FG Nexus Inc. (FGNX) 10-K Summary: Fiscal Year Ended December 31, 2025
Business Context and Reporting Period
This Annual Report covers the fiscal year ended December 31, 2025. FG Nexus Inc. (formerly Fundamental Global Inc.) is a Nevada holding company that executed a significant strategic pivot in 2025 to operate primarily as a digital asset treasury focused on Ethereum (ETH) and real-world asset tokenization. The company also maintains a merchant banking segment. During the year, the company completed a reverse merger, sold legacy businesses (reinsurance and managed services), and transferred significant legacy assets to a Contingent Value Rights (CVR) Trust.
Key Financial Metrics
| Metric | 2025 | 2024 |
|---|---|---|
| Total Revenue | $2.4 million | $0.8 million |
| Net Loss (Continuing Ops) | $(67.6) million | $(24.3) million |
| Net Loss (Total) | $(66.7) million | $(1.3) million |
| Cash and Cash Equivalents | $13.4 million | $6.6 million |
| ETH Digital Assets (Fair Value) | $119.4 million | $0 |
| Total Assets | $163.8 million | $109.5 million |
| Total Liabilities | $20.4 million | $35.3 million |
| Stockholders' Equity | $143.5 million | $74.2 million |
Note: 2024 results include significant income from discontinued operations ($23.0 million), whereas 2025 discontinued operations income was minimal ($0.9 million).
Material Changes vs. Prior Period
- Strategic Pivot to ETH: The company raised approximately $176 million in cash and $24 million in cryptocurrency via a Private Placement Offering in Q3 2025. Proceeds were used to acquire 40,093 ETH. This resulted in a $38.3 million unrealized loss and a $5.8 million realized loss on digital assets due to market volatility.
- Discontinued Operations: The reinsurance and managed services (Strong Technical Services) segments were classified as discontinued operations. The reinsurance business was sold in early 2026 (initial closing Jan 2026), and legacy assets were transferred to a CVR Trust in August 2025.
- Capital Structure Changes:
- Reverse Stock Split: A 1-for-5 reverse stock split was approved in Jan 2026 and effective Feb 13, 2026.
- Share Repurchases: The company repurchased ~1.6 million common shares ($26.1 million) and ~6,000 preferred shares ($0.1 million) during 2025. Post-year-end repurchases continued through March 2026.
- Charter Amendments: Authorized share counts were significantly increased, and the company name was changed to FG Nexus Inc.
- Revenue Composition: Revenue increased 210% year-over-year, driven by $1.5 million in ETH staking rewards and $0.5 million in merchant banking fees, offset by a decline in rental income following the sale of the Digital Ignition facility in 2024.
Guidance, Outlook, and Risks
Outlook and Strategy: Management intends to continue the ETH treasury strategy, utilizing staking and potential real-world asset tokenization. The company plans to reinstate its At-The-Market (ATM) offering, which was suspended in October 2025. A non-binding letter of intent exists to sell Quebec real estate for ~$11 million USD, expected to close in H1 2026.
Key Risks:
- Cryptocurrency Volatility: The company's financial performance is heavily correlated with the price of ETH. The stock may trade at a premium or discount to the net asset value of its holdings.
- Regulatory Uncertainty: Risks include potential classification of ETH as a security, which could subject the company to the Investment Company Act of 1940, and evolving regulations on digital asset custody and staking.
- Custody and Cybersecurity: While assets are held with institutional custodians (Anchorage, BitGo), there are risks of theft, hacking, or smart contract vulnerabilities. Insurance coverage is shared and may not cover total losses.
- Liquidity: While the company believes it has sufficient liquidity for the next 12 months, it relies on the convertibility of ETH to fund operations.
Investor Verification Checklist
- ETH Valuation: Verify the current fair value of the 40,093 ETH holdings against the $119.4 million reported, noting the significant unrealized loss recorded in 2025.
- Reinsurance Sale Completion: Confirm the final closing terms and proceeds of the reinsurance business sale, which was in progress at year-end.
- Share Count Adjustments: Ensure all share counts and per-share data are adjusted for the 1-for-5 reverse stock split effective February 13, 2026.
- CVR Trust Assets: Review the assets transferred to the CVR Trust (~$48.2 million book value) to understand what legacy assets are no longer on the balance sheet.
- Debt Covenants: Review the terms of the Quebec property installment loan and any potential margin calls on the digital currency loan facility.