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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Forian Inc | NASDAQ:FORA | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 2.51 | 1.01 | 3.26 | 0 | 14:03:24 |
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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(Address of principal executive offices)
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(Zip Code)
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Item 2.02 |
Results of Operations and Financial Condition
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Item 9.01 |
Financial Statements and Exhibits
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(d)
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Exhibits.
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Exhibit No.
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Description
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Press Release, dated November 9, 2023 (furnished herewith)
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104
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Cover Page Interactive Data File (embedded within the Inline XBRL document)
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FORIAN INC.
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Dated: November 9, 2023
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By:
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/s/ Edward Spaniel, Jr.
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Name:
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Edward Spaniel, Jr.
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Title:
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Executive Vice President, General Counsel and Secretary
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● |
Forian delivered the following results for the third quarter of 2023:
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Three Months Ended
September 30,
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Period-
over-
Period %
Change
|
|||||||||||
2023
Unaudited
|
2022
Unaudited
|
|||||||||||
Total revenue
|
$
|
5,348,469
|
$
|
4,310,694
|
24%
|
|
||||||
Income (loss) from continuing operations, net of tax
|
$
|
5,453,643
|
$
|
(2,966,053
|
)
|
284%
|
||||||
Loss from discontinued operations, net of tax
|
$
|
(1,111,552
|
)
|
$
|
(2,161,571
|
)
|
49%
|
|||||
Net income (loss)
|
$
|
4,342,091
|
$
|
(5,127,626
|
)
|
185%
|
||||||
Income (loss) from continuing operations, net of tax per share – diluted
|
$
|
0.16
|
$
|
(0.09
|
)
|
278%
|
||||||
Loss from discontinued operations, net of tax per share – diluted
|
$
|
(0.03
|
)
|
$
|
(0.07
|
)
|
57%
|
|||||
Income (loss) per share – diluted
|
$
|
0.13
|
$
|
(0.16
|
)
|
181%
|
||||||
Adjusted EBITDA1 – continuing operations
|
$
|
755,327
|
$
|
(1,230,740
|
)
|
161%
|
● |
Revenue for the quarter was $5.3 million, an increase of $1.0 million versus the prior year
|
● |
Net income from continuing operations for the quarter was $5.5 million, or $0.16 per share, compared to a net loss of $3.0 million, or $0.09 per
share, in the prior year
|
● |
Adjusted EBITDA1 for the quarter was $0.8 million, compared to negative $1.2 million in the prior year
|
● |
Cash, cash equivalents and marketable securities at September 30, 2023 totaled $49.0 million
|
• |
Licensed additional strategic healthcare data, further differentiating Forian’s unique integrated de-identified data factory
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• |
Repurchased 1,604,676 shares of Forian common stock in a privately negotiated transaction in October at redemption price of $2.15 per share
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• |
Launched new data science based information products, including a referral mapping tool
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September 30,
2023
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December 31,
2022
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|||||||
(UNAUDITED)
|
||||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
5,377,079
|
$
|
2,795,743
|
||||
Marketable securities
|
43,585,724
|
17,396,487
|
||||||
Accounts receivable, net
|
2,918,533
|
1,809,028
|
||||||
Proceeds receivable from sale of discontinued operation, net
|
4,097,872
|
-
|
||||||
Contract assets
|
870,328
|
2,252,958
|
||||||
Prepaid expenses
|
1,269,459
|
835,786
|
||||||
Other assets
|
369,616
|
432,338
|
||||||
Current assets of discontinued operations
|
-
|
1,393,688
|
||||||
Total current assets
|
58,488,611
|
26,916,028
|
||||||
|
||||||||
