FG Nexus Inc. — Major Shareholding Notification 2021

May 28, 2021

SC 13D/A 1 formsc13da.htm

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

SCHEDULE 13D

(Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13 d -1( a ) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13 d -2( a )

Under the Securities Exchange Act of 1934

(Amendment No. 3)*

FEDNAT HOLDING COMPANY

(Name of Issuer)

Common Stock, par value $0.01 per share

(Title of Class of Securities)

31431B109

(CUSIP Number)

Larry G. Swets, Jr.

FG Financial Group, Inc.

970 Lake Carillon Drive, Suite 318

St. Petersburg, FL 33716

With a copy to:

Elliott M. Smith, Esq.

Maia R. Gez, Esq.

White & Case LLP

1221 Avenue of the Americas

New York, New York 10020

(212) 819-8200

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications)

April 12, 2021

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box [ ].

Note : Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

• The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes ).

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| 1 | NAME
OF REPORTING PERSON FG
Financial Group, Inc. | |
| --- | --- | --- |
| 2 | CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP | (a)
[ ] (b)
[ ] |
| 3 | SEC
USE ONLY | |
| 4 | SOURCE
OF FUNDS N/A | |
| 5 | CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) | [ ] |
| 6 | CITIZENSHIP
OR PLACE OF ORGANIZATION Delaware | |

| NUMBER
OF SHARES BENEFICIALLY OWNED
BY EACH REPORTING PERSON
WITH | SOLE
VOTING POWER 0 |
| --- | --- |
| 8 | SHARED
VOTING POWER 1,442,871 |
| 9 | SOLE
DISPOSITIVE POWER 0 |
| 10 | SHARED
DISPOSITIVE POWER 1,442,871 |

| 11 | AGGREGATE
AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 1,442,871 | |
| --- | --- | --- |
| 12 | CHECK
IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES | [ ] |
| 13 | PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 8.1% | |
| 14 | TYPE
OF REPORTING PERSON CO | |

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| 1 | NAME
OF REPORTING PERSON FG
Financial Group Holdings LP | |
| --- | --- | --- |
| 2 | CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP | (a)
[ ] (b)
[ ] |
| 3 | SEC
USE ONLY | |
| 4 | SOURCE
OF FUNDS N/A | |
| 5 | CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) | [ ] |
| 6 | CITIZENSHIP
OR PLACE OF ORGANIZATION Delaware | |

| NUMBER
OF SHARES BENEFICIALLY OWNED
BY EACH REPORTING PERSON
WITH | SOLE
VOTING POWER 0 |
| --- | --- |
| 8 | SHARED
VOTING POWER 1,442,871 |
| 9 | SOLE
DISPOSITIVE POWER 0 |
| 10 | SHARED
DISPOSITIVE POWER 1,442,871 |

| 11 | AGGREGATE
AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 1,442,871 | |
| --- | --- | --- |
| 12 | CHECK
IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES | [ ] |
| 13 | PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 8.1% | |
| 14 | TYPE
OF REPORTING PERSON PN | |

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| 1 | NAME
OF REPORTING PERSON FG
Financial Group Holdings GP, LLC | |
| --- | --- | --- |
| 2 | CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP | (a)
[ ] (b)
[ ] |
| 3 | SEC
USE ONLY | |
| 4 | SOURCE
OF FUNDS N/A | |
| 5 | CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) | [ ] |
| 6 | CITIZENSHIP
OR PLACE OF ORGANIZATION Delaware | |

| NUMBER
OF SHARES BENEFICIALLY OWNED
BY EACH REPORTING PERSON
WITH | SOLE
VOTING POWER 0 |
| --- | --- |
| 8 | SHARED
VOTING POWER 1,442,871 |
| 9 | SOLE
DISPOSITIVE POWER 0 |
| 10 | SHARED
DISPOSITIVE POWER 1,442,871 |

| 11 | AGGREGATE
AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 1,442,871 | |
| --- | --- | --- |
| 12 | CHECK
IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES | [ ] |
| 13 | PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 8.1% | |
| 14 | TYPE
OF REPORTING PERSON OO | |

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Item 1. Security and Issuer.

