On behalf of the Board of Directors of Fundamental Global Inc. and Strong Global Entertainment, Inc., we are pleased to provide the accompanying proxy statement/prospectus relating to the proposed combination of these companies pursuant to an Arrangement Agreement and Plan of Arrangement described below.

The respective Special Committees and Boards of Directors of Fundamental Global Inc., a Nevada corporation (“FG”) (and its indirect subsidiary, Strong Global Entertainment, Inc., a company existing under the laws of the Province of British Columbia (“SGE”)), have unanimously approved the combination of these companies described in this joint proxy statement/prospectus. Each share of Class A Common Voting Shares of SGE (the “SGE Common Shares” or “SGE Common Stock”) issued and outstanding immediately prior to the Effective Time (as defined below) (other than certain shares held by FG) will be converted into 1.5 shares of FG common stock (the “FG Common Stock”).

On May 30, 2024, SGE and FG Holdings Québec Inc., a corporation existing under the laws of the Province of Québec which will, prior to the Business Combination (as defined below), be continued and converted to an unlimited liability company under the laws of the Province of British Columbia under the name “Fundamental Global Holdings BC ULC” (“FG Québec”), and 1483530 B.C. LTD, a newly formed subsidiary of FG Québec (“Subco”), entered into an Arrangement Agreement (the “Arrangement Agreement”) and Plan of Arrangement (the “Plan of Arrangement”), pursuant to which, commencing at the effective time of the Arrangement Agreement (the “Effective Time”), (i) the SGE Common Shares outstanding immediately prior to the Effective Time will be deemed to be transferred by the holders thereof to FG Québec in exchange for the arrangement consideration (“Arrangement Consideration”) consisting of FG Common Stock, (ii) SGE and Subco will be amalgamated and continue as one corporate entity (“Amalco”), and (iii) each SGE Common Share and Subco share held by FG Québec will be exchanged for one Common Share of Amalco. See the section titled “Arrangement Agreement and Plan of Arrangement” for more information.

If the Arrangement Agreement and Plan of Arrangement are adopted and the other transactions contemplated thereby are approved, including receipt of the final order of the Supreme Court of British Columbia (the “Court”) under Section 291 of the Business Corporations Act (British Columbia) and the regulations made thereunder, as now in effect and as they may be promulgated or amended from time to time (the “BCBCA”) approving the Arrangement Agreement and Plan of Arrangement (collectively, the “Arrangement” or the “Business Combination”), (a) prior to the closing of the Business Combination (the “Closing”), the Arrangement Consideration will be deposited in escrow to be paid to SGE stockholders in accordance with the Arrangement Agreement, and (b) the convertible securities of SGE (collectively, the “SGE Convertible Securities”), including (i) the restricted share units, stock options, and other awards issued under the 2023 Share Compensation Plan of SGE (the “2023 Share Compensation Plan”) and (ii) the share purchase warrants granted by SGE to Landmark Studio Group LLC to purchase up to an aggregate of 150,000 SGE Common Shares (the “Landmark Warrant”) and to Think Equity to purchase up to an aggregate of 50,000 SGE Common Shares (the “Think Equity Warrants” and together with the Landmark Warrant the “Warrants”) outstanding prior to the Effective Time will be adjusted at the Effective Time to be exercisable for, or settled in, FG Common Stock.

The proposed Business Combination will create a combined organization with enhanced operational efficiencies. SGE is currently an indirect subsidiary of FG and its financial information is consolidated with FG’s financial information. Both FG and SGE believe the proposed Business Combination will eliminate significant duplicative costs and inefficiencies currently associated with operating two separate public companies. In addition, the proposed Business Combination is expected to streamline the operations and significantly reduce public company administrative costs and allow management to focus on executing operating plans and creating stockholder value. SGE, FG, and FG Québec also believe that the stockholders of each such entity will benefit from the Business Combination with talented management teams, similar core values and strong commitments to serving their customers and communities and creating long-term stockholder value.

After completion of the Arrangement, SGE will be a predecessor of, and continue as, Amalco but SGE Common Stock will be delisted from NYSE American and will be deregistered under the Exchange Act.

SGE will hold a meeting of its stockholders (the “SGE Stockholder Meeting”) to vote on the proposals necessary to approve the Business Combination and certain other matters.

At the SGE Stockholder Meeting, which will be held at 108 Gateway Blvd, Suite 204 Mooresville, NC 28117 on September 17, 2024, at 10:00 a.m., Eastern Time, unless postponed or adjourned to a later date, SGE will ask its stockholders to: (i) approve the Arrangement Agreement and Plan of Arrangement and the related transactions, thereby approving the Business Combination, (ii) elect directors, (iii) ratify the selection of independent registered public accounting firm, and (iv) consider and transact such other business as may properly come before the meeting or any postponement or adjournment thereof. To participate in the meeting, a SGE stockholder of record will need the 12-digit control number included on such stockholder’s proxy card or instructions that accompanied such stockholder’s proxy materials. If a SGE stockholder holds his, her or its shares in “street name,” which means his, her or its shares are held of record by a broker, bank or other nominee, such SGE stockholder should contact his, her or its broker, bank or nominee to ensure that votes related to the shares he, she or it beneficially owns are properly counted. In this regard, such SGE stockholder must provide the record holder of his, her or its shares with instructions on how to vote his, her or its shares or, if such SGE stockholder wishes to attend the SGE Stockholder Meeting and vote in person, obtain a proxy from his, her or its broker, bank or nominee.

Each of the following securities of FG are currently publicly traded on the Nasdaq Stock Market LLC (“Nasdaq”): (i) each share of FG Common Stock under the trading symbol “FGF” and (ii) each share of Series A 8.00% Cumulative Preferred Stock of FG, $25.00 par value per share under the trading symbol “FGFPP” (the “FG Series A Preferred”). Each SGE Common Share is currently publicly traded on the NYSE American (“NYSE”) under the trading symbol “SGE.”

You may request a copy of this joint proxy statement/prospectus and any of the documents or other information filed with the SEC by FG or SGE, as applicable, without charge, by written or telephonic request directed to the appropriate company at the proxy solicitor contacts below. In order for you to receive timely delivery of the documents in advance of the meeting, you must request the information no later than September 10, 2024.

If you have any questions or need assistance with voting your shares of SGE Common Shares, please contact IR@strong-entertainment.com. or at 108 Gateway Blvd, Suite 204, Mooresville, North Carolina 28117 or (704) 471-6784. The accompanying joint proxy statement/prospectus and the notice of the SGE Stockholder Meeting will be available at www.strong-entertainment.com.

SGE stockholders should keep in mind that FG’s and SGE’s directors and officers may have interests in the Business Combination that are different from or in addition to, or may conflict with, their interests as an FG stockholder or SGE stockholder. Stockholders should review the section titled “Interests of FGH’s and SGE’s Directors and Executive Officers in the Arrangement” on page 11 for additional information.

The accompanying joint proxy statement/prospectus provides you with detailed information about the Business Combination and other matters to be considered at the SGE Stockholder Meeting. We urge you to carefully read the entire accompanying joint proxy statement/prospectus, including the financial statements and all annexes attached hereto and other documents referred to therein.

IN PARTICULAR, YOU SHOULD CAREFULLY CONSIDER THE MATTERS DISCUSSED UNDER “RISK FACTORS” BEGINNING ON PAGE 19 OF THE ACCOMPANYING JOINT PROXY STATEMENT/PROSPECTUS.

NEITHER THE U.S. SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE OR CANADIAN PROVINCIAL SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THE ACCOMPANYING JOINT PROXY STATEMENT/PROSPECTUS OR ANY OF THE SECURITIES TO BE ISSUED IN THE BUSINESS COMBINATION, PASSED UPON THE MERITS OR FAIRNESS OF THE BUSINESS COMBINATION OR RELATED TRANSACTIONS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THE ACCOMPANYING JOINT PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.

The accompanying joint proxy statement/prospectus is dated August 12, 2024, and is first being mailed to securityholders of SGE on or about August 15, 2024.

NOTICE IS HEREBY GIVEN that a meeting of the Stockholders (the “SGE Stockholder Meeting”) of Strong Global Entertainment, Inc. (“SGE”) will be held at 108 Gateway Blvd, Suite 204 Mooresville, NC 28117 on September 17, 2024 at 10:00 a.m. (Eastern time), to:

Assuming consummation of the Business Combination, the results of Proposals 3, 4 and 5 above relating to annual stockholder meeting matters will be irrelevant as SGE will become a wholly owned indirect subsidiary of FG and will no longer operate as an independent company following the closing of the Business Combination.

Only stockholders of record as of the close of business on August 12, 2024 are entitled to notice of, and to vote at, the SGE Stockholder Meeting either in person or by proxy. Please complete, sign, date and return the accompanying proxy card, or follow the instructions on the card for voting by telephone or Internet. You may also attend the meeting and vote in person.

The Contents of this notice of meeting and its mailing to the stockholders have been authorized by the SGE Board of Directors.

This Notice and the accompanying Proxy Statement are first being distributed or made available, as the case may be, on or about August 15, 2024, and the Company’s Proxy Statement for the SGE Stockholder Meeting and Annual Report on Form 10-K for the year ended December 31, 2023 are available at www.proxyvote.com.

This document, which forms part of a registration statement on Form S-4 filed with the SEC by FG, constitutes a prospectus of FG under the Securities Act of 1933, as amended (the “Securities Act”), with respect to the common stock of FG to be issued to SGE Stockholders under the Arrangement Agreement. This document also constitutes a notice of meeting and a proxy statement of SGE under Section 14(a) of the Exchange Act.

You should rely only on the information contained in, or incorporated by reference into, this joint proxy statement/prospectus. No one has been authorized to provide you with information that is different from that contained in, or incorporated by reference into, this joint proxy statement/prospectus. This joint proxy statement/prospectus is dated as of the date set forth on the cover hereof. You should not assume that the information contained in this joint proxy statement/prospectus is accurate as of any date other than that date. Neither the mailing of this joint proxy statement/prospectus to SGE stockholders nor the issuance by FG of its common stock in connection with the Business Combination will create any implication to the contrary.

Information contained in this joint proxy statement/prospectus regarding FG and its business, operations, management and other matters has been provided by FG and information contained in this joint proxy statement/prospectus regarding SGE and its business, operations, management and other matters has been provided by SGE.

Generally, and unless indicated otherwise, financial data presented about FG and SGE are presented using U.S. Dollars (“USD”). Additionally, certain financial data may be presented using Canadian Dollars (“CAD”). Where neither USD or CAD are expressly noted, $ references are to USD. This joint proxy statement/prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities, or the solicitation of a proxy or consent, in any jurisdiction to or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction.

Some of the statements contained in this joint proxy statement/prospectus constitute forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. Forward-looking statements reflect the current views of FG and SGE with respect to, among other things, the plans, strategies and prospects, both business and financial, of FG and SGE.

These statements are based on the beliefs and assumptions of the management of FG and SGE. Likewise, the financial statements included herein and all of the statements regarding market conditions and results of operations are forward-looking statements. In some cases, you can identify these forward-looking statements by the use of terminology such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “projects,” “anticipates” or the negative version of these words or other comparable words or phrases.

The forward-looking statements contained in this proxy statement reflect FG’s and SGE’s current views about future events and are subject to numerous known and unknown risks, uncertainties, assumptions and changes in circumstances that may cause its actual results to differ significantly from those expressed in any forward-looking statement. Neither FG nor SGE can guarantee that the transactions and events described will happen as described (or that they will happen at all). The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements:

While forward-looking statements reflect FG’s and SGE’s good faith beliefs, they are not guarantees of future performance. FG and SGE disclaim any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events or other changes after the date of this proxy statement, except as required by applicable law. For a further discussion of these and other risks and uncertainties, please see the section titled “Risk Factors” below. You should not place undue reliance on any forward-looking statements, which are based only on information available to FG and SGE (or to third parties making the forward-looking statements).

The following are some questions that you may have about the Business Combination and the SGE Stockholders Meeting, and brief answers to those questions. We urge you to read carefully the remainder of this proxy statement/prospectus because the information in this section does not provide all of the information that might be important to you. Additional important information is also contained in the documents filed with the SEC. See the section entitled “Where You Can Find More Information” beginning on page 113.

At the SGE Stockholder Meeting, holders of SGE Common Stock will act upon the matters described in the notice of meeting accompanying this proxy statement/prospectus, including the Business Combination. You are receiving this proxy statement/prospectus because you held shares of SGE Common Stock at the close of business on August 12, 2024 (the “Record Date”), and the Board of Directors of SGE (the “SGE Board of Directors” or “SGE Board”) is soliciting your proxy to vote at the SGE Stockholder Meeting. You are invited to attend the SGE Stockholder Meeting to vote on the proposals; however, you do not need to attend the meeting to vote your shares. Instead, you may vote your shares as described in further detail under the heading “How do I vote?” below.

The notice, this proxy statement/prospectus, and the proxy card for stockholders of record were distributed beginning on or about August 15, 2024, and are available at www.proxyvote.com.

Stockholders of record at the close of business on Record Date are entitled to vote in person or by proxy at the SGE Stockholder Meeting. As of the Record Date, 7,918,285 shares of SGE Common Stock were outstanding. Each stockholder is entitled to one vote for each share of common stock held on the Record Date. Stockholders do not have cumulative voting rights in the election of directors. For ten days prior to the SGE Stockholder Meeting during normal business hours, a complete list of all stockholders of record will be available for examination by any stockholder, for any purpose germane to the SGE Stockholder Meeting.

All stockholders as of the Record Date, or individuals holding their duly appointed proxies, may attend the SGE Stockholder Meeting. Appointing a proxy will not affect a stockholder’s right to attend the SGE Stockholder Meeting and to vote in person. Please note that if you hold your shares in “street name” (in other words, through a broker, bank, or other nominee), you will need to bring a proxy, executed in your favor, from the holder of record (the broker, bank or other nominee) to gain admittance to the SGE Stockholder Meeting.

What is the difference between a stockholder of record and a beneficial owner?

If your shares are registered directly in your name with SGE’s transfer agent, Broadridge Corporate Issuer Solutions, Inc., then you are a “stockholder of record.” The accompanying proxy card has been provided directly to you by SGE. You may vote by ballot at the SGE Stockholder Meeting or vote by proxy. To vote by proxy, complete, sign, date and return the enclosed proxy card or follow the instructions on the proxy card for voting by telephone or Internet. If your shares are held for you by a broker, bank or other nominee in street name, then you are not a stockholder of record. Rather, the broker, bank, or other nominee is the stockholder of record, and you are the “beneficial owner” of shares. In such case, you should follow the voting instructions provided to you by such broker, bank, or other nominee. If you are a beneficial owner of shares and wish to vote in person at the SGE Stockholder Meeting, then you must obtain a proxy, executed in your favor, from the holder of record (the broker, bank, or other nominee).

Two persons who are, or who represent by proxy, shareholders who, in the aggregate, hold at least 5% of the issued shares entitled to be voted at the meeting, present in person or represented by proxy, are required in order to hold the SGE Stockholder Meeting. If you vote, your shares will be part of the quorum. Shares represented by a properly executed proxy card that is marked “ABSTAIN” or returned without voting instructions will be counted as present for the purpose of determining whether the quorum requirement is satisfied. Also, shares held of record by a broker, bank or other nominee who has not received voting instructions from the beneficial owner of the shares and votes on matters without discretionary authority to do so (“broker non-votes”) will be counted as present for quorum purposes. However, although broker non-votes and abstentions are considered as present for purposes of establishing a quorum, they will not be considered as votes cast for or against a proposal. Once a share is represented at the SGE Stockholder Meeting, it will be deemed present for quorum purposes throughout the SGE Stockholder Meeting (including any postponement or adjournment thereof unless a new record date is or must be set for such postponement or adjournment).

The principal purpose of the SGE Stockholder Meeting is to: (i) approve the Arrangement Agreement and Plan of Arrangement and the related transactions, thereby approving the Business Combination; (ii) receive the audited financial statements of SGE for the fiscal year ended December 31, 2023 and the report of the auditors thereon; (iii) fix the number of directors at five; (iv) elect the SGE directors for the ensuing year; (v) ratify the appointment of Haskell & White LLP (the “SGE Auditor”) as independent registered public accounting firm for the ensuing year; and (vi) consider and transact such other business as may properly come before the meeting or any postponement or adjournment thereof. Assuming consummation of the Business Combination, Proposals (ii), (iii), and (iv) above relating to annual stockholder meeting matters will be irrelevant as SGE will become a wholly owned indirect subsidiary of FG and will no longer operate as an independent company following the closing of the Business Combination.

If you are a holder of record, you can vote either in person at the SGE Stockholder Meeting or by proxy without attending the SGE Stockholder Meeting. We urge you to vote by proxy even if you plan to attend the SGE Stockholder Meeting so that we will know as soon as possible that enough votes will be present for us to hold the meeting. If you attend the meeting and vote in person, your previously submitted proxy will be revoked and will not be counted.

The proxies named in the enclosed form of proxy and their substitutes will vote the shares represented by the enclosed form of proxy, if the proxy appears to be valid on its face, and, where a choice is specified by means of the ballot on the form of proxy, will vote in accordance with each specification so made.

If you hold your shares in “street name,” you must either direct the broker, bank, or other nominee as to how to vote your shares, or obtain a proxy from the broker, bank, or other nominee, executed in your favor, to vote at the meeting. Please refer to the voter instruction cards provided by your broker, bank, or other nominee for specific instructions on methods of voting, including by telephone or using the Internet.

You will receive separate proxy cards when you own shares in different ways. For example, you may own shares individually, as a joint tenant, in an individual retirement account, in trust or in one or more brokerage accounts. You should complete, sign, date and return each proxy card you receive or follow the telephone or Internet voting instructions on each card. The instructions on each proxy card may differ. Be sure to follow the instructions on each card.

Yes. If you are a stockholder of record, you may revoke your proxy or change your vote, regardless whether previously submitted by mail or via the Internet or by telephone, by (i) delivering a signed written notice stating that you revoke your proxy to the attention of the Corporate Secretary of SGE, at 108 Gateway Blvd, Suite 204, Mooresville, North Carolina 28117, that bears a later date than the date of the proxy you want to revoke and is received prior to the SGE Stockholder Meeting, (ii) submitting a valid, later-dated proxy via the Internet or by telephone before 11:59 p.m., Eastern Time, on September 16, 2024, or by mail that is received prior to the SGE Stockholder Meeting, or (iii) attending the SGE Stockholder Meeting (or, if the SGE Stockholder Meeting is postponed or adjourned, attending the postponed or adjourned meeting) and voting in person, which automatically will cancel any proxy previously given, or revoking your proxy in person, but your attendance alone at the SGE Stockholder Meeting will not revoke any proxy previously given.

If you hold your shares in “street name” through a broker, bank, or other nominee, you must contact your broker, bank or other nominee to change your vote through new voting instructions or, if you wish to change your vote in person at the SGE Stockholder Meeting, obtain a written legal proxy from the bank, broker or other nominee to vote your shares.

What happens if I submit a proxy card and do not give specific voting instructions?

If you are a stockholder of record and sign and return the proxy card without indicating your voting instructions, your shares will be voted in accordance with the recommendations of the SGE Board of Directors. With respect to any other matter that properly comes before the meeting, the proxy holders will vote as recommended by the SGE Board of Directors or, if no recommendation is given, in their own discretion. As of the filing date of this Proxy Statement, the SGE Board did not know of any other matter to be raised at the SGE Stockholder Meeting.

What happens if I do not submit a proxy card and do not vote by telephone or Internet or do not submit voting instructions to my broker, bank or other nominee?

If you are a stockholder of record and you neither designate a proxy nor attend the SGE Stockholder Meeting, your shares will not be represented at the meeting. If you are a beneficial owner and do not provide voting instructions to your bank, broker or other nominee, then, under applicable rules, the broker, bank or other nominee that holds your shares in “street name” may generally vote on “routine” matters but cannot vote on “non-routine” maters. If the broker, bank, or other nominee that holds your shares does not receive instructions from you on how to vote your shares on a “non-routine matter,” the broker, bank or other nominee will inform the inspector of election for the SGE Stockholder Meeting that it does not have the authority to vote on the matter with respect to your shares. This is generally referred to as a “broker non-vote.”

We believe that Proposal 1 regarding the approval of the Arrangement and Plan of Arrangement and Proposal 4 election of directors are “non-routine” matters under applicable rules. Therefore, a broker, bank or other nominee cannot vote on such proposals without voting instructions from the beneficial owners, and there may be broker non-votes in connection with Proposals 1 and 4.

We believe that Proposal 2 concerning the reception of audited financial statement of SGE for the fiscal year ended December 31, 2023, Proposal 3 concerning fixing the number of directors, and Proposal 5 concerning the ratification of the appointment of Haskell & White LLP as SGE’s independent registered public accounting firm for the year ending December 31, 2024, are considered “routine” matters under applicable rules. Therefore, a broker, bank or other nominee may generally vote on these matters except Proposal 2, which does not require a vote, and there will be no broker non-votes in connection with Proposals 3 and 5. However, whether a proposal is “routine” or “non-routine” remains subject to the final determination of NYSE. If NYSE disagrees with our conclusions regarding whether a matter is routine or not, we will communicate such information to you pursuant to a Current Report on Form 8-K.

What vote is required to approve each item? How will abstentions and broker non-votes be counted?

With respect to Proposal 1, consideration and approval of the Arrangement Agreement and Plan of Arrangement, a holder of common stock may vote “FOR” or “AGAINST” approval or “ABSTAIN” from voting on the proposal. Approval requires an affirmative vote of two-thirds (2/3) of the votes properly cast at the SGE Stockholder Meeting. Proxies marked “ABSTAIN” and broker non-votes will not be considered as votes cast for or against Proposal 1 and will have no effect on the outcome of the proposal.

No vote is required with respect to Proposal 2. Any questions regarding the SGE financial statements may be brought forward at the SGE Stockholder Meeting.

With respect to Proposal 3, fixing the number of directors of SGE’s Board of Directors, a holder of common stock may vote “FOR” or “AGAINST” ratification or “ABSTAIN” from voting on the proposal. Ratification requires an affirmative vote of holders of a majority of the votes properly cast at the SGE Stockholder Meeting. Proxies marked “ABSTAIN” will not be considered as votes cast for or against Proposal 3 and will have no effect on the outcome of the proposal.

As to Proposal 4, election of directors, a holder of common stock may vote “FOR” the election of each of the nominees proposed by the Board, or “WITHHOLD” authority to vote for one or more of the proposed nominees. The election of a director requires an affirmative vote of a plurality of the votes properly cast on the election of directors at the SGE Stockholder Meeting. A “plurality” means that the individuals who receive the largest number of votes are elected as directors up to the maximum number of directors to be elected at the meeting. As to Proposal 4, proxies marked “WITHHOLD” and broker non-votes will have no impact on the election of directors.

With respect to Proposal 5, ratification of Haskell & White LLP as SGE’s independent registered public accounting firm, a holder of common stock may vote “FOR” or “AGAINST” ratification or “ABSTAIN” from voting on the proposal. Ratification requires an affirmative vote of holders of a majority of the votes properly cast at the SGE Stockholder Meeting. Proxies marked “ABSTAIN” will not be considered as votes cast for or against Proposal 5 and will have no effect on the outcome of the proposal.

The Board recommends a vote “FOR” all of the matters to be presented for approval at the SGE Stockholder Meeting.

As of the date of this proxy statement/prospectus, it is expected that FG, which is the indirect holder of approximately 76% of SGE Common Stock, and certain SGE directors and officers will vote “FOR” approval of Proposals 1, 3, 4 and 5.

Who is paying for the preparation and mailing of the proxy materials and how will solicitations be made?

SGE will pay the expenses of soliciting proxies. Proxies may be solicited on SGE’s behalf by SGE’s directors, officers or employees in person or by mail, telephone, facsimile or electronic transmission. SGE does not compensate such persons for soliciting proxies. SGE has requested brokerage houses and other custodians, nominees and fiduciaries to forward soliciting material to beneficial owners and has agreed to reimburse those institutions for their out-of-pocket expenses.

In the Arrangement, commencing at the Effective Time, (i) the SGE Common Shares outstanding immediately prior to the Effective Time will be deemed to be transferred by the holders thereof to FG Québec in exchange for the Arrangement Consideration consisting of FG Common Stock; (ii) SGE and Subco will be amalgamated and continue as Amalco, and (iii) each SGE Common Share and Subco share held by FG Québec will be exchanged for one Common Share of Amalco. After completion of the Arrangement, SGE will become an indirect wholly owned subsidiary of FG and SGE Common Stock will be delisted from NYSE American and will be deregistered under the Exchange Act. See the section titled “Arrangement Agreement and Plan of Arrangement” for more information.

In the Arrangement, SGE stockholders will receive 1.5 shares of FG Common Stock for each share of SGE Common Stock held immediately prior to the completion of the Arrangement (other than certain shares held by FG). No fractional shares of FG Common Stock will be issued in connection with the Arrangement. With respect to each SGE stockholder, the Arrangement Consideration to which such SGE stockholder is entitled will be rounded up to the nearest whole share of FG Common Stock. Based on the closing price of FG Common Stock on Nasdaq on May 30, 2024, the last trading day before public announcement of the Arrangement, of $ 1.15, the exchange ratio represented approximately $1.725 in value for each share of SGE Common Stock. Based on the closing price of FG Common Stock on Nasdaq on August 9, 2024, the last practicable trading day before the date of the accompanying joint proxy statement/prospectus, of $0.97, the exchange ratio represented approximately $1.455 in value for each share of SGE Common Stock. The value of FG Common Stock at the time of completion of the Arrangement could be greater than, less than or the same as the value of FG Common Stock on the date of the accompanying joint proxy statement/prospectus. We urge you to obtain current market quotations of FG Common Stock (trading symbol “FGF”) and SGE Common Stock (trading symbol “SGE”).

Will the value of the Arrangement Consideration change between the date of this Proxy Statement and the time the Arrangement is completed?

Yes. Although the number of shares of FG Common Stock that SGE stockholders will receive is fixed, the value of the Arrangement Consideration will fluctuate between the date of this Proxy Statement and the completion of the Arrangement based upon the market value for FG Common Stock. Any fluctuation in the market price of FG Common Stock after the date of this Proxy Statement will change the value of the shares of FG Common Stock that SGE stockholders will receive. Neither FG nor SGE is permitted to terminate the Arrangement as a result, in and of itself, of any increase or decrease in the market price of FG Common Stock or SGE Common Stock.

All outstanding equity awards and other SGE Convertible Securities will be converted into the right to receive shares of FG Common Stock consistent with the exchange ratio established under the Arrangement Agreement.

Was a third-party valuation or fairness opinion obtained in connection with the transactions contemplated under the Arrangement Agreement?

Yes. Intrinsic, LLC provided an opinion on the fairness from a financial point of view of the holders of SGE Common Stock of the exchange ratio and Arrangement Consideration. The fairness opinion dated May 30, 2024, provided by Intrinsic is attached hereto as Annex B.

Yes. SGE stockholders are entitled to dissent rights under the BACA. For more information, see the section entitled “Dissent Rights” beginning on page 110.

Are there any risks that I should consider in deciding whether to approve the Business Combination?

Yes. You should read and carefully consider the risk factors set forth in the section entitled “Risk Factors” beginning on page 19.

What are the material U.S. federal income tax consequences of the Arrangement to SGE stockholders?

For U.S. federal income tax purposes, the Business Combination will (i) be treated as a single integrated transaction and (ii) qualify as a “reorganization” within the meaning of Section 368(a) of the Code.

A holder of SGE Common Shares will not recognize any gain or loss for U.S. federal income tax purposes upon the exchange of such holder’s SGE Common Shares for shares of FG Common Stock in the Business Combination.

For a more complete discussion of the material U.S. federal income tax consequences of the Arrangement, see the section entitled “Material U.S. Federal Income Tax Consequences” beginning on page 105.

FG and SGE expect the Business Combination to close in the third quarter of 2024. However, neither FG nor SGE can predict the actual date on which the Business Combination will be completed, or if the Business Combination will be completed at all, because completion is subject to conditions and factors outside the control of both companies.

If the Business Combination is not completed, SGE stockholders will not receive any consideration for their shares of SGE Common Stock. Instead, SGE will remain an independent public company, SGE Common Stock will continue to be listed on the NYSE American, and FG will not complete the issuance of shares of FG Common Stock pursuant to the Plan of Arrangement.

If you have any questions about the Business Combination or other matters being submitted for SGE stockholder approval, or how to submit your proxy, or if you need additional copies of this document or the enclosed proxy card, you should contact SGE’s investor relations team at IR@strong-entertainment.com. or at 108 Gateway Blvd, Suite 204, Mooresville, North Carolina 28117 or (704) 471-6784.

SUMMARY OF THE JOINT PROXY STATEMENT/PROSPECTUS

This summary, together with the section titled “Questions and Answers,” summarizes certain information contained in this joint proxy statement/prospectus and may not contain all of the information that is important to you. To better understand the Business Combination and other proposals to be considered at the Meetings, you should read this entire joint proxy statement/prospectus carefully, including the annexes. See also the section titled “Where You Can Find More Information.”

The Parties to the Business Combination

Fundamental Global Inc.

FG and its subsidiaries engage in diverse business activities including reinsurance, asset management, merchant banking, manufacturing and managed services. On December 9, 2022, FG completed its reincorporation from a Delaware corporation to a Nevada corporation. On February 29, 2024, FG’s predecessor, FG Financial Group, Inc., merged with FG Group Holdings Inc. in an all-stock transaction pursuant to which each holder of FG Group Holdings Inc. received one share of common stock of FG Financial Group, Inc. and the resulting company changed its name to Fundamental Global. The FG Common Stock and FG Series A Preferred are currently listed on Nasdaq under the symbols “FGF” and “FGFPP,” respectively. The address of FG’s principal executive offices is 108 Gateway Blvd, Suite 204, Mooresville, North Carolina 28117, and its telephone number is (704)-323-6851.

FG Holdings Québec Inc.

FG Québec (formerly Strong/MDI Screen Systems, Inc.) is a corporation existing under the laws of the Province of Québec and a wholly owned subsidiary of FG Group LLC, a Nevada limited liability company, which is a wholly owned subsidiary of FG. FG Québec currently owns 6,000,000 SGE Common Shares, representing approximately 76% of the issued and outstanding SGE Common Shares. Prior to the Business Combination, FG Québec will be converted into an unlimited liability company under the laws of the Province of British Columbia under the name “Fundamental Global Holdings BC ULC.”

Strong Global Entertainment, Inc.

SGE is a leader in the entertainment industry, providing mission critical products and services to cinema exhibitors and entertainment venues for over 90 years. SGE manufactures and distributes premium large format projection screens, provides comprehensive managed services, technical support and related products and services primarily to cinema exhibitors, theme parks, educational institutions and similar venues. In addition to traditional projection screens, SGE manufactures and distributes its Eclipse curvilinear screens, which are specially designed for theme parks, immersive exhibitions and simulation applications. SGE also provides maintenance, repair, installation, network support services and other services to cinema operators, primarily in the United States. SGE was incorporated on November 9, 2021, under the BCBCA. The address of SGE’s principal executive offices is 108 Gateway Blvd, Suite 204, Mooresville, North Carolina 28117, and its telephone number is (704) 471-6784.

Prior to the Arrangement Agreement, FG owns approximately 76% of the outstanding common shares of SGE. Following the Business Combination, FG will own 100% of the outstanding common shares of SGE.

The diagram below depicts a simplified version of our current organizational structure prior to the Business Combination.

The diagram below depicts a simplified version of our organizational structure giving effect to the Business Combination, highlighting the changes that will result from the Business Combination which is the change in ownership of Strong Global Entertainment, Inc. from 76% to 100%.

