ABOUT
THIS PROSPECTUS
This
prospectus is part of a registration statement that we filed with the U.S. Securities and Exchange Commission, or the SEC. As permitted
by the rules and regulations of the SEC, the registration statement filed by us includes additional information not contained in this
prospectus. You may read the registration statement and the other reports we file with the SEC at the SEC’s website described below
under the heading “Where You Can Find More Information.”
Neither
we nor the underwriters have authorized any other person to provide you with any information or to make any representations other than
those contained in this prospectus or any free writing prospectus. We take no responsibility for and can provide no assurance
as to the reliability of, any other information that others may give you. We will not make an offer to sell these securities in any jurisdiction
where the offer or sale is not permitted. You should assume that the information appearing in this prospectus is accurate only as of
the date on its cover, that the information appearing in any applicable free writing prospectus is accurate only as of the date of that
free writing prospectus, and that any information incorporated by reference is accurate only as of the date of the document incorporated
by reference, unless we indicate otherwise. Our business, financial condition, results of operations and prospects may have changed since
those dates. This prospectus incorporates by reference, and any free writing prospectus may contain and incorporate by reference, market
data and industry statistics and forecasts that are based on independent industry publications and other publicly available information.
Although we believe these sources are reliable, we do not guarantee the accuracy or completeness of this information and we have not
independently verified this information. In addition, the market and industry data and forecasts that may be included or incorporated
by reference in this prospectus or any applicable free writing prospectus may involve estimates, assumptions and other risks and uncertainties
and are subject to change based on various factors, including those discussed under the heading “Risk Factors” contained
in this prospectus and any applicable free writing prospectus, and under similar headings in other documents that are incorporated by
reference into this prospectus. Accordingly, investors should not place undue reliance on this information.
Unless
we state otherwise or the context otherwise requires, references in this prospectus to “we,” “our,” “us,”
or “the Company” are to FG Financial Group, Inc., a Delaware corporation, together with our consolidated subsidiaries.
For
investors outside the United States: Neither we nor any of the underwriters has done anything that would permit this offering or
possession or distribution of this prospectus or any free writing prospectus we may provide to you in connection with this offering in
any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come
into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the shares
of our common stock and the distribution of this prospectus and any such free writing prospectus outside of the United States.
| PROSPECTUS
SUMMARY
This
summary description about us and our business highlights selected information contained elsewhere in this prospectus or incorporated
by reference into this prospectus. It does not contain all the information you should consider before investing in our securities. Important
information is incorporated by reference into this prospectus. To understand this offering fully, you should read carefully this prospectus
and the documents incorporated by reference in their entirety, including “Risk Factors” included in this prospectus and incorporated
by reference, “Cautionary Statement Regarding Forward-Looking Statements,” and “Management’s Discussion and Analysis
of Financial Condition and Results of Operations” and the financial statements and the notes to those financial statements incorporated
by reference in this prospectus, together with the additional information described under “Incorporation by Reference.”
Overview
FG
Financial Group, Inc. is a reinsurance and investment management holding company. We focus on opportunistic collateralized and
loss capped reinsurance, while allocating capital in partnership with Fundamental Global® to SPAC and SPAC sponsor-related
businesses. The Company’s principal business operations are conducted through its subsidiaries and affiliates. The
Company also provides investment management services. From our inception in October 2012 through December 2019, we operated as an insurance
holding company, writing property and casualty insurance throughout the states of Louisiana, Florida, and Texas. On December 2, 2019,
we sold our three former insurance subsidiaries, and embarked upon our current strategy focused on reinsurance and asset management.
As of December 31, 2021, Fundamental Global
GP, LLC, a privately owned investment management company, and its affiliates, or “FG,” beneficially owned approximately 56%
of our common stock. D. Kyle Cerminara, Chairman of our Board of Directors, serves as Chief Executive Officer, Co-Founder and Partner
of FG.
Sale of the Insurance Business
On December 2, 2019, we completed the sale
of our insurance subsidiaries to FedNat Holding Company for a combination of cash and FedNat common stock (the “Asset Sale”).
The shares of FedNat common stock we received in the Asset Sale were issued to us pursuant to a standstill agreement which provides certain
limitations and restrictions with respect to the voting and sale or transfer of the securities until December 2024. As of December 31,
2021, we continued to hold 1,007,871 shares of FedNat common stock.
Current Business
Our strategy has evolved to focus on opportunistic
collateralized and loss-capped reinsurance, with capital allocation to special purpose acquisition companies (“SPACs”) and
SPAC sponsor-related businesses. As part of our refined focus, we have adopted the following capital allocation philosophy:
“Grow
intrinsic value per share with a long-term focus using fundamental research, allocating capital to
asymmetric risk/reward opportunities.”
Currently,
the business operates as a diversified holding company of insurance, reinsurance, asset management and our SPAC Platform businesses.
Insurance
We are establishing a Risk Retention Group
(“RRG”) to provide directors and officers insurance coverage to SPACs and their sponsors. We intend to provide capital, along
with other participants, to facilitate underwriting such insurance coverage. The Company will focus on fee income derived from originating,
underwriting, and servicing the insurance business, while mitigating our financial risk with external reinsurance partners.
Reinsurance
The
Company’s wholly owned reinsurance subsidiary, FG Reinsurance Ltd. (“FGRe”), a Cayman Islands limited liability company,
provides specialty property and casualty reinsurance. FGRe has been granted a Class B(iii) insurer license in accordance with
the terms of The Insurance Law Act (as revised) of the Cayman Islands and is subject to regulation by the Cayman Islands Monetary
Authority (the “Authority”). The terms of the license require advance approval from the Authority, should FGRe wish to
enter into any reinsurance agreements which are not fully collateralized to their aggregate exposure limit. FGRe participates in a Funds
at Lloyds syndicate covering risks written by the syndicate during the 2021 and 2022 calendar years. On April 1, 2021, FGRe entered into
its second reinsurance contract with a leading insurtech company that provides automotive insurance utilizing driver monitoring to predictively
segment and price drivers. FGRe’s exposure is limited by a loss-cap stipulated in the quota-share agreement.
Asset
Management
Pursuant to an investment advisory agreement,
FG Strategic Consulting, LLC (“FGSC”) a wholly-owned subsidiary of the Company, has agreed to provide investment advisory
services to FedNat, including identifying, analyzing and recommending potential investments, advising as to existing investments and
investment optimization, recommending investment dispositions, and providing advice regarding macro-economic conditions. In exchange
for providing the investment advisory services, FedNat has agreed to pay FGSC an annual fee of $100,000. The Investment Advisory Agreement
expires in December 2024.
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|
SPAC
Platform
On December 21, 2020, we formed FG SPAC
Solutions LLC (“FGSS”), a Delaware company, to facilitate the launch of our “SPAC Platform.” Under the SPAC Platform,
we plan to provide various strategic, administrative, and regulatory support services to newly formed SPACs, for a monthly fee. Additionally,
the Company co-founded a partnership, FG SPAC Partners, LP (“FGSP”), to participate as a co-sponsor for newly formed SPACs.
The Company also participates in the risk capital investments associated with the launch of such SPACs through its Asset Management business,
specifically FG Special Situations Fund, LP. The SPAC Platform entered into its first transaction with Aldel Investors, LLC, the sponsor
of Aldel Financial, Inc. (“Aldel”), a special purpose acquisition company, which completed its business combination with
The Hagerty Group, an automotive and marine insurer, on December 2, 2021. FGSS provided accounting, regulatory, strategic advisory, and
other administrative services to Aldel, which included assistance with negotiations with potential merger targets for the SPAC, as well
as assistance with the de-SPAC process.
Recent
Developments
Initial
Public Offerings from SPAC Platform Sponsors
In March and April 2022, the Company
continued to build upon its SPAC Platform strategy. On March 3, 2022, FG Merger Corp. (“FG Merger”) (Nasdaq: FGMCU) announced
the closing of an $80.5 million IPO in the United States, including the exercise of the over-allotment option granted to the underwriters
in the offering. Similarly, on April 5, 2022, FG Acquisition Corp. (“FG Acquisition”) (TSX:FGAA.V), announced the closing
of a $100 million IPO in Canada. The Company participated in the risk capital associated with the launch of the SPACs through its asset
management business, specifically FG Special Situations Fund, LP. Mr. Cerminara, our Chairman, Larry G. Swets, Jr., our Chief Executive
Officer, and Hassan R. Baqar, our Chief Financial Officer, also hold financial interests in the SPACs and/or their sponsor companies.
Additionally, Messrs. Cerminara, Swets, and Baqar are managers of the sponsor companies of the special purpose acquisition companies.
Mr. Swets serves as chairman of FG Merger, while Messrs. Baqar and Cerminara serve as director and senior advisor of FG Merger, respectively.
Mr. Swets serves as chief executive officer and director of FG Acquisition. Mr. Baqar serves as chief financial officer, secretary and
director of FG Acquisition. Mr. Cerminara serves as chairman of FG Acquisition.
In the aggregate, the Company’s indirect exposure to FG Merger through
its subsidiaries represents potential beneficial ownership of approximately 820,000 shares of FG Merger’s common stock, approximately
989,000 warrants with an $11.50 exercise price and 5-year expiration, and approximately 85,000 warrants with a $15.00 exercise price
and 10-year expiration. The Company has invested approximately $2.6 million in FG Merger through its subsidiaries. The Company’s
indirect exposure in FG Acquisition through its subsidiaries represents potential beneficial ownership of approximately 819,000 shares
of FG Acquisition’s common stock, approximately 1.4 million warrants with an $11.50 exercise price and 5-year expiration (the “FGAC
Warrants”), approximately 440,000 warrants with a $15 exercise price and 10-year expiration, and either (i) up to approximately
an additional 1.6 million FGAC Warrants, or (ii) up to approximately $2 million in cash, or (iii) a pro-rata combination of such FGAC
Warrants and cash, based on certain adjustment provisions and the level of redemptions of FG Acquisition’s publicly traded warrants
at the time of a business combination. Beneficial ownership figures stated above assume the successful closing of the underwriters’
exercise of full over-allotment option for 1.5 million additional shares of FG Acquisition. The Company has invested approximately $3.4
million in FG Acquisition through its subsidiaries.
Sale
of Common Stock
In
the 2021 fourth quarter, we consummated the public offering of 750,000
shares of our common stock, including full exercise by the underwriters of their overallotment option at a public offering
price of $4.00 per share, for gross proceeds of $3.0 million, before deducting underwriting commissions and offering expenses.
On
November 29, 2021, we completed our rights offering to purchase common stock, at a price of $4.00 per share. A total
691,735 shares were subscribed for, resulting in total gross proceeds to us of $2.8 million.
