SEC Form DEFM14A filed by Ballantyne Strong Inc.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934 (Amendment No. )

Check the appropriate box:

FG Group Holdings Inc.

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

INFORMATION STATEMENT OF FG FINANCIAL GROUP, INC.

CONSENT SOLICITATION STATEMENT OF FG GROUP HOLDINGS INC.

PROSPECTUS FOR

19,708,184 SHARES OF COMMON STOCK OF FG FINANCIAL GROUP, INC.

On behalf of the boards of directors of FG Financial Group, Inc. (“FGF”) and FG Group Holdings Inc. (“FGH”), we are pleased to enclose the accompanying information statement/consent solicitation statement/prospectus (this “Merger Solicitation”) relating to a proposed merger transaction involving FGF and FGH.

The disinterested members of the boards of directors of FGF and FGH have each unanimously approved a Plan of Merger, dated as of January 3, 2024, by and among FGF, FG Group LLC, a wholly owned subsidiary of FGF (“New FGH”), and FGH (as amended from time to time, the “Plan of Merger”). Kyle Cerminara, who serves as the Chairman of the Board of each of FGF and FGH, and Larry Swets, who serves as the Chief Executive Officer of FGF and is on the board of directors of each of FGF and FGH, recused themselves from the voting on the Plan of Merger and proposed transaction thereunder. In addition, the holder of a majority of FGF’s common stock, par value $0.001 per share (the “FGF Common Stock”), acting by written consent in lieu of a meeting, has approved and adopted the Plan of Merger. This Merger Solicitation serves as the information statement required by the Securities and Exchange Commission (the “SEC”) with respect to such written consent and no further action of holders of FGF Common Stock (the “FGF Stockholders”) is requested or required. If the Plan of Merger is adopted by the holders of FGH Common Stock (the “FGH Stockholders”) and the transactions under the Plan of Merger are consummated, FGH will merge with and into New FGH (the “Merger”), with New FGH as the surviving entity and wholly owned subsidiary of FGF. Following (and contingent upon consummation of) the Merger, FGF will amend its amended and restated articles of incorporation to change the name of FGF to “Fundamental Global Inc.”

The proposed Merger will create a combined organization with significantly enhanced scale and operational efficiencies. FGF and FGH believe the proposed Merger will eliminate significant duplicative costs and inefficiencies currently associated with operating two separate public companies. In addition, the proposed Merger is expected to streamline the operations and significantly reduce public company administrative costs and allow the combined management team to be more focused on executing operating plans and creating stockholder value. FGF and FGH also believe that the stockholders of both FGF and FGH will benefit from the combination of two companies with talented management teams, similar core values and strong commitments to serving their customers and communities and creating long term stockholder value.

As a result of the Merger, FGH Stockholders will receive consideration in the form of shares of FGF Common Stock. FGF Common Stock is listed and traded on the Nasdaq Global Market (the “NASDAQ”) under the trading symbol “FGF.” In connection with the Merger, and without any further action on the part of any party, each share of common stock, par value $0.01 per share, of FGH (the “FGH Common Stock”) will be converted into one (1) (the “Exchange Ratio”) share of FGF Common Stock. Based on the closing price of the FGF Common Stock on the NASDAQ on January 2, 2024, the last trading day before public announcement of the Merger, of $1.60, the Exchange Ratio represented approximately $1.60 in value for each share of FGH Common Stock. Based on the closing price of FGF Common Stock on the NASDAQ on January 26, 2024, the last practicable trading day before the date of the accompanying Merger Solicitation, of $1.39, the Exchange Ratio represented approximately $1.39 in value for each share of FGH Common Stock. The value of FGF Common Stock at the time of completion of the Merger could be greater than, less than or the same as the value of FGF Common Stock on the date of the accompanying Merger Solicitation. We urge you to obtain current market quotations of FGF Common Stock (trading symbol “FGF”) and FGH Common Stock (trading symbol “FGH”).

FGF and FGH expect the Merger will qualify as a reorganization for federal income tax purposes. Accordingly, it is expected that FGH Stockholders generally will not recognize any gain or loss for federal income tax purposes on the exchange of shares of FGH Common Stock for FGF Common Stock in the Merger. FGH Stockholders are urged to consult their own tax advisors with respect to the application of U.S. federal income tax laws to their particular situations as well as any tax consequences arising under the U.S. federal estate or gift tax rules, or under the laws of any state, local, foreign or other taxing jurisdiction or under any applicable tax treaty.

Based on the current number of shares of FGH Common Stock outstanding and reserved for issuance, FGF expects to issue approximately 19.7 million shares of FGF Common Stock in the aggregate in the Merger and approximately 2.8 million shares of FGF Common Stock held by Fundamental Global GP, LLC (and beneficially owned by FGH) will be retired. Following the completion of the Merger, former FGH Stockholders will own approximately seventy-two percent (72%), and former FGF Stockholders will own approximately twenty-eight percent (28%) of the outstanding FGF Common Stock.

The board of directors of FGH is soliciting the written consent of FGH Stockholders. This Merger Solicitation provides you with detailed information about the proposed Merger. It also contains or references information about FGF, New FGH, FGH, and certain related matters. You are encouraged to read this Merger Solicitation carefully. In particular, you should read the “Risk Factors” section beginning on page 23 for a discussion of the risks you should consider in evaluating the proposed Merger and how it will affect you.

If you (including banks and brokers) have any questions or need assistance with respect to your written consent, please contact Alliance Advisors (“Alliance”), FGH’s consent solicitor, by calling (844) 876-6185, or by emailing [email protected]. This Merger Solicitation relating to the Merger will be available at https://fg.group/investor-relations/ and at https://www.fgfinancial.com/sec-filings/.

Each of our boards of directors supports the Merger and the FGH board of directors unanimously recommends that holders of common stock of FGH consent to the Merger. We strongly support this combination of our companies and join our boards of directors in their recommendations.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities to be issued in connection with the Merger or determined if this document is accurate or complete. Any representation to the contrary is a criminal offense.

The accompanying Merger Solicitation is dated January 29, 2024, and is first being mailed to FGF Stockholders and FGH Stockholders on or about January 31, 2024.

ADDITIONAL INFORMATION

The accompanying Merger Solicitation incorporates important business and financial information about FGF and FGH from other documents that are not included in or delivered with this Merger Solicitation. This information is available to you without charge upon your written or oral request. You can obtain the documents incorporated by reference in this document through the Securities and Exchange Commission website at http://www.sec.gov or by requesting them in writing, by e-mail or by telephone at the appropriate address below:

You will not be charged for any of these documents that you request. In order to obtain timely delivery of any requested materials, YOU MUST REQUEST THIS INFORMATION BY February 16, 2024.

The contents of the websites of the SEC, FGF or FGH are not incorporated into this Merger Solicitation. The information about how you can obtain certain documents that are incorporated by reference into this Merger Solicitation at these websites is being provided only for your convenience.

No one has been authorized to provide you with information that is different from that contained in, or incorporated by reference into, this Merger Solicitation. This Merger Solicitation is dated January 29, 2024, and you should assume that the information in this document is accurate only as of such date. You should assume that the information incorporated by reference into this document is accurate as of the date of such incorporated document. Neither the mailing of this Merger Solicitation to FGF Stockholders or FGH Stockholders, nor the issuance by FGF of shares of FGF Common Stock in connection with the Merger will create any implication to the contrary.

This Merger Solicitation does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction to or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction. Except where the context otherwise indicates, information contained in, or incorporated by reference into, this document regarding FGF or New FGH has been provided by FGF, and information contained in, or incorporated by reference into, this document regarding FGH has been provided by FGH.

See the section entitled “Where You Can Find More Information” beginning on page 72 of the accompanying Merger Solicitation for further information.

FG Financial Group, Inc.

104 S. Walnut Street, Unit 1A

Itasca, IL 60143

INFORMATION STATEMENT

January 29, 2024

NOTICE OF STOCKHOLDER ACTION BY WRITTEN CONSENT

To the Stockholders of FG Financial Group, Inc.:

This notice and the accompanying information statement are being distributed to the holders of record (the “FGF Stockholders”) of the common stock, par value $0.001 per share (“FGF Common Stock”), of FG Financial Group, Inc., a Nevada corporation (the “Company”), as of the close of business on January 3, 2024 (the “Record Date”), in accordance with Rule 14c-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The purpose of this notice and the accompanying information statement is to notify FGF Stockholders of actions approved by our Board of Directors (the “FGF Board”) and taken by written consent in lieu of a meeting by the holder of a majority of the voting power of our outstanding capital stock as of the Record Date (the “FGF Written Consent”). The FGF Written Consent approved and adopted the plan of merger (as amended from time to time, the “Plan of Merger”) by and among FGF, FG Group LLC, a wholly owned subsidiary of FGF (“New FGH”), and FG Group Holdings Inc. (“FGH”), a copy of which is attached to this information statement as Annex A, and the transactions contemplated thereby, including (i) the merger of FGH with and into New FGH (the “Merger”), with New FGH as the surviving entity and wholly owned subsidiary of FGF, (ii) the issuance of shares of FGF Common Stock to the holders of FGH Common Stock (the “FGH Stockholders”) as consideration for the Merger, and (iii) the amendment of FGF’s amended and restated articles of incorporation to change the name of FGF to “Fundamental Global Inc.,” contingent upon the consummation of the Merger.

