[PART I](index=4&type=section&id=PART%20I) [Business Overview](index=5&type=section&id=Item%201.%20Business) Forian Inc. provides healthcare data and analytics solutions, leveraging a cloud-based platform after divesting its cannabis software business to focus on core informatics - Forian Inc. was founded on **October 15, 2020**, as a subsidiary of Medical Outcomes Research Analytics, LLC, becoming the parent company after a business combination on **March 2, 2021**[25](index=25&type=chunk) - On **February 10, 2023**, Forian completed the sale of its BioTrack subsidiary, exiting the cannabis industry to focus on healthcare data and analytics, with results presented as discontinued operations[26](index=26&type=chunk)[138](index=138&type=chunk) - Forian provides high-fidelity, analytics-ready healthcare informatics and solutions, leveraging data management and data science to enhance data for healthcare customers[28](index=28&type=chunk) - The company's solutions cover life sciences, pharma services, and healthcare payer and provider industries, offered through subscription and services-based models[24](index=24&type=chunk) - Key growth strategies include increasing usage and upsell, expanding into new markets, growing data and partner networks, and pursuing selective investments and acquisitions[54](index=54&type=chunk) - Forian's technology platform is entirely cloud-based, utilizing Amazon Web Services, and maintains **HIPAA compliance** and **SOC 2 certification** for data security[51](index=51&type=chunk)[52](index=52&type=chunk) - As of **March 26, 2024**, Forian had **37 employees**, focusing on customer success, employee well-being, and diversity[56](index=56&type=chunk)[57](index=57&type=chunk)[59](index=59&type=chunk) [Risk Factors](index=11&type=section&id=Item%201A.%20Risk%20Factors) Forian Inc. faces risks from its limited operating history, capital needs, product development, acquisitions, data reliance, third-party infrastructure, evolving privacy laws, cybersecurity threats, stock price volatility, and significant insider ownership - The company has a **limited operating and financial history**, incorporated in **October 2020**, facing risks as an early-stage and unproven business[62](index=62&type=chunk) - Forian may require additional capital for operations and expansion, with no assurance of acceptable terms, potentially leading to stockholder dilution or operational curtailment[63](index=63&type=chunk) - Dependence on external data sources means loss of access or increased costs could materially adversely affect the business and solution provision[64](index=64&type=chunk) - Acquisitions are part of the growth strategy, but challenges in identifying candidates, securing financing, or integrating businesses could lead to operational disruptions or failure to realize benefits[65](index=65&type=chunk)[66](index=66&type=chunk)[67](index=67&type=chunk) - Failure to develop and deploy new products or achieve market acceptance for new offerings could adversely affect business and results of operations[68](index=68&type=chunk)[69](index=69&type=chunk)[72](index=72&type=chunk) - Reliance on third-party computing infrastructure means errors, disruptions, or failures could adversely affect business, financial condition, and results of operations[73](index=73&type=chunk) - Evolving federal and state privacy laws increase compliance costs, potentially limiting customer service or product marketing, with significant non-compliance liabilities[88](index=88&type=chunk)[89](index=89&type=chunk)[93](index=93&type=chunk)[94](index=94&type=chunk)[95](index=95&type=chunk) - Security breaches and unauthorized system use could expose the company, customers, and data suppliers to loss, reputational damage, and significant costs, despite safeguards[96](index=96&type=chunk)[97](index=97&type=chunk)[98](index=98&type=chunk)[99](index=99&type=chunk) - Forian's common stock market price may be volatile, and the company does not intend to pay dividends, limiting stockholder returns to stock appreciation[101](index=101&type=chunk)[102](index=102&type=chunk)[104](index=104&type=chunk) - Directors and management beneficially own approximately **45% of outstanding common stock**, enabling significant control over stockholder approval matters, potentially misaligned with other stockholders' interests[103](index=103&type=chunk) - As an emerging growth and smaller reporting company, Forian benefits from reduced reporting requirements, potentially making its common stock less attractive to some investors[110](index=110&type=chunk)[112](index=112&type=chunk) [Unresolved Staff Comments](index=22&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) Forian Inc. has no unresolved staff comments from the SEC regarding its filings - No unresolved staff comments[114](index=114&type=chunk) [Cybersecurity](index=22&type=section&id=Item%201C.%20Cybersecurity) Forian Inc. maintains a robust cybersecurity program, overseen by the Board and managed by the Vice President of Data and Process Enablement, with no material incidents to date - The Board of Directors oversees the cybersecurity program, with members possessing diverse skills in risk management, technology, and finance[116](index=116&type=chunk) - Management, led by the Vice President of Data and Process Enablement, is responsible for identifying, measuring, monitoring, and controlling cybersecurity risks through assessments and training[117](index=117&type=chunk)[118](index=118&type=chunk)[119](index=119&type=chunk)[120](index=120&type=chunk) - Forian engages external experts, including cybersecurity assessors and risk management professionals, to evaluate and test its risk management systems[121](index=121&type=chunk) - The company has implemented policies and processes to oversee and manage risks associated with third-party service providers[122](index=122&type=chunk) - To date, Forian has not encountered cybersecurity threats or incidents that have materially and adversely affected its business strategy, results of operations, or financial condition[123](index=123&type=chunk) [Properties](index=23&type=section&id=Item%202.%20Properties) Forian Inc. maintains headquarters in Newtown, Pennsylvania, and a leased office in Boston, Massachusetts, with sufficient space after divesting other locations - Headquarters are in Newtown, Pennsylvania, with an additional leased office in Boston, Massachusetts[124](index=124&type=chunk) - Following the BioTrack Transaction, the company no longer leases office spaces in Florida, Colorado, or Washington[124](index=124&type=chunk) [Legal Proceedings](index=24&type=section&id=Item%203.%20Legal%20Proceedings) Forian Inc. is involved in ordinary legal claims, including a recently settled case and an ongoing lawsuit seeking over **$27.5 million** in damages from former Helix employees - The lawsuit 'Audet v. Green Tree International, et. al.' was settled, with a Final Order of Dismissal with Prejudice entered on **March 27, 2024**[127](index=127&type=chunk)[334](index=334&type=chunk) - An ongoing lawsuit, 'Grant Whitus et al. v. Forian Inc., Zachary Venegas and Scott Ogur,' seeks over **$27.5 million** in damages from former Helix employees for alleged breach of contract and unreceived equity interests/compensation[128](index=128&type=chunk)[335](index=335&type=chunk) [Mine Safety Disclosures](index=24&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to Forian Inc - Not applicable[129](index=129&type=chunk) [PART II](index=24&type=section&id=PART%20II) [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=24&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Forian Inc.'s common stock trades on Nasdaq under "FORA," with **307 holders** as of **March 27, 2024**, no dividends paid, and a **$3.45 million** share repurchase in **October 2023** - Forian Inc. common stock is listed on The Nasdaq Stock Market under the symbol **"FORA"**[3](index=3&type=chunk)[131](index=131&type=chunk) - As of **March 27, 2024**, there were approximately **307 holders of record** of the company's common stock[132](index=132&type=chunk) - The company has never declared or paid cash dividends on its common stock, intending to retain all available funds and future earnings for business development[102](index=102&type=chunk)[133](index=133&type=chunk) Issuer Purchases of Equity Securities (October 1 - December 31, 2023) | Period | Total Number of Shares Purchased (shares) | Average Price Paid per Share ($) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (shares) | Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (shares) | | :----------------------------------- | :---------------------------------------- | :------------------------------- | :---------------------------------------------------------------------------------------- | :-------------------------------------------------------------------------------------------- | | October 1, 2023 through October 31, 2023 | 1,604,676 | 2.15 | - | - | | November 1, 2023 through November 30, 2023 | - | - | - | - | | December 1, 2023 through December 31, 2023 | - | - | - | - | [[Reserved]](index=25&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Forian Inc. shifted focus to healthcare analytics after divesting cannabis businesses, achieving significant financial improvements in **2023** with increased revenues, a shift to net income, and enhanced liquidity from asset sales - Forian Inc. has divested its Helix Businesses, no longer serving the cannabis industry, and now focuses solely on healthcare and life sciences analytics[138](index=138&type=chunk) Results of Operations (Years Ended December 31, 2023 vs. 2022) | Metric | 2023 ($) | 2022 ($) | Change (YoY) ($) | | :------------------------------------------ | :----------- | :----------- | :----------- | | Revenues | 20,481,330 | 16,418,141 | +4,063,189 | | Cost of revenues | 5,477,032 | 5,049,701 | +427,331 | | Research and development | 1,407,580 | 4,009,769 | -2,602,189 | | Sales and marketing | 4,884,267 | 3,949,026 | +935,241 | | General and administrative | 13,633,193 | 16,879,858 | -3,246,665 | | Separation expenses | 599,832 | 5,417,043 | -4,817,211 | | Operating loss from continuing operations | (5,595,012) | (18,952,810) | +13,357,798 | | Net Income (Loss) | 11,106,687 | (25,971,971) | +37,078,658 | - Gross profit as a percentage of revenues increased to **73%** for **2023**, up from **69%** in **2022**, due to fixed or semi-variable data infrastructure costs[149](index=149&type=chunk) Adjusted EBITDA - Continuing Operations (Years Ended December 31, 2023 vs. 2022) | Metric | 2023 ($) | 2022 ($) | Change (YoY) ($) | | :-------------------------------- | :----------- | :----------- | :----------- | | Adjusted EBITDA - continuing operations | 2,336,380 | (6,707,809) | +9,044,189 | - As of **December 31, 2023**, the company's cash and marketable securities aggregated **$48,339,575**, with outstanding principal and accrued interest on convertible notes totaling **$24,870,181**[166](index=166&type=chunk) - Liquidity was enhanced by **$20,000,000** cash from the BioTrack sale and **$5,805,858** from a minority equity interest sale in **2023**[166](index=166&type=chunk) Cash Flow Activities (Years Ended December 31, 2023 vs. 2022) | Activity | 2023 ($) | 2022 ($) | Change (YoY) ($) | | :------------------------------------------ | :----------- | :----------- | :----------- | | Net cash provided by (used in) operating activities - continuing operations | 787,893 | (6,071,014) | +6,858,907 | | Net cash provided by (used in) investing activities - continuing operations | 7,119,943 | (4,797,267) | +11,917,210 | | Net cash used in financing activities - continuing operations | (4,601,518) | (100,528) | -4,500,990 | | Net increase in cash and cash equivalents - continuing operations | 3,306,318 | (10,968,809) | +14,275,127 | - The company has elected to take advantage of the extended transition period under the JOBS Act for new accounting standards as an "emerging growth company"[182](index=182&type=chunk)[183](index=183&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This item is not required for Forian Inc - This item is not required[184](index=184&type=chunk) [Financial Statements and Supplementary Data](index=34&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents Forian Inc.'s audited consolidated financial statements for **2023** and **2022**, reflecting the strategic shift to healthcare analytics and improved financial performance - The consolidated financial statements, prepared in accordance with **U.S. GAAP**, include accounts of Medical Outcomes Research Analytics, LLC and Helix Technologies, Inc. and its subsidiaries[208](index=208&type=chunk)[209](index=209&type=chunk) Consolidated Balance Sheet Highlights (as of December 31) | Metric | 2023 ($) | 2022 ($) | | :---------------------------------- | :----------- | :----------- | | Total Current Assets | 57,277,915 | 26,916,028 | | Total Assets | 58,888,612 | 46,258,167 | | Total Current Liabilities | 6,838,625 | 8,352,575 | | Total Liabilities | 32,708,806 | 33,835,691 | | Total Stockholders' Equity | 26,179,806 | 12,422,476 | Consolidated Statements of Operations Highlights (Years Ended December 31) | Metric | 2023 ($) | 2022 ($) | | :------------------------------------------ | :----------- | :----------- | | Revenue | 20,481,330 | 16,418,141 | | Total Costs and Expenses | 26,076,342 | 35,370,951 | | Operating Loss From Continuing Operations | (5,595,012) | (18,952,810) | | Net Income (Loss) | 11,106,687 | (25,971,971) | | Basic EPS | 0.34 | (0.81) | | Diluted EPS | 0.34 | (0.81) | Consolidated Statements of Cash Flows Highlights (Years Ended December 31) | Activity | 2023 ($) | 2022 ($) | | :------------------------------------------ | :----------- | :----------- | | Net cash provided by (used in) operating activities | 728,818 | (8,581,174) | | Net cash provided by (used in) investing activities | 7,119,943 | (6,461,045) | | Net cash used in financing activities | (4,601,518) | (100,528) | | Net change in cash | 3,247,243 | (15,142,747) | [Report of Independent Registered Public Accounting Firm](index=36&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Marcum LLP issued an unqualified opinion on Forian Inc.'s consolidated financial statements for **2023** and **2022**, prepared in accordance with U.S. GAAP - Marcum LLP audited Forian Inc.'s consolidated financial statements for **December 31, 2023** and **2022**, issuing an unqualified opinion that they fairly present financial position and results in conformity with **U.S. GAAP**[190](index=190&type=chunk) - The audit was conducted in accordance with **PCAOB standards**, but an audit of internal control over financial reporting was not performed as the company is not required to have one[192](index=192&type=chunk) [Consolidated Balance Sheets](index=37&type=section&id=Consolidated%20Balance%20Sheets) This section presents Forian Inc.'s consolidated balance sheets as of **December 31, 2023**, and **2022**, detailing assets, liabilities, and stockholders' equity Consolidated Balance Sheets (as of December 31) | ASSETS | 2023 ($) | 2022 ($) | | :------------------------------------------ | :----------- | :----------- | | Cash and cash equivalents | 6,042,986 | 2,795,743 | | Marketable securities | 42,296,589 | 17,396,487 | | Accounts receivable | 2,572,931 | 1,809,028 | | Proceeds receivable from sale of discontinued operations, net | 1,645,954 | — | | Contract assets | 1,126,713 | 2,252,958 | | Prepaid expenses | 1,077,233 | 835,786 | | Other current assets | 2,515,509 | 432,338 | | Current assets of discontinued operations | — | 1,393,688 | | **Total current assets** | **57,277,915** | **26,916,028** | | Property and equipment, net | 76,085 | 75,030 | | Right of use assets, net | 10,664 | 32,560 | | Deposits and