UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 1-U
Current Report Pursuant to Regulation A
Date of Report: September 16, 2024
(Date of earliest event reported)
Forge Group, Inc.
(Exact name of registrant as specified in its charter)
Pennsylvania
|
85-4184821
|
(State or other incorporation)
|
(I.R.S. Employer Identification No.)
|
P.O. Box 15033
Worcester, MA 01615
(Full mailing address of principal executive offices)
(202) 547-8700
(Issuer’s telephone number, including area code)
Common Stock
(Title of each class of securities issued pursuant to Regulation A)
Item 9. Other Events
Financial Results for the periods ended March 31, 2024, and June 30, 2024
On September 16, 2024, Forge Group, Inc. (the “Company”) issued press releases, which will be posted on its website and on its company page on the OTC Market website, announcing its financial results for the three and six-month periods ended March 31, 2024, and June 30, 2024, respectively. Copies of the press releases are filed as Exhibits 1U.1 and 1U.2 to this Report on Form 1-U.
Safe Harbor Statement
The information furnished in Form 1-U is not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, is not subject to the liabilities of that section, and is not deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.
This Current Report on Form 1-U may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934. You can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “projects,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties, including those described under the section entitled “Risk Factors” in our Offering Statement on Form 1-A dated February 7, 2022, filed with the Securities and Exchange Commission (“SEC”), as such factors may be updated from time to time in our periodic filings and prospectus supplements filed with the SEC, which are accessible on the SEC’s website at www.sec.gov. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in our filings with the SEC. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.
SIGNATURES
Pursuant to the requirements of Regulation A, the issuer has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
Forge Group, Inc.
|
|
|
|
|
By:
|
/s/ Patrick J. Bracewell
|
|
|
Patrick J. Bracewell
|
|
|
Chief Executive Officer
|
|
|
|
|
Date: September 16, 2024
|
Exhibit 1.u1
Forge Group, Inc. Announces 1st Quarter 2024 Financial Results
BETHESDA, Maryland, September 16, 2024 – Forge Group, Inc. (the “Company”, “we”, “us”, “our”, or “Forge”) (OTC Pink: FIGP), a specialist commercial auto insurance business, recently announced its financial results for three months ended March 31, 2024.
The Company has provided certain selected financial data in the table below for the three months ended March 31, 2024 (“1Q24”) and 2023 (“1Q23”), respectively:
Selected Financial Data
|
|
|
|
|
|
|
|
|
|
|
|
|
For the 3 months ended
|
|
|
|
March 31,
|
|
|
March 31,
|
|
|
|
2024
|
|
|
2023
|
|
(dollars in thousands except for per-share items)
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
Gross premiums written
|
|
|
5,743 |
|
|
|
5,021 |
|
Net premiums written
|
|
|
5,279 |
|
|
|
4,619 |
|
|
|
|
|
|
|
|
|
|
Net premiums earned
|
|
|
4,660 |
|
|
|
3,191 |
|
Underwriting income (loss) 1
|
|
|
(712 |
) |
|
|
(823 |
) |
Operating income (loss) before income taxes 2
|
|
|
(319 |
) |
|
|
(464 |
) |
|
|
|
|
|
|
|
|
|
Operating ratios
|
|
|
|
|
|
|
|
|
Loss ratio 3
|
|
|
63.5 |
% |
|
|
57.5 |
% |
Expense ratio 4
|
|
|
51.8 |
% |
|
|
68.3 |
% |
Combined ratio 5
|
|
|
115.3 |
% |
|
|
125.8 |
% |
Less: Investment ratio 6
|
|
|
-8.4 |
% |
|
|
-11.2 |
% |
Operating ratio 7
|
|
|
106.8 |
% |
|
|
114.5 |
% |
|
|
|
|
|
|
|
|
|
Adjusted book value per common share equivalent 8
|
|
$ |
19.75 |
|
|
$ |
19.63 |
|
Adjusted tangible book value per common share equivalent 9
|
|
$ |
17.48 |
|
|
$ |
17.33 |
|
Footnotes
1.
|
Underwriting income (loss) is a non-GAAP financial metric which measures the pre-tax profitability of our insurance operations before considering investment income. It is derived by subtracting loss and loss adjustment expense and underwriting expenses from net premiums earned.
|
2.
|
Pre-tax operating income (loss) is a non-GAAP financial metric which measures the profitability of our insurance operations before considering the impact of net realized and unrealized gains (losses), income (loss) from real estate operations, and certain non- recurring items.
|
3.
|
Loss ratio is losses and loss adjustment expenses incurred expressed as a percentage of net premiums earned.
|
4.
|
Expense ratio is underwriting expenses expressed as a percentage of net premiums earned.
|
5.
|
Combined ratio is the sum of the loss ratio and the expense ratio.
|
6.
|
Investment ratio is net investment income expressed as a percentage of net premiums earned.
|
7.
|
Operating ratio is the combined ratio minus the investment ratio.
|
8.
|
Adjusted book value per common share equivalent is a non-GAAP metric that our board and management team uses to evaluate overall long-term corporate performance. See Exhibits for more detail.
|
9.
|
Adjusted tangible book value per common share equivalent is a non-GAAP metric that our board and management team uses to evaluate overall long-term corporate performance. See Exhibits for more detail.
|
1Q24 financial highlights include:
|
•
|
Premium revenue. Gross premiums written were $5.7 million in 1Q24, an increase of 14.4% vs. the prior year comparable period. Net premiums written were $5.3 million in 1Q24, an increase of 14.3% vs. the prior year comparable period. Net premiums earned were $4.7 million in 1Q24, an increase of 46.0% vs. the prior year comparable period.
|
|
•
|
Loss ratio. Our loss ratio continues to perform well and below that of the commercial auto industry generally. Our loss ratio was 63.5% in 1Q24 compared to 57.5% for 1Q23.
|
|
•
|
Expense ratio. Our expense ratio continues to decline as we grow our premium revenue and scale our fixed expenses. Our expense ratio was 51.8% in 1Q24, which represents a decline of 16.5% vs. the prior year comparable period.
|
|
•
|
Combined ratio. Our combined ratio continues to decline as our expense ratio declines and our loss ratio remains within our long-term targets. As a reminder, a lower combined ratio is better and our intermediate-term goal is to generate a combined ratio of below 100%, thereby producing an underwriting profit. Our combined ratio was 115.3% in 1Q24, which represents a decline of 10.5% vs. the prior year comparable period.
|
|
o
|
Underwriting income (loss). We reported an underwriting loss of $712 thousand in 1Q24 compared to an underwriting loss of $823 thousand in 1Q23. This represents an improvement of $111 thousand.
|
|
•
|
Operating ratio. Our operating ratio continues to decline due to improvement in the combined ratio. Our investment ratio declined in 1Q24 vs. the prior year comparable period as our premium revenue (denominator) increased at a more rapid rate than net investment income. As a reminder, a lower operating ratio is better and our near-term goal is to generate an operating ratio below 100%, thereby producing an operating profit. Our operating ratio was 106.8% in 1Q24, which represents a decline of 7.7% vs. the prior year comparable period.
|
|
o
|
Operating income (loss) before income taxes. We reported a pre-tax operating loss of $319 thousand in 1Q24 compared to a pre-tax operating loss of $464 thousand in 1Q23. This represents an improvement of $145 thousand.
|
|
•
|
Adjusted book value and tangible book value per common share equivalent. Adjusted book value per common share equivalent (adjusted book value per share) was $19.75 as of March 31, 2024, which represents an increase of 0.7% compared to March 31, 2023. Adjusted tangible book value per common share equivalent (adjusted tangible book value per share) was $17.48 as of March 31, 2024, which represents an increase of 0.9% compared to March 31, 2023. We remain focused on minimizing erosion in our per-share net worth while we scale and reach sustainable profitability.
|
The Company commented:
Forge is off to a strong start in 2024. In 2023, our focus was on launching our new fully integrated digital insurance platform and transitioning off our legacy technology platform. In 2024, with this major initiative behind us, we have turned our focus to optimizing our agent and client experience using our new platform and streamlining and improving internal processes and procedures. In 1Q24, we have made significant progress rolling out our new digital agent portal (FIRE – Forge Insurance Rating Engine), which makes it easy for our distribution partners to quote business with Forge, allowing us to "activate" a large pool of contracted distribution partners. This new tool will be particularly helpful as we look to expand in the "small business class" segment, which is a primary focus in 2024 and a core part of our long-term business plan. Although we are starting from a relatively small base, growth in the “small business class” segment in 1Q24 has been in- line with our internal plan, and we continue to believe this segment will provide us with a long runway for profitable growth.
