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What changed in Forge Global Holdings, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Forge Global Holdings, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+246 added−304 removedSource: 10-K (2024-03-26) vs 10-K (2023-03-01)

Top changes in Forge Global Holdings, Inc.'s 2023 10-K

246 paragraphs added · 304 removed · 219 edited across 4 sections

Item 1. Business

Business — how the company describes what it does

70 edited+11 added−13 removed37 unchanged
Biggest changeOur platform serves people who have different aspirations and needs, such as: • The innovative CEO who wants to stay private and retain employees as long as it takes to achieve their long-term vision • The dedicated employee who needs to pay for their child’s college tuition or buy a home today and cannot afford to wait for their company to go public • The sophisticated individual investor who has historically lacked access to this investment class and the transparency to participate • And institutional investors who seek to access the private markets at scale We attribute our track record of growth to the key strategic investments we have made since inception, the remarkable efforts of our employees, the momentum contributed by our many clients and our commitment to ensuring that our technology performs at the highest level.
Biggest changeWe attribute our track record of growth to the key strategic investments we have made since inception, the remarkable efforts of our employees, the momentum contributed by our many customers, and our commitment to ensuring that our technology performs at the highest level.
Diverse and Experienced Team We have assembled a deep and experienced leadership team that includes senior executives from innovative technology companies and top-tier financial firms, leading public market exchanges and globally recognized asset managers. We operate as one team, leveraging our collective expertise, particularly in technology and product development, to enhance and expand our operations.
Diverse and Experienced Team We have assembled a deep and experienced leadership team that includes senior executives from innovative technology companies, top-tier financial firms, leading public market exchanges, and globally recognized asset managers. We operate as one team, leveraging our collective expertise, particularly in technology and product development, to enhance and expand our operations.
We believe that our participant network, along with the workflows we have created to structure and efficiently process direct and Investment Fund transactions, are challenging to replicate, create a strong barrier to entry and provide us the flexibility to optimally serve the private market in a manner that reflects the needs of both individual and institutional investors and also enables companies to stay private longer while attracting and retaining talent.
We believe that our participant network, along with the workflows we have created to structure and efficiently process direct secondary and Investment Fund transactions, are challenging to replicate, create a strong barrier to entry, and provide us the flexibility to optimally serve the private market in a manner that reflects the needs of both individual and institutional investors and also enables companies to stay private longer while attracting and retaining talent.
Competition We compete with individual brokers and companies that provide access to private market trading, issuer tender offers, custody services, data products and other private market capital solutions. Competitors in these spaces include other private market platforms and offline brokers, global banks, custodial service providers and subscription-based data providers (including data divisions of large stock exchanges).
Competition We compete with individual brokers and companies that provide access to private market trading, issuer tender offers, custody services, data products, and other private market solutions. Competitors in these spaces include other private market platforms and offline brokers, global banks, custodial service providers, and subscription-based data providers (including data divisions of large stock exchanges).
Transactions were primarily analog processes, using manual and administratively burdensome steps that demanded significant time and effort. These issues were compounded because of market fragmentation; there was not a large-scale platform where many buyers and sellers could transact with one another across a large swath of potential companies.
Transactions were primarily fully analog processes, using manual and administratively burdensome steps that demanded significant time and effort. These issues were compounded because of market fragmentation; there was not a large-scale platform where many buyers and sellers could transact with one another across a large swath of potential companies.
Our Competitive Strengths We have built a market-leading financial services platform to streamline a complex and historically analog process and, in the process, changed the landscape of private market investing for companies, employees and investors. We believe we are well-positioned to serve an increasing portion of the broader financial services ecosystem.
Our Competitive Strengths We have built a leading financial services platform to streamline a complex and historically fully analog process and, in the process, changed the landscape of private market investing for companies, employees, and investors. We believe we are well-positioned to serve an increasing portion of the broader financial services ecosystem.
Available Information Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, are filed with the SEC.
Available Information Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), are filed with the SEC.
Amassing the technical expertise and know-how to perform these tasks at scale is difficult, and we believe we are uniquely positioned as we continue to streamline large parts of this traditionally analog process.
Amassing the technical expertise and know-how to perform these tasks at scale is difficult, and we believe we are uniquely positioned as we continue to streamline large parts of this traditionally fully analog process.
Starting a trade on the Forge platform commences when a client submits an indication of interest (“IOI”) including whether they are buying or selling, the series or class of equity they want to sell or buy (e.g., preferred, common or both) and the price range and the volume range at which they are willing to buy or sell.
Starting a trade on the Forge platform commences when a customer submits an indication of interest (“IOI”) including whether they are buying or selling, the series or class of equity they want to sell or buy (e.g., preferred, common, or both) and the price range and the volume range at which they are willing to buy or sell.
Solely Focused on the Private Market Since inception, we have built world-class technology and invested heavily in an organization focused solely on facilitating private market transactions. This proprietary technology and operating expertise is supported by standard documentation and efficient workflows which makes the processing of trades an efficient and user-friendly experience.
Solely Focused on the Private Market Since inception, we have built world-class technology and invested heavily in an organization focused solely on facilitating private market transactions. This proprietary technology and operating expertise is supported by standard documentation and efficient workflows which makes the processing of trades a more efficient and user-friendly experience.
You should not consider information contained on our website to be part of this Report or in deciding whether to purchase our securities. “Forge Global”, our logo and our other registered or common law trademarks, service marks or trade names appearing in this Report are the property of Forge.
You should not consider information contained on our website to be part of this Report or in deciding whether to transact in our securities. “Forge Global”, our logo, and our other registered or common law trademarks, service marks, or trade names appearing in this Report are the property of Forge.
Forge Markets generates supply through two primary sources: (i) employees and shareholders of private companies seeking to sell shares and (ii) relationships with private companies who may be seeking to provide liquidity opportunities for their employees ahead of an IPO, acquisition or other exit event.
Forge Markets generates supply through two primary sources: (i) employees and stockholders of private companies seeking to sell shares and (ii) relationships with private companies who may be seeking to provide liquidity opportunities for their employees ahead of an IPO, acquisition, or other exit event.
We offer a trusted trading platform, proprietary data and insights to inform investment strategies, along with custody services to help companies, shareholders, institutions and accredited investors confidently navigate and transact in the private market.
We offer a trusted trading platform, proprietary data, and insights to inform investment strategies, along with custody services to help companies, stockholders, institutions, and accredited investors confidently navigate and transact in the private market.
For example, since a purchaser through our platform must at minimum be an ‘accredited investor’ as defined by Rule 501(a) of Regulation D, we collect information from the purchaser through an accreditation process.
For example, since a buyer through our platform must at minimum be an ‘accredited investor’ as defined by Rule 501(a) of Regulation D, we collect information from the buyer through an accreditation process.
The expertise our private market specialists provide is invaluable to help educate clients on the steps needed to access the private markets using our platform. We believe that through additional investments in technology, our platform will continue to further streamline historically analog processes, therefore driving greater efficiency in the execution of private market trades.
The expertise our private market specialists provide is invaluable to help educate customers on the steps needed to access the private markets using our platform. We believe that through additional investments in technology, our platform will continue to further streamline historically fully analog processes, therefore driving greater efficiency in the execution of private market trades.
Our scaled and integrated business model is at the nexus of the private market ecosystem, which we believe creates a sustaining competitive advantage fueling our clients' participation in the private market and our growth.
Our scaled and integrated business model is at the nexus of the private market ecosystem, which we believe creates a sustaining competitive advantage fueling our customers' participation in the private market and our growth.
The key solutions offered by our platform include: • Trading Solutions : Forge Markets is our platform that connects potential investors with private company shareholders and enables them to efficiently facilitate private share transactions. • Custody Solutions : Forge Trust is our non-depository trust company that enables clients to securely custody and manage assets through a robust and user-friendly online portal. • Data Solutions : Forge Data is our data business that provides market participants the information and insight to confidently navigate, analyze and make investment decisions in the private market.
The key solutions offered by our platform include: • Trading Solutions : Forge Markets is our platform that connects potential investors with private company stockholders and enables them to efficiently facilitate private share transactions. • Custody Solutions : Forge Trust Co. is our non-depository trust company that enables customers to securely custody and manage assets through a robust and user-friendly online portal. • Data Solutions : Forge Data is our data business that provides market participants the information and insight to confidently navigate, analyze, and make investment decisions in the private market.
Leading Platform in the Private Markets Operating at Scale We believe that we are a leading private market trading platform based on the number of transactions we facilitate and an expanding network of participating companies, employees and investors, as well as strategic investors and commercial partners.
Leading Platform in the Private Markets Operating at Scale We believe that we are a leading private market trading platform based on the number of transactions we facilitate and a strong network of participating companies, employees and investors, as well as strategic investors and commercial partners.
We define institutional investors as (i) participants on our platform who report as legal entities with primary business activities related to private equity, investment activities or financial services and (ii) participants we verify as such. We continually seek client feedback and invest resources to improve the user experience, accelerate liquidity and attract new clients on the platform.
We define institutional investors as (i) participants on our platform who report as legal entities with primary business activities related to private equity, investment activities, or financial services and (ii) participants we verify as such. We continually seek customer feedback and invest resources to improve the user experience, accelerate liquidity, and attract new customers to our platform.
The evaluation of investment suitability and risks rests with the account holder and their advisor, if 6 Ta ble of Contents any. As a result, Forge Trust is not responsible for the financial performance of custodial assets and does not provide any insurance coverage for the investment risks that are entirely borne by the SDIRA owner.
The evaluation of investment suitability and risks rests with the account holder and their advisor, if any. As a result, Forge Trust is not responsible for the financial performance of custodial assets and does not provide any insurance coverage for the investment risks that are entirely borne by the SDIRA owner.
Inside the Forge Markets experience, clients who are accredited investors can search for companies by name, sector or valuation.
Inside the Forge Markets experience, customers who are accredited investors can search for companies by name, sector, or valuation.
The Advisers Act imposes duties and restrictions on FGA, including requirements relating to the safekeeping of client funds and securities, prohibitions of fraudulent activities, disclosure and reporting obligations, and fiduciary duty obligations. Trust Regulation. Our state-chartered non-depository trust company subsidiary, Forge Trust Co., is subject to regulation and examination by the South Dakota Division of Banking.
The Advisers Act imposes duties and restrictions on FGA, including requirements relating to the custody of client assets, prohibitions of fraudulent activities, disclosure and reporting obligations, and fiduciary duty obligations. Trust Regulation. Our state-chartered non-depository trust company subsidiary, Forge Trust Co., is subject to regulation and examination by the South Dakota Division of Banking.
