Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 11, 2021 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2021 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2021 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-36366 | |
Entity Registrant Name | FG Financial Group, Inc. | |
Entity Central Index Key | 0001591890 | |
Entity Tax Identification Number | 46-1119100 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 360 Central Avenue | |
Entity Address, Address Line Two | Suite 800 | |
Entity Address, City or Town | St. Petersburg | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 33701 | |
City Area Code | 727 | |
Local Phone Number | 304-5666 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 5,801,471 | |
Common Stock, $0.001 par value per share | ||
Title of 12(b) Security | Common Stock, $0.001 par value per share | |
Trading Symbol | FGF | |
Security Exchange Name | NASDAQ | |
8.00% Cumulative Preferred Stock, Series A, $25.00 par value per share | ||
Title of 12(b) Security | 8.00% Cumulative Preferred Stock, Series A, $25.00 par value per share | |
Trading Symbol | FGFPP | |
Security Exchange Name | NASDAQ |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
ASSETS | ||
Equity securities, at fair value (cost basis of $31,239 and $24,763, respectively) (includes $15,608 and $4,013 held by the Company’s consolidated VIE, respectively) | $ 19,172 | $ 12,554 |
Other investments | 7,779 | 5,334 |
Cash and cash equivalents (includes $116 and $987 held by the Company’s consolidated VIE, respectively) | 8,929 | 12,132 |
Funds deposited with reinsured companies | 2,718 | 2,444 |
Current income taxes recoverable | 1,724 | |
Reinsurance balances receivable | 3,364 | |
Deferred policy acquisition costs | 1,017 | |
Other assets | 871 | 517 |
Total assets | 43,850 | 34,705 |
LIABILITIES | ||
Loss and loss adjustment expense reserves | 1,344 | |
Unearned premium reserves | 3,599 | |
Accounts payable | 713 | 455 |
Other liabilities | 426 | 57 |
Total liabilities | 6,082 | 512 |
Commitments and contingencies (Note 12) | ||
SHAREHOLDERS’ EQUITY | ||
Series A Preferred Shares, $25.00 par value, 1,000,000 shares authorized, 894,580 and 700,000 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively | 22,365 | 17,500 |
Common stock, $0.001 par value; 10,000,000 shares authorized; 5,051,471 and 6,269,821 shares issued as of September 30, 2021 and December 31, 2020, respectively, and 5,051,471 and 4,988,310 shares outstanding as of September 30, 2021 and December 31, 2020, respectively | 5 | 6 |
Additional paid-in capital | 40,609 | 47,065 |
Accumulated deficit | (30,593) | (24,193) |
Less: treasury stock at cost; 0 and 1,281,511 shares as of September 30, 2021 and December 31, 2020, respectively | (6,185) | |
Total shareholders’ equity attributable to FG Financial Group, Inc. | 32,386 | 34,193 |
Noncontrolling interests | 5,382 | |
Total shareholders’ equity | 37,768 | 34,193 |
Total liabilities and shareholders’ equity | $ 43,850 | $ 34,705 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Equity securities, cost basis | $ 31,239 | $ 24,763 |
Equity security investments held by VIE | 15,608 | 4,013 |
Cash and cash equivalents held by VIE | $ 116 | $ 987 |
Series A Preferred stock, par value | $ 25 | $ 25 |
Series A Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Series A Preferred stock, shares issued | 894,580 | 700,000 |
Series A Preferred stock, shares outstanding | 894,580 | 700,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, shares issued | 5,051,471 | 6,269,821 |
Common stock, shares outstanding | 5,051,471 | 4,988,310 |
Treasury stock, shares | 0 | 1,281,511 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenue: | ||||
Net premiums earned | $ 1,099,000 | $ 2,221,000 | ||
Net investment income (loss) | (1,299,000) | (7,715,000) | 2,792,000 | (16,992,000) |
Other income | 67,000 | 25,000 | 146,000 | 79,000 |
Total revenue | (133,000) | (7,690,000) | 5,159,000 | (16,913,000) |
Expenses: | ||||
Net losses and loss adjustment expenses | 1,058,000 | 1,893,000 | ||
Amortization of deferred policy acquisition costs | 202,000 | 633,000 | ||
General and administrative expenses | 3,000,000 | 1,900,000 | 6,698,000 | 4,210,000 |
Total expenses | 4,260,000 | 1,900,000 | 9,224,000 | 4,210,000 |
Loss from continuing operations before income taxes | (4,393,000) | (9,590,000) | (4,065,000) | (21,123,000) |
Income tax benefit | (665,000) | |||
Net loss from continuing operations | (4,393,000) | (9,590,000) | (4,065,000) | (20,458,000) |
Discontinued operations (Note 4): | ||||
Gain from sale of the Maison Business, net of taxes | 145,000 | |||
Net loss | (4,393,000) | (9,590,000) | (3,920,000) | (20,458,000) |
Gain attributable to noncontrolling interests | 569,000 | 1,235,000 | ||
Dividends declared on Series A Preferred Shares | 448,000 | 350,000 | 1,245,000 | 1,050,000 |
Loss attributable to FG Financial Group, Inc. common shareholders | $ (5,410,000) | $ (9,940,000) | $ (6,400,000) | $ (21,508,000) |
Basic and diluted net income (loss) per common share: | ||||
Continuing operations | $ (1.08) | $ (1.69) | $ (1.31) | $ (3.58) |
Discontinued operations | $ 0.03 | |||
Weighted average common shares outstanding: | ||||
Basic and diluted | 5,032,615 | 5,893,125 | 5,012,139 | 6,009,267 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) $ in Thousands | Preferred Stock [Member] | Common Stock [Member] | Treasury Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total | Noncontrolling Interest [Member] |
Beginning balance, value at Dec. 31, 2019 | $ 17,500 | $ 6 | $ (1,009) | $ 46,754 | $ (336) | $ 62,915 | |
Beginning balance, shares at Dec. 31, 2019 | 700,000 | 6,065,948 | 151,359 | ||||
Stock based compensation | 52 | 52 | |||||
Stock based compensation, shares | 2,158 | ||||||
Dividends declared on Series A Preferred Shares ($0.50 per share) | (350) | (350) | |||||
Net income (loss) | (8,297) | (8,297) | |||||
Ending balance, value at Mar. 31, 2020 | $ 17,500 | $ 6 | $ (1,009) | 46,806 | (8,983) | 54,320 | |
Ending balance, shares at Mar. 31, 2020 | 700,000 | 6,068,106 | 151,359 | ||||
Stock based compensation | 52 | 52 | |||||
Dividends declared on Series A Preferred Shares ($0.50 per share) | (350) | (350) | |||||
Net income (loss) | (2,571) | (2,571) | |||||
Ending balance, value at Jun. 30, 2020 | $ 17,500 | $ 6 | $ (1,009) | 46,858 | (11,904) | 51,451 | |
Ending balance, shares at Jun. 30, 2020 | 700,000 | 6,068,106 | 151,359 | ||||
Stock based compensation | 59 | 59 | |||||
Stock based compensation, shares | 19,410 | ||||||
Repurchase Transaction | $ 5,176 | 5,176 | |||||
Repurchase Transaction, shares | 1,130,152 | 1,130,152 | |||||
Dividends declared on Series A Preferred Shares ($0.50 per share) | (350) | (350) | |||||
Net income (loss) | (9,590) | (9,590) | |||||
Repurchase Transaction | $ (5,176) | (5,176) | |||||
Repurchase Transaction, shares | (1,130,152) | (1,130,152) | |||||
Ending balance, value at Sep. 30, 2020 | $ 17,500 | $ 6 | $ (6,185) | 46,917 | (21,844) | 36,394 | |
Ending balance, shares at Sep. 30, 2020 | 700,000 | 4,957,364 | 1,281,511 | ||||
Beginning balance, value at Dec. 31, 2020 | $ 17,500 | $ 6 | $ (6,185) | 47,065 | (24,193) | 34,193 | |
Beginning balance, shares at Dec. 31, 2020 | 700,000 | 4,988,310 | 1,281,511 | ||||
Stock based compensation | 177 | 177 | |||||
Stock based compensation, shares | 22,067 | ||||||
Dividends declared on Series A Preferred Shares ($0.50 per share) | (350) | (350) | |||||
Interests issued for contributed cash | 657 | ||||||
Net income (loss) | 34 | 34 | (1) | ||||
Ending balance, value at Mar. 31, 2021 | $ 17,500 | $ 6 | $ (6,185) | 47,242 | (24,509) | 34,054 | 656 |
Ending balance, shares at Mar. 31, 2021 | 700,000 | 5,010,377 | 1,281,511 | ||||
Beginning balance, value at Dec. 31, 2020 | $ 17,500 | $ 6 | $ (6,185) | 47,065 | (24,193) | 34,193 | |
Beginning balance, shares at Dec. 31, 2020 | 700,000 | 4,988,310 | 1,281,511 | ||||
Ending balance, value at Sep. 30, 2021 | $ 22,365 | $ 5 | 40,609 | (30,593) | 32,386 | 5,382 | |
Ending balance, shares at Sep. 30, 2021 | 894,580 | 5,051,471 | |||||
Beginning balance, value at Mar. 31, 2021 | $ 17,500 | $ 6 | $ (6,185) | 47,242 | (24,509) | 34,054 | 656 |
Beginning balance, shares at Mar. 31, 2021 | 700,000 | 5,010,377 | 1,281,511 | ||||
Series A Preferred Share issuance | $ 4,865 | (648) | 4,217 | ||||
Series A Preferred Share issuance, shares | 194,580,000 | ||||||
Stock based compensation | 70 | 70 | |||||
Dividends declared on Series A Preferred Shares ($0.50 per share) | (447) | (447) | |||||
Net income (loss) | (227) | (227) | 667 | ||||
Ending balance, value at Jun. 30, 2021 | $ 22,365 | $ 6 | $ (6,185) | 46,664 | (25,183) | 37,667 | 1,323 |
Ending balance, shares at Jun. 30, 2021 | 894,580 | 5,010,377 | 1,281,511 | ||||
Stock based compensation | 129 | 129 | |||||
Stock based compensation, shares | 41,094 | ||||||
Retirement of Treasury Stock, shares | 1,281,511 | ||||||
Dividends declared on Series A Preferred Shares ($0.50 per share) | (448) | (448) | |||||
Interests issued for contributed cash | 3,490 | ||||||
Net income (loss) | (4,962) | (4,962) | 569 | ||||
Ending balance, value at Sep. 30, 2021 | $ 22,365 | $ 5 | 40,609 | (30,593) | 32,386 | 5,382 | |
Ending balance, shares at Sep. 30, 2021 | 894,580 | 5,051,471 | |||||
Retirement of Treasury Stock | $ (1) | $ 6,185 | $ (6,184) | ||||
Retirement of treasury stock, shares | (1,281,511) |
Consolidated Statements of Sh_2
Consolidated Statements of Shareholders' Equity (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | |||||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | |
Statement of Stockholders' Equity [Abstract] | ||||||
Cash dividend paid per share of preferred stock outstanding | $ 0.50 | $ 0.50 | $ 0.50 | $ 0.50 | $ 0.50 | $ 0.50 |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (3,920) | $ (20,458) |
Adjustments to reconcile net income to net cash used by operating activities: | ||
Net unrealized holding (gains) losses on investments | (2,670) | 15,557 |
Net realized loss on sale of equity investments | 4 | 2,111 |
Net deferred income taxes | (106) | |
Stock compensation expense | 376 | 163 |
Purchase of investments by consolidated investment company subsidiary | (6,479) | (5,203) |
Changes in operating assets and liabilities: | ||
Funds deposited with reinsured companies | (274) | |
Current income taxes recoverable | 1,724 | (559) |
Reinsurance balances receivable | (3,364) | |
Deferred policy acquisition costs | (1,017) | |
Other assets and receivables | (344) | (1,319) |
Loss and loss adjustment expense reserves | 1,344 | |
Unearned premium reserves | 3,599 | |
Accounts payable and other liabilities | 627 | 129 |
Net cash used by operating activities | (10,394) | (9,685) |
Cash flows from investing activities: | ||
Purchases of furniture and equipment | (10) | (3) |
Purchases of equity method investments | (73) | |
Return of capital – other investments | 155 | |
Net cash provided (used) by investing activities | 72 | (3) |
Cash flows from financing activities: | ||
Proceeds from issuance of preferred stock, net | 4,217 | |
Payment of dividends on preferred shares | (1,245) | (1,050) |
Purchase of treasury shares | (2,538) | |
Cash contributions from non-controlling interests | 4,147 | |
Net cash provided (used) by financing activities | 7,119 | (3,588) |
Net decrease in cash and cash equivalents | (3,203) | (13,276) |
Cash and cash equivalents at beginning of period | 12,132 | 28,509 |
Cash and cash equivalents at end of period | 8,929 | 15,233 |
Non-Cash Financing Transactions | ||
Sale of equity investments to purchase treasury shares | $ 2,639 |
Nature of Business
Nature of Business | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business | 1. Nature of Business FG Financial Group, Inc. (“FGF”, the “Company”, “we”, or “us”) is a reinsurance and investment management holding company focused on opportunistic collateralized and loss capped reinsurance, while allocating capital in partnership with Fundamental Global ® As of September 30, 2021, Fundamental Global GP, LLC, a privately owned investment management company, and its affiliates, or “FG,” beneficially owned approximately 60 Sale of the Maison Business On December 2, 2019, we completed the sale of all of the issued and outstanding equity of three of the Company’s then wholly-owned subsidiaries, Maison Insurance Company (“Maison”), Maison Managers Inc. (“MMI”) and ClaimCor, LLC (“ClaimCor” and, together with Maison and MMI, the “Maison Business” or the “Insurance Companies”), to FedNat Holding Company, a Florida corporation (“FedNat”), pursuant to the terms and conditions of the Equity Purchase Agreement, dated as of February 25, 2019 (the “Purchase Agreement”), by and among the Company and each of Maison, MMI and ClaimCor, on the one hand, and FedNat, on the other hand (the “Asset Sale”). As consideration for the Asset Sale, FedNat paid the Company $ 51.0 million, consisting of $ 25.5 million in cash and $ 25.5 million in FedNat’s common stock, or 1,773,102 shares of FedNat common stock. In addition, upon the closing of the Asset Sale, $ 18.0 million of outstanding surplus note obligations payable by Maison to the Company, plus all accrued but unpaid interest, was repaid to the Company. On December 31, 2019, the shares of FedNat common stock issued to the Company in connection with the Asset Sale were registered under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to the terms of the Registration Rights Agreement entered into by the Company and FedNat at the closing of the Asset Sale. In addition to the Registration Rights Agreement, the Company and FedNat entered into a Standstill Agreement, a Reinsurance Capacity Right of First Refusal Agreement (the “Reinsurance Agreement”), and an Investment Advisory Agreement at the closing of the Asset Sale. Standstill Agreement The Standstill Agreement imposes certain limitations and restrictions with respect to the voting securities of FedNat (including shares of FedNat common stock) that are owned or held beneficially or of record by the Company. Under the Standstill Agreement, the Company has agreed to vote all of the voting securities of FedNat beneficially owned by the Company in accordance with the recommendation of the board of directors of FedNat with respect to any matter that is before the stockholders of FedNat for a vote by such stockholders. The Standstill Agreement imposes limitations on the sale of voting securities of FedNat held by the Company and restricts the Company from taking certain actions as a holder of voting securities of FedNat. The Standstill Agreement expires on December 2, 2024. For insurance regulatory purposes, the Company has waived any rights that it may have to exercise control of FedNat. FG FINANCIAL GROUP, INC. Notes to Consolidated Financial Statements Reinsurance Capacity Right of First Refusal Agreement The Reinsurance Agreement provides the Company with a right of first refusal to sell reinsurance coverage to the insurance company subsidiaries of FedNat, providing reinsurance on up to 7.5 15.0 Investment Advisory Agreement Pursuant to the Investment Advisory Agreement, FG Strategic Consulting, LLC (“FGSC,” formerly Fundamental Global Advisors LLC), a wholly-owned subsidiary of the Company, was formed to provide investment advisory services to FedNat, which include identifying, analyzing and recommending potential investments, advising as to existing investments and investment optimization, recommending investment dispositions, and providing advice regarding macro-economic conditions. In exchange for providing the investment advisory services, FedNat has agreed to pay FGSC an annual fee of $ 100,000 Current Business Our strategy has evolved to focus on opportunistic collateralized and loss capped reinsurance, while allocating capital to special purpose acquisition companies (“SPACs”) and SPAC sponsor-related businesses. Accordingly, in the first quarter 2021, we have launched our “SPAC Platform,” as further discussed below. As part of our refined focus, we have adopted the following capital allocation philosophy: “ Grow intrinsic value long-term focus fundamental research asymmetric risk/reward Historically, the Company has operated a real estate business through its subsidiary, FGI Metrolina Property Income Fund, LP; however, the Company does not anticipate that its real estate business will be a significant component of its future business plans. Reinsurance The Company has formed a wholly-owned reinsurance subsidiary, FG Reinsurance Ltd. (“FGRe”), a Cayman Islands limited liability company, to provide specialty property and casualty reinsurance. FGRe has been granted a Class B (iii) insurer license in accordance with the terms of The Insurance Law, 2010 and underlying regulations thereto and is subject to regulation by the Cayman Islands Monetary Authority (the “Authority”). The terms of the license required FGRe to receive a capital infusion in the amount of $ 5.0 156,000 3.3 2.9 2.4 Asset Management FGSC serves as an investment advisor to FedNat under the investment advisory agreement entered into at the closing of the Asset Sale. The Company has also formed Fundamental Global Asset Management, LLC (“FGAM”), a joint venture with an affiliate of FG, to sponsor investment advisors that will manage private funds ranging the full spectrum of alternative equities, fixed income, private equity and real estate. In September 2020, the joint venture sponsored the launch of FG Special Situations Fund via an investment of $ 5.0 4.0 FG FINANCIAL GROUP, INC. Notes to Consolidated Financial Statements Insurance FGRe is currently in the process of establishing and seeking regulatory approvals for a Risk Retention Group (“RRG”) to be domiciled in the State of Vermont for the purpose of providing directors and officers insurance coverage to special purpose acquisition vehicles. The Company expects to obtain the necessary regulatory approvals for the RRG in the fourth quarter of 2021. FGRe also anticipates providing capital, along with other participants, to facilitate the underwriting of