UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 20222023

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________ to ______________

Commission File No. 333-218248

FORGE INNOVATION DEVELOPMENT CORPCORP..

(Exact name of small business issuer as specified in its charter)

6280 Mission Blvd Unit 205

Jurupa Valley, CA 92509

(Address of principal executive offices)

(626) 986-4566

(Registrant’s telephone number, including area code)

N/A

( Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Securities registered pursuant to Section 12(b) of the Act: None

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

The number of shares of Common Stock, $0.0001 par value of the registrant outstanding aton August 12, 2022,14, 2023, was 45,621,86850,389,011.

FORGE INNOVATION DEVELOPMENT CORP.

QUARTERLY REPORT ON FORM 10-Q FOR THE PERIOD ENDED JUNEJune 30, 20222023

TABLE OF CONTENTS

PART I

ITEM 1. FINANCIAL STATEMENTS

FRORGE INNOVATION DEVELOPMENT CORP.

INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FORGE INNOVATION DEVELOPMENT CORP. AND SUBSIDIARYSUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

The accompanying notes are an integral part of these unaudited condensed financial statements.

FORGE INNOVATION DEVELOPMENT CORP. AND SUBSIDIARYSUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)(Unaudited)

The accompanying notes are an integral part of these unaudited condensed financial statements.

FORGE INNOVATION DEVELOPMENT CORP. AND SUBSIDIARYSUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)(Unaudited)

The accompanying notes are an integral part of these unaudited condensed financial statements.

FORGE INNOVATION DEVELOPMENT CORP. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)

The accompanying notes are an integral part of these unaudited condensed financial statements.

Forge Innovation Development Corp. and Subsidiary

Notes to the consolidated financial statements

Note 1 - Organization and Description of Business

Forge Innovation Development Corp. (individually “Forge” and collectively with its subsidiary, the “Company”), was initially incorporated in the State of Nevada on January 15, 2016 under the name of You-Go Enterprises, LLC (the “Company Predecessor”). On November 3, 2016, Forge amended its Articles of Incorporation in the State of Nevada to change the Company Predecessor’s name to Forge Innovation Development Corp. Our current principle executive office is located at 6280 Mission Blvd Unit 205, Jurupa Valley, CA 92509. The Company’s main business focuses on real estate development, land purchasing and selling and property management. The Company’s common stock is currently traded on OTCQB under the symbol “FGNV”.

On August 17, 2020, the Company established a wholly owned subsidiary, Forge Network Inc, in the State of California. As of June 30, 2022,2023, we have not generated any income from the subsidiary due to our business strategy adjustment. Meanwhile, we are also looking

On March 24, 2023, pursuant to an Asset Purchase Agreement between Forge Innovation Development Corp. (the “Company” or the “Buyer”) and Legend Investment Management, LLC (“Legend LLC” or the “Seller”), the Company acquired 77.3% of Legend LLC’s 66% ownership of Legend International Investment, LP (“Legend LP”). Legend LP owns 100% of Mission Marketplace; a grocery anchored shopping center (the “Property”) located at 6240 Mission Boulevard in Jurupa Valley, California. The Property contains two, one-story and one, two-story buildings containing 48,722 total square foot of gross leasable area situated on a 4.51acre site.

A relative of the President of the Company has significant influence of the Seller’s management, therefore the acquisition is being treated as a related party transaction. The Company acquired 51% interest of Legend LP from Legend LLC in exchanged for other business opportunities1,967,143 common stocks of the Company, valued at $0.70 per share for a total purchase price of $1,377,000, which could potentially increaseequals 51% of Legend LP’s approximate net value of $2,700,000 based on (1) the profitsProperty’s valuation appraisal report dated on February 20, 2023, (2) Legend LP’s net book value as of February 28, 2023, and (3) the loan agreement to Legend LP by a third-party lender effective on March 23, 2023. After the closing of the acquisition, the Company inwill own 51% of Legend LP and the yearSeller will own 15% of 2022.Legend LP.

Note 2 - Summary of Significant Accounting Policies

The accompanying unaudited consolidated interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s most recent Annual Financial Statements filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim period presented have been reflected herein. The results of operations for the interim period are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal period, as reported in the Form 10-K, have been omitted.

