Item 1. Legal Proceedings
Item 1. Legal Proceedings
From time to time, we are a party to or otherwise
involved in legal proceedings, claims and other legal matters, arising in the ordinary course of our business or otherwise. As indicated
in the Subsequent Events the number of FINRA claims against Forta has increased to 22 as of August 2021. The claims arise from the sale
to clients of alternative investments (REITs, Business Development Loan Funds, and Oil and Gas securities). Most of the claims arise from
investments prior 2015. None of the registered representatives that recommended these alternative investments is currently associated
with Forta. The total amount of the pending claims is in excess of $3,000,000 and the Company is in the process of determining the best
approach to respond to the claims. Based on the status of the claims with FINRA, management cannot reasonably estimate a potential range
of losses or settlements of the claims. Forta is evaluating how best to resolve the claims. Forta no longer generates significant revenue
from brokerage activity like the sale of alternative investments and the continuing need for a broker dealer will be evaluated by Company.
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