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30

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2023
OR
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from   to

Commission file number 001-04321

Forge Global Holdings, Inc.
(Exact name of registrant as specified in its charter)
Delaware
98-1561111
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
415 Mission Street
Suite 5510
San Francisco, CA 94105
(Address of principal executive offices, including zip code)
(415) 881-1612
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, par value $0.0001 per share
FRGEThe New York Stock Exchange
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  o 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).     Yes  x   No  o 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
x
Accelerated filer
o
Non-accelerated filer  
o
Smaller reporting company
o
Emerging growth company
o
                
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).     Yes   o     No  x

As of November 7, 2023, the registrant had 175,272,598 shares of common stock, $0.0001 par value per share, outstanding.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Unless the context otherwise requires, references in this Quarterly Report on Form 10-Q (this "Report") to “Forge,” the “Company,” “us,” “we,” “our,” and any related terms are intended to mean Forge Global Holdings, Inc. (the "Company") and its consolidated subsidiaries.
Certain statements in this Report may constitute “forward-looking statements” for purposes of the federal securities laws. Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions, or strategies regarding the future. In addition, any statements that refer to projections, forecasts, or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” “would,” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this Report may include, for example, statements about our ability to:
execute our business strategy, including monetization of services provided;
comply with laws and regulations applicable to our business;
stay abreast of modified or new laws and regulations that would apply to our business;
anticipate the uncertainties inherent in the development of new business lines, strategies, products, and services;
manage vendor and third party processes;
increase brand awareness;
access, collect, and use personal information and other data about consumers;
attract, train, and retain effective officers, key employees and personnel, or directors;
upgrade and maintain information technology systems;
acquire and protect intellectual property;
maintain the listing of our securities on the NYSE or another national securities exchange;
enhance future operating and financial results;
anticipate rapid technological changes;
anticipate the impact of, and response to, new accounting standards;
anticipate the significance and timing of contractual obligations;
maintain key strategic relationships with partners;
manage cyber and technology risk management processes, including incident management processes;
maintain disaster recovery and business continuity planning controls;
respond to uncertainties associated with product and service development and market acceptance;
manage potential funding and liquidity impediments in a high interest rate environment;
anticipate the impact of new U.S. federal income tax laws, including the impact on deferred tax assets;
successfully defend litigation;
manage impacts of adverse geopolitical conflicts, political unrest, and regulatory changes in international markets;
manage risks associated with macroeconomic uncertainty, such as monetary response measures via interest rate hikes that affect private market volatility, asset valuations, and investor appetite;
react to potential disruptions and instability in the banking industry and other parts of the financial services sector; and
respond to fluctuations in interest rates, foreign currency exchange rates, and a deterioration of credit outlook.
We caution you that the foregoing list may not contain all of the forward-looking statements made in this Report.
You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Report primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations, and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors, including those described in the section titled “Risk Factors” and elsewhere in this Report. Moreover, we operate in a very competitive and rapidly changing
environment. New risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Report. We cannot assure you that the results, events, and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events, or circumstances could differ materially from those described in the forward-looking statements.
Neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. Moreover, the forward-looking statements made in this Report relate only to events as of the date on which the statements are made. We undertake no obligation to update any after the date of this Report or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, partnerships, mergers, dispositions, joint ventures, or investments we may make.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.


Table of Contents



Part I - Financial Information

FORGE GLOBAL HOLDINGS, INC.
Unaudited Condensed Consolidated Balance Sheets
(In thousands of U.S. dollars, except share and per share data)
September 30,
2023
December 31,
2022
Assets
 Current assets:
Cash and cash equivalents$155,127 $193,136 
Restricted cash1,299 1,829 
Accounts receivable, net3,871 3,544 
Prepaid expenses and other current assets10,148 8,379 
Total current assets$170,445 $206,888 
Property and equipment, net317 359 
Internal-use software, net5,023 7,640 
Goodwill and other intangible assets, net130,897 133,887 
Operating lease right-of-use assets3,379 5,706 
Payment-dependent notes receivable, noncurrent5,763 7,371 
Other assets, noncurrent1,696 1,878 
Total assets $317,520 $363,729 
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable$1,480 $2,797 
Accrued compensation and benefits8,798 13,271 
Accrued expenses and other current liabilities8,121 6,421 
Operating lease liabilities, current2,300 3,896 
Total current liabilities 20,699 26,385 
Operating lease liabilities, noncurrent2,002 3,541 
Payment-dependent notes payable, noncurrent5,763 7,371 
Warrant liabilities3,321 606 
Other liabilities, noncurrent185 365 
Total liabilities31,970 38,268 
Commitments and contingencies (Note 8)
Stockholders’ equity:
Common stock, $0.0001 par value; 175,173,113 and 172,560,916 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively
18 18 
Additional paid-in capital534,659 509,094 
Accumulated other comprehensive income601 693 
Accumulated deficit(254,843)(190,418)
Total Forge Global Holdings, Inc. stockholders’ equity280,435 319,387 
Noncontrolling Interest5,115 6,074 
Total stockholders’ equity285,550 325,461 
Total liabilities and stockholders’ equity$317,520 $363,729 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5

FORGE GLOBAL HOLDINGS, INC.
Unaudited Condensed Consolidated Statements of Operations
(In thousands of U.S. dollars, except share and per share data)

Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Revenues:
Placement fees $7,283 $8,227 $17,638 $33,763 
Custodial administration fees11,280 7,673 33,124 18,799 
  Total revenues18,563 15,900 50,762 52,562 
Transaction-based expenses:
Transaction-based expenses (148)(86)(250)(397)
Total revenues, less transaction-based expenses 18,415 15,814 50,512 52,165 
Operating expenses:
Compensation and benefits27,650 44,040 78,566 115,064 
Professional services2,883 3,799 8,884 11,169 
Acquisition-related transaction costs 821  5,219 
Advertising and market development910 928 2,463 3,873 
Rent and occupancy1,142 1,097 3,616 3,803 
Technology and communications3,763 3,536 10,628 8,368 
General and administrative1,870 2,601 8,143 7,373 
Depreciation and amortization1,710 1,428 5,246 4,531 
Total operating expenses39,928 58,250 117,546 159,400 
Operating loss (21,513)(42,436)(67,034)(107,235)
Interest and other income (expenses):
Interest income1,725 874 4,553 1,161 
Change in fair value of warrant liabilities907 25,210 (2,715)19,808 
Other income (expenses), net215 202 647 731 
Total interest income and other income (expenses)2,847 26,286 2,485 21,700 
Loss before provision for income taxes(18,666)(16,150)(64,549)(85,535)
Provision for income taxes291 48 769 206 
Net loss(18,957)(16,198)(65,318)(85,741)
Net loss attributable to noncontrolling interest(609) (893) 
Net loss attributable to Forge Global Holdings, Inc.$(18,348)$(16,198)$(64,425)$(85,741)
Net loss per share attributable to Forge Global Holdings, Inc. common stockholders:
Basic$(0.11)$(0.10)$(0.37)$(0.64)
Diluted$(0.11)$(0.12)$(0.37)$(0.66)
Weighted-average shares used in computing net loss per share attributable to Forge Global Holdings, Inc. common stockholders:
Basic173,957,880 169,838,778 173,045,721 134,683,950 
Diluted173,957,880 170,209,256 173,045,721 135,960,612 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
6

FORGE GLOBAL HOLDINGS, INC.
Unaudited Condensed Consolidated Statements of Comprehensive Loss
(In thousands of U.S. dollars)


Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Net loss$(18,957)$(16,198)$(65,318)$(85,741)
Foreign currency translation adjustment(333)(159)(158)(159)
Comprehensive loss(19,290)(16,357)(65,476)(85,900)
Less: Comprehensive loss attributable to noncontrolling interest(745)(64)(959)(64)
Comprehensive loss attributable to Forge Global Holdings, Inc.$(18,545)$(16,293)$(64,517)$(85,836)
7

FORGE GLOBAL HOLDINGS, INC.
Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit)
(In thousands of U.S. dollars, except share data)

Convertible Preferred StockCommon StockAdditional Paid-In CapitalAccumulated DeficitAccumulated Other Comprehensive LossNoncontrolling InterestTotal
SharesAmountSharesAmount
 Balance as of December 31, 2022 $ 172,560,916$18 $509,094 $(190,418)$693 $6,074 $325,461 
 Issuance of common stock upon release of restricted stock units — 1,464,968(*) (*) — — — — 
 Tax withholding related to vesting of restricted stock units — (326,812)(*)(557)— — — (557)
Issuance of common stock upon exercise of vested options — 117,215(*)61 — — — 61 
 Repurchase of early exercised stock options — (8,132)(*)— — — — — 
 Vesting of early exercised stock options and restricted stock awards — — 131 — — — 131 
 Stock-based compensation expense — — 7,401 — — — 7,401 
 Net loss— — — — (21,188)— (73)(21,261)
 Foreign-currency translation adjustment — — — — 137 91 228 
 Balance as of March 31, 2023 $ 173,808,155$18 $516,130 $(211,606)$830 $6,092 $311,464 
Issuance of common stock upon release of restricted stock units— 243,473(*)(*)— — — — 
Issuance of common stock upon exercise of vested options— 335,085(*)269 — — — 269 
Vesting of early exercised stock options and restricted stock awards— — 67 — — — 67 
Stock-based compensation expense— — 8,809 — — — 8,809 
Net loss— — — (24,889)— (211)(25,100)
Foreign-currency translation adjustment— — — — (32)(21)(53)
Balance as of June 30, 2023$ 174,386,713$18 $525,275 $(236,495)$798 $5,860 $295,456 
Issuance of common stock upon release of restricted stock units— 740,880(*)(*)— — — — 
Issuance of common stock upon exercise of vested options— 239,920(*)124 — — — 124 
Repurchase of early exercised stock options— (194,400)(*)— — — — — 
Vesting of early exercised stock options and restricted stock awards— — 27 — — — 27 
Stock-based compensation expense— — 9,233 — — — 9,233 
Net loss— — — (18,348)— (609)(18,957)
Foreign-currency translation adjustment— — — — (197)(136)(333)
Balance as of September 30, 2023 175,173,11318 534,659 (254,843)601 5,115 285,550 
(*) amount less than 1
8

