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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2025

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-34964

HG HOLDINGS, INC.

(Exact name of Registrant as specified in its Charter)

(Address of principal executive offices, Zip Code)

Registrant’s telephone number, including area code: (850) 201-9204

Securities registered pursuant to Section 12(b) of the Act:

None

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, par value $.02 per share

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act: Yes ☐ No ☒

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act: Yes ☐ No ☒

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes ☒ No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Date File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act, (check one):

Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☒ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☐ No ☒

Aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant based on the closing price on the over-the-counter market on the Over-The-Counter Quotation Bureau ("OTCQB") on June 30, 2025, the last business day of the Registrant’s most recently completed second fiscal quarter: $7.6 million.

As of March 24, 2026 there were 5,107,035 outstanding shares of common stock of HG Holdings, Inc., par value $0.02 per share.

Documents incorporated by reference: None

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TABLE OF CONTENTS

Part I Page

Item 1 Business 3

Item 1A Risk Factors 9

Item 1B Unresolved Staff Comments 18

Item 1C Cybersecurity 18

Item 2 Properties 19

Item 3 Legal Proceedings 19

Item 4 Mine Safety Disclosures 19

Part II

Item 6 [Reserved] 21

Item 7A Quantitative and Qualitative Disclosures About Market Risk 27

Item 8 Financial Statements and Supplementary Data 27

Item 9A Controls and Procedures 28

Item 9B Other Information 29

Item 9C Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 29

Part III

Item 10 Directors, Executive Officers and Corporate Governance 29

Item 11 Executive Compensation 31

Item 14 Principal Accountant Fees and Services 34

Part IV

Item 15 Exhibits and Financial Statement Schedules 35

Signatures 38

Index to Consolidated Financial Statements F-1

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PART I

Item 1.Business

General

HG Holdings, Inc. (together with its consolidated subsidiaries, the “Company,” “we,” “us,” “our,” “it,” and “its”) operates through its wholly owned subsidiaries, National Consumer Title Insurance Company (“NCTIC”), National Consumer Title Group, LLC (“NCTG”), Title Agency Ventures, LLC (“TAV”), HG Managing Agency, LLC (“HGMA”), Omega National Title Agency, LLC (“ONTA” or “Omega”), Omega National Title of Florida, LLC (“ONF”) and Omega National Title of Pensacola, LLC (“ONP”), and through an affiliated investment in HC Government Realty Trust, Inc., a Maryland corporation (“HC Realty”).

The Company engages in the business of providing title insurance through its subsidiary, NCTIC, and providing title agency services through its subsidiaries, NCTG, TAV, ONTA, ONF and ONP. Through NCTIC, the Company underwrites land title insurance for owners and mortgagees as the primary insurer. The Company mainly provides title insurance services in the state of Florida.

The title insurance segment provides title insurance, closing and/or escrow services and similar or related services in connection with residential and commercial real estate transactions. The substantial majority of our business is dependent upon activity in the real estate and mortgage markets, which are cyclical and seasonal. Our strategy is to profitably grow our core title insurance and settlement services business through a focus on continued improvement of our customers’ experiences with our products and services. Our growth strategy also includes potential acquisitions to expand our market share, geographic footprint, and enhance our data or technological capabilities. We remain committed to efficiently managing our business to market conditions throughout business cycles and to deploying our capital to maximize stockholder returns.

The Company is also engaged in real estate-related activities through its equity investments in HC Realty as well as management advisory services provided to affiliates.

The Company was originally incorporated in Delaware in 1984 under the name Stanley Furniture Company, Inc. Until March 2, 2018, we were a leading design, marketing and distribution resource in the upscale segment of the wood residential furniture market. On March 2, 2018, we sold substantially all our assets (the “Asset Sale”) to Stanley Furniture Company LLC, formerly known as Churchill Downs LLC (the “Buyer”), and changed our name to HG Holdings, Inc., refocusing our business and core strategy on the insurance industry.

Title Insurance Segment

Our title insurance segment issues title insurance policies and provides title agency services for residential and commercial real estate transactions. This segment also provides closing and/or escrow services to facilitate real estate transactions.

Overview of Title Insurance Industry

Title insurance protects against loss or damage resulting from title defects that affect real property. When real property is conveyed from one party to another, occasionally there is an undisclosed defect in the title or a mistake or omission in a prior deed, will or mortgage that may give a third party a legal claim against such property. If a covered claim is made against real property, title insurance provides indemnification against insured defects. There are two basic types of title insurance policies – one for the mortgage lender and one for the real property owner. A lender often requires the property owner to purchase a lender’s title insurance policy to protect its position as a holder of a mortgage loan, but the lender’s title insurance policy does not protect the property owner. The property owner has to purchase a separate owner’s title insurance policy to protect its investment.

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Title Insurance Policies. Title insurance policies insure the interests of owners or lenders against defects in the title to real property. These defects include adverse ownership claims, liens, encumbrances or other matters affecting title. Title insurance policies generally are issued at the request of a preliminary title report or commitment, which documents the current title to the property and any exceptions and/or limitations. The preliminary title report or commitment includes specific exceptions and/or limitations (i.e., the existence of easements, restrictions, rights of way, conditions, encumbrances or other matters affecting the title to, or use of, real property), which the title agent determines through a search of public records and prior title policies.

The beneficiaries of title insurance policies generally are real estate buyers and mortgage lenders. A title insurance policy indemnifies the named insured and certain successors in interest against certain title defects, liens and encumbrances existing as of the date of the policy and not specifically excluded from its provisions. The policy typically provides coverage for the real property mortgage lender in the amount of its outstanding mortgage loan balance and for the buyer in the amount of the purchase price of the property. The potential for claims under a title insurance policy issued to a mortgage lender generally ceases upon repayment of the mortgage loan. The potential for claims under a title insurance policy issued to a buyer generally ceases upon the sale or transfer of the insured property. A title insurer, however, generally does not know when a property has been sold or refinanced except when it issues the replacement coverage. Due to these factors, the total liability of a title underwriter on outstanding policies cannot be precisely determined.

Prior to issuing title policies, title insurers attempt to reduce the risk of claim losses by performing title searches and, in most cases, curing identified title defects. A title insurance company’s primary expenses relate to such searches and examinations and the curative process of defects, preparation of title reports, policies and commitments, and facilitating the close of the real estate transaction. Claim losses typically result from errors made in the title search and examination process, from hidden defects such as fraud, forgery, incapacity, or missing heirs of the property, and from closing-related errors.

Issuing the Policy. Title insurance companies typically issue title insurance policies directly by the title insurer, through affiliated title agencies, or indirectly through independent third-party agencies unaffiliated with the title insurance company. When the policy is issued by a title insurer, the search is performed by or on behalf of the title insurer, and the premium is collected and retained by the title insurer. In a policy issued through an affiliated or independent third-party title agency, the agent performs the title search, and collects and retains a portion of the premium. The agent remits the remainder of the premium to the title insurance company as compensation for bearing the risk of loss in the event a claim is made under the policy. The percentage of the premium retained by an agent varies by geography and may be regulated by the state. The title insurance company is obligated to pay title claims in accordance with the terms of its policies, regardless of whether the title insurance company issues policies through its direct operations, affiliated agents or independent agents.

The Closing Process. In the United States, title insurance is essential to the real estate closing process in most transactions involving real property mortgage lenders. In a typical residential real estate sale transaction where title insurance is issued, a third party, such as a real estate broker or agent, lawyer or closer, orders the title insurance on behalf of an insured or in certain instances, such as with respect to a lender, the insured orders on its own behalf. Once the order has been placed and a title insurance company or an agent has determined the current status of the title to the property to its satisfaction, the title insurer or agent prepares, issues and circulates a commitment or preliminary report. The commitment or preliminary report identifies the conditions, exceptions and/or limitations that the title insurer intends to attach to the policy and identifies items appearing on the title that must be eliminated prior to closing.

In the United States, the closing or settlement function is, depending on the region, performed by a lawyer, an escrow company or a title insurance company or agent, generally referred to as a “closer.” Once documentation has been prepared and signed, and any required mortgage lender payoff demands are obtained, the transaction closes. The closer typically records the appropriate title documents and arranges the transfer of funds to pay off prior loans and extinguish the liens securing such loans. Title policies are then issued, typically insuring the priority of the mortgage of the real property mortgage lender in the amount of its mortgage loan and the buyer in the amount of the purchase price. Before a closing takes place, however, the title insurer or agent typically provides an update to the commitment to discover any adverse matters affecting title and, if any are found, works with the seller to eliminate them so that the title insurer or agent issues the title policy subject only to those exceptions to coverage which are acceptable to the title insurer, the buyer and the buyer’s lender.

Premiums. The premium for title insurance is typically due and earned in full when the real estate transaction is closed. Premiums generally are calculated with reference to the policy amount. The premium charged by a title insurer or an agent is subject to regulation in most areas. Such regulations vary from jurisdiction to jurisdiction. In the state of Florida, where a majority of our title insurance policies are issued, the state insurance regulator promulgates title insurance rates.

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Escrow and Other Title Fees. In addition to fees for underwriting title insurance policies, we derive a significant amount of our revenues from escrow and other title-related services, including closing. The escrow and other services provided include all of those typically required in connection with residential and commercial real estate purchases and refinancing activities. These fees are earned when the title policy is issued. Escrow and other title fees included in our title insurance segment represented approximately

30% of the total title insurance segment revenues in

2025.

Title Insurance Operations

Overview. The Company issues a majority of its title insurance policies in Florida, through its home office and through a network of affiliated and independent title agents. In the state of Florida, issuing agents are independent agents or subsidiaries of community and regional mortgage lending institutions, depending on local customs and regulations.

Revenues for the title insurance segment primarily result from purchases of new and existing residential and commercial real estate, refinance activity and certain other types of mortgage lending such as home equity lines of credit. Title insurance premiums vary from state to state and are subject to extensive regulation. Statutes generally provide that rates must not be excessive, inadequate or unfairly discriminatory. The process of implementing a rate change in most states involves pre-approval by the applicable state insurance regulator.

The substantial majority of our title insurance business is dependent upon the overall level of residential and commercial real estate activity and mortgage markets, which are cyclical and seasonal. Residential purchase activity is typically slower in the winter months with increased volumes in the spring and summer months and is sensitive to interest rates. Refinance activity is not seasonal; however, it is generally correlated with changes in interest rates and general economic cycles. Commercial real estate volumes are less sensitive to changes in interest rates than residential real estate volumes, but fluctuate based on local supply and demand conditions and financing availability. Commercial real estate historically has elevated activity towards the end of the year. However, changes in general economic conditions in the United States and abroad can cause fluctuations in these traditional patterns of real estate activity, and changes in the general economic conditions in a geography can cause fluctuations in these traditional patterns of real estate activity in that geography. The Company’s revenues from title insurance premiums in future periods are likely to fluctuate due to these and other factors which are beyond management’s control.

Distribution, Sales and Marketing. We distribute our title insurance policies and related products and services through our direct and agent (affiliated and independent) channels. In our direct channel, the distribution of our policies and related products and services occurs through sales representatives located throughout our geographic footprint. Title insurance policies issued, and other products and services delivered through this channel are primarily delivered in connection with sales and refinances of residential and commercial real property.

Within the direct channel, our sales and marketing efforts are focused on the primary sources of business referrals. For residential business, we generally market to real estate agents and brokers, mortgage brokers, real estate attorneys, mortgage originators, homebuilders and escrow service providers. For the refinance business, we market primarily to mortgage originators and servicers. For the commercial business, we market primarily to commercial real estate professionals, law firms, commercial lenders, commercial brokers and mortgage brokers.

In our agency channel, we issue policies in accordance with agreements with authorized agents. The agency agreements typically state the conditions under which the agent is authorized to issue our title insurance policies. The agency agreement specifies the services and price, if not regulated by the state, for those services and typically describes the circumstances under which the agent may be liable if a policy loss occurs. As is standard in the industry, title agents operate largely independent of the Company and may act as agents for other title insurers.

Within the agency channel, our sales and marketing efforts are directed at the agents themselves and emphasize the quality and timeliness of our underwriting, our customer service and other title service offerings.

Reserves for Title Claims. We reserve for claim losses associated with title insurance policies based upon historical loss patterns and other factors. The reserve for incurred but not reported (“IBNR”) claims, together with the reserve for known claims, reflects management’s best estimate of the total costs required to settle all current and future claims on title insurance policies. We continually update loss reserve estimates as new information becomes known, new loss patterns emerge or as other contributing factors are considered and incorporated into the analysis of reserve for title claim losses. Due to the uncertainty inherent in the process and to the judgment used by management, the ultimate liability may be greater or less than our current reserves. If actual claims loss development varies from what is currently expected and is not offset by other factors, it is possible that additional reserve adjustments may be required in future periods in order to maintain our recorded reserve within a reasonable range of our actuary's central estimate.

