Forge Global Holdings, Inc. (NYSE:FRGE) Q4 2022 Earnings Conference Call February 28, 2023 5:00 PM ET Company Participants Dominic Paschel - Senior Vice President Finance and Investor Relations Kelly Rodrigues - CEO Mark Lee - CFO Conference Call Participants Devin Ryan - JMP Securities Alex Kramm - UBS Owen Lau - Oppenheimer Jeff Schmitt - William Blair Ken Worthington - JPMorgan Patrick Moley - Piper Sander Operator Good afternoon. My name is Emma, and I will be your conference operator today. At this tim ...

Financial Performance - Placement fee revenues for the year ended December 31, 2022 were $107723 thousand[16] - Total revenues, less transaction-based expenses for the year ended December 31, 2022 were $125022 thousand[16] - Total operating expenses for the year ended December 31, 2022 were $134811 thousand[16] - Operating loss for the year ended December 31, 2022 was $(9789) thousand[16] - Net loss for the year ended December 31, 2022 was $(18499) thousand[16] - Adjusted EBITDA for the year ended December 31, 2022 was $8761 thousand[16] - Adjusted EBITDA for the year ended December 31, 2022 was $(46851) thousand[16] Key Business Metrics - Transaction volume for the year ended December 31, 2022 was $32 billion[9, 18] - Assets Under Custody as of December 31, 2022 were $143 billion[20] - Total Custodial Accounts as of December 31, 2022 were 2124677[20] Non-GAAP Financial Measure - The Company presents Adjusted EBITDA, a non-GAAP financial measure, to evaluate its ongoing operations and for internal planning and forecasting purposes[5]

Part I [Item 1. Business](index=6&type=section&id=Item%201.%20Business) Forge Global Holdings, Inc. operates a financial services platform for private markets, offering trading, custody, and data solutions - Forge provides a **trusted trading platform**, **proprietary data**, and **custody services** to enhance **accessibility**, **transparency**, and **liquidity** in private markets[20](index=20&type=chunk) - Key solutions include **Forge Markets (trading)**, **Forge Trust (custody)**, and **Forge Data (data and insights)**[20](index=20&type=chunk)[21](index=21&type=chunk) - Challenges in private markets include **lack of liquidity**, **limited access** for most investors, and **insufficient transparency**[23](index=23&type=chunk)[24](index=24&type=chunk)[26](index=26&type=chunk) - Forge Markets facilitates secondary purchases and sales of private company securities, with a standard minimum transaction size of **$100,000** as of December 31, 2022[32](index=32&type=chunk)[34](index=34&type=chunk) - Forge Trust serves primarily as a custodian for self-directed individual retirement accounts (SDIRAs) holding alternative assets, with **$14.9 billion of assets under custody** through **1.9 million accounts** as of December 31, 2022[43](index=43&type=chunk)[47](index=47&type=chunk) - Forge Intelligence (Data Solutions) offers subscription-based access to over a decade of secondary trading data across more than **1,000 private companies** as of December 31, 2022[48](index=48&type=chunk)[49](index=49&type=chunk) - Growth strategies include scaling existing solutions, developing new products, forming partnerships (e.g., Forge Europe with Deutsche Börse), international expansion, exploring new asset classes, and pursuing inorganic opportunities[51](index=51&type=chunk)[52](index=52&type=chunk) - Since inception, Forge has facilitated over **$12 billion in transaction volume** across approximately **23,000 transactions** in over **500 companies**, with approximately **568,000 registered users**[56](index=56&type=chunk) - The company is subject to extensive U.S. federal and state securities laws, including regulation of its broker-dealer (Forge Securities LLC), investment adviser (Forge Global Advisors LLC), and trust company (Forge Trust Co.) subsidiaries[72](index=72&type=chunk)[74](index=74&type=chunk)[75](index=75&type=chunk)[76](index=76&type=chunk)[77](index=77&type=chunk) - Forge Europe GmbH was formed in September 2022 with Deutsche Börse to expand into the European private market, targeting a launch in Germany in 2023[51](index=51&type=chunk)[419](index=419&type=chunk) [Item 1A. Risk Factors](index=14&type=section&id=Item%201A.%20Risk%20Factors) Forge faces significant risks from losses, competition, macroeconomic conditions, and complex regulatory challenges - Forge has a history of net losses (**$111.9 million in 2022**, **$18.5 million in 2021**) and an accumulated deficit of **$190.4 million** as of December 31, 2022, with no assurance of future profitability[92](index=92&type=chunk) - The company faces intense and increasing competition from established enterprises, global banks, and early-stage companies, which may have greater resources or offer more competitive pricing[94](index=94&type=chunk)[95](index=95&type=chunk) - Customers investing through Forge's platform face risks including **lack of information** on private companies, **illiquidity of securities**, and potential **transfer restrictions**[96](index=96&type=chunk)[99](index=99&type=chunk) - Macroeconomic conditions (high inflation, rising interest rates, geopolitical conflicts like the Russia-Ukraine war) and the trailing effects of the COVID-19 pandemic create economic uncertainty, increased volatility, and liquidity risks in private equity markets, potentially harming Forge's business[116](index=116&type=chunk)[117](index=117&type=chunk)[118](index=118&type=chunk)[119](index=119&type=chunk)[120](index=120&type=chunk) - Forge is subject to extensive and complex U.S. and non-U.S. laws and regulations for broker-dealers, investment advisers, and alternative trading systems, requiring significant expense and resources for compliance[133](index=133&type=chunk)[135](index=135&type=chunk)[136](index=136&type=chunk) - Proposed legislation, such as potential SEC requirements for more private company disclosures or limits on IRA investments, could negatively impact Forge's business model and revenue streams[138](index=138&type=chunk)[139](index=139&type=chunk)[140](index=140&type=chunk) - International expansion, including Forge Europe, exposes the company to new regulatory compliance risks, difficulties in managing international operations, and foreign exchange rate fluctuations[146](index=146&type=chunk)[147](index=147&type=chunk)[148](index=148&type=chunk) - The company is subject to stringent data privacy and security laws (e.g., GDPR, CCPA, CPRA), and