Following the Business Combination, FG will continue to conduct business through its three segments including reinsurance, asset management, which includes merchant banking services, and SGE which includes manufacturing and managed services to cinemas and entertainment venues. We are continuing to evaluate all of our business operations and evaluate the allocation of resources and management to those segments.

The combined company’s assets attributed to each segment as of March 31, 2024 were approximately 35% to reinsurance, 35% to asset management and merchant banking and 19% to SGE. For the three months ended March 31, 2024, FG reported segment revenues of $0.3 million from reinsurance, a $2.9 million net investment loss from asset management and merchant banking, and revenues of $11.1 million from SGE. Following the Business Combination, FG will hold 100% ownership of SGE, increased from the current 76% ownership level.

We plan to continue to manage the businesses as three separate operating segments following the Business Combination and believe we will realize benefits of focusing management resources on the business rather than maintaining multiple public companies. We intend to streamline and reduce overall corporate level operating expense and eliminate areas of duplicate public company cost. The primary areas of cost related to maintaining SGE as a separate public company include having separate boards of directors, separate D&O and related insurance coverages, separate national stock exchange listings, separate periodic SEC reporting and compliance. We intend to eliminate the board of directors and rationalize management costs at the SGE level and reduce incremental costs related to separate PCAOB audits, annual general meetings, stock exchange listings, periodic reports to the SEC, legal compliance, and investor relations. Management estimates the total cost of maintaining SGE as a separate standalone public company to be approximately $2.0 million on an annual basis. Management has not finalized all aspects of its future business plans and cost reduction initiatives and cannot provide assurance as to the magnitude of cost savings that will be realized, or provide assurance that other areas of cost from the Business Combination and from operating the businesses will not offset potential savings in the future.

The Arrangement Agreement

See the section titled “Arrangement Agreement and Plan of Arrangement.”

Pursuant to the Arrangement Agreement and Plan of Arrangement, commencing at the Effective Time of the Arrangement Agreement, (i) the SGE Common Shares outstanding immediately prior to the Effective Time will be deemed to be transferred by the holders thereof to FG Québec in exchange for the Arrangement Consideration consisting of 1.5 shares of FG Common Stock for each share of SGE Common Stock (ii) SGE and Subco will be amalgamated and continue as one corporate entity, Amalco, and (iii) each SGE Common Share and Subco share held by FG Québec will be exchanged for one Common Share of Amalco. Following the closing, SGE will cease to exist and SGE Common Stock will be delisted from NYSE American and deregistered under the Exchange Act.

Expected Timing of Business Combination

Treatment of Equity Awards

All outstanding equity awards will be converted into the right to receive shares of FG Common Stock consistent with the exchange ratio established under the Arrangement Agreement. The timing of issuance of the FG equity awards in exchange for the SGE equity awards will be determined by the compensation committee of FG.

Accounting Treatment of Business Combination

The combination with SGE is an acquisition of the non-controlling interests of a consolidated subsidiary of FG and will be accounted for as an equity transaction in accordance with ASC 810-10-45-22 through ASC 810-10-45-24. The carrying amount of the non-controlling interest will be adjusted to reflect the change in ownership interest in SGE. Any difference between the amount by which the non-controlling interest is adjusted and the fair value of the consideration paid or received will be recognized in equity/APIC and attributed to the equity holders of the parent in accordance with ASC 810-10-45-23.

Material U.S. Federal Income Tax Consequences

For U.S. federal income tax purposes, SGE and FG Québec intend that the Business Combination will (i) be treated as a single integrated transaction and (ii) qualify as a “reorganization” within the meaning of Section 368(a) of the Code.

The discussion of U.S. federal income tax consequences of the Business Combination contained in this joint proxy statement/prospectus is intended to provide only a general summary and is not a complete analysis or description of all potential U.S. federal income tax consequences of the Business Combination. The discussion does not address tax consequences that may vary with, or are contingent on, individual circumstances. In addition, it does not address the effects of any non-U.S., state, or local tax laws.

For a more complete discussion of the material U.S. federal income tax consequences of the Business Combination, see the section titled “Material U.S. Federal Income Tax Consequences” beginning on page 105.

Material Differences in Securityholder Rights

If the Business Combination is completed, SGE stockholders will receive shares of FG Common Stock and they will cease to be stockholders of SGE. FG is organized under the laws of the State of Nevada. SGE is organized under the laws of the province of British Columbia. A summary of the material differences between (1) the current rights of FG Stockholders under Nevada law and the FG’s governing documents and (2) the current rights of holders of SGE Stockholders under British Columbian law and SGE’s governing documents is included in the section titled “Comparison of Rights of FG Stockholders and SGE Stockholders” beginning on page 89.

Directors and Executive Officers

Upon consummation of the Business Combination, SGE stockholders will be stockholders of FG. It is anticipated that the current executive officers and directors of FG will remain the same, except that Todd Major, who currently serves as the CFO of SGE (and formerly served as the CFO of FG Group Holdings Inc prior to its merger with FG), is expected to serve as an Executive Officer and as the Chief Accounting Officer and Principal Accounting Officer of FG.

FG’s Reasons for the Business Combination

In reaching its decision to adopt and approve the Business Combination, the Special Committee of the FG Board of Directors and the FG Board evaluated the Arrangement Agreement, Plan of Arrangement, and the other contemplated transactions in consultation with FG’s management, as well as FG’s advisors, and considered a number of factors. The management of FG and the FG Board, after careful study and evaluation of the economic, financial, legal and other factors, and upon recommendation by the Special Committee of the FG Board, believe the Business Combination could provide FG with reduced compliance and overhead costs, enhanced focus on activities with attractive returns, and an increased opportunity for profitable expansion of its business, which in turn should benefit FG stockholders. For a more detailed discussion of FG’s reasons for the Business Combination, see the section titled “Arrangement Agreement and Plan of Arrangement – FG’s Reasons for the Business Combination” beginning on page 73.

SGE’s Reasons for the Business Combination; Recommendation of the SGE Board of Directors

The SGE Board recommends that the SGE stockholders approve the Business Combination and adopt and approve the Arrangement Agreement, Plan of Arrangement and the other contemplated transactions, as well as the other matters being submitted for approval by the SGE stockholders. The Special Committee of the SGE Board of Directors and the SGE Board believe the Arrangement Consideration to SGE stockholders is fair, advisable and in the best interests of SGE and its stockholders. The management of SGE and the SGE Board, after careful study and evaluation of the economic, financial, legal and other factors, and upon recommendation by the Special Committee of the SGE Board, believe the Business Combination could provide SGE with reduced compliance and overhead costs, and an increased opportunity for profitable expansion of its business, which in turn should benefit SGE stockholders who become stockholders of FG. For a more detailed discussion of SGE’s reasons for the Business Combination and the SGE Board of Directors’ recommendation, see the section titled “The Business Combination-SGE’s Reasons for the Business Combination; Recommendation of the SGE Board of Directors” beginning on page 12.

Dissent Rights

SGE stockholders are entitled to dissent rights under the BACA. For more information, see the section titled “Dissent Rights” beginning on page 110.

Interests of SGE’s Directors and Executive Officers in the Business Combination

When SGE stockholders consider the recommendation of the SGE Board of Directors in favor of the Business Combination and other proposals being submitted to SGE stockholder, SGE stockholders should keep in mind that SGE directors and officers may have interests in the Business Combination that may be different from or in addition to (and which may conflict with) their interests. Please see the sections titled “Risk Factors” and “Certain Relationships and Related Person Transactions” of this joint proxy statement/prospectus for a further discussion of these interests and other risks.

Opinion of SGE’s Financial Advisor

SGE engaged Intrinsic, LLC as financial advisor to SGE in connection with the Business Combination. In connection with this engagement, Intrinsic, LLC delivered a written opinion, dated May 30, 2024, to the SGE Board of Directors (the “Fairness Opinion”), to the effect that, as of the date of the Fairness Opinion and based upon and subject to the assumptions, conditions and limitations set forth therein, the Business Combination is fair to the holders of SGE Common Shares from a financial point of view.

The full text of the Fairness Opinion, which sets forth the assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the Fairness Opinion, is attached as Annex B to this joint proxy statement/prospectus and is incorporated herein by reference. The description of the Fairness Opinion set forth in this joint proxy statement/prospectus is qualified in its entirety by the full text of such Fairness Opinion. The Fairness Opinion was provided for the use and benefit of the SGE Board of Directors (in its capacity as such and not in any other capacity) in its evaluation of the Business Combination (and, in its engagement letter, Intrinsic, LLC provided its consent to the inclusion of the text of the Fairness Opinion as part of this joint proxy statement/prospectus). The members of the SGE Board of Directors considered a wide variety of factors in connection with their evaluation of the Business Combination, including the Fairness Opinion. Intrinsic, LLC’s only opinion is the formal written opinion Intrinsic, LLC has expressed as to whether, as of the date of such opinion, the Business Combination is fair to the holders of SGE Common Shares from a financial point of view.

The Fairness Opinion does not constitute a recommendation to proceed with the Business Combination. The Fairness Opinion did not address any other aspect or implications of the Business Combination and the Fairness Opinion does not constitute an opinion, advice or recommendation as to how any securityholder of SGE should vote at the Meetings. In addition, the Fairness Opinion did not in any manner address the prices at which the securities of FG would trade following the consummation of the Business Combination or at any time.

Emerging Growth Company

SGE is currently an “emerging growth company,” as defined in the Securities Act, as modified by the Jumpstart Our Business Startups Act (“JOBS Act”). SGE has taken advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley Act”), reduced disclosure obligations regarding executive compensation in SGE’s periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. As a result, stockholders of SGE may not have access to certain information they may deem important.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. SGE has not elected to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, SGE, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of SGE financial statements with certain other public companies difficult or impossible because of the potential differences in accounting standards used.

Recent Developments

On April 16, 2024, FG completed the sale of its Digital Ignition building and wholly owned subsidiary for proceeds of $6.5 million. FG received approximately $1.3 million in net cash proceeds, after payment of closing costs and repayment of the $4.9 million real estate loan at closing. In connection with the sale of the land and building, FG recorded a non-cash impairment charge of approximately $1.4 million to adjust the carrying value of the assets to the fair market value less costs to sell.

On May 3, 2024, SGE entered into an agreement to transfer its Strong/MDI subsidiary to FG Acquisition Corp, a special purpose acquisition company (“FGAC”). If the MDI acquisition by FGAC successfully closes, SGE would receive: (i) cash, in an amount equal to 25% of the net proceeds of a concurrent private placement, if any, (ii) preferred shares of FGAC with an initial preferred share redemption amount of $9.0 million, and (iii) common shares of FGAC equal to (a) $30 million (as adjusted pursuant to the MDI acquisition agreement) minus (x) the cash consideration and (y) the preferred shares, divided by (b) $10.00. If the MDI acquisition does not close, SGE would continue to own and operate its Strong/MDI subsidiary. Additional information regarding the Strong/MDI transaction is provided in the section titled, “Certain Relationships and Related Person Transactions – MDI Acquisition.”

Risk Factors

In evaluating the Plan of Arrangement and the Arrangement, including the issuance of shares of FG Common Stock in the Arrangement, you should carefully read this joint proxy statement/prospectus and give special consideration to the factors discussed in the section entitled “Risk Factors” beginning on page 19 of this joint proxy statement/prospectus. Please see the section entitled “Where You Can Find More Information” beginning on page 113 of this joint proxy statement/prospectus for the location of more information.

Holders

As of the Record Date, there were 107 holders of record of FG Common Stock, one holder of record of FG Series A Preferred and 34 holders of record of SGE Common Shares. The number of holders of record does not include a substantially greater number of “street name” holders or beneficial holders whose FG Common Stock, FG Series A Preferred and SGE Common Shares are held of record by banks, brokers and other financial institutions.

Dividend Policy

FG has not paid any cash dividends on its FG Common Stock to date and does not intend to pay cash dividends prior to or following the completion of the Business Combination. FG has 894,580 shares of FG 8.00% Cumulative Preferred Stock outstanding which FG pays dividends quarterly.

SGE has not paid any cash dividends on its SGE Common Shares to date and does not intend to pay cash dividends prior to the completion of the Business Combination.

On May 31, 2024, FG and SGE entered into the Arrangement Agreement that will result in FG acquiring the remaining 24% noncontrolling interest in SGE, which is and has been a consolidated subsidiary of FG. The transaction will result in FG issuing approximately 2.9 million common shares in exchange for the 1.9 million shares of SGE not already owned by FG.

Prior to the Arrangement Agreement, FG owned approximately 76% of the outstanding common shares of SGE and consolidates SGE in its historical consolidated financial statements. Because the results of SGE are already included in the consolidated financial statements of FG, the only two adjustments to the historical financial statements are to reclassify the noncontrolling interest within equity in the balance sheet and the income attributable to noncontrolling interest holders in the income statement. Therefore, the pro forma financial information is presented in a narrative format with the effects described in the following paragraphs.

The pro forma consolidated balance sheet as of March 31, 2024 gives effect to the transaction as if it had been completed on March 31, 2024. The pro forma consolidated balance sheet would reflect an adjustment to eliminate the noncontrolling interest balance of $1.8 million and increase Common Stock and Additional Paid In Capital by a like amount. There would be no changes to total assets, total liabilities or total shareholders’ equity.

The pro forma consolidated income statement for the three months ended March 31, 2024 gives effect to the transaction as if the transaction had occurred on January 1, 2024. The pro forma consolidated statement of operations would reflect an adjustment to reclassify the net loss attributable to noncontrolling interests of $17 thousand to net loss attributable to controlling interests. Pro forma net loss attributable to controlling interests would have changed by $17 thousand to $4.4 million for the three months ended March 31, 2024. Pro forma basic and diluted loss per common share would have been unchanged for the three months ended March 31, 2024.

The pro forma consolidated income statement for the year ended December 31, 2023 gives effect to the transaction as if the transaction had occurred on January 1, 2023. The pro forma consolidated statement of operations would reflect an adjustment to reclassify the net loss attributable to noncontrolling interests of $564 thousand to net loss attributable to controlling interests. Pro forma net loss attributable to controlling interests would have been increased from $14.1 million to $14.6 million for the year ended December 31, 2023. Pro forma basic and diluted loss per common share would have changed by $0.03 per share for the year ended December 31, 2023.

The words “we”, “us”, “our” or “the Company” refers to FG when used in the business overview section below.

FG, formerly known as FG Financial Group, Inc., is engaged in diverse business activities including reinsurance, asset management, merchant banking, manufacturing and managed services. As of March 31, 2024, Fundamental Global GP, LLC (“FGGP”) and its affiliated entities collectively beneficially owned approximately 28.3% of our common stock. D. Kyle Cerminara, our Chief Executive Officer and the Chairman of our Board of Directors, serves as Chief Executive Officer, Co-Founder and Partner of FGGP.

We were incorporated on October 2, 2012 in the State of Delaware under the name Maison Insurance Holdings, Inc., changed our name to 1347 Property Insurance Holdings, Inc. on November 19, 2013, and changed our name to FG Financial Group, Inc. on December 14, 2020.

Effective on December 9, 2022, the Company completed its reincorporation from a Delaware corporation to a Nevada corporation (the “Reincorporation”). Other than the change in the state of incorporation, the Reincorporation did not result in any change in the business, physical location, management, assets, liabilities or net worth of the Company, nor did it result in any change in location of the Company’s employees, including the Company’s management.

On February 29, 2024, FGF and FG Group Holdings Inc. a Nevada corporation (“FGH”) completed a merger transaction pursuant to the Plan of Merger, dated as of January 3, 2024, by and among FGF, FGH and FG Group LLC, a Nevada limited liability company and wholly owned subsidiary of FGF (the “Merger Sub”). Pursuant to the terms of the Merger Agreement and in accordance with the Nevada Revised Statutes, FGH merged with and into the Merger Sub (the “Merger”), with the Merger Sub as the surviving entity and wholly owned subsidiary of FGF. Following the Merger, on February 29, 2024, the Company amended its Amended and Restated Articles of Incorporation to change its name to Fundamental Global Inc.

The Company conducts business through its three reportable segments including reinsurance, asset management, which included merchant banking services, and Strong Global Entertainment which includes manufacturing and managed services to cinemas and entertainment venues. The operating segments are determined based on the business activities, and reflect the manner in which financial information is currently evaluated by management.

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 March 31, 2024, 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 and 2023 calendar years.

On December 21, 2020, we formed FG Management Solutions LLC (“FGMS”), formerly known as FG SPAC Solutions, LLC, a Delaware company, to facilitate the launch of our “SPAC Platform.” Under the SPAC Platform, we provide various strategic, administrative, and regulatory support services to newly formed SPACs for a monthly fee. Additionally, the Company co-founded a partnership, FG Merchant Partners, LP (“FGMP”), formerly known as FG SPAC Partners, LP, to participate as a co-sponsor for newly formed SPACs.

In the third quarter of 2022, the Company announced the expansion of its growth strategy through the formation of a merchant banking division.

In the fourth quarter of 2022, the Company invested $2.0 million into its first merchant banking project, FG Communities, Inc. (“FGC”). FGC is a self-managed real estate company focused on a growing portfolio of manufactured housing communities which are owned and operated by FGC.

FG is an indirect holder of 76% of SGE’s common shares and SGE is a consolidated subsidiary of FG. Refer to the section titled “Strong Global Entertainment, Inc” for a description of SGE’s business.

The Company owned and operated its Digital Ignition technology incubator and co-working facility in Alpharetta, Georgia. During the first quarter of 2024, the Company’s board authorized the sale of Digital Ignition and on April 16, 2024, the Company completed the sale of the Digital Ignition building and wholly owned subsidiary for proceeds of $6.5 million. Subsequent to March 31, 2024, the Company received approximately $1.3 million in cash, after payment of closing costs and repayment of debt at closing. 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 three months ended March 31, 2024 to adjust the carrying value of the assets to the fair market value less costs to sell.

We employed 205 persons (which includes 199 employees at SGE) at December 31, 2023, 204 of which were full-time. Of these employees, 94 positions were considered manufacturing or operational, 60 were service related and 51 were considered sales and administrative. We are not a party to any collective bargaining agreement.

Our corporate website is www.fundamentalglobal.com. A copy of our Code of Ethics can be found in the Governance Documents section of our website. Information contained at the website is not a part of this report.

The words “we”, “us”, “our” or “the Company” refers to SGE when used in the business overview section below.

SGE is a consolidated subsidiary of FG and is a leader in the entertainment industry, providing mission critical products and services to cinema exhibitors and entertainment venues for over 90 years. The Company manufactures and distributes premium large format projection screens, provides comprehensive managed services, technical support and related products and services primarily to cinema exhibitors, theme parks, educational institutions, and similar venues. In addition to traditional projection screens, the Company manufactures and distributes its Eclipse curvilinear screens, which are specially designed for theme parks, immersive exhibitions, as well as simulation applications. We also provide maintenance, repair, installation, network support services and other services to cinema operators, primarily in the United States.

We believe that we have cultivated a leadership position built on our exceptional reputation for quality and service in the industry. As a manufacturer and distributor of projection screens systems, we have contractual relationships to supply projection screens to major cinema exhibitors, including IMAX Corporation (“IMAX”), AMC Entertainment Holdings (“AMC”), and Cinemark Holdings, Inc. (“Cinemark”), and other cinema operators worldwide.

We operate one of the largest managed service teams in the industry, providing maintenance, repair, installation, network support and other services to cinemas and other facilities across the United States. Many of our customers choose annual managed service arrangements and we also provide maintenance and other services to customers on a time and materials basis. Our field service and Network Operations Center (“NOC”) staff work hand in hand to monitor and resolve issues for our customers. Our NOC, staffed by engineers and support technicians, operates 24/7/365 and monitors our customers’ networked equipment remotely, often providing proactive solutions to systems’ issues before they cause system failures.

Historically, the business of SGE included the operations of Strong/MDI Screen Systems, Inc. (“MDI”), a British Columbia entity and a leading global manufacturer and distributor of premium large format projection screens and coatings, and Strong Technical Services, Inc. (“STS”), which provides comprehensive managed services, technical support and other products and services, primarily in the United States.

As described below, SGE has entered into an agreement to sell MDI and, if the transaction is consummated, SGE will no longer own would expect to receive : (i) cash, in an amount equal to 25% of the net proceeds of a concurrent private placement, if any (the “Cash Consideration”), (ii) the issuance to SGE of preferred shares (“Preferred Shares”) with an initial preferred share redemption amount of $9.0 million, and (iii) the issuance to SGE of that number of FGA Common Shares equal to (a) the MDI Equity Value minus (x) the Cash Consideration and (y) the Preferred Shares, divided by (b) $10.00. It is anticipated that, upon completion of the MDI Acquisition, on a non-diluted basis and assuming completion of a $10 million private placement and the issuance of 338,560 FGA Common Shares to CG Investments VII Inc. as consideration for its deferred underwriting fee, SGE will hold an ownership interest of approximately 29.6% in Saltire. If the MDI Acquisition fails to close, SGE would retain its ownership and operation of Strong/MDI.

We were incorporated on November 9, 2021, under the Business Corporations Act (British Columbia) (the “BCBCA”). On May 18, 2023, we closed our initial public offering (“IPO”) of 1,000,000 of SGE Common Shares at a price to the public of $4.00 per share and separation from FGH (the “Separation”). After the separation, our direct controlling shareholder is FG Quebec, a subsidiary of FGH. On February 29, 2024, FGF, and FGH completed a merger transaction. Pursuant to the terms of the Merger Agreement FGH became a wholly owned subsidiary of FGF. Following the Merger, FGF changed its name to Fundamental Global Inc. As a result of the Merger, our indirect controlling shareholder changed from FGH to FG.

On November 3, 2023, we entered into an asset purchase agreement with Innovative Cinema Solutions, LLC (“ICS”), a full-service provider of technical services and solutions to national cinema chains. The operations of ICS were rolled into Strong Technical Services, Inc. (“STS”).

As of December 31, 2023, the board of directors of the Company authorized management to proceed with a plan to exit the content business, including Strong Studios and Unbounded. The plan is expected to improve the Company’s focus on its core businesses, reduce general and administrative costs, and improve financial performance.

On January 19, 2024, the Company entered into a demand credit agreement with Canadian Imperial Bank of Commerce (“CIBC”). The agreement consists of a demand operating credit and a business credit card facility.

Under the demand operating credit, with certain conditions, the credit limit is the lesser of (a) CAD$6,000,000 or (b) the sum of (i) 80% of Receivable Value, which includes all North American accounts receivable of Strong/MDI Screen Systems Inc., a British Columbia entity and Strong Technical Services Inc. (collectively, the “Subsidiaries”), and (ii) 50% of Inventory Value, but in no event may the amount in this clause (ii) exceed $1,500,000, minus (iii) all Priority Claims. The amounts obtained under this credit are to be used for working capital.

Under the business credit card facility, the credit limit is CAD$75,000. The amounts obtained under this credit are to be used for purchase and payment of goods and services.

On January 19, 2024, as a guarantor, the Company also signed a credit agreement which is an amendment (“Amendment No. 2”) entered into by CIBC and FG Quebec. The Amendment No. 2 amends certain Credit Agreement dated January 13, 2023 (the “Prior Agreement”) between CIBC and FG Quebec. Pursuant to the Amendment No. 2, (i) under the demand operating credit, the credit limit is decreased from $3,400,000 to $1,400,000, (ii) the business credit card facility is removed, (iii) reporting requirements and a negative covenant are added, and (iv) CIBC’s security interest in certain assets of FG Quebec securing the credit facilities under the Prior Agreement was removed in exchange for a guarantee from the Company with respect to all liabilities of FG Quebec to CIBC.

Projection Screens and Immersive Products — We believe we are a leading manufacturer and distributor of premium large format projection screens to the cinema industry in North America and around the globe. We have contractual relationships to supply screens to IMAX, AMC, Cinemark and many of the other major cinema operators worldwide. We also manufacture innovative screen support structures custom built to adapt to virtually any venue requirement, with a unique self-standing modular construction that allows for easy assembly and adjustable size.

In addition to traditional projection screens, we also manufacture our Eclipse curvilinear screens, which are specially designed to provide maximum viewer engagement in media-based attractions and immersive projection environments. We distribute Eclipse screens for use in theme parks, immersive exhibitions, as well as military simulation applications. The solid surface is designed to minimize light loss and maintain higher resolution at lower lumen output. Patented speaker panels allow selective placement of rear mounted speakers to ensure the audio derives from the source media on screen. Applications include interactive dark rides, 3D/4D theme park rides, flying theaters and motion simulators. During 2023, we also launched our new Siesmos flooring solution, which provides immersive operators with a haptic flooring solution utilizing our proprietary immersive coating, which along with our screen production, provides a premium immersive solution.

Our management believes that our screens are among the highest quality in the industry in terms of performance including the amount of gain (or brightness of the image reflected from the screen’s surface), viewing angles, and other characteristics important to the viewing experience. Our high quality is driven by our innovative manufacturing process, focus on quality control and our proprietary coatings. We believe that we are the only major screen manufacturer that develops and produces its own proprietary coatings, which are critical to the overall quality and continued innovation of our screens.

Technical Services — We operate one of the most comprehensive managed service teams in the industry, providing digital projection equipment installation and after-sale maintenance and support services to the cinema operators in the United States. Our field service technicians and our NOC staff work hand in hand to monitor and resolve issues for our customers. Many of our customers choose annual managed service arrangements for maintenance and repair services. We also provide maintenance services to customers who choose not to be covered by a managed service contract on a time and materials basis. Our NOC, staffed by engineers and support technicians, operates 24/7/365 and monitors our customers’ networked equipment remotely, often providing proactive solutions to systems issues before they cause system failures.

Other Products — We distribute projectors, servers, audio systems and other third-party products including lenses and lamps to customers worldwide.

We own or otherwise have rights to various trademarks and trade names used in conjunction with the sale of our products. We believe our success will not be dependent upon trademark protection, but rather upon our scientific and engineering capabilities and research and production techniques. We consider the Strong® trademark to be of value to our business.

We employed 199 persons at December 31, 2023, 198 of which were full-time. Of these employees, 94 positions were considered manufacturing or operational, 60 were service related and 45 were considered sales and administrative. We are not a party to any collective bargaining agreement.

The Company, including its subsidiaries, remains deeply rooted in cinema screen manufacturing and cinema-focused services. In this regard, we continuously drive our efforts to be the best partner for our customers, investment for our shareholders, neighbor in our community and to provide an empowering work environment for our employees.

Moreover, the Company is committed to the health, safety and wellness of its employees. We have modified our business practices and implemented certain policies at our offices in accordance with best practices to accommodate, and at times mandate, social distancing and remote work practices, including restricting employee travel, modifying employee work locations, implementing social distancing and enhanced sanitary measures in our facilities, and cancelling attendance at events and conferences. In addition, we have invested in employee safety equipment, additional cleaning supplies and measures, re-designed production lines and workplaces as necessary and adapted new processes for interactions with our suppliers and customers to safely manage our operations.

We are subject to complex laws, rules and regulations affecting our domestic and international operations relating to, for example, environmental, safety and health requirements; exports and imports; bribery and corruption; tax; data privacy; labor and employment; competition; and intellectual property ownership and infringement. Compliance with these laws, rules and regulations may be onerous and expensive, and if we fail to comply or if we become subject to enforcement activity, our ability to manufacture our products and operate our business could be restricted and we could be subject to fines, penalties or other legal liability. Furthermore, should these laws, rules and regulations be amended or expanded, or new ones enacted, we could incur materially greater compliance costs or restrictions on our ability to manufacture our products and operate our business.

Some of these complex laws, rules and regulations – for example, those related to environmental, safety and health requirements – may particularly affect us in the jurisdictions in which we manufacture products, especially if such laws and regulations require the use of abatement equipment beyond what we currently employ; require the addition or elimination of a raw material or process to or from our current manufacturing processes; or impose costs, fees or reporting requirements on the direct or indirect use of energy, or of materials or gases used or emitted into the environment, in connection with the manufacture of our products. There can be no assurance that in all instances a substitute for a prohibited raw material or process would be available, or be available at reasonable cost.

Our corporate website is www.strong-entertainment.com. A copy of our Code of Ethics can be found in the governance documents section of our website. Information contained at the website is not a part of this report.

You should carefully consider all the following risk factors, together with all of the other information in this joint proxy statement/prospectus, including the financial information, before deciding whether or how to vote or instruct your vote to be cast to approve the proposals described in this joint proxy statement/prospectus.

The value of your investment following consummation of the Business Combination will be subject to significant risks affecting, among other things, the combined company’s business, financial condition or results of operations. If any of the events described below occur, the post-Business Combination business and financial results could be adversely affected in material respects. This could result in a decline, which may be significant, in the trading price of FG’s securities and you therefore may lose all or part of your investment. The risk factors described below are not necessarily exhaustive and you are encouraged to perform your own investigation with respect to the businesses of FG and SGE.

An investment by SGE stockholders in FG Common Stock as a result of the exchange of shares of SGE Common Stock for shares of FG Common Stock in the Arrangement involves certain risks. Certain material risks and uncertainties connected with the Plan of Arrangement and the transactions contemplated thereby, including the Arrangement, and ownership of FG Common Stock are discussed below.

You should carefully read and consider all of these risks and all other information contained in this proxy statement/prospectus. The risks described herein may adversely affect the value of FG Common Stock that you, as an existing SGE stockholder, will hold upon the completion of the Arrangement, and could result in a significant decline in the value of FG Common Stock and cause the current FG stockholders and the SGE stockholders to lose all or part of their respective investments in FG Common Stock.

Because the exchange ratio is fixed and the market price of FG Common Stock may fluctuate, FG stockholders cannot be certain of the market value of the Arrangement Consideration they will receive.

In the Arrangement, each share of SGE Common Stock issued and outstanding immediately prior to the Effective Time (other than certain shares held by FG) will be converted into 1.5 shares of FG Common Stock. This exchange ratio is fixed and will not be adjusted for changes in the market price of either FG Common Stock or SGE Common Stock. Changes in the price of FG Common Stock prior to the Arrangement will affect the value that SGE stockholders will receive in the Arrangement. Neither FG nor SGE is permitted to terminate the Arrangement Agreement or Plan of Arrangement as a result, in and of itself, of any increase or decrease in the market price of FG Common Stock or SGE Common Stock.

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

The market price of FG Common Stock after the Arrangement may be affected by factors different from those affecting the shares of FG Common Stock or SGE Common Stock currently.

In the Arrangement, SGE stockholders will become FG stockholders. FG’s business differs from that of SGE. Accordingly, the results of operations of FG after the consummation of the Arrangement and the market price of FG Common Stock after the completion of the Arrangement may be affected by factors different from those currently affecting the independent results of operations of each of FG and SGE.

FG and SGE are expected to incur significant costs related to the Arrangement and integration.

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

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

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

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

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

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

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

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

FG may be unable to retain current FG or SGE personnel successfully while the Arrangement is pending or after the Arrangement is completed.

The success of the Business Combination will depend in part on FG’s ability to retain the talents and dedication of key employees and officers currently employed by FG and SGE. It is possible that these employees and officers may decide not to remain with FG or SGE, as applicable, while the Arrangement is pending or with FG (or its respective subsidiaries) after the Arrangement is consummated. If FG and SGE are unable to retain key employees, including management, who are critical to the successful integration and future operations of the companies, FG and SGE could face disruptions in their operations, loss of existing customers, loss of key information, expertise or know-how and unanticipated additional recruitment costs. In addition, if key employees terminate their employment, FG’s business activities after completion of the Arrangement may be adversely affected and management’s attention may be diverted from successfully integrating FG and SGE to hiring suitable replacements, all of which may cause FG’s business to suffer. In addition, FG and SGE may not be able to locate or retain suitable replacements for any key employees who leave either company.

The unaudited pro forma condensed combined financial information included in this joint proxy statement/prospectus is preliminary and the actual financial condition and results of operations of FG after the Arrangement may differ materially.