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Reinsurance. Within our title insurance segment, we limit our maximum loss by reinsuring risk of loss with other insurers (“reinsurers”) under reinsurance agreements. In these reinsurance arrangements, the primary insurer retains a certain amount of risk under a policy and cedes the remainder of the risk under the policy to the reinsurer. In exchange for accepting the risk of loss, the primary insurer pays the reinsurer premiums and benefits. The primary insurer generally remains liable to its insured for the total risk, but is reinsured for a portion of the total risk under the terms of the reinsurance agreement.

Competition. Competition for title insurance, escrow and other title services is based primarily on service, quality, price, customer relationships and the ease of access and use of the products. The number of competing companies and the size of such companies vary significantly by geographic regions. The four largest title insurance companies typically maintain greater than 80% of the market for title insurance in the United States. In our principal market, competitors include major title underwriters such as Fidelity National Financial, Inc., First American Financial Corporation, Old Republic International Corporation, Stewart Information Services Corporation, Westcor Land Title Insurance Company, and WFG National Title Insurance Company, as well as other regional title insurance companies, underwritten title companies and independent agency operations. Certain title insurers may have greater financial resources, larger distribution networks and more diverse offerings and geographic footprint than us. The addition or removal of regulatory barriers and/or new technologies may result in changes to competition in the title insurance business. Numerous agency operations throughout our geographic footprint also provide aggressive competition to our title agency business.

Regulation. Our title insurance subsidiaries are subject to extensive regulation under applicable state laws. The title insurer is subject to a holding company act in its state of domicile, which regulates, among other matters, the ability to pay dividends and enter into transactions with affiliates. State statutes establish supervisory agencies with broad administrative powers relating to issuing and revoking licenses to transact business, regulating trade practices, licensing agents, approving policy forms, accounting practices, financial practices, establishing reserve and capital and surplus, defining suitable investments for reserves and surplus, and approving premium rate schedules.

Corporate and Other Segment

The Corporate and Other segment contains the results of management advisory services and other investment activity not related to title insurance.

The Company, through its wholly-owned subsidiary, HGMA, engages in providing various management advisory services such as legal entity formation, licensure, regulatory approval, assumption of policies, and other general operational services.

Effective January 1, 2024, the Company, through HGMA, was engaged to provide management advisory services to a related captive managing general agency, HP Managing Agency, LLC ("HPMA"), and its affiliates, including but not limited to general management, legal compliance, strategy services and review of potential acquisitions and transactions. The engagement was initially for twelve months from January 1, 2024 through December 31, 2024, for a monthly fee of $200,000, and was renewed effective January 1, 2025 for an additional six months. HPMA is a related party of the Company as it is controlled by Steven A. Hale II, who serves as our Chairman, Chief Executive Officer and Director. The engagement expired in accordance with its terms on June 30, 2025.

Effective April 1, 2023, the Company, through HGMA, was also engaged to provide management advisory services to a related reinsurance intermediary affiliated with HPMA. The services included legal entity formation, licensure, regulatory approval, and other general operational services to allow the intermediary to adequately perform its business functions. The engagement was initially for twelve months from April 1, 2023 through March 31, 2024, for a monthly fee of $50,000, and was renewed effective April 1, 2024 for an additional nine months, as well as effective January 1, 2025 for an additional six months. The engagement expired in accordance with its terms on June 30, 2025.

On April 21, 2025, the Company entered into a Master Services Agreement, effective June 1, 2025, with HP Risk Solutions, LLC (“HP Risk”), a wholly-owned subsidiary of HP Holding Company, LLC, which is wholly owned by certain affiliates of Mr. Hale, pursuant to which the Company provides certain managerial and operational services to HP Risk for consideration from HP Risk of $6 million per year over the course of three years (the “Services Agreement”). For additional information regarding the Services Agreement, refer to Note 3, Significant Transactions, in the accompanying notes to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.

Additionally, the Company owns 250 shares of HC Realty’s Common Stock (the “HC Common Stock”) and 1,025,000 shares of HC Realty’s 10.00% Series B Cumulative Convertible Preferred Stock (the “HC Series B Stock”). As of December 31, 2025, the Company owns approximately 28.0% of the voting interest of HC Realty. In June 2024, HC Realty effected a one (1) for one thousand two hundred (1,200) reverse stock split of its common stock, which resulted in a reduction in the number of our shares of HC Common Stock from 300,000 to 250.

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HC Realty is an internally-managed real estate investment trust (“REIT”) focused on acquiring, financing, owning and managing build-to-suit or renovate-to-suit, single-tenant properties leased primarily to the U.S. government and administered by the U.S. General Services Administration (the "GSA") or directly by the federal government agencies or sub-agencies occupying such properties (referred to as “Government Properties”). HC Realty invests primarily in Government Properties ranging from 10,000 to 100,000 rentable square feet that are in their initial lease term after original construction or renovation-to-suit. HC Realty further emphasizes Government Properties that perform law enforcement, public service or other functions that support the mission of the agencies or sub-agencies occupying such properties. Leases associated with the Government Properties in which HC Realty invests are full faith and credit obligations of the United States of America. HC Realty intends to grow its portfolio primarily through direct acquisitions of Government Properties; although, HC Realty may elect to invest in Government Properties through indirect investments, such as joint ventures. Steven A. Hale II, our Chairman and Chief Executive Officer, serves as HC Realty’s Chairman, Chief Executive Officer and President and a member of the HC Realty board of directors. In addition, Mr. Hale, and certain investors affiliated with Mr. Hale, founded Hale Partnership Capital Management, LLC (“HPCM”), and Mr. Hale currently serves as HPCM’s sole manager. HPCM serves as investment manager and adviser to, and may possess voting and/or investment power over the securities of HC Realty held by, certain other investors in HC Realty. HC Realty is considered to be a related party to the Company.

For information about our reportable segments refer to Note 8, Segment Information in the accompanying notes to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.

Major Customers

For the year ended December 31, 2025, two customers accounted for more than 10% of our total consolidated revenue, with HP Risk and HPMA accounting for 23.8% and 11.3%, respectively. For the year ended December 31, 2024, one customer accounted for more than 10% of our total consolidated revenue, with HPMA accounting for 26.1 %.

Forward-Looking Statements

Certain statements made in this Annual Report on Form 10-K are not based on historical facts but are forward-looking statements within the meaning of applicable securities laws. We intend for all such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and other applicable law. These statements can be identified by the use of forward-looking terminology such as “believes,” “estimates,” “expects,” “may,” “will,” “should,” “could,” "would," "intends," or “anticipates,” or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy. These statements reflect our reasonable judgment with respect to future events, are not guarantees of future performance, and are subject to risks and uncertainties, some of which are beyond our control and difficult to predict, that could cause actual results to differ materially from those in the forward-looking statements. Such risks and uncertainties include the occurrence of events that negatively impact the Company’s liquidity in such a way as to limit or eliminate the Company’s ability to use its cash on hand to fund further asset acquisitions, an inability on the part of the Company to identify additional suitable businesses to acquire or develop, and the occurrence of events that negatively impact the Company’s title insurance operations and/or the business or assets of HC Realty and the value of our investment in HC Realty, such as HC Realty's dependence on leases by the U.S. government and its agencies for substantially all of its revenues, and the risk that the U.S. government reduces its spending on real estate or that it changes its preference away from leased properties. Forward-looking statements that were true at the time made may ultimately prove to be incorrect or false. We caution readers not to place undue reliance on forward-looking statements, which reflect our management’s view only as of the date this Annual Report on Form 10-K is filed with the Securities and Exchange Commission (the "SEC"). We make no representation, express or implied, about the accuracy of any such forward-looking statements contained hereunder. Except as otherwise required by federal securities laws, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new developments or otherwise.

Stockholders should carefully review the Item IA. Risk Factors section below for a discussion of the risks and uncertainties that we believe are material to our business, operating results, prospects and financial condition.

Information about our Executive Officers

Our executive officers, who are elected annually, and their ages as of January 1, 2026, are as follows:

Name Age Position

Steven A. Hale II 42 Chairman, Chief Executive Officer and Director

Anna A. Lieb 42 Principal Financial and Accounting Officer; Secretary

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Steven A. Hale II is the founder of HPCM, an asset management firm that serves as the investment manager to certain privately held investment partnerships. Mr. Hale has held this position since 2010. From 2007 to 2010, prior to founding HPCM, Mr. Hale was an associate director with Babson Capital Management, LLC, an asset management firm, where he had responsibility for coverage of distressed debt investments across a variety of industries. From 2005 to 2007, Mr. Hale was a leveraged finance analyst with Banc of America Securities. Mr. Hale has served as a director of the Company since February 2017, as Chairman of the Company’s Board of Directors (the "Board") since November 2017 and as an officer of the Company since March 2018. Mr. Hale has also served as the Chairman and Chief Executive Officer of HC Realty since March 2019. He has also served as President of HC Realty from August 2020 until January 2022 and again beginning in August 2024.

Anna A. Lieb joined the Company in September 2023 as the Controller of HGMA, a wholly-owned subsidiary of the Company, and assumed the role of Principal Financial and Accounting Officer, Secretary effective May 31, 2024. Mrs. Lieb has over 16 years of experience in finance and accounting, specializing in the insurance industry. Prior to joining the Company, Mrs. Lieb served as a Financial Controller and Vice President of SEC Reporting at SiriusPoint Ltd. from March 2019 to August 2023. From November 2013 until joining SiriusPoint Ltd., Mrs. Lieb served as an Accounting Advisory and Policy Manager at Marsh & McLennan Companies, Inc. Prior to that, Mrs. Lieb was an Audit Manager at KPMG LLP.

Employees

As of December 31, 2025, we had 69 employees, 68 of which were full-time employees.

Available Information

Our principal Internet address is www.hgholdingsinc.net. We make available, free of charge, on this website our annual, quarterly and current reports, proxy statements, and other filings with the SEC, including amendments to such filings, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. These filings are also available free of charge through the SEC’s website, www.sec.gov.

In addition, you may request a copy of these filings (excluding exhibits) at no cost by writing, telephoning or e-mailing us at the following address, telephone number or e-mail address:

HG Holdings, Inc.

6265 Old Water Oak Road, Suite 204

Tallahassee, Florida 32312

Attention: Mr. Steven A. Hale II

Telephone: 850-201-9204

Email: investor@hgholdingsinc.net

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Item 1A. Risk Factors

An investment in our common stock involves a high degree of risk. You should consider carefully the specific risk factors described below in addition to the other information contained in this Annual Report on Form 10-K, including our financial statements and related notes included elsewhere in this Annual Report on Form 10-K, before making a decision to invest in our common stock. If any of these risks actually occurs, our business, financial condition, results of operations or prospects could be materially and adversely affected. This could cause the trading price of our common stock to decline and a loss of all or part of your investment.

Risks Related to the Company

We have limited operating history in the title insurance and title agency businesses.

Since the Asset Sale on March 2, 2018, we completed the acquisitions of NCTIC, through which we provide title insurance, and NCTG, TAV, ONTA, ONF and ONP, through which we provide title agency services. We have limited operating history in the title insurance and title agency lines of business. Accordingly, our future success may in part be subject to the risks, expenses, uncertainties and delays inherent in establishing a footprint in this line of business and our ultimate success in the title insurance and title agency business cannot be assured.

Additionally, we may seek to acquire other assets in the title insurance and title agency businesses. If we are not successful in identifying, acquiring and operating such assets, our results of operations and cash flows may be adversely affected and our stock price may decline.

An “ownership change” could limit the use of our net operating loss carryforwards and our potential to derive a benefit from our net operating loss carryforwards.

If an ownership change (as described below) occurs pursuant to applicable statutory regulations, we are potentially subject to limitations on the use of our net operating loss carryforwards which in turn could adversely impact our potential to derive a benefit from our net operating loss carryforwards. In general, an ownership change would occur if the percentage of our common stock held by one or more 5% shareholders increases by more than 50 percentage points over the lowest percentage of our common stock owned by such shareholder during a three-year test period.

Resources may be expended in researching potential acquisitions that might not be consummated.

The investigation of additional businesses or assets to acquire and the negotiation, drafting and execution of relevant agreements and other documents will require substantial management time and attention in addition to potentially incurring legal and other professional expenses. If a decision is made not to complete a specific acquisition, the costs incurred up to that point for the proposed transaction likely would not be recoverable. Furthermore, even if an agreement is reached relating to a specific acquisition, we may fail to consummate the acquisition for any number of reasons including those beyond our control.

We may be required to register under the Investment Company Act of 1940, as amended (the “1940 Act”).

Under Section 3(a)(l) of the 1940 Act, an issuer is deemed to be an investment company if it is engaged in or proposes to engage in the business of investing, reinvesting, owning, holding, or trading in securities, and owns or proposes to acquire “investment securities” having a value exceeding 40% of the value of the issuer’s total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. The 1940 Act defines “investment securities” broadly to include virtually all securities except U.S. government securities and securities issued by majority-owned subsidiaries that are not themselves regulated or exempt investment companies. Consequently, the securities of HC Realty we hold may be considered investment securities and we may fall within the scope of Section 3(a)(1)(C) of the 1940 Act.