such insurance coverage. The Company will focus on fee income derived from originating, underwriting, and servicing the insurance business, while mitigating our financial risk with external reinsurance partners. SPAC Platform On December 21, 2020, we formed FG SPAC Solutions LLC (“FGSS”), a Delaware company, to facilitate the launch of our “SPAC Platform”. Under the SPAC Platform, we plan to provide various strategic, administrative, and regulatory support services to newly formed SPACs for a monthly fee. The Company co-founded a partnership, FG SPAC Partners, LP (“FGSP”) to participate as a co-sponsor for newly formed SPACs. The Company also participates in the risk capital investments associated with the launch of such SPACs through its Asset Management business, specifically FG Special Situations Fund, LP. The first transaction entered into under the SPAC Platform occurred on January 11, 2021, by and among FGSS and Aldel Investors, LLC, the sponsor of Aldel Financial, Inc. (“Aldel”), a special purpose acquisition company which consummated its initial public offering on April 12, 2021. Under the services agreement between FGSS and Aldel Investors, LLC (the “Agreement”), FGSS has agreed to provide certain accounting, regulatory, strategic advisory, and other administrative services to Aldel, which include assistance with negotiations with a potential merger target for the SPAC as well as assistance with the de-SPAC process. Additional information regarding our formation of FGSS and our SPAC Platform can be found in Note 10 – Related Party Transactions under the heading “Formation of FG SPAC Partners, LP.” |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 2. Significant Accounting Policies Basis of Presentation These statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Nature of Operations and Basis of Consolidation The accompanying Consolidated Financial Statements include the accounts of FG Financial Group, Inc., consolidated with the accounts of all subsidiaries and affiliates in which we hold a controlling financial interest as of the financial statement date. Normally, a controlling financial interest reflects ownership of a majority of the voting interests. We also consolidate variable interest entities (“VIE”) when we possess both the power to direct the activities of the VIE that most significantly affect their economic performance, and we (i) are obligated to absorb the losses that could be significant to the VIE or (ii) hold the right to receive benefits from the VIE that could be significant to the VIE. Significant intercompany balances and transactions have been eliminated upon consolidation. Information regarding our reportable business segments is contained in Note 13 – Segment reporting . Discontinued Operations Due to the sale of all of the issued and outstanding equity of Maison, MMI and ClaimCor on December 2, 2019, these operations have been classified as discontinued operations in the Company’s financial statements presented herein. For the nine months ended September 30, 2021, we recognized a gain from the sale of the Maison Business of approximately $ 145,000 . This was related to a final true-up and settlement in the first quarter 2021, for income taxes due to the Company under the sale agreement. The following table presents a reconciliation of the major classes of line items constituting pretax profit (loss) of discontinued operations to the after-tax profit (loss) of discontinued operations that are presented in the Company’s consolidated statements of operations for the three and nine months ended September 30, 2021 and 2020: Schedule of Discontinued Operations 2021 2020 2021 2020 (in thousands) Three months ended Nine months ended 2021 2020 2021 2020 Pre-tax gain (loss) on sale $ – $ – $ – $ – Income tax benefit – – (145 ) – Net gain from sale of Maison Business $ – $ – $ 145 $ – FG FINANCIAL GROUP, INC. Notes to Consolidated Financial Statements The Use of Estimates in the Preparation of Consolidated Financial Statements The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the application of policies and the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses for the reporting period. Actual results could differ from these estimates. Estimates and their underlying assumptions are reviewed on an ongoing basis. Changes in estimates are recorded in the accounting period in which they are determined. The critical accounting estimates and assumptions in the accompanying consolidated financial statements include the valuation of our investments, the valuation of net deferred income taxes and deferred policy acquisition costs, premium revenue recognition, reserves for loss and loss adjustment expenses, and stock-based compensation expense. Investments in Equity Securities Investments in equity securities are carried at fair value with subsequent changes in fair value recorded to the Consolidated Statements of Operations as a component of net investment income. Other Investments Other investments consist, in part, of equity investments made in privately held companies accounted for under the equity method. We utilize the equity method to account for investments when we possess the ability to exercise significant influence, but not control, over the operating and financial policies of the investee. The ability to exercise significant influence is presumed when the investor possesses more than 20% of the voting interests of the investee. This presumption may be overcome based on specific facts and circumstances that demonstrate that the ability to exercise significant influence is restricted. We apply the equity method to investments in common stock and to other investments when such other investments possess substantially identical subordinated interests to common stock. In applying the equity method, we record the investment at cost and subsequently increase or decrease the carrying amount of the investment by our proportionate share of the net earnings or losses and other comprehensive income of the investee. We record dividends or other equity distributions as reductions in the carrying value of the investment. Should net losses of the investee reduce the carrying amount of the investment to zero, additional net losses may be recorded if other investments in the investee are at-risk, even if we have not committed to provide financial support to the investee. Such additional equity method losses, if any, are based upon the change in our claim on the investee’s book value. Other investments also consist of equity we have purchased in a limited partnership and a limited liability company for which there does not exist a readily determinable fair value. The Company accounts for these investments at their cost, minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investment of the same issuer. Any profit distributions the Company receives on these investments are included in net investment income. Investment Company Accounting In September 2020, the Company invested approximately $ 5.0 Financial Services-Investment Companies FG FINANCIAL GROUP, INC. Notes to Consolidated Financial Statements Cash and Cash Equivalents Cash and cash equivalents include cash and highly liquid investments with original maturities of 90 days or less. Income Taxes The Company follows the asset and liability method of accounting for income taxes, whereby deferred income tax assets and liabilities are recognized for (i) the differences between the financial statement carrying amount of existing assets and liabilities and their respective tax bases and (ii) loss and tax credit carry-forwards. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the date of enactment. Future tax benefits are recognized to the extent that realization of such benefits is more likely than not and a valuation allowance is established for any portion of a deferred tax asset that management believes will not be realized. Current federal income taxes are charged or credited to operations based upon amounts estimated to be payable or recoverable as a result of taxable operations for the current year. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in income tax expense (benefit). Concentration of Credit Risk Financial instruments which potentially expose the Company to concentrations of credit risk include investments, cash, amounts held as collateral under our quota share insurance agreements, as well as other amounts due to us under our quota share insurance agreements. The Company maintains its cash with a major U.S. domestic banking institution which is insured by the Federal Deposit Insurance Corporation (“FDIC”) for up to $ 250,000 The Company had not experienced any credit losses related to amounts due to us under our quota share agreements. Premium Revenue Recognition The Company participates in a 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. Additional premiums due on a contract that has no remaining coverage period are earned in full when written. Premiums written are generally recognized as earned over the contract period in proportion to the risk covered. Unearned premiums represent the unexpired portion of reinsurance provided. Policy Acquisition Costs Policy acquisition costs are costs that vary with, and are directly related to, the successful production of new and renewal 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. FG FINANCIAL GROUP, INC. Notes to Consolidated Financial Statements Funds Held by Cedents The caption “Funds Deposited with Reinsured Companies” in the Company’s consolidated balance sheets includes amounts held by Funds at Lloyd’s provided to support our reinsurance contracts with Lloyd’s syndicates. As of September 30, 2021, funds held by cedents were $ 2.7 Loss and Loss Adjustment Expense Reserves Loss and loss adjustment reserve estimates are based on estimates derived from reports the Company has 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. 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 a 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. Client 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 client 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. Stock-Based Compensation The Company has accounted for stock-based compensation under the provisions of ASC Topic 718 – Stock Compensation The Company has also issued restricted stock units (“RSUs”) to certain of its employees and directors which have been accounted for as equity-based awards since, upon vesting, they are required to be settled in the Company’s common shares. We have used the fair value of the Company’s common stock on the date the RSUs were issued to estimate the grant date fair value of those RSUs which vest solely based upon the passage of time, as well as a Monte Carlo valuation model to estimate the fair value of those RSUs which vest solely upon market-based conditions. The fair value of each RSU is recorded as compensation expense over the requisite service period, which is generally the expected period over which the awards will vest. In the case of those RSUs which vest upon market-based conditions, should the market-based condition be achieved prior to the expiration of the derived service period, any unrecognized cost will be recorded as compensation expense in the period in which the RSUs actually vest. Based upon the Company’s historical forfeiture rates relating to stock options and RSUs, the Company has not made any adjustment to stock compensation expense for expected forfeitures. FG FINANCIAL GROUP, INC. Notes to Consolidated Financial Statements Fair Value of Financial Instruments The carrying values of certain financial instruments, including cash, short-term investments, deposits held, accounts payable, and other accrued expenses approximate fair value due to their short-term nature. The Company measures the fair value of financial instruments in accordance with GAAP which defines fair value as the exchange price that would be received for an asset (or paid to transfer a liability) in the principal or most advantageous market for the asset (or liability) in an orderly transaction between market participants on the measurement date. GAAP also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. See Note 5 for further information on the fair value of the Company’s financial instruments. Earnings (loss) Per Common Share Basic earnings (loss) per common share is computed using the weighted average number of shares outstanding during the respective period. Diluted earnings (loss) per common share assumes conversion of all potentially dilutive outstanding stock options, restricted stock units, warrants or other convertible financial instruments. Potential common shares outstanding are excluded from the calculation of diluted earnings (loss) per share if their effect is anti-dilutive. |
Recently Adopted and Issued Acc
Recently Adopted and Issued Accounting Standards | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Changes and Error Corrections [Abstract] | |
Recently Adopted and Issued Accounting Standards | 3. Recently Adopted and Issued Accounting Standards Accounting Standards Pending Adoption ASU 2016-13: Financial Instruments – Credit Losses In June 2016, the FASB issued ASU 2016-13: Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments |
Investments
Investments | 9 Months Ended |
Sep. 30, 2021 | |
Investments, All Other Investments [Abstract] | |
Investments | 4. Investments The following table summarizes the Company’s investments in equity securities as of September 30, 2021 and December 31, 2020: Schedule of Investments ($ in thousands) Cost Basis Gross Unrealized Gains Gross Unrealized Losses Carrying Amount As of September 30, 2021 FNHC common stock $ 20,751 $ – $ 17,187 $ 3,564 SPAC investments 19 – – 19 Private placements 10,469 5,120 – 15,589 Total equity securities $ 31,239 $ 5,120 $ 17,187 $ 19,172 As of December 31, 2020 FNHC common stock $ 20,751 $ – $ 12,209 $ 8,542 Private placements 4,012 – – 4,012 Total equity securities $ 24,763 $ – $ 12,209 $ 12,554 FG FINANCIAL GROUP, INC. Notes to Consolidated Financial Statements FedNat Common Stock On December 2, 2019, the Company received 1,773,102 25.5 156,000 330,231 1,286,871 1,442,871 3.2 SPAC Investments SPAC investments consist of the public equity of newly formed special purpose acquisition companies held by the Fund. The investments typically consist of one share of common stock of the SPAC, along with one-half of one redeemable warrant entitling the holder to purchase one share of common stock at an exercise price of $ 11.50 10.00 Private Placements Private placements consist of the private equity and risk capital associated with the sponsorship of SPACs and are held by the Fund. In September 2020, the Company invested $ 5.0 5.0 4.0 8.6 0.86 0.36 11.50 The Company has determined that its investment in the Fund represents an investment in a variable interest entity (“VIE”) in which the Company is the primary beneficiary and as such, has consolidated the financial results of the Fund as of September 30, 2021. The Company evaluates whether it is the primary beneficiary of a VIE at the time it becomes involved with a variable interest entity and continuously reconsiders that conclusion. In determining whether the Company is the primary beneficiary, the Company evaluates its control rights as well as economic interests in the entity held either directly or indirectly through affiliates via both qualitative and quantitative analysis. Further investments in, or redemptions of investments in FGAM, by either member of joint venture could affect the entity’s status as a VIE or the determination of the primary beneficiary. At each reporting date, the Company assesses whether it is the primary beneficiary and will consolidate or deconsolidate accordingly. For the nine months ended September 30, 2021, the Company invested an additional $ 1.65 4.1 1.65 1.65 1.0 0.65 1.0 286,000 FG FINANCIAL GROUP, INC. Notes to Consolidated Financial Statements Additionally, in the third quarter 2021, the Fund invested approximately $ 4.8 4.8 1.5 Schedule of Investments The assets and liabilities of the Fund, our investment company subsidiary, have been included in the Company’s consolidated balance sheets presented herein and as listed in the table below. The assets of the Fund may only be used to settle its obligations. The Company’s maximum exposure to loss as a result of its involvement with the Fund is $ 6.65 Schedule of Subsidiaries Assets ($ in thousands) September 30, December 31, Cash equivalents $ 116 $ 988 Investments-SPACs 19 – Investments-Private placements 15,589 4,012 Other assets 22 – Total assets $ 15,746 $ 5,000 Accounts payable $ 28 $ – Total liabilities $ 28 $ – Other Investments Other investments consist, in part, of equity investments made in privately held companies accounted for under the equity method. Equity method investments include our investment of $ 4.0 million in FGI Metrolina Property Income Fund, LP (“Metrolina”), which invests in real estate through a real estate investment trust which is wholly owned by Metrolina. The general partner of Metrolina, FGI Metrolina GP, LLC, is managed, in part, by Mr. Cerminara, the Chairman of the Company’s Board of Directors. The Company, a limited partner of Metrolina, does not have a controlling interest, but exerts significant influence over the entity’s operating and financial policies as it owns an economic interest of approximately 52 % as of September 30, 2021. We have recorded equity method earnings from our investment in Metrolina of approximately $ 137,000 and $ 61,000 for each of the nine months ended September 30, 2021 and 2020, respectively. The carrying value of our investment in Metrolina as of September 30, 2021 was approximately $ 4.83 million. 