FG Nexus Inc. Fair Value Disclosure
Note 8. Equity Holdings and Fair Value Disclosures
The Company accounts for each of its equity holdings using either the fair value method, the equity method or the cost method.
As of December 31, 2025, following the transfer of assets to the CVR Trust, the Company’s equity holdings consisted solely common shares of Saltire carried at $14.7 million, which is accounted for under the equity method.
As of December 31, 2024, the Company held approximately $60.1 million in holdings in equity securities and other holdings. The Company accounts for each of its equity holdings using either the fair value method, the equity method or the cost method as summarized below as of December 31, 2024 (in thousands):
| As of December 31, 2024 | ||||||||||||||||||||||||||||||||||||
| Equity Method | ||||||||||||||||||||||||||||||||||||
| Fair Value Method | Cost Method | FG Merchant Partners, LLC | FGAC Investors LLC | FG Merger Investors LLC | Aldel Investors II LLC | Strong Global Entertainment | GreenFirst Forest Products Holdings LLC | Total | ||||||||||||||||||||||||||||
| Holdings in publicly traded companies: | ||||||||||||||||||||||||||||||||||||
| GreenFirst Forest Products common shares | $ | 5,339 | $ | $ | $ | $ | $ | $ | $ | 467 | $ | 5,806 | ||||||||||||||||||||||||
| Saltire common and preferred shares and warrants | 969 | 4,334 | 27,227 | 32,530 | ||||||||||||||||||||||||||||||||
| iCoreConnect common shares and warrants | 112 | 67 | 52 | 231 | ||||||||||||||||||||||||||||||||
| Oppfi warrants | 312 | 312 | ||||||||||||||||||||||||||||||||||
| Aldel II founder shares and warrants | 997 | 1,270 | 2,267 | |||||||||||||||||||||||||||||||||
| Holdings in privately held companies: | ||||||||||||||||||||||||||||||||||||
| FG Communities common and preferred shares | 2,250 | 2,041 | 4,291 | |||||||||||||||||||||||||||||||||
| Firefly preferred shares | 12,898 | 12,898 | ||||||||||||||||||||||||||||||||||
| Craveworthy common shares and note | 200 | 1,457 | 1,657 | |||||||||||||||||||||||||||||||||
| Other | 81 | 81 | ||||||||||||||||||||||||||||||||||
| Total | $ | 5,763 | $ | 15,429 | $ | 5,531 | $ | 4,334 | $ | 52 | $ | 1,270 | $ | 27,227 | $ | 467 | $ | 60,073 | ||||||||||||||||||
Equity Method Holdings
As of December 31, 2025, the Company held approximately 23.8% of the outstanding common shares of Saltire. During the year ended December 31, 2025 and December 31, 2024, the Company recorded an equity method loss on the shares of $2.9 million and an equity method gain of $13 thousand, respectively. Based on quoted market prices, the market value of the Company’s ownership in common shares of Saltire was $9.0 million at December 31, 2025.
The summarized financial information presented below reflects the underlying financial information for Saltire, the Company’s sole holding accounted for under the equity method on December 31, 2025, (in thousands):
As of September 30, 2025 | As of December 31, 2024 | |||||||
| Current assets | $ | 67,033 | $ | 9,225 | ||||
| Long-term assets | 53,023 | 5,688 | ||||||
| Current liabilities | 88,616 | 21,410 | ||||||
| Long-term liabilities | 53,126 | 4,105 | ||||||
| Shareholders’ equity | (21,686 | ) | (10,602 | ) | ||||
| Twelve Months Ended September 30, 2025 | ||||
| Revenue | $ | 32,683 | ||
| Gross profit | 12,083 | |||
| Net loss | (7,595 | ) | ||
Each of the following equity method holdings were transferred to the CVR Trust in August 2025 and are no longer held by the Company. See Note 6 for additional details.
On January 4, 2021, FGMP was formed as a Delaware limited partnership to co-sponsor newly formed SPACs with their founders or partners, as well as other merchant banking interests. The Company was the sole managing member of the general partner of FGMP and held a limited partner interest of approximately 50% in FGMP directly and through its subsidiaries. FGMP participates as a co-sponsor of the SPACs launched under our SPAC Platform as well as merchant banking initiatives.