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A company that falls within the scope of Section 3(a)(1)(C) of the 1940 Act can avoid being regulated as an investment company if it can rely on certain of the exclusions or exemptions under the 1940 Act. One such exclusion is set forth in Rule 3a-1 under the 1940 Act, which provides a safe harbor from investment company registration for an issuer if no more than 45% of the value of its total assets consists of, and no more than 45% of its net income after taxes is derived from, securities, other than, among other limited types of securities, those issued by companies which are controlled primarily by such issuer. We acquired an equity interest in HC Realty on March 19, 2019. On April 3, 2020, April 29, 2020, and June 29, 2020, we purchased an aggregate of 825,000 additional shares of HC Series B Stock for an aggregate purchase price of $8.25 million. As a result of these purchases, we now own approximately 28.0% of the voting interest in HC Realty. We believe that these additional purchases allow us to rely on the safe harbor from investment company registration set forth in Rule 3a-1 of the 1940 Act because we own (i) at least 25% of the voting securities of HC Realty, resulting in us being presumed to control HC Realty within the meaning of Section 2(a)(9) of the 1940 Act and (ii) a sufficient number of shares of HC Series B Stock so that we primarily control HC Realty within the meaning of Rule 3a-1 of the 1940 Act.

We have not sought or obtained an exemptive order, no-action letter or any other assurances from the SEC or its staff regarding our ability to rely on Rule 3a-1 of the 1940 Act, nor has the SEC or its staff provided any such order, no-action letter or other assurances. If we are required to register under the 1940 Act, compliance with these additional regulatory burdens would significantly increase our operating expenses. Registered investment companies are subject to extensive, restrictive and potentially adverse regulation relating to, among other things, operating methods, management, capital structure, dividends and transactions with affiliates.

Cybersecurity risks and cyber incidents may adversely affect our business in the event we or any other party that provides us with essential services experiences cyber incidents.

We and any other party that provides us with services essential to our operations (including, but not limited to, our title insurance and title agency subsidiaries) are vulnerable to service interruptions or damages from any number of sources, including computer viruses, malware, unauthorized access, energy blackouts, natural disasters, terrorism, war and telecommunication failures. Any system failure or accident that causes interruptions in our operations could result in a material disruption to our business. A cyber incident is considered to be any adverse event that threatens the confidentiality, integrity or availability of our information resources. These incidents may be an intentional attack or an unintentional event and could involve gaining unauthorized access to our information systems for purposes of misappropriating assets, stealing confidential information, corrupting data or causing operational disruption.

The risk of a security breach or disruption, particularly through cyberattacks or cyber intrusions, including by computer hackers, nation-state affiliated actors, and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased, and will likely continue to increase in the future. Such threats are prevalent and continue to rise, are increasingly difficult to detect, and come from a variety of sources, including traditional computer “hackers,” threat actors, “hacktivists,” organized criminal threat actors, personnel (such as through theft or misuse), sophisticated nation states, and nation-state-supported actors. Some actors now engage and are expected to continue to engage in cyberattacks, including, without limitation, nation-state actors for geopolitical reasons and in conjunction with military conflicts and defense activities. During times of war and other major conflicts, we and the third-party service providers upon which we may rely may be vulnerable to a heightened risk of these attacks, including retaliatory cyberattacks.

The result of these incidents may include disrupted operations, misstated or unreliable financial data, liability for stolen assets or information, increased cybersecurity protection and insurance costs, litigation and damage to our stockholder relationships. As we and the parties that provide essential services to us increase our and their reliance on technology, the risks posed to the information systems of such persons have also increased. We have implemented processes, procedures and internal controls to help mitigate cyber incidents, but these measures do not guarantee that a cyber-incident will not occur or that attempted security breaches or disruptions would not be successful or damaging. A cyber incident could materially adversely impact our business, financial condition, results of operations, cash flows, or our ability to satisfy our debt service obligations. There also may be liability for any stolen assets or misappropriated Company funds or confidential information. Any material adverse effect experienced by us or other parties that provide us with services essential to our operations could, in turn, have an adverse impact on us.

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We may use artificial intelligence in our business and we are subject to risks related to such use.

We may use artificial intelligence in our business or incorporate artificial intelligence into our products and services. The artificial intelligence we may use may not operate properly or as expected, which could cause our title insurance subsidiaries to write policies they may not have otherwise written, misprice policies, assume greater risks, or overpay customer claims, among other potential negative impacts on our business and operations. Our existing competitors, new entrants, technology companies or other third parties may leverage artificial intelligence to the benefit of their business or operations or may incorporate artificial intelligence into their products and services more quickly or successfully than we do, which could make us less competitive and negatively impact our results of operations. In addition, if the content, analyses, output or recommendations produced by or with the assistance of artificial intelligence are unintentionally, or are alleged to be, deficient, inaccurate or misleading, our business, financial condition and results of operations may be adversely impacted.

We hold our cash and restricted cash in depository accounts that could be adversely affected if the financial institutions holding such deposits fail.

In 2023, certain specialized banking institutions with elevated concentrations of uninsured deposits experienced large deposit outflows coupled with insufficient liquidity to meet withdrawal demands, resulting in the institutions being placed into Federal Deposit Insurance Corporation (“FDIC”) receiverships. We maintain our cash and restricted cash at insured financial institutions. The account balances at each institution periodically substantially exceed the FDIC insurance coverage of $250,000, and, as a result, there is a concentration of credit risk related to amounts in excess of FDIC insurance coverage. If a bank in which we hold funds fails or is subject to adverse conditions in the financial or credit markets, we may be subject to a risk of loss or delay in accessing all or a portion of our funds exceeding the FDIC insurance coverage, which could adversely impact our short-term liquidity, ability to operate our business, and financial performance. To date, we have not experienced any material loss as a result of the failure of any financial institution in which we hold cash or restricted cash in depository accounts.

Catastrophic events, including, but not limited to, natural events and the outbreak of diseases, along with geopolitical concerns and changes to trade policy, could have a material adverse impact on our financial performance and results of operations.

A significant natural disaster, such as a hurricane, tropical storm, tornado, windstorm, earthquake, hail, and other catastrophic events, including the occurrence of a contagious disease or illness, such as COVID-19 or any other future epidemics or pandemics, could have a material adverse impact on our business, results of operations, and financial condition. In addition, climate change could result in an increase in the frequency or severity of natural disasters. Given the unpredictable nature of these events with respect to size, severity, duration and geographic location, it is not currently possible to quantify the ultimate impact that they may have on our business. Additionally, geopolitical concerns (including the ongoing conflicts between Russia and Ukraine and in the Middle East), the imposition of tariffs and other changes to trade policy in the U.S. and other jurisdictions, and terrorist attacks could result in increased volatility in, or damage to, real estate prices and the United States and the worldwide financial markets and economy more generally, including with respect to supply chain disruptions, labor market interruptions and government interventions, all of which could have a material adverse effect on our results of operations and financial condition.

Our common stockis traded on the OTCQBand there may belimitedability to trade our common stock.

Trading of our common stock is currently conducted in the over-the-counter market on the OTCQB, which is generally a less active, and therefore a less liquid, trading market than other types of markets such as national stock exchanges. As a result, an investor may find it more difficult to dispose of, or obtain accurate quotations for the price of, our common stock than if our shares of common stock were traded on other markets.

We have recorded goodwill as a result of prior acquisitions, and an economic or business downturn could cause these balances to become impaired, requiring write-downs that would reduce our operating income.

Goodwill aggregated approximately

$6.5 million, or approximatel

y 14% of our total assets as of

December 31, 2025. Current accounting rules require that goodwill be assessed for impairment at least annually or whenever changes in circumstances indicate that the carrying amount may not be recoverable from estimated future cash flows. Factors that may be considered a change in circumstance indicating the carrying value of our goodwill may not be recoverable include, but are not limited to, significant underperformance relative to historical or projected future operating results, a significant decline in our stock price and market capitalization, and negative industry or economic trends. As of

December 31, 2025, management has deemed there is no impairment of our recorded goodwill. However, if there is an economic downturn in the future, the carrying amount of our goodwill may no longer be recoverable, and we may be required to record an impairment charge, which would have a negative impact on our results of operations and financial condition. Management will continue to monitor our operating results, our market capitalization, and the impact of the economy to determine if there is an impairment of goodwill in future periods.

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Risks Related to our Title Insurance and Title Agency Businesses

Conditions in the real estate market generally impact the demand for a substantial portion of our title insurance and title agency subsidiaries’ products and services and NCTIC’s title claims experience.

Demand for a substantial portion of our title insurance and title agency subsidiaries’ products and services generally decreases as real estate activity, such as sales, mortgage financing and mortgage refinancing, decreases. We have found that real estate activity and, as a result, the demand for our title insurance and title agency subsidiaries’ products and services, generally decreases in the following situations:

● When mortgage interest rates are high or rising;

● When real estate affordability is declining.

National inventory levels for residential real estate have declined over the past several years and remain below historical average levels. The number of residential purchase transactions has also declined, particularly as a result of decreased demand due to increased mortgage interest rates beginning in 2022. Residential refinance activity is also strongly correlated with changes in mortgage interest rates, and rising mortgage interest rates during previous years have, expectedly, had an adverse impact on our refinance business, which is expected to continue for so long as mortgage interest rates remain high relative to the interest rates of outstanding mortgages. Higher interest rates have also negatively impacted the volume of commercial transactions since 2022.

Additionally, these market conditions and the increase in foreclosures that often results therefrom, may adversely impact NCTIC’s title claims experience. Historically, increasing foreclosure activity has led to an increase in title claims.

Unfavorable economic conditions may adversely affect our title insurance and title agency subsidiaries' businesses.

Historically, uncertainty and negative trends in general economic conditions in the United States and abroad, including significant tightening of credit markets and a general decline in the value of real property, have created a difficult operating environment for our title insurance and title agency subsidiaries’ core title and settlement businesses.

The demand for our title insurance and title agency services is dependent primarily on the volume of residential and commercial real estate transactions. The volume of these transactions historically has been influenced by such factors as mortgage interest rates, inventory, affordability, availability of financing and the overall state of the economy. Mortgage rates remained very high after emergency actions taken by the Federal Reserve to substantially increase its benchmark interest rate in an attempt to control inflation during 2022 and 2023. In the latter part of 2025, the Federal Reserve lowered the federal funds rate several times to a range of 3.50% to 3.75% as of December 31, 2025. While the latest and potential future Federal Reserve rate decreases may positively impact the title insurance market, mortgage rates continue to remain relatively high as compared to pre-2022 levels and will likely continue to contribute to decreased real estate activity in the upcoming year. Ongoing political and market uncertainties (including tariff policies) are contributing to the suppressed volume of real estate activity. In addition, expectations of further Federal Reserve rate decreases may not materialize and the Federal Reserve may increase rates in the future to combat inflation, which would likely have a negative impact on the title insurance market.

Our revenues and results of operations have been and may in the future be adversely affected by a decline in real estate prices, real estate activity and the availability of financing alternatives. Deterioration in the macroeconomic environment generally causes weakness or adverse changes in the level of real estate activity, which could have a material adverse effect on our consolidated financial condition or results of operations. Also, we may not be able to accurately predict the effects of periods or expectations of high or rapidly rising inflation rates, and governmental responses thereto, and may not respond in a timely or adequate manner to mitigate the negative effects of such inflation, such as decreases in the demand for our products and services and higher labor and other expenses. Depending upon the ultimate severity and duration of any economic downturn, the resulting effects on our title insurance and title agency subsidiaries’ businesses could be materially adverse, including a significant reduction in revenues, earnings and cash flows, deterioration in the value of or return on their investments and increased credit risk from customers and others with obligations to our title insurance and title agency subsidiaries.

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Changes in our relationships with large mortgage lenders or government–sponsored enterprises could adversely affect our business.

Large mortgage lenders and government-sponsored enterprises, because of their significant role in the mortgage process, have significant influence over our title insurance and title agency subsidiaries and other service providers. Changes in our relationship with any of these lenders or government-sponsored enterprises, the loss of all or a portion of the business we derive from these parties, any refusal of these parties to accept our products and services, the modification of the government-sponsored enterprises’ requirement for title insurance in connection with mortgages they purchase or the use of alternatives to our products and services, could have a material adverse effect on our business.

A downgrade by ratings agencies, reductions in statutory capital and surplus maintained by NCTIC, our title insurance underwriter, or a deterioration in other measures of financial strength could adversely affect our business.

The financial strength of NCTIC may be measured by ratings provided by ratings agencies. Demotech, Inc. currently rates NCTIC’s operations. NCTIC’s financial strength ratings are “Exceptional” or “A” by Demotech, Inc. This rating provides the ratings agency’s perspective on NCTIC’s financial strength, operating performance and cash generating ability. The ratings agency will continually review these ratings and the ratings are subject to change. If NCTIC’s ratings are downgraded from current levels by Demotech, Inc. or any other ratings agencies, NCTIC’s ability to retain existing customers and develop new customer relationships may be negatively impacted, which could result in a material adverse impact on our consolidated financial condition or results of operations.