Item 1 of the Schedule 13D is hereby amended and restated as follows:

This Amendment No. 3 to Statement of Beneficial Ownership on Schedule 13D (this “Amendment No. 3”) amends the Statement of Beneficial Ownership on Schedule 13D filed by FG Financial Group, Inc. (f/k/a/ 1347 Property Insurance Holdings, Inc.) (“FGF”) on December 11, 2019, as amended by Amendment No. 1 thereto filed by FGF and FG Reinsurance Limited (f/k/a Fundamental Global Reinsurance Ltd.) (“FGRe”) on July 30, 2020, and Amendment No. 2 thereto filed by FGF and FGRe on September 17, 2020 (collectively, the “Schedule 13D” or this “Statement”), each with respect to the common stock, $0.01 par value per share (the “Common Stock”), of FedNat Holding Company, a Florida corporation (the “Company”). Capitalized terms used but not defined in this Amendment No. 3 shall have the meanings set forth in the Schedule 13D. Except as amended and supplemented by this Amendment No. 3, the Schedule 13D remains unchanged.

Item 2. Identity and Background.

Item 2 of the Schedule 13D is hereby amended and restated as follows:

This Statement is filed by (i) FG Financial Group Holdings, LP, a Delaware limited partnership (“FGL”), (ii) FG Financial Group Holdings, GP, LLC, a Delaware limited liability company (“FGP”), and (iii) FGF, a Delaware corporation. FGL, FGP and FGF are sometimes referred to herein as a “Reporting Person” and collectively as the “Reporting Persons.” The Reporting Persons are filing this Statement jointly. Neither the fact of this filing nor anything contained herein shall be deemed to be an admission by either of the Reporting Persons that they constitute a “group.”

FGP is the general partner of FGL. The limited partners of FGL are FGRe and FGF. The principal business of FGL is acting as a holding company of certain securities owned by FGF and its reinsurance business, and the principal business of FGP is acting as the general partner of FGL. The principal business address of both FGL and FGP is 970 Lake Carillon Dr., Suite 318, St. Petersburg, Florida 33716.

FGF is the sole member and manager of FGP. FGF is a reinsurance and investment management holding company focused on opportunistic collateralized and loss capped reinsurance, while allocating capital to SPAC and SPAC sponsor-related businesses. Information regarding the identity and background of each executive officer and director of FGF is set forth on Schedule A to this Statement. Each of the individuals identified on Schedule A to this Statement is a U.S. citizen. FGF’s principal executive offices are located at 970 Lake Carillon Dr., Suite 318, St. Petersburg, Florida 33716.

Fundamental Global Investors, LLC, a North Carolina limited liability company, holding through its affiliated funds (collectively, “Fundamental Global”), is the largest stockholder of FGF and, together with Ballantyne Strong, Inc., a Delaware corporation (“BTN”), holds approximately 61.1% of FGF’s outstanding shares of common stock. BTN is a holding company with business operations in the entertainment industry and investments in public and privately held companies.

Due to his position with BTN, Fundamental Global and affiliated entities, Mr. D. Kyle Cerminara may be deemed to be a control person of FGF. The principal occupations of Mr. Cerminara are set forth on Schedules A and B to this Statement. Mr. Cerminara is a U.S. citizen. The business address of Fundamental Global is 108 Gateway Blvd, Suite 204, Mooresville, NC 28117. The business address for BTN is 4201 Congress Street, Suite 175, Charlotte, NC 28209. The business addresses of Mr. Cerminara are set forth on Schedules A and B to this Statement.

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Information regarding the identity and background of each executive officer and director of BTN is set forth on Schedule B to this Statement. Each of the individuals identified on Schedule B to this Statement is a U.S. citizen.

None of the Reporting Persons, Fundamental Global, BTN, any of their directors, officers, managers or other control persons named in this Item 2 or, to the Reporting Persons’ knowledge, any individuals identified on Schedules A or B to this Statement has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

None of the Reporting Persons, Fundamental Global, BTN, any of their directors, officers or other control persons named in this Item 2 or, to the Reporting Persons’ knowledge, any individuals identified on Schedules A or B to this Statement has, during the last five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

Item 3. Source and Amount of Funds or Other Consideration.

