Forian(FORA) - 2024 Q3 - Quarterly Report

Revenue Performance - Forian's revenues for the three months ended September 30, 2024, were $4,686,312, a decrease of$662,157 compared to $5,348,469 for the same period in 2023[144] - Revenues for the nine months ended September 30, 2024, were$14,340,791, representing a decrease of $771,607 from$15,112,398 for the same period in 2023[151] Cost of Revenues - Cost of revenues for the three months ended September 30, 2024, was $1,402,920, an increase of$40,365 compared to $1,362,555 for the same period in 2023[146] - Cost of revenues for the nine months ended September 30, 2024, was$4,913,195, an increase of $1,021,713 from$3,891,482 for the same period in 2023[153] Gross Profit - Gross profit as a percentage of revenues decreased to 70% for the three months ended September 30, 2024, compared to 75% for the same period in 2023[146] Operating Expenses - Research and development expenses for the three months ended September 30, 2024, were $291,962, an increase of$27,181 compared to $264,781 for the same period in 2023[147] - Sales and marketing expenses for the three months ended September 30, 2024, were$956,983, a decrease of $356,229 compared to$1,313,212 for the same period in 2023[148] - General and administrative expenses for the three months ended September 30, 2024, were $2,822,253, a decrease of$65,518 compared to $2,887,771 for the same period in 2023[149] Litigation Expenses - Litigation settlements and related expenses for the nine months ended September 30, 2024, were$1,152,670, an increase of $401,190 compared to$751,480 for the same period in 2023[157] Adjusted EBITDA - Adjusted EBITDA for the three months ended September 30, 2024 was $185,916, a decrease of$886,231 compared to $1,072,147 for the same period in 2023[179] - Adjusted EBITDA for the nine months ended September 30, 2024 was$368,535, down $934,197 from$1,302,732 for the same period in 2023[180] - The decrease in Adjusted EBITDA is primarily due to lower revenues and higher cost of sales, partially offset by decreases in operating expenses[179][180] - Management excludes depreciation and amortization, stock-based compensation, interest expense, and other items from Adjusted EBITDA to provide a clearer view of operational performance[162][164][165][168] - The Company recognizes that Adjusted EBITDA has limitations and should not be considered a substitute for U.S. GAAP financial measures[175][177] Cash Flow and Financing - Net cash used in operating activities for the nine months ended September 30, 2024, was $1,467,084, an increase of$2,854,434 compared to $1,387,350 for the same period in 2023[183] - Net cash used in investing activities was$730,177 for the nine months ended September 30, 2024, an increase of $3,091,229 compared to cash provided by investing activities of$2,361,052 for the same period in 2023[185] - Net cash used in financing activities was $1,138,037 for the nine months ended September 30, 2024, an increase of$30,046 compared to $1,107,991 for the same period in 2023[186] - The total net decrease in cash and cash equivalents for the nine months ended September 30, 2024, was$3,335,298, compared to an increase of $2,640,411 for the same period in 2023[182] Asset Sales - The Company sold BioTrack for$30,000,000, consisting of $20,000,000 in cash at closing and$10,000,000 in future payments[181] - The Company sold a minority equity interest in a customer for cash proceeds of $5,805,858, with future contingent earnout payments of up to$3,600,000 in 2025 and 2026[181] Cash and Debt - As of September 30, 2024, the Company's cash and marketable securities totaled $49,357,888[181] - Outstanding principal and accrued interest on the Notes, due September 1, 2025, amounted to$24,370,509[181] - The Company expects to fund operations and potential acquisitions through cash flow from operating activities, available cash, marketable securities, debt financing, and/or additional equity issuances[181]