Statutory capital and surplus, or the amount by which statutory assets exceed statutory liabilities, is also a measure of financial strength of an insurance company. Accordingly, if the statutory capital and surplus of NCTIC is reduced from the current level, or if there is a deterioration in other measures of financial strength, NCTIC’s results of operations, competitive position and liquidity could be adversely affected.

The issuance of title insurance policies and related activities by title agents, some of which operate with substantial independence from us, could adversely affect our business.

Our title insurance subsidiaries issue a significant portion of their policies through title agents, some that may operate largely independent of us. There is no guarantee that these title agents will fulfill their contractual obligations to our title insurance subsidiaries, which contracts include limitations that are designed to limit our title insurance subsidiaries’ risk with respect to the title agents’ activities. In addition, regulators are increasingly seeking to hold companies such as our title insurance subsidiaries responsible for the actions of these title agents and, under certain circumstances, our title insurance subsidiaries may be held liable directly to third parties for actions (including defalcations) or omissions of these title agents. As a result, the use of title agents by our title insurance subsidiaries could result in increased claims on the policies issued through title agents and an increase in other costs and expenses.

Competition in the title insurance industry may affect our revenues.

Competition in the title insurance industry is intense, particularly with respect to price, service and expertise. Larger commercial customers and mortgage originators also look to the size and financial strength of a title insurer. The four largest title insurance companies typically maintain greater than 80% of the market for title insurance in the United States. In our principal market, competitors include other major title underwriters such as Fidelity National Financial, Inc., First American Financial Corporation, Old Republic International Corporation, Stewart Information Services Corporation, Westcor Land Title Insurance Company, and WFG National Title Insurance Company, as well as other regional title insurance companies, underwritten title companies and independent agency operations. Although we are not aware of any current initiatives to reduce regulatory barriers to entering our industry, any such reduction could result in new competitors, including financial services firms or institutions, entering the title insurance business. From time-to-time, new entrants enter the marketplace with alternative products to traditional title insurance, although many of these alternative products have been disallowed by title insurance regulators. Further, advances in technologies, including artificial intelligence, could, over time, significantly disrupt the traditional business model of financial services and real estate-related companies, including title insurance companies. These alternative products or disruptive technologies, if permitted by regulators, could have a material adverse effect on our revenues and earnings.

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We depend on our ability to attract and retain key personnel and agents, and our inability to do so could adversely affect our business.

Competition for skilled and experienced personnel in our industry is high, and our success is substantially dependent on our ability to attract and retain such personnel. We may have difficulty hiring and retaining the necessary marketing and management personnel to support future growth plans. Also, our results of operations and financial condition could be adversely affected if we are unsuccessful in attracting and retaining new agents.

Errors and fraud involving the transfer of funds may adversely affect our title insurance and title agency subsidiaries.

Our title insurance and title agency subsidiaries rely on their systems, employees and domestic banks to transfer funds on behalf of our title insurance and title agency subsidiaries as well as title agents that are not affiliates of ours. These transfers are susceptible to user input error, fraud, system interruptions, incorrect processing and similar errors that from time-to-time result in lost funds or delayed transactions. Our title insurance and title agency subsidiaries’ email and computer systems and systems used by their agents, customers and other parties involved in a transaction may be subject to, and may continue to be the target of, fraudulent attacks, including attempts to cause our title insurance and title agency subsidiaries or their agents to improperly transfer funds. Funds transferred to a fraudulent recipient are often not recoverable. In certain instances, our title insurance and title agency subsidiaries may be liable for those unrecovered funds. The controls and procedures used by our title insurance and title agency subsidiaries to prevent transfer errors and fraud may prove inadequate, resulting in financial losses, reputational harm, loss of customers or other adverse consequences which could be material.

Regulatory oversight and changes in government regulation could prohibit or limit our title insurance and title agency subsidiaries’ operations, make it more costly or burdensome to conduct such operations or result in decreased demand for their products and services.

Our title insurance business is regulated by various federal, state, and local governmental agencies and operates within statutory guidelines. The industry in which our title insurance business operates and the markets into which it sells its products are also regulated and subject to statutory guidelines. In general, our title insurance business may be subject to increasing regulatory oversight and increasingly complex statutory guidelines. This may be due, among other factors, to the passing of, and significant changes in, laws and regulations pertaining to privacy and data protection.

For instance, the Consumer Financial Protection Bureau (“CFPB”) is charged with protecting consumers by enforcing federal consumer protection laws and regulations. The CFPB is an independent agency and funded by the United States Federal Reserve System. Its jurisdiction includes banks, credit unions, securities firms, payday lenders, mortgage servicing operations, foreclosure relief services, debt collectors and other financial companies. The nature and extent of these regulations include, but are not limited to: conducting rule-making, supervision, and enforcement of federal consumer protection laws; restricting unfair, deceptive, or abusive acts or practices; marshalling consumer complaints; promoting financial education; researching consumer behavior; monitoring financial markets for new risks to consumers; and enforcing laws that outlaw discrimination and other unfair treatment in consumer finance.

Governmental authorities regulate our insurance subsidiaries in the states in which we do business. These regulations generally are intended for the protection of policyholders rather than stockholders. The nature and extent of these regulations vary from jurisdiction to jurisdiction, but typically involve:

● approving or setting of insurance premium rates;

● limitations on types and amounts of investments;

● regulating underwriting and marketing practices;

● regulating dividend payments and other transactions among affiliates;

● licensing of insurers, agencies and, in certain states, escrow officers;

● regulation of reinsurance;

● restrictions on the size of risks that may be insured by a single company;

● deposits of securities for the benefit of policyholders;

● approval of policy forms;

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● methods of accounting; and

These regulations may impede or impose burdensome conditions on rate increases or other actions that we might want to take to enhance our operating results. In addition, state regulators perform periodic examinations of insurance companies, which could result in increased compliance or legal expenses.

Regulatory oversight could require us to raise capital, and/or make it more difficult to deploy capital. For example, our regulatory capital requirements have historically applied only at the subsidiary level, specifically our insurance underwriter subsidiaries. However, the National Association of Insurance Commissioners (the "NAIC") has adopted an approach to assess group risks and capital adequacy and assist in the regulation of insurer solvency using the Group Capital Calculation (the “GCC”), which uses an aggregation methodology for all entities within an insurance holding company system. The adoption of the GCC by jurisdictions in which we are regulated could increase our prescribed capital requirements, the level at which regulatory scrutiny intensifies, as well as significantly increase our cost of regulatory compliance. In addition, changes in the applicable regulatory environment, statutory guidelines or interpretations of existing regulations or statutes, enhanced governmental oversight or efforts by governmental agencies to cause customers to refrain from using our title insurance and title agency subsidiaries’ products or services could prohibit or limit their future operations or make it more costly or burdensome to conduct such operations or result in decreased demand for their products and services or a change in their competitive position. The impact of these changes would be more significant if they involve the Florida jurisdiction, as a majority of our title premiums are currently generated in the state of Florida, and a proposed bill aligning Florida law with the GCC approach adopted by the NAIC is currently working its way through the Florida legislature. These changes may restrict our ability to acquire assets or businesses, may limit the manner in which we conduct our business or otherwise may have a negative impact on our ability to generate revenues, earnings and cash flows. Additionally, in jurisdictions where rates are not promulgated by the state insurance regulator, these changes may compel us to reduce our prices and may restrict our ability to implement price increases.

Regulation of title insurance rates could adversely affect our business.

Title insurance rates are subject to extensive regulation, which varies from state to state. Our title insurance subsidiaries currently operate primarily in the state of Florida. In Florida, rates are promulgated by the state insurance regulator. Our insurance subsidiaries’ ability to promptly adapt to changing market dynamics through price adjustments may be limited due to the rates promulgated by the state’s insurance regulator, particularly in a declining market.

Our title insurance business may be adversely affected by business or regulatory conditions that disproportionately affect Florida.

Our title insurance subsidiaries currently operate primarily in the state of Florida. As a result of the significant income derived from customers in this state, our title insurance business is exposed to adverse business or regulatory conditions that significantly or disproportionally affect Florida. For example, a declining business climate or real estate market that is localized in Florida could have an adverse effect on the title insurance segment’s results of operations. Adverse regulatory developments, including reductions in rates or increased regulatory or capital requirements in Florida could similarly adversely affect the title insurance segment’s business, financial condition and results of operations.

Changes in certain laws and regulations, and in the regulatory environment in which we operate, could adversely affect our business.

Federal and state officials are discussing various potential changes to laws and regulations that could impact our businesses, including the reform of government-sponsored enterprises such as the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) and additional data privacy regulations, among others. Changes in these areas, and more generally in the regulatory environment in which our title insurance and title agency subsidiaries and their customers operate, could adversely impact the volume of mortgage originations in the United States and our title insurance and title agency subsidiaries competitive position and results of operations.

The overturning of the Chevron doctrine could have an unfavorable impact on us.

In June 2024, the U.S. Supreme Court issued a decision in the Loper Bright Enterprises v. Raimondo case that overturned the long-standing federal Chevron doctrine. The Chevron doctrine set forth a test that outlined when courts should defer to an agency’s interpretation of federal law. Under the doctrine, if Congress had not spoken directly to the precise issue in question, the courts were to defer to the agency’s interpretation so long as the interpretation was reasonable. Under the Loper Bright decision, courts are now required to exercise their independent judgment in deciding whether an agency has acted within its statutory authority and may not defer to an agency interpretation of the law simply because a statute is ambiguous.

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The overturning of the Chevron doctrine is likely to result in challenges to numerous agency interpretations in various areas of law including energy, environment, taxation, and labor, among others. If these challenges are upheld, they could have both favorable and unfavorable impacts on us, depending on whether the interpretations that are overturned were more favorable toward our business and operations than subsequent revised agency interpretations. The likely increase of challenges to agency actions may also increase legal costs and create less certainty around agency actions, at least in the near term.

Actual claims experience could materially vary from the expected claims experience reflected in NCTIC’

s reserve for incurred but not reported claims.

NCTIC maintains a reserve for IBNR claims pertaining to its title insurance products. The majority of this reserve pertains to title insurance policies, which are long-duration contracts with the majority of the claims reported within the first few years following the issuance of the policy. Generally

, 70% to 80% of claim amounts become known in the first six years of the policy life, and the majority of IBNR reserves relate to the six most recent policy years. Changes in expected ultimate losses and corresponding loss rates for recent policy years are considered likely and could result in a material adjustment to the IBNR reserves. Loss rates for recent policy years, positive or negative, may vary significantly given the long duration nature of a title insurance policy. In uncertain economic times, such as those experienced as a result of the COVID-19 pandemic, rising inflation and rising interest rates, larger changes may be more likely. Material changes in expected ultimate losses and corresponding loss rates for older policy years are also possible, particularly for policy years with loss ratios exceeding historical norms. The estimates made in determining the appropriate level of IBNR reserves could ultimately prove to be materially different from actual claims experience.

Changes in laws or regulations impacting real estate, particularly when applied retroactively, may cause a material change in expected ultimate losses and corresponding loss rates for recent and/or older policy years.

Risks Related to our Investment in HC Realty

Our investment in HC Realty may lose value.

We owned approximately 28.0% of the voting interest in HC Realty as of December 31, 2025. There is no guarantee that HC Realty will be successful implementing its business strategy for the acquisition, financing, ownership and management of Government Properties and, as a result, our investment in HC Common Stock and HC Series B Stock may lose value. Additionally, HC Realty has paused distributions on HC Common Stock and HC Series B Stock, which has resulted in our loss of revenue historically derived from such distributions, and we have recognized an impairment of our investment in HC Series B Stock.

HC Realty depends on leases by the U.S. government and its agencies for substantially all of its revenues and any failure by the U.S. government and its agencies to perform their obligations under their leases or renew their leases upon expiration could have a material adverse effect on our investment in HC Realty.

As of December 31, 2025, leases by the U.S. government and its agencies accounted for substantially all of HC Realty’s revenues. We expect that leases to agencies of the U.S. government will continue to be HC Realty’s primary source of revenues for the foreseeable future. Due to such concentration, any failure by the U.S. government to perform its obligations under its leases or a failure to renew its leases upon expiration, could cause interruptions in the receipt of lease revenue or result in vacancies, or both, which would reduce HC Realty’s revenue until the affected properties are leased, and could decrease the ultimate value of the affected property upon sale and have a material adverse effect on our investment in HC Realty. In addition, as part of ongoing efforts to reduce waste, the U.S. government and the GSA are reaching out to all tenant agencies to see if there are opportunities to reduce space usage.

By executive order on January 20, 2025, President Trump established the Department of Government Efficiency (“DOGE”) to maximize government efficiency and productivity. Among the actions taken by DOGE toward this goal were the terminations of leases by government agency or department tenants at numerous real estate properties around the country. While DOGE was disbanded in November 2025, any further effort by the U.S. government to terminate leases by government agency or department tenants for purposes of maximizing government efficiency and productivity, or otherwise, could materially and adversely affect HC Realty’s business, financial condition and results of operations, and our investment in HC Realty.