During 1Q24, we generated gross premiums written of $5.7 million, which represents an increase of 14.4%, compared to 1Q23. We expect strong year-over-year premium growth to continue as we move through 2024. Pursuant to GAAP, written premium is earned ratably over the term of the policy contract; however, this metric (written premium) provides a helpful indicator as to the increase in our overall business production.
An insurance company’s loss ratio is the most critical measure to the company’s underwriting profitability. Our loss ratio in 1Q24 remains within our long-term targets. Our loss ratio for 1Q24 was 63.5% compared to 57.5% in 1Q23. Because we are a small company at this stage, our loss ratio, which is an important driver of our overall profitability, is less predictable, particularly over shorter measurement periods (e.g., 3 - 6 months).
We continue to make progress on our expense ratio. Our expense ratio in 1Q24 was 51.8%, which represents a decrease of 16.5% compared to 1Q23. We remain focused on scaling our fixed expenses through profitable premium revenue growth.
We reported a pre-tax operating loss of $319 thousand in 1Q24 compared to a pre-tax operating loss of $464 thousand in 1Q23. This represents an improvement of $145 thousand. We reported a pre-tax profit, after net realized and unrealized gains (losses) of $43 thousand in 1Q24 compared to a pre-tax loss of $204 thousand for 1Q23. This represents an improvement of $247 thousand.
As we noted in our 2023 year-end reports, during 1Q24, we repurchased 16,000 of our outstanding shares of common stock at a price of $8.75 per share.
In summary, we are continuing to build on the work done in 2023 and are off to a strong start in 1Q24. Our financial results remain consistent with our long-term business plan, and we look forward to providing our shareholders with more updates as we move through the year.
About Forge
Forge Group, Inc. is a commercial auto insurance specialist. We principally focus on delivering commercial auto insurance products to small business owners and operators that operate in (i) certain business class segments and (ii) certain geographic markets in the U.S. Additional information is available on the Company’s website at: www.forgeinsurance.com.
Forward-Looking Statements
This release includes forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally can be identified by phrases such as the Company or its management "believes," "expects," "anticipates," "foresees," "forecasts," "estimates" or other words or phrases of similar import. Similarly, statements herein that describe the Company’s business strategy, outlook, objectives, plans, intentions, or goals are also forward-looking statements. All such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those in forward-looking statements. Please review the risks factors and uncertainties identified in the Company’s 2023 Annual Report on Form 1-K, Semi-Annual Reports on Form 1-SA and our other filings with the Securities and Exchange Commission. Any forward-looking statement made by the Company in this document speaks only as of the date of this release. Except as required by applicable law, we undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or developments or otherwise.
Note Regarding Financial Measures
Investors should be aware that accounting principles generally accepted in the United States prescribe when a company may reserve for particular risks, including litigation exposures. Accordingly, results for a given reporting period could be significantly affected if and when we establish reserves for one or more contingencies. Also, our regular reserve reviews may result in adjustments of varying magnitude as additional information regarding claims activity becomes known. Reported results, therefore, may be volatile in certain accounting periods.
Special Note Regarding Non-GAAP Financial Measures
We believe that the non-GAAP financial measures in this report, including those in the Exhibits, provide important and useful information for our shareholders. We use these non-GAAP measures for internal planning purposes and to evaluate our ongoing operations and performance. These non-GAAP financial measures are presented as supplemental information and not as alternatives to any GAAP financial measures.
Exhibits
Exhibit 1: Simplified Income Statement
The “Simplified Income Statement” exhibit is a non-GAAP presentation of “Net income (loss) attributable to Forge Group, Inc.” and is based on the Company’s Consolidated Statements of Operations and Comprehensive Earnings. This exhibit separates the Company’s core insurance operations (including investment income earned on income-generating securities) from the following other activities and items: real estate operations, the impact of net realized and unrealized gains (losses) on investment securities, and certain non-recurring items.
|
|
For the 3 months ended
|
|
|
|
March 31,
|
|
|
March 31,
|
|
|
|
2024
|
|
|
2023
|
|
(dollars in thousands)
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
Net premiums earned
|
|
|
4,660 |
|
|
|
3,191 |
|
|
|
|
|
|
|
|
|
|
Losses and loss adjustment expenses
|
|
|
2,957 |
|
|
|
1,833 |
|
|
|
|
|
|
|
|
|
|
Policy acquisition costs and other operating expenses
|
|
|
2,339 |
|
|
|
2,195 |
|
Lease expense
|
|
|
52 |
|
|
|
54 |
|
Sublease (income)
|
|
|
(42 |
) |
|
|
(41 |
) |
Depreciation and amortization (excl. real estate) 1
|
|
|
67 |
|
|
|
67 |
|
Service fee and other (income) expense
|
|
|
(1 |
) |
|
|
(94 |
) |
Underwriting expenses
|
|
|
2,415 |
|
|
|
2,181 |
|
|
|
|
|
|
|
|
|
|
Underwriting gain (loss)
|
|
|
(712 |
) |
|
|
(823 |
) |
Net investment income
|
|
|
393 |
|
|
|
359 |
|
Operating income (loss) before income taxes
|
|
|
(319 |
) |
|
|
(464 |
) |
Net realized and unrealized gains (losses) 2
|
|
|
375 |
|
|
|
331 |
|
Income (loss) from real estate operations 3
|
|
|
(13 |
) |
|
|
(71 |
) |
Income (loss) before income taxes
|
|
|
43 |
|
|
|
(204 |
) |
Income tax expense (benefit)
|
|
|
24 |
|
|
|
(41 |
) |
Net income (loss)
|
|
|
19 |
|
|
|
(162 |
) |
Net loss (gain) attributable to noncontrolling interest
|
|
|
1 |
|
|
|
- |
|
Net income (loss) attributable to Forge Group, Inc.
|
|
|
20 |
|
|
|
(162 |
) |
Footnotes
1.
|
Total depreciation and amortization minus depreciation and amortization attributable to real estate.
|
2.
|
Net realized investment gains (losses) plus net unrealized gains (losses) on equity securities.
|
3.
|
Income from real estate held for investment minus (i) depreciation of real estate held for the production of income, (ii) amortization of leases in place, (iii) amortization of finance costs, (iv) real estate operating expenses, and (v) interest expense.
|
Exhibit 2: Adjusted Book Value and Tangible Book Value Per Common Share Equivalent
“Adjusted book value per common share equivalent” and “adjusted tangible book value per common share equivalent” are non-GAAP metrics and are not intended to be an expression of the Company’s opinion of the value of its common stock.