any failure to protect customer information could lead to significant fines, litigation, and reputational harm[162](index=162&type=chunk)[164](index=164&type=chunk)[168](index=168&type=chunk)[169](index=169&type=chunk)[170](index=170&type=chunk) - Reliance on third-party service providers for operational functions and IT applications creates risks of disruption, breaches, or loss of services, potentially harming business operations and financial results[188](index=188&type=chunk)[189](index=189&type=chunk)[190](index=190&type=chunk) - As a public company, Forge faces increased legal, accounting, and compliance costs, and its management team has limited prior experience in managing a publicly traded company, potentially diverting attention from growth strategies[198](index=198&type=chunk)[201](index=201&type=chunk) [Item 1B. Unresolved Staff Comments](index=37&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reported no unresolved staff comments from the SEC - No unresolved staff comments[219](index=219&type=chunk) [Item 2. Properties](index=37&type=section&id=Item%202.%20Properties) Forge's corporate headquarters is in San Francisco, with additional leased offices, and anticipates future expansion - Corporate headquarters: San Francisco, California (**10,800 sq ft**, lease expires Dec 2023)[220](index=220&type=chunk) - Additional offices: San Francisco, San Mateo, Sioux Falls, South Dakota, and New York, New York[220](index=220&type=chunk) - Existing facilities are considered sufficient for current needs, with plans for future expansion[221](index=221&type=chunk) [Item 3. Legal Proceedings](index=37&type=section&id=Item%203.%20Legal%20Proceedings) Forge is involved in legal proceedings, including a lawsuit regarding the SharesPost Merger Agreement, which it will defend - Forge is a defendant in a lawsuit filed by Erika McKiernan, Stockholder Representative for former SharesPost stockholders, alleging breaches of the SharesPost Merger Agreement[223](index=223&type=chunk) - The lawsuit claims Forge failed to issue and deliver warrants as agreed and seeks indemnification for alleged losses[223](index=223&type=chunk) - Forge denies the allegations and intends to vigorously defend, believing the action will not materially impact operations or financial position[223](index=223&type=chunk) - The company is also subject to various actions, inquiries, investigations, and proceedings by regulatory and governmental agencies[224](index=224&type=chunk) [Item 4. Mine Safety Disclosures](index=38&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The company has no disclosures related to mine safety - No mine safety disclosures[225](index=225&type=chunk) Part II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=39&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Forge's common stock trades on NYSE, has 115 stockholders, has never paid dividends, and repurchased shares - Common stock is traded on the New York Stock Exchange (NYSE) under the symbol "**FRGE**"[228](index=228&type=chunk) - As of December 31, 2022, there were approximately **115 stockholders of record**[229](index=229&type=chunk) - The company has never paid cash dividends and does not intend to in the foreseeable future, planning to retain earnings for business development and expansion[217](index=217&type=chunk)[230](index=230&type=chunk) - During the three months ended December 31, 2022, Forge repurchased **163,054 shares of common stock**, representing early exercised but unvested stock options from a former employee[233](index=233&type=chunk) [Item 6. [Reserved]](index=41&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=42&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Forge experienced a significant revenue decrease and net loss in 2022 due to lower private market trading volumes, but maintains strong liquidity - Forge's business model is centered on three key solutions: **Trading (Forge Markets)**, **Custody (Forge Trust)**, and **Data (Forge Data)**, aiming for an accessible, transparent, and liquid private market[240](index=240&type=chunk) - The Business Combination, a reverse recapitalization with Legacy Forge as the accounting acquirer, was consummated on **March 21, 2022**[241](index=241&type=chunk)[243](index=243&type=chunk) - Key factors affecting performance include growing the customer base, expanding relationships with existing customers, investing in the platform, and adapting to private market trends, consumer behavior, and macroeconomic events[244](index=244&type=chunk)[245](index=245&type=chunk)[246](index=246&type=chunk)[247](index=247&type=chunk)[248](index=248&type=chunk) Key Business Metrics (2020-2022) | Dollars in thousands | 2022 | 2021 | 2020 | 2022 Over 2021 Change ($) | 2022 Over 2021 Change (%) | 2021 Over 2020 Change ($) | 2021 Over 2020 Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **TRADING BUSINESS** | | | | | | | | | Trades | 2,184 | 4,890 | 3,448 | (2,706) | (55)% | 1,442 | 42% | | Volume | $1,222,879 | $3,180,257 | $1,863,333 | $(1,957,378) | (62)% | $1,316,924 | 71% | | Net Take Rate | 3.3% | 3.3% | 2.6% | —% | —% | 0.7% | 27% | | Placement fee revenues, less transaction-based expenses | $40,182 | $104,689 | $48,864 | $(64,507) | (62)% | $55,825 | 114% | | **CUSTODY BUSINESS** | | | | | | | | | Total Custodial Accounts | 1,871,146 | 2,124,677 | N/A | (253,531) | (12)% | N/A | N/A | | Assets Under Custody | $14,870,257 | $14,334,527 | N/A | $535,730 | 4% | N/A | N/A | Consolidated Statements of Operations Summary (2020-2022) | (in thousands) | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | **Revenues:** | | | | | Placement fees | $40,665 | $107,723 | $29,240 | | Custodial administration fees | $28,718 | $20,333 | $22,404 | | **Total revenues** | **$69,383** | **$128,056** | **$51,644** | | Total revenues, less transaction-based expenses | $68,900 | $125,022 | $47,756 | | **Operating expenses:** | | | | | Compensation and benefits | $145,514 | $94,654 | $37,330 | | Professional services | $14,265 | $12,450 | $3,371 | | Acquisition-related transaction costs | $5,113 | $882 | $3,289 | | Advertising and market development | $4,754 | $5,090 | $1,528 | | Rent and occupancy | $5,455 | $3,744 | $2,381 | | Technology and communications | $11,489 | $8,243 | $4,616 | | General and administrative | $11,324 | $4,358 | $452 | | Depreciation and amortization | $6,026 | $5,390 | $2,406 | | **Total operating