Nature of Business |
9 Months Ended |
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Sep. 30, 2025 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| Nature of Business | Note 1. Nature of Business
FG Nexus Inc. (“FGNX”, the “Company”, “we”, or “us”), a Nevada corporation, recently undertook a significant strategic shift, adopting Ether, the native cryptocurrency of the Ethereum blockchain (“Ether” or “ETH”) as its primary treasury asset. This strategy reflects the Company’s commitment to align the corporate treasury with the future of programmable finance, digital capital markets and decentralized infrastructure. In connection with the strategic shift, the Company distributed certain assets to a trust, which are no longer part of the consolidated group, as described in more detail below. In addition to operating a digital asset treasury, the Company continues to operate its merchant banking business and holds real estate and equity holdings.
Business Segments
The Company currently has two operating segments, digital assets and merchant banking.
Digital Assets
The Company recently initiated an ETH treasury strategy. ETH is the native token of the Ethereum network. Ethereum is the foundation of digital finance and settlement layer for the majority of stablecoins, Decentralized Finance (DeFi), and tokenized assets. We intend to accumulate ETH as a long-term treasury asset. The Company’s goal is to acquire and grow our overall ETH position and utilize professional treasury strategies to increase our ETH holdings. We currently are solely invested in ETH. We may invest in other cryptocurrency or other assets in the future as we evaluate additional opportunities and transactions.
Our treasury strategy is focused on increasing net asset value through a combination of capital raising activities and treasury activities, currently including staking, and potentially other activities in the future. ETH serves as our primary treasury reserve asset, and we intend to focus on maximizing ETH accumulation and value accretion, while maintaining robust controls and oversight over these digital assets.
Merchant Banking
We manage our merchant banking and asset management activities through FG Management Solutions LLC (“FGMS”), which provides strategic, administrative, and regulatory support services to newly formed SPACs (our “SPAC Platform”). Additionally, the Company co-founded a partnership, FG Merchant Partners, LP (“FGMP”), to participate as a co-sponsor for newly formed SPACs and other merchant banking clients.
Our merchant banking group provides advisory services, facilitates capital formation and allocates capital to equity holdings. In our SPAC Platform, this also includes launching, sponsoring and providing strategic, administrative, and regulatory support services to newly formed SPACs. Our merchant banking division has facilitated the launch of several new companies, including FG Communities, Inc. (“FGC”), a self-managed real estate company focused on a growing portfolio of manufactured housing communities that are owned and operated by FGC, and Saltire, a Canadian public company that allocates capital to equity, debt and/or hybrid securities of high-quality private companies, among others.
The Company previously reported managed services and reinsurance as operating segments, both of which were reclassified to discontinued operations during the current year. The Company also previously operated Strong/MDI and Strong Studios, which were sold in the previous year. Discontinued operations are more fully described in Note 6.
Recent Developments and Transactions
Private Placement Offering
In July 2025, the Company entered into securities purchase agreement with certain accredited investors (the “Purchasers”) pursuant to which the Company agreed to sell and issue to the Purchasers in a private placement offering (the “Private Placement Offering”) pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to an aggregate of 40,000,000 shares (the “Pre-Funded Warrant Shares,”) of the Company’s common stock, par value $ per share (the “Common Stock”) at an offering price of $ per Pre-Funded Warrant payable at the option of the Purchaser in cash, Bitcoin, USDC or ETH. The Private Placement Offering closed in August 2025, and the Company received gross cash proceeds of approximately $176.0 million and cryptocurrency totaling approximately $24.0 million. Upon the effectiveness of the September Charter Amendment (as defined below), approximately million Pre-Funded Warrants automatically converted into shares of the Company’s Common Stock. As of September 30, 2025, a total of approximately million Pre-Funded Warrants were converted into the Company’s Common Stock, and approximately million Pre-Funded Warrants remained unconverted. As of November 12, 2025, a total of approximately million Pre-Funded Warrants have been converted into the Company’s Common Stock, and approximately million Pre-Funded Warrants remained unconverted.