|
|
As of
|
|
|
|
March 31,
|
|
|
December 31,
|
|
|
March 31,
|
|
(dollars in thousands except for per-share items)
|
|
2024
|
|
|
2023
|
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of Numerators
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
|
45,551 |
|
|
|
45,874 |
|
|
|
46,222 |
|
Less: Noncontrolling interest
|
|
|
(700 |
) |
|
|
(700 |
) |
|
|
(708 |
) |
GAAP book value
|
|
|
44,851 |
|
|
|
45,174 |
|
|
|
45,514 |
|
Less: Accumulated other comprehensive (income) loss (AOCI)
|
|
|
2,139 |
|
|
|
2,152 |
|
|
|
2,586 |
|
GAAP book value excluding AOCI
|
|
|
46,991 |
|
|
|
47,326 |
|
|
|
48,100 |
|
Add: Theoretical proceeds from exercise of options 1
|
|
|
1,276 |
|
|
|
1,228 |
|
|
|
2,014 |
|
Add: Non-GAAP real estate adjustments, net 2
|
|
|
4,015 |
|
|
|
3,828 |
|
|
|
3,630 |
|
Adjusted book value (numerator)
|
|
|
52,282 |
|
|
|
52,383 |
|
|
|
53,744 |
|
Less: Goodwill and other intangibles
|
|
|
(6,009 |
) |
|
|
(6,076 |
) |
|
|
(6,276 |
) |
Adjusted tangible book value (numerator)
|
|
|
46,273 |
|
|
|
46,307 |
|
|
|
47,467 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of Denominator
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares outstanding
|
|
|
2,044 |
|
|
|
2,050 |
|
|
|
2,050 |
|
Common shares issuable upon conversion of Series A Preferred Stock 3
|
|
|
458 |
|
|
|
458 |
|
|
|
458 |
|
Common shares underlying restricted stock awards outstanding 4
|
|
|
20 |
|
|
|
23 |
|
|
|
30 |
|
Common shares issuable upon exercise of outstanding options 5
|
|
|
125 |
|
|
|
120 |
|
|
|
200 |
|
Common share equivalents (denominator)
|
|
|
2,647 |
|
|
|
2,652 |
|
|
|
2,738 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Measures
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted book value per common share equivalent 6
|
|
$ |
19.75 |
|
|
$ |
19.76 |
|
|
$ |
19.63 |
|
Adjusted tangible book value per common share equivalent 7
|
|
$ |
17.48 |
|
|
$ |
17.46 |
|
|
$ |
17.33 |
|
Footnotes
1.
|
Proceeds that would be received from the exercise of outstanding stock options (vested and unvested).
|
2.
|
Intended to represent Company’s interest in real estate investments at historical cost. See Exhibit 3.
|
3.
|
Common shares issuable upon conversion of the Company’s Series A Preferred Stock.
|
4.
|
Common shares underlying restricted stock awards outstanding (unvested).
|
5.
|
Common shares underlying outstanding stock options (vested and unvested).
|
6.
|
Adjusted book value (numerator) divided by common share equivalents (denominator).
|
7.
|
Adjusted tangible book value (numerator) divided by common share equivalents (denominator).
|
Exhibit 3: Non-GAAP Real Estate Adjustments
The “Non-GAAP Real Estate Adjustments” contains certain non-GAAP adjustments and metrics intended to present the value of the Company’s interest in its real estate investments at historical cost. These non-GAAP adjustments and metrics are not intended to be an expression of the Company’s opinion of the value of its real estate investments.
|
|
|
|
|
|
As of
|
|
|
|
|
|
|
|
March 31,
|
|
|
December 31,
|
|
|
March 31,
|
|
(dollars in thousands) |
|
2024
|
|
|
2023
|
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate held for the production of income, net
|
|
|
29,390 |
|
|
|
29,543 |
|
|
|
30,002 |
|
Add: Leases in place
|
|
|
2,460 |
|
|
|
2,512 |
|
|
|
2,701 |
|
Add: Deferred rent 1
|
|
|
2,383 |
|
|
|
2,356 |
|
|
|
2,273 |
|
Real assets (GAAP)
|
|
|
34,232 |
|
|
|
34,411 |
|
|
|
34,977 |
|
Add: Accumulated depreciation 2
|
|
|
6,079 |
|
|
|
5,926 |
|
|
|
5,467 |
|
Add: Accumulated amortization 3
|
|
|
1,704 |
|
|
|
1,652 |
|
|
|
1,884 |
|
Less: Deferred rent
|
|
|
(2,383 |
) |
|
|
(2,356 |
) |
|
|
(2,273 |
) |
Real assets (Non-GAAP) 4
|
|
|
39,633 |
|
|
|
39,633 |
|
|
|
40,054 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes payable, net (GAAP)
|
|
|
26,155 |
|
|
|
26,325 |
|
|
|
26,809 |
|
Add: Unamortized finance costs
|
|
|
1,050 |
|
|
|
1,074 |
|
|
|
1,145 |
|
Notes payable (Non-GAAP) 5
|
|
|
27,206 |
|
|
|
27,399 |
|
|
|
27,954 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net real assets (Non-GAAP) 6
|
|
|
12,427 |
|
|
|
12,234 |
|
|
|
12,100 |
|
Less: Net real assets (GAAP) 7
|
|
|
(8,077 |
) |
|
|
(8,086 |
) |
|
|
(8,167 |
) |
Non-GAAP adjustments 8
|
|
|
4,350 |
|
|
|
4,148 |
|
|
|
3,933 |
|
Less: Noncontrolling interest 9
|
|
|
(335 |
) |
|
|
(319 |
) |
|
|
(303 |
) |
Non-GAAP real estate adjustments, net
|
|
|
4,015 |
|
|
|
3,828 |
|
|
|
3,630 |
|
Footnotes
1.
|
Cumulative difference between actual cash receipts and rental income recorded on a straight-line basis.
|
2.
|
Accumulated depreciation on real estate held for the production of income.
|
3.
|
Accumulated amortization on leases in place.
|
4.
|
Approximation of total cost basis of real estate investments.
|
5.
|
Gross principal amount of notes payable.
|
6.
|
Real assets (non-GAAP) minus notes payable (non-GAAP).
|
7.
|
Real assets (GAAP) minus notes payable (GAAP).
|
8.
|
Difference between non-GAAP and GAAP net real assets
|
9.
|
Portion of non-GAAP adjustments attributable to 7.7% owned by operating partner.
|
Exhibit 4: Consolidated Balance Sheets
Forge Group, Inc. and Subsidiaries
|
|
Consolidated Balance Sheets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of
|
|
|
|
March 31,
|
|
|
December 31,
|
|
|
March 31,
|
|
|
|
2024
|
|
|
2023
|
|
|
2023
|
|
(dollars in thousands)
|
|
(unaudited)
|
|
|
(audited)
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments and cash:
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed maturity securities, at fair value
|
|
$ |
27,775 |
|
|
$ |
27,970 |
|
|
$ |
27,354 |
|
Redeemable preferred stock, at fair value
|
|
|
1,381 |
|
|
|
1,363 |
|
|
|
1,361 |
|
Perpetual preferred stock, at fair value
|
|
|
585 |
|
|
|
562 |
|
|
|
565 |
|
Common stock, at fair value
|
|
|
1,819 |
|
|
|
1,691 |
|
|
|
2,652 |
|
Other invested assets
|
|
|
4,748 |
|
|
|
4,524 |
|
|
|
4,402 |
|
Real estate held for the production of income, net
|
|
|
29,390 |
|
|
|
29,543 |
|
|
|
30,002 |
|
Cash and cash equivalents
|
|
|
7,872 |
|
|
|
6,968 |
|
|
|
5,561 |
|
Restricted cash
|
|
|
227 |
|
|
|
226 |
|
|
|
217 |
|
Total investments and cash
|
|
|
73,797 |
|
|
|
72,848 |
|
|
|
72,115 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued investment income
|
|
|
336 |
|
|
|
297 |
|
|
|
316 |
|
Premium and reinsurance balances receivable
|
|
|
7,926 |
|
|
|
8,256 |
|
|
|
6,566 |
|
Ceded unearned premiums
|
|
|
157 |
|
|
|
71 |
|
|
|
149 |
|
Reinsurance balances recoverable on unpaid losses
|
|
|
828 |
|
|
|
690 |