expenses** | **$203,940** | **$134,811** | **$55,373** | | **Operating loss** | **$(135,040)** | **$(9,789)** | **$(7,617)** | | Interest income (expenses), net | $2,681 | $(2,307) | $(2,405) | | Change in fair value of warrant liabilities | $19,836 | $(6,064) | $(292) | | Other income (expenses), net | $945 | $47 | $(201) | | Loss before provision for income taxes | $(111,578) | $(18,113) | $(10,515) | | Provision for (benefit from) income taxes | $327 | $386 | $(803) | | **Net loss** | **$(111,905)** | **$(18,499)** | **$(9,712)** | | Net loss attributable to Forge Global Holdings, Inc. | $(111,859) | $(18,499) | $(9,712) | Revenue Breakdown and Changes (2020-2022) | (in thousands) | 2022 | 2021 | 2020 | 2022 Over 2021 Change ($) | 2022 Over 2021 Change (%) | 2021 Over 2020 Change ($) | 2021 Over 2020 Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Placement fees | $40,665 | $107,723 | $29,240 | $(67,058) | (62)% | $78,483 | 268% | | Custodial administration fees | $28,718 | $20,333 | $22,404 | $8,385 | 41% | $(2,071) | (9)% | | Total revenues | $69,383 | $128,056 | $51,644 | $(58,673) | (46)% | $76,412 | 148% | Adjusted EBITDA Reconciliation (2020-2022) | (in thousands) | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Net loss | $(111,905) | $(18,499) | $(9,712) | | Add: | | | | | Interest (income) expense, net | $(2,681) | $2,307 | $2,405 | | Provision for (benefit from) income taxes | $327 | $386 | $(803) | | Depreciation and amortization | $6,026 | $5,390 | $2,406 | | Loss on impairment of long lived assets | $446 | — | — | | Share-based compensation expense | $57,924 | $12,231 | $4,906 | | Change in fair value of warrant liabilities | $(19,836) | $6,064 | $292 | | Acquisition-related transaction costs | $5,113 | $882 | $3,289 | | Transaction bonus | $17,735 | — | — | | **Adjusted EBITDA** | **$(46,851)** | **$8,761** | **$2,783** | - Cash and cash equivalents totaled **$193.1 million** as of December 31, 2022, providing sufficient liquidity for the foreseeable future, primarily from the Business Combination proceeds[335](index=335&type=chunk)[336](index=336&type=chunk) Cash Flow Summary (2020-2022) | (in thousands) | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Net cash provided by (used in): | | | | | Operating activities | $(68,806) | $10,901 | $(2,528) | | Investing activities | $(6,650) | $(3,256) | $(23,373) | | Financing activities | $192,862 | $26,581 | $39,380 | - Operating cash flow was **negative $68.8 million** in 2022, primarily due to the net loss, partially offset by non-cash charges like share-based compensation[340](index=340&type=chunk) - Financing activities provided **$192.9 million** in 2022, mainly from PIPE Investment and A&R FPA investors, and Public Warrants exercise, offset by offering costs[347](index=347&type=chunk) Contractual Obligations as of December 31, 2022 (in thousands) | | Total | Less than 1 year | 1 to 3 years | 3 to 5 years | More than 5 years | | :--- | :--- | :--- | :--- | :--- | :--- | | Operating lease obligations | $7,973 | $4,220 | $3,753 | $— | $— | | Non-cancelable purchase obligations | $10,095 | $2,699 | $3,940 | $3,456 | $— | | **Total contractual obligations** | **$18,068** | **$6,919** | **$7,693** | **$3,456** | **$—** | [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=59&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Forge is exposed to market risks from interest rate and foreign currency fluctuations, impacting custodial fees and net assets - Interest rate changes can significantly impact custodial administration fees; a hypothetical **50 basis point change** would affect 2022 revenues by **$3.4 million**[377](index=377&type=chunk)[378](index=378&type=chunk) - Substantially all revenue and expenses are denominated in U.S. dollars, but international expansion introduces foreign exchange rate risk[380](index=380&type=chunk)[381](index=381&type=chunk) - A hypothetical **10% change** in foreign currency exchange rates would have affected net assets by approximately **$1.5 million** as of December 31, 2022[381](index=381&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=64&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents Forge's audited consolidated financial statements for 2020-2022, including balance sheets, income statements, and cash flows - The consolidated financial statements include the Balance Sheets, Statements of Operations, Comprehensive Loss, Changes in Convertible Preferred Stock and Stockholders' Equity (Deficit), and Cash Flows for the years ended December 31, 2022, 2021, and 2020[384](index=384&type=chunk) - The financial statements were audited by Ernst & Young LLP, who issued an unqualified opinion[387](index=387&type=chunk) - A critical audit matter identified was the impairment assessment of goodwill, which involved significant assumptions and subjectivity[393](index=393&type=chunk)[394](index=394&type=chunk) Consolidated Balance Sheets (in thousands) | | December 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $193,136 | $74,781 | | Total current assets | $206,888 | $88,085 | | Property and equipment, net | $359 | $497 | | Internal-use software, net | $7,640 | $2,691 | | Goodwill and other intangible assets, net | $133,887 | $137,774 | | Operating lease right-of-use assets | $5,706 | $7,881 | | Total assets | **$363,729** | **$257,895** | | **Liabilities, convertible preferred stock and stockholders' equity (deficit)** | | | | Accounts payable | $2,797 | $1,920 | | Accrued compensation and benefits | $13,271 | $21,240 | | Total current liabilities | $26,385 | $38,023 | | Warrant liabilities | $606 | $7,844 | | Total liabilities | **$38,268** | **$64,479** | | Convertible preferred stock, net of issuance costs | $— | $246,056 | | Total stockholders' equity (deficit) | **$325,461** | **$(52,640)** | | Total liabilities, convertible preferred stock and stockholders' equity (deficit) | **$363,729** | **$257,895** | Consolidated Statements of Cash Flows (in thousands) | | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Net cash provided by (used in): | | | | | Operating activities | $(68,806) | $10,901 | $(2,528) | | Investing activities | $(6,650) | $(3,256) | $(23,373) | | Financing activities | $192,862 | $26,581 | $39,380 | | Net increase in cash and cash equivalents | $118,561 | $34,226 | $13,479 | | Cash, cash equivalents and restricted cash, end of the period | $194,965 | $76,404 | $42,178 | - The Business Combination on **March 21, 2022**, was accounted