Fundamental Global Inc. Files 2023 Annual Report on Form 10-K

TL;DR

<b>Fundamental Global Inc. has filed its 2023 10-K report, detailing its financial performance and corporate structure.</b>

AI Summary

Fundamental Global Inc. (FGNXP) filed a Annual Report (10-K) with the SEC on March 14, 2024. Fundamental Global Inc. filed its 10-K report for the fiscal year ending December 31, 2023. The company's SIC code is 6331 (Fire, Marine & Casualty Insurance). The filing includes financial data for the fiscal years 2023, 2022, and 2021. Key dates include the filing date of March 14, 2024, and the fiscal year end of December 31, 2023. The company was formerly known as FG Financial Group, Inc. and 1347 Property Insurance Holdings, Inc.

Why It Matters

For investors and stakeholders tracking Fundamental Global Inc., this filing contains several important signals. This 10-K filing provides a comprehensive overview of Fundamental Global Inc.'s financial health and operational status for the fiscal year 2023, crucial for investors assessing the company's performance and future prospects. The report's detailed financial statements and disclosures offer insights into the company's insurance business segment and any investments or variable interest entities it holds, which are key to understanding its risk profile and strategic direction.

Risk Assessment

Risk Level: medium — Fundamental Global Inc. shows moderate risk based on this filing. The company operates in the insurance sector, which is subject to significant regulatory oversight and market fluctuations, as indicated by its SIC code 6331 and the need for detailed financial reporting.

Analyst Insight

Investors should review the detailed financial statements and risk factors within the 10-K to understand the company's performance and potential risks in the insurance industry.

Key Numbers

• 2023-12-31 — Fiscal Year End (Reporting period)
• 2024-03-14 — Filing Date (Date of submission)
• 0001591890 — Central Index Key (SEC identifier for the filer)
• 6331 — SIC Code (Industry classification)

Key Players & Entities

• Fundamental Global Inc. (company) — Filer name
• FG Financial Group, Inc. (company) — Former company name
• 1347 Property Insurance Holdings, Inc. (company) — Former company name
• 2023-12-31 (date) — Fiscal year end
• 2024-03-14 (date) — Filing date
• 6331 (industry_code) — Standard Industrial Classification

FAQ

Risk Factors

• Regulatory Environment [high — regulatory]: The company operates in the insurance industry, which is subject to extensive regulation by state and federal authorities, impacting its operations and profitability.
• Market Competition [medium — market]: The insurance market is highly competitive, with numerous established players and potential new entrants, which could affect pricing and market share.
• Financial Risks [medium — financial]: The company faces financial risks related to investment performance, claims experience, and the ability to maintain adequate capital reserves.

Key Dates

• 2023-12-31: Fiscal Year End — End of the reporting period for the 10-K.
• 2024-03-14: Filing Date — Date the 10-K was officially submitted to the SEC.

Key Financial Figures

• $0.001 — ch Registered Common Stock, par value $0.001 per share FGF The Nasdaq Stock Mark
• $25.00 — ve Preferred Stock, Series A, par value $25.00 per share FGFPP The Nasdaq Stock Ma

Filing Documents

• form10-k.htm (10-K) — 1585KB
• ex21-1.htm (EX-21.1) — 5KB
• ex23-1.htm (EX-23.1) — 3KB
• ex31-1.htm (EX-31.1) — 19KB
• ex31-2.htm (EX-31.2) — 20KB
• ex32-1.htm (EX-32.1) — 7KB
• ex32-2.htm (EX-32.2) — 7KB
• ex97.htm (EX-97.1) — 16KB
• 0001493152-24-009954.txt (&nbsp;) — 7231KB
• fgf-20231231.xsd (EX-101.SCH) — 54KB
• fgf-20231231_cal.xml (EX-101.CAL) — 62KB
• fgf-20231231_def.xml (EX-101.DEF) — 249KB
• fgf-20231231_lab.xml (EX-101.LAB) — 440KB
• fgf-20231231_pre.xml (EX-101.PRE) — 350KB
• form10-k_htm.xml (XML) — 1000KB