Use of Estimates

The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. In the opinion of management, all adjustments necessary in order to make the consolidated financial statements not misleading have been included. Actual results could differ from those estimates.

Revenue Recognition

On January 1, 2018, the Company adopted ASU 2014-09, Revenue from Contracts with Customers, using the modified retrospective approach, which applies the new standard to contracts that are not completed as of the date of adoption. Under the new standard, revenue is recognized upon transfer of control of promised goods and services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those goods and services.

Revenue streams that are scoped into ASU 2014-09 include:

Property management services: The Company deals directly with prospects and tenants for the owners of properties, which mainly includes marketing property, collecting rent, handling maintenance, repairing issues and responding to tenant complaints. The Company recognizes revenue as earned on a monthly basis and has concluded this is appropriate under the new standard.

Real estate sales: The Company accounts for the sale of real estate assets and any related gain recognition in accordance with the accounting guidance applicable to sales of real estate, which establishes standards for recognition of profit on all real estate sales transactions, other than retail land sales. The Company recognizes the sale, and associated gain or loss from the disposition, provided that the earnings process is complete, and the Company does not have significant continuing involvement. Subsequent to the adoption of the new standard, the Company may recognize a gain on a real estate disposition that previously did not qualify as a sale or for full profit recognition due to the timing of the transfer of control.

Business Combination

We allocate the fair value of purchase consideration to the tangible assets acquired, liabilities assumed and intangible assets acquired based on their estimated fair values. The excess of the fair values of these identifiable assets and liabilities over the fair value of purchase consideration is recorded as gain on bargain purchase included in other income on the consolidated statement of operations.

Non-controlling Interests

Non-controlling interests are portions of entities included in the consolidated financial statements that are not attributable to the Company. Non-controlling interests are identified separately from the Company’s stockholders’ equity and its net income (loss). Non-controlling interest equity balances include the non-controlling entity’s initial contribution at the date of the original acquisition, on-going contributions, distributions, and percentage share of earnings since inception. The non-controlling interests are calculated based on percentages of ownership.

Share-based compensation

The Company accounts for stock options and other equity-based compensation issued in accordance with ASC 718 “Stock Compensation”, which requires the measurement and recognition of compensation expense related to the fair value of equity-based compensation awards that are ultimately expected to vest. Stock-based compensation expense recognized includes the compensation cost for all share-based compensation payments granted to employees and nonemployees, net of estimated forfeitures, over the employees’ requisite service period or the non-employee performance period based on the grant date fair value estimated in accordance with the provisions of ASC 718. ASC 718 is also applied to awards modified, repurchased, or cancelled during the periods reported.

Recently Issued Accounting Pronouncements Not Yet Adopted

New Accounting Standards Adopted

In June 2016, the FASB issued ASU No. 2016-13, (FASB ASC Topic(Topic 326), Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments which amends the current accounting guidance and requires the use of the new forward-looking “expected loss” model, which requires all expected losses to be determined based on historical experience, current conditions and reasonable and supportable forecasts, rather than the “incurred loss” model. This guidance amends the accounting for credit losses for most financial assets and certain other instruments including trade and other receivables, held-to-maturity debt securities, loans and other instruments. The effective date ofCompany adopted ASU No. 2016-13 for smaller reporting companies is postponed to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company believes the adoption of ASU No. 2016-13 will not have a materialon January 1, 2023, which had no impact on its financial position and resultsthe beginning balance of operations.the Company’s balance as there was no receivable balances as of January 1, 2023.

The management does not believe that other than disclosed above, the recently issued but not yet adopted accounting pronouncements will have a material impact on its financial position results of operations or cash flows.

Note 3 - Going Concern

The accompanying consolidated financial statements were prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of obligations in the normal course of business. However, the Company has suffered recurring losses from operations since inception, resulting in an accumulated deficit of $1,571,5641,329,119 as of June 30, 2022.2023. These conditions raise substantial doubt about the ability of the Company to continue as a going concern.

In view of these matters, continuation as a going concern is dependent upon several factors, including the availability of debt or equity funding upon terms and conditions acceptable to the Company and ultimately achieving profitable operations. Management believes that the Company’s business plan provides it with an opportunity to continue as a going concern. However, management cannot provide assurance that the Company will meet its objectives and be able to continue in operation.