for as a reverse recapitalization, with Legacy Forge as the accounting acquirer[416](index=416&type=chunk)[417](index=417&type=chunk)[494](index=494&type=chunk) - Forge Europe GmbH was formed in September 2022 with Deutsche Börse, with Forge having a majority ownership and consolidating the subsidiary[419](index=419&type=chunk)[420](index=420&type=chunk) - The company adopted ASU 2016-13 (Credit Losses) and ASU 2017-04 (Goodwill Impairment) in 2022, with immaterial impact[484](index=484&type=chunk)[485](index=485&type=chunk) - Goodwill and other intangible assets, net, were **$133.9 million** as of December 31, 2022. An impairment test was performed due to market conditions, but no impairment loss was recorded for goodwill[393](index=393&type=chunk)[394](index=394&type=chunk)[399](index=399&type=chunk)[445](index=445&type=chunk) - Total share-based compensation expense was **$57.9 million** in 2022, significantly higher than **$12.2 million** in 2021, primarily due to RSU grants and cumulative catch-up expense for performance/market-based options[296](index=296&type=chunk)[297](index=297&type=chunk)[401](index=401&type=chunk) - As of December 31, 2022, the company had federal net operating loss carryforwards of **$31.0 million** and state NOLs of **$38.6 million** (California) and **$12.7 million** (other states), subject to annual limitations[604](index=604&type=chunk)[605](index=605&type=chunk) - Related party transactions include fees paid to Financial Technology Partners (**$18.3 million in 2022**), investments by a director and Temasek in the PIPE Investment, and banking relationships with First Republic Bank[615](index=615&type=chunk)[618](index=618&type=chunk)[619](index=619&type=chunk)[620](index=620&type=chunk) [Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosures](index=110&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosures) The company reported no changes in or disagreements with accountants on accounting and financial disclosures - No changes in or disagreements with accountants on accounting and financial disclosures[624](index=624&type=chunk) [Item 9A. Controls and Procedures](index=110&type=section&id=Item%209A.%20Controls%20and%20Procedures) Forge's disclosure controls and procedures were effective as of December 31, 2022, with no material changes in internal control - Disclosure controls and procedures were evaluated and deemed effective as of December 31, 2022[625](index=625&type=chunk) - No material changes in internal control over financial reporting occurred during the period[626](index=626&type=chunk) - Management acknowledges inherent limitations in control systems, meaning they provide reasonable, not absolute, assurance against errors and fraud[627](index=627&type=chunk) [Item 9B. Other Information](index=110&type=section&id=Item%209B.%20Other%20Information) The company reported no other information required under this item - No other information to report[628](index=628&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdiction that Prevent Inspections.](index=110&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdiction%20that%20Prevent%20Inspections.) The company reported no disclosures regarding foreign jurisdictions that prevent inspections - No disclosures regarding foreign jurisdictions that prevent inspections[629](index=629&type=chunk) Part III [Item 10. Directors, Executive Officers and Corporate Governance](index=111&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information regarding directors, executive officers, and corporate governance will be incorporated by reference from the 2023 Proxy Statement - Information will be incorporated by reference from the 2023 Annual Meeting of Stockholders Proxy Statement[632](index=632&type=chunk)[633](index=633&type=chunk) [Item 11. Executive Compensation](index=111&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation will be incorporated by reference from the 2023 Proxy Statement - Information will be incorporated by reference from the 2023 Annual Meeting of Stockholders Proxy Statement[632](index=632&type=chunk)[634](index=634&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owner and Management and Related Stockholder Matters](index=111&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owner%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership and related stockholder matters will be incorporated by reference from the 2023 Proxy Statement - Information will be incorporated by reference from the 2023 Annual Meeting of Stockholders Proxy Statement[632](index=632&type=chunk)[635](index=635&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=111&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information regarding certain relationships, related transactions, and director independence will be incorporated by reference from the 2023 Proxy Statement - Information will be incorporated by reference from the 2023 Annual Meeting of Stockholders Proxy Statement[632](index=632&type=chunk)[636](index=636&type=chunk) [Item 14. Principal Accounting Fees and Services](index=111&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information regarding principal accounting fees and services will be incorporated by reference from the 2023 Proxy Statement - Information will be incorporated by reference from the 2023 Annual Meeting of Stockholders Proxy Statement[632](index=632&type=chunk)[637](index=637&type=chunk) Part IV [Item 15. Exhibits, Financial Statement Schedules](index=112&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists all exhibits and financial statement schedules filed as part of the 10-K report, many incorporated by reference - Lists exhibits and financial statement schedules, including the Merger Agreement, Certificate of Incorporation, Bylaws, and various stock plans[639](index=639&type=chunk)[641](index=641&type=chunk) - Many exhibits are incorporated by reference from previous SEC filings[641](index=641&type=chunk) [Item 16. Form 10-K Summary](index=113&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company did not provide a Form 10-K summary under this item - No Form 10-K Summary provided[645](index=645&type=chunk)

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, 2022 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 415 Mission Street Suite 5510 San Francisco, CA 94105 OR (Address of principal executive offices, including zip code) o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SE ...