4.4 4.0 0.4 Equity method investments also include our investment in FG SPAC Partners, LP (“FGSP”). On January 4, 2021, FGSP was formed as a Delaware limited partnership to co-sponsor newly formed SPACs with their founders or partners. The Company is the sole managing member of the general partner of FGSP and holds an approximate 49 % limited partner interest in FGSP directly and through its subsidiaries. Certain of our directors and officers also hold limited partner interests in FGSP. Our Chief Executive Officer and Director, Larry G. Swets, Jr., holds a limited partner interest through Itasca Financial LLC, an advisory and investment firm for which Mr. Swets is managing member. Hassan R. Baqar, our Chief Financial Officer effective August 6, 2021, also holds a limited partner interest through Sequoia Financial LLC, an advisory firm for which Mr. Baqar is managing member. The Chairman of our Board of Directors, D. Kyle Cerminara, also holds a limited partner interest through Fundamental Global, LLC, a holding company for which Mr. Cerminara is the manager and one of the members. We have recorded equity method earnings from our investment in FGSP of approximately $ 2.39 million for the nine months ended September 30, 2021. The carrying value of our investment in FGSP as of September 30, 2021 was approximately $ 2.46 million, representing $ 2.39 million in undistributed earnings. On January 11, 2021, FGSP purchased 1,075,000 founder shares from Aldel, for total consideration of $ 4,674 . On March 25, 2021, FGSP entered into a forfeiture agreement with Aldel whereby FGSP agreed to transfer 575,000 of these founder shares back to Aldel at no cost. Concurrent with Aldel’s initial public offering, on April 12, 2021, FGSP also purchased 650,000 warrants at a price of $ 0.10 per warrant, each exercisable to purchase one share of Aldel’s Class A common stock at an exercise price of $ 15.00 per share (the “OTM Warrants”), for a purchase price of $ 65,000 . In addition, as discussed above, the Company, through the Fund, has invested $ 1.0 million in the risk capital of Aldel Investors, LLC, which represent beneficial ownership of approximately 286,000 Aldel founder shares. Altogether, the Company’s investment represents beneficial interests of approximately 533,000 Aldel founder shares and approximately 321,000 OTM Warrants. Mr. Swets serves as senior advisor to Aldel. Mr. Baqar serves as a director and chief financial officer of Aldel. Mr. Cerminara serves as a director of Aldel. FG FINANCIAL GROUP, INC. Notes to Consolidated Financial Statements Other investments also consist of equity we have purchased in a limited partnership and a limited liability company for which there does not exist readily determinable fair values. The Company accounts for these investments at their cost, minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investment of the same issuer. Any profit distributions the Company receives on these investments are included in net investment income. The Company’s total investment in these two entities was approximately $ 483,000 73,000 42,000 38 776,000 Impairment For equity securities without readily determinable fair values, impairment is determined via a qualitative assessment which considers indicators to evaluate whether the investment is impaired. Some of these indicators include a significant deterioration in the earnings performance or asset quality of the investee, a significant adverse change in regulatory, economic or general market conditions in which the investee operates, or doubt over an investee’s ability to continue as a going concern. If the investment is deemed to be impaired after conducting this analysis, the Company would estimate the fair value of the investment to determine the amount of impairment loss. For equity method investments, such as the Company’s investment in Metrolina, evidence of a loss in value might include a series of operating losses of an investee, the absence of an ability to recover the carrying amount of the investment, or a deterioration in the value of the investee’s underlying assets. If these, or other indicators lead to the conclusion that there is a decrease in the value of the investment that is other than temporary, the Company would recognize that decrease in value even though the decrease may be in excess of what would otherwise be recognized under the equity method of accounting. The risks and uncertainties inherent in the assessment methodology used to determine impairment include, but may not be limited to, the following: ● the opinions of professional investment managers and appraisers could be incorrect; the past operating performance and cash flows generated from the investee’s operations may not reflect their future performance; and ● the estimated fair values for investment for which observable market prices are not available are inherently imprecise. We have not recorded an impairment on our investments for either of the nine months ended September 30, 2021 and 2020. Net investment income (loss) for the three and nine months ended September 30, 2021 and 2020 is as follows: Schedule of Net Investment Income (Loss) ($ in thousands) Three Months Ended September 30, Nine Months Ended 2021 2020 2021 2020 Unrealized holding loss on FNHC common stock $ (2,424 ) $ (5,760 ) $ (4,978 ) $ (15,618 ) Unrealized holding gain on private placement investments 4 – 5,120 – Realized loss on FHNC shares – (2,110 ) – (2,110 ) Dividend income from FNHC common stock – 160 – 479 Equity method earnings 1,070 – 2,527 – Other 51 (5 ) 123 257 Net investment income (loss) $ (1,299 ) $ (7,715 ) $ 2,792 $ (16,992 ) FG FINANCIAL GROUP, INC. Notes to Consolidated Financial Statements |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 5. Fair Value Measurements The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. The FASB has issued guidance that defines fair value as the exchange price that would be received for an asset (or paid to transfer a liability) in the principal, or most advantageous market in an orderly transaction between market participants. This guidance also establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The guidance categorizes assets and liabilities at fair value into one of three different levels depending on the observation of the inputs employed in the measurements, as follows: ● Level 1 – inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets providing the most reliable measurement of fair value since it is directly observable. ● Level 2 – inputs to the valuation methodology which include quoted prices for similar assets or liabilities in active markets. These inputs are observable, either directly or indirectly, for substantially the full-term of the financial instrument. ● Level 3 - inputs to the valuation methodology which are unobservable and significant to the measurement of fair value. The availability of valuation techniques and observable inputs can vary from investment to investment and are affected by a variety of factors, including the type of investment, whether the investment is new and not yet established in the marketplace, the liquidity of markets and other characteristics specific to the individual investment. In some cases, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the hierarchy based on the lowest level input that is significant to the fair value measurement. When determining fair value, the Company uses valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. We have valued our investment in FedNat and SPAC units at their last reported sales price as the shares and units are traded on a national exchange. They have been characterized in Level 1 of the fair value hierarchy. Furthermore, certain of our private placement investments are characterized in Level 1 of the fair value hierarchy as their value is based on the underlying investments it holds (those investments also traded on a national exchange). The remainder of our private placement investments have been characterized in Level 3 of the fair value hierarchy. As of September 30, 2021, these consist of the Fund’s private placement investments in the equity interests of the sponsor companies of OppFi (formerly FGNA) and Aldel. The estimated fair value of our OppFi sponsor interests consist of both class A and A-1 interests in the Sponsor, which, represent the beneficial interest of approximately 860,000 shares of OppFi as well as approximately 360,000 warrants to purchase OppFi common stock at $ 11.50 per share. The estimated fair value of our Aldel sponsor interests consist of a total of approximately 471,000 Aldel founder shares held by the Fund to which the Company was allocated approximately 286,000 founder shares, with the remaining 185,000 founder shares allocated to noncontrolling interests. The value of these interests was determined using Monte-Carlo simulation and option pricing models. Inherent in Monte-Carlo simulation and option pricing models are assumptions related to expected volatility, expected term, dividend yield and risk-free interest rate of the underlying SPAC common stock. The Company estimates the volatility of the common stock based on the historical performance of various broad market indices blended with various peer companies which the Company considers having similar characteristics to the underlying SPAC. Following are the significant inputs in the valuation model for the fair value of our OppFi and Aldel sponsorship interests as of September 30, 2021: Summary of Valuation Model for Fair Value OppFi Aldel Founder Shares Warrants Founder Shares Expected volatility 55.0 % 36.0 % 25.0 % Expected term (years) 0.7 0.8 4.8 0.8 1.3 Dividend yield 0.0 % 0.0 % 0.0 % Risk-free rate 0.1 % 0.9 % 0.1 % Probability of completing a business combination 100.0 % 100.0 % 90.0 % Discount for lack of marketability 19.0 % n/a 10.0 % At each subsequent measurement date, we will review the valuation of these investments and will record adjustments as necessary to reflect the expected exit value of the investment under current market conditions. The Fund uses an independent pricing service to value its private operating company investments which may include an income approach, a market approach, or a combination thereof. The Fund may use multiple valuation approaches and estimate fair value based on a weighted average or a selected outcome within a range of multiple valuation results. Due to the inherent uncertainty of valuations, the fair values reflected in the financial statements as of the measurement date may differ materially from: 1) values that would have been used had a readily available market existed for these investments; and 2) the values that may ultimately be realized upon sale of the investments. FG FINANCIAL GROUP, INC. Notes to Consolidated Financial Statements Financial instruments measured, on a recurring basis, at fair value as of September 30, 2021 and December 31, 2020 in accordance with the guidance promulgated by the FASB are as follows. Schedule of Financial Instruments Measured at Fair Value (in thousands) As of September 30, 2021 Level 1 Level 2 Level 3 Total FedNat common stock $ 3,564 $ – $ – $ 3,564 SPAC investments 19 – – 19 Private placements 4,934 – 10,655 15,589 $ 8,517 $ – $ 10,655 $ 19,172 As of December 31, 2020 FNHC common stock $ 8,542 $ – $ – $ 8,542 Private placements – – 4,012 4,012 $ 8,542 $ – $ 4,012 $ 12,554 The following table presents the changes in assets classified in Level 3 of the fair value hierarchy for the nine months ended September 30, 2021. There was no activity with respect to Level 3 assets for the nine months ended September 30, 2020. Schedule of Changes in Classified Assets (in thousands) 2021 Balance, January 1 $ 4,012 Purchases 1,667 Unrealized holding gains 4,976 Balance, September 30 $ 10,655 |
Loss and Loss Adjustment Expens
Loss and Loss Adjustment Expense Reserves | 9 Months Ended |
Sep. 30, 2021 | |
Loss And Loss Adjustment Expense Reserves | |
Loss and Loss Adjustment Expense Reserves | 6. Loss and Loss Adjustment Expense Reserves A significant degree of judgment is required to determine amounts recorded in the consolidated financial statements for the provision for loss and loss adjustment expense (“LAE”) reserves. The process for establishing this provision reflects the uncertainties and significant judgmental factors inherent in predicting future results of both known and unknown loss events. The process of establishing the provision for loss and LAE reserves relies on the judgment and opinions of a large number of individuals, including the opinions of the Company’s management, as well as the management of ceding companies and their actuaries. The COVID-19 pandemic is unprecedented, and the Company does not have previous loss experience on which to base the associated estimate for loss and loss adjustment expenses. In estimating losses, the Company may assess any of the following: ● a review of in-force treaties that may provide coverage and incur losses; ● general forecasts, catastrophe and scenario modelling analyses and results shared by cedents; reviews of industry insured loss estimates and market share analyses; and ● management’s judgement. Significant assumptions which served as the basis for the Company’s estimates of reserves for the COVID-19 pandemic losses and loss adjustment expenses include: ● the scope of coverage provided by the underlying policies, particularly those that provide for business interruption coverage; ● the regulatory, legislative, and judicial actions that could influence contract interpretations across the insurance industry; ● the extent of economic contraction caused by the COVID-19 pandemic and associated actions; and ● the ability of the cedents and insured to mitigate some or all of their losses. FG FINANCIAL GROUP, INC. Notes to Consolidated Financial Statements Under the terms of our quota share agreements, and due to the nature of claims and premium reporting, a lag exists 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. The reports we receive from our cedents have pre-determined due dates. In the case of the Company’s FAL contract, third quarter 2021 premium and loss information will not be made available to the Company until subsequent to the filing of this quarterly report. Thus, our third quarter results, including the loss and loss adjustment expense reserves presented herein, have been based upon a combination of first and second quarter actual results as well as full-year forecasts reported to us by the ceding companies for which we used to approximate third quarter results. While the Company believes its estimate of loss and loss adjustment expense reserves are adequate as of September 30, 2021, based on available information, actual losses may ultimately differ materially from the Company’s current estimates. The Company will continue to monitor the appropriateness of its assumptions as new information is provided. A summary of changes in outstanding loss and loss adjustment expense reserves for the nine months ended September 30, 2021, is as follows and includes reserves related to both our FAL contract, as well as our automotive insurance quota-share agreement which became effective April 1, 2021. There was no activity with respect to loss and loss adjustment expense reserves for the nine months ended September 30, 2020. Summary of Changes in Outstanding Loss and Loss Adjustment Expense Reserves (in thousands) 2021 Balance, January 1, gross of reinsurance $ – Less reinsurance recoverable on loss and LAE expense reserves – Balance, January 1, net of reinsurance – Incurred related to: Current year 1,893 Prior years – Paid related to: Current year (549 ) Prior years – Balance, September 30, net of reinsurance 1,344 Plus reinsurance recoverable related to loss and LAE expense reserves – Balance, September 30, gross of reinsurance $ 1,344 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 7. Income Taxes Income tax expense for the three and nine months ended September 30, 2021 and 2020 varies from the amount that would result by applying the applicable statutory federal income tax rate to income before income taxes as summarized in the following table: Summary of Income Tax Expense (Benefit) ($ in thousands) Three months ended September 30, Nine months ended September 30, 2021 2020 2021 2020 Income tax expense (benefit) at statutory income tax rate of 21% $ (923 ) $ (2,014 ) $ (854 ) $ (4,436 ) Valuation allowance for deferred tax assets deemed unrealizable 1,041 1,510 1,081 3,514 Rate differential due to CARES Act – – – (214 ) Non-deductible expenses associated with the Share Repurchase Transaction – 516 – 516 State income tax (net of federal tax benefit) – – (114 ) – Noncontrolling interests (119 ) (259 ) – Other 1 (12 ) 1 (45 ) Income tax expense (benefit) $ – $ – (145 ) $ (665 ) Income tax benefit – from continuing operations $ – $ – $ – $ (665 ) Income tax benefit – from discontinuing operations $ – $ – $ (145 ) $ – Due to the sale of all of the issued and outstanding equity of Maison, MMI and Claimcor on December 2, 2019, these operations have been classified as discontinued operations in the Company’s financial statements presented herein. For the quarter ended March 31, 2021, we recognized a gain from the sale of the Maison Business of approximately $ 145,000 FG FINANCIAL GROUP, INC. Notes to Consolidated Financial Statements As a result of the passage of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), the Company recorded a credit of $ 214,000 Deferred income taxes reflect the net tax effects of temporary differences between carrying amounts of assets and liabilities for financial reporting purposes as compared to the amounts used for income tax purposes. As of September 30, 2021, the Company has gross net deferred tax assets of approximately $ 5.3 million; however the Company has recorded a valuation allowance against all of its net deferred tax assets due to the uncertain nature surrounding our ability to realize these tax benefits in the future, resulting in a net deferred income tax asset of $ 0 as of September 30, 2021. Significant components of the Company’s net deferred tax assets are as follows: Schedule of Deferred Income Taxes September 30, 2021 December 31, 2020 Deferred income tax assets: Net operating loss carryforward $ 2,824 $ 1,143 Share-based compensation 221 216 Investments 2,085 2,570 Unearned premium reserves 151 – Other 21 5 Deferred income tax assets 5,302 3,934 Less: Valuation allowance (5,015 ) (3,934 ) Deferred income tax assets net of valuation allowance $ 287 $ – Deferred income tax liabilities: Deferred policy acquisition costs $ 214 $ – Other 73 – Deferred income tax liabilities $ 287 $ – Net deferred income tax asset (liability) $ – $ – As of September 30, 2021, the Company had net operating loss carryforwards (“NOLs”) for federal income tax purposes of approximately $ 13.4 0.5 0.1 1.2 11.6 As of September 30, 2021, the Company had no unrecognized tax benefits. The Company analyzed its tax positions in accordance with the provisions of Accounting Standards Codification Topic 740, Income Taxes no |