The FGF Written Consent is the only stockholder approval required to effect the approval and adoption of the Plan of Merger under the Nevada Revised Statutes, our articles of incorporation or our bylaws. No consent or proxies are being requested from our stockholders, and the FGF Board is not soliciting your consent or proxy in connection with the corporate actions (the “Corporate Actions”) described in this information statement. The Corporate Actions, as approved by the Written Consent, will not become effective until 20 calendar days after the accompanying information statement is first mailed or otherwise delivered to the FGF Stockholders.

WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.

No action is required by you. The accompanying information statement is furnished to FGF Stockholders only to inform the FGF Stockholders of the actions described above before they take place in accordance with Rule 14c-2 of the Exchange Act. This information statement is first mailed to you on or about January 31, 2024.

Please feel free to call us at (847) 773-1665 should you have any questions on the enclosed information statement/consent solicitation statement/prospectus.

FG Group Holdings Inc.

5960 Fairview Road, Suite 275

Charlotte, NC 28210

January 29, 2024

NOTICE OF SOLICITATION OF WRITTEN CONSENT

To the Stockholders of FG Group Holdings Inc.:

We are pleased to enclose the information statement/consent solicitation statement/prospectus (“Merger Solicitation”) relating to the proposed merger pursuant to that certain Plan of Merger dated January 3, 2024 (the “Plan of Merger”) by and among FG Financial Group, Inc. (“FGF”), FG Group LLC, a wholly owned subsidiary of FGF (“New FGH”), and FG Group Holdings Inc. (“FGH”). If (i) the Plan of Merger is adopted and the merger and the other transactions contemplated thereby are approved by FGH’s stockholders, and (ii) the Merger is subsequently completed, FGH will merge with and into New FGH (the “Merger”), with New FGH as the surviving entity and wholly owned subsidiary of FGF. Following (and contingent upon consummation of) the Merger, FGF will amend its amended and restated articles of incorporation to change the name of FGF to “Fundamental Global Inc.” All shares of FGH capital stock issued and outstanding immediately prior to the effective time of the Merger (the “Effective Time”) will be converted into the applicable merger consideration, as set forth in the Plan of Merger and described in the accompanying Merger Solicitation.

The Merger Solicitation attached to this notice is being delivered to you on behalf of FGH’s board of directors (the “FGH Board”) to request that holders of the outstanding shares of FGH’s common stock as of the record date of January 3, 2024, execute and return written consents to adopt and approve the Plan of Merger, the Merger, and the other transactions contemplated by the Plan of Merger, in all respects. The corporate actions approved pursuant to such written consent will become effective upon receipt of consents from the holders of a majority of the outstanding shares of FGH common stock entitled to vote on the Plan of Merger, but no sooner than 20 business days after the accompanying Merger Solicitation is first mailed or otherwise delivered to the FGF Stockholders and FGH Stockholders.

The attached Merger Solicitation describes the proposed Merger and the actions to be taken in connection with the Merger, and provides additional information about the parties involved. A copy of the Plan of Merger is attached as Annex A to this Merger Solicitation.

FGH has determined that FGH Stockholders are not entitled to appraisal or dissenters’ rights with respect to the Merger under the Nevada Revised Statutes or the FGH articles of incorporation or bylaws.

The disinterested members of the FGH Board have considered the Merger and the terms of the Plan of Merger and have unanimously determined that the Merger and the Plan of Merger are advisable, fair to and in the best interests of FGH and its stockholders, and recommend that FGH Stockholders approve the Plan of Merger, the Merger, and the other transactions contemplated by the Plan of Merger, by submitting a written consent.

Please complete, date and sign the written consent enclosed with this Merger Solicitation and return it promptly to FGH by one of the means described in the section of this Merger Solicitation entitled “FGH’s Solicitation of Written Consents.” Completed, dated and signed written consents should be delivered to FGH on or before February 23, 2024, the date the FGH Board has set as the targeted final date for receipt of written consents.

Your consideration and consent are important. We cannot complete the transactions contemplated by the Plan of Merger unless FGH Stockholders approve the Plan of Merger, the Merger, and the other transactions contemplated by the Plan of Merger, by submitting a written consent. The consent of the holders of a majority of the outstanding shares of FGH common stock entitled to vote on the Plan of Merger is required to approve the Plan of Merger, the Merger, and the other transactions contemplated by the Plan of Merger.

Please feel free to call us at (704) 994-8279 should you have any questions on the enclosed Merger Solicitation.

TABLE OF CONTENTS

about this information statement/consent solicitation statement/prospectus

This document, which forms part of a registration statement on Form S-4 filed with the Securities and Exchange Commission (the “SEC”) by FGF, constitutes a prospectus of FGF under Section 5 of the Securities Act of 1933, as amended (the “Securities Act”), with respect to the shares of common stock of FGF to be issued to the FGH Stockholders under the Plan of Merger. This document also constitutes an information statement of FGF under Section 14(c) of the Exchange Act, and a consent solicitation statement of FGH under Section 14(a) of the Exchange Act.

You should rely only on the information contained in this information statement/consent solicitation statement/prospectus (“Merger Solicitation”) in deciding whether to approve the proposed Merger. Neither FGF or FGH has authorized anyone to give any information or to make any representations other than those contained in this Merger Solicitation. Do not rely upon any information or representations made outside of this Merger Solicitation. The information contained in this Merger Solicitation may change after the date of this Merger Solicitation. Do not assume after the date of this Merger Solicitation that the information contained in this Merger Solicitation is still correct. Further, you should not assume that the information incorporated by reference into this Merger Solicitation is accurate as of any date other than the date of the incorporated document.

Except where the context otherwise indicates, information contained in, or incorporated by reference into, this document regarding FGF or New FGH has been provided by FGF, and information contained in, or incorporated by reference into, this document regarding FGH has been provided by FGH.

This Merger Solicitation does not constitute an offer to sell or a solicitation of an offer to buy any securities, or the solicitation of a proxy or consent, in any jurisdiction to or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction.

QUESTIONS AND ANSWERS

The following are some questions that you may have about the Merger and the FGF information statement or the FGH consent solicitation, and brief answers to those questions. We urge you to read carefully the remainder of this Merger Solicitation because the information in this section does not provide all of the information that might be important to you with respect to the Merger. Additional important information is also contained in the documents incorporated by reference into this Merger Solicitation. See the section entitled “Where You Can Find More Information” beginning on page 72.

In this Merger Solicitation, unless the context otherwise requires:

To complete the Merger, FGH Stockholders must approve the Merger Agreement (the “FGH Stockholder Approval”). FGH is soliciting the written consent of FGH Stockholders (the “FGH Consent Solicitation”) to obtain the FGH Stockholder Approval. FGH Stockholders are requested to complete, date and sign the written consent enclosed with this Merger Solicitation and return it promptly to FGH by one of the means described in the section of this Merger Solicitation entitled “FGH’s Solicitation of Written Consents.” FGH Stockholders are not entitled to appraisal or dissenters’ rights in connection with the proposed Merger.

This document also provides FGF Stockholders with notice of actions approved by the FGF Board of Directors and taken by written consent in lieu of a meeting by the holders of a majority of the outstanding FGF Common Stock (the “FGF Written Consent”). The FGF Written Consent approved and adopted the Plan of Merger, and the transactions contemplated thereby, including (i) the Merger, (ii) the issuance of FGF Common Stock to the FGH Stockholders as consideration for the Merger, and (iii) the amendment of FGF’s amended and restated articles of incorporation to change the name of FGF to “Fundamental Global Inc.,” contingent upon the consummation of the Merger. The FGF Written Consent is the only approval required of the FGF Stockholders to effect the approval and adoption of the Plan of Merger under the Nevada Revised Statutes (the “NRS”), the FGF Articles of Incorporation and FGF’s bylaws. No consent or proxies are being requested from FGF Stockholders, and the FGF Board is not soliciting their consent or proxy in connection with the Merger and related transactions. FGF Stockholders are not entitled to appraisal or dissenters’ rights.

This document is also a prospectus that is being delivered to FGH Stockholders because, in connection with the Merger, FGF is offering shares of FGF Common Stock to the FGH Stockholders in exchange for the outstanding FGH Common Stock as the consideration to be received in the Merger.

This Merger Solicitation contains important information about the Merger and the FGF Common Stock being issued as consideration in the Merger. You should read it carefully and in its entirety. FGH Stockholders are asked to promptly complete, date and sign the written consent enclosed with this Merger Solicitation and return it promptly to FGH by one of the means described in the section of this Merger Solicitation entitled “FGH’s Solicitation of Written Consents.”

After completion of the Merger, FGH will cease to exist, will no longer be a public company, and FGH Common Stock will be delisted from the NYSE American, will be deregistered under the Exchange Act and will cease to be publicly traded. FGF Stockholders will continue to own their existing shares of FGF Common Stock. See the information provided in the section entitled “The Transaction Agreements-Description of the Plan of Merger-Structure of the Merger” beginning on page 51 and the Plan of Merger for more information about the Merger.

In considering the recommendations of the FGH Board, FGH Stockholders should be aware that FGH directors and executive officers may have interests in the Merger that are different from, or in addition to, the interests of FGH Stockholders generally. For a more complete description of these interests, see the information provided in the section entitled “The Merger-Interests of FGH’s Directors and Executive Officers in the Merger” beginning on page 45.