other assets | 1,523,948 | 196,675 | | Non-current assets of discontinued operations | — | 19,037,874 | | **Total assets** | **58,888,612** | **46,258,167** | | LIABILITIES AND STOCKHOLDERS' EQUITY | | | | Accounts payable | 161,590 | 316,105 | | Accrued expenses | 4,252,257 | 3,766,789 | | Short-term operating lease liabilities | 10,664 | 21,600 | | Warrant liability | 563 | 4,547 | | Deferred revenues | 2,413,551 | 2,581,287 | | Current liabilities of discontinued operations | — | 1,662,247 | | **Total current liabilities** | **6,838,625** | **8,352,575** | | Other long-term liabilities | 1,000,000 | 10,960 | | Convertible notes payable, net of debt issuance costs | 24,870,181 | 25,106,547 | | Non-current liabilities of discontinued operations | — | 365,609 | | **Total long-term liabilities** | **25,870,181** | **25,483,116** | | **Total liabilities** | **32,708,806** | **33,835,691** | | Total Stockholders' Equity | 26,179,806 | 12,422,476 | | **Total liabilities and stockholders' equity** | **58,888,612** | **46,258,167** | [Consolidated Statements of Operations](index=38&type=section&id=Consolidated%20Statements%20of%20Operations) This section presents Forian Inc.'s consolidated statements of operations for the years ended **December 31, 2023**, and **2022**, detailing revenues, expenses, and net income or loss Consolidated Statements of Operations (Years Ended December 31) | Metric | 2023 ($) | 2022 ($) | | :------------------------------------------ | :----------- | :----------- | | Revenue | 20,481,330 | 16,418,141 | | Cost of revenues | 5,477,032 | 5,049,701 | | Research and development | 1,407,580 | 4,009,769 | | Sales and marketing | 4,884,267 | 3,949,026 | | General and administrative | 13,633,193 | 16,879,858 | | Separation expenses | 599,832 | 5,417,043 | | Depreciation and amortization | 74,438 | 65,554 | | **Total costs and expenses** | **26,076,342** | **35,370,951** | | Operating loss From Continuing Operations | (5,595,012) | (18,952,810) | | Total other income, net | 7,414,182 | (215,200) | | Income (loss) from continuing operations before income taxes | 1,819,170 | (19,168,010) | | Income tax expense | (85,740) | (23,980) | | Income (loss) from continuing operations, net of tax | 1,733,430 | (19,191,990) | | Loss from discontinued operations | (94,427) | (6,812,913) | | Gain on sale of discontinued operations | 11,531,849 | 32,932 | | Income tax effect on discontinued operations | (2,064,165) | — | | Income (loss) from discontinued operations, net of tax | 9,373,257 | (6,779,981) | | **Net Income (Loss)** | **11,106,687** | **(25,971,971)** | | Net income (loss) per share - basic | 0.34 | (0.81) | | Net income (loss) per share - diluted | 0.34 | (0.81) | [Consolidated Statements of Stockholders' Equity](index=39&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) This section presents Forian Inc.'s consolidated statements of stockholders' equity for the years ended **December 31, 2023**, and **2022**, detailing changes in equity components Consolidated Statements of Stockholders' Equity (Years Ended December 31) | Metric | 2023 ($) | 2022 ($) | | :------------------------------------------ | :----------- | :----------- | | Balance at January 1 | 12,422,476 | 25,171,265 | | Vesting of Restricted Stock and Stock Awards, net of shares surrendered for taxes | (191,465) | (87,406) | | Repurchase and retirement of common stock, net of excise taxes | (3,484,554) | — | | Issuance of Forian common stock upon exercise of stock options | — | — | | Issuance of Forian common stock upon exercise of warrants | — | — | | Stock-based compensation expense | 6,326,662 | 13,310,588 | | Net income (loss) | 11,106,687 | (25,971,971) | | Balance at December 31 | 26,179,806 | 12,422,476 | [Consolidated Statements of Cash Flows](index=41&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section presents Forian Inc.'s consolidated statements of cash flows for the years ended **December 31, 2023**, and **2022**, detailing cash movements from operating, investing, and financing activities Consolidated Statements of Cash Flows (Years Ended December 31) | Activity | 2023 ($) | 2022 ($) | | :------------------------------------------ | :----------- | :----------- | | Net cash provided by (used in) operating activities - continuing operations | 787,893 | (6,071,014) | | Net cash used in operating activities - discontinued operations | (59,075) | (2,510,160) | | **Net cash provided by (used in) operating activities** | **728,818** | **(8,581,174)** | | Net cash provided by (used in) investing activities - continuing operations | 7,119,943 | (4,797,267) | | Net cash used in investing activities - discontinued operations | — | (1,663,778) | | **Net cash provided by (used in) investing activities** | **7,119,943** | **(6,461,045)** | | Net cash used in financing activities - continuing operations | (4,601,518) | (100,528) | | **Net cash used in financing activities** | **(4,601,518)** | **(100,528)** | | Net change in cash | 3,247,243 | (15,142,747) | | Cash and cash equivalents, beginning of period | 2,795,743 | 17,938,490 | | Cash and cash equivalents, end of period | 6,042,986 | 2,795,743 | [Notes to Consolidated Financial Statements](index=43&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed notes to Forian Inc.'s consolidated financial statements, covering accounting policies, discontinued operations, liabilities, equity, and subsequent events - Note 4: Discontinued Operations – The company completed the sale of BioTrack and other businesses in **2023** and **2022**, resulting in a **$11,531,849 gain** on BioTrack sale and a **$9,373,257 net gain** from discontinued operations in **2023**[270](index=270&type=chunk)[271](index=271&type=chunk)[272](index=272&type=chunk)[276](index=276&type=chunk) - Note 10: Warrant Liability – The fair value of the warrant liability decreased from **$4,547** as of **December 31, 2022**, to **$563** as of **December 31, 2023**, with **51,102 warrants** expiring in **2023**[285](index=285&type=chunk)[286](index=286&type=chunk) - Note 12: Convertible Notes – Principal outstanding on **3.5% Convertible Promissory Notes** decreased from **$24,000,000** in **2022** to **$23,000,000** in **2023**, with a **$1,000,000** redemption on **September 12, 2023**, resulting in a **$111,151 gain**[288](index=288&type=chunk)[289](index=289&type=chunk)[292](index=292&type=chunk) - Note 13: Stock-Based Compensation – As of **December 31, 2023**, total unrecognized stock compensation expense for unvested awards was **$11,359,575**, expected to be recognized over approximately **3.08 years**[302](index=302&type=chunk) - Note 15: Related Party Transactions – Includes runoff commissions to Adam Dublin, a director holding **$6,000,000** in convertible notes, and the repurchase of **1,604,676 common shares** from affiliated investors for **$3,450,053** in **October 2023**[307](index=307&type=chunk)[308](index=308&type=chunk)[309](index=309&type=chunk) - Note 16: Income Taxes – The company recognized net income tax expense of **$85,740** in **2023**, compared to **$23,980** in **2022**, with a **$8,119,492 valuation allowance** against deferred tax assets due to realization uncertainty[312](index=312&type=chunk)[320](index=320&type=chunk) - Note 18: Commitments and Contingencies – The company has remaining payment obligations of **$14,829,575** under service and license agreements as of **December 31, 2023**, extending beyond **2026**[332](index=332&type=chunk) - Note 19: Subsequent Events – Post-period events include stock option and RSU grants in **January** and **March 2024**, and a **$1,000,000** convertible note redemption in **February 2024**, resulting in an anticipated **$137,356 gain**[336](index=336&type=chunk)[337](index=337&type=chunk)[338](index=338&type=chunk)[339](index=339&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=65&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) There have been no changes in or disagreements with accountants on accounting and financial disclosure for Forian Inc - None[341](index=341&type=chunk) [Controls and Procedures](index=65&type=section&id=Item%209A.