The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of Forge Innovation Development Corp. to continue as a going concern.

Note 4 – Real Estate Investments

Schedule of Real Estate Investments

Note 5 - Income Taxes

The Company has not recognized an income tax benefit for its operating losses generated based on uncertainties concerning its ability to generate taxable income in future periods. The tax benefit for the period presented is offset by a valuation allowance established against deferred tax assets arising from the net operating losses, the realization of which could not be considered more likely than not. In future periods, tax benefits and related deferred tax assets will be recognized when management considers realization of such amounts to be more likely than not.

For the sixthree months ended June 30, 20222023 and 2021,2022, the Company has incurred a net loss before taxof $389,129 and $9,340, respectively. For the six months ended June 30, 2023 and 2022, the Company incurred net income of $82,257 and net loss of $40,097 and $135,689, respectively. Net operation losses (“NOLs”) can be carried forever based on the 2017 Tax Cuts and Jobs Act. As of June 30, 20222023 and December 31, 2021,2022, deferred tax assets resulted from NOLs of approximately $418,248526,284 and $430,783420,873, respectively, which waswere fully off-set by valuation allowance reserved.

Note 56 - Related Party Transactions

During the six months ended June 30, 20222023 and 2021,2022, Mr. Liang, the Company’s CEO, paid operating expenses on behalf of the Company in the amount of $4,80914,370 and $1,0384,809, respectively. Repayment paid back to Mr. Liang totaled $14,337 and $nil for the six months ended June 30, 2023 and 2022. As of June 30, 20222023 and December 31, 2021,2022, the Company had payable balance to Mr. Liang in the amount of $4,80933 and $284nil, respectively.

On January 4, 2021, the Company purchased a vehicle from Patrick Liang, the President of the Company, for daily business operation, in the amount of $22,861, which equaled to the remaining vehicle loan balance with 7.11% interest rate annum for a period of 41 months and monthly installment of $558.

On July 15, 2022, the Company traded its Mazda vehicle with Longo Toyota to exchange a 2022 Toyota Mirai. The total purchase price for the 2022 Toyota Mirai is $84,406.12 and the loan amount is $48,295 by deducting the value of the trade-in Mazda vehicle and the rebate from the manufacturer. The monthly installment amount is $671 with 0% APR and a payment term of 72 months. Along with the transaction, we received a $15,000 Hydrogen subsidy card for the compensation for the purchase of new energy automobile. We recorded the subsidy as prepaid expense and unearned revenue to amortize on a straight-line basis over the estimate useful life of four years started on the purchase date. As a result of the trade-in transaction, $6,874 gain on disposal was recognized during the year ended December 31, 2022. During the six months ended June 30, 2023, the Company made loan payment of $4,231.

As of June 30, 2023 and December 31, 2022, $6,691 will be due within the next 12 months, outCompany had payable of $12,82461,500 loan balance.and $60,000, respectively, owing to Speedlight Consulting Services Inc. (“Speedlight”) for consulting services, which was owned by a previous director, appointed on November 2020 and resigned on January 11, 2023. The title ofamount is unsecure, non-interest-bearing and due on demand. During the car is under the process of transferring as ofsix months ended June 30, 2022.2023 and 2022, the Company incurred professional fee with Speedlight in the total amount of $4,500 and $19,600, respectively.

During the six months ended June 30, 2022 and 2021,2023, the Company incurred professional feereceived advance of $28,000 from Mr. Hua Guo, an officer of the Company for operating expenses. As of June 30, 2023, the amount payable to Mr. Hua Guo is $28,000. The amount is unsecure, non-interest-bearing and due on demand.

During the six months ended June 30, 2023 and 2022, the Company generated property management income of $45,000 and $40,000 from Legend. Pursuant to the agreement between Legend and the Company, the Company will manage the properties owned by Legend LP, which is called Mission Marketplace; a grocery anchored shopping center (the “Property”) located at 6240 Mission Boulevard in Jurupa Valley, California. The Property contains two, one-story and one, two-story buildings containing 48,722 total square foot of gross leasable area situated on a 4.51 acre site. The original monthly service charge was $5,000 which was amended to $10,000 per month in June 2022 due to Legend required additional management services for their properties. On November 17, 2022, the monthly service charge was amended to $15,000 with Speedlight Consulting Services Inc. whose owner, Mr. Hengjiang Pang, is our director starting November 9, 2020,one year term due to new tenants moving in and additional management services desired. On March 24, 2023, the Company acquired 51% interest in Legend LP from Legend LLC. Legend LP became a subsidiary of the Company.

