FGH FG Group Holdings Inc

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

August 10, 2023

Date of Report (Date of earliest event reported)

 

FG GROUP HOLDINGS INC.

(Exact name of registrant as specified in its charter)

 

Nevada		1-13906		47-0587703
(State or other jurisdiction		(Commission		(IRS Employer
of incorporation or organization)		File No.)		Identification Number)

 

5960 Fairview Road, Suite 275
Charlotte, North Carolina		28210
(Address of principal executive offices)		(Zip Code)

 

(704) 994-8279

(Registrant’s telephone number including area code)

 

N/A

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

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

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Title of Each Class		Trading Symbol(s)		Name of Each Exchange on Which Registered
Common Stock, $0.01 par value		FGH		NYSE American

 

Emerging growth company ☐

 

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

 

 

 

Item 2.02 Results of Operations and Financial Condition

 

FG Group Holdings Inc., a Nevada corporation (the “Company”), issued a press release on August 10, 2023, with earnings information for the Company’s fiscal quarter ended June 30, 2023. The press release is furnished with this Current Report on Form 8-K (this “Current Report”) as Exhibit 99.1.

 

Item 7.01 Regulation FD Disclosure

 

The information set forth under Item 2.02 of this Current Report is incorporated herein by reference. In addition, on August 11, 2023, management of the Company plans to discuss the Company’s financial results for the fiscal quarter June 30, 2023, and the Company’s business plan, strategy and outlook on an earnings conference call with analysts and investors. The supplemental slides to be referenced during the conference call are furnished with this Current Report as Exhibit 99.2.

 

The information contained in Items 2.02 and 7.01 to this Current Report, including in Exhibit 99.1, is being “furnished” and, as such, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

 

Forward Looking Statements

 

In addition to the historical information in this Current Report and in the exhibit furnished with this Current Report, it includes forward-looking statements which involve a number of 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, 2022 filed with the Securities and Exchange Commission on March 16, 2023, and the following risks and uncertainties: the Company’s ability to maintain and expand its revenue streams to compensate for the lower demand for the Company’s digital cinema products and installation services; potential interruptions of supplier relationships or higher prices charged by suppliers; the Company’s ability to successfully compete and introduce enhancements and new features that achieve market acceptance and that keep pace with technological developments; the Company’s ability to successfully execute its capital allocation strategy or achieve the returns it expects from these holdings; the Company’s ability to maintain its brand and reputation and retain or replace its significant customers; challenges associated with the Company’s long sales cycles; the impact of a challenging global economic environment or a downturn in the markets; the effects of economic, public health, and political conditions that impact business and consumer confidence and spending, including rising interest rates, periods of heightened inflation and market instability, the outbreak of any highly infectious or contagious diseases, such as COVID-19 and its variants or other health epidemics or pandemics, and armed conflicts, such as the ongoing military conflict in Ukraine and related sanctions; economic and political risks of selling products in foreign countries (including tariffs); risks of non-compliance with U.S. and foreign laws and regulations, potential sales tax collections and claims for uncollected amounts; cybersecurity risks and risks of damage and interruptions of information technology systems; the Company’s ability to retain key members of management and successfully integrate new executives; the Company’s ability to complete acquisitions, strategic investments, entry into new lines of business, divestitures, mergers or other transactions on acceptable terms, or at all; the impact of economic, public health and political conditions on the companies in which the Company holds equity stakes; the Company’s ability to utilize or assert its intellectual property rights, the impact of natural disasters and other catastrophic events, whether natural, man-made, or otherwise (such as the outbreak of any highly infectious or contagious diseases, or armed conflict); the adequacy of the Company’s insurance; the impact of having a controlling stockholder and vulnerability to fluctuation in the Company’s stock price. Given the risks and uncertainties, readers should not place undue reliance on any forward-looking statement and should recognize that the statements are predictions of future results which may not occur as anticipated. Many of the risks listed above have been, and may further be, exacerbated by the impact of economic, public health (such as a resurgence of the COVID-19 pandemic) and political conditions (such as the military conflict in Ukraine) that impact consumer confidence and spending, particularly in the cinema, entertainment, and other industries in which the Company and the companies in which the Company holds an equity stake operate, and the worsening economic environment. Actual results could differ materially from those anticipated in the forward-looking statements and from historical results, due to the risks and uncertainties described herein, as well as others not now anticipated. New risk factors emerge from time to time and it is not possible for management to predict all such risk factors, nor can it assess the impact of all such factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Except where required by law, the Company assumes no obligation to update forward-looking statements to reflect actual results or changes in factors or assumptions affecting such forward-looking statements.