%20Controls%20and%20Procedures) Forian Inc.'s management concluded that disclosure controls and internal control over financial reporting were ineffective as of **December 31, 2023**, due to material weaknesses in general IT controls, with remediation efforts underway - Management concluded that disclosure controls and procedures were not effective as of **December 31, 2023**, due to unremediated material weaknesses[342](index=342&type=chunk)[343](index=343&type=chunk) - Management assessed internal control over financial reporting as ineffective as of **December 31, 2023**[347](index=347&type=chunk) - A material weakness was identified due to the lack of properly designed general information technology controls for logical access, change management, and vendor application management[348](index=348&type=chunk) - Remediation efforts include implementing a new ERP system, establishing and testing logical access controls, and contracting an outside consulting firm[350](index=350&type=chunk)[351](index=351&type=chunk) - Previously identified material weaknesses related to lack of segregation of duties and formalization of financial close processes were fully remediated in **2023**[350](index=350&type=chunk) - As an emerging growth company, Forian Inc. is exempt from the requirement for an attestation report on internal control over financial reporting by its independent registered public accounting firm[353](index=353&type=chunk) [Other Information](index=70&type=section&id=Item%209B.%20Other%20Information) This item contains no other information - None[356](index=356&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=70&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to Forian Inc - Not applicable[357](index=357&type=chunk) [PART III](index=70&type=section&id=PART%20III) [Directors, Executive Officers and Corporate Governance](index=70&type=section&id=Item%2010.%20Directors,%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from Forian's **2024** Annual Meeting Proxy Statement - Information is incorporated by reference to Forian's Proxy Statement for its **2024** Annual Meeting of Stockholders[359](index=359&type=chunk) [Executive Compensation](index=70&type=section&id=Item%2011.%20Executive%20Compensation) Information detailing executive compensation is incorporated by reference from Forian's **2024** Annual Meeting Proxy Statement - Information is incorporated by reference to Forian's Proxy Statement for its **2024** Annual Meeting of Stockholders[360](index=360&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=71&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information on security ownership of beneficial owners and management is incorporated by reference from Forian's **2024** Annual Meeting Proxy Statement - Information is incorporated by reference to Forian's Proxy Statement for its **2024** Annual Meeting of Stockholders[362](index=362&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=71&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions,%20and%20Director%20Independence) Information on certain relationships, related transactions, and director independence is incorporated by reference from Forian's **2024** Annual Meeting Proxy Statement - Information is incorporated by reference to Forian's Proxy Statement for its **2024** Annual Meeting of Stockholders[363](index=363&type=chunk) [Principal Accounting Fees and Services](index=71&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information detailing principal accounting fees and services is incorporated by reference from Forian's **2024** Annual Meeting Proxy Statement - Information is incorporated by reference to Forian's Proxy Statement for its **2024** Annual Meeting of Stockholders[364](index=364&type=chunk) [PART IV](index=71&type=section&id=PART%20IV) [Exhibits and Financial Statement Schedules](index=71&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists Form 10-K exhibits and financial statement schedules, with omitted schedules and a detailed exhibit index of various agreements and certifications - Financial Statement Schedules have been omitted as they are not applicable, not required, or the information is presented elsewhere[366](index=366&type=chunk) - The Exhibit Index includes various agreements such as the Agreement and Plan of Merger, Stock Purchase Agreement, Certificate of Incorporation, Bylaws, Equity Incentive Plans, and certifications[370](index=370&type=chunk)[372](index=372&type=chunk) [Form 10-K Summary](index=73&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item indicates that no Form 10-K Summary is provided - None[373](index=373&type=chunk)

Adjusted EBITDA is a non-U.S. GAAP measure. See Appendix for further information, including a reconciliation of Adjusted EBITDA to Net Loss. 5 Note: Other costs and expenses excludes litigation costs, separation expenses, stock compensation and depreciation & amortization expense. Summary Balance Sheet Data $000's The outlook provided above constitutes forward-looking information within the meaning of applicable securities laws and is based on a number of assumptions and subject to a number of risks. See sl ...

Exhibit 99.1 Forian Inc. Announces Fourth Quarter and Full Year 2023 Financial Results Full year 2023 revenue grew 25% Full year 2023 Adjusted EBITDA of $2.3MM Newtown, PA, March 28, 2024 (GLOBE NEWSWIRE) – via NewMediaWire – Forian Inc. (Nasdaq: FORA), a provider of data science driven information and analytics solutions to the healthcare and life sciences industries, today announced results for the quarter and year ended December 31, 2023. "Forian finished the year by executing against our quarterly plan ...

NEWTOWN, PA, March 08, 2024 (GLOBE NEWSWIRE) -- via NewMediaWire -- Forian Inc. (Nasdaq: FORA), a provider of data science driven information and analytics solutions to the healthcare and life sciences industries, will announce its fourth quarter and full year 2023 financial results on Thursday, March 28, 2024, after the close of the market. The Company will host a conference call and webcast at 4:30 p.m. (ET) on March 28, 2024, to discuss the results. To register for the conference call, click here. The we ...

NEWTOWN, PA, March 08, 2024 (GLOBE NEWSWIRE) -- via NewMediaWire -- Forian Inc. (Nasdaq: FORA), a provider of data science driven information and analytics solutions to the healthcare and life sciences industries, will announce its fourth quarter and full year 2023 financial results on Thursday, March 28, 2024, after the close of the market. The Company will host a conference call and webcast at 4:30 p.m. (ET) on March 28, 2024, to discuss the results. To register for the conference call, click here. The we ...

