Related Party Transactions

12 Months Ended

Dec. 31, 2022

Related Party Transactions [Abstract]

Related Party Transactions

Off Balance Sheet ItemsThe Company organizes a series of Investment Funds, each of which is represented by a limited liability company (“LLC”) within Forge Investments LLC and by portfolio companies within Forge Investments SPC and Forge Investments II SPC. The Investment Funds were formed for the purpose of investing in securities relating to a single private company. Each series of Investment Funds consists of a separate and distinct portfolio of investments owned by different investors. The Company utilizes third-party fund administrators to manage the Investment Funds and has no ownership interest nor participation in the gains or losses of the entities represented by the Investment Funds. The Company paid for the expenses incurred by these entities, including fund insurance expenses of $0.2 million, $0.3 million, and $1.1 million and fund management expenses of $0.1 million, $0.4 million, and $0.3 million for the years ended December 31, 2022, 2021, and 2020, respectively, included in transaction-based expenses in the consolidated statements of operations. Also, the Company incurred fund audit fees of $0.9 million, $0.8 million, and $0.4 million during the years ended December 31, 2022, 2021, and 2020, respectively, included in professional services in the consolidated statements of operations. The Company did not consolidate Forge Investments LLC, Forge Investments SPC and Forge Investments II SPC, or the Investment Funds, because the Company has no direct or indirect interest in Forge Investments LLC, Forge Investments SPC and Forge Investments II SPC, or the Investment Funds, and the expenses that the Company pays on behalf of Forge Investments LLC, Forge Investments SPC and Forge Investments II SPC, or the Investment Funds, are not significant to those entities. The Company believes its maximum exposure to loss resulting from its involvement with those entities is limited to the payment of future insurance expenses, management expenses and audit fees.Related Party Transactions

On September 7, 2022 the Company and DBAG formed a subsidiary, Forge Europe GmbH. DBAG is a shareholder of the Company and one of the Company's directors is affiliated with this entity (see Note 1).

Financial Technology Partners LP (“Financial Technology Partners”), a shareholder of the Company and affiliated entity of one of the Company's former directors, previously served as financial and strategic advisor to the Company on its financing, merger, and acquisition transactions. During the year ended December 31, 2022 the Company incurred $18.3 million in fees to Financial Technology Partners, of which $17.4 million was related to common stock issued during the Merger and was recorded as a reduction to additional paid-in capital. The remaining $0.9 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 consolidated statements of operations. During the year ended December 31, 2021, the Company incurred $4.9 million in fees to Financial Technology Partners.

James Herbert, II, one of the Company's directors, through the James and Cecilia Herbert 1994 Revocable Trust, purchased 75,000 shares of the Company's common stock (for a purchase price of $0.8 million) in the PIPE Investment, concurrently and in connection with the closing of the Business Combination. Mr. Herbert's transaction was on the same terms as the other investors who purchased shares in the PIPE Investment pursuant to certain subscription agreements dated September 13, 2021.

Mr. Herbert is also the founder and executive chairman of First Republic Bank (“FRB”). Upon Mr. Herbert’s appointment to the board of directors in April 2022, FRB became a related party. The majority of the Company’s operating cash accounts are maintained at FRB, including funds held in money market accounts, which are included in cash and cash equivalents and restricted cash in the consolidated balance sheets. As of December 31, 2022, the Company held $171.9 million and $0.8 million in cash and cash equivalents and restricted cash, respectively, at FRB. Interest income earned on amounts held at FRB, subsequent to Mr. Herbert's appointment in April 2022, was $2.6 million for the year ended December 31, 2022, included in interest income (expenses), net in the consolidated statements of operations. The interest rates applied to amounts held at FRB are no less favorable to the Company than to other third party account holders.

Prior to the Business Combination, one of Legacy Forge's directors was also a director of Temasek Holding (Private) Limited ("Temasek"). Temasek, through its wholly-owned subsidiary, Ossa Investments Pte. Ltd, purchased 1,000,000 shares of the Company's common stock (for a purchase price of $10.0 million) in the PIPE Investment, concurrently and in connection with the closing of the Business Combination. This transaction was on the same terms as the other investors who purchased shares in the PIPE Investment pursuant to certain subscription agreements dated September 13, 2021.

During the year ended December 31, 2021 the Company entered into client engagement agreements with certain companies to serve as exclusive transaction agent to help facilitate private purchases of shares of issuers. These companies are identified as related parties who are holders of either the Company’s common stock or redeemable convertible preferred stock. The Company recognized $1.2 million in placement fee revenue in the consolidated statements of operations for trades executed with these companies for the year ended December 31, 2021. The associated revenue recognized for the years ended December 31, 2022 and 2020 is immaterial.