Commitments and Contingencies

12 Months Ended

Dec. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

The Company is subject to claims and lawsuits in the ordinary course of business, including arbitration, class actions and other litigation, some of which include claims for substantial or unspecified damages. The Company is also the subject of inquiries, investigations, and proceedings by regulatory and other governmental agencies. The Company reviews its lawsuits, regulatory inquiries and other legal proceedings on an ongoing basis and provides disclosures and records loss contingencies in accordance with the loss contingencies accounting guidance. The Company establishes an accrual for losses at management’s best estimate when the Company assesses that it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. If no amount within the range is considered a better estimate than any other amount, an accrual for losses is recorded based on the bottom amount of the range. The Company's accrual for probable and estimable loss contingencies was $1.9 million and $0.5 million as of December 31, 2023 and 2022, and is recorded in accrued expenses and other current liabilities on the consolidated balance sheets and expensed in general and administrative expenses in our consolidated statements of operations. We estimate the range of reasonably possible losses above amounts that have been recorded at $0.1 million to $10.5 million as of December 31, 2023.

Legal Proceedings

On January 7, 2022, Erika McKiernan, in her capacity as Stockholder Representative for the former stockholders of SharesPost, filed a lawsuit against the Company in the Court of Chancery of the State of Delaware, asserting claims in connection with the Agreement and Plan of Merger, dated as of May 10, 2020, by and among the Company, SharesPost, Thanksgiving Merger Sub, Inc., and Erika McKiernan as the Stockholder Representative, as amended on November 6, 2020 (the "SharesPost Merger Agreement”). In general, the complaint asserted breaches of the SharesPost Merger Agreement and sought declaratory judgements establishing those breaches. In December 2023, the parties agreed to settle this matter resulting in a cash payment of $0.3 million, the release of shares of the Company's common stock that had been held in escrow, and modification of the Junior Preferred Stock Warrants. See Note 11, "Warrants" for more information.

On March 29, 2023, the Company was named as a defendant in a lawsuit brought by an alleged former warrant holder of the Company, in a case captioned Alta Partners, LLC v. Forge Global Holdings, Inc., No. 1:23-cv-2647 in the United States District Court for the Southern District of New York. On June 21, 2023, Plaintiff filed an amended complaint in the action. Plaintiff’s allegations include breaches of the Warrant Agreement dated December 15, 2020, breach of the implied covenant of good faith and fair dealing, and violation of Section 11 of the Securities Act of 1933, as amended (the "Securities Act"). Plaintiff’s complaint seeks, among other things, an award of money damages. On July 12, 2023, the Company filed a partial motion to dismiss in the action. On March 13, 2024, the court issued an opinion and order in connection with the motion to dismiss dismissing certain of the breach of contract claims, certain of the Section 11 claims, and the breach of the implied covenant of good faith and fair dealing claim. The court has set an initial pretrial conference for the parties for April 11, 2024. The Company disputes Plaintiff’s claims and intends to defend the suit vigorously. Our accrual and range of reasonably possible loss in excess of such accrual with respect to this matter is included in the amounts referenced above.

The Company is involved in a legacy matter arising prior to the Company’s October 2019 acquisition of IRA Services, Inc. On May 6, 2019, IRA Services, Inc. was named as a defendant in a matter (see Todd Allen Yancey v. Edwin Blue, et al., case no. 19-civ-0251, as amended) alleging claims including conversion, breach of oral contract, breach of fiduciary duty, and fraudulent misrepresentation. Trial proceedings in this matter began on March 18, 2024. The Company believes the claims are without merit. The Company is unable to predict the outcome to resolve this action but any loss in connection with this matter would first be applied against the escrow.

401(k) Plan

The Company has established a tax-qualified retirement plan under Section 401(k) of the Code for all of its U.S. employees, including executive officers, who satisfy certain eligibility requirements, including requirements relating to age and length of service. The Company matches 2% of every dollar contributed to the plan by employees, including executive officers, up to a maximum of $6,600. During the years ended December 31, 2023, 2022, and 2021, the Company recorded 401(k) contribution expense related to the defined contribution plan of $0.9 million, $1.0 million, and $0.5 million, respectively, in compensation and benefits in the Company’s consolidated statements of operations.

Non-Cancelable Purchase Obligations

In the normal course of business, the Company enters into non-cancelable purchase commitments with various parties mainly for its operating leases, software products, and services. As of December 31, 2023, the Company had outstanding non-cancelable purchase obligations with a term of 12 months or longer, excluding operating lease obligations (see Note 7, "Leases," for additional information) as follows (in thousands):


	Amount
2024	$	1,969
2025	1,972
2026	2,222
2027	1,231
Thereafter	—
Total	$	7,394