If you are an FGH Stockholder, after carefully reading and considering the information contained in this Merger Solicitation, please complete, date and sign the written consent enclosed with this Merger Solicitation and return it to FGH as soon as possible by one of the means described in the section of this Merger Solicitation entitled “FGH’s Solicitation of Written Consents.” Please note that if you hold shares beneficially in “street name,” you should follow the instructions provided by your bank, broker, trustee or other nominee.

If your shares are held by a broker, bank, trustee or other nominee, you should contact your broker, bank, trustee or other nominee to withdraw or revoke your consent.

FGH record holders. For shares or FGH Common Stock held directly, please complete, date and sign the written consent enclosed with this Merger Solicitation and return it to FGH as soon as possible by one of the means described in the section of this Merger Solicitation entitled “FGH’s Solicitation of Written Consents.”

FGH shares in “street name.” For shares held in “street name” through a bank, broker, trustee or other nominee, you should follow the procedures provided by your bank, broker, trustee or other nominee to submit your written consent.

FGH Stockholders: If you have any questions about the Merger or how to submit your written consent, or if you need additional copies of this document or the enclosed written consent, you should contact FGH’s investor relations team at [email protected] or [email protected], or at 5960 Fairview Road, Suite 275, Charlotte, NC 28210, or by telephone at (704) 994-8279, or FGH’s consent solicitor, Alliance, by calling toll-free at (844) 876-6185.

UNAUDITED PRO FORMA CONDENSED COMBINED

FINANCIAL INFORMATION

The disinterested members of the boards of directors of FGF and FGH have each unanimously approved a Plan of Merger, dated as of January 3, 2024, by and among FGF, New FGH (a wholly owned subsidiary of FGF), and FGH. As a result of the Merger, FGH Stockholders will receive consideration in the form of shares of FGF Common Stock. FGF Common Stock is listed and traded on the NASDAQ under the trading symbol “FGF.” In connection with the Merger, and without any further action on the part of any party, each share of FGH Common Stock will be converted into one share of FGF Common Stock.

The following unaudited pro forma condensed combined financial information is based on the separate historical financial statements of FGF and FGH after giving effect to the Merger and the issuance of FGF Common Stock in connection therewith, and the assumptions and adjustments described in the accompanying notes to the unaudited pro forma condensed combined financial information. The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2022 combines the historical consolidated statements of operations of FGF and FGH, giving effect to the Merger as if it had been completed on January 1, 2022. The unaudited pro forma condensed combined statement of operations for the period ended September 30, 2023 combines the historical consolidated statements of operations of FGF and FGH, giving effect to the Merger as if it had been completed on January 1, 2022. The accompanying unaudited pro forma condensed combined balance sheet as of September 30, 2023 combines the historical consolidated balance sheets of FGF and FGH, giving effect to the Merger as if it had been completed on September 30, 2023.

The following unaudited pro forma condensed combined financial information and related notes are based on and should be read in conjunction with (i) the historical audited consolidated financial statements of FGF and the related notes included in FGF’s Annual Report on Form 10-K for the year ended December 31, 2022 and unaudited consolidated financial statements of FGF and the related notes included in FGF’s Quarterly Report on Form 10-Q for the period ended September 30, 2023, and (ii) the historical audited consolidated financial statements of FGH and the related notes included in FGH’s Annual Report on Form 10-K for the year ended December 31, 2022 and unaudited consolidated financial statements of FGH and the related notes included in FGH’s Quarterly Report on Form 10-Q for the period ended September 30, 2023, each of which is incorporated into this Merger Solicitation by reference.

The historical consolidated financial information has been adjusted in the unaudited pro forma condensed combined financial information to give effect to the pro forma events that are transaction accounting adjustments. The unaudited pro forma condensed combined financial information contained herein does not reflect the costs of any integration activities or benefits that may result from the realization of future cost savings from operating efficiencies, or any other synergies that may result from the Merger. The following unaudited pro forma condensed combined financial information gives effect to the Merger and includes adjustments for the following:

The unaudited pro forma transaction accounting adjustments reflecting the completion of the Merger are based on certain currently available information and certain assumptions and methodologies that FGF believes are reasonable under the circumstances. The unaudited pro forma transaction accounting adjustments, which are described in the accompanying notes, may be revised as additional information becomes available and is evaluated. Therefore, it is likely that the actual adjustments will differ from the unaudited pro forma transaction accounting adjustments and it is possible the difference may be material. FGF believes that its assumptions and methodologies provide a reasonable basis for presenting all of the significant effects of the Merger based on information available to management at this time and that the unaudited pro forma transaction accounting adjustments give appropriate effect to those assumptions and are properly applied in the unaudited pro forma condensed combined financial information.

Future results may differ materially from the results reflected because of various factors, including those discussed in the section entitled “Risk Factors” beginning on page 23 and appearing under the caption “Risk Factors” in FGF’s and FGH’s most recently filed Annual Reports on Form 10-K and in any subsequently filed Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, which are incorporated by reference in this Merger Solicitation, and the factors discussed in the section entitled “Cautionary Statement Regarding Forward-Looking Statements” beginning on page 22. Among other factors, the actual amounts recorded as of the completion of the Merger may differ materially from the information presented in these unaudited pro forma condensed combined financial statements as a result of (but not limited to):

The unaudited pro forma condensed combined financial statements should be read together with:

Accounting for the Merger

The Merger will be accounted for as a reverse acquisition. 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 acquiror primarily based on the evaluation of the following facts and circumstances:

(i) FGH equity holders will own a majority of the voting rights of FGF following consummation of the Merger; following the completion of the Merger, it is anticipated that persons who were stockholders of FGH and FGF immediately prior to the Merger will own approximately 72% and 28% of FGF Common Stock, respectively;

(ii) D. Kyle Cerminara will be CEO of FGF following the Merger and act as FGF’s principal executive officer, with FGH’s current CEO, Mark Roberson, joining the FGF management team as CFO and act as FGF’s principal financial and accounting officer following the Merger and will remain as CEO of SGE, while FGH’s current CFO will remain as CFO of SGE, and FGF’s current CEO and CFO will lead FGF’s merchant banking and SPAC businesses following the Merger;

(iii) FGF’s Board of Directors will consist of seven members, three of whom have been designated by FGH and FGF, respectively; and

(iv) FGF will be headquartered in Charlotte, North Carolina, which is consistent with the location of FGH executive leadership prior to the Merger.

Other factors were evaluated but are not considered to have a material impact on the determination of FGH as the accounting acquirer.

Given the nature of FGF’s assets and liabilities, and the corresponding accounting policies, a determination was made that the fair value of the FGF assets and liabilities as of September 30, 2023 approximates carrying value. In addition, no preliminary intangible assets of FGF have been identified. As a result, the unaudited pro forma condensed combined balance sheet as of September 30, 2023 does not contain any adjustments to the historical value of the assets and liabilities of FGF. A final determination of the fair value of FGF’s assets and liabilities will be based on those that exist as of the Closing Date, and therefore, cannot be made prior to the completion of the Merger. The pro forma adjustments are preliminary and are subject to change as additional information becomes available and as additional analysis is performed.

The unaudited pro forma condensed combined financial information has been presented for illustrative purposes only and does not necessarily reflect what FGF’s financial condition or results of operations would have been had the proposed Merger closed on the dates indicated. Further, the unaudited pro forma condensed combined financial information also may not be useful in predicting the future financial condition and results of operations of FGF. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors. The unaudited pro forma adjustments represent management’s estimates based on information available as of the date of this unaudited pro forma condensed combined financial information and are subject to change as additional information becomes available and analyses are performed.

Unaudited Pro Forma Condensed Combined Balance Sheet

As of September 30, 2023

(In thousands)

Unaudited Pro Forma Condensed Combined Statement of Operations

For the Nine Months Ended September 30, 2023 

(In thousands, except share and per share amounts)

Unaudited Pro Forma Condensed Combined Statement of Operations

For the Year Ended December 31, 2022

(In thousands, except share and per share amounts)

Notes To Unaudited Pro Forma Condensed Combined Financial Information

Note 1. Basis of Presentation

The unaudited pro forma condensed combined financial statements were prepared utilizing the historical financial information of FGF and FGH in accordance with Article 11 of the SEC Regulation S-X, and they incorporate the acquisition method of accounting in accordance with U.S. GAAP. Certain transaction accounting adjustments have been computed in order to show the effects of the Merger on the condensed combined historical financial information of FGF and FGH. These adjustments are preliminary and are subject to change as additional information becomes available and analyses are performed, including management’s estimates of fair value of the assets acquired and liabilities assumed.

The unaudited pro forma condensed combined financial information is presented as follows:

The unaudited pro forma condensed combined financial information does not reflect anticipated synergies, operating efficiencies and cost savings that are expected to result from the Merger or integration costs that may be incurred. Management expects to realize annual cost savings, including reductions to management compensation and the director compensation program, as well as duplicate operating expenses such as professional fees (legal, audit, tax preparation and consulting, and investor relations) and tax consulting and preparation fees that management expects to result from the Merger. The pro forma adjustments represent management’s best estimates and are based upon currently available information and certain assumptions that management believes are reasonable under the circumstances. There were no material transactions between FGF and FGH during the periods presented.

