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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Forge Global Holdings Inc | NYSE:FRGE | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.06 | 4.17% | 1.50 | 564 | 13:00:00 |
Forge Global Holdings, Inc. (“Forge,” or the “Company”) (NYSE: FRGE), a leading private securities marketplace, today announced its financial results for the quarter ended September 30, 2022.
“As macroeconomic headwinds persist, we’ve kept our focus on building for the future,” said Kelly Rodriques, CEO of Forge. “We made progress in Q3 toward our goal of building a global business at the center of the private market ecosystem – debuting our first lending product to unlock new sell-side inventory and for the first time offering custody services of private shares for our trading clients to drive efficiency across the trading process and accelerate the network effects of our unique model. We also increased the value we deliver to customers through our data products with new features and upgrades and began acquiring third-party trading data that will broaden the private market data our customers can access; and finally, we announced our expansion into Europe with Forge Europe.”
Financial Highlights for the Third Quarter of 2022
Given the unique economic environment, Forge believes that quarter-over-quarter comparisons are more indicative of the current state of the business and has provided both quarter-over-quarter and year-ago quarter comparisons.
Revenue: Total revenue less transaction-based expenses was $15.8 million compared to $16.5 million in the quarter ended June 30, 2022, and $27.1 million in the quarter ended September 30, 2021.
Operating Income: Total operating loss was $42.4 million, compared to total operating loss of $26.0 million in the quarter ended June 30, 2022, and total operating loss of $5.7 million in the quarter ended September 30, 2021.
Net Loss: Net loss of $16.2 million, compared to net loss of $5.1 million in the quarter ended June 30, 2022, and net loss of $5.1 million in the quarter ended September 30, 2021.
Adjusted EBITDA: Total Adjusted EBITDA was a loss of $13.3 million, compared to total Adjusted EBITDA loss of $12.3 million in the quarter ended June 30, 2022, and total Adjusted EBITDA loss of $1.3 million in the quarter ended September 30, 2021.
Cash Flow from Operating Activities: Net cash used in operating activities was $11.4 million, compared to $18.2 million in the quarter ended June 30, 2022, and $5.1 million in the quarter ended September 30, 2021.
Cash Flow from Financing Activities: Net cash provided by financing activities was $10.6 million, compared to $22.6 million in the quarter ended June 30, 2022, and $0.7 million in the quarter ended September 30, 2021.
Ending Cash Balance: Cash and cash equivalents as of September 30, 2022 was $202.6 million.
Share Count: Basic weighted-average number of shares used to compute net loss per share attributable to common stockholders for the quarter ended September 30, 2022, was 170 million shares and fully diluted outstanding share count as of September 30, 2022 was 184 million shares.
We estimate for the quarter ended December 31, 2022 that Forge will have 171 million weighted average basic shares outstanding, which will be used to calculate earnings per share in a loss position.
Fully diluted outstanding share count includes all common shares outstanding plus shares that would be issued in respect to outstanding options and warrants, net of shares to be withheld in respect of exercise price of the respective instruments. Instruments that are out of the money are excluded from the fully diluted outstanding share count.
KPIs:
Please refer to the section titled “Use of Non-GAAP Financial Information” and the tables within this press release which contain explanations and reconciliations of the Company’s non-GAAP financial measures.
Recent Business Highlights:
Additional Business Metrics:
Webcast/Conference Call Details
Forge will host a webcast conference call today, November 9th, 2022, at 5:00 p.m. Eastern Time/2:00 p.m Pacific Time to discuss these financial results and business highlights. The listen-only webcast is available at https://ir.forgeglobal.com. Investors and participants can access the conference call over the phone by dialing 1 (888) 440-4165 from the United States, or +1 (646) 960-0858 internationally. The conference ID is 5410143.
Following the conference call, an on-demand replay of the webcast will be made available on the Investor Relations page of the Company’s website at https://ir.forgeglobal.com.
Use of Non-GAAP Financial Information
In addition to our financial results determined in accordance with generally accepted accounting principles in the United States of America ("GAAP"), we present Adjusted EBITDA, a non-GAAP financial measure. We use Adjusted EBITDA to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that Adjusted EBITDA, when taken together with the corresponding GAAP financial measure, provides meaningful supplemental information regarding our performance by excluding specific financial items that have less bearing on our core operating performance. We consider Adjusted EBITDA to be an important measure because it helps illustrate underlying trends in our business and our historical operating performance on a more consistent basis.