Item 4 of the Schedule 13D is hereby amended and supplemented as follows:

On April 12, 2021, as part of an internal restructuring, FGF transferred 1,286,871 shares of Common Stock, which it directly owned, to FGL, and FGRe transferred 156,000 shares of Common Stock, which it directly owned, to FGL, in each case, for no consideration, leading FGL to be the direct owner of 1,422,871 shares of Common Stock. Because FGF directly or indirectly beneficially owned all such shares of Common Stock both prior to and after the transactions, FGF’s beneficial ownership did not change as a result of the transactions.

Item 4. Purpose of Transaction.

Item 4 of the Schedule 13D is hereby amended and supplemented as follows:

The information in Item 3 regarding the restructuring is incorporated herein by reference.

Item 5. Interest in Securities of the Issuer.

Item 4 of the Schedule 13D is hereby amended and restated as follows:

(a) The Reporting Persons beneficially own in the aggregate 1,442,871 shares of Common Stock, which represents approximately 8.1% of the Company’s outstanding shares of Common Stock.

FGL directly holds the number and percentage of shares of Common Stock disclosed as beneficially owned by it in the applicable table set forth on the cover page to this Statement. FGP, as the general partner of FGL, and FGF, as the sole member and manager of FGP, may each be deemed to indirectly beneficially own the shares of Common Stock disclosed as directly owned by FGL.

None of Fundamental Global, BTN, any of their directors, officers, managers or other control persons named in Item 2 or, to the Reporting Persons’ knowledge, any individuals identified on Schedules A or B to this Statement directly hold any of the shares of Common Stock disclosed in this Statement.

Each percentage ownership of Common Stock set forth in this Statement is based on the 17,825,228 shares of Common Stock reported by the Company as outstanding as of April 1, 2021 in its Definitive Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission (the “SEC”) on April 6, 2021.

(b) FGL, FGP and FGF have the shared power to vote or dispose or to direct the voting and disposition of the shares of Common Stock held by FGL.

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(c) Other than as described in Item 3, none of the Reporting Persons, Fundamental Global, BTN, any of their directors, officers or other control persons named in Item 2 or, to the Reporting Persons’ knowledge, any individuals identified on Schedules A or B to this Statement has effected a transaction in the Common Stock since September 17, 2020, the date of the most recent filing of Schedule 13D prior to this Amendment No. 3.

(d) Not applicable.

(e) Not applicable.

Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.

Item 6 of the Schedule 13D is hereby amended and restated as follows:

The information set forth in Items 3 and Item 4 is incorporated herein by reference. In addition, for insurance regulatory purposes, the Reporting Persons also plan to waive any rights that they may have to exercise control of the Company.

Item 7. Material to be Filed as Exhibits.

Item 7 of the Schedule 13D is hereby amended and restated as follows:

99.1	Equity Purchase Agreement, dated February 25, 2019, by and among FedNat Holding Company, FG Financial Group, Inc., Maison Managers, Inc., Maison Insurance Company, and ClaimCor, LLC (incorporated herein by reference to Exhibit 2.1 to the Reporting Person’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 25, 2019).
99.2	Registration Rights Agreement, dated December 2, 2019, by and between FedNat Holding Company and FG Financial Group, Inc. (incorporated herein by reference to Exhibit 10.1 to the Reporting Person’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 2, 2019).
99.3	Standstill Agreement, dated December 2, 2019, by and between FedNat Holding Company and FG Financial Group, Inc. (incorporated herein by reference to Exhibit 10.2 to the Reporting Person’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 2, 2019).
99.4	Reinsurance Capacity Right of First Refusal Agreement, dated December 2, 2019, by and between FedNat Holding Company and FG Financial Group, Inc. (incorporated herein by reference to Exhibit 10.3 to the Reporting Person’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 2, 2019).
99.5	Investment Advisory Agreement, dated December 2, 2019, by and between Fundamental Global Advisors LLC and FedNat Holding Company (incorporated herein by reference to Exhibit 10.4 to the Reporting Person’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 2, 2019).
99.6	Share Repurchase and Cooperation Agreement, dated September 15, 2020, between FG Financial Group, Inc., as Company, and Hale Partnership Capital Management, LLC, Hale Partnership Capital Advisors, LLC, Hale Partnership Fund, L.P., MGEN II – Hale Fund, L.P., Clark Hale – Fund L.P., Smith II– Hale Fund, L.P., Dickinson – Hale Fund, L.P., and Steven A. Hale II, as Hale Parties (previously filed with the Schedule 13D).
99.7	Joint Filing Agreement, dated April 14, 2021, by and between FG Financial Group Holdings, LP, FG Financial Group Holdings, GP, LLC and FG Financial Group, Inc. (filed herewith).

