | 195847 |
| Sales | (33864) |
| Receipt of ETH from native staking activities | 1543 |
| Realized loss | (5815) |
| Unrealized measurement of fair value | (38327) |
| Fair value, December 31, 2025 | $119384 |

---

Additions are the result of purchases and receipts of ETH, BTC and USDC in connection with the Private Placement Offering (see Note 1). The receipts of ETH from native staking represent the rewards earned from native staking.

**Note 5. Merger of FG and FGH**

On February 29, 2024, FG and FGH completed a merger transaction pursuant to which FGH common stockholders received one share of FG common stock for each share of common stock of FGH held by such stockholder.

The merger involved a change of control between two businesses and was accounted for as a reverse acquisition in accordance with ASC 805 Business Combinations ("ASC 805"). A reverse acquisition occurs when the entity that issues securities (the legal acquirer) is identified as the acquiree for accounting purposes and the entity whose equity interests are acquired (the legal acquiree) is identified as the acquirer for accounting purposes. FGH was determined to be the accounting acquirer.

Per ASC 805, the acquirer measures the identifiable assets acquired and the liabilities assumed at their acquisition-date fair values. The Company determined the fair value of the FGF assets and liabilities as of February 29, 2024 was approximately $17.9 million. In a reverse acquisition, generally the legal acquirer (accounting acquiree) issues consideration in the transaction. As such, the fair value of the consideration transferred is determined based on the number of equity interests the accounting acquirer (legal acquiree) would have had to issue to the owners of the legal acquirer (accounting acquiree) in order to provide the same ratio of ownership of equity interests in the combined entity as a result of the reverse acquisition. Management determined total consideration was $15.6 million The value of the net assets acquired exceeded the purchase price by approximately $2.3 million. As a result, the Company recorded a gain on the bargain purchase during 2024, which is recorded within bargain purchase on acquisition and other (expense) income, net on the consolidated statement of operations. Management evaluated the bargain purchase gain and revisited the value of the individual assets acquired and liabilities assumed in the merger and determined that no adjustments to reduce the fair value of the assets or increase the fair value of the liabilities assumed were necessary.

The table below represents the pro forma consolidated income statement as if FG had been included in the consolidated results of the Company for the year ended December 31, 2024. The revenue amounts below exclude revenue generated by our discontinued operations.

---

| | |
|:---|:---|
|  | **Year Ended**<br> **December 31, 2024** |
| Revenue | $789 |
| Net loss from continuing operations | $(26834) |

---

**Note 6. Distribution of Assets to CVR Trust**

As discussed above, the Company distributed a significant portion of its legacy assets to the CVR Trust in connection with the creation of CVRs for the benefit of the Company's stockholders as of August 8, 2025. The CVR Trust is a Delaware statutory trust. The Management Committee of the CVR Trust will manage the liquidation and monetization of the CVR Trust's assets, whether such assets are held directly by the CVR Trust or indirectly through the CVR Trust's wholly-owned subsidiary, FG CVR SpinCo, LLC, a Delaware limited liability company (the "SpinCo"). The CVR Trust is the sole member and manager of SpinCo.

Management evaluated whether the Company is required to consolidate the CVR Trustunder ASC 810. Management concluded that although the CVR Trust qualifies as a variable interest entity ("VIE") pursuant to ASC 810, the Company is not the primary beneficiary as the Company does not hold a variable interest and does not possess both (1) power over significant activities and (2) exposure to potentially significant benefits or losses. Accordingly, consolidation is not required.

The transferred assets included: (i) all interests in STS, (ii) the preferred shares of Saltire Capital Ltd. ("Saltire") plus all accumulated dividends, (iii) all shares or other interests in FG Merchant Partners, (iv) all interests in Firefly Systems Inc., (v) all interests in GreenFirst Forest Products Ltd., (vi) all interests in FG Communities Inc., (vii) all interests in Craveworthy Brands, (viii) all interests in FG Merger II Corp., (ix) all interests in Aldel Financial II Inc., (x) all interests in Greenland Exploration Limited, (xi) all interests in Argo Holdings, (xii) all interests in Think Markets, (xiii) all interests in Pivotal Capital, (xiv) all interests in B-Scada Inc. and (xv) all current cash and cash equivalents of the Company as of the establishment of the CVR Trust. The following table summarizes the book values of the assets transferred to the CVR Trust (in thousands):

---

| | |
|:---|:---|
| Cash | $17962 |
| Interests in: |  |
| &nbsp;&nbsp;&nbsp;Strong Technical Services | 778 |
| &nbsp;&nbsp;&nbsp;Firefly Systems | 12898 |
| &nbsp;&nbsp;&nbsp;FG Merchant Partners | 5558 |
| &nbsp;&nbsp;&nbsp;GreenFirst Forest Products | 3726 |
| &nbsp;&nbsp;&nbsp;FGAC Investors | 2157 |
| &nbsp;&nbsp;&nbsp;Aldel Investors | 1355 |
| &nbsp;&nbsp;&nbsp;FG Communities | 2250 |
| &nbsp;&nbsp;&nbsp;Other | 1541 |
| Total | $48225 |

---

**Note 7. Discontinued Operations**

*Reinsurance*

The Company's wholly owned reinsurance subsidiary, FG Reinsurance Ltd ("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.

During the fourth quarter of 2024, the Board approved a plan to evaluate the potential sale of the Company's reinsurance business. As a result, management evaluated the classification of its reinsurance business as a discontinued operation as of December 31, 2024 and determined the reinsurance business is a component of an entity and represented a discontinued operation. Accordingly, the reinsurance business has been included as part of discontinued operations for all periods presented.

On March 14, 2025, the Company entered into an agreement for the sale of the entire issued share capital of FG RE Corporate Member Limited and for the planned commutation of its Lloyds of London reinsurance treaties UHA 251 22, B1868HT2300259, and B1868HT2400259. The transaction closed during the second quarter of 2025, and the Company received consideration of $5.6 million. In October 2025, the Company entered into an agreement to sell the remaining portion of its reinsurance business. Pursuant to the agreements, the Company will receive (1) the release of $3.3 million of collateral that the Company had posted in connection with certain reinsurance contracts; (2) the payment of $1.0 million in cash; and (3) a 40% equity interest in the entity purchasing the reinsurance business. Additionally, pursuant to the agreements, the Company agreed to leave $1.3 million dollars in cash in the reinsurance business in exchange for a promissory note in the amount of $1.3 million that accrues interest at a rate of 6% per annum with all principal and accrued interest due and payable on June 30, 2027.

 

During the fourth quarter of 2024, the Company recorded an impairment charge of approximately $2.1 million to adjust the carrying amount of the disposal group to its fair value less cost to sell. The Company adjusted the impairment charge in 2025 and recorded an additional impairment charge of $0.1 million.

 

*Strong Technical Services, Inc.*

 

On August 8, 2025, the Company transferred its ownership of Strong Technical Services, Inc. (its managed services operating segment) to the CVR Trust, as described above. Management evaluated the classification Strong Technical Services as a discontinued operation and determined it is a component of an entity and represented a discontinued operation. Accordingly, the managed services segment. is included as part of discontinued operations in the accompanying consolidated financial statements.

*Strong/MDI*

On May 3, 2024, Strong Global Entertainment entered into the Acquisition Agreement with FGAC, Strong/MDI, FGAC Investors LLC, and CG Investments VII Inc. On September 25, 2024, Strong Global Entertainment completed the transaction. As part of the closing, FGAC was renamed Saltire. Pursuant to the Acquisition Agreement, Strong Global Entertainment received the equivalent of approximately $29.5 million in cash and preferred and common shares of Saltire, consisting of: (i) cash consideration in an amount equal to 25% of the net proceeds of a concurrent private placement (or $0.8 million), (ii) the issuance of preferred shares with an initial preferred share redemption amount of $9.0 million, and (iii) the issuance of $19.7 million of Saltire common shares. In connection with the transaction, and after including the impact of the reclassification of approximately $5.4 million from accumulated other comprehensive income to realized loss on foreign exchange, the Company recorded a net gain on the sale of Strong/MDI of approximately $21.8 million during the third quarter of 2024. Upon completion of the transaction, Strong Global Entertainment held an ownership interest of approximately 37.3% in Saltire, which is 23.8% as of December 31, 2025.

Management evaluated the classification of Strong/MDI as a discontinued operation and determined Strong/MDI is a component of an entity and represented a discontinued operation. Accordingly, Strong/MDI has been included as part of discontinued operations for the year ended December 31, 2024.

*Strong Studios*

In March 2022, Strong Studios acquired, from Landmark Studio Group LLC ("Landmark"), the rights to original feature films and television series, and was assigned third party rights to content for global multiplatform distribution.

In September 2023, the Company acquired all of the outstanding capital stock of Unbounded Media Corporation ("Unbounded"), an independent media and creative production company.

As of December 31, 2023, the board of directors of Strong Global Entertainment approved the Company's plan to exit its content business, including Strong Studios and Unbounded and authorized management to proceed with such plan. As a result, management evaluated the classification of Strong Studios as a discontinued operation as of December 31, 2023 and determined Strong Studios is a component of an entity and represented a discontinued operation. Accordingly, Strong Studios has been included as part of discontinued operations for all periods presented.

The Company determined that the disposal of the entities described above are considered a strategic shift that will have a major effect on the Company's operations and financial results because these businesses historically represented a significant portion of the Company's revenues and assets and operated as distinct lines of business.

The assets and liabilities included as part of discontinued operations as of December 31, 2025 and December 31, 2024 related to the Company's managed services and reinsurance businesses. The major classes of assets and liabilities are as follows (in thousands):

Schedule of Major Class Assets and Liabilities Included as Part of Discontinued Operations

---

| | | |
|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** |
| Cash and cash equivalents | $- | $1232 |
| Accounts receivable, net |  | 3587 |
| Inventories, net |  | 1432 |
| Lease right-of-use-assets |  | 1285 |
| Property, plant and equipment, net |  | 377 |
| Other assets |  | 285 |
| Reinsurance balance receivable | 11218 | 22976 |
| Funds deposited with reinsured companies | 2665 | 8650 |
| &nbsp;&nbsp;&nbsp;Total assets of discontinued operations | $13883 | $39824 |
| Accounts payable and accrued expenses | $169 | $4862 |
| Deferred revenue and customer deposits |  | 771 |
| Debt, net of issuance costs |  | 301 |
| Lease obligations |  | 1352 |
| Loss and loss adjustment expense reserves | 5380 | 13283 |
| Present value of future profits | 3878 | 9153 |
| &nbsp;&nbsp;&nbsp;Total liabilities of discontinued operations | $9427 | $29722 |

---

The major line items constituting the net income (loss) from discontinued operations are as follows (in thousands):

Schedule of Net Loss From Discontinued Operation

---

| | | | |
|:---|:---|:---|:---|
|  | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** |
|  | **Managed<br> Services** | **Reinsurance** | **Total** |
| Net product and services revenue | $19387 | $- | $19387 |
| Net premiums earned | - | 14823 | 14823 |
| &nbsp;&nbsp;&nbsp;Total revenue | 19387 | 14823 | 34210 |
| Cost of products and services revenues | (16020) |  | (16020) |
| Net losses and loss adjustment expenses |  | (8790) | (8790) |
| Amortization of deferred policy acquisition costs |  | (3982) | (3982) |
| Selling and administrative expenses | (2550) | (1910) | (4460) |
| Impairment of assets | - | (75) | (75) |
| &nbsp;&nbsp;&nbsp;Total expenses | (18570) | (14757) | (33327) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income from operations | 817 | 66 | 883 |
| Other income | 1 | 8 | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income from discontinued operations before taxes | 818 | 74 | 892 |
| Income tax expense | - | - | - |
| &nbsp;&nbsp;&nbsp;Net income from discontinued operations | $818 | $74 | $892 |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Year Ended Ended December 31, 2024** | **Year Ended Ended December 31, 2024** | **Year Ended Ended December 31, 2024** | **Year Ended Ended December 31, 2024** | **Year Ended Ended December 31, 2024** |
|  | **Managed Services** | **Reinsurance** | **Strong/MDI** | **Strong Studios** | **Total** |
| Net product and services revenue | $31574 | $- | $11286 | $- | $42860 |
| Net premiums earned | - | 18708 | - | - | 18708 |
| &nbsp;&nbsp;&nbsp;Total revenue | 31574 | 18708 | 11286 |  | 61568 |
| Cost of products and services revenues | (25823) |  | (6530) |  | (32353) |
| Net losses and loss adjustment expenses |  | (11572) |  |  | (11572) |
| Amortization of deferred policy acquisition costs |  | (4983) |  |  | (4983) |
| Selling and administrative expenses | (4243) | (2079) | (2800) | (52) | (9174) |
| (Loss) gain on disposal and impairment of assets | - | (2057) | (72) | 10 | (2119) |
| &nbsp;&nbsp;&nbsp;Total expenses | (30066) | (20691) | (9402) | (42) | (60201) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income (loss) from operations | 1508 | (1983) | 1884 | (42) | 1367 |
| Other (expense) income | (137) | (22) | 21800 | - | 21641 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income (loss) from discontinued operations before taxes | 1371 | (2005) | 23684 | (42) | 23008 |
| Income tax benfit (expense) | 47 | - | (93) | - | (46) |
| &nbsp;&nbsp;&nbsp;Net income (loss) from discontinued operations | $1418 | $(2005) | $23591 | $(42) | $22962 |

---

**Note 8. Equity Holdings and Fair Value Disclosures**

The Company accounts for each of its equity holdings using either the fair value method, the equity method or the cost method.

As of December 31, 2025, following the transfer of assets to the CVR Trust, the Company's equity holdings consisted solely common shares of Saltire carried at $14.7 million, which is accounted for under the equity method.

As of December 31, 2024, the Company held approximately $60.1 million in holdings in equity securities and other holdings. The Company accounts for each of its equity holdings using either the fair value method, the equity method or the cost method as summarized below as of December 31, 2024 (in thousands):

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** |
|  | | | **Equity Method** | **Equity Method** | **Equity Method** | **Equity Method** | **Equity Method** | **Equity Method** | **Equity Method** |
|  | <br>**Fair Value Method** | <br>**Cost Method** | **FG Merchant Partners, LLC** | **FGAC Investors LLC** | **FG Merger Investors LLC** | **Aldel Investors II LLC** | **Strong Global Entertainment** | **GreenFirst Forest Products Holdings LLC** | **Total** |
| Holdings in publicly traded companies: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;GreenFirst Forest Products common shares | $5339 | $- | $- | $- | $- | $- | $- | $467 | $5806 |
| &nbsp;&nbsp;&nbsp;Saltire common and preferred shares and warrants |  |  | 969 | 4334 |  |  | 27227 |  | 32530 |
| &nbsp;&nbsp;&nbsp;iCoreConnect common shares and warrants | 112 |  | 67 |  | 52 |  |  |  | 231 |
| &nbsp;&nbsp;&nbsp;Oppfi warrants | 312 |  |  |  |  |  |  |  | 312 |
| &nbsp;&nbsp;&nbsp;Aldel II founder shares and warrants |  |  | 997 |  |  | 1270 |  |  | 2267 |
| Holdings in privately held companies: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;FG Communities common and preferred shares |  | 2250 | 2041 |  |  |  |  |  | 4291 |
| &nbsp;&nbsp;&nbsp;Firefly preferred shares |  | 12898 |  |  |  |  |  |  | 12898 |
| &nbsp;&nbsp;&nbsp;Craveworthy common shares and note |  | 200 | 1457 |  |  |  |  |  | 1657 |
| &nbsp;&nbsp;&nbsp;Other | - | 81 | - | - | - | - | - | - | 81 |
| Total | $5763 | $15429 | $5531 | $4334 | $52 | $1270 | $27227 | $467 | $60073 |

---

*<u>Equity Method Holdings</u>*

As of December 31, 2025, the Company held approximately 23.8% of the outstanding common shares of Saltire. During the year ended December 31, 2025 and December 31, 2024, the Company recorded an equity method loss on the shares of $2.9 million and an equity method gain of $13 thousand, respectively. Based on quoted market prices, the market value of the Company's ownership in common shares of Saltire was $9.0 million at December 31, 2025.

The summarized financial information presented below reflects the underlying financial information for Saltire, the Company's sole holding accounted for under the equity method on December 31, 2025, (in thousands):

Schedule of Financial Information for Investments Accounted Under the Equity Method

---

| | | |
|:---|:---|:---|
|  | **As of**<br> **September 30, 2025** | **As of**<br> **December 31, 2024** |
| Current assets | $67033 | $9225 |
| Long-term assets | 53023 | 5688 |
| Current liabilities | 88616 | 21410 |
| Long-term liabilities | 53126 | 4105 |
| Shareholders' equity | (21686) | (10602) |

---

---

| | |
|:---|:---|
|  | **Twelve Months Ended <br> September 30, 2025** |
| Revenue | $32683 |
| Gross profit | 12083 |
| Net loss | (7595) |

---

Each of the following equity method holdings were transferred to the CVR Trust in August 2025 and are no longer held by the Company. See Note 6 for additional details.

On January 4, 2021, FGMP was formed as a Delaware limited partnership to co-sponsor newly formed SPACs with their founders or partners, as well as other merchant banking interests. The Company was the sole managing member of the general partner of FGMP and held a limited partner interest of approximately 50% in FGMP directly and through its subsidiaries. FGMP participates as a co-sponsor of the SPACs launched under our SPAC Platform as well as merchant banking initiatives.

The Company recorded an equity method gain of $0.1 million and an equity method loss of $2.7 million during the year ended December 31, 2025 and December 31, 2024, respectively. The Company made capital contributions of approximately $22 thousand to FGMP during the year ended December 31, 2025.

The Company held direct limited liability company interests in FGAC Investors LLC, which holds equity interests in (i) FG Acquisition Corp., (ii) FG Merger Investors LLC, which maintains holdings in iCoreConnect (as defined below), and (iii) GreenFirst Forest Products Holdings, LLC, which holds equity securities in GreenFirst (as defined below). Management determined that it had the ability to exercise significant influence over FGAC Investors LLC, FG Merger Investors LLC and GreenFirst Forest Products Holdings, LLC, and accounted for each of these holdings under the equity method of accounting.

For the year ended December 31, 2025 and December 31, 2024, the Company recorded an equity method loss on FG Merger Investors LLC of approximately $25 thousand and $3.8 million, respectively. The Company recorded an equity method loss from GreenFirst Forest Products Holdings, LLC of approximately $0.1 million and $0.3 million for the year ended December 31, 2025 and December 31, 2024, respectively, and a loss of $2.3 million and $4.6 million from FGAC Investors LLC for the year ended December 31, 2025 and December 31, 2024, respectively.

The Company recorded an equity method gain from FG Merger Investors II LLC ("FGMI") of approximately $0.2 million and $0 during the year ended December 31, 2025 and December 31, 2024, respectively. The Company made capital contributions of approximately $0.3 million to FGMI during the year ended December 31, 2025. For the year ended December 31, 2025, the Company recorded an equity method gain on Aldel II LLC of approximately $0.1 million.