|
|
|
1,080 |
|
Deferred policy acquisition costs, net
|
|
|
300 |
|
|
|
298 |
|
|
|
266 |
|
Deferred rent
|
|
|
2,383 |
|
|
|
2,356 |
|
|
|
2,273 |
|
Leases in place
|
|
|
2,460 |
|
|
|
2,512 |
|
|
|
2,701 |
|
Right-of-use asset, net
|
|
|
140 |
|
|
|
143 |
|
|
|
148 |
|
Goodwill and other intangibles
|
|
|
6,009 |
|
|
|
6,076 |
|
|
|
6,276 |
|
Other assets
|
|
|
2,258 |
|
|
|
2,006 |
|
|
|
1,639 |
|
Total assets
|
|
$ |
96,593 |
|
|
$ |
95,551 |
|
|
$ |
93,530 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Unpaid losses and loss adjustment expenses
|
|
$ |
9,912 |
|
|
$ |
8,426 |
|
|
$ |
8,832 |
|
Unearned premium
|
|
|
10,988 |
|
|
|
10,283 |
|
|
|
7,849 |
|
Reinsurance balances payable
|
|
|
158 |
|
|
|
36 |
|
|
|
209 |
|
Accrued expenses
|
|
|
2,254 |
|
|
|
2,437 |
|
|
|
1,789 |
|
Notes payable
|
|
|
26,155 |
|
|
|
26,325 |
|
|
|
26,809 |
|
Defined benefit plan unfunded liability
|
|
|
336 |
|
|
|
333 |
|
|
|
488 |
|
Operating lease liability, net
|
|
|
692 |
|
|
|
729 |
|
|
|
836 |
|
Other liabilities
|
|
|
546 |
|
|
|
1,108 |
|
|
|
497 |
|
Total liabilities
|
|
|
51,042 |
|
|
|
49,676 |
|
|
|
47,309 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mezzanine Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock, without par value 1
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Additional paid-in capital (Preferred Stock)
|
|
|
5,227 |
|
|
|
5,227 |
|
|
|
5,227 |
|
Stockholders' Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock, $0.01 par value 2
|
|
|
21 |
|
|
|
21 |
|
|
|
21 |
|
Treasury stock
|
|
|
(210 |
) |
|
|
(70 |
) |
|
|
- |
|
Additional paid-in capital
|
|
|
16,502 |
|
|
|
16,604 |
|
|
|
16,353 |
|
Unearned employee stock ownership plan shares
|
|
|
(1,624 |
) |
|
|
(1,827 |
) |
|
|
(1,827 |
) |
Retained earnings
|
|
|
27,074 |
|
|
|
27,372 |
|
|
|
28,325 |
|
Accumulated other comprehensive income (loss), net of tax
|
|
|
(2,139 |
) |
|
|
(2,152 |
) |
|
|
(2,586 |
) |
Noncontrolling interest
|
|
|
700 |
|
|
|
700 |
|
|
|
708 |
|
Total equity
|
|
|
45,551 |
|
|
|
45,874 |
|
|
|
46,222 |
|
Total liabilities and equity
|
|
$ |
96,593 |
|
|
$ |
95,551 |
|
|
$ |
93,530 |
|
Footnotes
1.
|
1,000,000 shares authorized, 550,000 shares issued and outstanding.
|
2.
|
10,000,000 shares authorized, 2,044,148, 2,050,232, and 2,050,000 issued and outstanding, respectively.
|
Exhibit 5: Consolidated Statements of Earnings and Comprehensive Earnings
Forge Group, Inc. and Subsidiaries
|
|
Consolidated Statements of Earnings and Comprehensive Earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
For the 3 months ended
|
|
|
|
March 31,
|
|
|
March 31,
|
|
|
|
2024
|
|
|
2023
|
|
(dollars in thousands)
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
Net premiums earned
|
|
$ |
4,660 |
|
|
$ |
3,191 |
|
Income from real estate held for investment
|
|
|
556 |
|
|
|
569 |
|
Net investment income
|
|
|
393 |
|
|
|
359 |
|
Net realized investment gains
|
|
|
4 |
|
|
|
(37 |
) |
Net unrealized gains on equity securities
|
|
|
370 |
|
|
|
368 |
|
Service fee and other income (expense)
|
|
|
1 |
|
|
|
94 |
|
Total revenues
|
|
|
5,985 |
|
|
|
4,544 |
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
Losses and loss adjustment expenses
|
|
|
2,957 |
|
|
|
1,833 |
|
Policy acquisition costs and other operating expenses
|
|
|
2,339 |
|
|
|
2,195 |
|
Depreciation and amortization
|
|
|
296 |
|
|
|
335 |
|
Real estate operating expense
|
|
|
55 |
|
|
|
79 |
|
Interest expense on debt
|
|
|
284 |
|
|
|
292 |
|
Lease expense
|
|
|
52 |
|
|
|
54 |
|
Sublease income
|
|
|
(42 |
) |
|
|
(41 |
) |
Total expenses
|
|
|
5,942 |
|
|
|
4,747 |
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
|
|
43 |
|
|
|
(204 |
) |
|
|
|
|
|
|
|
|
|
Income tax expense (benefit)
|
|
|
24 |
|
|
|
(41 |
) |
Net income (loss)
|
|
|
19 |
|
|
|
(162 |
) |
Net loss (gain) attributable to noncontrolling interest
|
|
|
1 |
|
|
|
- |
|
Net income (loss) attributable to Forge Group, Inc.
|
|
|
20 |
|
|
|
(162 |
) |
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
|
|
|
Unrealized gains (losses) on AFS securities, net of tax
|
|
|
16 |
|
|
|
226 |
|
Reclassification adjustment for losses (gains) included in net income
|
|
|
(3 |
) |
|
|
(1 |
) |
Total other comprehensive income (loss), net of tax
|
|
|
13 |
|
|
|
225 |
|
|
|
|
|
|
|
|
|
|
Total comprehensive income (loss)
|
|
|
32 |
|
|
|
62 |
|
Exhibit 1.u2
Forge Group, Inc. Announces 2nd Quarter 2024 Financial Results
BETHESDA, Maryland, September 16, 2024 – Forge Group, Inc. (the “Company”, “we”, “us”, “our”, or “Forge”) (OTC Pink: FIGP), a specialist commercial auto insurance business, recently announced its financial results for six months ended June 30, 2024.
The Company has provided certain selected financial data in the table below for the three months ended June 30, 2024 (“2Q24”) and 2023 (“2Q23”), respectively, and the six months ended June 30, 2024 (“YTD 2024”) and 2023 (“YTD 2023”), respectively:
Selected Financial Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the 3 months ended
|
|
|
For the 6 months ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2024
|
|
|
2023
|
|
|
2024
|
|
|
2023
|
|
(dollars in thousands except for per-share items)
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross premiums written
|
|
|
5,354 |
|
|
|
3,524 |
|
|
|
11,097 |
|
|
|
8,546 |
|
Net premiums written
|
|
|
4,988 |
|
|
|
3,259 |
|
|
|
10,267 |
|
|
|
7,878 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net premiums earned
|
|
|
5,143 |
|
|
|
3,524 |
|
|
|
9,803 |
|
|
|
6,715 |
|
Underwriting income (loss) 1
|
|
|
(395 |
) |
|
|
(942 |
) |
|
|
(1,107 |
) |
|
|
(1,765 |
) |
Operating income (loss) before income taxes 2
|
|
|
17 |
|
|
|
(576 |
) |
|
|
(302 |
) |
|
|
(1,040 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating ratios
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss ratio 3
|
|
|
56.3 |
% |
|
|
66.9 |
% |
|
|
59.7 |
% |
|
|
62.4 |
% |
Expense ratio 4
|
|
|
51.4 |
% |
|
|
59.8 |
% |
|
|
51.6 |
% |
|
|
63.9 |
% |
Combined ratio 5
|
|
|
107.7 |
% |
|
|
126.7 |
% |
|
|
111.3 |
% |
|
|
126.3 |
% |
Less: Investment ratio 6
|
|
|
-8.0 |
% |
|
|
-10.4 |
% |
|
|
-8.2 |
% |
|
|
-10.8 |
% |
Operating ratio 7
|
|
|
99.7 |
% |
|
|
116.3 |
% |
|
|
103.1 |
% |
|
|
115.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted book value per common share equivalent 8
|
|
$ |
19.76 |
|
|
$ |
19.46 |
|
|
$ |
19.76 |
|
|
$ |
19.46 |
|
Adjusted tangible book value per common share equivalent 9
|
|
$ |
17.51 |
|
|
$ |
17.19 |
|
|
$ |
17.51 |
|
|
$ |
17.19 |
|
Footnotes
1.