As of June 30, 2023, Legend LP had loans payable in the total amount of $19,600 and $36,000709,500, respectively. Onowing to three entities under the control by the Mother of Mr. Liang, the President of the Company. The amount is unsecure, non-interest-bearing and due on demand. Of the total amount payable, $658,000 was assumed by acquisition of Legend LP. During the three months ended June 30, 2022 and December 31, 2021,2023, the Company had balance of due to Speedlight Consulting Services Inc in the amountreceived additional advance of $60,00061,500 from and repaid $63,00010,000, respectively. to these entities.

Note 7 - Leases

The Company leased an office space from a third party on December 2017 for four-year term with the expiration date on January 14, 2022. We determined the lease is an operating lease upon adoption of ASC 842 on January 1, 2019. Operating leases result in the recognition of ROU assets and lease liabilities on the balance sheet with 5.5% incremental borrowing rate used. During the six months ended June 30, 2022 and 2021, the Company recorded $nil and $32,214 rent expenses, respectively, and 0 lease payments made during the quarters. As of June 30, 2022 and December 31, 2021, the Company had $83,070 rent payable toward the lease agreement.

Note 8 – PPPCommercial and SBA Loans

On April 16, 2020, the Company received a Promissory Note (the “Note”) in the amount of $19,400 under the Paycheck Protection Program (the “PPP Loan”) through East West Bank (the “Lender”). The interest rate on this Note is a fixed rate of 1.00% per annum. According to SBA’s PPP Loan description, the PPP loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll). Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease. The Company received the forgiveness letter from SBA on March 10, 2021 and the Company recognized under other income in the amount of $19,400 for the six months ended June 30, 2021, accordingly.

On July 14, 2020, the Company entered into a loan agreement with the U.S. Small Business Administration (“SBA”), pursuant to which the Company obtained a loan in the amount of $14,000 with the term of 30 years and interest rate of 3.75%, payable monthly including principal and interest in the amount $69. As of June 30, 20222023 and December 31, 2021,2022, the outstanding loan balances were $12,91612,689 and $13,33012,689, respectively.

Upon acquisition of Legend LP, the Company assumed loans from Legend LP which is payable to a third party in the principal amount of $3,531,200 (the “Existing Loan”). On March 23, 2023, Legend LP extended the Existing Loan with the third party in a promissory note (the “Note”) at the interest rate of 3.73% per annum over “The Wall Street Journal Prime Rate,” as the rate may change from time to time. “The Wall Street Journal Prime Rate” is and shall mean the variable rate of interest, on a per annum basis, which is announced and/or published in the Money Rates section of The Wall Street Journal from time to time as its prime rate. The Note rate shall be redetermined whenever The Wall Street Journal Prime Rate Changes. The Note was formally signed and completed between Legend LP and the third-party lender on April 5, 2023. Pursuant to the Note, the loan is due March 20, 2025. During the three months ended June 30, 2023, the Company received additional amount of $362,250 from this third party which was paid directly to vendors for real estate investments by the creditor. The Company accrued interest and loan fee of $110,956 under the Note. During the three months ended June 30, 2023, the Company recognized interest expense and loan fee of $204,763. Interest payable of $39,835 was included in accounts payable and accrued liabilities as at June 30, 2023.

The Company also assumed a loan from a third party in the total amount of $386,091 upon acquisition of Legend LP, which is unsecured, non-interest-bearing and due one demand.

Note 8 – Acquisition of Legend

On March 23, 2023, the Company acquired 51% of partnership interest of Legend LP from Legend LLC, for issuance of 1,967,143 common stocks of the Company, with a total fair value of $1,377,000. Legend became a subsidiary of the Company. Legend LP owns 100% of Mission Marketplace: a grocery anchored shopping center located at 6240 Mission Boulevard in Jurupa Valley, California. The Property contains two, one-story and one, two-story buildings containing 48,722 total square foot of gross leasable area situated on a 4.51acre site. Legend LLC is a related party of the President of the Company. The acquisition has been accounted for as a business combination in accordance with ASC 805 Business Combinations.

