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Forian Inc. Announces First Quarter 2024 Financial Results

NEWTOWN, PA - (NewMediaWire) - May 14, 2024 - 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 ended March 31, 2024.

“We navigated through the expected tough first quarter environment head-on, and it has not dimmed our optimism for the long-term growth and earning potential of our company. We are confident in our ability to continue to bring best-in-class solutions to market and improve the overall health information ecosystem with our analytics-ready information products,” stated Max Wygod, Executive Chairman and Chief Executive Officer of Forian. “We are pleased to have successfully tackled these obstacles and based on recent performance trends, we anticipate a swift return to growth, reflecting positive momentum and strategic wins.”

  • Forian delivered the following results for the first quarter of 2024:

 

      Three Months Ended March 31,    
              Period-over-
      2024   2023   Period % 
      Unaudited   Unaudited   Change
Revenue    $              4,877,378     $              4,870,387    0%
               
Loss from continuing operations, net of tax    $             (1,212,615)    $             (2,248,799)   46%
Income from discontinued operations, net of tax    $                         -       $              8,747,278    100%
Net (loss) income    $             (1,212,615)    $              6,498,479    119%
               
Loss from continuing operations, net of tax per share - basic and diluted  $                     (0.04)    $                     (0.08)   50%
Income from discontinued operations, net of tax per share - basic and diluted  $                         -       $                      0.27    100%
(Loss) income per share - basic and diluted    $                     (0.04)    $                      0.19    121%
               
Adjusted EBITDA (a non-GAAP financial measure defined below)  $                 104,417     $                (186,783)   156%

 

  • Revenue for the quarter was $4.9 million, unchanged versus the prior year
  • Net loss from continuing operations for the quarter was $1.2 million, or $0.04 per share, compared to a net loss of $2.2 million, or $0.08 per share, in the prior year
  • Adjusted EBITDA for the quarter was $0.1 million, compared to negative $0.2 million in the prior year
  • Cash, cash equivalents and marketable securities at March 31, 2024 totaled $47.4 million

 

Highlights

  • Expanded and enriched our linked data assets by licensing additional streams of data, further enhancing Forian’s unique Chronos data lake
  • Launched Chartis, a provider profiling and affiliations product that classifies entities across organizational affiliations and includes proprietary scoring of the strength, relevance and importance of those affiliations and additional profiling information on individual and organizational providers, including specialty and contact information 

 

This release uses non-GAAP financial measures that are adjusted for the impact of various U.S. GAAP items. See the section titled “Non-GAAP Financial Measures” and the table entitled “Reconciliation of U.S. GAAP to Non-GAAP Financial Measures” below for details. 

Quarterly Conference Call and Webcast 

Forian will host a conference call and webcast at 4:30 p.m. ET on May 14, 2024 to discuss its financial results with the investment community. To register for the conference call, click here. The webcast will be available live at https://edge.media-server.com/mmc/p/884vhumf. This information is also available on our website at www.forian.com/investorsTo be included on the Company’s email distribution list, please sign up atwww.forian.com/investors

About Forian

Forian provides a unique suite of data management capabilities and proprietary information and analytics solutions to optimize and measure operational, clinical and financial performance for customers within the traditional and emerging life sciences and healthcare payer and provider segments. Forian has industry leading expertise in acquiring, integrating, normalizing and commercializing large scale healthcare data assets. Forian’s information products overlay sophisticated data management and data science capabilities on top of a comprehensive clinical data lake to identify unique relationships, create distinctive information assets and generate proprietary insights. For more information, please visit the Company’s website at www.forian.com.

 

Cautionary Statements Regarding Forward-Looking Statements

 

This release contains “forward-looking statements” within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In this context, forward-looking statements often address expected future business and financial performance and financial condition, which may include GAAP and non-GAAP financial measures, and often contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,” “will,” “would,” “target,” similar expressions and variations or negatives of these words. Forward-looking statements by their nature address matters that involve risks and uncertainties, many of which are beyond our control and are not guarantees of future results, such as statements about future financial and operating results, company strategy and intended product offerings and market positioning. These and other forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed in any forward-looking statements. Accordingly, there are or will be important factors that could cause actual results to differ materially from those indicated in such statements and, therefore, you should not place undue reliance on any such statements and caution must be exercised in relying on forward-looking statements. Factors that could cause actual results to differ include, but are not limited to, those risks and uncertainties associated with operations, strategy and goals, our ability to execute on our strategy and the additional risks and uncertainties set forth more fully under the caption “Risk Factors” in Forian’s Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on March 29, 2024, and elsewhere in Forian’s filings and reports with the SEC. Forward-looking statements contained in this release are made as of the date hereof, and we undertake no duty to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable law. 

