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What changed in Forge Global Holdings, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Forge Global Holdings, Inc.'s 2023 and 2024 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 2024 report.

+403 added−409 removedSource: 10-K (2025-03-06) vs 10-K (2024-03-26)

Top changes in Forge Global Holdings, Inc.'s 2024 10-K

403 paragraphs added · 409 removed · 247 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeIn 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.
Biggest changeIn 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, information on management teams and investors, primary 5 Table of Contents financing round data, and mutual fund marks.
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.
Amassing the technical expertise and know-how to perform these tasks at scale is difficult, and we believe we are uniquely positioned to continue to streamline large parts of this traditionally fully analog process.
Forge Securities is subject to the Bank Secrecy Act, as amended by the USA PATRIOT Act (the "Bank Secrecy Act"), the regulations promulgated by the Financial Crimes Enforcement Network (“FinCEN”), as well as the economic and trade sanction programs administered by the U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”). Investment Advisor Regulation .
Forge Securities is subject to the Bank Secrecy Act, as amended by the USA PATRIOT Act (the "Bank Secrecy Act"), the regulations promulgated by the Financial Crimes Enforcement Network (“FinCEN”), as well as the economic and trade sanction programs administered by the U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”). Investment Adviser Regulation .
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.
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. • Custody-as-a-Service .
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 believe we have built a highly effective and efficient approach to new client 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.
Our investment adviser subsidiary, Forge Global Advisors LLC (“FGA”), is registered with and subject to regulation by the SEC under the Investment Advisers Act of 1940 (the "Advisers Act”). FGA provides advisory and management services to our Investment Funds that are not registered under the Investment Company Act of 1940.
Our investment adviser subsidiary, Forge Global Advisors LLC (“FGA”), is registered with and subject to regulation by the SEC under the Investment Advisers Act of 1940 (the "Advisers Act”). FGA provides advisory and management services to our SAFs that are not registered under the Investment Company Act of 1940.
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 regulatory framework applies to our U.S. businesses in the following ways: • regulation of our broker-dealer and registered investment adviser subsidiaries; • regulation of our South Dakota chartered non-depository licensed trust company; and • regulation of our California licensed lending subsidiary. Broker Dealer Regulation .
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.
Diverse and Experienced Team 9 Table of Contents 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.
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.
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, 2024, we have 16 patents issued or pending in the United States and internationally.
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 could be subject to additional legal and regulatory requirements if laws and regulations change in the jurisdictions we operate. 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.
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.
Forge Lending is engaged in the business of originating loans to option holders in the stock of unregistered 10 Table of Contents private companies for the purpose of exercising these options in connection with a follow up sale of the acquired securities on the Forge marketplace. European Regulation.
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.
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.
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).
Competition We compete with other broker-dealers and companies that provide access to private market trading, company liquidity solutions, private market data, custody services, 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).
In addition, Forge UK, a wholly owned subsidiary of Forge GmbH , is an appointed representative of Kroll Securities Limited, an independent third-party which is authorized and regulated by the Financial Conduct Authority to facilitate transactions in securities. Data Privacy Our businesses collect, store, share, transfer, use and otherwise process the personal data of individuals worldwide.
Forge UK, a wholly owned subsidiary of Forge GmbH, is an appointed representative of Sapeno Partners LLC, an independent third-party which is authorized and regulated by BaFin to facilitate transactions in securities. Data Privacy Our businesses collect, store, share, transfer, use, and otherwise process the personal data of individuals worldwide.
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.
Innovative, Private Markets Platform Operating at Scale 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 are supported by efficient workflows which make the processing of trades a more efficient and user-friendly experience.
While this application is under review by BaFin, Forge GmbH has registered with BaFin as a tied agent to provide investment brokerage services in Germany exclusively under the license and liability of Effecta GmbH, an independent third-party which is registered with BaFin as an investment firm.
Forge GmbH is registered with the Federal Financial Supervisory Authority ("BaFin") as a tied agent to provide investment brokerage services in Germany exclusively under the license and liability of Effecta GmbH, an independent third-party which is registered with BaFin as an investment firm.
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.
While our operations are chiefly located in the United States, we have expanded our operations internationally to match the global demand for our products and services, including our expansion into the European private market with the establishment of Forge Europe with our long-time strategic partner, Deutsche Börse.
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).
We have approximately 721,000 registered users, which includes approximately 700,500 individual investors and approximately 20,500 institutional investors, with institutional investors representing approximately 57% of our transaction volume since inception as of December 31, 2024, including the historical business and companies we have acquired on a pro forma basis.
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.
Other trademarks and trade names referred to in this Report are the property of their respective owners. 11 Table of Contents 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.
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.
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.
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.
For the year ended December 31, 2024, transactions took an average of 42 days to close and the standard minimum transaction size on our platform was $100,000; however, we facilitated transactions less than this minimum size based on circumstances such as upon the specific request of certain sellers or to receive a partial execution of a larger order.
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.
Clients submit an indication of interest (“IOI”) on the platform indicating whether they are buying or selling, the series or class of equity they want to sell or buy (e.g., preferred, common, or both), the price range, and number of shares or volume range they are looking to buy or sell.
Government Regulation We operate in a rapidly evolving regulatory environment and are subject to extensive and complex regulations.
We also engage temporary employees, contractors and consultants as needed to support our operations. Government Regulation We operate in a rapidly evolving regulatory environment and are subject to extensive and complex regulations.
We are also proud and fortunate to have talented and passionate employees that are bold, humble, and accountable and a culture that puts trust, transparency, and collaboration top-of-mind.
We are also proud and fortunate to have talented and passionate employees who are bold, humble, and accountable, as well as a culture that puts trust, transparency, and collaboration at the top of our minds. Employees As of December 31, 2024, we had 300 employees and 300 full-time employees.
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 will also continue to optimize our growth strategy with value-creating mergers, acquisitions, and other strategic transactions. 8 Table of Contents Expand Internationally Issuers, buyers, and sellers from over 80 jurisdictions have transacted on our platform since inception (as of December 31, 2024, including the historical business and companies we have acquired on a pro forma basis).
We believe the investments we have and continue to make will enable us to quickly introduce new products and services while also providing us the opportunity to quickly and profitably continue to scale.
We believe the investments we have and continue to make will enable us to introduce new products and services quickly while also providing us the opportunity to continue to scale quickly and profitably. Deep Private Markets Experience. We believe our deep involvement in private markets uniquely positions us to understand, address, and anticipate the evolving needs of market participants.
Through a South Dakota trust company, Forge Trust enables account holders to invest and custody assets such as private company shares, private equity, venture capital, and real estate. Forge Trust currently serves primarily as a custodian of self-directed individual retirement accounts ("SDIRAs") holding alternative assets.
As of December 31, 2024, Forge Trust held approximately $16.9 billion of assets under custody through approximately 2.4 million accounts. • Self-Directed IRA Accounts. Forge Trust serves as a custodian of SDIRAs holding alternative assets. Account holders can invest and custody assets such as private company shares, private equity, venture capital, and real estate.
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.
We aggregate, anonymize, and supplement private market data, including historical trade and IOI data from transactions facilitated through the Forge marketplace. As of December 31, 2024, this data set contained secondary trading data on over 1,000 private companies.
Our European-based subsidiaries, Forge Europe GmbH (“Forge GmbH”) and Forge Europe UK Ltd (“Forge UK”) have commenced their business operations in Germany and the United Kingdom. Forge GmbH has applied for a license with the Federal Financial Supervisory Authority ("BaFin”) in order to provide investment brokerage services in Germany.
Our European-based subsidiaries, Forge Europe GmbH (“Forge GmbH”) and Forge Europe UK Ltd (“Forge UK”) have commenced their business operations in Germany and the UK.
Strategy Powered by Complementary and Integrated Solutions We strategically built our business model around complementary solutions to deliver a robust set of products and services that provide a synergized customer experience, and strong user economics. We believe over time customers will increasingly look to end-to-end providers such as us that can provide a holistic approach to their private market needs.
Strategy Powered by Complementary and Integrated Solutions We strategically built our business model around complementary solutions to deliver robust products and services that combine to provide a synergized experience and encourage continued use of our platform. We believe the evolution of private markets will necessitate a holistic approach to address the needs of its participants.
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).
With over a decade of experience, we have developed proprietary technology and honed our expertise to deliver efficient, user-friendly solutions. We have facilitated over $15 billion in transaction volume across approximately 28,000 transactions for over 600 companies as of December 31, 2024, including the historical business and companies we have acquired on a pro forma basis.
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 customers, and our commitment to ensuring that our technology performs at the highest level.
We believe this holistic approach yields strong platform-based network effects, fueling participation in the private market and our growth. We attribute our success to our integrated operating model, 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.
In addition, Forge Trust offers a powerful, highly scalable cloud-based custody platform that provides custody-as-a-service to our clients.
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 clients, including Acorns IRA accounts. Sales and Marketing We believe we’ve created a brand and client experience synonymous with trust.
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Item 1. Business Overview Forge is building the private market of the future – a more accessible, transparent, and liquid market for participating in private market growth.
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Item 1. Business Overview Forge is committed to democratizing access to private markets through our comprehensive suite of private market solutions, including a purpose-built technology-driven platform connecting buyers and sellers of private shares with investment opportunities. Our platform offers data, insights, and tools to help institutions and individuals confidently navigate the private market.
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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.
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We believe that private market investing should be seamless, centralized, and automated. We are focused on accelerating the evolution of private markets by building a market structure based on accessibility, liquidity, and transparency.
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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.
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Forge’s platform stands out for the breadth and depth of our order book and the broad spectrum of market participants, which fall into three general categories: investors, shareholders, and companies.
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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.
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To serve the distinct needs of each of these categories we have strategically invested in complementary solutions to offer our clients the most critical tools to participate in the private market ecosystem through an integrated platform that allows clients to engage in various investment opportunities and supports the process from beginning to end.
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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.
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Our Comprehensive Suite of Private Market Solutions Marketplace The flagship product of Forge’s private market platform is the Forge marketplace, which is designed to efficiently connect buyers looking to invest in private companies and sellers of company shares and related products.
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Challenges in the Private Markets Historically, participating in the private market was a complex and opaque endeavor for a number of reasons, including: Lack of Liquidity The private markets lacked technology, automated processes, and standardized documentation which led to an inefficient and illiquid market with little volume.
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To enhance private market participation for our clients, our marketplace incorporates features designed to simplify the complexities of private market transactions. These features include actionable data, insights, order submission and management, active negotiation and matching, and facilitating closing.
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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.
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We believe the seamless integration of these features creates a smooth client experience characterized by a centralized and intuitive user interface which enables clients to register for free, add holdings, explore private company data and insights, discover trade opportunities, effortlessly express trade interest, and ultimately enter into a transaction.
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Lack of Access Gaining access to opportunities in private companies was extremely difficult and historically was only available to a small number of well-connected investors primarily made up of brand name angel investors and venture capital firms. In addition, the investment minimums were prohibitively high, usually in the millions of dollars, which excluded most individual investors from participation.
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As a result of our extensive operating history, we have a deep understanding of the varied needs that market participants have when transacting in private markets. To address these distinct needs, our marketplace offers a diverse suite of transaction frameworks to our clients: • Direct Secondary Transfers.
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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.
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Clients can directly buy and sell preferred and common stock of private companies by searching for companies by name, sector, or valuation.
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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.
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Buyers and sellers are then matched on the platform based on those parameters and Forge facilitates the transaction. We also provide certain template documents to the parties and facilitate execution of company-specific stock transfer agreements at closing.
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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.