Certain holdings owned by our former equity method investees were valued using Monte-Carlo simulation and option pricing models. Inherent in Monte-Carlo simulation and option pricing models are assumptions related to expected volatility and discount for lack of marketability of the underlying holding. Our former investees estimated the volatility of these holdings based on the historical performance of various broad market indices blended with various peer companies which they considered as having similar characteristics to the underlying holding, as well as consideration of price and volatility of relevant publicly traded securities such as SPAC warrants. Our former investees also considered the probability of a successful merger when valuing equity for SPACs that had not yet closed.

*<u>Fair Value Method Holdings</u>*

The carrying value of fair value method holdings is determined based on the security's trading price multiplied by the number of shares held. The following table summarizes the Company's fair value method holdings as of December 31, 2024 (in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
| **As of December 31, 2024** | **Cost Basis** | **Gross**<br> **Unrealized**<br> **Gains** | **Gross**<br> **Unrealized**<br> **Losses** | **Carrying**<br> **Amount** |
| GreenFirst common stock | $8679 | $- | $(3340) | $5339 |
| iCoreConnect common shares | 8 | 104 |  | 112 |
| OppFi common stock and warrants | 29 | 283 | - | 312 |
| Total fair value method holdings | $8716 | $387 | $(3340) | $5763 |

---

GreenFirst Forest Products Inc. ("GreenFirst") is a publicly-traded Canadian company focused on environmentally sustainable forest management and lumber production. The Company held shares of GreenFirst directly that were accounted for at fair value based on observable quoted market prices. The Company also held GreenFirst common shares through an equity method holding in GreenFirst Forest Products Holdings LLC (see Equity Method Holdings below).

iCoreConnect Inc. ("iCoreConnect") is a cloud-based software and technology company focused on increasing workflow productivity and customer profitability through its enterprise platform of applications and services. The Company held shares of iCoreConnect directly that are accounted for at fair value based on observable quoted market prices. The Company also held iCoreConnect shares and warrants through an equity method holding in FGMP (see Equity Method Holdings below).

OppFi Inc. ("OppFi") is a publicly-traded tech-enabled, mission-driven specialty finance platform that broadens the reach of community banks to extend credit access to everyday Americans. The Company accounted for its common shares and warrants of OppFi using the fair value method based on observable quoted market prices.

*<u>Cost Method Holdings without Readily Determinable Fair Value</u>*

Each of the Company's cost method holdings were transferred to the CVR Trust in August 2025 and are no longer held by the Company. See Note 6 for additional details.

In addition to our equity method and fair value method holdings, other holdings which do not have a readily determinable fair value were accounted for at their cost, subject to any adjustment from time to time due to impairment or observable price changes in orderly transactions. When the Company observed an orderly transaction of an investee's identical or similar equity securities, the Company adjusted the carrying value based on the observable price as of the transaction date. Any profit distributions the Company received on these holdings were included in net holdings income. Management was not aware of any issuances of identical or similar equities during 2025. As a result, the carrying value of holdings without readily determinable fair value did not change during 2025.

*Other*

The Company's other holdings included a convertible promissory note and a senior unsecured promissory note.

On September 29, 2023, the Company invested $250,000 in a convertible promissory note with ThinkMarkets, all of which was repaid during 2025.

On March 16, 2023, the Company invested $200,000 in a senior unsecured loan to Craveworthy LLC ("Craveworthy"). The loan had an interest rate of 13% and a maturity of March 15, 2024. The senior unsecured note was amended to a convertible bridge loan on October 17, 2023, and the maturity date was changed to October 16, 2024. In November 2024, the Company and Craveworthy extended the maturity date to April 16, 2025. The Company expected the maturity date would be extended again, however, the loan was transferred to the CVR Trust in August 2025.

*Impairment*

For equity securities without readily determinable fair values, impairment is determined via a qualitative assessment which considers indicators to evaluate whether the holding is impaired. Some of these indicators include a significant deterioration in the earnings performance or asset quality of the investee, a significant adverse change in regulatory, economic or general market conditions in which the investee operates, or doubt over an investee's ability to continue as a going concern. If the holding is deemed to be impaired after conducting this analysis, management would estimate the fair value of the holding to determine the amount of impairment loss.

For equity method holdings, evidence of a loss in value might include a series of operating losses of an investee, the absence of an ability to recover the carrying amount of the holding, or a deterioration in the value of the investee's underlying assets. If these, or other indicators, lead to the conclusion that there is a decrease in the value of the holding that is other than temporary, the Company would recognize that decrease in value even though the decrease may be in excess of what would otherwise be recognized under the equity method of accounting.

The risks and uncertainties inherent in the assessment methodology used to determine impairment include, but may not be limited to, the following:

● the opinions of professional appraisers could be incorrect;

● the past operating performance and cash flows generated from the investee's operations may not reflect their future performance; and

● the estimated fair values for holdings for which observable market prices are not available are inherently imprecise.

The Company did not record an impairment on its holdings during 2025.

Net holdings loss for the year ended December 31, 2025 and December 31, 2024 are as follows (in thousands):

Schedule of Net Holdings Loss

---

| | | |
|:---|:---|:---|
|  | **Year Ended** | **Year Ended** |
|  | **December 31, 2025** | **December 31, 2024** |
| Realized gain on common stock holdings | $1056 | $306 |
| Unrealized loss in value on common stock holdings | (2546) | (4749) |
| Loss on equity method holdings | (4935) | (11294) |
| Dividend income | 754 |  |
| Other | 168 | 1062 |
| Net loss on equity holdings and other holdings | $(5503) | $(14675) |

---

 

*Fair Value Measurements*

The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. The FASB has issued guidance that defines fair value as the exchange price that would be received for an asset (or paid to transfer a liability) in the principal, or most advantageous market in an orderly transaction between market participants. This guidance also establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The guidance categorizes assets and liabilities at fair value into one of three different levels depending on the observation of the inputs employed in the measurements, as follows:

● Level 1 – inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets providing the most reliable measurement of fair value since it is directly observable.

● Level 2 – inputs to the valuation methodology which include quoted prices for similar assets or liabilities in active markets. These inputs are observable, either directly or indirectly, for substantially the full-term of the financial instrument.

● Level 3 – inputs to the valuation methodology which are unobservable and significant to the measurement of fair value.

The availability of valuation techniques and observable inputs can vary from holding to holding and are affected by a variety of factors, including the type of holding, whether the holding is new and not yet established in the marketplace, the liquidity of markets and other characteristics specific to the individual holding. In some cases, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the hierarchy based on the lowest level input that is significant to the fair value measurement. When determining fair value, the Company uses valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs.

Financial instruments measured, on a recurring basis, at fair value in accordance with the guidance promulgated by the FASB as of December 31, 2025 and December 31, 2024 are as follows (in thousands):

Schedule of Financial Instruments Measured on Recurring Basis at Fair Value

---

| | | | | |
|:---|:---|:---|:---|:---|
| **As of December 31, 2025** | **Level 1** | **Level 2** | **Level 3** | **Total** |
| ETH digital assets | $119384 | - | - | $119384 |
|  | $119384 | $&nbsp;&nbsp;&nbsp;&nbsp; - | $&nbsp;&nbsp;&nbsp;&nbsp; - | $119384 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| **As of December 31, 2024** | **Level 1** | **Level 2** | **Level 3** | **Total** |
| OppFi warrants | $312 | $- | $- | $312 |
| iCoreConnect common shares and warrants | 112 |  |  | 112 |
| GreenFirst common stock | 5339 | - | - | 5339 |
|  | $5763 | $&nbsp;&nbsp;&nbsp;&nbsp; - | $&nbsp;&nbsp;&nbsp;&nbsp; - | $5763 |

---

Holdings without a readily determinable fair value are measured at fair value on a nonrecurring basis. During the year ended December 31, 2025, the Company did not record any adjustments due to impairment or observable price changes in orderly transactions.

The following table provides a rollforward of nonrecurring Level 3 fair value measurements for the year ended December 31, 2025 (in thousands):

Schedule of Nonrecurring Level 3 Fair Value Measurements

---

| | |
|:---|:---|
| **<u>Assets:</u>** |  |
| Convertible notes |  |
| &nbsp;&nbsp;&nbsp;Balance, December 31, 2024 | 248 |
| &nbsp;&nbsp;&nbsp;Increase in fair value of convertible note |  |
| &nbsp;&nbsp;&nbsp;Repayments | (48) |
| &nbsp;&nbsp;&nbsp;Transfer to CVR Trust | (200) |
| Balance, December 31, 2025 | $- |

---

**Note 9. Property, Plant and Equipment**

Property, plant and equipment primarily consists of the Company's real estate and is presented net of accumulated depreciation for a net book value of $2.2 million and $2.4 million as of December 31, 2025 and December 31, 2024, respectively. Depreciation expense from continuing operations for the year ended December 31, 2025 and 2024 was $0.2 million and $0.3 million, respectively.

The Company signed a non-binding letter of intent to sell its Quebec property for $15.0 million CAD. Following repayment of the installment note, the transaction is expected to generate approximately $8.0-$9.0 million USD in net pretax proceeds. The letter of intent does not constitute a binding agreement, and there can be no assurance that a definitive sale agreement will be reached or that the transaction will be completed. The transaction, if completed, is expected to close during the first half of 2026, subject to the execution of definitive agreements, completion of due diligence, and satisfaction of customary closing conditions.

**Note 10. Income Taxes**

Net loss from continuing operations before income taxes consists of (in thousands):

---

| | | |
|:---|:---|:---|
|  | **Years Ended December 31,** | **Years Ended December 31,** |
|  | **2025** | **2024** |
| United States | $(67798) | $(18838) |
| Foreign | 91 | (5439) |
| &nbsp;&nbsp;&nbsp;Total | $(67707) | $(24277) |

---

Income tax benefit from continuing operations consists of (in thousands):

---

| | | |
|:---|:---|:---|
|  | **Years Ended December 31,** | **Years Ended December 31,** |
|  | **2025** | **2024** |
| Current: |  |  |
| &nbsp;&nbsp;&nbsp;Federal | $(69) | $(108) |
| &nbsp;&nbsp;&nbsp;State | (15) | (25) |
| &nbsp;&nbsp;&nbsp;Foreign | (1902) | (423) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | (1986) | (556) |
| Deferred: |  |  |
| &nbsp;&nbsp;&nbsp;Federal |  | 648 |
| &nbsp;&nbsp;&nbsp;State |  |  |
| &nbsp;&nbsp;&nbsp;Foreign | 2059 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | 2059 | 648 |
| Total | $73 | $92 |

---

Income tax benefit from continuing operations differed from the amounts computed by applying the U.S. Federal income tax rate to pretax loss from continuing operations as follows (in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Years Ended December 31,** | **Years Ended December 31,** | **Years Ended December 31,** | **Years Ended December 31,** |
|  | **2025** | **2025** | **2024** | **2024** |
| Expected federal income tax benefit | $14212 | -21.0% | $5098 | -21.0% |
| State income taxes, net of federal benefit | (10) | 0.0% | 29 | -0.1% |
| Foreign tax effects - Canada | 175 | -0.3% | 791 | -3.3% |
| Change in state tax rate |  |  | (233) | 1.0% |
| Change in valuation allowance | (8712) | 12.9% | (4763) | 19.6% |
| Merger of FGF and FGH |  |  | (2049) | 8.4% |
| Other permanent items | (188) | 0.3% | (753) | 3.1% |
| Gain on preferred shares | (1365) | 2.0% |  |  |
| Acquisition costs | (1301) | 1.9% |  |  |
| Net investment income | (973) | 1.4% |  |  |
| Return to provision | (587) | 0.9% | 2269 | -9.3% |
| Tax credits | 45 | -0.1% |  |  |
| Transfer of equity method and other holdings to CVR Trust | (750) | 1.1% |  |  |
| Other | (473) | 0.7% | (297) | 1.2% |
| &nbsp;&nbsp;&nbsp;Total | $73 | -0.1% | $92 | -0.4% |

---

Deferred tax assets and liabilities were comprised of the following (in thousands):

---

| | | |
|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** |
| Deferred tax assets: |  |  |
| &nbsp;&nbsp;&nbsp;Non-deductible accruals | $385 | $212 |
| &nbsp;&nbsp;&nbsp;Stock compensation expense | 517 | 677 |
| &nbsp;&nbsp;&nbsp;Uncollectible receivable reserves | 5 | 5 |
| &nbsp;&nbsp;&nbsp;Net operating losses | 14680 | 10737 |
| &nbsp;&nbsp;&nbsp;Tax credits | 1744 | 1699 |
| &nbsp;&nbsp;&nbsp;Disallowed interest expense | 2719 | 2654 |
| &nbsp;&nbsp;&nbsp;Equity in income of equity method investments |  | 860 |
| &nbsp;&nbsp;&nbsp;Unrealized measurement of fair value of ETH | 8159 |  |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 45 | 23 |
| &nbsp;&nbsp;&nbsp;Other | 191 | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total deferred tax assets | 28445 | 16871 |
| &nbsp;&nbsp;&nbsp;Valuation allowance | (28336) | (16838) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net deferred tax assets after valuation allowance | 109 | 33 |
| Deferred tax liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | (220) | (247) |
| &nbsp;&nbsp;&nbsp;Equity in income of equity method investments |  |  |
| &nbsp;&nbsp;&nbsp;State tax effecting methodology |  | (33) |
| &nbsp;&nbsp;&nbsp;Section 987 loss | (109) |  |
| &nbsp;&nbsp;&nbsp;Cash repatriation | (145) | (2165) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total deferred tax liabilities | (474) | (2445) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net deferred tax liability | $(365) | $(2412) |

---

Income tax paid (net of refunds) by jurisdiction (in thousands):

Schedule of Income Taxes Paid

---

| | | |
|:---|:---|:---|
|  | **Years Ended December 31,** | **Years Ended December 31,** |
|  | **2025** | **2024** |
| Federal | $- | $- |
| State | (45) | 135 |
| Federal | 1199 | 214 |
| &nbsp;&nbsp;&nbsp;Total | $1154 | $349 |

---

The majority of state payments in 2024 were to Georgia and Illinois. All foreign tax payments were related to Canada, for 2025 $0.8 million was related to withholding tax for remitting Canadian earnings to the U.S. and the remaining $0.4 million was related to annual Canadian income tax returns. In 2024, all of the foreign payments were related to annual Canadian income tax returns.

The tax expense/benefit related to the managed services and reinsurance businesses has been allocated to discontinued operation. The Company has sufficient net operating losses to offset materially the taxable income/loss from these discontinued operations, all of which is offset by valuation allowance.

As a result of the Private Placement Offering, the Company underwent an ownership change as defined under Internal Revenue Code Section 382 ("Section 382"). As a result, the Company's ability to utilize its Federal net operating loss and capital loss carryforwards in future years is subject to an annual limitation. The estimated base limitation under Section 382 on the future utilization of net operating losses generated prior to the ownership change is approximately $0.5 million per year. This limitation is calculated based on the value of the Company's stock immediately before the deemed ownership change, multiplied by the applicable long-term tax-exempt rate, and may be subject to further adjustment as provided under Section 382 and related regulations. Due to the application of these limitations and the carryforward periods for Federal net operating loss and capital loss carryforwards, the gross deferred tax asset related to net operating losses has been reduced by $1.9 million, and the gross deferred tax asset related to capital losses has been reduced by $10.0 million.

In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income. The Company considers the scheduled reversal of taxable temporary differences, projected future taxable income and tax planning strategies in making this assessment. A cumulative loss in a particular jurisdiction in recent years is a significant piece of evidence with respect to the realizability that is difficult to overcome. Based on the available objective evidence including recent updates to the taxing jurisdictions generating income, the Company concluded that a valuation allowance of $28.3 million should be recorded against the Company's U.S. tax jurisdiction deferred tax assets as of December 31, 2025. The valuation allowance covers substantially all U.S. net deferred tax assets. The remaining deferred items that are realizable are the deferred tax liabilities for Canadian withholding tax and Canadian fixed assets. The overall change in valuation allowance is driven primarily by deferred tax impacts of unrealized fair value changes in ETH holdings and the increase in current year net operating losses. The effective tax rate above relates only to continuing operations.

The Company recorded a deferred tax liability related to withholding tax on the repatriation of earnings from its Canadian subsidiary of $0.1 million and $2.2 million at December 31, 2025 and December 31, 2024, respectively. The change in liability during 2025 was due to distributions and withholding tax accrued and paid in 2025. This Canadian withholding tax expense is reported in the foreign tax effects section of the summary of tax expense and rate reconciliation.

A provision of Tax Cuts and Jobs Act of 2017 (the "2017 Tax Act") was the implementation of the Global Intangible-Low Taxed Income Tax, or "GILTI." The Company has elected to account for the impact of GILTI in the period in which the tax actually applies to the Company. U.S. GAAP does not prescribe a single required approach for GILTI under ASC Topic 740; entities may either recognize deferred taxes for temporary differences expected to reverse as GILTI or treat GILTI as a period cost. During the year ended December 31, 2025, the Company did not incur any additional taxable income as a result of this provision.

As of December 31, 2025, the Company had net operating loss carryforwards for federal and state income tax purposes of approximately $50.7 million and $56.7 million, respectively. Federal net operating losses of $5.0 million expire in 2037 for Federal losses generated through December 31, 2017. The federal net operating losses generated in 2018 and future years will be carried forward indefinitely.

In July 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted and effective and made significant changes to Federal tax laws, including certain changes that were effective for the 2025 tax year. Changes in tax laws are accounted for in the period of enactment and the retroactive effects are recognized in these financial statements. There were no material income tax consequences of this enacted legislation on the reporting period of these financial statements.

The Company is subject to possible examinations not yet initiated for Federal purposes for the fiscal years 2022, 2023, and 2024. In most cases, the Company has examinations open for state or local jurisdictions based on the particular jurisdiction's statute of limitations.

Estimated amounts related to underpayment of income taxes, including interest and penalties, were not material for the years ended December 31, 2025 and 2024. Amounts accrued for estimated underpayment of income taxes were zero as of December 31, 2025 and 2024.

**Note 11. Equity Incentive Plans**

The Company's 2021 Equity Incentive Plan (the "2021 Plan") was originally approved by the Company's stockholders on October 1, 2021, and has subsequently been amended, most recently pursuant to Amendment No. 3 approved by stockholders on July 23, 2025, to increase the number of shares authorized for issuance under the 2021 Plan to 2.0 million shares. The purpose of the 2021 Plan is to attract and retain directors, consultants, officers and other key employees of the Company and its subsidiaries and to provide to such persons incentives and rewards for superior performance. The 2021 Plan is administered by the Compensation and Management Resources Committee of the Board and has a term of ten years. The 2021 Plan awards may be in the form of stock options (which may be incentive stock options or nonqualified stock options), stock appreciation rights ("SARs"), restricted shares, RSUs, and other share-based awards. As of December 31, 2025, there were approximately 2.0 million shares remaining available for future issuance.