   

Media and Investor Contact:
forian.com/investors
ir@forian.com

267-225-6263
SOURCE: Forian Inc.

 

FORIAN INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
       
       
  March 31,   December 31,
  2024   2023
  (UNAUDITED)    
ASSETS      
Current assets:      
Cash and cash equivalents $           1,029,128    $           6,042,986 
Marketable securities             46,405,857               42,296,589
Accounts receivable, net              4,267,782                2,572,931
Proceeds receivable from sale of discontinued operation, net                           -                1,645,954
Contract assets              1,023,413                1,126,713
Prepaid expenses                 868,525                1,077,233
Other assets              2,437,222                2,515,509
Total current assets             56,031,927               57,277,915
       
Property and equipment, net                   67,198                     76,085
Right of use assets, net                    5,395                     10,664
Deposits and other assets              1,390,589                1,523,948
Total assets $         57,495,109    $         58,888,612 
       
LIABILITIES AND STOCKHOLDERS' EQUITY      
Current liabilities:      
Accounts payable $             374,735    $             161,590 
Accrued expenses              3,235,544                4,252,257
Short-term operating lease liabilities                    5,395                     10,664
Warrant liability                       450                         563
Deferred revenues              2,852,454                2,413,551
Total current liabilities              6,468,578                6,838,625
       
Long-term liabilities:      
Other liabilities                 500,000                1,000,000
Convertible notes payable, net of debt issuance costs ($6,000,000 in principal is held by a related party)             23,981,788               24,870,181
Total long-term liabilities             24,481,788               25,870,181
       
Total liabilities             30,950,366               32,708,806
       
Commitments and contingencies       
Stockholders' equity:      
Preferred Stock; par value $0.001; 5,000,000 Shares authorized; 0 issued and outstanding as of March 31, 2024 and December 31, 2023                           -                             -
Common Stock; par value $0.001; 95,000,000 Shares authorized; 31,093,172 issued and outstanding as of  March 31, 2024 and 30,920,450 issued and outstanding as of December 31, 2023                   31,093                     30,920
Additional paid-in capital             75,411,679               73,834,300
Accumulated deficit           (48,898,029)             (47,685,414)
Total stockholders' equity             26,544,743               26,179,806
Total liabilities and stockholders' equity $         57,495,109    $         58,888,612 
       

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
           
  For the Three Months Ended March 31,    
  2024   2023    
           
Revenue  $     4,877,378     $      4,870,387     
           
Costs and Expenses:          
Cost of revenue        1,703,357             1,252,215     
Research and development           389,889               531,689     
Sales and marketing        1,055,141             1,196,192     
General and administrative        3,492,454             3,639,826     
Separation expenses                   -                 599,832     
Depreciation and amortization              8,887                 38,430     
Total costs and expenses         6,649,728             7,258,184    
           
Operating loss From Continuing Operations       (1,772,350)           (2,387,797)    
           
Other Income (Expense):          
Change in fair value of warrant liability                 113                  (5,559)    
Interest and investment income           675,157               382,922     
Gain on sale of investment             48,612                       -       
Interest expense          (198,963)             (208,456)    
Gain on debt redemption           137,356                       -       
Total other income (expense), net            662,275               168,907    
           
Loss from continuing operations before income taxes       (1,110,075)           (2,218,890)    
Income taxes          (102,540)               (29,909)    
Loss from continuing operations, net of tax       (1,212,615)           (2,248,799)    
           
Loss from discontinued operations                   -                  (94,427)    
Gain on sale of discontinued operations                   -             11,531,849     
Income tax effect on discontinued operations                   -              (2,690,144)    
Income from discontinued operations, net of tax                   -               8,747,278     
Net (loss) income  $    (1,212,615)    $      6,498,479     
           
Net (loss) income per share          
Basic and diluted          
  Continuing operations  $           (0.04)    $             (0.08)    
  Discontinued operations  $               -       $              0.27     
Net (loss) income per share - basic and diluted  $           (0.04)    $              0.19     
           
Weighted-average shares outstanding 30,999,433   32,300,237    
           

 

