United States securities and exchange commission logo
November 3, 2021
Blythe Masters
Chief Executive Officer
Motive Capital Corp
7 World Trade Center
250 Greenwich Street, FL 47
New York, NY 10007
Re: Motive Capital Corp
Registration
Statement on Form S-4
Filed October 7,
2021
File No. 333-260104
Dear Mr. Masters:
We have reviewed your registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe our comments apply to your
facts and
circumstances or do not believe an amendment is appropriate, please tell
us why in your
response.
After reviewing any amendment to your registration statement and
the information you
provide in response to these comments, we may have additional comments.
Registration Statement on Form S-4
Cover Page
1. Please revise the cover
page and the question and answer section to disclose the cash
value of the securities
that (i) the public shareholders, (ii) the public warrantholders, (iii)
the Sponsor and (iv)
the holders of Forge capital stock will receive in connection with the
Domestication and
Business Combination. Also, disclose here the cost per share in the
PIPE Investment and the
aggregate cost of the PIPE Investment as well as the cost per
Forward Purchase Unit
and the aggregate cost of the Forward Purchase Units. In addition,
please disclose here
the voting power of (i) the public shareholders, (ii) the Sponsor, (iii)
the holders of Forge
capital stock, (iv) the PIPE Investors and (v) the A&R FPA Investors
following the Business
Combination.
Blythe Masters
FirstName LastNameBlythe Masters
Motive Capital Corp
Comapany 3,
November NameMotive
2021 Capital Corp
November
Page 2 3, 2021 Page 2
FirstName LastName
2. We note that in connection with (or concurrent with) the business
combination, the proxy
statement/prospectus references several potential distributions and
trading activities. As
such, please provide us with your detailed analysis of how you intend
to structure/conduct
such transactions and purchases so as to comply with the trading
prohibitions of Rules 101
and 102 of Regulation M under the Exchange Act.
Questions and Answers
Questions and Answer about the Merger, page 3
3. Please add a question and answer or expand your disclosure on page 17
to include
disclosure regarding the ownership of the public shareholders, the
PIPE Investors, the
A&R FPA Investors, the Sponsor and its affiliates and the Forge equity
holders of the
combined company after the merger that shows a range of redemption
scenarios, including
a maximum, minimum and interim redemption scenario. In this regard, we
note your
disclosure on page 17 shows the ownership for the minimum and maximum
redemption
scenarios. In addition, please disclose the Sponsor's total potential
ownership interest in
the combined company assuming exercise and conversion of all
securities as well as the
approximate dollar value of the interest based on the transaction
value and recent trading
prices as compared to the price paid, and disclose the A&R FPA
Investors total potential
ownership interest in the combined company assuming exercise and
conversion of all
securities.
4. Please add a question and answer that shows the potential impact of
redemptions on the
per share value of the shares owned by non-redeeming shareholders by
including a
sensitivity analysis showing a range of redemption scenarios,
including minimum,
maximum and interim redemption levels.
5. Please add a question and answer that quantifies the value of warrants
based on recent
trading prices that may be retained by redeeming stockholders assuming
maximum
redemptions and identify any material resulting risks.
6. Please add a question and answer that addresses the material risks to
public warrant
holders, including those arising from differences between private and
public warrants.
Clarify in this section whether recent common stock trading prices
exceed the threshold
that would allow the company to redeem public warrants, and clearly
explain the steps if
any, the combined company will take to notify all shareholders,
including beneficial
owners, regarding when the warrants become eligible for redemption.
7. Please add a question and answer that addresses the consideration that
Forge Global, Inc.
equity holders will receive for vested and unvested shares of issued
and outstanding
common and preferred stock, for vested and unvested Forge Stock
Options and for vested
and unvested Forge Warrants.
8. Please add a question and answer that identifies the Minimum Cash
Condition and the
maximum percentage of public shares that may be redeemed such that the
remaining
funds held in the trust account are sufficient to satisfy the Minimum
Available Cash
Blythe Masters
FirstName LastNameBlythe Masters
Motive Capital Corp
Comapany 3,
November NameMotive
2021 Capital Corp
November
Page 3 3, 2021 Page 3
FirstName LastName
Condition.