The following table presents the allocation of the consideration transferred to the assets acquired and liabilities assumed based on their fair values.

Schedule of Assets Acquired and Liabilities Fair Values

Given the nature of Legend’s operations, substantially all revenue and expenses incurred at the beginning of the month. Considering the short period of 7 days from acquisition date to the quarter end, upon agreement with Legend LLC, the Company would start to consolidate the operation results of Legend from April 1, 2023. From April 1, 2023 to June 30, 2023, the Company recognized net loss of $314,147 from operations of Legend LP.

Note 9 – Stockholders’ Equity

As of June 30, 2023 and December 31, 2022, the Company had 50,389,011 and 45,621,868 shares of common stock issued and outstanding, respectively.

On March 24, 2023, the Company issued 1,967,143 shares of common stock to complete the acquisition of Legend (Note 8).

2023 Equity Incentive Plan

On June 15, 2023, the Board of the Company adopted an equity incentive plan to increase stockholder value and to advance the interests of the Company by furnishing a variety of economic incentives (“Incentives”) designed to attract, retain and motivate employees, certain key consultants and directors of the Company. Incentives may consist of opportunities to purchase or receive shares of Common Stock, $0.0001 par value, of the Company (“Common Stock”) on terms determined under this plan (the “2023 Equity Incentive Plan”). Under the 2023 Equity Incentive Plan, the Company can issue up to 5,000,000 shares of common stocks of the Company. Incentives may be granted in any one or a combination of: (a) incentive stock options and non-statutory stock options; (b) stock appreciation rights; (c) stock awards; (d) restricted stock; and (e) performance shares. Such incentives may be subject to vesting conditions determined by the Board of Directors at grant. The maximum term of options or other stock-based award granted is ten years or such lesser time as determined by the Board of Directors at the time of grant.

On June 26, 2023, the Company granted a total of 2,800,000 shares of common stock of the Company to four consultants for one-year consulting services, pursuant to the Company’s 2023 Equity Incentive Plan. The fair value of the shares granted was valued in the amount of $1,960,000 at the grant date. For the three months ended June 30, 2023, the Company recognized share-based compensation in the amount of $42,959. As of June 30, 2023, the deferred share-based compensation totaled $1,917,041.

As of June 30, 2023, the Company’s common stock issuable under the 2023 Equity Incentive Plan totaled 2,200,000 shares.

Note 10 - Commitment and Contingencies

On December 8, 2017, the Company entered into a lease agreement with Puente Hills Business Center II, L.P. (“PHBC-II”) for a lease term offorty-eight months months,, and which was expiredscheduled to expire on January 14, 2022, at monthly rent of $4,962, subject to increase. On or about September 29, 2020, the Company vacated the premises. On October 22, 2020, PHBC-II filed a lawsuit against the Company and its guarantor, Mr. Liang for default on rent payments. No judgment has been rendered as of June 30, 2022, and the case is in the pre-trial stage.Liang. The Company has retained legal counsel to address the matter and the Court has scheduledrescheduled the trial date onfrom January 31, 2023 to April 18, 2023, and then again rescheduled to June 14, 2023. On July 14, 2023, the Company reached a settlement with PHBC-II and agreed to pay rent of $100,000 and rent deposit of $13,953 became nonrefundable. During the three and six months ended June 30, 2023, the Company recognized settlement loss of $30,883 which is included in other expenses, net on the consolidated statement of operations. As of June 30, 2023, the Company had $100,000 in rent payable to PHBC-II, with $60,000 within one year and $40,000 due after one year. As of December 31, 2022, the Company had $83,070rent payabletoward the lease agreement.

Note 10 -11- Subsequent Event

TheOn July 14, 2023, the Company reached a settlement with PHBC-II and agreed to pay rent of $100,000 (the “Settlement”). Pursuant to the Settlement, the rent payment shall be paid in full with certain payment schedules on or before May 10, 2026. Once the $100,000has evaluated all other subsequent events throughbeen paid in full, the date these consolidated financial statements were issuedSettlement shall be considered to be satisfied and determine that there were no other subsequent events or transactions that require recognition or disclosures in the consolidated financial statements.Company shall not be obligated to make any further payments.