Note 2. Accounting Policies

The accounting policies of FGF after the Merger shall be those of the accounting acquiror, FGH. Upon consummation of the Merger, FGF management will perform a comprehensive review of the two entities’ accounting policies. As a result of the review, post-Closing management may identify differences between the accounting policies of the two entities which, when conformed, could have a material impact on the financial statements of FGF post-Closing. Based on its initial analysis, each of FGF’s and FGH’s management did not identify any differences that would have a material impact on the unaudited pro forma condensed combined financial information. As a result, the unaudited pro forma condensed combined financial information does not assume any differences in accounting policies.

Note 3. Preliminary Purchase Price Allocation

The Merger will be accounted for as a business combination under Accounting Standards Codification (“ASC”) 805, Business Combinations, using the acquisition method of accounting, and FGH has been determined to be the accounting acquirer. The proposed transaction will be accounted for as a reverse acquisition in accordance with U.S. GAAP. Under this method of accounting, FGF, which is the legal acquirer, will be treated as the acquired company for financial reporting purposes and FGH will be treated as the accounting acquirer. The allocation of the preliminary estimated purchase price with respect to the Merger is based upon FGF’s and FGH’s managements’ estimates and assumptions related to the fair value of assets acquired and liabilities assumed as of September 30, 2023, using currently available information. Given the nature of FGF’s assets and liabilities, and the corresponding accounting policies, a determination was made that the fair value of the FGF assets and liabilities as of September 30, 2023 approximates carrying value. As a result, the unaudited pro forma condensed combined balance sheet as of September 30, 2023 does not contain any adjustments to the historical value of the assets and liabilities of FGF.

Note 4. Adjustments to Unaudited Pro Forma Condensed Combined Balance Sheet

The pro forma adjustments included in the Unaudited Pro Forma Condensed Combined Balance Sheet as of September 30, 2023 are as follows:

Note 5. Adjustments to Unaudited Pro Forma Condensed Combined Statement of Operations

The pro forma adjustments included in the Unaudited Pro Forma Condensed Combined Statements of Operations are as follows:

Note 6. Net Loss Per Share

The below calculation represents the net loss per share calculated using the shares issued in the Merger assuming the shares were outstanding since January 1, 2022.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Some of the statements contained or incorporated by reference into this Merger Solicitation which are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, which are based on current expectations, estimates and projections about the industry and markets in which FGF and FGH, and their respective subsidiaries, operate and beliefs of and assumptions made by FGF management and FGH management, involve uncertainties that could significantly affect the financial condition, results of operations, business plans and the future performance of FGF and FGH and their respective subsidiaries.

Words such as “aim,” “anticipate,” “estimate,” “expect,” “goal,” “guidance,” “intend,” “is anticipated,” “is estimated,” “is expected,” “is intended,” “objective,” “plan,” “projected,” “projection,” “will affect,” “will be,” “will continue,” “will decrease,” “will grow,” “will impact,” “will increase,” “will incur,” “will reduce,” “will remain,” “will result,” “would be,” variations of such words or phrases (including where the word “could,” “may” or “would” is used rather than the word “will” in a phrase) and similar words and phrases indicating that the statement addresses some future result, occurrence, plan or objective are intended to identify forward-looking statements but are not the exclusive means of identifying these statements. Such forward-looking statements include, but are not limited to, statements about the strategic rationale and financial benefits of the Merger, including expected future financial and operating results and the combined company’s plans, objectives, expectations and intentions. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future-including statements relating to projections of revenue, income or loss, earnings or loss per share, the payment or nonpayment of dividends, capital structure and other financial items; statements of plans and objectives of FGF or FGH or their management or board of directors, including those relating to products or services; and statements of future economic performance-are forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, we can give no assurance that our expectations will be attained, and therefore actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements.

In addition to the factors relating to the Merger discussed under the caption “Risk Factors” beginning on page 23 and the factors previously disclosed in FGF’s and FGH’s reports filed with the SEC, the following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements or historical performance: (1) the risk that the cost savings and any revenue synergies from the Merger may not be fully realized or may take longer than anticipated to be realized, (2) disruption to the parties’ businesses as a result of the announcement and pendency of the Merger, (3) the risk that the integration of each party’s operations will be materially delayed or will be more costly or difficult than expected or that the parties are otherwise unable to successfully integrate each party’s businesses into the other’s businesses, (4) the failure to obtain the necessary approvals of the FGH Stockholders, (5) the amount of the costs, fees, expenses and charges related to the Merger, (6) reputational risk and the reaction of each company’s customers, suppliers, employees or other business partners to the Merger, (7) any unexpected delay in closing the Merger, (8) the possibility that the Merger may be more expensive to complete than anticipated, including as a result of unexpected factors or events, (9) the dilution caused by FGF’s issuance of additional shares of FGF Common Stock in the Merger, (10) a material adverse change in the financial condition of FGF or FGH, (11) general competitive, economic, political and market conditions, (12) major catastrophes such as earthquakes, floods or other natural or human disasters, including pandemics and infectious disease outbreaks, and any related disruption to local, regional and global economic activity and financial markets, and the impact of the foregoing on FGF or FGH, or the ability to complete the Merger, or any of the other risks described herein, (13) the outcome of any legal proceedings that may be instituted against FGF or FGH, related to the Merger or otherwise, and (14) other factors that may affect future results of FGH and FGF including changes in asset quality and credit risk, (15) the inability to sustain revenue and earnings growth, (16) changes in interest rates and capital markets, (17) inflation, (18) the impact, extent and timing of technological changes, (19) capital management activities, and (20) actions of the Federal Reserve Board and legislative and regulatory actions and reforms.

For any forward-looking statements made in this Merger Solicitation or in any documents incorporated by reference into this Merger Solicitation, FGF and FGH claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this Merger Solicitation or the dates of the documents incorporated by reference in this Merger Solicitation. As for forward-looking statements that relate to future financial results and other projections, actual results will be different due to the inherent uncertainties of estimates, forecasts and projections and may be better or worse than projected and such differences could be material. Given these uncertainties, we caution you not to place reliance on these forward-looking statements. Annualized, pro forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results. Except as required by applicable law, neither FGF nor FGH undertakes to update these forward-looking statements to reflect facts, circumstances, assumptions or events that occur after the date the forward-looking statements are made.

For additional information about factors that could cause actual results to differ materially from those described in the forward-looking statements, please see the reports that FGF and FGH have filed with the SEC as described under “Where You Can Find More Information” beginning on page 72.

We expressly qualify in their entirety all forward-looking statements attributable to either of us or any person acting on our behalf by the cautionary statements contained or referred to in this Merger Solicitation.

RISK FACTORS

An investment by FGH Stockholders in FGF Common Stock as a result of the exchange of shares of FGF Common Stock for shares of FGH Common Stock in the Merger involves certain risks. Certain material risks and uncertainties connected with the Plan of Merger and the transactions contemplated thereby, including the Merger, and ownership of FGF Common Stock are discussed below. In addition, FGF and FGH discuss certain other material risks connected with the ownership of FGF Common Stock and with FGF’s business, and with the ownership of FGH Common Stock and FGH’s business, respectively, under the caption “Risk Factors” appearing in their Annual Reports on Form 10-K most recently filed with the SEC and may include additional or updated disclosures of such material risks in their subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K that have been filed with the SEC or may be filed with the SEC after the date of this Merger Solicitation, each of which report is or will be incorporated by reference in this Merger Solicitation.

You should carefully read and consider all of these risks and all other information contained in this Merger Solicitation, including the discussions of risk factors included in the documents incorporated by reference in this Merger Solicitation. The risks described in this Merger Solicitation and in those documents incorporated by reference may adversely affect the value of FGF Common Stock that you, as an existing FGF Stockholder, currently hold or that you, as an existing FGH Stockholder, will hold upon the completion of the Merger, and could result in a significant decline in the value of FGF Common Stock and cause the current FGF Stockholders and/or the FGH Stockholders to lose all or part of their respective investments in FGF Common Stock.

Risks Relating to the Merger

Because the Exchange Ratio is fixed and the market price of FGF Common Stock may fluctuate, FGH Stockholders cannot be certain of the market value of the Merger Consideration they will receive.

In the Merger, each share of FGH Common Stock issued and outstanding immediately prior to the Effective Time (other than certain shares held by FGF or FGH) will be converted into one (1) share of FGF Common Stock. This Exchange Ratio is fixed and will not be adjusted for changes in the market price of either FGF Common Stock or FGH Common Stock. Changes in the price of FGF Common Stock prior to the Merger will affect the value that FGH Stockholders will receive in the Merger. Neither FGF nor FGH is permitted to terminate the Plan of Merger as a result, in and of itself, of any increase or decrease in the market price of FGF Common Stock or FGH Common Stock.

Stock price changes may result from a variety of factors, including general market and economic conditions, regulatory considerations, including changes in U.S. monetary policy and its effect on global financial markets and on interest rates, changes in FGF’s or FGH’s businesses, operations and prospects, major catastrophes such as earthquakes, floods or other natural or human disasters, including infectious disease outbreaks, and any related disruption to local, regional and global economic activity and financial markets, and the impact that any of the foregoing may have on FGF or FGH or the customers or other constituencies of FGF or FGH, many of which factors are beyond FGF’s or FGH’s control. Therefore, during the pendency of the FGH consent solicitation and at any given time prior to the consummation of the Merger, FGF Stockholders and FGH Stockholders will not know the market value of the consideration to be received by FGH Stockholders at the Effective Time. You should obtain current market quotations for shares of FGF Common Stock and for shares of FGH Common Stock.

The market price of FGF Common Stock after the Merger may be affected by factors different from those affecting the shares of FGF Common Stock or FGH Common Stock currently.