The unaudited pro forma condensed combined financial information in this joint proxy statement/prospectus is presented for illustrative purposes only and is not necessarily indicative of what FG’s actual financial condition or results of operations would have been had the Arrangement been completed on the dates indicated. The unaudited pro forma condensed combined financial information does not reflect anticipated operating efficiencies and cost savings that are expected to result from the Arrangement or integration costs that may be incurred. Accordingly, actual results may differ materially from the pro forma adjustments reflected in this joint proxy statement/prospectus. For more information, see the section entitled “Unaudited Pro Forma Combined Financial Information” beginning on page 14.

Certain of FG’s and SGE’s directors and executive officers may have interests in the Arrangement that may differ from, or may be in addition to, the interests of FG stockholders and SGE stockholders generally.

FG stockholders and SGE stockholders should be aware that some of FG’s and SGE’s directors and executive officers may have interests in the Arrangement and have arrangements that are different from, or in addition to, the interests or arrangements of FG stockholders and SGE stockholders generally. These interests and arrangements may create potential conflicts of interest. The FG Board of Directors and the SGE Board of Directors were aware of these respective interests and considered these interests, among other matters, when making their decisions to approve and adopt the Arrangement Agreement, the Plan of Arrangement, and the other contemplated transactions, and in recommending that SGE stockholders approve and adopt the Business Combination. For a more complete description of these interests, please see the sections entitled “Certain Relationships and Related Person Transactions” beginning on page 101.

The Arrangement Agreement and Plan of Arrangement may be terminated in accordance with their terms and the Arrangement may not be completed, which could negatively affect FG and/or SGE.

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

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

FG and SGE will be subject to business uncertainties while the Arrangement is pending.

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

The shares of FG Common Stock to be received by SGE stockholders as a result of the Arrangement will have different rights from the shares of SGE Common Stock.

In the Arrangement, SGE stockholders will become FG stockholders and their rights as FG stockholders will be governed by FG’s governing documents. The rights associated with FG Common Stock are different from the rights associated with FG Common Stock. See the section titled “Comparison of Rights of FG Stockholders and SGE Stockholders” beginning on page 89 for a discussion of the rights associated with FG Common Stock.

SGE stockholders will have a reduced ownership and voting interest in FG after the Arrangement and will exercise less influence over management.

FG stockholders and SGE Common Stock currently have the right to vote in the election of the board of directors and on other matters affecting FG and SGE, respectively. When the Arrangement is completed, each holder of SGE Common Stock who receives shares of FG Common Stock will become a holder of FG Common Stock, with a percentage ownership of FG that is smaller than the holder’s percentage ownership of SGE. Because of this, SGE stockholders may have less influence on the management and policies of FG than they now have on the management and policies of SGE.

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

In connection with the payment of the Arrangement Consideration, based on the current number of shares of SGE Common Stock outstanding, FG expects to issue approximately 2.9 million shares of FG Common Stock to SGE stockholders. The dilution caused by the issuance of these new shares of FG Common Stock may result in fluctuations in the market price of FG Common Stock, including a stock price decrease.

Independent members of the SGE Board have obtained an opinion from an unaffiliated third party as to the fairness of the exchange ratio to the holders of SGE Common Stock.

The Special Committee consisting of independent members of the SGE Board obtained an opinion from Intrinsic, which supports the exchange ratio as fair to the holders of SGE Common Stock from a financial point of view. There is no assurance of the accuracy of this report and holders of SGE Common Stock receiving FG Common Stock as a result of the Arrangement could experience a loss as a result of decreasing stock prices. The full text of the written opinion, dated May 30, 2024, of Intrinsic, which describes, among other things, the assumptions made, procedures followed, factors considered and limitations on the review undertaken, is attached as Annex B to this joint proxy statement/prospectus and is incorporated by reference herein in its entirety.

See “Summary of Joint Proxy Statement/Prospectus — Fairness Opinion of SGE’s Financial Advisor” on page 12 of this joint proxy statement/prospectus for more information.

SGE stockholders will have dissent rights with respect to the Arrangement.

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

Under Sections 237-247 of the BCBCA, the SGE stockholders will be entitled to appraisal or dissent rights in connection with the Arrangement. If any of the SGE stockholders choose to exercise their dissent rights it will require FG to set aside and not distribute that portion of FG shares which are attributable to the commons stock for which dissent rights have been exercised. Additionally, it may slow or hinder the expected cost savings from the Arrangement. See the section entitled “Dissent Rights” beginning on page 110 for more information on the dissent rights associated with SGE Common Stock and the Arrangement.

Litigation related to the Arrangement could prevent or delay completion of the Arrangement or otherwise negatively affect the business and operations of FG and SGE.

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

If the Business Combination does not qualify as a “reorganization” within the meaning of Section 368(a) of the Code, the U.S. holders of SGE Common Shares may be required to pay U.S. federal income taxes.

Although SGE and FG Québec intend that the Business Combination will qualify as a “reorganization” within the meaning of Section 368(a) of the Code, it is possible that the IRS may assert that the Business Combination fails to qualify as such. If the IRS were to be successful in any such contention, or if for any other reason the arrangement were to fail to qualify as a “reorganization,” each holder of SGE Common Shares would recognize a gain or loss with respect to all such holder’s SGE Common Shares based on the difference between (i) the fair market value of the FG Common Stock received and (ii) that holder’s tax basis in such SGE Common Shares. For U.S. holders, any such gain would generally be subject to tax at capital gains rates, and the deductibility of any such loss would be subject to limitations; for non-U.S. holders, any gain recognized would be subject to U.S. federal income tax only if connected with a U.S. trade or business (and, if applicable, attributable to a U.S. permanent establishment) or the non-U.S. holder is an individual present in the United States for 183 or more days during the taxable year of the disposition and certain other requirements are met. For additional information regarding the U.S. federal income tax consequences if the Business Combination were to fail to qualify as a “reorganization,” see the discussion under the section entitled “Material U.S. Federal Income Tax Consequences” beginning on page 105.

FG is expected to incur significant costs related to its combination and integration with SGE.

FG has incurred and expects to incur certain non-recurring costs associated with the combination and integration of SGE and FG. These costs include legal, financial advisory, accounting, consulting and other advisory fees, insurance, public company filing fees and other regulatory fees, printing costs and other related costs. The combined company may also incur expenses in connection with the integration of operations. There are many factors that could affect the total amount or the timing of the integration costs. Moreover, many of the costs that will be incurred are, by their nature, difficult to estimate accurately. These integration costs may result in FG taking charges against earnings in future periods.

Integrating the businesses may be more difficult, costly or time consuming than expected and we may fail to realize the anticipated benefits of the combination.

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

The future results following the FG and SGE combination may suffer if FG does not effectively manage its expanded operations.

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

FG may be unable to retain current personnel successfully following the combination.

The success of FG will depend in part on its ability to retain the talents and dedication of key employees and officers. It is possible that these employees and officers may decide not to remain with FG. If FG and SGE are unable to retain key employees, including management, who are critical to the successful integration and future operations of the companies, FG and SGE could face disruptions in their operations, loss of existing customers, loss of key information, expertise or know-how and unanticipated additional recruitment costs. In addition, if key employees terminate their employment, FG’s business activities may be adversely affected and management’s attention may be diverted from successfully integrating the businesses to hiring suitable replacements, all of which may cause FG’s business to suffer. In addition, FG may not be able to locate or retain suitable replacements for any key employees who leave either company.

The words “we”, “us”, “our” or “the Company” refers to SGE when used in the Risk Relating to SGE Operating Business section below.

SGE estimates future revenue associated with customers and customer prospects for purposes of financial planning and measurement of its sales pipeline, but we have limited contractual assurance of future business from our customers. While we do have arrangements with some of our customers, customers are not required to purchase any minimum amounts, and could stop doing business with us. Some customers maintain simultaneous relationships with our competitors, and could shift more of their business away from us if they choose to do so in the future.

There is no guarantee that we will be able to service and retain or renew existing agreements, maintain relationships with any of our customers or business partners on acceptable terms or at all, or collect amounts owed to us from insolvent customers or business partners. The loss of any of our large customers could have a material adverse impact on our business.

SGE’s operating results could be materially harmed if we are unable to accurately forecast demand for our products and services and adequately manage our inventory.

To ensure adequate inventory supply, SGE forecasts inventory needs, places orders and plans personnel levels based on estimates of future demand. Our ability to accurately forecast demand for our products and services is limited and could be affected by many factors, including an increase or decrease in customer demand for our products and services or for products and services of our competitors, product and service introductions by competitors, unanticipated changes in general market conditions, effects of the COVID-19 pandemic and the weakening of economic conditions or consumer confidence in future economic conditions. If we fail to accurately forecast customer demand, we may experience excess inventory levels or a shortage of products available for sale. Conversely, if we underestimate customer demand for our products and services, we may not be able to deliver products to meet requirements, and this could result in damage to our brand and customer relationships and adversely affect our revenue and operating results.

Interruptions of, or higher prices of, components from SGE’s suppliers may affect our results of operations and financial performance.

A portion of SGE’s revenues is dependent on the distribution of products supplied by various key suppliers. If we fail to maintain satisfactory relationships with our suppliers, or if our suppliers experience significant financial difficulties, we could experience difficulty in obtaining needed goods and services. Some suppliers could also decide to reduce inventories or raise prices to increase cash flow. The loss of any one or more of our suppliers could have an adverse effect on our business, and we may be unable to secure alternative manufacturing arrangements. Even if we are able to obtain alternative manufacturing arrangements, such arrangements may not be on terms similar to our current arrangements, or we may be forced to accept less favorable terms in order to secure a supplier as quickly as possible so as to minimize the impact on our business operations. In addition, any required changes in our suppliers could cause delays in our operations and increase our production costs and new suppliers may not be able to meet our production demands as to volume, quality, or timeliness.

Geopolitical conditions, military conflicts, acts or threats of terrorism, natural disasters, pandemics, and other conditions or events beyond our control could adversely affect us.

Geopolitical conditions, military conflicts (including Russia’s invasion of Ukraine), acts or threats of terrorism, natural disasters, pandemics (including the COVID-19 pandemic), and other conditions or events beyond our control may adversely affect our business, results of operations, financial condition, or prospects. For example, military conflicts, acts or threats of terrorism, and political, financial, or military actions taken in response could adversely affect general economic, business, or market conditions and, in turn, us, especially as an intermediary within the financial system. In addition, nation states engaged in warfare or other hostile actions may directly or indirectly use cyberattacks against financial systems and financial-services companies like us to exert pressure on one another or other countries with influence or interests at stake. We also could be negatively impacted if our key personnel, a significant number of our employees, or our systems or infrastructure were to become unavailable or damaged due to a pandemic, natural disaster, war, act of terrorism, accident, or similar cause. These same risks and uncertainties arise too for the service providers and counterparties on whom we depend as well as their own third-party service providers and counterparties.

The most notable impact of COVID-19 on SGE’s results of operations was the significant impact to our customers, specifically those in the entertainment and advertising industries, and their ability and willingness to purchase our products and services. A significant number of our customers temporarily ceased operations during the pandemic. For instance, many movie theaters and other entertainment centers were forced to close or curtail their hours and, correspondingly, terminated or deferred their non-essential capital expenditures. The COVID-19 pandemic also adversely affected film production and the pipeline of feature films available in the short- and long-term. We were also required to temporarily close our screen manufacturing facility in Canada due to the governmental response to COVID-19, experienced lower revenues from field services, and saw a reduction in non-recurring time and materials-based services. The impact of any future outbreak of contagious disease, or a worsening or resurgence of COVID-19, is not readily ascertainable, is uncertain and cannot be predicted, but could have an adverse impact on business, financial condition and results of operations.

In the case of Russia’s invasion of Ukraine, security risks as well as increases in fuel and other commodity costs, supply-chain disruptions, and associated inflationary pressures have impacted our business the most.

We may also experience one or more of the following conditions that could have a material adverse impact on our business operations and financial condition: adverse effects on our strategic partners’ businesses or on the businesses of companies in which we hold equity stakes; impairment charges; extreme currency exchange-rate fluctuations; inability to recover costs from insurance carriers; and business continuity concerns for us, our customers and our third-party vendors.

These conditions and events and others like them are highly complex and inherently uncertain, and their effect on our business, results of operations, financial condition, and prospects in the future cannot be reliably predicted.

Changes in general economic conditions, geopolitical conditions, domestic and foreign trade policies, monetary policies and other factors beyond our control may adversely impact our business and operating results.

Our operations and performance may depend on global, regional, economic and geopolitical conditions. Russia’s invasion and military attacks on Ukraine have triggered significant sanctions from North American and European leaders. These events continue to develop and escalate, creating increasingly volatile global economic conditions. Resulting changes in North American trade policy could trigger retaliatory actions by Russia, its allies and other affected countries, including China, resulting in a “trade war.” A trade war could result in increased costs for raw materials that we use in our manufacturing and could otherwise limit our ability to sell our products abroad. These increased costs would have a negative effect on our financial condition and profitability. Furthermore, events like the military conflict between Russia and Ukraine may increase the likelihood of supply interruptions and further hinder our ability to find the materials we need to make our products. If the conflict between Russia and Ukraine continues for a long period of time, or if other countries become further involved in the conflict, we could face significant adverse effects to our business and financial condition.

Environmental, social and governance matters may impact our business and reputation.

Increasingly, in addition to the importance of their financial performance, companies are being judged by their performance on a variety of environmental, social and governance (“ESG”) matters, which are considered to contribute to the long-term sustainability of companies’ performance.

A variety of organizations measure the performance of companies on ESG topics, and the results of these assessments are widely publicized. In addition, investments in funds that specialize in companies that perform well in such assessments are increasingly popular, and major institutional investors have publicly emphasized the importance of ESG measures to their investment decisions. Topics taken into account in such assessments include, among others, companies’ efforts and impacts on climate change and human rights, ethics and compliance with law, diversity and the role of companies’ board of directors in supervising various sustainability issues.

ESG goals and values are embedded in our core mission and vision, and we consider their potential impact on the sustainability of our business over time and the potential impact of our business on society. However, in light of investors’ increased focus on ESG matters, there can be no certainty that we will manage such issues successfully, or that we will successfully meet society’s expectations as to our proper role. This could lead to risk of litigation or reputational damage relating to our ESG policies or performance.

Further, possible actions to address ESG issues may not maximize short-term financial results and may yield financial results that conflict with the market’s expectations. We have and may in the future make business decisions that may reduce our short-term financial results if we believe that the decisions are consistent with our ESG goals, which we believe will improve our financial results over the long-term. These decisions may not be consistent with the short-term expectations of our stockholders and may not produce the long-term benefits that we expect, in which case our business, financial condition, and operating results could be harmed.

The markets for SGE’s products and services are highly competitive and if market share is lost, we may be unable to lower our cost structure quickly enough to offset the loss of revenue.

The domestic and international markets for SGE’s product lines are highly competitive, evolving and subject to rapid technological and other changes. We expect the intensity of competition in each of these areas to continue in the future for a number of reasons including:

In addition, we face competition for consumer attention from other forms of entertainment, including streaming services and other forms of entertainment that may impact the cinema industry. The other forms of entertainment may be more attractive to consumers than those utilizing our technologies, which could harm our business, prospects and operating results.

For these and other reasons, we must continue to enhance our technologies and our existing products and services, and introduce new, high-quality technologies and products and services to meet the wide variety of competitive pressures that we face. If we are unable to compete successfully, our business, prospects and results of operations will be materially adversely impacted.

SGE depends in part on distributors, dealers and resellers to sell and market our products and services, and our failure to maintain and further develop our sales channels could harm our business.

In addition to our in-house sales force, we sell some of our products and services through distributors, dealers and resellers. As we do not have long-term contracts and these agreements may be cancelled at any time, any changes to our current mix of distributors could adversely affect our gross margin and could negatively affect both our brand image and our reputation. If our distributors, dealers and resellers are not successful in selling our products, our revenue would decrease. In addition, our success in expanding and entering into new markets internationally will depend on our ability to establish relationships with new distributors. If we do not maintain our relationship with existing distributors or develop relationships with new distributors, dealers and resellers our ability to grow our business and sell our products and services could be adversely affected and our business may be harmed.

If SGE is unable to maintain its brand and reputation, our business, results of operations and prospects could be materially harmed.

SGE’s business, results of operations and prospects depend, in part, on maintaining and strengthening our brand and reputation for providing high quality products and services. Reputational value is based in large part on perceptions. Although reputations may take decades to build, any negative incidents can quickly erode trust and confidence, particularly if they result in adverse publicity, governmental investigations or litigation. If problems with our products cause operational disruption or other difficulties, or there are delays or other issues with the delivery of our products or services, our brand and reputation could be diminished. Damage to our reputation could also arise from actual or perceived legal violations, product safety issues, data security breaches, actual or perceived poor employee relations, actual or perceived poor service, actual or perceived poor privacy practices, operational or sustainability issues, actual or perceived ethical issues or other events within or outside of our control that generate negative publicity with respect to us. Any event that has the potential to negatively impact our reputation could lead to lost sales, loss of new opportunities and retention and recruiting difficulties. If we fail to promote and maintain our brand and reputation successfully, our business, results of operations and prospects could be materially harmed.

SGE’s operating margins may decline as a result of increasing product costs.

SGE’s business is subject to pressure on pricing and costs caused by many factors, including supply chain disruption, intense competition, the cost of components used in our products, labor costs, constrained sourcing capacity, inflationary pressure, pressure from customers to reduce the prices we charge for our products and services, and changes in consumer demand. . Factors including global supply chain disruptions have resulted in shortages in labor, materials and services. Such shortages have resulted in cost increases, particularly for labor, and could continue to increase. Costs for the raw materials used to manufacture our products are affected by, among other things, energy prices, demand, fluctuations in commodity prices and currency, shipping costs and other factors that are generally unpredictable and beyond our control such as the escalating military conflict between Russia and Ukraine. Increases in the cost of raw materials used to manufacture our products or in the cost of labor and other costs of doing business internationally could have an adverse effect on, among other things, the cost of our products, gross margins, operating results, financial condition, and cash flows.

SGE’s sales cycle can be long and timing of orders and shipments unpredictable, particularly with respect to large enterprises, which could harm our business and operating results.

The timing of SGE’s sales is difficult to predict, and customers typically order screen and other distribution products with limited advance notice which impacts our ability to forecast revenue and manage operations. For our managed service offerings, the sales cycle can be long and involve educating and achieving buy-in from multiple parts of a customer organization. As a result, the length and variable nature of customer ordering patterns and timing could materially adversely impact our business and results of operations.

SGE is substantially dependent upon significant customers who could cease purchasing our products at any time.

SGE’s top ten customers accounted for approximately 50% of consolidated products and services revenues during the three months ended March 31, 2024. Trade accounts receivable from these customers represented approximately 56% of net consolidated receivables at March 31, 2024. One of SGE’s customers accounted for more than 10% of both its consolidated net revenues during the three months ended March 31, 2024 and its net consolidated receivables as of March 31, 2024. While SGE believes its relationships with such customers are stable, most arrangements are made by purchase order and are terminable at will by either party. A significant decrease or interruption in business from the Company’s significant customers could have a material adverse effect on business, financial condition and results of operations. SGE could also be adversely affected by such factors as changes in foreign currency rates and weak economic and political conditions in each of the countries in which SGE sells its products and offers its services.

SGE is exiting the content business which could result in additional costs.

We have discontinued our content business to improve the Company’s focus resources on its core businesses, reduce general and administrative costs, and improve financial performance. While the Company may receive proceeds from the disposition of certain parts of the content business, it may also not realize the expected benefits and may incur additional costs and liabilities associated with the exit activities that could negatively impact the Company. We are involved in a dispute regarding one of the projects in the content business and may incur significant legal and other costs in the future as we exit the business.

SGE’s revenues and results of operations may fluctuate significantly from period to period.

Our revenues and results of operations can vary based on the timing of shipments of our cinema products particularly with regard to the timing of cinema screen shipments and timing of customer orders and shipments of projection equipment. Those fluctuations could increase on a quarter-to-quarter basis may cause our revenue and earnings results to fluctuate significantly from period to period, and the results of any one period may not be indicative of the results for any future periods.

Government agencies in Canada have notified Strong/MDI that certain modifications are required to be made to the Joliette Plant in order to meet safety and emissions standards.

SGE’ Strong/MDI division has been informed by certain government agencies in Canada, including but not limited to, the Joliette Fire Department, and the Quebec Ministry of the Environment, that certain aspects of the Joliette Plant must be modified to fully comply with safety and emissions standards. Strong/MDI has implemented changes to address some, but not all, of the identified requirements.

The required modifications include installing new air evaluator and exhaust chimneys as well as modifying the walls and doors in the paint and coatings area to achieve a 2-hour fire resistance standard. In addition, it was required that we modify certain mezzanine areas to reduce their size and upgrade construction to non-combustible materials, add an additional exterior access, and purchase spill resistant pallets. If we fail to address the requirements, it could be possible that we could incur penalties or production could be interrupted. The expansion could cost more or take longer than our expectations and could result in production disruptions in the facility during the construction process.

SGE’s business is subject to the economic and political risks of selling products in foreign countries.

SGE expects that international sales will continue to be important to our business for the foreseeable future. Foreign sales are subject to general political and economic risks, including the adverse impact of changes to international trade and tariff policies, including in the U.S. and China, which have created uncertainty regarding international trade, unanticipated or unfavorable circumstances arising from host country laws or regulations, unfavorable changes in U.S. policies on international trade and investment, the imposition of governmental economic sanctions on countries in which we do business, quotas, capital controls or other trade barriers, whether adopted by individual governments or addressed by regional trade blocks, threats of war, terrorism or governmental instability, currency controls, fluctuating exchange rates with respect to sales not denominated in U.S. dollars, changes in import/export regulations, tariffs and freight rates, potential negative consequences from changes to taxation policies, restrictions on the transfer of funds into or out of a country and the disruption of operations from labor, political and other disturbances, such as the impact of the coronavirus and other public health epidemics or pandemics. Government policies on international trade and investment can affect the demand for our products, impact the competitive position of our products or prevent us from being able to sell or manufacture products in certain countries. The implementation of more restrictive trade policies, such as higher tariffs or new barriers to entry, in countries in which we sell large quantities of products and services could negatively impact our business, financial condition and results of operations. For example, a government’s adoption of “buy national” policies or retaliation by another government against such policies could have a negative impact on our results of operations. If we were unable to navigate the foreign regulatory environment, or if we were unable to enforce our contractual rights in foreign countries, our business could be adversely impacted. Any of these events could reduce our sales, limit the prices at which we can sell our products, interrupt our supply chain or otherwise have an adverse effect on our operating performance.

To the extent that orders are denominated in foreign currencies, our reported sales and earnings are subject to foreign exchange fluctuations. In addition, there can be no assurance that our remaining international customers will continue to accept orders denominated in U.S. dollars. For those sales which are denominated in U.S. dollars, a weakening in the value of foreign currencies relative to the U.S. dollar could have a material adverse impact on us by increasing the effective price of our products in international markets. Certain areas of the world are also more cost conscious than the U.S. market and there are instances where our products are priced higher than local manufacturers. We are also exposed to foreign currency fluctuations between the Canadian and U.S. dollar due to our screen manufacturing facility in Canada where a majority of its sales are denominated in the U.S. dollar while its expenses are denominated in Canadian currency. We cannot predict the effects of exchange rate fluctuations upon our future operating results because of the number of currencies involved, the variability of currency exposures and the potential volatility of currency exchange rates.

Any of these factors could adversely affect our foreign activities and our business, financial condition and results of operations.

The risk of non-compliance with U.S. and foreign laws and regulations applicable to our international operations could have a significant impact on our financial condition, results of operations and strategic objectives.

SGE’s global operations subject us to regulation by U.S. federal and state laws and multiple foreign laws, regulations and policies, which could result in conflicting legal requirements. These laws and regulations are complex, change frequently, have tended to become more stringent over time and increase our cost of doing business. These laws and regulations include import and export control, environmental, health and safety regulations, data privacy requirements, international labor laws and work councils and anti-corruption and bribery laws such as the U.S. Foreign Corrupt Practices Act, the U.N. Convention Against Bribery and local laws prohibiting corrupt payments to government officials. We are subject to the risk that we, our employees, our affiliated entities, contractors, agents or their respective officers, directors, employees and agents may take action determined to be in violation of any of these laws. An actual or alleged violation could result in substantial fines, sanctions, civil or criminal penalties, debarment from government contracts, curtailment of operations in certain jurisdictions, competitive or reputational harm, litigation or regulatory action and other consequences that might adversely affect our financial condition, results of operations and strategic objectives.

In addition, SGE is subject to Canadian and foreign anti-corruption laws and regulations such as the Canadian Corruption of Foreign Public Officials Act. In general, these laws prohibit a company and its employees and intermediaries from bribing or making other prohibited payments to foreign officials or other persons to obtain or retain business or gain some other business advantage. We cannot predict the nature, scope or effect of future regulatory requirements to which our operations might be subject or the manner in which existing laws might be administered or interpreted. Failure by us or our predecessors to comply with the applicable legislation and other similar foreign laws could expose us and our senior management to civil and/or criminal penalties, other sanctions and remedial measures, legal expenses and reputational damage, all of which could materially and adversely affect our business, financial condition and results of operations. Likewise, any investigation of any alleged violations of the applicable anti-corruption legislation by Canadian or foreign authorities could also have an adverse impact on our business, financial condition and results of operations.

A reversal of the U.S. economic recovery and a return to volatile or recessionary conditions in the United States or abroad could adversely affect SGE’s business or our access to capital markets in a material manner.

Worsening economic and market conditions, downside shocks, or a return to recessionary economic conditions could serve to reduce demand for our products and adversely affect our operating results. These economic conditions may also impact the financial condition of one or more of our key suppliers, which could affect our ability to secure product to meet our customers’ demand. In addition, a downturn in the cinema market could impact the valuation and collectability of certain receivables held by us. Our results of operations and the implementation of our business strategy could be adversely affected by general conditions in the global economy, including financial and economic conditions that are outside of our control, including those resulting from supply chain delays or interruptions, labor shortages, wage pressures, rising inflation, geopolitical events, or interruptions and other force majeure events, such as the COVID-19 pandemic. The most recent global financial crisis caused by COVID-19 resulted in extreme volatility and disruptions in the capital and credit markets. A severe or prolonged economic downturn could result in a variety of risks to our business and could have a material adverse effect on us. We could also be adversely affected by such factors as changes in foreign currency rates and weak economic and political conditions in each of the countries in which we sell our products.

SGE relies extensively on our information technology systems and are vulnerable to damage and interruption.

We rely on our information technology systems and infrastructure to process transactions, summarize results and manage our business, including maintaining client and supplier information. Additionally, we utilize third parties, including cloud providers, to store, transfer and process data. From time to time, we experience cyber-attacks on our information technology systems. Our information technology systems, as well as the systems of our customers, suppliers and other partners, whose systems we do not control, are vulnerable to outages and an increasing risk of continually evolving deliberate intrusions to gain access to company sensitive information. Likewise, data security incidents and breaches by employees and others with or without permitted access to our systems pose a risk that sensitive data may be exposed to unauthorized persons or to the public. A cyber-attack or other significant disruption involving our information technology systems, or those of our customers, suppliers and other partners, could also result in disruptions in critical systems, corruption or loss of data and theft of data, funds or intellectual property. We may be unable to prevent outages or security breaches in our systems. We remain potentially vulnerable to additional known or yet unknown threats as, in some instances, we, our suppliers and our other partners may be unaware of an incident or its magnitude and effects. We also face the risk that we expose our customers or partners to cybersecurity attacks. Any or all of the foregoing could adversely affect our results of operations and cash flows, as well as our business reputation.

Any failure to maintain the security of information relating to our customers, employees and suppliers, whether as a result of cybersecurity attacks or otherwise, could expose us to litigation, government enforcement actions and costly response measures, and could disrupt our operations and adversely affect our business and reputation.

In connection with the sales and marketing of our products and services, we may from time to time transmit confidential information. We also have access to, collect or maintain private or confidential information regarding our customers, employees, and suppliers, as well as our business. We face risks associated with security breaches, whether through cyber-attacks or cyber intrusions over the internet, malware, computer viruses, attachments to e-mails, persons inside our organization or persons with access to systems inside our organization, and other significant disruptions of our information technology networks and related systems. These risks include operational interruption, private data exposure and damage to our relationship with our customers, among others. Cyber-attacks are rapidly evolving and becoming increasingly sophisticated. It is possible that computer hackers and others might compromise our security measures, or the security measures of those parties that we do business with now or in the future, and obtain the personal information of our customers, employees and suppliers or our business information. A security breach of any kind, including physical or electronic break-ins, computer viruses and attacks by hackers, employees or others, could expose us to risks of data loss, litigation, government enforcement actions, regulatory penalties and costly response measures, and could seriously disrupt our operations. Any resulting negative publicity could significantly harm our reputation, which could cause us to lose market share and have an adverse effect on our results of operations.

The words “we”, “us”, “our” or “the Company” refers to FG when used in the Risk Relating to FG Operating Business section below.

FG’s capital allocation strategy may not be successful, which could adversely impact our financial condition.

We intend to continue investing part of our cash balances in public and private companies and may engage in mergers, acquisitions and divestitures. We intend our holdings in public companies to be made in circumstances where we believe that we will be able to exercise some degree of influence or control. We may also continue to invest in private companies or other areas, including acquisitions of businesses. These types of holdings are riskier than holding our cash balances as bank deposits or, for example, conservative options such as treasury bonds or money market funds. There can be no assurance that we will be able to maintain or enhance the value or the performance of the companies in which we have invested or may invest in the future, or that we will achieve returns or benefits from these holdings. Under certain circumstances, significant declines in the fair values of these holdings may require the recognition of other-than-temporary impairment losses. We may lose all or part of our holdings relating to such companies if their value decreases as a result of their financial performance or for any other reason. If our interests differ from those of other investors in companies over which we do not have control, we may be unable to effect any change at those companies. We are not required to meet any diversification standards, and our holdings may continue to remain concentrated. In addition, we may seek to sell some or all of our existing businesses as part of our holding company strategy.

If our capital allocation strategy is not successful or we achieve less than expected returns from these holdings, it could have a material adverse effect on us. The Board of Directors may also change our capital allocation strategy at any time, and such changes could further increase our exposure, which could adversely impact us.

Any potential future acquisitions, strategic investments, entry into new lines of business, divestitures, mergers or joint ventures may subject us to significant risks, any of which could harm our business.

Our long-term strategy may include identifying and acquiring, investing in or merging with suitable candidates on acceptable terms, entry into new lines of business and markets or divesting of certain business lines or activities. In particular, over time, we may acquire, make investments in or merge with providers of product offerings that complement our business or may terminate such activities. Mergers, acquisitions, divestitures and entries into new lines of business include a number of risks and present financial, managerial and operational challenges, including but not limited to:

Any acquired business, technology, service or product, or entry into a new line of business could significantly under-perform relative to our expectations, and may not achieve the benefits we expect. For all these reasons, our pursuit of an acquisition, investment, new line of business, divestiture, merger or joint venture could cause our actual results to differ materially from those anticipated.

Failure to effectively utilize or successfully assert intellectual property rights could negatively impact us.

We own or otherwise have rights to various trademarks and trade names used in conjunction with the sale of our products, the most significant of which is Strong®. We rely on trademark laws to protect these intellectual property rights. We cannot assure that these intellectual property rights will be effectively utilized or, if necessary, successfully asserted. There is a risk that we will not be able to obtain and perfect our own intellectual property rights, or, where appropriate, license from others, intellectual property rights necessary to support new product introductions. Our intellectual property rights, and any additional rights we may obtain in the future, may be invalidated, circumvented or challenged in the future. Our failure to perfect or successfully assert intellectual property rights could harm our competitive position and could negatively impact us.