However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. In addition, other companies, including companies in our industry, may calculate similarly titled non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of Adjusted EBITDA as a tool for comparison. A reconciliation is provided below for Adjusted EBITDA to net loss, the most directly comparable financial measure stated in accordance with GAAP. Investors are encouraged to review Adjusted EBITDA and the reconciliation of Adjusted EBITDA to net loss, and not to rely on any single financial measure to evaluate our business.
We defined Adjusted EBITDA as net loss, adjusted to exclude: (i) interest expense, net, (ii) provision for or benefit from income taxes, (iii) depreciation and amortization, (iv) share-based compensation expense, (v) change in fair value of warrant liabilities, (vi) acquisition-related transaction costs, and (vii) other significant gains, losses, and expenses (such as impairments, transaction bonus) that we believe are not indicative of our ongoing results.
Forward-Looking Statements
This press release contains “forward-looking statements,” which generally are accompanied by words such as “believe,” “may,” ”could,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “target,” “goal,” “expect,” “should,” “would,” “plan,” “predict,” “project,” “forecast,” “potential,” “seem,” “seek,” “future,” “outlook,” and similar expressions that predict, indicate or relate to future events or trends or Forge’s future financial or operating performance, or that are not statements of historical matters. These forward-looking statements include, but are not limited to, statements regarding Forge’s beliefs regarding its financial position and operating performance, the benefits of Forge’s business combination with Motive Capital Corp, and future opportunities for Forge to expand its business. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, while considered reasonable by Forge and its management, are subject to risks and uncertainties that may cause actual results to differ materially from current expectations. You should carefully consider the risks and uncertainties described in Forge’s documents filed, or to be filed, with the SEC, including in its Quarterly Report on Form 10-Q that will be filed on or around November 10, 2022. There may be additional risks that Forge presently does not know of or that it currently believes are immaterial that could also cause actual results to differ materially from those contained in the forward-looking statements. In addition, forward-looking statements reflect Forge’s expectations, plans or forecasts of future events and views as of the date of this press release. Forge anticipates that subsequent events and developments will cause its assessments to change. However, while Forge may elect to update these forward-looking statements at some point in the future, Forge specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing Forge’s assessments as of any date subsequent to the date of this press release. Accordingly, undue reliance should not be placed upon the forward-looking statements.
About Forge
Forge is a leading provider of marketplace infrastructure, data services and technology solutions for private market participants. By combining world-class trading technology and operating expertise, Forge Markets enables private company shareholders to trade private company shares with accredited investors. Forge Company Solutions, Forge Data and Forge Trust along with Forge Markets help provide additional transparency, access and solutions that companies as well as institutional and accredited investors need to confidently navigate and efficiently transact in the private markets. Securities-related services are offered through Forge Securities LLC (“Forge Securities”), a wholly-owned subsidiary of Forge. Forge Securities is a registered broker-dealer that operates an alternative trading system and is a Member of FINRA/SIPC.
FORGE GLOBAL HOLDINGS, INC.