9. Please and a question and answer that discloses the deferred
underwriting fees payable to
UBS Investment Bank and J.P. Morgan Securities LLC that are contingent
upon the the
Business Combination as well as the fees to the Placement Agents for
the PIPE
Investment that are contingent upon the Business Combination. In
addition, please add a
risk factor that addresses the material risks to unaffiliated
investors of taking the company
public through a merger rather than an underwritten offering. These
risks could include
the absence of due diligence conducted by an underwriter that would be
subject to liability
for any material misstatements or omission in a registration
statement.
Who will manage New Forge, page 4
10. Please expand this question and answer to disclose all of the
directors and officers that
will manage New Forge.
Do any of Motive's directors or officers have interests that may conflict with
the interests of
Motive's shareholders, page 5
11. Please expand your disclosure here both to quantify the aggregate
dollar amount and to
describe the nature of what the Sponsor, the directors and the
officers have at risk that
depends upon completion of a business combination, including the
current value of
securities held, loans extended, fees due, and out-of-pocket expenses
for which they are
waiting for reimbursement. In addition, address the fiduciary or
contractual obligations to
other entities. In this regard, we note that you identify the other
entities to which the
Motive officers and directors have fiduciary duties or contractual
obligations on page
234. In addition, please highlight the risk that the Sponsor will
benefit from the
completion of a business combination and may be incentivized to
complete an acquisition
of a less favorable target company or on terms less favorable to
shareholders rather than
liquidate. Also, clarify whether the Sponsor and its affiliates can
earn a positive rate of
return on their investment, even if other SPAC shareholders experience
a negative rate of
return in the post-business combination company.
12. We note that Motive's amended and restated articles of association
waived the corporate
opportunities doctrine. Please address this potential conflict of
interest and whether it
impacted your search for an acquisition target.
Will I experience dilution as a result of the Business Combination, page 5
13. Please expand this question and answer to disclose all possible
sources and the extent of
dilution that shareholders who elect not to redeem their shares may
experience in
connection with the business combination and the impact of each
significant source of
dilution, including the amount of equity held by the Sponsors,
officers and directors, and
all convertible securities, including warrants retained by redeeming
shareholders, at each
of the redemption levels detailed in your sensitivity analysis,
including any needed
assumptions. Also, disclose the effective underwriting fee on a
percentage basis for
Blythe Masters
FirstName LastNameBlythe Masters
Motive Capital Corp
Comapany 3,
November NameMotive
2021 Capital Corp
November
Page 4 3, 2021 Page 4
FirstName LastName
shares at each redemption level presented in your sensitivity
analysis.
Summary of the Proxy Statement/Prospectus
The Proposals to be Submitted at the Extraordinary Meeting, page 13
14. Please disclose here or in the Questions and Answers section a summary
of each of the
separately presented proposals that comprise the Non-Binding
Organizational Documents
Proposals.
Motive's Board of Directors' Reasons for the Approval of the Business
Combination, page 14
15. Please balance the disclosure in the fourth bullet point on page 15 by
disclosing in the
Summary of the Proxy Statement/Prospectus section Forge's net losses
for the most
recently completed fiscal year and the six months ended June 30, 2021.
16. We note that one of the positive factors the board of directors
considered was Forge's
potential for growth including engaging in acquisitions. Please
clarify whether Forge
currently has any understandings, agreements or plans related to
specific targets.
Opinion of the Financial Advisor to Motive's Board of Directors, page 16
17. We note that Houlihan Lokey provided a fairness opinion. Please revise
to provide a clear
explanation as to the reason why the fairness opinion was obtained and
please state
that the fairness opinion addresses fairness to all shareholders as a
group as opposed to
only those shareholders unaffiliated with the sponsor or its
affiliates.
Other Agreements, page 17
18. Please expand this section to include summaries of the material terms
of each agreement.
Organizational Structure, page 18
19. Please revise to show VIEs in China, if any. In addition, please
revise the diagram on
page 19 to show the ownership of the A&R FPA Investors. Also, please
disclose the
number of Public Warrants, Private Warrants, Forward Purchase Warrants
held by the
Public Shareholders, the Sponsor, affiliates and Motive's Officers and
Directors, the PIPE
Investors and the A&R FPA Investors as well as the the number of
convertible securities
held by the Forge Holders in the footnotes to the diagram on page 19.
Regulatory Matters, page 19
20. Your disclosure on page 19 that "[o]n October 1, 2021, Forge and
Motive filed the
required forms under the HSR Act with respect to the Business
Combination with the . . .
