●
|
Forian delivered the following results for the first quarter of 2024:
|
Three Months Ended
March 31,
|
Period-
over-
Period %
Change
| |||||||||||
2024
Unaudited
|
2023
Unaudited
| |||||||||||
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
|
●
|
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
|
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
|
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
|
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
|
•
|
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 notes. Management 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.
|
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
|
)
|
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Disclaimer
Forian Inc. published this content on 14 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 May 2024 21:08:34 UTC.