The Company recorded an equity method gain of $0.1 million and an equity method loss of $2.7 million during the year ended December 31, 2025 and December 31, 2024, respectively. The Company made capital contributions of approximately $22 thousand to FGMP during the year ended December 31, 2025.
The Company held direct limited liability company interests in FGAC Investors LLC, which holds equity interests in (i) FG Acquisition Corp., (ii) FG Merger Investors LLC, which maintains holdings in iCoreConnect (as defined below), and (iii) GreenFirst Forest Products Holdings, LLC, which holds equity securities in GreenFirst (as defined below). Management determined that it had the ability to exercise significant influence over FGAC Investors LLC, FG Merger Investors LLC and GreenFirst Forest Products Holdings, LLC, and accounted for each of these holdings under the equity method of accounting.
For the year ended December 31, 2025 and December 31, 2024, the Company recorded an equity method loss on FG Merger Investors LLC of approximately $25 thousand and $3.8 million, respectively. The Company recorded an equity method loss from GreenFirst Forest Products Holdings, LLC of approximately $0.1 million and $0.3 million for the year ended December 31, 2025 and December 31, 2024, respectively, and a loss of $2.3 million and $4.6 million from FGAC Investors LLC for the year ended December 31, 2025 and December 31, 2024, respectively.
The Company recorded an equity method gain from FG Merger Investors II LLC (“FGMI”) of approximately $0.2 million and $0 during the year ended December 31, 2025 and December 31, 2024, respectively. The Company made capital contributions of approximately $0.3 million to FGMI during the year ended December 31, 2025. For the year ended December 31, 2025, the Company recorded an equity method gain on Aldel II LLC of approximately $0.1 million.
Certain holdings owned by our former equity method investees were valued using Monte-Carlo simulation and option pricing models. Inherent in Monte-Carlo simulation and option pricing models are assumptions related to expected volatility and discount for lack of marketability of the underlying holding. Our former investees estimated the volatility of these holdings based on the historical performance of various broad market indices blended with various peer companies which they considered as having similar characteristics to the underlying holding, as well as consideration of price and volatility of relevant publicly traded securities such as SPAC warrants. Our former investees also considered the probability of a successful merger when valuing equity for SPACs that had not yet closed.
Fair Value Method Holdings
The carrying value of fair value method holdings is determined based on the security’s trading price multiplied by the number of shares held. The following table summarizes the Company’s fair value method holdings as of December 31, 2024 (in thousands):
| As of December 31, 2024 | Cost Basis | Gross Unrealized Gains | Gross Unrealized Losses | Carrying Amount | ||||||||||||
| GreenFirst common stock | $ | 8,679 | $ | $ | (3,340 | ) | $ | 5,339 | ||||||||
| iCoreConnect common shares | 8 | 104 | 112 | |||||||||||||
| OppFi common stock and warrants | 29 | 283 | 312 | |||||||||||||
| Total fair value method holdings | $ | 8,716 | $ | 387 | $ | (3,340 | ) | $ | 5,763 | |||||||
GreenFirst Forest Products Inc. (“GreenFirst”) is a publicly-traded Canadian company focused on environmentally sustainable forest management and lumber production. The Company held shares of GreenFirst directly that were accounted for at fair value based on observable quoted market prices. The Company also held GreenFirst common shares through an equity method holding in GreenFirst Forest Products Holdings LLC (see Equity Method Holdings below).
iCoreConnect Inc. (“iCoreConnect”) is a cloud-based software and technology company focused on increasing workflow productivity and customer profitability through its enterprise platform of applications and services. The Company held shares of iCoreConnect directly that are accounted for at fair value based on observable quoted market prices. The Company also held iCoreConnect shares and warrants through an equity method holding in FGMP (see Equity Method Holdings below).
OppFi Inc. (“OppFi”) is a publicly-traded tech-enabled, mission-driven specialty finance platform that broadens the reach of community banks to extend credit access to everyday Americans. The Company accounted for its common shares and warrants of OppFi using the fair value method based on observable quoted market prices.
Cost Method Holdings without Readily Determinable Fair Value
Each of the Company’s cost method holdings were transferred to the CVR Trust in August 2025 and are no longer held by the Company. See Note 6 for additional details.