 

Item 9.01. Financial Statements and Exhibits.

 

(d)

Exhibits.

 

Exhibit No.		Description
99.1		Press Release, dated August 10, 2023, issued by the Company
99.2		Supplemental Slides to be Referenced During the Second Quarter Conference Call of FG Group Holdings Inc.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	FG GROUP HOLDINGS INC.
Date: August 11, 2023	By:	/s/ Todd R. Major
		Todd R. Major
		Chief Financial Officer

 

 

 

Exhibit 99.1

 

 

FG Group Holdings Reports Second Quarter 2023 Operating Results

 

Charlotte, NC – August 10, 2023 – FG Group Holdings Inc. (NYSE American: FGH) (the “Company” or “FG Group Holdings”) today announced operating results for the second quarter ended June 30, 2023.

 

Operational Highlights

 

	●	The Company completed the separation and initial public offering of its Strong Global Entertainment subsidiary (“Strong”) which began trading on the NYSE American in May 2023. FG Group Holdings owns approximately 84% of the Class A Common Shares outstanding following the separation.
	●	Following the IPO, FG Group Holdings now owns a controlling stake in Strong as well as minority ownership in GreenFirst Forest Products Inc. (“GreenFirst”), FG Financial Group Inc. (“FG Financial”) and Firefly Media (“Firefly”). The Company also has commercial real estate holdings in Georgia and Quebec, Canada.
	●	Consolidated revenue (which includes the results of Strong Global Entertainment) almost doubled, operating loss and net loss improved, and Adjusted EBITDA was significantly higher for the quarter compared to the prior year, with increased demand at Strong from its cinema customers as well as its first significant sale of IP at Strong Studios.

 

Mark Roberson, Chief Executive Officer, commented, “We are pleased to have completed the IPO of Strong Global Entertainment. This important and exciting transaction, provides Strong with the platform as an independent company to execute on its growth plans. Notably, in its first quarter since the transaction, Strong posted impressive operating results, benefitting from a resurgence in cinema box office performance which is helping to accelerate demand for Strong’s technical services as theatres undertake premium upgrades. Additionally, Strong Studios marked its first IP sale, contributing to significant growth in the business. Our other holdings provide exposure to dynamic and growing industries and continue to execute on their long-term strategic plans. During the quarter, Firefly entered several new international markets, Greenfirst continued to strengthen its balance sheet with a focus on its core operations in Ontario, and FG Financial expanded its reinsurance and merchant banking business.”

 

Kyle Cerminara, Chairman of the Board, commented, “I want to congratulate the team at Strong for completing the IPO transaction. It’s a meaningful step in the long-term growth and evolution of Strong, and an important step for FG Group Holdings.”

 

Second Quarter 2023 Financial Review (Compared to Three Months Ended June 30, 2022)

 

As a result of our controlling ownership, the results of Strong Global Entertainment are consolidated into our operating results discussed below.

 

	●	Revenue was $18.0 million for the quarter compared to $9.1 million in the second quarter of 2022. Revenue at Strong Global Entertainment increased 102% related to significant growth in cinema screen products and service reveneues as well as $6.4 million from the sale of IP in its Strong Studios subsidiary.
	●	Gross profit was $7.4 million, or 41.3% of revenue, compared to $2.4 million, or 26.5% of revenue, during the quarter ended June 30, 2022. Gross profit at Strong Global Entertainment increased to $7.2 million, or 40% of its revenue, primarily related to the expansion of Strong’s screen and service revenues and the sale of IP by Strong Studios.