In addition, on March 24, 2023, the Board approved an employee stock purchase plan ("FGF ESPP Plan") whereby qualifying employees can choose each year to have up to 5% of their annual base earnings withheld to purchase the Company's common shares in the open market. The Company matches 100% of the employee's contribution amount after thirty days of employment.

Total stock-based compensation expense for the years ended December 31, 2025 and December 31, 2024 was approximately $7.8 million and $1.6 million, respectively. The increase in stock-based compensation expense in the current period is primarily related to the issuance of warrants in connection with the Private Placement Offering. See Note 12 for additional details. Effective July 31, 2025, the Compensation and Management Resources Committee of the Board of Directors also approved the acceleration of all unvested restricted stock units.

As of December 31, 2025, total unrecognized stock compensation expense of approximately $18 thousand remained, all of which related to stock options, and will be recognized through June 2028. Stock compensation expense has been reflected in the Company's financial statements as part of general and administrative expense.

*Restricted Stock Units*

The following table summarizes RSU activity for the year ended December 31, 2025:

---

| | | |
|:---|:---|:---|
| **Restricted Stock Units** | **Number of**<br> **Units** | **Weighted**<br> **Average Grant Date Fair Value** |
| Non-vested units, December 31, 2024 | 6254 | $247.12 |
| &nbsp;&nbsp;&nbsp;Granted | 4116 | 84.90 |
| &nbsp;&nbsp;&nbsp;Vested | (10157) | 181.45 |
| &nbsp;&nbsp;&nbsp;Forfeited | (213) | 245.00 |
| Non-vested units, December 31, 2025 | - | $- |

---

In May 2025, the Company granted a total of 4,116 RSUs to the members of its Board of Directors pursuant to the Company's director compensation policy.

 

 

*Stock Options*

The following table summarizes activity for stock options issued for the year ended December 31, 2025:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Common Stock Options** | **Shares** | **Weighted Average Exercise Price** | **Weighted Average Remaining Contractual Term (yrs)** | **Weighted Average Grant Date Fair Value** | **Aggregate Intrinsic Value** |
| Outstanding, December 31, 2024 | 5358 | $357.20 | 5.9 | $177.2 | $- |
| &nbsp;&nbsp;&nbsp;Granted |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Exercised |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Expired | (1244) | 339.85 |  | 163.50 |  |
| &nbsp;&nbsp;&nbsp;Forfeited | (914) | 251.40 | - | 149.15 | - |
| Outstanding, December 31, 2025 | 3200 | $394.05 | 4.0 | $190.50 | $- |
| Exercisable, December 31, 2025 | 1944 | $396.05 | 3.3 | $172.45 | $- |

---

**Note 12. Stockholders' Equity**

*8.00% Cumulative Preferred Stock, Series A*

As of December 31, 2025, the Company had 888,884 Series A Preferred Stock shares outstanding, compared to 894,580 outstanding as of December 31, 2024.

Dividends on the Series A Preferred Stock are cumulative from the date of original issue and are payable quarterly on the 15th day of March, June, September and December of each year, when, as and if declared by our Board of Directors or a duly authorized committee thereof. Dividends are payable out of amounts legally available therefore at a rate equal to 8.00% per annum per $25.00 of stated liquidation preference per share, or $2.00 per share of Series A Preferred Stock per year. The Series A Preferred Stock shares trade on the Nasdaq Stock Market under the symbol "FGNXP".

 

Preferred Stock Share Repurchase Program

 

In December 2025, the Company's Board of Directors approved a preferred share repurchase program to acquire up to 894,580 shares of the Company's outstanding Series A Preferred Stock shares (the "Preferred Share Repurchase Program"). The Preferred Share Repurchase Program, which is open-ended, allows the Company to repurchase its preferred shares from time to time in the open market and in negotiated transactions. Any repurchases conducted pursuant to the Preferred Share Repurchase Program will be in accordance with Rule 10b-18 of the Exchange Act and will be made in accordance with applicable laws and regulations in effect from time to time.

Commencing on December 12, 2025, and through December 31, 2025, the Company purchased a total of approximately 6 thousand shares of its Series A Preferred Stock at a total cost (including commissions) of approximately $0.1 million. Subsequent to December 31, 2025 and through March 23, 2026, the Company purchased an additional approximately 202 thousand of its Series A Preferred Stock at a total cost (including commissions) of approximately $5.0 million. Through March 23, 2026, the Company has repurchased approximately 22.6% of its Series A Preferred Stock outstanding immediately prior to implementation of the program. All repurchased Series A Preferred Stock are recorded as a reduction to the liquidation value of the Preferred Stock.

 

*Common Stock*

 

The total number of shares of common stock outstanding as of December 31, 2025 was 7,080,747, compared to 253,581 as of December 31, 2024.

 

Common Stock Share Repurchase Program

In September 2025, the Company's Board adopted a share repurchase program to acquire up to $200 million of the Company's outstanding common stock (the "Share Repurchase Program"). The Stock Repurchase Program, which is open-ended, allows the Company to repurchase its Common Stock from time to time in the open market and in negotiated transactions. Any repurchases conducted pursuant to the Share Repurchase Program will be in accordance with Rule 10b-18 of the Exchange Act and will be made in accordance with applicable laws and regulations in effect from time to time. Subject to applicable rules and regulations, the shares of common stock may be purchased from time to time in the open market transactions and in amounts as the Company deems appropriate, based on factors such as market conditions, legal requirements, and other business considerations.

Commencing on October 23, 2025, and through December 31, 2025, the Company purchased a total of approximately 1.6 million shares of its Common Stock at a total cost (including commissions) of approximately $26.1 million. Subsequent to December 31, 2025 and through March 23, 2026, the Company purchased an additional approximately 0.6 million shares of its Common Stock at a total cost (including commissions) of approximately $8.7 million. Through March 23, 2026, the Company has repurchased approximately 25.8% of its Common Stock outstanding immediately prior to implementation of the program. All repurchased shares are recorded as treasury stock.

Transactions During 2024

As discussed in Notes 1 and 5, on February 29, 2024, FGF and FGH closed the plan of merger to combine the companies in an all-stock transaction. In connection with the Merger, FGH common stockholders received one share of FGF common stock for each share of common stock of FGH held by such stockholder. As a result, the Company issued approximately 0.8 million of its common shares to common stockholders of FGH.

As discussed in Note 1, on September 30, 2024, the Company and Strong Global Entertainment completed the Arrangement to combine the companies in an all-stock transaction. In connection with the transaction, stockholders of Strong Global Entertainment received 1.5 common shares of the Company for each share of Strong Global Entertainment. As a result, the Company issued approximately 0.1 million of its common shares to stockholders of Strong Global Entertainment.

*Warrants*

In connection with the Private Placement Offering, the Company entered into a Placement Agency Agreement (the "Placement Agency Agreement") with ThinkEquity, dated July 29, 2025, pursuant to which ThinkEquity served as placement agent in connection with the Private Placement Offering. The Company paid ThinkEquity a cash placement fee of $6,000,000, or 3.0% of the aggregate purchase price paid by the PIPE Purchasers (as defined below) in the Private Placement Offering. The Company also issued ThinkEquity warrants (the "Placement Agent Warrants") to purchase up 0.6 million shares of Common Stock, at a price per share equal to $27.50.

In August 2025, the Company entered into side letter agreement (the "Side Letter Agreement") with OGroup LLC to induce certain members of OGroup LLC to execute employment agreements with the Company. Pursuant to the Side Letter Agreement the Company issued warrants to purchase a total of 0.1 million shares of Common Stock at a price per share of $25.00 to certain individuals affiliated with OGroup LLC.

In connection with the Private Placement Offering and the Company's establishment of the Company's cryptocurrency treasury operations warrants to purchase an aggregate of 0.1 million shares of Common Stock at a price per share of $25.00 were issued to certain entities affiliated with FG Merchant Partners.

The weighted average grant date fair value of warrants issued during 2025 was $22.47. The fair value of each warrant issued was estimated on the date of grant using a lattice valuation model with the following assumptions:

---

| | |
|:---|:---|
| Expected dividend yield at date of issuance | 0.0% |
| &nbsp;&nbsp;&nbsp;Risk-free interest rate | 3.9% - 4.2 |
| &nbsp;&nbsp;&nbsp;Expected stock price volatility | 90.6% - 140.0 |
| Expected life of warrants (years) | 5.2 – 10.2 |

---

The risk-free interest rate assumptions were based on the interpolated U.S. Treasury yield curve in effect at the time of the issuance. Interpolated risk-free rate based upon the years to expiration. The expected volatility was based on historical volatility of comparable companies. The expected life is based on the term of the warrant agreements.

The following table summarizes activity for warrants for the year ended December 31, 2025:

---

| | | | |
|:---|:---|:---|:---|
| **Warrants** | **Units** | **Weighted<br> Average<br> Exercise Price** | **Weighted<br> Average Remaining<br> Contractual Term (yrs)** |
| Outstanding, December 31, 2024 | 4516 | $359.38 | 2.3 |
| &nbsp;&nbsp;&nbsp;Issued | 872800 | 26.72 |  |
| &nbsp;&nbsp;&nbsp;Exercised |  |  |  |
| &nbsp;&nbsp;&nbsp;Expired | - | - | - |
| Outstanding, December 31, 2025 | 877316 | $28.43 | 9.5 |

---

**Note 13. Related Party Transactions**

Related party transactions are carried out in the normal course of operations and are measured in part by the amount of consideration paid or received, as established and agreed by the parties. Except where disclosed elsewhere in these consolidated financial statements, the following is a summary of related party transactions.

 

*Limited Liability Company Interests*

The Company participated as a limited partner in a fund that was unwound during 2023.

As a result of the winddown, the Company held a direct limited liability company interests in FGAC Investors LLC, FG Merger Investors LLC, and GreenFirst Forest Products Holdings, LLC. Mr. Cerminara and Mr. Swets, the head of the Company's merchant banking business, serve as managers of FGAC Investors LLC and FG Merger Investors LLC, while Mr. Cerminara ultimately controls GreenFirst Forest Products Holdings, LLC. The Company's interest in each of these LLC's was transferred to the CVR Trust in August 2025.

*FG Merchant Partners*

FGMP was formed to co-sponsor newly formed SPACs and other merchant banking clients with their founders or partners. Certain of our directors and officers also hold limited partner interests in FGMP. Mr. Swets holds a limited partner interest through Itasca Financial LLC, an advisory and investment firm for which Mr. Swets is managing member. Mr. Cerminara also holds a limited partner interest through Fundamental Global, LLC ("FG LLC"), a holding company for which Mr. Cerminara is the manager and one of the members.

FGMP has invested in the founder shares and warrants of Aldel Financial Inc., FG Merger Corp, FG Acquisition Corp, Aldel Financial II Inc., FGC and Craveworthy. Certain of our directors and officers are affiliated with these entities. The Company's ownership interest in each of these entities was distributed to the CVR Trust in August 2025.

*FG Communities*

In October 2022, the Company directly invested $2.0 million into FGC, which was included in other holdings on the consolidated balance sheet as of December 31, 2024. The Company also held an interest through its ownership in FGMP. As noted above, the Company's ownership interest in FGC was distributed to the CVR Trust in August 2025. FGC is a self-managed real estate company focused on a growing portfolio of manufactured housing communities which are owned and operated by FGC. Mr. Cerminara is the President and a director of FGC.

*Craveworthy*

On March 16, 2023, the Company invested $0.2 million in a senior unsecured loan to Craveworthy. Mr. Swets has an indirect interest in Craveworthy, independent from the interests held by the Company through its ownership in FGMP. As noted above, the Company's ownership interest in Craveworthy was distributed to the CVR Trust in August 2025.

*FG Imperii Investors*

 

During the third quarter of 2025, the Company entered into a promissory note with FG Imperii Investors LLC ("FGII") pursuant to which the Company agreed to loan approximately $0.2 million to FGII. FGII is the sponsor of FG Imperii Acquisition Corp., a SPAC in the process of completing its initial public offering. The promissory note was payable on the date FG Imperii Acquisition Corp. consummates its initial public offering, which occurred during January 2026. Certain of our directors and officers are affiliated with FGII.

*Saltire*

The Company owns real estate in Canada that it leases to a wholly-owned subsidiary of Saltire. Pursuant to the terms of the lease, the Company receives annual rental income of $0.4 million. Mr. Swets, the head of the Company's merchant banking business, serves as the Executive Chair and is a member of the Board of Directors of Saltire. Mr. Cerminara, the Company's Chief Executive Officer and Chairman of the Company's Board of Directors, and Richard Govignon, a member of the Company's Board of Directors, serve as members of the Board of Directors of Saltire.

*Shared Services Agreement*

On March 31, 2020, the Company entered into a Shared Services Agreement (the "Shared Services Agreement") with Fundamental Global Management, LLC ("FGM"), an affiliate of FG LLC, pursuant to which FGM provides the Company with certain services related to the day-to-day management of the Company, including assisting with regulatory compliance, evaluating the Company's financial and operational performance, providing a management team to supplement the executive officers of the Company, and such other services consistent with those customarily performed by executive officers and employees of a public company. In exchange for these services, the Company pays FGM a fee of $456,000 per quarter (the "Shared Services Fee"), plus reimbursement of expenses incurred by FGM in connection with the performance of the services, subject to certain limitations approved by the Board or Compensation and Management Resources Committee from time to time.

The Shared Services Agreement has an initial term of three years, and thereafter renews automatically for successive one-year terms unless terminated in accordance with its terms. The Shared Services Agreement may be terminated by FGM or by the Company, by a vote of the Company's independent directors, at the end of the initial or automatic renewal term upon 120 days' notice, subject to payment by the Company of certain costs incurred by FGM to wind down the provision of services and, in the case of a termination by the Company without cause, payment of a termination fee equal to the Shared Services Fee paid for the two quarters preceding termination. In the third quarter of 2022, the Shared Services Agreement was amended to eliminate termination fees and to increase the termination notice from 120 days to 365 days.

The Company paid $2.5 million and $1.8 million to FGM under the Shared Services Agreement during the year ended December 31, 2025 and December 31, 2024, respectively. Payments made during the year ended December 31, 2025 included reimbursement of $0.7 million of certain expenses incurred by FGM in connection with the Private Placement. These amounts are included in General and administrative expenses on the consolidated statements of operations.

**Note 14. Earnings Per Share**

Net earnings per share is computed by dividing net income (loss) by the weighted average number of common shares and common share equivalents outstanding during the periods presented. In calculating diluted earnings per share, those potential common shares that are found to be anti-dilutive are excluded from the calculation. The table below provides a summary of the numerators and denominators used in determining basic and diluted earnings per share for the year ended December 31, 2025 and 2024 (in thousands, except per share amounts).

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2025** | **2024** |
| Basic and diluted: |  |  |
| &nbsp;&nbsp;&nbsp;Net loss from continuing operations | $(67634) | $(24277) |
| &nbsp;&nbsp;&nbsp;Net loss attributable to non-controlling interest |  | 160 |
| &nbsp;&nbsp;&nbsp;Discount on repurchase of Series A Preferred Shares | 16 |  |
| &nbsp;&nbsp;&nbsp;Dividends declared on Series A Preferred Shares | (1788) | (1410) |
| &nbsp;&nbsp;&nbsp;Loss attributable to FG Nexus common shareholders from continuing operations | $(69406) | $(25527) |
| &nbsp;&nbsp;&nbsp;Weighted average common shares outstanding | 2667 | 211 |
| Loss per common share from continuing operations | $(26.02) | $(120.98) |

---

The following potentially dilutive securities outstanding as of December 31, 2025 and 2024 have been excluded from the computation of diluted weighted-average shares outstanding as their effect would be anti-dilutive under the treasury stock method.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** | **As of December 31,** | **As of December 31,** |
|  | **2025** | **2025** | **2024** | **2024** |
| Options to purchase common stock |  | 3200 |  | 5358 |
| Warrants |  | 877316 |  | 4516 |
| Restricted stock units | | - | | 6,265 |
|  |  | 880516 |  | 16139 |

---

**Note 15. Retirement Plans**

The Company sponsors a defined contribution 401(k) plan (the "FGH Plan") for all eligible employees. Pursuant to the provisions of the FGH Plan, employees may defer up to 100% of their compensation. The Company will match 50% of the amount deferred up to 6% of their compensation. The contributions made to the Plan by the Company were approximately $0.1 million for each of the years ended December 31, 2025 and December 31, 2024.

As noted above, on March 24, 2023, the Board approved the FGF ESPP Plan whereby qualifying employees can choose each year to have up to 5% of their annual base earnings withheld to purchase the Company's common shares in the open market. The Company matches 100% of the employee's contribution amount after thirty days of employment. The Company's contribution is expensed as paid, and for the year ended December 31, 2025 and December 31, 2024 totaled approximately $37 thousand and $32 thousand, respectively. The FGF ESPP Plan matching contributions are included within general and administrative expenses on the consolidated statement of operations.

**Note 16. Commitments and Contingencies**

 

The Company is involved, from time to time, in certain legal disputes in the ordinary course of business. No such disputes, individually or in the aggregate, are expected to have a material effect on the Company's business or financial condition.

A Fundamental Global subsidiary is named as a defendant in personal injury lawsuits based on alleged exposure to asbestos-containing materials. A majority of the cases involve product liability claims based principally on allegations of past distribution of commercial lighting products containing wiring that may have contained asbestos. Each case names dozens of corporate defendants in addition to Fundamental Global. In the Company's experience, a large percentage of these types of claims have never been substantiated and have been dismissed by the courts. The Company has not suffered any adverse verdict in a trial court proceeding related to asbestos claims and intends to continue to defend these lawsuits

On July 16, 2024, the Company received notice that it was named as a defendant, along with over 500 other companies, in a civil action filed for cost recovery and contributions related to the release and/or threatened release of hazardous substances from a facility known as the BKK Class 1 Landfill in Los Angeles County California from periods prior to 1987. The action alleges that FGH is a successor to Pichel Industries, Inc. ("Pichel Industries") and that Pichel Industries contributed waste to the landfill. The Company is not aware of any successor relationship between it and Pichel. There have no further actions in this case since the initial filing in 2024, and the Company intends to defend itself vigorously in the event the plaintiffs choose to pursue action against us.

The Company is a guarantor of the obligations of an entity that was previously sold and is no longer part of the consolidated group. The Company has been notified that the primary obligor has not met the obligations for which it is liable, and the third party has requested that the Company satisfy the obligations on behalf of the buyer under the guaranty. The Company is evaluating its obligations and determining its response.

As of December 31, 2025, the Company has recorded a loss contingency reserve of approximately $0.9 million, which represents the Company's estimate of its potential losses related to the settlement of various open proceedings and claims. Management does not expect the resolution of these proceedings and claims to have a material adverse effect on the Company's consolidated financial condition, results of operations or cash flows.