In addition to our equity method and fair value method holdings, other holdings which do not have a readily determinable fair value were accounted for at their cost, subject to any adjustment from time to time due to impairment or observable price changes in orderly transactions. When the Company observed an orderly transaction of an investee’s identical or similar equity securities, the Company adjusted the carrying value based on the observable price as of the transaction date. Any profit distributions the Company received on these holdings were included in net holdings income. Management was not aware of any issuances of identical or similar equities during 2025. As a result, the carrying value of holdings without readily determinable fair value did not change during 2025.
Other
The Company’s other holdings included a convertible promissory note and a senior unsecured promissory note.
On September 29, 2023, the Company invested $250,000 in a convertible promissory note with ThinkMarkets, all of which was repaid during 2025.
On March 16, 2023, the Company invested $200,000 in a senior unsecured loan to Craveworthy LLC (“Craveworthy”). The loan had an interest rate of 13% and a maturity of March 15, 2024. The senior unsecured note was amended to a convertible bridge loan on October 17, 2023, and the maturity date was changed to October 16, 2024. In November 2024, the Company and Craveworthy extended the maturity date to April 16, 2025. The Company expected the maturity date would be extended again, however, the loan was transferred to the CVR Trust in August 2025.
Impairment
For equity securities without readily determinable fair values, impairment is determined via a qualitative assessment which considers indicators to evaluate whether the holding 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 holding is deemed to be impaired after conducting this analysis, management would estimate the fair value of the holding to determine the amount of impairment loss.
For equity method holdings, 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 holding, 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 holding 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 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 holdings for which observable market prices are not available are inherently imprecise. |
The Company did not record an impairment on its holdings during 2025.
Net holdings loss for the year ended December 31, 2025 and December 31, 2024 are as follows (in thousands):
| Year Ended | ||||||||
| December 31, 2025 | December 31, 2024 | |||||||
| Realized gain on common stock holdings | $ | 1,056 | $ | 306 | ||||
| Unrealized loss in value on common stock holdings | (2,546 | ) | (4,749 | ) | ||||
| Loss on equity method holdings | (4,935 | ) | (11,294 | ) | ||||
| Dividend income | 754 | |||||||
| Other | 168 | 1,062 | ||||||
| Net loss on equity holdings and other holdings | $ | (5,503 | ) | $ | (14,675 | ) | ||
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 holding to holding and are affected by a variety of factors, including the type of holding, whether the holding is new and not yet established in the marketplace, the liquidity of markets and other characteristics specific to the individual holding. 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.
Financial instruments measured, on a recurring basis, at fair value in accordance with the guidance promulgated by the FASB as of December 31, 2025 and December 31, 2024 are as follows (in thousands):
| As of December 31, 2025 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| ETH digital assets | $ | 119,384 | $ | 119,384 | ||||||||||||
| $ | 119,384 | $ | $ | $ | 119,384 | |||||||||||
| As of December 31, 2024 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| OppFi warrants | $ | 312 | $ | $ | $ | 312 | ||||||||||
| iCoreConnect common shares and warrants | 112 | 112 | ||||||||||||||
| GreenFirst common stock | 5,339 | 5,339 | ||||||||||||||
| $ | 5,763 | $ | $ | $ | 5,763 | |||||||||||
Holdings without a readily determinable fair value are measured at fair value on a nonrecurring basis. During the year ended December 31, 2025, the Company did not record any adjustments due to impairment or observable price changes in orderly transactions.
The following table provides a rollforward of nonrecurring Level 3 fair value measurements for the year ended December 31, 2025 (in thousands):
| Assets: | ||||
| Convertible notes | ||||
| Balance, December 31, 2024 | 248 | |||
| Increase in fair value of convertible note | ||||
| Repayments | (48 | ) | ||
| Transfer to CVR Trust | (200 | ) | ||
| Balance, December 31, 2025 | $ |
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 27, 2026 | Showing above |
| 2024 | Mar 31, 2025 | |
| 2022 | Mar 24, 2023 | |
| 2021 | Mar 30, 2022 | |
| 2020 | Mar 18, 2021 | |
| 2019 | Mar 30, 2020 | |
| 2018 | Mar 20, 2019 | |
| 2017 | Mar 26, 2018 | |
| 2016 | Mar 16, 2017 | |
| 2015 | Mar 17, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.