 

 

	●	Loss from operations was $0.8 million compared to $0.9 million during the quarter ended June 30, 2022.
	●	Net loss attributable to FG Group Holdings was $5.3 million, or $0.27 per basic and diluted share, in the second quarter of 2023, compared to $5.6 million, or $0.29 per basic and diluted share, in the second quarter of 2022.
	●	Adjusted EBITDA increased to $2.9 million as compared to $(0.4) million in the prior year.

 

Conference Call

 

A conference call to discuss the Company’s 2023 second quarter financial results will be held on Friday, August 11, 2023 at 8:30 am Eastern Time. Interested parties can listen to the call via live webcast or by phone. To access the webcast, visit the Company’s website at https://fg.group/investor-relations/ or use the following link: FGH Webcast Link. To access the conference call by phone, dial (888) 506-0062 (domestic) or (973) 528-0011 (international) and use participant code 402280. Please access the webcast or dial in at least five minutes before the start of the call to register.

 

A replay of the webcast will be available following the conclusion of the live broadcast and accessible on the Company’s website at https://fg.group/investor-relations/.

 

About FG Group Holdings Inc.

 

FG Group Holdings Inc. (NYSE American: FGH) is a diversified holding company with operations and investments across a broad range of industries. The Company has a majority ownership in Strong Global Entertainment, (NYSE American: SGE), which includes STRONG/MDI Screen Systems (www.strongmdi.com), the leading premium screen and projection coatings supplier in the world and Strong Technical Services (www.strong-tech.com), which provides comprehensive managed service offerings with 24/7/365 support nationwide to ensure solution uptime and availability. FG Group Holdings also holds equity stakes in GreenFirst Forest Products Inc., Firefly Systems, Inc., and FG Financial Group, Inc., as well as real estate through its Digital Ignition operating business.

 

About Fundamental Global®

 

Fundamental Global® is a private partnership focused on long-term strategic holdings. Fundamental Global® was co-founded by former T. Rowe Price, Point72 and Tiger Cub portfolio manager Kyle Cerminara and former Chairman and CEO of TD Ameritrade, Joe Moglia. Its current holdings include FG Financial Group Inc., FG Group Holdings Inc., BK Technologies Corp., GreenFirst Forest Products, Inc., FG Merger Corp., FG Acquisition Corp., OppFi Inc., Hagerty Inc., and FG Communities, Inc.

 

The FG® logo is a registered trademark of Fundamental Global®.

 

Use of Non-GAAP Measures

 

FG Group Holdings prepares its consolidated financial statements in accordance with United States generally accepted accounting principles (“GAAP”). In addition to disclosing financial results prepared in accordance with GAAP, the Company discloses information regarding Adjusted EBITDA (“Adjusted EBITDA”), which differs from the commonly used EBITDA (“EBITDA”). Adjusted EBITDA both adjusts net income (loss) to exclude income taxes, interest, and depreciation and amortization, and excludes share-based compensation, impairment charges, equity method income (loss), fair value adjustments, severance, foreign currency transaction gains (losses), transactional gains and expenses, gains on insurance recoveries, certain tax credits and other cash and non-cash charges and gains.

 

EBITDA and Adjusted EBITDA are not measures of performance defined in accordance with GAAP. However, Adjusted EBITDA is used internally in planning and evaluating the Company’s operating performance. Accordingly, management believes that disclosure of these metrics offers investors, bankers and other stakeholders an additional view of the Company’s operations that, when coupled with the GAAP results, provides a more complete understanding of the Company’s financial results.

 

 

EBITDA and Adjusted EBITDA should not be considered as an alternative to net income (loss) or to net cash from operating activities as measures of operating results or liquidity. The Company’s calculation of EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures used by other companies, and the measures exclude financial information that some may consider important in evaluating the Company’s performance.