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Our subsidiary, Forge Lending LLC ("Forge Lending"), also supports private company employees by providing non-recourse loans with deferred interest to facilitate the exercise of their stock options in connection with sales on the Forge marketplace. • Forge Fund and Third-Party Investments.
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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.
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Forge funds are designed to provide investors with the opportunity to acquire ownership interests in Single Asset Funds (each, a “SAF”) managed by Forge Global Advisors LLC ("FGA"), our registered investment adviser subsidiary (see “Asset Management” below for additional services offered by FGA).
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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.
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Ownership interests are represented in fund units of the SAF that owns the underlying shares of 4 Table of Contents the private company or has in investment in a master fund that owns those shares. In addition to facilitating transactions through our Forge-established SAFs, Forge also serves as a placement agent for third-party funds. • Forge Pro .
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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.
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Forge Pro is our web application geared towards institutional clients that combines data visualization and visibility of detailed trade data, such as trading book views, extensive company data, and advanced pricing data. Through Forge Pro, clients are able to enter and manage IOIs and orders through a professional-grade interface designed for sophisticated market participants.
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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.
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To ensure compliance with federal securities laws and other applicable rules and regulations, our clients must satisfy certain participation criteria (e.g., accreditation) and provide identification information.
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Inside the Forge Markets experience, customers who are accredited investors can search for companies by name, sector, or valuation.
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In addition, our marketplace is designed to support the requirements of applicable registration exemptions such as Section 4(a)(1) and Reg D for primary issuance, as well as Section 4(a)(7) and industry practices known as Section 4(a)(1½) for secondary transactions, which provide exemptions from registration under the Securities Act of 1933, as amended (the "Securities Act").
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The first is a direct secondary transfer and the second is a pooled investment vehicle (each, an “Investment Fund”) which can aggregate multiple buyers and multiple sellers. The transaction flow is similar for both transaction types: a potential seller and buyer each submit an IOI, the buyers and sellers are matched up, and the company approves the transaction.
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Private Company Solutions Through our Private Company Solutions ("PCS"), we engage with private companies to deliver comprehensive, tailored solutions for their liquidity and capital formation needs, which we believe positions Forge as a trusted capital solutions partner and can drive additional participation on the Forge platform generally.
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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.
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The key solutions we specifically provide through PCS include (i) proprietary software to streamline company tender offer programs, (ii) structured liquidity programs where companies can provide their employees with ongoing liquidity opportunities through our marketplace, and (iii) facilitating capital raising initiatives for companies by participating in primary financings and/or tender offers through either direct engagement from companies or FGA-managed SAFs.
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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").
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Asset Management As noted in “Forge Fund Investments” above, FGA operates as a registered investment advisor that manages a suite of SAFs that invest in private companies on behalf of Forge and its marketplace users.
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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.
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We believe FGA enhances investment efficiency by streamlining interactions among investors, equity holders, and private companies, as well as increases Forge’s reach due to our positions on private company capitalization tables through these FGA-managed SAFs.
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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.
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As of December 31, 2024, FGA managed approximately $922 million in assets under management (“AUM”) across over 90 SAFs, which are structured as individual LLCs or Cayman Island funds. • Fund Creation and Management . FGA manages SAFs to facilitate investments in private companies on behalf of Forge and its clients.
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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.
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These SAFs provide investors with structured access to private market opportunities while enabling companies to engage with a single entity on their cap table.
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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.
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FGA oversees the lifecycle of each SAF, which begins at the initial acquisition of shares via either the primary or secondary markets sourced through either our marketplace or PCS and are liquidated or distributed upon a liquidity event of the underlying asset (typically an IPO, merger, or acquisition). Additionally, funds are sometimes created through investment in third-party fund opportunities.
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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.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn 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.
Biggest changeIn 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 client support and other aspects of our offering (including websites, articles, blog posts, and client 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; 21 Table of Contents • 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.
You 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.
You 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 clients or acquire new clients 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 clients 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.
Accordingly, the ability of Forge GmbH and Forge UK to conduct their business is completely dependent on the good standing of the principal firms under whose license we operate in the respective jurisdiction, and any suspension or other restriction on their licenses may have a material adverse effect on our expansion efforts and restrict our ability to operate in the respective jurisdiction.
Accordingly, the ability of Forge GmbH and Forge UK to conduct their business is dependent on the good standing of the principal firms under whose license we operate in the respective jurisdiction, and any suspension or other restriction on their licenses may have a material adverse effect on our expansion efforts and restrict our ability to operate in the respective jurisdiction.
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.
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. Forge Securities is exempt from the requirements of Rule 15c3-3 under the Exchange Act, which requires broker-dealers to maintain certain liquidity reserves.
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.
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 clients; 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.
Any or all of the issues above could adversely affect our ability to attract new customers and continue our relationship with existing customers, cause our customers to stop using our products and services, result in negative publicity, or subject us to governmental, regulatory, or third-party lawsuits, disputes, investigations, orders, regulatory fines, penalties for violation of applicable laws or regulations, or other actions or liability, thereby harming our business, financial condition, operating results, cash flows, and prospects.
Any or all of the issues above could adversely affect our ability to attract new clients and continue our relationship with existing clients, cause our clients to stop using our products and services, result in negative publicity, or subject us to governmental, regulatory, or third-party lawsuits, disputes, investigations, orders, regulatory fines, penalties for violation of applicable laws or regulations, or other actions or liability, thereby harming our business, financial condition, operating results, cash flows, and prospects.
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.
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; 30 Table of Contents • 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.
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.
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 clients.
Any accidental or unauthorized access to or disclosure, loss, destruction, disablement or encryption of, use or misuse of or modification of data, including personal information, cybersecurity breach, or other security incident that we, our customers or our third-party service providers experience or the perception that one has occurred or may occur, could harm our reputation, reduce the demand for our products and services, and disrupt normal business operations.
Any accidental or unauthorized access to or disclosure, loss, destruction, disablement or encryption of, use or misuse of or modification of data, including personal information, cybersecurity breach, or other security incident that we, our clients or our third-party service providers experience or the perception that one has occurred or may occur, could harm our reputation, reduce the demand for our products and services, and disrupt normal business operations.
In addition to established enterprises and global banks, we may also face competition from early-stage companies attempting to capitalize on the same, or similar, opportunities as we are. Some of our current and potential competitors have longer operating histories, significantly greater financial, technical, marketing, and other resources and a larger customer base than we do.
In addition to established enterprises and global banks, we may also face competition from early-stage companies attempting to capitalize on the same, or similar, opportunities as we are. Some of our current and potential competitors have longer operating histories, significantly greater financial, technical, marketing, and other resources and a larger client base than we do.
Any failure to timely and effectively resolve any such errors, bugs, vulnerabilities, or defects in the software on which we rely, and any associated degradations or interruptions of service, could result in damage to our reputation, loss of customers, loss of revenue, regulatory or governmental inquiries, civil litigation, or liability for damages, any of which could have an adverse effect on our business, financial condition, and results of operations.
Any failure to timely and effectively resolve any such errors, bugs, vulnerabilities, or defects in the software on which we rely, and any associated degradations or interruptions of service, could result in damage to our reputation, loss of clients, loss of revenue, regulatory or governmental inquiries, civil litigation, or liability for damages, any of which could have an adverse effect on our business, financial condition, and results of operations.
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.
Such attacks can include third parties gaining access to systems and confidential information, including personal information of our employees or clients, 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.
Operating results are difficult to forecast because they generally depend on a number of factors, including the competition we face, as well as our ability to attract and retain customers while generating sustained revenues through our services. We may be unable to adopt measures in a timely manner to compensate for any unexpected shortfall in income.
Operating results are difficult to forecast because they generally depend on a number of factors, including the competition we face, as well as our ability to attract and retain clients while generating sustained revenues through our services. We may be unable to adopt measures in a timely manner to compensate for any unexpected shortfall in income.
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. Institutions and individual investors face significant risk when buying securities on our platform, which may make our offerings generally less attractive.
Given our focus on the private market, our clients 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. Institutions and individual investors face significant risk when buying securities on our platform, which may make our offerings generally less attractive.
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.
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 clients is of critical importance.
Compliance and trading problems or other deficiencies or weaknesses that are reported to regulators, such as the SEC, FINRA, the CFPB, or state regulators, by dissatisfied customers or others, or that are identified by regulators themselves, are investigated by such regulators, and may, if pursued, result in formal claims being filed against us by customers or disciplinary action being taken against us or our employees by regulators or enforcement agencies.
Compliance and trading problems or other deficiencies or weaknesses that are reported to regulators, such as the SEC, FINRA, the CFPB, or state regulators, by dissatisfied clients or others, or that are identified by regulators themselves, are investigated by such regulators, and may, if pursued, result in formal claims being filed against us by clients or disciplinary action being taken against us or our employees by regulators or enforcement agencies.
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.
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 clients or acquire new clients in a cost-effective manner, our business could be harmed.
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.
These provisions and duties impose restrictions and obligations on us with respect to our dealings with our clients, 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 clients.
Even if an investigation or proceeding did not result in a sanction or the sanction imposed against us or our personnel by a regulator were small in monetary amount, the adverse publicity relating to the investigation, proceeding, or imposition of these sanctions could harm our reputation and cause us to lose existing customers or fail to gain new customers.
Even if an investigation or proceeding did not result in a sanction or the sanction imposed against us or our personnel by a regulator were small in monetary amount, the adverse publicity relating to the investigation, proceeding, or imposition of these sanctions could harm our reputation and cause us to lose existing clients or fail to gain new clients.
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.
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 client preferences.
As we expand our business operations and potentially enter new markets, new challenges in attracting and retaining customers will arise that we may not successfully address. We face intense and increasing competition and, if we do not compete effectively, our competitive positioning and operating results will be harmed. We expect our competition to continue to increase.
As we expand our business operations and potentially enter new markets, new challenges in attracting and retaining clients will arise that we may not successfully address. We face intense and increasing competition and, if we do not compete effectively, our competitive positioning and operating results will be harmed. We expect our competition to continue to increase.
In particular, market volatility can decrease investor appetite in the private market and increase liquidity risks to private equity valuations given uncertainty around settlement prices for illiquid assets. Weaknesses in public and private equity markets could also cause our existing customers to incur losses, which in turn could cause our brand and reputation to suffer.
In particular, market volatility can decrease investor appetite in the private market and increase liquidity risks to private equity valuations given uncertainty around settlement prices for illiquid assets. Weaknesses in public and private equity markets could also cause our existing clients to incur losses, which in turn could cause our brand and reputation to suffer.
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.
Financial services providers like us, as well as our clients, 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.
Our brand promotion activities may not generate customer awareness or increase revenue, and even if they do, any increase in revenue may not offset the expenses we incur in building our brand. If we fail to successfully promote and maintain our brand or if we incur excessive expenses in this effort, our business could be materially and adversely harmed.
Our brand promotion activities may not generate client awareness or increase revenue, and even if they do, any increase in revenue may not offset the expenses we incur in building our brand. If we fail to successfully promote and maintain our brand or if we incur excessive expenses in this effort, our business could be materially and adversely harmed.
We have in the past recorded, and may in the future record, significant valuation allowances on our deferred tax assets, which may have a material impact on our results of operations and cause fluctuations in such results. As of December 31, 2023, we had a valuation allowance for deferred tax assets in the United States and in other countries.
We have in the past recorded, and may in the future record, significant valuation allowances on our deferred tax assets, which may have a material impact on our results of operations and cause fluctuations in such results. As of December 31, 2024, we had a valuation allowance for deferred tax assets in the United States and in other countries.