**Note 17. Debt**

The Company's short-term consists of the following (in thousands):

---

| | | |
|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2024** |
| Short-term debt: |  |  |
| &nbsp;&nbsp;&nbsp;20-year installment loan | $1924 | $1939 |
| &nbsp;&nbsp;&nbsp;Revolving credit facility |  |  |
| &nbsp;&nbsp;&nbsp;Insurance debt | - | 137 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total short-term debt | 1924 | 2076 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Less: deferred debt issuance costs, net | (1) | (8) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total short-term debt, net of issuance costs | $1923 | $2068 |

---

 

 

*Installment Loan and Revolving Credit Facility*

In January 2023, Strong/MDI and Canadian Imperial Bank of Commerce ("CIBC") entered into a demand credit agreement (the "2023 Credit Agreement"), which amended and restated the prior credit agreement entered into in 2021. The 2023 Credit Agreement consists of a revolving line of credit for up to CAD$5.0 million and a 20-year installment loan for up to CAD$3.1 million.

Under the 2023 Credit Agreement: (i) the amount outstanding under the line of credit is payable on demand and bears interest at the lender's prime rate plus 1.0% and (ii) the amount outstanding under the 20-year installment loan bears interest at the lender's prime rate plus 0.5% and is payable in monthly installments, including interest, over their respective borrowing periods. The lender may also demand repayment of the 20-year installment loan at any time. The 2023 Credit Agreement is secured by a lien on the manufacturing facility in Quebec, Canada that is leased to Strong/MDI. The 2023 Credit Agreement requires our subsidiary in Canada to maintain a ratio of liabilities to "effective equity" (tangible stockholders' equity, less amounts receivable from affiliates and equity holdings) not exceeding 2.5 to 1 and a fixed charge coverage ratio of not less than 1.1 times earnings before interest, income taxes, depreciation and amortization. In connection with the IPO of Strong Global Entertainment, the 20-year installment note did not transfer to the Company. In May 2023, Strong/MDI and CIBC entered into an amendment to the 2023 Credit Agreement which reduced the amount available under the revolving line of credit to CAD$3.4 million, and CIBC provided an undertaking to Strong/MDI to a release of CIBC's security interest in certain assets to be transferred to a subsidiary in connection with transactions related to the IPO of Strong Global Entertainment. On January 19, 2024, the Company and CIBC entered into a second amendment to the 2023 Credit Agreement. Pursuant to the amendment, the credit limit for the revolving line of credit was reduced to CDN$1.4 million. The revolving line of credit was terminated in January 2026.

The 20-year installment note bears variable interest at 4.95% as of December 31, 2025. The Company was in compliance with its debt covenants as of December 31, 2025.

As noted above, the Company signed a non-binding letter of intent to sell its Quebec property. The Company will utilize a portion of the proceeds generated from the sale of the facility to repay the installment loan, at which time the credit facility will be terminated.

**Note 18. Segment Reporting**

The Company has two operating segments – digital assets and merchant banking. The chief operating decision maker ("CODM") is the Company's Chief Executive Officer. The measure of profit or loss used by the CODM to identify and measure the Company's reportable segments is income before income tax. The Company's digital assets segment includes the operations related to the ETH treasury strategy. Our merchant banking segment includes our equity and other holdings. The "other" category primarily includes rental income and expenses related to the Company's real estate in Canada and the land and building previously owned and operated by Digital Ignition.

The following tables present the financial information for each segment that is specifically identifiable or based on allocations using internal methodology for the years ended December 31, 2025 and 2024 (in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** |
|  | **Digital Assets** | **Merchant Banking** | **Other** | **Total** |
| ETH staking rewards | $1475 | $- | $- | $1475 |
| Rental income |  |  | 415 | 415 |
| Merchant banking advisory fees | - | 523 | - | 523 |
| &nbsp;&nbsp;&nbsp;Total revenue | 1475 | 523 | 415 | 2413 |
| Compensation costs | (655) | (1239) |  | (1894) |
| Professional fees | (574) | (608) |  | (1182) |
| Bank and custodial fees | (90) | (2) |  | (92) |
| Realized loss on digital assets | (5815) |  |  | (5815) |
| Unrealized measurement of fair value of ETH digital assets | (38327) |  |  | (38327) |
| Loss on equity holdings |  | (5503) |  | (5503) |
| Depreciation and amortization |  |  | (291) | (291) |
| Other operating expenses | (11) | (92) |  | (103) |
| Interest expense, net | - | - | (113) | (113) |
| &nbsp;&nbsp;&nbsp;Segment (loss) income before taxes | (43997) | (6921) | 11 | (50907) |
| Corporate and other non-segment operating expenses |  |  |  | (10957) |
| Stock-based compensation |  |  |  | (7760) |
| Foreign currency transaction gain |  |  |  | 1936 |
| Interest expense, net |  |  |  | (19) |
| Loss from continuing operations before taxes |  |  |  | $(67707) |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** |
|  | **Digital Assets** | **Merchant Banking** | **Other** | **Total** |
| ETH staking rewards | $- | $- | $- | $- |
| Rental income |  |  | 704 | 704 |
| Merchant banking advisory fees | &nbsp;&nbsp;&nbsp;&nbsp; - | 75 | - | 75 |
| &nbsp;&nbsp;&nbsp;Total revenue |  | 75 | 704 | 779 |
| Compensation costs |  | (679) | (104) | (783) |
| Professional fees |  | (400) |  | (400) |
| Loss on equity holdings |  | (14675) |  | (14675) |
| Depreciation and amortization |  | (18) | (384) | (402) |
| Other operating expenses |  | (91) | (170) | (261) |
| Impairment |  |  | (1475) | (1475) |
| Interest expense, net | - | - | (225) | (225) |
| &nbsp;&nbsp;&nbsp;Segment loss before taxes |  | (15788) | (1654) | (17442) |
| Corporate and other non-segment operating expenses |  |  |  | (7552) |
| Stock-based compensation |  |  |  | (1618) |
| Bargain purchase on acquisition |  |  |  | 2321 |
| Interest expense, net |  |  |  | (78) |
| Loss from continuing operations before taxes |  |  |  | $(24369) |

---

The following table presents the Company's specifically identifiable assets for each of the Company's segments as of December 31, 2024 (in thousands).

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** |
|  | **Merchant**<br> **Banking** | **Digital Assets** | **Other** | **Total** |
| Segment assets | $14677 | $119384 | $29783 | $163844 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Merchant**<br> **Banking** | **Digital Assets** | **Other** | **Total** |
| Segment assets | $60073 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; - | $49396 | $109469 |

---

The "other" segment assets includes $13.9 million and $39.8 million of assets of discontinued operations as of December 31, 2025 and December 31, 2024, respectively, which are related to the Company's reinsurance and managed services businesses.

There were no capital expenditures during 2025 or 2024.

**Note 19. Subsequent Events**

The Company's management has evaluated subsequent events after the consolidated balance sheet dated as of December 31, 2025, through the date of filing of this Form 10-K. Based on the evaluation, management has determined that, other than as disclosed in the accompanying notes, no subsequent events have occurred that would require recognition in the accompanying consolidated financial statements or disclosure in the notes thereto.

**ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE**

None.

**ITEM 9A. CONTROLS AND PROCEDURES**

*Evaluation of Disclosure Controls and Procedures*

 

The Company's management performed an evaluation under the supervision and with the participation of the Company's principal executive officer and principal financial officer of the effectiveness of the design and operation of the Company's disclosure controls and procedures, as such term is defined in Rules 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as of December 31, 2025. Based upon this evaluation, the Company's principal executive officer and principal financial officer concluded that the Company's disclosure controls and procedures were effective as of the end of the period covered by this Annual Report on Form 10-K to ensure that information required to be disclosed in the reports that the Company files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms; and (ii) accumulated and communicated to the Company's management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

*Management's Report on Internal Control Over Financial Reporting*

The Company's management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) promulgated under the Exchange Act. The Company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. Internal control over financial reporting includes those policies and procedures that:

● pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company's assets;

● provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles;

● provide reasonable assurance that the Company's receipts and expenditures are made in accordance with proper authorizations from the Company's management and directors; and

● provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use, or disposition of the Company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Our management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the criteria set forth in *Internal Control – Integrated Framework* issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework). Based upon this evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2025.

This Annual Report on Form 10-K does not include a report of our independent registered public accounting firm regarding the effectiveness of our internal control over financial reporting. SEC's rules permit smaller reporting companies like ours to provide only management's report.

*Changes in Internal Control Over Financial Reporting*

 

During the third quarter of 2025, beginning with the implementation of our ETH treasury strategy, we implemented new internal controls surrounding the acquisition, safeguarding, custody, accounting and reporting of our digital assets. Other than these new controls over our digital assets, and the controls over the assets and operations transferred to the CVR Trust there have been no significant changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the year ended December 31, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

**ITEM 9B. OTHER INFORMATION**

None.

**ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS**

None.

**PART III**

**ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE**

The information required by this item will be contained in the Company's definitive proxy statement, to be filed in connection with the 2026 Annual Meeting of Stockholders and is incorporated herein by reference.

**ITEM 11. EXECUTIVE COMPENSATION**

The information required by this item will be contained in the Company's definitive proxy statement, to be filed in connection with the 2026 Annual Meeting of Stockholders and is incorporated herein by reference.

**ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS**

The following table sets forth, as of December 31, 2025, the number of shares of common stock underlying awards outstanding under the amended 2021 Plan and the 2018 Equity Incentive Plan (the "2018 Plan"), as well as the number of shares remaining available for issuance under the amended 2021 Plan. No more awards may be made under the 2018 Plan or the 2014 Equity Incentive Plan.

---

| | | | |
|:---|:---|:---|:---|
| **Plan Category** | **Number of**<br> **securities to**<br> be issued upon<br> exercise of<br> outstanding options,<br> warrants and<br> rights<sup>(1)</sup>** | **Weighted-**<br> **average**<br> **exercise price**<br> **of outstanding**<br> **options,**<br> **warrants and**<br> **rights** | **Number of**<br> **securities**<br> **remaining**<br> **available for**<br> **future issuance**<br> **under equity**<br> **compensation**<br> **plans (excluding**<br> **securities**<br> **reflected in**<br> **column (a))<sup>(2)</sup>** |
|  | (a) | (b) | (c) |
| Equity compensation plans approved by security holders | 3200 | $- | 1994978 |
| Equity compensation plans not approved by security holders | - | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- | - |
| &nbsp;&nbsp;&nbsp;**Total** | **3200** | $**-** | **1994978** |

---

<sup>1.</sup> Includes common shares to be issued upon exercise of stock options issued under our 2018 Plan. <br> <sup>2.</sup> Represents shares available for future issuance under the 2021 Plan.

The information regarding our largest holders and ownership of our securities by our management and directors will be contained in the Company's definitive proxy statement, to be filed in connection with the 2026 Annual Meeting of Stockholders and is incorporated herein by reference.

**ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE**

The information required by this item will be contained in the Company's definitive proxy statement, to be filed in connection with the 2026 Annual Meeting of Stockholders, and is incorporated herein by reference.

**ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES**

The information required by this item will be contained in the Company's definitive proxy statement, to be filed in connection with the 2026 Annual Meeting of Stockholders, and is incorporated herein by reference.

**PART IV**

**ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES**

The following documents are filed as part of this report

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Financial
 Statements – The following consolidated financial statements of the Company and the report of independent auditor thereon are
 filed with this report:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. Independent
 Auditor's Report

ii. Consolidated
 Balance Sheets as of December 31, 2025 and 2024

iii. Consolidated
 Statements of Operations for the Years Ended December 31, 2025 and 2024

iv. Consolidated
 Statements of Comprehensive Loss for the Years Ended December 31, 2025 and 2024

v. Consolidated
 Statements of Stockholders' Equity for the Years ended December 31, 2025 and 2024

vi. Consolidated
 Statements of Cash Flows for the Years ended December 31, 2025 and 2024

vii. Notes
 to the Consolidated Financial Statements for the Years ended December 31, 2025 and 2024

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Financial
 Statement Schedules – Schedules other than those listed above are omitted for the reason that they are not applicable, or the
 information is otherwise contained in the Financial Statements.

(c) Exhibits
 - the exhibits listed below are filed or incorporated by reference as part of this report.