 

EBITDA and Adjusted EBITDA have limitations as analytical tools, and you should not consider them in isolation, or as substitutes for analysis of the Company’s results as reported under GAAP. Some of these limitations are: (i) they do not reflect the Company’s cash expenditures, or future requirements for capital expenditures or contractual commitments, (ii) they do not reflect changes in, or cash requirements for, the Company’s working capital needs, (iii) EBITDA and Adjusted EBITDA do not reflect interest expense, or the cash requirements necessary to service interest or principal payments, on the Company’s debt, (iv) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements, (v) they do not adjust for all non-cash income or expense items that are reflected in the Company’s statements of cash flows, (vi) they do not reflect the impact of earnings or charges resulting from matters management considers not to be indicative of the Company’s ongoing operations, and (vii) other companies in the Company’s industry may calculate these measures differently than the Company does, limiting their usefulness as comparative measures.

 

Management believes EBITDA and Adjusted EBITDA facilitate operating performance comparisons from period to period by isolating the effects of some items that vary from period to period without any correlation to core operating performance or that vary widely among similar companies. These potential differences may be caused by variations in capital structures (affecting interest expense), tax positions (such as the impact on periods or companies of changes in effective tax rates or net operating losses) and the age and book depreciation of facilities and equipment (affecting relative depreciation expense). The Company also presents EBITDA and Adjusted EBITDA because (i) management believes these measures are frequently used by securities analysts, investors and other interested parties to evaluate companies in the Company’s industry, (ii) management believes investors will find these measures useful in assessing the Company’s ability to service or incur indebtedness, and (iii) management uses EBITDA and Adjusted EBITDA internally as benchmarks to evaluate the Company’s operating performance or compare the Company’s performance to that of its competitors.

 

 

Forward-Looking Statements

 

In addition to the historical information included herein, this press release includes forward-looking statements, such as management’s expectations regarding its portfolio companies, industry outlook, and the Company’s future sales and financial performance, which involve a number of risks and uncertainties, including but not limited to those discussed in the “Risk Factors” section contained in Item 1A in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 16, 2023, and the following risks and uncertainties: the Company’s ability to maintain and expand its revenue streams to compensate for the lower demand for the Company’s digital cinema products and installation services; potential interruptions of supplier relationships or higher prices charged by suppliers; the Company’s ability to successfully compete and introduce enhancements and new features that achieve market acceptance and that keep pace with technological developments; the Company’s ability to successfully execute its capital allocation strategy or achieve the returns it expects from these holdings; the Company’s ability to maintain its brand and reputation and retain or replace its significant customers; challenges associated with the Company’s long sales cycles; the impact of a challenging global economic environment or a downturn in the markets; the effects of economic, public health, and political conditions that impact business and consumer confidence and spending, including rising interest rates, periods of heightened inflation and market instability, the outbreak of any highly infectious or contagious diseases, such as COVID-19 and its variants or other health epidemics or pandemics, and armed conflicts, such as the ongoing military conflict in Ukraine and related sanctions; economic and political risks of selling products in foreign countries (including tariffs); risks of non-compliance with U.S. and foreign laws and regulations, potential sales tax collections and claims for uncollected amounts; cybersecurity risks and risks of damage and interruptions of information technology systems; the Company’s ability to retain key members of management and successfully integrate new executives; the Company’s ability to complete acquisitions, strategic investments, entry into new lines of business, divestitures, mergers or other transactions on acceptable terms, or at all; the impact of economic, public health and political conditions on the companies in which the Company holds equity stakes; the Company’s ability to utilize or assert its intellectual property rights, the impact of natural disasters and other catastrophic events, whether natural, man-made, or otherwise (such as the outbreak of any highly infectious or contagious diseases, or armed conflict); the adequacy of the Company’s insurance; the impact of having a controlling stockholder and vulnerability to fluctuation in the Company’s stock price. Given the risks and uncertainties, readers should not place undue reliance on any forward-looking statement and should recognize that the statements are predictions of future results which may not occur as anticipated. Many of the risks listed above have been, and may further be, exacerbated by the impact of economic, public health (such as a resurgence of the COVID-19 pandemic) and political conditions (such as the military conflict in Ukraine) that impact consumer confidence and spending, particularly in the cinema, entertainment, and other industries in which the Company and the companies in which the Company holds an equity stake operate, and the worsening economic environment. Actual results could differ materially from those anticipated in the forward-looking statements and from historical results, due to the risks and uncertainties described herein, as well as others not now anticipated. New risk factors emerge from time to time and it is not possible for management to predict all such risk factors, nor can it assess the impact of all such factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Except where required by law, the Company assumes no obligation to update forward-looking statements to reflect actual results or changes in factors or assumptions affecting such forward-looking statements.