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
Convertible Preferred StockCommon StockAdditional Paid-In CapitalAccumulated DeficitAccumulated Other Comprehensive LossNoncontrolling InterestTotal
SharesAmountSharesAmount
Balance as of December 31, 202123,668,198$246,056 20,269,864$ (*)$25,919 $(78,559)$ $ $(52,640)
Retroactive application of recapitalization (Note 3)50,245,951— 43,031,1395(5)
Unissued common stock (1)
— (210,302)— — — — — — 
Balance as of December 31, 202173,914,149246,056 63,090,701525,914 (78,559)(52,640)
Pre-close issuance of common stock upon exercise of vested options— 190,505 (*) 102 — — — 102 
Pre-close issuance of common stock upon exercise of unvested options— 4,472 (*) — — 
Pre-close issuance of common stock for services — 62,952 (*) 621 — — — 621 
Conversion of preferred stock to common stock(73,914,149)(246,056)73,914,1497246,049 246,056 
Conversion of May 2020 and October 2020 preferred stock warrants of Legacy Forge to common stock warrants— — 2,949 — — 2,949 
Settlement of promissory notes— 24,205 4,207 
Issuance of common stock upon Merger (net of redemptions), including PIPE and A&R FPA investors, net of transaction cost of $58,673
— 31,961,0473 140,808 — — — 140,811 
Vesting of early exercised stock options and restricted stock awards— — 409 — — — 409 
Share-based compensation expense— — 7,948 — — — 7,948 
Net loss— — — (64,424)— — (64,424)
Balance as of March 31, 2022$ 169,223,826$17 $429,005 $(142,983)$ $ $286,039 
Issuance of common stock upon exercise of vested options— 146,232(*)401 — — 401 
Issuance of common stock upon exercise of Public Warrants— 1,994,022(*)23,629 — — 23,629 
Vesting of early exercised stock options and restricted stock awards— 638 — — 638 
Share-based compensation expense — 10,903 — — 10,903 
Net loss— (5,119)— — (5,119)
Balance as of June 30, 2022 171,364,080$17 $464,576 $(148,102)$ $ $316,491 
Issuance of common stock upon exercise of Public Warrants— 768(*)9 — — 9 
Issuance of common stock upon release of restricted stock units— 43,142(*)(*)— — — 
Issuance of common stock upon exercise of vested options— 622,929(*)364 — — 365 
9

Issuance of common stock upon early exercise of unvested options— 78,076— — — 
Issuance of common stock upon exercise of Junior Preferred Stock Warrants— 123,379(*)653 — — 653 
Issuance of common stock upon Merger (1)
— 210,302(*)(*)— — — 
Formation of Forge Europe— 3,830 — 5,658 9,488 
Vesting of early exercised stock options— 193 — — 193 
Share-based compensation expense— 26,967 — — 26,967 
Net loss— (16,198)— (*)(16,198)
Foreign currency translation adjustment— (95)(64)(159)
Balance as of September 30, 2022 172,442,67618 496,592 (164,300)(95)5,594 337,809 
(*) amount less than 1
(1) This amount represents shares that were not issued upon the closing of the Business Combination as a result of a stockholder’s demand for appraisal rights. These shares were issued to the stockholder during the year ended December 31, 2022 after the statutory period to perfect such rights lapsed. See Note 1, "Organization and Description of Business," for additional information.
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
10

FORGE GLOBAL HOLDINGS, INC.
Unaudited Condensed Consolidated Statements of Cash Flows
(In thousands of U.S. dollars)
Nine Months Ended September 30,
20232022
Cash flows from operating activities:
Net loss$(65,318)$(85,741)
Adjustments to reconcile net loss to net cash (used in) provided by operations:
Share-based compensation25,443 45,974 
Depreciation and amortization5,247 4,531 
Transaction expenses related to the Merger 3,132 
Amortization of right-of-use assets2,327 2,819 
Loss on impairment of long lived assets536 446 
Allowance for doubtful accounts529 294 
Change in fair value of warrant liabilities2,715 (19,808)
Settlement of related party promissory notes (Note 3) 5,517 
Changes in operating assets and liabilities:
Accounts receivable(857)2,042 
Prepaid expenses and other assets1,590 (4,265)
Accounts payable(1,318)(43)
Accrued expenses and other liabilities2,011 402 
Accrued compensation and benefits(4,472)(11,118)
Operating lease liabilities(3,317)(3,942)
Net cash used in operating activities(34,884)(59,760)
Cash flows from investing activities:
Purchases of property and equipment(113)(116)
Purchases of intangible assets (126)
Capitalized internal-use software development costs (4,590)
Purchases of certificates of deposit(3,180) 
Net cash used in investing activities(3,293)(4,832)
Cash flows from financing activities:
Proceeds from the Merger 7,865 
Proceeds from PIPE investment and A&R FPA investors 208,500 
Payments for offering costs (56,852)
Proceeds from exercise of Public Warrants 22,940 
Proceeds from exercise of options, including proceeds from repayment of promissory notes353 997 
Taxes withheld and paid related to net share settlement of equity awards(557) 
Formation of Forge Europe (Note 4) 9,488 
Payments for redemption of Public Warrants (165)
Net cash (used in) provided by financing activities(204)192,773 
Effect of changes in currency exchange rates on cash and cash equivalents(158)(159)
Net (decrease) increase in cash and cash equivalents(38,539)128,022 
10

Cash, cash equivalents and restricted cash, beginning of the period194,965 76,404 
Cash, cash equivalents and restricted cash, end of the period$156,426 $204,426 
Nine Months Ended September 30,
20232022
Reconciliation of cash, cash equivalents and restricted cash to the amounts reported within the consolidated balance sheets
Cash and cash equivalents$155,127 $202,603 
Restricted cash1,299 1,823 
Total cash, cash equivalents and restricted cash, end of the period$156,426 $204,426 
Nine Months Ended September 30,
20232022
Supplemental disclosure of non-cash investing and financing activities:
Capitalized internal-use software development costs accrued and not yet paid $234 
Reclassification of deferred offering costs to equity $5,932 
Conversion of preferred stock $246,049 
Conversion of May 2020 and October 2020 preferred stock warrants of Legacy Forge to common stock warrants $2,949 
Non-cash assets acquired in the Merger $193 
Warrants issued in connection with A&R FPA $3,080 
Assumption of Merger warrants liability $13,983 
Vesting of early exercised stock options and restricted stock awards225 $1,240 
Warrant liability reclassified to additional paid-in capital upon exercise of Public Warrants $698 
Warrant liability reclassified to additional paid-in capital upon exercise of Junior Preferred Stock Warrants $653 
Issuance of common stock upon settlement of related party promissory notes $4,207 
Early exercise of stock options upon settlement of related party promissory notes $1,310 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
11