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Some of HC Realty’s leases with the U.S. government permit the U.S. government to terminate the lease and discontinue paying rent prior to the lease expiration date.

From time to time, HC Realty enters into leases that provide the U.S. government the right to terminate the lease during a specified period prior to the expiration of the total term stated in the lease, with such period often referred to as the “soft term.” In the event that a portion of HC Realty’s U.S. government tenant agencies exercise their termination rights during a soft term period prior to the expiration of the total term stated in the lease, for government efficiency and productivity reasons, fiscal policy reasons, security concerns or other reasons, and HC Realty is not able to lease the vacant space to another tenant in a timely manner or at all, it could have a material adverse effect on HC Realty’s business, financial condition and results of operations, and our investment in HC Realty.

The U.S. government may consolidate its existing GSA leases, which may have an adverse effect on HC Realty’s business and results of operations and our investment in HC Realty.

The U.S. government has been acting to reduce its expenses by consolidating various lease agreements for single office buildings in which several agencies and/or branches are located. HC Realty faces the risk that such consolidation will take place in one or more of its Government Properties, leading lessees to migrate to a property that is not beneficially owned by HC Realty. There can be no assurance that the U.S. government will not consolidate GSA leases. Because many of the Government Properties were built or renovated for specific GSA lessees, it may be difficult to find other tenants interested in facilities with these specifications. HC Realty may consequently have to invest significant amounts of capital to renovate Government Properties with GSA specifications for other tenants. The vacancies or costs attendant to renovations for new tenants resulting from U.S. government lease consolidation could significantly impair HC Realty’s revenues and business strategy and our investment in HC Realty.

The value of our investment in HC Realty would be adversely affected if HC Realty failed to qualify as a REIT.

HC Realty has elected to be treated as a REIT for U.S. federal income tax purposes. HC Realty’s continued qualification as a REIT depends on its satisfaction of certain asset, income, organizational, distribution and stockholder ownership requirements on a continuing basis. HC Realty’s ability to satisfy some of the asset tests depends upon the fair market values of its assets, some of which are not able to be precisely determined and for which HC Realty has indicated it will not obtain independent appraisals. If HC Realty fails to qualify as a REIT in any taxable year, and certain statutory relief provisions are not available, HC Realty would be subject to U.S. federal income tax on its taxable income at regular corporate rates and distributions to stockholders would not be deductible by it in computing its taxable income. Any such corporate tax liability could be substantial and would reduce the amount of cash available for distribution. Unless entitled to relief under certain provisions of the Internal Revenue Code of 1986, as amended, HC Realty also would be disqualified from taxation as a REIT for the four taxable years following the year during which HC Realty ceased to qualify as a REIT. In addition, if HC Realty fails to qualify as a REIT, HC Realty will no longer be required to make distributions. As a result of all these factors, HC Realty’s failure to qualify as a REIT could impair its ability to expand business and raise capital and could adversely affect the value of our investment in HC Common Stock and HC Series B Stock.

Risks Related to Conflicts of Interest

Our Chairman and Chief Executive Officer, who is also a director, may have potential or actual conflicts of interest because of his positions with HPCM and HC Realty.

Steven A. Hale II, our Chairman and Chief Executive Officer, is the sole manager of HPCM which serves as the investment adviser for the Hale Partnership Fund, L.P. and related entities (collectively, the “Hale Funds”) and certain holders of HC Series B Stock other than us. The Hale Funds own approximately 74.0% of our outstanding common stock. We also own HC Series B Stock and HC Common Stock. Mr. Hale also serves as Chairman, Chief Executive Officer and President and a director of HC Realty.

Mr. Hale owes fiduciary duties to (i) us, (ii) HC Realty as a result of his position with HC Realty and (iii) the Hale Funds and certain holders of HC Series B Stock other than us as a result of his position with HPCM, the investment adviser to these parties. As a result, Mr. Hale may have potential or actual conflicts of interest when faced with decisions that could have different implications for us and HC Realty. In addition, Mr. Hale may have potential or actual conflicts of interest when faced with decisions that could have different implications for us and the Hale Funds or the other holders of HC Series B Stock advised by HPCM. For example, these potential conflicts could arise over matters such as funding and capital matters.

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Our executive officers, directors and 10% stockholders have significant voting power and may vote their shares in a manner that is not in the best interest of other stockholders.

Our current executive officers, directors and 10% stockholders control approximately

89.7% of the voting power represented by our outstanding common stock. If these stockholders act together, whether by written consent or at a duly called and held meeting of stockholders, they may be able to exert significant control over our management and affairs requiring stockholder approval, such as the election of directors or our dissolution. This concentration of ownership may have the effect of delaying or preventing a change in control and might adversely affect the market price of our common stock. This concentration of ownership may not be in the best interests of all our stockholders.

Our Chief Executive Officer, who will be employed on a part-time basis for the foreseeable future, currently has outside business interests that will require his time and attention and may interfere with his ability to devote all of his time to our business, which may adversely affect our business and operations.

Mr. Hale, our Chief Executive Officer, will be employed for the foreseeable future on a part-time basis and has outside business interests that could require substantial time and attention. Mr. Hale is also associated with HPCM and HC Realty and devotes significant time to their affairs. We cannot accurately predict the amount of time and attention that will be required of Mr. Hale to perform his ongoing duties related to outside business interests. The inability of Mr. Hale to devote sufficient time to managing our business could have a material adverse effect on our business and operations.

Item 1B.Unresolved Staff Comments

None.

Item 1C.Cybersecurity

As part of our commitment to maintaining the integrity, confidentiality, and availability of our information assets, the Company places a significant emphasis on cybersecurity. The Company’s risk management program is designed to comply with laws and regulations applicable to cybersecurity. The Board is responsible for overseeing the Company’s risk management program and cybersecurity is a critical element of this program. The Company's management, including its Director of Information Technology, is responsible for the day-to-day administration of the Company’s risk management program and its cybersecurity policies, processes, and practices. Our Director of Information Technology has served in similar roles in information technology and information security for over 20 years. He holds an undergraduate degree in Management Information Systems.

Our strategies, policies, and initiatives aimed at protecting our systems and data against potential threats are outlined below.

1. Cybersecurity Governance:

The Company has established a robust governance framework to oversee cybersecurity initiatives. This framework includes:

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2. Cybersecurity Policies:

The Company has implemented a comprehensive set of cybersecurity policies and procedures designed to mitigate risks and protect our information assets. These policies cover areas such as:

3. Cybersecurity Compliance:

The Company is committed to complying with all applicable cybersecurity regulations and standards. We regularly review our cybersecurity practices to ensure they align with industry best practices and regulatory requirements.

Cybersecurity is a top priority for us and we are dedicated to continuously improving our cybersecurity posture to protect our systems and data from evolving threats. By implementing robust governance, policies, technologies, and compliance measures, we strive to maintain the trust and confidence of our stakeholders in our ability to safeguard their information.

Pursuant to the Company’s cybersecurity policy, the Board will be promptly notified of any material cybersecurity incident required to be disclosed under Item 1.05 of Form 8-K and shall oversee the Company’s response to such matter.

In 2025, we did not identify any cybersecurity threats that have materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition. However, despite our efforts, we cannot eliminate all risks from cybersecurity threats, or provide assurances that we have not experienced an undetected cybersecurity incident. For more information about these risks, please see “Item 1A. Risk Factors – Risks Related to the Company - Cybersecurity risks and cyber incidents may adversely affect our business in the event we or any other party that provides us with essential services experiences cyber incidents” in this Annual Report on Form 10-K.

Item 2.Properties

Our corporate headquarters is located in Tallahassee, Florida where we lease office space. The Company’s subsidiaries, principally Omega, lease office space throughout Florida. It is our opinion that these leased properties are in good operating condition, suitable, and adequate for present uses.

Item 3.Legal Proceedings

The information required for this Part I, Item 3 is incorporated by reference to the discussion under the heading “Litigation” in Note 12, Commitments and Contingencies in the accompanying notes to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.

Item 4.Mine Safety Disclosures

Not Applicable.

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PART II

Item 5.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market and Dividend Information

Our common stock is traded in the over-the-counter market on the OTCQB under the symbol “STLY”. Any over-the-counter market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.

As of March 12, 2026, we had approximately 367 beneficial stockholders. We currently anticipate that we will retain all future earnings for the operation of our business, and we do not currently intend to pay any cash dividends on our common stock in the foreseeable future.

Issuer Purchases of Equity Securities

In May 2024, the Board authorized the repurchase of up to $1.5 million of shares of the Company’s common stock (the “2024 Repurchase Program”) and discontinued the repurchase program that had been authorized in 2022. The authorization did not obligate the Company to acquire a specific number of shares during any period and did not have an expiration date. Repurchases under the 2024 Repurchase Program could be made from time to time in the open market, or through privately negotiated transactions or otherwise, in such quantities, at such prices, in such manner and on such terms and conditions as the authorized officers of the Company determined were in the best interests of the Company. Repurchases also could be made under a plan adopted pursuant to Rule 10b5-1 promulgated under the Exchange Act.

In December 2025, the Board authorized a new share repurchase program pursuant to which the Company may repurchase up to $1.5 million of its outstanding common stock (the “2025 Repurchase Program”), which replaced the 2024 Repurchase Program. The authorization does not obligate the Company to acquire a specific number of shares during any period and does not have an expiration date. Repurchases under the 2025 Repurchase Program may be made from time to time in the open market, or through privately negotiated transactions or otherwise, in such quantities, at such prices, in such manner and on such terms and conditions as the authorized officers of the Company determine are in the best interests of the Company. Repurchases may also be made under a plan adopted pursuant to Rule 10b5-1 promulgated under the Exchange Act.

During the year ended December 31, 2025, the Company repurchased 606,055 shares of common stock (203,733 of which were repurchased under the share repurchase programs and 402,322 of which were repurchased from three related stockholders outside of, and as an exception to, the share repurchase programs) at a weighted average price per share of $7.23.

The following table summarizes the Company’s repurchase activity, including activity under the share repurchase programs, for the three months ended December 31, 2025:

Total number of shares Maximum dollar value

Total number of purchased as part of of shares that may yet

shares Average price paid publicly announced be purchased under the

Period purchased per share plans or programs plans or programs

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Item 6. Reserved

The following discussion should be read in conjunction with the consolidated financial statements and the notes thereto included elsewhere in this Annual Report on Form 10-K.

The statements in this discussion regarding business outlook, our expectations regarding our future performance, liquidity and capital resources and other non-historical statements in this discussion are forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to the risks and uncertainties described in Part I, Item 1A “Risk Factors.” Our actual results may differ materially from those contained in or implied by any forward-looking statements.

Overview

For a description of our business, including descriptions of segments, see the discussion under Business in Item 1 of Part I of this Annual Report on Form 10-K, which is incorporated by reference into this Item 7 of Part II of this Annual Report on Form 10-K.

Title Insurance Segment Trends and Conditions

Our title insurance segment issues title insurance policies and provides title agency services on residential and commercial real estate transactions. This segment also provides closing and/or escrow services to facilitate real estate transactions.

Our title insurance segment revenue is closely related to the level of real estate activity, such as sales, mortgage financing and mortgage refinancing. Declines in the level of real estate activity or the average price of real estate sales will adversely affect our title insurance revenues. A shortage in the supply of homes for sale, elevated home prices, high mortgage interest rates and inflation have created volatility in the residential real estate market since 2021. In addition, geopolitical uncertainties and other macroeconomic factors may continue to contribute to volatility in domestic and global arenas.

The industry as a whole has experienced lower real estate transaction volume in recent years, largely due to higher mortgage interest rates as compared to pre-2022 levels. In the latter part of 2025, the Federal Reserve lowered the federal funds rate several times to a range of 3.50% to 3.75% as of December 31, 2025; however, mortgage rates have remained elevated relative to pre-2022 levels and continue to affect affordability and transaction volumes. Despite continued elevated mortgage rates, the Mortgage Bankers Association (the “MBA”) projects a gradual recovery in the housing market. Per the MBA’s 2026 Mortgage Finance Forecast, total U.S. single-family mortgage origination volume is expected to increase to approximately $2.2 trillion in 2026, compared with estimated volumes in 2025 of approximately $2.0 trillion, as both purchase and refinance activity are forecast to grow.

Because commercial real estate transactions tend to be generally driven by supply and demand for commercial space and occupancy rates in a particular area rather than by interest rate fluctuations, we believe that our commercial real estate title insurance business is less dependent on the industry cycles discussed above than our residential real estate title business. Commercial real estate transaction volume is also often linked to the availability of financing. Factors including U.S. tax reform and a shift in U.S. monetary policy have had, or are expected to have, varying effects on availability of financing in the U.S. Lower corporate and individual tax rates, and corporate tax-deductibility of capital expenditures have provided increased capacity and incentive for investments in commercial real estate.