 

Investor Relations Contacts
Mark Roberson	John Nesbett / Jennifer Belodeau
FG Group Holdings Inc. - Chief Executive Officer	IMS Investor Relations
(704) 994-8279	(203) 972-9200
IR@fg.group	fggroup@imsinvestorrelations.com

 

 

FG Group Holdings Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands, except par values)

(Unaudited)

 

		June 30, 2023				December 31, 2022
Assets
Current assets:
Cash and cash equivalents		$	4,966			$	3,789
Accounts receivable (net of credit allowances of $250 and $409, respectively)			6,408				6,167
Inventories, net			3,125				3,389
Other current assets			12,009				4,871
Total current assets			26,508				18,216
Property, plant and equipment, net			12,586				12,649
Operating lease right-of-use assets			259				310
Finance lease right-of-use asset			906				666
Equity holdings			30,240				37,522
Film and television programming rights, net			7,691				1,501
Intangible assets, net			2				5
Goodwill			902				882
Other assets			1				2
Total assets		$	79,095			$	71,753
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable		$	3,637			$	4,375
Accrued expenses			7,521				5,167
Short-term debt			14,927				2,510
Current portion of long-term debt			220				216
Current portion of operating lease obligations			116				116
Current portion of finance lease obligations			179				117
Deferred revenue and customer deposits			1,143				1,787
Total current liabilities			27,743				14,288
Operating lease obligations, net of current portion			200				257
Finance lease obligations, net of current portion			732				550
Long-term debt, net of current portion and deferred debt issuance costs, net			4,898				5,004
Deferred income taxes			4,490				4,851
Other long-term liabilities			720				105
Total liabilities			38,783				25,055
Commitments, contingencies and concentrations (Note 16)
Stockholders’ equity:
Preferred stock, par value $.01 per share; authorized 1,000 shares, none outstanding			-				-
Common stock, par value $.01 per share; authorized 50,000 shares; issued 22,264 shares; outstanding 19,470			223				223
Additional paid-in capital			55,051				53,882
Retained earnings			7,151				16,437
Treasury stock, 2,794 shares at cost			(18,586	)			(18,586	)
Accumulated other comprehensive loss			(4,769	)			(5,258	)
Total FG Group Holdings shareholders’ equity			39,070				46,698
Equity attributable to non-controlling interest			1,242				-
Total stockholders’ equity			40,312				46,698
Total liabilities and stockholders’ equity		$	79,095			$	71,753

 

 

FG Group Holdings Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

 