Lack of Transparency 4 Ta ble of Contents There was little information on private companies easily accessible to non-insiders. Information such as the amount of buy-side and sell-side interest in companies, and the pricing of their shares was not readily available to market participants.
Lack of Transparency There was little information on private companies easily accessible to non-insiders. Information such as the amount of buy-side and sell-side interest in companies, and the pricing of their shares was not readily available to market participants.
This regulatory framework applies to our U.S. businesses in the following ways: • regulation of our broker-dealer and registered investment advisor subsidiaries; • regulation of our South Dakota chartered non-depository licensed trust company; and • regulation of our California licensed lending subsidiary. 10 Ta ble of Contents Broker Dealer Regulation .
This regulatory framework applies to our U.S. businesses in the following ways: • regulation of our broker-dealer and registered investment advisor subsidiaries; • regulation of our South Dakota chartered non-depository licensed trust company; and • regulation of our California licensed lending subsidiary. Broker Dealer Regulation .
This lack of transparency created uncertainty with market participants who lacked the data they needed to make a well-informed investment decision. Forge’s Differentiated Solutions We have developed and continue to enhance our infrastructure and complementary solutions which are purpose-built for the needs of private market participants.
This lack of transparency created uncertainty with market participants who lacked the data they needed to make a well-informed investment decision. 4 Table o f Contents Forge’s Differentiated Solutions We have developed and continue to enhance our infrastructure and complementary solutions which are purpose-built for the needs of private market participants.
We believe our robust technology platform, as well as our large network of clients and partners, provide us the opportunity to transform the private market asset class and serve as the foundation on which others build their systems and businesses.
We believe our robust technology platform, as well as our large network of customers, partners, and other market participants, provide us the opportunity to transform the private market asset class and serve as the foundation on which others build their systems and businesses.
Issuers, buyers and sellers from over 70 jurisdictions have transacted on our platform since inception (as of December 31, 2022 and including the historical business and companies we have acquired on a pro forma basis).
Issuers, buyers, and sellers from over 80 jurisdictions have transacted on our platform since inception (as of December 31, 2023 and including the historical business and companies we have acquired on a pro forma basis).
We could be subject to additional legal and regulatory requirements if laws and regulations change in the jurisdictions we operate. U.S. Regulation U.S. federal and state securities laws establish a system of regulation of securities, fund management, custody and lending markets in which we operate.
We could be subject to additional legal and regulatory requirements if laws and regulations change in the jurisdictions we operate. U.S. Regulation 10 Table o f Contents U.S. federal and state securities laws establish a system of regulation of securities, fund management, custody, and lending markets in which we operate.
We will continue to explore other asset classes that have significant investor demand. 7 Ta ble of Contents • Inorganic Opportunities . We will focus on value-generating mergers, acquisitions and other strategic transactions, drawing on our track record of successfully completing acquisitions.
We will continue to explore other asset classes that have significant investor demand. 7 Table o f Contents • Inorganic Opportunities . We will focus on value-generating mergers, acquisitions and other strategic transactions, drawing on our track record of successfully completing acquisitions.
Forge Lending, LLC (“Forge Lending”), our licensed lender with the State of California, is subject to regulation and examination by the Department of Financial Protection and Innovation pursuant to the California Finance Lending Laws.
Forge Lending LLC (“Forge Lending”), our licensed lender with the State of California, is subject to regulation and examination by the Department of Financial Protection and Innovation pursuant to the California Financing Law.
See “ Risk Factors—Regulatory, Tax and Legal Risks—We have expanded and may continue to expand into international markets, which expose us to significant new risks, and our international expansion efforts may not be successful. ” • New Asset Classes .
For more information, see “Risk Factors—Regulatory, Tax, and Legal Risks—We have expanded and may continue to expand into international markets, which expose us to significant new risks, and our international expansion efforts may not be successful.” • New Asset Classes .
FCS offers fixed-price programs and market-based programs that provide issuer standard documentation and streamlined online workflows to efficiently run liquidity processes for shareholders and investors. Custody Solutions Forge Trust Forge Trust makes it easy and seamless for investors, equity holders and institutions to hold, value and manage assets.
We facilitate fixed-price programs and market-based programs that provide issuer standard documentation and streamlined online workflows to efficiently run liquidity processes for stockholders and investors. Custody Solutions Forge Trust makes it easy and seamless for investors, equity holders, and institutions to hold, value, and manage assets.
In addition to traditional benefits, we offer employee rewards and recognition programs to recognize and celebrate excellent work that aligns with our core company values. We provide continuous recognition of employee milestones, wins and hard work. Values We are driven by our shared values and put team before self.
In addition to traditional benefits, we offer employee rewards and recognition programs to recognize and celebrate excellent work that aligns with our core company values. We provide continuous recognition of employee milestones, wins, and hard work. Values We are driven by our dedication to a culture promoting shared values and putting team before self.
We earn revenue on Forge Markets through placement fees that we charge buyers and/or sellers. These fees, which we call take rates or commissions, are based on several factors including size of transaction, type of structure, type of buyer and seller and use of an external broker.
We earn revenue on Forge Markets through placement fee revenue that we charge buyers and/or sellers. These fees, which we call take rates or commissions, are based on several factors including size of transaction, type of structure, type of buyer and seller, and use of a third-party broker.
Participants may pay a higher commission if the total dollar amount of the transaction is less than our typical minimum transaction amount.
Participants may pay a higher commission if the notional amount of the transaction is less than our typical minimum transaction amount.
To strengthen our ties in the private market, our tech-enabled offering Forge Company Solutions (“FCS”) provides private companies with streamlined liquidity processes, expert guidance and relationship management. FCS leverages our software solution to provide private companies with oversight and control of company share transactions while reducing administrative burden.
To further strengthen our ties in the private market, our tech-enabled offering private company solutions provide private companies with streamlined liquidity processes, expert guidance, and relationship management. Our private company solutions leverage our software solution to provide private companies with oversight and control of company share transactions while reducing administrative burden.
Corporate Information 11 Ta ble of Contents Forge was initially founded in January 2014 as Equidate, Inc. We acquired IRA Services, Inc. ("IRA Services") in October 2019. We acquired SharesPost, Inc. ("SharesPost") in November 2020 (which was formed in March 2009).
Corporate Information Forge was initially founded in January 2014 as Equidate, Inc. We acquired IRA Services, Inc. ("IRA Services") in October 2019. We acquired SharesPost, Inc. ("SharesPost") in November 2020 (which was formed in March 2009).
Intellectual Property At Forge, we rely primarily on trade secret, copyright and trademark law to protect our proprietary intellectual property in the United States and foreign jurisdictions.
Intellectual Property 11 Table o f Contents At Forge, we rely primarily on trade secret, copyright, and trademark law to protect our proprietary intellectual property in the United States and foreign jurisdictions.
While sellers do not need to qualify as accredited investors to sell their private securities, it is often the sale of their shares on our platform that enables the shareholder to meet the requirements to qualify as an accredited investor, which in turn provides them with the opportunity to reinvest their money into other available private company securities.
While sellers do not need to qualify as accredited investors to sell their private securities, the sale of their shares on our platform can enable them to meet the requirements to qualify as an accredited investor, which in turn provides them with the opportunity to reinvest their money into other available private company securities.
Our principal executive offices are located at 415 Mission Street, Suite 5510, San Francisco, California 94105, and our telephone number is (415) 881-1612. Our website address is www.forgeglobal.com. Information contained on, or that can be accessed through, our website does not constitute part of this Report and inclusions of our website address in this Report are inactive textual references only.
Our principal executive offices are located at 4 Embarcadero Center, Floor 15, San Francisco, California 94111, and our telephone number is (415) 881-1612. Our website address is www.forgeglobal.com. Information contained on, or that can be accessed through, our website does not constitute part of this Report and inclusions of our website address in this Report are inactive textual references only.
We are: • Bold : Innovate by delivering new ideas and solutions. We have the courage to take risks and push past our comfort zone while respectfully challenging ideas. We redefine failures as learning opportunities. • Accountable : Debate, commit, take ownership and support the team.
We believe that this culture is advanced by striving to be: • Bold : Innovate by delivering new ideas and solutions. We have the courage to take risks and push past our comfort zone while respectfully challenging ideas. We redefine failures as learning opportunities. • Accountable : Debate, commit, take ownership, and support the team.
Human Capital Resources At Forge, we believe that our people are our greatest asset. We welcome people from all backgrounds and foster a culture where everyone can show up as their whole self each day. We care for and respect each other, and embrace diversity by celebrating different perspectives, skills and experiences.
Human Capital Resources At Forge, we believe that our people are our greatest asset. We welcome a diverse and inclusive environment and foster a culture where everyone can show up as their whole self each day. We strive to create an environment where employees care for and respect each other, and embrace diversity by celebrating different perspectives, skills, and experiences.
Subscribers can access this data set through our web platform, as well as through our data feed offerings and file-based and API delivery so that investors can utilize this data set in a manner that best matches their investment processes. Forge Intelligence earns revenue through an annual subscription fee.
Subscribers can access all such trading and non-trading data through our Forge Intelligence web platform, as well as through our data feed offerings and file-based and API delivery so that investors can utilize this data set in a manner that best matches their investment processes.
Forge Lending is engaged in the business of originating loans to option holders in the stock of unregistered private companies for the purpose of exercising these options in connection with a follow up sale of the acquired securities on Forge Markets. Asia-Pacific Regulation Our Singapore-based subsidiary, SharesPost Asia Pte. Ltd.
Forge Lending is engaged in the business of originating loans to option holders in the stock of unregistered private companies for the purpose of exercising these options in connection with a follow up sale of the acquired securities on Forge Markets. European Regulation.
We have approximately 568,000 registered users, which includes approximately 552,000 individual investors and approximately 16,000 institutional investors, with institutional investors representing approximately 57% of our transaction volume since inception (each figure as of December 31, 2022 and including the historical business and companies we have acquired on a pro forma basis).
We have approximately 636,000 registered users, which includes approximately 618,000 individual investors and approximately 18,000 institutional investors, with institutional investors representing approximately 57% of our transaction volume since inception (each figure from inception through December 31, 2023 and including the historical business and companies we have acquired on a pro forma basis).
The standard minimum transaction size on our platform is $100,000 as of December 31, 2022; however, we may allow an amount less than this under certain circumstances such as upon the specific request of certain sellers or to receive a partial execution of a larger order. There are two main structures of trades we enable through Forge Markets.
For the year ended December 31, 2023, the standard minimum transaction size on our platform was $100,000; however, we allow an amount less than this under certain circumstances such as upon the specific request of certain sellers or to receive a partial execution of a larger order. We facilitate two main types of trades through Forge Markets.