---

| | | | | |
|:---|:---|:---|:---|:---|
| | | **Incorporated by Reference** | **Incorporated by Reference** | **Incorporated by Reference** |
| **Exhibit**<br> **No.** | <br>**Description** | **Form** | **Exhibit** | **Filing Date** |
| 2.1 | [Plan of Merger by and between FG Financial Group, Inc., FG Group Holdings Inc. and FG Group LLC, dated January 3, 2024](https://www.sec.gov/Archives/edgar/data/1591890/000149315224000516/ex2-1.htm) | 8-K | 2.1 | January 4, 2024 |
| 2.2 | [Arrangement Agreement, including a Plan of Arrangement, by and between FG Holdings Quebec Inc., Strong Global Entertainment, Inc. and 1483530 LTD](https://www.sec.gov/Archives/edgar/data/1591890/000149315224022446/ex2-1.htm) | 8-K | 2.1 | June 4, 2024 |
| 3.1 | [Certificate of Merger, as filed with the Secretary of State of the State of Delaware on December 7, 2022](https://www.sec.gov/Archives/edgar/data/1591890/000149315222035072/ex3-1.htm) | 8-K | 3.1 | December 9, 2022 |
| 3.2 | [Articles of Merger, as filed with the Secretary of State of the State of Nevada on December 7, 2022](https://www.sec.gov/Archives/edgar/data/1591890/000149315222035072/ex3-2.htm) | 8-K | 3.2 | December 9, 2022 |
| 3.3 | [Articles of Incorporation, as filed with the Secretary of State of the State of Nevada](https://www.sec.gov/Archives/edgar/data/1591890/000149315222035072/ex3-3.htm) | 8-K | 3.3 | December 9, 2022 |
| 3.4 | [Certificate of Correction, dated October 11, 2022, to the Certificate of Amendment of the Fourth Amended and Restated Certificate of Incorporation of FG Financial Group, Inc.](https://www.sec.gov/Archives/edgar/data/1591890/000149315222028258/ex3-1.htm) | 8-K | 3.1 | October 12, 2022 |
| 3.5 | [Certificate of Amendment to Amended and Restated Articles of Incorporation of Fundamental Global Inc.](https://www.sec.gov/Archives/edgar/data/1591890/000149315224008332/ex3-1.htm) | 8-K | 3.1 | February 29, 2024 |
| 3.6 | [Certificate of Change of Fundamental Global Inc.](https://www.sec.gov/Archives/edgar/data/1591890/000149315224043089/ex3-1.htm) | 8-K | 3.1 | October 30, 2024 |
| 3.7 | [Certificate of Amendment, dated September 5, 2025, to Amended and Restated Articles of Incorporation of FG Nexus Inc.](https://www.sec.gov/Archives/edgar/data/1591890/000164117225026794/ex3-1.htm) | 8-K | 3.1 | September 8, 2025 |
| 3.8 | [Certificate of Amendment, dated October 6, 2025, to Amended and Restated Articles of Incorporation of FG Nexus Inc.](https://www.sec.gov/Archives/edgar/data/1591890/000149315225017381/ex3-1.htm) | 8-K | 3.1 | October 8, 2025 |
| 3.9 | [Certificate of Change filed by FG Nexus Inc. dated February 10, 2026](https://www.sec.gov/Archives/edgar/data/1591890/000149315226006729/ex3-1.htm) | 8-K | 3.1 | February 13, 2026 |
| 3.10 | [By-Laws](https://www.sec.gov/Archives/edgar/data/1591890/000149315222035072/ex3-4.htm) | 8-K | 3.4 | December 9, 2022 |
| 3.11 | [First Amendment, effective October 13, 2025, to By-Laws of FG Nexus Inc.](https://www.sec.gov/Archives/edgar/data/1591890/000149315225018058/ex3-8.htm) | S-3ASR | 3.8 | October 14, 2025 |
| 3.12 | [Amendment, effective February 24, 2026, to By-Laws of FG Nexus Inc.](https://www.sec.gov/Archives/edgar/data/1591890/000149315226008259/ex3-1.htm) | 8-K | 3.1 | February 27, 2026 |
| 4.1 | [Form of Common Stock certificate](https://www.sec.gov/Archives/edgar/data/1591890/000114420414004784/v366069_ex4-1.htm) | S-1/A1 | 4.1 | January 30, 2014 |
| 4.2 | [Common Stock Purchase Warrant](https://www.sec.gov/Archives/edgar/data/1591890/000091476015000080/p88627_x42.htm) | 8-K | 4.2 | February 27, 2015 |
| 4.3 | [Form of Global Certificate of Cumulative Preferred Stock, Series A](https://www.sec.gov/Archives/edgar/data/1591890/000149315218001465/ex4-4.htm) | S-1/A1 | 4.4 | February 5, 2018 |
| 4.4 \* | [Description of securities](ex4-4.htm) |  |  |  |
| 4.5 | [Form of Optionally Exercisable Pre-Funded Warrant](https://www.sec.gov/Archives/edgar/data/1591890/000164117225021498/ex4-1.htm) | 8-K | 4.1 | July 30, 2025 |
| 4.6 | [Form of Automatically Exercisable Pre-Funded Warrant](https://www.sec.gov/Archives/edgar/data/1591890/000164117225021498/ex4-2.htm) | 8-K | 4.2 | July 30, 2025 |
| 4.7 | [Form of Placement Agent Warrant](https://www.sec.gov/Archives/edgar/data/1591890/000164117225021498/ex4-3.htm) | 8-K | 4.3 | July 30, 2025 |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| |  | | **Incorporated by Reference** | **Incorporated by Reference** | **Incorporated by Reference** |
| **Exhibit**<br> **No.** |  | <br>**Description** | **Form** | **Exhibit** | **Filing Date** |
| 10.1 | † | [2021 Equity Incentive Plan](https://www.sec.gov/Archives/edgar/data/1591890/000149315221031813/ex10-1.htm) | 10-K | 10.1 | March 24, 2023 |
| 10.2 | † | [Amendment No. 1 to FG Financial Group, Inc. 2021 Equity Incentive Plan](https://www.sec.gov/Archives/edgar/data/1591890/000149315223017936/ex10-1.htm) | 8-K | 10.1 | May 17, 2023 |
| 10.3 | † | [Amendment No. 2 to 2021 Equity Incentive Plan](https://www.sec.gov/Archives/edgar/data/1591890/000149315224047200/formdef14a.htm) | DEF 14A | A | November 21, 2024 |
| 10.4 | † | [Form of Non-Employee Director Restricted Share Unit Agreement under 2021 Equity Incentive Plan](https://www.sec.gov/Archives/edgar/data/1591890/000149315222008162/ex10-16.htm) | 10-K | 10.16 | March 30, 2022 |
| 10.5 |  | [Amended and Restated Limited Liability Agreement of Fundamental Global Asset Management, LLC dated August 6, 2021](https://www.sec.gov/Archives/edgar/data/1591890/000149315221019938/ex10-1.htm) | 10-Q | 10.1 | August 16, 2021 |
| 10.6 |  | [Shared Services Agreement, dated August 11, 2022, between Fundamental Global Management, LLC and registrant](https://www.sec.gov/Archives/edgar/data/1591890/000149315222022135/ex10-1.htm) | 10-Q | 10.1 | August 11, 2022 |
| 10.7 | † | [FG Financial Group, Inc. 2023 Employee Share Purchase Plan](https://www.sec.gov/Archives/edgar/data/1591890/000149315223017936/ex10-2.htm) | 8-K | 10.2 | May 17, 2023 |
| 10.8 | † | [Form of Director and Officer Indemnification Agreement](https://www.sec.gov/Archives/edgar/data/1591890/000149315224001738/ex10-1.htm) | S-4 | 10.1 | January 8, 2024 |
| 10.9 |  | [Form of Securities Purchase Agreement, dated as of July 29, 2025, between FG Nexus Inc. and each Purchaser (as defined therein).](https://www.sec.gov/Archives/edgar/data/1591890/000164117225021498/ex10-1.htm) | 8-K | 10.1 | July 30, 2025 |
| 10.10 |  | [Placement Agency Agreement, dated July 29, 2025, between FG Nexus Inc. and ThinkEquity LLC.](https://www.sec.gov/Archives/edgar/data/1591890/000164117225021498/ex10-2.htm) | 8-K | 10.2 | July 30, 2025 |
| 10.11 |  | [Form of Registration Rights Agreement, dated as of July 29, 2025, between FG Nexus Inc. and each Purchaser (as defined therein).](https://www.sec.gov/Archives/edgar/data/1591890/000164117225021498/ex10-3.htm) | 8-K | 10.3 | July 30, 2025 |
| 10.12 |  | [Asset Management Agreement, dated July 21, 2025, between FG Nexus LLC and Galaxy Digital Capital Management LP.](https://www.sec.gov/Archives/edgar/data/1591890/000164117225021498/ex10-4.htm) | 8-K | 10.4 | July 30, 2025 |
| 10.13 |  | [Side Letter Agreement, dated August 4, 2025, between Fundamental Global Inc. and OGroup, LLC.](https://www.sec.gov/Archives/edgar/data/1591890/000164117225022830/ex10-1.htm) | 8-K | 10.1 | August 8, 2025 |
| 10.14 |  | [Common Stock Purchase Warrant issued to Maja Vujinovic.](https://www.sec.gov/Archives/edgar/data/1591890/000164117225022830/ex10-2.htm) | 8-K | 10.2 | August 8, 2025 |
| 10.15 |  | [Common Stock Purchase Warrant issued to Theodore Rosenthal.](https://www.sec.gov/Archives/edgar/data/1591890/000164117225022830/ex10-3.htm) | 8-K | 10.3 | August 8, 2025 |
| 10.16 |  | [Common Stock Purchase Warrant issued to Galeb3 Inc.](https://www.sec.gov/Archives/edgar/data/1591890/000164117225022830/ex10-4.htm) | 8-K | 10.4 | August 8, 2025 |
| 10.17 |  | [Common Stock Purchase Warrant issued to Manatee Ventures Inc.](https://www.sec.gov/Archives/edgar/data/1591890/000164117225022830/ex10-5.htm) | 8-K | 10.5 | August 8, 2025 |
| 10.18 |  | [Employment Agreement, dated August 4, 2025, between Fundamental Global Inc. and Maja Vujinovic.](https://www.sec.gov/Archives/edgar/data/1591890/000164117225022830/ex10-6.htm) | 8-K | 10.6 | August 8, 2025 |
| 10.19 |  | [Employment Agreement, dated August 4, 2025, between Fundamental Global Inc. and Jose Vargas.](https://www.sec.gov/Archives/edgar/data/1591890/000164117225022830/ex10-7.htm) | 8-K | 10.7 | August 8, 2025 |
| 10.20 |  | [Common Stock Purchase Warrant issued to Cerminara Capital LLC.](https://www.sec.gov/Archives/edgar/data/1591890/000164117225022830/ex10-9.htm) | 8-K | 10.9 | August 8, 2025 |
| 10.21 |  | [Common Stock Purchase Warrant issued to Moglia Capital LLC.](https://www.sec.gov/Archives/edgar/data/1591890/000164117225022830/ex10-10.htm) | 8-K | 10.10 | August 8, 2025 |
| 10.22 |  | [Common Stock Purchase Warrant issued to Itasca Financial LLC.](https://www.sec.gov/Archives/edgar/data/1591890/000164117225022830/ex10-11.htm) | 8-K | 10.11 | August 8, 2025 |
| 10.23 |  | [Common Stock Purchase Warrant issued to Hassan Raza Baqar.](https://www.sec.gov/Archives/edgar/data/1591890/000164117225022830/ex10-12.htm) | 8-K | 10.12 | August 8, 2025 |
| 10.24 |  | [ATM Sales Agreement, dated August 7, 2025, by and between FG Nexus Inc. and ThinkEquity LLC.](https://www.sec.gov/Archives/edgar/data/1591890/000164117225022830/ex10-13.htm) | 8-K | 10.13 | August 8, 2025 |
| 10.25 |  | [Master Custody Service Agreement, dated July 17, 2025, between FG Nexus Inc. and Anchorage Digital Bank N.A.](https://www.sec.gov/Archives/edgar/data/1591890/000164117225026808/ex10-1.htm) | S-3ASR | 10.1 | September 8, 2025 |
| 10.26 |  | [BitGo Custodial Services Agreement, dated August 1, 2025, between FG Nexus Inc. and BitGo Trust Company, Inc.](https://www.sec.gov/Archives/edgar/data/1591890/000164117225026808/ex10-2.htm) | S-3ASR | 10.2 | September 8, 2025 |
| 10.27 | # | [Transaction Agreement, executed and delivered on October 22, 2025.](https://www.sec.gov/Archives/edgar/data/1591890/000149315225019832/ex10-1.htm) | 8-K | 10.1 | October 28, 2025 |
| 10.28 |  | [Agreement, dated October 25, 2025, by and between FG Reinsurance Holdings LLC, Thomas C. Heise and Devondale Holdings LLC.](https://www.sec.gov/Archives/edgar/data/1591890/000149315225019832/ex10-2.htm) | 8-K | 10.2 | October 28, 2025 |
| 10.29 | # | [Form of Master Digital Currency Loan Agreement, dated October 29, 2025.](https://www.sec.gov/Archives/edgar/data/1591890/000149315225020768/ex10-1.htm) | 8-K | 10.1 | November 4, 2025 |
| 10.30 | # | [Form of Account Control Agreement, dated October 29, 2025.](https://www.sec.gov/Archives/edgar/data/1591890/000149315225020768/ex10-2.htm) | 8-K | 10.2 | November 4, 2025 |
| 10.31 | # | [Form of Loan Term Sheet.](https://www.sec.gov/Archives/edgar/data/1591890/000149315225020768/ex10-3.htm) | 8-K | 10.3 | November 4, 2025 |
| 10.32 | † | [Mark D. Roberson Employment Agreement, dated May 18, 2023.](https://www.sec.gov/Archives/edgar/data/1893448/000149315223018205/ex10-7.htm) | 8-K | 10.7 | May 19, 2023 |
| 10.33 | † | [Mark D. Roberson Amended and Restated Employment Agreement, dated May 18, 2023.](https://www.sec.gov/Archives/edgar/data/946454/000149315223018208/ex10-10.htm) | 8-K | 10.10 | May 19, 2023 |
| 10.34 | † | [Todd R, Major Employment Agreement, dated May 18, 2023.](https://www.sec.gov/Archives/edgar/data/1893448/000149315223018205/ex10-8.htm) | 8-K | 10.8 | May 19, 2023 |
| 10.35 | † | [Todd R. Major Amended and Restated Employment Agreement, dated May 18, 2023.](https://www.sec.gov/Archives/edgar/data/946454/000149315223018208/ex10-11.htm) | 8-K | 10.11 | May 19, 2023 |
| 14.1 | \* | [Code of Business Conduct and Ethics](ex14-1.htm) |  |  |  |
| 19.1 | \* | [Insider Trading Policy](ex19-1.htm) |  |  |  |
| 21.1 | \* | [Registrant's subsidiaries](ex21-1.htm) |  |  |  |
| 24.1 | \* | [Power of Attorney (included on signature page).](#Rma_014) |  |  |  |
| 23.1 | \* | [Consent of Haskell & White LLP.](ex23-1.htm) |  |  |  |
| 31.1 | \* | [Certification of Principal Executive Officer pursuant to Rule 13a-14(a) of the Exchange Act.](ex31-1.htm) |  |  |  |
| 31.2 | \* | [Certification of Principal Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act.](ex31-2.htm) |  |  |  |
| 32.1 | \*\* | [Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.](ex32-1.htm) |  |  |  |
| 32.2 | \*\* | [Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.](ex32-2.htm) |  |  |  |
| 97 |  | [FG Nexus Inc. Clawback Policy](https://www.sec.gov/Archives/edgar/data/1591890/000149315224009954/ex97.htm) | 10-K | 97 | March 14, 2024 |
| 101.INS | \* | Inline XBRL Instance Document. |  |  |  |
| 101.SCH | \* | Inline XBRL Taxonomy Extension Schema. |  |  |  |
| 101.CAL | \* | Inline XBRL Taxonomy Extension Calculation Linkbase. |  |  |  |
| 101.DEF | \* | Inline XBRL Taxonomy Extension Definition Linkbase. |  |  |  |
| 101.LAB | \* | Inline XBRL Taxonomy Extension Label Linkbase. |  |  |  |
| 101.PRE | \* | Inline XBRL Taxonomy Extension Presentation Linkbase. |  |  |  |
| 104 |  | XBRL Cover Page Interactive Data File (embedded within the Inline XBRL document). |  |  |  |

---

\* Filed herewith.

\*\* Furnished herewith.

† Management contract or compensatory plan or arrangement

# The Registrant has redacted provisions or terms of this Exhibit pursuant to Regulation S-K Item 601(b)(10)(iv). While portions of the Exhibits have been omitted, these Exhibits include a prominent statement on the first page of each redacted Exhibit that certain identified information has been excluded from the exhibit because it is both not material and is the type that the Registrant treats as private or confidential. The Registrant agrees to furnish an unredacted copy of the Exhibit to the SEC upon its request.

**ITEM 16. FORM 10-K SUMMARY**

None.

**FG NEXUS INC.**

**SIGNATURES**

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | | | |
|:---|:---|:---|:---|
|  |  | **FG NEXUS INC.** | **FG NEXUS INC.** |
| **Date:** | March 26, 2026 | **By:** | */s/ D. Kyle Cerminara* |
|  |  | **Name:** | D. Kyle Cerminara |
|  |  | **Title:** | Principal Executive Officer |

---

**POWER OF ATTORNEY**

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Mark D. Roberson, the true and lawful attorney-in-fact and agent of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully as to all intents and purposes as each of the undersigned might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or their or his substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

---

| | | |
|:---|:---|:---|
| */s/ D. Kyle Cerminara* | Chief Executive Officer and Chairman of the Board | March 26, 2026 |
| D. Kyle Cerminara | (Principal Executive Officer) |  |
| */s/ Mark D. Roberson* | Chief Financial Officer | March 26, 2026 |
| Mark D. Roberson | (Principal Financial Officer) |  |
| */s/ Todd R. Major* | Chief Accounting Officer | March 26, 2026 |
| Todd R. Major | (Principal Accounting Officer) |  |
| */s/ Richard E. Govignon* | Director | March 26, 2026 |
| Richard E. Govignon |  |  |
| */s/ Rita Hayes* | Director | March 26, 2026 |
| Rita Hayes |  |  |
| */s/ Michael C. Mitchell* | Director | March 26, 2026 |
| Michael C. Mitchell |  |  |
| */s/ Robert J. Roschman* | Director | March 26, 2026 |
| Robert J. Roschman |  |  |
| */s/ Ndamukong Suh* | Director | March 26, 2026 |
| Ndamukong Suh |  |  |
| */s/ Jose Vargas* | Director | March 26, 2026 |
| Jose Vargas |  |  |
| */s/ Maja Vujinovic* | Director | March 26, 2026 |
| Maja Vujinovic |  |  |
| */s/ Scott D. Wollney* | Director | March 26, 2026 |
| Scott D. Wollney |  |  |

---

## Exhibit 4.4

**Exhibit 4.4**

**DESCRIPTION OF THE SECURITIES OF**

**FG NEXUS INC.**

**REGISTERED PURSUANT TO SECTION 12 OF**

**THE SECURITIES EXCHANGE ACT OF 1934**

*The following summarizes the terms and provisions of the Common Stock and 8.00% Cumulative Preferred Stock, Series A, of FG Nexus Inc., a Nevada corporation (the "Company"). The Common Stock and 8.00% Cumulative Preferred Stock, Series A, are both registered under Section 12(b) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The following summary does not purport to be complete and is qualified in its entirety by reference to the Company's Amended and Restated Articles of Incorporation ("Articles of Incorporation") and Bylaws, which the Company has previously filed with the Securities and Exchange Commission, and applicable Nevada law.*

 

**Authorized Capital**

The Company's authorized capital stock consists of 280,000,000,000 shares, of which (i) 180,000,000,000 shares are designated as shares of common stock, par value $0.001 per share (the "Common Stock"), (ii) 100,000,000,000 shares are designated as shares of preferred stock, par value $0.001 per share (the "Preferred Stock"), with (a) 10,000,000,000 shares of such Preferred Stock being designated as preferred stock, par value $25.00 per share, 8.00% Cumulative Preferred Stock, Series A (the "Series A Preferred Stock"), and (b) 90,000,000,000 shares of such Preferred Stock being undesignated preferred stock, par value $0.001 per share.

Under Nevada law, stockholders generally are not personally liable for a corporation's acts or debts.

**Common Stock**

***Exchange and Trading Symbol***

 ****

The Common Stock is listed for trading on the Nasdaq Global Market tier of the Nasdaq Stock Market under the trading symbol "FGNX."

***Rights, Preferences and Privileges***

 ****

All outstanding shares of our Common Stock are duly authorized, fully paid and nonassessable. Holders of shares of our Common Stock have no conversion, preemptive or subscription rights, and there are no redemption or sinking fund provisions applicable to our common stock. The rights, preferences and privileges of the holders of our Common Stock are subject to, and may be adversely affected by, the rights of the holders of shares of the Series A Preferred Stock or any series of our Preferred Stock that the Company may designate and issue in the future.

***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. A stockholder meeting quorum consists of one-third (1/3) of voting power, represented in person or by proxy. There is no cumulative voting with respect to the election of directors. Directors are elected annually by a plurality of the votes cast by the holders of Common Stock. Except for the approval required to amend the Company's Articles of Incorporation or the Bylaws and 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 outstanding shares of Preferred Stock (including the Series A 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.

***Liquidation***

 ****

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.

**Preferred Stock**

The Board of Directors of the Company is permitted, subject to any limitations prescribed by applicable law and without further approval or action by the holders of Common Stock, to issue up to 90,000,000,000 shares of Preferred Stock in one or more series. As of March 23, 2026, no shares of Preferred Stock have been issued.

The Board of Directors may fix the designation, powers, preferences and rights of the shares of each such series and any qualifications, limitations or restrictions thereof, including dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences and sinking fund terms. The rights of the holders of Common Stock are generally be subject to the prior rights of the holders of any outstanding shares of Preferred Stock with respect to dividends, liquidation preferences and other matters.

**Series A Preferred Stock**

The Board of Directors of the Company is permitted, subject to any limitations prescribed by applicable law and without further approval or action by the holders of Common Stock, to issue up to 10,000,000,000 shares of Series A Preferred Stock, of which 894,580 shares have been issued and 692,806 are outstanding as of March 23, 2026. The rights, preferences, privileges, qualifications, restrictions, limitations and other terms of the Series A Preferred Stock are set forth in the Company's Articles of Incorporation. The original issue date of the Series A Preferred Stock was February 28, 2018.

***Exchange and Trading Symbol***

 ****

The Series A Preferred Stock is listed for trading on the Nasdaq Global Market tier of the Nasdaq Stock Market under the trading symbol "FGNXP."

***Rights and Preferences***

 ****

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 the Company's 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 the Company. The Series A Preferred Stock has no stated maturity and is not 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 rights, preferences and privileges of the holders of Series A Preferred Stock are subject to, and may be adversely affected by, the rights of the holders of shares of any other series of preferred stock that the Company may designate and issue in the future that ranks senior to the Series A Preferred Stock.

 **

***Ranking***

 **

The Series A Preferred Stock ranks senior to the Common Stock and any other junior stock (as defined in the Articles of Incorporation) with respect to the payment of dividends and distributions of assets upon liquidation, dissolution or winding up, equally with any parity stock (as defined in the Articles of Incorporation) of the Company, including any series of Preferred Stock that the Company 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 any series of Preferred Stock that the Company 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 the Company's liquidation, dissolution or winding-up.

***Dividends***

 ****

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 are payable quarterly on the 15th day of March, June, September and December of each year, commencing on June 15, 2018 (each, a "dividend payment date"). In the event that the Company issues additional shares of 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 the Company specifies at the time such additional shares are issued.

Dividends, if so declared, are payable to holders of record of the Series A Preferred Stock as they appear on the Company's books on the applicable record date, which is March 1, June 1, September 1 and December 1, as applicable, immediately preceding the applicable dividend payment date (each, a "dividend record date"). These dividend record dates apply regardless of whether a particular dividend record date is a business day (as defined in the Articles of Incorporation). As a result, holders of shares of Series A Preferred Stock are not entitled to receive dividends on a dividend payment date if such shares were not issued and outstanding on the applicable dividend record date.

A dividend period is the period from and including a dividend payment date to but excluding the next dividend payment date, except that the initial dividend period commenced on and included the original issue date of the Series A Preferred Stock and ended on and excluded the June 15, 2018 dividend payment date. Dividends payable on the Series A Preferred Stock are computed on the basis of a 360-day year consisting of twelve 30-day months. If any date on which dividends would otherwise be payable is not a business day, then the dividend payment date will be the next succeeding business day with the same force and effect as if made on the original dividend payment date, and no additional dividends shall accrue on the amount so payable from such date to such next succeeding business day.

No dividends on shares of Series A Preferred Stock shall be authorized by the Board of Directors (or a duly authorized committee thereof) or paid or set apart for payment by the Company at any time when the terms and provisions of any agreement of the Company, including any agreement relating to the Company's indebtedness, prohibit the authorization, payment or setting apart for payment thereof or provide that the authorization, payment or setting apart for payment thereof would constitute a breach of the agreement or a default under the agreement, or if the authorization, payment or setting apart for payment shall be restricted or prohibited by law.

Notwithstanding the foregoing, dividends on the Series A Preferred Stock accrue whether or not the Company has earnings, whether or not there are funds legally available for the payment of those dividends and whether or not those dividends are declared by the Board of Directors. No interest, or sum in lieu of interest, is payable in respect of any dividend payment or payments on the Series A Preferred Stock that may be in arrears, and holders of the Series A Preferred Stock are not entitled to any dividends in excess of full cumulative dividends described above. Any dividend payment made on the Series A Preferred Stock is first credited against the earliest accumulated but unpaid dividend due with respect to those shares.