Cyber incidents or attacks directed at us and to our systems could result in unauthorized access, information theft, data corruption, operational disruption, and/or financial and reputational loss. We depend on digital technologies, including information systems, infrastructure, and cloud applications and services, including those of third parties.
Cybersecurity incidents or attacks directed at us and to our systems could result in unauthorized access, information theft, data corruption, operational disruption, and/or financial and reputational loss. We depend on digital technologies, including information systems, infrastructure, and cloud applications and services, including those of third parties.
Failure to comply with the GDPR, and any supplemental European Economic Area country’s national data protection laws which may apply by virtue of the location of the individuals whose personal information we may collect, may result in significant fines and other administrative penalties.
Failure to comply with the GDPR, and any supplemental European Economic Area country’s, or UK’s, national data protection laws which may apply by virtue of the location of the individuals whose personal information we may collect, may result in significant fines and other administrative penalties.
In addition, under Section 382 of the Internal Revenue Code of 1986, as amended (the "Code"), a corporation that undergoes an “ownership change” is subject to limitations on its ability to utilize its net operating loss carryforwards ("NOLs") to offset future taxable income.
In addition, under Section 382 and Section 383 of the Internal Revenue Code of 1986, as amended (the "Code"), a corporation that undergoes an “ownership change” is subject to limitations on its ability to utilize its net operating loss carryforwards ("NOLs") to offset future taxable income.
If we fail to manage our expansion, implement improvements, or maintain effective internal controls and procedures, our costs and expenses may increase more than we plan and we may lose the ability to develop new solutions, satisfy our customers, respond to competitive pressures, or otherwise execute our business plan.
If we fail to manage our expansion, implement improvements, or maintain effective internal controls and procedures, our costs and expenses may increase more than we plan and we may lose the ability to develop new solutions, satisfy our clients, respond to competitive pressures, or otherwise execute our business plan.
If any of our employees engage in illegal, improper, or suspicious activity or other misconduct, we could become subject to regulatory sanctions and significant legal liability, and could suffer serious harm to our reputation, financial condition, relationships, and our ability to attract new customers.
If any of our employees engage in illegal, improper, or suspicious activity or other misconduct, we could become subject to regulatory sanctions and significant legal liability, and could suffer serious harm to our reputation, financial condition, relationships, and our ability to attract new clients.
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.
We have and may in the future become involved in, disputes and litigation matters between clients 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 may be unable to sufficiently obtain, develop, or protect, our intellectual property, any of which could reduce our competitiveness and harm our business and operating results. Our ability to service our customers depends, in part, upon our ability to obtain and develop intellectual property in an extremely competitive market.
We may be unable to sufficiently obtain, develop, or protect, our intellectual property, any of which could reduce our competitiveness and harm our business and operating results. Our ability to service our clients depends, in part, upon our ability to obtain and develop intellectual property in an extremely competitive market.
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.
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.
Failure to comply with any of these requirements may result in, among other things, enforcement action by governmental authorities, lawsuits, monetary damages, fines or monetary penalties, restitution or other payments to investors, modifications to business practices, revocation of required licenses or registrations, voiding of loan contracts, and reputational harm, all of which could materially harm our results of operations.
Failure to comply with any of these requirements may result in, among other things, enforcement action by governmental authorities and self-regulatory organizations, lawsuits, monetary damages, fines or monetary penalties, restitution or other payments to investors, modifications to business practices, revocation of required licenses or registrations, voiding of loan contracts, and reputational harm, all of which could materially harm our results of operations.
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.
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 client experience.
Future changes in our stock ownership as well as other changes that may be outside of our control, could result in additional ownership changes under Section 382 of the Code. Our NOLs may also be impaired under similar provisions of state law.
Future changes in our stock ownership as well as other changes that may be outside of our control, could result in additional ownership changes under Section 382 and Section 383 of the Code. Our NOLs may also be impaired under similar provisions of state law.
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.
An adverse change in domestic or global market conditions, and/or 18 Table of Contents 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.
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.
There is a risk that clients may increasingly look to us to make them whole for delayed and/or broken trades. Clients may litigate over a failure of sellers to deliver securities or over the untimely deliveries of securities.
Such errors, bugs, vulnerabilities, or defects could also be exploited by malicious actors and result in exposure of data of customers on our platform, or otherwise result in a security breach or other security incident.
Such errors, bugs, vulnerabilities, or defects could also be exploited by malicious actors and result in exposure of data of clients on our platform, or otherwise result in a security breach or other security incident.
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.
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 clients away from our services and reduce our market share.
We may in the future be the target of incomplete, inaccurate, and misleading or false statements about our company and our business that could damage our brand and deter customers from adopting our services.
We may in the future be the target of incomplete, inaccurate, and misleading or false statements about our company and our business that could damage our brand and deter clients from adopting our services.
We may introduce, or make changes to, features, products, services, privacy practices, or terms of service that customers do not like, which may materially and adversely affect our brand.
We may introduce, or make changes to, features, products, services, privacy practices, or terms of service that clients do not like, which may materially and adversely affect our brand.
Errors, bugs, vulnerabilities, design defects, or technical limitations within the software on which we rely may lead to negative customer experiences (including the communication of inaccurate information to customers), compromised ability of our products to perform in a manner consistent with customer expectations, delayed product introductions, compromised ability to protect the data (including personal information) of our customers and our intellectual property, or an inability to provide some or all of our services.
Errors, bugs, vulnerabilities, design defects, or technical limitations within the software on which we rely may lead to negative client experiences (including the communication of inaccurate information to clients), compromised ability of our products to perform in a manner consistent with client expectations, delayed product introductions, compromised ability to protect the data (including personal information) of our clients and our intellectual property, or an inability to provide some or all of our services.
We may require additional capital to satisfy our liquidity needs, support the growth of our business, and respond to competitive challenges, including the need to promote our products and services, develop new products and services, enhance our existing products, services, and operating infrastructure, and acquire and invest in complementary companies, businesses, and technologies.
We may require additional capital to satisfy our liquidity needs, support the growth of our business, and respond to competitive challenges, including the need to promote our products and services, develop new products and services, enhance our existing products, services, and operating infrastructure, and acquire and invest in complementary companies, businesses, 15 Table of Contents and technologies.
We believe that maintaining and promoting our brand in a cost-effective manner is critical to achieving widespread acceptance of our products and services and expanding our base of customers.
We believe that maintaining and promoting our brand in a cost-effective manner is critical to achieving widespread acceptance of our products and services and expanding our base of clients.
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.
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.
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 clients and to prevent fraud, money laundering, and terrorist financing.
Disruptions in service and slower system response times could interrupt our business and result in substantial losses, decreased customer service and satisfaction, customer attrition, fines, litigation, and harm to our reputation.
Disruptions in service and slower system response times could interrupt our business and result in substantial losses, decreased client service and satisfaction, client attrition, fines, litigation, and harm to our reputation.
A reduction in our liquidity position could reduce our customers’ confidence in us, which could result in the withdrawal of customer assets and loss of customers, or could cause us to fail to satisfy broker-dealer or other regulatory capital guidelines, which may result in immediate suspension of securities activities, regulatory prohibitions against certain business practices, increased regulatory inquiries and reporting requirements, increased costs, fines, penalties, or other sanctions, including suspension or expulsion by the SEC, FINRA, or other self-regulatory organizations or state regulators, and could ultimately lead to the liquidation of our broker-dealers or other regulated entities.
A reduction in our liquidity position could reduce our clients’ confidence in us, which could result in the withdrawal of client assets and loss of clients, or could cause us to fail to satisfy broker-dealer or other regulatory capital guidelines, which may result in immediate suspension of securities activities, regulatory prohibitions against certain business practices, increased regulatory inquiries and reporting requirements, increased costs, fines, penalties, or other sanctions, including suspension or expulsion by the SEC, FINRA, or other self-regulatory organizations or state regulators, and could ultimately lead to the liquidation of our broker-dealers or other regulated entities.
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 24 Table of Contents technology and the number of our employees who are working remotely, which may create additional opportunities for cybercriminals to exploit vulnerabilities.
We can be held liable for the corrupt or other illegal activities of these third-party intermediaries, our employees, representatives, contractors, partners, and agents, even if we do not explicitly authorize such activities.
We can be held liable for the corrupt or other illegal activities of 25 Table of Contents these third-party intermediaries, our employees, representatives, contractors, partners, and agents, even if we do not explicitly authorize such activities.
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.
We are subject to the Foreign Corrupt Practices Act, 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.
We may in the future depend on dividends, distributions, and other payments from our subsidiaries to fund payments on our obligations, including any debt obligations we may incur. Regulatory and other legal restrictions may limit our ability to transfer funds to or from certain subsidiaries, including Forge Securities.
We depend on dividends, distributions, and other payments from our subsidiaries to fund payments on our obligations, including any debt obligations we may incur. Regulatory and other legal restrictions may limit our ability to transfer funds to or from certain subsidiaries, including Forge Securities.
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.
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, 2024, we had recorded a total of approximately $126 million of goodwill and other intangible assets.
Changes in tax laws, differences in interpretation of tax laws and regulations, and proposed legislation that would impose taxes on certain financial transactions could have a material adverse effect on our business, financial condition, and results of operations.
Changes and complexities in tax laws, incomplete filings, differences in interpretation of tax laws and regulations, and proposed legislation that would impose taxes on certain financial transactions could have a material adverse effect on our business, financial condition, and results of operations.
Compliance with laws and regulations require significant expense and devotion of resources, which may adversely affect our ability to operate profitably. • We rely on our executive team and key personnel to grow our business, and the loss of or inability to hire either could harm our business. • Cyber incidents or attacks directed at us and to our systems could result in unauthorized access, information theft, data corruption, operational disruption, and/or financial and reputational loss. • We collect, store, share, disclose, transfer, use, and otherwise process customer information and other data, including personal information, and an actual or perceived failure by us or our third-party service providers to protect such information and data or respect customers’ privacy could damage our reputation and brand, negatively affect our ability to retain customers and harm our business, financial condition, operating results, cash flows, and prospects. • We depend on third parties for a wide array of services, systems, and information technology applications, and a breach or violation of law by one of these third parties could disrupt our business.
Compliance with laws and regulations require significant expense and devotion of resources, which may adversely affect our ability to operate profitably. • We rely on our executive team and key personnel to grow our business, and the loss of or inability to hire either could harm our business. • Cybersecurity incidents or attacks directed at us and to our systems could result in unauthorized access, information theft, data corruption, operational disruption, and/or financial and reputational loss. 12 Table of Contents • We collect, store, share, disclose, transfer, use, and otherwise process client information and other data, including personal information, and an actual or perceived failure by us or our third-party service providers to protect such information and data or respect clients’ privacy could damage our reputation and brand, negatively affect our ability to retain clients and harm our business, financial condition, operating results, cash flows, and prospects. • We depend on third parties for a wide array of services, systems, and information technology applications, and a breach or violation of law by one of these third parties could disrupt our business.
If we do not successfully maintain a strong and trusted brand, our business, financial condition, and results of operations could be materially and adversely affected. We conduct our brokerage and other business operations through subsidiaries and may in the future rely on dividends from our subsidiaries for a substantial amount of our cash flows.
If we do not successfully maintain a strong and trusted brand, our business, financial condition, and results of operations could be materially and adversely affected. We conduct our brokerage and other business operations through subsidiaries and rely on dividends from our subsidiaries for a substantial amount of our cash flows.
The operation of our platform involves the use, collection, storage, sharing, disclosure, transfer, and other processing of customer information, including personal information.