FTC and the . . . Antitrust Division" appears to conflict with your
disclosure on page 119
that "[o]n March 25, 2021, Forge and Motive filed the required forms
under the HSR Act
with respect to the Business Combination with the Antitrust Division
and the FTC."
Please revise for clarity and consistency.
Blythe Masters
FirstName LastNameBlythe Masters
Motive Capital Corp
Comapany 3,
November NameMotive
2021 Capital Corp
November
Page 5 3, 2021 Page 5
FirstName LastName
Risk Factors
Risks Related to the Operation of our Business
Our customers may encounter difficulties with investing through our
platform..., page 37
21. We note that you reference using insurance coverage to cover the
replacement cost of
securities in the event that a transaction fails to settle, that you
mention that commissions
may be waived in a failed settlement situation in the next risk factor
on this page, and
that you reference a clearing service performance obligation on page
F-49. Please tell us
what consideration you have given to a potential obligation to
register as a clearing
agency, based on these disclosures.
We have been or are involved in, and may in the future become involved in,
disputes or
litigation, page 37
22. We note your disclosure that Forge has been and is involved in
disputes and litigation
matters between customers with respect to transactions on its
platform. If material, please
revise to include a brief description and quantitative information
regarding such disputes
and litigation matters.
We have expanded and may continue to expand into international markets, page 45
23. We note your disclosure on page 45 that Forge operates and serves
investors in foreign
jurisdictions. Please identify these jurisdictions here and in
Information About Forge
section of your registration statement.
Risks Relating to the Domestication
The Domestication may result in adverse tax consequences for holders of Motive
Ordinary
Shares..., page 64
24. Please expand your disclosure in this section to more fully describe
the tax consequences
of the transaction and the related risks.
Unaudited Pro Forma Condensed Combined Financial Information
Note 3 - Adjustments to Unaudited Pro Forma Condensed Combined Balance Sheet,
page 76
25. We note adjustment (N) to your unaudited pro forma condensed combined
balance sheet
reflects a change in classification of Forge preferred stock warrants
from liability to
equity. Please tell us how you determined these warrants to purchase
shares of
domestication common stock should be classified as equity.
Specifically, explain the
change in terms and the impact on the accounting determination. Please
provide any
accounting guidance considered in your accounting determination.
Note 5 - Net Income (Loss) per Share, page 78
26. Please tell us and revise to explain the reason(s) for the pro forma
adjustment related to
interest expense on convertible notes for the twelve months ended
December 31, 2020 as
Blythe Masters
FirstName LastNameBlythe Masters
Motive Capital Corp
Comapany 3,
November NameMotive
2021 Capital Corp
November
Page 6 3, 2021 Page 6
FirstName LastName
noted on page 80. Additionally, please tell us how this adjustment is
related to adjustment
(bb) in your pro forma condensed combined statement of operations for
the year ended
December 31, 2020.
Structure of the Merger, page 92
27. Please revise your merger-related disclosure throughout your filing to
more clearly state
that Motive legally acquired Forge.
Proposal No. 1 - The Business Combination Proposal
Other Agreements
Forge Shareholder Support Agreement, page 104
28. Please disclose here, if true, that the Forge Shareholders have
already approved the
Merger and the transactions contemplated by the Merger Agreement. In
this regard, we
note your disclosure on page 6. In addition, please identify the RRA
Holders as well as
the aggregate number of shares of Domestication Common Stock that the
RRA Holders
may offer pursuant to the A&R Registration Rights Agreement.
Certain Projected Financial Information, page 107
29. We note that the projections were based on numerous variables and
assumptions, but that
you appear to have only listed two estimates and assumptions. Please
revise to provide,
and quantify where applicable, each of the variables and assumptions
used for the
projections.