In the Merger, FGH Stockholders will become FGF Stockholders. FGF’s business differs from that of FGH. Accordingly, the results of operations of FGF after the consummation of the Merger and the market price of FGF Common Stock after the completion of the Merger may be affected by factors different from those currently affecting the independent results of operations of each of FGF and FGH. For a discussion of the businesses of FGF and FGH and of certain factors to consider in connection with those businesses, see the documents incorporated by reference in this Merger Solicitation and referred to under “Where You Can Find More Information” beginning on page 72.

FGF and FGH are expected to incur significant costs related to the Merger and integration.

FGF and FGH have incurred and expect to incur certain non-recurring costs associated with the Merger. These costs include legal, financial advisory, accounting, consulting and other advisory fees, insurance, public company filing fees and other regulatory fees, printing costs and other related costs. Some of these costs are payable by either FGF or FGH regardless of whether or not the Merger is completed.

The combined company may also incur expenses in connection with the integration of operations. There are many factors that could affect the total amount or the timing of the integration costs. Moreover, many of the costs that will be incurred are, by their nature, difficult to estimate accurately. These integration costs may result in FGF taking charges against earnings following the completion of the Merger, and the amount and timing of such charges are uncertain at present.

Integrating the companies’ businesses may be more difficult, costly or time consuming than expected and FGF and FGH may fail to realize the anticipated benefits of the Merger.

The success of the Merger will depend, in part, on the ability to realize the anticipated cost savings and synergies from combining FGF and FGH. If FGF and FGH are not able to successfully achieve these objectives, the anticipated benefits of the Merger may not be realized fully or at all or may take longer to realize than expected. In addition, the actual cost savings and anticipated benefits of the Merger could be less than anticipated, and integration may result in additional unforeseen expenses.

FGF and FGH have operated and, until the completion of the Merger, will continue to operate, independently. The success of the Merger will depend, in part, on FGF’s ability to successfully combine and integrate the businesses of both companies in a manner that does not materially disrupt existing operations or result in decreased revenue or reputational harm. It is possible that the integration process could result in the loss of key employees, the disruption of either company’s ongoing businesses, difficulties in integrating operations and systems, including communications systems, administrative and information technology infrastructure and financial reporting and internal control systems, or inconsistencies in standards, controls, procedures and policies that adversely affect the companies’ ability to maintain relationships with clients, customers and employees or to achieve the anticipated benefits and cost savings of the Merger. Integration efforts between the two companies may also divert management attention and resources. These integration matters could have an adverse effect on each of FGF and FGH during this transition period and for an undetermined period after completion of the Merger on FGF.

The businesses and operations of each of FGF, FGH and the combined company following the completion of the Merger may be adversely affected in numerous and complex ways, including as a result of adverse economic conditions, natural and human disasters or other international or domestic calamities.

Each of FGF’s and FGH’s businesses and operations are sensitive to general business and economic conditions in the United States. Uncertainty about federal fiscal monetary and related policies, the medium and long-term fiscal outlook of the federal government, and future tax rates is a concern for businesses, consumers and investors in the United States. Changes in any of these policies are influenced by macroeconomic conditions and other factors that are beyond the control of FGF and FGH.

In addition, adverse economic, social and political conditions in the United States and in foreign countries, including adverse conditions resulting from natural disasters, acts of terrorism, outbreaks of hostilities or other domestic or international calamities, epidemics and pandemics, and other matters beyond the control of FGF and FGH, and the government policy responses to such conditions, could have an adverse effect on the businesses, financial condition, results of operations, prospects and trading prices of each of FGF and FGH during the time the Merger is pending and on FGF and its subsidiaries following the completion of the Merger. All of these factors could be detrimental to FGF’s, FGH’s and the combined company’s businesses, and the interplay between these factors can be complex and unpredictable.

The future results of FGF following the Merger may suffer if FGF does not effectively manage its expanded operations.

Following the Merger, the size of the business of FGF is expected to increase beyond the current size of either FGF’s or FGH’s business. FGF’s future success will depend, in part, upon its ability to manage this expanded business, which may pose challenges for management, including challenges related to the management and monitoring of new operations and associated increased costs and complexity. FGF may also face increased scrutiny from governmental authorities as a result of the significant increase in the size of its business. There can be no assurances that FGF will be successful or that it will realize the expected operating efficiencies, cost savings, revenue enhancements or other benefits currently anticipated from the Merger.

FGF may be unable to retain current FGF or FGH personnel successfully while the Merger is pending or after the Merger is completed.

The success of the Merger will depend in part on FGF’s ability to retain the talents and dedication of key employees and officers currently employed by FGF and FGH. It is possible that these employees and officers may decide not to remain with FGF or FGH, as applicable, while the Merger is pending or with FGF or new FGH (or their respective subsidiaries) after the Merger is consummated. If FGF and FGH are unable to retain key employees, including management, who are critical to the successful integration and future operations of the companies, FGF and FGH 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, FGF’s business activities after completion of the Merger may be adversely affected and management’s attention may be diverted from successfully integrating FGF and FGH to hiring suitable replacements, all of which may cause FGF’s business to suffer. In addition, FGF and FGH may not be able to locate or retain suitable replacements for any key employees who leave either company.

The unaudited pro forma condensed combined financial information included in this Merger Solicitation is preliminary and the actual financial condition and results of operations of FGF after the Merger may differ materially.

The unaudited pro forma condensed combined financial information in this Merger Solicitation is presented for illustrative purposes only and is not necessarily indicative of what FGF’s actual financial condition or results of operations would have been had the Merger been completed on the dates indicated. The unaudited pro forma condensed combined financial information reflects adjustments, which are based upon preliminary estimates of transaction expenses, adjustments, and to record the identifiable assets acquired and liabilities assumed at fair value. The unaudited pro forma condensed combined financial information does not reflect anticipated synergies, operating efficiencies and cost savings that are expected to result from the Merger or integration costs that may be incurred. Accordingly, the final accounting adjustments may differ materially from the pro forma adjustments reflected in this Merger Solicitation. For more information, see the section entitled “Unaudited Pro Forma Condensed Combined Financial Information” beginning on page 15.

Certain of FGF’s and FGH’s directors and executive officers may have interests in the Merger that may differ from, or may be in addition to, the interests of FGF Stockholders and FGH Stockholders generally.

FGF Stockholders and FGH Stockholders should be aware that some of FGF’s and FGH’s directors and executive officers may have interests in the Merger and have arrangements that are different from, or in addition to, the interests or arrangements of FGF Stockholders and FGH Stockholders generally. These interests and arrangements may create potential conflicts of interest. The FGF Board of Directors and the FGH Board of Directors were aware of these respective interests and considered these interests, among other matters, when making their decisions to approve and adopt the Plan of Merger, the Merger, and the other transactions contemplated by the Plan of Merger, and in recommending that FGF Stockholders approve and adopt the Plan of Merger via written consent and FGH Stockholders approve and adopt the Plan of Merger via written consent, as applicable. For a more complete description of these interests, please see the sections entitled “The Merger-Interests of FGF’s Directors and Executive Officers in the Merger” beginning on page 45 and “The Merger-Interests of FGH’s Directors and Executive Officers in the Merger” beginning on page 46.

The Plan of Merger may be terminated in accordance with its terms and the Merger may not be completed, which could negatively affect FGF and/or FGH.

If the Merger is not completed for any reason, including as a result of FGH Stockholders failing to approve the FGH Merger Proposal, there may be various adverse consequences and FGF and/or FGH may experience negative reactions from the financial markets and from their respective customers and employees. For example, FGF’s or FGH’s businesses may have been affected adversely by the failure to pursue other beneficial opportunities due to the focus of management on the Merger, without realizing any of the anticipated benefits of completing the Merger. Additionally, if the Plan of Merger is terminated, the market price of FGF Common Stock or FGH Common Stock could decline to the extent that the current market prices reflect a market assumption that the Merger will be completed.

Additionally, each of FGF and FGH has incurred and will incur substantial one-time expenses in connection with the negotiation and completion of the transactions contemplated by the Plan of Merger, as well as the costs and expenses of filing, printing and mailing this Merger Solicitation, and all filing and other fees paid to the SEC in connection with the Merger. If the Merger is not completed, FGF and FGH would have to pay these expenses without realizing the expected benefits of the Merger.

FGF and FGH will be subject to business uncertainties while the Merger is pending.

Uncertainty about the effect of the Merger on employees and customers may have an adverse effect on FGF and FGH. These uncertainties may impair FGF’s or FGH’s ability to attract, retain and motivate key personnel until the Merger is completed, and could cause customers and others that deal with FGF or FGH to seek to change existing business relationships with FGF or FGH.

The shares of FGF Common Stock to be received by FGH Stockholders as a result of the Merger will have different rights from the shares of FGH Common Stock.

In the Merger, FGH Stockholders will become FGF Stockholders and their rights as FGF Stockholders will be governed by FGF’s governing documents. The rights associated with FGF Common Stock are different from the rights associated with FGH Common Stock. See the section entitled “Comparison of Stockholders’ Rights” beginning on page 60 for a discussion of the rights associated with FGF Common Stock.

In connection with the Merger, New FGH will assume FGH’s outstanding debt obligations, and the combined company’s level of indebtedness following the completion of the Merger could adversely affect the combined company’s ability to raise additional capital and to meet its obligations under its existing indebtedness.