FORGE GLOBAL HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Organization and Description of Business
Forge Global Holdings, Inc. (the “Company” and f/k/a Motive Capital Corp) is a financial services platform headquartered in San Francisco, California. The Company offers 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. The Company's scaled and integrated business model is at the nexus of the private market ecosystem, which it believes creates a sustaining competitive advantage fueling its clients' participation in the private market and the Company's growth.
On March 21, 2022 (the “Closing Date”), the Company consummated the Business Combination (as defined below) pursuant to the terms of the Agreement and Plan of Merger dated September 13, 2021 (the "Merger Agreement"), by and among Motive Capital Corp, a blank check company incorporated as a Cayman Islands exempted company in 2020 (“MOTV”), FGI Merger Sub Inc., a Delaware corporation and wholly-owned subsidiary of MOTV (“Merger Sub”), and Forge Global, Inc., a Delaware corporation (“Legacy Forge”). Pursuant to the Merger Agreement, on the Closing Date, immediately prior to the consummation of the Business Combination, MOTV changed its jurisdiction of incorporation from the Cayman Islands to the State of Delaware and changed its corporate name to "Forge Global Holdings, Inc." (the “Domestication”). On the Closing Date, Merger Sub merged with and into Legacy Forge (the "Merger"), with Legacy Forge surviving the Merger as a direct, wholly-owned subsidiary of the Company (together with the Merger, the Domestication, and the other transactions contemplated by the Merger Agreement, the “Business Combination”).
The Merger was accounted for as a reverse recapitalization with Legacy Forge being the accounting acquirer and MOTV as the acquired company for accounting purposes. Accordingly, all historical financial information presented in the unaudited condensed consolidated financial statements represents the accounts of Legacy Forge and its wholly-owned subsidiaries as if Legacy Forge is the predecessor to the Company. The shares and net loss per common share prior to the Merger have been retroactively restated as shares reflecting the exchange ratio (the "Exchange Ratio") as established by the Merger Agreement (each outstanding share of Legacy Forge Class A common stock was exchanged for approximately 3.122931 shares of the Company’s common stock, including all shares of Legacy Forge preferred stock, which were converted to shares of Legacy Forge's Class A common stock immediately prior to the Merger). See Note 3, “Recapitalization,” for additional information.
Forge Europe GmbH
In September 2022, the Company and Deutsche Börse Aktiengesellschaft (“DBAG,” a German company and together with the Company, the “Investors”) formed an entity, Forge Europe GmbH (“Forge Europe”), to further expand the Company’s business in the European market. Upon formation, the Investors contributed to Forge Europe an aggregate cash amount of $14.1 million (the “Cash Consideration”) and certain of the Company’s intangible assets (the “Noncash Consideration”). $4.6 million of the Cash Consideration was contributed by the Company and $9.5 million was contributed by DBAG. The Company has a majority ownership interest in Forge Europe and accounts for Forge Europe as a fully consolidated subsidiary. The remaining interest, held by DBAG (a related party of the Company), is reported as a noncontrolling interest in the unaudited condensed consolidated financial statements.
Upon initial consolidation, Forge Europe did not have any assets other than the $14.1 million transferred as Cash Consideration and the intangible assets contributed as Noncash Consideration with zero carrying value. Accordingly, the Cash Consideration contributed by DBAG as the noncontrolling interest holder of DBAG was in excess of its share of Forge Europe’s net assets, and the excess was recognized in additional paid-in capital upon consolidation of Forge Europe in the unaudited condensed consolidated statements of changes in stockholders' equity.
2. Summary of Significant Accounting Policies
Basis of Presentation and Consolidation
The accompanying unaudited condensed consolidated financial statements include the accounts of the Company, and its subsidiaries and have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). All intercompany balances and transactions have been eliminated in consolidation.
12