Forge Global Holdings, Inc. (NYSE:FRGE) Q3 2022 Earnings Conference Call November 9, 2022 5:00 PM ET Company Participants Dominic Paschel - Senior Vice President Kelly Rodriques - Chief Executive Officer Mark Lee - Chief Financial Officer Conference Call Participants Devin Ryan - JMP Securities Patrick Moley - Piper Sandler Jeff Schmitt - William Blair Ken Worthington - JPMorgan Owen Lau - Oppenheimer Operator Good afternoon. My name is Emma, and I will be your conference operator today. At this time, I wou ...

Forge Global Holdings, Inc. (NYSE:FRGE) Q2 2022 Earnings Conference Call August 11, 2022 5:00 PM ET Company Participants Dominic Paschel - Senior Vice President Kelly Rodriques - Chief Executive Officer Mark Lee - Chief Financial Officer Conference Call Participants Devin Ryan - JMP Securities Michael Cho - JPMorgan Owen Lau - Oppenheimer Operator Ladies and gentlemen, good afternoon, and welcome to Forge’s Second Quarter Fiscal 2022 Financial Results Conference Call. All participants will be in a listen-on ...

Part I - Financial Information This section covers the company's unaudited financial statements, management's analysis, market risks, and internal controls [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) Forge Global Holdings' unaudited condensed consolidated financial statements detail the company's financial position and performance Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $204,942 | $74,781 | | Total current assets | $221,255 | $88,085 | | Total assets | $386,106 | $257,895 | | **Liabilities & Equity** | | | | Total current liabilities | $23,382 | $38,023 | | Total liabilities | $69,615 | $64,479 | | Total stockholders' equity (deficit) | $316,491 | $(52,640) | Condensed Consolidated Statements of Operations Highlights (in thousands) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $16,640 | $38,673 | $36,662 | $70,728 | | Operating (loss) income | $(26,048) | $(805) | $(64,799) | $1,421 | | Net loss | $(5,119) | $(8,003) | $(69,543) | $(7,065) | | Diluted Net loss per share | $(0.20) | $(0.15) | $(0.66) | $(0.12) | Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(48,362) | $17,938 | | Net cash used in investing activities | $(3,435) | $(406) | | Net cash provided by financing activities | $182,154 | $30,309 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, highlighting revenue decline, increased expenses, and strong liquidity [Business Overview and Recent Developments](index=37&type=section&id=Business%20Overview%20and%20Recent%20Developments) This section outlines Forge's private market financial services platform, its public listing, and strategic partnerships - The company's business is built on four integrated pillars: **Forge Markets** (trading), **Forge Trust** (custody), **Forge Data** (information), and **Forge Company Solutions** (software for private companies)[182](index=182&type=chunk) - On March 21, 2022, the company consummated its business combination with MOTV, becoming a publicly traded company on the NYSE under the ticker **"FRGE"**[181](index=181&type=chunk)[182](index=182&type=chunk) - Forge signed an agreement with **Morgan Stanley Smith Barney LLC (MSSB)** for MSSB to direct their customers' orders of private issuer equity securities to the **Forge Markets** platform[186](index=186&type=chunk) [Key Business Metrics](index=42&type=section&id=Key%20Business%20Metrics) Key business metrics show a significant downturn in trading volume and trades, while assets under custody increased Trading Business Metrics Comparison (Q2 2022 vs Q2 2021) | Metric | Q2 2022 | Q2 2021 | % Change | | :--- | :--- | :--- | :--- | | Trades | 630 | 1,370 | (54)% | | Volume (in thousands) | $331,794 | $914,990 | (64)% | | Net Take Rate | 3.2% | 3.4% | (6)% | Custody Business Metrics Comparison (as of June 30) | Metric | 2022 | 2021 | % Change | | :--- | :--- | :--- | :--- | | Total Custodial Accounts | 1,739,838 | 1,880,564 | (7)% | | Assets Under Custody (in thousands) | $15,274,252 | $14,585,683 | 5% | [Results of Operations](index=46&type=section&id=Results%20of%20Operations) Revenues declined significantly due to lower trading volumes, leading to an operating loss, partially offset by a warrant liabilities gain Revenue Comparison (in thousands) | Revenue Type | Q2 2022 | Q2 2021 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Placement fees | $10,951 | $32,945 | $(21,994) | (67)% | | Custodial administration fees | $5,689 | $5,728 | $(39) | (1)% | | **Total revenues** | **$16,640** | **$38,673** | **$(22,033)** | **(57)%** | - Compensation and benefits expense for Q2 **2022** was flat year-over-year at **$27.4 million**. However, for the six months ended **June 30, 2022**, it increased by **48%** to **$71.0 million**, primarily due to a one-time transaction bonus of **$17.7 million** related to the business combination and a **$12.1 million** increase in share-based compensation[244](index=244&type=chunk)[246](index=246&type=chunk) - The company recorded a **$20.6 million** gain from the change in fair value of warrant liabilities in Q2 **2022**, compared to a **$5.4 million** loss in Q2 **2021**. This was a primary driver of the reduced net loss for the quarter[273](index=273&type=chunk) [Liquidity and Capital Resources](index=53&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with substantial cash, despite operating cash outflow, supported by financing activities - The company's principal source of liquidity as of **June 30, 2022**, was its cash and cash equivalents balance of **$204.9 million**[279](index=279&type=chunk) Cash Flow Summary (in thousands) | Activity | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | | Operating Activities | $(48,362) | $17,938 | | Investing Activities | $(3,435) | $(406) | | Financing Activities | $182,154 | $30,309 | - Cash from financing activities in the first half of **2022** included **$208.5 million** from PIPE and A&R FPA investors and **$22.1 million** from the exercise of Public Warrants, offset by **$56.9 million** in offering costs[288](index=288&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=57&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks are interest rate fluctuations affecting custodial fees and minimal foreign exchange rate exposure - The company's primary market risk exposure is to interest rate changes, which impact custodial administration fees. A hypothetical **50 basis point** change in interest rates would have affected custodial fee revenues by **$1.1 million** for the six months ended **June 30, 2022**[310](index=310&type=chunk)[312](index=312&type=chunk) - Foreign exchange rate risk is not currently material, as substantially all of the company's revenue and expenses are denominated in **U.S. dollars**[314](index=314&type=chunk) [Item 