Natural disasters and other catastrophic events beyond our control could adversely affect our business operations and financial performance.

The occurrence of one or more natural disasters, such as fires, hurricanes, tornados, tsunamis, floods and earthquakes, geo-political events, such as civil unrest in a country in which our suppliers are located or terrorist or military activities disrupting transportation, communication or utility systems, or other highly disruptive events, such as nuclear accidents, public health epidemics or pandemics, such as the COVID-19 pandemic, unusual weather conditions or cyber-attacks, could adversely affect our operations and financial performance. In the event of a major disruption caused by the occurrence of any of the aforementioned events, we may lose the services of our employees or experience system interruptions, which could lead to diminishment of our business operations. Such events could result, among other things, in operational disruptions, physical damage to or destruction or disruption of one or more of our properties or properties used by third parties in connection with the supply of products or services to us, the lack of an adequate workforce in parts or all of our operations and communications and transportation disruptions. We cannot anticipate all the ways in which the current global health crisis and financial market conditions could adversely impact our business. These factors could also cause consumer confidence and spending to decrease or result in increased volatility in the United States and global financial markets and economy. Such occurrences could have a material adverse effect on us and could also have indirect consequences such as increases in the costs of insurance if they result in significant loss of property or other insurable damage.

The insurance that we maintain may not fully cover all potential exposures.

We maintain property, business interruption and casualty insurance but such insurance may not cover all risks associated with the hazards of our business and is subject to limitations, including deductibles and maximum liabilities covered. We are potentially at risk if one or more of our insurance carriers fail. Additionally, severe disruptions in the domestic and global financial markets could adversely impact the ratings and survival of some insurers. In the future, we may not be able to obtain coverage at current levels, and our premiums may increase significantly on coverage that we maintain.

FG has had limited operations upon which to predict our future performance, since the sale of our former insurance business.

At the end of 2019, FG sold its former insurance business, and began to transition to operate as a reinsurance, merchant banking and asset management holding company. Accordingly, our historical financial statements provide little basis upon which to predict our future performance. Our revenue has been reduced, as we have limited assets with which to generate revenue. Our failure to secure additional sources of revenue may have a material impact on our results of operations and financial condition. In addition, the uncertainty surrounding our future operations and business prospects may negatively impact the value and liquidity of our stock. If we are unable to implement our business plans successfully, our financial condition and results of operations will be impaired, and your investment in our Company will be at risk.

FG does not have an operating history or established reputation in the reinsurance industry, and our lack of an established operating history and reputation may make it difficult for us to attract or retain business.

FG provides property and casualty reinsurance through FGRe. We do not have a prolonged operating history on which we can base an estimate of our future earnings prospects. We also do not have an established reputation in the reinsurance industry. Reputation is a very important factor in the reinsurance industry, and competition for business is, in part, based on reputation. Although we expect that our reinsurance policies will be fully collateralized, we are a relatively newly formed reinsurance company and do not yet have a well-established reputation in the industry. Our lack of an established reputation may make it difficult for us to attract or retain business. We will compete with major reinsurers, all of which have substantially greater financial marketing and management resources than we do, which may make it difficult for us to effectively market our products or offer our products at a profit. In addition, we do not have or currently intend to obtain financial strength ratings, which may discourage certain counterparties from entering into reinsurance contracts with us.

As a reinsurer, we will depend on our cedents’ evaluations of the risks associated with their insurance underwriting, which may subject us to reinsurance losses.

In the proportional reinsurance business, in which we will assume an agreed percentage of each underlying insurance contract being reinsured, or quota-share contracts, we do not plan to separately evaluate each of the original individual risks assumed under these reinsurance contracts. We will therefore be largely dependent on the original underwriting decisions made by ceding companies, which will subject us to the risk that the cedents may not have adequately evaluated the insured risks and that the premiums ceded may not adequately compensate us for the risks we assume. We also do not plan to separately evaluate each of the individual claims made on the underlying insurance contracts under quota-share arrangements, in which case we will be dependent on the original claims decisions made by our cedents.

The involvement of reinsurance brokers may subject us to their credit risk.

As a standard practice of the reinsurance industry, reinsurers frequently pay amounts owed on claims under their policies to reinsurance brokers, and these brokers, in turn, remit these amounts to the ceding companies that have reinsured a portion of their liabilities with the reinsurer. In some jurisdictions, if a broker fails to make such a payment, the reinsurer might remain liable to the cedent for the deficiency notwithstanding the broker’s obligation to make such payment. Conversely, in certain jurisdictions, when the cedent pays premiums for policies to reinsurance brokers for payment to the reinsurer, these premiums are considered to have been paid and the cedent will no longer be liable to the reinsurer for these premiums, whether or not the reinsurer has actually received them from the broker. Consequently, as a reinsurer, we expect to assume a degree of credit risk associated with the brokers that we intend to do business with.

We may not be successful in carrying out our asset management strategy, and the fair value of our investments will be subject to a loss in value.

Through our SPAC sponsorships, we may be subject to lock-up agreements, and our ability to access the capital used to sponsor SPACs may be limited for a defined period, which may increase a risk of loss of all or a significant portion of value. Our investments may also become concentrated. A significant decline in the values of these investments may produce a large decrease in our consolidated shareholders’ equity and can have a material adverse effect on our consolidated book value per share and earnings.

The insurance and reinsurance businesses are highly competitive, and we may not be able to compete successfully in those industries.

The reinsurance business, in which we participate, and the insurance business that we plan to enter are highly competitive. We compete and will compete with major U.S. and non-U.S. reinsurers and insurers, many of which have greater financial, marketing and management resources than we do. There has been significant consolidation in the insurance and reinsurance sector in recent years, and we may experience increased competition as a result of that consolidation, with consolidated entities having enhanced market power. These consolidated entities may use their enhanced market power and broader capital base to negotiate price reductions for products and services that compete with ours, and we may experience rate declines and possibly write less business. Any failure by us to effectively compete could adversely affect our financial condition and results of operations.

The insurance and reinsurance industries are highly cyclical, and we may at times experience periods characterized by excess underwriting capacity and unfavorable premium rates.

Historically, insurers and reinsurers have experienced significant fluctuations in operating results due to competition, frequency of occurrence or severity of catastrophic events, levels of capacity, general economic conditions, changes in equity, debt and other investment markets, changes in legislation, case law and prevailing concepts of liability, and other factors. Demand for reinsurance is influenced significantly by the underwriting results of primary insurers and prevailing general economic conditions. The supply of insurance and reinsurance is related to prevailing prices and levels of surplus capacity that, in turn, may fluctuate in response to changes in rates of return on both underwriting and investment sides. As a result, the insurance and reinsurance businesses historically have been cyclical, characterized by periods of intense price competition, due to excessive underwriting capacity, as well as periods when shortages of capacity permitted favorable premium levels and changes in terms and conditions. Until recently, the supply of insurance and reinsurance had increased over the past several years, and may again in the future, either as a result of capital provided by new entrants or by the commitment of additional capital by existing insurers or reinsurers. Continued increases in the supply of insurance and reinsurance may have consequences for us, including fewer contracts written, lower premium rates, increased expenses for customer acquisition and retention, and less favorable policy terms and conditions.

Climate change, as well as increasing regulation in the area of climate change, may adversely affect our insurance and reinsurance business, financial condition and results of operations.

Changing weather patterns and climatic conditions, such as global warming, may have added to the unpredictability and frequency of natural disasters in certain parts of the world and created additional uncertainty as to future trends and exposures. Although the loss experience of catastrophe insurers and reinsurers has historically been characterized as low frequency, there is a growing concern today that climate change increases the frequency and severity of extreme weather events, and, in recent years, the frequency of major catastrophes appears to have resumed historical levels or increased and may continue to increase in the future.

Claims for catastrophic events, or an unusual frequency of smaller losses in a particular period, could expose us to large losses, cause substantial volatility in our results of operations and could have a material adverse effect on our ability to write new business if we are not able to adequately assess and reserve for the increased frequency and severity of catastrophes resulting from these environmental factors. Additionally, catastrophic events could result in declines in the value of investments we hold and significant disruptions to our physical infrastructure, systems, and operations. Climate change-related risks may also specifically adversely impact the value of the securities that we hold.

Changes in security asset prices may impact the value of our investments, resulting in realized or unrealized losses on our invested assets. These risks are not limited to but can include: (i) changes in supply/demand characteristics for fossil fuels (e.g., coal, oil, natural gas); (ii) advances in low-carbon technology and renewable energy development; and (iii) effects of extreme weather events on the physical and operational exposure of industries and issuers, and the transition that these companies make towards addressing climate risk in their own businesses.

We cannot predict how legal, regulatory and/or social responses to concerns around global climate change may impact our business. There can be no assurance that our reinsurance coverage and other measures taken will be sufficient to mitigate losses resulting from one or more catastrophic events. As a result, the occurrence of one or more catastrophic events and the continuation and worsening of recent trends could have an adverse effect on our results of operations and financial condition.

We are also subject to complex and changing laws, regulation and public policy debates relating to climate change which are difficult to predict and quantify and may have an adverse impact on our business. Changes in regulations relating to climate change or our own leadership decisions implemented as a result of assessing the impact of climate change on our business may result in an increase in the cost of doing business or a decrease in premiums in certain lines of business.

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 experience and loss development patterns to assist in the establishment of loss reserves. Most or all of these factors are not directly quantifiable, particularly on a prospective basis, and the effects of these and unforeseen factors could negatively impact our ability to accurately assess the risks of the policies that we write. Changes in the assumptions used by these models or by management could lead to an increase in our estimate of ultimate losses in the future. In addition, there may be significant reporting lags between the occurrence of the insured event and the time it is reported to the insurer and additional lags between the time of reporting and final settlement of claims. In addition, the estimation of loss reserves is more difficult during times of adverse economic and market conditions due to unexpected changes in behavior of claimants and policyholders, including an increase in fraudulent reporting of exposures and/or losses, reduced maintenance of insured properties or increased frequency of small claims. Changes in the level of inflation also result in an increased level of uncertainty in our estimation of loss reserves. As a result, actual losses and loss adjustment expenses paid can deviate, perhaps substantially, from the reserve estimates reflected in our financial statements.

If our loss reserves are determined to be inadequate, we will be required to increase loss reserves at the time of such determination with a corresponding reduction in our net income in the period when the deficiency becomes known. It is possible that claims in respect of events that have occurred could exceed our claim reserves and have a material adverse effect on our results of operations, in a particular period, or our financial condition in general. As a compounding factor, although most insurance contracts have policy limits, the nature of property and casualty insurance and reinsurance is such that losses and the associated expenses can exceed policy limits for a variety of reasons and could significantly exceed the premiums received on the underlying policies, thereby further adversely affecting our financial condition.

FG’s results of operations will fluctuate from period to period and may not be indicative of our long-term prospects.

We anticipate that the performance of our reinsurance operations and our investment portfolio will fluctuate from period to period. In addition, because we plan to underwrite products and make investments to achieve favorable return on equity over the long-term, our short-term results of operations may not be indicative of our long-term prospects. Our results of operations may also be adversely impacted by general economic conditions and the conditions and outlook of the reinsurance markets and capital markets.

Changes in the value of the equity holdings FG directly owns, or indirectly owns through our ownership of equity method investees, could materially affect our income and increase the volatility of our earnings.

As of March 31, 2024, our consolidated balance sheet includes approximately $49 million related to equity holdings held directly by us or indirectly through equity method investees. Changes in the value of any of the investments could significantly impact our reported results and shareholders’ equity.

Adverse developments in the financial markets could have a material adverse effect on FG’s results of operations, financial position and our businesses, and may also limit our access to capital.

Adverse developments in the financial markets, such as disruptions, uncertainty or volatility in the capital and credit markets, may result in realized and unrealized capital losses that could have a material adverse effect on our results of operations, financial position and our businesses, and may also limit our access to capital required to operate our business. Depending on market conditions, we could incur additional realized and unrealized losses on our investment portfolio in future periods, which could have a material adverse effect on our results of operations, financial condition and business. Economic conditions could also have a material impact on the frequency and severity of claims and therefore could negatively impact our underwriting returns. The volatility in the financial markets could continue to significantly affect our investment returns, reported results, and shareholders’ equity.

The capital requirements of our businesses depend on many factors, including regulatory requirements, the performance of our investment portfolio, our ability to write new business successfully, the frequency and severity of catastrophe events and our ability to establish premium rates and reserves at levels sufficient to cover losses.

FG’s investments in special purpose acquisition companies as well as the sponsors of special purpose acquisition companies involve a high degree of risk.

We have invested in IPOs of special purpose acquisition companies, including SPACs that are sponsored by our affiliates. In general, a SPAC is a special purpose vehicle that is 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. SPACs are required to either consummate a business combination or liquidate within a set period of time following their 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 the 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 acquired equity interests in and expect to acquire additional interests in various sponsors of SPACs (“Sponsor”). By investing in a Sponsor, we have provided at-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 and warrants in the SPAC. 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 an investment directly in a SPAC’s IPO 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.

As the number of SPACs evaluating targets increases, attractive targets may become more scarce, and there may be increased competition for attractive targets. This could increase the cost of an initial business combination and it could even result in an inability to find a target or to consummate an initial business combination.

In recent years, the number of SPACs that have been formed has increased substantially. Many potential targets for special purpose acquisition companies have already entered into an initial business combination. As a result, at times, fewer attractive targets may be available to consummate an initial business combination.

In addition, because there are more SPACs seeking to enter into an initial business combination with available targets, the competition for available targets with attractive fundamentals or business models may increase, which could cause target companies to demand improved financial terms. Attractive deals could also become more scarce for other reasons, such as economic or industry sector downturns, geopolitical tensions, or increases in the cost of additional capital needed to close business combinations or operate targets post-business combination. Together, this could increase the cost of, delay or otherwise complicate or frustrate the ability of a SPAC to find and consummate an initial business combination and may result in an inability to consummate an initial business combination on terms favorable to investors altogether.

Furthermore, the strength of the market for SPAC IPOs has fluctuated substantially from year to year and has experienced cycles of relative strength and weakness. There can be no assurance that the SPAC market will be strong in the future.

FG’s failure to obtain or maintain approval of insurance regulators and other regulatory authorities as required for the operations of our reinsurance subsidiary may have a material adverse effect on our future business, financial condition, results of operations and prospects.

FGRe, FG’s reinsurance subsidiary, has a Class B (iii) insurer license in accordance with the terms of The Insurance Law, 2010 and is subject to regulation by the Cayman Islands Monetary Authority. Failure to comply with the laws, regulations and requirements applicable to a Cayman Islands-domiciled reinsurance subsidiary could result in consequences which may have a material adverse effect on our business and results of operations. Our future business plans may also require advance approval of our insurance operations. Failure to receive or maintain the licenses necessary to execute on our strategy or receive necessary approvals may have a material adverse effect on our future business.

FG is subject to the risk of becoming an investment company under the Investment Company Act.

We are subject to the risk of inadvertently becoming an investment company, which would require us to register under the Investment Company Act of 1940, as amended (the “Investment Company Act”). Registered investment companies are subject to extensive, restrictive and potentially adverse regulations relating to, among other things, operating methods, management, capital structure, dividends and transactions with affiliates. Registered investment companies are not permitted to operate their business in the manner in which we currently operate and plan to operate our business in the future.

We plan to monitor the value of our investments and structure our operations and transactions to qualify for exemptions under the Investment Company Act. Accordingly, we may structure transactions in manners less advantageous than if we did not have Investment Company Act concerns, or we may avoid otherwise economically desirable transactions due to those concerns. In addition, adverse developments with respect to our ownership of our operating subsidiaries, including significant appreciation or depreciation in the market value of certain of our publicly traded holdings, could result in our inadvertently becoming an investment company. If it were established that we were an investment company, there would be a risk, among other material adverse consequences, that we could become subject to monetary penalties or injunctive relief, or both, in an action brought by the SEC, that we would be unable to enforce contracts with third parties, or that third parties could seek to obtain rescission of transactions with us undertaken during the period it was established that we were an unregistered investment company.

FG has a limited operating history as a publicly traded company. Our inexperience as a public company and the requirements of being a public company may strain our resources, divert management’s attention, affect our ability to attract and retain qualified board members and have a material adverse effect on us and our stockholders.

We have a limited operating history as a publicly traded company. As a publicly traded company, we are required to develop and implement substantial control systems, policies and procedures to satisfy our periodic SEC reporting and Nasdaq obligations. Management’s previous experience may not be sufficient to successfully develop and implement these systems, policies and procedures and to operate our Company. Failure to do so could jeopardize our status as a public company, and the loss of such status may have a material adverse effect on us and our stockholders.

In addition, as a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Act, and Nasdaq rules, including those promulgated in response to the Sarbanes-Oxley Act. The requirements of these rules and regulations increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and increase demand on our systems and resources. The Exchange Act requires, among other things, that we file annual, quarterly and current reports with respect to our business and financial condition. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal controls for financial reporting. To maintain and improve the effectiveness of our disclosure controls and procedures, we need to continually commit significant resources, maintain staff and provide additional management oversight. In addition, implementing our business strategy and sustaining our growth will require us to commit additional management, operational and financial resources to identify new professionals to join our organization and to maintain appropriate operational and financial systems to adequately support expansion. These activities may divert management’s attention from other business concerns, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

As a public company, we incur significant annual expenses related to these steps associated with, among other things, director fees, reporting requirements, transfer agent fees, accounting, administrative personnel, auditing and legal fees and similar expenses. We also incur higher costs for director and officer liability insurance and other insurance coverages. Any of these factors make it more difficult for us to attract and retain qualified members of our Board of Directors. Finally, we expect to incur additional costs once we lose smaller reporting company status or are required to provide an auditor attestation report on the effectiveness of our internal control over financial reporting.

If FG fails to establish and maintain an effective system of integrated internal controls, we may not be able to report our financial results accurately, which could have a material adverse effect on our business, financial condition and results of operations.

Ensuring that we have adequate internal financial and accounting controls and procedures in place so that we can produce accurate financial statements on a timely basis is a costly and time-consuming effort that we will need to evaluate frequently. Section 404 of the Sarbanes-Oxley Act requires public companies to conduct an annual review and evaluation of their internal controls and attestations of the effectiveness of internal controls by independent auditors. We currently qualify as a smaller reporting company under the regulations of the SEC. As a smaller reporting company, we are exempt from the requirement to include the auditor’s report of the effectiveness of internal control over financial reporting until such time as we no longer qualify as a smaller reporting company, based on our public float and reporting more than $100 million in annual revenues in a fiscal year. Regardless of our qualification status, we have implemented control systems and procedures to satisfy the reporting requirements under the Exchange Act and applicable requirements of Nasdaq, among other items. Maintaining these internal controls is costly and may divert management’s attention.

Our evaluation of our internal controls over financial reporting may identify material weaknesses that may cause us to be unable to report our financial information on a timely basis and thereby subject us to adverse regulatory consequences, including sanctions by the SEC, or violations of Nasdaq’s listing rules. There also could be a negative reaction in the financial markets due to a loss of investor confidence in us and the reliability of our financial statements. Confidence in the reliability of our financial statements also could suffer if we or our independent registered public accounting firm were to report a material weakness in our internal controls over financial reporting. This may have a material adverse effect on our business, financial condition and results of operations and could also lead to a decline in the price of our common stock.

While FG currently qualifies as a smaller reporting company under SEC regulations, we cannot be certain, if we take advantage of the reduced disclosure requirements applicable to these companies, that we will not make our stock less attractive to investors. Once we lose smaller reporting company status, the costs and demands placed upon our management are expected to increase.

The SEC’s rules exempt smaller reporting companies, like us, from various reporting requirements applicable to public companies that are not smaller reporting companies. So long as we qualify as a smaller reporting company, based on our public float, and report less than $100 million in annual revenues in a fiscal year, we are permitted, and we intend, to omit the auditor’s attestation on internal control over financial reporting that would otherwise be required by the Sarbanes-Oxley Act.

Until such time that we lose smaller reporting company status, it is unclear if investors will find our stock less attractive because we may rely on certain disclosure exemptions. If some investors find our stock less attractive as a result, there may be a less active trading market for the stock, and our stock price may be more volatile and could cause our stock price to decline. Even if we remain a smaller reporting company, if our public float exceeds $75 million and we report $100 million or more in annual revenues in a fiscal year, we will become subject to the provisions of Section 404(b) of the Sarbanes-Oxley Act, requiring our independent registered public accounting firm to provide an attestation report on the effectiveness of our internal control over financial reporting, making the public reporting process more costly.

Holders of FG’s outstanding shares of 8.00% Cumulative Preferred Stock, Series A, have dividend, liquidation and other rights that are senior to the rights of holders of our common shares.

As of March 31, 2024, we have issued and outstanding 894,580 shares of preferred stock designated as 8.00% Cumulative Preferred Stock, Series A, par value $25.00 per share (the “Series A Preferred Stock”). The aggregate liquidation preference with respect to the outstanding shares of Series A Preferred Stock is approximately $22.4 million, and annual dividends on the outstanding shares of Series A Preferred Stock are approximately $1.8 million. Holders of our Series A Preferred Stock are entitled to receive, when, as and if declared by our Board of Directors cumulative cash dividends from and including the original issue date at the rate of 8.00% of the $25.00 per share liquidation preference per annum (equivalent to $2.00 per annum per share). Upon our voluntary or involuntary liquidation, dissolution or winding up, before any payment is made to holders of our common shares, holders of these preferred shares are entitled to receive, for each share held, an amount equal to the $25.00 liquidation preference and unpaid dividends. This would reduce the remaining amount of our assets, if any, available to distribute to holders of our common shares.

Our Board of Directors has the authority to designate and issue additional preferred shares with liquidation, dividend and other rights that are senior to those of our common shares, similar or senior to the rights of the holders of our Series A Preferred Stock. Because our decision to issue additional securities will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of any future offerings. Thus, our stockholders bear the risk that future securities issuances might dilute their interests and reduce the market price of our stock.

FG may fail to satisfy the continued listing standards of Nasdaq, in which case our stock might be delisted.

Even though we currently satisfy the continued listing standards for Nasdaq and expect to continue to do so, we can provide no assurance that we will continue to satisfy the continued listing standards in the future. In the event that we are unable to satisfy the continued listing standards of Nasdaq, our stock may be delisted from that market. Any delisting of our stock from Nasdaq could:

In addition, delisting our stock could deter broker-dealers from making a market in or otherwise seeking or generating interest in our stock and might deter some institutions or others from investing in our securities at all. For these reasons and others, delisting could adversely affect the price of our stock and our business, financial condition and results of operations.

FG’s information technology systems may fail or suffer a loss of security which may have a material adverse effect on our business.

Our business is highly dependent upon the successful and uninterrupted functioning of our computer and data processing systems. Our operations are dependent upon our ability to process our business timely and efficiently and protect our information systems from physical loss or unauthorized access. In the event that our systems cannot be accessed due to a natural catastrophe, terrorist attack or power outage, or systems and telecommunications failures or outages, external attacks such as computer viruses, malware or cyber-attacks, or other disruptions occur, our ability to perform business operations on a timely basis could be significantly impaired and may cause our systems to be inaccessible for an extended period of time. A sustained business interruption or system failure could adversely impact our ability to perform necessary business operations in a timely manner, hurt our relationships with our business partners and customers and have a material adverse effect our financial condition and results of operations.

Our operations also depend on the reliable and secure processing, storage and transmission of confidential and other information in our computer systems and networks. From time to time, we may experience threats to our data and systems, including malware and computer virus attacks, unauthorized access, systems failures and disruptions. Computer viruses, hackers, phishing attacks, social engineering schemes, ransomware, employee misconduct and other external hazards could expose our data systems to security breaches, cyber-attacks or other disruptions. In addition, we routinely transmit and receive personal, confidential and proprietary information by electronic means. Our systems and networks may be subject to breaches or interference. Any such event may result in operational disruptions as well as unauthorized access to or the disclosure or loss of our proprietary information or our customers’ information or theft of funds and other monetary loss, which in turn may result in legal claims, regulatory scrutiny and liability, damage to our reputation, the incurrence of costs to eliminate or mitigate further exposure, the loss of customers or affiliated advisers or other damage to our business.

Fundamental Global GP, LLC and its affiliated entity control a substantial interest in us and thus may exert substantial influence on actions requiring a stockholder vote, potentially in a manner that you do not support.

As of March 31, 2024, Fundamental Global GP, LLC (“FGGP”) and its affiliated entities collectively beneficially owned approximately 28.3% of our common stock. Accordingly, they may exert a substantial influence on actions requiring a stockholder vote, including election of directors, potentially in a manner that you do not support. D. Kyle Cerminara, Chairman of our Board of Directors, serves as Chief Executive Officer, Co-Founder and Partner of FGGP. Due to his position as a member of our Board of Directions as well as his positions at FG, he has considerable influence on actions requiring a stockholder vote.

FG may be unable to attract and retain key personnel and management, which could adversely impact our ability to successfully implement and execute our business and growth strategy.

The successful implementation of our business and growth strategy depends in large part upon the ability and experience of members of our management and other personnel. Our performance will be dependent on our ability to identify, hire, train, motivate and retain qualified management and personnel with experience in the reinsurance industry, investment advisory services, and in real estate investments. We may not be able to attract and retain such personnel on acceptable terms, or at all. If we lose the service of qualified management or other personnel or are unable to attract and retain the necessary members of management or personnel, we may not be able to successfully execute on our business strategy, which could have an adverse effect on our business.

Some of FG’s directors and officers also serve as directors and/or executive officers for other public companies or for our controlling stockholders or their affiliates, which may lead to conflicting interests.

Our Chairman and CEO, D. Kyle Cerminara, serves as an executive officer of FGGP and its affiliated entity, which together, as of March 31, 2024, beneficially owned approximately 28.3% of our outstanding shares of common stock. Mr. Cerminara is also the Chairman of FG Acquisition Corp (TSX:FGAA.U). Scott D. Wollney, one of our directors, serves as an executive officer and director of Atlas Financial Holdings, Inc. (Nasdaq: AFH) (“Atlas”), a commercial automobile managing general agency. Our head of merchant banking, Larry Swets, serves as director of GreenFirst Forest Products Inc. (TSXV: GFP), and FG Acquisition Corp. (TSX: FGAA.U). He also serves as the Chief Executive Officer of FG Acquisition Corp. Our Chief Financial Officer, Mark D. Roberson, also serves as Director and Chief Executive Officer of SGE.

Our executive officers and members of our Company’s Board of Directors have fiduciary duties to our stockholders; likewise, persons who serve in similar capacities at the public companies have fiduciary duties to those companies’ investors. There may be potential conflicts of interest if our Company and one or more of these other companies pursue acquisitions, investments and other business opportunities that may be suitable for each of us. Our directors who find themselves in these multiple roles may, as a result, have conflicts of interest or the appearance of conflicts of interest with respect to matters involving or affecting more than one of the companies to which they owe fiduciary duties. Furthermore, our directors who find themselves in these multiple roles own stock options, shares of common stock and other securities in some of these entities. These ownership interests could create, or appear to create, potential conflicts of interest when the applicable individuals are faced with decisions that could have different implications for our Company and these other entities. From time to time, we may enter into transactions with or participate jointly in investments with those other entities or their affiliates. We may create new situations in the future in which our directors serve as directors or executive officers in future investment holdings of such entities.

FG’s executive officers and directors will allocate their time to our and other businesses in which they are involved, at their discretion, potentially to the detriment of FG.

Our executive officers and directors are not required to, and will not, commit their full time to our affairs, which may result in conflicts of interest in allocating their time between our operations and those other businesses in which they are involved. Our chief executive officer is engaged in other business endeavors for which he may be entitled to substantial compensation, and our executive officers are not obligated to contribute any specific amount of time to our affairs. Our directors also serve as officers and board members for other entities. If our executive officers’ and directors’ elect to devote substantial amounts of time to the affairs of other businesses, in excess of current levels, they might not assign sufficient attention to FG, potentially impairing our results of operations, financial condition, and prospects and the value of our securities.

Members of our management and companies with which they are affiliated in the past have been, and may in the future be, involved in civil disputes and litigation and governmental investigations relating to their business affairs unrelated to our company. Any such claims or investigations may divert management’s attention from our business or be detrimental to our reputation, resulting in adverse effects upon our results of operations, financial condition, and prospects and the value of our securities held by investors.

FG’s executive offices are located at 108 Gateway Blvd, Suite 204, Mooresville, NC 28117. In the opinion of FG’s management, its executive offices are suitable for its current business and are adequately maintained.

SGE’s United States corporate offices are located at 108 Gateway Blvd, Suite 204, Mooresville, NC 28117. In addition, SGE or its subsidiaries lease the following facilities as of the date hereof:

SGE believes these facilities are adequate for future needs. In addition, SGE does not anticipate any difficulty in retaining occupancy of any leased facilities, either by renewing leases prior to expiration or replacing them with equivalent leased facilities, or purchasing these or other facilities in the future.

SGE is involved, from time to time, in certain legal disputes in the ordinary course of business. No such disputes, individually or in the aggregate, are expected to have a material effect on the SGE’s business or financial condition.

FG is named as a defendant in personal injury lawsuits based on alleged exposure to asbestos-containing materials related to the operations of a former division of SGE. A majority of the cases involve product liability claims based principally on allegations of past distribution of commercial lighting products containing wiring that may have contained asbestos. Each case names dozens of corporate defendants in addition to FG. In FG’s experience, a large percentage of these types of claims have never been substantiated and have been dismissed by the courts. FG has not suffered any adverse verdict in a trial court proceeding related to asbestos claims and intends to continue to defend these lawsuits. Under the Fundamental Global Asset Purchase Agreement, SGE agreed to indemnify FG for future losses, if any related to current product liability or personal injury claims arising out of products sold or distributed in the U.S. by the operations of the businesses being transferred to SGE in the Separation, in an aggregate amount not to exceed $250,000 per year, as well as to indemnify FG for all expenses (including legal fees) related to the defense of such claims. As of March 31, 2024, FG has a loss contingency reserve of approximately $0.3 million, of which $0.1 million represents future payments on a settled case and the remaining $0.2 million represents the FG’s estimate of its potential losses related to the settlement of open cases. When appropriate, FG may settle additional claims in the future. FG does not expect the resolution of these cases to have a material adverse effect on its consolidated financial condition, results of operations or cash flows.

On April 29, 2024, Ravenwood-Productions LLC (“Ravenwood”) and Kevin V. Duncan (“Duncan” and, together with Ravenwood, the “Plaintiffs”) filed a civil complaint (the “Complaint”) against SGE, certain affiliated entities, and certain of its current and former employees, officers and directors (collectively, the “Defendants”) in the United States District Court for the Central District of California. The Complaint claims seven causes of action, each claim against some, or all, of the Defendants. The Plaintiffs seek, among other forms of relief, compensatory damages and restitution. SGE, along with the other Defendants, deny the allegations in the Complaint, and intend to vigorously defend against the Complaint. Based on information presently available to SG and consultation with legal counsel, SGE believes the Complaint is without merit. As of the date hereof, SGE does not believe a loss related to the Complaint is probable, and no liability or reserve has been established for this matter, although SGE expect to incur legal fees and other costs related to its defense of these claims.

On July 16, 2024, FG received notice that its was named as a defendant in a civil action filed, along with over 500 other companies, for cost recovery and contributions related to the release and/or threatened release of hazardous substances from a facility known as the BKK Class 1 Landfill in Los Angeles County California from periods prior to 1987. The action alleges that FGH is a successor to Pichel Industries, Inc. (“Pichel Industries”) and that Pichel Industries contributed waste to the landfill. Management of FG is in the early stages of evaluating the claim and determining its response.