Corporate
Information
We
are a Delaware corporation. Our principal executive offices are located at 360 Central Ave, Suite 800, St. Petersburg, Florida, 33701,
and our telephone number at this address is (727) 304-5666. Our website is www.fgfinancial.com. Information contained on, or that
may be accessible through, our website is not a part of, and is not incorporated into, this prospectus.
|
THE
OFFERING
| Shares
Offered |
|
shares
of Common Stock |
| |
|
|
| Shares
of Common Stock Outstanding Prior to this Offering |
|
6,528,001
shares of Common Stock |
| |
|
|
| Shares
of Common Stock Outstanding Following this Offering |
|
shares
of Common Stock |
| |
|
|
| Option
to Purchase Additional Shares |
|
We
have granted the underwriters an option for a period of 45 days to purchase up to an additional shares
of our Common Stock (15% of the shares of Common Stock sold in this offering) at the public offering price, less underwriting
discounts and commissions. |
| |
|
|
| Use
of Proceeds |
|
We
estimate that we will receive approximately $ million in net proceeds from this offering (or approximately $ million
if the underwriters exercise their over-allotment option in full), after deducting the estimated underwriting discounts and commissions
and estimated offering expenses. |
| |
|
|
| |
|
We
intend to use the net proceeds that we receive from this offering for general corporate purposes and working capital. See “Use
of Proceeds” for additional information. |
| |
|
|
| Nasdaq
Global Market Ticker Symbol |
|
FGF |
| |
|
|
| Dividend
Policy |
|
We
do not anticipate declaring or paying any cash dividends to holders of our Common Stock in the foreseeable future. We currently intend
to retain future earnings, if any, to finance the growth of our business. If we decide to pay cash dividends in the future, the declaration
and payment of such dividends will be at the sole discretion of our board of directors and may be discontinued at any time. In determining
the amount of any future dividends, our board of directors will take into account any legal or contractual limitations, our actual
and anticipated future earnings, cash flow, debt service and capital requirements and other factors that our board of directors may
deem relevant. |
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|
|
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|
Our
outstanding Series A Preferred Stock ranks senior to the shares of our Common Stock with respect to dividend rights. Holders of shares
of our Series A Preferred Stock are entitled to receive, when, as and if declared by our board of directors, out of lawfully available
funds for the payment of dividends, cumulative cash dividends at a rate of 8.00% per annum of the $25.00 per share liquidation preference
(equivalent to $2.00 per annum per share). All accrued dividends on the Series A Preferred Stock shall be paid in cash only when,
as and if declared by our board of directors out of lawfully available funds therefor or upon a liquidation or redemption of the
Series A Preferred Stock. |
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|
|
| Risk
Factors |
|
An
investment in our securities involves a high degree of risk. See the section entitled “Risk Factors” included in this
prospectus and our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, incorporated by reference herein,
and any other risk factors described in the documents incorporated by reference herein, for a discussion of certain factors to consider
carefully before deciding to invest in our Common Stock. |
You
should carefully read the “Risk Factors” section of this prospectus for a discussion of factors that you should consider
before deciding to invest in our common stock.
The
number of shares of our common stock to be outstanding after this offering is based on 6,528,001 shares of our common stock outstanding
as of May 3, 2022, and excludes the following:
| |
● |
130,000
shares of common stock issuable upon exercise of options to purchase shares of common stock outstanding as of May 3, 2022,
with a weighted-average exercise price of $3.38 per share; |
| |
● |
133,859
shares of common stock reserved for future issuance
as of May 3, 2022 under our amended and restated 2014 equity incentive plan, our 2018 equity incentive plan,
and our 2021 equity incentive plan; and |
| |
|
|
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● |
370,000 stock options, restricted
shares or restricted stock units issuable to our Chief Executive Officer pursuant to an Equity Award Letter Agreement entered into
on January 18, 2021, between the Company and the Company’s Chief Executive Officer, Mr. Swets. |
Unless
otherwise indicated, this prospectus reflects and assumes the following:
| |
● |
no
exercise of outstanding options; and |
| |
● |
no
exercise by the underwriters of their option to purchase up to additional shares of our common stock from us to cover over-allotments,
if any. |
CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus and the documents incorporated by reference into it may contain forward-looking statements regarding the Company and represents
our expectations and beliefs concerning future events that are, or may be considered to be, “forward-looking statements”
within the meaning of Section 27A of the Securities Act of 1933, as amended, or the “Securities Act,” and Section
21E of the Securities Exchange Act of 1934, as amended, or the “Exchange Act.” These forward-looking statements are
intended to be covered by the safe harbor for forward-looking statements provided by the Private Securities Litigation Reform Act of
1995. The forward-looking statements included herein or incorporated herein by reference include or may include, but are not limited
to, (and you should read carefully) statements that are predictive in nature, depend upon or refer to future events or conditions, or
use or contain words, terms, phrases, or expressions such as “achieve,” “forecast,” “plan,” “propose,”
“strategy,” “envision,” “hope,” “will,” “continue,” “potential,”
“expect,” “believe,” “anticipate,” “project,” “estimate,” “predict,”
“intend,” “should,” “could,” “may,” “might,” or similar words, terms, phrases,
or expressions or the negative of any of these terms. Any statements in this prospectus or incorporated herein by reference that are
not based upon historical fact are forward-looking statements and represent our best judgment as to what may occur in the future. Forward-looking
statements involve a number of known and unknown risks and uncertainties, including but not limited to those discussed in the “Risk
Factors” section contained in Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2021 and the following
risks and uncertainties: market conditions and general conditions in the global economy, including the impact of health and safety
concerns from the current COVID-19 pandemic and the impact of governmental measures taken in response thereto; the uncertainty and difficulty
in predicting the ultimate impact of the COVID-19 pandemic on our business; our lack of operating history or established reputation in
the reinsurance industry; our inability to obtain or maintain the necessary approvals to operate reinsurance subsidiaries; risks associated
with operating in the reinsurance industry, including inadequately priced insured risks, credit risk associated with brokers we may do
business with, and inadequate retrocessional coverage; our inability to execute on our investment and investment management strategy,
including our strategy to invest in the risk capital of special purpose acquisition companies; potential loss of value of investments;
risk of becoming an investment company; fluctuations in our short-term results as we implement our business strategy; risks of not being
able to attract and retain qualified management and personnel to implement and execute on our business and growth strategy; failure of
our information technology systems, data breaches and cyber-attacks; our ability to establish and maintain an effective system of internal
controls; the requirements of being a public company and losing our status as a smaller reporting company or becoming an accelerated
filer; any potential conflicts of interest between us and our controlling stockholders and different interests of controlling stockholders;
potential conflicts of interest between us and our directors and executive officers; volatility or decline in the value of the shares
of FedNat Holding Company common stock received by us as consideration in the sale of our insurance business or limitations and
restrictions with respect to our ownership of such shares; risks of being a minority stockholder of FedNat Holding Company; risks associated
with our related party transactions and investments; and risks associated with our investments in special purpose acquisition
companies (SPACs), including the failure of any such SPAC to complete its initial business combination. Our expectations and future
plans and initiatives may not be realized. If one of these risks or uncertainties materializes, or if our underlying assumptions prove
incorrect, actual results may vary materially from those expected, estimated or projected.
Although
we believe the expectations reflected in our forward-looking statements are reasonable, in reading this prospectus and the documents
incorporated into this prospectus by reference, you should consider the factors discussed under the heading “Risk Factors”
contained in this prospectus in evaluating any forward-looking statements and you are cautioned not to place undue reliance on any forward-looking
statements. Each forward-looking statement is made and applies only as of the date of the particular statement, and we are not obligated
to update, withdraw, or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You
should consider these risks when reading any forward-looking statements. All forward-looking statements attributed or attributable to
us or to persons acting on our behalf are expressly qualified in their entirety by this section entitled “Cautionary Statement
Regarding Forward-Looking Statements.”
RISK
FACTORS
An
investment in our securities involves a high degree of risk. Before making an investment in our securities, you should carefully consider
the risks discussed under the heading “Risk Factors” in our most recent Annual Report on Form 10-K, which are incorporated herein by reference (other than, in each
case, information furnished, rather than filed), as well as the information contained in this prospectus relating to this offering. Any
of those risk factors could significantly and adversely affect our business, prospects, financial condition and results of operations,
and the trading price of our securities. Although we describe, and will describe, what we believe to be the principal risks related to
our Company and the securities we offer, we can also be affected by risks we do not anticipate or do not think will have a material effect
upon us. Please also read carefully the section entitled “Cautionary Statement Regarding Forward-Looking Statements.”
Risks
Related to This Offering
Our
share price may be volatile and could decline substantially.
The
market price of our Common Stock could be subject to significant fluctuations due to changes in sentiment in the market regarding our
operations or business prospects. Since the beginning of 2021, our Common Stock has traded at a low of $2.61, on March
31, 2022, and a high of $9.99, on June 25, 2021. Many factors may cause the market price for our Common Stock to decline,
including:
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● |
shortfalls
in revenues, cash flows or continued losses from operations; |
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|
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● |
our
failure to effectively compete in the insurance and reinsurance industries; |
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|
|
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● |
our
inability to carry out our investment and investment management strategy; |
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|
|
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● |
potential
losses from our investments in special purpose acquisition companies; |
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|
|
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● |
government
action or regulation; and |
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|
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● |
unfavorable
outcomes from litigation. |
In
addition, the stock market experiences extreme fluctuations in price and volume that particularly affect the market price of shares of
companies like ours. These price and volume fluctuations are often unrelated or disproportionate to the operating performance of the
affected companies. Because of this volatility, we may fail to meet the expectations of our stockholders or of securities analysts, and
our stock price could decline as a result. Declines in our stock price for any reason, as well as broad-based market fluctuations or
fluctuations related to our financial results or other developments, may adversely affect your ability to sell your shares at a price
equal to or above the price at which you purchased them. Decreases in the price of our Common Stock may also lead to de-listing of our
Common Stock.
Management
will have broad discretion as to the use of the proceeds from this offering, and we may not use the proceeds effectively.
We
have not allocated specific amounts of the net proceeds from this offering for any specific purpose. Accordingly, our management will
have broad discretion in the application of the net proceeds from this offering and could spend the proceeds in ways that you do not
agree with or that do not improve our results of operations or enhance the value of our common stock. See “Use of Proceeds.”
Our failure to apply these funds effectively could have a material adverse effect on our business, financial results, operating results
and/or cash flow and could cause the price of our common stock to decline.
Our
outstanding options, and the availability for resale of certain of the underlying shares, may adversely affect the trading
price of our Common Stock.
Our
outstanding options could adversely affect our ability to obtain future financing or engage in certain mergers or other
transactions, since the holders thereof may exercise them at a time when we may be able to obtain additional capital through a new offering
of securities on terms more favorable to us than the terms of outstanding securities. For the life of the options, the holders
have the opportunity to profit from a rise in the market price of our Common Stock without assuming the risk of ownership. The issuance
of shares upon the exercise of outstanding options would also dilute the ownership interests of our existing stockholders.
Additional
financing or future equity issuances may result in future dilution to our stockholders.
We
expect that we will need to raise additional funds in the future to finance our internal growth, our merger and acquisition plans, investment
activities, and for other reasons. Any required additional financing may not be available on terms acceptable to us, or at all. If we
raise additional funds by issuing equity securities, you may experience significant dilution of your ownership interest and the newly
issued securities may have rights senior to those of the holders of our Common Stock. The price per share at which we sell additional
securities in future transactions may be higher or lower than the price per share in this offering. Alternatively, if we raise additional
funds by obtaining loans from third parties, the terms of those financing arrangements may include negative covenants or other restrictions
on our business that could impair our operational flexibility and would also require us to fund additional interest expense. If adequate
additional financing is not available when required or is not available on acceptable terms, we may be unable to successfully execute
our business plan.