Property and equipment, net
|
86,238
|
75,030
|
||||||
Right of use assets, net
|
15,810
|
32,560
|
||||||
Deposits and other assets
|
201,630
|
196,675
|
||||||
Non current assets of discontinued operations
|
-
|
19,037,874
|
||||||
Total assets
|
$
|
58,792,289
|
$
|
46,258,167
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
259,792
|
$
|
316,105
|
||||
Accrued expenses
|
4,431,172
|
3,766,789
|
||||||
Short-term operating lease liabilities
|
15,810
|
21,600
|
||||||
Warrant liability
|
459
|
4,547
|
||||||
Deferred revenues
|
2,753,619
|
2,581,287
|
||||||
Current liabilities of discontinued operations
|
-
|
1,662,247
|
||||||
Total current liabilities
|
7,460,852
|
8,352,575
|
||||||
Long-term liabilities:
|
||||||||
Long-term operating lease liabilities
|
-
|
10,960
|
||||||
Convertible notes payable, net of debt issuance costs ($6,000,000 in principal is held by a related party)
|
24,665,944
|
25,106,547
|
||||||
Non current liabilities of discontinued operations
|
-
|
365,609
|
||||||
Total long-term liabilities
|
24,665,944
|
25,483,116
|
||||||
|
||||||||
Total liabilities
|
32,126,796
|
33,835,691
|
||||||
Commitments and contingencies
|
||||||||
Stockholders' equity:
|
||||||||
Preferred Stock; par value $0.001; 5,000,000 Shares authorized; 0 issued and outstanding as of September 30, 2023
and December 31, 2022
|
-
|
-
|
||||||
Common Stock; par value $0.001; 95,000,000 Shares authorized; 32,488,811 issued and outstanding as of September
30, 2023 and 32,251,326 issued and outstanding as of December 31, 2022
|
32,489
|
32,251
|
||||||
Additional paid-in capital
|
75,707,361
|
71,182,326
|
||||||
Accumulated deficit
|
(49,074,357
|
)
|
(58,792,101
|
)
|
||||
Total stockholders' equity
|
26,665,493
|
12,422,476
|
||||||
Total liabilities and stockholders' equity
|
$
|
58,792,289
|
$
|
46,258,167
|
For the Three Months Ended September 30,
|
For the Nine Months Ended September 30,
|
|||||||||||||||
2023
|
2022
|
2023
|
2022
|
|||||||||||||
Revenue
|
$
|
5,348,469
|
$
|
4,310,694
|
$
|
15,112,398
|
$
|
11,448,468
|
||||||||
Costs and Expenses:
|
||||||||||||||||
Cost of revenue
|
1,362,555
|
1,339,054
|
3,891,482
|
3,853,486
|
||||||||||||
Research and development
|
264,781
|
806,108
|
1,100,657
|
3,315,506
|
||||||||||||
Sales and marketing
|
1,313,212
|
1,080,660
|
3,746,731
|
2,904,358
|
||||||||||||
General and administrative
|
3,204,591
|
3,908,460
|
10,393,016
|
13,003,158
|
||||||||||||
Separation expenses
|
-
|
-
|
599,832
|
5,417,043
|
||||||||||||
Depreciation and amortization
|
10,598
|
16,916
|
64,285
|
48,599
|
||||||||||||
Total costs and expenses
|
6,155,737
|
7,151,198
|
19,796,003
|
28,542,150
|
||||||||||||
Operating loss From Continuing Operations
|
(807,268
|
)
|
(2,840,504
|
)
|
(4,683,605
|
)
|
(17,093,682
|
)
|
||||||||
Other Income (Expense):
|
||||||||||||||||
Change in fair value of warrant liability
|
1,594
|
8,539
|
4,088
|
343,155
|
||||||||||||
Interest and investment income
|
646,832
|
88,972
|
1,666,786
|
111,683
|
||||||||||||
Gain on sale of investment
|
5,805,858
|
-
|
5,805,858
|
|||||||||||||
Interest expense
|
(211,333
|
)
|
(213,060
|
)
|
(630,547
|
)
|
(633,041
|
)
|
||||||||
Gain on debt redemption
|
111,151
|
-
|
111,151
|
|||||||||||||
Total other income (expense), net
|
6,354,102
|
(115,549
|
)
|
6,957,336
|
(178,203
|
)
|
||||||||||
Income (loss) from continuing operations before income taxes
|
5,546,834
|
(2,956,053
|
)
|
2,273,731
|
(17,271,885
|
)
|
||||||||||
Income tax expense
|
(93,191
|
)
|
(10,000
|
)
|
(159,287
|
)
|
(20,000
|
)
|
||||||||
Income (loss) from continuing operations, net of tax
|
5,453,643
|
(2,966,053
|
)
|
2,114,444
|
(17,291,885
|
)
|
||||||||||
Loss from discontinued operations
|
-
|
(2,161,571
|
)
|
(94,427
|
)
|
(5,325,531
|
)
|
|||||||||
Gain on sale of discontinued operations
|
-
|
-
|
11,531,849
|
202,159
|
||||||||||||
Income tax effect on discontinued operations
|
(1,111,552
|
)
|
-
|
(3,834,122
|
)
|
|||||||||||
(Loss) Income from discontinued operations, net of tax
|
(1,111,552
|
)
|
(2,161,571
|
)
|
7,603,300
|
(5,123,372
|
)
|
|||||||||
Net income (loss)
|
4,342,091
|
(5,127,624
|
)
|
9,717,744
|
(22,415,257
|
)
|
||||||||||
Net income (loss) per share
|
||||||||||||||||
Basic
|
||||||||||||||||
Continuing operations
|
$
|
0.17
|
$
|
(0.09
|
)
|
$
|
0.07
|
$
|
(0.54
|
)
|
||||||
Discontinued operations
|
$
|
(0.03
|
)
|
$
|
(0.07
|
)
|
$
|
0.23
|
$
|
(0.16
|
)
|
|||||
Net income (loss) per share - basic and diluted
|
$
|
0.14
|
$
|
(0.16
|
)
|
$
|
0.30
|
$
|
(0.70
|
)
|
||||||
Diluted
|
||||||||||||||||
Continuing operations
|
$