Unless full cumulative dividends on all shares of Series A Preferred Stock have been or contemporaneously are declared and paid (or declared and a sum sufficient for the payment thereof has been set aside or contemporaneously is set apart for payment for all past dividend periods):

● no dividend shall be declared or paid or set aside for payment upon the Common Stock, or any other junior stock (other than a dividend payable solely in Common Stock or other junior stock), nor shall any distribution be declared or made upon the Common Stock or any other junior stock;

● no Common Stock or other junior stock shall be purchased, redeemed or otherwise acquired for consideration by the Company, directly or indirectly (other than (1) as a result of a reclassification of junior stock for or into other junior stock, or the exchange or conversion of one share of junior stock for or into another share of junior stock, or (2) through the use of the proceeds of a substantially contemporaneous sale of junior stock) nor shall any monies be paid to or made available for a sinking fund for the redemption of such stock (it being understood that the provisions of this bullet point shall not apply to grants or settlements of grants pursuant to any equity compensation plan adopted by the Company); and

● no shares of Series A Preferred Stock or parity stock shall be repurchased, redeemed or otherwise acquired for consideration by the Company other than pursuant to pro rata offers to purchase all, or a pro rata portion, of the Series A Preferred Stock and such parity stock except by conversion into or exchange for junior stock.

When dividends are not paid in full (or a sum sufficient for such full payment is not so set apart) upon the Series A Preferred Stock and any parity stock, all dividends declared upon the Series A Preferred Stock and any party stock shall be declared pro rata so that the amount of dividends declared per share of Series A Preferred Stock and such parity stock shall in all cases bear to each other the same ratio that accrued dividends per share on the Series A Preferred Stock and such parity stock (which shall not include any accrual in respect of unpaid dividends for prior dividend periods if such preferred stock does not have a cumulative dividend) bear to each other. No interest, or sum of money in lieu of interest, shall be payable in respect of any dividend payment or payments on the Series A Preferred Stock that may be in arrears.

 **

***Liquidation Rights***

 **

Upon the Company's 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 the Company's 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 the Company 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 Common Stock or any class or series of the Company's capital stock it may issue that ranks junior to the Series A Preferred Stock as to liquidation rights.

In any such distribution, if the Company's assets are not sufficient to pay the liquidation distributions in full to all holders of the Series A Preferred Stock and all holders of any parity stock, the amounts paid to the holders of Series A Preferred Stock and to the holders of any parity stock will be paid pro rata in accordance with the respective aggregate liquidation distributions of those holders. In any such distribution, the liquidation distribution to any holder of preferred stock means the amount payable to such holder in such distribution, including any declared but unpaid dividends (and any unpaid, accrued cumulative dividends in the case of any holder of shares on which dividends accrue on a cumulative basis). If the liquidation distributions have been paid in full to all holders of shares of the Series A Preferred Stock and any holders of shares of parity stock and shares ranking senior to the Series A Preferred Stock with respect to the distribution of assets upon liquidation, dissolution or winding-up, the holders of the Company's other classes of capital stock will be entitled to receive all of the Company's remaining assets according to their respective rights and preferences.

A consolidation or merger involving the Company with any other entity, including the consolidation or merger in which the holders of Series A Preferred Stock receive cash, securities or other property for their shares, or the sale or transfer of all or substantially all of the property and assets of the Company for cash, securities or other property, will not be deemed to constitute a liquidation, dissolution or winding-up.

***Redemption***

 ****

The Series A Preferred Stock is not subject to any mandatory redemption, sinking fund, retirement fund, purchase fund or other similar provisions.

The Series A Preferred Stock is not redeemable prior to February 28, 2023. On and after that date, the Series A Preferred Stock will be redeemable at the Company's option, in whole or in part, upon not less than 30 days nor more than 60 days' written notice, at a redemption price equal to $25.00 per share, plus any accumulated and unpaid dividends thereon to, but not including, the redemption date. Holders of the Series A Preferred Stock have no right to require the redemption of the Series A Preferred Stock.

In connection with any redemption of Series A Preferred Stock, the Company shall pay, in cash, any accumulated and unpaid dividends to, but not including, the redemption date, unless a redemption date falls after a dividend record date and prior to the corresponding dividend payment date, in which case each holder of Series A Preferred Stock at the close of business on such dividend record date shall be entitled to the dividend payable on such shares on the corresponding dividend payment date notwithstanding the redemption of such shares before such dividend payment date.

If shares of the Series A Preferred Stock are to be redeemed, the notice of redemption shall be given by first class mail to the holders of record of the Series A Preferred Stock to be redeemed, mailed not less than 30 days nor more than 60 days prior to the date fixed for redemption thereof (provided that, if the Series A Preferred Stock is held in book-entry form through The Depository Trust Company, or "DTC," the Company may give such notice in any manner permitted by DTC). Each notice of redemption will include a statement setting forth:

● the redemption date;

● the number of shares of Series A Preferred Stock to be redeemed and, if less than all the shares of Series A Preferred Stock held by such holder are to be redeemed, the number of such shares of Series A Preferred Stock to be redeemed from such holder;

● the redemption price;

● that the shares should be delivered via book entry transfer or the place or places where holders may surrender certificates evidencing the Series A Preferred Stock for payment of the redemption price; and

● if applicable, that such redemption is being made in connection with a change of control and, in that case, a brief description of the transaction or transactions constituting such change of control.

In case of any redemption of only part of the shares of Series A Preferred Stock at the time outstanding, the shares of Series A Preferred Stock to be redeemed shall be selected either pro rata or in such other manner as the Company may determine to be fair and equitable.

If notice of redemption of any shares of Series A Preferred Stock has been given and if the Company has irrevocably set aside the funds necessary for such redemption, then, from and after the redemption date (unless the Company shall default in providing for the payment of the redemption price plus accumulated and unpaid dividends, if any), dividends will cease to accumulate on such shares of Series A Preferred Stock, such shares of Series A Preferred Stock shall no longer be deemed outstanding and all rights of the holders of such shares of Series A Preferred Stock will terminate, except the right to receive the redemption price plus accumulated and unpaid dividends, if any, payable upon redemption.

Unless full cumulative dividends on all shares of Series A Preferred Stock shall have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof has been or contemporaneously is set apart for payment for all past dividend periods, no shares of Series A Preferred Stock shall be redeemed unless all outstanding shares of Series A Preferred Stock are simultaneously redeemed, and the Company shall not purchase or otherwise acquire directly or indirectly any shares of Series A Preferred Stock (except by exchanging it for its junior stock); provided, however, that the Company may purchase or acquire shares of Series A Preferred Stock pursuant to a purchase or exchange offer made on the same terms to holders of all outstanding shares of Series A Preferred Stock.

The Company's ability to redeem the Series A Preferred Stock as described above may be limited by the terms of agreements governing the Company's existing and future indebtedness and by the provisions of other existing and future agreements.

***Voting Rights***

 ****

Holders of Series A Preferred Stock do not have any voting rights, except as set forth below or as otherwise from time to time provided by law, nor do the holders of the Series A Preferred Stock receive any notice of a meeting or vote by the Company's common stockholders.

In any matter on which holders of Series A Preferred Stock are entitled to vote, each share of Series A Preferred Stock is entitled to one vote for each $25.00 of liquidation preference.

So long as any shares of Series A Preferred Stock remain outstanding, the Company 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 the Articles of Incorporation, whether by way of a merger, consolidation, transfer or conveyance of all or substantially all of the Company's 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 set forth in (b) above. 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 set forth in (b) above, then such holders will not have any voting rights with respect to the Events set forth in (b) above. Moreover, if any Event set forth in (b) 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 Series A Preferred Stock, voting separately as a class, will also be required.

Holders of the Series A Preferred Stock are not entitled to vote with respect to (x) any increase in the total number of authorized shares of parity stock or junior stock of the Company, or (y) any increase in the amount of the authorized Series A Preferred Stock or the creation or issuance of any other class or series of parity stock or junior stock, and any such authorization, creation or issuances will not be deemed to adversely affect the rights of the holders of the Series A Preferred Stock.

The foregoing voting provisions will not apply if, at or prior to the time when the act with respect to which such vote would otherwise be required shall be effected, all outstanding shares of Series A Preferred Stock shall have been redeemed or called for redemption upon proper notice and sufficient funds, in cash, shall have been deposited in trust to effect such redemption and irrevocable instructions have been given to the paying agent to pay the redemption price and all accrued and unpaid distributions on the Series A Preferred Stock.

***Book Entry***

 ****

The Series A Preferred Stock is represented by a global security deposited with and registered in the name of Cede & Co. as DTC's nominee. DTC is the depository for the Series A Preferred Stock. Unless exchanged in whole or in part for a certificated security, a global security may not be transferred. However, DTC, its nominees, and their successors may transfer a global security as a whole to one another. Beneficial interests in the global securities are shown on, and transfers of the global securities are made only through, records maintained by DTC and its participants.

**Transfer Agent, Registrar, Dividend Disbursing Agent and Redemption Agent**

Broadridge Financial Solutions, Inc., located at 51 Mercedes Way, Edgewood, NY 11717, is the transfer agent and registrar for the Common Stock and Series A Preferred Stock and the dividend disbursing agent and redemption agent for the Series A Preferred Stock. In addition, Securitize Transfer Agent LLC, located at 78 SW 7th Suite 500, Miami, FL 33130, serves as co-transfer agent and registrar for the Common Stock.

**Anti-Takeover Effects of Provisions of Nevada Law and the Company's Articles of Incorporation and Bylaws**

***Nevada Revised Statutes (as amended, the "NRS")***

***Nevada "Combinations With Interested Stockholders" Statutes***

The Nevada "Combination With Interested Stockholders" Statutes, NRS 78.411 through 78.444 et seq., provides that an interested stockholder cannot engage in specified business combinations with a corporation for a period of two years after the date on which the person became an interested stockholder, unless (a) the combination or transaction by which the person first became an interested stockholder was approved by the corporation's board of directors before the person became an interested stockholder; or (b) the combination is approved by the board and, at or after that time, the combination is approved at an annual or special meeting of the stockholders by the affirmative vote of 60% or more of the voting power of the disinterested stockholders. At the expiration of the two-year waiting period, no proposed combinations with an interested stockholder may occur unless (a) the combination or transaction was approved by the board before the stockholder became an interested stockholder; (b) the combination is approved by a majority of the corporation's disinterested stockholders at an annual or special meeting; or (c) the combination meets certain statutory requirements for specifying a premium transaction price.

These statutes do not apply to (i) a person who has been an interested stockholder for 4 or more years; (ii) any combination with a person who was an interested stockholder on January 1, 1991; (iii) any combination of a corporation which adopts an amendment to its articles of incorporation, approved by the holders of a majority of the outstanding voting power of the corporation not beneficially owned by interested stockholders, expressly electing not to be governed by these statutes. Such an amendment would not be effective until 18 months after the stockholder vote and would not apply to any combination with a person who first became an interested stockholder on or before the effective date of the amendment; (iv) when the person became an interested stockholder inadvertently.

A "combination" is generally defined to include mergers or consolidations of the corporation or any subsidiary of the corporation with an interested stockholder or an entity that is, or after and as a result of the merger or consolidation would be, an affiliate or associate of the interested stockholder, or any sale, lease exchange, mortgage, pledge, transfer, or other disposition, in one transaction or a series of transactions, with an "interested stockholder" having: (a) an aggregate market value equal to 5% or more of the aggregate market value of the assets of the corporation, (b) an aggregate market value equal to 5% or more of the aggregate market value of all outstanding shares of the corporation, (c) 10% or more of the earning power or net income of the corporation, and (d) certain other transactions with an interested stockholder or an affiliate or associate of an interested stockholder.

In general, an "interested stockholder" is a person who, together with affiliates and associates, owns (or within two years, did own) 10% or more of a corporation's voting stock. The statute could prohibit or delay mergers or other takeover or change in control attempts and, accordingly, may discourage attempts to acquire our Company even though such a transaction may offer our stockholders the opportunity to sell their stock at a price above the prevailing market price. However, the Company's Articles of Incorporation expressly elect not to be governed by the provisions of NRS Sections 78.411 through 78.444. Accordingly, the "Combinations with Interested Stockholders" statutes are not applicable to the Company.

***Nevada "Acquisition of Controlling Interest" Statutes***

Under the Nevada "Acquisition of Controlling Interest" Statutes, NRS 78.378 through 78.3793 et seq., if a person acquires a "controlling interest" (defined as ownership of shares that would entitle the person to exercise (i) one-fifth or more but less than one-third, (ii) one-third or more but less than a majority, or (iii) a majority or more of the voting power of the corporation in an election of directors), stockholders have the right to regulate that person's voting rights. The acquisition of a controlling interest must be approved by both (a) the holders of a majority of the voting power of the corporation and (b) if the acquisition would adversely alter or change any preference or any relative or other right given to any other class or series of outstanding shares, the holders of a majority of each class or series affected, excluding those shares voted by any interested stockholder. An "interested stockholder" under these statutes includes an acquiring person, an officer or a director of the corporation, or an employee of the corporation.

If provided in a corporation's articles or bylaws, a corporation may redeem the control shares at the average price paid by the acquiring person if the majority of disinterested stockholders do not grant full voting rights to the control shares or the acquiring person fails to submit an offer statement to the corporation. Conversely, if the stockholders grant full voting rights, disinterested dissenting stockholders may obtain payment of the fair value of their shares.

The effect of the Nevada control share statutes is that the acquiring person, and those acting in association with the acquiring person, will obtain only such voting rights in the control shares as are conferred by a resolution of the stockholders at an annual or special meeting. The Nevada control share law, if applicable, could have the effect of discouraging takeovers of our Company. A corporation may elect to not be governed by, or "opt out" of, the control share provisions by making an election in its articles of incorporation or bylaws, provided that the opt-out election must be in place on the 10th day following the date an acquiring person has acquired a controlling interest, that is, crossing any of the three thresholds described above. The Company's Articles of Incorporation expressly elect not to be governed by the provisions of NRS Sections 78.378 through 78.3793 (Acquisition of Controlling Interest). Accordingly, the control share statutes are not applicable to the Company.

***Articles of Incorporation and Bylaws***

 ****

The Company's Articles of Incorporation and Bylaws include anti-takeover provisions that:

● 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;

● 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;

● do not provide stockholders cumulative voting rights with respect to director elections;

● provide that special meetings of the stockholders may be called only by or at the direction of the Board of Directors or at the request of 50% or more of the voting power of all of the outstanding shares of the Company's capital stock entitled to vote on any issue contemplated to be considered at such proposed special meeting;

● require the approval of a majority of the voting power of all of the outstanding shares of the Company's capital stock entitled to vote generally in the election of directors to amend the Articles of Incorporation; and

● allow the Board of Directors to make, alter or repeal the Company's Bylaws but only allow stockholders to amend the Bylaws upon the approval of a majority of the voting power of all of the outstanding shares of the Company's capital stock entitled to vote generally in the election of directors.

Provisions of the Company's Articles 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.

 **

***Exclusive Forum Provision.***

 **

In addition, the Articles of Incorporation provide that any action within the scope of the exclusive forum provision shall be decided by a judge (as opposed to a jury), to the extent permitted under applicable laws. Any person or entity purchasing or otherwise acquiring any interest in any security of the Company is deemed to have notice of and consented to these provisions.

***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 Nevada 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 Company's Articles of Incorporation authorizes the issuance of "blank check" Preferred Stock with such designations, rights and preferences as may be determined from time to time by the Company's Board of Directors. Accordingly, the Board of Directors is empowered, without stockholder approval, to issue shares of Preferred Stock with dividend, liquidation, conversion, voting or other rights that could adversely affect the value, voting power or other rights of holders of Common Stock. In addition, the Board of Directors may, under certain circumstances, issue Preferred Stock in order to delay, defer, prevent or make more difficult a change of control transaction such as a merger, tender offer, business combination or proxy contest, assumption of control by a holder of a large block of the Company's securities or the removal of incumbent management of the Company, even if those events were favorable to the interests of the Company's stockholders.

## Exhibit 14.1

**Exhibit 14.1**

**CODE OF BUSINESS CONDUCT AND ETHICS OF FG NEXUS**

The Board of Directors (the "Board") of FG Nexus (the "Company") has adopted this Code of Business Conduct and Ethics (this "Code") to provide value for our shareholders; and

● To encourage honest and ethical conduct, including fair dealing and the ethical handling of conflicts of interest;

● To promote accurate, fair and timely reporting of the Company's financial results and condition and other information the Company releases to the public market in reports it files with the Securities and Exchange Commission (the "SEC");

● To comply with applicable laws and governmental rules and regulations;

● To prompt internal reporting of violations of this Code and to set forth the manner in which perceived violations of ethical principles are to be reported;

● To protect the Company's legitimate business interests, including corporate opportunities, assets and confidential information; and

● To deter wrongdoing.

It is the policy of the Company that employees, directors and agents of the Company and its subsidiaries are held to the highest standards of honest and ethical conduct when conducting the affairs of the Company. Because the equity shares of the Company are publicly traded, senior financial officers of the Company are held to an especially high set of ethical standards and will not commit acts contrary to these standards of ethical conduct nor shall they condone the commission of such acts by others the Company's. organization. This Code of Ethics applies to all officers, non-employee directors and employees of the Company and its subsidiaries. All directors, officers, employees and independent contractors of the Company are expected to be familiar with this Code and to adhere to the principles and procedures set forth in this Code. For purposes of this Code, all directors, officers, employees and independent contractors are referred to collectively as "employees" or "you" throughout this Code. Violations of this Code will be dealt with expeditiously and as consistently as possible by the Chairman of the Audit Committee, who may consult outside counsel with respect to any issue relating to this Code of Ethics, and may subject our employees to disciplinary action, which, in severe cases may lead up to and including termination of employment.

**A. Honest and Ethical Conduct**

All directors, officers, employees and independent contractors owe duties to the Company to act with integrity. Integrity requires, among other things, being honest and ethical. This includes the ethical handling of actual or apparent conflicts of interest between personal and professional relationships.

All directors, officers, employees and independent contractors have the following duties:

● To conduct business with professional courtesy and integrity, and act honestly and fairly without prejudice in all commercial dealings;

● To work in a safe, healthy and efficient manner, using skills, time and experience to the maximum of abilities;

● To comply with applicable Company policies and job requirements, and adhere to a high standard of business ethics;

● To observe laws, governmental rules, regulations and accounting standards;

● To deal fairly with the Company's customers, suppliers, competitors and employees, and not take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any other unfair dealings.

● To achieve responsible use of and control over all assets and resources employed or entrusted.

● To maintain the confidentiality of information where required or consistent with Company policies; and

● Not to disclose information or documents relating to the Company or its business, other than as required by law, not to make any unauthorized public comment on Company affairs and not to misuse any information about the Company or its associates, and not to accept improper or undisclosed material personal benefits from third parties as a result of any transaction or transactions of the Company.