PART I FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company's financials reflect a significant turnaround, shifting from a net loss to a $9.7 million net income for the first nine months of 2023, driven by strategic divestitures Condensed Consolidated Balance Sheet Highlights | Account | Sep 30, 2023 (Unaudited) | Dec 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $5,377,079 | $2,795,743 | | Marketable securities | $43,585,724 | $17,396,487 | | Total current assets | $58,488,611 | $26,916,028 | | Total assets | $58,792,289 | $46,258,167 | | **Liabilities & Equity** | | | | Total current liabilities | $7,460,852 | $8,352,575 | | Convertible notes payable, net | $24,665,944 | $25,106,547 | | Total liabilities | $32,126,796 | $33,835,691 | | Total stockholders' equity | $26,665,493 | $12,422,476 | Condensed Consolidated Statement of Operations Highlights | Metric | Q3 2023 | Q3 2022 | 9 Months 2023 | 9 Months 2022 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $5,348,469 | $4,310,694 | $15,112,398 | $11,448,468 | | Operating Loss (Continuing) | $(807,268) | $(2,840,504) | $(4,683,605) | $(17,093,682) | | Net Income (Loss) | $4,342,091 | $(5,127,624) | $9,717,744 | $(22,415,257) | | Diluted EPS | $0.13 | $(0.16) | $0.30 | $(0.70) | Condensed Consolidated Statement of Cash Flows Highlights (Nine Months Ended Sep 30) | Cash Flow Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash from operating activities | $1,328,275 | $(9,151,286) | | Net cash from investing activities | $2,361,052 | $(8,007,047) | | Net cash from financing activities | $(1,107,991) | $(71,207) | | Net change in cash | $2,581,336 | $(17,229,540) | - The company completed the sale of its BioTrack subsidiary on February 10, 2023, for **$30 million**, exiting the cannabis industry to focus on healthcare analytics, resulting in a **gain on sale of $11.5 million**[21](index=21&type=chunk)[81](index=81&type=chunk)[82](index=82&type=chunk) - On July 21, 2023, the company sold its equity interest in a customer for **$5.8 million in cash**, recognizing a gain on the sale, with potential for an additional **$3.6 million in earnout payments**[50](index=50&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management highlights a successful strategic pivot to healthcare analytics, evidenced by revenue growth, cost reductions, and substantially strengthened liquidity from divestitures [Results of Operations](index=36&type=section&id=Results%20of%20Operations) Revenue from continuing operations grew 32% to $15.1 million in the first nine months of 2023, with improved gross margins and significantly lower operating expenses Results of Operations from Continuing Operations (Nine Months Ended Sep 30) | Metric | 2023 | 2022 | Change (%) | | :--- | :--- | :--- | :--- | | Revenues | $15,112,398 | $11,448,468 | +32.0% | | Cost of revenues | $3,891,482 | $3,853,486 | +1.0% | | Research and development | $1,100,657 | $3,315,506 | -66.8% | | Sales and marketing | $3,746,731 | $2,904,358 | +29.0% | | General and administrative | $10,393,016 | $13,003,158 | -20.1% | | Operating loss | $(4,683,605) | $(17,093,682) | +72.6% | - Revenue for the nine months ended Sep 30, 2023, **increased by 32% YoY**, primarily due to increased sales of information products to new and existing customers in the healthcare industry[152](index=152&type=chunk) - Gross profit as a percentage of revenues **increased to 74%** for the nine months ended Sep 30, 2023, compared to 66% for the same period in 2022, as many data infrastructure costs are fixed or semi-variable[153](index=153&type=chunk) - Separation expenses of **$5.4 million were recorded in 2022** related to the non-renewal of advisory agreements with former Helix executives, compared to $0.6 million in 2023 for a CEO resignation[157](index=157&type=chunk)[158](index=158&type=chunk) [Non-GAAP Financial Measures](index=38&type=section&id=Non-GAAP%20Financial%20Measures) Adjusted EBITDA from continuing operations turned positive to $0.55 million for the first nine months of 2023, a $7.0 million improvement from the prior year's loss Reconciliation to Adjusted EBITDA (Continuing Operations, Nine Months Ended Sep 30) | Reconciliation Item | 2023 | 2022 | | :--- | :--- | :--- | | Net Income (loss) from continuing operations | $2,114,444 | $(17,291,885) | | Depreciation and amortization | $64,285 | $48,599 | | Stock based compensation expense | $4,920,572 | $10,581,021 | | Interest and investment income | $(1,666,786) | $(111,683) | | Interest expense | $630,547 | $633,041 | | Gain on sale of investment | $(5,805,858) | $0 | | Severance expense | $250,000 | $0 | | Income tax expense | $159,287 | $20,000 | | Other adjustments | $(115,239) | $(343,155) | | **Adjusted EBITDA** | **$551,252** | **$(6,464,062)** | - **Adjusted EBITDA for the nine months ended September 30, 2023, was $551,252**, an increase of $7,015,314 compared to a loss of $(6,464,062) for the same period in 2022[172](index=172&type=chunk) [Liquidity and Capital Resources](index=42&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity significantly improved to $49.0 million in cash and marketable securities, bolstered by proceeds from asset sales and positive operating cash flow - As of September 30, 2023, the company's balance of **cash and marketable securities aggregated $49.0 million**[173](index=173&type=chunk) - Liquidity was significantly boosted by the sale of BioTrack for **$30.0 million** and the sale of a minority equity interest for **$5.8 million** in 2023[173](index=173&type=chunk) Cash Flows from Continuing Operations (Nine Months Ended Sep 30) | Cash Flow Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $1,387,350 | $(6,775,497) | | Net cash provided by (used in) investing activities | $2,361,052 | $(6,356,478) | | Net cash used in financing activities | $(1,107,991) | $(71,207) | [Quantitative and Qualitative Disclosures About Market Risk](index=46&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Forian Inc. is not required to provide this information in its quarterly report - This item is not required for the registrant[187](index=187&type=chunk) [Controls and Procedures](index=46&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were ineffective as of September 30, 2023, due to material weaknesses, with remediation efforts underway - The company's CEO and CFO concluded that **disclosure controls and procedures as of September 30, 2023, remain ineffective** due to previously identified material weaknesses[189](index=189&type=chunk) - **Remediation efforts are underway**, including hiring additional personnel, engaging outside consultants, and implementing upgraded accounting and finance systems[191](index=191&type=chunk)[192](index=192&type=chunk) PART II OTHER INFORMATION [Legal Proceedings](index=47&type=section&id=Item%201.%20Legal%20Proceedings) The company is defending two significant lawsuits, one claiming subsidiary ownership and another from former employees seeking over $27.5 million in damages - In ***Audet v. Green Tree International***, a plaintiff claims 10% ownership of a subsidiary and seeks unspecified monetary damages, with a trial anticipated between January and March 2024[197](index=197&type=chunk) - In ***Grant Whitus et al. v. Forian Inc.***, former Helix employees are suing for **over $27.5 million in damages** related to claims of promised equity and compensation[198](index=198&type=chunk) [Risk Factors](index=48&type=section&id=Item%201A.%20Risk%20Factors) This item is not required for the company's quarterly report - This item is not required[199](index=199&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=48&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the reporting period - None reported[200](index=200&type=chunk) [Defaults Upon Senior Securities](index=48&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - None reported[201](index=201&type=chunk) [Mine Safety Disclosures](index=48&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company's operations - Not applicable[202](index=202&type=chunk) [Other Information](index=48&type=section&id=Item%205.%20Other%20Information) The company did not report any other information for this period - None reported[203](index=203&type=chunk) [Exhibits](index=48&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including required Sarbanes-Oxley certifications and Inline XBRL data files - The report lists filed exhibits, including **Sarbanes-Oxley certifications (31.1, 31.2, 32.1)** and Inline XBRL documents[204](index=204&type=chunk)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended June 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number: 001-40146 FORIAN INC. UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q Securities registered pursuant to Section 12(b) of the Act: | Title of each class | Trading Symbol(s) | Name of each exchange on which | | --- | --- | --- | | | | r ...