In connection with the Merger, FGF will assume FGH’s outstanding indebtedness. FGF’s existing debt, together with any future incurrence of additional indebtedness, could have important consequences for the combined company’s creditors and the combined company’s stockholders. For example, it could limit the combined company’s ability to obtain additional financing for working capital, capital expenditures, debt service requirements, acquisitions and general corporate or other purposes; restrict the combined company from making strategic acquisitions or cause the combined company to make non-strategic divestitures; restrict the combined company from paying dividends to its stockholders; increase the combined company’s vulnerability to general economic and industry conditions; and require a substantial portion of cash flow from operations to be dedicated to the payment of principal and interest on the combined company’s indebtedness, thereby reducing the combined company’s ability to use cash flows to fund its operations, capital expenditures and future business opportunities.

FGH Stockholders will have a reduced ownership and voting interest in FGF after the Merger and will exercise less influence over management.

FGF Stockholders and FGH Common Stock currently have the right to vote in the election of the board of directors and on other matters affecting FGF and FGH, respectively. When the Merger is completed, each holder of FGH Common Stock who receives shares of FGF Common Stock will become a holder of FGF Common Stock, with a percentage ownership of FGF that is smaller than the holder’s percentage ownership of FGH. Based on the number of shares of FGF Common Stock and FGH Common Stock outstanding as of the close of business on the FGH Record Date, and based on the number of shares of FGF Common Stock expected to be issued in the Merger, the former FGH Stockholders, as a group, are estimated to own approximately seventy-two percent (72%) of the issued and outstanding shares of FGF Common Stock immediately after the Merger and current FGF Stockholders as a group are estimated to own approximately twenty-eight percent (28%) of the issue and outstanding shares of FGF Common Stock immediately after the Merger. Because of this, FGH Stockholders may have less influence on the management and policies of FGF than they now have on the management and policies of FGH.

The dilution caused by the issuance of shares of FGF Common Stock in connection with the Merger may adversely affect the market price of FGF Common Stock.

In connection with the payment of the Merger Consideration, based on the current number of shares of FGH Common Stock outstanding, FGF expects to issue approximately 19.7 million shares of FGF Common Stock to FGH Stockholders. The dilution caused by the issuance of these new shares of FGF Common Stock may result in fluctuations in the market price of FGF Common Stock, including a stock price decrease.

Independent members of the FGH Board have obtained an opinion from an unaffiliated third party as to the fairness of the Exchange Ratio to the holders of FGH Common Stock.

The independent members of the FGH Board (with Messrs. Cerminara and Swets recusing themselves) obtained an opinion from Intrinsic, which supports the Exchange Ratio as fair to the holders of FGH Common Stock from a financial point of view. Intrinsic delivered a written opinion and final supporting analysis presentation to the effect that, as of that date and based upon and subject to the factors and assumptions set forth therein, the Exchange Ratio is fair to holders of FGH Common Stock from a financial point of view. There is no assurance that this report will have any impact on the price of FGF Common Stock, and holders of FGH Common Stock receiving FGF Common Stock as a result of the Merger could experience a loss as a result of decreasing stock prices. The full text of the written opinion, dated January 3, 2024, of Intrinsic, which describes, among other things, the assumptions made, procedures followed, factors considered and limitations on the review undertaken, is attached as Annex B to this Merger Solicitation and is incorporated by reference herein in its entirety.

See “The Merger — Fairness Opinion of FGH’s Financial Advisor” on page 37 of this Merger Solicitation for more information.

FGF Stockholders and FGH Stockholders will not have appraisal rights or dissenters’ rights in the Merger.

Appraisal rights (also known as dissenters’ rights) are statutory rights that, if applicable under law, enable security holders to dissent from an extraordinary transaction, such as a merger, and to demand that the corporation pay the fair value for their shares as determined by a court in a judicial proceeding instead of receiving the consideration offered to security holders in connection with the extraordinary transaction.

Under Section 92A.390 of the NRS, the FGF Stockholders will not be entitled to appraisal or dissenters’ rights in connection with the Merger with respect to any shares of FGF Common Stock that remain outstanding after the consummation of the Merger. If the Merger is completed, FGF Stockholders will not receive any consideration for their shares, and their shares of FGF Common Stock will remain outstanding. Accordingly, FGF Stockholders are not entitled to any appraisal or dissenters’ rights in connection with the Merger.

Under Section 92A.390 of the NRS, stockholders do not have appraisal rights with respect to shares of any class or series of stock if such shares of stock are covered securities under section 18(b)(1)(A) or (B) of the Securities Act of 1933, 15 U.S.C. § 77r(b)(1)(A) or (B), as amended. Because FGH Common Stock is listed on the NYSE American, a national securities exchange, and because FGH Stockholders will receive in the Merger only shares of FGF Common Stock, which will be publicly listed on NASDAQ upon the Effective Time, FGH Stockholders are not entitled to any appraisal rights in connection with the Merger.

Litigation related to the Merger could prevent or delay completion of the Merger or otherwise negatively affect the business and operations of FGF and FGH.

FGF and FGH may incur costs in connection with the defense or settlement of any stockholder lawsuits filed in connection with the Merger. Such litigation could have an adverse effect on the financial condition and results of operations of FGF and FGH and could prevent or delay the completion of the Merger.

Risks Relating to FGF’s Business

You should read and consider risk factors specific to FGF’s business that will also affect FGF after completion of the Merger. These risks are described in the sections entitled “Risk Factors” in FGF’s Annual Report on Form 10-K for the year ended December 31, 2022, FGF’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2023, June 30, 2023, and September 30, 2023, and in other documents incorporated by reference into this Merger Solicitation. Please see the section entitled “Where You Can Find More Information” beginning on page 72 of this Merger Solicitation for the location of information incorporated by reference into this Merger Solicitation.

Risks Relating to FGH’s Business

You should read and consider risk factors specific to FGH’s business that will also affect FGF after completion of the Merger. These risks are described in the sections entitled “Risk Factors” in FGH’s Annual Report on Form 10-K for the year ended December 31, 2022, FGH’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2023, June 30, 2023, and September 30, 2023, and in other documents incorporated by reference into this Merger Solicitation. Please see the section entitled “Where You Can Find More Information” beginning on page 72 of this Merger Solicitation for the location of information incorporated by reference into this Merger Solicitation.

FGH’S SOLICITATION OF WRITTEN CONSENTS

FGH Consent Solicitation

The FGH Board of Directors is providing these consent solicitation materials to those FGH Stockholders who are being requested to approve the Merger and adopt and approve the Plan of Merger and the transactions contemplated thereby (the “FGH Merger Proposal”) by executing and delivering the written consent furnished with this Merger Solicitation. Approval of the Merger and approval and adoption of the Plan of Merger requires the written consent of the holders of a majority of the issued and outstanding FGH Common Stock.

FGH Stockholders Entitled to Consent

Only FGH Stockholders of record as of the close of business on January 3, 2024 (the “FGH Record Date”), will be entitled to execute and deliver a written consent. As of the close of business on the FGH Record Date, there were 19,674,852 shares of FGH Common Stock outstanding and entitled to execute and deliver written consents with respect to the FGH Merger Proposal. Each holder of FGH Common Stock is entitled to one vote for each share of FGH Common Stock held as of the FGH Record Date.

Submission of FGH Written Consents

An FGH Stockholder may consent to the FGH Merger Proposal with respect to such FGH Stockholder’s shares by completing, dating and signing the written consent furnished with this Merger Solicitation and returning it to FGH on or before February 23, 2024, the date the FGH Board has set as the targeted final date for receipt of written consents. FGH reserves the right to extend the final date for receipt of written consents beyond February 23, 2024 (provided that FGH will not extend such date beyond July 31, 2024, which is approximately six (6) months after the date of this Merger Solicitation), in the event that consents approving the FGH Merger Proposal have not been obtained by that date from holders of a sufficient number of shares of FGH Common Stock under the NRS and NYSE American rules. Any such extension may be made without notice to FGH Stockholders. Once written consents from holders of a sufficient number of shares of FGH Common Stock under the NRS and NYSE American rules are obtained, the consent solicitation will conclude.

If an FGH Stockholder holds shares of FGH Common Stock as of the FGH Record Date and such FGH Stockholder wishes to give his/her/its written consent to the FGH Merger Proposal, such FGH Stockholder must fill out the enclosed written consent, date and sign it, and promptly return it to FGH on or before February 23, 2024, the date the FGH Board has set as the targeted final date for receipt of written consents. Once an FGH Stockholder has completed, dated and signed the written consent, such FGH Stockholder may deliver it to FG Group Holdings Inc., c/o Broadridge, as follows:

Executing FGH Written Consents; Revocation of FGH Written Consents

An FGH Stockholder may execute a written consent to approve the FGH Merger Proposal (which is equivalent to a vote “FOR” the proposal) or disapprove, or withhold consent with respect to, the FGH Merger Proposal (which is equivalent to a vote “AGAINST”) the FGH Merger Proposal. If an FGH Stockholder does not return a written consent, it will have the same effect as a vote against the FGH Merger Proposal. If an FGH Stockholder returns a signed written consent without indicating such FGH Stockholder’s decision on the FGH Merger Proposal, such FGH Stockholder will have given his/her/its consent to approve the FGH Merger Proposal.