Proposals No. 3A Through 3F - The Non-Binding Organizational Documents
Proposals, page
123
30. Your disclosure on pages 124, 129,130 and 242 that the Proposed
Charter provides that
the federal district courts of the United States will be the exclusive
forum for the
resolutions of any complaint asserting a cause of action under the
Securities Act appears
to be inconsistent with your disclosure on page 66 that the Proposed
Charter's exclusive
forum provision will not apply to suits brought to enforce a duty or
liability created by the
Securities Act or the Exchange Act. In addition, the Proposed Charter
in Annex B does
not appear to include an exclusive forum provision. Please revise for
clarity and
consistency. Also, if the provision does apply to Securities Act
claims, please revise your
disclosure to state that investors cannot waive compliance with the
federal securities laws
and the rules and regulations thereunder. If the provision does not
apply to actions arising
under the Securities Act or Exchange Act, please ensure that the
exclusive forum
provision in the governing documents states this clearly, or tell us
how you will inform
investors in future filings that the provision does not apply to any
actions arising under the
Securities Act or the Exchange Act. In this regard, we note that the
Proposed Charter in
Annex B does not include an exclusive forum provision and that Section
8 of Article VI of
the Proposed Bylaws identifies the federal district courts of the
United States as the sole
Blythe Masters
FirstName LastNameBlythe Masters
Motive Capital Corp
Comapany 3,
November NameMotive
2021 Capital Corp
November
Page 7 3, 2021 Page 7
FirstName LastName
and exclusive forum for any complaint asserting a cause of action
arising under the
Securities Act of 1933 but is silent as to the Exchange Act.
Non-Binding Organizational Documents Proposal 3C - Adoption of Supermajority
Vote
Requirement to Amend, page 125
31. Please briefly describe Articles V, VI, VII, VIII and IX of the
Proposed Charter here.
U.S. Federal Income Tax Considerations, page 144
32. We note your disclosure on page 6 that the Domestication is intended
to qualify as a
"reorganization" within in the meaning of Section 368(a) of the Code
and your disclosure
on page 96 that indicates that the Merger will qualify as a
"reorganization" within the
meaning of Section 368(a) of the Code. You do not appear to discuss
whether the
Domestication and Merger will qualify as such in this section. Please
revise or advise.
Information About Forge
Business Overview, page 167
33. Please clarify what you mean by your statement regarding a "defensible
moat" on page
167. In addition, we note your disclosure on page 168 that you have
facilitated over
19,000 trades in over 400 companies in 70 countries since your
founding. Please disclose
here, if true, that you were incorporated in 2012. Also, so that
investors understand the
importance of each of your four pillars, please disclose the
percentage of revenue you earn
from each.
34. Please revise to disclose the range of fees you charge for your
services, including the
factors that may impact the rates you charge. For example, we note
that your website
states that you typically charge a 5% commission for trades but that
participants may pay
a higher commission if the total dollar amount of the transaction is
less than your
minimum transaction amount of $100,000.
Forge's Differentiated Solutions
Forge Markets, page 171
35. Please disclose here your process for determining whether the
transactions on your
platform are exempt from registration pursuant to the Securities Act
and that the trades are
consistent with federal securities laws.
36. Please disclose whether you require a minimum transaction size. In
addition, please
disclose your data policies related to the transaction prices for
securities. In this regard,
we note your disclosure on page 38.
37. We note your disclosure on page 172 regarding the two main trade
structures enabled
through Forge Markets. Please provide us with a complete description
of the materials
terms and features of each structure, including the mechanics and
documentation of the
trades, the timing of settlement of the trades, the Securities Act
exemption relied upon to
Blythe Masters
FirstName LastNameBlythe Masters
Motive Capital Corp
Comapany 3,
November NameMotive
2021 Capital Corp
November
Page 8 3, 2021 Page 8
FirstName LastName
effect the trades, and how the trades are effected in light of share
transfer restrictions
(whether imposed by the issuer or arising under the federal securities
laws). In addition,
we note the disclosure regarding issuer approval. Please explain the
role of the issuer in
these trades, including whether such approval is required for all
trades.
Forge Trust, page 174
38. Please disclose here whether you have insurance for the assets you
custody, and describe
where and how you custody such assets, including whether you use
third-parties and the
resulting risks if you do. In addition, we note that you intend to
offer taxable custody
accounts in 2022 and private share lending accounts. Please disclose
the estimated costs
associated with these new products as well as when you intend to offer
the private share
lending product. Also, on page 176, we note your disclosure in your
Forge Data section
that you plan to make significant investments in research and
development, expand the
breadth and depth of your sales coverage both in the U.S. and
internationally, and seek
partnership opportunities with key players in the private market
ecosystem to unlock the
value afforded by using data and analytics. Please quantify the
investments you intend to
make in research and development, identify your current sales coverage
and plan of
operation for the development of the products and services you intend
to develop in this
pillar, including a timeline and estimated costs as well as steps you
have already taken to
seek partnership opportunities.