Equity Incentive Plan Grants
Equity Incentive Plan Grants | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Equity Incentive Plan Grants | 8. Equity Incentive Plan Grants In April 2014, the Company established an equity incentive plan for employees and directors of the Company (the “2014 Plan”). The purpose of the 2014 Plan was to create incentives designed to motivate recipients to significantly contribute toward the Company’s growth and success, to attract and retain persons of outstanding competence, and to provide such persons with an opportunity to acquire an equity interest in the Company. The 2014 Plan allowed for the issuance of non-qualified stock options, restricted stock, restricted stock units (“RSUs”), performance shares, performance cash awards, and other stock-based awards and provided for the issuance of 354,912 On May 31, 2018, our shareholders approved the 1347 Property Insurance Holdings, Inc. 2018 Equity Incentive Plan (the “2018 Plan”). The purpose of the 2018 Plan is to attract and retain directors, consultants, and other key employees of the Company and its subsidiaries and to provide to such persons incentives and rewards for superior performance. The 2018 Plan is administered by the Compensation and Management Resources Committee of the Board and has a term of ten years. The 2018 Plan allows for the issuance of both incentive stock options and non-qualified stock options, stock appreciation rights, RSUs, and other stock-based, as well as cash-based awards. As of September 30, 2021, there remained 0 FG FINANCIAL GROUP, INC. Notes to Consolidated Financial Statements As of September 30, 2021, the Company had RSU agreements outstanding under both the 2014 and 2018 Plans as well as non-qualified stock options outstanding under the 2018 Plan. RSUs Outstanding under the 2014 and 2018 Plan The following table summarizes RSU activity for the nine months ended September 30, 2021 and 2020: Schedule of Restricted Stock Units Activity Restricted Stock Units Number of Units Weighted Average Grant Date Fair Value Non-vested units, January 1, 2020 140,002 $ 5.93 Granted 60,998 – Vested (21,568 ) 4.94 Forfeited – – Non-vested units, September 30, 2020 179,432 $ 5.94 Non-vested units, January 1, 2021 148,486 $ 5.44 Granted – – Vested (63,161 ) 5.55 Forfeited – – Non-vested units, September 30, 2021 85,325 $ 5.36 (1) On August 12, 2020, the Board issued 60,998 40,000 50,000 40,000 (2) Upon the resignation of Marsha G. King and Lewis M. Johnson on December 14, 2020, and March 12, 2021, respectively, the Board accelerated the vesting of 19,210 20,987 17,400 Stock Options Outstanding under the 2018 Plan On January 12, 2021, in connection with Larry G. Swets, Jr.’s appointment as Chief Executive Officer, the Company entered into a Stock Option Agreement (the “Stock Option”) with Mr. Swets under the Company’s 2018 Equity Incentive Plan. The Stock Option entitles Mr. Swets to purchase up to 130,000 shares of the Company’s common stock at an exercise price of $ 3.38 per share. The Stock Option becomes vested and fully exercisable in 20% increments on each anniversary of the grant date provided that Mr. Swets’ remain in the continuous service of the Company through each applicable vesting date and provided that the Company’s book value per share shall have increased by 15% or more as compared to the Company’s book value per share as of the fiscal year end prior . The Stock Option expires on January 11, 2031 . The Stock Option contains performance and service conditions that affect vesting. Pursuant to ASC Topic 718- Stock Compensation, In estimating the fair value of the Stock Option, the Company estimated volatility based on the historical volatility of our stock. The risk-free interest rate is based on the U.S. Treasury Constant Maturity similar to the expected remaining life of the Stock Option. The expected life of the Stock Option is assumed to be equivalent to its contractual term. The dividend rate is based on our historical rate, which the Company anticipates will remain at zero. The following assumptions were used to determine the estimated fair value of the Stock Option: FG FINANCIAL GROUP, INC. Notes to Consolidated Financial Statements Schedule of Fair Value of Stock Options Expected volatility 45.60 % Expected life (years) 10.00 Risk-free interest rate 1.15 % Dividend yield 0.00 % The following table summarizes activity for stock options issued for the nine months ended September 30, 2021. There was no activity for the nine months ended September 30, 2020. Schedule of Stock Option Activity Common Stock Options Shares Weighted Ave Exercise Price Weighted Ave Remaining Contractual Term (yrs) Weighted Ave Grant Date Fair Value Aggregate Intrinsic Value Outstanding, January 1, 2021 – $ – – $ – $ – Exercisable, January 1, 2021 – $ – – $ – $ – Granted 130,000 3.38 10.00 1.88 – Exercised – – – – – Cancelled – – – – – Outstanding, September 30, 2021 130,000 $ 3.38 9.29 $ 1.88 $ 193,700 Exercisable, September 30, 2021 – $ – – $ – $ – Total stock-based compensation expense for the nine months ended September 30, 2021 and 2020 was approximately $ 377,000 163,000 506,000 Warrants For the nine months ended September 30, 2021 and 2020, warrants were neither granted nor exercised, nor did any warrants expire. As of September 30, 2021, the Company had 1,500,000 15.00 February 24, 2022 |
Shareholders_ Equity
Shareholders’ Equity | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
Shareholders’ Equity | 9. Shareholders’ Equity Series A Preferred Stock On May 21, 2021, we completed the underwritten public offering of an additional 194,580 8.00% 25.00 4.9 25,380 894,580 Dividends on the Series A Preferred Stock are cumulative from the date of original issue and are payable quarterly on the 15th day of March, June, September and December of each year, when, as and if declared by our Board of Directors or a duly authorized committee thereof. Dividends are payable out of amounts legally available therefor at a rate equal to 8.00% per annum per $ 25.00 of stated liquidation preference per share, or $ 2.00 per share of Series A Preferred Stock per year. Our Board of Directors declared the third quarter 2021 dividend on the shares of Series A Preferred Stock on November 12, 2021. The Series A Preferred Stock is not redeemable prior to February 28, 2023. On and after that date, the Series A Preferred Stock will be redeemable at our option, for cash, in whole or in part, at a redemption price of $ 25.00 FG FINANCIAL GROUP, INC. Notes to Consolidated Financial Statements Common Stock On October 28, 2021, we closed the underwritten public offering of 652,174 shares of our common stock at a public offering price of $ 4.00 per share. Furthermore, on November 3, 2021, the underwriters exercised their over-allotment option, closing on the sale of an additional 97,826 shares of our common stock under the same terms. The issuance, including the exercise of the over-allotment, resulted in approximately $ 2.5 million in net proceeds to us, after deducting underwriting commissions and other offering expenses. On October 29, 2021, the Company announced the commencement of its previously announced rights offering to holders of its common stock. Pursuant to the terms of the rights offering, the Company distributed, to each holder of its common stock, one non-transferable subscription right to purchase 0.15 share of common stock, at a price of $4.00 per whole share, for each share held as of 5:00 p.m. Eastern Time on October 25, 2021, the record date for the rights offering. The subscription rights may be exercised at any time during the subscription period, which commenced on October 29, 2021. The rights will expire if they are not exercised by 5:00 p.m., Eastern Time, on November 29, 2021, unless the Company extends the rights offering subscription period. The Company will not issue any fractional shares of the Company’s common stock in the rights offering, and subscription rights will be rounded down to the nearest whole number of shares. Stockholders are entitled to purchase, in total, up to 757,720 shares of common stock, for potential gross proceeds to the Company of approximately $ 3.0 million. The Company intends to use the net proceeds from this offering for working capital and other general corporate purposes. Retirement of Treasury Stock On August 19, 2021, the Board approved the retirement of all 1,281,511 common stock treasury shares owned by the Company. Accordingly, these shares have been classified as authorized, but unissued shares on the Company’s balance sheet as of September 30, 2021. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 10. Related Party Transactions Related party transactions are carried out in the normal course of operations and are measured in part by the amount of consideration paid or received as established and agreed by the parties. Management believes that consideration paid for such services in each case approximates fair value. Except where disclosed elsewhere in these consolidated financial statements, the following is a summary of related party transactions. Investment in Metrolina As of September 30, 2021, the Company had invested $ 4.0 million as a limited partner in FGI Metrolina Property Income Fund, LP (“Metrolina”), which invests in real estate through a real estate investment trust which is wholly owned by Metrolina. The general partner of Metrolina, FGI Metrolina GP, LLC, is managed, in part, by Mr. Cerminara, the Chairman of the Board of Directors of the Company. In the third quarter, 2021, Metrolina announced it would be liquidating and returning capital to its investors. Accordingly, on November 11, 2021, we received approximately $ 4.4 4.0 0.4 Metrolina’s investment program was managed by FG Funds Management LLC, an affiliate of FG, which, with its affiliates, is the largest stockholder of the Company. The Company’s investment represents an approximate 52% ownership stake in Metrolina as of September 30, 2021. Joint Venture Agreement On March 31, 2020, the Company entered into the Limited Liability Company Agreement (the “LLC Agreement”) of Fundamental Global Asset Management, LLC (“FGAM”), a joint venture owned 50% FGAM is governed by a Board of Managers consisting of four managers, two of which are appointed by each member of the joint venture. The Company has appointed two of its independent directors to the Board of Managers of FGAM. Certain major actions, including any decision to sponsor a new investment manager, require the prior consent of both members. FG FINANCIAL GROUP, INC. Notes to Consolidated Financial Statements In September 2020, the Company provided seed capital of $ 5.0 million into FGAM, to capitalize FG Special Situations Fund Advisor, LLC (the “Advisor”), a Delaware limited liability company formed on September 2, 2020, and to sponsor the launch of FG Special Situations Fund, LP (the “Fund”), a Delaware limited partnership also formed on September 2, 2020. FGAM has invested in the Fund through the Fund’s general partner and the Advisor, both of which are ultimately controlled by Mr. Cerminara, the Chairman of the Company’s Board of Directors. Of the total $ 5.0 million invested, approximately $ 4.0 million was used by FG New America Investors, LLC (the “Sponsor”) as part of a total $ 8.6 million of risk capital used to launch FG New America Acquisition Corp (NYSE: FGNA), a special purpose acquisition company which consummated its initial public offering on October 2, 2020. On July 20, 2021, FGNA completed its definitive business combination with Opportunity Financial, LLC and began operating as OppFi Inc. (“OppFi”), with OppFi’s common stock trading on the NYSE under the ticker symbol “OPFI”. The Fund’s specific investment consists of both class A and class A-1 interests of the Sponsor. On July 15, 2021, the Sponsor entered into a sponsor forfeiture agreement with FGNA and Opportunity Financial, LLC, under which the Sponsor agreed to forfeit a portion of FGNA Class B common stock as well as a portion of warrants to purchase FGNA Class A common stock which the Sponsor previously held. As a result, as of July 20, 2021, the class A and class A-1 interests represent a potential beneficial ownership of approximately 0.86 million common shares of OPFI as well as approximately 0.36 million warrants to purchase common shares of OPFI at a price of $ 11.50 per share. The class A and class A-1 interests have not been registered under the Securities Act of 1933, as amended, and are not transferrable except as provided for in the operating agreement of the Sponsor. Mr. Cerminara is a manager of the Sponsor. Mr. Swets, our Chief Executive Officer, was the Chief Executive Officer and a director of FGNA, however no longer holds those positions following FGNAs business combination with OppFi. Mr. Swets is also a manager of the Sponsor. Hassan R. Baqar, our Chief Financial Officer effective August 6, 2021, was the Chief Financial Officer of FGNA, however no longer holds that position following FGNA’s business combination with OppFi. In the first quarter, 2021, the Company invested an additional $ 1.65 1.65 1.65 1.0 0.65 1.0 286,000 Investment Advisory Agreement Pursuant to the Investment Advisory Agreement entered into upon closing of the Asset Sale, FG Strategic Consulting, LLC (“FGSC”), a wholly-owned subsidiary of the Company, has agreed to provide investment advisory services to FedNat, including identifying, analyzing and recommending potential investments, advising as to existing investments and investment optimization, recommending investment dispositions, and providing advice regarding macro-economic conditions. In exchange for providing the investment advisory services, FedNat has agreed to pay FGSC an annual fee of $ 100,000 Shared Services Agreement On March 31, 2020, the Company entered into a Shared Services Agreement (the “Shared Services Agreement”) with Fundamental Global Management, LLC (“FGM”), an affiliate of FG, pursuant to which FGM provides the Company with certain services related to the day-to-day management of the Company, including assisting with regulatory compliance, evaluating the Company’s financial and operational performance, providing a management team to supplement the executive officers of the Company, and such other services consistent with those customarily performed by executive officers and employees of a public company (collectively, the “Services”). In exchange for the Services, the Company pays FGM a fee of $ 456,250 The Shared Services Agreement has an initial term of three years, and thereafter renews automatically for successive one-year terms unless terminated in accordance with its terms. The Shared Services Agreement may be terminated by FGM or by the Company, by a vote of the Company’s independent directors, at the end of the initial or automatic renewal term upon 120 days’ notice, subject to payment by the Company of certain costs incurred by FGM to wind down the provision of Services and, in the case of a termination by the Company without cause, payment of a termination fee equal to the Shared Services Fee paid for the two quarters preceding termination. FG FINANCIAL GROUP, INC. Notes to Consolidated Financial Statements The Company paid $ 1.37 0.91 Share Repurchase Transaction On September 15, 2020, the Company entered into a Share Repurchase and Cooperation Agreement (the “Share Repurchase Agreement”) with Hale Partnership Capital Management, LLC and certain of its affiliates (collectively, the “Hale Parties”), which, prior to the transaction, owned more than 18% of the Company’s outstanding common stock (the “Share Repurchase Transaction”). Pursuant to the Share Repurchase Agreement, the Company agreed to purchase (exclusive of any fees or expenses) all of the 1,130,152 2.8 330,231 2.7 The Share Repurchase Agreement contains certain customary standstill provisions that, for a period of five years commencing September 15, 2020 (the “Standstill Period”), prohibit, among other things, the Hale Parties from (i) making certain announcements regarding the Company’s transactions, (ii) soliciting proxies, (iii) acquiring ownership of any securities of the Company, (iv) advising, encouraging or influencing any vote or disposition of any securities of the Company, (v) selling securities of the Company resulting in any third party owning more than 4.9% Each of the Company and the Hale Parties has the right to terminate the Share Repurchase Agreement prior to the end of the Standstill Period if (i) any of the Hale Parties, in the case of the Company, or (ii) the Company, in the case of the Hale Parties, commits a material breach of the Share Purchase Agreement and such breach is not cured within 15 As the total consideration paid in the Share Repurchase Transaction exceeded the fair value of the treasury shares repurchased by the Company, the Company recorded a charge of approximately $ 0.2 million to general and administrative expense for the year ended December 31, 2020, representing the estimated fair value of the rights conveyed to the Company pursuant to the standstill provisions in the agreement. The fair value of the 1,130,152 shares of Company common stock, or approximately $ 5.2 million, was recorded to treasury stock. Formation of FG SPAC Partners, LP On January 4, 2021, FG SPAC Partners, LP (“FGSP”) was formed as a Delaware limited partnership to co-sponsor newly formed SPACs with their founders or partners. The Company is the sole managing member of the general partner of FGSP and holds an approximate 49% limited partner interest in FGSP directly and through its subsidiaries. Certain of our directors and officers also hold limited partner interests in FGSP. Mr. Swets, holds a limited partner interest through Itasca Financial LLC, an advisory and investment firm for which Mr. Swets is managing member. Mr. Baqar also holds a limited partner interest through Sequoia Financial LLC, an advisory firm for which Mr. Baqar is managing member. Mr.Cerminara, also holds a limited partner interest through Fundamental Global, LLC, a holding company for which Mr. Cerminara is the manager and one of the members. FG FINANCIAL GROUP, INC. Notes to Consolidated Financial Statements On January 11, 2021, FGSP purchased 1,075,000 founder shares from Aldel, for total consideration of $ 4,674 . On March 25, 2021, FGSP entered into a forfeiture agreement with Aldel whereby FGSP agreed to transfer 575,000 of these founder shares back to Aldel at no cost. Concurrent with Aldel’s initial public offering, on April 12, 2021, FGSP also purchased 650,000 warrants at a price of $ 0.10 per warrant, each exercisable to purchase one share of Aldel’s Class A common stock at an exercise price of $ 15.00 per share (the “OTM Warrants”), for an aggregate purchase price of $ 65,000 . In addition, the Company through its joint venture investment in Fundamental Global Asset Management, LLC and the FG Special Situations Fund, LP, has invested $ 1.0 million in the risk capital of Aldel Investors, LLC, which represent beneficial ownership of approximately 286,000 Aldel founder shares. Altogether, the Company’s investment represents beneficial interests of approximately 533,000 Aldel founder shares and approximately 321,000 OTM Warrants. Mr. Swets, serves as senior advisor to Aldel. Mr. Baqar serves as a director and chief financial officer of Aldel. Mr. Cerminara serves as a director of Aldel. |