Further, users of our websites and solutions all accept the terms of service that clearly identify content owned and controlled by Forge. We have always emphasized innovation in our products and solutions. As of December 31, 2022, we have 12 active applications for patents in the United States and EU.
Further, users of our websites and solutions all accept the terms of service that clearly identify content owned and controlled by Forge. We have always emphasized innovation in our products and solutions. As of December 31, 2023, we have 18 patents issued or pending in the United States and internationally.
Our intuitive online user experience is supported by our private market specialists and our proprietary trading data, which we believe enables our solutions to work efficiently and synergistically. Our solutions allow us to offer support to our distinct customer segments along their private market journeys.
Our intuitive online user experience is supported by our private market specialists and our proprietary trading data, which we believe enables our solutions to work efficiently and synergistically in one marketplace. Our solutions allow us to support our customer segments along their private market journeys by using our complementary trading, data, and custody solutions either separately or together.
From IOI match to close, transactions on our platform take an average of 50 days to complete, and the majority of private resales are between one buyer and one seller. Our process is designed to support the requirements of the applicable exemption from registration.
For the year ended December 31, 2023, transactions on our platform take an average of 42 days to complete from IOI match to close, and the majority of direct secondary transactions are between one buyer and one seller. Our process is designed to support the requirements of the applicable exemption from registration.
Only accredited investors are eligible to invest in private securities through our platform. Our Know Your Customer (“KYC”) and Anti-Money Laundering (“AML”) processes permit us to verify an investor’s accreditation or shareholder’s identity quickly and efficiently.
Each prospective customer must satisfy certain participation criteria (e.g., accreditation) and provide customer identification information. Only accredited investors are eligible to invest in private securities through our platform. Our Know Your Customer (“KYC”) and Anti-Money Laundering (“AML”) processes permit us to verify an investor’s accreditation or stockholder’s identity quickly and efficiently.
Since inception, we have facilitated over $12 billion in transaction volume for approximately 23,000 transactions in over 500 companies (each figure as of December 31, 2022 and including the historical business and companies we have acquired on a pro forma basis).
We have facilitated over $14 billion in transaction volume for approximately 25,000 transactions in approximately 570 companies (each figure from inception through December 31, 2023 and including the historical business and companies we have acquired on a pro forma basis).
We approach customer engagement and acquisition across a combination of owned, earned, and paid channels including: • An integrated growth strategy across product, marketing and sales, that engages our discrete audiences to learn and participate in the private market with Forge • A robust content strategy and search engine optimization (“SEO") that drives organic customer awareness and engagement • PR and social media that amplifies our messages and drives qualified customers to us directly • Paid channels including paid search, digital acquisition, and sponsorships to target prospective customers across their journey • A strategic lifecycle communications program - through product and marketing - that engages prospects and clients with content and experiences that serve to qualify and drive participation in the private market We believe we have built a highly effective and efficient approach to new customer engagement and lead acquisition, and are focused on expanding our full-funnel marketing programs—from awareness to re-engagement—across our priority audiences to extend our reach and reinforce our position in the market.
We approach customer engagement and acquisition across a combination of owned, earned, and paid channels including: • An integrated growth strategy across product, marketing, and sales, that engages our discrete audiences to learn and participate in the private market with Forge. • A robust content strategy and search engine optimization that drives organic customer awareness and engagement. • Public relations, thought leadership, and social media that drives conversations, amplifies our messages, and attracts qualified customers to us directly. • Paid channels including paid search, digital acquisition, and sponsorships to target prospective customers across their journey. • A strategic lifecycle communications program - through product and marketing - that engages prospects and customers with content and experiences that serve to qualify and drive participation in the private market.
As of December 31, 2022, we had approximately 315 full-time employees. We also engage temporary employees and consultants as needed to support our operations. Employee Experience Our priority is to promote a sense of belonging and community through our fun and compelling work environment. We cultivate community and collaboration through an excellent employee experience.
As of December 31, 2023, we had 345 full-time employees. We also engage temporary employees and consultants as needed to support our operations. Employee Experience Our priority is to promote a sense of belonging and community through our commitment to our overall vision and each other. We aim to cultivate community and collaboration through an excellent employee experience.
We expect to leverage our platform to continue to drive growth primarily in the following areas: • Additional Scale . We will continue to invest and scale our key solutions and build our client and investor networks. • New Products .
Our Growth Strategy We believe the private market has an unmet need for the solutions we have built. We expect to leverage our platform to continue to drive growth primarily in the following areas: • Additional Scale . We will continue to invest and scale our key solutions and build our customer and investor networks. • New Products .
While our operations are chiefly located in the United States and the majority of our trading revenues are derived from transactions involving U.S. issuers, we have and may continue to expand our operations internationally in order to match the global demand for our products and services.
While our operations are chiefly located in the United States and the majority of our trading revenues are derived from transactions involving U.S. issuers, we have and may continue to expand our operations internationally in order to match the global demand for our products and services, including our recent expansion into the European private market with the establishment of Forge Europe with our long-time strategic partner Deutsche Börse.
By providing transparency through continuous, high-impact communication, we strive to ensure that employees understand what we do, how the organization works and how their work impacts the greater goals of the organization. We have established a Culture Council consisting of representatives across the organization with the purpose of promoting a unified culture, ensuring inclusion and participation of all employees.
By providing transparency through continuous, high-impact communication, we strive to ensure that employees understand what we do, how the organization works, and how their work impacts the greater goals of the organization.
We have strategically invested in our complementary solutions to collectively drive strong network effects and help power the private market ecosystem.
We have strategically invested in our complementary solutions to collectively drive strong network effects and help power the private market ecosystem. Our platform serves all private market participants, including companies, employee and investor stockholders, institutional investors, and sophisticated accredited investors.
In addition, Forge Trust offers a powerful, highly scalable cloud-based custody platform that provides custody-as-a-service to our clients. The custody platform provides an application programming interface (“API”) that enables our clients to easily integrate and offer our custody platform to their customers.
In addition, Forge Trust offers a powerful, highly scalable cloud-based custody platform that provides custody-as-a-service to our clients.
In addition, we assess per transaction fees based on the complexity of the transaction. This excludes our custody-as-a-service account revenues, which are based on contractually negotiated terms with our partners. As of December 31, 2022, Forge Trust had $14.9 billion of assets under custody through 1.9 million accounts.
On a quarterly basis, our SDIRA accounts are assessed maintenance fees and asset-based fees, with asset-based fees based on the complexity and the number of assets held. In addition, we assess per transaction fees based on the complexity of the transaction. This excludes our custody-as-a-service account revenues, which are based on contractually negotiated terms with our partners.
Additional steps taken to support an exemption from registration, including acquiring some verification of ownership from the seller by which we can document how the seller came to own the shares, such as a share acquisition agreement or stock certificate. 5 Ta ble of Contents Pursuant to our purchase agreement template executed between the buyer and seller, the seller is required to provide the buyer all applicable restrictions pertaining to the shares that that seller has in its possession, or, in some cases, of which the seller has knowledge.
Additional steps taken to support an exemption from registration, including acquiring some verification of ownership from the seller by which we can document how the seller came to own the shares, such as a share acquisition agreement or stock certificate.
The buyer’s representations within the purchase agreement include but are not limited to (i) that the purchase is solely for investment purposes and not for further distribution, (ii) understanding that the securities are “restricted securities” and may not be freely traded and (iii) that the sale of the securities are not registered under the Securities Act.
Typically, this is an issuer’s specific stock transfer agreement (“STA”), which supersedes the purchase agreement, and contains applicable restrictions pertaining to the shares, as well as representations by the buyer, such as (i) that the purchase is solely for investment purposes and not for further distribution, (ii) understanding that the securities are “restricted securities” and may not be freely traded, and (iii) that the sale of the securities is not registered under the Securities Act.
Diversity and Inclusion Diversity is about our people, geography and partners. We strive to build a globally inclusive culture and diverse organization. Inclusion is about our connections. We aim to build skills that nurture respectful conversations, create deeper human connections and encourage diverse interactions.
We aim to build skills that nurture respectful conversations, create deeper human connections and encourage diverse interactions.
Our platform’s ease of use masks the complexity that is required to complete a trade, since amassing the expertise to perform all the necessary tasks to complete trades at scale is technically challenging and complex. In addition, our private market specialists support buyers and sellers who have questions or otherwise need help completing their transactions.
Our platform offers a user friendly workflow for what is otherwise a technically challenging and complex trade flow and allows us to do that at scale. In addition, our private market specialists support buyers and sellers who have questions or otherwise need help completing their transactions.
The client experience is powered by an intuitive user interface that enables investors to register for free, explore private company data and insights, discover trade opportunities and easily indicate trade interest for execution in these opportunities. Each prospective client must satisfy certain participation criteria (e.g., accreditation) and provide customer identification information.
Trading Solutions Forge Markets is our platform designed to efficiently connect individual and institutional accredited investors with the stockholders of private companies. The customer experience is powered by an intuitive user interface that enables investors to register for free, explore private company data and insights, discover trade opportunities, and easily indicate trade interest for execution in these opportunities.
Marketing Our marketing strategy creates enterprise value by building our brand, attracting, engaging, converting and retaining clients, and delivering compelling content and experiences that help people reach their financial goals. 8 Ta ble of Contents We believe that our brand is the collection of every experience a person has with our company over time and we strive to deliver on our brand promise to our customers, our partners and our employees each and every day.
Marketing 8 Table o f Contents Our marketing strategy creates enterprise value by building our brand, attracting, engaging, converting, and retaining customers, and delivering compelling content and experiences that facilitate private market participation by institutions, accredited investors, and private company stockholders. We strive to deliver on our brand promise to our customers, partners, and employees each and every day.
We aim to grow this revenue stream moving forward through direct sales, distribution and partnership arrangements, as well by adding new features and upgrades to the platform. Our Growth Strategy We believe the private market has an unmet need for the solutions we have built.
Forge Intelligence is our subscription-based platform that services market participants looking for timely and accurate data about the private market. We aim to grow this revenue stream moving forward through direct sales, distribution and partnership arrangements, referrals from our Markets and Custody solutions, and by adding new features and upgrades.
We facilitate secondary purchases and/or sales of private company securities (“private resales”), such as preferred and common stock, as well as private fund securities holding private company securities. Private resales are typically exempt from registration under the Securities Act of 1933, as amended (the "Securities Act"), pursuant to Sections 4(a)(1), or case law interpretations thereunder (e.g., 4(a)(1 ½)).
Direct secondary transactions are typically conducted pursuant to Section 4(a)(1), or case law interpretations thereunder, which provides an exemption from registration under the Securities Act of 1933, as amended (the "Securities Act").