The operation of our platform involves the use, collection, storage, sharing, disclosure, transfer, and other processing of client information, including personal information.
Additionally, if hackers were able to access our secure data, they might be able to gain access to the personal information of our customers.
Additionally, if hackers were able to access our secure data, they might be able to gain access to the personal information of our clients.
We collect, store, share, disclose, transfer, use, and otherwise process customer information and other data, including personal information, and an actual or perceived failure by us or our third-party service providers to protect such information and data or respect customers’ privacy could damage our reputation and brand, negatively affect our ability to retain customers and harm our business, financial condition, operating results, cash flows, and prospects.
We collect, store, share, disclose, transfer, use, and otherwise process client information and other data, including personal information, and an actual or perceived failure by us or our third-party service providers to protect such information and data or respect clients’ privacy could damage our reputation and brand, negatively affect our ability to retain clients and harm our business, financial condition, operating results, cash flows, and prospects.
Any negative publicity about our industry or our company, the quality and reliability of our products and services, our compliance and risk management processes, changes to our products and services, our privacy, data protection, and information security practices, litigation, regulatory licensing and infrastructure, and the experience of our customers with our products or services could adversely affect our reputation and the confidence in and use of our products and services.
Any negative publicity about our industry or our company, the quality and reliability of our products and services, our compliance and risk 17 Table of Contents management processes, changes to our products and services, our privacy, data protection, and information security practices, litigation, regulatory licensing and infrastructure, and the experience of our clients with our products or services could adversely affect our reputation and the confidence in and use of our products and services.
Fluctuations in interest rates can affect the results of our operations. Sustained high interest rates could shift investment preferences and flows affecting customer appetite for trading in private equity assets on our Forge Markets platform, and could also adversely influence fund redemption rates and allocation within our subsidiary, Forge Global Advisors LLC ("FGA").
Fluctuations in interest rates can affect the results of our operations. Sustained high interest rates could shift investment preferences and flows affecting client appetite for trading in private equity assets on our Forge marketplace, and could also adversely influence fund redemption rates and allocation within our subsidiary, Forge Global Advisors LLC ("FGA").
In addition, if we change or expand our business activities, we may be required to obtain additional licenses or registrations before we can engage in those activities in each jurisdiction, which could cause us to incur substantial compliance costs.
In addition, if we change or expand our business activities, we may be required to obtain additional licenses or registrations before we can engage in those activities in each jurisdiction, which could cause us to incur 20 Table of Contents substantial compliance costs.
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.
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.
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.
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 22 Table of Contents favor.
Conversely, low interest rates directly reduce our ability to earn custodial administration fees from our Forge Trust services, but could increase activity on our Forge Markets platform and positively influence fund redemption rates and allocation within FGA. Accordingly, fluctuations in interest rates can both positively and adversely affect our business, financial condition, results of operations, cash flows, and future prospects.
Conversely, low interest rates directly reduce our ability to earn custodial administration fees from our custodial solutions, but could increase activity on our Forge marketplace and positively influence fund redemption rates and allocation within FGA. Accordingly, fluctuations in interest rates can both positively and adversely affect our business, financial condition, results of operations, cash flows, and future prospects.
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.
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.
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.
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.
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 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 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.
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.
The regulatory framework for data privacy and security worldwide is continuously evolving and developing and, as a result, interpretation and implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future.
The global regulatory framework for data privacy and security worldwide is rapidly evolving and, as a result, interpretation and implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future.
Any failure or perceived failure by us or our third-party service providers to comply with our posted privacy policies or with any applicable federal, state or similar foreign laws, rules, regulations, industry standards, policies, certifications, or orders relating to data privacy and security, or any compromise of security that results in the theft, unauthorized access, acquisition, use, disclosure, or misappropriation of personal information or other customer data, could result in significant awards, fines, civil and/or criminal penalties or judgments, proceedings or litigation by governmental agencies or customers, including class action privacy litigation in certain jurisdictions and negative publicity and reputational harm, one or all of which could have an adverse effect on our reputation, business, financial condition, and results of operations.
Any failure or perceived failure by us or our third-party service providers to comply with our posted privacy policies or with any applicable federal, state or similar foreign laws, rules, regulations, industry standards, policies, certifications, or orders relating to data privacy and security, or any compromise of security that results in the theft, unauthorized access, acquisition, use, disclosure, or misappropriation of personal information or other client data, could result in civil and/or criminal penalties or judgments, proceedings, litigation (including class actions) and negative publicity and reputational harm, one or all of which could have an adverse effect on our reputation, business, financial condition, and results of operations.
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.
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.
In addition, Forge UK, a wholly owned subsidiary of Forge GmbH , is an appointed representative of Kroll Securities Limited, an independent third-party which is authorized and regulated by the Financial Conduct Authority to facilitate transactions in securities.
In addition, Forge UK, a wholly owned subsidiary of Forge GmbH, is an appointed representative of Sapeno Partners LLC, an independent third-party which is authorized and regulated by the Financial Conduct Authority to facilitate transactions in securities.
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 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; • difficulties or delays in obtaining required regulatory approvals; • 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; 16 Table of Contents • 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.
Further, additional changes to federal or state tax laws or technical guidance relating to such laws that would further reduce the corporate tax rate could operate to effectively reduce or eliminate the value of any 28 Table o f Contents deferred tax asset.
Further, additional changes to federal or state tax laws or technical guidance relating to such laws that would further reduce the corporate tax rate could operate to effectively reduce or eliminate the value of any deferred tax asset.
While some of our issuer customers may prefer that we not publish the transaction prices for transactions in their securities, which could impact our Forge Intelligence and Forge Markets offerings, we maintain that such prices are, by definition, information belonging to us. We negotiate exceptions to this policy on a case-by-case basis, and such exceptions have historically been very limited.
While some of our issuer clients may prefer that we not publish the transaction prices for transactions in their securities, we maintain that such prices are, by definition, information belonging to us. We negotiate exceptions to this policy on a case-by-case basis, and such exceptions have historically been very limited.
Our continued business and revenue growth is dependent on our ability to cost-effectively attract new customers, retain existing customers, and increase usage of our products and services, and we cannot be sure that we will be successful 14 Table o f Contents in these efforts.
Our continued business and revenue growth is dependent on our ability to cost-effectively attract new clients, retain existing clients, and increase usage of our products and services, and we cannot be sure that we will be successful in these efforts.
Any perceived or actual breach of laws and regulations could also negatively impact our business, financial condition, and results of operations. We are subject to stringent laws, rules, regulations, policies, industry standards, and contractual obligations regarding data privacy and security and may be subject to additional related laws and regulations in jurisdictions into which we expand.
Any perceived or actual breach of laws and regulations could also negatively impact our business, financial condition, and results of operations. We are subject to stringent laws and regulations regarding data privacy and security and may become subject to additional related laws and regulations in jurisdictions into which we expand.
These risks include the following: • private companies may exercise their right of first refusal over the securities or otherwise prohibit the transfer of the securities, and therefore certain securities on our platform may not be available to certain investors; • private companies are not required to make periodic public filings, and therefore certain capitalization, operational, and financial information may not be available for evaluation; • an investment may only be appropriate for investors with a long-term investment horizon and a capacity to absorb a loss of some or all of their investment; • the securities, when purchased, are generally highly illiquid, are often subject to further transfer restrictions, and no public market exists for such securities; • post-IPO transfer restrictions, including lock-up restrictions, may ultimately limit the ability to sell the securities on the open market; and • transactions may fail to settle, which could harm our reputation.
These risks include the following: • private companies may exercise their right of first refusal over the securities or otherwise prohibit the transfer of the securities, and therefore certain securities on our platform may not be available to certain investors; • private companies are not required to make periodic public filings, and therefore certain capitalization, operational, and financial information may not be available for evaluation; • an investment may only be appropriate for investors with a long-term investment horizon and a capacity to absorb a loss of some or all of their investment; • the securities, when purchased, are generally highly illiquid, are often subject to further transfer restrictions, and no public market exists for such securities; • post-IPO transfer restrictions, including lock-up restrictions, may ultimately limit the ability to sell the securities on the open market; and • transactions may fail to settle, which could harm our reputation. 14 Table of Contents We have and may in the future become involved in, disputes or litigation matters between clients with respect to failed transactions on our platform (such as in the event of delayed delivery or a failure to deliver securities).

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe use frameworks established by the National Institute of Standards and Technology and other applicable industry standards to further define, benchmark, and refine our cybersecurity practices. As part of our overall risk management system, our dedicated information security team monitors and tests our cybersecurity policies and procedures through methods such as periodic reviews, targeted assessments, and tabletop exercises.
Biggest changeAs part of our overall risk management system, our dedicated information security team monitors and tests our cybersecurity policies and procedures through methods such as periodic reviews, targeted assessments, and tabletop exercises. All personnel are made aware of our cybersecurity policies and procedures upon hire and through periodic refresher trainings.
Our CISO is assisted in this oversight role by additional members of management, including our Chief Technology Officer, Head of Risk, and our Chief Legal Officer, each of whom bring decades of leadership experience managing risks in their respective fields.
Our CISO is assisted in this oversight role by additional members of management, including our Chief Technology Officer, Chief Risk Officer, and Head of Legal, each of whom bring decades of leadership experience managing risks in their respective fields.
Our CISO, who has over 20 years of cybersecurity and information security experience, oversees our cybersecurity framework and reports to our management-level risk committee and cybersecurity risk subcommittee.
Our CISO, who has over 20 years of cybersecurity and information security experience, oversees our cybersecurity framework, reports to our management-level risk committee, and chairs our cybersecurity risk subcommittee.
That said, as discussed more fully under the section titled “Risk Factors,” in this Report, the sophistication of cyber threats continues to increase, and the preventative actions we take to reduce the risk of cyber incidents and protect our systems and information may be insufficient despite our best efforts.
As discussed more fully under the section titled “Risk Factors,” in this Report, the sophistication of cyber threats continues to increase, and the preventative actions we take to reduce the risk of cyber incidents and protect our systems and information may be insufficient despite our best efforts.
Item 1C. Cybersecurity Risk Management and Strategy We have established policies and processes for assessing, identifying, and managing material risk from cybersecurity threats, and have integrated these processes into our overall risk management framework, systems, and processes.
Item 1C. Cybersecurity Risk Management and Strategy 34 Table of Contents We have established policies and processes for assessing, identifying, and managing material risk from cybersecurity threats, and have integrated these processes into our overall risk management framework, systems, and processes.
We require each third-party service provider to certify that it has the ability to implement and maintain appropriate security measures consistent with all applicable laws, to implement and maintain reasonable security measures in connection with their work with us, and to promptly report any suspected breach of its security measures that may affect us.
We used a risk-based approach to require certain third-party service providers to certify that they have the ability to implement and maintain appropriate security measures consistent with all applicable laws, to implement and maintain reasonable security measures in connection with their work with us, and to promptly report any suspected breach of its security measures that may affect us.
These risk assessments include the effectiveness of our cybersecurity program and its practices for identifying, assessing, and mitigating cybersecurity risks; our controls to prevent, detect, and respond to cyber incidents; our cyber resiliency, including crisis preparedness, incident response processes, business continuity, and disaster recovery capabilities; and our investments in cybersecurity infrastructure and program needs. 34 Table o f Contents Following these risk assessments, we implement, refine, and maintain reasonable safeguards to minimize identified risks; reasonably address any identified gaps in existing safeguards; and regularly monitor the effectiveness of our safeguards.