Because
we do not currently intend to pay cash dividends on our Common Stock, stockholders will primarily benefit from an investment in our stock
only if it appreciates in value.
We
do not anticipate declaring or paying any cash dividends on our shares of Common Stock. We currently intend to retain all future earnings,
if any, for use in the operations and expansion of the business. As a result, we do not anticipate paying cash dividends in the foreseeable
future. Any future determination as to the declaration and payment of cash dividends or non-cash dividends will be at the discretion
of our board of directors and will depend on factors the board of directors deems relevant, including among others, our results of operations,
financial condition and cash requirements, business prospects, and the terms of any of our financing arrangements. Accordingly, realization
of a gain on stockholders’ investments will primarily depend on the appreciation of the price of our stock. There is no guarantee
that our stock will appreciate in value.
Our
investments in special purpose acquisition companies and in sponsors of special purpose acquisition companies involve a high degree of
risk.
We
have invested in, and expect to continue to invest in, initial public offerings (“IPOs”) of special
purpose acquisition companies (“SPACs”), including SPACs that are sponsored by our affiliates. In general, a SPAC is a special
purpose vehicle, formed to raise capital from the public through an IPO with the purpose, usually, of using the proceeds to acquire a
single unspecified business or assets to be identified after the IPO. The IPO proceeds are held in a trust account until released to
fund a business combination or used to redeem shares sold in the IPO. A SPAC is required to either consummate a business
combination or liquidate within a set period of time following its IPO. Because, at the time of the IPO, the SPAC has no operating
history or any plans, arrangements or understandings with any prospective investment targets, we will have no basis upon which to evaluate
a SPAC’s ability to achieve its business objectives. If a SPAC fails to complete its initial business transaction within the required
time period, it will never generate any operating revenues, and our SPAC investment may receive only a fixed dollar amount per share
upon redemption, or less than such fixed amount in certain circumstances, which could significantly affect our operating results
and shareholders’ equity.
Additionally,
we have invested in equity interests in SPAC sponsors (“Sponsors”) and expect to acquire additional interests in sponsors
of SPACs in the future. By investing in a Sponsor, we have provided risk capital which allows the Sponsor to launch the IPO of the SPAC.
In exchange for this investment, we own interests in the Sponsor that entitle us to receive distributions of shares, warrants
and/or other interests in the SPAC after the lock-up period following the SPAC’s IPO has expired. These Sponsor interests
do not have redemption rights to receive any portion of our original investment back from the trust account of the SPAC, as is normally
associated with an IPO investment directly into a SPAC. Accordingly, an investment in a Sponsor is subject to a much higher degree of
risk than a direct investment in a SPAC because the entire investment may be lost if the SPAC is not successful in consummating
a business combination. Such potential loss could have a material effect on our financial results and shareholders’ equity. In
addition, the trading prices of our common stock could fluctuate based on the trading prices of the SPACs in which we invest.
If we are deemed a “controlled company”
within the meaning of the Nasdaq listing rules, we may follow certain exemptions from certain corporate governance requirements that
could adversely affect our public shareholders.
Following this offering, our largest stockholder
may continue to own more than a majority of the voting power of our outstanding shares of common stock. As such, we may be deemed a “controlled
company” under Nasdaq Marketplace Rules 5615(c). Under the Nasdaq listing rules, a company of which more than 50% of the voting
power is held by an individual, group, or another company is a “controlled company” and is permitted to phase in its compliance
with the independent committee requirements. Although we do not intend to rely on the “controlled company” exemptions under
the Nasdaq listing rules even if we are deemed a “controlled company,” we could elect to rely on these exemptions in the
future. If we were to elect to rely on the “controlled company” exemptions, a majority of the members of our board of directors
might not be independent directors and our nominating and corporate governance and compensation committees might not consist entirely
of independent directors. Accordingly, if we rely on the exemptions, during the period we remain a controlled company and during any
transition period following a time when we are no longer a controlled company, you would not have the same protections afforded to stockholders
of companies that are subject to all of the corporate governance requirements of Nasdaq.
USE
OF PROCEEDS
We
estimate that the net proceeds from this offering will be approximately $ (or approximately $ if the underwriters exercise
their over-allotment option in full), after deducting the estimated underwriting discounts and commissions and estimated offering expenses
payable by us. The actual offering price per share of Common Stock in this offering will be determined between us and the underwriters
at the time of pricing, and may be at a discount to the current market price for our Common Stock.
We
currently intend to use the net proceeds from this offering for general corporate purposes, which may include working capital, capital
expenditures, operational purposes and potential acquisitions. As a result, our management will retain broad discretion in the allocation
and use of the net proceeds of this offering, and investors will be relying on the judgment of our management with regard to the use
of these net proceeds. The precise amount, use and timing of the application of such proceeds will depend upon our funding requirements
and the availability and cost of other capital.
DIVIDEND
POLICY
We
do not anticipate declaring or paying any cash dividends to holders of our Common Stock in the foreseeable future. We currently intend
to retain future earnings, if any, to finance the growth of our business. If we decide to pay cash dividends in the future, the declaration
and payment of such dividends will be at the sole discretion of our board of directors and may be discontinued at any time. In determining
the amount of any future dividends, our board of directors will take into account any legal or contractual limitations, our actual and
anticipated future earnings, cash flow, debt service and capital requirements and other factors that our board of directors may deem
relevant.
Our
outstanding Series A Preferred Stock ranks senior to the shares of our Common Stock with respect to dividend rights. Holders of shares
of our Series A Preferred Stock are entitled to receive, when, as and if declared by our board of directors, out of lawfully available
funds for the payment of dividends, cumulative cash dividends at a rate of 8.00% per annum of the $25.00 per share liquidation preference
(equivalent to $2.00 per annum per share). All accrued dividends on the Series A Preferred Stock shall be paid in cash only when, as
and if declared by our board of directors out of lawfully available funds therefor or upon a liquidation or redemption of the Series
A Preferred Stock.
CAPITALIZATION
The
following table sets forth our capitalization as of December 31, 2021:
| |
● |
on
an actual basis; |
| |
|
|
| |
● |
on
an as-adjusted basis to reflect the issuance and sale by us of shares of our Common Stock in this offering
at an assumed public offering price of $ per share, after deducting underwriting discounts and commissions
and estimated offering expenses payable by us and the receipt by us of the proceeds of such sale. |
Our
capitalization following the closing of this offering will be adjusted based on the actual offering price and other terms of this offering
determined at pricing. You should read this information together with the section titled “Management’s Discussion and Analysis
of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2021,
which is incorporated by reference in this prospectus, and our consolidated financial statements and related notes incorporated
by reference in this prospectus.
| | |
As of December 31, 2021 | |
| | |
Actual | | |
As-Adjusted | |
| | |
| | |
(unaudited) | |
| | |
| | |
| |
| Cash and cash equivalents | |
$ | 15,542 | | |
$ | | |
| Stockholders’ equity: | |
| | | |
| | |
| Series A preferred shares, $25.00 par and liquidation value; 1,000,000
shares authorized, 894,580 shares issued and outstanding | |
| 22,365 | | |
| | |
| Common stock, $0.001 par value; 100,000,000 shares authorized; 6,497,205
shares issued and outstanding (actual); shares issued and outstanding (as-adjusted) | |
| 6 | | |
| | |
| Additional paid-in capital | |
| 46,037 | | |
| | |
| Accumulated deficit | |
| (34,399 | ) | |
| | |
| Total shareholders’ equity | |
$ | 34,009 | | |
$ | | |
DILUTION
If
you purchase our securities in this offering, your interest will be diluted to the extent of the difference between the public offering
price per share of our common stock and the net tangible book value per share of our common stock after this offering. We calculate net
tangible book value per share by dividing our net tangible assets (tangible assets less total liabilities) by the number of shares of
our common stock issued and outstanding as of December 31, 2021.
Our
net tangible book value at December 31, 2021, was $ , or $
per share, based on 6,497,205 shares of our common stock outstanding. After giving effect to the issuance and sale of
shares of common stock in this offering at the public offering price of $
per share, after deducting underwriting discounts and commissions and estimated offering expenses, our as adjusted net tangible book
value at December 31, 2021, would be $ , or $
per share. This represents an immediate increase in pro forma net tangible book value of $
per share to existing stockholders and an immediate dilution of $ per share
to investors in this offering. The following table illustrates this per share dilution:
| Public
offering price per share of common stock | |
| | | |
$ | | |
| Net
tangible book value per share as of December 31, 2021 | |
$ | | | |
| | |
| Increase
per share attributable to this offering | |
$ | | | |
| | |
| As
adjusted net tangible book value per share as of December 31, 2021, after this offering | |
| | | |
$ | | |
| Dilution
per share to new investors participating in this offering | |
| | | |
$ | | |
If
the underwriters exercise in full their option to purchase additional shares of common stock at the public offering price of $
per share, the as adjusted net tangible book value after this offering would be $
per share, representing an increase in net tangible book value of $ per share
to existing stockholders and immediate dilution in net tangible book value of $
per share to purchasers in this offering at the public offering price.
To
the extent that outstanding options or warrants are exercised, or we issue new options under our equity incentive plans, you will experience
further dilution. In addition, we may choose to raise additional capital due to market conditions or strategic considerations even if
we believe we have sufficient funds for our current or future operating plans. To the extent that the additional capital is raised through
the sale of common stock or securities convertible or exchangeable into common stock, such issuance could result in further dilution
to our stockholders.
The
above table excludes, as of December 31, 2021:
| ● | shares
of common stock issuable upon exercise of options to purchase shares of common stock outstanding,
with a weighted-average exercise price of $3.38 per share; |
| ● | shares
of common stock reserved for future issuance under our amended and restated 2014 equity incentive
plan, our 2018 equity incentive plan, and our 2021 equity incentive plan; and |
| ● | 370,000
stock options, restricted shares or restricted stock units issuable to our Chief Executive
Officer pursuant to an Equity Award Letter Agreement entered into on January 18, 2021, between
the Company and the Company’s Chief Executive Officer, Mr. Swets. |
PRINCIPAL
STOCKHOLDERS
The
following table sets forth certain information regarding the beneficial ownership of shares of our common stock as of April 19, 2022,
by:
| ● | Each
person (or group of affiliated persons) known by us to beneficially own more than 5% of our
common stock; |
| ● | Each
of our directors and named executive officers; and |
| ● | All
of our current directors and executive officers as a group. |
The
number and percentages of shares beneficially owned are based on 6,528,001 common shares outstanding as of April 19, 2022. Information
with respect to beneficial ownership has been furnished by each director, executive officer and beneficial owner of more than 5% of our
common stock. Beneficial ownership is determined in accordance with the rules of the SEC and requires that such persons have voting or
investment power with respect to the securities. In computing the number of shares beneficially owned by a person listed below and the
percentage ownership of such person, shares of common stock underlying warrants, options and RSUs held by each such person that are exercisable
or vest within 60 days of April 19, 2022 are deemed outstanding, but are not deemed outstanding for computing the percentage ownership
of any other person. Except as otherwise noted below, and subject to applicable community property laws, the persons named have sole
voting and investment power with respect to all shares of common stock shown as beneficially owned by them.