4. Controls and Procedures](index=58&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes to internal control over financial reporting - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of **June 30, 2022**[316](index=316&type=chunk) - No material changes were made to the company's internal control over financial reporting during the second quarter of **2022**[317](index=317&type=chunk) Part II - Other Information This section covers legal proceedings, key risk factors, and other miscellaneous company information [Item 1. Legal Proceedings](index=59&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in a lawsuit regarding warrant issuance, which it believes is without merit and will not materially impact operations - On **January 7, 2022**, the Stockholder Representative for former **SharesPost** stockholders filed a lawsuit against Forge, alleging breaches of the merger agreement related to the form of warrants to be issued[321](index=321&type=chunk) - Forge believes the allegations are without merit, has filed a counterclaim, and does not currently believe the lawsuit will have a material adverse impact on its operations or financial position[321](index=321&type=chunk) [Item 1A. Risk Factors](index=59&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant risks including historical losses, intense competition, transaction revenue reliance, regulatory challenges, and cybersecurity threats - The company has a history of losses, with an accumulated deficit of **$148.1 million** as of **June 30, 2022**, and may not achieve or maintain profitability in the future[324](index=324&type=chunk) - The business faces intense competition from established financial institutions and early-stage companies, some of which have greater resources and longer operating histories[326](index=326&type=chunk) - The business is subject to extensive and evolving laws and regulations from the **SEC**, **FINRA**, and other authorities, with potential for new rules on private company transparency that could impact the business model[372](index=372&type=chunk)[374](index=374&type=chunk)[377](index=377&type=chunk) - The company is exposed to significant cybersecurity risks, including data breaches and fraudulent activity, and is subject to stringent data privacy laws like the **CCPA** and **GDPR**, with non-compliance carrying risks of significant penalties and reputational harm[402](index=402&type=chunk)[410](index=410&type=chunk)[433](index=433&type=chunk) [Other Items (Items 2, 3, 4, 5, 6)](index=83&type=section&id=Other%20Items) This section confirms no unregistered sales of equity securities, no defaults, no mine safety disclosures, and references filed exhibits - The company reported no unregistered sales of equity securities, defaults upon senior securities, mine safety disclosures, or other information for the period covered by the report[464](index=464&type=chunk)[465](index=465&type=chunk)[466](index=466&type=chunk)[467](index=467&type=chunk)

Forge Global Holdings, Inc. (NYSE:FRGE) Q1 2022 Earnings Conference Call May 16, 2022 5:00 PM ET Company Participants Dominic Paschel – Senior Vice President-Finance and Investor Relations Kelly Rodriques – Chief Executive Officer Mark Lee – Chief Financial Officer Conference Call Participants Rich Repetto – Piper Sandler Devin Ryan – JMP Securities Ken Worthington – JPMorgan Alex Cram – UBS Owen Lau – Oppenheimer Operator Welcome to Forge’s First Quarter Fiscal 2022. All participants will be in a listen-on ...

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 March 31, 2022 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 jur ...

PART I [Business](index=7&type=section&id=Item%201.%20Business) Motive Capital Corp, a blank check company, seeks to complete a business combination by December 2022, focusing on financial technology acquisitions [General and Initial Public Offering](index=7&type=section&id=General%20and%20Initial%20Public%20Offering) Motive Capital Corp, a blank check company, completed its $414 million IPO in December 2020, placing proceeds into a trust account - The company is a blank check company with no operations, formed to effect an initial business combination[17](index=17&type=chunk) Initial Public Offering and Private Placement Details | Metric | Value | | :--- | :--- | | IPO Units Sold | 41,400,000 | | Price per Unit | $10.00 | | Gross IPO Proceeds | $414,000,000 | | Private Placement Warrants | 7,386,667 | | Price per Private Warrant | $1.50 | | Gross Private Placement Proceeds | $11,080,000 | | Amount Placed in Trust Account | $414,000,000 | [Proposed Business Combination](index=7&type=section&id=Proposed%20Business%20Combination) The company entered a definitive merger agreement with Forge Global, Inc. on September 13, 2021, valuing the transaction at $1.5 billion - Entered into a definitive merger agreement with Forge Global, Inc. on September 13, 2021, which will result in Forge becoming a wholly-owned subsidiary of the post-merger company[24](index=24&type=chunk)[26](index=26&type=chunk) - Total consideration for Forge equity holders is valued at **$1.5 billion**, with an aggregate cash component not to exceed **$100 million**[27](index=27&type=chunk) - The transaction is supported by a **$68.5 million** PIPE financing from certain investors at **$10.00 per share**[31](index=31&type=chunk) - An Amended & Restated Forward Purchase Agreement commits purchasers to buy **5 million** Forward Purchase Units, and up to an additional **9 million** units to offset redemptions, for a total potential of **14 million units**[28](index=28&type=chunk) [Business Strategy and Acquisition Criteria](index=11&type=section&id=Business%20Strategy%20and%20Acquisition%20Criteria) The company's strategy focuses on acquiring financial technology companies in North America and Europe, prioritizing strong market positions and financial results - The company focuses on financial software and information services companies within the financial technology sector, specifically targeting sub-sectors like Banking & Payments, Capital Markets, Data & Analytics, Insurance, and Investment Management[34](index=34&type=chunk) - Acquisition criteria include a defensible market position, strong operating and financial results, readiness to be a public company, and offering attractive risk-adjusted returns for shareholders[40](index=40&type=chunk) [Initial Business Combination and Redemption](index=15&type=section&id=Initial%20Business%20Combination%20and%20Redemption) The company must complete its initial business combination by December 15, 2022, with public shareholders having redemption rights subject to asset maintenance - The deadline to complete an initial business combination is **December 15, 2022**[45](index=45&type=chunk) - The initial business