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

You should read the following discussion in conjunction with our consolidated financial statements and related notes and information included elsewhere in this proxy statement/prospectus. You should review the “Risk Factors” section of this proxy statement/prospectus for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. Some of the information contained in this discussion and analysis and set forth elsewhere in this proxy statement/prospectus includes forward-looking statements that involve risks and uncertainties.

Unless context denotes otherwise, the terms “Company,” “we,” “us,” and “our,” refer to Fundamental Global Inc., and its subsidiaries.

The results of operations for the years ended December 31, 2023 and December 31, 2022 presented below are the results of FGH, which are now our historical results following the consummation of the FGF Merger.

Revenue increased $3.0 million or 7.5% to $43.3 million for the year ended December 31, 2023 from $40.3 million for the year ended December 31, 2022.

The primary driver of revenue growth was a $3.7 million increase in revenue from Strong Entertainment, which was partially offset by the expiration of the agreement covering support services provided to Firefly, which expired at the end of 2022. The growth in revenue from Strong Entertainment was due to increased sales of projection screens, audio visual equipment and related products to the cinema industry, as well as higher demand from cinema customers for installation services and field maintenance and monitoring services.

Total expenses increased $4.6 million or 11.0% to $46.8 million for the year ended December 31, 2023 from $42.1 million for the year ended December 31, 2022. Expenses are comprised of cost of sales related to the Strong Entertainment operating business and selling, general and administrative expenses. The increase in total expenses was due to $2.3 million increase in cost of cinema product and service revenues accompanying the revenue growth in the entertainment business, a $2.9 million increase in selling, general and administrative expenses due to the combination of growth in the entertainment business and the additional costs of operating Strong Entertainment as a public company.

Loss from operations increased $1.6 million or 91.1% to $3.4 million for the year ended December 31, 2023 from $1.8 million during the year ended December 31, 2022. Improvements in operating results from Strong Entertainment were offset by increased overhead costs related to operating Strong Entertainment as a separate public company.

Net loss from continuing operations increased $3.2 million or 48.2% to $9.8 million for the year ended December 31, 2023 from $6.6 million during the year ended December 31, 2022. Other expense, net included a $6.2 million unrealizes loss on equity holdings during the year ended December 31, 2023 compared to an unrealized loss of $4.5 million during the year ended December 31, 2022. The unrealized loss on equity holdings during the year ended December 31, 2023 was partially offset by a $2.5 million gain on an insurance policy and a $1.0 million gain from the acquisition of ICS.

Three Months Ended March 31, 2024 Compared to Three Months Ended March 31, 2023

Revenue increased $2.1 million or 31.6% to $8.6 million for the three months ended March 31, 2024 from $6.6 million for the three months ended March 31, 2023.

The primary driver of revenue growth was a $1.1 million increase in revenue from Strong Entertainment combined with improved investment performance as compared with the prior year period. The growth in revenue from Strong Entertainment was due to increased demand from cinema operators for screen products and installation services. Investment income was favorable as the Company’s equity method losses were lower in the current year period. The three months ended March 31, 2024 also includes reinsurance premiums and investment income for one month following the merger transaction which was effective February 29, 2024. The second quarter of 2024 will be the first reporting period that will reflect a full quarter of reinsurance and investment operating results from the acquired FG Financial business lines.

Total expenses increased $3.9 million or 36.3% to $14.6 million for the three months ended March 31, 2024 from $10.7 million for the three months ended March 31, 2023. Expenses are comprised of cost of sales related to the Strong Entertainment operating business, costs of the reinsurance and asset management business and selling, general and administrative expenses. The increase in total expenses was due to $0.7 million increase in cost of cinema product and service revenues accompanying the revenue growth in the entertainment business; a $1.1 million increase in selling, general and administrative expenses due to the combination of growth in the entertainment business, the additional costs of operating Strong Entertainment as a public company, and the additional SG&A from the FGF Financial business following the February 2024 merger which added $1.1 million in reinsurance expenses and general and expense in the period following the February 2024 merger; and a $1.4 million non-cash impairment related to the sale of the Digital Ignition building. As an objective of merging FGH and FGF, management expects general and administrative costs to decline following the merger transition.

Loss from operations increased $1.8 million or 43.7% to $5.9 million for the three months ended March 31, 2024 from $4.1 million during the first quarter of 2023. Improvements in operating results from Strong Entertainment and improved investment results were offset by increased overhead costs related to operating Strong Entertainment as a separate public company and the non-cash impairment loss of $1.4 million related to the sale of Digital Ignition. Those increased expenses were partially offset by a non-recurring $1.8 million gain related to the FGF merger transaction and the improved gross profit contribution from Strong Entertainment.

Net loss from continuing operations increased $0.5 million or 12.0% to $4.3 million for the three months ended March 31, 2024 from $3.8 million during the first quarter of 2023. Improvements in operating results from Strong Entertainment and improved investment results were offset by increased overhead costs related to operating Strong Entertainment as a separate public company and the non-cash impairment loss of $1.4 million related to the sale of Digital Ignition. Net loss from continuing operations also benefited from $1.8 million gain related to the FGF merger transaction presented in bargain purchase from acquisition and other income, net.

Critical accounting estimates are those estimates made in accordance with generally accepted accounting principles that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition or results of operations. Actual results may differ materially from these estimates. Set forth below is qualitative and quantitative information necessary to understand the estimation uncertainty and the impact the critical accounting estimate has had or is reasonably likely to have on financial condition or results of operations, to the extent the information is material and reasonably available.

Other investments consist, in part, of equity investments made in privately held companies accounted for under the equity method. Certain investments held by our equity method investees are valued using Monte-Carlo simulation and option pricing models. Inherent in Monte-Carlo simulation and option pricing models are assumptions related to expected volatility and discount for lack of marketability of the underlying investment. Our investees estimate the volatility of these investments based on the historical performance of various broad market indices blended with various peer companies which they consider as having similar characteristics to the underlying investment, as well as consideration of price and volatility of relevant publicly traded securities such as SPAC warrants. Our investees also consider the probability of a successful merger when valuing equity for SPACs that have not yet completed a business combination.

Upon adoption of ASU 2016-13, the Company calculated an allowance for expected credit losses for its reinsurance balances receivable by applying a Probability of Default / Loss Given Default model. The model considers both the external collectability history as well as external loss history. The external loss history that the Company used included a long-term probability of liquidation study specific to insurance companies. Additionally, the life of each of the Company’s reinsurance treaties was also considered as the probability of default was calculated over the contractual length of the reinsurance contracts. The credit worthiness of a counterparty is evaluated by considering the credit ratings assigned by independent agencies and individually evaluating all the counterparties.

Trade accounts receivable are recorded at the invoiced amount and do not bear interest. Management determines the allowance for expected credit losses based on several factors, including overall customer credit quality, historical write-off experience and a specific analysis that projects the ultimate collectability of the account. As such, these factors may change over time causing the allowance level and provision for expected credit losses to be adjusted accordingly. Past due accounts are written off when our efforts have been unsuccessful in collecting amounts due.

The provision for income taxes is calculated based on the expected tax treatment of transactions recorded in the Company’s consolidated financial statements. In determining its provision for income taxes, the Company interprets tax legislation in a variety of jurisdictions and makes assumptions about the expected timing of the reversal of deferred income tax assets and liabilities and the valuation of net deferred income taxes.

The ultimate realization of the deferred income tax asset balance is dependent upon the generation of future taxable income during the periods in which the Company’s temporary differences reverse and become deductible. A valuation allowance is established when it is more likely than not that all or a portion of the deferred income tax asset balance will not be realized. In determining whether a valuation allowance is needed, management considers all available positive and negative evidence affecting specific deferred income tax asset balances, including the Company’s past and anticipated future performance, the reversal of deferred income tax liabilities, and the availability of tax planning strategies. To the extent a valuation allowance is established in a period, an expense must be recorded within the income tax provision in the consolidated statements of income and comprehensive income.

The Company participates in reinsurance quota-share contracts and estimates the ultimate premiums for the contract period. These estimates are based on information received from the ceding companies, whereby premiums are recorded as written in the same periods in which the underlying insurance contracts are written and are based on cession statements from cedents. These statements are received quarterly and in arrears, and thus, for any reporting lag, premiums written are estimated based on the portion of the ultimate estimated premiums relating to the risks underwritten during the lag period. Premium estimates are reviewed by management periodically. Such review includes a comparison of actual reported premiums to expected ultimate premiums. Based on management’s review, the appropriateness of the premium estimates is evaluated, and any adjustments to these estimates are recorded in the period in which they are determined. Changes in premium estimates, including premiums receivable, are not unusual and may result in significant adjustments in any period. A significant portion of amounts included in the caption “Reinsurance balances receivable” in the Company’s consolidated balance sheets represent estimated premiums written, net of commissions, brokerage, and loss and loss adjustment expense, and are not currently due based on the terms of the underlying contracts. Premiums written are generally recognized as earned over the contract period in proportion to the risk covered. Additional premiums due on a contract that has no remaining coverage period are earned in full when written. Unearned premiums represent the unexpired portion of reinsurance provided.

We combine contracts with the same customer into a single contract for accounting purposes when the contracts are entered into at or near the same time and the contracts are negotiated as a single commercial package, consideration in one contract depends on the other contract, or the services are considered a single performance obligation. If an arrangement involves multiple performance obligations, the items are analyzed to determine the separate units of accounting, whether the items have value on a standalone basis and whether there is objective and reliable evidence of their standalone selling price. The total contract transaction price is allocated to the identified performance obligations based upon the relative standalone selling prices of the performance obligations. The standalone selling price is based on an observable price for services sold to other comparable customers, when available, or an estimated selling price using a cost plus margin approach. We estimate the amount of total contract consideration we expect to receive for variable arrangements by determining the most likely amount we expect to earn from the arrangement based on the expected quantities of services we expect to provide and the contractual pricing based on those quantities. We only include some or a portion of variable consideration in the transaction price when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur or when the uncertainty associated with the variable consideration is subsequently resolved. We consider the sensitivity of the estimate, our relationship and experience with the client and variable services being performed, the range of possible revenue amounts and the magnitude of the variable consideration to the overall arrangement.

As discussed in more detail below, revenue is recognized when a customer obtains control of promised goods or services under the terms of a contract and is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services. We typically do not have any material extended payment terms, as payment is due at or shortly after the time of the sale. Sales, value-added and other taxes collected concurrently with revenue producing activities are excluded from revenue.

We recognize contract assets or unbilled receivables related to revenue recognized for services completed but not yet invoiced to the clients. Unbilled receivables are recorded as accounts receivable when we have an unconditional right to contract consideration. A contract liability is recognized as deferred revenue when we invoice clients, or receive cash, in advance of performing the related services under the terms of a contract. Deferred revenue is recognized as revenue when we have satisfied the related performance obligation.

We defer costs to acquire contracts, including commissions, incentives and payroll taxes, if they are incremental and recoverable costs of obtaining a customer contract with a term exceeding one year. Deferred contract costs are reported within other assets and amortized to selling expense over the contract term, which generally ranges from one to five years. The Company has elected to recognize the incremental costs of obtaining a contract with a term of less than one year as a selling expense when incurred. We did not have any deferred contract costs as of March 31, 2024 or December 31, 2023.

Policy acquisition costs are costs that vary with, and are directly related to, the successful production of new and renewal reinsurance business, and consist principally of commissions, taxes, and brokerage expenses. If the sum of a contract’s expected losses and loss expenses and deferred acquisition costs exceeds associated unearned premiums and expected investment income, a premium deficiency is determined to exist. In this event, deferred acquisition costs are written off to the extent necessary to eliminate the premium deficiency. If the premium deficiency exceeds deferred acquisition costs, then a liability is accrued for the excess deficiency. There were no premium deficiency adjustments recognized during the periods presented herein.

Loss and loss adjustment expense reserve estimates are based on estimates derived from reports received from ceding companies. These estimates are periodically reviewed by the Company’s management and adjusted as necessary. Since reserves are estimates, the final settlement of losses may vary from the reserves established and any adjustments to the estimates, which may be material, are recorded in the period they are determined.

Loss estimates may also be based upon actuarial and statistical projections, an assessment of currently available data, predictions of future developments, estimates of future trends and other factors. Significant assumptions used by the Company’s management and third-party actuarial specialists include loss development factor selections, initial expected loss ratio selections, and weighting of methods used. The final settlement of losses may vary, perhaps materially, from the reserves recorded. All adjustments to the estimates are recorded in the period in which they are determined. U.S. GAAP does not permit establishing loss reserves, which include case reserves and IBNR loss reserves, until the occurrence of an event which may give rise to a claim. As a result, only loss reserves applicable to losses incurred up to the reporting date are established, with no allowance for the establishment of loss reserves to account for expected future loss events. Generally, the Company obtains regular updates of premium and loss related information for the current and historical periods, which are utilized to update the initial expected loss ratio. We also experience lag between (i) claims being reported by the underlying insured to the Company’s cedent and (ii) claims being reported by the Company’s cedent to the Company. This lag may impact the Company’s loss reserve estimates. Cedent reports have pre-determined due dates (for example, thirty days after each month end). As a result, the lag depends in part upon the terms of the specific contract. The timing of the reporting requirements is designed so that the Company receives premium and loss information as soon as practicable once the cedent has closed its books. Accordingly, there should be a short lag in such reporting. Additionally, most of the contracts that have the potential for large single event losses have provisions that such loss notifications are provided to the Company immediately upon the occurrence of an event.

The Company uses the fair-value method of accounting for stock-based compensation awards granted. The Company has determined the fair value of its outstanding stock options on their grant date using the Black-Scholes option pricing model along with multiple Monte Carlo simulations to determine a derived service period as the options vest based upon meeting certain performance conditions. The Company determines the fair value of restricted stock units (“RSUs”) on their grant date using the fair value of the Company’s common stock on the date the RSUs were issued (for those RSU which vest solely based upon the passage of time). The fair value of these awards is recorded as compensation expense over the requisite service period, which is generally the expected period over which the awards will vest, with a corresponding increase to additional paid-in capital. When the stock options are exercised, or correspondingly, when the RSUs vest, the amount of proceeds together with the amount recorded in additional paid-in capital is recorded in shareholders’ equity.

See Note 2, Summary of Significant Accounting Policies, to the unaudited condensed consolidated financial statements for the quarter ended March 31, 2024 included in this proxy statement/prospectus for a description of recently issued accounting pronouncements.

The purpose of liquidity management is to ensure that there is sufficient cash to meet all financial commitments and obligations as they fall due. The liquidity requirements of the Company and its subsidiaries have been met primarily by funds generated from operations, proceeds from the sales of our common stock and credit facilities.

The following table summarizes the Company’s consolidated cash flows for the three months ended March 31, 2024 and 2023.

For the three months ended March 31, 2024, net cash used in operating activities was approximately $0.2 million, compared to $15,000 for the three months ended March 31, 2023. Cash from operations decreased due to a net cash outflow for working capital including higher payments to our vendors and for other accrued expenses, an increase in net outflows related to our insurance business, which were partially offset by the receipt of customer deposits.

For the three months ended March 31, 2024, net cash provided by investing activities was approximately $1.9 million, compared to $0.1 million for the three months ended March 31, 2023. Cash provided by investing activities during the three months ended March 31, 2024 included $1.9 million of an increase in cash as a result of the merger of FGF and FGH. Investing cash flows during the three months ended March 31, 2024 and 2023, included approximately $22,000 and $0.1 million, respectively, of capital expenditures in the Strong Entertainment business.

For the three months ended March 31, 2024, net cash used in financing activities was approximately $0.6 million, compared to cash provided by financing activities of $1.0 million for the three months ended March 31, 2023. Cash used in financing activities during the three months ended March 31, 2024 included $0.3 million of principal payments on debt and finances leases and $0.4 million of payments of dividends on our Series A Preferred Shares. Cash by financing activities during the three months ended March 31, 2023 included $1.4 million of net borrowing under our credit facility, partially offset by $0.3 million of principal payments on debt and finances leases.

STRONG GLOBAL ENTERTAINMENT, INC. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion highlights the principal factors that have affected our financial condition and results of operations as well as our liquidity and capital resources for the periods described. This discussion should be read in conjunction with our Consolidated Financial Statements and the related notes included in this proxy statement/prospectus. This discussion contains forward-looking statements. Please see the explanatory note concerning “Forward-Looking Statements” in this proxy statement/prospectus. Risk Factors for a discussion of the uncertainties, risks and assumptions associated with these forward-looking statements. The operating results for the periods presented were not materially affected by inflation.

Unless the context indicates otherwise, the words the “Company,” “we,” “our,” and “us” refers to SGE in this section.

SGE is a leader in the entertainment industry, providing mission critical products and services to cinema exhibitors and entertainment venues for over 90 years. The Company manufactures and distributes premium large format projection screens, provides comprehensive managed services, technical support and related products and services primarily to cinema exhibitors, theme parks, educational institutions, and similar venues. In addition to traditional projection screens, the Company manufactures and distributes its Eclipse curvilinear screens, which are specially designed for theme parks, immersive exhibitions, as well as simulation applications. It also provides maintenance, repair, installation, network support services and other services to cinema operators, primarily in the United States.

On November 3, 2023, we entered into an asset purchase agreement with Innovative Cinema Solutions, LLC (“ICS”), a full-service provider of technical services and solutions to national cinema chains. The operations of ICS were rolled into STS.

We plan to grow market share and organic revenue and improve operating results, with the intent of expanding the ultimate valuation of the business. In addition, we may acquire other businesses, which may be within or outside of our existing markets.

As of December 31, 2023, the board of directors of Strong Global Entertainment approved the Company’s plan to exit its content business, including Strong Studios, Inc. (“Strong Studios”) and Unbounded Media Corporation (“Unbounded” and collectively with Strong Studios, the “Content Business”) and authorized management to proceed with such plan. The plan is expected to improve the Company’s focus on its core businesses, reduce general and administrative costs, and improve financial performance. As a result of the shutdown, we have presented the operating results of the Content Business as discontinued operations for all periods presented. See Note 3 of SGE’s audited consolidated financial statements for additional details.

The coronavirus pandemic (“COVID-19”) had an unprecedented impact to consumer behaviors and our customers, particularly our customers’ ability and willingness to purchase our products and services. The Company believes that consumer reticence to engage in outside-the-home activities, caused by the risk of contracting COVID-19, has abated, and our customers have resumed more typical, pre-COVID-19 purchasing behaviors. And while we believe our customers made significant progress in its recovery from the pandemic, the impact of COVID-19 on inflation and supply chains and the continued economic recovery will be contingent upon several key factors, including the volume of new film content available, the box office performance of new film content released, the duration of the exclusive theatrical release window, and evolving consumer behavior with competition from other forms of in- and out-of-home entertainment. There can be no assurances that there will be no additional public health crises, including further resurgence or variants of COVID-19, which could reverse the current trend and have a negative impact on the Company’s results of operations. Our results of operations in future periods may continue to be adversely impacted by inflationary pressures and global supply chain issues, and other negative effects on global economic conditions.

Revenue increased 9.4% to $42.6 million in 2023 from $39.0 million in 2022. The increase from the prior year was comprised of a $0.7 million increase in product revenue and a $3.0 million increase in service revenue.

The increase in revenue from products was almost entirely due to increased sales of projection screens, audio visual equipment and related products to the cinema industry. The increase in demand from our cinema customers is due to a combination of increase sales efforts, increased market share and are rebound in the rate of investment by exhibitors in upgrading their auditoriums, particularly the pace of laser projection upgrades. We expect the upgrades from xenon to laser to continue and to be a multi-year catalyst in the industry.

Our service revenues increased due to higher demand from cinema customers for installation services and field maintenance and monitoring services, which increased $1.6 million and $1.0 million, respectively, from the prior year, as well as incremental revenue from the ICS acquisition late in year. We have increased the scope of our offerings to better support our customers and to increase market share in cinema services, including cinema screen installation work performed for certain of our customers.

Gross profit was $10.6 million or 24.8% of revenues in 2023 compared to $9.5 million or 24.3% in 2022.

Gross profit from product sales was $7.9 million or 25.7% of revenues in 2023 compared to $7.4 million or 24.5% of revenues in 2022. The increase in gross profit percentage from product sales resulted primarily from product mix as revenue from the sale of higher margin traditional cinema screens grew at a slightly faster rate than our lower margin digital equipment.

Gross profit from service revenue was $2.7 million or 22.6% of revenues in 2023 compared to $2.1 million or 23.5% of revenues in 2022. Gross profit from service work increased in line with the increase in service revenue. Gross profit margins declined slightly due to inefficiencies in the ramp and training of our installation and service teams during the year.

Income from operations was $0.6 million in 2023 compared to $2.4 million during 2022. We recorded approximately $1.2 million of costs in connection with the completion of the IPO in May 2023 that did not meet the criteria for capitalization. In addition, administrative expenses increased during the current year due to the increased costs associated with operating as a publicly traded company following the IPO.

Total other income of $2.8 million during 2023 primarily consisted of a $2.5 million gain on an insurance policy and a $1.0 million gain from the acquisition of ICS, partially offset by $0.4 million of foreign currency transaction adjustments and $0.3 million of interest expense. Total other income of $0.4 million during 2022 included $0.5 million of foreign currency transaction adjustments, partially offset by $0.1 million of interest expense.

Income tax expense was $0.5 million during each of 2023 and 2022. Our income tax expense primarily consisted of income tax on our foreign earnings.

During the past several years, we have primarily met our working capital and capital resource needs from operating cash flows and credit facilities, as well as our initial public offering. Our primary cash requirements involve operating expenses, working capital, capital expenditures, and other general corporate activities. We ended 2023 with total cash and cash equivalents of $5.5 million compared to $3.6 million as of December 31, 2022.

In response to the COVID-19 pandemic and related closures of cinemas, theme parks and entertainment venues, we took decisive actions to conserve cash, reduce operating expenditures, delay capital expenditures, and manage working capital.

We believe that our existing sources of liquidity, including cash and cash equivalents, operating cash flow, credit facilities, receivables and other assets will be sufficient to meet our projected capital needs for at least the next twelve months. However, our ability to continue to meet our cash requirements will depend on, among other things, our ability to achieve anticipated levels of revenues and cash flow from operations, our ability to manage costs and working capital successfully, any unforeseen disruptions of cinemas, theme parks and other entertainment venues (such as those experienced with COVID-19), and the continued availability of financing, if needed. We cannot provide any assurance that our assumptions used to estimate our liquidity requirements will remain accurate due to the variability and unpredictability of the current economic environment. In the event of a sustained market deterioration or declines in net sales or other events, we may need additional liquidity, which would require us to evaluate available alternatives and take appropriate actions. We may, depending on a variety of factors, including market conditions for capital raises, the trading price of our Class A Voting Common Shares without par value (“Common Shares”) and opportunities for uses of any proceeds, engage in additional public or private offerings of equity or debt securities to increase our capital resources. However, financial and economic conditions could limit our access to credit and impair our ability to raise capital, if needed, on acceptable terms or at all, and we cannot provide any assurance that we will be able to obtain any additional sources of financing or liquidity on acceptable terms, or at all. See Note 13 to the consolidated financial statements included in this proxy statement/prospectus, for a description of our debt as of December 31, 2023.

On June 7, 2021, Strong/MDI entered into a demand credit agreement (the “2021 Credit Agreement”) with Canadian Imperial Bank of Commerce (“CIBC”), which amended and restated the demand credit agreement dated as of September 5, 2017. The 2021 Credit Agreement consisted of a revolving line of credit for up to CDN$2.0 million subject to a borrowing base requirement, a 20-year installment loan for up to CDN$5.1 million and a 5-year installment loan for up to CDN$0.5 million. These borrowings were due on demand by the lender. In January 2023, Strong/MDI entered into a demand credit agreement (the “2023 Credit Agreement”), which amended and restated the 2021 Credit Agreement. The 2023 Credit Agreement consists of a revolving line of credit for up to CAD$5.0 million and a 20-year installment loan for up to CAD$3.1 million. Under the 2023 Credit Agreement: (i) the amount outstanding under the line of credit is payable on demand and bears interest at the lender’s prime rate plus 1.0% and (ii) the amount outstanding under the installment loan bears interest at the lender’s prime rate plus 0.5% and is payable in monthly installments, including interest, over their respective borrowing periods. The lender may also demand repayment of the installment loan at any time. The 2023 Credit Agreement is secured by a lien on Strong/MDI’s Quebec, Canada facility and substantially all of Strong/MDI’s assets. The 2023 Credit Agreement requires Strong/MDI to maintain a ratio of liabilities to “effective equity” (tangible stockholders’ equity, less amounts receivable from affiliates and equity holdings) not exceeding 2.5 to 1 and a fixed charge coverage ratio of not less than 1.1 times earnings before interest, income taxes, depreciation and amortization. The borrowings under the revolving line of credit are due on demand by the lender and total $2.4 million, approximately $3.2 million CAD, as of December 31, 2023. In May 2023, Strong/MDI and CIBC entered into an amendment to the 2023 Credit Agreement which reduced the amount available under the revolving line of credit to CAD$3.4 million, and CIBC provided an undertaking to Strong/MDI to a release of CIBC’s security interest in certain assets transferred to a subsidiary in connection with transactions related to our initial public offering (the “IPO”).

On January 19, 2024, we entered into a new demand credit agreement with CIBC. The agreement consists of a demand operating credit and a business credit card facility. Under the demand operating credit, with certain conditions, the credit limit is the lesser of (a) CAD$6.0 million or (b) the sum of (i) 80% of Receivable Value, which includes all North American accounts receivable of Strong/MDI and STS (collectively, the “Subsidiaries”), and (ii) 50% of Inventory Value, but in no event may the amount in this clause (ii) exceed $1.5 million, minus (iii) all Priority Claims.

Net cash provided by operating activities from continuing operations was $3.5 million during 2023 compared to $1.7 million during 2022. Cash from operations increased due to an increase in earnings from continuing operations and improvements in working capital, including the collection of accounts receivable and customer deposits, which was partially offset by higher payments to our vendors and for other accrued expenses.

Net cash used in investing activities from continuing operations was $0.4 million during 2023, which primarily consisted of $0.4 million of capital expenditures. Net cash used in investing activities from continuing operations during 2022 was $0.3 million, which consisted entirely of capital expenditures.

Net cash provided by financing activities from continuing operations was $1.1 million during 2023, which primarily consisted of net proceeds of our IPO of $2.4 million and $2.4 million of net borrowings under the CIBC revolving line of credit, partially offset by $3.0 million transferred to FG Group Holdings prior to our IPO and Separation and $0.6 million of principal payments on debt and finance leases. Net cash used in financing activities from continuing operations was $0.4 million during 2022, consisting primarily of $0.4 million of principal payments on debt and finance leases.

We prepare our consolidated financial statements in accordance with United States generally accepted accounting principles (“GAAP”). In addition to disclosing financial results prepared in accordance with GAAP, we disclose information regarding Adjusted EBITDA, which differs from the term EBITDA as it is commonly used. In addition to adjusting net income (loss) to exclude income taxes, interest, and depreciation and amortization, Adjusted EBITDA also excludes share-based compensation, impairment charges, severance, foreign currency transaction gains (losses), transactional gains and expenses, gains on insurance recoveries 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 our operating performance. Accordingly, management believes that disclosure of these metrics offers investors, bankers and other stakeholders an additional view of our operations that, when coupled with the GAAP results, provides a more complete understanding of our 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. Our 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 our performance.

EBITDA and Adjusted EBITDA have limitations as analytical tools, and you should not consider them in isolation, or as substitutes for analysis of our results as reported under GAAP. Some of these limitations are (i) they do not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments, (ii) they do not reflect changes in, or cash requirements for, our 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 our 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 our statements of cash flows, (vi) they do not reflect the impact of earnings or charges resulting from matters we consider not to be indicative of our ongoing operations, and (vii) other companies in our industry may calculate these measures differently than we do, limiting their usefulness as comparative measures.

We believe 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). We also present EBITDA and Adjusted EBITDA because (i) we believe these measures are frequently used by securities analysts, investors and other interested parties to evaluate companies in our industry, (ii) we believe investors will find these measures useful in assessing our ability to service or incur indebtedness, and (iii) we use EBITDA and Adjusted EBITDA internally as benchmarks to evaluate our operating performance or compare our performance to that of our competitors.

The following table sets forth reconciliations of net (loss) income under GAAP to EBITDA and Adjusted EBITDA (in thousands):

Three Months Ended March 31, 2024 Compared to Three Months Ended March 31, 2023

Revenue increased 11.2% to $11.1 million in the first quarter of 2024 from $10.0 million in the first quarter of 2023. The increase from the prior year was due to $0.8 million of higher revenue from product sales and a $0.3 million increase in service revenue.

The increase in revenue from products was primarily due to $1.5 million of revenue as a result of the acquisition of the net assets of Innovative Cinema Solutions, LLC (“ICS”) in late 2023 and a $0.1 million increase in revenue from screen systems, partially offset by a decrease in other digital equipment sales.

On the cinema services side, the primary driver of the revenue increase was from installation and warehouse services, both of which were up $0.1 million from the first quarter in the prior year as we have increased the scope of our offerings to better support our customers and to increase market share in cinema services.

Gross profit was $2.7 million or 24.0% of revenues in the first quarter of 2024 compared to $2.3 million or 23.3% in the first quarter of 2023.

Gross profit from product sales was $2.1 million or 26.0% of revenues for the first quarter of 2024 compared to $1.7 million or 24.1% of revenues for the first quarter of 2023. The increase in gross profit from product sales resulted from product mix for our screen systems and higher margins on digital equipment, primarily as a result of the ICS acquisition.

Gross profit from service revenue was $0.6 million or 18.8% of revenues for the first quarter of 2024 compared to $0.6 million or 21.2% of revenues for the first quarter of 2023. Gross profit percentage decreased from the prior year due to lower margins on installation services, partially offset by an increase in warehouse services.

Income from operations was $0.2 million in the first quarter of 2024 compared to $0.5 million during the first quarter of 2023. We incurred higher general and administrative expenses in connection with operating as an independent public company following the Separation in May 2023, which partially offset the increase in gross profit.

Total other income of $0.1 million during the first quarter of 2024 primarily consisted of $0.2 million of foreign currency transaction adjustments, partially offset by $0.1 million of interest expense. Total other income of $0.1 million during the first quarter of 2023 included $0.1 million of foreign currency transaction adjustments, partially offset by $0.1 million of interest expense.

Income tax expense was $0.1 million during both the first quarter of 2024 and 2023. Our income tax expense primarily consisted of income tax on our foreign earnings.

During the past several years, we have primarily met our working capital and capital resource needs from operating cash flows and credit facilities, as well as our initial public offering. Our primary cash requirements involve operating expenses, working capital, capital expenditures, and other general corporate activities. We ended the first quarter of 2024 with total cash and cash equivalents of $5.1 million compared to $5.5 million as of December 31, 2023.

We believe that our existing sources of liquidity, including cash and cash equivalents, operating cash flow, credit facilities, receivables and other assets will be sufficient to meet our projected capital needs for at least the next twelve months. However, our ability to continue to meet our cash requirements will depend on, among other things, our ability to achieve anticipated levels of revenues and cash flow from operations, our ability to manage costs and working capital successfully, any unforeseen disruptions of cinemas, theme parks and other entertainment venues (such as those experienced with COVID-19), and the continued availability of financing, if needed. We cannot provide any assurance that our assumptions used to estimate our liquidity requirements will remain accurate due to the variability and unpredictability of the current economic environment. In the event of a sustained market deterioration or declines in net sales or other events, we may need additional liquidity, which would require us to evaluate available alternatives and take appropriate actions. We may, depending on a variety of factors, including market conditions for capital raises, the trading price of our Class A Voting Common Shares without par value (“Common Shares”) and opportunities for uses of any proceeds, engage in additional public or private offerings of equity or debt securities to increase our capital resources. However, financial and economic conditions could limit our access to credit and impair our ability to raise capital, if needed, on acceptable terms or at all, and we cannot provide any assurance that we will be able to obtain any additional sources of financing or liquidity on acceptable terms, or at all. See Note 10 to the consolidated financial statements included in this proxy statement/prospectus, for a description of our debt as of March 31, 2024.