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SIGNATURE

After reasonable inquiry and to the best of our knowledge and belief, the undersigned certify that the information set forth in this Statement is true, complete and correct.

Dated: May 28, 2021

| FG
Financial Group Holdings, LP | |
| --- | --- |
| By: | FG
Financial Group Holdings, GP, LLC, its general partner |
| /s/
Larry G. Swets, Jr. | |
| Name: | Larry
G. Swets, Jr. |
| Title: | Executive
Officer |

| FG
Financial group holdings, gp, LLC | |
| --- | --- |
| /s/
Larry G. Swets, Jr. | |
| Name: | Larry
G. Swets, Jr. |
| Title: | Executive
Officer |

| FG
Financial group, INC. | |
| --- | --- |
| /s/
John S. Hill | |
| Name: | John
S. Hill |
| Title: | Executive
Vice President, Chief Financial Officer and Secretary |

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Schedule A

Identity and Background of Executive Officers of FG Financial Group, Inc.

| Name | Business
Address | Present
Principal Occupation and Name, Principal Business and
Address of any Organization in which such
Employment Is Conducted |
| --- | --- | --- |
| Larry
G. Swets | 970
Lake Carillon Dr., Suite 318 St.
Petersburg, Florida 33716 | Chief
Executive Officer and Director FG
Financial Group, Inc. 970
Lake Carillon Dr., Suite 318 St.
Petersburg, Florida 33716 Chief
Executive Officer and Director GreenFirst
Forest Products Inc. 1800
- 510 West Georgia Street Vancouver,
British Columbia V6B 0M3 GreenFirst
Forest Products Inc. is a publicly traded company focused on
investments in the global forest products industry. President Itasca
Golf Managers, Inc. 105
South Maple Street Itasca,
Illinois 60143 Itasca
Golf Managers, Inc. is a management services and advisory firm. Managing
Member Itasca
Financial LLC 105
South Maple Street Itasca,
Illinois 60143 Itasca
Financial LLC is an advisory and investment firm. Chief
Executive Officer FG
New America Acquisition Corp. 105
South Maple Street Itasca,
Illinois 60143 FG
New American Acquisition Corp. is a special purpose acquisition company. |
| John
S. Hill | 970
Lake Carillon Dr., Suite 318 St.
Petersburg, Florida 33716 | Executive
Vice President, Chief Financial Officer and
Secretary FG
Financial Group, Inc. 970
Lake Carillon Dr., Suite 318 St.
Petersburg, Florida 33716 |
| Brian
D. Bottjer | 970
Lake Carillon Dr., Suite 318 St.
Petersburg, Florida 33716 | Senior
Vice President and Controller FG
Financial Group, Inc. 970
Lake Carillon Dr., Suite 318 St.
Petersburg, Florida 33716 |

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Identity and Background of Directors of FG Financial Group, Inc.

| Name | Business
Address | Present
Principal Occupation and Name, Principal Business and
Address of any Organization in which such
Employment Is Conducted |
| --- | --- | --- |
| D.
Kyle Cerminara | 108 Gateway
Blvd, Suite 204 Mooresville, NC 28117 | Chief
Executive Officer, Co-Founder and Partner Fundamental
Global Investors, LLC 108 Gateway Blvd, Suite 204 Mooresville, NC 28117 |
| | 105
South Maple Street, Itasca, IL, 60143 | President FG
New America Acquisition Corp. 105
South Maple Street Itasca,
Illinois, 60143 |
| Rita
Hayes | 970
Lake Carillon Dr., Suite 318 St.
Petersburg, Florida 33716 | Chair Hayes
International Advisors, LLC 180
Meeting Street, Suite 330 Charleston,
South Carolina 29401 Hayes
International Advisors counsels industry and institutional leaders on a range of economic, political and regulatory matters. |