Unaudited Condensed Consolidated Balance Sheets
(In thousands of U.S. dollars, except share and per share data)
September 30, 2022
December 31, 2021
Assets
Current assets:
Cash and cash equivalents
$
202,603
$
74,781
Restricted cash
1,823
1,623
Accounts receivable, net
3,045
5,380
Payment-dependent notes receivable, current
2
1,153
Prepaid expenses and other current assets
9,525
5,148
Total current assets
$
216,998
$
88,085
Property and equipment, net
272
497
Internal-use software, net
6,723
2,691
Goodwill and other intangible assets, net
134,891
137,774
Operating lease right-of-use assets
3,794
7,881
Payment-dependent notes receivable, noncurrent
6,508
13,453
Other assets, noncurrent
1,676
7,514
Total assets
$
370,862
$
257,895
Liabilities, convertible preferred stock and stockholders’ equity (deficit)
Current liabilities:
Accounts payable
$
2,020
$
1,920
Accrued compensation and benefits
10,213
21,240
Accrued expenses and other current liabilities
7,710
8,343
Operating lease liabilities, current
3,819
5,367
Payment-dependent notes payable, current
2
1,153
Total current liabilities
$
23,764
$
38,023
Operating lease liabilities, noncurrent
1,785
5,159
Payment-dependent notes payable, noncurrent
6,508
13,453
Warrant liabilities
632
7,844
Other liabilities, noncurrent
364
—
Total liabilities
$
33,053
$
64,479
Commitments and contingencies (Note 8)
Convertible preferred stock, net of issuance costs, $0.00001 par value; nil and 86,815,192 shares authorized as of September 30, 2022 and December 31, 2021, respectively; nil and 73,914,149 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively; aggregate liquidation preference of $0 and $271,845 as of September 30, 2022 and December 31, 2021, respectively
—
246,056
Stockholders’ equity (deficit):
Common stock, $0.0001 par value; 172,442,676 and 63,090,701 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively
18
—
Additional paid-in capital
496,592
25,919
Accumulated other comprehensive loss
(95
)
—
Accumulated deficit
(164,300
)
(78,559
)
Total Forge Global Holdings, Inc. stockholders’ equity (deficit)
$
332,215
$
(52,640
)
Noncontrolling Interest
5,594
—
Total stockholders’ equity (deficit)
$
337,809
$
(52,640
)
Total liabilities, convertible preferred stock and stockholders’ equity (deficit)
$
370,862
$
257,895
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
Nine Months Ended
September 30, 2022
June 30, 2022
September 30, 2021
September 30, 2022
September 30, 2021
Revenues:
Placement fees
$
8,227
$
10,951
$
22,940
$
33,763
$
83,394
Custodial administration fees
7,673
5,689
4,718
18,799
14,992
Total revenues
$
15,900
$
16,640
$
27,658
$
52,562
$
98,386
Transaction-based expenses:
Transaction-based expenses
(86
)
(178
)
(582
)
(397
)
(3,174
)
Total revenues, less transaction-based expenses
$
15,814
$
16,462
$
27,076
$
52,165
$
95,212
Operating expenses:
Compensation and benefits
44,040
27,384
22,880
115,064
70,737
Professional services
3,799
3,853
2,987
11,169
9,791
Acquisition-related transaction costs
821
692
71
5,219
163
Advertising and market development
928
1,441
1,134
3,873
2,979
Rent and occupancy
1,097
1,140
914
3,803
2,711
Technology and communications
3,536
2,809
2,259
8,368
5,839
General and administrative
2,601
3,170
1,139
7,373
3,127
Depreciation and amortization
1,428
2,021
1,385
4,531
4,137
Total operating expenses
$
58,250
$
42,510
$
32,769
$
159,400
$
99,484
Operating loss
$
(42,436
)
$
(26,048
)
$
(5,693
)
$
(107,235
)
$
(4,272
)
Interest and other income (expenses):
Interest income (expenses), net
874
266
11
1,161
(2,323
)
Change in fair value of warrant liabilities
25,210
20,558
737
19,808
(5,575
)
Other income, net
202
140
74
731
230
Total interest income (expenses) and other income (expenses)
$
26,286
$
20,964
$
822
$
21,700
$
(7,668
)
Loss before provision for income taxes
$
(16,150
)
$
(5,084
)
$
(4,871
)
$
(85,535
)
$
(11,940
)
Provision for income taxes
48
35
203
206
199
Net loss including noncontrolling interest
$
(16,198
)
$
(5,119
)
$
(5,074
)
$
(85,741
)
$
(12,139
)
Net loss attributable to Forge Global Holdings, Inc.
$
(16,198
)
$
(5,119
)
$
(5,074
)
$
(85,741
)
$
(12,139
)
Net loss per share attributable to Forge Global Holdings, Inc. common stockholders:
Basic
$
(0.10
)
$
(0.03
)
$
(0.10
)
$
(0.64
)
$
(0.22
)
Diluted
$
(0.12
)
$
(0.20
)
$
(0.10
)
$
(0.66
)
$
(0.22
)
Weighted-average shares used in computing net loss per share attributable to Forge Global Holdings, Inc. common stockholders:
Basic
169,838,778
167,052,900
51,450,791
134,683,950
55,147,414
Diluted
170,209,256
173,578,093
51,450,791
135,960,612
55,147,414
FORGE GLOBAL HOLDINGS, INC.