Except
as otherwise indicated below, the address for each beneficial owner is c/o FG Financial Group, Inc., 360 Central Ave, Suite 800, St.
Petersburg, FL 33701.
| | |
| | |
Percentage of Outstanding Shares
Beneficially Owned |
|
| Name and Address of Beneficial Owner | |
Number of Shares Beneficially Owned | | |
Before
Offering | |
|
After
Offering |
|
| 5% Beneficial Owners | |
| | | |
| | |
|
|
|
|
| Fundamental Global GP, LLC(1) 108 Gateway Blvd., Suite 204, Mooresville, NC 28117 | |
| 3,532,765 | | |
| 54.1 | % |
|
|
|
|
| Named Executive Officers and Directors | |
| | | |
| | |
|
|
|
|
| Larry G. Swets, Jr., President, Chief Executive Officer and Director | |
| 15,199 | | |
| * | |
|
|
|
|
| Hassan R. Baqar, Executive Vice President, Chief Financial Officer | |
| – | | |
| * | |
|
|
|
|
| Brian D. Bottjer, Senior Vice President, Chief Accounting Officer and Secretary | |
| – | | |
| * | |
|
|
|
|
| D. Kyle Cerminara, Chairman of the Board(1)(2) | |
| 3,549,690 | | |
| 54.4 | % |
|
|
|
|
| Rita Hayes, Director | |
| 8,070 | | |
| * | |
|
|
|
|
| E. Gray Payne, Director | |
| 8,259 | | |
| * | |
|
|
|
|
| Scott D. Wollney, Director | |
| 11,259 | | |
| * | |
|
|
|
|
| Richard E. Govignon, Jr., Director | |
| – | | |
| * | |
|
|
|
|
| All Executive Officers and Directors as a Group (8 individuals)(2) | |
| 3,592,477 | | |
| 55.0 | % |
|
|
|
|
*
Less than 1.0%
| 1. | Fundamental
Global GP, LLC (referred to therein as “FG”) shares voting and dispositive power
with respect to 3,532,765 shares of common stock. Fundamental Activist Fund I, LP (“FAFI”)
shares voting and dispositive power with respect to 788,199 shares of common stock. FGI 1347
Holdings, LP (“FGIH”), of which BK Technologies, Inc., a wholly-owned subsidiary
of BK Technologies Corporation (“BKTI”), is the sole limited partner, shares
voting and dispositive power with respect to 477,282 shares of common stock. Mr. Cerminara
is a member of the Board of Directors of BKTI. Fundamental Global Partners Master Fund, LP
(“FGPM”) shares voting and dispositive power with respect to 628,875 shares of
common stock. Ballantyne Strong, Inc. (“BTN”) shares voting and dispositive power
with respect to 1,638,409 shares of common stock. Mr. Cerminara is Chairman of the Board
of BTN. Information regarding beneficial ownership of our common stock by FG and its affiliates
is included herein in reliance on a Form 4 filed with the SEC on December 12, 2021. Due to
his positions with FG and affiliated entities, Mr. Cerminara may be deemed to be beneficial
owner of the shares of the Company’s common stock disclosed as directly owned by FAFI,
FGIH and FGPM. Due to his positions with BTN, FG and affiliated entities, Mr. Cerminara may
be deemed to be beneficial owner of the shares of the Company’s common stock disclosed
as directly owned by BTN. The business address for Mr. Cerminara is c/o FG Investors GP,
LLC, 108 Gateway Blvd., Suite 204, Mooresville, North Carolina 28114. |
| 2. | Includes
3,532,765 shares reported as beneficially owned by FG and its affiliates, of which Mr. Cerminara
is deemed to have beneficial ownership by virtue of his positions with FG, as discussed in
footnote 1. |
DESCRIPTION
OF COMMON STOCK
The
following description of certain terms of the Common Stock in this prospectus does not purport to be complete and is in all respects
subject to, and qualified in its entirety by references to the relevant provisions of our fourth amended and restated certificate of
incorporation, as corrected and amended (the “Certificate of Incorporation”), our fourth amended and restated bylaws (the
“Bylaws”) and Delaware corporate law. You are strongly encouraged to read our Certificate of Incorporation
and Bylaws in their entirety for a complete description of the rights and preferences of our securities, copies of which have
been filed with the SEC. These documents are also incorporated by reference into the registration statement of which this prospectus
forms a part.
General
The
Company’s authorized capital stock consists of 100,000,000 shares of common stock, par value $0.001 per share (the “Common
Stock”), and 1,000,000 shares of preferred stock, par value $25.00 per share (the “Preferred Stock”), all of which
shares have been designated as a single series of 8.00% Cumulative Preferred Stock, Series A (the “Series A Preferred Stock”).
Under
Delaware law, stockholders generally are not personally liable for a corporation’s acts or debts.
Exchange
and Trading Symbol
The
Common Stock is listed for trading on The Nasdaq Global Market under the trading symbol “FGF.”
Rights
and Preferences
All
outstanding shares of Common Stock are duly authorized, fully paid and nonassessable. Holders of shares of Common Stock have no conversion,
preemptive or subscription rights, and there are no redemption or sinking fund provisions applicable to the Common Stock. The rights,
preferences and privileges of the holders of Common Stock are subject to, and may be adversely affected by, the rights of the holders
of shares of the Series A Preferred Stock and any series of Preferred Stock that the Company may designate and issue in the future.
Voting
Rights
Holders
of Common Stock are entitled to one vote for each share held of record on all matters to be voted on by the stockholders. There is no
cumulative voting with respect to the election of directors. Directors are elected by a plurality of the votes cast by the holders of
Common Stock. Except for the approval required to amend the Company’s Certificate of Incorporation or the Bylaws and except as
otherwise required by law, all other matters brought to a vote of the holders of Common Stock are determined by a majority of the votes
cast, and, except as may be provided with respect to any other outstanding class or series of the Company’s stock, the holders
of shares of Common Stock possess the exclusive voting power.
Dividends
Subject
to preferences that may be applicable to any then outstanding shares of Preferred Stock (including the Series A Preferred Stock), the
holders of Common Stock are entitled to receive dividends, if any, as may be declared from time to time by the Company’s Board
of Directors out of legally available funds.
Liquidation
In
the event of the Company’s liquidation, dissolution or winding up, the holders of Common Stock are entitled to share ratably in
the assets legally available for distribution to stockholders after the payment of all of the Company’s known debts and liabilities
and after adequate provision has been made for each class of stock having preference over the Common Stock, if any.
Anti-Takeover
Effects of Provisions of Delaware Law and the Company’s Certificate of Incorporation and Bylaws
Delaware
Anti-Takeover Law
The
Company is subject to Section 203 of the Delaware General Corporation Law (“Section 203”). Section 203 generally prohibits
a public Delaware corporation from engaging in a “business combination” with an “interested stockholder” for
a period of three years after the date of the transaction in which the person became an interested stockholder unless:
| ● |
prior
to the date of the transaction, the board of directors of the corporation approved either the business combination or the transaction
which resulted in the stockholder becoming an interested stockholder; |
| |
|
| ● |
upon
consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder
owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes
of determining the number of shares outstanding (but not the outstanding voting stock owned by the interested stockholder) those
shares owned by (i) persons who are directors and also officers and (ii) employee stock plans in which employee participants do not
have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer;
or |
| |
|
| ● |
at
or subsequent to such time the business combination is approved by the board of directors and authorized at an annual or special
meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock
which is not owned by the interested stockholder. |
Section
203 defines a “business combination” to generally include:
| ● |
any
merger or consolidation of the corporation or any direct or indirect majority-owned subsidiary of the corporation with the interested
stockholder; |
| |
|
| ● |
any
sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), except proportionately
as a stockholder of such corporation, to or with the interested stockholder of assets of the corporation or of any direct or indirect
majority-owned subsidiary of the corporation which assets have an aggregate market value equal to 10% or more of either the aggregate
market value of all the assets of the corporation determined on a consolidated basis or the aggregate market value of all the outstanding
stock of the corporation; |
| |
|
| ● |
subject
to certain exceptions, any transaction which results in the issuance or transfer by the corporation or by any direct or indirect
majority-owned subsidiary of the corporation of any stock of the corporation or of such subsidiary to the interested stockholder; |
| |
|
| ● |
subject
to certain exceptions, any transaction involving the corporation or any direct or indirect majority-owned subsidiary of the corporation
that has the effect, directly or indirectly, of increasing the interested stockholder’s proportionate share of the stock of
any class or series of securities, or securities convertible into the stock of any class or series, of the corporation or of any
such subsidiary; and |
| |
|
| ● |
any
receipt by the interested stockholder of the benefit, directly or indirectly (except proportionately as a stockholder of such corporation),
of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation or any direct or indirect
majority-owned subsidiary. |
In
general, Section 203 defines an interested stockholder as any entity or person that (i) is the owner of 15% or more of the outstanding
voting stock of the corporation, or (ii) is an affiliate or associate of the corporation and was the owner of 15% or more of the outstanding
voting stock of the corporation at any time within the three-year period immediately prior to the date on which it is sought to be determined
whether such person is an interested stockholder, and the affiliates and associates of such person.
Certificate
of Incorporation and Bylaws
The
Company’s Certificate of Incorporation and Bylaws include anti-takeover provisions that:
| ● |
authorize
the Board of Directors, without further action by the stockholders, to issue shares of Preferred Stock in one or more series, and
with respect to each series, to fix the number of shares constituting that series, and establish the rights and terms of that series; |
| |
|
| ● |
establish
advance notice procedures for stockholders to submit nominations of candidates for election to the Board of Directors to be brought
before a stockholders meeting; |
| |
|
| ● |
allow
the Company’s directors to establish the size of the Board of Directors and fill vacancies on the Board created by an increase
in the number of directors (subject to the rights of the holders of any series of Preferred Stock to elect additional directors under
specified circumstances); |
| |
|
| ● |
require
the affirmative vote of the holders of shares representing at least a majority of the voting power of all of the then-outstanding
shares of capital stock of the Company entitled to vote generally in the election of directors in order to remove a director or the
entire Board of Directors, with or without cause; |
| |
|
| ● |
do
not provide stockholders cumulative voting rights with respect to director elections; |
| |
|
| ● |
do
not permit stockholders to take action by written consent; |
| |
|
| ● |
provide
that special meetings of the stockholders may be called only by or at the direction of the Board of Directors or at the request of
50% or more of the voting power of all of the outstanding shares of the Company’s capital stock entitled to vote on any issue
contemplated to be considered at such proposed special meeting; |
| |
|
| ● |
require
the approval of 66 2/3% or more of the voting power of all of the outstanding shares of the Company’s capital stock entitled
to vote generally in the election of directors to amend the Certificate of Incorporation; and |
| |
|
| ● |
provide
that the Company’s Bylaws may be amended by the Board of Directors without stockholder approval; provided, however, that the
stockholders may amend the Bylaws only with the affirmative vote of the holders of at least 66 2/3% of the voting power of all of
the then-outstanding shares of capital stock of the Company entitled to vote generally in the election of directors. |
Provisions
of the Company’s Certificate of Incorporation and Bylaws may delay or discourage transactions involving an actual or potential
change in the Company’s control or change in the Company’s Board of Directors or management, including transactions in which
stockholders might otherwise receive a premium for their shares or transactions that the Company’s stockholders might otherwise
deem to be in their best interests. Therefore, these provisions could adversely affect the price of the Common Stock.