These risk assessments include the effectiveness of our cybersecurity program and its practices for identifying, assessing, and mitigating cybersecurity risks; our controls to prevent, detect, and respond to cyber incidents; our cyber resiliency, including crisis preparedness, incident response processes, business continuity, and disaster recovery capabilities; and our investments in cybersecurity infrastructure and program needs.
These service providers assist us with designing, implementing, and testing our cybersecurity policies and procedures, as well as advising on applicable disclosure requirements.
We engage consultants and other third parties in connection with our risk assessment processes. These service providers assist us with designing, implementing, and testing our cybersecurity policies and procedures, as well as advising on applicable disclosure requirements.
Our cybersecurity policies and procedures are also incorporated into our broader risk management framework such that all enterprise and operational risks are evaluated in a holistic manner. We engage consultants and other third parties in connection with our risk assessment processes.
Such policies and procedures cover areas such as identity and access management, vendor management, data governance and protection, vulnerability management, incident response, and operational risk management. Our cybersecurity policies and procedures are also incorporated into our broader risk management framework such that all enterprise and operational risks are evaluated in a holistic manner.
We conduct a regular cybersecurity risk assessment process through our Head of Information Security (“CISO”) and dedicated information security team which reports to our management-level risk committee, which meets at least quarterly to discuss and evaluate risks that could be material to our business, including cybersecurity threats.
We conduct a regular cybersecurity risk assessment process through our Head of Information Security (“CISO”) and dedicated information security team.
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This committee is comprised of key leadership across the Company, including our Chief Executive Officer, Chief Financial Officer, Chief Technology Officer, Chief Operating Officer, Chief Legal Officer, and Head of Risk. We additionally have a cybersecurity risk subcommittee which also meets at least quarterly and is designed to assist the management-level risk committee in its oversight of cybersecurity threats.
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We implement, refine, and maintain reasonable safeguards designed to minimize identified risks; reasonably address any identified gaps in existing safeguards; and regularly monitor the effectiveness of our safeguards. We use frameworks established by the National Institute of Standards and Technology and other applicable industry standards to further define, benchmark, and refine our cybersecurity practices.
Removed
We may conduct further assessments in the event of a material change in our business practices or emerging industry data that may affect information systems that are vulnerable to such cybersecurity threats.
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All personnel are made aware of our cybersecurity policies and procedures upon hire and through periodic refresher trainings. Such policies and procedures cover areas such as identity and access management, vendor management, data governance and protection, vulnerability management, incident response, and operational risk management.
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Although we cannot eliminate all potential threats, our cybersecurity program is operated in a manner to minimize the likelihood of any threat becoming material and to keep pace with a constantly evolving cybersecurity landscape.

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 35 Table o f Contents believe that suitable additional or substitute space will be available on commercially reasonable terms to meet our future needs.
Biggest changeWe believe that our existing facilities are sufficient for our current needs. In 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.
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 2. Properties 35 Table of Contents 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.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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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.
Biggest changeIssuer Purchases of Equity Securities There were no repurchases made during the three months ended December 31, 2024. In March 2025, our board of directors approved a share repurchase program of up to $10 million. No repurchases have been made under the program as of the date of this Report.
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.
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, 2024 that were not otherwise disclosed in our Quarterly Reports on Form 10-Q or our Current Reports on Form 8-K.
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").
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 2025 Annual Meeting of Stockholders to be filed within 120 days after the end of the fiscal year covered by this Report (the "Proxy Statement").
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.
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, 2024, there were approximately 115 stockholders of record of our common stock.
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Repurchases under the program may be made from time to time through open market purchases or through privately negotiated transactions subject to market conditions, applicable legal requirements, and other relevant factors. Open market repurchases may be structured to occur in accordance with the requirements of Rule 10b-18.
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We may also, from time to time, enter into Rule 10b5-1 plans to facilitate repurchases of shares under this authorization. The timing and number of shares repurchased under the program will depend on a variety of factors, including stock price, trading volume, and general business and market conditions.
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The program does not obligate us to acquire any particular amount of our common stock, and may be modified, suspended, or terminated at any time in our sole discretion. The program has no expiration date.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

70 edited+36 added−56 removed28 unchanged
Biggest changeThe following table reconciles net loss attributable to Forge Global Holdings, Inc. to our Adjusted EBITDA for the periods presented below (in thousands): Year Ended December 31, 2023 2022 2021 Net loss attributable to Forge Global Holdings, Inc. $ (90,221) $ (111,859) $ (18,499) Add: Interest (income) expense, net (6,421) (2,681) 2,307 Provision for (benefit from) income taxes 819 327 386 Depreciation and amortization 6,954 6,026 5,390 Net loss attributable to noncontrolling interest (1,328) (46) — Loss on impairment of long lived assets 599 446 — Share-based compensation expense 34,334 57,924 12,231 Change in fair value of warrant liabilities 6,465 (19,836) 6,064 Acquisition-related transaction costs (1) — 5,113 882 Transaction bonus (2) — 17,735 — Adjusted EBITDA $ (48,799) $ (46,851) $ 8,761 (1) Acquisition-related transaction costs include transaction costs related to the Business Combination, which consisted of legal, accounting, and other professional services directly related to the Merger, direct and incremental expenses in connection with business acquisitions, which consist primarily of professional services fees for investment banking advisors, legal services, accounting advisory, and other external costs directly related to acquisitions and other strategic opportunities, including the formation of Forge Europe.
Biggest changeThe following table reconciles net loss attributable to Forge Global Holdings, Inc. to our Adjusted EBITDA for the periods presented below (in thousands): Year Ended December 31, 2024 2023 Net loss attributable to Forge Global Holdings, Inc. $ (66,333) $ (90,221) Add: Interest income (5,675) (6,421) Provision for income taxes 1,066 819 Depreciation and amortization 6,658 6,954 Net loss attributable to noncontrolling interest (1,510) (1,328) Loss on impairment of long lived assets 1,052 599 Share-based compensation expense 30,489 34,334 Change in fair value of warrant liabilities (9,424) 6,465 Adjusted EBITDA $ (43,677) $ (48,799) Some of the limitations of Adjusted EBITDA include: (i) Adjusted EBITDA does not properly reflect capital commitments to be paid in the future, and (ii) although depreciation and amortization are non-cash charges, the underlying assets may need to be replaced and Adjusted EBITDA does not reflect these capital expenditures.
Although we currently are not a party to any agreement and do not have any understanding with any third parties with respect to potential investments in, or acquisitions of, businesses or technologies, we may enter into these types of arrangements in the future, which could also require us to seek additional equity or debt financing.
Although we currently are not a party to any financing agreement and do not have any understanding with any third parties with respect to potential investments in, or acquisitions of, businesses or technologies, we may enter into these types of arrangements in the future, which could also require us to seek additional equity or debt financing.
We generally expect these expenses to increase in absolute dollars as our marketplace revenue grows. Compensation and benefits Compensation and benefits expense is our most significant operating expense and includes employee wages, bonuses, share-based compensation, severance costs, benefits, and employer taxes.
We generally expect these expenses to increase in absolute dollars as our revenue grows. Compensation and benefits Compensation and benefits expense is our most significant operating expense and includes employee wages, bonuses, share-based compensation, severance costs, benefits, and employer taxes.
When indicators of impairment are present, the Company determines the recoverability of its long-lived assets by comparing the carrying value of our long-lived assets to future undiscounted net cash flows expected to result from the use of the assets and their eventual disposition.
When indicators of impairment are present, the Company determines the recoverability of its long-lived assets by comparing the carrying value of its long-lived assets to future undiscounted net cash flows expected to result from the use of the assets and their eventual disposition.
Our fees are earned from the overall maintenance activities of all assets and are not charged on the basis of the dollar value of Assets Under Custody, but we believe that Assets Under Custody is a useful metric for assessing the relative size and scope of our business. 41 Table of Contents Non-GAAP Financial Measures In addition to our financial results determined in accordance with generally accepted accounting principles in the United States ("GAAP"), we present Adjusted EBITDA, a non-GAAP financial measure.
Our fees are earned from the overall maintenance activities of all assets and are not charged on the basis of the dollar value of Assets Under Custody, but we believe that Assets Under Custody is a useful metric for assessing the relative size and scope of our business. 40 Table of Contents Non-GAAP Financial Measures In addition to our financial results determined in accordance with generally accepted accounting principles in the United States ("GAAP"), we present Adjusted EBITDA, a non-GAAP financial measure.
Our future financing requirements will depend on many factors including our growth rate, the timing and extent of spending to support development of our platform and the expansion of sales and marketing activities.
Our future equity and financing requirements will depend on many factors including our growth rate, the timing and extent of spending to support development of our platform, and the expansion of sales and marketing activities.
Accordingly, the Company recognizes the warrant instruments as liabilities at fair value and adjusts the carrying value of the instruments to fair value at each reporting period until they are redeemed, exchanged, expired, or exercised.
The Company recognizes the warrant instruments as liabilities at fair value and adjusts the carrying value of the instruments to fair value at each reporting period until they are redeemed, exchanged, expired, or exercised.
This includes brand advertising, thought leadership, content marketing, public relations, partnerships, and other strategies that amplify our brand. We have a rigorous approach to measuring customer lifetime value and optimizing our customer acquisition investments according to market dynamics and effective return on investment ("ROI"). We manage our discretionary expenses in growth marketing in real-time, as audience-specific dynamics show positive ROI.
This includes brand advertising, thought leadership, content marketing, public relations, partnerships, and other strategies that amplify our brand. We have a rigorous approach to measuring client lifetime value and optimizing our client acquisition investments according to market dynamics and effective return on investment ("ROI"). We manage our discretionary expenses in growth marketing in real-time, as audience-specific dynamics show positive ROI.
These represent the percentage of fees earned by our platform on any transactions executed from the commission we charged on such transactions less transaction-based expenses, which is a determining factor in our revenue. The Net Take Rate can vary based upon the service or product offering and is also affected by the average order size and transaction frequency.
These represent the percentage of fees earned by our marketplace on any transactions executed from the commission we charged on such transactions less transaction-based expenses, which is a determining factor in our revenue. The Net Take Rate can vary based upon the service or product offering and is also affected by the average order size and transaction frequency.
The cash administration fees are based on prevailing interest rates and customer cash balances, and currently make up the majority of custodial administration fee revenue. With respect to the account maintenance fees, we assess a flat quarterly fee per account, with additional fees based on the number and types of assets held and the number and type of transactions executed.
Cash administration fees are based on prevailing interest rates and client cash balances and currently make up the majority of custodial administration fee revenue. With respect to the account maintenance fees, we assess a flat quarterly fee per account, with additional fees based on the number and types of assets held and the number and type of transactions executed.
We generally expect our technology and communications expense to increase, over the long term, as we continue to increase our headcount and innovate on our offerings and services. General and administrative General and administrative includes insurance, travel and entertainment, reserves for contingent losses, including allowances for bad debts and legal proceedings, and other general and administrative costs .
We generally expect our technology and communications expense to increase over the long term as we continue to innovate on our offerings and services and increase headcount. General and administrative General and administrative includes insurance, travel and entertainment, allowances for bad debt, reserves for contingent losses including legal proceedings, and other general and administrative costs .
The Company will continue to adjust the warrant liability for changes in the fair value until the earlier of a) the exercise, exchange, or expiration of the warrants or b) the redemption of the warrants, at which time the warrants will be reclassified to additional paid-in-capital.
The Company will continue to adjust the warrant liabilities for changes in the fair value until the earlier of a) the exercise, exchange, or expiration of the warrants or b) the redemption of the warrants, at which time the warrants will be reclassified to additional paid-in-capital.