PART I FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents Forian Inc.'s unaudited condensed consolidated financial statements and explanatory notes for the periods ended March 31, 2023, and December 31, 2022 [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20as%20of%20March%2031%2C%202023%20%28unaudited%29%20and%20December%2031%2C%202022) | Item | March 31, 2023 | December 31, 2022 | | :----------------------------------- | :------------- | :---------------- | | **ASSETS** | | | | Total current assets | $55,313,863 | $26,916,028 | | Total assets | $55,634,738 | $46,258,167 | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | Total current liabilities | $9,907,060 | $8,352,575 | | Total long-term liabilities | $25,320,397 | $25,483,116 | | Total liabilities | $35,227,457 | $33,835,691 | | Total stockholders' equity | $20,407,281 | $12,422,476 | | Total liabilities and stockholders' equity | $55,634,738 | $46,258,167 | - Total assets increased by **$9,376,571 (20.3%)** from December 31, 2022, to March 31, 2023, primarily driven by an increase in marketable securities and proceeds receivable from the sale of discontinued operations[8](index=8&type=chunk) - Total stockholders' equity increased by **$7,984,805 (64.3%)** from December 31, 2022, to March 31, 2023, mainly due to net income and stock-based compensation[9](index=9&type=chunk)[14](index=14&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20for%20the%20Three%20Months%20Ended%20March%2031%2C%202023%20and%202022%20%28unaudited%29) | Item | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Revenue | $4,870,387 | $3,534,861 | | Total costs and expenses | $7,258,184 | $13,859,863 | | Loss From Continuing Operations | $(2,387,797) | $(10,325,002) | | Total other income, net | $168,907 | $12,302 | | Loss from continuing operations, net of tax | $(2,248,799) | $(10,317,700) | | Income (loss) from discontinued operations, net of tax | $8,747,278 | $(1,536,388) | | Net Income (Loss) | $6,498,479 | $(11,854,088) | | Net income (loss) per share - basic and diluted | $0.19 | $(0.37) | - The company reported a net income of **$6,498,479** for Q1 2023, a significant improvement from a net loss of **$(11,854,088)** in Q1 2022, primarily driven by a gain on the sale of discontinued operations[12](index=12&type=chunk) - Revenue from continuing operations increased by **37.8%** year-over-year, from **$3,534,861** in Q1 2022 to **$4,870,387** in Q1 2023[12](index=12&type=chunk)[147](index=147&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity%20for%20the%20Three%20Months%20Ended%20March%2031%2C%202023%20and%202022%20%28unaudited%29) | Item | Balance at Jan 1, 2023 | Net Income | Stock-based Compensation | Balance at Mar 31, 2023 | | :----------------------------------- | :--------------------- | :--------- | :----------------------- | :---------------------- | | Common Stock (Par Value @ $0.001) | $32,251 | $0 | $167 | $32,419 | | Additional Paid-In Capital | $71,182,326 | $0 | $1,580,925 | $72,668,484 | | Accumulated Deficit | $(58,792,101) | $6,498,479 | $0 | $(52,293,622) | | Total Stockholders' Equity | $12,422,476 | $6,498,479 | $1,580,925 | $20,407,281 | - Total stockholders' equity increased from **$12,422,476** at January 1, 2023, to **$20,407,281** at March 31, 2023, primarily due to net income of **$6,498,479** and stock-based compensation expense of **$1,580,925**[14](index=14&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20Three%20Months%20Ended%20March%2031%2C%202023%20and%202022%20%28unaudited%29) | Cash Flow Activity | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(1,228,426) | $(3,825,878) | | Net cash used in investing activities | $(633,003) | $(667,515) | | Net cash used in financing activities | $(94,599) | $(13,122) | | Net change in cash | $(1,956,028) | $(4,506,515) | | Cash and cash equivalents, end of period | $839,715 | $13,431,975 | - Net cash used in operating activities decreased by **$2,597,452**, from **$(3,825,878)** in Q1 2022 to **$(1,228,426)** in Q1 2023, indicating improved operational cash burn[16](index=16&type=chunk)[168](index=168&type=chunk) - Cash and cash equivalents at the end of Q1 2023 were **$839,715**, a decrease from **$2,795,743** at the beginning of the period[16](index=16&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) [Note 1 Business Organization and Nature of Operations](index=8&type=section&id=Note%201%20BUSINESS%20ORGANIZATION%20AND%20NATURE%20OF%20OPERATIONS) Forian Inc., formed in 2020, now focuses exclusively on healthcare data management and analytics after divesting cannabis businesses - Forian Inc. was formed in October 2020 through a business combination with Helix Technologies Inc[17](index=17&type=chunk) - The company has divested its cannabis industry-related businesses (BioTrack, security monitoring, and Engeni LLC) in 2022-2023, and now focuses solely on healthcare and related industries[19](index=19&type=chunk)[138](index=138&type=chunk) [Note 2 Basis of Presentation](index=8&type=section&id=Note%202%20BASIS%20OF%20PRESENTATION) Financial statements are prepared under U.S. GAAP, condensed per Form 10-Q, with management believing all necessary adjustments are included - Financial statements are prepared under U.S. GAAP, with condensations and omissions per Form 10-Q instructions[20](index=20&type=chunk) [Note 3 Summary of Significant Accounting Policies](index=8&type=section&id=Note%203%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines significant accounting policies, including consolidation, discontinued operations, revenue recognition, and stock-based compensation - The company's consolidated financial statements include Medical Outcomes Research Analytics, LLC and Helix Technologies, Inc. and its subsidiaries, with intercompany transactions eliminated[21](index=21&type=chunk) - The sales of BioTrack, the security monitoring business, and Engeni, LLC are classified as discontinued operations due to representing a strategic shift[24](index=24&type=chunk) - Revenue is primarily derived from license fees for information products, recognized when customers obtain control of promised goods or services, often ratably over the contract term[44](index=44&type=chunk) - Separation expenses for Q1 2023 include **$250,000** for salary continuation and **$349,832** for accelerated vesting of restricted stock due to the CEO's resignation[77](index=77&type=chunk) - In Q1 2022, separation expenses included **$5,417,043** in stock compensation due to non-renewal of advisor agreements for former Helix executives[78](index=78&type=chunk) [Note 4 Discontinued Operations](index=18&type=section&id=Note%204%20DISCONTINUED%20OPERATIONS) This note details the 2022-2023 sale of Helix Businesses, exiting the cannabis industry, with financial results presented as discontinued operations - Helix completed the sale of BioTrack on February 10, 2023, for **$30.0 million** (**$20.0 million** cash at closing, **$10.0 million** in twelve monthly installments)[83](index=83&type=chunk) - The company recognized a gain on sale of BioTrack of **$11,531,849** and a loss from discontinued operations of **$94,427** during Q1 2023[84](index=84&type=chunk) | Item | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Total revenues (Helix Businesses) | $1,301,475 | $2,856,418 | | Total costs and expenses (Helix Businesses) | $1,395,902 | $4,647,856 | | Net gain (loss) from discontinued operations, net of tax | $8,747,278 | $(1,536,388) | [Note 5 Marketable Securities](index=20&type=section&id=Note%205%20MARKETABLE%20SECURITIES) Marketable securities, primarily short-term U.S. Treasuries, are classified as available-for-sale and significantly increased in Q1 2023 - Marketable securities are valued using Level 1 inputs (current market quotes) and consist of short-term U.S. Treasuries and money market mutual funds[88](index=88&type=chunk) | Item | March 31, 2023 | December 31, 2022 | | :----------------------- | :------------- | :---------------- | | Cost | $38,854,166 | $17,234,633 | | Fair Market Value | $39,164,720 | $17,396,487 | [Note 6 Prepaid Expenses and Other Current Assets](index=21&type=section&id=Note%206%20PREPAID%20EXPENSES%20AND%20OTHER%20CURRENT%20ASSETS) Prepaid expenses, mainly for software and insurance, decreased in Q1 2023, while other current assets include employee receivables | Item | March 31, 2023 | December 31, 2022 | | :---------------- | :------------- | :---------------- | | Prepaid expenses | $425,986 | $835,786 | - Other current assets as of March 31, 2023, include **$342,986** receivable from employees[92](index=92&type=chunk) [Note 7 Property and Equipment, Net](index=21&type=section&id=Note%207%20PROPERTY%20AND%20EQUIPMENT%2C%20NET) Net property and equipment increased in Q1 2023 due to software development, with a corresponding rise in depreciation and amortization | Item | March 31, 2023 | December 31, 2022 | | :-------------------------- | :------------- | :---------------- | | Property