Authorized
and Unissued Shares
The
Company’s authorized and unissued shares of Common Stock and Series A Preferred Stock are available for future issuance
without stockholder approval except as may otherwise be required by applicable stock exchange rules or Delaware law. The Company may
issue additional shares for a variety of purposes, including future offerings to raise additional capital, to fund acquisitions and as
employee and consultant compensation. The existence of authorized but unissued shares of Common Stock and Series A Preferred Stock
could render more difficult, or discourage an attempt, to obtain control of the Company by means of a proxy contest, tender offer,
merger or otherwise.
Transfer
Agent and Registrar
The
transfer agent for the Company’s Common Stock is Vstock Transfer, LLC.
UNDERWRITING
ThinkEquity
LLC is acting as the representative of the underwriters of this offering, which we refer to as the Representative. We have entered
into an underwriting agreement, dated , 2022 (the “Underwriting Agreement”), with the Representative.
Subject to the terms and conditions of the Underwriting Agreement, we have agreed to sell to each underwriter named below and each underwriter
named below has severally and not jointly agreed to purchase from us, at the public offering price per share less the underwriting discounts
and commissions set forth on the cover page of this prospectus, the number of shares of Common Stock listed next to its name in the following
table:
| Underwriters | |
Number
of Shares | |
| ThinkEquity LLC | |
| | |
| | |
| | |
| Total | |
| | |
All
of the shares of Common Stock to be purchased by the underwriters will be purchased from us.
The
Underwriting Agreement provides that the obligations of the underwriters to pay for and accept delivery of the shares of Common Stock
offered by this prospectus are subject to various conditions and representations and warranties, including the approval of certain legal
matters by their counsel and other conditions specified in the Underwriting Agreement. The shares of Common Stock are offered by the
underwriters, subject to prior sale, when, as and if issued to and accepted by them. The underwriters reserve the right to withdraw,
cancel or modify the offer to the public and to reject orders in whole or in part. The underwriters are obligated to take and pay for
all of the shares of Common Stock offered by this prospectus if any such shares of Common Stock are taken.
Over-Allotment
Option
We
have granted to the underwriters an option, exercisable no later than 45 calendar days after the closing of this offering, to purchase
up to an additional shares of Common Stock (15% of the shares of Common Stock sold in this offering) from us to cover over-allotments,
if any, at a price per share of Common Stock equal to the public offering price, less the underwriting discounts and commissions. The
underwriters may exercise this option only to cover over-allotments made in connection with this offering. If the underwriters exercise
this option in whole or in part, then the underwriters will be severally committed, subject to the conditions described in the Underwriting
Agreement, to purchase these additional shares of Common Stock. If any additional shares of Common Stock are purchased, the underwriters
will offer the additional shares of Common Stock on the same terms as those on which the shares of Common Stock are being offered hereby.
Discounts,
Commissions and Reimbursement
The
Representative has advised us that the underwriters propose to offer the shares of Common Stock to the public at the public offering
price per share set forth on the cover page of this prospectus. The underwriters may offer shares to securities dealers at that price
less a concession of not more than $ per share. After the initial offering to the public, the public offering price and other
selling terms may be changed by the Representative.
The
following table summarizes the public offering price, underwriting discounts and commissions and proceeds before expenses to us assuming
both no exercise and full exercise by the underwriters of their over-allotment option:
| | |
Per Share | | |
Total
Without
Over-allotment
Option | | |
Total
With
Over-allotment
Option | |
| Public offering price | |
$ | | | |
$ | | | |
$ | | |
| Underwriting discount (7%) | |
$ | | | |
$ | | | |
$ | | |
| Proceeds, before expenses, to us | |
$ | | | |
$ | | | |
$ | | |
We
have paid an expense deposit of $30,000 (the “Advance”) to the Representative, which will be applied against the actual
out-of-pocket accountable expenses that will be paid by us to the underwriters in connection with this offering and will be reimbursed
to us to the extent not incurred.
We
have also agreed to reimburse the Representative for all reasonable and actual accountable expenses incurred by the Representative in
connection with this offering up to a maximum of $100,000 in the aggregate, including the fees and expenses of the underwriters’
legal counsel and any expenses incurred by the Representative in conducting its due diligence, including background checks of our officers
and directors, less the Advance previously paid to the Representative.
We
estimate the expenses of this offering payable by us, not including underwriting commissions, will be approximately $ .
Lock-up
Agreements
Pursuant
to “lock-up” agreements, our directors and officers have agreed, subject to limited exceptions, for a period of three (3)
months from the date of the Underwriting Agreement, without the prior written consent of the Representative, that they
will not offer, issue, sell, contract to sell, encumber, grant any option for the sale of or otherwise dispose of any of our securities.
In
addition, pursuant to the Underwriting Agreement, we and any of our successors have agreed, for a period of three (3) months from the
date of the Underwriting Agreement, that each will not (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly
or indirectly, any shares of our capital stock or any securities convertible into or exercisable or exchangeable for shares of our capital
stock; (ii) file or caused to be filed any registration statement with the SEC relating to the offering of any shares of our capital
stock or any securities convertible into or exercisable or exchangeable for shares of our capital stock; (iii) complete any offering
of our debt securities, other than entering into a line of credit with a traditional bank; or (iv) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences of ownership of our capital stock, whether any such
transaction described in clause (i), (ii), (iii) or (iv) above is to be settled by delivery of shares of our capital stock or such other
securities, in cash or otherwise.
Right
of First Refusal
In
addition, for a period of twelve (12) months from the date of the closing of this offering, we agreed to grant to the Representative,
an irrevocable right of first refusal to act as sole investment banker, sole book-runner and/or sole placement agent, at the Representative’s
sole discretion, for each and every future public and private equity and debt offering, including all equity linked financings, during
such twelve (12) month period for us, or any successor to or any subsidiary of us, on terms agreed to by both us and the Representative.
The Representative will have the sole right to determine whether or not any other broker-dealer shall have the right to participate in
any such offering and the economic terms of any such participation.
Indemnification
We
have agreed to indemnify the underwriters against liabilities relating to this offering arising under the Securities Act and the Exchange
Act, liabilities arising from breaches of some or all of the representations and warranties contained in the Underwriting Agreement,
and to contribute to payments that the underwriters may be required to make for these liabilities.
Determination
of Offering Price
The
public offering price of the securities we are offering was negotiated between us and the Representative based on the trading price of
our Common Stock prior to the offering, among other things. Other factors considered in determining the public offering price of the
shares of Common Stock include our history and prospects, the stage of development of our business, our business plans for the future
and the extent to which they have been implemented, an assessment of our management, general conditions of the securities markets at
the time of the offering and such other factors as were deemed relevant.
Listing;
Nasdaq Global Market
The
Common Stock is listed for traded on The Nasdaq Global Market under the symbol “FGF.”
Transfer
Agent
Our
transfer agent for our Common Stock is VStock Transfer, LLC, 18 Lafayette Place, Woodmere, New York 11598.
Other
Relationships
From
time to time, certain of the underwriters and/or their affiliates have provided, and may in the future provide, various investment banking
and other financial services for us for which services they have received and, may in the future receive, customary fees. In the course
of their businesses, the underwriters and their affiliates may actively trade our securities or loans for their own account or for the
accounts of customers, and, accordingly, the underwriters and their affiliates may at any time hold long or short positions in such securities
or loans.
On May 18, 2021, we entered into an underwriting agreement
(the “May 2021 Underwriting Agreement”) with the Representative, which provided for the issuance and sale by us and the purchase
by the Representative, in a firm commitment underwritten public offering, of 194,580 shares of our Series A Preferred Stock, including
25,380 shares of our Series A Preferred Stock upon the exercise in full by the underwriters of their over-allotment option. The Representative
was paid a commission equal to 8% of the gross proceeds of the offering in addition to the payment of $75,000 for its expenses incurred
in such offering. In addition, for a period of twelve (12) months from the date of the May 2021 Underwriting Agreement, we agreed to grant
to the Representative, subject to certain exceptions, an irrevocable right of first refusal to act as sole sales agent, at the Representative’s
sole discretion, for each and every future “at-the-market” offering, during such twelve (12) month period for us, or any successor
to or any subsidiary of us, on terms customary for the Representative. The Representative will have the sole right to determine whether
or not any other broker-dealer shall have the right to participate in any such offering and the economic terms of any such participation.
On October 25, 2021, we entered into an underwriting
agreement (the “October 2021 Underwriting Agreement”) with the Representative, pursuant to which we issued and sold to Representative,
in a firm commitment underwritten public offering, 750,000 shares of our Common Stock, including 97,826 shares of our Common Stock upon
the exercise in full by the underwriters of their over-allotment option. The Representative was paid a commission equal to 7% of the
gross proceeds of the offering in addition to the payment of $100,000 for its expenses incurred in such offering. In addition, for a
period of twelve (12) months from the date of the October 2021 Underwriting Agreement, we agreed to grant to the Representative, subject
to certain exceptions, an irrevocable right of first refusal to act as sole investment banker, sole book-runner and/or sole placement
agent, at the Representative’s sole discretion, for each and every future public and private equity and debt offering, including
all equity linked financings, during such twelve (12) month period for us, or any successor to or any subsidiary of us, on terms agreed
to by both us and the Representative. The Representative will have the sole right to determine whether or not any other broker-dealer
shall have the right to participate in any such offering and the economic terms of any such participation.
Price
Stabilization, Short Positions and Penalty Bids
In
connection with this offering, the underwriters may engage in transactions that stabilize, maintain or otherwise affect the price of
our Common Stock. Specifically, the underwriters may over-allot in connection with this offering by selling more shares of our Common
Stock than are set forth on the cover page of this prospectus. This creates a short position in shares of our Common Stock for its own
account. The short position may be either a covered short position or a naked short position. In a covered short position, the number
of shares of Common Stock over-allotted by the underwriters is not greater than the number of shares of Common Stock that they may purchase
in the over-allotment option. In a naked short position, the number of shares of Common Stock involved is greater than the number of
shares Common Stock in the over-allotment option. To close out a short position, the underwriters may elect to exercise all or part of
the over-allotment option. The underwriters may also elect to stabilize the price of our Common Stock or reduce any short position by
bidding for, and purchasing, Common Stock in the open market.
The
underwriters may also impose a penalty bid. This occurs when a particular underwriter or dealer repays selling concessions allowed to
it for distributing shares of Common Stock in this offering because the underwriter repurchases the shares of Common Stock in stabilizing
or short covering transactions.
Finally,
the underwriters may bid for, and purchase, shares of our Common Stock in market making transactions, including “passive”
market making transactions as described below.