Unaudited Condensed Consolidated Statements of Cash Flows
(In thousands of U.S. dollars)
Three Months Ended
Nine Months Ended
September 30, 2022
June 30, 2022
September 30, 2021
September 30, 2022
September 30, 2021
Cash flows from operating activities:
Net loss including noncontrolling interest
$
(16,198
)
$
(5,119
)
$
(5,074
)
$
(85,741
)
$
(12,139
)
Adjustments to reconcile net loss including noncontrolling interest to net cash (used in) provided by operations:
Share-based compensation
26,712
10,740
2,824
45,974
9,975
Depreciation and amortization
1,428
2,021
1,385
4,531
4,137
Transaction expenses related to the Merger
—
—
—
3,132
—
Amortization of right-of-use assets
858
905
675
2,819
1,992
Loss on impairment of long lived assets
—
181
—
446
—
Bad debt reserve
25
(33
)
(214
)
294
—
Change in fair value of warrant liabilities
(25,210
)
(20,558
)
(737
)
(19,808
)
5,575
Settlement of related party promissory notes (Note 3)
—
—
—
5,517
—
Other
—
—
160
—
285
Changes in operating assets and liabilities:
Accounts receivable
(1,586
)
1,611
(28
)
2,042
1,560
Prepaid expenses and other assets
2,678
(6,025
)
291
(4,265
)
469
Accounts payable
(1,886
)
982
446
(43
)
333
Accrued expenses and other liabilities
1,584
(441
)
(4,929
)
402
(2,092
)
Accrued compensation and benefits
1,558
(1,070
)
1,011
(11,118
)
5,388
Operating lease liabilities
(1,361
)
(1,379
)
(891
)
(3,942
)
(2,626
)
Net cash (used in) provided by operating activities
$
(11,398
)
$
(18,185
)
$
(5,081
)
$
(59,760
)
$
12,857
Cash flows from investing activities:
Purchases of property and equipment
(10
)
(95
)
—
(116
)
—
Purchases of intangible assets
(29
)
(97
)
(2,202
)
(126
)
(2,202
)
Capitalized internal-use software development costs
(1,358
)
(1,551
)
(247
)
(4,590
)
(653
)
Net cash used in investing activities
$
(1,397
)
$
(1,743
)
$
(2,449
)
$
(4,832
)
$
(2,855
)
Cash flows from financing activities:
Proceeds from the Merger
—
—
—
7,865
—
Proceeds from PIPE investment and A&R FPA investors
—
500
—
208,500
—
Payments for offering costs
—
(473
)
(1,010
)
(56,852
)
(1,750
)
Proceeds from exercise of Public Warrants
804
22,136
—
22,940
—
Formation of Forge Europe
9,488
9,488
Proceeds from exercise of options, including proceeds from repayment of promissory notes
492
400
346
997
1,460
Payments for redemption of Public Warrants
(165
)
(47,735
)
(165
)
—
Proceeds from issuance of Series B-1 convertible preferred stock, net of issuance costs
—
—
46,095
—
47,735
Proceeds from issuance of Series B-2 convertible preferred stock, net of issuance costs
—
—
1,640
—
1,640
Repayment of notes payable
—
—
—
—
(19,437
)
Payments to repurchase early exercised stock options
—
—
(7
)
—
(10
)
Net cash (used in) provided by financing activities
$
10,619
$
22,563
$
(671
)
$
192,773
$
29,638
Effect of changes in currency exchange rates on cash and cash equivalents
(159
)
—
—
(159
)
—
Net (decrease) increase in cash and cash equivalents
(2,335
)
2,635
(8,201
)
128,022
39,640
Cash, cash equivalents and restricted cash, beginning of the period
206,761
204,126
90,019
76,404
42,178
Cash, cash equivalents and restricted cash, end of the period
$
204,426
$
206,761
$
81,818
$
204,426
$
81,818
Reconciliation of cash, cash equivalents and restricted cash to the amounts reported within the unaudited condensed consolidated balance sheets
Cash and cash equivalents
$
202,603
$
204,942
$
80,450
$
202,603
$
80,450
Restricted cash
1,823
1,819
1,368
1,823
1,368
Total cash, cash equivalents and restricted cash, end of the period
$
204,426
$
206,761
$
81,818
$
204,426
$
81,818
FORGE GLOBAL HOLDINGS, INC.
Reconciliation of GAAP to Non-GAAP Results
(In thousands of U.S. dollars)
Three Months Ended
Nine Months Ended
September 30, 2022
June 30, 2022
September 30, 2021
September 30, 2022
September 30, 2021
Net loss including noncontrolling interest
$
(16,198
)
$
(5,119
)
$
(5,074
)
$
(85,741
)
$
(12,139
)
Add:
Interest (income) expense, net
(874
)
(266
)
(11
)
(1,161
)
2,323
Provision for (benefit from) income taxes
48
35
203
206
199
Depreciation and amortization
1,428
2,021
1,385
4,531
4,137
Loss on impairment of long lived assets
—
181
—
446
—
Share-based compensation expense
26,712
10,740
2,824
45,974
9,975
Change in fair value of warrant liabilities
(25,210
)
(20,558
)
(737
)
(19,808
)
5,575
Acquisition-related transaction costs (1)
821
692
71
5,219
163
Transaction bonus (2)
—
—
—
17,735
—
Adjusted EBITDA
$
(13,273
)
$
(12,274
)
$
(1,339
)
$
(32,599
)
$
10,233
(1)
Acquisition-related transaction costs represent charges involved in the merger between Forge Global, Inc. and Motive Capital Corp as further described in our Form 10-Q for the three months ended March 31, 2022 (the “Merger”), other business combinations, and strategic opportunities. These expenses include legal, accounting, and investment banking advisory services.
(2)Represents a one-time transaction bonus to certain executives as a result of consummation of the Merger.
FORGE GLOBAL HOLDINGS, INC. SUPPLEMENTAL FINANCIAL INFORMATION KEY OPERATING METRICS (In thousands of U.S. dollars)
Key Business Metrics
We monitor the following key business metrics to help us evaluate our business, identify trends affecting our business, formulate business plans and make strategic decisions. The tables below reflect period-over-period changes in our key business metrics, along with the percentage change between such periods. The results of our trading business (Forge Markets) and our custody business (Forge Custody) are presented for the interim periods below. We believe the following business metrics are useful in evaluating our business:
Three Months Ended
Dollars in thousands
September 30,
2022
June 30, 2022
Change
% Change
TRADING BUSINESS
Trades
426
630
(204
)
(32
) %
Volume
$
226,229
$
331,794
$
(105,565
)
(32
) %
Net Take Rate
3.6
%
3.2
%
0.4
%
13
%
Placement fee revenues, less transaction-based expenses
$
8,141
$
10,773
$
(2,632
)
(24
)%
Three Months Ended
Dollars in thousands
September 30, 2022
September 30 2021
Change
% Change
TRADING BUSINESS
Trades
426
1,022
(596
)
(58
)%
Volume
$
226,229
$
674,273
$
(448,044
)
(66
) %
Net Take Rate
3.6
%
3.3
%
0.3
%
9
%
Placement fee revenues, less transaction-based expenses
$
8,141
$
22,358
$
(14,217
)
(64
)%
As of
Dollars in thousands
September 30, 2022
June 30, 2022
Change
% Change
CUSTODY BUSINESS
Total Custodial Accounts
1,811,774
1,739,838
71,936
4
%
Assets Under Custody
$
14,967,314
$
15,274,252
$
(306,938
)
(2
)%
As of
Dollars in thousands
September 30, 2022
September 30, 2021
Change
% Change
CUSTODY BUSINESS
Total Custodial Accounts
1,811,774
1,985,235
(173,461
)
(9
)%
Assets Under Custody
$
14,967,314
$
14,476,674
$
490,640
3
%
View source version on businesswire.com: https://www.businesswire.com/news/home/20221109005933/en/
Investor Relations Contact: Dominic Paschel ir@forgeglobal.com
Media Contact: Lindsay Riddell press@forgeglobal.com
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