Our custody business earns recurring revenue from quarterly account and asset fees, cash administration fees, partnership fees and other transactional fees on accounts held at Forge Trust. On a quarterly basis, our SDIRA accounts are assessed maintenance fees and asset-based fees, with asset-based fees based on the complexity and the number of assets held.
The custody platform provides an application programming interface (“API”) that enables our clients to easily integrate and offer our custody platform to their customers. 6 Table o f Contents Our custody business earns recurring revenue from quarterly account and asset fees, cash administration fees, partnership fees, and other transactional fees on accounts held at Forge Trust.
Further data points include company waterfall charts, which can be used to analyze the changes in equity ownership and valuation resulting from different exit scenarios, as well as preferred equity conversion ratios and protective provisions such as liquidation preferences.
In addition to this secondary trading data, we provide non-trading data that investors can also use to research and analyze investment opportunities, including: • Company descriptions and information on management teams and investors; • Primary financing round data; • Analytics such as sector insights, peer comparisons, and investment trends of prominent investors; • Company waterfall charts, which can be used to analyze the changes in equity ownership and valuation resulting from different exit scenarios; • Preferred equity conversion ratios and company protective provisions such as liquidation preferences; • Mutual fund marks; and • Public company comparable data, such as share price, change in share price, and estimated valuations.
As of December 31, 2022, our data set contained more than a decade of secondary trading data across more than 1,000 private companies.
As of December 31, 2023, this data set contained non-trading data on more than 2,500 private companies and 500 previously private, now public companies.
Removed
Our solutions include trading, distinct data offerings fueled by our proprietary trading data, and custody offerings that support participation in the private market. In addition, we have established strong relationships with market participants, including investors, shareholders and companies in need of our solutions.
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We facilitate secondary purchases and/or sales of private company securities (“direct secondary transactions”), such as preferred and common stock, as well as private fund units of Investment Funds that hold private company securities as underlying assets.
Removed
Our recently announced strategic evolution represents the continued growth of our business from one centered around discrete but overlapping pillars, to an integrated, customer-centric organization designed to more effectively serve the needs of private market participants. Trading Solutions Forge Markets Forge Markets is our platform designed to efficiently connect individual and institutional accredited investors with the shareholders of private companies.
Added
We also provide a template purchase agreement that the buyer and seller can use to ensure that each party is legally bound to proceed with the transaction, subject to approval by the issuer.
Removed
Such representations are informative and likely dispositive as to the private nature of the proposed transaction. They evidence the material investment intent, which underscores the importance of affirming that neither buyer nor seller has engaged in an underwriting process, nor could be deemed to be a statutory underwriter.
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Our template contains standard representations typically used in this type of agreement; however, we are not a party to the purchase agreement and the buyer and seller are free to negotiate the template or use their own version. 5 Table o f Contents At the closing of a transaction, we facilitate the execution of the final agreement for transfer of beneficial ownership.
Removed
Typically, an issuer’s stock transfer agreement (“STA”) will supplement the representations made in the purchase agreement. In most cases, the STA will contain a copy of the legends contained on the stock certificate.
Added
In most cases, the STA also contains a copy of the legends contained on the stock certificate. Similarly to the purchase agreement, we facilitate the execution of the STA only in and administrative capacity, and are not a party to and do not control the final terms of the STA.
Removed
Similar to the purchase agreement, the buyer’s representations within the STA include that the purchase of securities is for investment purposes only and not for further distribution, the securities are not registered under the Securities Act and the buyer’s understanding that the securities are “restricted securities.” We are not parties to and do not control the final terms of the purchase agreements and STAs in such transactions, as they are separately negotiated between the applicable buyer, seller and issuer.
Added
As of December 31, 2023, Forge Trust had $15.6 billion of assets under custody through 2.1 million accounts. Data Solutions We aggregate, verify, anonymize, and supplement private market data, including historical trade and IOI data from our Forge Markets platform. As of December 31, 2023, this data set contained secondary trading data on more than 1,000 private companies.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeYou should read this summary together with the more detailed description of each risk factor contained in the subheadings further below. • We have a history of losses and may not achieve or maintain profitability in the future. • Our customers may encounter difficulties with investing through our platform, and face risks including those related to a lack of information available about private companies, liquidity concerns and potential transfer or sale restrictions with respect to securities offered on our platform. 12 Ta ble of Contents • There is no assurance that our revenue and business models will be successful. • If we are unable to develop new solutions or adapt to technological changes, our revenue may not grow as expected. • If we fail to attract new customers, or fail to do so in a cost-effective manner, our business may be harmed. • We face intense and increasing competition and, if we do not compete effectively, our competitive positioning and our operating results will be harmed.
Biggest changeYou should read this summary together with the more detailed description of these and other risk factors contained in the subheadings further below. • We have a history of losses and may not achieve or maintain profitability in the future. • There is no assurance that our revenue and business models will be successful. • If we are unable to develop new solutions or adapt to technological changes, our revenue may not grow as expected. • If we fail to retain our existing customers or acquire new customers in a cost-effective manner, our business could be harmed. • We face intense and increasing competition and, if we do not compete effectively, our competitive positioning and operating results will be harmed. • Given our focus on the private market, our customers may encounter additional risks when investing through our platform, including potential transfer or sale restrictions on securities, lack of information about private companies, opacity in pricing, and liquidity concerns. • Unfavorable macroeconomic or financial market conditions, as well as adverse global economic or geopolitical conditions could limit our ability to grow our business and adversely affect the results of our operations. • Our business is subject to extensive, complex, and evolving laws and regulations promulgated by U.S. state, U.S. federal, and non-U.S. laws, including those applicable to broker-dealers, investment advisers, and alternative trading systems, such as regulation by the SEC and FINRA, and in the jurisdictions in which we operate.
We have and expect to continue to experience growth, and intend to continue to expand our operations. This growth has placed, and will continue to place, significant demands on our management and operational and financial infrastructure, and our business, financial condition and results of operations could be materially and adversely affected if we are unable to manage such growth.
We have and expect to continue to experience growth, and intend to continue to expand our operations. This growth has placed, and will continue to place, significant demands on our management, operational, and financial infrastructure, and our business, financial condition, and results of operations could be materially and adversely affected if we are unable to manage such growth.
In most states and jurisdictions in which we operate, a regulatory agency or agencies regulate and enforce laws relating to loan servicers, brokers, and originators, collection agencies, and money services businesses.
In most states and jurisdictions in which we operate, a regulatory agency or agencies regulate and enforce laws relating to loan servicers, brokers, originators, collection agencies, and money services businesses.
From time to time, we are also involved in, or the subject of, reviews, requests for information, investigations and proceedings (both formal and informal) by state and federal governmental agencies and self-regulatory organizations, regarding our business activities and our qualifications to conduct our business in certain jurisdictions, which could subject us to significant fines, penalties, obligations to change our business practices and other requirements resulting in increased expenses and diminished earnings.
From time to time, we are also involved in, or the subject of, reviews, requests for information, and investigations and proceedings (both formal and informal) by state and federal governmental agencies and self-regulatory organizations, regarding our business activities and our qualifications to conduct our business in certain jurisdictions, which could subject us to significant fines, penalties, obligations to change our business practices, and other requirements resulting in increased expenses and diminished earnings.
These additional requirements relate to matters including maintaining effective and comprehensive compliance programs, record-keeping and reporting and disclosure requirements. The Advisers Act generally grants the SEC broad administrative powers, including the power to limit or restrict an investment adviser from conducting advisory activities in the event it fails to comply with federal securities laws.
These additional requirements relate to matters including maintaining effective and comprehensive compliance programs, record-keeping, and reporting and disclosure requirements. The Advisers Act generally grants the SEC broad powers, including the power to limit or restrict an investment adviser from conducting advisory activities in the event it fails to comply with federal securities laws.
Our executive officers and other employees are at-will employees, which means they may terminate their employment relationship with us at any time, and their knowledge of our business and industry would be extremely difficult to replace. We cannot ensure that we will be able to retain the services of any members of our senior management or other key employees.
Our executive officers and other employees are at-will employees, which means they may terminate their employment relationship with us at any time, and their knowledge of our business and industry would be extremely difficult to replace. We cannot ensure that we will be able to retain the services of any members of our senior management or other key personnel.
If additional funds are raised through the issuance of equity or convertible debt securities, our stockholders could suffer significant dilution, and any new shares we issue in connection therewith could have rights, preferences and privileges superior to those of our current stockholders.
In addition, if additional funds are raised through the issuance of equity or convertible debt securities, our stockholders could suffer significant dilution, and any new shares we issue in connection therewith could have rights, preferences, and privileges superior to those of our current stockholders.
FINRA has adopted extensive regulatory requirements relating to sales practices, advertising, registration of personnel, compliance and supervision, and compensation and disclosure, to which Forge Securities and its personnel are subject. FINRA and the SEC also have the authority to conduct periodic examinations of Forge Securities, and may also conduct administrative proceedings.
FINRA has adopted extensive regulatory requirements relating to sales practices, advertising, registration of personnel, compliance and supervision, and compensation and disclosure, to which Forge Securities and its personnel are subject. FINRA and the SEC also have the authority to conduct periodic examinations of Forge Securities, and may also conduct administrative and enforcement proceedings.
As a result of any such delay or inability to replace such key third-party service provider, our ability to process investments and perform other business functions could suffer and our business, financial condition and results of operations could be materially and adversely affected.
As a result of any such delay or inability to replace such key third-party service provider, our ability to process investments and perform other business functions could suffer and our business, financial condition, and results of operations could be adversely affected.
Maintaining, promoting and positioning our brand and reputation will depend on our ability to continue to provide useful, reliable, secure, and innovative products and services; to maintain trust and remain a financial services leader; and to provide a consistent, high-quality customer experience.
Maintaining, promoting, and positioning our brand and reputation will depend on our ability to continue providing useful, reliable, secure, and innovative products and services; to maintain trust and remain a financial services leader; and to provide a consistent, high-quality customer experience.
There is a risk that clients may increasingly look to us to make them whole for delayed and/or broken trades. Customers may litigate over a failure of sellers to deliver securities or over the untimely deliveries of securities.
There is a risk that customers may increasingly look to us to make them whole for delayed and/or broken trades. Customers may litigate over a failure of sellers to deliver securities or over the untimely deliveries of securities.
With respect to placement fees, a decline in the price of securities transactions brokered by us, or a decline in the financial markets generally, or a decline in fee rates could negatively impact our revenue and overall financial position.
With respect to placement fee revenue, a decline in the price of securities transactions brokered by us, or a decline in the financial markets generally, or a decline in fee rates could negatively impact our revenue and overall financial position.
Harm to our brand can arise from many sources, including failure by us or our partners and service providers to satisfy expectations of service and quality, inadequate protection or actual or perceived misuse of personally identifiable information, compliance failures and claims, regulatory inquiries and enforcement, rumors, litigation and other claims, misconduct by our partners, employees or other counterparties, and actual or perceived failure to adequately address the environmental, social and governance expectations of our various stakeholders, any of which could lead to a tarnished reputation and loss of customers.
Harm to our brand can arise from many sources, including failure by us or our partners and service providers to satisfy expectations of service and quality, inadequate protection or actual or perceived misuse of personally identifiable information, compliance failures and claims, regulatory inquiries and enforcement, rumors, litigation and other claims, misconduct by our partners, personnel or other counterparties, and actual or perceived failure to adequately address the environmental, social, and governance expectations of our various stakeholders, any of which could lead to a tarnished reputation and loss of customers.
Our enterprise risk management and regulatory compliance framework may not be fully effective in identifying or mitigating risk exposures in evolving market and regulatory environments or against all types of risk.
Our risk management and regulatory compliance framework may not be fully effective in identifying or mitigating risk exposures in evolving market and regulatory environments or against all types of risk.
Among other things, our Certificate of Incorporation and our Bylaws include provisions regarding: • providing for a classified board of directors with staggered, three-year terms; • the ability of our board of directors to issue shares of preferred stock, including “blank check” preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; • the prohibition of cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; • the limitation of the liability of, and the indemnification of, our directors and officers; • the ability of our board of directors to amend our Bylaws, which may allow our board of directors to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend our Bylaws to facilitate an unsolicited takeover attempt; and • advance notice procedures with which stockholders must comply to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in our board of directors and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us.
Among other things, our Certificate of Incorporation and our Bylaws include provisions regarding: • providing for a classified board of directors with staggered, three-year terms; 31 Table o f Contents • the ability of our board of directors to issue shares of preferred stock, including “blank check” preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; • the prohibition of cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; • the limitation of the liability of, and the indemnification of, our directors and officers; • the ability of our board of directors to amend our Bylaws, which may allow our board of directors to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend our Bylaws to facilitate an unsolicited takeover attempt; and • advance notice procedures with which stockholders must comply to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in our board of directors and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us.
Our enterprise risk management and compliance processes, policies and procedures may not be fully effective in identifying or mitigating all exposures and particularly against emerging risks.
Our risk management and compliance processes, policies, and procedures may not be fully effective in identifying or mitigating all exposures and particularly against emerging risks.
Any of these advantages would allow competitors to potentially offer more competitive pricing or other terms or features, a broader range of investment and financial products, or a more specialized set of specific products or services, as well as respond more quickly than we can to new or emerging technologies and changes in customer preferences, among other items.
Any of these advantages would allow competitors to potentially offer more competitive pricing or other terms or features, a broader range of investment and financial products, or a more specialized set of specific products or services, as well as respond more quickly than we can to new or emerging technologies and changes in customer preferences.
Additionally, our trust company subsidiary, Forge Trust, is subject to minimum capital requirements of the State of South Dakota, in which it is chartered.
Additionally, our trust company subsidiary, Forge Trust Co., is subject to minimum capital requirements of the State of South Dakota, in which it is chartered.
The choice of forum provision may limit the ability of our shareholders to bring a claim in a forum that they find favorable for disputes with us or our directors, officers or other employees, and may discourage such lawsuits. There is uncertainty as to whether a court would enforce this provision.
The choice of forum provision may limit the ability of our stockholders to bring a claim in a forum that they find favorable for disputes with us or our directors, officers, or other employees, and may discourage such lawsuits. There is uncertainty as to whether a court would enforce this provision.
Our Bylaws provide that, to the fullest extent permitted by law, unless we consent in writing to an alternative forum, (a) the Delaware Court of Chancery (or, if such court does not have, or declines to accept, jurisdiction, another state court or a federal court located in Delaware) will be the exclusive forum for any complaint asserting any internal corporate claims, 32 Ta ble of Contents including claims in the right of Forge based upon a violation of a duty by a current or former director, officer, employee or stockholder in such capacity, or as to which the Delaware General Corporation Law confers jurisdiction upon the Court of Chancery and (b) the federal district courts of the United States will be the exclusive forum for any complaint asserting a cause of action arising under the Securities Act.
Our Bylaws provide that, to the fullest extent permitted by law, unless we consent in writing to an alternative forum, (a) the Delaware Court of Chancery (or, if such court does not have, or declines to accept, jurisdiction, another state court or a federal court located in Delaware) will be the exclusive forum for any complaint asserting any internal corporate claims, including claims in the right of Forge based upon a violation of a duty by a current or former director, officer, employee, or stockholder in such capacity, or as to which the Delaware General Corporation Law confers jurisdiction upon the Court of Chancery and (b) the federal district courts of the United States will be the exclusive forum for any complaint asserting a cause of action arising under the Securities Act.
In addition, the loss of any of our senior management or key employees could materially adversely affect our ability to execute our business plan and strategy, and we may not be able to find adequate replacements on a timely basis, or at all.
In addition, the loss of any of our senior management or key personnel could materially adversely affect our ability to execute our business plan and strategy, and we may not be able to find adequate replacements on a timely basis, or at all.
Future acquisitions could also result in dilutive issuances of our equity securities, the incurrence of debt, contingent liabilities, regulatory obligations to further capitalize our business, and goodwill and intangible asset impairments, any of which could harm our financial condition and negatively impact our shareholders.
Future acquisitions could also result in dilutive issuances of our equity securities, the incurrence of debt, contingent liabilities, regulatory obligations to further capitalize our business, and goodwill and intangible asset impairments, any of which could harm our financial condition and negatively impact our stockholders.
If we do not succeed in attracting well-qualified employees or retaining and motivating existing employees, our business could be materially and adversely affected. We may not be able to secure adequate insurance to cover all known risks and our insurance policies may not be sufficient to cover all potential claims.
If we do not succeed in attracting well-qualified personnel or retaining and motivating existing personnel, our business could be materially and adversely affected. We may not be able to secure adequate insurance to cover all known risks and our insurance policies may not be sufficient to cover all potential claims.
Moreover, any settlement, or any consent order or adverse judgment in connection with any formal or informal proceeding or investigation by a government agency, may prompt litigation or additional investigations or proceedings as other litigants or other government agencies begin independent reviews of the same activities.
Moreover, any settlement, or any consent order or adverse judgment in connection with any proceeding or investigation by a government agency, may prompt litigation or additional investigations or proceedings as other litigants or other government agencies begin independent reviews of the same activities.
We have been or are involved in, and may in the future become involved in, disputes or litigation matters between customers with respect to failed transactions on our platform (such as in the event of delayed delivery or a failure to deliver securities).
We have and may in the future become involved in, disputes or litigation matters between customers with respect to failed transactions on our platform (such as in the event of delayed delivery or a failure to deliver securities).
In addition, it may require us to expend significant financial and operational resources in response to a security breach, including repairing system damage, increasing security protection costs by deploying additional personnel and modifying or enhancing our protection technologies, investigating, remediating or correcting the breach and any security vulnerabilities, defending against and resolving legal and regulatory claims, and preventing future security breaches and incidents, all of which could expose us to uninsured liability, increase our risk of regulatory scrutiny, expose us to legal liabilities, including litigation, regulatory enforcement, indemnity obligations or damages for contract breach, divert resources and the attention of our management and key personnel away from our business operations, and cause us to incur significant costs, any of which could materially adversely affect our business, financial condition and results of operations.
In addition, it may require us to expend significant financial and operational resources in response to a security breach, including repairing system damage, increasing security protection costs by deploying additional personnel, and modifying or enhancing our protection technologies, investigating, remediating, or correcting the breach and any security vulnerabilities, defending against and resolving legal and regulatory claims, and preventing future security breaches and incidents, all of which could expose us to uninsured liability, increase our risk of regulatory scrutiny, expose us to legal 26 Table o f Contents liabilities, including litigation, regulatory enforcement, indemnity obligations or damages for contract breach, divert resources and the attention of our management and key personnel away from our business operations, and cause us to incur significant costs, any of which could materially adversely affect our business, financial condition, and results of operations.
As a result, future capital raising efforts may reduce the market price of our common stock and be dilutive to existing shareholders. We do not intend to pay cash dividends for the foreseeable future.
As a result, future capital raising efforts may reduce the market price of our common stock and be dilutive to existing stockholders. We do not intend to pay cash dividends for the foreseeable future.
As a financial services company, our business, results of operations and reputation are directly affected by elements beyond our control, such as macroeconomic and geopolitical conditions that might affect the volatility in financial markets.
As a financial services company, our business, results of operations and reputation are directly affected by elements beyond our control, such as macroeconomic and geopolitical conflicts that might affect the volatility in financial markets.
Our existing or future competitors may develop products or services that are similar to our products and services or that achieve greater market acceptance than our products and services, which could attract new customers away from our services and reduce our market share in the future.
Our existing or future competitors may develop products or services that are similar to our products and services or that achieve greater market acceptance than our products and services, which could attract new customers away from our services and reduce our market share.
For example, in 2016, we became subject to a SEC Order (in the Matter of Equidate, Inc. and Equidate Holdings LLC, Release No. 10262) pursuant to Section 8A of the Securities Act and Section 21C of the Exchange Act (the “Order”).
In 2016, we became subject to a SEC Order (in the Matter of Equidate, Inc. and Equidate Holdings LLC, Release No. 10262) pursuant to Section 8A of the Securities Act and Section 21C of the Exchange Act (the “Order”).
These provisions and duties impose restrictions and obligations on us with respect to our dealings with our customers, fund investors and our investments; including, for example, restrictions on transactions with our affiliates. Accordingly, FGA is subject to periodic SEC examinations and other requirements under the Advisers Act and related regulations primarily intended to benefit advisory customers.
These provisions and duties impose restrictions and obligations on us with respect to our dealings with our customers, fund investors, and our investments; including, for example, restrictions on transactions with our affiliates. In addition, FGA is subject to periodic SEC examinations and other requirements under the Advisers Act and related regulations primarily intended to benefit advisory customers.
We operate and serve investors in foreign jurisdictions, and our business is subject to the laws and requirements of each jurisdiction in which we operate. Issuers, buyers and sellers from over 70 jurisdictions use our platform.
We operate and serve investors in foreign jurisdictions, and our business is subject to the laws and requirements of each jurisdiction in which we operate. Issuers, buyers and sellers from over 80 jurisdictions use our platform.
Our future success depends on our continuing ability to attract, develop, motivate and retain highly qualified and skilled employees. Qualified individuals are in high demand, and we may incur significant costs to attract and retain them.