These
activities may stabilize or maintain the market price of our Common Stock at a price that is higher than the price that might otherwise
exist in the absence of these activities. The underwriters are not required to engage in these activities, and may discontinue any of
these activities at any time without notice. These transactions may be effected on the national securities exchange on which our shares
of Common Stock are traded, in the over-the-counter market, or otherwise.
Passive
Market Making
In
connection with the offering, the underwriters may engage in passive market making transactions in shares of our Common Stock on The
Nasdaq Global Market in accordance with Rule 103 of Regulation M under the Exchange Act during the period before the commencement of
offers or sales of shares of our Common Stock and extending through the completion of distribution. A passive market maker must display
its bids at a price not in excess of the highest independent bid of the security. However, if all independent bids are lowered below
the passive market maker’s bid, that bid must be lowered when specified purchase limits are exceeded.
Electronic
Distribution
This
prospectus in electronic format may be made available on websites or through other online services maintained by one or more of the underwriters,
or by their affiliates. Other than this prospectus in electronic format, the information on any underwriters’ website and any information
contained in any other website maintained by an underwriter is not part of this prospectus or the registration statement of which this
prospectus forms a part, has not been approved and/or endorsed by us or any underwriter in its capacity as underwriter, and should not
be relied upon by investors.
Selling
Restrictions
No
action has been taken in any jurisdiction (except in the United States) that would permit a public offering of shares of our Common Stock,
or the possession, circulation or distribution of this prospectus or any other material relating to us or shares of our Common Stock
in any jurisdiction where action for that purpose is required. Accordingly, shares of our Common Stock may not be offered or sold, directly
or indirectly, and this prospectus or any other offering material or advertisements in connection with our Common Stock may be distributed
or published, in or from any country or jurisdiction, except in compliance with any applicable rules and regulations of any such country
or jurisdiction.
European
Economic Area and United Kingdom
In
relation to each Member State of the European Economic Area and the United Kingdom (each a “Relevant State”), no shares of
our Common Stock have been offered or will be offered pursuant to the offering to the public in that Relevant State prior to the publication
of a prospectus in relation to the Common Stock which has been approved by the competent authority in that Relevant State or, where appropriate,
approved in another Relevant State and notified to the competent authority in that Relevant State, all in accordance with the Prospectus
Regulation, except that offers of shares may be made to the public in that Relevant State at any time under the following exemptions
under the Prospectus Regulation:
| |
● |
to
legal entities which are qualified investors as defined under the Prospectus Regulation; |
| |
|
|
| |
● |
by
the underwriters to fewer than 150 natural or legal persons (other than qualified investors as defined in the Prospectus Regulation),
subject to obtaining the prior consent of the representatives of the underwriters for any such offer; or |
| |
|
|
| |
● |
in
any other circumstances falling within Article 1(4) of the Prospectus Regulation, |
provided
that no such offer of Common Stock shall result in a requirement for us or any underwriter to publish a prospectus pursuant to Article
3 of the Prospectus Regulation or supplement a prospectus pursuant to Article 23 of the Prospectus Regulation.
For
the purposes of this provision, the expression an “offer of Common Stock to the public” in relation to any Common Stock in
any Relevant State means the communication in any form and by any means of sufficient information on the terms of the offer and any Common
Stock to be offered so as to enable an investor to decide to purchase or subscribe for our Common Stock, and the expression “Prospectus
Regulation” means Regulation (EU) 2017/1129.
United
Kingdom
This
prospectus has only been communicated or caused to have been communicated and will only be communicated or caused to be communicated
as an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets
Act of 2000, or the FSMA) as received in connection with the issue or sale of our Common Stock in circumstances in which Section 21(1)
of the FSMA does not apply to us. All applicable provisions of the FSMA will be complied with in respect to anything done in relation
to our Common Stock in, from or otherwise involving the United Kingdom.
Canada
The
shares of our Common Stock may be sold only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors,
as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted
clients, as defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any resale
of the securities must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements
of applicable securities laws.
Securities
legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this prospectus
(including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by
the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province or territory. The purchaser
should refer to any applicable provisions of the securities legislation of the purchaser’s province or territory for particulars
of these rights or consult with a legal advisor.
Pursuant
to section 3A.3 of National Instrument 33-105 Underwriting Conflicts, or NI 33-105, the underwriters are not required to comply with
the disclosure requirements of NI 33-105 regarding underwriter conflicts of interest in connection with this offering.
Australia
This
prospectus is not a disclosure document under Chapter 6D of the Australian Corporations Act, has not been lodged with the Australian
Securities and Investments Commission and does not purport to include the information required of a disclosure document under Chapter
6D of the Australian Corporations Act. Accordingly, (i) the offer of the securities under this prospectus is only made to persons to
whom it is lawful to offer the securities without disclosure under Chapter 6D of the Australian Corporations Act under one or more exemptions
set out in section 708 of the Australian Corporations Act, (ii) this prospectus is made available in Australia only to those persons
as set forth in clause (i) above, and (iii) the offeree must be sent a notice stating in substance that by accepting this offer, the
offeree represents that the offeree is such a person as set forth in clause (i) above, and, unless permitted under the Australian Corporations
Act, agrees not to sell or offer for sale within Australia any of the securities sold to the offeree within 12 months after its transfer
to the offeree under this prospectus.
China
The
information in this document does not constitute a public offer of the securities, whether by way of sale or subscription, in the People’s
Republic of China (excluding, for purposes of this paragraph, Hong Kong Special Administrative Region, Macau Special Administrative Region
and Taiwan). The securities may not be offered or sold directly or indirectly in the PRC to legal or natural persons other than directly
to “qualified domestic institutional investors.”
France
This
document is not being distributed in the context of a public offering of financial securities (offre au public de titres financiers)
in France within the meaning of Article L.411-1 of the French Monetary and Financial Code (Code Monétaire et Financier) and Articles
211-1 et seq. of the General Regulation of the French Autorité des marchés financiers (“AMF”). The securities
have not been offered or sold and will not be offered or sold, directly or indirectly, to the public in France.
This
document and any other offering material relating to the securities have not been, and will not be, submitted to the AMF for approval
in France and, accordingly, may not be distributed or caused to distributed, directly or indirectly, to the public in France.
Such
offers, sales and distributions have been and shall only be made in France to (i) qualified investors (investisseurs qualifiés)
acting for their own account, as defined in and in accordance with Articles L.411-2-II-2° and D.411-1 to D.411-3, D.744-1, D.754-1
;and D.764-1 of the French Monetary and Financial Code and any implementing regulation and/or (ii) a restricted number of non-qualified
investors (cercle restreint d’investisseurs) acting for their own account, as defined in and in accordance with Articles L.411-2-II-2°
and D.411-4, D.744-1, D.754-1; and D.764-1 of the French Monetary and Financial Code and any implementing regulation.
Pursuant
to Article 211-3 of the General Regulation of the AMF, investors in France are informed that the securities cannot be distributed (directly
or indirectly) to the public by the investors otherwise than in accordance with Articles L.411-1, L.411-2, L.412-1 and L.621-8 to L.621-8-3
of the French Monetary and Financial Code.
Ireland
The
information in this document does not constitute a prospectus under any Irish laws or regulations and this document has not been filed
with or approved by any Irish regulatory authority as the information has not been prepared in the context of a public offering of securities
in Ireland within the meaning of the Irish Prospectus (Directive 2003/71/EC) Regulations 2005 (the “Prospectus Regulations”).
The securities have not been offered or sold, and will not be offered, sold or delivered directly or indirectly in Ireland by way of
a public offering, except to (i) qualified investors as defined in Regulation 2(l) of the Prospectus Regulations and (ii) fewer than
100 natural or legal persons who are not qualified investors.
Israel
The
securities offered by this prospectus have not been approved or disapproved by the Israel Securities Authority (the “ISA”),
nor have such securities been registered for sale in Israel. The securities may not be offered or sold, directly or indirectly, to the
public in Israel, absent the publication of a prospectus that has been approved by the ISA. The ISA has not issued permits, approvals
or licenses in connection with this offering or publishing this prospectus, nor has it authenticated the details included herein, confirmed
their reliability or completeness, or rendered an opinion as to the quality of the securities being offered.
This
document does not constitute a prospectus under the Israeli Securities Law and has not been filed with or approved by the ISA. In the
State of Israel, this document may be distributed only to, and may be directed only at, and any offer of the securities may be directed
only at, (i) to the extent applicable, a limited number of persons in accordance with the Israeli Securities Law and (ii) investors listed
in the first addendum to the Israeli Securities Law (the “Addendum”) consisting primarily of joint investment in trust funds,
provident funds, insurance companies, banks, portfolio managers, investment advisors, members of the Tel Aviv Stock Exchange Ltd., underwriters,
venture capital funds, entities with equity in excess of NIS 50 million and “qualified individuals,” each as defined in the
Addendum (as it may be amended from time to time), collectively referred to as qualified investors (in each case purchasing for their
own account or, where permitted under the Addendum, for the accounts of their clients who are investors listed in the Addendum). Qualified
investors will be required to submit written confirmation that they fall within the scope of the Addendum, are aware of the meaning of
same and agree to it.
Italy
The
offering of the securities in the Republic of Italy has not been authorized by the Italian Securities and Exchange Commission (Commissione
Nazionale per le Società e la Borsa, “CONSOB”) pursuant to the Italian securities legislation and, accordingly, no
offering material relating to the securities may be distributed in Italy and such securities may not be offered or sold in Italy in a
public offer within the meaning of Article 1.1(t) of Legislative Decree No. 58 of 24 February 1998 (“Decree No. 58”), other
than:
| |
● |
to
Italian qualified investors, as defined in Article 100 of Decree No. 58 by reference to Article 34-ter of CONSOB Regulation no. 11971
of 14 May 1999 (“Regulation no. 11971”) as amended (“Qualified Investors”); and |
| |
● |
in
other circumstances that are exempt from the rules on public offer pursuant to Article 100 of Decree No. 58 and Article 34-ter of
Regulation No. 11971 as amended. |
Any
offer, sale or delivery of the securities or distribution of any offer document relating to the securities in Italy (excluding placements
where a Qualified Investor solicits an offer from the issuer) under the paragraphs above must be:
| |
● |
made
by investment firms, banks or financial intermediaries permitted to conduct such activities in Italy in accordance with Legislative
Decree No. 385 of 1 September 1993 (as amended), Decree No. 58, CONSOB Regulation No. 16190 of 29 October 2007 and any other applicable
laws; and |
| |
|
|
| |
● |
in
compliance with all relevant Italian securities, tax and exchange controls and any other applicable laws. |
Any
subsequent distribution of the securities in Italy must be made in compliance with the public offer and prospectus requirement rules
provided under Decree No. 58 and the Regulation No. 11971 as amended, unless an exception from those rules applies. Failure to comply
with such rules may result in the sale of such securities being declared null and void and in the liability of the entity transferring
the securities for any damages suffered by the investors.
Japan
The
securities have not been and will not be registered under Article 4, paragraph 1 of the Financial Instruments and Exchange Law of Japan
(Law No. 25 of 1948), as amended (the “FIEL”) pursuant to an exemption from the registration requirements applicable to a
private placement of securities to Qualified Institutional Investors (as defined in and in accordance with Article 2, paragraph 3 of
the FIEL and the regulations promulgated thereunder). Accordingly, the securities may not be offered or sold, directly or indirectly,
in Japan or to, or for the benefit of, any resident of Japan other than Qualified Institutional Investors. Any Qualified Institutional
Investor who acquires securities may not resell them to any person in Japan that is not a Qualified Institutional Investor, and acquisition
by any such person of securities is conditional upon the execution of an agreement to that effect.