|
Underwriting income (loss) is a non-GAAP financial metric which measures the pre-tax profitability of our insurance operations before considering investment income. It is derived by subtracting loss and loss adjustment expense and underwriting expenses from net premiums earned.
|
2.
|
Pre-tax operating income (loss) is a non-GAAP financial metric which measures the profitability of our insurance operations before considering the impact of net realized and unrealized gains (losses), income (loss) from real estate operations, and certain non- recurring items.
|
3.
|
Loss ratio is losses and loss adjustment expenses incurred expressed as a percentage of net premiums earned.
|
4.
|
Expense ratio is underwriting expenses expressed as a percentage of net premiums earned.
|
5.
|
Combined ratio is the sum of the loss ratio and the expense ratio.
|
6.
|
Investment ratio is net investment income expressed as a percentage of net premiums earned.
|
7.
|
Operating ratio is the combined ratio minus the investment ratio.
|
8.
|
Adjusted book value per common share equivalent is a non-GAAP metric that our board and management team uses to evaluate overall long-term corporate performance. See Exhibits for more detail.
|
9.
|
Adjusted tangible book value per common share equivalent is a non-GAAP metric that our board and management team uses to evaluate overall long-term corporate performance. See Exhibits for more detail.
|
2Q24 financial highlights include:
|
•
|
Premium revenue. Gross premiums written were $5.4 million in 2Q24, an increase of 51.9% vs. the prior year comparable period. Net premiums written were $5.0 million in 2Q24, an increase of 53.1% vs. the prior year comparable period. Net premiums earned were $5.1 million in 2Q24, an increase of 45.9% vs. the prior year comparable period.
|
|
•
|
Loss ratio. Our loss ratio continues to perform well and below that of the commercial auto industry generally. Our loss ratio was 56.3% in 2Q24 compared to 66.9% for 2Q23.
|
|
•
|
Expense ratio. Our expense ratio continues to decline as we grow our premium revenue and scale our fixed expenses. Our expense ratio was 51.4% in 2Q24, which represents a decline of 8.4% vs. the prior year comparable period. |
|
•
|
Combined ratio. Our combined ratio continues to decline as our expense ratio declines and our loss ratio remains within our long-term targets. As a reminder, a lower combined ratio is better and our intermediate-term goal is to generate a combined ratio of below 100%, thereby producing an underwriting profit. Our combined ratio was 107.7% in 2Q24, which represents a decline of 19.1% vs. the prior year comparable period.
|
|
o
|
Underwriting income (loss). We reported an underwriting loss of $395 thousand in 2Q24 compared to an underwriting loss of $942 thousand in 2Q23. This represents an improvement of $547 thousand.
|
|
•
|
Operating ratio. Our operating ratio continues to decline due to improvement in the combined ratio.Our investment ratio declined in 2Q24 vs. the prior year comparable period as our premium revenue (denominator) increased at a more rapid rate than net investment income. As a reminder, a lower operating ratio is better and our near-term goal is to generate an operating ratio below 100%, thereby producing an operating profit. Our operating ratio was 99.7% in 1Q24, which represents a decline of 16.7% vs. the prior year comparable period.
|
|
o
|
Operating income (loss) before income taxes. We reported pre-tax operating income of $17 thousand in 2Q24 compared to a pre-tax operating loss of $576 thousand in 2Q23. This represents an improvement of $593 thousand.
|
|
•
|
Adjusted book value and tangible book value per common share equivalent. Adjusted book value per common share equivalent (adjusted book value per share) was $19.76 as of June 30, 2024, which represents an increase of 1.5% compared to June 30, 2023. Adjusted tangible book value per common share equivalent (adjusted tangible book value per share) was $17.51 as of June 30, 2024, which represents an increase of 1.9% compared to June 30, 2023. We remain focused on minimizing erosion in our per-share net worth while we scale and reach sustainable profitability.
|
YTD 2024 financial highlights include:
|
•
|
Premium revenue. Gross premiums written were $11.1 million YTD 2024, an increase of 29.9% vs. the prior year comparable period. Net premiums written were $10.3 million YTD 2024, an increase of 30.3% vs. the prior year comparable period. Net premiums earned were $9.8 million YTD 2024, an increase of 46.0% vs. the prior year comparable period.
|
|
•
|
Loss ratio. Our loss ratio continues to perform well and below that of the commercial auto industry generally. Our loss ratio was 59.7% YTD 2024 compared to 62.4% for YTD 2023.
|
|
•
|
Expense ratio. Our expense ratio continues to decline as we grow our premium revenue and scale our fixed expenses. Our expense ratio was 51.6% YTD 2024, which represents a decline of 12.3% vs. the prior year comparable period.
|
|
•
|
Combined ratio. Our combined ratio continues to decline as our expense ratio declines and our loss ratio remains within our long-term targets. As a reminder, a lower combined ratio is better and our intermediate-term goal is to generate a combined ratio of below 100%, thereby producing an underwriting profit. Our combined ratio was 111.3% YTD 2024, which represents a decline of 15.0% vs. the prior year comparable period.
|
|
o
|
Underwriting income (loss). We reported an underwriting loss of $1.1 million YTD 2024 compared to an underwriting loss of $1.8 million YTD 2023. This represents an improvement of $658 thousand.
|
|
•
|
Operating ratio. Our operating ratio continues to decline due to improvement in the combined ratio. Our investment ratio declined YTD 2024 vs. the prior year comparable period as our premium revenue (denominator) increased at a more rapid rate than net investment income. As a reminder, a lower operating ratio is better and our near-term goal is to generate an operating ratio below 100%, thereby producing an operating profit. Our operating ratio was 103.1% YTD 2024, which represents a decline of 12.4% vs. the prior year comparable period.
|
|
o
|
Operating income (loss) before income taxes. We reported a pre-tax operating loss of $302 thousand YTD 2024 compared to a pre-tax operating loss of $1.0 million YTD 2023. This represents an improvement of $738 thousand.
|
The Company commented:
We have had a strong first half of 2024. We have made considerable progress across all areas of the business, and we are seeing tangible improvements in our financial performance as a result. In terms of new business production, we continue to expand our distribution reach and have made progress growing brand awareness – particularly in certain core states. Our distribution and operations teams have successfully rolled out our digital agent portal (FIRE) to many of our distribution partners, and an increasing percentage of our new business submissions are coming through the FIRE portal. This has increased productivity, compressed quoting turnaround time, and has improved the overall agent experience. We will continue to refine the agent portal as we move through the remainder of 2024 (and beyond). As mentioned in our 1Q24 earnings release, rolling out the agent portal to our distribution partners has been a focus in the first half of 2024 as it is critical to growing in the “small business class” segment – a key strategic initiative for 2024. This segment, while starting from a very small base at year-end 2023, has become a meaningful contributor to our new business premium in 2Q24 and we expect this trend to continue (as it grows at a faster rate than our legacy public auto business class segment) – which is consistent with our long-term business plan. During YTD 2024, we generated gross premiums written of $11.1 million, which represents an increase of 29.9%, compared to YTD 2023. We expect this trend to continue as we move through the remainder of 2024.
We are mindful of the challenges growth can present, particularly in a “risk” business such as insurance. As we grow, we must ensure that our operations and infrastructure are able to support a larger business. To that end we have invested in our data and analytics capabilities. Having access to the right data (and the ability to analyze this data) allows us to monitor the various dimensions of our business on a real-time basis. We continue to make progress building out our data and analytics capabilities – making progress expanding departmental dashboards during the first half of 2024. For example, in our claims area, we are focused on continuing to handle claims proactively – monitoring, among other things, cycle times (the time it takes to close claims), claims inventory (number of open claims), and claims adjuster workload (open claims per adjuster). In our servicing area, we are elevating dashboards to monitor agent and customer response times. In short, we are building more sophisticated analytical capabilities which will allow us to monitor our performance and service levels on a real-time basis – and act quickly if needed. Better analytics will also help us improve business planning and resource allocation as we think about 2025 and beyond.