combination must be with a target business having an aggregate fair market value of at least **80%** of the assets held in the trust account[43](index=43&type=chunk) - Public shareholders have the right to redeem their shares for cash upon completion of the business combination, but redemptions cannot cause the company's net tangible assets to fall below **$5,000,001**[48](index=48&type=chunk)[49](index=49&type=chunk) - If no business combination is completed within **24 months** of the IPO, the company will cease operations, redeem public shares, and dissolve[52](index=52&type=chunk) [Risk Factors](index=22&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks as a blank check entity, including failure to complete a business combination, high redemptions, and internal control weaknesses - The company is a blank check entity with no operating history, making it difficult for investors to evaluate its ability to achieve its business objectives[64](index=64&type=chunk) - Failure to complete an initial business combination by the **December 15, 2022** deadline will result in the company's liquidation, with public shareholders receiving their pro-rata share of the trust account and warrants expiring worthless[82](index=82&type=chunk)[87](index=87&type=chunk) - The ability of public shareholders to redeem their shares for cash could make the company's financial condition unattractive to targets or prevent the completion of a business combination if redemption levels are high[79](index=79&type=chunk)[80](index=80&type=chunk) - A material weakness in internal control over financial reporting has been identified regarding the accounting for complex equity instruments, which could adversely affect the ability to report financial results accurately[178](index=178&type=chunk)[181](index=181&type=chunk) - The company's warrants and forward purchase agreement are accounted for as derivative liabilities, and changes in their fair value are included in earnings each period, which may cause volatility in reported financial results[183](index=183&type=chunk) - The report from the independent registered public accounting firm expresses substantial doubt about the company's ability to continue as a going concern due to the mandatory liquidation requirement if a business combination is not completed[88](index=88&type=chunk) [Unresolved Staff Comments](index=73&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the Securities and Exchange Commission - There are no unresolved staff comments[215](index=215&type=chunk) [Properties](index=75&type=section&id=Item%202.%20Properties) The company's executive offices are provided by its sponsor, with a potential monthly fee currently waived - Executive offices are provided by the sponsor, with a potential fee of up to **$10,000 per month**, which is currently waived[216](index=216&type=chunk) [Legal Proceedings](index=75&type=section&id=Item%203.%20Legal%20Proceedings) The company is not a party to any material pending legal proceedings - The company is not involved in any material legal proceedings[217](index=217&type=chunk) [Mine Safety Disclosures](index=75&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - No mine safety disclosures are reported[218](index=218&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=76&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's units, shares, and warrants trade on the NYSE, with no cash dividends paid or planned before a business combination - The company's securities are traded on the NYSE under symbols MOTV.U (units), MOTV (Class A shares), and MOTV WS (warrants)[221](index=221&type=chunk) - No cash dividends have been paid to date, and none are planned prior to the completion of the initial business combination[223](index=223&type=chunk) - Gross proceeds of **$414 million** from the IPO were raised, with the net proceeds placed in a trust account. Transaction costs amounted to approximately **$23.7 million**[226](index=226&type=chunk)[227](index=227&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=78&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) For 2021, the company reported net income of $9.4 million, driven by derivative fair value changes, but faces going concern doubt due to liquidation risk Results of Operations | Metric | For the Year Ended Dec 31, 2021 | For the Period from Sep 28, 2020 to Dec 31, 2020 | | :--- | :--- | :--- | | General and administrative expenses | $6.8 million | $35,000 | | Change in fair value of derivative liabilities | $16.1 million (gain) | ($10.7 million) (loss) | | Net Income (Loss) | $9.4 million | ($11.8 million) | - As of December 31, 2021, the company had approximately **$255,000** in cash and a working capital deficit of approximately **$4.9 million**[248](index=248&type=chunk) - Management has determined that the mandatory liquidation requirement if a business combination is not completed by **December 15, 2022** raises substantial doubt about the company's ability to continue as a going concern[252](index=252&type=chunk) - Critical accounting policies include classifying Class A ordinary shares subject to redemption as temporary equity and accounting for warrants and the forward purchase agreement as derivative liabilities, which are remeasured to fair value each reporting period[271](index=271&type=chunk)[277](index=277&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=92&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Motive Capital Corp is not required to provide this market risk disclosure - The company is exempt from this disclosure requirement as it qualifies as a smaller reporting company[282](index=282&type=chunk) [Financial Statements and Supplementary Data](index=92&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section refers to the full financial statements and supplementary data located at the end of the Form 10-K report - The financial statements are located after Item 16 of the report[283](index=283&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=92&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - There were no disagreements with accountants[284](index=284&type=chunk) [Controls and Procedures](index=92&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded disclosure controls were ineffective due to a material weakness in accounting for complex equity instruments, leading to prior restatements - Management concluded that disclosure controls and procedures were not effective as of **December 31, 2021**[285](index=285&type=chunk) - A material weakness was identified in the internal control over financial reporting concerning the interpretation and accounting for complex equity and equity-linked instruments[287](index=287&type=chunk) - This material weakness led to the restatement of the company's balance