**B. Conflicts of Interest**

A "conflict of interest" arises when an individual's personal interest interferes or appears to interfere with the interests of the Company. A conflict of interest can arise when a director, officer or employee takes actions or has personal interests that may make it difficult to perform his or her Company work objectively and effectively. Conflicts of interest should be avoided. Unless pre-approved by our Board (for our Executive Officers) or an Executive Officer (for employees), officers and employees should be free from any interest, influence or relationship which might conflict, or appear to conflict, with the interests of the Company or the effectiveness of their job performance. Officer and employees must, therefore, avoid any investment, gratuity or association, which interferes, or might reasonably be thought to interfere, with their best judgment in the performance of their job duties and other actions affecting the Company. It is important to closely examine any gift, loan or other special preference offered by a person or organization that does or wants to do business with the Company. Any employee who has specific questions regarding the appropriateness of a particular action, including acceptance of gratuities from suppliers or contractors, should consult with his or her manager.

There are a variety of situations in which a conflict of interest may arise. While it would be impractical to attempt to list all possible situations, some common types of conflicts may be:

● To serve as a director, employee or contractor for a company that has a business relationship with, or is a competitor of the Company;

● To enter into any financial transaction, arrangement, or relationship that is beyond the ordinary course of business, involving the Company;

● To have a financial interest in a competitor, supplier or customer of the Company;

● To receive improper personal benefits from a competitor, supplier or customer, as a result of any transaction or transactions of the Company;

● To accept financial interest beyond entertainment or nominal gifts in the ordinary course of business, such as a meal or a coffee mug; or

● To use for personal gain, rather than for the benefit of the Company, an opportunity, position, resources or confidential information that is offered to you solely in your capacity as an employee, officer or director of the Company and that is one that the Company is legally and contractually permitted to undertake and that is otherwise reasonable for the Company to pursue.

● Offering any type of payments or business courtesy of significant value (e.g. entertainment, meals, transportation or lodging) to a government official, supplier or customer for the purpose of influencing any government or organizational decision or obtaining favorable treatment or advantage.

In most cases, anything that would constitute a conflict for a director, officer or employee also would present a conflict if it is related to a member of his or her family.

Interests in other companies, including potential competitors and suppliers, that are purely for management of the other entity, or where an otherwise questionable relationship is disclosed to the Board and any necessary action is taken to ensure there will be no effect on the Company, are not considered conflicts unless otherwise determined by the Board.

Evaluating whether a conflict of interest exists can be difficult and may involve a number of considerations. We also encourage you to seek guidance from our General Counsel when you have any questions or doubts, and should be resolved by informing the Chairman of the Audit Committee of the potential conflict and obtaining a written authorization to proceed whenever required.

**C. Related-Party Transactions**

The Company shall strive to avoid, wherever possible, all Related-Party Transactions (as defined below) that could result in actual or potential conflicts of interests, except if in accordance with the approval process and guidelines included below.

"Related-Party Transactions" are defined as transactions in which (1) the aggregate amount involved will or may be expected to exceed $120,000 in any calendar year, (2) the Company or any of the Company's subsidiaries is a participant, and (3) any (a) executive officer, director or nominee for election as a director, (b) greater than 5% beneficial owner of the Company's common shares, or (c) immediate family member, of the persons referred to in clauses (a) or (b) (each, a "Related Party"), has or will have a direct or indirect material interest (other than solely as a result of being a director or a less than 10% beneficial owner of another entity).

**<u>Approval Process and Guidelines.</u>**

● Each director and executive officer shall identify any Related-Party Transaction involving a Related Party and inform the Audit Committee of the Board (the "Audit Committee") before the Company may engage in the transaction with a Related Party. Each of the Company's directors and officers shall complete a directors' and officers' questionnaire that elicits information about Related-Party Transactions.

● In the event that the Company proposes to enter into, or materially amend, a Related-Party Transaction, the General Counsel shall present such Related-Party Transaction to the Audit Committee for review and consideration.

● Any Related-Party Transaction, if not a Related-Party Transaction when originally consummated, or if not initially identified as a Related-Party Transaction prior to consummation, shall be submitted to the Audit Committee for review as soon as reasonably practicable.

**D. Disclosure**

Each director, officer or employee, to the extent involved in the Company's disclosure process, including the Chief Executive Officer or Chief Financial Officer is required to be familiar with the Company's disclosure controls and procedures applicable to him or her so that the Company's public reports and documents comply in all material respects with the applicable securities laws and rules. In addition, each such person having direct or supervisory authority regarding these securities filings or the Company's other public communications concerning its general business, results, financial condition and prospects should, to the extent appropriate within his or her area of responsibility, consult with other Company officers and employees and take other appropriate steps regarding these disclosures with the goal of making full, fair, accurate, timely and understandable disclosures.

Each director, officer or employee, to the extent involved in the Company's disclosure process must:

● Familiarize himself or herself with the disclosure requirements applicable to the Company as well as the business and financial operations of the Company.

● Not knowingly misrepresent, or cause others to misrepresent, facts about the Company to others, whether within or outside the Company, including to the Company's independent auditors, governmental regulators and self-regulatory organizations.

Those persons having responsibility for particular areas of the Company's periodic reports such as the Annual Report on Form 10-K must report to the Board on an ongoing basis the following matters which come to their attention:

● Deviations from or changes to the current public information available for the Company;

● Changes in risks, or new risks, to the Company as they are identified; and

● Changes that may affect the Company's financial results.

Our employees who work in the Financial Department hold an important and elevated role in corporate governance. They are empowered to ensure that shareholder interests are appropriately balanced, protected and preserved. Accordingly, all financial managers are expected to uphold the following standards:

● To provide information that is accurate, complete, objective, relevant, timely and understandable;

● To comply with laws, rules and regulations of federal, state, provincial and local governments, and appropriate regulatory agencies;

● To act in good faith, responsibly, with due care, competence and diligence, without misrepresenting facts or allowing their independent judgment to be subordinated;

● To respect the confidentiality of information acquired in connection with their activities for the Company, except when authorized or otherwise legally obligated to disclose;

● To share knowledge and to maintain skills needed to perform their jobs;

● To proactively promote ethical behavior as a responsible partner among peers in the workplace and community; and

● To achieve responsible use of and control over all assets and resources employed by or entrusted to them.

Compliance with all governmental laws, rules and regulations applicable to the Company is mandatory and any violations thereof are considered violations of this Code. Mistakes should never be covered up, but should be immediately fully disclosed and corrected, if possible.

False, misleading or dishonest reporting, both inside and outside the Company, is not only strictly prohibited, but could lead to civil and even criminal liability and sanction by the Company or termination. For example, falsification of expense reports or time records may be considered theft. Submission of false information to the government or to government agencies such as the U.S. Securities and Exchange Commission, in some instances, lead to fines and/or imprisonment.

**E. Compliance**

It is the Company's policy to comply with all applicable laws, rules and regulations. It is the responsibility of each employee, officer and director to adhere to the standards and restrictions imposed by those laws, rules and regulations in the performance of their duties for the Company, including those relating to accounting and auditing matters and insider trading.

The Board endeavors to ensure that the directors, officers and employees of the Company act with integrity and observe the highest standards of behavior and business ethics in relation to their corporate activities.

Specifically, directors, officers and employees must:

● Comply with the law;

● Act in the best interests of the Company;

● Be responsible and accountable for their actions; and

● Observe the ethical principles of fairness, honesty and truthfulness, including disclosure of potential conflicts.

Generally, it is against Company policies for any individual to profit from undisclosed information relating to the Company or any other company in violation of insider trading or other laws. Anyone who is aware of material nonpublic information relating to the Company, our customers, or other companies may not use the information to purchase or sell securities in violation of securities laws.

If you are uncertain about the legal rules involving your purchase or sale of any Company securities or any securities in companies that you are familiar with by virtue of your work for the Company, you should consult with the General Counsel before making any such purchase or sale.

**F. Reporting and Accountability**

All managers are responsible for communicating this policy to the employees under their supervision and the policy will be electronically available. Any revisions or updates to this policy will be published periodically and appropriately distributed for inclusion in the Company's on-line reference materials and other appropriate locations. All employees will be required to certify that they have reviewed and understood this Code of Ethics. This certification will take place upon the Code of Ethics coming into effect. New coming directors, Executive Officers and employees will be required to make this certification upon joining the company.

The Board has the authority to interpret this Code in any particular situation. Any director, officer or employee who becomes aware of any known or suspected violation of this Code is required to notify the employee's manager or to the General Counsel promptly. Any violation or failure to report a known violation of law or policy may result in disciplinary action up to and including termination. If the report is made to the employee's manager, the manager shall promptly report the matter to and Executive Officer. In some cases, including in the event that appropriate action is not being taking by a manager or an Executive Officer in response to report, employees may report issues to the Chairman of the Audit Committee of the Board. Employees who report an actual or apparent violation of this policy will not be subject to retaliation or reprisal from any person as a result of having disclosed the violation and any such attempt at retaliation or reprisal will result in disciplinary action up to and including termination.

Any questions relating to how these policies should be interpreted or applied should be addressed to the General Counsel.

Each director, officer or employee must:

● Notify the General Counsel promptly of any existing or potential violation of this Code; and

● Not retaliate against any other director, officer or employee for reports of potential violations.

The Company will follow the following procedures in investigating and enforcing this Code and in reporting on the Code:

● The General Counsel, as appropriate, will take all appropriate action to investigate any violations reported. After the conclusion of an investigation of a director or executive officer, the conclusions shall be reported to the Board.

● The Board will conduct such additional investigation as it deems necessary. The Board will determine whether a director or executive officer has violated this Code. Upon being notified that a violation has occurred, the Company will take such disciplinary or preventive action as deemed appropriate, up to and including dismissal.

**G. Corporate Opportunities**

Employees, officers and directors are prohibited from taking (or directing to a third party) a business opportunity that is offered to them solely in their capacity as an employee, officer or director of the Company and that is one that the Company is legally and contractually permitted to undertake and that is otherwise reasonable for the Company to pursue, unless the Company has already been offered the opportunity and turned it down. Employees, officers and directors are prohibited from using corporate property, information or position for personal gain, and competing with the Company.

Sometimes, the line between personal and Company benefits is difficult to draw, and sometimes there are both personal and Company benefits in certain activities. Employees, officers and directors who intend to make use of Company property or services in a manner not solely for the benefit of the Company should consult beforehand with the General Counsel.

**H. Confidentiality**

In carrying out the Company's business, employees, independent contractors, officers and directors often learn confidential or proprietary information about the Company, its intellectual property, its customers, suppliers, or joint venture parties. Employees, independent contractors, officers and directors must maintain the confidentiality of all information so entrusted to them, except when disclosure is authorized or legally mandated. Confidential or proprietary information of our Company, and of other companies, includes any non-public information that would be harmful to the relevant company or useful or helpful to competitors if disclosed.

**I. Fair Dealing**

Our core value of operating is based on responsiveness, openness, honesty and trust with our members, business partners, employees and shareholders. We do not seek competitive advantages through illegal or unethical business practices. Each employee, officer and director should endeavor to deal fairly with the Company's customers, service providers, suppliers, competitors and employees. No employee, officer or director should take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any unfair dealing practice. Bribes and kickbacks are prohibited. Other than for modest gifts given or received in the normal course of business (e.g., coffee mugs, pens and other logoed promotional materials or business lunches), neither you nor your relatives may give gifts to, or receive gifts from, the Company's customers and suppliers. Other gifts may be given or accepted only with prior approval of the Company's Chief Financial Officer.

**J. Protection and Proper Use of Company Assets**

All employees, officers and directors should protect the Company's assets (these include intellectual property rights in its technological know-how, information about the Company's business strategies and intentions, information regarding plans for research or future research, internal databases, customer lists, confidential technical data, organizational charts, employee directories and compensation information) and ensure their efficient use. All Company assets should be used only for legitimate business purposes. Theft, carelessness and waste have a direct impact on our profit.

While employees, executive officers and directors may occasionally use the Company's assets to send or receive personal messages, to access internet materials that are not directly business-related, or to create personal documents or files, they are required to keep these activities to a minimum and in compliance with all of the Company's internal policies and guidelines. In addition, all may not use any the Company's resource in violation of any law, rule or regulation. Additionally, they may not allow other people to use the Company's resources for any purpose, except as may be allowed to their immediate family members, under our internal policies; provided, however, that they will not allow the use of any of the Company's proprietary information to any of their immediate family members. You may not use any the Company's resource to create, transmit, store or display messages, images or materials that are for personal gain, solicitations, chain letters, or are threatening, sexually explicit, harassing or otherwise demeaning to any person or group. Such misuse of assets is misconduct, and may result in disciplinary action up to and including termination of employment or association.

The Company's assets may not be used for personal activities that may lead to the loss or damage of the asset. You are responsible for safeguarding the integrity of the systems, including not exposing the system to computing viruses and the like.

The Company may access and inspect all of the company's resources that an employee, executive officer or director may use for personal activity, including company's computers, servers and systems, telephones, mobile phones, voicemail systems, desks, vehicles and other equipment belonging to the Company. For reasons related to safety, supervision, security and other concerns, the Company may inspect persons and property on the Company's premises at any time and without notice, subject to applicable local laws.

**K. Waivers and Amendments**

From time to time, the Company may waive provisions of this Code. Any employee or director who believes that a waiver may be called for should discuss the matter with the General Counsel.

Any waiver of the Code for executive officers or directors of the Company must be approved by the Board. The Company will disclose any such waivers within four business days by filing a current report on Form 8-K with the Commission or, in cases where a Form 8-K is not required, by distributing a press release, in each case as required by applicable SEC regulations and requirements of NYSE American or any other applicable law or rule of any other applicable stock exchange. Alternatively, the Company may disclose any such waivers on the Company's website in a manner that satisfies the requirements of Item 5.05(c) of Form 8-K.

The Company is committed to continuously reviewing and updating its policies, and therefore reserves the right to amend this Code at any time, for any reason, subject to applicable law. All Code of Ethics terms should be construed in tandem with the Company's other stated policies, procedures and guidelines, and in conjunction with any applicable laws, rules and regulations.

**L. Contracting and Signing on Behalf of the Company**

Signing correspondence, reports and other documents that contain substantive opinions, conclusions or determinations that may legally bind the Company must be signed by or under the control of the Executive Officers. An employee may not sign/execute an agreement on behalf of the Company unless he or she has the legal authority to obligate the Company. Typically, only the Executive Officers will have signature rights.

**M. Respecting Privacy**

Under this policy, personal information necessary for effective business operation will be collected and retained. Furthermore, access to personal employee information within The Company will be limited to the employee and to those persons with a legitimate business need for such information, including needs related to the performance of job responsibilities.

With regard to employment verifications, certain employee information may be disclosed without the written consent of the current or former employee. Such information includes verification and dates of employment, job titles and work locations. In addition, the Company will disclose any information required by law or court order.

Employee privacy also becomes an issue when personal use is made of the Company's resources. Although the Company's assets are intended for use in supporting and conducting the Company's business, limited and reasonable personal use of Company equipment and systems is permitted. Where not prohibited by law or regulation, The Company reserves the right to monitor the use and content of its corporate resources and systems. Employees should have no expectation of privacy when using the company's resources, whether for business or personal use. The Company may inspect the Company's records and systems, including electronic systems, and inspect the information contained in them with or without advance notice to employees – even when information is stored under an individual's personal identification code or password.

**N. Other Employment, Professional and Trade Associations, Charities and Community Service**

Unless otherwise approved by the Board (for our Executive Officers) or an Executive Officer of the Company (for employees), the Company expects its full-time employees to devote all of their work time to the Company.

In participating in an outside organization, one must understand whether he or she is representing the Company or acting in a personal capacity. Unless an employee is designated as the official Company's representative by the Company, the employee is acting solely in his or her individual capacity.

As a member of a trade or professional group, such employee may come in contact with competitors' employees. An employee should never discuss proprietary or sensitive competitive issues such as prices, costs, terms or conditions of sales, product plans or any other competitively sensitive, confidential or nonpublic information.

When participating in community services or charities an employee must be alert to possible conflicts of interest between the Company and the organization. If a conflict arises between the organization and the Company, the relevant employee should disqualify himself or herself from making any decision in the capacity as an organization representative that concerns or impacts the Company or, if necessary, resign from the organization.

**O. Non-Discrimination**

The Company will treat all employees fairly, without regard to age, race, national origin, religion, sex, condition of pregnancy, marital status, disability, veteran status and sexual orientation.

**P. SEXUAL HARASSMENT AND OTHER UNLAWFUL BEHAVIOR**

The Company does not tolerate sexual harassment or other unlawful behavior in the workplace, whether committed by a co-worker, leader, client, contractor, vendor or anyone else. Actions, words, jokes or comments that are derogatory and based on any person's sex, race, ethnicity, sexual orientation, age, religion or disability will not be tolerated at the company.

The Company is committed to providing a workplace free from unlawful behavior and sexual harassment. If an employee feels he or she has been subjected to such harassment at The Company, it is the employee's obligation to report the conduct to appropriate Company personnel.

Complaints should be directed to the President. The Company expects leaders to act upon such allegations, and expects employees to report such behavior. If an investigation confirms that improper conduct occurred, the company will take appropriate action.

## Exhibit 19.1

**Exhibit 19.1**

**FG NEXUS INC.**

**(the "Company")**

**INSIDER TRADING POLICY**

**I.** **Introduction** 

The purpose of this Insider Trading Policy (this "Policy") is to promote compliance with applicable securities laws by the Company and its subsidiaries and all directors, officers and employees ("the Insiders") thereof, and to preserve the reputation and integrity of the Company as well as that of persons affiliated therewith while not putting unnecessary restrictions on the Insiders.

**II.** **Applicability** 

The Policy is applicable to all directors, officers and employees of the Company and its subsidiaries. Every director, officer and employee of the Company and its subsidiaries must read and retain this Policy. Questions regarding this Policy should be directed to the Company's Chief Executive Officer and Chief Financial Officer (the "Company's Officers") and the Company's Officers will coordinate with the Company's legal counsel to answer the questions. The Company may also determine that other persons should be subject to this Policy, such as contractors or consultants who have access to material nonpublic information. This Policy also applies to certain family members, members of a person's household and entities controlled or influenced by a person covered by this Policy, as described below.

**III.** **Policy** 

It is the Company's policy that no (i) director, officer or other employee of the Company or any of its subsidiaries, (ii) agent or advisor of the Company or any of its subsidiaries (such as its auditors, consultants or attorneys), or (iii) Related Person (as defined below) thereof (individually a "Covered Person" and, collectively, the "Covered Persons") having material, nonpublic information relating to the Company may buy or sell shares of Common Stock or other capital stock or securities of the Company (collectively, "Company Securities") or engage in any other action to take advantage of, or pass on to others, such information. This Policy also applies to material, nonpublic information relating to any other company with publicly-traded securities, including our customers, suppliers and other business partners, obtained in the course of employment by or association with the Company.

To avoid even the appearance of impropriety, additional restrictions on trading Company Securities apply to directors and executive officers. See Section VI.