An insurance company’s loss ratio is the most critical measure to the company’s underwriting profitability. Our loss ratio was 59.7% YTD 2024, which is well within our long-term targets and below that of the commercial auto industry. We attribute this to our lower-risk strategy (operating only in certain states and in certain business class segments) and our product design and pricing – which are supported by seasoned underwriters and claims professionals.
We continue to make progress on our expense ratio – a key focus area. Our expense ratio in 2Q24 was 51.4%, which represents a decrease of 8.4% compared to 2Q23. We have added a handful of additional team members in 2024, both to support our larger business (we have added staff in the claims and data analytics areas) and continue the acceleration of our growth in the “small business class” segment (we have added staff in the business development area). We believe these are sound investments and expect our expense ratio to continue moving lower through the remainder of 2024.
We are pleased to report a pre-tax operating profit – before the impact of net realized and unrealized gains (losses) and income (loss) from real estate operations – of $17 thousand in 2Q24 compared to a pre-tax operating loss of $576 thousand in 2Q23. This represents an improvement of $593 thousand. We wrote down in value a private investment in 2Q24 (OTTI adjustment) which adversely impacted overall pre-tax profitability. As a result of this write-down, we reported a pre-tax loss, after net realized and unrealized gains (losses) of $361 thousand in 2Q24 compared to a pre-tax loss of $442 thousand for 2Q23. By way of background, we made two separate “venture-stage” private investments in 2019, totaling $1.4 million at cost. Both investments have been a drag on our results over the last 12 months. As of June 30, 2024, these investments were carried on our balance sheet at an aggregate value of $203 thousand (or 15% of the amount of our original investment). The silver lining here – if any – is that their impact on our go-forward financial results will likely be minimal. With the benefit of hindsight, it is our view that, given the binary nature of such “venture-stage” investments, they should sit within a portfolio of similar investments (not be made on a one-off basis). These were the only “venture-stage” investments we have made at Forge (and they will likely be our last). Despite the impact of the write-down of these investments, our adjusted book value per share was $19.76 as of June 30, 2024, which represents an increase of 1.5% compared to June 30, 2023.
In summary, we are incredibly excited about the progress we’ve made thus far in the first half of 2024. Our financial results remain consistent with our long-term business plan, and we look forward to providing our shareholders with more updates as we move through the year.
About Forge
Forge Group, Inc. is a commercial auto insurance specialist. We principally focus on delivering commercial auto insurance products to small business owners and operators that operate in (i) certain business class segments and (ii) certain geographic markets in the U.S. Additional information is available on the Company’s website at: www.forgeinsurance.com.
Forward-Looking Statements
This release includes forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally can be identified by phrases such as the Company or its management "believes," "expects," "anticipates," "foresees," "forecasts," "estimates" or other words or phrases of similar import. Similarly, statements herein that describe the Company’s business strategy, outlook, objectives, plans, intentions, or goals are also forward-looking statements. All such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those in forward-looking statements. Please review the risks factors and uncertainties identified in the Company’s 2023 Annual Report on Form 1-K, Semi-Annual Reports on Form 1-SA and our other filings with the Securities and Exchange Commission. Any forward-looking statement made by the Company in this document speaks only as of the date of this release. Except as required by applicable law, we undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or developments or otherwise.
Note Regarding Financial Measures
Investors should be aware that accounting principles generally accepted in the United States prescribe when a company may reserve for particular risks, including litigation exposures. Accordingly, results for a given reporting period could be significantly affected if and when we establish reserves for one or more contingencies. Also, our regular reserve reviews may result in adjustments of varying magnitude as additional information regarding claims activity becomes known. Reported results, therefore, may be volatile in certain accounting periods.
Special Note Regarding Non-GAAP Financial Measures
We believe that the non-GAAP financial measures in this report, including those in the Exhibits, provide important and useful information for our shareholders. We use these non-GAAP measures for internal planning purposes and to evaluate our ongoing operations and performance. These non-GAAP financial measures are presented as supplemental information and not as alternatives to any GAAP financial measures.
Exhibits
Exhibit 1: Simplified Income Statement
The “Simplified Income Statement” exhibit is a non-GAAP presentation of “Net income (loss) attributable to Forge Group, Inc.” and is based on the Company’s Consolidated Statements of Operations and Comprehensive Earnings. This exhibit separates the Company’s core insurance operations (including investment income earned on income-generating securities) from the following other activities and items: real estate operations, the impact of net realized and unrealized gains (losses) on investment securities, and certain non-recurring items.
|
|
For the 3 months ended
|
|
|
For the 6 months ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2024
|
|
|
2023
|
|
|
2024
|
|
|
2023
|
|
(dollars in thousands)
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net premiums earned
|
|
|
5,143 |
|
|
|
3,524 |
|
|
|
9,803 |
|
|
|
6,715 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses and loss adjustment expenses
|
|
|
2,894 |
|
|
|
2,359 |
|
|
|
5,852 |
|
|
|
4,192 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Policy acquisition costs and other operating expenses
|
|
|
2,583 |
|
|
|
2,046 |
|
|
|
4,923 |
|
|
|
4,241 |
|
Lease expense
|
|
|
53 |
|
|
|
52 |
|
|
|
105 |
|
|
|
106 |
|
Sublease (income)
|
|
|
(43 |
) |
|
|
(41 |
) |
|
|
(86 |
) |
|
|
(82 |
) |
Depreciation and amortization (excl. real estate) 1
|
|
|
67 |
|
|
|
67 |
|
|
|
134 |
|
|
|
134 |
|
Service fee and other (income) expense
|
|
|
(16 |
) |
|
|
(16 |
) |
|
|
(18 |
) |
|
|
(110 |
) |
Underwriting expenses
|
|
|
2,643 |
|
|
|
2,107 |
|
|
|
5,058 |
|
|
|
4,288 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underwriting gain (loss)
|
|
|
(395 |
) |
|
|
(942 |
) |
|
|
(1,107 |
) |
|
|
(1,765 |
) |
Net investment income
|
|
|
411 |
|
|
|
366 |
|
|
|
805 |
|
|
|
725 |
|
Operating income (loss) before income taxes
|
|
|
17 |
|
|
|
(576 |
) |
|
|
(302 |
) |
|
|
(1,040 |
) |
Net realized and unrealized gains (losses) 2
|
|
|
(367 |
) |
|
|
147 |
|
|
|
8 |
|
|
|
478 |
|
Income (loss) from real estate operations 3
|
|
|
(11 |
) |
|
|
(14 |
) |
|
|
(24 |
) |
|
|
(84 |
) |
Income (loss) before income taxes
|
|
|
(361 |
) |
|
|
(442 |
) |
|
|
(318 |
) |
|
|
(646 |
) |
Income tax expense (benefit)
|
|
|
13 |
|
|
|
11 |
|
|
|
37 |
|
|
|
(30 |
) |
Net income (loss)
|
|
|
(374 |
) |
|
|
(454 |
) |
|
|
(355 |
) |
|
|
(616 |
) |
Net loss (gain) attributable to noncontrolling interest
|
|
|
1 |
|
|
|
(6 |
) |
|
|
2 |
|
|
|
(6 |
) |
Net income (loss) attributable to Forge Group, Inc.
|
|
|
(373 |
) |
|
|
(460 |
) |
|
|
(353 |
) |
|
|
(622 |
) |
Footnotes
1.
|
Total depreciation and amortization minus depreciation and amortization attributable to real estate.
|
2.
|
Net realized investment gains (losses) plus net unrealized gains (losses) on equity securities.
|
3.
|
Income from real estate held for investment minus (i) depreciation of real estate held for the production of income, (ii) amortization of leases in place, (iii) amortization of finance costs, (iv) real estate operating expenses, and (v) interest expense.