Net Income (Loss) Per Common Sh
Net Income (Loss) Per Common Share | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Common Share | 11. Net Income (Loss) Per Common Share Net income (loss) per common share is computed by dividing net income by the weighted average number of common shares and common share equivalents outstanding during the periods presented. In calculating diluted earnings per share, those potential common shares that are found to be anti-dilutive are excluded from the calculation. The table below provides a summary of the numerators and denominators used in determining basic and diluted earnings per share for the three and nine months ended September 30, 2021 and 2020. Schedule of Numerators and Denominators Used in Calculation of Basic and Diluted Earnings Per Share ($ in thousands except per share data) Three months ended September 30, Nine months ended September 30, 2021 2020 2021 2020 Basic and diluted: Net loss from continuing operations $ (4,393 ) $ (9,590 ) $ (4,065 ) $ (20,458 ) Gain attributable to noncontrolling interests (569 ) – (1,235 ) – Dividends declared on Series A Preferred Shares (448 ) (350 ) (1,245 ) (1,050 ) Loss attributable to FG Financial Group, Inc. common (5,410 ) (9,940 ) (6,545 ) (21,508 ) Weighted average common shares outstanding 5,032,615 5,893,125 5,012,139 6,009,267 Loss per common share from continuing operations $ (1.08 ) $ (1.69 ) $ (1.31 ) $ (3.58 ) Gain from sale of Maison Business, net of taxes $ – $ – 145 $ – Weighted average common shares outstanding 5,010,377 – 5,012,139 – Income per common share from discontinued operations $ – $ – $ 0.03 $ – The following potentially dilutive securities outstanding as of September 30, 2021 and 2020 have been excluded from the computation of diluted weighted-average shares outstanding as their effect would be anti-dilutive: Schedule of Potentially Dilutive Securities Excluded from Calculation As of September 30, 2021 2020 Options to purchase common stock 130,000 – Warrants to purchase common stock 1,500,000 1,500,000 Restricted stock units 85,325 179,432 1,715,325 1,679,432 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 12. Commitments and Contingencies Equity Award Letter Agreement On January 18, 2021, the Company and the Company’s Chief Executive Officer, Larry G. Swets, Jr., entered into an Equity Award Letter Agreement (the “Letter Agreement”), pursuant to which the Company agreed to grant Mr. Swets a future award (the “Future Award”) of 370,000 stock options, restricted shares or restricted stock units, subject to the approval of an amended and/or new equity plan, among other conditions. Specifically, under the Letter Agreement, no such Future Award may be granted until there is a determination by the Compensation Committee of the specific vesting and other terms of the award, and an amended and/or new equity plan, in a form to be prepared and reviewed by the Board of Directors of the Company (the “Board”), has been approved by the Board and stockholders of the Company that authorizes a sufficient number of shares of common stock to make such Future Award. FG FINANCIAL GROUP, INC. Notes to Consolidated Financial Statements Legal Proceedings From time to time, we are involved in legal proceedings and litigation arising in the ordinary course of business. Currently, it is not possible to predict legal outcomes and their impact on the future development of claims. Any such development will be affected by future court decisions and interpretations. Because of these uncertainties, additional liabilities may arise for amounts in excess of the Company’s current reserves. Operating Lease Commitments Effective July 23, 2021, the Company entered into a lease agreement for office space in St. Petersburg, FL. The lease has a term of one year. Total minimum rent over the term is expected to be $ 18,000 15,000 25,000 Impact of the Coronavirus (COVID-19) Pandemic We continue to monitor the recent outbreak of the novel coronavirus (COVID-19) on our operations. Given the ongoing and dynamic nature of the circumstances, it is difficult to predict the full impact of the COVID-19 pandemic on our business. Adverse events such as health-related concerns about working in our offices, the inability to travel and other matters affecting the general work environment have negatively impacted and could continue to harm our business and our business strategy. The extent to which our operations and investments may continue to be impacted by the COVID-19 pandemic will depend largely on future developments, which are highly uncertain and cannot be accurately predicted, including new developments concerning the severity of the pandemic and actions by government authorities to contain the pandemic or treat its impact. Furthermore, the impacts of a potential worsening of global economic conditions and the continued disruptions to and volatility in the financial markets remain unknown. In the event of a major disruption caused by the pandemic, we may lose the services of our employees, experience system interruptions or face challenges accessing the capital or credit markets, which could lead to diminishment of our business operations. Any of the foregoing could harm our business and delay the implementation of our business strategy. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Segment Reporting | 13. Segment Reporting The Company has two operating segments; insurance and asset management. The chief operating decision maker (“CODM”) is the Company’s Chief Executive Officer. The measure of profit or loss used by the CODM to identify and measure the Company’s reportable segments is income before income tax. Our insurance segment consists of the operations of our Cayman Islands-based reinsurance subsidiary, FGRe, which includes our two quota share reinsurance agreements, as well the returns associated with the investments made by our reinsurance operations, which include the Company’s FedNat common stock investment as well as a portion of our investment in Aldel. Our asset management segment includes the operations of the Fund, as well as our investments in Metrolina, our investment advisory agreement with FedNat and the operations of our newly formed SPAC Platform. The following table presents the financial information for each segment that is specifically identifiable or based on allocations using internal methodology as of and for the three and nine months ended September 30, 2021 and 2020. The three months ended March 31, 2020 marked the first quarter following the sale of the Company’s insurance operations in the Asset Sale. Accordingly, the Company had limited information to present for its insurance segment for 2020, restricted primarily to its investment in FedNat common stock. Furthermore, cash proceeds received as a result of the Asset Sale had not yet been deployed and have been presented in the ‘other’ segment as of September 30, 2020. The ‘other’ category in the table below consists largely of corporate general and administrative expenses which have not been allocated to a specific segment. Summary of Segment Reporting (in thousands) For the three months ended September 30, 2021 Insurance Asset Management Other Total Revenues from external customers $ 1,099 $ 66 $ – $ 1,165 Interest revenue (8 ) 37 – 29 Total revenue 3,882 (4,015 ) – (133 ) Depreciation and amortization – 1 2 3 Income (loss) before income tax 2,275 (4,123 ) (2,545 ) (4,393 ) For the nine months ended September 30, 2021 Revenues from external customers $ 2,221 $ 146 $ – $ 2,367 Interest revenue 5 49 – 54 Total revenue 3,894 1,265 – 5,159 Depreciation and amortization – 1 35 36 Income (loss) before income tax 686 905 (5,656 ) (4,065 ) As of September 30, 2021 Segment assets $ 13,452 $ 21,382 $ 9,016 $ 43,850 For the three months ended September 30, 2020 Revenues from external customers $ – $ 25 $ – $ 25 Interest revenue 1 28 – 29 Total revenue (7,710 ) 20 – (7,690 ) Depreciation and amortization – – 2 2 Income (loss) before income tax (7,746 ) 19 (1,863 ) (9,590 ) For the nine months ended September 30, 2020 Revenues from external customers $ – $ 75 $ 4 $ 79 Interest revenue 1 153 – 154 Total revenue (17,249 ) 332 4 (16,913 ) Depreciation and amortization – – 4 4 Income (loss) before income tax (17,318 ) 331 (4,136 ) (21,123 ) As of September 30, 2020 Segment assets $ 12,459 $ 10,361 $ 14,136 $ 36,956 |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation These statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). |
Nature of Operations and Basis of Consolidation | Nature of Operations and Basis of Consolidation The accompanying Consolidated Financial Statements include the accounts of FG Financial Group, Inc., consolidated with the accounts of all subsidiaries and affiliates in which we hold a controlling financial interest as of the financial statement date. Normally, a controlling financial interest reflects ownership of a majority of the voting interests. We also consolidate variable interest entities (“VIE”) when we possess both the power to direct the activities of the VIE that most significantly affect their economic performance, and we (i) are obligated to absorb the losses that could be significant to the VIE or (ii) hold the right to receive benefits from the VIE that could be significant to the VIE. Significant intercompany balances and transactions have been eliminated upon consolidation. Information regarding our reportable business segments is contained in Note 13 – Segment reporting . |
Discontinued Operations | Discontinued Operations Due to the sale of all of the issued and outstanding equity of Maison, MMI and ClaimCor on December 2, 2019, these operations have been classified as discontinued operations in the Company’s financial statements presented herein. For the nine months ended September 30, 2021, we recognized a gain from the sale of the Maison Business of approximately $ 145,000 . This was related to a final true-up and settlement in the first quarter 2021, for income taxes due to the Company under the sale agreement. The following table presents a reconciliation of the major classes of line items constituting pretax profit (loss) of discontinued operations to the after-tax profit (loss) of discontinued operations that are presented in the Company’s consolidated statements of operations for the three and nine months ended September 30, 2021 and 2020: Schedule of Discontinued Operations 2021 2020 2021 2020 (in thousands) Three months ended Nine months ended 2021 2020 2021 2020 Pre-tax gain (loss) on sale $ – $ – $ – $ – Income tax benefit – – (145 ) – Net gain from sale of Maison Business $ – $ – $ 145 $ – FG FINANCIAL GROUP, INC. Notes to Consolidated Financial Statements |
The Use of Estimates in the Preparation of Consolidated Financial Statements | The Use of Estimates in the Preparation of Consolidated Financial Statements The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the application of policies and the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses for the reporting period. Actual results could differ from these estimates. Estimates and their underlying assumptions are reviewed on an ongoing basis. Changes in estimates are recorded in the accounting period in which they are determined. The critical accounting estimates and assumptions in the accompanying consolidated financial statements include the valuation of our investments, the valuation of net deferred income taxes and deferred policy acquisition costs, premium revenue recognition, reserves for loss and loss adjustment expenses, and stock-based compensation expense. |
Investments in Equity Securities | Investments in Equity Securities Investments in equity securities are carried at fair value with subsequent changes in fair value recorded to the Consolidated Statements of Operations as a component of net investment income. |
Other Investments | Other Investments Other investments consist, in part, of equity investments made in privately held companies accounted for under the equity method. We utilize the equity method to account for investments when we possess the ability to exercise significant influence, but not control, over the operating and financial policies of the investee. The ability to exercise significant influence is presumed when the investor possesses more than 20% of the voting interests of the investee. This presumption may be overcome based on specific facts and circumstances that demonstrate that the ability to exercise significant influence is restricted. We apply the equity method to investments in common stock and to other investments when such other investments possess substantially identical subordinated interests to common stock. In applying the equity method, we record the investment at cost and subsequently increase or decrease the carrying amount of the investment by our proportionate share of the net earnings or losses and other comprehensive income of the investee. We record dividends or other equity distributions as reductions in the carrying value of the investment. Should net losses of the investee reduce the carrying amount of the investment to zero, additional net losses may be recorded if other investments in the investee are at-risk, even if we have not committed to provide financial support to the investee. Such additional equity method losses, if any, are based upon the change in our claim on the investee’s book value. Other investments also consist of equity we have purchased in a limited partnership and a limited liability company for which there does not exist a readily determinable fair value. The Company accounts for these investments at their cost, minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investment of the same issuer. Any profit distributions the Company receives on these investments are included in net investment income. |
Investment Company Accounting | Investment Company Accounting In September 2020, the Company invested approximately $ 5.0 Financial Services-Investment Companies FG FINANCIAL GROUP, INC. Notes to Consolidated Financial Statements |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash and highly liquid investments with original maturities of 90 days or less. |
Income Taxes | Income Taxes The Company follows the asset and liability method of accounting for income taxes, whereby deferred income tax assets and liabilities are recognized for (i) the differences between the financial statement carrying amount of existing assets and liabilities and their respective tax bases and (ii) loss and tax credit carry-forwards. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the date of enactment. Future tax benefits are recognized to the extent that realization of such benefits is more likely than not and a valuation allowance is established for any portion of a deferred tax asset that management believes will not be realized. Current federal income taxes are charged or credited to operations based upon amounts estimated to be payable or recoverable as a result of taxable operations for the current year. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in income tax expense (benefit). |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments which potentially expose the Company to concentrations of credit risk include investments, cash, amounts held as collateral under our quota share insurance agreements, as well as other amounts due to us under our quota share insurance agreements. The Company maintains its cash with a major U.S. domestic banking institution which is insured by the Federal Deposit Insurance Corporation (“FDIC”) for up to $ 250,000 The Company had not experienced any credit losses related to amounts due to us under our quota share agreements. |
Premium Revenue Recognition | Premium Revenue Recognition The Company participates in a 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. Additional premiums due on a contract that has no remaining coverage period are earned in full when written. Premiums written are generally recognized as earned over the contract period in proportion to the risk covered. Unearned premiums represent the unexpired portion of reinsurance provided. |