Item 2. Management’s Discussion and Analysis orand Plan of Operation

This 10−Q contains forward-looking statements. Our actual results could differ materially from those set forth as a result of general economic conditions and changes in the assumptions used in making such forward-looking statements. The following discussion and analysis of our financial condition and results of operations should be read together with the audited consolidated financial statements and accompanying notes and the other financial information appearing elsewhere in this report. The analysis set forth below is provided pursuant to applicable Securities and Exchange Commission regulations and is not intended to serve as a basis for projections of future events.

Overview

Forge Innovation Development Corp. is a development stage company and was incorporated in the State of Nevada in January 2016. The Company’s primary objective is commercial and residential land development, including the purchase and sale of real estate, targeting properties primarily in Southern California. We also intend to manage properties we own, and properties owned by unaffiliated third parties. Our activities will include securing acquisition rights to properties, obtaining zoning and other entitlements for the properties, securing financing for purchase of the properties, improving the properties’ infrastructure and amenities and selling the properties to homeowner and commercial owners for restaurants, offices and small businesses. Our first property acquisition was 29 acres in the city of Desert Hot Springs in Southern California. Due to problems with permits and adjacent landowners, rather than getting involved in protracted negotiations, the Company sold the property to an independent third party for a profit.

On August 17, 2020, the Company established a wholly owned subsidiary, Forge Network Inc, in the State of California. As of June 30, 2022,2023, we have not generated any income from the subsidiary due to our business strategy adjustment. Meanwhile, we are also looking

On March 24, 2023, pursuant to an Asset Purchase Agreement between Forge Innovation Development Corp. (the “Company” or the “Buyer”) and Legend Investment Management, LLC (“Legend LLC” or the “Seller”), the Company acquired 77.3% of Legend LLC’s 66% ownership of Legend International Investment, LP (“Legend LP”). Legend LP owns 100% of Mission Marketplace; a grocery anchored shopping center (the “Property”) located at 6240 Mission Boulevard in Jurupa Valley, California. The Property contains two, one-story and one, two-story buildings containing 48,722 total square foot of gross leasable area situated on a 4.51acre site.

A relative of the President of the Company has significant influence of the Seller’s management, therefore the acquisition is being treated as a related party transaction. The Company acquired 51% interest of Legend LP from Legend LLC in exchanged for other business opportunities1,967,143 common stocks of the Company, valued at $0.70 per share for a total purchase price of $1,377,000, which could potentially increaseequals 51% of Legend LP’s approximate net value of $2,700,000 based on (1) the profitsProperty’s valuation appraisal report dated on February 20, 2023, (2) Legend LP’s net book value as of February 28, 2023, and (3) the loan agreement to Legend LP by a third-party lender effective on March 23, 2023. After the closing of the acquisition, the Company inwill own 51% of Legend LP and the yearSeller will own 15% of 2022.Legend LP.

Results of Operationoperation for the three months ended June 30, 2022 and 20212023

For the three months ended June 30, 2022,2023, we had total revenue of $30,259,$133,010, as compared to $9,000$30,259 for the three months ended June 30, 2021,2022, an increase of $21,259$102,751 or 236%340%. The increase in total revenue was attributablemainly due to the newly signed Property Management Agreement (the “PMA”) withacquisition of Legend Investment International, LP (“Legend Investment”) on April 2, 2022. Pursuantin the first quarter of 2023 which generated rent income for the three months ended June 30, 2023.

For the three months ended June 30, 2023, we had property management income of $nil, as compared to $5,259 for the three months ended June 30, 2022, a decrease of $5,259 or 100%. The decrease was due to the PMA, the original monthly service charge was $5,000 which was amended to $10,000 per month in May 2022 due to Legend Investment required additional management services for their properties. In April 2022, we terminated thetermination of property management services with Bloomage Beverly Hills Investment Inc.a third party in April 2022.