Portugal
This
document is not being distributed in the context of a public offer of financial securities (oferta pública de valores mobiliários)
in Portugal, within the meaning of Article 109 of the Portuguese Securities Code (Código dos Valores Mobiliários). The
securities have not been offered or sold and will not be offered or sold, directly or indirectly, to the public in Portugal. This document
and any other offering material relating to the securities have not been, and will not be, submitted to the Portuguese Securities Market
Commission (Comissăo do Mercado de Valores Mobiliários) for approval in Portugal and, accordingly, may not be distributed
or caused to distributed, directly or indirectly, to the public in Portugal, other than under circumstances that are deemed not to qualify
as a public offer under the Portuguese Securities Code. Such offers, sales and distributions of securities in Portugal are limited to
persons who are “qualified investors” (as defined in the Portuguese Securities Code). Only such investors may receive this
document and they may not distribute it or the information contained in it to any other person.
Sweden
This
document has not been, and will not be, registered with or approved by Finansinspektionen (the Swedish Financial Supervisory Authority).
Accordingly, this document may not be made available, nor may the securities be offered for sale in Sweden, other than under circumstances
that are deemed not to require a prospectus under the Swedish Financial Instruments Trading Act (1991:980) (Sw. lag (1991:980) om handel
med finansiella instrument). Any offering of securities in Sweden is limited to persons who are “qualified investors” (as
defined in the Financial Instruments Trading Act). Only such investors may receive this document and they may not distribute it or the
information contained in it to any other person.
Switzerland
The
securities may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange (“SIX”) or on any
other stock exchange or regulated trading facility in Switzerland. This document has been prepared without regard to the disclosure standards
for issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure standards for listing prospectuses
under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland.
Neither this document nor any other offering material relating to the securities may be publicly distributed or otherwise made publicly
available in Switzerland.
Neither
this document nor any other offering material relating to the securities have been or will be filed with or approved by any Swiss regulatory
authority. In particular, this document will not be filed with, and the offer of securities will not be supervised by, the Swiss Financial
Market Supervisory Authority (FINMA).
This
document is personal to the recipient only and not for general circulation in Switzerland.
United
Arab Emirates
Neither
this document nor the securities have been approved, disapproved or passed on in any way by the Central Bank of the United Arab Emirates
or any other governmental authority in the United Arab Emirates, nor has the Company received authorization or licensing from the Central
Bank of the United Arab Emirates or any other governmental authority in the United Arab Emirates to market or sell the securities within
the United Arab Emirates. This document does not constitute and may not be used for the purpose of an offer or invitation. No services
relating to the securities, including the receipt of applications and/or the allotment or redemption of such shares, may be rendered
within the United Arab Emirates by the Company.
No
offer or invitation to subscribe for securities is valid or permitted in the Dubai International Financial Centre.
LEGAL
MATTERS
The
validity of the securities offered by this prospectus will be passed on for us by Loeb & Loeb LLP, New York, New York. Certain legal
matters in connection with this offering will be passed on for the underwriters by Blank Rome LLP, New York, New York.
EXPERTS
The
consolidated financial statements of the Company as of December 31, 2021 and 2020 and for the years ended December 31,
2021 and 2020, incorporated in this prospectus by reference to the Company’s Annual Report on Form 10-K for the year
ended December 31, 2021, have been so incorporated in reliance on the report of BDO USA, LLP, an independent registered public
accounting firm, incorporated herein by reference, given on the authority of said firm as experts in accounting and auditing.
DISCLOSURE
OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons
of the Company pursuant to the foregoing provisions, we have been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act of 1933 and is therefore unenforceable.
WHERE
YOU CAN FIND MORE INFORMATION
We
are subject to the information reporting requirements of the Exchange Act and, in accordance with these requirements, we file, electronically,
with the SEC, annual, quarterly and current reports, proxy statements, information statements, and other information. Our SEC filings
are available to the public over the Internet at the SEC’s website at www.sec.gov. In addition, we provide free access to these
materials through our website, www.fgfinancial.com, as soon as reasonably practicable after they are filed with or furnished to the SEC.
Information contained on, or (other than our SEC filings) that may be accessible through, our website is not a part of, and is not incorporated
into, this prospectus.
We
have filed with the SEC a registration statement on Form S-1 relating to the securities covered by this prospectus. This prospectus is
a part of the registration statement and does not contain all the information in the registration statement. Whenever a reference is
made in this prospectus to a contract or other document, the reference is only a summary and you should refer to the exhibits that are
a part of the registration statement for a copy of the contract or other document. You may review a copy of the registration statement
through the SEC’s website.
INCORPORATION
BY REFERENCE
The
SEC allows us to incorporate by reference information in this document. This means that we can disclose important information to you
by referring you to documents that we have previously filed with the SEC or documents that we will file with the SEC in the future. The
information incorporated by reference is considered to be an important part of this prospectus, except for any information that is superseded
by information that is included directly in this document.
We
are incorporating by reference in this prospectus the following documents which we have previously filed with the SEC (other than any
portions of the Current Reports on Form 8-K that were furnished pursuant to Item 2.02 or 7.01 of Form 8-K or other applicable SEC rules):
| (1) |
Annual
Report on Form 10-K for the year ended December 31, 2021, filed on March 30, 2022 as well as Amendment No. 1 to
our Annual Report on Form 10-K/A for the year ended December 31, 2021, filed on April 29, 2022; |
| |
|
| (2) |
the description of our shares of common stock contained
in (i) our Registration Statement on Form 8-A, as filed with the SEC on March 19, 2014, including any amendment or report filed for
the purpose of updating such description and (ii) Exhibit 4.4—Description of Securities to our Annual Report on Form 10-K for
the year ended December 31, 2021, filed with the SEC on March 30, 2022; |
| |
|
| (3) |
the
description of our shares of 8.00% Cumulative Preferred Stock, Series A contained in (i) our Registration Statement on Form 8-A,
as filed with the SEC on February 26, 2018, and (ii) Exhibit 4.4—Description of Securities to our Annual Report on Form 10-K
for the year ended December 31, 2021, filed with the SEC on March 30, 2022; and |
| |
|
| (4) |
Proxy
Statement on Schedule 14A filed October 25, 2021. |
Whenever
after the date of filing the registration statement of which this prospectus is a part, and until all of the securities to which this
prospectus relates have been sold or the offering is otherwise terminated, we file reports or documents under Section 13(a), 13(c), 14
or 15(d) of the Exchange Act, those reports and documents will be deemed to be part of this prospectus from the time they are filed.
Any statements made in this prospectus or in a document incorporated or deemed to be incorporated by reference in this prospectus will
be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained in this prospectus or
in any subsequently filed document that is also incorporated or deemed to be incorporated by reference in this prospectus modifies or
supersedes the statement. Nothing in this prospectus will be deemed to incorporate information furnished by us on Form 8-K that under
the rules of the SEC, is not deemed “filed” for purposes of the Exchange Act.
We
will provide to each person, including any beneficial owner, to whom a prospectus is delivered, a copy of any or all of the information
that has been incorporated by reference in the prospectus, but not delivered with the prospectus, upon oral or written request, free
of charge. Any requests for this information should be made by calling or sending a letter to our principal executive offices
at the following address:
FG
Financial Group, Inc.
Attention:
Investor Relations
360
Central Ave, Suite 800
St.
Petersburg, FL 33701
Telephone:
(727) 304-5666
Shares of Common Stock
FG
Financial Group, Inc.
ThinkEquity
, 2022
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item
13. Other Expenses of Issuance and Distribution
The
following table sets forth the various costs and expenses to be paid by us in connection with the sale and distribution of the securities
being registered, other than underwriting discounts and commissions. All amounts shown are estimates, except for the registration
fee required by the Securities and Exchange Commission (“SEC”).
| SEC registration fee | |
$ | 427 | |
| FINRA filing fee | |
| 1,190 | |
| Accounting fees and expenses | |
| 30,000 | |
| Legal fees and expenses | |
| 200,000 | |
| Transfer agent fees and expenses | |
| 10,000 | |
| Printing fees and expenses | |
| 10,000 | |
| Miscellaneous | |
| 20,000 | |
| Total | |
$ | 271,617 | |
Item
14. Indemnification of Directors and Officers
Section
145 of the Delaware General Corporation Law provides, in summary, that a director or officer of a Delaware corporation is entitled, under
certain circumstances, to be indemnified against all expenses and liabilities (including attorneys’ fees) incurred by him, as a
result of suits brought against him in his capacity as a director or officer, if he acted in good faith and in a manner they reasonably
believed to be in or not opposed to our best interests of the company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful; provided that no indemnification may be made against expenses in respect of any
claim, issue or matter as to which a director or officer was adjudged to be liable to the company, unless and only to the extent that
the court in which such action or suit was brought determines, upon application, that, despite the adjudication of liability, but, in
view of all the circumstances of the case, he is fairly and reasonably entitled to indemnity for such expenses that the court deems proper.
Any such indemnification may be made by us only as authorized in each specific case upon a determination by the stockholders, disinterested
directors, or independent legal counsel that indemnification is proper because the indemnitee has met the applicable standard of conduct.
Our
By-laws, as amended, provides that our directors and officers will be indemnified by us to the fullest extent authorized by Delaware
General Corporation Law, as it now exists or may in the future be amended.
We
may in the future enter into agreements with our directors to provide contractual indemnification in addition to the indemnification
provided in our By-laws. Our By-laws also permit us to secure insurance on behalf of any officer, director, employee or agent for any
liability arising out of his or her actions, regardless of whether the bylaws or Delaware General Corporation Law would permit indemnification.
We have purchased a policy of directors’ and officers’ liability insurance that insures our directors and officers against
the cost of defense, settlement or payment of a judgment in some circumstances and insures us against our obligations to indemnify the
directors and officers.
These
provisions may discourage stockholders from bringing a lawsuit against our directors for breach of their fiduciary duty. These provisions
also may have the effect of reducing the likelihood of derivative litigation against directors and officers, even though such an action,
if successful, might otherwise benefit us and our stockholders. Furthermore, a stockholder’s investment may be adversely affected
to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions.
We believe that these provisions, the insurance and the indemnity agreements are necessary to attract and retain talented and experienced
directors and officers.
In
any underwriting agreement we enter into in connection with the sale of Common Stock being registered hereby, the underwriter will agree
to indemnify, under certain conditions, us, our directors, our officers and persons who control us, within the meaning of the Securities
Act, against certain liabilities.
Item
15. Recent Sales of Unregistered Securities
None.
Item
16. Exhibits
| Exhibit |
|
|
|
Incorporated
by Reference to: |
| No. |
|
Description |
|
Document |
|
Ex.
