Sec Form 13D Filing - Fundamental Global GP LLC filing for Fundamental Global Inc. (FGF) - 2022-07-14

None of the Reporting Persons nor, to the Reporting Persons’ knowledge, any of their partners, managers, officers, directors or other controlling persons 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.

The total cost for purchasing the Common Stock reported as owned by the Reporting Persons, including brokerage commissions, was approximately as follows: FAFI, $7,010,060; FGIH, $3,740,789; BTN, $12,111,565 and Mr. Cerminara, $26,003. The source of these funds was working capital or personal funds, as applicable. In addition, on December 31, 2021, Fundamental Global Partners Master Fund, LP (“FGPM”) transferred all of its securities of the Company to FAFI in exchange for its limited partners receiving limited partnership interests in FAFI. FGPM’s total cost for purchasing the Common Stock previously reported as owned, including brokerage commissions, was approximately $4,359,258, which included a cost of $50,000 for a call option to purchase 50,000 shares of Common Stock that has since expired.

On June 16, 2022, FAFI and BTN purchased 632,911 and 1,265,822 shares, respectively, of Common Stock in an underwritten public offering (the “Public Offering”) at a public offering price of $1.58 per share. The Public Offering closed on June 21, 2022. FAFI and BTN acquired the shares for long-term holding purposes.

On November 29, 2021, BTN elected to exercise (i) the subscription rights distributed by the Company on October 29, 2021 to it to purchase 155,761 shares of the Company’s Common Stock at a purchase price of $4.00 per share and (ii) its over-subscription privilege to purchase an additional 444,239 additional shares of the Company’s Common Stock at a purchase price of $4.00 per share. In total, BTN committed to purchase 600,000 shares for a total cost of $2.4 million. BTN has acquired the shares for long-term holding purposes.

On December 31, 2021, pursuant to that certain Transfer and Distribution Agreement, dated as of the same date (the “Transfer and Distribution Agreement”), by FGPM and FAFI, among others, FGPM transferred all securities of the Company to FAFI. The foregoing description is qualified in its entirety by reference to the full text of the Transfer and Distribution Agreement, which is filed herewith as Exhibit 99.1, and is incorporated herein by reference. The purpose of the transfer was to simplify the organizational structure of the funds managed by FGGP without a change in beneficial ownership for FGGP or its controlling entities and individuals, as applicable.

None of the Reporting Persons have any present plan or proposal that would result in any of the actions described in paragraphs (a) through (j) of Item 4 of Schedule 13D, except as set forth herein and except as may be proposed by Mr. Cerminara in his capacity as director of the Company, or by such board of directors with Mr. Cerminara’s participation. The Reporting Persons reserve the right in the future to formulate any such plans or proposals, and to take any actions with respect to their holdings in the Company, including any or all of the actions described in paragraphs (a) through (j) of Item 4 of Schedule 13D.

The Reporting Persons may in the future acquire additional shares of Common Stock of the Company or dispose of some or all of the shares of Common Stock of the Company held by them in open-market transactions or privately negotiated transactions, on such terms and at such times as the Reporting Persons may deem advisable, subject to applicable law.

The Reporting Persons anticipate that a press release will be issued on July 14, 2022 regarding this Statement and highlighting several events that change the way ownership is reported. The foregoing description is qualified in its entirety by reference to the full text of the Press Release, which is filed herewith as Exhibit 99.3, and is incorporated herein by reference.

(a) FGGP, FAFI, FGIH, BTN and Mr. Cerminara together beneficially own in the aggregate 5,452,853 shares of Common Stock, which represents approximately 58.8% of the Company’s outstanding shares of Common Stock and includes approximately 4,430 shares potentially issuable to Mr. Cerminara upon the vesting of restricted stock units within 60 days of the filing of this Statement.

Each of FAFI, FGIH and BTN 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. Mr. Cerminara directly holds the number and percentage of shares of Common Stock disclosed as solely beneficially owned by him in the applicable table set forth on the cover page to this Statement. FGGP does not directly hold any shares of Common Stock. None of the other Reporting Persons nor, to the Reporting Persons’ knowledge, any of their partners, managers, officers, directors or other controlling persons directly hold any of the shares of Common Stock disclosed in this Statement, except as described below.

Larry G. Swets Jr., a director of BTN, beneficially owns in the aggregate 47,886 shares of Common Stock, which represents approximately 0.5% of the Company’s outstanding shares of Common Stock and includes approximately 2,687 shares potentially issuable to Mr. Swets upon the vesting of restricted stock units within 60 days of the filing of this Statement.

Each percentage ownership of shares of Common Stock set forth in this Statement is based on 6,528,001 shares of Common Stock reported by the Company as outstanding as of May 13, 2022 in its Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 16, 2022, adjusted by the 2,750,000 shares issued in the Public Offering and the applicable number of shares issuable upon the vesting of restricted stock units within 60 days of the filing of this Statement.

The Reporting Persons also beneficially own in the aggregate 8,973 shares of the Company’s 8.00% Cumulative Preferred Stock, Series A, $25.00 par value per share (the “Preferred Stock”), which represent approximately 1.0% of the outstanding shares of Preferred Stock. The Preferred Stock is non-voting and non-convertible. FAFI directly holds all of the shares of Preferred Stock.

(c) The following transactions have been effected by FAFI and BTN during the past sixty days: on June 16, 2022, FAFI and BTN purchased 632,911 and 1,265,822 shares, respectively, of Common Stock in the Public Offering at a price of $1.58 per share. The following transactions have been effected by Mr. Swets during the past sixty days: On June 21, 2022, Mr. Swets purchased 30,000 shares of Common Stock in the Public Offering at a price of $1.58 per share.

(e) On August 1, 2021, Fundamental Global Investors, LLC no longer beneficially owned any Company securities following the assignment of all investment management agreements related to the Common Stock to FGGP. In addition, on December 31, 2021, FGPM transferred all securities of the Company to FAFI.

The information set forth under Item 4 above is incorporated herein by reference.

On August 1, 2021, Fundamental Global Investors, LLC assigned the investment management agreements for FGPM, FAFI and FGIH to FGGP. On December 31, 2021, FGPM transferred all securities of the Company to FAFI.

Pursuant to Rule 13d-1(k) promulgated under the Securities Exchange Act of 1934, as amended, the Reporting Persons have entered into an agreement with respect to the joint filing of this Amendment No. 16, which agreement is filed herewith as Exhibit 99.2 and incorporated herein by reference.

SIGNATURES

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: July 14, 2022

FUNDAMENTAL GLOBAL GP, LLC

FUNDAMENTAL ACTIVIST FUND I, LP

by Fundamental Activist Fund I GP, LLC, its general partner

FGI 1347 HOLDINGS, LP

by FGI 1347 GP, LLC, its general partner

BALLANTYNE STRONG, INC.

D. KYLE CERMINARA

Schedule A

Ballantyne Strong, Inc.

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

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