An FGH Stockholder’s consent to the FGH Merger Proposal may be changed or revoked at any time before the consents of a sufficient number of shares of FGH Common Stock under the NRS and NYSE American rules to approve and adopt the FGH Merger Proposal have been obtained. If an FGH Stockholder wishes to change or revoke a previously given consent before that time, such FGH Stockholder may do so by mailing a notice of revocation to FG Group Holdings Inc., c/o Broadridge, P.O. Box 9111, Farmingdale, NY 11735-9543, or by submitting a new written consent with a later date by one of the means described herein under “— Submission of FGH Written Consents,” in each case, no later than February 23, 2024. However, once written consents approving the FGH Merger Proposal from holders of a sufficient number of shares of FGH Common Stock under the NRS and NYSE American rules are obtained, the consent solicitation will conclude.

FGH Solicitation of Written Consents; Expenses

The expense of preparing, printing and mailing these consent solicitation materials is being borne by FGH. Officers and employees of FGH may solicit consents by telephone and personally, in addition to solicitation by mail. These persons will receive their regular salaries but no special compensation for soliciting consents.

Recommendation of the FGH Board

THE FGH BOARD RECOMMENDS THAT THE FGH STOCKHOLDERS APPROVE THE MERGER AND ADOPT AND APPROVE THE PLAN OF MERGER AND THE TRANSACTIONS CONTEMPLATED THEREBY BY EXECUTING AND DELIVERING THE WRITTEN CONSENT FURNISHED WITH THIS MERGER SOLICITATION. The FGH Board believes the Merger Consideration to FGH Stockholders is fair, advisable and in the best interests of FGH and its stockholders. The management of FGH and the FGH Board, after careful study and evaluation of the economic, financial, legal and other factors, also believe the Merger could provide FGF with increased opportunity for profitable expansion of its business, which in turn should benefit FGH Stockholders who become stockholders of FGF.

FGH Stockholders’ Appraisal or Dissenters’ Rights

FGH Stockholders are not entitled to appraisal or dissenters’ rights under the NRS. For more information, see the section entitled “The Merger-Appraisal or Dissenters’ Rights in the Merger” beginning on page 50.

Assistance

If you need assistance in completing your consent card or have questions regarding the FGH Merger Proposal, please contact FGH’s consent solicitor:

Alliance Advisors

Toll-Free: (844) 876-6185

[email protected]

THE MERGER

This section of the Merger Solicitation describes material aspects of the Merger. This summary may not contain all of the information that is important to you. You should carefully read this entire Merger Solicitation and the other documents we refer you to for a more complete understanding of the Merger. In addition, we incorporate important business and financial information about each of us into this Merger Solicitation by reference. You may obtain the information incorporated by reference into this Merger Solicitation without charge by following the instructions in the section entitled “Where You Can Find More Information” beginning on page 72.

The Parties to the Merger

FG Financial Group, Inc.

104 S. Walnut Street, Unit 1A

Itasca, IL 60143

(847) 773-1665

FGF is a reinsurance, merchant banking and asset management holding company. FGF focuses on opportunistic collateralized and loss capped reinsurance, while allocating capital in partnership with Fundamental Global®, and from time to time, other strategic investors, to merchant banking activities. FGF’s principal business operations are conducted through its subsidiaries and affiliates. FGF also provides asset management services. From its inception in October 2012 through December 2019, FGF operated as an insurance holding company, writing property and casualty insurance throughout the states of Louisiana, Florida, and Texas. In late 2019, FGF sold its three former insurance subsidiaries, and embarked upon its current strategy focused on reinsurance, merchant banking and asset management. FGF’s strategy has evolved to focus on opportunistic collateralized and loss-capped reinsurance, with capital allocation to merchant banking activities with asymmetrical risk/reward opportunities. Currently, FGF operates as a diversified holding company of insurance, reinsurance, asset management, its Special Purpose Acquisition Corporation (“SPAC”) Platform businesses, and merchant banking division.

FGF Common Stock is traded on the NASDAQ under the symbol “FGF.” FGF Series A Preferred Stock is also traded on the NASDAQ under the symbol “FGFPP.”

FG Group LLC

104 S. Walnut Street, Unit 1A

Itasca, IL 60143

(847) 773-1665

New FGH is a Nevada limited liability company and a wholly-owned subsidiary of FGF. New FGH does not own any material assets or operate any business and was organized solely for purposes of carrying out the Merger. After consummation of the Merger, FGH will merge with and into New FGH, and New FGH will possess all the rights, privileges, immunities and franchises, of a public as well as of a private nature, of FGH; all property, real, personal and mixed, and all debts due on whatever account, and all and every other interest, of or belonging to or due to the FGH, shall be taken and deemed to be transferred to and vested in New FGH without further act or deed; and the title to any real estate or any interest in any real estate, vested in the FGH, shall not revert or be in any way impaired by reason of the Merger; and New FGH will be responsible and liable for all the liabilities, debts, obligations, and penalties of FGH.

FG Group Holdings Inc.

5960 Fairview Road, Suite 275

Charlotte, NC 28210

(704) 994-8279

FGH is a holding company. FGH’s holdings primarily consist of holdings in public and private companies and real estate holdings in the United States and Canada.

FGH has historically conducted a large portion of its operations primarily through its Strong Entertainment operating segment. FGH completed the separation and initial public offering (“IPO”) of the Strong Entertainment business on May 18, 2023. Following this transaction, Strong Global Entertainment became a separate publicly listed company, of which FGH holds approximately 76% of Strong Global Entertainment’s Class A common shares and 100% of Strong Global Entertainment’s Class B common shares as of the date hereof.

FGH Common Stock is traded on the NYSE American under the symbol “FGH.”

Terms of the Merger

The boards of directors of FGF and FGH have each unanimously approved a Plan of Merger by and among FGF, New FGH, and FGH. In addition, the holder of a majority of the FGF Common Stock, acting by written consent in lieu of a meeting, has approved and adopted the Plan of Merger. If the Plan of Merger is also approved by FGH’s stockholders and the transactions under the Plan of Merger are consummated, FGH will merge with and into New FGH, with New FGH as the surviving entity and wholly owned subsidiary of FGF.

As a result of the Merger, FGH Stockholders will receive consideration in the form of shares of FGF Common Stock. In connection with the Merger, and without any further action on the part of any party, each share of FGH Common Stock will be converted into one (1) share of FGF Common Stock in accordance with the established Exchange Ratio. Based on the closing price of the FGF Common Stock on the NASDAQ on January 3, 2024, the last trading day before public announcement of the Merger, of $1.60, the Exchange Ratio represented approximately $1.60 in value for each share of FGH Common Stock. Based on the closing price of FGF Common Stock on the NASDAQ on January 26, 2024, the last practicable trading day before the date of the accompanying Merger Solicitation, of $1.39, the Exchange Ratio represented approximately $1.39 in value for each share of FGH Common Stock. The value of FGF Common Stock at the time of completion of the Merger could be greater than, less than or the same as the value of FGF Common Stock on the date of the accompanying Merger Solicitation. We urge you to obtain current market quotations of FGF Common Stock (trading symbol “FGF”) and FGH Common Stock (trading symbol “FGH”).

Based on the current number of shares of FGH Common Stock outstanding and reserved for issuance, FGF expects to issue approximately 19.7 million shares of FGF Common Stock in the aggregate in the Merger and approximately 2.8 million shares of FGF Common Stock held by FGG (and beneficially owned by FGH) will be retired. Following the completion of the Merger, former FGH Stockholders will own approximately seventy-two percent (72%), and former FGF Stockholders will own approximately twenty-eight percent (28%) of the outstanding FGF Common Stock.

At any time prior to the filing of the articles of merger with the Secretary of State of the State of Nevada, whether before or after the approval of the FGH Stockholders, the Plan of Merger may be terminated and the Merger abandoned (a) by the mutual written agreement of FGH, FGF and New FGH, or (b) by either the FGH or FGF if (i) the FGH Board or the FGF Board, as applicable, determines in good faith, after consultation with its outside legal counsel that the consummation of the Merger or other transactions contemplated by the Plan of Merger is reasonably likely to result in a breach of its fiduciary duties to the stockholders of FGH or FGF, as applicable, under applicable law; (ii) the other party has materially breached of any of the obligations, covenants, or other agreements or any of the representations or warranties (or any such representation or warranty ceases to be true) set forth in the Plan of Merger (provided that the terminating party is not then in material breach of any representation, warranty, obligation, covenant, or other agreement contained in the Plan of Merger); or (iii) any court of competent jurisdiction or other governmental authority shall have issued an order, or taken any other action restraining, enjoining or otherwise prohibiting the Merger or the other transactions contemplated by the Plan of Merger and such order or other action shall have become final and non-appealable.

The FGH Board of Directors is soliciting the written consent of the FGH Stockholders. This Merger Solicitation provides you with detailed information about the proposed Merger. It also contains or references information about FGF, New FGH, FGH, and certain related matters. You are encouraged to read this Merger Solicitation carefully. In particular, you should read the “Risk Factors” section beginning on page 23 for a discussion of the risks you should consider in evaluating the proposed Merger and how it will affect you.

Listing of Merger Consideration; Delisting and Deregistration of FGH Common Stock

The shares of FGF Common Stock to be issued in the Merger will be listed for trading on the NASDAQ. Following the Merger, shares of FGF Common Stock will continue to be listed on the NASDAQ. In addition, following the Merger, FGH Common Stock will be delisted from the NYSE American and deregistered under the Exchange Act.