Our future success depends on our continuing ability to attract, develop, motivate, and retain highly qualified and skilled personnel. Qualified individuals are in high demand, and we may incur significant costs to attract and retain them.
Our shareholders will not be deemed, by operation of the choice of forum provision, to have waived our obligation to comply with all applicable federal securities laws and the rules and regulations thereunder.
Our stockholders will not be deemed, by operation of the choice of forum provision, to have waived our obligation to comply with all applicable federal securities laws and the rules and regulations thereunder.
The costs of defending any such claims or litigation could be significant and, if we are unsuccessful, could subject us to substantial liability, prevent us from using the relevant technology or providing related products or services, or result in a requirement that we pay significant damages or licensing fees.
The costs of defending any such claims or litigation could be significant and, if we are unsuccessful, could subject us to substantial liability, prevent us from using the relevant intellectual property or providing related products or services, or result in a requirement that we pay significant damages or licensing fees.
Such attacks can include third parties gaining access to systems and confidential information, including personal information of our employees or customers, including through the use of stolen or inferred credentials, computer malware, viruses, spamming, phishing attacks, ransomware, card skimming code, business email compromises, and other deliberate attacks and attempts to gain unauthorized access or otherwise compromise or disrupt our 26 Ta ble of Contents systems or those of our third-party providers.
Such attacks can include third parties gaining access to systems and confidential information, including personal information of our employees or customers, including through the use of stolen or inferred credentials, computer malware, viruses, spamming, phishing attacks, ransomware, card skimming code, business email compromises, and other deliberate attacks and attempts to gain unauthorized access or otherwise compromise or disrupt our systems or those of our third-party providers.
The provision does not apply to any direct claims brought by our shareholders on their own behalf, or on behalf of any class of similarly situated shareholders, under the Exchange Act.
The provision does not apply to any direct claims brought by our stockholders on their own behalf, or on behalf of any class of similarly situated stockholders, under the Exchange Act.
We have been or are involved in, and may in the future become involved in, disputes and litigation matters between customers with respect to transactions on our platform. The high notional value of transactions on our platform makes us a target for clients to engage in lawsuits between one another and/or with us.
We have and may in the future become involved in, disputes and litigation matters between customers with respect to transactions on our platform. The high notional value of transactions on our platform makes us a target for customers to engage in lawsuits between one another and/or with us.
Additionally, if one or more key third-party service providers were to cease to exist, or to terminate its relationship with us, there could be delays in our ability to process transactions and perform other operational functions for which we are currently relying on such third-party service providers for, and we may not be able to promptly replace such third-party service provider with a different third-party service provider that has the ability to promptly provide the same services in the same manner and on the same economic terms.
Additionally, if one or more key third-party service providers were to cease to exist, or to terminate its relationship with us, there could be delays in our ability to process transactions and perform other operational functions for which we are currently relying on such third-party service providers for, and we may not be able to promptly replace such third-party service provider with a different third-party service provider that has the ability to promptly provide the same services in the 29 Table o f Contents same manner and on the same economic terms.
We cannot ensure that all of our employees and agents will comply with our internal policies and procedures and applicable law, including anti-corruption, anti-bribery and similar laws. We may ultimately be held responsible for any such non-compliance. 23 Ta ble of Contents We operate in an industry in which integrity and the confidence of our customers is of critical importance.
We cannot ensure that all of our employees and agents will comply with our internal policies and procedures and applicable law, including anti-corruption, anti-bribery, and similar laws. We may ultimately be held responsible for any such non-compliance. We operate in an industry in which integrity and the confidence of our customers is of critical importance.
These laws also require that we keep accurate books and records and maintain internal controls and compliance procedures designed to prevent any such actions. In 27 Ta ble of Contents addition, we or our third-party intermediaries may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities.
These laws also require that we keep accurate books and records and maintain internal controls and compliance procedures designed to prevent any such actions. In addition, we or our third-party intermediaries may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities.
We are subject to the FCPA, U.S. domestic bribery laws and other U.S. and foreign anti-corruption laws. Anti-corruption and anti-bribery laws have been enforced aggressively in recent years and are interpreted broadly to generally prohibit companies, their employees and their third-party intermediaries from authorizing, offering or providing, directly or indirectly, improper payments or benefits to recipients in the public sector.
We are subject to the FCPA, U.S. domestic bribery laws, and other U.S. and foreign anti-corruption laws. Anti-corruption and anti-bribery laws are enforced aggressively and are interpreted broadly to generally prohibit companies, their employees, and their third-party intermediaries from authorizing, offering, or providing, directly or indirectly, improper payments or benefits to recipients in the public sector.
Future issuances of debt securities and equity securities may adversely affect us, including the market price of common stock and may be dilutive to existing shareholders.
Future issuances of debt securities and equity securities may adversely affect us, including the market price of common stock and may be dilutive to existing stockholders.
For example, under SEC rules applicable to Forge Securities, a dividend in excess of 30% of a member firm’s excess net capital may not be paid 18 Ta ble of Contents without Forge Securities providing prior written notice. Compliance with these rules may impede our ability to receive dividends, distributions and other payments from Forge Securities.
For example, under SEC rules applicable to Forge Securities, a dividend in excess of 30% of a member firm’s excess net capital may not be paid without Forge Securities providing prior written notice. Compliance with these rules may impede our ability to receive dividends, distributions, and other payments from Forge Securities.
Such securities also may be governed by an indenture or other instrument containing covenants restricting its operating flexibility. Additionally, any convertible or exchangeable securities 34 Ta ble of Contents that we issue in the future may have rights, preferences and privileges more favorable than those of our common stock.
Such securities also may be governed by an indenture or other instrument containing covenants restricting its operating flexibility. Additionally, any convertible or exchangeable securities that we issue in the future may have rights, preferences, and privileges more favorable than those of our common stock.
To manage our growth effectively, we must continue to improve our operational, financial and management systems and controls by, among other things: • effectively attracting, training, integrating and retaining new employees; • further improving our key business systems, processes, and information technology infrastructure, including our and third-party services, to support our business needs; • enhancing our information, training and communication systems to ensure that our employees are well-coordinated and can effectively communicate with each other and our customers; and 15 Ta ble of Contents • improving our internal control over financial reporting and disclosure controls and procedures to ensure timely and accurate reporting of our operational and financial results.
To manage our growth effectively, we must continue to improve our operational, financial, and management systems and controls by, among other things: • effectively attracting, training, integrating, and retaining new personnel; • further improving our key business systems, processes, and information technology infrastructure, including our and third-party services, to support our business needs; • enhancing our information, training, and communication systems to ensure that our personnel are well-coordinated and can effectively communicate with each other and our customers; and • improving our internal control over financial reporting and disclosure controls and procedures to ensure timely and accurate reporting of our operational and financial results.
We are required to test goodwill for impairment at least annually or earlier if events or changes in circumstances indicate the carrying value may not be recoverable. As of December 31, 2022, we had recorded a total of approximately $134 million of goodwill and other intangible assets.
We are required to test goodwill for impairment at least annually or earlier if events or changes in circumstances indicate the carrying value may not be recoverable. As of December 31, 2023, we had recorded a total of approximately $130 million of goodwill and other intangible assets.
An adverse change in domestic or global market conditions, particularly if such change has the effect of changing one of our critical assumptions or estimates made in connection with the impairment testing of goodwill or intangible assets, could result in a change to the estimation of fair value that could result in an impairment charge to our goodwill or other intangible assets.
An adverse change in domestic or global market conditions, and/or declines in our stock price, particularly if such change has the effect of changing one of our critical assumptions or estimates made in connection with the impairment testing of goodwill or intangible assets, could result in a change to the estimation of fair value that could result in an impairment charge to our goodwill or other intangible assets.
Regulatory, Tax and Legal Risks Our business is subject to extensive laws and regulations promulgated by U.S. state, U.S. federal and non-U.S. laws, including those applicable to broker-dealers, investment advisers and alternative trading systems, including regulation by the SEC and FINRA in the jurisdictions in which we operate.
Regulatory, Tax, and Legal Risks Our business is subject to extensive, complex, and evolving laws and regulations promulgated by U.S. state, U.S. federal, and non-U.S. laws, including those applicable to broker-dealers, investment advisers, and alternative trading systems, such as regulation by the SEC and FINRA, and in the jurisdictions in which we operate.
Insurance and other traditional risk mitigating tools 24 Ta ble of Contents may be held by or available to us in order to manage certain exposures, but they are subject to terms such as deductibles, coinsurance, limits and policy exclusions, as well as risk of counterparty denial of coverage, default or insolvency.
Insurance and other traditional risk mitigating tools may be held by or available to us in order to manage certain exposures, but they are subject to terms such as deductibles, coinsurance, limits, and policy exclusions, as well as risk of counterparty denial of coverage, default, or insolvency.
The Sarbanes-Oxley Act requires, among other things, that we establish and maintain effective internal controls and procedures for financial reporting. Furthermore, the need to establish the corporate infrastructure demanded of a public company may divert our management’s attention from implementing our growth strategy, which could prevent us from improving our business, financial condition and results of operations.
The Sarbanes-Oxley Act requires, among other things, that we establish and maintain effective internal controls and procedures for financial reporting. Furthermore, maintaining the corporate infrastructure demanded of a public company may divert our management’s attention from implementing our growth strategy from time to time, which could prevent or delay us from improving our business, financial condition, and results of operations.
If we change or expand our business activities, such as through our recent establishment of Forge Europe, we may be required to obtain additional licenses before we can engage in those activities.
If we change or expand our business activities, either in scope or geographically such as through our recent establishment of Forge Europe, we may be required to obtain additional licenses before we can engage in those activities.
The market price of our common stock may decline below your purchase price, and you may not be able to sell your shares of our common stock at or above the price you paid for such shares (or at all). Our operating results and stock price may be volatile.
The market price of our common stock may decline below your purchase price, and you may not be able to sell your shares of our common stock at or above the price you paid for such shares (or at all).
These events could have a material and adverse effect on our business, results of operations, financial condition and prospects. 19 Ta ble of Contents If our goodwill, or other intangible assets, or fixed assets become impaired, we may be required to record a charge to our earnings.
These events could have a material and adverse effect on our business, results of operations, financial condition, and prospects. If our goodwill, or other intangible assets, or fixed assets become impaired, we may be required to record a charge to our earnings.
For example, many state legislatures have adopted comprehensive legislation that would apply to the online collection of personal information of a broad number of U.S. state residents, including measures relating to privacy, data security, data breaches and the protection 25 Ta ble of Contents of sensitive and personal information.
For example, many state legislatures have adopted comprehensive legislation that would apply to the online collection of personal information of a broad number of U.S. state residents, including measures relating to privacy, data security, data breaches, and the protection of sensitive and personal information.
There is no assurance that our revenue and business models will be successful. The majority of our revenue is derived from commissions earned on securities-based transactions, or placement fees. We maintain a platform which generates revenue through our Forge Markets offering by volume-based fees sourced from institutions, individual investors and shareholders.
There is no assurance that our revenue and business models will be successful. The majority of our revenue historically is derived from commissions earned on securities-based transactions. We maintain a platform which generates revenue through our Forge Markets offering by volume-based fees sourced from institutions, individual investors, and stockholders.
We have previously completed and may continue to evaluate and complete acquisitions in the future, which could require significant management attention, result in additional dilution to our stockholders, increase expenses and disrupt our business and adversely affect our financial results. 16 Ta ble of Contents Our success will depend, in part, on our ability to expand our business.
We have previously completed and may continue to evaluate and complete acquisitions in the future, which could require significant management attention, result in additional dilution to our stockholders, increase expenses, disrupt our business, and adversely affect our financial results. Our success will depend, in part, on our ability to expand our business.
Item 1A. Risk Factors In addition to the factors discussed elsewhere in this Report, the following risks and uncertainties, some of which have occurred and any of which may occur in the future, could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Item 1A. Risk Factors In addition to the factors discussed elsewhere in this Report, the following risks and uncertainties, some of which have occurred and any of which may occur in the future, could have a material adverse effect on our business, financial 12 Table o f Contents condition, results of operations, and cash flows.
These laws and regulations may hinder our ability to access funds that we may need to make payments on our obligations, including any debt obligations we may incur and otherwise conduct our business by, among other things, reducing our liquidity in the form of corporate cash.
These laws and regulations may hinder our ability to access funds that we may 18 Table o f Contents need to make payments on our obligations, including any debt obligations we may incur and otherwise conduct our business by, among other things, reducing our liquidity in the form of corporate cash.
Furthermore, our technology may become obsolete, and there is no guarantee that we will be able to successfully develop, obtain or use new technologies to adapt our platform to stay competitive in the future.
Furthermore, our intellectual property may become obsolete, and there is no guarantee that we will be able to successfully obtain, develop, or use new intellectual property to adapt our platform to stay competitive in the future.
Our broker-dealer subsidiary, Forge Securities, LLC (“Forge Securities”), is subject to Rule 15c3-1 under the Exchange Act, which specifies minimum capital requirements intended to ensure the general financial soundness and liquidity of broker-dealers, and Forge Securities is subject to Rule 15c3-3 under the Exchange Act, which requires broker-dealers to maintain certain liquidity reserves.
Our broker-dealer subsidiary, Forge Securities, is subject to Rule 15c3-1 under the Exchange Act, which specifies minimum capital requirements intended to ensure the general financial soundness and liquidity of broker-dealers. Forge Securities is exempt from the requirements of Rule 15c3-3 under the Exchange Act, which requires broker-dealers to maintain certain liquidity reserves.
In addition, we rely on certain exemptions from licensing requirements in other jurisdictions where we conduct business. Changes in licensing and registration laws may result in increased disclosure requirements, increased fees, or may impose other conditions to licensing or registrations that we or our personnel are unable to meet.
In addition, we rely on certain exemptions from licensing requirements in other 20 Table o f Contents jurisdictions where we conduct business. Changes in licensing and registration laws may result in increased disclosure requirements, increased fees, or may impose other conditions to licensing or registrations that we or our personnel are unable to meet.
We develop and maintain systems and processes aimed at detecting and preventing fraudulent activity, which require significant investment, maintenance and ongoing monitoring and updating as technologies and regulatory requirements change and as efforts to overcome security and anti-fraud measures become more sophisticated.
We develop and maintain systems and processes aimed at detecting and preventing fraudulent activity, which require significant investment, maintenance, and ongoing monitoring and updating as technologies and regulatory 30 Table o f Contents requirements change and as efforts to overcome security and anti-fraud measures become more sophisticated.
We also generate revenues through our Forge Trust offering with account fees, cash management fees and custody-as-a-service fees through custodial offerings, or custodial administration fees for all Forge customers and also through our Forge Intelligence and FCS offerings.
We also generate revenues through our Forge Trust offering with account fees, cash management fees, and custody-as-a-service fees through custodial offerings, or custodial administration fees for all Forge customers and also through our Forge Intelligence offering and private company solutions.
Any future determination to pay dividends will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, restrictions contained in future agreements and financing instruments, business prospects and such other factors as our board of directors deems relevant.
Any future determination to pay dividends will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, restrictions contained in future agreements and financing instruments, business prospects, and such other factors as our board of directors deems relevant. Item 1B. Unresolved Staff Comments None.
The risks we face in connection with acquisitions include: • diversion of management time and focus from operating our business to addressing acquisition integration challenges; • poor quality or misleading performance data available during due diligence, and resultant inability to realize the projected benefits of such acquisitions; • coordination of technology, product development, risk management and sales and marketing functions; • retention of employees from the acquired company, and retention of our employees who were attracted to us because of our smaller size or for other reasons; • cultural challenges associated with integrating employees from the acquired company into our organization; • integration of the acquired company’s accounting, management information, human resources and other administrative systems; • the need to implement or improve controls, procedures and policies at a business that prior to the acquisition may have lacked effective controls, information security safeguards, procedures and policies; • potential write-offs or impairments of goodwill, other intangible assets or long-lived assets ; • liability for activities of the acquired company before the acquisition, including intellectual property infringement claims, violations of laws, commercial disputes, tax liabilities and other known and unknown liabilities; • litigation or other claims in connection with the acquired company, including claims from terminated employees, subscribers, former shareholders or other third parties; and • geographic expansion that may expose our business to known and unknown regulatory compliance risks including elevated risk factors for tax compliance, money laundering controls, and supervisory controls oversight.
The risks we face in connection with acquisitions include: • diversion of management time and focus from operating our business to addressing acquisition integration challenges; • poor quality or misleading performance data available during due diligence, and resultant inability to realize the projected benefits of such acquisitions; • coordination of technology, product development, risk management, sales, and marketing functions; • retention of personnel from the acquired company, and retention of our personnel who were attracted to us because of our smaller size or for other reasons; • cultural challenges associated with integrating personnel from the acquired company into our organization; • integration of the acquired company’s accounting, management information, human resources, and other administrative systems; • the need to implement or improve controls, procedures, and policies at a business that prior to the acquisition may have lacked effective controls, information security safeguards, procedures, and policies; • potential write-offs or impairments of goodwill, other intangible assets or long-lived assets; • liability for activities of the acquired company before the acquisition, including intellectual property infringement claims, violations of laws, commercial disputes, tax liabilities, and other known and unknown liabilities; • litigation or other claims in connection with the acquired company, including claims from terminated employees, subscribers, former stockholders, or other third parties; and • geographic expansion that may expose our business to known and unknown regulatory compliance risks including elevated risk factors for tax compliance, money laundering controls, and supervisory controls oversight. 17 Table o f Contents Our failure to address these risks or other problems encountered in connection with our acquisitions and investments could cause us to fail to realize the anticipated benefits of these acquisitions or investments, cause us to incur unanticipated liabilities and harm our business generally.
The securities industry is highly regulated, including under federal, state and other applicable laws, rules, and regulations, and we may be adversely affected by regulatory changes related to suitability of financial products, supervision, sales practices, advertising, private placements, application of fiduciary standards, best execution, and market structure, any of which could limit our business and damage our reputation.
Broker-dealer activities are highly regulated, including under federal, state, and other applicable laws, rules, and regulations, and we may be adversely affected by regulatory changes related to suitability of financial products, supervision, sales practices, advertising, private placements, application of fiduciary standards, best execution, and market structure, any of which could limit our business and damage our reputation.
Our involvement in any such matter also could cause significant harm to our reputation and divert management attention from the operation of our business, even if the matters are ultimately determined in our favor.
Our involvement in any such matter also could cause significant harm to our reputation and divert management attention from the operation of our business, even if the matters are ultimately determined in our 23 Table o f Contents favor.
Various laws and regulations in the United States and abroad, such as the Bank Secrecy Act, the Dodd-Frank Act, the USA PATRIOT Act, and the Credit Card Accountability Responsibility and Disclosure Act, impose certain anti-money laundering requirements on companies that are financial institutions or that provide financial products and services.
Various laws and regulations in the United States and abroad, such as the Bank Secrecy Act, the Dodd-Frank Act, and the USA PATRIOT Act, impose certain anti-money laundering ("AML") requirements on companies that are financial institutions or that provide financial products and services.
The process of developing new technologies and products is complex, and if we are unable to successfully innovate and continue to deliver a superior experience, demand for our products may decrease and our growth and operations may be harmed. If we fail to attract new customers, or fail to do so in a cost-effective manner, our business may be harmed.
The process of developing new technologies and products is complex, and if we are unable to successfully innovate and continue to deliver a superior experience, demand for our products may decrease and our growth and operations may be harmed. If we fail to retain our existing customers or acquire new customers in a cost-effective manner, our business could be harmed.
There is a risk that our affiliated entities will not maintain proper information barriers if we fail to develop and enforce appropriate policies and 20 Ta ble of Contents procedures regarding information barriers between entities.
There is a risk that our affiliated entities will not maintain proper information barriers if we fail to develop and enforce appropriate policies and procedures regarding information barriers between entities.
As a result of the COVID-19 pandemic, we may also face increased cybersecurity risks due to our reliance on internet technology and the number of our employees who are working remotely, which may create additional opportunities for cybercriminals to exploit vulnerabilities.
We may also face increased cybersecurity risks due to our reliance on internet technology and the number of our employees who are working remotely, which may create additional opportunities for cybercriminals to exploit vulnerabilities.
Financial services providers like us, as well as our customers, colleagues, regulators, vendors and other third parties, have experienced a significant increase in fraudulent activity in recent years and will likely continue to be the target of increasingly sophisticated criminal activity in the future.
Financial services providers like us, as well as our customers, colleagues, regulators, vendors, and other third parties, have experienced a significant increase in fraudulent activity and will likely continue to be the target of increasingly sophisticated criminal activity in the future given our dependence on digital technologies.