| Name | Business
Address | Present
Principal Occupation and Name, Principal Business and
Address of any Organization in which such
Employment Is Conducted |
| --- | --- | --- |
| E.
Gray Payne | 970
Lake Carillon Dr., Suite 318 St.
Petersburg, Florida 33716 | Director FG
Financial Group, Inc. 970
Lake Carillon Dr., Suite 318 St.
Petersburg, Florida 33716 |
| Larry
G. Swets, Jr. | See
above. | See
above. |
| Scott
D. Wollney | 970
Lake Carillon Dr., Suite 318 St.
Petersburg, Florida 33716 | President,
Chief Executive Officer and Director Atlas
Financial Holdings, Inc. 953
American Lane, 3rd Floor Schaumburg,
Illinois 60173 Atlas
Financial Holdings, Inc. is a specialty commercial automobile insurance company. |
| Dennis
A. Wong | 970
Lake Carillon Dr., Suite 318 St.
Petersburg, Florida 33716 | Owner
and Consultant Insurance
Resolution Group 37301
N. Fox Hill Drive Wadsworth,
Illinois 60083 Insurance
Resolution Group is a consulting firm focused on providing strategic advisory and financial consulting to domestic and international
companies with insurance or insurance related operations. |

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Schedule B

Identity and Background of Executive Officers of Ballantyne Strong, Inc. :

| Name | Business
Address | Present
Principal Occupation and Name, Principal Business and Address of any Organization in which
such Employment Is Conducted |
| --- | --- | --- |
| Mark
D. Roberson | 4201
Congress Street, Suite 175 Charlotte,
North Carolina 28209 | Chief
Executive Officer Ballantyne
Strong, Inc. 4201
Congress Street, Suite 175 Charlotte,
North Carolina 28209 |
| Todd
R. Major | 4201
Congress Street, Suite 175 Charlotte,
North Carolina 28209 | Chief
Financial Officer Ballantyne
Strong, Inc. 4201
Congress Street, Suite 175 Charlotte,
North Carolina 28209 |
| Ray
F. Boegner | 4201
Congress Street, Suite 175 Charlotte,
North Carolina 28209 | President
of Strong Entertainment Ballantyne
Strong, Inc. 4201
Congress Street, Suite 175 Charlotte,
North Carolina 28209 |

Identity and Background of Directors of Ballantyne Strong, Inc. :

| Name | Business
Address | Present
Principal Occupation and Name, Principal Business and Address of any Organization in which
such Employment Is Conducted |
| --- | --- | --- |
| D.
Kyle Cerminara | 4201
Congress Street, Suite 140 Charlotte,
North Carolina 28209 | Chief
Executive Officer, Co-Founder and Partner Fundamental
Global Investors, LLC 108 Gateway Blvd, Suite 204 Mooresville, NC 28117 |
| | 105
South Maple Street Itasca,
Illinois, 60143 | President FG
New America Acquisition Corp. 105
South Maple Street Itasca,
Illinois, 60143 |
| William
J. Gerber | 4201
Congress Street, Suite 175 Charlotte,
North Carolina 28209 | Director Ballantyne
Strong, Inc. 4201
Congress Street, Suite 175 Charlotte,
North Carolina 28209 |
| Charles
T. Lanktree | 4201
Congress Street, Suite 175 Charlotte,
North Carolina 28209 | Chief
Executive Officer Eggland’s
Best, LLC 70
East Swedesford Road, Suite 150 Malvern,
Pennsylvania 19355 Eggland’s
Best, LLC is a distributor of nationally branded eggs. |
| Robert
J. Roschman | 4201
Congress Street, Suite 175 Charlotte,
North Carolina 28209 | Investor/Self-Employed Roschman
Enterprises 6300
NE 1st Avenue, Suite 300 Fort
Lauderdale, Florida 33334 Roschman
Enterprises is involved in real estate, property management and property development. |
| Ndamukong
Suh | 4201
Congress Street, Suite 175 Charlotte,
North Carolina 28209 | Professional
Athlete; Independent Private Investor; Director Ballantyne
Strong, Inc. 4201
Congress Street, Suite 175 Charlotte,
North Carolina 28209 |

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