Policy Acquisition Costs | Policy Acquisition Costs Policy acquisition costs are costs that vary with, and are directly related to, the successful production of new and renewal 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. FG FINANCIAL GROUP, INC. Notes to Consolidated Financial Statements |
Funds Held by Cedents | Funds Held by Cedents The caption “Funds Deposited with Reinsured Companies” in the Company’s consolidated balance sheets includes amounts held by Funds at Lloyd’s provided to support our reinsurance contracts with Lloyd’s syndicates. As of September 30, 2021, funds held by cedents were $ 2.7 |
Loss and Loss Adjustment Expense Reserves | Loss and Loss Adjustment Expense Reserves Loss and loss adjustment reserve estimates are based on estimates derived from reports the Company has 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. 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 a 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. Client 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 client 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. |
Stock-Based Compensation | Stock-Based Compensation The Company has accounted for stock-based compensation under the provisions of ASC Topic 718 – Stock Compensation The Company has also issued restricted stock units (“RSUs”) to certain of its employees and directors which have been accounted for as equity-based awards since, upon vesting, they are required to be settled in the Company’s common shares. We have used the fair value of the Company’s common stock on the date the RSUs were issued to estimate the grant date fair value of those RSUs which vest solely based upon the passage of time, as well as a Monte Carlo valuation model to estimate the fair value of those RSUs which vest solely upon market-based conditions. The fair value of each RSU is recorded as compensation expense over the requisite service period, which is generally the expected period over which the awards will vest. In the case of those RSUs which vest upon market-based conditions, should the market-based condition be achieved prior to the expiration of the derived service period, any unrecognized cost will be recorded as compensation expense in the period in which the RSUs actually vest. Based upon the Company’s historical forfeiture rates relating to stock options and RSUs, the Company has not made any adjustment to stock compensation expense for expected forfeitures. FG FINANCIAL GROUP, INC. Notes to Consolidated Financial Statements |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying values of certain financial instruments, including cash, short-term investments, deposits held, accounts payable, and other accrued expenses approximate fair value due to their short-term nature. The Company measures the fair value of financial instruments in accordance with GAAP which defines fair value as the exchange price that would be received for an asset (or paid to transfer a liability) in the principal or most advantageous market for the asset (or liability) in an orderly transaction between market participants on the measurement date. GAAP also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. See Note 5 for further information on the fair value of the Company’s financial instruments. |
Earnings (loss) Per Common Share | Earnings (loss) Per Common Share Basic earnings (loss) per common share is computed using the weighted average number of shares outstanding during the respective period. Diluted earnings (loss) per common share assumes conversion of all potentially dilutive outstanding stock options, restricted stock units, warrants or other convertible financial instruments. Potential common shares outstanding are excluded from the calculation of diluted earnings (loss) per share if their effect is anti-dilutive. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Schedule of Discontinued Operations | Schedule of Discontinued Operations 2021 2020 2021 2020 (in thousands) Three months ended Nine months ended 2021 2020 2021 2020 Pre-tax gain (loss) on sale $ – $ – $ – $ – Income tax benefit – – (145 ) – Net gain from sale of Maison Business $ – $ – $ 145 $ – |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Investments, All Other Investments [Abstract] | |
Schedule of Investments | The following table summarizes the Company’s investments in equity securities as of September 30, 2021 and December 31, 2020: Schedule of Investments ($ in thousands) Cost Basis Gross Unrealized Gains Gross Unrealized Losses Carrying Amount As of September 30, 2021 FNHC common stock $ 20,751 $ – $ 17,187 $ 3,564 SPAC investments 19 – – 19 Private placements 10,469 5,120 – 15,589 Total equity securities $ 31,239 $ 5,120 $ 17,187 $ 19,172 As of December 31, 2020 FNHC common stock $ 20,751 $ – $ 12,209 $ 8,542 Private placements 4,012 – – 4,012 Total equity securities $ 24,763 $ – $ 12,209 $ 12,554 |
Schedule of Subsidiaries Assets | The assets and liabilities of the Fund, our investment company subsidiary, have been included in the Company’s consolidated balance sheets presented herein and as listed in the table below. The assets of the Fund may only be used to settle its obligations. The Company’s maximum exposure to loss as a result of its involvement with the Fund is $ 6.65 Schedule of Subsidiaries Assets ($ in thousands) September 30, December 31, Cash equivalents $ 116 $ 988 Investments-SPACs 19 – Investments-Private placements 15,589 4,012 Other assets 22 – Total assets $ 15,746 $ 5,000 Accounts payable $ 28 $ – Total liabilities $ 28 $ – |
Schedule of Net Investment Income (Loss) | Net investment income (loss) for the three and nine months ended September 30, 2021 and 2020 is as follows: Schedule of Net Investment Income (Loss) ($ in thousands) Three Months Ended September 30, Nine Months Ended 2021 2020 2021 2020 Unrealized holding loss on FNHC common stock $ (2,424 ) $ (5,760 ) $ (4,978 ) $ (15,618 ) Unrealized holding gain on private placement investments 4 – 5,120 – Realized loss on FHNC shares – (2,110 ) – (2,110 ) Dividend income from FNHC common stock – 160 – 479 Equity method earnings 1,070 – 2,527 – Other 51 (5 ) 123 257 Net investment income (loss) $ (1,299 ) $ (7,715 ) $ 2,792 $ (16,992 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Summary of Valuation Model for Fair Value | Following are the significant inputs in the valuation model for the fair value of our OppFi and Aldel sponsorship interests as of September 30, 2021: Summary of Valuation Model for Fair Value OppFi Aldel Founder Shares Warrants Founder Shares Expected volatility 55.0 % 36.0 % 25.0 % Expected term (years) 0.7 0.8 4.8 0.8 1.3 Dividend yield 0.0 % 0.0 % 0.0 % Risk-free rate 0.1 % 0.9 % 0.1 % Probability of completing a business combination 100.0 % 100.0 % 90.0 % Discount for lack of marketability 19.0 % n/a 10.0 % |
Schedule of Financial Instruments Measured at Fair Value | Financial instruments measured, on a recurring basis, at fair value as of September 30, 2021 and December 31, 2020 in accordance with the guidance promulgated by the FASB are as follows. Schedule of Financial Instruments Measured at Fair Value (in thousands) As of September 30, 2021 Level 1 Level 2 Level 3 Total FedNat common stock $ 3,564 $ – $ – $ 3,564 SPAC investments 19 – – 19 Private placements 4,934 – 10,655 15,589 $ 8,517 $ – $ 10,655 $ 19,172 As of December 31, 2020 FNHC common stock $ 8,542 $ – $ – $ 8,542 Private placements – – 4,012 4,012 $ 8,542 $ – $ 4,012 $ 12,554 |
Schedule of Changes in Classified Assets | The following table presents the changes in assets classified in Level 3 of the fair value hierarchy for the nine months ended September 30, 2021. There was no activity with respect to Level 3 assets for the nine months ended September 30, 2020. Schedule of Changes in Classified Assets (in thousands) 2021 Balance, January 1 $ 4,012 Purchases 1,667 Unrealized holding gains 4,976 Balance, September 30 $ 10,655 |
Loss and Loss Adjustment Expe_2
Loss and Loss Adjustment Expense Reserves (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Loss And Loss Adjustment Expense Reserves | |
Summary of Changes in Outstanding Loss and Loss Adjustment Expense Reserves | Summary of Changes in Outstanding Loss and Loss Adjustment Expense Reserves (in thousands) 2021 Balance, January 1, gross of reinsurance $ – Less reinsurance recoverable on loss and LAE expense reserves – Balance, January 1, net of reinsurance – Incurred related to: Current year 1,893 Prior years – Paid related to: Current year (549 ) Prior years – Balance, September 30, net of reinsurance 1,344 Plus reinsurance recoverable related to loss and LAE expense reserves – Balance, September 30, gross of reinsurance $ 1,344 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Summary of Income Tax Expense (Benefit) | Income tax expense for the three and nine months ended September 30, 2021 and 2020 varies from the amount that would result by applying the applicable statutory federal income tax rate to income before income taxes as summarized in the following table: Summary of Income Tax Expense (Benefit) ($ in thousands) Three months ended September 30, Nine months ended September 30, 2021 2020 2021 2020 Income tax expense (benefit) at statutory income tax rate of 21% $ (923 ) $ (2,014 ) $ (854 ) $ (4,436 ) Valuation allowance for deferred tax assets deemed unrealizable 1,041 1,510 1,081 3,514 Rate differential due to CARES Act – – – (214 ) Non-deductible expenses associated with the Share Repurchase Transaction – 516 – 516 State income tax (net of federal tax benefit) – – (114 ) – Noncontrolling interests (119 ) (259 ) – Other 1 (12 ) 1 (45 ) Income tax expense (benefit) $ – $ – (145 ) $ (665 ) Income tax benefit – from continuing operations $ – $ – $ – $ (665 ) Income tax benefit – from discontinuing operations $ – $ – $ (145 ) $ – |
Schedule of Deferred Income Taxes | Schedule of Deferred Income Taxes September 30, 2021 December 31, 2020 Deferred income tax assets: Net operating loss carryforward $ 2,824 $ 1,143 Share-based compensation 221 216 Investments 2,085 2,570 Unearned premium reserves 151 – Other 21 5 Deferred income tax assets 5,302 3,934 Less: Valuation allowance (5,015 ) (3,934 ) Deferred income tax assets net of valuation allowance $ 287 $ – Deferred income tax liabilities: Deferred policy acquisition costs $ 214 $ – Other 73 – Deferred income tax liabilities $ 287 $ – Net deferred income tax asset (liability) $ – $ – |
Equity Incentive Plan Grants (T
Equity Incentive Plan Grants (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Restricted Stock Units Activity | The following table summarizes RSU activity for the nine months ended September 30, 2021 and 2020: Schedule of Restricted Stock Units Activity Restricted Stock Units Number of Units Weighted Average Grant Date Fair Value Non-vested units, January 1, 2020 140,002 $ 5.93 Granted 60,998 – Vested (21,568 ) 4.94 Forfeited – – Non-vested units, September 30, 2020 179,432 $ 5.94 Non-vested units, January 1, 2021 148,486 $ 5.44 Granted – – Vested (63,161 ) 5.55 Forfeited – – Non-vested units, September 30, 2021 85,325 $ 5.36 |
Schedule of Fair Value of Stock Options | Schedule of Fair Value of Stock Options Expected volatility 45.60 % Expected life (years) 10.00 Risk-free interest rate 1.15 % Dividend yield 0.00 % |
Schedule of Stock Option Activity | The following table summarizes activity for stock options issued for the nine months ended September 30, 2021. There was no activity for the nine months ended September 30, 2020. Schedule of Stock Option Activity Common Stock Options Shares Weighted Ave Exercise Price Weighted Ave Remaining Contractual Term (yrs) Weighted Ave Grant Date Fair Value Aggregate Intrinsic Value Outstanding, January 1, 2021 – $ – – $ – $ – Exercisable, January 1, 2021 – $ – – $ – $ – Granted 130,000 3.38 10.00 1.88 – Exercised – – – – – Cancelled – – – – – Outstanding, September 30, 2021 130,000 $ 3.38 9.29 $ 1.88 $ 193,700 Exercisable, September 30, 2021 – $ – – $ – $ – |
Net Income (Loss) Per Common _2
Net Income (Loss) Per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Numerators and Denominators Used in Calculation of Basic and Diluted Earnings Per Share | Net income (loss) per common share is computed by dividing net income by the weighted average number of common shares and common share equivalents outstanding during the periods presented. In calculating diluted earnings per share, those potential common shares that are found to be anti-dilutive are excluded from the calculation. The table below provides a summary of the numerators and denominators used in determining basic and diluted earnings per share for the three and nine months ended September 30, 2021 and 2020. Schedule of Numerators and Denominators Used in Calculation of Basic and Diluted Earnings Per Share ($ in thousands except per share data) Three months ended September 30, Nine months ended September 30, 2021 2020 2021 2020 Basic and diluted: Net loss from continuing operations $ (4,393 ) $ (9,590 ) $ (4,065 ) $ (20,458 ) Gain attributable to noncontrolling interests (569 ) – (1,235 ) – Dividends declared on Series A Preferred Shares (448 ) (350 ) (1,245 ) (1,050 ) Loss attributable to FG Financial Group, Inc. common (5,410 ) (9,940 ) (6,545 ) (21,508 ) Weighted average common shares outstanding 5,032,615 5,893,125 5,012,139 6,009,267 Loss per common share from continuing operations $ (1.08 ) $ (1.69 ) $ (1.31 ) $ (3.58 ) Gain from sale of Maison Business, net of taxes $ – $ – 145 $ – Weighted average common shares outstanding 5,010,377 – 5,012,139 – Income per common share from discontinued operations $ – $ – $ 0.03 $ – |
Schedule of Potentially Dilutive Securities Excluded from Calculation | The following potentially dilutive securities outstanding as of September 30, 2021 and 2020 have been excluded from the computation of diluted weighted-average shares outstanding as their effect would be anti-dilutive: Schedule of Potentially Dilutive Securities Excluded from Calculation As of September 30, 2021 2020 Options to purchase common stock 130,000 – Warrants to purchase common stock 1,500,000 1,500,000 Restricted stock units 85,325 179,432 1,715,325 1,679,432 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Summary of Segment Reporting | Summary of Segment Reporting (in thousands) For the three months ended September 30, 2021 Insurance Asset Management Other Total Revenues from external customers $ 1,099 $ 66 $ – $ 1,165 Interest revenue (8 ) 37 – 29 Total revenue 3,882 (4,015 ) – (133 ) Depreciation and amortization – 1 2 3 Income (loss) before income tax 2,275 (4,123 ) (2,545 ) (4,393 ) For the nine months ended September 30, 2021 Revenues from external customers $ 2,221 $ 146 $ – $ 2,367 Interest revenue 5 49 – 54 Total revenue 3,894 1,265 – 5,159 Depreciation and amortization – 1 35 36 Income (loss) before income tax 686 905 (5,656 ) (4,065 ) As of September 30, 2021 Segment assets $ 13,452 $ 21,382 $ 9,016 $ 43,850 For the three months ended September 30, 2020 Revenues from external customers $ – $ 25 $ – $ 25 Interest revenue 1 28 – 29 Total revenue (7,710 ) 20 – (7,690 ) Depreciation and amortization – – 2 2 Income (loss) before income tax (7,746 ) 19 (1,863 ) (9,590 ) For the nine months ended September 30, 2020 Revenues from external customers $ – $ 75 $ 4 $ 79 Interest revenue 1 153 – 154 Total revenue (17,249 ) 332 4 (16,913 ) Depreciation and amortization – – 4 4 Income (loss) before income tax (17,318 ) 331 (4,136 ) (21,123 ) As of September 30, 2020 Segment assets $ 12,459 $ 10,361 $ 14,136 $ 36,956 |
Nature of Business (Details Nar
Nature of Business (Details Narrative) - USD ($) | Sep. 30, 2020 | Jul. 14, 2020 | Dec. 02, 2019 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2021 |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Net income loss | $ (4,962,000) | $ (227,000) | $ 34,000 | $ (9,590,000) | $ (2,571,000) | $ (8,297,000) | ||||
Reinsurance Capacity Right of First Refusal Agreement [Member] | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Reinsurance capacity right, percentage | 7.50% | |||||||||
Annual reinsurance limit | $ 15,000,000 | |||||||||
Annual fee for advisory services | 100,000 | |||||||||
Common Stock [Member] | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Net income loss | ||||||||||
Fundamental Global Investor [Member] | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Capital infustion | 5,000,000 | $ 5,000,000 | ||||||||
Sale of stock transactions | 156,000 | |||||||||
Sale of stock transaction | $ 3,300,000 | |||||||||
Collateralize obligation | 2,400,000 | |||||||||
Fundamental Global Investor [Member] | Maximum [Member] | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Net income loss | $ 2,900,000 | |||||||||
Fundamental Global Investor [Member] | Common Stock [Member] | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Sale of stock ownership, percentage | 60.00% | |||||||||
FedNat Holding Company [Member] | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Received the payment for asset sale consideration | $ 51,000,000 | |||||||||
Disposal Group, Including Discontinued Operation, Consideration | 25,500,000 | |||||||||
[custom:StockIssuedDuringPeriodValueForSaleConsideration] | $ 25,500,000 | |||||||||
Stock issued for sale consideration, shares | 1,773,102 | |||||||||
Surplus Notes | $ 18,000,000 | |||||||||
Sale of stock transactions | 156,000 | |||||||||
Fundamental Global Asset Management, LLC [Member] | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Real estate investments | $ 5,000,000 | $ 1,650,000 | $ 1,650,000 | $ 5,000,000 | $ 1,650,000 | |||||
FG New America Investors, LLC [Member] | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Payments to acquire other investments | $ 4,000,000 |
Schedule of Discontinued Operat
Schedule of Discontinued Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Accounting Policies [Abstract] | ||||
Pre-tax gain (loss) on sale | ||||
Income tax benefit | (145) | |||
Net gain from sale of Maison Business | $ 145 |
Significant Accounting Polici_4
Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Mar. 31, 2021 | |
Gain (Loss) on Disposition of Business | $ 145,000 | ||||
Cash deposit per institution insured by FDIC | 250,000 | 250,000 | |||
Fund by cedents | 2,700,000 | 2,700,000 | |||
Fundamental Global Asset Management, LLC [Member] | |||||
Real estate investment | $ 1,650,000 | $ 5,000,000 | $ 1,650,000 | $ 5,000,000 | $ 1,650,000 |
Schedule of Investments (Detail
Schedule of Investments (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Debt Securities, Held-to-maturity, Allowance for Credit Loss [Line Items] | ||
Investments: Cost basis | $ 31,239 | $ 24,763 |
Investments: Gross Unrealized Gains | 5,120 | |
Investments: Gross Unrealized Losses | 17,187 | 12,209 |
Investments: Carrying Amount | 19,172 | 12,554 |
FedNat Common Stock [Member] | ||
Debt Securities, Held-to-maturity, Allowance for Credit Loss [Line Items] | ||
Investments: Cost basis | 20,751 | 20,751 |
Investments: Gross Unrealized Gains | ||
Investments: Gross Unrealized Losses | 17,187 | 12,209 |
Investments: Carrying Amount | 3,564 | 8,542 |
SPAC Units [Member] | ||
Debt Securities, Held-to-maturity, Allowance for Credit Loss [Line Items] | ||
Investments: Cost basis | 19 | |
Investments: Gross Unrealized Gains | ||
Investments: Gross Unrealized Losses | ||
Investments: Carrying Amount | 19 | |
Private Placements [Member] | ||
Debt Securities, Held-to-maturity, Allowance for Credit Loss [Line Items] | ||
Investments: Cost basis | 10,469 | 4,012 |
Investments: Gross Unrealized Gains | 5,120 | |
Investments: Gross Unrealized Losses | ||
Investments: Carrying Amount | $ 15,589 | $ 4,012 |
Schedule of Subsidiaries Assets
Schedule of Subsidiaries Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 |
Other assets | $ 871 | $ 517 | |
Total assets | 43,850 | 34,705 | $ 36,956 |
Accounts payable | 713 | 455 | |
Total liabilities | 6,082 | 512 | |
SPAC [Member] | |||
Cash equivalents | 116 | 988 | |
Investments-SPACs | 19 | ||
Investments-Private placements | 15,589 | 4,012 | |
Other assets | 22 | ||
Total assets | 15,746 | 5,000 | |
Accounts payable | 28 | ||
Total liabilities | $ 28 |
Schedule of Net Investment Inco
Schedule of Net Investment Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Net Investment Income [Line Items] | ||||
Net investment income (loss) | $ (1,299) | $ (7,715) | $ 2,792 | $ (16,992) |
Unrealized Holding Loss on FNHC Common Stock [Member] | ||||
Net Investment Income [Line Items] | ||||
Net investment income (loss) | (2,424) | (5,760) | (4,978) | (15,618) |
Unrealized Holding Gain on Private Placement Investments [Member] | ||||
Net Investment Income [Line Items] | ||||
Net investment income (loss) | 4 | 5,120 | ||
Realized Loss on FHNC Shares [Member] | ||||
Net Investment Income [Line Items] | ||||
Net investment income (loss) | (2,110) | (2,110) | ||
Dividend Income from FNHC Common Stock [Member] | ||||
Net Investment Income [Line Items] | ||||
Net investment income (loss) | 160 | 479 | ||
Equity Method Earnings [Member] | ||||
Net Investment Income [Line Items] | ||||
Net investment income (loss) | 1,070 | 2,527 | ||
Other [Member] | ||||
Net Investment Income [Line Items] | ||||
Net investment income (loss) | $ 51 | $ (5) | $ 123 | $ 257 |
Investments (Details Narrative)
Investments (Details Narrative) - USD ($) | Nov. 11, 2021 | Aug. 11, 2021 | Mar. 25, 2021 | Jan. 11, 2021 | Sep. 15, 2020 | Jul. 14, 2020 | Dec. 02, 2019 | Sep. 30, 2021 | Sep. 30, 2020 | Apr. 12, 2021 | Mar. 31, 2021 | Jan. 04, 2021 | Sep. 02, 2020 |
Shares issued during period | 185,000 | ||||||||||||
share price | $ 11.50 | ||||||||||||
Beneficial ownership of shares | 471,000 | ||||||||||||
Class of stock warrant | 360,000 | ||||||||||||
Proceeds receive from liquidation | $ 4,400,000 | ||||||||||||
Investment | 4,000,000 | ||||||||||||
Distributed earnings | $ 400,000 | ||||||||||||
Investments | $ 483,000 | ||||||||||||
Gain on loss investment | $ 73,000 | $ 42,000 | |||||||||||
Investment from the partnership percentage | 38.00% | ||||||||||||
Proceeds From Sale of Other Investments | $ 776,000 | ||||||||||||
Private Placement [Member] | |||||||||||||
Investment Owned at cost | 1,500,000 | ||||||||||||
Parent [Member] | Private Placement [Member] | |||||||||||||
Investment Owned at cost | $ 4,800,000 | ||||||||||||
FG New America Acquisition Corp [Member] | |||||||||||||
share price | $ 11.50 | ||||||||||||
Real estate investment | 5,000,000 | $ 4,000,000 | |||||||||||
Risk Capital | $ 8,600,000 | ||||||||||||
Beneficial ownership of shares | 860,000 | ||||||||||||
Class of stock warrant | 360,000 | ||||||||||||
Aldel Investors, LLC [Member] | |||||||||||||
Beneficial ownership of shares | 286,000 | ||||||||||||
SPAC Units [Member] | |||||||||||||
share price | $ 11.50 | ||||||||||||
Share issued price per share | $ 10 | ||||||||||||
FedNat Holding Company [Member] | |||||||||||||
Stock issued for sale consideration, shares | 1,773,102 | ||||||||||||
Stock issued for sale consideration, value | $ 25,500,000 | ||||||||||||
Shares transferred | 156,000 | ||||||||||||
Number of shares hold during period, shares | 1,286,871 | ||||||||||||
Shares issued during period | 1,442,871 | ||||||||||||
Estimated fair value of common stock | $ 3,200,000 | ||||||||||||
FedNat Holding Company [Member] | Hale Parties [Member] | Share Repurchase and Cooperation Agreement [Member] | |||||||||||||
Repurchase of common stock in exchange of shares | 330,231 | ||||||||||||
Estimated fair value of common stock | $ 2,700,000 | ||||||||||||
Fundamental Global Asset Management, LLC [Member] | |||||||||||||
Real estate investment | $ 1,650,000 | 5,000,000 | $ 1,650,000 | ||||||||||
Fundamental Global Asset Management, LLC [Member] | Noncontrolling Interest [Member] | |||||||||||||
Real estate investment | $ 4,100,000 | ||||||||||||
Fundamental Global Asset Management, LLC [Member] | Aldel Investors, LLC [Member] | |||||||||||||
Real estate investment | $ 1,000,000 | ||||||||||||
Beneficial ownership of shares | 286,000 | 286,000 | |||||||||||
Investment Owned at cost | $ 1,000,000 | ||||||||||||
Fundamental Global Asset Management, LLC [Member] | Aldel Investors, LLC [Member] | Noncontrolling Interest [Member] | |||||||||||||
Real estate investment | 650,000 | ||||||||||||
AIdel Investors LLC [Member] | Parent [Member] | |||||||||||||
Investment owned at fair value | 1,650,000 | ||||||||||||
FGI Metrolina Property Income Fund, LP [Member] | |||||||||||||
Equity Method Investments | $ 4,000,000 | ||||||||||||
Equity Method Investment, Ownership Percentage | 52.00% | ||||||||||||
FGI Metrolina GP, LLC [Member] | |||||||||||||
Equity Method Investments | $ 4,830,000 | ||||||||||||
Payments for (Proceeds from) Investments | 137,000 | $ 61,000 | |||||||||||
FG SPAC Partners LP [Member] | |||||||||||||
Stock issued for sale consideration, shares | 1,075,000 | ||||||||||||
Stock issued for sale consideration, value | $ 4,674 | ||||||||||||
Shares transferred | 575,000 | ||||||||||||
Risk Capital | $ 1,000,000 | ||||||||||||
Beneficial ownership of shares | 286,000 | ||||||||||||
Class of stock warrant | 650,000 | ||||||||||||
Equity Method Investments | 2,460,000 | ||||||||||||
Equity Method Investment, Ownership Percentage | 49.00% | ||||||||||||
Payments for (Proceeds from) Investments | 2,390,000 | ||||||||||||
Undistributed Earnings, Basic | $ 2,390,000 | ||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.10 | ||||||||||||
FG SPAC Partners LP [Member] | OTMWarrants [Member] | |||||||||||||
Beneficial ownership of shares | 321,000 | ||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 15 | ||||||||||||
Warrants and Rights Outstanding | $ 65,000 | ||||||||||||
FG SPAC Partners LP [Member] | Aldel Investors, LLC [Member] | |||||||||||||
Beneficial ownership of shares | 533,000 |
Summary of Valuation Model for
Summary of Valuation Model for Fair Value (Details) | 9 Months Ended |
Sep. 30, 2021 | |
Opp FiInvestors LLC [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Expected term of warrants | 4 years 9 months 18 days |
Opp FiInvestors LLC [Member] | Minimum [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Expected term of founder shares | 8 months 12 days |
Opp FiInvestors LLC [Member] | Maximum [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Expected term of founder shares | 9 months 18 days |
Opp FiInvestors LLC [Member] | Measurement Input, Price Volatility [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input, founder shares | 55 |
Measurement input, warrants | 36 |
Opp FiInvestors LLC [Member] | Measurement Input, Expected Dividend Rate [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input, founder shares | 0 |
Measurement input, warrants | 0 |
Opp FiInvestors LLC [Member] | Measurement Input, Risk Free Interest Rate [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input, founder shares | 0.1 |
Measurement input, warrants | 0.9 |
Opp FiInvestors LLC [Member] | Probability of Completing Business Combination [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input, founder shares | 100 |
Measurement input, warrants | 100 |
Opp FiInvestors LLC [Member] | Measurement Input, Discount for Lack of Marketability [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input, founder shares | 19 |
Aldel Investors, LLC [Member] | Minimum [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Expected term of founder shares | 9 months 18 days |
Aldel Investors, LLC [Member] | Maximum [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Expected term of founder shares | 1 year 3 months 18 days |
Aldel Investors, LLC [Member] | Measurement Input, Price Volatility [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input, founder shares | 25 |
Aldel Investors, LLC [Member] | Measurement Input, Expected Dividend Rate [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input, founder shares | 0 |
Aldel Investors, LLC [Member] | Measurement Input, Risk Free Interest Rate [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input, founder shares | 0.1 |
Aldel Investors, LLC [Member] | Probability of Completing Business Combination [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input, founder shares | 90 |
Aldel Investors, LLC [Member] | Measurement Input, Discount for Lack of Marketability [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input, founder shares | 10 |
Schedule of Financial Instrumen
Schedule of Financial Instruments Measured at Fair Value (Details) - Fair Value, Recurring [Member] - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities, common stock | $ 19,172,000 | $ 12,554,000 |
FedNat Common Stock [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities, common stock | 3,564,000 | |
SPAC Units [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities, common stock | 19,000 | |
Private Placements [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities, common stock | 15,589,000 | 4,012,000 |
FHNC Common Stock [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities, common stock | 8,542,000 | |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities, common stock | 8,517,000 | 8,542,000 |
Fair Value, Inputs, Level 1 [Member] | FedNat Common Stock [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities, common stock | 3,564,000 | |
Fair Value, Inputs, Level 1 [Member] | SPAC Units [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities, common stock | 19,000 | |
Fair Value, Inputs, Level 1 [Member] | Private Placements [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities, common stock | 4,934,000 | |
Fair Value, Inputs, Level 1 [Member] | FHNC Common Stock [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities, common stock | 8,542,000 | |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities, common stock | ||
Fair Value, Inputs, Level 2 [Member] | FedNat Common Stock [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities, common stock | ||
Fair Value, Inputs, Level 2 [Member] | SPAC Units [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities, common stock | ||
Fair Value, Inputs, Level 2 [Member] | Private Placements [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities, common stock | ||
Fair Value, Inputs, Level 2 [Member] | FHNC Common Stock [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities, common stock | ||
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities, common stock | 10,655,000 | 4,012,000 |
Fair Value, Inputs, Level 3 [Member] | FedNat Common Stock [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities, common stock | ||
Fair Value, Inputs, Level 3 [Member] | SPAC Units [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities, common stock | ||
Fair Value, Inputs, Level 3 [Member] | Private Placements [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities, common stock | $ 10,655,000 | 4,012,000 |
Fair Value, Inputs, Level 3 [Member] | FHNC Common Stock [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities, common stock |
Schedule of Changes in Classifi
Schedule of Changes in Classified Assets (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Fair Value Disclosures [Abstract] | |
Balance, January 1 | $ 4,012 |
Purchases | 1,667 |
Unrealized holding gains | 4,976 |
Balance, September 30 | $ 10,655 |
Fair Value Measurements (Detail
Fair Value Measurements (Details Narrative) | 9 Months Ended |
Sep. 30, 2021$ / sharesshares | |
Investment Owned, Balance, Shares | 471,000 |
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right | 360,000 |
Share Price | $ / shares | $ 11.50 |
Stock Issued During Period, Shares, New Issues | 185,000 |
Opp FiInvestors LLC [Member] | |
Investment Owned, Balance, Shares | 860,000 |
Aldel Investors, LLC [Member] | |
Investment Owned, Balance, Shares | 286,000 |
Summary of Changes in Outstandi
Summary of Changes in Outstanding Loss and Loss Adjustment Expense Reserves (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Loss And Loss Adjustment Expense Reserves | |
Balance, January 1, gross of reinsurance | |
Less reinsurance recoverable on loss and LAE expense reserves | |
Balance, January 1, net of reinsurance | |
Current year | 1,893 |
Prior years | |
Current year | (549) |
Prior years | |
Balance, September 30, net of reinsurance | 1,344 |
Plus reinsurance recoverable related to loss and LAE expense reserves | |
Balance, September 30, gross of reinsurance | $ 1,344 |
Summary of Income Tax Expense (
Summary of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense (benefit) at statutory income tax rate of 21% | $ (923) | $ (2,014) | $ (854) | $ (4,436) |
Valuation allowance for deferred tax assets deemed unrealizable | 1,041 | 1,510 | 1,081 | 3,514 |
Rate differential due to CARES Act | (214) | |||
Non-deductible expenses associated with the Share Repurchase Transaction | 516 | 516 | ||
State income tax (net of federal tax benefit) | (114) | |||
Noncontrolling interests | (119) | (259) | ||
Other | 1 | (12) | 1 | (45) |
Income tax expense (benefit) | (145) | (665) | ||
Income tax benefit – from continuing operations | (665) | |||
Income tax benefit – from discontinuing operations | $ (145) |
Summary of Income Tax Expense_2
Summary of Income Tax Expense (Benefit) (Details) (Parenthetical) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | ||||
Provision for taxes at U.S. statutory marginal income tax rate | 21.00% | 21.00% | 21.00% | 21.00% |
Schedule of Deferred Income Tax
Schedule of Deferred Income Taxes (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforward | $ 2,824 | $ 1,143 |
Share-based compensation | 221 | 216 |
Investments | 2,085 | 2,570 |
Unearned premium reserves | 151 | |
Other | 21 | 5 |
Deferred income tax assets | 5,302 | 3,934 |
Less: Valuation allowance | (5,015) | (3,934) |
Deferred income tax assets net of valuation allowance | 287 | |
Deferred policy acquisition costs | 214 | |
Other | 73 | |
Deferred income tax liabilities | 287 | |
Net deferred income tax asset (liability) |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2021 | Sep. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Gain (Loss) on Disposition of Business | $ 145,000 | |||||
Income Tax Expense (Benefit) | $ (665,000) | |||||
Deferred Tax Assets, Gross | 5,302,000 | 5,302,000 | $ 3,934,000 | |||
Deferred Tax Assets, Deferred Income | 0 | 0 | ||||
Operating loss carryforwards | 13,400,000 | 13,400,000 | ||||
Unrecognized tax benefits | 0 | 0 | ||||
Expire on December 31, 2039 [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Operating loss carryforwards | 500,000 | 500,000 | ||||
Expire on December 31, 2040 [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Operating loss carryforwards | 100,000 | 100,000 | ||||
Expire on December 31, 2041 [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Operating loss carryforwards | 1,200,000 | 1,200,000 | ||||
Not Expire Under Current Tax Law [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Operating loss carryforwards | $ 11,600,000 | 11,600,000 | ||||
CARES Act [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Income Tax Expense (Benefit) | $ 214,000 | |||||
Maison Business [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Gain (Loss) on Disposition of Business | $ 145,000 |
Schedule of Restricted Stock Un
Schedule of Restricted Stock Units Activity (Details) - Restricted Stock Units (RSUs) [Member] - $ / shares | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Non-vested Units, Beginning balance | 148,486 | 140,002 |
Weighted Average Grant Date Fair Value, Beginning balance | $ 5.44 | $ 5.93 |
Number of Non-vested Units, Granted | 60,998 | |
Weighted Average Grant Date Fair Value, Granted | ||
Number of Non-vested Units, Vested | (63,161) | (21,568) |
Weighted Average Grant Date Fair Value, Vested | $ 5.55 | $ 4.94 |
Number of Non-vested Units, Forfeited | ||
Weighted Average Grant Date Fair Value, Forfeited | ||
Number of Non-vested Units, Ending balance | 85,325 | 179,432 |
Weighted Average Grant Date Fair Value, Ending balance | $ 5.36 | $ 5.94 |
Schedule of Fair Value of Stock
Schedule of Fair Value of Stock Options (Details) | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Expected volatility | 45.60% |