Charter Amendments
As approved by a majority of its stockholders by written consent, dated July 23, 2025, the Company filed a certificate of amendment to its amended and restated articles of incorporation with the Nevada Secretary of State on September 5, 2025 to (i) increase the total number of authorized shares of Common Stock from million to billion, (ii) increase the total number of authorized shares of preferred stock, par value $ per share (the “Undesignated Preferred Stock”) from million to million, (iii) increase the total number of authorized shares of 8% cumulative preferred stock, Series A (the “Series A Preferred Stock”) from million to million and (iv) change the name of the Company to “FG Nexus Inc.” (the “September Charter Amendment”). The September Charter Amendment was declared effective on September 5, 2025.
A majority of the stockholders of Company approved, by written consent dated September 4, 2025, a certificate of amendment to its amended and restated articles of incorporation to (a) increase the total number of authorized shares of Common Stock from billion shares to billion shares and the total number of authorized shares of preferred stock from million shares to billion shares (collectively, the “Preferred Stock”), of which (i) billion shares of Preferred Stock (increased from million) are designated 8% cumulative preferred stock, Series A, par value $ (the “Series A Preferred Stock”), and (ii) billion shares of Preferred Stock (increased from million shares) are undesignated preferred stock, par value $ per share (the “Undesignated Preferred Stock”), (b) require that certain “Concurrent Jurisdiction Actions” and “Internal Actions” (as such terms are defined in NRS 78.046, collectively, the “Internal Actions”) must be brought solely or exclusively in the Eighth Judicial District Court of Clark County in the State of Nevada and that such Internal Actions should be tried before a judge rather than a jury, in accordance with NRS 78.046(4); (c) clarify that any change of the Company’s name shall not require consent of the Company’s stockholders, in accordance with NRS 78.390(8); (d) have the Company “opt out” of the interested stockholder combination provisions set forth in NRS Sections 78.411 to 78.444, inclusive; and (e) have the Company “opt out” of the control share provisions set forth in NRS Sections 78.378 to 78.3793, inclusive (the “Additional Charter Amendment”). In connection with the Additional Charter Amendment, we also amended our By-laws to clarify the applicable voting thresholds for proposed amendments to the By-Laws. The Additional Charter Amendment was filed with and declared effective by the Secretary of State of the State of Nevada, on October 7, 2025.
Asset Transfer and CVR Trust
In August 2025, in connection with the Private Placement Offering and the launch of our treasury strategy, the Company transferred a significant portion of its legacy assets (the “Asset Transfer”) to a trust (the “CVR Trust”) established in connection with the creation of contingent value rights (“CVRs”) for the benefit of the Company’s stockholders as of August 8, 2025. The Company distributed the CVRs prior to the effectiveness of the Charter Amendment and the exercise of any of the Pre-Funded Warrants sold in the Private Placement Offering. The CVRs represent the contractual right to receive a pro rata portion of the net proceeds received by the CVR Trust upon the future disposition, if any, of the assets transferred to the CVR Trust by the Company. See Note 5 for additional details.
Following the Asset Transfer, the Company retained assets relating to, among other things, its reinsurance business, its merchant banking business, certain real estate assets, and certain equity holdings.
ATM Offering
On August 7, 2025, the Company entered into a Sales Agreement (the “Sales Agreement”) with ThinkEquity LLC (the “Sales Agent”), pursuant to which the Company may offer and sell, from time to time through the Sales Agent, up to such number or dollar amount of shares that would (a) exceed the number or dollar amount of shares of Common Stock registered on the effective registration statement pursuant to which the offering is being made, (b) exceed the number of authorized but unissued shares of Common Stock (less shares of Common Stock issuable upon exercise, conversion or exchange of any outstanding securities of the Company or otherwise reserved from the Company’s authorized capital stock), (c) exceed the number or dollar amount of shares of Common Stock permitted to be sold under Form S-3 or (d) exceed the number or dollar amount of shares of Common Stock for which the Company has filed a Prospectus Supplement (defined below) (the lesser of (a), (b), (c) and (d), the “Shares”) of the Company’s Common Stock, subject to the terms and conditions of the Sales Agreement. The Company filed a Registration Statement on Form S-3 offering up to $5 billion of the Shares. Under the Sales Agreement, the Sales Agent may sell the Shares in sales deemed to be an “at-the-market offering” as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended (the “Securities Act”), including sales made directly on or through The Nasdaq Global Market or any other existing trading market for the Common Stock, in negotiated transactions at market prices prevailing at the time of sale or at prices related to such prevailing market prices, and/or any other method permitted by law. The Company may instruct the Sales Agent not to sell the Shares if the sales cannot be effected at or above the price designated by the Company from time to time. Through September 30, 2025, the Company sold a total of approximately million shares of Common Stock pursuant to the Sales Agreement, which generated gross proceeds of approximately $14.6 million. Through October 12, 2025, the Company sold a cumulative total of approximately million shares of Common Stock pursuant to the Sales Agreement, which generated gross proceeds of approximately $15.5 million. As of October 13, 2025, the Company suspended the ATM. While the Company plans to reinstate the ATM and to sell additional Shares, as of the date of this Quarterly Report on Form 10-Q (this “Form 10-Q”), the reinstatement of the ATM has not yet occurred.