FORGE GLOBAL HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
In the normal course of business, the Company has transactions with various investment entities. In certain instances, the Company provides investment advisory services to pooled investment vehicles (each, an “Investment Fund”). The Company does not have discretion to make any investment, except for the specific investment for which an Investment Fund was formed. The Company performs an assessment to determine (a) whether the Company’s investments or other interests will absorb portions of a variable interest entity’s expected losses or receive portions of the entity’s expected residual returns and (b) whether the Company’s involvement, through holding interests directly or indirectly in the entity would give it a controlling financial interest. The Company consolidates entities in which it, directly or indirectly, is determined to have a controlling financial interest. Consolidation conclusions are reviewed quarterly to identify whether any reconsideration events have occurred. There have been no changes to the Company's significant accounting policies described in the audited consolidated financial statements for the year ended December 31, 2022, that have had a material impact on these unaudited condensed consolidated financial statements and related notes. See Note 9, "Off Balance Sheet Items", for additional information.
Unaudited Interim Condensed Consolidated Financial Information
The accompanying interim condensed consolidated financial statements as of September 30, 2023 and for the three and nine months ended September 30, 2023 and 2022 and accompanying notes are unaudited. These unaudited interim condensed consolidated financial statements (the "unaudited condensed consolidated financial statements") have been prepared in accordance with GAAP applicable to interim financial statements. These financial statements are presented in accordance with the rules and regulations of the SEC and do not include all disclosures normally required in annual consolidated financial statements prepared in accordance with GAAP. As such, the information included herein should be read in conjunction with the consolidated financial statements and accompanying notes as of and for the year ended December 31, 2022 (the “audited consolidated financial statements”) that were included in the Company’s Annual Report on Form 10-K filed with the SEC on March 1, 2023, which provides a more complete discussion of the Company’s accounting policies and certain other information. In management’s opinion, the unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual financial statements, which include only normal recurring adjustments, necessary for a fair statement of the Company’s financial position as of September 30, 2023 and its condensed consolidated results of operations for the three and nine months ended September 30, 2023 and 2022 and cash flows for the nine months ended September 30, 2023 and 2022. The results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of the results expected for the year ending December 31, 2023 or any other future interim or annual periods.
Use of Estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant management estimates include collectability of accounts receivable, the fair value of financial assets and liabilities, the impairment of long-lived assets and goodwill, the fair value of warrants, equity awards, share-based compensation expenses, including the determination of the fair value of the Company’s common stock prior to the Business Combination and the derived service period for the awards containing market-based vesting conditions, and the valuation of deferred tax assets. These estimates are inherently subjective in nature and, therefore, actual results may differ from the Company’s estimates and assumptions. The Company bases its estimates on historical experience and also on assumptions that it believes are reasonable. Further, the Company applies judgment in determining whether, directly or indirectly, it has a controlling financial interest in the Investment Funds, in order to conclude whether any of the Investment Funds must be consolidated.
The Company believes the estimates and assumptions underlying the unaudited condensed consolidated financial statements are reasonable and supportable based on the information available as of September 30, 2023. These estimates may change as new events occur and additional information is obtained, and related financial impacts will be recognized in the Company’s consolidated financial statements as soon as those events become known.
Impairment of Long-Lived Assets
The Company’s long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. The Company also evaluates the period of depreciation
13

FORGE GLOBAL HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
and amortization of long-lived assets to determine whether events or circumstances warrant revised estimates of useful lives. 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. If the estimated future undiscounted cash flows demonstrate the long-lived assets are not recoverable, an impairment loss would be calculated based on the excess of the carrying amounts of the long-lived assets over their fair value. No impairment charges were recognized during the three months ended September 30, 2023
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. Goodwill is not amortized but is tested for impairment annually on October 1, or more frequently if events or changes in circumstances indicate the goodwill may be impaired. These events or circumstances could include a significant change in the business climate, regulatory environment, established business plans, operating performance indicators, or competition. Potential impairment indicators may also include, but are not limited to, (i) the results of the Company’s most recent annual or interim impairment testing, (ii) downward revisions to internal forecasts, (iii) declines in the Company’s market capitalization below its book value, and the magnitude and duration of those declines, (iv) a reorganization resulting in a change to the Company’s operating segments, and (v) other macroeconomic factors, such as increases in interest rates that may affect the weighted average cost of capital or volatility in the equity and debt markets. No impairment charges were recognized during the nine months ended September 30, 2023.
In-process research and development (“IPR&D”) assets acquired in a business combination are considered indefinite lived until the completion or abandonment of the associated research and development efforts. Upon conclusion of the relevant research and development project, the Company will amortize the acquired IPR&D over its estimated useful life or expense the acquired IPR&D should the research and development project be unsuccessful with no future alternative use.
Acquired intangible assets also consist of identifiable intangible assets, primarily software technology, trade name, and customer relationships resulting from business acquisitions. Finite-lived intangible assets are recorded at fair value on the date of acquisition and are amortized over their estimated useful lives. The Company bases the useful lives and related amortization expense on its estimate of the period that the assets will generate revenues or otherwise be used.
Accounts Receivable, Net
Accounts receivable consist of amounts billed and currently due from customers, which are subject to collection risk. The total allowance for doubtful accounts netted against account receivables was $1.3 million and $0.9 million as of September 30, 2023 and December 31, 2022, respectively.
Concentration of Credit Risks
The Company’s exposure to credit risk associated with its contracts with holders of private company equity (“sellers”) and investors (“buyers”) related to the transfer of private securities is measured on an individual counterparty basis. Credit risk is affected by volatility in traded credit spreads, increasing discount rates, and changing economic outlook on a sectoral or counterpart (name) specific basis. To reduce the potential for risk concentration, the Company’s aggregate exposure is monitored in light of changing counterparty and market conditions. As of September 30, 2023 and December 31, 2022, the Company did not have any material concentrations of credit risk outside the ordinary course of business.
As of September 30, 2023 and December 31, 2022, no customers accounted for more than 10% of the Company’s accounts receivable. No customer accounted for more than 10% of total revenue, less transaction-based expenses for the three and nine months ended September 30, 2023 and 2022.
Revenue Recognition 
Contract Balances 
Contract assets represent amounts for which the Company has recognized revenue for contracts that have not yet been invoiced to our customers. The Company does not have any contract assets as of September 30, 2023 and December 31, 2022. Contract liabilities consist of deferred revenue, which relates to amounts invoiced in advance of performance under a revenue contract. The total contract liabilities of $0.3 million and $0.4 million as of September 30, 2023 and December 31, 2022, respectively, related to advance billings for data subscriptions, recorded in accrued expenses and other current
14