On January 19, 2024, we entered into a new demand credit agreement with CIBC. The agreement consists of a demand operating credit and a business credit card facility. Under the demand operating credit, with certain conditions, the credit limit is the lesser of (a) CAD$6.0 million or (b) the sum of (i) 80% of Receivable Value, which includes all North American accounts receivable of Strong/MDI and STS, and (ii) 50% of Inventory Value, but in no event may the amount in this clause (ii) exceed $1.5 million, minus (iii) all Priority Claims. As of March 31, 2024, there was CAD$3.3 million, or approximately $2.5 million, of principal outstanding on the revolving credit facility, which bears variable interest at 8.2%. We were in compliance with our debt covenants as of March 31, 2024.

Net cash provided by operating activities from continuing operations was $0.2 million during the first quarter of 2024 compared to $0.8 million during the first quarter of 2023. Cash from operations decreased due to a net cash outflow for working capital including higher payments to our vendors and for other accrued expenses, which was partially offset by the receipt of customer deposits.

Net cash used in investing activities from continuing operations was $22,000 and $0.1 million during the first quarter of 2024 and 2023, respectively, which consisted entirely of capital expenditures.

Net cash used in financing activities from continuing operations was $0.1 million during the first quarter of 2024, which consisted of $0.1 million of principal payments on debt and finance leases, partially offset by $0.1 million of net borrowings under the CIBC revolving line of credit. Net cash used in financing activities from continuing operations was $0.1 million during the first quarter of 2023, consisting primarily of $1.2 million transferred to Fundamental Global and by $0.3 million of principal payments on debt, partially offset by $1.4 million of net borrowings under the CIBC revolving line of credit.

We prepare our condensed consolidated financial statements in accordance GAAP. In addition to disclosing financial results prepared in accordance with GAAP, we disclose information regarding Adjusted EBITDA, which differs from the term EBITDA as it is commonly used. In addition to adjusting net income (loss) to exclude income taxes, interest, and depreciation and amortization, Adjusted EBITDA also excludes share-based compensation, impairment charges, severance, foreign currency transaction gains (losses), transactional gains and expenses, gains on insurance recoveries and other cash and non-cash charges and gains.

The following table sets forth reconciliations of net (loss) income under GAAP to EBITDA and Adjusted EBITDA (in thousands):

Our primary exposure to foreign currency fluctuations pertains to our subsidiary in Canada. In certain instances, we may enter into a foreign exchange contract to manage a portion of this risk. We do not have any trading activities that include non-exchange traded contracts at fair value.

Generally, our revenue and earnings fluctuate moderately from quarter to quarter. As we increase our sales in our current markets, and as we expand into new markets in different geographies, it is possible we may experience different seasonality patterns in our business. As a result, the results of operations for the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for an entire fiscal year.

See Note 2, Summary of Significant Accounting Policies, to the condensed consolidated financial statements for the quarter ended March 31, 2024 included in this proxy statement/prospectus for a description of recently issued accounting pronouncements.

In preparing our condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles, management must make a variety of decisions which impact the reported amounts and the related disclosures. These decisions include the selection of the appropriate accounting principles to be applied and the assumptions on which to base accounting estimates. In making these decisions, management applies its judgment based on its understanding and analysis of the relevant circumstances and our historical experience.

Our accounting policies and estimates that are most critical to the presentation of our results of operations and financial condition, and which require the greatest use of judgments and estimates by management, are designated as our critical accounting policies.

Our historical combined financial statements for periods prior to the IPO were prepared on a stand-alone basis in accordance with U.S. GAAP and are derived from Fundamental Global’s condensed consolidated financial statements and accounting records using the historical results of operations and assets and liabilities attributed to our operations and include allocations of expenses from Fundamental Global. Fundamental Global continues to provide certain services to us, and costs associated with these functions have been allocated to us in such prior period financial statements. The allocations include costs related to corporate services, such as executive management, information technology, legal, finance and accounting, human resources, tax, treasury, and other services. These costs were allocated on a basis of revenue, headcount or other measures we have determined as reasonable. Stock-based compensation includes expense attributable to our employees are also allocated from Fundamental Global. These allocations are reflected within operating expenses in our condensed consolidated statements of operations. Management believes the basis on which the expenses have been allocated to be a reasonable reflection of the utilization of services provided to, or the benefit received by, us during the periods presented. However, these allocations may not necessarily be indicative of the actual expenses we would have incurred as an independent company during the periods prior to the IPO or of the additional costs we incur as a stand-alone company.

PROPOSAL 1 — APPROVAL OF ARRANGEMENT AGREEMENT, PLAN OF ARRANGEMENT AND RELATED TRANSACTIONS

The SGE Board of Directors is providing these proxy solicitation materials to those SGE stockholders who are being requested to approve the Business Combination and adopt and approve the Arrangement Agreement and Plan of Arrangement and the transactions contemplated thereby (the “Arrangement Resolution ”) by voting “FOR” the Arrangement Proposal. For more information regarding the Arrangement Agreement and Plan of Arrangement, see the section titled, “Arrangement Agreement and Plan of Arrangement” beginning on page 69.

The SGE Board, upon recommendation of the Special Committee of the SGE Board, has approved and recommends that the SGE stockholders approve the Arrangement Agreement and Plan of Arrangement as follows:

1.1 The arrangement (the “Arrangement”) pursuant to section 288 of the Business Corporations Act (British Columbia) (the “BCBCA”) involving Strong Global Entertainment, Inc. (the “Company”), FG Holdings Québec Inc., and 1483530 B.C. Ltd. (“Subco”), as contemplated in the arrangement agreement (the “Arrangement Agreement”) among the Company, Subco and FG Holdings Québec Inc. dated May 30, 2024, all as more particularly described and set forth in the joint proxy statement/prospectus of SGE dated August 12, 2024 accompanying the notice of this meeting (as the Arrangement may be amended, restated, supplemented or novated from time to time in accordance with its terms) is hereby authorized, approved and adopted.

1.2 The plan of arrangement, as it has been or may be modified, supplemented or amended in accordance with the Arrangement Agreement and its terms, (the “Plan of Arrangement”), the full text of which is set out as Annex A-2 to the joint proxy statement/prospectus, is hereby authorized, approved and adopted.

1.3 The Arrangement Agreement and all the transactions contemplated therein, the actions of the directors of the Company in approving the Arrangement and the Arrangement Agreement and the actions of the directors and officers of the Company in executing and delivering the Arrangement Agreement and any modifications, supplements or amendments thereto, are hereby ratified and approved.

1.4 The Company is hereby authorized to apply for a final order from the Supreme Court of British Columbia (the “Court”) to approve the Arrangement on the terms set forth in the Arrangement Agreement and the Plan of Arrangement (as they may be, or may have been, modified, supplemented or amended from time to time in accordance with their terms).

1.5 Notwithstanding that this resolution has been passed (and the Arrangement adopted) by the security holders of the Company entitled to vote thereon or that the Arrangement has been approved by the Court, the directors of the Company are hereby authorized and empowered, at their discretion, without further notice to or approval of the security holders of the Company: (i) to amend or modify the Arrangement Agreement or the Plan of Arrangement, to the extent permitted by their terms; and (ii) subject to the terms of the Arrangement Agreement, not to proceed with the Arrangement and any related transactions.

1.6 Any one director or officer of the Company be and is hereby authorized and directed for and on behalf of the Company to execute or cause to be executed and to deliver or cause to be delivered, under the corporate seal of the Company or otherwise, all such other documents and instruments and to perform or cause to be performed all such other acts and things as in such person’s opinion may be necessary or desirable to give full force and effect to the foregoing resolutions and the matters authorized thereby, the Arrangement Agreement and the completion of the Plan of Arrangement in accordance with the terms of the Arrangement Agreement and the matters authorized thereby, including:

such determination, in each case, to be conclusively evidenced by the execution and delivery of such other document or instrument or the doing of any other such act or thing.

Approval of the Arrangement Resolution requires an affirmative vote of two-thirds (2/3) of the votes properly cast at the SGE Stockholder Meeting. Proxies marked “ABSTAIN” and broker non-votes will not be considered as votes cast for or against Proposal 1 and will have no effect on the outcome of the proposal.

THE SGE BOARD RECOMMENDS THAT THE SGE STOCKHOLDERS VOTE “FOR” THE APPROVAL OF ARRANGEMENT AND THE PLAN OF ARRANGEMENT.

SGE Stockholders are entitled to appraisal or dissent rights under the BCBCA. For more information, see the section entitled “Dissent Rights” beginning on page 110.

PROPOSAL 2 — RECEIVE AUDITED FINANCIAL STATEMENTS OF SGE FOR FISCAL YEAR ENDED DECEMBER 31, 2023

The audited financial statements of SGE for the year ended December 31, 2023 and the auditors’ report thereon will be placed before the SGE stockholders at the SGE Stockholder Meeting for their consideration and were sent to such stockholders together with the report of the auditors therein, as part of the accompanying joint proxy statement/prospectus. No formal action will be taken at the SGE Stockholder Meeting to approve the financial statements, which have been approved by the SGE Board of Directors in accordance with applicable corporate and securities legislation. Any questions regarding the financial statements may be brought forward at the SGE Stockholder Meeting.

SGE’s Board of Directors currently consists of five directors, each serving a one-year term. The Nominating and Corporate Governance Committee and the Board recommend that the number of directors be set at five and that five directors be elected at the SGE Stockholder Meeting to serve until the 2025 Annual Meeting or until their successors are duly elected and qualified.

Approval of the proposal to set the number of directors at five requires the affirmative vote of a majority of the votes properly cast at the SGE Stockholder Meeting. Therefore, proxies marked “ABSTAIN” will have no impact on the outcome. Properly executed proxies submitted pursuant to this solicitation will be voted “FOR” the fixing of the number of directors marked on the proxy, unless specified otherwise.

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” FIXING THE NUMBER OF DIRECTORS AT FIVE DIRECTORS.

Notwithstanding the foregoing, assuming consummation of the Business Combination, the results of this Proposal will no longer be relevant as SGE will become a wholly owned indirect subsidiary of FG and will no longer operate as an independent company following the closing of the Business Combination.

SGE’s Board of Directors currently consists of five directors, each serving a one-year term. Based upon the recommendation of the Nominating and Corporate Governance Committee, the Board has nominated Mark Roberson, D. Kyle Cerminara, Richard E. Govignon, Jr., Marsha G King, and John W. Struble to stand for election at the SGE Stockholder Meeting, with each director holding office for a term of one year and until his or her successor has been duly elected and qualified or until his or her earlier death, retirement, resignation, or removal.

Set forth below is information about each of the Company’s directors and executive officers, including ages as of August 12, 2024.

The following is a summary of the biographical information about our officers and directors.

Mark D. Roberson, has been our Chief Executive Officer and a member of our Board of Directors since our inception in November 2021. He has also served as FG’s Chief Financial Officer since February 2024, FGH’s’ Chief Executive Officer since April 2020 and FGH’s Executive Vice President, Chief Financial Officer and Treasurer from November 2018 to April 2020. Mr. Roberson brings an extensive background in executive leadership, operations, corporate finance, SEC reporting, treasury, and mergers and acquisitions. He previously served as Chief Operations Officer of Chanticleer Holdings, Inc., a Nasdaq-listed restaurant operating company, from May 2015 to November 2018, and as Chief Executive Officer of PokerTek, Inc., a then Nasdaq-listed gaming technology company, from February 2010 to October 2014 (having served as Acting Chief Executive Officer from May 2009 until February 2010). He also served as Chief Financial Officer and Treasurer of PokerTek, Inc. from October 2007 until October 2014. Mr. Roberson previously held positions at Curtiss-Wright, Inc., a NYSE-listed aerospace and defense contractor, Krispy Kreme Doughnut Corporation, a then NYSE-listed fast-casual restaurant franchisor and operator, and LifeStyle Furnishings International, a $2 billion private equity backed furniture manufacturer. Mr. Roberson is a Certified Public Accountant who started his career with Ernst & Young and PricewaterhouseCoopers. He earned an MBA from Wake Forest University, a B.S. in Accounting from UNC-Greensboro and a B.S. in Economics from Southern Methodist University. He served on the Board of Directors of CynergisTek, Inc. (NYSE American: CTEK), a cybersecurity and information management consulting firm from May 2016 to September 2022, where he chaired the audit committee and was a member of the compensation committee, which be previously chaired. We believe Mr. Roberson is qualified to serve on our Board of Directors because of his extensive experience at FGH, as well as his familiarity with the Company as an operating segment of FGH, and his operational expertise.

Todd R. Major, has been SGE’s Chief Financial Officer since its inception in November 2021. He has served as SGE’s Secretary and Treasurer since June 2022. He was a member of SGE’s Board of Directors from November 2021 to January 2022. Mr. Major previously served as FGH’s Chief Financial Officer, Secretary and Treasurer from April 2020 to February 2024 and Senior Vice President, Finance from April 2019 to April 2020, as Senior Director, Financial and SEC Reporting of Bojangles, Inc., a then Nasdaq-listed restaurant operating company and franchisor, from March 2015 to April 2019, as Director, Financial Reporting of Premier, Inc. (Nasdaq: PINC), a healthcare performance improvement company, from September 2014 to February 2015, and as Senior Director, Financial Reporting of Horizon Lines, Inc., a then NYSE-traded transportation and logistics company from November 2006 to September 2014. From June 2003 to November 2006, Mr. Major previously held positions of increasing responsibility at Nabi Biopharmaceuticals, Inc., a then Nasdaq-listed biopharmaceutical company engaged in the development and commercialization of proprietary products. Mr. Major is a Certified Public Accountant and earned an MBA from Queens University of Charlotte and a B.A. in Accounting from Flagler College.

D. Kyle Cerminara, has been SGE’s Chairman since March 2022. Mr. Cerminara has over 20 years’ experience as an institutional investor, asset manager, director, chief executive, founder and operator of multiple financial services and technology businesses. Mr. Cerminara co-founded FG in 2012 and serves as its Chief Executive Officer.

Mr. Cerminara is a member of the board of directors of a number of companies focused in the reinsurance, investment management, technology and communication sectors, including Fundamental Global, Inc. (NASDAQ: FGF) (formerly known as FG Financial Group, Inc. and as 1347 Property Insurance Holdings, Inc.), which operates as a reinsurance and asset management company, since December 2016, and Firefly Systems Inc., a venture-backed digital advertising company, since August 2020. Mr. Cerminara has served as the Chairman and President since the founding of FG Communities, Inc. in July 2022. FG Communities is a corporation created to preserve and improve affordable housing through ownership and management of manufactured housing communities. Mr. Cerminara is the chairperson of the board of directors of FG Acquisition Corp. (TSX:FGAA.U), a Canadian special purpose acquisition company that has completed its initial public offering and is focused on searching for a target company in the financial services sector. In addition, from February 2022 to August 2023, Mr. Cerminara served as a Senior Advisor to FG Merger Corp. (NASDAQ: FGMC), a special purpose acquisition company, which merged with iCoreConnect, Inc. (NASDAQ: ICCT), a market leading, cloud-based software and technology company focused on increasing workflow productivity and customer profitability through its enterprise and healthcare workflow platform of applications and services. Mr. Cerminara has served as the Chairman of FG Merger II Corp. since October 2023 and as the Chairman of FG Merger III Corp. since November 2023. FG Merger II Corp. and FG Merger III Corp. are each a blank check company whose business purpose is to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.

Mr. Cerminara served as a director of FGH, a holding company with diverse business activities focused on serving the entertainment and retail markets that merged with FG in February 2024, from February 2015 until February 2024; he served as its Chairman from May 2015 until February 2024; and he previously served as its Chief Executive Officer from November 2015 through April 2020. Mr. Cerminara was appointed Chairman of FG in May 2018 and served as its Principal Executive Officer from March 2020 to June 2020, and has served as its Chief Executive Office since its merger with FGH in February 2024. Mr. Cerminara served as a Director of BK Technologies Corporation from July 2015 through December 2023, and served as its Chairman from July 2022 through December 2023 and previously from March 2017 until April 2020. From April 2021 to December 2021, Mr. Cerminara served as a director of Aldel Financial Inc. (NYSE: ADF), a special purpose acquisition company co-sponsored by Fundamental Global, which merged with Hagerty, a leading specialty insurance provider focused on the global automotive enthusiast market. From July 2020 to July 2021, Mr. Cerminara served as Director and President of FG New America Acquisition Corp. (NYSE: FGNA), a special purpose acquisition company, which merged with OppFi Inc. (NYSE: OPFI), a leading financial technology platform that powers banks to help everyday consumers gain access to credit. He served on the board of directors of GreenFirst Forest Products Inc. (TSXV: GFP) (formerly Itasca Capital Ltd.), a public company focused on investments in the forest products industry, from June 2016 to October 2021 and was appointed Chairman from June 2018 to June 2021; Limbach Holdings, Inc. (NASDAQ: LMB), a company which provides building infrastructure services, from March 2019 to March 2020; Iteris, Inc. (NASDAQ: ITI), a publicly-traded, applied informatics company, from August 2016 to November 2017; Magnetek, Inc., a publicly-traded manufacturer, in 2015; and blueharbor bank, a community bank, from October 2013 to January 2020. He served as a Trustee and President of StrongVest ETF Trust, which was an open-end management investment company, from July 2016 to March 2021. Previously, Mr. Cerminara served as the Co-Chief Investment Officer of CWA Asset Management Group, LLC, a position he held from January 2013 to December 2020.

Prior to these roles, Mr. Cerminara was a Portfolio Manager at Sigma Capital Management, an independent financial adviser, from 2011 to 2012, a Director and Sector Head of the Financials Industry at Highside Capital Management from 2009 to 2011, and a Portfolio Manager and Director at CR Intrinsic Investors from 2007 to 2009. Before joining CR Intrinsic Investors, Mr. Cerminara was a Vice President, Associate Portfolio Manager and Analyst at T. Rowe Price (NASDAQ: TROW) from 2001 to 2007, where he was named amongst Institutional Investor’s Best of the Buy Side Analysts in November 2006, and an Analyst at Legg Mason from 2000 to 2001. Mr. Cerminara received an MBA degree from the Darden Graduate School of Business at the University of Virginia and a B.S. in Finance and Accounting from the Smith School of Business at the University of Maryland, where he was a member of Omicron Delta Kappa, an NCAA Academic All American and Co-Captain of the men’s varsity tennis team. He also completed a China Executive Residency at the Cheung Kong Graduate School of Business in Beijing, China. Mr. Cerminara holds the Chartered Financial Analyst (CFA) designation.

We believe Mr. Cerminara is qualified to serve as our Chairman because of his extensive experience at FG as well as his familiarity with the Company as an operating segment of FGH (prior to its merger with Fundamental Global, Inc.) and his operational expertise.

Dr. Richard E. Govignon, Jr has been a member of SGE’s Board of Directors since January 2022. Dr. Govignon has been a Partner of Dnerus Financial, a family asset management company, since June 2021. Dr. Govignon is an experienced corporate director/trustee in the U.S. and Canada with broad exposure to numerous industries. Dr. Govignon has served as a director of the board of FG (formerly FG Financial, Inc.) (Nasdaq: FGF), a reinsurance and asset management holding company focused on collateralized and loss-capped reinsurance and merchant banking since December 2021. Dr. Govignon also serves as a member of the board of directors of FG Acquisition Corp (TSX: FGAA.U), a special purpose acquisition corporation incorporated under the laws of the Province of British Columbia since April 2022. Dr. Govignon is also a member of the board of directors of B-Scada, Inc. (OTC: SCDA), a company developing software and hardware products since June 2021. Since October 2023, Dr. Govignon has served as a member of the board of directors of FG Merger II Corp., a special-purpose acquisition company in the process of completing its initial public offering. Since November 2023, Dr. Govignon has served as a member of the board of directors of FG Merger III Corp., a special-purpose acquisition company in the process of completing its initial public offering. Dr. Govignon served as a member of the board of directors of GreenFirst Forest Products, Inc. (TSXV: GFP), a public company focused on forest product investments, from January 2019 to December 2021. Dr. Govignon also served as a trustee of the StrongVest ETF Trust (US: CWAI), which invested in a diversified portfolio of corporate bonds with varying maturities and equity securities from 2017 to 2019. Dr. Govignon has worked in the healthcare and pharmaceutical industry in various management and pharmacy positions for over 20 years, most recently with ShopRite Pharmacy since 2022 and previously with CVS Health Corporation (2022-2019 and from 2013-2017), with Acme Markets Inc. (2017-2019) and Rite Aid Corporation (2001-2013). Dr. Govignon received a Bachelor of Science in Pharmacy and a Doctor of Pharmacy from the University of the Sciences in Philadelphia. We believe Dr. Govignon’s managerial experience and his experience in investing and financial analysis make him qualified to serve on our Board of Directors.

John W. Struble has been a member of SGE’s Board of Directors since January 2022. Mr. Struble currently serves as the Chief Financial Officer of Artisanal Brewing Ventures (“ABV”), a private equity owned company based in Charlotte, NC. ABV is an umbrella company of like-minded craft beverage companies including Southern Tier Brewing, Southern Tier Distilling, Victory Brewing, Bold Rock Cider and Sixpoint Brewing. From March 2020 to November 2020, Mr. Struble worked at FGM, an affiliate of Fundamental Global, which provides services related to the day-to-day management of certain Fundamental Global’s portfolio companies and affiliates. Mr. Struble was appointed to the board of directors of BK Technologies Inc. (NYSE: BKTT) in March 2017 where he served as Chairman of the Board until December 2021. From December 2013 to March 2020, Mr. Struble served as Chief Financial Officer of Intra Pac International LLC, a specialty packaging manufacturing company owned by private equity investment firm Onex Corporation (TSX: ONEX), where he was responsible for the finance, information technology and human resources functions. From May 2010 to May 2012, he served as Corporate Controller (Operations) of Euramax International, Inc., where he was responsible for the accounting and finance functions for the North American operations. Euramax is a public company that produces aluminium, steel, vinyl and fiberglass products for original equipment manufacturers, distributors, contractors, and home centers in North America and Europe. Prior to that, he was a controller of Rock-Tenn Company, from December 2008 to February 2010. Mr. Struble is a Certified Public Accountant. He received an MBA from the University of Georgia and a B.S. in Business Administration from the State University of New York at Buffalo. We believe Mr. Struble is qualified to serve on our Board of Directors because of his previous board experience and his financial expertise.

Marsha G. King, PhD has been a member of SGE’s Board of Directors since January 2022. Dr. King has served as the President/Founder for Polaris Leadership Consulting since April 2021. Since April 2022, Dr. King has served as a director of Vend Tech International, Inc., a privately held vending machine company. Dr. King was also a director of FG (formerly Financial Group, Inc.) (NASDAQ: FGF) where she was a member of the Compensation Committee from January 2019 until December 2021. Dr. King has also served as President/Owner for SkillPoint Consulting, Inc., where she consulted with executives to improve their overall business and leadership performance, from January 2007 to April 2021. Dr. King has also taught as an adjunct professor at Northwestern University, The George Washington University, The Pennsylvania State University, Johns Hopkins University, Georgetown University and the University at Buffalo. Prior to joining SkillPoint Consulting Inc., Dr. King worked at Capital One Financial Corporation from September 1999 to January 2007, where she served as director of leadership acceleration before being promoted to Managing Vice President, Human Resources in October 2002. Prior to that, Dr. King served as an executive coach at Development Dimensions International, Inc., a global human resource consulting firm, from August 1998 to September 1999. Dr. King received a Bachelor of Science in Business Administration from The Ohio State University and a Master of Education in Instructional Systems Design/Multimedia and Ph.D. in Organizational Development from The Pennsylvania State University. We believe Dr. King is qualified to serve on SGE’s Board of Directors based on her perspective and experience consulting and providing executive leadership.

SGE is a newly formed company, and as discussed in more detail elsewhere, prior to the Separation, FGH, our ultimate parent and majority shareholder, operated the Entertainment operating segment (the “Entertainment Business”). Our compensation committee has met to review and approve the employment agreements of our executive officers. As a result, we have set forth below the compensation of our executive officers. In compliance with SEC rules, the information included in this section is historical, as applicable.

For purposes of the following compensation discussion and analysis, and the tabular executive compensation disclosures that follow, the individuals listed below are referred to collectively as the “Named Executive Officers” or (“NEOs”). These include:

The following table sets forth information regarding all forms of compensation earned by the NEOs during the last two fiscal years as employees of SGE.

The following table sets forth information concerning outstanding equity awards of SGE for each of the NEOs as of the end of the fiscal year ended December 31, 2023.

* Based on the closing stock price of SGE’s Common Shares of $1.5986 on December 29, 2023, the last trading day of the 2023 fiscal year.

There is also limit on the amount of compensation payable to our non-employee directors. Specifically, the aggregate grant date fair value of all awards granted to any single non-employee director during any single calendar year (determined as of the applicable grant date(s) under applicable financial accounting rules), when taken together with any cash fees paid to the non-employee director during the same calendar year, may not exceed $200,000.

In addition, we expect to reimburse all directors for reasonable expenses incurred in attending meetings of the Board or any of its committees.

The election of a director requires the affirmative vote of a plurality of the votes properly cast. A “plurality” means that the individuals who receive the largest number of votes are elected as directors, up to the maximum number of directors to be elected at the meeting. Therefore, proxies marked “WITHHOLD” and broker non-votes will have no impact on the election of directors. Properly executed proxies submitted pursuant to this solicitation will be voted “FOR” the election of the directors marked on the proxy, unless specified otherwise.

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE ELECTION OF MARK ROBERSON, D. KYLE CERMINARA, RICHARD E. GOVIGNON, JR., MARSHA G. KING, AND JOHN W. STRUBLE, AS DIRECTORS.

The information regarding SGE director independence and the SGE Board of Directors and its committees is as follows:

SGE’s business and affairs are managed under the direction of its Board of Directors. SGE’s Articles, as amended, provide that the total number of directors on its Board of Directors shall be fixed from time to time, by ordinary resolution of the Shareholders. SGE’s board is composed of five directors. SGE’s officers are appointed by the Board of Directors and serve at the discretion of the Board of Directors, rather than for specific terms of office.

SGE’s Audit Committee of the Board of Directors (the “Audit Committee”) consists of Richard E. Govignon Jr., John W. Struble and Marsha G. King, each of whom is independent for purposes of serving on the Audit Committee under the SEC’s rules and NYSE American’s listing requirements. All Audit Committee members are financially literate. The Board of Directors has determined that John W. Struble is an “Audit Committee Financial Expert” as defined by Item 407(d)(5)(ii) of Regulation S-K under the Exchange Act. John W. Struble serves as the Chairperson of the Audit Committee. We adopted an audit committee charter, detailing the principal functions of the Audit Committee. The Audit Committee assists the Board of Directors in fulfilling its responsibilities for oversight of the quality and integrity of the accounting, internal controls, and reporting practices of the Company, and perform such other duties as are directed by the Board of Directors. The Audit Committee’s role includes a particular focus on the qualitative aspects of financial reporting to shareholders, and on the Company’s processes to manage business and financial risk, and for compliance with significant applicable legal, ethical and regulatory requirements. The Audit Committee’s responsibilities include, among other things, reviewing policies and procedures regarding transactions, and reviewing and overseeing the transactions, between the Company and officers, directors and other related parties that are not a normal part of the Company’s business, and overseeing compliance with the Company’s code of business conduct and ethics (the “Code of Ethics”) and considering conflicts of interest. Annually and on a quarterly basis, the Audit Committee reviews and discuss matters separately with management of SGE and with SGE’s independent registered public accounting firm. The Audit Committee will provide a report in the annual proxy that includes the Audit Committee’s review and discussion of matters with management and the independent public accounting firm.

The Audit Committee also conducts periodic oversight of SGE’s risk management, including regularly reviewing SGE’s cybersecurity and other information technology risks, controls and procedures and the SGE’s plans to mitigate cybersecurity risks and to respond to data breaches.

The Audit Committee is directly responsible for the appointment of the independent registered public accounting firm engaged to prepare and issue an audit report on the financial statements of SGE and periodically reviews and evaluates such firm’s performance and independence from management. All audit and permitted non-audit services will be pre-approved by the Audit Committee. The Audit Committee may delegate the responsibility of approving proposed non-audit services that arise between Audit Committee meetings to the Audit Committee chairperson, provided that the decision to approve the services is presented for ratification at the next scheduled Audit Committee meeting. The Audit Committee meets with management and the independent registered public accounting firm to review and discuss earnings press releases and our policies with respect to release of financial information and earnings guidance to be provided to analysts and rating agencies.

SGE’s compensation committee of the Board of Directors (the “Compensation Committee”) consists of Richard E. Govignon Jr., John W. Struble and Marsha G. King, each of whom is independent for purposes of serving on the Compensation Committee under the SEC’s rules and NYSE American’s listing requirements. Marsha G. King serves as the Chairperson of the Compensation Committee. SGE has adopted a Compensation Committee charter, detailing the principal functions of the Compensation Committee. The Compensation Committee is responsible for establishing policies with respect to the compensation of SGE’s officers and has overall responsibilities for approving and evaluating officer compensation plans, policies and programs of SGE. The Compensation Committee’s functions include, but are not limited to:

The Compensation Committee has the sole authority to retain and to terminate any compensation consultant, legal counsel or financial or other advisor to be used to assist in the performance of its duties and responsibilities, without consulting or obtaining the approval of senior management of SGE in advance, and has the sole authority to approve the compensation advisor’s fees and other retention terms. The Compensation Committee is responsible for annually reviewing an assessment of any potential conflict of interest raised by the work of a compensation consultant (and other compensation advisor, as required) that is involved in determining or recommending executive and/or director compensation. The Compensation Committee is permitted to delegate its authority to a subcommittee of its members. The Compensation Committee annually reviews and reassesses the adequacy of its charter and performance and recommends any proposed changes to the Board for approval.

SGE’s Nominating and Corporate Governance Committee of the Board of Directors (the “Nominating and Corporate Governance Committee”) consists of Richard E. Govignon Jr., John W. Struble and Marsha G. King, each of whom is independent for purposes of serving on the Nominating and Corporate Governance Committee under the SEC’s rules and NYSE American’s listing requirements. Richard E. Govignon Jr. serves as the Chairperson of the Nominating and Corporate Governance Committee. SGE has adopted a Nominating and Corporate Governance Committee charter, detailing the principal functions of the Nominating and Corporate Governance Committee. The functions of the Nominating and Corporate Governance Committee include, among other items, overseeing all aspects of SGE’s corporate governance functions, including compliance with significant legal, ethical and regulatory requirements. The Nominating and Corporate Governance Committee’s functions include, but not be limited to:

The Nominating and Corporate Governance Committee also reports to, and assists, the Board of Directors in identifying individuals for membership on the Board of Directors and recommends to the Board of Directors the director nominees for SGE’s annual meeting of shareholders.

During 2023, the SGE Board of Directors held eight meetings (including regularly scheduled and special meetings), the SGE Audit Committee held four meetings, the SGE Compensation Committee held two meetings, the SGE Nominating and Corporate Governance Committee held one meeting, and each director attended at least 75% of the aggregate of (i) the total number of meetings of our board of directors held during the period for which he or she served as a director and (ii) the total number of meetings held by all committees of our board of directors on which he or she served during the periods that he or she served. Although we do not have a formal policy regarding attendance by members of our board of directors at annual meetings of stockholders, we encourage, but do not require, our directors to attend.