Increasing the number of orders is critical to increasing our revenue and, in turn, to achieving profitability. • Volume is defined as the total sales value for all securities traded through our Forge Markets platform, which is the aggregate value of the issuer company’s equity attributed to both the buyer and seller in a trade and as such a $100 trade of equity between buyer and seller would be captured as $200 of volume for us.
Increasing the number of orders is critical to increasing our revenue and, in turn, to achieving profitability. • Volume is defined as the total sales value for all securities traded through our Forge marketplace, which is the aggregate value of the issuer company’s equity attributed to both the buyer and seller in a trade and as such a $100 trade of equity between buyer and seller would be captured as $200 of volume for us.
We believe our existing cash and cash equivalents as of December 31, 2023 will be sufficient to meet our operating working capital and capital expenditure requirements for the next twelve months and the foreseeable futur e.
We believe our existing cash and cash equivalents as of December 31, 2024 will be sufficient to meet our operating working capital and capital expenditure requirements for the next twelve months and the foreseeable futur e.
Buyers' and sellers' behaviors vary over time and are affected by numerous conditions. For example, behavior may be impacted by social or economic factors such as changes in disposable income levels and the need for liquidity, employee tenure, general interest in investing, interest rate levels, and reaction to stock market volatility.
Consumer Behavio r — Buyers' and sellers' behaviors vary over time and are affected by numerous conditions. For example, behavior may be impacted by social or economic factors such as changes in disposable income levels and the need for liquidity, employee tenure, general interest in investing, interest rate levels, and reaction to stock market volatility.
In evaluating Adjusted EBITDA, be aware that in the future we will incur expenses similar to the adjustments in this presentation. Our presentation 42 Table of Contents of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by these expenses or any unusual or non-recurring items.
In evaluating Adjusted EBITDA, be aware that in the future we will incur expenses similar to the adjustments in this presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by these expenses or any unusual or non-recurring items.
When applicable, allocation of the transaction fees to the performance obligations or to the distinct goods or services that form part of a single performance obligation will depend on the individual facts and circumstances of the contract. All of our revenues are from contracts with customers.
When applicable, an allocation of the transaction fees to the performance obligations or to the distinct goods or services that form part of a single performance obligation will depend on the individual facts and circumstances of the contract. All of the Company’s revenues are from contracts with customers.
Recent Accounting Pronouncements See the section titled "Summary of Significant Accounting Policies" in Note 2 of the notes to our consolidated financial statements . 51 Table of Contents
Recent Accounting Pronouncements See the section titled "Summary of Significant Accounting Policies" in Note 2 of the notes to our consolidated financial statements . 50 Table of Contents
For grants with performance or market-based conditions, the Company uses a Monte Carlo simulation to determine the fair value and the derived service period at the grant date and recognizes share-based compensation expense using an accelerated attribution method when it becomes probable that the performance-based condition will be met.
For awards with market-based conditions, the Company uses a Monte Carlo simulation to determine the fair value and the derived service period at the grant date and recognizes share-based compensation expense using an accelerated attribution method when it becomes probable that the condition will be met.
Results of Operations The following table sets forth our consolidated statements of operations for the years ended December 31, 2023 and 2022 (in thousands).
Results of Operations The following table sets forth our consolidated statements of operations for the years ended December 31, 2024 and 2023 (in thousands).
We generally expect our marketing expenses to increase in the long term in absolute dollars but manage our spend judiciously and adapt as market conditions evolve. Rent and occupancy Rent and occupancy expense is related to our leased property and includes rent, maintenance, real estate taxes, utilities, and other related costs .
We generally expect our marketing expenses to increase in the long term in absolute dollars but manage our spend judiciously and adapt as market conditions evolve. 42 Table of Contents Rent and occupancy Rent and occupancy expense is related to our leased property and includes rent, maintenance, real estate taxes, utilities, impairment and other related costs .
Goodwill and Other Intangible Assets, Net 50 Table of Contents Goodwill represents the excess of the aggregate fair value of the consideration transferred in a business combination over the fair value of the assets acquired, net of liabilities assumed.
Goodwill and Other Intangible Assets, Net Goodwill represents the excess of the aggregate fair value of the consideration transferred in a business combination over the fair value of the assets acquired, net of liabilities assumed.
Non-cash charges include share-based compensation, depreciation and amortization, amortization of right-of-use assets, and changes in fair value of warrant liabilities.
Non-cash charges primarily consist of share-based compensation, depreciation and amortization, amortization of right-of-use assets, and changes in fair value of warrant liabilities.
Volume is influenced by, among other things, the pricing and quality of our services as well as market conditions that affect private company valuations, such as increases in valuations of comparable companies at IPO. • Net Take Rates are defined as our marketplace revenues (previously called placement fee revenue), less transaction-based expenses, divided by Volume.
Volume is influenced by, among other things, the pricing and quality of our services as well as market conditions that affect private company valuations, such as increases in valuations of comparable companies at IPO. • Net Take Rates are defined as our marketplace revenues, less markets-related transaction-based expenses, divided by Volume.
Revenues from custodial administration fees are recognized either over time as underlying performance obligations are met and day-to-day maintenance activities are performed for custodial accounts, or at a point in time upon completion of transactions requested by custodial account holders.
Account and asset fees are assessed on the first day of the calendar quarter. Revenues from custodial administration fees are recognized either over time as underlying performance obligations are met and day-to-day maintenance activities are performed for custodial accounts, or at a point in time upon completion of transactions requested by custodial account holders.
We defined Adjusted EBITDA as net loss, adjusted to exclude: (i) interest expense, net, (ii) provision for or benefit from income taxes, (iii) depreciation and amortization, (iv) share-based compensation expense, (v) change in fair value of warrant liabilities, (vi) acquisition-related transaction costs, and (vii) other significant gains, losses and expenses (such as impairments or transaction bonus) that we believe are not indicative of our ongoing results.
We define Adjusted EBITDA as net loss attributable to Forge Global Holdings, Inc., adjusted to exclude: (i) net loss attributable to noncontrolling interest, (ii) provision for income taxes, (iii) interest income, (iv) depreciation and amortization, (v) share-based compensation expense, (vi) change in fair value of warrant liabilities, and (vii) other significant gains, losses, and expenses such as impairments or acquisition-related transaction costs that we believe are not indicative of our ongoing results.
While we expect our compensation 43 Table of Contents and benefits expense to increase as our revenue grows and we hire additional personnel to support new products and services, in the near term, we are focused on aligning our headcount with current business needs and making strategic headcount additions to support growth.
While we expect our compensation and benefits expense to increase as our revenue grows and we hire additional personnel to support new products and services, in the near term, we are focused on aligning our headcount with current business needs.
We disaggregate revenue by service type, as we believe that this level of disaggregation best depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are impacted by economic factors. We recognize revenue pursuant to ASC 606, Revenue from Contracts with Customers .
The Company disaggregates revenue by service type, as management believes that this level of disaggregation best depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are impacted by economic factors. The Company recognizes revenue pursuant to ASC 606, Revenue from Contracts with Customers.
Interest income Interest income primarily includes interest income earned on our cash and cash equivalents. 44 Table of Contents Change in fair value of warrant liabilities Changes in the fair value of warrant liabilities are related to warrant liabilities that are marked-to-market each reporting period with the change in fair value recorded in the accompanying consolidated statements of operations until the warrants are exercised, expire or other facts and circumstances lead the warrant liabilities to be reclassified to stockholders’ equity.
Change in fair value of warrant liabilities Changes in the fair value of warrant liabilities are related to warrant liabilities that are marked-to-market each reporting period with the change in fair value recorded in the accompanying consolidated statements of operations until the warrants are exercised, expire, or other facts and circumstances that could lead the warrant liabilities to be reclassified to stockholders’ equity occur.
Such changes in estimates and refinements in estimation methodologies are reflected in reported results of operations; if material, the effects of changes in estimates are disclosed in the notes to our consolidated financial statements . On an ongoing basis, we evaluate our estimates and assumptions. Our actual results may differ from these estimates under different assumptions or conditions.
Such changes in estimates and 47 Table of Contents refinements in estimation methodologies are reflected in reported results of operations; if material, the effects of changes in estimates are disclosed in the notes to our consolidated financial statements . On an ongoing basis, we evaluate our estimates and assumptions.
The amount of 49 Table of Contents revenue recognized reflects the consideration that we expect to receive in exchange for services. To achieve the core principle of this standard, we applied the following five steps: 1. Identification of the contract, or contracts, with the customer; 2. Identification of the performance obligations in the contract; 3.
The amount of revenue recognized reflects the consideration that the Company expects to receive in exchange for services. To achieve the core principle of this standard, the Company applies the following five steps: 1. Identification of the contract, or contracts, with the customer; 2. Identification of the performance obligations in the contract; 3. Determination of the transaction price; 4.
Cash Flow Summary The following table summarizes our cash flows for the periods presented (in thousands): Year Ended December 31, 2023 2022 Net cash provided by (used in): Operating activities $ (41,456) $ (68,806) Investing activities $ (8,160) $ (6,650) Financing activities $ 57 $ 192,862 Operating Activities Cash used in operating activities for the year ended December 31, 2023 of $41.5 million was primarily driven by our net loss of $91.5 million, adjusted for non-cash charges of $53.7 million and net cash outflows of $3.6 million provided by changes in our operating assets and liabilities.
Cash Flow Summary The following table summarizes our cash flows for the periods presented (in thousands): Year Ended December 31, 2024 2023 Net cash provided by (used in): Operating activities $ (40,533) $ (41,456) Investing activities $ 5,471 $ (8,160) Financing activities $ (3,891) $ 57 46 Table of Contents Operating Activities Cash used in operating activities for the year ended December 31, 2024 of $40.5 million was primarily driven by our net loss of $67.8 million, adjusted for non-cash charges of $31.7 million and net cash outflows of $4.3 million in connection with changes in our operating assets and liabilities.
Cash used in operating activities for the year ended December 31, 2022 of $68.8 million was primarily driven by our net loss of $111.9 million, adjusted for non-cash charges of $57.6 million and net cash outflows of $14.5 million provided by changes in our operating assets and liabilities.
Cash used in operating activities for the year ended December 31, 2023 of $41.5 million was primarily driven by our net loss of $91.5 million, adjusted for non-cash charges of $53.7 million and net cash outflows of $3.6 million provided by changes in our operating assets and liabilities.
The account revenues depend on the number of Total Custodial Accounts, which include accounts customers opened directly with us and the activity within these accounts, as well as accounts we custody on behalf of partners.
The account revenues depend on the number of total custodial accounts, which include accounts clients opened directly with us and the activity within these accounts, as well as accounts we custody on behalf of partners. Transaction-based expenses Transaction-based expenses represent third-party fees incurred to support our marketplace and custody solutions.
Other income (expenses), net Other income (expenses), net, includes other non-operating income and expenditures, sublease income, and gain or loss on equity method investments . Provision for income taxes Income tax expense consists of federal, state and foreign income taxes.
Other income, net Other income, net, includes other non-operating income and expenditures, and sublease income. Provision for income taxes Provision for income taxes consists of federal, state, and foreign income taxes.
Contractual Obligations The following table summarizes our contractual obligations as of December 31, 2023, and the years in which these obligations are due (in thousands): Total Less than 1 year 1 to 3 years 3 to 5 years More than 5 years Operating lease obligations (1) $ 5,621 $ 2,810 $ 2,811 $ — $ — Non-cancelable purchase obligations (2) 7,394 1,969 4,194 1,231 — Total contractual obligations $ 13,015 $ 4,779 $ 7,005 $ 1,231 $ — __________ (1) Our lease portfolio primarily includes leased office space, all of which are accounted for as operating leases.