Historically, real estate transactions have produced seasonal revenue fluctuations in the real estate industry. The first calendar quarter is typically the weakest quarter in terms of revenue due to the generally low volume of home sales during January and February. The second and third calendar quarters are typically the strongest quarters in terms of revenue, primarily due to a higher volume of residential transactions in the spring and summer months. The fourth quarter is typically strong due to the desire of commercial entities to complete transactions by year-end. Seasonality in recent years deviated from historical patterns due to changes in interest rates and other market conditions.

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Corporate and Other Segment

Effective January 1, 2025, the Company changed its reportable segments to: (i) Title Insurance and (ii) Corporate and Other. The Corporate and Other segment is comprised of activity previously presented in the Real Estate, Reinsurance and Management Advisory Services segments. This change reflects changes in the business mix and the manner in which management monitors performance, and had no impact on the Company’s historical consolidated financial position, results of operations or cash flows. Where applicable, prior periods have been revised to conform to this presentation. The Corporate and Other segment includes results of management advisory services and other investment activity not related to title insurance. The Company, through its wholly-owned subsidiary, HGMA, engages in providing various management advisory services such as legal entity formation, licensure, regulatory approval, assumption of policies and other general operational services. In addition, the Corporate and Other segment includes the results of the Company’s investment in a related party, HC Realty. The Company currently owns approximately 28.0% of the voting interest in HC Realty through its ownership of 250 shares of HC Common Stock and 1,025,000 shares of HC Series B Stock. HC Realty owns and operates a portfolio of Government Properties leased to and occupied by U.S. government tenant agencies and sub-agencies administered by the GSA or directly by federal agencies. As part of ongoing efforts to reduce space usage, the U.S. government and the GSA may seek opportunities to reduce leased space across tenant agencies. As of December 31, 2025, leases by the U.S. government and its agencies accounted for substantially all of HC Realty’s revenues. In the event the U.S. government reduces spending on real estate, changes its preferences away from leased properties, or exercises early termination rights with respect to any lease, HC Realty’s revenues, and the value of our investment in HC Realty, could be adversely affected.

Results of Operations

The following table sets forth the key items discussed in the results of operations section below for the years ended December 31, 2025 and 2024 (dollar amounts in thousands):

Loss before income taxes $ (1,071 ) $ (267 ) $ (804 )

Effective tax rate 255.6 % 6.7 %

2025 Compared to 2024

As of December 31, 2025, our sources of income include earnings on our title insurance and title agency subsidiaries, revenue earned from management services, and interest earned on our cash deposits and investment portfolio. The Company believes that the revenue generating from these sources and cash on hand are sufficient to fund operating expenses for at least 12 months from the date of the accompanying consolidated financial statements.

The Company’s underwriting results were primarily influenced by a growth of the net title premium to $6.9 million for the year ended December 31, 2025 from $6.0 million for the year ended December 31, 2024 driven by the higher volume in affiliated title business written in 2025.

The Company’s escrow and other title fees increased to $2.8 million for the year ended December 31, 2025, compared to $2.5 million for the year ended December 31, 2024 due to the increase in volumes of title business generated in 2025.

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Management fees generated by the Company were $5.0 million for the year ended December 31, 2025, as compared to $3.0 million for the year ended December 31, 2024. The increase was due to the new Services Agreement with HP Risk becoming effective June 1, 2025. HP Risk is a wholly-owned subsidiary of HP Holding Company, LLC, which, in turn, is wholly owned by certain affiliates of Steven A. Hale II, our Chairman and Chief Executive Officer, pursuant to which the Company is providing certain managerial and operational services to HP Risk for consideration from HP Risk of $6.0 million per year over the course of three years. Such services include, but are not limited to: reinsurance brokerage services; the review and improvement of financial goals; compliance with legal and regulatory mandates; maintenance of an ethical business environment; investment and asset manager compliance; cash and equity management; corporate tax management; personnel management; related party transaction oversight; tax preparation administration; strategic capital modeling; the review of potential acquisitions and transactions involving affiliates and third parties, including but not limited to, renewal rights deals, loss portfolio transfers or entity acquisitions; execution of (or provision for the execution of) all general corporate legal matters; and provision of internal control management services.

The Company’s cost of revenue consists primarily of a provision for title claim losses and underwriting expenses, which are largely comprised of commissions to unaffiliated title agencies. Cost of revenue for the year ended December 31, 2025 was $0.5 million compared to $0.6 million for the year ended December 31, 2024. The decrease in cost of revenue was attributable to favorable reserve development in the provision for title claims loss and loss adjustment expense attributable to one claim related to the prior insured year, as a result of estimation of the reserve for claims loss and loss adjustment expenses and the collection of subrogation on a prior year claim. Original estimates of ultimate loss exposures are decreased or increased as additional information becomes known during the adjustment process regarding individual claims.

The Company’s operating expenses primarily consist of general and administrative expenses, such as personnel expenses, office and technology expenses, and professional fees. General and administrative expenses for the year ended December 31, 2025 were $13.0 million, as compared to $12.6 million for the year ended December 31, 2024. The increase is primarily due to higher legal and professional fees related to transactions described in Note 3, Significant Transactions, in the accompanying Consolidated Financial Statements, as well as an increase in employee health and benefit costs in 2025 as compared to 2024.

Other (expense) income, net primarily consist of interest and dividend income, changes in the net asset value of investment in limited partnership, as well as changes in value and distributions of our related party investments. During the year ended December 31, 2025, other (expense) income, net of ($2.3) million was primarily driven by a $4.1 million impairment of HC Series B Stock, offset by distributions from related parties of $0.9 million. Additionally, other (expense) income included interest income of $0.4 million and an increase in the net asset value of investment in limited partnership of $0.4 million. During the year ended December 31, 2024, the Company generated $1.4 million in other (expense) income, net primarily as a result of a recovery of $1.1 million from FedNat Holding Company (“FedNat”) litigation. Additionally, the Company generated dividend and interest income of $0.7 million, increase in the net asset value of investment in limited partnership of $0.4 million and net gain from investments in related parties of $0.2 million during the year ended December 31, 2024, which were largely offset by an impairment of the investment in HC Common Stock and HC Series B Stock of $1.2 million.

Our effective tax rate for the years ended December 31, 2025 and 2024 was 255.6% and 6.7%, respectively, primarily as a result of net operating loss carryforward, valuation allowances on deferred tax assets, and state income tax differences in the jurisdictions in which the Company currently operates. The increase in effective tax rate in 2025 as compared to 2024 was driven primarily by a valuation allowance release on federal and Florida net operating losses. Historically, the effective tax rate had been driven almost exclusively by state income taxes.

Financial Condition, Liquidity and Capital Resources

Sources of liquidity include cash on hand, earnings from our title insurance and title agency subsidiaries, management service fees earned, and interest and dividends from deposits and invested assets. We expect cash on hand to be adequate for ongoing operational expenditures for at least 12 months from the date of the issuance of the accompanying consolidated financial statements. At December 31, 2025, we had $10.3 million in cash and cash equivalents and an additional $6.7 million in restricted cash, all of which is cash held in escrow for title insurance transactions. The Company records an offsetting escrow liability given that we are liable for the disposition of these escrowed funds. A portion of our unrestricted and restricted cash and cash equivalents is currently held in savings accounts earning interest at approximately 3.6% annually.

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Cash Flows

(in thousands)

Net cash provided by operating activities $ 878 $ 1,961

Net cash provided by investing activities 183 1,060

Net cash used in financing activities (4,391 ) (364 )

Cash and cash equivalents and restricted cash at end of period $ 17,079 $ 20,409

Cash flows from operating activities differ from net income (loss) due to adjustments for non-cash items, such as gains and losses on investments, amortization, depreciation, claims and other accrued liabilities, and collections or changes in receivables and other assets. Net cash provided by operations of $0.9 million for the year ended December 31, 2025 differs from operating results for the year ended December 31, 2025 primarily due to an impairment of the investment in HC Series B Stock of $4.1 million and an increase of $1.5 million in escrow liabilities on the title insurance subsidiaries. Net cash provided by operations of $2.0 million for the year ended December 31, 2024 differs from operating results for the year ended December 31, 2024 primarily due to an impairment of the investment in HC Common Stock and HC Series B Stock of $1.2 million and an increase of $0.7 million in escrow liabilities on the title insurance subsidiaries.

Cash flows from investing activities include effects of purchases of investments and proceeds from sales or maturities of investments. During the year ended December 31, 2025, the Company had $0.2 million of net cash provided by investing activities, which was a result of $1.5 million of proceeds from redemptions of securities and sales of investments, partially offset by $1.3 million of purchases of investments, including investments in related parties of $0.3 million. During the year ended December 31, 2024, the Company had $1.1 million of net cash provided by investing activities, which consisted of $2.4 million of proceeds from redemptions of securities and sales of investments, partially offset by $1.3 million of purchases of investments, including investments in related parties of $0.5 million.

Cash flows from financing activities include effects of capital contributions, repurchase of outstanding shares of common stock and changes in noncontrolling interest. Cash flows used in financing activities for the year ended December 31, 2025 were $4.4 million and consisted of $4.4 million in repurchases of shares of common stock and $11,000 of net distributions to minority stockholders. Cash flows used in financing activities for the year ended December 31, 2024 were $0.4 million and consisted of $243,000 in repurchases of shares of common stock, partially offset by $121,000 of net distributions to minority stockholders.

Non-cash Transactions

Additionally, during the second quarter of 2025, the Company entered into an Assignment and Contribution Agreement (the “Contribution Agreement”) with the certain assignors listed therein (the “Assignors”), pursuant to which the Assignors agreed to assign and contribute to the Company an aggregate of 10,203 shares of common stock, no par value ("ACMAT Common Stock"), and 291,656 shares of Class A stock, no par value ("ACMAT Class A Stock"), of ACMAT Corporation (“ACMAT”), a Connecticut corporation, and, in consideration of and exchange therefor, the Company agreed to issue to the Assignors an aggregate of 2,899,876 shares of Company common stock, contingent upon the closing of the transactions contemplated by the Services Agreement. After giving effect to the transactions pursuant to the Contribution Agreement, the Company owns approximately 39.1% of the outstanding equity of ACMAT and approximately 10.4% of the voting power of ACMAT, based on ACMAT's outstanding equity as of November 6, 2025. Holders of ACMAT Class A Stock are entitled to one-tenth vote per share in relation to ACMAT Common Stock, holders of which are entitled to one vote per share, with respect to matters subject to approval by ACMAT stockholders. ACMAT, through its subsidiaries, offers surety bonds for prime, sub-prime, specialty trade, environmental, asbestos and lead abatement contractors and miscellaneous obligations nationwide. ACMAT also provides other miscellaneous surety such as workers’ compensation bonds, supply bonds, subdivision bonds, and license and permit bonds. HPCM, an entity wholly owned by Mr. Hale, is the registered investment advisor or investment manager for each of the Assignors, and Mr. Hale is the sole principal owner of Hale Partnership Capital Advisors, LLC, the general partner of all but one of the Assignors. The transaction closed on June 30, 2025.

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As a result of the transaction, the Company recorded a $12.5 million investment in ACMAT Corporation at the time of close, based on the value of the Company's 2,899,876 shares of common stock issued as a consideration given. The transaction is classified as a nonmonetary, non-reciprocal transfer between related parties and did not constitute a business combination under Financial Accounting Standards Board Accounting Standards Codification Topic 805, Business Combinations. No cash consideration was exchanged. Refer to Note 5, Investments in the accompanying notes to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for initial and subsequent measurements of the Company's investments in ACMAT Common Stock and ACMAT Class A Stock.

Critical Accounting Estimates

See Note 2, Significant Accounting Policies in the accompanying notes to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for a summary of our significant accounting and reporting policies.

Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States (“GAAP”), which requires management to make estimates and assumptions. We believe that the accounting policies that require the most significant judgments and estimations by management are: (1) valuation of goodwill, (2) valuation of investments in related parties, and (3) reserve for title claims. If actual events differ significantly from the underlying judgments or estimates used by management in the application of these accounting policies, there could be a material adverse effect on our results of operations and financial condition.

Valuation of Goodwill Impairment

Goodwill represents the excess of purchase price over fair value of identifiable net assets acquired and assumed in a business combination. Goodwill is reviewed for impairment at the reporting unit level on an annual basis or more frequently if circumstances indicate potential impairment, through a comparison of fair value to the carrying amount. In evaluating the recoverability of goodwill, we perform a quarterly goodwill impairment analysis based on a review of qualitative factors to determine if events and circumstances exist, which will lead to a determination that the fair value of a reporting unit is greater than its carrying amount, prior to performing a full fair-value assessment. In the absence of any indicators of potential impairment, the evaluation of goodwill is performed annually during the fourth quarter of each year.