For the three months ended June 30, 2023, we had property management income from related party, Legend LP, in the amount of $nil, as compared to $25,000 for the three months ended June 30, 2022, a decrease of $25,000. The decrease was mainly due to the salesacquisition of Legend LP, which eliminated to recognize property management income from Legend LP as intercompany transaction for the managed properties.three months ended June 30, 2023.

For the three months ended June 30, 2023, the Company had total rent income generated by Legend LP of $133,010 as compared to $nil during the three months ended June 30, 2022, an increase of $133,010, or 100%. The increase was mainly resulted from the acquisition of Legend LP.

During the three months ended June 30, 20222023 and 2021,2022, the Company incurred general and administrative expenses of $42,083$62,080 and $90,127,$23,085, respectively. During the same period of 2022 and 2023, the depreciation expense increased from $9,198 to $115,634, and property operating expense increased from $nil to $52,010. The decrease wasincreases in expenses are mainly due to the decrease in payroll expenseacquisition of Legend LP, which leads more depreciation expenses and professional fees incurred duringproperty operating related expenses.

During the three months ended June 30, 2022. 2023 and 2022, the Company had interest expense of $204,763 and $nil occurred from the loans of Legend LP.

For the three months ended June 30, 2023 and 2022, the Company had share-based compensation of $42,959 and 2021, our net losses were $9,340 and $81,127, respectively$nil. The decrease in net loss was mainlyincrease is due to the increaseadoption of revenue generated,2023 Equity Incentive Plan and the decrease in general administrative expenses forissuance of 2,800,000 shares of common stocks under the three months ended June 30, 2022, comparedplan to the same period in last year.Company’s 2023 Equity Incentive Plan.

Results of Operationoperation for the six months ended June 30, 2022 and 20212023

For the six months ended June 30, 2022,2023, we had total revenue of $45,863,$178,010, as compared to $18,000$45,863 for the six months ended June 30, 2021,2022, an increase of $27,863$132,147 or 155%288%. The increase in total revenue was attributable to the newly signed Property Management Agreement (the “PMA”) with Legend Investment International, LP (“Legend Investment”) on April 2, 2022. Pursuant to the PMA, the original monthly service charge was $5,000 which was amended to $10,000 per month in May 2022 due to Legend Investment required additional management services for their properties. In April 2022, we terminated the property management services with Bloomage Beverly Hills Investment Inc.mainly due to the salesacquisition of Legend LP in the managed properties.first quarter of 2023.

For the six months ended June 30, 2023, we had property management income of $45,000, as compared to $45,863 for the six months ended June 30, 2022, a decrease of $863. The decrease was mainly due to the acquisition of Legend LP, which eliminated to recognize property management income from Legend LP as intercompany transaction for the three months ended June 30, 2023.

For the six months ended June 30, 2023, the Company had total rent income generated by Legend LP of $133,010 as compared to $nil during the six months ended June 30, 2022, an increase of $133,010, or 100%. The increase was mainly resulted from the acquisition of Legend LP.

During the six months ended June 30, 20222023 and 2021,2022, the Company incurred general and administrative expenses of $83,845$98,391 and $172,289,$54,569 respectively. During the same period of 2022 and 2023, the depreciation expense increased from $14,275 to $121,847, and property operating expense increased from $nil to $52,010. The decreaseincreases in general and administrative expenses wasare mainly due to the decrease in salaryacquisition of Legend LP, which led to more depreciation expenses and property operating related expenses.

During the six months ended June 30, 2023 and 2022, the Company had interest expense of $204,763 and professional expense. $nil occurred from the loans of Legend LP.

During the six months ended June 30, 2023 and 2022, the Company had gain on bargain purchase of $487,688 and $nil on the acquisition of Legend LP.

For the six months ended June 30, 2023 and 2022, the Company had share-based compensation of $42,959 and 2021, our net loss was $40,097 and $135,689, respectively.$nil. The decrease in net loss was mainlyincrease is due to the increase in revenueadoption of 2023 Equity Incentive Plan and decrease in general and administrative expenses for the six months ended June 30, 2022, comparedissuance of 2,800,000 shares of common stocks under the plan to the same period in last year.Company’s 2023 Equity Incentive Plan.