|
0.16
|
$
|
(0.09
|
)
|
$
|
0.07
|
$
|
(0.54
|
)
|
||||||
Discontinued operations
|
$
|
(0.03
|
)
|
$
|
(0.07
|
)
|
$
|
0.23
|
$
|
(0.16
|
)
|
|||||
Net income (loss) per share - basic and diluted
|
$
|
0.13
|
$
|
(0.16
|
)
|
$
|
0.30
|
$
|
(0.70
|
)
|
||||||
Weighted-average shares outstanding- basic
|
32,459,838
|
32,088,358
|
32,397,090
|
31,978,719
|
||||||||||||
Weighted-average shares outstanding- diluted
|
35,068,716
|
32,088,358
|
32,503,359
|
31,978,719
|
For the Nine Months Ended September 30,
|
||||||||
2023
|
2022
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net income (loss)
|
$
|
9,717,744
|
$
|
(22,415,257
|
)
|
|||
Less: Income (loss) from discontinued operations
|
7,603,300
|
(5,123,372
|
)
|
|||||
Income (loss) from continuing operations
|
2,114,444
|
(17,291,885
|
)
|
|||||
Adjustments to reconcile net income (loss) to net cash used in operating activities - continuing operations:
|
||||||||
Depreciation and amortization
|
64,285
|
48,599
|
||||||
Amortization on right of use asset
|
16,750
|
1,211
|
||||||
Amortization of debt issuance costs
|
3,999
|
3,999
|
||||||
Accrued interest on Convertible Notes
|
626,549
|
629,041
|
||||||
Amortization of discount - proceeds from sale of discontinued operations
|
(341,205
|
)
|
-
|
|||||
Realized and unrealized gain on marketable securities
|
(1,318,083
|
)
|
(110,914
|
)
|
||||
Gain on sale of investment
|
(5,805,858
|
)
|
||||||
Gain on debt redemption
|
(111,151
|
)
|
||||||
Stock-based compensation expense
|
4,920,572
|
10,581,021
|
||||||
Change in fair value of warrant liability
|
(4,088
|
)
|
(343,155
|
)
|
||||
Change in operating assets and liabilities:
|
||||||||
Accounts receivable
|
(1,109,505
|
)
|
(1,924,218
|
)
|
||||
Contract assets
|
983,499
|
(921,290
|
)
|
|||||
Prepaid expenses
|
(34,542
|
)
|
(183,050
|
)
|
||||
Changes in lease liabilities during the period
|
(16,750
|
)
|
34,008
|
|||||
Deposits and other assets
|
57,767
|
468,833
|
||||||
Accounts payable
|
(56,313
|
)
|
195,084
|
|||||
Accrued expenses
|
1,224,648
|
527,580
|
||||||
Deferred revenues
|
172,332
|
1,509,639
|
||||||
Net cash provided by (used in) operating activities - continuing operations
|
1,387,350
|
(6,775,497
|
)
|
|||||
Net cash used in operating activities - discontinued operations
|
(59,075
|
)
|
(2,375,789
|
)
|
||||
Net cash provided by (used in) operating activities
|
1,328,275
|
(9,151,286
|
)
|
|||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Additions to property and equipment
|
(75,493
|
)
|
(45,367
|
)
|
||||
Purchase of marketable securities
|
(103,468,975
|
)
|
(42,929,102
|
)
|
||||
Sale of marketable securities
|
78,597,821
|
36,392,416
|
||||||
Proceeds from sale of investment
|
5,805,858
|
|||||||
Cash from sale of discontinued operations
|
21,501,841
|
225,575
|
||||||
Net cash provided by (used in) provided by investing activities - continuing operations
|
2,361,052
|
(6,356,478
|
)
|
|||||
Net cash used in investing activities - discontinued operations
|
-
|
(1,650,569
|
)
|
|||||
Net cash provided by (used in) investing activities
|
2,361,052
|
(8,007,047
|
)
|
|||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Payments on notes payable and financing arrangements
|
-
|
(13,122
|
)
|
|||||
Cash used to redeem convertible notes
|
(960,000
|
)
|
-
|
|||||
Payment of employee withholding tax related to restricted stock units
|
(147,991
|
)
|
(58,085
|
)
|
||||
Net cash used in financing activities- continuing operations
|
(1,107,991
|
)
|
(71,207
|
)
|
||||
Net cash used in financing activities
|
(1,107,991
|
)
|
(71,207
|
)
|
||||
Net change in cash
|
2,581,336
|
(17,229,540
|
)
|
|||||
Cash and cash equivalents, beginning of period
|
2,795,743
|
17,938,490
|
||||||
Cash and cash equivalents, end of period
|
$
|
5,377,079
|
$
|
708,952
|
||||
Supplemental disclosure of cash flow information
|
||||||||
Cash paid for interest
|
$
|
-
|
$
|
-
|
||||
Cash paid for taxes
|
$
|
3,276,800
|
$
|
2,550
|
• |
Depreciation and Amortization. Depreciation and amortization expense is a non-cash expense relating to capital expenditures and intangible assets arising from acquisitions that are expensed on a straight-line basis over the estimated useful
life of the related assets. We exclude depreciation and amortization expense from Adjusted EBITDA because we believe that (i) the amount of such expenses in any specific period may not directly correlate to the underlying performance of
our business operations and (ii) such expenses can vary significantly between periods as a result of new acquisitions and full amortization of previously acquired tangible and intangible assets. Accordingly, we believe that this exclusion
assists management and investors in making period-to-period comparisons of operating performance. Investors should note that the use of tangible and intangible assets contributed to revenue in the periods presented and will contribute to
future revenue generation and should also note that such expense will recur in future periods.
|
• |
Stock-Based Compensation Expense. Stock-based compensation expense is a non-cash expense arising from the grant of stock-based awards to employees. We believe that excluding the effect of stock-based compensation from Adjusted EBITDA assists
management and investors in making period-to-period comparisons in our Company’s operating performance because (i) the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business
operations and (ii) such expenses can vary significantly between periods as a result of the timing of grants of new stock-based awards, including grants in connection with acquisitions. Stock-based compensation expense includes certain
separation expenses related to the vesting of stock options. Effective February 10, 2023, the Company’s Chief Executive Officer, President and Class II member of the Board of Directors resigned. In connection with the resignation, the
Company entered into a separation agreement providing for, among other things, accelerated vesting of 106,656 unvested restricted shares of the Company common stock. Stock based compensation expense for the three months ended March 31,
2023 includes $349,832 related to the accelerated vesting of stock. On March 2, 2022, we and the former chief executive officer and the former chief financial officer of Helix mutually agreed not to renew special advisor agreements. Per
the terms of the agreements, options to purchase 366,166 shares of common stock continued to vest according to their original terms through March 2, 2023, and unvested stock options to purchase 732,332 shares of common stock were
forfeited. The advisors were not required to perform services to the Company beyond the non-renewal date of March 2, 2022. As a result, we recorded $5,417,043 of stock compensation expenses during March 2022 related to the options that
vested through the twelve months ending March 2, 2023. We believe that excluding stock-based compensation from Adjusted EBITDA assists management and investors in making meaningful comparisons between our Company’s operating performance
and the operating performance of other companies that may use different forms of employee compensation or different valuation methodologies for their stock-based compensation. Investors should note that stock-based compensation is a key
incentive offered to employees whose efforts contributed to the operating results in the periods presented and are expected to contribute to operating results in future periods. Investors should also note that such expenses will recur in
the future.
|
• |
Interest Expense. Interest
expense is associated with the convertible notes entered into on September 1, 2021 in the amount of $24,000,000 (the “Notes”). The Notes are due on September 1, 2025 and accrue interest at an annual rate of 3.5%. We exclude interest
expense from Adjusted EBITDA (i) because it is not directly attributable to the performance of our business operations and, accordingly, its exclusion assists management and investors in making period-to-period comparisons of operating
performance and (ii) to assist management and investors in making comparisons to companies with different capital structures. Investors should note that interest expense associated with the Notes will recur in future periods.
|
• |
Investment Income. Investment
income is associated with the level of marketable debt securities and other interest-bearing accounts in which we invest. Interest and investment income can vary over time due to a variety of financing transactions, changes in interest
rates, cash used to fund operations and capital expenditures and acquisitions that we have entered into or may enter into in the future. We exclude interest and investment income from Adjusted EBITDA (i) because these items are not
directly attributable to the performance of our business operations and, accordingly, their exclusion assists management and investors in making period-to-period comparisons of operating performance and (ii) to assist management and
investors in making comparisons to companies with different capital structures. Investors should note that interest income will recur in future periods.
|
• |
Other Items. We
engage in other activities and transactions that can impact our net loss. In the periods being reported, these other items included (i) change in fair value of warrant liability which related to warrants assumed in the acquisition of
Helix; (ii) gain on sale of investment which relates to the sale of a minority equity interest; and (iii) gain on debt redemption which relates to a gain on the early retirement of a portion of our convertible notes. We exclude these
other items from Adjusted EBITDA because we believe these activities or transactions are not directly attributable to the performance of our business operations and, accordingly, their exclusion assists management and investors in making
period-to-period comparisons of operating performance. Investors should note that some of these other items may recur in future periods.
|
• |
Severance expenses. Effective February 10, 2023, the Company’s Chief Executive Officer, President and Class II member of the Board of Directors resigned. In connection with the resignation, the Company entered into a separation agreement providing
for, among other things, (i) salary continuation for twelve months and (ii) accelerated vesting of 106,656 unvested restricted shares of the Company common stock. Severance expenses for the nine months ended September 30, 2023 includes $250,000 related to the salary continuation. We exclude these other items from Adjusted EBITDA because we believe these costs are not recurring and not directly
attributable to the performance of our business operations and, accordingly, their exclusion assists management and investors in making period-to-period comparisons of operating performance. In addition, the Company records normal course
of business severance expenses in the operating expense line item related to our employees’ activities.
|
• |
Income tax expense.
We exclude the income tax expense from Adjusted EBITDA (i) because we believe that the income tax expense is not directly attributable to the underlying performance of our business operations and, accordingly, its exclusion assists
management and investors in making period-to-period comparisons of operating performance and (ii) to assist management and investors in making comparisons to companies with different tax attributes.
|
For the Three Months Ended September 30,
|
For the Nine Months Ended September 30,
|
|||||||||||||||
2023
|
2022
|
2023
|
2022
|
|||||||||||||
Total revenues
|
$
|
5,348,469
|
$
|
4,310,694
|
$
|
15,112,398
|
$
|
11,448,468
|
||||||||
Net Income (loss) from continuing operations
|
$
|
5,453,643
|
$
|
(2,966,053
|
)
|
$
|
2,114,444
|
$
|
(17,291,885
|
)
|
||||||
Depreciation and amortization
|
10,598
|
16,916
|
64,285
|
48,599
|
||||||||||||
Stock based compensation expense
|
1,551,997
|
1,592,848
|
4,920,572
|
10,581,021
|
||||||||||||
Change in fair value of warrant liability
|
(1,594
|
)
|
(8,539
|
)
|
(4,088
|
)
|
(343,155
|
)
|
||||||||
Interest and investment income
|
(646,832
|
)
|
(88,972
|
)
|
(1,666,786
|
)
|
(111,683
|
)
|
||||||||
Interest expense
|
211,333
|
213,060
|
630,547
|
633,041
|
||||||||||||
Gain on sale of investment
|
(5,805,858
|
)
|
-
|
(5,805,858
|
)
|
-
|
||||||||||
Gain on debt redemption
|
(111,151
|
)
|
-
|
(111,151
|
)
|
-
|
||||||||||
Severance expense
|
-
|
-
|
250,000
|
-
|
||||||||||||
Income tax expense
|
93,191
|
10,000
|
159,287
|
20,000
|
||||||||||||
Adjusted EBITDA - continuing operations
|
$
|
755,327
|
$
|
(1,230,740
|
)
|
$
|
551,252
|
$
|
(6,464,062
|
)
|
Document and Entity Information |
Nov. 09, 2023 |
---|---|
Cover [Abstract] | |
Document Type | 8-K |
Amendment Flag | false |
Document Period End Date | Nov. 09, 2023 |
Entity File Number | 001-40146 |
Entity Registrant Name | FORIAN INC. |
Entity Central Index Key | 0001829280 |
Entity Incorporation, State or Country Code | DE |
Entity Tax Identification Number | 85-3467693 |
Entity Address, Address Line One | 41 University Drive |
Entity Address, Address Line Two | Suite 400 |
Entity Address, City or Town | Newtown |
Entity Address, State or Province | PA |
Entity Address, Postal Zip Code | 18940 |
City Area Code | 267 |
Local Phone Number | 225-6263 |
Title of 12(b) Security | Common Stock, $0.001 par value |
Trading Symbol | FORA |
Security Exchange Name | NASDAQ |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Written Communications | false |
Soliciting Material | false |
Pre-commencement Tender Offer | false |
Pre-commencement Issuer Tender Offer | false |
1 Year Forian Chart |
1 Month Forian Chart |
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