Contractual Obligations The following table summarizes our contractual obligations as of December 31, 2024, and the years in which these obligations are due (in thousands): Total Less than 1 year 1 to 3 years 3 to 5 years More than 5 years Operating lease obligations (1) $ 8,102 $ 3,864 $ 2,201 $ 2,037 $ — Non-cancelable purchase obligations (2) 4,101 1,220 2,068 650 163 Total contractual obligations $ 12,203 $ 5,084 $ 4,269 $ 2,687 $ 163 (1) Our lease portfolio primarily includes leased office space, all of which are accounted for as operating leases.
Our chief operating decision maker is our Chief Executive Officer, who reviews financial information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance, allocating resources, and evaluating our financial performance.
The Company’s chief operating decision maker ("CODM") is its Chief Executive Officer, who reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources and evaluating the Company’s financial performance. Accordingly, we have concluded that we consist of a single operating segment and reportable segment for accounting and financial reporting purposes.
Additional funds may not be available on terms favorable to us or at all. We intend to continue to make investments in product development, sales efforts, and additional general and administrative costs in connection with operating as a public company. We expect to continue to maintain financing flexibility in the current market conditions.
We intend to continue to make investments in product development, sales efforts, and additional general and administrative costs in connection with operating as a public company. We expect to continue to maintain financing flexibility in the current market conditions. As a result, we may require additional capital resources to execute strategic initiatives to grow our business.
This was due to cash paid for capitalized internal-use software of $6.3 million, purchases of property and equipment of $0.2 million, and purchases of intangible assets of $0.1 million. Financing Activities Cash provided by financing activities wa s $0.1 million for the year ended December 31, 2023, and relate to stock option and other equity award activities and settlements.
Cash provided by financing activities was $0.1 million for the year ended December 31, 2023 , and relate to stock option and other equity award activities and settlements.
Investing activities consist primarily of net purchases of term deposits of $7.6 million and purchases of property and equipment of $0.5 million. 48 Table of Contents Cash used in investing activities was $6.7 million for the year ended December 31, 2022.
Investing activities consist primarily of net purchases of term deposits of $7.6 million and purchases of property and equipment of $0.5 million. Financing Activities Cash used in financing activities wa s $3.9 million for the year ended December 31, 2024, and relate to stock option and other equity award activities and settlements.
We earn agency marketplace revenue in non-underwritten transactions, such as private placements of equity securities. We receive marketplace revenue on these transactions and believe that our trade execution performance obligation is completed upon the placement and consummation of a transaction and, as such, revenue is earned on the transaction date with no further obligation to the customer at that time.
The Company believes that its trade execution performance obligation is completed upon the placement and consummation of a transaction and, as such, revenue is earned on the transaction date with no further obligation to the customer at that time. The Company acts as a principal in the contract and recognizes revenue upon execution of a trade.
Other Operating Expenses Year Ended December 31, 2023 Over 2022 Change (in thousands) 2023 2022 $ % Professional services $ 11,905 $ 14,265 $ (2,360) (17) % Acquisition-related transaction costs — 5,113 (5,113) (100) Advertising and market development 3,486 4,754 (1,268) (27) Rent and occupancy 4,884 5,455 (571) (10) Technology and communications 14,507 11,489 3,018 26 General and administrative 12,510 11,324 1,186 10 Depreciation and amortization 6,954 6,026 928 100 15 Total other operating expenses $ 54,246 $ 58,426 $ (4,180) (7) % Comparison of the Year Ended December 31, 2023 and 2022 Other operating expenses decreased $4.2 million, or 7%, to $54.2 million.
Other Operating Expenses Year Ended December 31, 2024 Over 2023 Change (in thousands) 2024 2023 $ % Professional services $ 8,405 $ 11,905 $ (3,500) (29) % Advertising and market development 4,334 3,486 848 24 Rent and occupancy 5,218 4,884 334 7 Technology and communications 12,481 14,507 (2,026) (14) General and administrative 10,831 12,510 (1,679) (13) Depreciation and amortization 6,658 6,954 (296) 100 (4) Total other operating expenses $ 47,927 $ 54,246 $ (6,319) (12) % Comparison of the Year Ended December 31, 2024 and 2023 Other operating expenses decreased $6.3 million, or 12%, to $47.9 million.
Basis of Presentation The consolidated financial statements and accompanying notes included elsewhere in this Report include our accounts and accounts of our consolidated subsidiaries and were prepared in accordance with GAAP.
Basis of Presentation The consolidated financial statements and accompanying notes included elsewhere in this Report include our accounts and accounts of our consolidated subsidiaries and were prepared in accordance with GAAP. 41 Table of Contents Components of Results of Operations Revenue Marketplace revenue — Our marketplace revenue consists of fees earned by us in connection with our marketplace, PCS, asset management, and data solutions.
Year Ended December 31, 2023 2022 Total revenues, less transaction-based expenses $ 69,390 $ 68,900 Operating expenses: Compensation and benefits 106,593 145,514 Other 54,246 58,426 Total operating expenses 160,839 203,940 Operating loss (91,449) (135,040) Total interest and other income (expenses) 719 23,462 Loss before provision for income taxes (90,730) (111,578) Provision for income taxes 819 327 Net loss (91,549) (111,905) Net loss attributable to noncontrolling interest (1,328) (46) Net loss attributable to Forge Global Holdings, Inc. $ (90,221) $ (111,859) Revenue 45 Table of Contents Year Ended December 31, 2023 Over 2022 Change (in thousands) 2023 2022 $ % Marketplace revenue $ 25,790 $ 40,665 $ (14,875) (37) % Custodial administration fees 44,031 28,718 15,313 53 Total revenues 69,821 69,383 438 1 Transaction-based expenses: Transaction-based expenses (431) (483) 52 (11) Total revenues, less transaction-based expenses $ 69,390 $ 68,900 $ 490 1 % Comparison of the Year Ended December 31, 2023 and 2022 Total revenues, less transaction-based expenses were $69.4 million for the year ended December 31, 2023 compared to $68.9 million for the year ended December 31, 2022, representing an increase of $0.5 million, or 1%.
Year Ended December 31, 2024 2023 Total revenues, less transaction-based expenses $ 78,655 $ 69,390 Operating expenses: Compensation and benefits 112,991 106,593 Other 47,927 54,246 Total operating expenses 160,918 160,839 43 Table of Contents Operating loss (82,263) (91,449) Total interest and other income 15,486 719 Loss before provision for income taxes (66,777) (90,730) Provision for income taxes 1,066 819 Net loss (67,843) (91,549) Net loss attributable to noncontrolling interest (1,510) (1,328) Net loss attributable to Forge Global Holdings, Inc. $ (66,333) $ (90,221) Revenue Year Ended December 31, 2024 Over 2023 Change (in thousands) 2024 2023 $ % Marketplace revenue $ 37,540 $ 25,790 $ 11,750 46 % Custodial administration fees 41,789 44,031 (2,242) (5) Total revenues 79,329 69,821 9,508 14 Transaction-based expenses: Transaction-based expenses (674) (431) (243) 56 Total revenues, less transaction-based expenses $ 78,655 $ 69,390 $ 9,265 13 % Comparison of the Year Ended December 31, 2024 and 2023 Total revenues, less transaction-based expenses were $78.7 million for the year ended December 31, 2024 compared to $69.4 million for the year ended December 31, 2023, representing an increase of $9.3 million, or 13%.
Revenue from Contracts with Customers We enter into contracts with customers that can include various services, which are generally capable of being distinct and accounted for as separate performance obligations.
Allocation of the transaction price to the performance obligations in the contract; and 5. Recognition of the revenue when, or as, a performance obligation is satisfied. Revenue from Contracts with Customers The Company enters into contracts with customers that can include various services, which are capable of being distinct and accounted for as separate performance obligations.
See Note 4, "Fair Value Measurements" to the consolidated financial statements. 47 Table of Contents Liquidity and Capital Resources We have financed our operations primarily through revenue from operations, issuances of securities, and proceeds from the Business Combination. Our primary requirements for liquidity and capital are to finance working capital, capital expenditures, and investments in business acquisitions.
Liquidity and Capital Resources We have financed our operations primarily through revenue from operations, issuances of securities, and proceeds from the Business Combination. Our primary requirements for liquidity and capital are to finance working capital and capital expenditures. As of December 31, 2024, our principal source of liquidity was our cash and cash equivalents balance of $105.1 million.
We recognize compensation expense on a straight-line basis over the requisite service period of the awards, which is generally the award's vesting term. The fair value of RSUs is based on the closing price of the Company's common stock. Forfeitures are accounted for as they occur.
Custodial transaction fees include third-party vault fees. Share-Based Compensation The Company recognizes share-based compensation expense for all share-based awards, primarily stock options, and RSUs, based on the grant date fair value of the awards on a straight-line basis over the requisite service period of the awards, which is generally the award's vesting term.
RSU expense was $29.6 million and $40.6 million for the years ended December 31, 2023 and 2022, respectively, of which $5.3 million and $24.3 million, respectively, related to the Executive Retention RSUs granted to certain executives described in Note 12, "Share-Based Compensation" to our consolidated financial statements included elsewhere in this Report.
RSU expense was $27.2 million and $29.6 million for the years ended December 31, 2024 and 2023, respectively, of which $1.1 million and $5.3 million, respectively, related to RSUs granted to certain executives . Option expense was $3.3 million and $4.8 million for the years ended December 31, 2024 and 2023, respectively.
Incentive compensation consists of variable compensation in connection with marketplace revenue (previously called placement fee revenue) and discretionary bonuses to eligible employees based upon individual and company performance.
Severance expense increased $3.0 million as the Company continues to align headcount to current and future business needs and focuses on managing expenses. Incentive compensation consists of variable compensation in connection with marketplace revenue and discretionary bonuses to eligible employees based upon individual and company performance.
We may explore and pursue acquisitions and other strategic opportunities and as a result, we may or may not incur acquisition-related transaction costs in future periods. Advertising and market development Advertising and market development is an important driver of our value and we intend to continue making meaningful investments in the Forge brand and growth marketing.
We have and may continue to incur additional professional services expenses relating to public company regulatory requirements and customary practices. Advertising and market development Advertising and market development is an important driver of our value and we intend to continue making meaningful investments in the Forge brand and growth marketing.
Year Ended December 31, 2023 Over 2022 Change 2022 Over 2021 Change Dollars in thousands 2023 2022 2021 Change % Change Change % Change TRADING BUSINESS Trades 1,756 2,184 4,890 (428) (20) % (2,706) (55) % Volume $ 765,899 $ 1,222,879 $ 3,180,257 $ (456,980) (37) % $ (1,957,378) (62) % Net Take Rate 3.3 % 3.3 % 3.3 % — — % — — % Marketplace revenues, less transaction-based expenses $ 25,359 $ 40,182 $ 104,689 $ (14,823) (37) % $ (64,507) (62) % • Trades are defined as the total number of orders executed by us and entities we have acquired on behalf of private investors and stockholders.
Year Ended December 31, 2024 Over 2023 Change Dollars in thousands 2024 2023 Change % Change MARKETPLACE SOLUTIONS Trades 2,762 1,756 1,006 57 % Volume $ 1,325,470 $ 765,899 $ 559,571 73 % Net Take Rate 2.8 % 3.3 % (0.5) (15) % Marketplace revenues, less transaction-based expenses $ 36,988 $ 25,359 $ 11,629 46 % • Trades are defined as the total number of orders executed by us on behalf of private investors and stockholders.