and equipment, net | $112,093 | $75,030 | | Item | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Depreciation and amortization expense | $38,430 | $15,349 | [Note 8 Accrued Expenses](index=21&type=section&id=Note%208%20ACCRUED%20EXPENSES) Accrued expenses significantly increased in Q1 2023, primarily driven by the recognition of income taxes payable | Item | March 31, 2023 | December 31, 2022 | | :-------------------------- | :------------- | :---------------- | | Accrued salary, commission and bonus | $1,659,762 | $2,112,482 | | Income taxes payable | $2,746,515 | $0 | | Accrued expenses (other) | $2,017,259 | $1,654,307 | | Total | $6,423,536 | $3,766,789 | [Note 9 Warrant Liability](index=22&type=section&id=Note%209%20WARRANT%20LIABILITY) Warrant liability, a Level 3 financial instrument, increased in fair value during Q1 2023, calculated using the Black-Scholes model - Warrants to purchase Helix common stock were converted to warrants to purchase Company common stock and are classified as a liability[96](index=96&type=chunk) | Item | As of March 31, 2023 | As of December 31, 2022 | | :----------------------------------- | :------------------- | :---------------------- | | Fair value of financial instruments - warrants | $10,106 | $4,547 | | Warrants outstanding | 86,502 | 92,058 | - The change in fair value of warrant liability for Q1 2023 was **$5,559**, compared to **$(219,840)** for Q1 2022[97](index=97&type=chunk) [Note 10 Convertible Notes](index=23&type=section&id=Note%2010%20CONVERTIBLE%20NOTES) The company holds **$24.0 million** in 3.5% Convertible Promissory Notes due 2025, convertible into common stock and warrants at **$11.98** per share | Item | March 31, 2023 | December 31, 2022 | | :----------------------------------- | :------------- | :---------------- | | Principal outstanding | $24,000,000 | $24,000,000 | | Convertible note payable, net of debt issuance costs | $25,315,003 | $25,106,547 | - The Notes accrue interest at an annual rate of **3.5%** and are convertible into common stock and warrants at an exercise price of **$11.98** per share[100](index=100&type=chunk) | Item | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Interest expense related to the Notes | $208,456 | $210,000 | [Note 11 Stock-Based Compensation](index=24&type=section&id=Note%2011%20STOCK-BASED%20COMPENSATION) This note details stock-based compensation plans, with **$15.4 million** unrecognized expense as of March 31, 2023, and significant Q1 expenses from executive separations | Item | March 31, 2023 | December 31, 2022 | | :----------------------------------- | :------------- | :---------------- | | Unvested Restricted Shares and Units | 910,720 | 551,258 | | Outstanding Stock Options | 4,634,302 | 3,983,808 | - Stock-based compensation expense for Q1 2023 was **$1,580,925**, including **$349,832** related to accelerated vesting for the former CEO's resignation[109](index=109&type=chunk)[111](index=111&type=chunk) - Stock-based compensation expense for Q1 2022 was **$7,904,584**, including **$5,417,043** related to options vesting for former Helix executives due to non-renewal of advisor agreements[110](index=110&type=chunk)[111](index=111&type=chunk) [Note 12 Net Income (Loss) Per Share](index=26&type=section&id=Note%2012%20NET%20INCOME%20%28LOSS%29%20PER%20SHARE) The company reported basic and diluted net income per share of **$0.19** for Q1 2023, a significant improvement from Q1 2022, driven by discontinued operations income | Item | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Net Income (Loss) | $6,498,479 | $(11,854,088) | | Basic and diluted loss from continuing operations per share | $(0.08) | $(0.32) | | Basic and diluted income (loss) from discontinued operations per share | $0.27 | $(0.05) | | Net loss per common share - basic and diluted | $0.19 | $(0.37) | | Weighted average common shares outstanding | 32,300,237 | 31,857,685 | - Potentially dilutive securities, including warrants, stock options, convertible notes, and unvested restricted stock awards/units, totaling **8,156,371** as of March 31, 2023, were excluded from diluted EPS calculation due to their anti-dilutive effect on loss from continuing operations[114](index=114&type=chunk) [Note 13 Related Party Transactions](index=27&type=section&id=Note%2013%20RELATED%20PARTY%20TRANSACTIONS) This note discloses related party transactions, including payments to the Chief Strategy Officer and a director's holding of **$6.0 million** in convertible notes - Adam Dublin, Chief Strategy Officer, received **$49,032** from a former vendor in Q1 2023 (**$92,369** in Q1 2022)[115](index=115&type=chunk) - A director of the company holds **$6,000,000** in principal of the 3.5% Convertible Promissory Notes[117](index=117&type=chunk) [Note 14 Segment Results](index=27&type=section&id=Note%2014%20SEGMENT%20RESULTS) Following cannabis business divestiture, Forian Inc.'s continuing operations now comprise a single segment focused on healthcare analytics and information services - The company's continuing operations now consist of a single reportable segment focused on healthcare and other industries, following the disposal of cannabis-related businesses[121](index=121&type=chunk) [Note 15 Leases](index=28&type=section&id=Note%2015%20LEASES) The company accounts for operating leases under ASC Topic 842, primarily for facilities, with lease liabilities and ROU assets recorded on the balance sheet | Item | March 31, 2023 | December 31, 2022 | | :-------------------------- | :------------- | :---------------- | | Right of use assets, net | $27,346 | $32,560 | | Total lease liabilities | $27,346 | $32,560 | | Item | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Total operating lease costs | $10,743 | $450 | - Future minimum lease payments total **$29,056**, with **$17,794** due in the remainder of 2023 and **$11,262** in 2024[127](index=127&type=chunk) [Note 16 Commitments and Contingencies](index=29&type=section&id=Note%2016%20COMMITMENTS%20AND%20CONTINGENCIES) The company has **$5.0 million** in future payment obligations through 2026 and is vigorously defending two material legal proceedings | Year Ending December 31, | March 31, 2023 | | :----------------------- | :------------- | | 2023 (remaining) | $1,137,595 | | 2024 | $1,887,595 | | 2025 | $1,600,000 | | 2026 | $400,000 | | Total | $5,025,190 | - The company is a defendant in Audet v. Green Tree International, et al., a lawsuit claiming **10%** ownership of an indirect subsidiary, seeking unspecified monetary damages[131](index=131&type=chunk) - The company is also a defendant in Grant Whitus et al. v. Forian Inc., et al., a lawsuit by former Helix employees seeking over **$27.5 million** in damages for alleged breach of contract and other claims related to unreceived equity interest or compensation[132](index=132&type=chunk) [Note 17 Subsequent Events](index=30&type=section&id=Note%2017%20SUBSEQUENT%20EVENTS) No subsequent events requiring adjustment or disclosure were identified up to the financial statement issuance date - No subsequent events requiring adjustment or disclosure were identified after the balance sheet date up to the issuance of the financial statements[133](index=133&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Forian Inc.'s Q1 2023 financial condition and results, including operations, non-GAAP measures, liquidity, and critical accounting policies [Overview](index=31&type=section&id=Overview) - Forian Inc. provides data management and proprietary information and analytics solutions to the healthcare and related industries[136](index=136&type=chunk) - Following the sale of its Helix Businesses in February 2023, the company no longer operates in the cannabis industry and focuses solely on healthcare analytics[138](index=138&type=chunk) [Financial Operations Overview](index=31&type=section&id=Financial%20Operations%20Overview) - Revenues are primarily derived from licensing fees for proprietary information products and services contracts with government agencies[140](index=140&type=chunk) - Cost of revenues includes labor, information licensing, hosting, and infrastructure costs[141](index=141&type=chunk) - Research and development focuses on new features and applications, with expenses primarily from employee-related costs, subcontractors, and hosted infrastructure[142](index=142&type=chunk) - Sales and marketing expenses include salaries, commissions, advertising, market research, and event costs, with plans for continued investment[143](index=143&type=chunk) - General and administrative expenses cover administrative functions, professional fees, and other corporate support[144](index=144&type=chunk) [Results of Operations for the Three Months Ended March 31, 2023 and 2022](index=33&type=section&id=Results%20of%20Operations%20for%20the%20Three%20Months%20Ended%20March%2031%2C%202023%20and%202022) | Item | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | Change ($) | Change (%) | | :----------------------------------- | :-------------------------------- | :-------------------------------- | :--------- | :--------- | | Revenues | $4,870,387 | $3,534,861 | $1,335,526 | 37.8% | | Cost of revenues | $1,252,215 | $1,243,030 | $9,185 | 0.7% | | Research and development | $531,689 | $1,089,879 | $(558,190) | -51.2% | | Sales and marketing | $1,196,192 | $820,594 | $375,598 | 45.8% | | General and administrative | $3,639,826 | $5,273,968 | $(1,634,142) | -31.0% | | Separation expenses | $599,832 | $5,417,043 | $(4,817,211) | -88.9% | | Loss from continuing operations | $(2,387,797) | $(10,325,002) | $7,937,205 | -76.9% | - Gross profit as a percentage of revenues increased to **74.3%** for Q1 2023, up from **64.8%** in Q1 2022, due to cost of revenues increasing at a lower rate than revenue[148](index=148&type=chunk) - The decrease in General and Administrative expenses was primarily due to lower personnel costs, consulting, and professional fees, including a **$729,763** decrease in stock-based compensation related to the departure of former Helix advisors[151](index=151&type=chunk) [Non-GAAP Financial Measures](index=34&type=section&id=Non-GAAP%20Financial%20Measures) - Adjusted EBITDA is presented as a non-GAAP measure to supplement U.S. GAAP net income/loss, used by management for decision-making, budgeting, and evaluating performance[154](index=154&type=chunk)[155](index=155&type=chunk) - Adjusted EBITDA excludes depreciation and amortization, stock-based compensation expense, interest expense, investment income, other items (like warrant liability fair value changes), severance expenses, and income tax expense[158](index=158&type=chunk)[160](index=160&type=chunk) | Item | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Net loss from continuing operations | $(2,248,799) | $(10,317,700) | | Adjustments: | | | | Depreciation and amortization | $38,430 | $15,349 | | Stock based compensation expense | $1,828,233 | $7,613,978 | | Change in fair value of warrant liability | $5,559 | $(219,840) | | Interest and investment income | $(382,922) | $(3,795) | | Interest expense | $208,456 | $211,333 | | Severance expense | $250,000 | $0 | | Income tax expense | $29,909 | $5,000 | | Adjusted EBITDA - continuing operations | $(271,134) | $(2,695,675) | - Adjusted EBITDA loss from continuing operations decreased by **$2,424,541**, from **$(2,695,675)** in Q1 2022 to **$(271,134)** in Q1 2023, reflecting higher revenues and lower R&D and G&A expenses[165](index=165&type=chunk) [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) - The company's operations have been financed primarily through equity issuances and convertible notes, and it expects to continue funding operations via cash flow, debt, and/or additional equity[166](index=166&type=chunk) - As of March 31, 2023, the company had **$40 million** in cash and marketable securities, plus **$8.8 million** in proceeds receivable from the BioTrack sale[166](index=166&type=chunk) [Cash Flows](index=38&type=section&id=Cash%20Flows) | Cash Flow Activity | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities - continuing operations | $(1,201,777) | $(2,399,452) | | Net cash provided by (used in) investing activities - continuing operations | $(633,003) | $160,378 | | Net cash used in financing activities - continuing operations | $(94,599) | $(13,122) | - Net cash used in operating activities decreased by **$1,197,675** in Q1 2023 compared to Q1 2022, driven by a decreased Adjusted EBITDA loss[168](index=168&type=chunk) - Net cash used in investing activities increased by **$793,381** in Q1 2023, primarily due to increased net purchases of marketable securities, partially offset by cash from discontinued operations sale[169](index=169&type=chunk) - Net cash used in financing activities increased by **$81,477** in Q1 2023, mainly due to cash used for income tax withholding payments on vesting restricted stock[170](index=170&type=chunk) [Critical Accounting Policies and Use of Estimates](index=39&type=section&id=Critical%20Accounting%20Policies%20and%20Use%20of%20Estimates) - The company's critical accounting policies involve judgments and estimates, particularly for discontinued operations, which require estimates regarding cost allocation and net asset values[172](index=172&type=chunk)[174](index=174&type=chunk) - The adoption of ASU 2021-08 (Accounting for Contract Assets and Contract Liabilities from Contracts with Customers) on January 1, 2023, did not have a material impact on the financial statements[175](index=175&type=chunk) - As an 'emerging growth company' under the JOBS Act, Forian Inc. elects to use the extended transition period for new or revised accounting standards and is exempt from certain reporting requirements[177](index=177&type=chunk)[178](index=178&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This item is not required for the company - This item is not required for the company[179](index=179&type=chunk) [Item 4. Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were ineffective as of March 31, 2023, due to material weaknesses, with ongoing remediation efforts - Disclosure controls and procedures were deemed ineffective as of March 31, 2023, due to material weaknesses in internal controls over financial reporting[181](index=181&type=chunk) - Remediation efforts include hiring additional accounting personnel and outside consultants, and implementing upgraded accounting and finance systems[184](index=184&type=chunk)[185](index=185&type=chunk) - No changes in internal control over financial reporting occurred during Q1 2023 that materially affected, or are reasonably likely to materially affect, internal control over financial reporting, other than the ongoing remediation efforts[187](index=187&type=chunk) PART II OTHER INFORMATION [Item 1. Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) The company is vigorously defending two material legal proceedings, including a **10%** ownership claim and a **$27.5 million** lawsuit by former employees - John Audet filed a complaint claiming **10%** ownership of Green Tree International, an indirect subsidiary, seeking monetary damages and an accounting[189](index=189&type=chunk) - Four former Helix employees filed a lawsuit seeking over **$27.5 million** in damages for alleged breach of contract, promissory estoppel, and other claims related to unreceived equity interest or compensation[190](index=190&type=chunk) - The company believes both lawsuits are without merit and intends to defend vigorously against the claims[189](index=189&type=chunk)[190](index=190&type=chunk) [Item 1A. Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) This item is not required for the company - This item is not required for the company[191](index=191&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=42&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds were reported - None to report for unregistered sales of equity securities and use of proceeds[192](index=192&type=chunk) [Item 3. Defaults Upon Senior Securities](index=42&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported - None to report for defaults upon senior securities[193](index=193&type=chunk) [Item 4. Mine Safety Disclosures](index=42&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - This item is not applicable[193](index=193&type=chunk) [Item 5. Other Information](index=42&type=section&id=Item%205.%20Other%20Information) No other information was reported under this item - None to report for other information[194](index=194&type=chunk) [Item 6. Exhibits](index=42&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including various agreements, corporate documents, and required certifications - Exhibits include the Stock Purchase Agreement for Bio-Tech Medical Software, Inc., Certificate of Incorporation, Bylaws, Separation Agreement with Daniel Barton, License Agreement, and various certifications (CEO, CFO, Sarbanes-Oxley Act)[196](index=196&type=chunk) Signatures - The report was signed on behalf of Forian Inc. by Max Wygod, Chief Executive Officer, and Michael Vesey, Chief Financial Officer, on May 15, 2023[198](index=198&type=chunk)[199](index=199&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number: 001-40146 FORIAN INC. (Exact name of registrant as specified in its charter) Delaware 85-3467693 (State of Other Jurisdiction of incorporation or Organization) (I.R.S. Employer Iden ...

Forian Inc. (NASDAQ:FORA) Q3 2022 Earnings Conference Call November 14, 2022 4:30 PM ET Company Participants Max Wygod - Co-Founder and Executive Chair Daniel Barton - Chief Executive Officer Michael Vesey - Chief Financial Officer Conference Call Participants Eric Martinuzzi - Lake Street Capital Operator Greetings, and welcome to Forian Inc. Third Quarter 2022 Financial Results Conference Call and Webcast. At this time all participants are in a listen-only mode. A question-and-answer session will follow t ...