FORGE GLOBAL HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
liabilities on the unaudited condensed consolidated balance sheets. During the three and nine months ended September 30, 2023, the Company recognized $0.1 million and $0.4 million, respectively, of revenue that was included in deferred revenue recorded in accrued expenses and other current liabilities at December 31, 2022.
Revenue by Geographic Location
For the three and nine months ended September 30, 2023, revenue outside of the United States (including U.S. territories), based on customer billing address, was $1.0 million, and $3.0 million, respectively. For the three and nine months ended September 30, 2022, revenue outside of the United States (including U.S. territories), based on customer billing address, was $1.9 million, and $6.1 million, respectively.
3. Recapitalization
As discussed in Note 1, "Organization and Description of Business," on the Closing Date, Legacy Forge completed the acquisition of MOTV and acquired 100% of MOTV’s shares and Legacy Forge received gross proceeds of $216.4 million, which included $7.9 million in proceeds from MOTV's trust and bank accounts, net of redemptions, $68.5 million in proceeds from the PIPE Investment (as defined below), and $140.0 million in proceeds from the A&R FPA (as defined below). The Company recorded $61.8 million of transaction costs, which consisted of legal, accounting, and other professional services directly related to the Merger, of which $58.7 million was related to common stock issued during the Merger and was recorded as a reduction to additional paid-in capital. The remaining $3.1 million was related to issuance of Public and Private Placement Warrants, including warrants issued to A&R FPA investors, and was expensed immediately upon consummation of the Merger as acquisition-related transaction cost in the unaudited condensed consolidated statements of operations. The cash outflows related to these costs were presented as financing activities in the Company’s unaudited condensed consolidated statements of cash flows. Deferred offering costs were offset against proceeds upon accounting for the consummation of the Merger. In addition, upon closing of the Merger, certain executives received a one-time transaction bonus for an aggregate amount of $17.7 million, of which $12.2 million was to be paid to the executives in cash, and the remaining amount $5.5 million was offset against outstanding promissory notes that were due from these executives as of the Closing Date. The transaction bonus was included in compensation and benefits in the unaudited condensed consolidated statements of operations for the three and nine months September 30, 2022. See Note 10, "Capitalization," for additional information.
On the Closing Date, each holder of MOTV Class A ordinary stock received one share of the Company’s common stock, par value 0.0001, for each MOTV Class A ordinary share held prior to the Merger, and each holder of MOTV Class B ordinary stock received one share of the Company’s common stock, par value 0.0001, for each MOTV Class B ordinary share held prior to the Merger. See Note 10, "Capitalization" and Note 11, "Warrants" for additional details of the Company’s stockholders’ equity prior to and subsequent to the Merger.
All equity awards of Legacy Forge were assumed by the Company and converted into comparable equity awards that are settled or exercisable for shares of the Company’s common stock. As a result, each outstanding stock option of Legacy Forge was converted into an option to purchase shares of the Company’s common stock based on the Exchange Ratio and each outstanding warrant of Legacy Forge was converted into a warrant to purchase shares of the Company’s common stock based on the Exchange Ratio.
The Merger was accounted for as a reverse recapitalization with Legacy Forge as the accounting acquirer and MOTV as the acquired company for accounting purposes. Legacy Forge was determined to be the accounting acquirer since Legacy Forge's former management makes up the majority of the Company's management team, Legacy Forge’s former management nominated or represents a majority of the Company’s board of directors, and Legacy Forge represents the majority of the continuing operations of the Company. Accordingly, all historical financial information presented in these unaudited condensed consolidated financial statements represents the accounts of Legacy Forge and its wholly-owned subsidiary. Net assets were stated at historical cost consistent with the treatment of the transaction as a reverse recapitalization of Legacy Forge.
Each public and private warrant of MOTV that was unexercised at the time of the Merger was assumed by the Company and represents the right to purchase one share of the Company’s common stock upon exercise of such warrant.
15

FORGE GLOBAL HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
PIPE Investment
On March 21, 2022, concurrently with the execution of the Merger Agreement, MOTV entered into subscription agreements with certain investors, to which such investors collectively subscribed for an aggregate of 6,850,000 shares of the Company’s common stock at $10.00 per share for aggregate gross proceeds of $68.5 million (the “PIPE Investment”). The PIPE Investment was consummated concurrently with the closing of the Merger.
Amended and Restated Forward Purchase Agreement
On March 21, 2022, concurrently with the execution of the Merger Agreement, certain MOTV fund vehicles managed by an affiliate of MOTV purchased 14,000,000 units at $10.00 per unit, for an aggregate purchase price of $140.0 million in a private placement that closed substantially concurrently with the closing of the Business Combination under the Amended and Restated Forward Purchase Agreement (the “A&R FPA”). Each unit consists of one share of the Company’s common stock and one-third of one Public Warrant. The A&R FPA was consummated concurrently with the closing of the Merger.
4. Fair Value Measurements
Financial instruments consist of cash equivalents, restricted cash, accounts receivable, certificates of deposit, accounts payable, accrued liabilities, payment-dependent notes receivable, payment-dependent notes payable, and warrant liabilities. Cash equivalents, payment-dependent notes receivable, payment-dependent notes payable, certificates of deposits, and warrant liabilities are stated at fair value on a recurring basis. Restricted cash, accounts receivable, accounts payable, and accrued liabilities are stated at their carrying value, which approximates fair value due to the short time these financial instruments are held to the expected receipt or payment date.
The following tables present the fair value hierarchy for assets and liabilities measured at fair value on a recurring basis (in thousands):
As of September 30, 2023
Level 1Level 2Level 3Total
Cash and cash equivalents:
Money market funds$123,824 $ $ $123,824 
Payment-dependent notes receivable, non-current  5,763 5,763 
Certificates of deposit(1)(2)
 3,130  3,130 
Total financial assets$123,824 $3,130 $5,763 $132,717 
Payment-dependent notes payable, non-current  5,763 5,763 
Junior preferred stock warrants  1,105 1,105 
Private placement warrants  2,216 2,216 
Total financial liabilities$ $ $9,084 $9,084 
As of December 31, 2022
Level 1Level 2Level 3Total
Cash and cash equivalents:
Money market funds$149,139 $ $ $149,139 
Payment-dependent notes receivable, non-current  7,371 7,371 
Total financial assets$149,139 $ $7,371 $156,510 
Payment-dependent notes payable, non-current  7,371 7,371 
Junior preferred stock warrants  384 384 
Private placement warrants  222 222 
Total financial liabilities$ $ $7,977 $7,977 
(1) Included in prepaid expenses and other current assets on the unaudited condensed consolidated balance sheets as of September 30, 2023 and consolidated balance sheets as of December 31, 2022.
16