Depreciation and amortization Depreciation and amortization is attributable to property and equipment, intangible assets and capitalized internal-use software.
Depreciation and amortization Depreciation and amortization is attributable to property and equipment, intangible assets, and capitalized internal-use software. Interest income Interest income primarily includes interest income earned on our cash, cash equivalents, U.S. government treasury bills, and term deposits.
For the year ended December 31, 2023, the Company recognized a $6.5 million loss from warrant revaluations as compared to a $19.8 million gain for the year ended December 31, 2022.
For the year ended December 31, 2024, the Company recognized a $9.4 million gain from warrant revaluations, in comparison to a $6.5 million loss for the year ended December 31, 2023. See Note 3, "Fair Value Measurements" of the notes to our consolidated financial statements.
There may also be high profile IPOs, SPACs, or idiosyncratic events impacting single companies that impact consumer behavior. These shifts in consumer behavior may influence interest in our products over time. • Macroeconomic Environment . Customer and business behavior and risk appetite is impacted by the overall macroeconomic environment.
There may also be high profile IPOs, SPACs, or idiosyncratic events impacting single companies that impact consumer behavior.
The cash administration fees are based on prevailing interest rates and customer cash balances, and currently make up the majority of custodial administration fee revenue. With respect to the account maintenance fees, we assess a flat quarterly fee per account, with additional fees based on the number and types of assets held and the number and type of transactions executed.
Cash administration fees are based on prevailing interest rates and 48 Table of Contents custodial customer cash balances, and currently make up the majority of custodial administration fee revenue and are assessed on the last day of the month.
Accordingly, we have concluded that we consist of a single operating segment and reportable segment for accounting and financial reporting purposes. 40 Table of Contents Key Business Metrics We monitor the following key business metrics to help us evaluate our business, identify trends affecting our business, formulate business plans, and make strategic decisions.
The CODM uses net income as the measure of profit or loss for purposes of assessing segment performance and deciding how to allocate resources, primarily by monitoring actual results against the forecast. 39 Table of Contents Key Business Metrics We monitor the following key business metrics to help us evaluate our business, identify trends affecting our business, formulate business plans, and make strategic decisions.
Subscription fees for the periods presented were included as part of marketplace revenue (previously called placement fee revenue) in the consolidated statements of operations . Transaction-based expenses Transaction-based expenses represent fees incurred to support placement activities. These include, but are not limited to, third-party broker fees, transfer fees, fund management, and fund and trade settlement .
Transaction-Based Expenses Transaction-based expenses represent the fees incurred to support placement and custodial activities. These include, but are not limited to, third-party broker fees and transfer fees related to placement provided to brokerage clients to facilitate transactions and to a lesser extent those for fund management, and fund settlement expenses that relate to services provided to Forge-managed SAFs.
The most significant judgments, estimates, and assumptions relate to the critical accounting policies, as discussed in more detail below. Revenue Recognition We generate revenue from fees charged for the trading of private placements on our platform, and fees for account and asset management provided to customers.
Our actual results may differ from these estimates under different assumptions or conditions. The most significant judgments, estimates, and assumptions relate to the critical accounting policies, as discussed in more detail below.
December 31, 2023 2023 Over 2022 Change 2022 Over 2021 Change Dollars in thousands 2023 2022 2021 Change % Change Change % Change CUSTODY BUSINESS Total Custodial Accounts 2,078,868 1,871,146 2,124,677 207,722 11 % (253,531) (12) % Assets Under Custody $ 15,647,469 $ 14,870,257 $ 14,334,527 $ 777,212 5 % $ 535,730 4 % • Total Custodial Accounts are defined as our customers’ custodial accounts that are established on our platform and billable.
December 31, 2024 2024 Over 2023 Change Dollars in thousands 2024 2023 Change % Change CUSTODY SOLUTION Total Custodial Accounts 2,376,099 2,078,868 297,231 14 % Assets Under Custody $ 16,897,318 $ 15,647,469 $ 1,250 8 % Custodial administration fees, less transaction-based expenses $ 41,667 $ 44,031 $ (2,364) (5) % • Total Custodial Accounts are defined as our clients’ custodial accounts that are established on our platform and billable.
Custodial administration fees increased by $15.3 million, or 53%, driven by an 11% increase in total accounts and higher cash administration fees attributable to the higher interest rate environment offset in part by lower cash balances.
Custodial administration fees decreased by $2.2 million , or 5% , driven by lower cash administration fees attributable to lower interest rates and lower cash balances.
Revenues generated from our data solutions are classified as part of marketplace revenue in our consolidated statements of operations (see Subscription Fees below). Custodial administration fee s — We generate revenue from account maintenance fees, asset fees, transaction fees, and cash administration fees.
The number of trades, dollar volume of trades, and net take rate are the key business metrics we monitor to evaluate the financial performance of our marketplace solutions business. Custodial administration fee s — We generate revenue from cash administration fees, account maintenance fees, asset fees, and transaction fees.
Having customers that come to our platform through third-party brokers or our private company solutions may also impact our marketplace revenue. The mix of clients in any given period will impact our overall take rate and revenues.
The mix of clients in any given period will impact our overall revenues and take rate. Segment Information The Company operates as a single operating segment and reportable segment.
We have not adjusted methodology, assumptions, or otherwise changed any aspects of “Placement Fee” revenue in making this name change to “Marketplace" revenue, and this category of revenue remains comparable to prior period presentations. Unless the context otherwise requires, references in this section to "Forge," the “Company,” “we,” “us” and “our” refer to Forge Global Holdings, Inc. and its subsidiaries.
This section discusses 2024 and 2023 items and our results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023. Unless the context otherwise requires, references in this section to "Forge," the “Company,” “we,” “us” and “our” refer to Forge Global Holdings, Inc. and its subsidiaries.
Non-cash charges included share-based compensation of $57.9 million, depreciation and amortization of $6.0 million, amortization of right-of-use assets of $4.0 million, and settlements of related party promissory notes of $5.5 million. Investing Activities Cash used in investing activities was $8.2 million for the year ended December 31, 2023.
Investing Activities Cash provided by investing activities for the year ended December 31, 2024 of $5.5 million was primarily driven by receipts on maturity of term deposits of $6.6 million offset by purchases of property and equipment of $0.8 million. Cash used in investing activities was $8.2 million for the year ended December 31, 2023 .
We categorize our services into the following three categories: Marketplace revenue (previously called placement fee revenue)— We maintain a platform which generates revenues through our Forge Markets offering with volume-based fees sourced from institutions, individual investors, and private equity holders. Marketplace revenue represent fees charged by us for executing a private placement on our platform.
The Company generates revenue through its private market platform, with volume-based fees sourced from institutions, individual investors and private equity holders in connection with non-underwritten transactions, such as private placements of equity securities in the secondary market. Marketplace revenue is earned by the Company for meeting the point-in-time performance obligation of executing a private placement on its platform.
Components of Results of Operations Revenue We generate revenue from providing private market services, which include fees charged for private placements on our platform, and fees charged for account and asset management to customers.
Revenue Recognition The Company generates revenue from fees charged for the trading of private shares through its platform, and fees for custodial account and asset management provided to customers.
Prior to the Business Combination, the fair value of employee and non-employee stock options was determined on the grant date using the Black-Scholes option pricing model using various inputs, including the fair value of the underlying common stock, the expected term of the stock-based award, the expected volatility of the price of our common stock, risk-free interest rates, and the expected dividend yield of common stock.
The fair value of stock options is determined using the Black-Scholes option pricing model and the fair value of RSUs is based on the closing price of the Company's common stock on the grant date. Forfeitures are accounted for as they occur.
The decrease in incentive compensation of $22.1 million was driven by a $4.1 million decrease in commission expense in line with the 37% decline in marketplace revenue and the 2022 one-time transaction bonuses for certain executives of $17.7 million related to the consummation of the Business Combination.
The increase in incentive compensation of $4.7 million was driven by an increase of $3.2 million in commission expense in line with the 46% increase in marketplace revenue. The remaining increase is attributable to higher discretionary bonuses in connection with improved company performance.
Operating Expenses Compensation and benefits Year Ended December 31, 2023 Over 2022 Change (in thousands) 2023 2022 $ % Salary $ 53,829 $ 47,836 $ 5,993 13% Incentive compensation and other bonus 12,257 34,356 (22,099) (64) Share-based compensation 34,334 57,924 (23,590) (41) Benefits and other 6,173 5,398 775 14 Total compensation and benefits $ 106,593 $ 145,514 $ (38,921) (27)% Comparison of the Year Ended December 31, 2023 and 2022 Compensation and benefits expense was $106.6 million for the year ended December 31, 2023, compared to $145.5 million for the year ended December 31, 2022, representing a decrease of $38.9 million, or 27%.
Operating Expenses Compensation and benefits Year Ended December 31, 2024 Over 2023 Change (in thousands) 2024 2023 $ % Salary $ 54,496 $ 52,168 $ 2,328 4 % Severance 4,642 1,661 2,981 179 Incentive compensation and other bonus 16,940 12,257 4,683 38 Share-based compensation 30,489 34,334 (3,845) (11) Benefits and other 6,424 6,173 251 4 Total compensation and benefits $ 112,991 $ 106,593 $ 6,398 6 % Comparison of the Year Ended December 31, 2024 and 2023 Compensation and benefits expense was $113.0 million for the year ended December 31, 2024, compared to $106.6 million for the year ended December 31, 2023, representing an increase of $6.4 million , or 6% . 44 Table of Contents Salary expense increased $2.3 million, or 4%, due to the impact of annual increases effective January 1, 2024, offset in part by lower average employee headcount.
The decrease in share-based compensation expense of $23.6 million was primarily related to restricted stock units (" RSUs") granted on June 1, 2022 under the 2022 Stock Option and Incentive Plan and cumulative catch-up recognized in connection with the Business Combination in 2022.
The decrease in share-based compensation expense of $3.8 million was primarily related to restricted stock units (" RSUs") granted to certain executives which fully amortized in January 2024, partially offset by new RSU grants and accelerated amortization in connection with executive separations net of forfeitures.
Removed
This section discusses our results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022. In this Report we are renaming a category of our revenue, previously described as “Placement Fee” revenue, to “Marketplace” revenue in order to align with the types of revenue included in this category.
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Business Overview Forge is committed to democratizing access to private markets through our comprehensive suite of private market solutions, including a purpose-built technology-driven platform connecting buyers and sellers of private shares with investment and custody opportunities. Our marketplace offers data, insights, and tools to help institutions and individuals confidently navigate the private market.
Removed
Marketplace revenue includes placement fees, subscription fees earned from our data products, and private company solutions revenue. We believe this name better describes the revenue included therein and therefore is more useful to investors by better characterizing the underlying types of revenue included.
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Our Private Company Solutions ("PCS") deliver tailored solutions to private companies for their liquidity and capital formation needs. Our asset management solution enhances investment efficiency through a suite of single asset funds (“SAF”) that invest in private companies.
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Business Overview Forge is building the private market of the future – a more accessible, transparent, and liquid market for participating in private market growth. 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.
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Our data solutions provide clients with key insights into a traditionally opaque market and drive additional participation in our marketplace and platform generally. We also provide custodial services for self-directed retirement accounts, specializing in the custody of alternative assets to our clients.
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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.
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Forge’s platform attracts a broad spectrum of market participants, which fall into three general categories: investors, shareholders, and companies.
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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 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.
Added
To serve the distinct needs of each of these categories, we have strategically invested in complementary solutions to offer our clients the most critical tools to participate in the private market ecosystem through an integrated platform that allows them to engage in various investment opportunities and supports the process from beginning to end.

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