Background of the Merger

The management of each of FGF and FGH and each of their boards of directors (which we refer to in this section as the “FGF Board” and the “FGH Board,” respectively) regularly review and assess the performance, strategy, competitive position, challenges, opportunities, and prospects of their respective companies, in each case with the goal of enhancing value for their respective stockholders. These reviews have included periodic consideration of, and discussions with other companies from time to time regarding potential strategic alternatives, including business combinations, acquisitions and dispositions to further the companies’ strategic objectives. As part of these reviews, members of management of each company have had, from time to time, informal discussions with members of management of other companies regarding trends and developments, and, on occasion, strategic alternatives available to their respective companies, including potential business combinations and other strategic transactions.

The current ownership and control of FGF and FGH includes significant overlap. FGG shares voting and dispositive power with respect approximately 32% of the outstanding FGH Common Stock, and FGH owns a 44% economic interest in FGFH, which is co-managed by Mr. Cerminara and an employee of FGG, and shares voting and dispositive power with respect to approximately 54% of the outstanding FGF Common Stock. Mr. Cerminara is Chief Executive Officer of FGG, co-manager of FGFH, and chairman of the boards of directors of both FGF and FGH. Mr. Swets is the President and Chief Executive Officer of FGF, and member of the FGF Board, and is also a member of the FGH Board. As a result of the control exercised by Mr. Cerminara and entities controlled by Mr. Cerminara, including FGG, Mr. Cerminara maintains a controlling interest in FGF.

One of the primary reasons for the Merger is to reduce overhead, realize synergies, streamline administrative and regulatory matters, and improve the efficiency of both companies. The assets and operations of both companies are well understood by the boards of both entities, given the overlap in ownership and management between the companies. The boards of both companies also believe the Merger can be accomplished in an expeditious and cost-effective manner, given their great familiarity with the facts and circumstances of each entity and the business structure.

The following chronology summarizes the key events that led to the signing of the Plan of Merger. This summary does not purport to catalogue every conversation of or among the FGF Board, the FGH Board, their respective management teams or the representatives of FGF and FGH, and other parties.

In the ordinary course of business, the FGF Board and the FGH Board, together with their respective senior management teams, regularly review and assesses their near-term and long-term strategy, strategic direction, financial performance and business with a view towards generating long-term stockholder value.

As part of this process, from time to time over the past several years, the FGF Board and the FGH Board (with the majority of members of each of the Boards of Directors being “independent” as defined by SEC, NYSE American and NASDAQ rules and regulations) and their senior management teams have reviewed potential strategic alternatives including, among other things, continuing as stand-alone public companies or executing a merger transaction as the best opportunity to enhance stockholder value. The FGH Board, the FGF Board, and their respective management teams also considered the potential benefits and risks associated with each such course of action. In the ordinary course of business, members of management of FGF and FGH have had numerous conversations over the years about their businesses and discussed the possibility of potential combinations and other ways of working together to the mutual benefit of the companies. In addition, stockholders from each of FGF and FGH have inquired on multiple occasions if management and its respective Board of Directors had considered the merits of combining the companies. Specifically, as one example, on December 6, 2022, at the FGH 2022 annual meeting of stockholders, management of FGH held a question-and-answer session and several stockholders inquired about the potential benefits of combining FGH and FGF. Subsequently, in December 2022, representatives of FGF and FGH initiated meetings with legal counsel to explore the process as well as the potential benefits, costs and other considerations of a proposed merger of FGF and FGH. Those discussions and evaluations continued at both the Board and management level of each company over the following months.

During June and July 2023, FGF and FGH each proceeded to engage independent counsel specifically to represent the respective parties in a potential merger transaction, evaluate potential courses of action, and to begin drafting a plan of merger. FGF engaged Holland & Hart LLP, and FGH engaged Snell & Wilmer L.L.P. Those discussions and evaluations continued at the board and management level of each company over the next several months.

On July 31, 2023, the FGF Board held a meeting at which FGF management gave a briefing on the proposed merger. Management indicated that the merger was expected to be advantageous because of cost savings from running the two companies on a common platform thereby eliminating duplication of costs and inefficiencies in the current management arrangements.

On August 2, 2023, the FGH Board held a meeting at which both routine and strategic matters were discussed, including discussion of the proposed Merger and the potential cost savings and other strategic benefits of combining the companies.

On August 10, 2023, the FGF Board held a meeting at which the proposed merger was discussed. Management reported that the parties were working with outside advisors regarding the most efficient structure, with the options of FGF acquiring FGH and of FGH acquiring FGF both being evaluated by outside advisors.

At each of the July and August 2023 FGF Board meetings, Mr. Swets advised the FGF Board of the conflicts he and Mr. Cerminara had as members of both the FGF Board and FGH Board, as well as Mr. Swets’ role in management at FGF, and that they would accordingly be abstaining from any votes taken with respect to the proposed transaction.

On September 6, 2023, the FGH Board held a meeting at which the proposed Merger was discussed, including the potential impact of the proposed Merger on the combined company’s cost structure and financial position.

At each of the August and September 2023 FGH Board meetings, Mr. Cerminara and Mr. Swets advised the board of potential conflicts as members of both the FGH Board and FGF Board, as well as Mr. Swets’ role in management at FGF, and that they would accordingly be abstaining from any votes taken with respect to the proposed transaction.

Working with outside advisors and legal counsel, and following the discussions with the respective boards of directors, management for FGF and FGH determined that FGH merging with and into a subsidiary of FGF, with FGH Stockholders receiving FGF Common Stock as consideration in the transaction was the recommended structure for a combination of the companies.

On October 18, 2023, the FGH Board held a meeting at which both routine and strategic matters were discussed, including discussion of the proposed merger and the recommended structure. At this meeting, the independent members of the FGH Board (with Messrs. Cerminara and Swets recusing themselves) voted to engage Intrinsic as their financial advisor, and to provide an opinion on the fairness from a financial point of view of the holders of FGH Common Stock of the Exchange Ratio to be provided in the Plan of Merger.

Intrinsic and its affiliates are engaged in advisory, research, and other financial and non-financial activities and services for various persons and entities. The independent members of the FGH Board selected Intrinsic as its financial advisor because it is a nationally recognized valuation, advisory and financial diligence firm that has substantial experience in transactions similar to the transactions contemplated by the Plan of Merger. Pursuant to a letter agreement dated October 25, 2023, the independent members of the FGH Board engaged Intrinsic to assess the fairness, from a financial point of view, of the Merger Consideration in connection with the transactions contemplated by the Plan of Merger. Intrinsic began the process of meeting with the management of FGH and FGF, reviewing financial information about FGH and FGF’s underlying operations and holdings and preparing their opinion on the fairness from a financial point of view of the Exchange Ratio. Discussions and evaluations of the proposed merger continued at the board and management level of each company during November and December 2023.

On November 9, 2023, the FGF Board had a regularly scheduled board meeting at which management updated the board on the progress of various work streams to implement the proposed merger. Management was asked to keep the Board apprised of developments with respect to the determination of the Exchange Ratio and progress toward definitive documentation.

On January 3, 2024, a meeting of the FGF Board was held where management discussed the proposed transactions and reviewed the Plan of Merger. The FGF Board evaluated the Exchange Ratio based on several metrics, including underlying value of the holdings of each company in relation to their respective share prices, the current share price of each company, and the volume weighted average stock price (“VWAP”) of each company’s common stock over the most recent 20–90-day period. The FGF Board also discussed the potential cost savings and other synergies from the proposed merger.

The independent members of the FGF Board reviewed the information presented, the fairness opinion delivered by Intrinsic, evaluated the Exchange Ratio and after lengthy discussion, a vote was held. Messrs. Cerminara and Swets recused themselves from the vote on the Plan of Merger and the independent members of the Board of Directors voted unanimously to approve the Plan of Merger and the transactions contemplated thereby, including the Merger and the name change following the Merger from FGF to “Fundamental Global Inc.” The FGF Board recommended that the FGF Stockholders approve and adopt the Plan of Merger and the transactions contemplated thereby. On January 3, 2024, the holder of a majority of the FGF Common Stock, acting by written consent in lieu of a meeting, approved and adopted the Plan of Merger.

Also on January 3, 2024, a meeting of the FGH Board was held where management discussed the proposed transactions, reviewed the Plan of Merger, and Intrinsic presented the results of their fairness opinion. The FGH Board evaluated the Exchange Ratio based on several metrics, including underlying value of the holdings of each company in relation to their respective share prices, the current share price of each company, and the VWAP of each company’s common stock over the most recent 20–90-day period. The FGH Board also discussed the potential cost savings and other synergies from the proposed merger.

The independent members of the FGH Board reviewed the information presented, evaluated the Exchange Ratio and after lengthy discussion, a vote was held. Messrs. Cerminara and Swets recused themselves from the vote on the Plan of Merger and the transactions contemplated thereby, and the independent members of the Board of Directors voted unanimously to approve the Plan of Merger.

FGH’s Reasons for the Merger; Recommendation of the FGH Board

In reaching its decision to adopt and approve the Plan of Merger, the Merger and the other transactions contemplated by the Plan of Merger, and to recommend that its stockholders adopt the Plan of Merger, the FGH Board evaluated the Plan of Merger, the Merger and the other transactions contemplated by the Plan of Merger in consultation with FGH’s management, as well as FGH’s financial and legal advisors, and considered a number of factors, including the following: