Business Overview - Forian's subscription and services-based solutions cover life sciences, pharmaceutical services, healthcare payer and provider, and financial services industries[25]. - As of February 10, 2023, Forian completed the sale of BioTrack, resulting in the cessation of software solutions for the cannabis industry, while retaining certain license rights[27]. - On October 31, 2024, Forian acquired 100% of Kyber Data Science LLC, enhancing its offerings in healthcare information products for the financial services industry[27]. - Forian's databases include billions of de-identified patient events dating back to 2014, representing the majority of the U.S. population, updated regularly to enhance data offerings[38]. - The U.S. healthcare spending is approximately 17% of GDP, with a growing emphasis on digitizing medical records and integrating disparate data sources[32]. - Forian's information products are largely subscription-based, with multi-year contracts providing tailored solutions to clients[41]. - The company aims to drive growth by acquiring new customers and increasing usage within the existing customer base through cross-selling additional information solutions[45]. - Forian's technology platform processes and integrates various data sources to produce a longitudinal database, enhancing its competitive edge in the market[44]. - The healthcare analytics market is segmented into clinical analytics, commercial analytics, and technology platform solutions, with increasing demand for integrated data solutions[33]. - Forian's competitive strengths include deep domain expertise, a diverse customer base, and a flexible approach to privacy-focused analytics software[44]. Financial Performance - Revenues for the year ended December 31, 2024, were 1,063,721 (approximately 5%) compared to 7,334,163 in 2024, up 5,477,032 in 2023, largely due to the Kyber acquisition and higher information licensing expenses[151]. - Gross profit as a percentage of revenues decreased to 64% in 2024 from 74% in 2023[151]. - Research and development expenses rose to 37,165 (approximately 3%) compared to 4,334,289 in 2024, down 4,957,833 in 2023, due to lower severance and commissions[153]. - General and administrative expenses were 63,268 (approximately 0.5%) from 669,955 in 2024, down 1,032,985 in 2023[155]. - Adjusted EBITDA for the year ended December 31, 2024, was 2,509,334 compared to (3,771,070), compared to a net income of 282,827 in 2024 from 505,066[171]. Risks and Challenges - The company faces risks related to its limited operating history and may require additional capital for operations and expansion[59][60]. - The company depends on external data sources for its information products, which poses risks if access to this data is lost or restricted[61]. - The company’s growth strategy includes acquisitions, which may involve risks related to identifying suitable candidates and successful integration[62][63]. - The company faces risks related to the evolving federal and state privacy and data protection laws, which may increase operating costs and impact service delivery[84]. - Compliance with new privacy laws may require significant investment and could expose the company to liabilities if not adhered to properly[85]. - Cybersecurity threats pose significant risks to the company's systems and data, potentially leading to substantial costs related to rebuilding systems and defending against litigation[92]. - The competitive market for qualified personnel poses a challenge for the company in attracting and retaining necessary expertise, which could impact business continuity[77]. - Consolidation among customers may reduce service purchases, negatively affecting the company's revenue and financial condition[83]. - The company may struggle to accurately forecast operating results and growth rates, which could lead to lower-than-anticipated financial performance and stock price declines[82]. Compliance and Governance - The company has identified material weaknesses in its internal control over financial reporting, which could lead to inaccuracies in financial statements and loss of investor confidence[78]. - As of December 31, 2024, the company concluded that its disclosure controls and procedures were not effective, particularly regarding payables transactions and revenue recognition under ASC 606[79]. - The company intends to remediate identified material weaknesses, but insufficient remediation efforts could adversely affect financial reporting accuracy and compliance with SEC rules[80]. - The company has implemented practices to comply with applicable privacy laws, including engaging third parties for guidance on data de-identification[88]. - The company does not intend to pay dividends on its common stock, limiting returns to stockholders to stock price appreciation[97]. - Directors and management own approximately 46% of the company's common stock, allowing them to exert significant control over stockholder approval matters[98]. - The company is classified as an emerging growth company, allowing it to take advantage of reduced reporting requirements, which may affect its attractiveness to investors[105]. Cybersecurity and Data Management - The company prioritizes a strong cybersecurity program to safeguard sensitive information and protect its operations[110]. - The company maintains an enterprise-wide information systems security program to safeguard its information systems and assist in reporting cybersecurity incidents[115]. - The company evaluates third-party providers to manage risks associated with data breaches or cybersecurity incidents[118]. - The company has established oversight mechanisms for managing cybersecurity risks, involving regular assessments and engagement with external experts[117]. - The company relies on third-party vendors for data security, and any breaches in their systems could materially impact the company's operations and financial results[94]. Employee and Workforce - As of April 9, 2025, the company had 48 employees, with a positive relationship with its workforce and no organized work stoppages[55]. - Severance expenses for the year ended December 31, 2023, included 250,000 for salary continuation and $349,832 for accelerated vesting of stock for the six months ended June 30, 2023[218].
Forian(FORA) - 2024 Q4 - Annual Report