The corporate laws of British Columbia allow SGE to indemnify directors and officers and former directors and officers, and SGE’s corporate Articles, as amended, require us (subject to the provisions of the BCBCA noted below), to indemnify our directors, former directors, alternate directors and their heirs and legal personal representatives against all eligible penalties to which such person is or may be liable, and SGE must, after the final disposition of an eligible proceeding, pay the expenses actually and reasonably incurred by such person in respect of that proceeding. Each director and alternate director is deemed to have contracted with SGE on the terms of the indemnity contained in our Articles, as amended.

In addition, under the BCBCA, SGE may pay, as they are incurred in advance of the final disposition of an eligible proceeding, the expenses actually and reasonably incurred by an eligible party in respect of that proceeding, provided that SGE first receives from the eligible party a written undertaking that, if it is ultimately determined that the payment of expenses is prohibited by the restrictions noted below, the eligible party will repay the amounts advanced.

Notwithstanding the provisions of SGE’s Articles, as amended, noted above, under the BCBCA the Company must not indemnify an eligible party or pay the expenses of an eligible party, if any of the following circumstances apply:

(1) if the indemnity or payment is made under an earlier agreement to indemnify or pay expenses and, at the time that the agreement to indemnify or pay expenses was made, the company was prohibited from giving the indemnity or paying the expenses by its memorandum or articles;

(2) if the indemnity or payment is made otherwise than under an earlier agreement to indemnify or pay expenses and, at the time that the indemnity or payment is made, the company is prohibited from giving the indemnity or paying the expenses by its memorandum or articles;

(3) if, in relation to the subject matter of the eligible proceeding, the eligible party did not act honestly and in good faith with a view to the best interests of the company or the associated corporation, as the case may be;

(4) in the case of an eligible proceeding other than a civil proceeding, if the eligible party did not have reasonable grounds for believing that the eligible party’s conduct in respect of which the proceeding was brought was lawful.

In addition, if an eligible proceeding is brought against an eligible party by or on behalf of SGE or by or on behalf of an associated corporation, SGE must not do either of the following:

(1) indemnify the eligible party under section 160(a) of the BCBCA in respect of the proceeding; or

Notwithstanding any of the foregoing, and whether or not payment of expenses or indemnification has been sought, authorized or declined under the BCBCA or the Articles of SGE, as amended, on the application of SGE or an eligible party, the Supreme Court of British Columbia may do one or more of the following:

(1) order a company to indemnify an eligible party against any liability incurred by the eligible party in respect of an eligible proceeding;

(2) order a company to pay some or all of the expenses incurred by an eligible party in respect of an eligible proceeding;

(3) order the enforcement of, or any payment under, an agreement of indemnification entered into by a company;

(4) order a company to pay some or all of the expenses actually and reasonably incurred by any person in obtaining an order under this section;

SGE entered into indemnification agreements with each of its directors and officers. The indemnification agreements provide the directors and officers with contractual rights to indemnification, expense advancement and reimbursement, to the fullest extent permitted under the Articles of the Company, as amended, and the BCBCA, subject to certain exceptions contained in those agreements.

SGE’s Board of Directors has adopted a Code of Ethics that applies to all of our employees, officers and directors, including our executive and senior financial officers. The full text of SGE’s Code of Ethics has been posted on the investor relations section of its website. We intend to disclose future amendments to our Code of Ethics, or any waivers of such code, on our website or in public filings.

SGE’s Code of Ethics that its Board of Directors adopted requires us to avoid, wherever possible, all related party transactions that could result in actual or potential conflicts of interests, except in accordance with the approval process and guidelines included in the Code of Ethics. Under SGE’s Code of Ethics, a “conflict of interest” arises when an individual’s personal interest interferes or appears to interfere with our interests.

In addition, the Audit Committee of SGE’s Board of Directors adopted a charter, pursuant to which the audit committee reviews policies and procedures regarding transactions, and reviews and oversees the transactions, between SGE and officers, directors and other related parties that are not a normal part of its business. If the Board of Directors creates a special committee in connection with such a transaction or holds a meeting of the non-interested directors of the Board to approve such transaction, the Audit Committee will not be required to consider such transaction or assess conflicts of interest in connection with such transaction.

These procedures are intended to determine whether any such related party transaction impairs the independence of a director or presents a conflict of interest on the part of a director, employee or officer.

The transactions described in the section “Certain Relationships and Related Transactions, and Director Independence—Relationship with FG Group Holdings” (collectively, the “FG Group Holdings Contemplated Transactions”) were entered into prior to the adoption of SGE’s related person transaction approval policy and therefore were not approved under the policy. In addition, (i) amendments, modifications, terminations, extensions, or exercises of discretion outside the ordinary course of business, with respect to the agreements constituting FG Group Holdings Contemplated Transactions, (ii) negotiation, execution, modification, termination or extension, or exercises of discretion outside the ordinary course of business, with respect to any new agreements with FG Group Holdings (“New Agreements”) and (iii) the assertion, handling or resolution of any disputes arising under the agreements related to the FG Group Holdings Contemplated Transactions or any New Agreements, in each case involving amounts that will or may be expected to exceed $120,000, will be reviewed and approved by SGE’s directors that are unaffiliated with FGH. Any executive officer of SGE who is also an officer, director or employee of FGH may participate in these activities provided that he or she does so solely on behalf of SGE and under the direction of, and subject to the approval of, our independent directors that are unaffiliated with FGH. Any director of SGE who is also an officer, director or other affiliate of FGH may participate in these activities provided that he or she does so solely on behalf of FGH or its affiliates, as applicable, and provided that our independent directors have received advance notice of his or her participation.

There have been no material changes to the procedures by which shareholders of SGE may recommend nominees to SGE’s Board of Directors.

There are no family relationships among any of SGE’s directors or executive officers.

No director or executive officer has been involved in any legal proceeding during the past ten years that is material to an evaluation of his or her ability or integrity.

SGE has adopted insider trading policies pursuant to its Code of Business Conduct and Ethics, under which all SGE employees, directors and agents are prohibited from profiting from undisclosed information relating to SGE or any other company in violation of insider trading or other laws. The full text of the SGE Code of Business Conduct and Ethics has been posted on the investor relations section of the SGE website.

SGE’s Code of Ethics that its Board of Directors adopted requires SGE to avoid, wherever possible, all related party transactions that could result in actual or potential conflicts of interests, except in accordance with the approval process and guidelines included in the Code of Ethics. Under our Code of Ethics, a “conflict of interest” arises when an individual’s personal interest interferes or appears to interfere with SGE’s interests.

In addition, the Audit Committee of SGE’s Board of Directors adopted a charter, pursuant to which the audit committee reviews policies and procedures regarding transactions, and reviews and oversees the transactions, between us and officers, directors and other related parties that are not a normal part of our business. If the Board of Directors creates a special committee in connection with such a transaction or holds a meeting of the non-interested directors of the Board to approve such transaction, the Audit Committee will not be required to consider such transaction or assess conflicts of interest in connection with such transaction.

On May 18, 2023, SGE entered into various agreements that govern the separation of the entertainment business from FG (the “Separation”). Upon completion of the Business Combination, SGE will be 100% owned by FG and many of the agreements will be largely irrelevant in the context of the consolidated operating business. Refer to the Section “Relationship between SGE and FG” for additional information.

Section 16(a) of the Exchange Act requires directors and certain officers of SGE, as well as persons who own more than 10% of a registered class of SGE’s equity securities, to file reports with the SEC.

Based upon a review of filings with the SEC and written representations from SGE’s directors, officers, and other persons who own more than 10% of a registered class of its shares that no other reports were required, SGE believes that all parties complied during 2023 with the reporting requirements of Section 16(a) of the Exchange Act.

The following table sets forth, as of December 31, 2023, the number of shares of common stock underlying awards outstanding under the 2021 Plan, the 2018 Plan, and the Company’s Amended and Restated 2014 Equity Incentive Plan (“2014 Plan”), as well as the number of shares remaining available for issuance under the 2021 Plan. No more awards may be made under the 2018 Plan or the 2014 Plan.

The following table provides information as of December 31, 2023 about SGE’s equity compensation plan and arrangements:

The information regarding SGE’s largest holders and ownership of our securities by its management and directors will be contained in the “Security Ownership of Certain Beneficial Owners and Management” section of this proxy statement/prospectus.

PROPOSAL 5 — RATIFICATION OF APPOINTMENT OF HASKELL & WHITE LLP AS SGE’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 2024

At the SGE Stockholder Meeting, stockholders will be asked to ratify the appointment of Haskell & White LLP (“Haskell & White”) as SGE’s independent registered public accounting firm for the year ending December 31, 2024. The Audit Committee of SGE’s Board of Directors has appointed Haskell & White as SGE’s independent registered public accounting firm for the year ending December 31, 2024. Haskell & White also served as SGE’s independent registered public accounting firm for the year ended December 31, 2023 and has served as SGE’s independent registered public accounting firm since 2021. If stockholders do not ratify the appointment of Haskell & White, the Board may consider the selection of other independent registered public accounting firms for the year ending December 31, 2024, but will not be required to do so.

Stockholder ratification of the appointment of Haskell & White is not required. However, the SGE Board of Directors is submitting the appointment of Haskell & White to the stockholders for ratification as a matter of good corporate governance. Even if the appointment is ratified, the SGE Board of Directors, in its discretion, may direct the appointment of a different independent registered public accounting firm for 2024 if the Board of Directors feels that such a change would be in the best interests of SGE and its stockholders.

The Audit Committee and the Board of Directors believe that the continued retention of Haskell & White as SGE’s independent registered public accounting firm is in the best interests of SGE and its stockholders at this time.

Ratification requires an affirmative vote of a majority of the votes properly cast at the SGE Stockholder Meeting. Therefore, proxies marked “ABSTAIN” will have no impact on the outcome. Properly executed proxies submitted pursuant to this solicitation will be voted “FOR” the ratification of the appointment of Haskell & White LLP, unless specified otherwise.

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF HASKELL & WHITE LLP AS SGE’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2024.

The consolidated financial statements for the years ended December 31, 2023 and 2022 have been audited by Haskell & White, as independent registered public accounting firm. SGE’s Audit Committee requires that management obtain the prior approval of the Audit Committee for all audit and permissible non-audit services to be provided by Haskell & White. Fees for all services provided by Haskell & White were pre-approved by the Audit Committee.

Following is a description of material aspects of the Arrangement. This summary may not contain all of the information that is important to you. You should carefully read this entire proxy statement/prospectus and the other documents we refer you to for a more complete understanding of the Arrangement, including the full text of the Arrangement Agreement and Plan of Arrangement. Please see the section entitled “Where You Can Find More Information” beginning on page 113.

On May 30, 2024, SGE, FG Québec, and Subco, entered into the Arrangement Agreement and Plan of Arrangement, pursuant to which, commencing at the Effective Time (i) the SGE Common Shares outstanding immediately prior to the Effective Time will be deemed to be transferred by the holders thereof to FG Québec in exchange for the Arrangement Consideration consisting of FG Common Stock (ii) SGE and Subco will be amalgamated and continue as one corporate entity, Amalco, and (iii) each SGE Common Share and Subco share held by FG Québec will be exchanged for one Common Share of Amalco.

If the Arrangement Agreement and Plan of Arrangement are adopted and the other transactions contemplated thereby are approved, including receipt of the final order of the Supreme Court of British Columbia under Section 291 of BCBCA approving the Business Combination, (a) prior to the Closing of the Business Combination, the Arrangement Consideration will be deposited in escrow to be paid to SGE stockholders in accordance with the Arrangement Agreement, and (b) the SGE Convertible Securities outstanding prior to the Effective Time will be adjusted at the Effective Time to be exercisable for, or settled in, FG Common Stock.

Listing of Arrangement Consideration; Delisting and Deregistration of SGE Common Stock

The shares of FG Common Stock to be issued in the Arrangement will be listed for trading on Nasdaq. Following the Arrangement, shares of FG Common Stock will continue to be listed on Nasdaq. In addition, following the Arrangement, SGE Common Stock will be delisted from the NYSE American and deregistered under the Exchange Act.

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

The current ownership and control of FG and SGE includes significant overlap. FG shares voting and dispositive power with respect approximately 76% of the outstanding SGE Common Stock. Further, there are overlapping executive officer and director positions as described in “Certain Relationships and Related Person Transactions” on page 101.

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

The following chronology summarizes the key events that led to the signing of the Arrangement Agreement and Plan of Arrangement. This summary does not purport to catalogue every conversation of or among the FG Board, the SGE Board, their respective Special Committees and management teams, or the representatives of FG and SGE, and other parties.

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

As part of this process, from time to time, the FG Board and the SGE Board (with the majority of members of each of the Boards of Directors being “independent” as defined by SEC, NYSE American and Nasdaq rules and regulations) and their senior management teams have reviewed potential strategic alternatives including, among other things, continuing as stand-alone public companies or executing a third-party transaction as the best opportunity to enhance stockholder value. The SGE Board, the FG Board, and their respective management teams also considered the potential benefits and risks associated with each such course of action. In the ordinary course of business, members of management of FG and SGE have had conversations about their businesses and discussed the possibility of potential combinations and other ways of working together to the mutual benefit of the companies. In addition, stockholders from each of FG and SGE have inquired as to whether management and their respective board of directors had considered the merits of combining the companies.

During March 2024, FG and SGE each proceeded to engage independent counsel specifically to represent the respective parties in a potential Arrangement transaction, evaluate potential courses of action, and to begin drafting an Arrangement Agreement and Plan of Arrangement. FG engaged Holland & Hart LLP, and SGE engaged Gowling WLG (Canada) LLP. Those discussions and evaluations continued at the board and management level of each company over the next several months.

On May 2, 2024, the SGE Board held a meeting at which both routine and strategic matters were discussed, including discussion of the proposed Arrangement and the potential cost savings and other strategic benefits of combining the companies. Management gave a briefing on the proposed Arrangement. Management indicated that the Arrangement was expected to be advantageous because of cost savings from running the two companies on a common platform thereby eliminating duplication of costs and inefficiencies in the current management arrangements.

Working with outside advisors and legal counsel, and following the discussions with the respective boards of directors, management for FG and SGE determined that the structure reflected in the Arrangement Agreement and Plan of Arrangement was the recommended structure for a combination of the companies. At each of the SGE and FG Board meetings, the directors with special interests identified those interests and indicated that they would accordingly be abstaining from any votes taken with respect to the proposed transaction. Such interests are discussed under “Certain Relationships and Related Person Transactions” on page 99.

On April 30, 2024, the SGE Board established a special committee of independent directors to evaluate the transaction and make its recommendations to the FG Board regarding the Business Combination and engaged Intrinsic as its financial advisor, and to provide an opinion on the fairness from a financial point of view to the holders of SGE Common Stock of the exchange ratio to be provided in the Plan of Arrangement

On May 2, 2024, the SGE Board held a meeting at which both routine and strategic matters were discussed, including discussion of the proposed Arrangement and the recommended structure.

Intrinsic and its affiliates are engaged in advisory, research, and other financial and non-financial activities and services for various persons and entities. The independent members of the SGE Board selected Intrinsic as its financial advisor because it is a nationally recognized valuation, advisory and financial diligence firm that has substantial experience in transactions similar to the transactions contemplated by the Arrangement Agreement and Plan of Arrangement. The independent members of the SGE Board engaged Intrinsic to assess the fairness, from a financial point of view, of the Arrangement Consideration. Intrinsic began the process of meeting with the management of SGE and FG, reviewing financial information about SGE and FG’s underlying operations and holdings and preparing their opinion on the fairness from a financial point of view of the exchange ratio and Arrangement Consideration. Discussions and evaluations of the proposed Arrangement continued at the board and management level of each company.

On May13, 2024, the FG Board had a regularly scheduled board meeting at which management updated the board on the progress of various work streams to implement the proposed Arrangement. Management was asked to keep the Board apprised of developments with respect to the determination of the exchange ratio and progress toward definitive documentation.

On May 20, 2024, the FG Board established a special committee of independent directors to evaluate the transaction and make its recommendations to the FG Board regarding the Business Combination.

On May 30, 2024, meetings of the FG Board and the FG Special Committee were held where the proposed transactions and terms of the Arrangement Agreement and Plan of Arrangement were reviewed and considered. The FG Special Committee and FG Board evaluated the exchange ratio based on several metrics, including underlying value of the holdings of each company in relation to their respective share prices, the current share price of each company, and the volume weighted average stock price (“VWAP”) of each company’s common stock over the most recent 20–90-day period. They also discussed the potential impact of the MDI Acquisition and the potential cost savings and other benefits from the proposed Arrangement.

The FG Special Committee reviewed the information presented and after lengthy discussion, unanimously voted to approve the Arrangement Agreement and Plan of Arrangement and the transactions contemplated thereby, and recommended that the FG Board approve the Arrangement. The FG Board, taking into consideration the information presented and the recommendation of the FG Special Committee also approved the Arrangement.

Also on May 30, 2024, meetings of the SGE Board and the SGE Special Committee were held where the proposed transactions and terms of the Arrangement Agreement and Plan of Arrangement were reviewed and considered, and Intrinsic presented the results of their fairness opinion. The SGE Special Committee and the SGE Board evaluated the exchange ratio based on several metrics, including underlying value of the holdings of each company in relation to their respective share prices, the current share price of each company, and the VWAP of each company’s common stock over the most recent 20–90-day period. They also discussed the potential strategic fit and cost savings and other benefits from the proposed Arrangement.

The SGE Special Committee reviewed the information presented and after a thorough discussion, unanimously voted to approve the Arrangement Agreement and Plan of Arrangement and the transactions contemplated thereby, and recommended that the SGE Board approve the Arrangement. The SGE Board, taking into consideration the information presented and the recommendation of the SGE Special Committee also unanimously approved the Arrangement and determined to recommend the Arrangement for approval by SGE stockholders.

SGE’s Reasons for the Business Combination; Recommendation of the SGE Board

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

The SGE Board also considered potential risks related to the Arrangement but concluded that the anticipated benefits of the Arrangement were likely to substantially outweigh these risks. These potential risks include:

The foregoing discussion of the information and factors considered by the SGE Board is not intended to be exhaustive, but includes the material factors considered by the SGE Board. In reaching its decision to approve the Business Combination, the SGE Board did not quantify or assign any relative weights to the factors considered, and individual directors may have given different weights to different factors. The SGE Board considered all these factors as a whole, including through its discussions with SGE’s management and financial and legal advisors.

For the reasons set forth above, the SGE Board determined that the Business Combination is advisable and in the best interests of SGE and its stockholders.

This explanation of the reasoning of the SGE Board and all other information presented in this section is forward-looking in nature and, therefore, should be read in light of the factors discussed in the section entitled “Cautionary Statement Regarding Forward-Looking Statements” on page 2.

FOR THE REASONS SET FORTH ABOVE, THE SGE BOARD UNANIMOUSLY RECOMMENDS THAT THE SGE STOCKHOLDERS APPROVE THE BUSINESS COMBINATION.

In reaching its decision to adopt and approve the Business Combination, the FG Board evaluated the Arrangement Agreement, Plan of Arrangement, and the other contemplated transactions in consultation with FG’s management, as well as FG’s legal advisors, and considered a number of factors, including the following:

The FG Board also considered potential risks related to the Arrangement but concluded that the anticipated benefits of the Arrangement were likely to substantially outweigh these risks. These potential risks include:

The foregoing discussion of the information and factors considered by the FG Board is not intended to be exhaustive but includes the material factors considered by the FG Board. In reaching its decision to approve the Business Combination, the FG Board did not quantify or assign any relative weights to the factors considered, and individual directors may have given different weights to different factors. The FG Board considered all these factors as a whole, including through its discussions with FG’s management and legal advisors.

For the reasons set forth above, the FG Board determined that the Business Combination is advisable and in the best interests of FG and its stockholders, and adopted and approved the Business Combination.

It should be noted that this explanation of the reasoning of the FG Board and all other information presented in this section is forward looking in nature and, therefore, should be read in light of the factors discussed in the section entitled “Cautionary Statement Regarding Forward-Looking Statements” on page 2.

On May 30, 2024, the independent members of the SGE Board (with Messrs. Cerminara, Govignon and Roberson recusing themselves) voted to engage Intrinsic as their financial advisor, and to provide an opinion to and for the sole benefit of the SGE Board as to the fairness from a financial point of view to the holders of SGE Common Stock of the Exchange Ratio to be provided in the Arrangement Agreement.

The full text of Intrinsic’s opinion, which sets forth, among other things, the assumptions made, matters considered and limitations on the scope of review undertaken by Intrinsic in rendering its opinion, is attached as Annex B and is incorporated into this joint proxy statement/prospectus by reference in its entirety. Holders of SGE Common Stock are encouraged to read this opinion carefully in its entirety. Intrinsic’s opinion was provided to the special committee and the independent members of the SGE Board for its information in connection with their evaluation of the value of the Business Combination, relates only to the fairness from a financial point of view to the holders of SGE Common Stock of the Exchange Ratio to be provided in the Arrangement Agreement, does not address any other aspect of the proposed Business Combination and does not constitute a recommendation to any stockholder as to how such stockholder should vote or act with respect to any matters relating to the proposed Business Combination. The summary of Intrinsic’s opinion in this joint proxy statement/prospectus is qualified in its entirety by reference to the full text of the opinion.

Intrinsic rendered its opinion to the special committee and to the independent members of the SGE Board that, as of May 30, 2024 and based upon and subject to the factors and assumptions set forth therein, the Exchange Ratio pursuant to the Arrangement Agreement was fair, from a financial point of view, to the holders of SGE Common Stock.

In rendering its opinion, Intrinsic has relied upon and assumed, without independent verification, the accuracy and completeness of all data, material and other information furnished or otherwise made available to Intrinsic by Management (including any materials prepared by third parties and provided to Intrinsic by or on behalf of Management), discussed with Intrinsic by or on behalf of Management, or reviewed by Intrinsic, or that was publicly available, and Intrinsic does not assume any responsibility for or with respect to such data, material, or other information. Intrinsic has not been requested to, and did not perform an independent evaluation, physical inspection or appraisal of any of the assets or liabilities (contingent or otherwise) of the Subject Companies. Intrinsic has further relied upon Management’s representations that Management is not aware of any facts or circumstances that would make such information inaccurate or misleading. Intrinsic has undertaken no independent analysis of any potential or actual litigation, regulatory action, possible unasserted claims or other contingent liabilities, to which a Subject Company is or may be a party or is or may be subject, or of any governmental investigation of any possible unasserted claims or other contingent liabilities to which a Subject Company is or may be a party or is or may be subject. In relying on the financial analyses and forecasts provided to Intrinsic, Intrinsic has assumed, with the consent of the independent members of the SGE Board, that they have been reasonably prepared on a basis reflecting the best currently available estimates and judgments of the respective Subject Company’s management as to the future financial performance of such Subject Company, and Intrinsic assumes no responsibility for and expresses no view as to such analyses and forecasts or the assumptions on which they are based. Intrinsic has further relied on the assurances of Management that they are unaware of any facts that would make such business prospects and financial outlook incomplete or misleading.

Intrinsic has also assumed that the Arrangement Agreement will conform in all material respects to the latest available drafts reviewed by Intrinsic; that the Business Combination will be consummated in a timely manner and in accordance with the terms set forth in the Arrangement Agreement and discussed with Management without waiver, modification, or amendment of any material term, condition or agreement; and that all governmental, regulatory, and other consents and approvals necessary for the consummation of the Business Combination will be obtained without any material adverse effect on FG, SGE, the Subject Companies, or on the contemplated benefits of the Business Combination.

Intrinsic has relied upon and assumed, without independent verification, that there has been no change in the business, assets, liabilities, financial condition, results of operations, cash flows or prospects of the Subject Companies since the dates of the most recent financial statements and other information, financial or otherwise, provided to Intrinsic, in each case that would be material to its analysis for Intrinsic’s opinion.

Intrinsic’s opinion is necessarily based on financial, economic, market and other conditions as in effect on, and information available to Intrinsic as of, the date of its opinion. Intrinsic has not undertaken to update, reaffirm, revise or withdraw its opinion or otherwise comment upon any events occurring or coming to Intrinsic’s attention after the date of its opinion and does not have any obligation to update, revise or reaffirm its opinion.

Intrinsic’s opinion addresses solely the fairness from a financial point of view, as of May 30, 2024, to the holders of SGE Common Stock of the Exchange Ratio provided for in the Arrangement Agreement and does not address any other terms or agreement relating to the Business Combination or any other matters pertaining to FG or SGE, or any other person or entity. Intrinsic was not authorized, and did not, (i) solicit other potential parties with respect to the Business Combination or any alternatives to the Business Combination or any related transaction with FG or SGE; (ii) negotiate the terms of the Business Combination or any related transaction; or (iii) advise the SGE Board or any other party or entity with respect to alternatives to the Business Combination or any related transaction.

Intrinsic’s opinion was furnished solely for the use and benefit of the special committee and the independent members of the SGE Board (solely in its capacity as such) in connection with its consideration of the Business Combination and is not intended to, and does not, confer any rights or remedies upon any other person, and is not intended to be used, and may not be used, for any other purpose, without Intrinsic’s express, prior written consent. Intrinsic’s opinion should not be construed as creating any fiduciary duty on Intrinsic’s part to any party. Intrinsic’s opinion is not intended to be, and does not constitute, a recommendation to the independent members of the SGE Board, any security holder or any other person or entity as to how to act or vote with respect to any matter relating to the Business Combination.

Intrinsic’s opinion does not constitute legal, regulatory, accounting, insurance, tax or other similar professional advice, and does not address or express an opinion regarding: (i) the underlying business decision of the independent members of the SGE Board or SGE’s security holders to proceed with or effect the Business Combination; (ii) the fairness of any portion or aspect of the Business Combination not expressly addressed in Intrinsic’s opinion; (iii) the fairness of any portion or aspect of the Business Combination to the creditors or other constituencies of FG or SGE other than those set forth in the opinion; (iv) the relative merits of the Business Combination as compared to any alternative business strategies that might exist for FG or SGE or the effect of any other transaction in which FG or SGE might engage; (v) the tax or legal consequences of the Business Combination to FG, SGE, or its respective security holders; (vi) how any security holder should act or vote, as the case may be, with respect to the Business Combination; (vii) the solvency, creditworthiness or fair value of any Subject Company or any other participant in the Business Combination under any applicable laws relating to bankruptcy, insolvency or similar matters; (viii) future price or value of the FG Common Stock or the SGE Common Stock or any other equity interests in FG or SGE or any assets of FG or SGE; or (ix) the fairness of the amount or nature of the compensation to any of FG’s or SGE’s respective officers, directors, or employees relative to the compensation to the other security holders of FG or SGE. Intrinsic’s opinion has been approved by the Opinions Committee of Intrinsic.

Intrinsic’s opinion to the special committee and independent members of the SGE Board was one of many factors taken into consideration by the independent members of the SGE Board in making its determination to approve the Business Combination. The foregoing summary does not purport to be a complete description of the analyses performed by Intrinsic in connection with its opinion and is qualified in its entirety by reference to the written opinion of Intrinsic attached as Annex B.

Interests of FG’s and SGE’s Directors and Executive Officers in the Arrangement

Certain of FG’s and SGE’s directors and executive officers may have interests in the Business Combination or with respect to SGE that are different from, or in addition to, the interests of SGE Stockholders generally. Each of the FG and SGE Boards was aware of these interests and considered them, among other matters, in evaluating and negotiating the Business Combination. These interests are described in “Certain Relationships and Related Person Transactions” beginning on page 99.

The SGE equity awards held by SGE’s directors and executive officers immediately prior to the Effective Time will be treated in the same manner as those SGE equity awards held by other employees generally. Upon completion of the Arrangement, outstanding SGE equity awards will be treated as follows:

SGE is party to existing employment agreements with its named executive officers that, in certain cases, provide for payments following a termination of employment in connection with a change in control. The SGE officers are not expected to be terminated in connection with the Arrangement. The material provisions of these employment agreements are discussed below.

Mr. Roberson’s employment agreement with SGE provides for an annual base salary of $275,000, subject to annual review and adjustment, and he is eligible for performance-based compensation in the form of an annual bonus targeted at 75% of base salary, payable in a combination of cash and equity, as determined by the Compensation Committee. The bonus will be subject to the achievement of performance metrics and other criteria as determined by the Compensation Committee. Mr. Roberson is also eligible to participate in SGE’s 401(k), medical, dental and vision plans and certain other benefits available generally to employees of SGE. The employment agreement also contains customary non-competition and non-solicitation covenants. In the event Mr. Roberson is terminated without cause (as defined in Mr. Roberson’s employment agreement), and provided he enters into a general release in favor of SGE and related parties, he will be entitled to severance equal to one year of his base salary and twelve (12) months of Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) premiums.

Mr. Major’s employment agreement with SGE provides for an annual base salary of $225,000, subject to annual review and adjustment, and he is eligible for performance-based compensation in the form of an annual bonus targeted at 50% of base salary, payable in a combination in cash and equity, as determined by the Chief Executive Officer and the Compensation Committee. The bonus will be subject to the achievement of performance metrics and other criteria as determined by the Chief Executive Officer and the Compensation Committee. Mr. Major is also eligible to participate in SGE’s 401(k), medical, dental and vision plans and certain other benefits available generally to employees of SGE. The employment agreement also contains customary non-competition and non-solicitation covenants. In the event Mr. Major is terminated without cause (as defined in Mr. Major’s employment agreement), and provided he enters into a general release in favor of SGE and related parties, he will be entitled to severance equal to one year of his base salary and twelve (12) months of COBRA premiums.

From and after the Effective Time, the combined company may generally indemnify and hold harmless and advance expenses as incurred to persons, including the SGE directors and executive officers, whether arising before or after the Effective Time, arising out of the fact that any such person is or was a director or officer of SGE or any of its subsidiaries and pertaining to matters existing or occurring at or prior to the Effective Time, including the transactions contemplated by the Arrangement Agreement and Plan of Arrangement. The combined company may obtain a tail policy or other coverage for directors’ and officers’ liability insurance with respect to claims arising from facts or events which occurred at or before the Effective Time, taking into account the costs and benefits associated with an appropriate coverage limit of tail insurance policy.

The board of directors and management of FG as of the Effective Time of the Arrangement will be the same as the current directors and management of FG.

The FG Articles of Incorporation and bylaws, each as in effect immediately prior to the Effective Time, will continue to be the articles of incorporation and bylaws of FG following the consummation of the Arrangement. As stockholders of FG following the consummation of the Arrangement, ownership interests of the former SGE stockholders will be governed by FG’s charter documents as of the Effective Time.

FG and SGE believe that the Arrangement does not raise significant regulatory concerns and that they will be able to obtain all requisite regulatory approvals. However, there can be no assurance that all regulatory approvals will be obtained and, if obtained, there can be no assurances regarding the timing of the approvals, the companies’ ability to obtain the approvals on satisfactory terms or the absence of litigation challenging such approvals. In addition, there can be no assurance that such approvals will not impose conditions or requirements that, individually or in the aggregate, would or could reasonably be expected to have an adverse effect on the financial condition, results of operations, assets or business of the combined company following completion of the Arrangement.

The FG Common Stock is quoted on Nasdaq under the symbol “FG” and the FG Series A Preferred Stock is quoted on the Nasdaq under the symbol “FGPP.” SGE Common Stock is listed on the NYSE American under the symbol “SGE.” In the Arrangement, the SGE Common Stock will be delisted from NYSE American and deregistered under the Exchange Act.

FG will cause the shares of FG Common Stock to be issued as Arrangement Consideration to be approved for listing on Nasdaq by filing a Listing of Additional Shares Notification Form. Neither FG nor SGE will be required to complete the Arrangement if such shares are not authorized for listing, subject to official notice of issuance. Following the Arrangement, shares of FG Common Stock will continue to be listed on Nasdaq.

The following description is qualified in its entirety by reference to the full text of the Arrangement Agreement, a copy of which is attached to the accompanying joint proxy statement/prospectus.