Equity and Capital Resources

We have incurred losses since inception of our business in 2016, except for prior quarter, and as of June 30, 2022,2023, we had an accumulated deficit of $1,571,564.$1,329,119. As of June 30, 2022,2023, we had cash of $2,634$628 and a working capital of $648,127, compared to cash of $11,734 and a negative working capital of $139,709, compared to cash of $60,364 and a negative working capital of $95,686$140,204 as of December 31, 2021.2022. The decreasechange in the working capital was primarily due to cash used to pay for operating expenses.expenses, deferred compensation and acquired loans from Legend.

Going Concern Assessment

The Company demonstrates adverse conditions that raise substantial doubt about the Company’s ability to continue as a going concern. These adverse conditions are negative financial trends, specifically cash outflow from operating activities, operating losses, accumulated deficit and other adverse key financial ratios.

Management’s plan to alleviate the substantial doubt about the Company’s ability to continue as a going concern include attempting to improve its business profitability, its ability to generate sufficient cash flow from its operations and execute the business plan of the Company in order to meet its operating needs on a timely basis. However, there can be no assurance that these plans and arrangements will be sufficient to fund the Company’s ongoing capital expenditures and other requirements.

The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event that the Company cannot continue as a going concern.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

Critical Accounting Policies

The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires making estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. The estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis of making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

The critical accounting policies are discussed in further detail in the notes to the audited consolidated financial statements appearing elsewhere in this report. Management believes that the application of these policies on a consistent basis enables us to provide useful and reliable financial information about our operating results and financial condition.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

As a “small reporting company” we are not required to provide this information under this item pursuant to Regulation S-K.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report on Form 10-Q, our President (principal executive officer) and our Chief Financial Officer performed an evaluation of the effectiveness of and the operation of our disclosure controls and procedures as defined in Rule 13a-15(e) or Rule 15d-15(e) under the Exchange Act. Based on that evaluation, our President and Chief Financial Officer each concluded that as of the end of the period covered by this report on Form 10-Q, our disclosure controls and procedures were not effective in timely alerting them to material information relating to Forge Innovation Development Corp. required to be included in our Exchange Act filings.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 or Rule 15d-15 under the Exchange Act that occurred during the quarter ended June 30, 20222023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings.

On December 8, 2017, the Company entered into a lease agreement with Puente Hills Business Center II, L.P. (“PHBC-II”) for a lease term of forty-eight months, and which was expiredscheduled to expire on January 14, 2022, at monthly rent of $4,962,$4,962, subject to increase. On or about September 29, 2020, the Company vacated the premises. On October 22, 2020, PHBC-II filed a lawsuit against the Company and its guarantor, Mr. Liang for default on rent payments. No judgment has been rendered as of June 30, 2022, and the case is in the pre-trial stage.Liang. The Company has retained legal counsel to address the matter and the Court has scheduledrescheduled the trial date onfrom January 31, 2023 to April 18, 2023, and then again rescheduled to June 14, 2023. On July 14, 2023, the Company reached a settlement with PHBC-II and agreed to pay rent of $100,000 and rent deposit of $13,953 became nonrefundable. During the three and six months ended June 30, 2023, the Company recognized settlement loss of $30,883 which is included in other expenses, net on the consolidated statement of operations. As of June 30, 2023, the Company had $100,000 in rent payable to PHBC-II, with $60,000 within one year and $40,000 due after one year. As of December 31, 2022, the Company had $83,070 rent payable  toward the lease agreement.

Item 1A. Risk Factors.

As a “smaller reporting company”, we are not required to provide this information under this item pursuant to Regulation S-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

NoneOn June 26, 2023, the Company granted total 2,800,000 shares of common stock of the Company to four consultants, pursuant to the Company’s 2023 Equity Incentive Plan, the shares of which were registered with the SEC by filing of the Form S-8 dated on June 16, 2023. The fair value of the shares granted was valued in the amount of $1,960,000 at grant date. For the three months ended June 30, 2023, the Company recognized share-based compensation in the amount of $42,959. As of June 30, 2023, the deferred share-based compensation totaled $1,917,041.

Item 3. Defaults Upon Senior Securities.

None

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None

Item 6. Exhibits.

(a) Exhibits.

* Filed herewith.

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

EXHIBIT INDEX

* Filed herewith.