In addition to regulatory risks, there are significant risks and costs inherent in doing business in international markets, including: • difficulty establishing and managing international operations and the increased operations, travel, infrastructure and legal and compliance costs associated with locations in different countries or regions; • difficulties or delays in obtaining and/or maintaining the regulatory permissions, authorizations, licenses or consents that may be required to offer certain products in one or more international markets; • difficulties in managing multiple regulatory relationships across different jurisdictions on complex legal and regulatory matters; • difficulties in identifying and obtaining appropriate local foreign counsel in the jurisdictions in which we operate or plan to operate; • if we were to engage in any merger or acquisition activity internationally, this is complex and would be new for us and subject to additional regulatory scrutiny; • the need to vary products, pricing and margins to effectively compete in international markets; • the need to adapt and localize products for specific countries, including obtaining rights to third-party intellectual property used in each country; • increased competition from local providers of similar products and services; • the challenge of positioning our products and services to meet a demand in the local market; • the ability to obtain, maintain, protect, defend and enforce intellectual property rights abroad; 22 Ta ble of Contents • the need to offer customer support and other aspects of our offering (including websites, articles, blog posts and customer support documentation) in various languages; • compliance with anti-bribery laws and the potential for increased complexity due to the requirements on us as a group to follow multiple rule sets; • complexity and other risks associated with current and future legal requirements in other countries, including laws, rules, regulations and other legal requirements related to cybersecurity and data privacy frameworks and labor and employment laws; • the need to enter into new business partnerships with third-party service providers in order to provide products and services in the local market, which we may rely upon to be able to provide such products and services or to meet certain regulatory obligations; • varying levels of internet technology adoption and infrastructure, and increased or varying network and hosting service provider costs and differences in technology service delivery in different countries; • fluctuations in currency exchange rates and the requirements of currency control regulations, which might restrict or prohibit conversion of other currencies into U.S. dollars; • taxation of our international earnings and potentially adverse tax consequences due to requirements of or changes in the income and other tax laws of the United States or the international jurisdictions in which we operate; and • political or social unrest or economic instability in a specific country or region in which we operate.
In addition, the jurisdictions that currently do not provide extensive regulation of our business may later choose to do so, and if such jurisdictions so act, we could incur substantial compliance costs and may not be able to obtain or maintain all requisite licenses and permits, which could require us to modify, limit, or cease our activities in the relevant jurisdiction or jurisdictions. 21 Table o f Contents In addition to regulatory risks, there are significant risks and costs inherent in doing business in international markets, including: • difficulty establishing and managing international operations and the increased operations, travel, infrastructure, and legal and compliance costs associated with locations in different countries or regions; • difficulties or delays in obtaining and/or maintaining the regulatory permissions, authorizations, licenses, or consents that may be required to offer certain products in one or more international markets; • difficulties in managing multiple regulatory relationships across different jurisdictions on complex legal and regulatory matters; • difficulties in identifying and obtaining appropriate local foreign counsel in the jurisdictions in which we operate or plan to operate; • if we were to engage in any merger or acquisition activity internationally, this is complex and would be new for us and subject to additional regulatory scrutiny; • the need to vary products, pricing, and margins to effectively compete in international markets; • the need to adapt and localize products for specific countries, including obtaining rights to third-party intellectual property used in each country; • increased competition from local providers of similar products and services; • the challenge of positioning our products and services to meet a demand in the local market; • the ability to obtain, maintain, protect, defend, and enforce intellectual property rights abroad; • the need to offer customer support and other aspects of our offering (including websites, articles, blog posts, and customer support documentation) in various languages; • compliance with anti-bribery laws and the potential for increased complexity due to the requirements on us as a group to follow multiple rule sets; • maintaining risk management frameworks, and adhering to appropriate global and local regulatory risk management guidelines, prudential rules, and control standards. • complexity and other risks associated with current and future legal requirements in other countries, including laws, rules, regulations, and other legal requirements related to cybersecurity and data privacy frameworks and labor and employment laws; • the need to enter into new business partnerships with third-party service providers in order to provide products and services in the local market, which we may rely upon to be able to provide such products and services or to meet certain regulatory obligations; • varying levels of internet technology adoption and infrastructure, and increased or varying network and hosting service provider costs and differences in technology service delivery in different countries; • fluctuations in currency exchange rates and the requirements of currency control regulations, which might restrict or prohibit conversion of other currencies into U.S. dollars; • taxation of our international earnings and potentially adverse tax consequences due to requirements of or changes in the income and other tax laws of the United States or the international jurisdictions in which we operate; and • political or social unrest or economic instability in a specific country or region in which we operate. 22 Table o f Contents We have limited experience with international regulatory environments and market practices, and we may not be able to penetrate or successfully operate in the markets we choose to enter.
If no or few securities or industry analysts commence coverage of us, the market price and liquidity for our common stock could be negatively impacted.
Securities and industry analysts may not publish research on us. If no or few securities or industry analysts commence coverage of us, the market price and liquidity for our common stock could be negatively impacted.
Our failure to comply with anti-money laundering, economic and trade sanctions regulations, and similar laws could subject us to substantial civil and criminal penalties, or result in the loss or restriction of our MSB or broker-dealer registrations and state licenses, or liability under our contracts with third parties, which may significantly affect our ability to conduct some aspects of our business.
Our failure to comply with AML, economic and trade sanctions regulations, and similar laws could subject us to substantial civil and criminal penalties, or result in the loss or restriction of our financial institution registrations and state licenses, or liability under our contracts with third parties, which may significantly affect our ability to conduct some aspects of our business.
Additionally, if we fail to acquire and retain new institutions, individual investors and shareholders, or fail to do so in a cost- 14 Ta ble of Contents effective manner, we may be unable to increase revenue and achieve profitability for our Forge Markets and Forge Trust offerings.
Additionally, if we fail to acquire and retain new institutions, individual investors, and stockholders, or fail to do so in a cost-effective manner, we may be unable to increase revenue and achieve profitability for our Forge Markets and Forge Trust offerings.
We are subject to overview by multiple regulators. Forge Trust Co. is subject to regulation and examinations by the South Dakota Division of Banking. Forge Trust Co. is also subject to the Bank Secrecy Act, the regulations promulgated by FinCEN, as well as the economic and trade sanction programs administered by OFAC.
Forge Trust Co. is registered with and subject to regulation and examinations by the South Dakota Division of Banking. Forge Trust Co. is also subject to the Bank Secrecy Act, the regulations promulgated by FinCEN, as well as the economic and trade sanction programs administered by OFAC.
If we cannot protect our proprietary technology from intellectual property challenges, or if our platform becomes obsolete, our business, financial condition and results of operations could be adversely affected. Accusations of infringement of third-party intellectual property rights could materially and adversely affect our business.
If we 27 Table o f Contents cannot protect our intellectual property from third-party challenges, or if our platform becomes obsolete, our business, financial condition, and results of operations could be adversely affected. Accusations of infringement of third-party intellectual property rights could materially and adversely affect our business.
We are subject to various federal, state and local regulatory regimes. The principal policy objectives of these regulatory regimes are to protect borrowers, investors, and other financial services customers and to prevent fraud, money laundering, and terrorist financing.
The principal policy objectives of these regulatory regimes are to protect borrowers, investors, and other financial services customers and to prevent fraud, money laundering, and terrorist financing.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeIn the future, we may need to add new facilities and expand our existing facilities as we add employees, grow our infrastructure and evolve our business, and we believe that suitable additional or substitute space will be available on commercially reasonable terms to meet our future needs.
Biggest changeIn the future, we may need to add new facilities and expand our existing facilities as we add employees, grow our infrastructure and evolve our business, and we 35 Table o f Contents believe that suitable additional or substitute space will be available on commercially reasonable terms to meet our future needs.
Item 2. Properties Our corporate headquarters occupies approximately 10,800 square feet in San Francisco, California under a lease agreement that expires December 2023. We also lease and sub-lease additional offices in San Francisco, California; San Mateo, California; Sioux Falls, South Dakota; and New York, New York. We believe that our existing facilities are sufficient for our current needs.
Item 2. Properties Our corporate headquarters occupies approximately 21,800 square feet in San Francisco, California under a sublease agreement that expires December 2025. We also lease and sub-lease additional offices in San Francisco, California; San Mateo, California; Sioux Falls, South Dakota; and New York, New York. We believe that our existing facilities are sufficient for our current needs.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeSecurities Authorized for Issuance under Equity Compensation Plans Information regarding the securities authorized for issuance under our equity compensation plans can be found under Item 12 of this Report. 37 Ta ble of Contents
Biggest changeIssuer Purchases of Equity Securities There were no repurchases made during the three months ended December 31, 2023. Securities Authorized for Issuance under Equity Compensation Plans Information regarding the securities authorized for issuance under our equity compensation plans can be found under Item 12 of this Report.
The actual number of shareholders is greater than this number of record holders, and includes shareholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees. Dividend Policy We have never paid cash dividends on our capital stock and we do not anticipate paying any cash dividends in the foreseeable future.
The actual number of stockholders is greater than this number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees. Dividend Policy We have never paid cash dividends on our capital stock and we do not anticipate paying any cash dividends in the foreseeable future.
Sales of Unregistered Securities and Use of Proceeds We did not sell any equity securities which were not registered under the Securities Act during the fiscal year ended December 31, 2022 that were not otherwise disclosed in our Quarterly Reports on Form 10-Q or our Current Reports on Form 8-K.
Sales of Unregistered Securities and Use of Proceeds We did not sell any equity securities which were not registered under the Securities Act during the fiscal year ended December 31, 2023 that were not otherwise disclosed in our Quarterly Reports on Form 10-Q or our Current Reports on Form 8-K.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information for Common Stock Our common stock is traded on the New York Stock Exchange under the symbol “FRGE”. Holders of Record As of December 31, 2022, there were approximately 115 stockholders of record of our common stock.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information for Common Stock Our common stock is traded on the New York Stock Exchange under the symbol “FRGE”. Holders of Record As of December 31, 2023, there were approximately 120 stockholders of record of our common stock.
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Stock Performance Graph The graph below compares the cumulative total stockholder return on our common stock with the cumulative total return on the Standard & Poor's 500 Stock Index (S&P 500) and S&P 500 Information Technology Index (S&P IT) through December 31, 2022.
Added
Securities Authorized for Issuance under Equity Compensation Plans The information required by this item will be incorporated by reference to our definitive proxy statement for our 2024 Annual Meeting of Stockholders to be filed within 120 days after the end of the fiscal year covered by this Report (the "Proxy Statement").
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The graph assumes $100 was invested at the market close on March 21, 2022, which was the first day our common stock began trading after the Closing of the Business Combination. The comparisons in this chart are required by the SEC and are not intended to forecast or be indicative of the possible future performance of our common stock.
Removed
The performance graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall information be incorporated by reference into any future filing under the Securities Act or Exchange Act, except to the extent that we specifically incorporate it by reference into such filing.
Removed
Issuer Purchases of Equity Securities During the three months ended December 31, 2022, we repurchased 163,054 shares of our common stock, which represented early exercised but unvested stock options from a former employee.

Other FRGE 10-K year-over-year comparisons