FORGE GLOBAL HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(2) Includes $1.0 million certificates of deposit required to fulfill the Company's obligations in connection with real estate lease agreements.
The Company classifies money market funds, certain payment-dependent notes receivable, and payment-dependent notes payable within Level 1 of the fair value hierarchy because the Company values these investments using quoted market prices.
Payment-Dependent Notes Receivable and Payment-Dependent Notes Payable Classified as Level 3
The Company classifies certain payment-dependent notes receivable and payment-dependent notes payable within Level 3 of the fair value hierarchy if the underlying securities are equity of private companies whose regular financial and nonfinancial information is generally not available other than when it is publicly disclosed, or significant unobservable inputs are used to estimate fair value.
The Company estimates fair values of payment-dependent notes receivable and payment-dependent notes payable utilizing completed transactions made through the Company’s platform for the relevant private securities as well as mutual fund valuations of private companies as relevant data inputs.
Legacy Forge Warrant Liabilities
The Company's Legacy Forge warrant liabilities consisted of warrants to purchase Series B-1 preferred stock or subsequent round stock (the "Series B-1 Preferred Stock Warrants") and Junior Preferred Stock Warrants (as defined below). The Company used a hybrid method that incorporates the Black-Scholes option-pricing model and an adjusted backsolve model to estimate the fair value of the Legacy Forge warrant liabilities through June 30, 2022. Subsequent to June 30, 2022, the Company used a binomial lattice model in a risk-neutral framework to value Legacy Forge warrant liabilities. See Note 11, "Warrants", for additional information.
Subsequent to the Merger, the Series B-1 Preferred Stock Warrants and Junior Preferred Stock Warrants were converted to common stock warrants. As a result, the Series B-1 Preferred Stock Warrants were remeasured at fair value prior to the conversion resulting in a change in fair value of $0.1 million for the three and nine months ended September 30, 2022, which was recognized as a component of change in fair value of warrant liabilities within the unaudited condensed consolidated statements of operations, and subsequently settled in additional paid-in capital as a result of the conversion to equity-classified common stock warrants. The Junior Preferred Stock Warrants were remeasured at fair value prior to the conversion to common stock warrants, which did not result in a change in fair value as of the conversion date. These warrants remained liability-classified after the conversion into the common stock warrants as the Company's obligation with respect to these warrants is capped at a fixed monetary amount and may be settled in a variable number of common shares. The Junior Preferred Stock Warrants were remeasured at fair value as of September 30, 2023, which resulted in a gain of $0.4 million and loss of $0.7 million for the three and nine months ended September 30, 2023, respectively.
The Company estimated the fair value of the Junior Preferred Stock Warrants as of September 30, 2023 and December 31, 2022, respectively, using the following key assumptions:    
September 30,
2023
December 31,
2022
Fair value of underlying securities$2.03$1.73
Expected term (years)2.112.9
Expected volatility105.0%46.1%
Risk-free interest rate5.0%4.2%
Expected dividend yield0.0%0.0%
Fair value per warrant $0.42$0.15
Private Placement Warrants
17

FORGE GLOBAL HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The Company classifies the Private Placement Warrants within Level 3, because significant unobservable inputs are used to estimate fair value. To estimate the fair value of Private Placement Warrants, the Company used a binomial lattice model in a risk-neutral framework. The Private Placement Warrant liabilities were remeasured at fair value as of September 30, 2023, which resulted in a gain of $0.5 million and a loss of $2.0 million for the three and nine months ended September 30, 2023, respectively. The significant assumptions used in the analysis were the trading price of the Company’s common stock as of September 30, 2023 and December 31, 2022, respectively, using the following key assumptions:
September 30,
2023
December 31,
2022
Fair value of underlying securities$2.03$1.73
Expected term (years)3.54.2
Expected volatility107.5%44.6%
Risk-free interest rate4.8%4.1%
Expected dividend yield0.0%0.0%
Fair value per warrant$0.30$0.03
Transfers Into and Out of Level 3
The Company transfers financial instruments out of Level 3 on the date when underlying input parameters are readily observable from existing market quotes. For payment-dependent notes payable and receivable, transfers from Level 3 to Level 1 generally relate to a company going public and listing on a national securities exchange. During the nine months ended September 30, 2023, there were no transfers of securities into or out of Level 3. During the nine months ended September 30, 2022, the transfer of Private Placement Warrants from Level 2 to Level 3 was due to the redemption and exercises of the Public Warrants which resulted in the lack of an identical instrument with a quoted price (see Note 11).
The following tables provide reconciliation for all financial assets and liabilities measured at fair value using significant unobservable inputs (Level 3) for the nine months ended September 30, 2023 and 2022 (in thousands):
Total Level 3 Financial AssetsTotal Level 3 Financial Liabilities
Balance as of December 31, 2022$7,371 $7,977 
Change in fair value of payment-dependent notes receivable(1,608)— 
Change in fair value of payment-dependent notes payable— (1,608)
Change in fair value of Junior Preferred Stock Warrants— 721 
Change in fair value of Private Placement Warrants— 1,994 
Balance as of September 30, 2023$5,763 $9,084 
18