The Arrangement Agreement contains covenants of each of SGE and FG Québec relating to, among other things, using all commercially reasonable efforts and doing all things reasonably required to cause the Arrangement to become effective on the Effective Date.

SGE has agreed to, among other things, subject to the SGE Board of Director’s right to determine not to proceed with the Arrangement and obtaining the approvals as contemplated by the Interim Order and the Arrangement Agreement (including the approval of the Arrangement Resolution by the SGE stockholders and the Regulatory Approvals) and as may be directed by the Court in the Interim Order, file, proceed with and diligently pursue an application for the Final Order.

The Arrangement is subject to a number of specified conditions, including, amongst other things:

With respect to condition (1) above, the Interim Order was obtained on August 9, 2024. The foregoing conditions are for the mutual benefit of the parties to the Arrangement Agreement and may be waived by mutual consent of the parties in writing at any time.

Furthermore, the Arrangement is subject to a number of specific conditions in favour of FG Québec, including, among other things, that dissent rights will not have been exercised prior to the Effective Date by holders of 5% or more of the outstanding SGE Common Shares.

The Arrangement Agreement may, at any time prior to the Effective Time, be terminated by mutual written consent of the parties. Additionally, either party may terminate the Arrangement Agreement at any time prior to the Effective Time if there will be enacted, amended or made applicable any Law, or there will exist any injunction or court order that makes consummation of the Arrangement illegal or otherwise prohibits or enjoins SGE or FG Québec from consummating the Arrangement and such applicable Law, injunction or court order will have become final and non-appealable.

Furthermore, FG Québec may terminate the Arrangement Agreement at any time prior to the Effective Time, provided that FG Québec is not then in material breach of its obligations under the Arrangement Agreement, if any representation or warranty of SGE under the Arrangement Agreement is materially untrue or incorrect, or will have become untrue or incorrect, or if SGE is in material default of a covenant or obligation under the Arrangement Agreement, in any case such that SGE would be incapable of satisfying its closing conditions. Additionally, SGE may terminate the Arrangement Agreement at any time prior to the Effective Time, provided that SGE is not then in material breach of its obligations under the Arrangement Agreement, if any representation or warranty of FG Québec under the Arrangement Agreement is materially untrue or incorrect, or will have become untrue or incorrect, or if FG Québec is in material default of a covenant or obligation under the Arrangement Agreement, in any case such that FG Québec would be incapable of satisfying its closing conditions. SGE may terminate the Arrangement Agreement by resolution of the SGE Board of Directors without further notice to, or action on the part of, the SGE stockholders and nothing expressed or implied herein or in the Plan of Arrangement will be construed as fettering the absolute discretion by the SGE Board of Directors to elect to terminate the Arrangement Agreement and discontinue efforts to effect the Arrangement for whatever reasons it may consider appropriate.

Upon termination of the Arrangement Agreement, no party thereto will have any liability or further obligation to any other party thereunder, except as expressly contemplated by the Arrangement Agreement.

The Arrangement Agreement and the Plan of Arrangement may, at any time and from time to time before and after the holding of the SGE Stockholder Meeting but not later than the Effective Time, be amended by mutual written agreement of the parties without, subject to the Interim Order and Final Order and applicable Laws, further notice to or authorization on the part of the SGE stockholders for any reason whatsoever; provided, however, that notwithstanding the foregoing, following the SGE Stockholder Meeting, the distribution of FG Common Stock to SGE stockholders under the Plan of Arrangement will not be decreased without the approval of the SGE stockholders given in the same manner as required for the approval of the Arrangement or as may be ordered by the Court. The Court may also amend the Arrangement Agreement and the Plan of Arrangement in the Final Order.

Except as otherwise specifically provided in the Arrangement Agreement, each party has agreed to pay its respective costs, fees and expenses of the Arrangement incurred in connection with the negotiation, preparation and execution of the Arrangement Agreement, and all documents and instruments executed or delivered pursuant to the Arrangement Agreement, as well as any costs and expenses incurred.

The Arrangement is proposed to be carried out under Division 5 of Part 9 of the BCBCA. The following procedural steps must be taken in order for the Arrangement to become effective:

Pursuant to the terms of the Interim Order, the Arrangement Resolution must, subject to further order of the Court, be approved by at least two-thirds (66 ²/₃%) of the votes cast by the SGE stockholders, voting as a single class, present in person or by proxy at the SGE Stockholder Meeting.

FG Québec has indicated that it will vote all the SGE Common Shares held by it FOR the Arrangement Resolution. FG Québec has advised SGE that it currently holds 6,000,000 SGE Common Shares representing approximately 76% of the issued and outstanding SGE Common Shares, and that the SGE Common Shares held by FG Québec will be voted in favor of the Arrangement Resolution. Accordingly, FG Québec has a sufficient number of SGE Common Shares to ensure that the Arrangement Resolution is approved by not less than 66 2/3% of the votes cast by holders of SGE Common Shares present in person or represented by proxy and entitled to vote at the SGE Stockholder Meeting.

Notwithstanding the foregoing, the Arrangement Resolution authorizes the directors of SGE, at their discretion, without further notice to or approval of the SGE stockholders: (i) to amend or modify the Arrangement Agreement or the Plan of Arrangement, to the extent permitted by their terms; and (ii) subject to the terms of the Arrangement Agreement, not to proceed with the Arrangement and any related transactions.

If more than 5% of the issued and outstanding SGE Common Shares become the subject of Dissent Rights, the Arrangement may be terminated by FG Québec.

Under the BCBCA, SGE is required to obtain the approval of the Court with respect to the SGE Stockholder Meeting and the Arrangement. On August 9, 2024, prior to the mailing of the materials in respect of the Meeting, SGE obtained the Interim Order regarding the holding of the SGE Stockholder Meeting and other procedural matters.

SGE anticipates the Court hearing in respect of the Final Order to take place on or about September 23, 2024, or as soon as the Court may direct or counsel for SGE may be heard, at the courthouse, 800 Smithe Street, Vancouver, British Columbia V6Z 2E1, subject to the approval of the Arrangement Resolution at the SGE Stockholder Meeting. Any SGE stockholder or any other interested party with leave of the Court desiring to support or oppose the application, may appear (either in person or by counsel) and make submissions at the hearing in respect of the application for the Final Order provided that such person must file with the Court at the Court Registry, 800 Smithe Street, Vancouver, British Columbia V6Z 2E1, a response to petition in the form prescribed by the Supreme Court Civil Rules and deliver a copy thereof, together with a copy of all material on which such person intends to rely at the hearing of the application, to the solicitor for SGE: Gowling WLG (Canada) LLP, 2300 - 550 Burrard Street, Vancouver, British Columbia V6C 2B5, Attention: Cyndi Laval, by or before 12:00 Noon (Vancouver time) on Septemb

	Sincerely,

	/s/ Mark D. Roberson
	Mark D. Roberson
	Chief Executive Officer
	Strong Global Entertainment, Inc.

ABOUT THIS DOCUMENT	1
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS	2
QUESTIONS AND ANSWERS	3
SUMMARY OF THE JOINT PROXY STATEMENT/PROSPECTUS	9
UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION	14
BUSINESS	14
RISK FACTORS	19
PROPERTIES	40
LEGAL PROCEEDINGS	40
MANAGEMENT’S DICSUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	41
THE SGE STOCKHOLDER MEETING	54
ARRANGEMENT AGREEMENT AND PLAN OF ARRANGEMENT	69
DESCRIPTION OF FG SECURITIES	82
COMPARISON OF RIGHTS OF FG STOCKHOLDERS AND SGE STOCKHOLDERS	89
BENEFICIAL OWNERSHIP OF FG SECURITIES	97
BENEFICIAL OWNERSHIP OF SGE SECURITIES	99
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS	101
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES	105
DISSENT RIGHTS	110
LEGAL MATTERS	112
WHERE YOU CAN FIND MORE INFORMATION	113
ANNEX A-1 – THE PLAN OF ARRANGEMENT	A-1-1
ANNEX A-2 – THE ARRANGEMENT AGREEMENT	A-2-1
ANNEX B – FAIRNESS OPINION	B-1
ANNEX C – SECTIONS 237 – 247 OF THE BCBCA	C-1
INDEX TO FINANCIAL STATEMENTS	F-1

	●	the ability of FG, FG Québec and SGE prior to the Business Combination to meet the conditions to closing of the Business Combination, including approval by the Court and by the stockholders of SGE of the Business Combination;
	●	the ability of the combined company following the Business Combination, to realize the benefits from the Business Combination;
	●	changes in the market price of FG Common Stock after the Business Combination, which may be affected by factors different from those currently affecting the price of shares of FG Common Stock;
	●	the occurrence of any event, change or other circumstances that could give rise to the termination of the Arrangement Agreement;
	●	the ability of SGE to obtain the Interim Order and the Final Order;
	●	the ability of FG to maintain the listing of the FG Common Stock on Nasdaq following the Business Combination;
	●	future financial performance following the Business Combination;
	●	the impact from the outcome of any known and unknown litigation;
	●	the ability of the combined company to forecast and maintain an adequate rate of revenue growth and appropriately plan its expenses;
	●	expectations regarding future expenditures of the combined company following the Business Combination;
	●	the future mix of revenue and effect on gross margins of the combined company following the Business Combination;
	●	changes in interest rates or rates of inflation;
	●	the attraction and retention of qualified directors, officers, employees and key personnel of the combined company following the Business Combination;
	●	the ability of the combined company to compete effectively in multiple competitive industries;
	●	the ability to protect and enhance FG’s corporate reputation and brand across industries;
	●	expectations concerning the relationships and actions of FG’s affiliates with third parties;
	●	the impact from future regulatory, judicial and legislative changes in the multiple industries in which the combined company will operate;
	●	intense competition and competitive pressures from other companies in the industries in which the combined company will operate;
	●	the financial and other interests of the FG Board of Directors and SGE Board of Directors, which may have influenced such boards’ decision to approve the Business Combination;
	●	the volatility of the market price and liquidity of the FG Common Stock and other securities of FG; and
	●	other factors detailed under the section titled “Risk Factors.”

	●	Voting by Telephone or Internet. If you are a holder of record, you may vote by proxy by using either the telephone or Internet methods of voting. Proxies submitted by telephone or through the Internet must be received by 11:59 p.m., Eastern Time, on September 16, 2024. Please see the proxy card for instructions on how to access the telephone and Internet voting systems.
	●	Voting by Proxy Card. Each stockholder of record may vote by completing, signing, dating and promptly returning the accompanying proxy card in the self-addressed stamped envelope provided. When you return a properly executed proxy card, the shares represented by your proxy will be voted as you specify on the proxy card. Your proxy card must be received prior to the SGE Stockholder Meeting to be counted.

	●	Certain of our competitors in the digital equipment industry have longer operating histories and greater financial, technical, marketing and other resources than we do, which, among other things, may permit them to adopt aggressive pricing policies. As a result, we may suffer from pricing pressures that could adversely affect our ability to generate revenues and our results of operations. Some of our competitors also have greater name and brand recognition and a larger customer base than us.
	●	Some of our competitors are manufacturing their own digital equipment while we employ a distribution business model through our distribution agreements with NEC Display Solutions of America, Inc., Barco, Inc. and certain other suppliers. As a result, we may suffer from pricing pressures that could adversely affect our ability to generate revenues.
	●	Suppliers could decide to utilize their current sales force to supply their products directly to customers rather than utilizing channels.

	1.	approve the Arrangement Agreement and Plan of Arrangement and the related transactions, thereby approving the Business Combination;
	2.	receive the audited financial statements of SGE for the fiscal year ended December 31, 2023, together with the report of the independent registered public accounting firm therein;
	3.	fix the number of directors at five;
	4.	elect the SGE directors for the ensuing year;
	5.	ratify the appointment of Haskell & White LLP (the “*SGE Auditor*”) as auditor for the ensuing year and to authorize the directors of SGE to fix their remuneration; and
	6.	consider and transact such other business as may properly come before the meeting or any postponement or adjournment thereof.

	●	diversion of management attention from running our existing business;
	●	possible material weaknesses in internal control over financial reporting;
	●	increased expenses including legal, administrative and compensation expenses related to newly hired or terminated employees;
	●	increased costs to integrate, develop or, in the case of a divestiture, separate the technology, personnel, customer base and business practices of the acquired, new or divested business or assets;
	●	potential exposure to material liabilities not discovered in the due diligence process;
	●	potential adverse effects on reported results of operations due to possible write-down of goodwill and other intangible assets associated with acquisitions;
	●	potential damage to customer relationships or loss of synergies in the case of divestitures; and
	●	unavailability of acquisition financing or inability to obtain such financing on reasonable terms.

	●	adversely affect our ability to attract new investors;
	●	decrease the liquidity of our outstanding stock;
	●	reduce our flexibility to raise additional capital;
	●	reduce the price at which our stocks trade; and
	●	increase the transaction costs inherent in trading our stock, with overall negative effects for our stockholders.

	●	Strong/MDI leases an approximate 80,000 square-foot manufacturing plant in Joliette, Quebec, Canada. The Joliette Plant is used for offices, manufacturing, assembly and distribution of cinema and other screens. The initial term of the lease for this facility expires in 2038.
	●	STS leases a combined office and warehouse facility in Omaha, Nebraska, which is primarily used for the storage and distribution of third-party products. The lease for this facility expires in February 2027.
	●	STS also leases a warehouse facility in Shawnee, Kansas, which is primarily used for the storage and distribution of third-party products. The lease for this facility expires in May 2025.

	Year Ended December 31,
	2023			2022			$ Change			% Change
	(dollars in thousands)
Revenues	$	43,328		$	40,323		$	3,005			7.5	%
Expenses		46,777			42,128			4,649			11.0	%
Loss from operations		(3,449	)		(1,805	)		(1,644	)		91.1	%
Other expense, net		(3,731	)		(4,724	)		(993	)		21.0	%
Net loss from continuing operations		(9,781	)		(6,599	)		(3,182	)		48.2	%

	Three Months Ended March 31,
	2024			2023			$ Change		% Change
	(dollars in thousands)
Revenues	$	8,643		$	6,567		$	2,076		31.6	%
Expenses		14,575			10,696			3,879		36.3	%
Loss from operations		(5,932	)		(4,129	)		1,803		43.7	%
Bargain purchase on acquisition and other income, net		1,795			32			1,763		n/m
Net loss from continuing operations		(4,253	)		(3,798	)		455		12.0	%

	●	Identify the contract, or contracts, with a customer;
	●	Identify the performance obligations in the contract;
	●	Determine the transaction price;
	●	Allocate the transaction price to the identified performance obligations; and
	●	Recognize revenue when, or as, the Company satisfies the performance obligations.

(in thousands)	Three Months Ended March 31,
Summary of Cash Flows	2024			2023
Cash and cash equivalents - beginning of period	$	6,644		$	3,789
Net cash used in operating activities from continuing operations		(538	)		(15	)
Net cash provided by investing activities from continuing operations		2,234			123
Net cash (used in) provided by financing activities from continuing operations		(634	)		1,042
Effect of exchange rate changes on cash and cash equivalents		(5	)		6
Net increase in cash from continuing operations		1,057			1,156
Net decrease in cash from discontinued operations		(492	)		(596	)
Net increase in cash and cash equivalents		565			560
Cash and cash equivalents - end of period	$	7,209		$	4,349

Name	Age	Position
Directors:

Mark Roberson	59	Director and Chief Executive Officer
D. Kyle Cerminara	46	Chairman of the Board of Directors
Richard E. Govignon, Jr.	47	Director
Marsha G. King	57	Director
John W. Struble	48	Director

	●	Mark D. Roberson, Chief Executive Officer
	●	Todd R. Major, Chief Financial Officer, Secretary and Treasurer, and
	●	Ray F. Boegner, Former President

Name and Principal Position	Year	Salary ($)		Bonus ($)⁽³⁾		Stock Awards ($)⁽⁴⁾		Option Awards ($)⁽⁴⁾		Non-Equity Incentive Plan Compensation ($)		All Other Compensation ($)⁽⁵⁾		Total ($)
Mark D. Roberson⁽¹⁾	2023		160,769		200,000		239,400		-		-		5,759		605,928
CEO	2022		-		-		-		-		-		-		-

Todd R. Major⁽¹⁾	2023		131,539		150,000		199,500		-		-		4,946		485,985
CFO	2022		-		-		-		-		-		-		-

Ray F. Boegner⁽²⁾	2023		126,923		50,000		199,500		-		-		3,988		380,411
Former President	2022		-		-		-		-		-		-		-

(1)	Messrs. Roberson and Major began receiving compensation from SGE in May 2023, upon the consummation of SGE’s IPO. Prior to May 2023, Messrs. Roberson and Major received compensation from FGH.

(2)	Mr. Boegner served as SGE’s President from May 2023, the consummation of SGE’s IPO, to September 2023, when he passed away unexpectedly. Prior to May 2023, Mr. Boegner received compensation from FGH.

(2)	SGE’s Compensation Committee approved the payment of transaction-related bonuses to Messrs. Roberson, Major and Boegner for extra time and effort given by such employees in connection with the successful completion of SGE’s IPO.

(4)	The amounts in these columns represent the aggregate grant date fair value calculated in accordance with the Financial Accounting Standards Board Accounting Standards Codification Topic 718. For additional information relating to the assumptions made in valuing and expensing these awards refer to Note 16 in this proxy statement/prospectus.

(5)	SGE provides its executives with certain employee benefits. These benefits include excess life and disability insurance and contributions made by SGE under the 401(k) Plan. The amounts reported for each NEO as All Other Compensation for 2023 are identified and quantified below.

	Mr. Roberson		Mr. Major		Mr. Boegner
Employer match on 401(k) Plan	$	4,760	$	3,946	$	3,118
Excess life and disability insurance		1,000		1,000		870
Total All Other Compensation	$	5,759	$	4,946	$	3,988

	Option Awards								Stock Awards
Name	Number of Securities Underlying Unexercised Options (#) Exercisable		Number of Securities Underlying Unexercised Options (#) Unexercisable		Option Exercise Price ($)		Option Expiration Date		Number of Shares or Units of Stock That Have Not Vested (#)			Market Value of Shares or Units of Stock That Have Not Vested ($)(*)
Mark D. Roberson		-		-		-		-		30,000	(1)		47,958

Todd R. Major		-		-		-		-		25,000	(1)		39,965

Ray F. Boegner		-		-		-		-		-			-

●	Our Chairman is entitled to receive an annual cash retainer of $85,000, paid in quarterly installments, and each other non-employee director is entitled to receive an annual cash retainer of $45,000, paid in quarterly installments. In July 2024, the annual cash retainer for the Chairman was increased to $85,000 and for each other non-employee director was increased to $45,000;

●	The chairperson of the Audit Committee is entitled to receive an additional annual cash retainer of $10,000, paid in quarterly installments;

●	The chairperson of the Compensation Committee as well as the chairperson of the Nominating and Corporate Governance Committee is each entitled to receive an additional cash retainer of $5,000, paid in quarterly installments;

●	Each non-employee director receives an annual grant of restricted stock units (“RSUs”) with a value of $25,000, vesting on the first anniversary of the grant date, with the first grant made upon the completion of the IPO, provided that, if the director makes himself available and consents to be nominated by SGE for continued service as a director of the Company, but is not nominated to the Board of Directors for election by stockholders, other than for good reason as determined by the Board of Directors in its discretion, then the RSUs will vest in full as of the director’s last date of service as a director of SGE; and

●	On May 28, 2023, our Chairman received 30,000 RSUs and each other non-employee director received 20,000 RSUs, pursuant to the Share Compensation Plan. These RSUs vested immediately.

	●	Determining the compensation of the Chief Executive Officer, and overseeing all other executive officers’ compensation, including salary and payments under SGE’s incentive compensation and equity-based plans;
	●	Administering the SGE’s stock compensation plans, including approving all individual grants and awards under these plans;
	●	Reviewing compensation for non-employee directors and recommending changes to the Board of Directors;
	●	Reviewing and discussing with management the compensation discussion and analysis to be included in our annual meeting proxy statement;
	●	Reviewing and monitoring matters related to human capital management, including talent acquisition, development and retention, internal pay equity, diversity and inclusion, and corporate culture; and
	●	Conducting an annual risk assessment to ensure that the SGE’s executive compensation plans and programs do not promote the assumption of excessive risk and remain consistent with the approved overall compensation philosophy and strategy.

	●	Administering a director orientation program for all newly-elected or appointed members of the Board of Directors;
	●	Recommending the assignment of directors to the various committees of the Board of Directors;
	●	Evaluating emergent ESG related risks and SGE’s ESG goals, and reviewing and discussing with management strategies, activities, and policies regarding ESG-related matters and making recommendations to the Board;
	●	Reviewing and assessing shareholder proposals submitted to SGE for inclusion in SGE’s proxy statement; and
	●	Periodically reviewing SGE’s corporate governance policies and practices and recommending changes to the Board of Directors when appropriate in light of SGE’s position, developments in laws and regulations applicable to the SGE, and corporate governance trends and practices.

	●	“eligible penalty” means a judgment, penalty or fine awarded or imposed in, or an amount paid in settlement of, an eligible proceeding; and
	●	“eligible proceeding” means a legal proceeding or investigative action, whether current, threatened, pending or completed, in which a director, former director or alternative director of the Company (an “eligible person”) or any of the heirs and legal personal representatives of the eligible party, by reason of the eligible party being or having been a director or alternative director:

	○	is or may be joined as a party, or
	○	is or may be liable for or in respect of a judgment, penalty or fine in, or expenses related to, the proceeding.

Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights⁽¹⁾		Weighted- average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))⁽²⁾
	(a)		(b)		(c)
Equity compensation plans approved by security holders		1,151,107	$	-		698,070
Equity compensation plans not approved by security holders		-		-		-
Total		1,151,107	$	-		698,070

1.	Includes 22,738 common shares to be issued upon vesting of restricted stock units and 130,000 common shares to be issued upon vesting of stock options issued under SGE’s 2018 Plan; and includes approximately 998,369 gross common shares (pretax) to be issued upon vesting of restricted stock units issued under our 2021 Plan.

2.	Represents shares available for future issuance under the 2021 Plan.

Plan category	Number of securities to be issued upon exercise of outstanding options and restricted stock units		Weighted-average exercise price of outstanding options, and restricted stock units		Number of securities remaining available for future issuance under equity compensation plans
Equity compensation plans approved by security holders		330,000	$	3.11		502,265
Equity compensation plans not approved by security holders		-		-		-
Total		330,000	$	3.11		502,265

	2023		2022
Audit Fees⁽¹⁾	$	329,900	$	170,200
Audit-Related Fees⁽²⁾		32,000		83,100
Tax Fees		-		-
All Other Fees		-		-
Total	$	361,900	$	253,300

(1)	Includes fees for professional services rendered during the fiscal year for the audit of SGE’s annual financial statements and for reviews of the financial statements included in its quarterly reports on Form 10-Q.

(2)	Includes fees for services that generally only the independent registered public accounting firm can be reasonably expected to provide, including comfort letters, consents, and review of registration statements filed with the SEC.

	●	the SGE Board’s belief that the Arrangement will create, and enable SGE Stockholders to become stockholders of, a larger, financially stronger company with an enhanced platform for future growth;
	●	the SGE Board’s belief that FG’s earnings and prospects, and the benefits potentially available in the proposed Arrangement, would result in the combined company having the opportunity to have superior future earnings and prospects compared to SGE’s earnings and prospects on a stand-alone basis;
	●	the SGE Board’s belief that both companies share similar cultures, including with respect to strategic focus, and the SGE Board’s belief that the complementary cultures would facilitate the successful completion of the transaction and integration following consummation of the transaction;
	●	the ability to leverage the scale and financial capabilities of the combined company to accelerate investments in the business;
	●	the expectation of cost savings resulting from the transaction;
	●	the terms of the Arrangement and the fact that the exchange ratio is fixed, with no adjustment in the Arrangement Consideration to be received by SGE Stockholders as a result of possible increases or decreases in the trading price of SGE Common Stock or FG Common Stock following the announcement of the Arrangement;
	●	the fact that 100% of the Arrangement Consideration would be in the form of FG Common Stock, which would allow SGE Stockholders to participate in the future growth and opportunities of the combined company and the anticipated pro forma impact of the Arrangement;
	●	the corporate governance of the combined company;
	●	the SGE Board’s familiarity with and understanding of both FG and SGE’s businesses, results of operations, asset quality, financial and market positions and expectations concerning their respective future earnings and prospects;
	●	the SGE Board’s understanding of the current and prospective environment in which SGE and FG operate, including economic conditions, the interest rate environment, increased operating costs resulting from regulatory and compliance mandates, the competitive environment and the challenges facing SGE as an independent institution, including, among other things, the costs required to continue to improve asset quality, and the likely effect of these factors on SGE both with and without the Arrangement;
	●	the SGE Board’s evaluation, with the assistance of management and SGE’s financial and legal advisors, of SGE’s stand-alone plan and other strategic alternatives available to SGE for enhancing value over the long term and the potential risks, rewards and uncertainties associated with SGE’s stand-alone plan and such other alternatives, and the SGE Board’s belief that the proposed Arrangement offered greater benefits, with reduced risks, as compared to the value that could reasonably be expected to be obtained from SGE’s stand-alone plan and other alternatives available to SGE;
	●	the SGE Board’s belief that the combined company will be in a better position to address many of the key challenges currently facing SGE, including the expense and time that would be required to be incurred to drive organic growth, including by improving asset quality, as compared with SGE on a stand-alone basis, and the SGE Board’s belief that the combined company will be able to address these matters on an accelerated basis;
	●	the SGE Board’s review and discussions with SGE’s management and advisors concerning the operations, financial condition and regulatory compliance programs and prospects of FG;
	●	the process through which the SGE Board, with the assistance of management and SGE’s financial and legal advisors, conducted extensive analysis and considered the available alternatives for SGE over an extended period of time, including consideration of other potential strategic partners and the likelihood of any other party offering financial and other terms that would be superior to the proposed Arrangement, and an evaluation and testing of SGE’s stand-alone plan, and determined that no such alternative was as strategically and financially compelling as the transaction with FG; and

	●	the contractual, regulatory, and other approvals required in connection with the Arrangement and the risk that such approvals may not be received in a timely manner or at all or may impose unacceptable conditions;
	●	certain anticipated Arrangement-related costs that SGE expects to incur, including a number of non-recurring costs in connection with the Arrangement even if the Arrangement is not ultimately consummated;
	●	the possibility of encountering difficulties in achieving anticipated cost savings in the amounts estimated or in the time frame contemplated;
	●	the possibility of encountering difficulties in successfully maintaining existing customer, vendor, and employee relationships;
	●	the possibility of encountering difficulties in successfully integrating the business, operations and workforce of the two companies;
	●	the risk of losing key employees of either company during the pendency of the Arrangement and thereafter;
	●	the possible diversion of management attention and resources from the operation of SGE’s business or other strategic opportunities towards the completion of the Arrangement;
	●	the potential for legal claims challenging the Arrangement; and
	●	the other risks described under the sections entitled “Risk Factors” beginning on page 19 and “Cautionary Statement Regarding Forward-Looking Statements” beginning on page 2.

	●	in reviewing these factors, the FG Board considered that FG already owns 76% of SGE’s outstanding common shares, that SGE is incurring additional costs to maintain a separate listing as a public company, and that FG and its shareholders, as the majority shareholder of SGE, would stand to realize a meaningful benefit from potentially reducing SGE’s operating costs and increasing its value;
	●	the strategic rationale for the Arrangement, including the cost savings and simplification of FG’s and SGE’s overall organization structure;
	●	the FG Board’s belief that SGE’s earnings and prospects, and the cost savings potentially available in the proposed Arrangement, would create the opportunity for the combined company to have superior future earnings and prospects compared to FG’s earnings and prospects on a stand-alone basis;
	●	the complementary nature of the cultures of the two companies, including with respect to corporate purpose, management philosophy, and strategic focus, which would facilitate the successful integration and implementation of the transaction;
	●	the expanded possibilities for growth and value creation;
	●	the expectation of significant cost savings from reducing the legal, audit, tax, and other administrative costs of operating SGE as a separate public company;
	●	the terms of the Arrangement and the fact that the exchange ratio is fixed, with no adjustment in the Arrangement Consideration to be received by SGE Stockholders as a result of possible increases or decreases in the trading price of SGE Common Stock or FG Common Stock following the announcement of the Arrangement;
	●	that the executive management team of the combined company will represent an experienced management team with greater bench strength and potential to create value in a more cost efficient structure;
	●	its understanding of the current and prospective environment in which FG and SGE operate, including national, regional and local economic conditions, the interest rate environment, increased operating costs resulting from regulatory and compliance mandates, the competitive environment generally, and the likely effect of these factors on FG both with and without the Arrangement;
	●	its expectation that any required contractual, regulatory and other approvals for the Arrangement and the other transactions contemplated by the Plan of Arrangement could be obtained in a timely fashion;
	●	its review with FG’s outside legal advisor of the terms of the Arrangement; and
	●	FG’s past record of integrating similar transactions and of realizing projected financial goals and benefits of those transactions, and the strength of FG’s management and infrastructure to successfully complete the integration process following the completion of the Arrangement.

	●	the risk that any contractual, regulatory and other approvals required in connection with the Arrangement may not be received in a timely manner or at all or may impose unacceptable conditions;
	●	the possibility of encountering difficulties in achieving anticipated cost savings in the amounts estimated or in the time frame contemplated;
	●	the possibility of encountering difficulties in successfully integrating FG’s and SGE’s business, operations and workforce;
	●	the risk of losing key FG or SGE employees during the pendency of the Arrangement and thereafter;
	●	certain anticipated Arrangement-related costs, including a number of non-recurring costs in connection with the Arrangement even if the Arrangement is not ultimately consummated;
	●	the potential for legal claims challenging the Arrangement;
	●	the diversion of management attention and resources from the operation of FG’s business towards the completion of the Arrangement; and
	●	the other risks described under the sections entitled “Risk Factors” beginning on page 19 and “Cautionary Statement Regarding Forward-Looking Statements” beginning on page 2.

	●	reviewed the draft Arrangement Agreement as provided to Intrinsic on or about May 29, 2024 (which draft was substantially and materially the form of the executed Agreement Agreement);
	●	discussed with senior management of SGE (“Management”) the terms of the Business Combination;
	●	reviewed and analyzed certain audited and unaudited financial and other data for SGE, FG, the legacy operations of FG Financial Group, Inc. (“Legacy FGF”), the legacy operations of FG Group Holdings Inc. (“Legacy FGH”), FireFly Systems Inc. (“FireFly”), and GreenFirst Forest Products Inc. (“GFP”), as well as commercial real estate in Alpharetta, Georgia and Joliette, Quebec, Canada. Each of SGE, FG, Legacy FGF, Legacy FGH, FireFly, and GFP are a “Subject Company” and collectively are the “Subject Companies”;
	●	reviewed certain forecasts provided to Intrinsic in November 2023, and subsequently reiterated by Management on or about April 26, 2024;
	●	discussed with Management potential cost savings as a result of the transactions contemplated by the Arrangement Agreement;
	●	conducted discussions with members of Management with respect to the business, operations, assets, liabilities, prospects and financial condition and outlook of SGE;

	●	conducted discussions with members of the senior management of FG with respect to the business, operations, assets, liabilities, prospects and financial condition and outlook of the Subject Companies;
	●	reviewed certain publicly available financial data and other information for companies deemed to be relevant;
	●	reviewed the financial terms, to the extent publicly available, of selected precedent transactions deemed to be relevant;
	●	conducted such other financial studies, analyses and investigations and considered such other information as Intrinsic deemed appropriate; and
	●	reviewed a management representation letter addressed to Intrinsic from Management addressing the accuracy and completion of information provided to Intrinsic.