|
Exhibit 2: Adjusted Book Value and Tangible Book Value Per Common Share Equivalent
“Adjusted book value per common share equivalent” and “adjusted tangible book value per common share equivalent” are non-GAAP metrics and are not intended to be an expression of the Company’s opinion of the value of its common stock.
|
|
As of
|
|
|
|
June 30,
|
|
|
December 31,
|
|
|
June 30,
|
|
(dollars in thousands except for per-share items)
|
|
2024
|
|
|
2023
|
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of Numerators
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
|
45,391 |
|
|
|
45,874 |
|
|
|
45,504 |
|
Less: Noncontrolling interest
|
|
|
(699 |
) |
|
|
(700 |
) |
|
|
(713 |
) |
GAAP book value
|
|
|
44,693 |
|
|
|
45,174 |
|
|
|
44,791 |
|
Less: Accumulated other comprehensive (income) loss (AOCI)
|
|
|
2,110 |
|
|
|
2,152 |
|
|
|
2,644 |
|
GAAP book value excluding AOCI
|
|
|
46,803 |
|
|
|
47,326 |
|
|
|
47,434 |
|
Add: Theoretical proceeds from exercise of options 1
|
|
|
1,276 |
|
|
|
1,228 |
|
|
|
2,014 |
|
Add: Non-GAAP real estate adjustments, net 2
|
|
|
4,211 |
|
|
|
3,828 |
|
|
|
3,834 |
|
Adjusted book value (numerator)
|
|
|
52,290 |
|
|
|
52,383 |
|
|
|
53,283 |
|
Less: Goodwill and other intangibles
|
|
|
(5,942 |
) |
|
|
(6,076 |
) |
|
|
(6,210 |
) |
Adjusted tangible book value (numerator)
|
|
|
46,348 |
|
|
|
46,307 |
|
|
|
47,073 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of Denominator
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares outstanding
|
|
|
2,044 |
|
|
|
2,050 |
|
|
|
2,050 |
|
Common shares issuable upon conversion of Series A Preferred Stock 3
|
|
|
458 |
|
|
|
458 |
|
|
|
458 |
|
Common shares underlying restricted stock awards outstanding 4
|
|
|
20 |
|
|
|
23 |
|
|
|
30 |
|
Common shares issuable upon exercise of outstanding options 5
|
|
|
125 |
|
|
|
120 |
|
|
|
200 |
|
Common share equivalents (denominator)
|
|
|
2,647 |
|
|
|
2,652 |
|
|
|
2,738 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Measures
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted book value per common share equivalent 6
|
|
$ |
19.76 |
|
|
$ |
19.76 |
|
|
$ |
19.46 |
|
Adjusted tangible book value per common share equivalent 7
|
|
$ |
17.51 |
|
|
$ |
17.46 |
|
|
$ |
17.19 |
|
Footnotes
1.
|
Proceeds that would be received from the exercise of outstanding stock options (vested and unvested).
|
2.
|
Intended to represent Company’s interest in real estate investments at historical cost. See Exhibit 3.
|
3.
|
Common shares issuable upon conversion of the Company’s Series A Preferred Stock.
|
4.
|
Common shares underlying restricted stock awards outstanding (unvested).
|
5.
|
Common shares underlying outstanding stock options (vested and unvested).
|
6.
|
Adjusted book value (numerator) divided by common share equivalents (denominator).
|
7.
|
Adjusted tangible book value (numerator) divided by common share equivalents (denominator).
|
Exhibit 3: Non-GAAP Real Estate Adjustments
The “Non-GAAP Real Estate Adjustments” contains certain non-GAAP adjustments and metrics intended to present the value of the Company’s interest in its real estate investments at historical cost. These non-GAAP adjustments and metrics are not intended to be an expression of the Company’s opinion of the value of its real estate investments.
|
|
As of
|
|
|
|
June 30,
|
|
|
December 31,
|
|
|
June 30,
|
|
(dollars in thousands) |
|
2024
|
|
|
2023
|
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate held for the production of income, net
|
|
|
29,237 |
|
|
|
29,543 |
|
|
|
29,849 |
|
Add: Leases in place
|
|
|
2,407 |
|
|
|
2,512 |
|
|
|
2,635 |
|
Add: Deferred rent 1
|
|
|
2,400 |
|
|
|
2,356 |
|
|
|
2,294 |
|
Real assets (GAAP)
|
|
|
34,044 |
|
|
|
34,411 |
|
|
|
34,779 |
|
Add: Accumulated depreciation 2
|
|
|
6,232 |
|
|
|
5,926 |
|
|
|
5,620 |
|
Add: Accumulated amortization 3
|
|
|
1,757 |
|
|
|
1,652 |
|
|
|
1,950 |
|
Less: Deferred rent
|
|
|
(2,400 |
) |
|
|
(2,356 |
) |
|
|
(2,294 |
) |
Real assets (Non-GAAP) 4
|
|
|
39,633 |
|
|
|
39,633 |
|
|
|
40,054 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes payable, net (GAAP)
|
|
|
25,977 |
|
|
|
26,325 |
|
|
|
26,650 |
|
Add: Unamortized finance costs
|
|
|
1,027 |
|
|
|
1,074 |
|
|
|
1,121 |
|
Notes payable (Non-GAAP) 5
|
|
|
27,004 |
|
|
|
27,399 |
|
|
|
27,771 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net real assets (Non-GAAP) 6
|
|
|
12,629 |
|
|
|
12,234 |
|
|
|
12,283 |
|
Less: Net real assets (GAAP) 7
|
|
|
(8,067 |
) |
|
|
(8,086 |
) |
|
|
(8,129 |
) |
Non-GAAP adjustments 8
|
|
|
4,562 |
|
|
|
4,148 |
|
|
|
4,154 |
|
Less: Noncontrolling interest 9
|
|
|
(351 |
) |
|
|
(319 |
) |
|
|
(320 |
) |
Non-GAAP real estate adjustments, net
|
|
|
4,211 |
|
|
|
3,828 |
|
|
|
3,834 |
|
Footnotes
1.
|
Cumulative difference between actual cash receipts and rental income recorded on a straight-line basis.
|
2.
|
Accumulated depreciation on real estate held for the production of income.
|
3.
|
Accumulated amortization on leases in place.
|
4.
|
Approximation of total cost basis of real estate investments.
|
5.
|
Gross principal amount of notes payable.
|
6.
|
Real assets (non-GAAP) minus notes payable (non-GAAP).
|
7.
|
Real assets (GAAP) minus notes payable (GAAP).
|
8.
|
Difference between non-GAAP and GAAP net real assets
|
9.
|
Portion of non-GAAP adjustments attributable to 7.7% owned by operating partner.