RISK FACTORS

ITEM 1A. RISK FACTORS 4

UNRESOLVED STAFF COMMENTS

ITEM 1B. UNRESOLVED STAFF COMMENTS 14

CYBERSECURITY

ITEM 1C. CYBERSECURITY 14

PROPERTIES

ITEM 2. PROPERTIES 15

LEGAL PROCEEDINGS

ITEM 3. LEGAL PROCEEDINGS 15

MINE SAFETY DISCLOSURES

ITEM 4. MINE SAFETY DISCLOSURES 15 PART II 15

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

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 15

[RESERVED]

ITEM 6. [RESERVED] 16

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 16

QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK 25

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 26

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 55

CONTROLS AND PROCEDURES

ITEM 9A. CONTROLS AND PROCEDURES 55

OTHER INFORMATION

ITEM 9B. OTHER INFORMATION 56

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS 56 PART III 56

DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE 56

EXECUTIVE COMPENSATION

ITEM 11. EXECUTIVE COMPENSATION 66

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS 73

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 75

PRINCIPAL ACCOUNTANT FEES AND SERVICES

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES 77 PART IV 78

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 78

FORM 10-K SUMMARY

ITEM 16. FORM 10-K SUMMARY 79

SIGNATURES

SIGNATURES 80 1 FUNDAMENTAL GLOBAL INC. PART I This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These statements are therefore entitled to the protection of the safe harbor provisions of these laws. These statements may be identified by the use of forward-looking terminology such as "anticipate," "believe," "budget," "can," "contemplate," "continue," "could," "envision," "estimate," "expect," "evaluate," "forecast," "goal," "guidance," "indicate," "intend," "likely," "may," "might," "outlook," "plan," "possibly," "potential," "predict," "probable," "probably," "pro-forma," "project," "seek," "should," "target," "view," "will," "would," "will be," "will continue," "will likely result" or the negative thereof or other variations thereon or comparable terminology. In particular, discussions and statements regarding the Company's future business plans and initiatives are forward-looking in nature. We have based these forward-looking statements on our current expectations, assumptions, estimates, and projections. While we believe these to be reasonable, such forward-looking statements are only predictions and involve a number of risks and uncertainties, many of which are beyond our control. These and other important factors may cause our actual results, performance, or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements and may impact our ability to implement and execute on our future business plans and initiatives. Management cautions that the forward-looking statements in this Annual Report on Form 10-K are not guarantees of future performance, and we cannot assume that such statements will be realized or the forward-looking events and circumstances will occur. Fact

Business

Business Our strategy has evolved to focus on opportunistic collateralized and loss capped reinsurance, with capital allocation to merchant banking activities with asymmetrical risk/reward opportunities. 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, our Special Purpose Acquisition Corporation "SPAC" Platform businesses, and our merchant banking division. Insurance Sponsor Protection Coverage and Risk, Inc. has been formed as a special purpose captive in South Carolina to provide reinsurance coverage for Sides A, B, & C Directors and Officers Liability insurance coverage for related and unrelated entities of FG Reinsurance Ltd ("FGRe"). These will include SPAC entities engaged in the services or business of taking companies public, as well as small cap businesses performing an initial public offering. Sponsor Protection Coverage and Risk, Inc. has yet to write any business. Reinsurance The Company's wholly owned reinsurance subsidiary, FGRe, a Cayman Islands limited liability company, provides specialty property and casualty reinsurance. FGRe has been granted a Class B (iii) insurer license in accordance with the terms of The Insurance Act (as revised) of the Cayman Islands and underlying regulations thereto and is subject to regulation by the Cayman Islands Monetary Authority (the "Authority"). The terms of the license require advance approval from the Authority should FGRe wish to enter into any reinsurance agreements which are not fully collateralized. As of December 31, 2023, the Company had eight active reinsurance contracts, including participating in a Funds at Lloyds ("FAL") syndicate covering risks written by the syndicate during the 2021, 2022 a

Underwriting

Underwriting risks and reserving for losses are based on probabilities and related modeling, which are subject to inherent uncertainties. Our success is dependent upon our ability to assess accurately the risks associated with the businesses that we insure and reinsure. We establish reserves for losses and loss adjustment expenses which represent estimates based on actuarial and statistical projections, at a given point in time, of our and our cedent's expectations of the ultimate future settlement and administration costs of losses incurred. We utilize actuarial models as well as available historical insurance industry loss ratio ex

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View this 10-K filing on SEC EDGAR