sheet as of **December 15, 2020**, and financial statements for the period ended **December 31, 2020**, as well as interim statements for **2021**[287](index=287&type=chunk) - Management is working to remediate the weakness by consulting with subject matter experts and improving processes for evaluating complex accounting standards[292](index=292&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=95&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) The company is led by key executives and a seven-member board, with potential conflicts of interest due to affiliations with Motive Partners Executive Officers and Directors | Name | Title | | :--- | :--- | | Rob Heyvaert | Executive Chairman and Director | | Blythe Masters | Chief Executive Officer and Director | | Kristy Trieste | Chief Financial Officer and Director | | Jill M. Considine | Director | | Stephen C. Daffron | Director | | Dina Dublon | Director | | Paula Madoff | Director | - The board has three standing committees (Audit, Compensation, Nominating and Corporate Governance), each composed entirely of independent directors[319](index=319&type=chunk) - Potential conflicts of interest exist as officers and directors have fiduciary duties to other entities, including Motive Partners and its affiliates, which may have overlapping investment objectives[335](index=335&type=chunk)[336](index=336&type=chunk) [Executive Compensation](index=109&type=section&id=Item%2011.%20Executive%20Compensation) No cash compensation has been paid to officers or directors, with only out-of-pocket expenses reimbursed - No officers or directors have received cash compensation for services rendered[346](index=346&type=chunk) - The sponsor, officers, and directors are reimbursed for out-of-pocket expenses related to company activities, such as identifying target businesses[346](index=346&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters](index=110&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Shareholder%20Matters) Initial shareholders, including the sponsor, own 100% of Class B shares, giving them significant influence over shareholder votes - The sponsor, officers, and directors as a group beneficially own **100%** of the Class B ordinary shares, which constitutes **20%** of the company's total outstanding ordinary shares[350](index=350&type=chunk)[354](index=354&type=chunk) - Only holders of Class B ordinary shares have the right to vote for the election of directors prior to the initial business combination[354](index=354&type=chunk) - Significant beneficial owners of Class A ordinary shares include Weiss Asset Management LP (**7.3%**) and Citadel Advisors LLC (**6.6%**) as of their respective filing dates[350](index=350&type=chunk)[352](index=352&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=112&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) The company has several related party transactions with its sponsor, and four of its seven directors are independent - The sponsor purchased **10,350,000** founder shares (after adjustments) for **$25,000** and **7,386,667** private placement warrants for **$11.08 million**[357](index=357&type=chunk)[358](index=358&type=chunk) - The board of directors has determined that Dina Dublon, Jill M. Considine, Paula Madoff, and Stephen C. Daffron are independent directors[368](index=368&type=chunk) - The audit committee is responsible for reviewing and approving all related party transactions exceeding **$120,000**[366](index=366&type=chunk) [Principal Accountant Fees and Services](index=116&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) The company's independent auditor, WithumSmith+Brown, PC, was paid $144,200 in audit fees for FY 2021, with all services pre-approved Accountant Fees (WithumSmith+Brown, PC) | Fee Category | FY 2021 | Period Ended Dec 31, 2020 | | :--- | :--- | :--- | | Audit Fees | $144,200 | $92,700 | | Audit-Related Fees | $0 | $0 | | Tax Fees | $3,605 | $0 | | All Other Fees | $0 | $0 | PART IV [Exhibits, Financial Statement Schedules](index=117&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists all exhibits filed with the Form 10-K, including the merger agreement and charter documents - This section provides an index of all exhibits filed with the Form 10-K, including the merger agreement, charter documents, and various other agreements[376](index=376&type=chunk)[377](index=377&type=chunk) Financial Statements [Report of Independent Registered Public Accounting Firm](index=121&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) The auditor issued an unqualified opinion but highlighted substantial doubt about the company's going concern ability due to mandatory liquidation risk - The auditor's report contains a "Going Concern" paragraph, raising substantial doubt about the company's ability to continue operations if a business combination is not completed by the deadline[389](index=389&type=chunk) [Consolidated Financial Statements](index=123&type=section&id=Consolidated%20Financial%20Statements) The financial statements show $414.1 million in the trust account, a $43.7 million shareholders' deficit, and a $9.4 million net income for 2021 Consolidated Balance Sheet Data (as of Dec 31) | Account | 2021 | 2020 | | :--- | :--- | :--- | | Cash | $254,726 | $1,674,650 | | Cash and Investments held in Trust Account | $414,111,439 | $414,020,525 | | Total Liabilities | $44,368,676 | $55,438,801 | | Class A ordinary shares subject to possible redemption | $414,000,000 | $414,000,000 | | Total shareholders' deficit | ($43,728,277) | ($53,092,021) | Consolidated Statement of Operations Data | Account | Year Ended Dec 31, 2021 | Period Ended Dec 31, 2020 | | :--- | :--- | :--- | | General and administrative expenses | ($6,829,050) | ($35,004) | | Change in fair value of derivative liabilities | $16,101,880 | ($10,659,080) | | Net income (loss) | $9,363,744 | ($11,799,629) | [Notes to Consolidated Financial Statements](index=127&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail the company's formation, IPO, proposed merger, accounting policies, related party transactions, and a decrease in derivative liabilities - The company has until **December 15, 2022**, to consummate a Business Combination, or it will be required to liquidate[422](index=422&type=chunk) - All **41,400,000** Class A ordinary shares are classified as temporary equity due to redemption features and are carried at their redemption value of **$414 million**[459](index=459&type=chunk) - The fair value of derivative liabilities (public warrants, private warrants, and forward purchase agreement) decreased from **$40.5 million** as of **Dec 31, 2020**, to **$24.4 million** as of **Dec 31, 2021**, resulting in a non-operating gain[512](index=512&type=chunk)[514](index=514&type=chunk)