FORIAN INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
         
    For the Period Ended March 31,
    2024   2023
CASH FLOWS FROM OPERATING ACTIVITIES:        
Net (loss) income    $               (1,212,615)    $                6,498,479 
Less: Income from discontinued operations                                    -                           8,747,278 
Loss from continuing operations                        (1,212,615)                       (2,248,799)
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities - continuing operations:        
Depreciation and amortization                                8,887                             38,430
Amortization on right of use asset                                5,269                               5,214
Amortization of debt issuance costs                                1,333                               1,333
Accrued interest on convertible Notes                             197,630                           208,456
Amortization of discount - proceeds from sale of discontinued operations                            (20,712)                           (55,041)
Accretion of discount - marketable securities                           (619,565)                         (320,530)
Gain on sale of investment                            (48,612)                                     -
Gain on debt redemption                           (137,356)                                     -
Stock-based compensation expense                          1,658,915                         1,828,233
Change in fair value of warrant liability                                 (113)                               5,559
Change in operating assets and liabilities:        
Accounts receivable                        (1,694,851)                       (1,986,256)
Contract assets                             103,300                           412,244
Prepaid expenses                             208,708                           409,800
Changes in lease liabilities during the period                            (16,229)                             (5,214)
Deposits and other assets                             211,646                             11,841
Accounts payable                             213,145                             33,346
Accrued expenses                        (1,016,713)                           (59,788)
Deferred revenues                             438,903                           519,395
Other liabilities                           (489,040)                                     -
Net cash used in operating activities - continuing operations                        (2,208,070)                       (1,201,777)
Net cash used in operating activities - discontinued operations                                       -                           (26,649)
  Net cash used in operating activities                         (2,208,070)                       (1,228,426)
         
CASH FLOWS FROM INVESTING ACTIVITIES:        
Additions to property and equipment                                       -                           (75,493)
Purchase of marketable securities                      (48,848,811)                     (39,704,579)
Sale of marketable securities                        45,359,108                       18,256,876
Proceeds from sale of investment                              48,612                                     -
Cash from sale of discontinued operations                          1,666,666                       20,890,193
Net cash provided by used in investing activities - continuing operations                        (1,774,425)                         (633,003)
  Net cash used in investing activities                         (1,774,425)                         (633,003)
         
CASH FLOWS FROM FINANCING ACTIVITIES:        
Cash used to redeem convertible notes                           (950,000)                                     -
Tax payments related to shares withheld for vested restricted stock units                            (81,363)                           (94,599)
Net cash used in financing activities- continuing operations                        (1,031,363)                           (94,599)
  Net cash used in financing activities                        (1,031,363)                           (94,599)
         
Net change in cash                        (5,013,858)                       (1,956,028)
         
Cash and cash equivalents, beginning of period                          6,042,986                         2,795,743
         
Cash and cash equivalents, end of period   $                  1,029,128    $                    839,715 
         

 

Non-GAAP Financial Measures

 

In this press release, we have provided certain non-GAAP measures, which we define as financial information that has not been prepared in accordance with U.S. GAAP. The non-GAAP financial measure provided herein is earnings before interest, taxes, non-cash and other items (“Adjusted EBITDA”), which should be viewed as supplemental to, and not as an alternative for, net income or loss calculated in accordance with U.S. GAAP (referred to below as “net loss”). 

 

Adjusted EBITDA is used by our management as an additional measure of our Company’s performance for purposes of business decision-making, including developing budgets, managing expenditures and evaluating potential acquisitions or divestitures. Period-to-period comparisons of Adjusted EBITDA help our management identify additional trends in our Company’s financial results that may not be shown solely by period-to-period comparisons of net income. In addition, we may use Adjusted EBITDA in the incentive compensation programs applicable to some of our employees in order to evaluate our Company’s performance. Our management recognizes that Adjusted EBITDA has inherent limitations because of the excluded items, particularly those items that are recurring in nature. In order to compensate for those limitations, management also reviews the specific items that are excluded from Adjusted EBITDA, but included in net income, as well as trends in those items.

 

We believe that the presentation of Adjusted EBITDA is useful to investors in their analysis of our results for reasons similar to the reasons why our management finds it useful and because it helps facilitate investor understanding of decisions made by management in light of the performance metrics used in making those decisions. In addition, as more fully described below, we believe that providing Adjusted EBITDA, together with a reconciliation of net loss to Adjusted EBITDA, helps investors make comparisons between our Company and other companies that may have different capital structures, different effective income tax rates and tax attributes, different capitalized asset values and/or different forms of employee compensation. However, Adjusted EBITDA is not intended as a substitute for comparisons based on net loss. In making any comparisons to other companies, investors need to be aware that companies use different non-GAAP measures to evaluate their financial performance. Investors should pay close attention to the specific definition being used and to the reconciliation between such measures and the corresponding U.S. GAAP measures provided by each company under applicable SEC rules. 