Investing in Company Securities provides an opportunity to share in the future growth of the Company. Investment in the Company and sharing in the growth of the Company, however, does not mean short-range speculation based on fluctuations in the market. Such activities may put the personal gain of a Covered Person in conflict with the best interests of the Company and its stockholders.

**IV.** **Definitions/Explanations** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. <u>What is "Material" Information?</u> 

The materiality of information depends upon the circumstances. Information is considered "material" if there is a substantial likelihood that a reasonable investor would consider it important in making an investment decision, or if the facts would have been viewed by the reasonable investor as having significantly altered the "total mix" of information publicly available. Material information can be positive or negative and can relate to virtually any aspect of a company's business and impact the value of any type of security – debt or equity.

Some examples of material information include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) unpublished
 financial information;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) news
 of a pending or proposed transaction, such as a significant merger, acquisition, divestiture
 or joint venture;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) stock
 splits or dividends, calls for redemption of securities and other events regarding the Company's
 outstanding securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) acquisition
 or loss of a significant contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) development
 of a significant new product or process;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) change
 in control or a change in management;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) change
 in auditors or auditor notification that the Company can no longer rely on an auditor's
 report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) new
 equity or debt offerings or purchases (whether publicly or privately);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) significant
 change in strategy or development involving corporate relationships;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) significant
 litigation exposure or regulatory action;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) impending
 bankruptcy or receivership; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) a
 significant cybersecurity event, such as a data breach.

The above list is only illustrative; many other types of information may be considered "material," depending on the circumstances. The materiality of particular information should be reviewed on a frequent basis.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. <u>What is "Nonpublic" Information?</u> 

Information is "nonpublic" if it is not available to the general public. In order for information to be considered public, it must be widely disseminated in a manner making it generally available to investors through such media as Business Wire, Newswire, Dow Jones, Thomson Reuters, The Wall Street Journal, the Associated Press or United Press International. The circulation of rumors, even if accurate and reported in the media, does not constitute effective public dissemination.

In addition, even after a public announcement of material information, a reasonable period of time must elapse in order for the market to react to the information. Generally, two full Trading Sessions following publication is viewed as a reasonable time period before such information is deemed to be public. Therefore, if an announcement is made before the commencement of trading on a Monday, an employee (as an example) may trade in Company Securities starting on Wednesday of that week, because two full Trading Sessions would have elapsed by then (all of Monday and Tuesday). If the announcement is made on Monday after trading begins, the employee may not trade in Company Securities until Thursday. If the announcement is made on Friday after trading begins, the employee may not trade in Company Securities until Wednesday of the following week. As used herein, the term "Trading Session" means, on a day on which the Nasdaq Stock Market is open for trading, the period from the time trading begins until it ends on such day.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. <u>Who is a "Related Person?"</u> 

For purposes of this Policy, a "Related Person" includes (1) a person's spouse and minor children and anyone else living in such person's household, (2) partnerships in which such person is a general partner, (3) trusts of which such person is a trustee, (4) estates of which such person is an executor, and (5) other legal entities that such person controls. Although a person's parent or sibling is not considered a Related Person (unless living in the same household), a parent or sibling may be a "tippee" for securities laws purposes. See Section V.E. below for a discussion on the prohibition on "tipping."

**V.** **Trading Guidelines and Requirements** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. <u>Non-disclosure of Material Nonpublic Information</u> 

Material, nonpublic information is strictly confidential and must not be disclosed, whether through written, oral or electronic means to anyone, except the persons within the Company or third party agents of the Company such as investment banking advisors or outside legal counsel whose positions or roles require them to know such information, until such information has been publicly released by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. <u>Prohibited Trading in Company Securities</u> 

No Covered Person may place a purchase or sell order or recommend that another person place a purchase or sell order in Company Securities including initial elections, changes in elections or reallocation of funds relating to 401(k) plan accounts, when such Covered Person has knowledge of material, nonpublic information concerning the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. <u>Transactions Under Rule 10b5-1 Plans</u> 

Covered Persons may elect to sell shares pursuant to contracts, plans or instructions complying with the requirements of Rule 10b5-1(c)(1) under the Securities Exchange Act of 1934, as amended ("Rule 10b5-1 Plans") and are not per se prohibited by this Policy so long as such 10b5-1 Plans are entered into in good faith while the Covered Person is not in possession of material, nonpublic information; provided, that the adoption and maintenance of any such Rule 10b5-1 Plans by a Covered Person must be approved by the Company's Officers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. <u>Twenty-Twenty Hindsight</u> 

If securities transactions ever become the subject of scrutiny, they are likely to be viewed after- the-fact with the benefit of hindsight. As a result, before engaging in any transaction relating to the Company Securities a Covered Person should carefully consider how such person's transaction may be construed in the bright light of hindsight. Again, in the event of any questions or uncertainties about the Policy, please consult the Company's Officers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. <u>"Tipping" Information to Others</u> 

Covered Persons may be liable for communicating or tipping material, nonpublic information to any third party ("tippee"). Further, insider trading violations are not limited to trading or tipping by Covered Persons. Persons other than Covered Persons also can be liable for insider trading, including tippees who trade on material, nonpublic information tipped to them and individuals who trade on material, nonpublic information which has been misappropriated.

Tippees are liable for trading on material, nonpublic information illegally tipped to them by a Covered Person. Similarly, just as Covered Persons are liable for the insider trading of their tippees, tippees who pass such information along to others who trade on such information will be liable. In other words, a tippee's liability for insider trading is no different from that of a Covered Person. Tippees can obtain material, nonpublic information by receiving overt tips from others or through, among other things, conversations at social, business or other gatherings.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F. <u>Short Sales.</u> 

Short sales of Company Securities may evidence an expectation on the part of the seller that the securities will decline in value and, therefore, have the potential to signal to the market that the seller lacks confidence in the Company's prospects. In addition, short sales may reduce a seller's incentive to seek to improve the Company's performance. Pursuant to this Policy, no Covered Person shall engage in a short sale of Company Securities. Furthermore, Section 16(c) of the Exchange Act prohibits officers and directors from engaging in short sales. Short sales arising from certain types of hedging transactions are governed by Section V.H below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;G. <u>Publicly Traded Options.</u> 

A transaction in options is, in effect, a bet on the short-term movement of a company's stock and therefore creates the appearance that the Covered Person is trading based on material, nonpublic information. Transactions in options also may focus the Covered Person's attention on short-term performance at the expense of the Company's long-term objectives. Accordingly, transactions by Covered Persons in puts, calls or other derivative securities relating to the Company, on an exchange or in any other organized market, are prohibited by this Policy.

Anyone may, of course, in accordance with this Policy and other Company policies, exercise options granted by the Company. Option positions arising from certain types of hedging transactions are governed by Section V.H. below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;H. <u>Hedging Transactions.</u> 

Hedging or monetization transactions can be accomplished through a number of possible mechanisms, including through the use of financial instruments such as prepaid variable forwards, equity swaps, zero-cost collars and exchange funds. Such hedging transactions may permit a director, officer or employee of the Company or any of its subsidiaries to lock in much of the value of his or her stock holdings, often in exchange for all or part of the potential for upside appreciation in the stock. These transactions may allow the director, officer or employee to continue to own Company Securities or equity securities of any subsidiaries of the Company, but without the full risks and rewards of ownership. When that occurs, the director, officer or employee may no longer have the same objectives as the Company's other stockholders. Therefore, directors, officers and employees of the Company and its subsidiaries are prohibited from engaging in such transactions involving Company Securities or equity securities of any subsidiaries of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I. <u>Margin Accounts and Pledges.</u> 

Securities held in a margin account may be sold by the broker without the customer's consent if the customer fails to meet a margin call. Similarly, securities pledged (or hypothecated) as collateral for a loan may be sold in foreclosure if the borrower defaults on the loan. Because a margin sale or foreclosure sale may occur at a time when the pledgor is aware of material, nonpublic information or otherwise is not permitted to trade in Company Securities, Covered Persons are prohibited from holding Company Securities in a margin account or pledging Company Securities as collateral for a loan. Company Securities owned by any significant shareholder (i.e., any beneficial owner of more than 5% of the common stock of the Company) affiliated with a Covered Person shall not be subject to the prohibition set forth in this Section I. Pledges of Company Securities arising from certain types of hedging transactions are governed by Section H above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;J. <u>Trading in Other Securities</u> 

No Covered Person may place purchase or sell orders or recommend that another person place a purchase or sell order involving the securities of another company if such Covered Person learns of material, nonpublic information about such other company in the course of such Covered Person's employment or other special relationship with the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;K. <u>Post-Termination/Separation Transactions</u> 

This Policy continues to apply to transactions in the Company Securities by a Covered Person following termination of employment or other services with the Company if such Covered Person is aware of material, nonpublic information until such time that the information becomes public or is no longer material.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;L. <u>Individual Responsibility.</u> 

Every Covered Person has the individual responsibility to comply with this Policy against insider trading. A Covered Person may, from time to time, have to forego a proposed transaction in Company Securities even if he or she planned to make the transaction before learning of the material, nonpublic information and even though the Covered Person believes he or she may suffer an economic loss or forego anticipated profit by waiting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;M. Participation
 in the 2023 Employee Stock Purchase Plan

Covered Persons may participate in the Company's 2023 Employee Stock Purchase Plan ("ESPP") pursuant to its terms, subject to the limitations set forth in the ESPP and this Policy. Participation in the ESPP is equivalent to the decision to purchase Company Securities. Accordingly, Covered Persons may initially enroll in the ESPP only during an open trading window and must make their election to participate in the next upcoming ESPP purchase period during an open trading window and only after receipt of pre-clearance under this Policy. Automatic renewals of ESPP participants under the terms of the ESPP need not be pre-cleared if the terms of participation are not changed by the participant. Any participation changes permitted under the ESPP during a purchase period (such as payroll deduction amounts or withdrawals from the ESPP) must be made during an open trading window and must be pre-cleared by Covered Persons under this Policy prior to making any such changes. Any Company Securities acquired under the ESPP may only be sold by Covered Persons in accordance with this Policy.

VI. Additional
 Restrictions and Requirements for Directors and Executive Officers and other Nominated Individuals

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. <u>Trading Window</u> 

In addition to being subject to all of the other limitations in this Policy, directors and executive officers of the Company or any of its subsidiaries, as well as their Related Persons, may only buy or sell Company Securities in the public market during the period beginning the second trading day after the release of material information, via a press release or a current report on Form 8-K. See Section V.C., above, for exceptions relating to Rule 10b5-1 trading plans. It is the objective of the Company to disclose all material information to the public as soon as reasonably practical. Additionally, the Company may establish event-specific black-out periods from time to time which will further limit the time during which directors and executive officers of the Company or any of its subsidiaries, as well as their Related Persons, may buy or sell Company Securities in the public market.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. <u>Pre-Clearance</u> 

Directors and executive officers of the Company or any of its subsidiaries, as well as their Related Persons, must obtain prior clearance from the Company's Officers, before any purchases or sales of Company Securities including any exercise of stock options are made thereby. The Company's Officers, will consult as necessary with senior management of and/or legal counsel to the Company before clearing any proposed trade. Each proposed purchase and sale will be evaluated to determine if it raises insider trading concerns or other concerns under the federal or state securities laws and regulations. Any advice will relate solely to the restraints imposed by law and will not constitute advice regarding the investment aspects of any transaction. Clearance of a transaction is valid only for a 48-hour period. If the transaction order for a purchase or sale of Company Securities is not placed within that 48-hour period, clearance of such purchase or sale as the case may be, must be re-requested. If clearance is denied, the fact of such denial must be kept confidential by the person requesting such clearance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. <u>Nominated Individuals</u> 

From time to time, the Company may also prohibit all or certain Covered Persons from trading securities of the Company because of material developments known to the Company and certain individuals identified by officers of the Company and not yet disclosed to the public. In such event, all such designated Covered Persons may not engage in any transaction involving the purchase or sale of the Company's securities and should not disclose to others the fact of such suspension of trading. The Company would re-open the trading window at the beginning of the third Trading Session following the date of public disclosure of the information, or at such time as the information is no longer material.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. <u>Certification</u> 

All directors, officers and other employees must certify their understanding of, and intent to comply with, this Policy upon the commencement of their relationship with the Company or any of its subsidiaries and annually thereafter. The certification form is attached hereto as <u>Exhibit A</u>.

**VII.** **The Consequences of Insider Trading** 

Individuals who trade on material, non-public information or tip information to others can be subject to an array of civil and criminal penalties. Violations are taken very seriously by the Securities and Exchange Commission (the "SEC"), the federal agency responsible for enforcing the law in this area. Potential sanctions include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) disgorgement
 of profits gained or losses avoided and interest thereon;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) a
 civil penalty of up to three times the profit gained or loss avoided;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) a
 bar from acting as an officer or director of a publicly traded company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) a
 criminal fine (no matter how small the profit or the lack thereof) of up to $5 million; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) a
 jail term of up to 20 years.

These penalties can apply even if the individual is not a director or officer of the Company. The SEC has imposed large penalties even when the disclosing person did not profit from the trading. The SEC, the Nasdaq Stock Market and Financial Industry Regulatory Authority use sophisticated electronic surveillance techniques to uncover insider trading. In addition to the potentially severe civil and criminal penalties for violation of the insider trading laws, violation of this Policy may result in the imposition by the Company of sanctions, including dismissal from the Company. A conviction or finding of liability for insider trading can also result in individuals being banned generally from employment in the securities or financial services industries or other employment, and even a mere allegation of insider trading can result in severe harm to professional and personal reputation.

*Approved by the Board of Directors on May 10, 2017 and revised in 2023 and again October 21, 2025*

## Exhibit 21.1

**Exhibit 21.1**

**SUBSIDIARIES**

Fundamental Global Reinsurance, Ltd., a Cayman Islands Company

FG Strategic Consulting, LLC, a Delaware Company

FG Management Solutions, LLC, a Delaware Company

Fundamental Global Asset Management, LLC, a Delaware Company

FG Reinsurance Holdings, LLC, a Delaware Company

FG Re Solutions, Ltd, a Bermuda Company

Sponsor Protection and Coverage Risk, Inc, a South Carolina Company

Sponsor Protection and Coverage Risk Retention Group, Inc, a South Carolina Company

Fundamental Global Holdings BC ULC, a British Columbia, Canada Company

## Exhibit 23.1

**Exhibit 23.1**

**CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

We consent to the inclusion of our report within this Form 10-K of FG Nexus Inc. (f/k/a Fundamental Global, Inc.) (the "Company") of our report dated March 31, 2025, relating to our audit, before the effects of the adjustments to retrospectively apply the one-for-five reverse stock split effected on February 13, 2026, and to retrospectively reflect the discontinued operations to the 2024 consolidated financial statements as described in Note 1 and Note 7, respectively, of the consolidated financial statements of the Company as of December 31, 2024, and for the year then ended, appearing in the Company's Annual Report on Form 10-K for the year ended December 31, 2025.

Our report dated March 31, 2025 contains five emphasis of matters paragraphs relating to the Company's reverse merger with FG Group Holdings Inc., business combination with Strong Global Entertainment, Inc., sale of Strong/MDI Screen Systems, Inc., plan to sell its reinsurance business, and reverse stock split at a ratio of one (1)-for-twenty-five (25).

HASKELL & WHITE LLP

Irvine, California

March 26, 2026

## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATION**

I, D. Kyle Cerminara, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I
 have reviewed this annual report on Form 10-K of FG Nexus Inc.;

2. Based
 on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
 to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to
 the period covered by this report;

3. Based
 on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
 respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in
 this report;

4. The
 registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures
 (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange
 Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Designed
 such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
 to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others
 within those entities, particularly during the period in which this report is being prepared;

b. Designed
 such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
 supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
 for external purposes in accordance with generally accepted accounting principles;

c. Evaluated
 the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about
 the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
 and

d. Disclosed
 in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's
 most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected,
 or is reasonably likely to materially affect, the registrant's internal control over financial reporting;

&nbsp;&nbsp;&nbsp;&nbsp;5. The
 registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial
 reporting, to the registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing
 the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. All
 significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
 reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information;
 and

b. Any
 fraud, whether material or not material, that involves management or other employees who have a significant role in the registrant's
 internal control over financial reporting.

---

| | |
|:---|:---|
| Date: | March 26, 2026<br>|
| By: | */s/ D. Kyle Cerminara* |
|  | D. Kyle Cerminara, Chief Executive Officer<br> (Principal Executive Officer) |

---

## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATION**

I, Mark D. Roberson, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I
 have reviewed this annual report on Form 10-K of FG Nexus Inc.;

2. Based
 on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
 to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to
 the period covered by this report;

3. Based
 on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
 respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in
 this report;

4. The
 registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures
 (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange
 Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Designed
 such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
 to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others
 within those entities, particularly during the period in which this report is being prepared;

b. Designed
 such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
 supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
 for external purposes in accordance with generally accepted accounting principles;

c. Evaluated
 the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about
 the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
 and

d. Disclosed
 in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's
 most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected,
 or is reasonably likely to materially affect, the registrant's internal control over financial reporting;

&nbsp;&nbsp;&nbsp;&nbsp;5. The
 registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial
 reporting, to the registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing
 the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. All
 significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
 reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information;
 and

b. Any
 fraud, whether material or not material, that involves management or other employees who have a significant role in the registrant's
 internal control over financial reporting.

---

| | |
|:---|:---|
| Date: | March 26, 2026<br>|
| By: | */s/ Mark D. Roberson* |
|  | Mark D. Roberson, Chief Financial Officer<br> (Principal Financial Officer) |

---

## Exhibit 32.1

**Exhibit 32.1**

**STATEMENTS REQUIRED BY 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT**

**TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Annual Report on Form 10-K of FG Nexus Inc. (the "Company"), for the year ended December 31, 2025, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, D. Kyle Cerminara, Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:

&nbsp;&nbsp;&nbsp;&nbsp;1. The
 Form 10-K fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The
 information contained in the Form 10-K fairly presents, in all material respects, the financial condition and result of operations
 of the Company.

---

| | |
|:---|:---|
| Dated: | March 26, 2026 |
| By: | */s/ D. Kyle Cerminara* |
|  | D. Kyle Cerminara, Chief Executive Officer<br> (Principal Executive Officer) |

---

## Exhibit 32.2

**Exhibit 32.2**

**STATEMENTS REQUIRED BY 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT**

**TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Annual Report on Form 10-K of FG Nexus (the "Company"), for the year ended December 31, 2025, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Mark D. Roberson, Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:

&nbsp;&nbsp;&nbsp;&nbsp;1. The
 Form 10-K fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The
 information contained in the Form 10-K fairly presents, in all material respects, the financial condition and result of operations
 of the Company.

---

| | |
|:---|:---|
| Dated: | March 26, 2026 |
| By: | */s/ Mark D. Roberson* |
|  | Mark D. Roberson, Chief Financial Officer<br> (Principal Financial Officer) |

---