		Three Months Ended June 30,								Six Months Ended June 30,
		2023				2022				2023				2022
Net product sales		$	8,411			$	6,683			$	15,615			$	14,386
Net service revenues			9,611				2,460				12,516				4,783
Total net revenues			18,022				9,143				28,131				19,169
Total cost of products			6,305				4,833				11,770				10,690
Total cost of services			4,270				1,890				6,436				3,547
Total cost of revenues			10,575				6,723				18,206				14,237
Gross profit			7,447				2,420				9,925				4,932
Selling and administrative expenses:
Selling			618				684				1,152				1,225
Administrative			7,602				2,621				10,326				5,354
Total selling and administrative expenses			8,220				3,305				11,478				6,579
Gain on disposal of assets			5				-				6				-
Loss from operations			(768	)			(885	)			(1,547	)			(1,647	)
Other income (expense):
Interest income			-				1				-				7
Interest expense			(138	)			(88	)			(249	)			(147	)
Foreign currency transaction (loss) gain			(426	)			206				(307	)			(136	)
Unrealized loss on equity holdings			(1,647	)			(4,178	)			(4,538	)			(2,451	)
Other (expense) income, net			(14	)			3				9				(198	)
Total other expense			(2,225	)			(4,056	)			(5,085	)			(2,925	)
(Loss) income before income taxes and equity method holding loss			(2,993	)			(4,941	)			(6,632	)			(4,572	)
Income tax (expense) benefit			(355	)			303				(56	)			(47	)
Equity method holding loss			(2,043	)			(960	)			(2,694	)			(1,780	)
Net loss			(5,391	)			(5,598	)			(9,382	)			(6,399	)
Net loss attributable to non-controlling interest			(118	)			-				(118	)			-
Net loss attributable to FG Group Holdings		$	(5,273	)		$	(5,598	)		$	(9,264	)		$	(6,399	)
Net loss per share:
Basic		$	(0.27	)		$	(0.29	)		$	(0.48	)		$	(0.33	)
Diluted		$	(0.27	)		$	(0.29	)		$	(0.48	)		$	(0.33	)
Weighted-average shares used in computing net loss per share:
Basic			19,470				19,273				19,293				19,133
Diluted			19,470				19,273				19,293				19,133

 

 

FG Group Holdings Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

		Six Months Ended June 30,
		2023				2022
Cash flows from operating activities:
Net loss		$	(9,382	)		$	(6,399	)
Adjustments to reconcile net loss from continuing operations to net cash used in operating activities:
Recovery of doubtful accounts			(3	)			3
Provision for obsolete inventory			29				6
Provision for warranty			73				15
Depreciation and amortization			2,527				702
Amortization and accretion of operating leases			59				137
Equity method holding loss			2,694				1,780
Adjustment to SageNet promissory note in connection with prepayment			-				202
Unrealized loss (gain) on equity holdings			4,538				2,451
Deferred income taxes			(388	)			(292	)
Stock-based compensation expense			1,037				369
Changes in operating assets and liabilities:
Accounts receivable			(225	)			(1,085	)
Inventories			286				(602	)
Current income taxes			(401	)			(135	)
Other assets			(8,692	)			1,055
Accounts payable and accrued expenses			5,978				(674	)
Deferred revenue and customer deposits			(651	)			(446	)
Operating lease obligations			(65	)			(132	)
Net cash used in operating activities			(2,586	)			(3,045	)
Cash flows from investing activities:
Capital expenditures			(318	)			(840	)
Acquisition of programming rights			(86	)			(337	)
Sale (purchase) of equity holdings			198				(2,000	)
Receipt of SageNet promissory note			-				2,300
Net cash provided by (used in) investing activities			(206	)			(877	)
Cash flows from financing activities:
Principal payments on short-term debt			(414	)			(285	)
Principal payments on long-term debt			(101	)			(66	)
Proceeds from Strong Global Entertainment initial public offering			2,411				-
Borrowings under credit facility			4,344				-
Repayments under credit facility			(2,132	)			-
Payments of withholding taxes for net share settlement of equity awards			(104	)			(15	)
Payments on finance lease obligations			(66	)			(2	)
Net cash provided by (used in) financing activities			3,938				(368	)
Effect of exchange rate changes on cash and cash equivalents			31				(30	)
Net increase (decrease) in cash and cash equivalents and restricted cash			1,177				(4,320	)
Cash and cash equivalents and restricted cash at beginning of period			3,789				8,881
Cash and cash equivalents and restricted cash at end of period		$	4,966			$	4,561

 

 

FG Group Holdings and Subsidiaries

Summary by Business Segment

(In thousands)

(Unaudited)

 