Expected life (years) | 10 years |
Risk-free interest rate | 1.15% |
Dividend yield | 0.00% |
Schedule of Stock Option Activi
Schedule of Stock Option Activity (Details) - 2014 Equity Incentive Plan [Member] | 9 Months Ended |
Sep. 30, 2021USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares, Outstanding, Beginning balance | shares | |
Weighted Average Exercise Price, Outstanding, Beginning balance | |
Weighted Ave Remaining Contractual Term (Years), Outstanding, Beginning balance | |
Weighted Ave Grant Date Fair Value, Outstanding, Beginning balance | |
Aggregate Intrinsic Value, Outstanding, Beginning balance | $ | |
Shares, Exercisable, Beginning balance | shares | |
Weighted Average Exercise Price, Exercisable, Beginning balance | |
Weighted Ave Remaining Contractual Term (Years), Exercisable, Beginning balance | |
Weighted Ave Grant Date Fair Value, Exercisable, Beginning balance | |
Aggregate Intrinsic Value, Exercisable, Beginning balance | $ | |
Shares, Granted | shares | 130,000 |
Weighted Average Exercise Price, Granted | $ 3.38 |
Weighted Ave Remaining Contractual Term (Years), Granted | 10 years |
Weighted Average Grant date Fair Value, Granted | $ 1.88 |
Aggregate Intrinsic Value, Granted | $ | |
Shares, Exercised | shares | |
Weighted Average Exercise Price, Exercised | |
Weighted Ave Remaining Contractual Term (Years), Exercised | |
Weighted Average Grant date Fair Value, Exercised | |
Aggregate Intrinsic Value, Exercised | $ | |
Shares, Cancelled | shares | |
Weighted Average Exercise Price, Cancelled | |
Weighted Ave Remaining Contractual Term (Years), Cancelled | |
Weighted Average Grant date Fair Value, Cancelled | |
Aggregate Intrinsic Value, Cancelled | $ | |
Shares, Outstanding, Ending balance | shares | 130,000 |
Weighted Average Exercise Price, Outstanding, Ending balance | $ 3.38 |
Weighted Ave Remaining Contractual Term (Years), Outstanding, Ending balance | 9 years 3 months 14 days |
Weighted Ave Grant Date Fair Value, Outstanding, Ending balance | $ 1.88 |
Aggregate Intrinsic Value, Outstanding, Ending balance | $ | $ 193,700 |
Shares, Exercisable, Ending balance | shares | |
Weighted Average Exercise Price, Exercisable, Ending balance | |
Weighted Ave Remaining Contractual Term (Years), Exercisable, Ending balance | |
Weighted Ave Grant Date Fair Value, Exercisable, Ending balance | |
Aggregate Intrinsic Value, Exercisable, Ending balance | $ |
Equity Incentive Plan Grants (D
Equity Incentive Plan Grants (Details Narrative) - USD ($) | Aug. 06, 2021 | Mar. 12, 2021 | Jan. 12, 2021 | Dec. 14, 2020 | Aug. 12, 2020 | Jul. 27, 2021 | Sep. 30, 2021 | Sep. 30, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Common share options authorized under plan | 354,912 | |||||||
Share-based Payment Arrangement, Expense | $ 377,000 | $ 163,000 | ||||||
Unrecognized stock based compensation expense | $ 506,000 | |||||||
Warrant [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock option, expiry date | Feb. 24, 2022 | |||||||
Warrants outstanding | 1,500,000 | |||||||
Weighted average exercise price, outstanding | $ 15 | |||||||
Restricted Stock Units (RSUs) [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of restricted stock issued | 60,998 | |||||||
Non Employee Director [Member] | Restricted Stock Units (RSUs) [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of restricted stock issued | 60,998 | |||||||
Number of restricted stock issued, value | $ 40,000 | |||||||
Non Employee Director [Member] | Restricted Stock Units (RSUs) [Member] | Maximum [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of restricted stock issued, value | $ 50,000 | |||||||
Non Employee Director [Member] | Restricted Stock Units (RSUs) [Member] | Minimum [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of restricted stock issued, value | $ 40,000 | |||||||
Dr. Marsha G. King [Member] | Restricted Stock Units (RSUs) [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of restricted stock issued | 19,210 | |||||||
Lewis M Johnson [Member] | Restricted Stock Units (RSUs) [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of restricted stock issued | 20,987 | |||||||
Mr.Hill [Member] | Restricted Stock Units (RSUs) [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of restricted stock issued | 17,400 | |||||||
2018 Equity Incentive Plan [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Common share options available for issuance | 0 | |||||||
2018 Equity Incentive Plan [Member] | Larry G. Swets Jr [Member] | Stock Option Agreement [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 130,000 | |||||||
Share-based Payment Arrangement, Option, Exercise Price Range, Outstanding, Weighted Average Exercise Price | $ 3.38 | |||||||
Stock option,description | The Stock Option becomes vested and fully exercisable in 20% increments on each anniversary of the grant date provided that Mr. Swets’ remain in the continuous service of the Company through each applicable vesting date and provided that the Company’s book value per share shall have increased by 15% or more as compared to the Company’s book value per share as of the fiscal year end prior | |||||||
Stock option, expiry date | Jan. 11, 2031 |
Shareholders_ Equity (Details N
Shareholders’ Equity (Details Narrative) - USD ($) $ / shares in Units, $ in Millions | May 21, 2021 | Nov. 03, 2021 | Oct. 29, 2021 | Oct. 28, 2021 | Aug. 19, 2021 | Sep. 30, 2021 | Dec. 31, 2020 |
Class of Stock [Line Items] | |||||||
Number of shares issued | 185,000 | ||||||
Preferred stock, par value | $ 25 | $ 25 | |||||
8.00% Cumulative Preferred Stock, Series A [Member] | |||||||
Class of Stock [Line Items] | |||||||
Preferred stock, par value | $ 2 | ||||||
Liquidation preference per share | $ 25 | ||||||
8.00% Cumulative Preferred Stock, Series A [Member] | IPO [Member] | |||||||
Class of Stock [Line Items] | |||||||
Number of shares issued | 194,580 | ||||||
Preferred stock, dividend percentage | 8.00% | ||||||
Preferred stock, par value | $ 25 | ||||||
Proceeds from preferred stock | $ 4.9 | ||||||
Liquidation preference per share | $ 25 | ||||||
Series A Preferred Stock [Member] | IPO [Member] | Fundamental Global Investor [Member] | |||||||
Class of Stock [Line Items] | |||||||
Number of preferred stock purchased during period | 25,380 | ||||||
Series A Preferred Stock [Member] | IPO [Member] | Fundamental Global Investor [Member] | Closing Date of Offering [Member] | |||||||
Class of Stock [Line Items] | |||||||
Number of preferred stock purchased during period | 894,580 | ||||||
Common Stock [Member] | |||||||
Class of Stock [Line Items] | |||||||
Treasury Stock, Shares, Retired | 1,281,511 | ||||||
Common Stock [Member] | IPO [Member] | Subsequent Event [Member] | |||||||
Class of Stock [Line Items] | |||||||
Number of shares issued | 652,174 | ||||||
Preferred stock, par value | $ 4 | ||||||
Common Stock [Member] | Over-Allotment Option [Member] | Subsequent Event [Member] | |||||||
Class of Stock [Line Items] | |||||||
Number of shares issued | 97,826 | ||||||
Proceeds from Issuance of Common Stock | $ 2.5 | ||||||
Common Stock [Member] | Rights Offering [Member] | Subsequent Event [Member] | |||||||
Class of Stock [Line Items] | |||||||
Number of shares issued | 757,720 | ||||||
Proceeds from Issuance of Common Stock | $ 3 | ||||||
Right to purchase share, description. | the Company announced the commencement of its previously announced rights offering to holders of its common stock. Pursuant to the terms of the rights offering, the Company distributed, to each holder of its common stock, one non-transferable subscription right to purchase 0.15 share of common stock, at a price of $4.00 per whole share, for each share held as of 5:00 p.m. Eastern Time on October 25, 2021, the record date for the rights offering. The subscription rights may be exercised at any time during the subscription period, which commenced on October 29, 2021. The rights will expire if they are not exercised by 5:00 p.m., Eastern Time, on November 29, 2021, unless the Company extends the rights offering subscription period. |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Nov. 11, 2021 | Aug. 11, 2021 | Apr. 12, 2021 | Mar. 25, 2021 | Jan. 11, 2021 | Sep. 15, 2020 | Jul. 14, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Mar. 31, 2021 | Jan. 04, 2021 | Sep. 02, 2020 |
Proceeds receive from liquidation | $ 4,400,000 | |||||||||||||||
Investment | 4,000,000 | |||||||||||||||
Distributed earnings | $ 400,000 | |||||||||||||||
Beneficial ownership of shares | 471,000 | 471,000 | ||||||||||||||
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right | 360,000 | 360,000 | ||||||||||||||
Share Price | $ 11.50 | $ 11.50 | ||||||||||||||
General and Administrative Expense | $ 3,000,000 | $ 1,900,000 | $ 6,698,000 | $ 4,210,000 | ||||||||||||
Treasury Stock, Value, Acquired, Cost Method | $ 5,200,000 | |||||||||||||||
Common Stock [Member] | ||||||||||||||||
Repurchase of common stock | 1,130,152 | |||||||||||||||
FG New America Acquisition Corp [Member] | ||||||||||||||||
Real estate investment | $ 5,000,000 | 5,000,000 | $ 4,000,000 | |||||||||||||
Risk capital | $ 8,600,000 | |||||||||||||||
Beneficial ownership of shares | 860,000 | |||||||||||||||
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right | 360,000 | |||||||||||||||
Share Price | $ 11.50 | |||||||||||||||
Aldel Investors, LLC [Member] | ||||||||||||||||
Beneficial ownership of shares | 286,000 | 286,000 | ||||||||||||||
Joint Venture Agreement [Member] | ||||||||||||||||
Investment ownership percentage | 50.00% | |||||||||||||||
Share Repurchase and Cooperation Agreement [Member] | ||||||||||||||||
General and Administrative Expense | $ 200,000 | |||||||||||||||
Share Repurchase and Cooperation Agreement [Member] | Common Stock [Member] | Third Party [Member] | Minimum [Member] | ||||||||||||||||
Investment ownership percentage | 4.90% | |||||||||||||||
Metrolina Property Income Fund, LP [Member] | ||||||||||||||||
Real Estate Investments, Other | $ 4,000,000 | $ 4,000,000 | ||||||||||||||
Investment ownership percentage | 52.00% | 52.00% | ||||||||||||||
Fundamental Global Asset Management, LLC [Member] | ||||||||||||||||
Real estate investment | $ 1,650,000 | $ 5,000,000 | $ 1,650,000 | 5,000,000 | $ 1,650,000 | |||||||||||
Fundamental Global Asset Management, LLC [Member] | Noncontrolling Interest [Member] | ||||||||||||||||
Real estate investment | $ 4,100,000 | $ 4,100,000 | ||||||||||||||
Fundamental Global Asset Management, LLC [Member] | Aldel Financial [Member] | ||||||||||||||||
Real estate investment | 1,650,000 | |||||||||||||||
Fundamental Global Asset Management, LLC [Member] | Adel Financial Inc [Member] | ||||||||||||||||
Real estate investment | 1,000,000 | |||||||||||||||
Fundamental Global Asset Management, LLC [Member] | Adel Financial Inc [Member] | Noncontrolling Interest [Member] | ||||||||||||||||
Real estate investment | 650,000 | |||||||||||||||
Fundamental Global Asset Management, LLC [Member] | Aldel Investors, LLC [Member] | ||||||||||||||||
Real estate investment | $ 1,000,000 | |||||||||||||||
Beneficial ownership of shares | 286,000 | 286,000 | 286,000 | |||||||||||||
Fundamental Global Asset Management, LLC [Member] | Aldel Investors, LLC [Member] | Noncontrolling Interest [Member] | ||||||||||||||||
Real estate investment | $ 650,000 | $ 650,000 | ||||||||||||||
Fundamental Global Advisors LLC [Member] | Investment Advisory Agreement [Member] | ||||||||||||||||
Advisor annual fee | 100,000 | |||||||||||||||
Fundamental Global Management, LLC [Member] | Shared Services Agreement [Member] | ||||||||||||||||
Shared services fee | $ 456,250 | $ 1,370,000 | $ 910,000 | |||||||||||||
FedNat Holding Company [Member] | ||||||||||||||||
Estimated fair value of common stock | $ 3,200,000 | |||||||||||||||
Sale of Stock, Number of Shares Issued in Transaction | 156,000 | |||||||||||||||
FedNat Holding Company [Member] | Share Repurchase and Cooperation Agreement [Member] | Hale Parties [Member] | ||||||||||||||||
Repurchase of common stock | 1,130,152 | 1,130,152 | ||||||||||||||
Value of repurchase of common stock | $ 2,800,000 | |||||||||||||||
Repurchase of common stock in exchange of shares | 330,231 | |||||||||||||||
Estimated fair value of common stock | $ 2,700,000 | |||||||||||||||
Notice period to cure breach | 15 days | |||||||||||||||
FG SPAC Partners LP [Member] | ||||||||||||||||
Investment ownership percentage | 49.00% | |||||||||||||||
Risk capital | $ 1,000,000 | |||||||||||||||
Beneficial ownership of shares | 286,000 | |||||||||||||||
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right | 650,000 | |||||||||||||||
Sale of Stock, Number of Shares Issued in Transaction | 575,000 | |||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.10 | |||||||||||||||
FG SPAC Partners LP [Member] | OTMWarrants [Member] | ||||||||||||||||
Beneficial ownership of shares | 321,000 | |||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 15 | |||||||||||||||
FG SPAC Partners LP [Member] | Aldel Investors, LLC [Member] | ||||||||||||||||
Beneficial ownership of shares | 533,000 | |||||||||||||||
Adel Financial Inc [Member] | ||||||||||||||||
Risk capital | $ 1,000,000 | |||||||||||||||
Adel Financial Inc [Member] | Founder Shares [Member] | ||||||||||||||||
Number of shares purchased | 1,075,000 | |||||||||||||||
Payment for purchase of shares | $ 4,674 | |||||||||||||||
Adel Financial Inc [Member] | OTMWarrants [Member] | ||||||||||||||||
Warrants purchased | 650,000 | |||||||||||||||
Purchase price of warrants | $ 0.10 | |||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 15 | |||||||||||||||
Payments for purchase of warrants | $ 65,000 | |||||||||||||||
Adel Financial Inc [Member] | Forfeiture Agreement [Member] | ||||||||||||||||
Sale of Stock, Number of Shares Issued in Transaction | 575,000 |
Schedule of Numerators and Deno
Schedule of Numerators and Denominators Used in Calculation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Earnings Per Share [Abstract] | ||||
Net loss from continuing operations | $ (4,393) | $ (9,590) | $ (4,065) | $ (20,458) |
Gain attributable to noncontrolling interests | (569) | (1,235) | ||
Dividends declared on Series A Preferred Shares | (448) | (350) | (1,245) | (1,050) |
Loss attributable to FG Financial Group, Inc. common shareholders | $ (5,410) | $ (9,940) | $ (6,545) | $ (21,508) |
Weighted average common shares outstanding | 5,032,615 | 5,893,125 | 5,012,139 | 6,009,267 |
Loss per common share from continuing operations | $ (1.08) | $ (1.69) | $ (1.31) | $ (3.58) |
Gain from sale of Maison Business, net of taxes | $ 145 | |||
Weighted average common shares outstanding | 5,010,377 | 5,012,139 | ||
Income per common share from discontinued operations | $ 0.03 |
Schedule of Potentially Dilutiv
Schedule of Potentially Dilutive Securities Excluded from Calculation (Details) - shares | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive securities outstanding | 1,715,325 | 1,679,432 |
Equity Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive securities outstanding | 130,000 | |
Warrants to purchase common stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive securities outstanding | 1,500,000 | 1,500,000 |
Restricted Stock Units (RSUs) [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive securities outstanding | 85,325 | 179,432 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | Jan. 18, 2021 | Dec. 02, 2020 | Sep. 30, 2021 | Sep. 30, 2020 |
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||||
Stock Issued During Period, Shares, New Issues | 185,000 | |||
Payments for Rent | $ 15,000 | $ 25,000 | ||
Lease Agreement [Member] | Six Months Term [Member] | ||||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||||
Payments for Rent | $ 18,000 | |||
Larry G. Swets Jr [Member] | Equity Award Letter Agreement [Member] | ||||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||||
Stock Issued During Period, Shares, New Issues | 370,000 |
Summary of Segment Reporting (D
Summary of Segment Reporting (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | |||||
Revenues from external customers | $ 1,165,000 | $ 25,000 | $ 2,367,000 | $ 79,000 | |
Interest revenue | (29,000) | (29,000) | (54,000) | (154,000) | |
Interest revenue | 29,000 | 29,000 | 54,000 | 154,000 | |
Total revenue | (133,000) | (7,690,000) | 5,159,000 | (16,913,000) | |
Depreciation and amortization | 3,000 | 2,000 | 36,000 | 4,000 | |
Income (loss) before income tax | (4,393,000) | (9,590,000) | (4,065,000) | (21,123,000) | |
Segment assets | 43,850,000 | 36,956,000 | 43,850,000 | 36,956,000 | $ 34,705,000 |
Insurance [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues from external customers | 1,099,000 | 2,221,000 | |||
Interest revenue | (8,000) | (1,000) | (5,000) | (1,000) | |
Interest revenue | 8,000 | 1,000 | 5,000 | 1,000 | |
Total revenue | 3,882,000 | (7,710,000) | 3,894,000 | (17,249,000) | |
Depreciation and amortization | |||||
Income (loss) before income tax | 2,275,000 | (7,746,000) | 686,000 | (17,318,000) | |
Segment assets | 13,452,000 | 12,459,000 | 13,452,000 | 12,459,000 | |
Asset Management [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues from external customers | 66,000 | 25,000 | 146,000 | 75,000 | |
Interest revenue | (37,000) | (28,000) | (49,000) | (153,000) | |
Interest revenue | 37,000 | 28,000 | 49,000 | 153,000 | |
Total revenue | (4,015,000) | 20,000 | 1,265,000 | 332,000 | |
Depreciation and amortization | 1,000 | 1,000 | |||
Income (loss) before income tax | (4,123,000) | 19,000 | 905,000 | 331,000 | |
Segment assets | 21,382,000 | 10,361,000 | 21,382,000 | 10,361,000 | |
Other Segments [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues from external customers | 4,000 | ||||
Interest revenue | |||||
Interest revenue | |||||
Total revenue | 4,000 | ||||
Depreciation and amortization | 2,000 | 2,000 | 35,000 | 4,000 | |
Income (loss) before income tax | (2,545,000) | (1,863,000) | (5,656,000) | (4,136,000) | |
Segment assets | $ 9,016,000 | $ 14,136,000 | $ 9,016,000 | $ 14,136,000 |