For our annual goodwill impairment test, we utilize two approaches to value goodwill: the income approach, which converts future estimates of cash flows by reporting unit to a single (discounted) current value, and the market approach, which uses publicly available peer data to estimate value of the reporting unit. The valuation techniques performed in our quantitative analysis make use of our estimates and assumptions related to revenue and operating margin growth rates, future market conditions, determination of market multiples and comparative companies, and determination of risk-adjusted discount rates. Forecasts of future operations are based, in part, on actual operating results and our expectations as to future growth and market conditions, which are inherently uncertain and difficult to project. In performing our analysis, we make assumptions and apply judgments to estimate industry economic factors and the future profitability of our businesses. Due to the uncertainty and complexity of performing the goodwill impairment analysis, future results related to market conditions and our business operations and other inputs to the analysis may be worse than estimated or assumed. In such cases, we may be exposed to future material impairments of goodwill.

Valuation of Investments in Related Parties

The Company’s investments in related parties are accounted for either under the equity method of accounting or, where they do not meet the criteria of accounting under the equity method, under the cost adjusted for market observable events less impairment method. For information about the Company’s investments in related parties and its accounting policy, refer to Note 5, Investments and Note 2, Significant Accounting Policies in the accompanying notes to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K.

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The Company's review of its investments in related parties is performed on a regular basis to determine if the investments are impaired. For purposes of this assessment, the Company performs a qualitative review where it considers the investee’s cash position, liquidity, earnings and revenue outlook, equity position, and ownership, among other factors. If the qualitative impairment assessment leads to a conclusion that a potential impairment exists, a quantitative assessment is performed. In performing the quantitative assessment for impairment, the Company estimates a fair value of the investment utilizing a combination of the income, market and cost approach, where applicable. If indicated fair value is lower than the carrying amount of the investment, the Company recognizes in current earnings an impairment loss that is equal to the difference between the fair value of the investment and its carrying amount. The valuation techniques performed in our quantitative analysis make use of the investee's growth projections and free cash flows, assumptions related to risk-adjusted discount rate, timing of liquidity events, determination of market multiples and comparative companies, and assumptions related to reproduction or replacement value. Forecasts of future operations are based, in part, on assumptions and data provided by management of the investee and our expectations as to market, peer data and research, which are inherently uncertain and difficult to project. Due to the uncertainty and complexity of performing the valuation analysis, future results related to market conditions and the investee's business operations and other inputs to the analysis may be worse than estimated or assumed. In such cases, we may be exposed to future material impairments of our investments in related parties.

For the year ended December 31, 2025, the Company recognized $4.1 million in impairments to investments in related parties and $1.2 million in impairments were recognized for the year ended December 31, 2024.

Reserve for Title Claims

The total reserve for all reported and unreported losses the Company incurred is represented by the reserve for title claims. The Company's reserves for unpaid losses and loss adjustment expenses (“LAE”) are established using estimated amounts required to settle claims for which notice has been received (reported) and the amount estimated to be required to satisfy claims that have been incurred but not reported (“IBNR”). We reserve for each known claim based on our review of the estimated amount of the claim and the costs required to settle the claim. The reserves for IBNR claims are estimates that are established at the time the premium revenue is recognized and are based upon historical policy loss emergence and development patterns, adjusted for other factors, including industry trends, legal environment, policy year and policy type differences.

The table below summarizes our reserves for known claims and IBNR claims related to title insurance (in thousands):

As of As of

Known title claims $ 66 $ 114

Non-title claims - -

Total reserve for title claims $ 705 $ 637

Although claims against title insurance policies can be reported relatively soon after the policy has been issued, claims may be reported many years later. Generally, 70% to 80% of claim amounts become known in the first six years of the policy life, and the majority of IBNR reserves relate to the six most recent policy years. Estimating future title loss payments is difficult because of the complex nature of title claims, the long periods of time over which claims are paid, significantly varying dollar amounts of individual claims and other factors. The Company continually reviews and adjusts its reserve estimates as necessary to reflect its loss experience and any new information that becomes available. Due to the uncertainty inherent in the process and to the judgment used by management, the ultimate liability may be greater or less than our current reserves. If actual claims loss development varies from what is currently expected and is not offset by other factors, it is possible that additional reserve adjustments may be required in future periods in order to maintain our recorded reserve within a reasonable range of our actuary's central estimate.

Despite the variability of such estimates, management believes that the total reserve for claims is adequate to cover claim losses which might result from pending and future claims under title insurance policies issued through December 31, 2025.

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The table below presents our title insurance loss development experience for the past two years (in thousands):

For the Year For the Year

Ended Ended

Provision for claims related to:

Total provision for claim losses (1) 156 328

Claims paid related to:

Current year - -

Prior years (88 ) (4 )

Total title claims paid (88 ) (4 )

Ending reserve for title claims $ 705 $ 637

As of December 31, 2025 and 2024, our title claim reserves were $705,000 and $637,000, respectively, which we determined were reasonable and represented our best estimate. These recorded amounts were within a reasonable range of the central estimates provided by our actuaries. During the years ended December 31, 2025 and 2024, the Company recognized ($85,000) and $109,000, respectively, in net provision for claims development attributable to insured events of the prior years. Original estimates are decreased or increased as additional information becomes known regarding individual claims.

At December 31, 2025 and 2024, there were no reinsurance recoverables on paid claims or unpaid reserves.

Item 7A.Quantitative and Qualitative Disclosures about Market Risk

Not applicable as the Company is a smaller reporting company.

Item 8.Financial Statements and Supplementary Data

See the “Index to Consolidated Financial Statements” at page F-1 of this Annual Report on Form 10-K.

Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

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Item 9A.Controls and Procedures

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms, and that such information is accumulated and communicated to us, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, we recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, as ours are designed to do, and we necessarily were required to apply our judgment in evaluating whether the benefits of the controls and procedures that we adopt outweigh their costs.

As required by Rules 13a-15(b) and 15d-15(b) of the Exchange Act, an evaluation as of December 31, 2025 was conducted under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures, as of December 31, 2025, were effective at the reasonable assurance level.

Management’s Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) promulgated under the Exchange Act. Under Rule 13a-15(c), management must evaluate, with the participation of the principal executive officer and principal financial officer, the effectiveness, as of the end of each fiscal year, of our internal control over financial reporting. The term internal control over financial reporting is defined as a process designed by, or under the supervision of, the issuer’s principal executive and principal financial officers, or persons performing similar functions, and effected by the issuer’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP and includes those policies and procedure that:

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

In the course of preparing this Annual Report on Form 10-K and the consolidated financial statements included herein, our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2025 using the criteria issued by the Committee of Sponsoring Organizations of the Treadway Commissions (COSO) in the Internal Control-Integrated Framework (2013). Based on that evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2025.

This Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm as we are a smaller reporting company as of December 31, 2025.

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Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) that occurred during the quarter ended December 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information

During the three months ended December 31, 2025, none of our directors or officers, as defined in Section 16 of the Exchange Act, adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K of the Exchange Act.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance.

Directors

Our Board has set the number of our directors at three, one of whom is our Chairman and Chief Executive Officer, Steven A. Hale II, and two of whom are independent. Our directors are divided into three classes with staggered terms. One director, Mr. Hale, whose term was set to expire in 2025, was nominated for re-election by our Board and re-elected by our stockholders to serve another three-year term expiring in 2028.

Director Whose Term Expires this Year

Jeffrey S. Gilliam, 68, has been a director since February 2015. Since April 2022, Mr. Gilliam has served as the CFO/Treasurer of Hickory Springs Manufacturing Company. Mr. Gilliam also has served as the managing member of Willow Oak Advisory Group, LLC (“Willow Oak Advisory Group”), a provider of business advisory services, since January 2016. Related to his duties with Willow Oak Advisory Group, Mr. Gilliam served as President of Columbus Industries, Inc. (a division of Filtration Group) from August 2019 until February 2022. Mr. Gilliam was a director of the Finley Group, a corporate advisory firm, from August 2012 until January 2016. Mr. Gilliam served as President of Toter, Incorporated (a division of Wastequip, LLC), a manufacturer of automated cart systems, from October 2008 until August 2012, and as Vice President Finance (Chief Financial Officer) from June 2002 until October 2008. Our corporate governance and nominating committee and our Board concluded that Mr. Gilliam is qualified to serve as a director by reason of his strong financial experience as a chief financial officer. Mr. Gilliam was appointed to our Board in February 2015 pursuant to an agreement dated February 12, 2015 with Hale Partnership Fund, LP and Talanta Fund, L.P. (collectively with their affiliates, the “Hale-Talanta Group”), which had nominated two candidates for election to our Board at the 2015 annual meeting of stockholders. Under this agreement, we appointed Mr. Gilliam to our Board for a term expiring at the 2017 annual meeting of stockholders and the Hale-Talanta Group withdrew its nominations. Mr. Gilliam was re-elected by our stockholders in 2020 and 2023.Mr. Gilliam's term as director is set to expire in 2026.

Directors Whose Terms Do Not Expire this Year

Peter M. Sherman, 64, has been a director since December 2020. Mr. Sherman has served as founder of Sherman Capital Management, a special situation investing and restructuring consulting firm for institutional investors, since July 2016. Mr. Sherman also served as Chief Risk Officer of Capitala Group, a lower middle market lender and equity investor, from February 2018 to March 2024. Mr. Sherman was a partner in Brevet Capital Management, a middle market direct lending hedge fund, from June 2014 to June 2016. Mr. Sherman was elected to our Board in December 2020 upon the recommendation of our Chairman and Chief Executive Officer and was re-elected by the Company’s stockholders in 2021 and 2024. Our corporate governance and nominating committee and our Board concluded that Mr. Sherman is qualified to serve as a director by reason of his experience in principal finance and debt capital markets, special situation restructuring, and as a capital provider to lower to middle market companies through his role as a chief risk officer. Mr. Sherman’s term as director expires in 2027.

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Steven A. Hale II,42,has been a director since February 2017 and has served as Chairman of our Board since November 2017. He has also served as our Chief Executive Officer since March 2018. Since March 2019, Mr. Hale has served as Chairman and Chief Executive Officer of HC Realty, an internally-managed real estate investment trust focused on acquiring, financing, owning and managing build-to-suit or renovate-to-suit, single-tenant properties leased primarily to the U.S. government and administered by the GSA or directly by the federal government agencies or sub-agencies occupying such properties. He has also served as President of HC Realty from August 2020 until January 2022 and again beginning in August 2024. We currently own approximately 28.0% of the voting interest of HC Realty and HC Realty is considered to be a related party of the Company. Mr. Hale is also the founder and sole manager of HPCM, an asset management firm that serves as the investment manager to certain privately held investment partnerships. Mr. Hale has held his position with HPCM since 2010. From 2007 to 2010, prior to founding HPCM, Mr. Hale was an associate director with Babson Capital Management, LLC, an asset management firm, where he had responsibility for coverage of distressed debt investments across a variety of industries. From 2005 to 2007, Mr. Hale was a leveraged finance analyst with Banc of America Securities. Our corporate governance and nominating committee and our Board concluded that Mr. Hale is qualified to serve as a director by reason of his experience as our Chief Executive Officer, his experience with asset management and his indirect ownership of approximately 74% of our outstanding shares of common stock.

Mr. Hale was initially elected to our Board pursuant to the terms of an agreement dated January 30, 2017 with Hale Partnership Fund, LP, and related parties (collectively, the “Hale Group”), a stockholder group that, as of the date of the agreement, owned approximately 10% of our outstanding shares of common stock and which had nominated two candidates for election to our Board at the 2017 annual meeting of stockholders. Under this agreement, we appointed Mr. Hale to our Board and the Hale Group withdrew its nominations and agreed, among other things, to vote in favor of the election of Messrs. Hale and Gilliam as directors at the 2017 annual meeting of stockholders for a term that expired at the 2020 annual meeting of stockholders. Mr. Hale was re-elected by our stockholders in 2020,2022 and 2025. Mr. Hale’s term as a director expires in 2028.

Delinquent Section 16(a) Reports

The Exchange Act requires our executive officers and directors, and any persons owning more than 10% of our common stock, to file certain reports of ownership and changes in ownership with the SEC. Based solely on our review of the copies of the Forms 3,4 and 5 we have received, and written representations from certain reporting persons that no Forms 5 were required to be filed by those persons, we believe that all executive officers, directors and 10% stockholders complied with these filing requirements, except as follows:

One Form 4 required to be filed by HPCM on April 23,2025 was filed late on May 12,2025 due to delays in obtaining EDGAR filing codes for HPCM and its joint filers, Mr. Hale and Hale Partnership Fund, L.P. The Form 4 was filed promptly upon obtaining such EDGAR filing codes and reports the acquisition of shares of Company common stock by entities for which HPCM serves as investment manager in exchange for shares of ACMAT Common Stock and ACMAT Class A Stock and other assets pursuant to the Contribution Agreement.

Code of Ethics

We have adopted a code of ethics that applies to our associates, including the principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. Our code of ethics is posted on our website at www.hgholdingsinc.net. Amendments to and waivers from our code of ethics will be posted to our website when permitted by applicable SEC rules and regulations.