		Three Months Ended March 31,								Six Months Ended June 30,
		2023				2022				2023				2022
Strong Entertainment
Revenue		$	17,839			$	8,822			$	27,790			$	18,543
Gross profit			7,264				2,098				9,585				4,304
Operating income			349				180				924				790
Adjusted EBITDA			3,597				267				4,284				1,021
Corporate and Other
Revenue		$	183			$	321			$	341			$	626
Gross profit			183				322				340				628
Operating loss			(1,117	)			(1,065	)			(2,471	)			(2,437	)
Adjusted EBITDA			(744	)			(638	)			(1,794	)			(1,573	)
Consolidated
Revenue		$	18,022			$	9,143			$	28,131			$	19,169
Gross profit		$	7,447			$	2,420			$	9,925			$	4,932
Operating loss		$	(768	)		$	(885	)		$	(1,547	)		$	(1,647	)
Adjusted EBITDA		$	2,853			$	(371	)		$	2,490			$	(552	)

 

 

FG Group Holdings and Subsidiaries

Reconciliation of Net Loss to Adjusted EBITDA

(In thousands)

(Unaudited)

 

		Quarters Ended June 30,
		2023												2022
		Strong Entertainment				Corporate and Other				Consolidated				Strong Entertainment				Corporate and Other				Consolidated
Net (loss) income		$	(623	)		$	(4,768	)		$	(5,391	)		$	561			$	(6,159	)		$	(5,598	)
Interest expense, net			62				76				138				29				58				87
Income tax expense (benefit)			413				(58	)			355				(271	)			(32	)			(303	)
Depreciation and amortization			2,130				125				2,255				154				182				336
EBITDA			1,982				(4,625	)			(2,643	)			473				(5,951	)			(5,478	)
Stock-based compensation expense			714				196				910				-				175				175
Equity method holding loss			-				2,043				2,043				-				960				960
Unrealized loss on equity holdings			-				1,647				1,647				-				4,178				4,178
IPO related expenses			475				-				475				-				-				-
Gain on disposal of assets			-				(5	)			(5	)			-				-				-
Foreign currency transaction loss (income)			426				-				426				(206	)			-				(206	)
Adjusted EBITDA		$	3,597			$	(744	)		$	2,853			$	267			$	(638	)		$	(371	)

 

		Six Months Ended June 30,
		2023												2022
		Strong Entertainment				Corporate and Other				Consolidated				Strong Entertainment				Corporate and Other				Consolidated
Net income (loss)		$	246			$	(9,628	)		$	(9,382	)		$	427			$	(6,826	)		$	(6,399	)
Interest expense, net			118				131				249				53				87				140
Income tax expense			113				(57	)			56				40				7				47
Depreciation and amortization			2,309				212				2,521				367				335				702
EBITDA			2,786				(9,342	)			(6,556	)			887				(6,397	)			(5,510	)
Stock-based compensation expense			714				323				1,037				-				369				369
Equity method holding loss			-				2,694				2,694				-				1,780				1,780
Unrealized loss on equity holdings			-				4,538				4,538				-				2,451				2,451
IPO related expenses			475				-				475				-				-				-
Gain on disposal of assets			-				(5	)			(5	)			-				-				-
Foreign currency transaction loss (income)			309				(2	)			307				134				2				136
Severance and other			-				-				-				-				222				222
Adjusted EBITDA		$	4,284			$	(1,794	)		$	2,490			$	1,021			$	(1,573	)		$	(552	)

 

 

Exhibit 99.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

v3.23.2

Cover	Aug. 10, 2023
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Aug. 10, 2023
Entity File Number	1-13906
Entity Registrant Name	FG GROUP HOLDINGS INC.
Entity Central Index Key	0000946454
Entity Tax Identification Number	47-0587703
Entity Incorporation, State or Country Code	NV
Entity Address, Address Line One	5960 Fairview Road
Entity Address, Address Line Two	Suite 275
Entity Address, City or Town	Charlotte
Entity Address, State or Province	NC
Entity Address, Postal Zip Code	28210
City Area Code	(704)
Local Phone Number	994-8279
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $0.01 par value
Trading Symbol	FGH
Security Exchange Name	NYSEAMER
Entity Emerging Growth Company	false

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