Agreement to Sell Reinsurance Business
In October 2025, the Company entered into an agreement to sell the remaining portion of its reinsurance business. Pursuant to the agreements, the Company will receive (1) the release of $3.3 million of collateral that the Company had posted in connection with certain reinsurance contracts; (2) the payment of $1.0 million in cash; and (3) a 40% equity interest in the entity purchasing the reinsurance business. Additionally, pursuant to the agreements, the Company agreed to leave $1.3 million dollars in cash in the reinsurance business in exchange for a promissory note in the amount of $1.3 million that accrues interest at a rate of 6% per annum with all principal and accrued interest due and payable on June 30, 2027. See Note 6 for additional details.
Letter of Intent to Sell Quebec Real Estate
The Company signed a non-binding letter of intent to sell its Quebec property for $15.0 million CAD. Following repayment of the existing installment loan, the transaction is expected to generate approximately $8.0-$9.0 million USD in net pretax proceeds. The letter of intent does not constitute a binding agreement, and there can be no assurance that a definitive sale agreement will be reached or that the transaction will be completed. The transaction, if completed, is expected to close during the first quarter of 2026, subject to the execution of definitive agreements, completion of due diligence, and satisfaction of customary closing conditions.
Prior Year Developments and Transactions
On February 29, 2024, FGF and FG Group Holdings, Inc. (“FGH”) closed a plan of merger to combine the companies in an all-stock transaction (the “Merger”). In connection with the Merger, FGH common stockholders received one share of FGF common stock for each share of common stock of FGH held by such stockholder. Upon completion of the Merger, the combined company was renamed to Fundamental Global Inc., and the common stock and Series A cumulative preferred stock of the combined company continued to trade on the Nasdaq Stock Market LLC (the “Nasdaq”) under the tickers “FGF” and “FGFPP,” respectively.
On May 3, 2024, Strong Global Entertainment, Inc. (“Strong Global Entertainment” or “SGE”) entered into an acquisition agreement (the “Acquisition Agreement”) with FG Acquisition Corp. (“FGAC”), a special purpose acquisition company (“SPAC”), Strong/MDI Screen Systems, Inc. (“Strong/MDI”), FGAC Investors LLC, and CG Investments VII Inc. The transaction closed on September 25, 2024. As part of the closing, FGAC was renamed Saltire Holdings, Ltd (“Saltire”), and Saltire acquired all of the outstanding shares of one of the Company’s indirect wholly-owned subsidiaries, Strong/MDI. As a result of the acquisition, Strong/MDI became a wholly-owned subsidiary of Saltire.
On May 30, 2024, the Company and Strong Global Entertainment, an operating company in which we held approximately 76% of the Class A common shares, entered into a definitive arrangement agreement and plan of arrangement to combine the companies in an all-stock transaction (the “Arrangement”). Upon completion of the Arrangement, the stockholders of Strong Global Entertainment received 1.5 common shares of the Company for each share of Strong Global Entertainment. The transaction closed on September 30, 2024. Following the closing, Strong Global Entertainment ceased to exist, and its common shares were delisted from NYSE American LLC (“NYSE American”) and deregistered under the Securities Exchange Act of 1934 (the “Exchange Act”). As the Company was the majority shareholder of Strong Global Entertainment, the financial results of Strong Global Entertainment are presented on a consolidated basis in the Company’s condensed consolidated financial statements included in this Form 10-Q.
In April 2024, the Company sold its Digital Ignition technology incubator and co-working facility in Alpharetta, Georgia for gross proceeds of $6.5 million. In connection with the sale of the land and building, the Company recorded a non-cash impairment charge of approximately $1.4 million during the first quarter of 2024 to adjust the carrying value of the assets to the fair market value less costs to sell.
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