Audit Committee

The audit committee of our Board presently consists of Messrs. Gilliam (Chair) and Sherman. Our Board has determined that Messrs. Gilliam and Sherman each meet the current independence requirements contained in the rules of the NASDAQ Stock Market (which we have adopted for purposes of determining such independence even though our common stock is not listed on a national securities exchange), including the additional independence requirements applicable to audit committee members. Our Board has also determined that Mr. Gilliam qualifies as an “audit committee financial expert” as that term is defined in regulations promulgated by the SEC.

Insider Trading Policy

We have adopted insider trading policies and procedures governing the purchase, sale, and/or other dispositions of our securities by directors, officers, and employees that are reasonably designed to promote compliance with insider trading laws, rules and regulations (the “Insider Trading Policy”). The Insider Trading Policy is filed as Exhibit 19.1 to this Annual Report on Form 10-K.

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Item 11. Executive Compensation.

Our named executive officers for 2025 were Steven A. Hale II, our Chairman and Chief Executive Officer, and Anna A. Lieb, our Principal Financial and Accounting Officer; Secretary (collectively the “Named Executive Officers”).

During 2025, our executive compensation program had two major components: salary and a cash bonus. The program was designed to promote our strategy of profitably growing our core title insurance and management services business.

Our executive compensation program is administered by the compensation and benefits committee of our Board.

Salary and Bonus. Our Named Executive Officers received the following cash compensation in 2025:

● Steven A. Hale II received an annual salary of $125,000, and

Long-Term Incentives. Our Named Executive Officers did not receive any restricted stock awards in 2025.

Summary Compensation Table

The following table sets forth compensation received by the Named Executive Officers for the years ended December 31, 2025 and 2024.

SUMMARY COMPENSATION TABLE

Stock Option Non-Equity All Other

Salary Awards Awards Incentive Plan Compensation Total

Name and Principal Position Year ($) Bonus ($) ($) ($) Compensation ($) ($)

Outstanding Equity Awards at Fiscal Year-End Table

As of December 31, 2025, there were no outstanding equity awards.

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Director Compensation

Our Board has approved a policy for compensation of non-employee directors providing that each non-employee director receives annual cash compensation in the amount of $35,000. The corporate governance and nominating committee reviews director compensation annually and, as part of that process, typically has for review publicly available director compensation information for other comparable companies. Our Board approves director compensation. Pursuant to the agreement under which he was elected to our Board, Mr. Hale has agreed to serve as a director without compensation.

The following table sets forth information concerning the compensation of directors for the year ended December 31, 2025.

DIRECTOR COMPENSATION

FOR THE FISCAL YEAR ENDED December 31, 2025

Fees

Earned Stock

Name in Cash ($) Awards ($) (1) Total ($)

STEVEN A. HALE II — — —

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information with respect to the beneficial ownership of our common stock as of March 24, 2026 by each stockholder we know to be the beneficial owner of more than 5% of our outstanding common stock, by each director, by each of our Named Executive Officers and by all directors and executive officers as a group. Unless otherwise set forth below, the address of each stockholder listed in the following table is 6265 Old Water Oak Road, Suite 204, Tallahassee, Florida 32312. Percentages are based on 5,107,035 shares of common stock outstanding as of March 24, 2026.

Amount and

Nature

of Beneficial Percent

Name Ownership of Class

Hale Partnership Fund, L.P. and related parties 3,777,158 (b) 73.96 %

Anna A. Lieb — —

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Equity Compensation Plan Information

The Company’s 2012 Incentive Compensation Plan, as amended, expired during 2022. Therefore, the Company does not have any outstanding options, warrants or rights subject to equity compensation plans, and there are no shares remaining available for future issuance under equity compensation plans.

Review of Transactions with Related Persons

Under the audit committee charter, the audit committee is responsible for reviewing any transaction involving related persons which requires disclosure pursuant to SEC Regulation S-K, Item 404 and has the power to approve or disapprove these transactions.

Since January 1, 2025, the Company has entered into the following transactions involving amounts in excess of $120,000 with related persons or affiliated entities.

During 2025, the Company invested an additional $272,000 into HP LPT Holding Company LLC ("HP LPT"), a limited liability company domiciled in the state of Florida. HP LTP is a related party of the Company as it is controlled by Mr. Hale through his ownership of the Hale Funds. HP LPT is a holding company for the segregated portfolio cell writing reinsurance business in Cayman Islands.

Beginning in 2024, the Company, through HGMA, was engaged to provide management advisory services to a related captive managing general agency, HPMA, and its affiliates, including a related reinsurance intermediary. Such services included, but were not limited to general management, legal entity formation, legal compliance, strategy services, review of potential acquisitions and transactions, licensure, regulatory approval, and other general operational services. The engagement was renewed for six months from January 1, 2025 through June 30, 2025, for a monthly fee of $250,000. HPMA is a related party of the Company as it is controlled by Mr. Hale. The engagement expired in accordance with its terms on June 30, 2025.

On April 21, 2025, the Company entered into the Services Agreement, effective June 1, 2025, with HP Risk, a wholly-owned subsidiary of HP Holding Company, LLC, which is wholly owned by certain affiliates of Mr. Hale, pursuant to which the Company provides certain managerial and operational services to HP Risk for consideration from HP Risk of $6 million per year over the course of three years. For additional information regarding the Services Agreement, refer to Note 3, Significant Transactions in the accompanying notes to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.

During 2025, the Company received $891,000 of distributions as a result of the Company's equity investment in HP Holding Company, LLC. HP Holding Company, LLC is a related party of the Company as it is controlled by Mr. Hale through his ownership of the Hale Funds.

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Director Independence

Our Board has determined that all current directors, with the exception of Mr. Hale, who serves as our Chief Executive Officer, are “independent directors” as that term is defined in the rules of the NASDAQ Stock Market (which we have adopted for purposes of determining such independence even though we do not have any securities listed on a national securities exchange).

Item 14. Principal Accountant Fees and Services.

Fees and Services

As previously disclosed in our Current Report on Form 8-K filed with the SEC on November 3, 2025, effective as of November 1, 2025, the partners and professional staff of Horne LLP (“Horne”), an independent registered public accounting firm, joined BDO USA, P.C. (“BDO”). As a result of this transaction, effective as of November 1, 2025, Horne resigned as the Company’s independent registered public accounting firm, and the Company, through and with the approval of the audit committee, appointed BDO as its independent registered public accounting firm. The following table sets forth the fees, including reimbursement of expenses, billed by, or expected to be billed by, BDO and Horne for each of the periods set forth below, all of which were pre-approved by the audit committee.

Audit-Related Fees — —

Tax Fees — —

All Other Fees — —

Audit Fees. These fees relate to professional services rendered for the audit of our annual financial statements and reviews of our Quarterly Reports on Form 10-Q.

Pre-Approval Policies and Procedures

The audit committee has established a policy to pre-approve all audit, audit-related, tax and other services proposed to be provided by our independent accountants before engaging the accountants for that purpose. Consideration and approval of these services generally occur at the audit committee’s regularly scheduled meetings. In order to address situations where it is impractical to wait until the next scheduled meeting, the audit committee has delegated the authority to approve non-audit services not in excess of $25,000 individually or in the aggregate to the chairman of the audit committee. Any services approved pursuant to this delegation of authority are required to be reported to the full audit committee at the next regularly scheduled meeting.

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PART IV

(1) Item 15. Exhibit and Financial Statement Schedules

(a)(1) Financial Statements:

(b) Exhibits:

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21.1 List of Subsidiaries. (2)

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101.INS Inline XBRL INSTANCE DOCUMENT (2)

101.SCH Inline XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT (2)

101.CAL Inline XBRL TAXONOMY EXTENSION CALCULATION LINKBASE (2)

101.DEF Inline XBRL TAXONOMY EXTENSION DEFINITION LINKBASE (2)

101.LAB Inline XBRL TAXONOMY EXTENSION LABELS LINKBASE (2)

101.PRE Inline XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE (2)

(1) Management contract or compensatory plan

(2) Filed Herewith

(3) Furnished Herewith

Item 16.Form 10-K Summary

None.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

HG HOLDINGS, INC.

By: /s/Steven A. Hale II

Steven A. Hale II

Chairman, Chief Executive Officer and Director

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signature Title Date

/s/Peter M. Sherman (Peter M. Sherman) Director March 27, 2026

/s/Jeffrey S. Gilliam (Jeffrey S. Gilliam) Director March 27, 2026

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HG HOLDINGS, INC.

ANNUAL REPORT ON FORM 10-K

FOR THE YEAR ENDED December 31, 2025

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Page

Report of Independent Registered Public Accounting Firm (PCAOB ID 243) F-2

Consolidated Financial Statements F-4

Consolidated Balance Sheets as of December 31, 2025 and 2024 F-4

Notes to Consolidated Financial Statements F-8

F-1

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Report of Independent Registered Public Accounting Firm

Shareholders and Board of Directors of HG Holdings, Inc.

HG Holdings, Inc.

Tallahassee, Florida

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of HG Holdings, Inc. (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of operations, changes in stockholders’ equity, and cash flows for the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Valuation of Investment in HC Government Realty Trust, Inc. Series B Stock for Impairment

As described in Note 5 to the consolidated financial statements, the carrying value of the Company’s investment in the Series B Stock (the "HC Series B Stock") of HC Government Realty Trust, Inc. ("HC Realty"), a related party entity, totaled $5.2 million as of December 31, 2025 and the Company recognized an impairment loss in the HC Series B Stock in the amount of $4.1 million during the year ended December 31, 2025. The Company accounts for its investment in the HC Series B Stock under the cost adjusted for market observable events less impairment method as it is not deemed to be in-substance common stock. The Company reviews its investment in HC Series B Stock on a regular basis to determine if the investment is impaired. If management’s assessment indicates that an impairment exists, the Company recognizes an impairment loss in current earnings that is equal to the difference between the fair value of the investment and its carrying value.

F-2

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We identified the valuation of the investment in HC Series B Stock for impairment as a critical audit matter. The principal consideration for our determination was the subjective judgement required by management in developing certain elements used to estimate the fair value of the investment in HC Series B Stock, specifically the relevant market multiples and the discount for lack of marketability. Auditing these elements involved especially subjective and complex auditor judgment due to the nature and extent of audit effort required to address these matters, including the extent of specialized skills and knowledge needed.

The primary procedures we performed to address this critical audit matter included:

/s/ BDO USA, P.C.

(formerly HORNE LLP)

We have served as the Company's auditor since 2023.

Ridgeland, Mississippi

March 27, 2026

F-3

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HG HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share and share amounts)

As of December 31, As of December 31,

ASSETS

Investments

Fixed income securities, held-to-maturity - 1,000

Investments in limited partnerships 3,088 2,183

Due from related parties 526 3

Interest and dividend receivables - 19

Property, plant and equipment, net 38 62

Deferred tax asset, net 2,712 -

LIABILITIES

Accrued salaries, wages and benefits 612 496

Other accrued expenses 39 224

Reserve for title claims 705 637

Other liabilities 17 35

Commitments and contingencies (refer to Note 12)

STOCKHOLDERS’ EQUITY

Noncontrolling interests (132 ) (148 )

Total liabilities and stockholders’ equity $ 50,686 $ 42,168

The accompanying notes are an integral part of the consolidated financial statements.

F-4

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HG HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share and share amounts)

For the Year For the Year

Ended Ended

Revenues:

Cost of revenues:

Provision for title claim losses 119 328

Search and other fees 103 62

Operating expenses:

Other general and administrative expenses (4,640 ) (4,719 )

STLY US Equity

STLY · 10-K · period ended 2025-12-31

Item 1.Business

Item 1A. Risk Factors

Item 1B.Unresolved Staff Comments

Item 1C.Cybersecurity

Item 2.Properties

Item 3.Legal Proceedings

Item 4.Mine Safety Disclosures

Item 5.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Item 6. Reserved

Item 7A.Quantitative and Qualitative Disclosures about Market Risk

Item 8.Financial Statements and Supplementary Data

Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9A.Controls and Procedures

Item 9B. Other Information

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Item 10. Directors, Executive Officers and Corporate Governance.

Item 11. Executive Compensation.

Item 14. Principal Accountant Fees and Services.

Item 16.Form 10-K Summary

STLY US Equity☆

STLY · 10-K · period ended 2025-12-31

Item 1.Business

Item 1A. Risk Factors

Item 1B.Unresolved Staff Comments

Item 1C.Cybersecurity

Item 2.Properties

Item 3.Legal Proceedings

Item 4.Mine Safety Disclosures

Item 5.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Item 6. Reserved

Item 7A.Quantitative and Qualitative Disclosures about Market Risk

Item 8.Financial Statements and Supplementary Data

Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9A.Controls and Procedures

Item 9B. Other Information

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Item 10. Directors, Executive Officers and Corporate Governance.

Item 11. Executive Compensation.

Item 14. Principal Accountant Fees and Services.

Item 16.Form 10-K Summary

STLY US Equity