FORGE GLOBAL HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Total Level 3 Financial AssetsTotal Level 3 Financial Liabilities
Balance as of December 31, 2021$13,453 $21,297 
Change in fair value of payment-dependent notes receivable(6,945)— 
Change in fair value of payment-dependent notes payable— (6,945)
Change in fair value of Series B-1 Preferred Stock Warrant liability— 106 
Settlement of Series B-1 Preferred Stock Warrant liability via conversion to equity-classified common stock warrants— (2,950)
Exercise of Junior Preferred Stock Warrants— (653)
Change in fair value of Junior Preferred Stock Warrants— (3,937)
Transfer of Private Placement Warrants out of Level 2 to Level 3— 20,461 
Change in fair value of Private Placement Warrants— (20,239)
Balance as of September 30, 2022$6,508 $7,140 
5. Condensed Consolidated Balance Sheet Components
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consisted of the following (in thousands):

September 30,
2023
December 31,
2022
Prepaid insurance$2,889 $3,250 
Prepaid software1,455 1,406 
Other prepaid expenses951 1,546 
Certificates of deposit3,131  
Other current assets1,722 2,177 
Prepaid expenses and other current assets$10,148 $8,379 

Internal-Use Software, Net
Capitalized internal-use software consists of the following (in thousands):
September 30,
2023
December 31,
2022
Capitalized internal-use software$9,062 $9,605 
Less: Accumulated amortization(4,039)(1,965)
Total capitalized internal-use software$5,023 $7,640 
For the three and nine months ended September 30, 2023, the Company recorded amortization expense on capitalized internal-use software placed in service of $0.7 million and $2.1 million, respectively. The Company recorded $0.5 million of impairment loss for developed software that will no longer be put into service, included in general and administrative expense within the unaudited condensed consolidated statements of operations during the nine months ended September 30, 2023. No impairment was recorded for the three months ended September 30, 2023. For the three and nine months ended September 30, 2022, the Company recorded amortization expense on capitalized internal-use software placed in service of $0.4 million and $1.3 million, respectively.
Accrued Expenses and Other Current Liabilities
19

FORGE GLOBAL HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Accrued expenses and other current liabilities consist of the following (in thousands):
September 30,
2023
December 31,
2022
Accrued professional services$3,200 $1,380 
Contingent liability1,100 1,500 
Accrued taxes and deferred tax liabilities1,403 1,006 
Common stock unvested liability259 589 
Other current liabilities2,159 1,946 
Total$8,121 $6,421 
6. Goodwill and Intangible Assets, Net
The Company carried out interim impairment tests of its long-lived assets pursuant to ASC 360 - Property, Plant, and Equipment, and its goodwill in accordance with ASC 350 - Intangibles - Goodwill and other. No impairment losses were recorded for the long-lived assets or goodwill as of September 30, 2023. See Note 2, "Summary of Significant Accounting Policies," for additional information.
The components of intangible assets and accumulated amortization are as follows (in thousands):
As of September 30, 2023
Weighted Average Remaining Amortization PeriodGross Carrying AmountAccumulated AmortizationNet Carrying Amount
Goodwill:
Goodwill from acquisitions$120,948 $— $120,948 
Finite-lived intangible assets:
Developed technology1.1 years$13,200 $(10,124)$3,076 
Customer relationships5.6 years7,507 (3,434)4,073 
Launched in-process research and development assets3.0 years960 (384)576 
Total finite-lived intangible assets$21,667 $(13,942)$7,725 
Indefinite-lived intangible assets:
Trade name - website domainIndefinite2,224 — 2,224 
Total infinite-lived intangible assets2,224 — 2,224 
Total intangible assets23,891 (13,942)9,949 
Total goodwill and intangible assets$144,839 $(13,942)$130,897 

20

FORGE GLOBAL HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2022
Weighted Average Remaining Amortization PeriodGross Carrying AmountAccumulated AmortizationNet Carrying Amount
Goodwill:
Goodwill from acquisitions$120,948 $— $120,948 
Finite-lived intangible assets:
Developed technology1.8 years$13,200 $(8,035)$5,165 
Customer relationships6.1 years7,507 (2,677)4,830 
Launched in-process research and development assets3.7 years960 (240)720 
Total finite-lived intangible assets$21,667 $(10,952)$10,715 
Indefinite-lived intangible assets:
Trade name - website domainIndefinite2,224 — 2,224 
Total infinite-lived intangible assets2,224 — 2,224 
Total intangible assets23,891 (10,952)12,939 
Total goodwill and intangible assets$144,839 $