|
Exhibit 4: Consolidated Balance Sheets
Forge Group, Inc. and Subsidiaries
|
|
Consolidated Balance Sheets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of
|
|
|
|
June 30,
|
|
|
December 31,
|
|
|
June 30,
|
|
|
|
2024
|
|
|
2023
|
|
|
2023
|
|
(dollars in thousands)
|
|
(unaudited)
|
|
|
(audited)
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments and cash:
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed maturity securities, at fair value
|
|
$ |
27,134 |
|
|
$ |
27,970 |
|
|
$ |
27,108 |
|
Redeemable preferred stock, at fair value
|
|
|
1,392 |
|
|
|
1,363 |
|
|
|
1,368 |
|
Perpetual preferred stock, at fair value
|
|
|
562 |
|
|
|
562 |
|
|
|
529 |
|
Common stock, at fair value
|
|
|
2,010 |
|
|
|
1,691 |
|
|
|
2,431 |
|
Other invested assets
|
|
|
3,809 |
|
|
|
4,524 |
|
|
|
4,930 |
|
Real estate held for the production of income, net
|
|
|
29,237 |
|
|
|
29,543 |
|
|
|
29,849 |
|
Cash and cash equivalents
|
|
|
9,236 |
|
|
|
6,968 |
|
|
|
5,659 |
|
Restricted cash
|
|
|
230 |
|
|
|
226 |
|
|
|
220 |
|
Total investments and cash
|
|
|
73,610 |
|
|
|
72,848 |
|
|
|
72,094 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued investment income
|
|
|
298 |
|
|
|
297 |
|
|
|
238 |
|
Premium and reinsurance balances receivable
|
|
|
7,430 |
|
|
|
8,256 |
|
|
|
6,141 |
|
Ceded unearned premiums
|
|
|
104 |
|
|
|
71 |
|
|
|
95 |
|
Reinsurance balances recoverable on unpaid losses
|
|
|
1,038 |
|
|
|
690 |
|
|
|
1,266 |
|
Deferred policy acquisition costs, net
|
|
|
351 |
|
|
|
298 |
|
|
|
254 |
|
Deferred rent
|
|
|
2,400 |
|
|
|
2,356 |
|
|
|
2,294 |
|
Leases in place
|
|
|
2,407 |
|
|
|
2,512 |
|
|
|
2,635 |
|
Right-of-use asset, net
|
|
|
96 |
|
|
|
143 |
|
|
|
146 |
|
Goodwill and other intangibles
|
|
|
5,942 |
|
|
|
6,076 |
|
|
|
6,210 |
|
Other assets
|
|
|
1,952 |
|
|
|
2,006 |
|
|
|
1,783 |
|
Total assets
|
|
$ |
95,629 |
|
|
$ |
95,551 |
|
|
$ |
93,157 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Unpaid losses and loss adjustment expenses
|
|
$ |
10,843 |
|
|
$ |
8,426 |
|
|
$ |
9,936 |
|
Unearned premium
|
|
|
10,781 |
|
|
|
10,283 |
|
|
|
7,530 |
|
Reinsurance balances payable
|
|
|
13 |
|
|
|
36 |
|
|
|
- |
|
Accrued expenses
|
|
|
1,293 |
|
|
|
2,437 |
|
|
|
1,691 |
|
Notes payable
|
|
|
25,977 |
|
|
|
26,325 |
|
|
|
26,650 |
|
Defined benefit plan unfunded liability
|
|
|
339 |
|
|
|
333 |
|
|
|
497 |
|
Operating lease liability, net
|
|
|
434 |
|
|
|
729 |
|
|
|
802 |
|
Other liabilities
|
|
|
559 |
|
|
|
1,108 |
|
|
|
547 |
|
Total liabilities
|
|
|
50,237 |
|
|
|
49,676 |
|
|
|
47,653 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mezzanine Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock, without par value 1
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Additional paid-in capital (Preferred Stock)
|
|
|
5,227 |
|
|
|
5,227 |
|
|
|
5,227 |
|
Stockholders' Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock, $0.01 par value 2
|
|
|
21 |
|
|
|
21 |
|
|
|
21 |
|
Treasury stock
|
|
|
(210 |
) |
|
|
(70 |
) |
|
|
- |
|
Additional paid-in capital
|
|
|
16,604 |
|
|
|
16,604 |
|
|
|
16,426 |
|
Unearned employee stock ownership plan shares
|
|
|
(1,624 |
) |
|
|
(1,827 |
) |
|
|
(1,827 |
) |
Retained earnings
|
|
|
26,785 |
|
|
|
27,372 |
|
|
|
27,587 |
|
Accumulated other comprehensive income (loss), net of tax
|
|
|
(2,110 |
) |
|
|
(2,152 |
) |
|
|
(2,644 |
) |
Noncontrolling interest
|
|
|
699 |
|
|
|
700 |
|
|
|
713 |
|
Total equity
|
|
|
45,391 |
|
|
|
45,874 |
|
|
|
45,504 |
|
Total liabilities and equity
|
|
$ |
95,629 |
|
|
$ |
95,551 |
|
|
$ |
93,157 |
|
Footnotes
1.
|
1,000,000 shares authorized, 550,000 shares issued and outstanding.
|
2.
|
10,000,000 shares authorized, 2,044,148, 2,050,232, and 2,050,000 issued and outstanding, respectively.
|
Exhibit 5: Consolidated Statements of Earnings and Comprehensive Earnings
Forge Group, Inc. and Subsidiaries
|
|
Consolidated Statements of Earnings and Comprehensive Earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the 3 months ended
|
|
|
For the 6 months ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2024
|
|
|
2023
|
|
|
2024
|
|
|
2023
|
|
(dollars in thousands)
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net premiums earned
|
|
$ |
5,143 |
|
|
$ |
3,524 |
|
|
$ |
9,803 |
|
|
$ |
6,715 |
|
Income from real estate held for investment
|
|
|
546 |
|
|
|
543 |
|
|
|
1,102 |
|
|
|
1,112 |
|
Net investment income
|
|
|
411 |
|
|
|
366 |
|
|
|
805 |
|
|
|
725 |
|
Net realized investment gains
|
|
|
(344 |
) |
|
|
(89 |
) |
|
|
(339 |
) |
|
|
(126 |
) |
Net unrealized gains on equity securities
|
|
|
(23 |
) |
|
|
236 |
|
|
|
347 |
|
|
|
604 |
|
Service fee and other income (expense)
|
|
|
16 |
|
|
|
16 |
|
|
|
18 |
|
|
|
110 |
|
Total revenues
|
|
|
5,750 |
|
|
|
4,596 |
|
|
|
11,735 |
|
|
|
9,140 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses and loss adjustment expenses
|
|
|
2,894 |
|
|
|
2,359 |
|
|
|
5,852 |
|
|
|
4,192 |
|
Policy acquisition costs and other operating expenses
|
|
|
2,583 |
|
|
|
2,046 |
|
|
|
4,923 |
|
|
|
4,241 |
|
Depreciation and amortization
|
|
|
296 |
|
|
|
309 |
|
|
|
592 |
|
|
|
644 |
|
Real estate operating expense
|
|
|
44 |
|
|
|
23 |
|
|
|
99 |
|
|
|
102 |
|
Interest expense on debt
|
|
|
284 |
|
|
|
291 |
|
|
|
568 |
|
|
|
583 |
|
Lease expense
|
|
|
53 |
|
|
|
52 |
|
|
|
105 |
|
|
|
106 |
|
Sublease income
|
|
|
(43 |
) |
|
|
(41 |
) |
|
|
(86 |
) |
|
|
(82 |
) |
Total expenses
|
|
|
6,111 |
|
|
|
5,039 |
|
|
|
12,053 |
|
|
|
9,786 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
|
|
(361 |
) |
|
|
(442 |
) |
|
|
(318 |
) |
|
|
(646 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense (benefit)
|
|
|
13 |
|
|
|
11 |
|
|
|
37 |
|
|
|
(30 |
) |
Net income (loss)
|
|
|
(374 |
) |
|
|
(454 |
) |
|
|
(355 |
) |
|
|
(616 |
) |
Net loss (gain) attributable to noncontrolling interest
|
|
|
1 |
|
|
|
(6 |
) |
|
|
2 |
|
|
|
(6 |
) |
Net income (loss) attributable to Forge Group, Inc.
|
|
|
(373 |
) |
|
|
(460 |
) |
|
|
(353 |
) |
|
|
(622 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gains (losses) on AFS securities, net of tax
|
|
|
(9 |
) |
|
|
(131 |
) |
|
|
6 |
|
|
|
95 |
|
Reclassification adjustment for losses (gains) included in net income
|
|
|
38 |
|
|
|
73 |
|
|
|
36 |
|
|
|
72 |
|
Total other comprehensive income (loss), net of tax
|
|
|
29 |
|
|
|
(58 |
) |
|
|
42 |
|
|
|
166 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income (loss)
|
|
|
(345 |
) |
|
|
(512 |
) |
|
|
(313 |
) |
|
|
(450 |
) |
Forge (PK) (USOTC:FIGP)
과거 데이터 주식 차트
부터 11월(11) 2024 으로 12월(12) 2024
Forge (PK) (USOTC:FIGP)
과거 데이터 주식 차트
부터 12월(12) 2023 으로 12월(12) 2024