No. |
| 1.1 |
** |
Form
of Underwriting Agreement |
|
|
|
|
| 3.1 |
|
Fourth Amended and Restated Certificate of Incorporation, as corrected and amended |
|
[17] |
|
3.1 |
| 3.2 |
|
Certificate
of Amendment to Fourth Amended and Restated Certificate
of Incorporation |
|
[19] |
|
3.1 |
| 3.3 |
|
Fourth Amended and Restated By-Laws |
|
[1] |
|
3.2 |
| 4.1 |
|
Form of Common Stock certificate |
|
[2] |
|
4.1 |
| 4.2 |
|
Form of Global Certificate of Cumulative Preferred Stock, Series A |
|
[3] |
|
4.4 |
| 4.3 |
|
Description of Securities |
|
[4] |
|
4.4 |
| 5.1 |
** |
Opinion of Loeb & Loeb LLP |
|
|
|
|
| 10.1 |
† |
Amended and Restated 2014 Equity Incentive Plan |
|
[5] |
|
App.
A |
| 10.2 |
† |
2018 Equity Incentive Plan |
|
[6] |
|
10.1 |
| 10.3 |
† |
Form of Director and Officer Indemnification Agreement |
|
[2] |
|
10.6 |
| 10.4 |
† |
Equity Award Letter Agreement between registrant and Larry Swets |
|
[7] |
|
10.1 |
| 10.5 |
† |
Stock Option Agreement between registrant and Larry Swets |
|
[16] |
|
10.5 |
| 10.6 |
† |
Form of Restricted Stock Unit Agreement for executive officers under 2014 Equity Incentive Plan |
|
[8] |
|
10.2 |
| 10.7 |
† |
Form of Executive Restricted Stock Unit Award Agreement under the Share-Matching Program under the 2014 Equity Incentive Plan |
|
[9] |
|
10.1 |
| 10.8 |
† |
Form of Non-Employee Director Restricted Stock Unit Award Agreement under the Share-Matching Program under the 2014 Equity Incentive Plan |
|
[9] |
|
10.2 |
| 10.9 |
† |
Form of Stock Option Agreement under the 2018 Equity Incentive Plan |
|
[10] |
|
10.2 |
| 10.10 |
† |
Form of Restricted Share Agreement under the 2018 Equity Incentive Plan |
|
[10] |
|
10.3 |
| 10.11 |
|
Form of Restricted Share Unit Agreement under the 2018 Equity Incentive Plan |
|
[10] |
|
10.4 |
| 10.12 |
† |
Form of Non-Employee Director Restricted Share Unit Agreement under the 2018 Equity Incentive Plan |
|
[11] |
|
10.3 |
| 10.13 |
† |
Form of Executive Stock Grant Agreement under the 2018 Equity Incentive Plan |
|
[12] |
|
10.1 |
| 10.14 |
† |
Form of Executive Restricted Share Unit Agreement for Share-Matching Grants under 2018 Equity Incentive Plan |
|
[12] |
|
10.2 |
| 10.15 |
|
Registration Rights Agreement, dated December 2, 2019, between FedNat Holding Company and registrant |
|
[13] |
|
10.1 |
| 10.16 |
|
Standstill Agreement, dated December 2, 2019, between FedNat Holding Company and registrant |
|
[13] |
|
10.2 |
| 10.17 |
|
Reinsurance Capacity Right of First Refusal Agreement, dated December 2, 2019, by and between FedNat Holding Company and registrant |
|
[13] |
|
10.3 |
| 10.18 |
|
Investment Advisory Agreement, dated December 2, 2019, between FedNat Holding Company and registrant |
|
[13] |
|
10.4 |
| 10.19 |
† |
Employment Agreement, dated December 2, 2019, between Brian D. Bottjer and registrant |
|
[13] |
|
10.9 |
| 10.20 |
† |
Employment Agreement, dated November 10, 2020, between Larry G. Swets, Jr. and registrant |
|
[14] |
|
10.1 |
| 10.21 |
|
Shared Services Agreement, dated March 31, 2020, between Fundamental Global Management, LLC and registrant |
|
[15] |
|
10.1 |
| 10.22 |
|
Amended and Restated Limited Liability Company Agreement of Fundamental Global Asset Management, LLC, dated August 6, 2021 |
|
[18] |
|
10.1 |
| 10.23 |
|
Second Amended and Restated Management Services Agreement, dated August 11, 2021, between Sequoia Financial LLC and registrant |
|
[18] |
|
10.2 |
| 10.24 |
† |
2021
Equity Incentive Plan |
|
[19] |
|
10.1 |
| 10.25 |
† |
Form of Non-Employee Director Restricted Share Unit Agreement under 2021 Equity Incentive Plan |
|
[20] |
|
10.16 |
| 10.26 |
|
Underwriting Agreement, dated May 18, 2021, by and between FG Financial Group, Inc. and ThinkEquity, a division of Fordham Financial Management, Inc. |
|
[21] |
|
1.1 |
| 10.27 |
|
Underwriting Agreement, dated October 25, 2021, by and between FG Financial Group, Inc. and ThinkEquity LLC |
|
[22] |
|
1.1 |
| 21.1 |
|
Registrant’s subsidiaries |
|
[20] |
|
21.1 |
| 23.1 |
* |
Consent
of BDO USA, LLP (independent registered public accounting firm) |
|
|
|
|
| 23.2 |
** |
Consent
of Loeb & Loeb LLP (included in Exhibit 5.1 to the Registration Statement) |
|
|
|
|
| 24.1 |
* |
Power
of Attorney (included on signature page). |
|
|
|
|
| 107 |
* |
Calculation of Filing Fee Table |
|
|
|
|
*
Filed herewith.
**
To be filed by amendment.
†
Management contract or compensatory plan or arrangement.
[1]
Registrant’s Current Report on Form 8-K filed December 17, 2020
[2]
Registrant’s Registration Statement on Form S-1/A1 (Reg. No. 333-193314), filed January 30, 2014
[3]
Registrant’s Registration Statement on Form
S-1/A1 (Reg. No. 333-222470), filed February 5, 2018
[4]
Registrant’s Annual Report on Form 10-K for
year ended December 31, 2019
[5]
Registrant’s Definitive Proxy Statement on
Schedule 14A filed April 30, 2015
[6]
Registrant’s Current Report on Form 8-K filed
June 1, 2018
[7] Registrant’s Current Report on Form
8-K filed January 19, 2021
[8] Registrant’s Current Report on Form 8-K
filed June 2, 2015
[9] Registrant’s Current Report on Form 8-K
filed December 19, 2017
[10] Registrant’s Current Report on Form 8-K
filed June 1, 2018
[11] Registrant’s Quarterly Report on Form
10-Q for quarter ended September 30, 2018, filed November 13, 2018
[12] Registrant’s Current on Report
on Form 8-K filed August 28, 2018
[13] Registrant’s Current Report on
Form 8-K filed December 2, 2019
[14] Registrant’s Current Report on
Form 8-K filed November 16, 2020
[15] Registrant’s Current Report on
Form 8-K filed April 6, 2020
[16] Registrant’s Annual Report on Form
10-K for the year ended December 31, 2020, filed March 18, 2021
[17] Registrant’s Current Report on
Form 8-K filed May 21, 2021
[18] Registrant’s Quarterly Report on Form 10-Q for the quarter
ended June 30, 2021, filed August 16, 2021
[19] Registrant’s Current Report on Form 8-K filed December 17,
2021
[20] Registrant’s Annual Report on Form 10-K for the year ended
December 31, 2021, filed March 30, 2022
[21] Registrant’s Current Report on Form 8-K filed May 19, 2021
[22] Registrant’s Current Report on Form 8-K filed October 26,
2021
Item
17. Undertakings
| (a) |
The
undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing
of the registrant’s annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan’s annual report pursuant to section 15(d) of the Securities Exchange Act
of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering
thereof. |
| |
|
| (b) |
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion
of the SEC such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that
a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication
of such issue. |
| |
|
| (c) |
The
undersigned Registrant hereby undertakes that: |
| |
(1) |
For
purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed
as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant
to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time
it was declared effective. |
| |
|
|
| |
(2) |
For
the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering thereof. |
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf
by the undersigned, thereunto duly authorized in the City of St. Petersburg, State of Florida, on May 5, 2022.
| |
FG
Financial Group, Inc. |
| |
|
|
| |
By:
|
/s/
Larry G. Swets, Jr. |
| |
|
Larry
G. Swets, Jr. |
| |
|
Chief
Executive Officer |
POWER
OF ATTORNEY
Each
of the undersigned, whose signature appears below, hereby constitutes and appoints Larry G. Swets, Jr. and Brian D. Bottjer and each
of them, as his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, to do any and
all acts and things and execute, in the name of the undersigned, any and all instruments which said attorney-in-fact and agent may deem
necessary or advisable in order to enable the Company to comply with the Securities Act and any requirements of the SEC in respect thereof,
in connection with the filing with the SEC of this Registration Statement on Form S-1 under the Securities Act, including specifically
but without limitation, power and authority to sign the name of the undersigned to such Registration Statement, and any amendments to
such Registration Statement, and any additional Registration Statement filed pursuant to Rule 462(b), and to file the same with
all exhibits thereto and other documents in connection therewith, with the SEC, to sign any and all applications, registration statements,
notices or other documents necessary or advisable to comply with applicable state securities laws, and to file the same, together with
other documents in connection therewith with the appropriate state securities authorities, granting unto said attorney-in-fact and agent,
full power and authority to do and to perform each and every act and thing requisite or necessary to be done in and about the premises,
as fully and to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent, or his substitute, may lawfully do or cause to be done by virtue hereof.
Pursuant
to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities
and on the dates indicated.
| Signature |
|
Capacity
in Which Signed |
|
Date |
| |
|
|
|
|
| /s/
Larry G. Swets, Jr. |
|
Director
and Chief Executive Officer |
|
May
5, 2022 |
| Larry
G. Swets, Jr. |
|
(Principal
Executive Officer) |
|
|
| |
|
|
|
|
| /s/
Brian D. Bottjer |
|
Senior
Vice President and Chief Accounting Officer |
|
May
5, 2022 |
| Brian
D. Bottjer |
|
(Principal
Financial and Accounting Officer) |
|
|
| |
|
|
|
|
| /s/
Hassan R. Baqar |
|
Executive Vice President and
Chief Financial Officer |
|
May 5, 2022 |
| Hassan R. Baqar |
|
|
|
|
| |
|
|
|
|
| /s/
D. Kyle Cerminara* |
|
Chairman
of the Board |
|
May 5, 2022 |
| D.
Kyle Cerminara |
|
|
|
|
| |
|
|
|
|
| /s/
Richard E. Govignon, Jr.* |
|
Director |
|
May
5, 2022 |
| Richard
E. Govignon, Jr. |
|
|
|
|
| |
|
|
|
|
| /s/
Rita Hayes* |
|
Director |
|
May
5, 2022 |
| Rita
Hayes |
|
|
|
|
| |
|
|
|
|
| /s/
E. Gray Payne* |
|
Director |
|
May
5, 2022 |
| E.
Gray Payne |
|
|
|
|
| |
|
|
|
|
| /s/
Scott D. Wollney* |
|
Director |
|
May
5, 2022 |
| Scott
D. Wollney |
|
|
|
|
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