 

The following is an explanation of the items excluded by us from Adjusted EBITDA but included in net loss from continuing operations:

 

  • 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. The Company excludes depreciation and amortization expense from Adjusted EBITDA because management believes that (i) the amount of such expenses in any specific period may not directly correlate to the underlying performance of the 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, management believes 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. Management believes that excluding the effect of stock-based compensation from Adjusted EBITDA assists management and investors in making period-to-period comparisons in the Company’s operating performance because (i) the amount of such expenses in any specific period may not directly correlate to the underlying performance of 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 2023 includes $349,832 related to the accelerated vesting of stock, which is recognized in separation expenses in the condensed consolidated statements of operations. The Company 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. As a result, management recorded $5,417,043 of stock compensation expenses related to the options that vested through the three months ending March 31, 2023, which is recognized in separation expenses in the condensed consolidated statements of operations. Management believes that excluding stock-based compensation from Adjusted EBITDA assists management and investors in making meaningful comparisons between the 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 are due on September 1, 2025, and accrue interest at an annual rate of 3.5%. Management excludes interest expense from Adjusted EBITDA (i) because it is not directly attributable to the performance of 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 the Company invests. Interest and investment income can vary over time due to changes in interest rates and level of investments. Management excludes interest and investment income from Adjusted EBITDA (i) because these items are not directly attributable to the performance of 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. The Company engages in other activities and transactions that can impact net income (loss). In the periods reported, these other items included (i) change in fair value of warrant liability relating to warrants assumed in the acquisition of Helix; (ii) gain on sale of investment relating 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 the convertible notesManagement excludes these other items from Adjusted EBITDA because management believes these activities or transactions are not directly attributable to the performance of 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 three months ended March 31, 2023 includes $250,000 related to the salary continuation. Managements excludes these other items from Adjusted EBITDA because management believes these costs are not recurring and not directly attributable to the performance of 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 its employees’ activities.

 

  • Litigation related expenses. Management excludes litigation expenses that are extraordinary in nature and are unrelated to the Company’s day-to-day business operations. The nature of these expenses is primarily related to direct and incremental third-party legal expenses associated with such litigation, which pertains to entities acquired in the Helix merger.

 

  • Income tax expense. Management excludes the income tax expense from Adjusted EBITDA (i) because management believes that the income tax expense is not directly attributable to the underlying performance of 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. 

 

There are limitations to using non-GAAP financial measures because non-GAAP financial measures are not prepared in accordance with U.S. GAAP and may be different from non-GAAP financial measures provided by other companies.

 

The non-GAAP financial measures are limited in value because they exclude certain items that may have a material impact upon our reported financial results. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by management about which items are adjusted to calculate our non-GAAP financial measures. We compensate for these limitations by analyzing current and future results on a U.S. GAAP basis as well as a non-GAAP basis and also by providing U.S. GAAP measures in our public disclosures.

 

Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with U.S. GAAP. We encourage investors and others to review our financial information in its entirety, not to rely on any single financial measure to evaluate our business and to view our non-GAAP financial measures in conjunction with the most directly comparable U.S. GAAP financial measures.

 

The following table reconciles the specific items excluded from U.S. GAAP metrics in the calculation of non-GAAP metrics for the periods shown below:

FORIAN INC.
RECONCILIATION OF US GAAP TO NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
         
  For the Three Months Ended March 31,  
  2024   2023  
         
Revenue $       4,877,378    $             4,870,387   
         
Net loss from continuing operations  $     (1,212,615)    $           (2,248,799)  
         
Depreciation and amortization                8,887                       38,430  
Stock based compensation expense          1,658,915                   1,828,233  
Change in fair value of warrant liability                 (113)                         5,559  
Interest and investment income            (675,157)                    (382,922)  
Interest expense             198,963                      208,456  
Gain on sale of investment             (48,612)                                -  
Gain on debt redemption           (137,356)                                -  
Severance expense                       -                      250,000  
Litigation related expenses             208,965                       84,351  
Income tax expense             102,540                       29,909  
         
Adjusted EBITDA - continuing operations $         104,417    $               (186,783)