39. Please describe your private share lending program and discuss how you
will ensure that
the lending program complies with the federal securities laws.
Powerful Network Effect Afforded Through Our Four Pillars, page 179
40. We note your disclosure regarding your commercial partners Deutsche
Borse, Wells
Fargo, BNP Paribas, Certent, Astrella by AST, Temasek and Addepar.
Please describe
your relationship with each and, to the extent that you have
partnership agreements with
any, please describe the material terms of such partnerships and, if
material to your
business, file these as exhibits to your registration statement.
41. Please disclose the jurisdictions in which you currently operate and
the specific
jurisdictions in which you plan to expand-on-the-ground coverage and
any resulting risks.
In addition, we note your disclosure that plan to expand-on-the-ground
coverage in Asia
and that one of your offices is located in Hong Kong. To the extent
that you have or
intend to have operations in China, please consider Topic No. 10 of
the Division of
Corporation Finance's Disclosure Guidance as well as the July 30, 2021
Statement on
Investor Protection Related to Recent Developments in China on our
website and revise
the registration statement accordingly.
The State of Regulation, page 183
42. Please revise this section to provide disclosure regarding the rules,
regulations and laws of
the foreign jurisdictions in which you operate and how such rules,
regulations and laws
Blythe Masters
FirstName LastNameBlythe Masters
Motive Capital Corp
Comapany 3,
November NameMotive
2021 Capital Corp
November
Page 9 3, 2021 Page 9
FirstName LastName
impact Forge's operations.
Forge's Management's Discussion and Analysis of Financial Condition and Results
of Operations
Components of Results of Operations, page 192
43. We note disclosure on pages 196 and 200 that placement fees represent
85% and 57% of
your total revenues for the six-months ended June 30, 2021 and fiscal
year ended
December 31, 2020, respectively. We also note your disclosure on page
190 that the type
of client may influence your placement fee revenue and that the mix of
clients in any
given period will impact your overall take rate. Please revise to
disclose, in a tabular
format, placement fees earned and volume from institutions, individual
investors, and
private equity holders for each period presented and discuss any
trends. Please refer to
Item 303(a)(3) of Regulation S-K.
Results of Operations, page 195
44. We note disclosure of transaction-based expenses of $2.6 million and
$3.9 million
recorded as a reduction of revenues for the six-months ended June 30,
2021 and fiscal
year ended December 31, 2020, respectively. We also note disclosure on
page 193 that
these expenses represent fees incurred to support placement
activities. Noting you
disclose on page F-49 that you act as a principal in recognizing
revenues for your
placement fees, please tell us why you are netting transaction-based
expenses against
revenues and provide any guidance you considered in your accounting
determination.
Please refer to ASC 606-10-55-36 thru 55-40.
Description of New Forge Capital Stock
Warrants, page 240
45. Please disclose the material terms of the Public Warrants and the
Private Warrants of New
Forge, including the exclusive forum provision of in Section 9.3 of
the Warrant
Agreement filed as Exhibit 4.1 to the registration statement. In
addition, please include a
risk factor addressing the risks associated with the exclusive forum
provision. Also,
please disclose the material terms of the Forward Purchase Units.
Forge Global, Inc.
Note 12 - Share-Based Compensation
Nonrecourse Promissory Notes to Early Exercise Stock Options, page F-71
46. We note your disclosure here and on page F-76 that during fiscal years
ended December
31, 2020 and 2019, certain employees early exercised stock options in
exchange for
promissory notes, the transactions were accounted for as
modifications, and the
promissory notes were not recognized in their financial statements.
Please tell us all the
relevant facts and circumstances related to these transactions, more
clearly explain how
you accounted for them and provide any guidance considered in your
accounting
determination.
Blythe Masters
Motive Capital Corp
November 3, 2021
Page 10
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Refer to Rules 460 and 461 regarding requests for acceleration. Please
allow adequate
time for us to review any amendment prior to the requested effective date of
the registration
statement.
You may contact John Spitz at 202-551-3484 or Michael Volley at
202-551-3437 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Sonia Bednarowski at 202-551-3666 or Erin Purnell at 202-551-3454 with
any other
questions.
FirstName LastNameBlythe Masters Sincerely,
Comapany NameMotive Capital Corp
Division of
Corporation Finance
November 3, 2021 Page 10 Office of Finance
FirstName LastName