ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
||
(State of Other Jurisdiction of incorporation or Organization)
|
(I.R.S. Employer Identification No.)
|
|
||
(Address of principal executive offices)
|
(Zip code)
|
Title of Each Class
|
Trading Symbol(s)
|
Name Of Each Exchange
On Which Registered
|
||
|
|
|
Large accelerated filer ☐
|
Accelerated filer ☐
|
|
Smaller reporting company
|
Emerging growth company
|
Page
|
||
PART I
|
||
Item 1.
|
4 | |
Item 1A.
|
10 | |
Item 1B.
|
21 | |
Item 1C.
|
21 | |
Item 2.
|
22 | |
Item 3.
|
23 | |
Item 4.
|
23 | |
PART II
|
||
Item 5.
|
23 | |
Item 6.
|
24 | |
Item 7.
|
24 | |
Item 7A.
|
33 | |
Item 8.
|
34 | |
Item 9.
|
65 | |
Item 9A.
|
65 | |
Item 9B.
|
67 | |
Item 9C.
|
67 | |
PART III
|
||
Item 10.
|
67 | |
Item 11.
|
67 | |
Item 12.
|
68 | |
Item 13.
|
68 | |
Item 14.
|
68 | |
PART IV
|
||
Item 15.
|
68 | |
Item 16.
|
70 |
Item 1. |
Business
|
• |
the delivery of evidence-based insight into the safety and efficacy of ethical pharmaceuticals and emerging therapies to pharmaceutical manufacturers, physicians, caregivers, payers and patients with credible
evidence to improve patient care and health outcomes;
|
• |
the empowerment of regulators to more-granularly assess the safety, health, social and economic outcomes associated with all therapeutic options as the cannabis market scales and emerging therapies are adopted
as mainstream therapeutic alternatives; and
|
• |
the creation of new standards for product and treatment classification in emerging therapeutic markets where no existing or widely adopted standards exist today.
|
• |
Flexible and scalable approach to privacy-focused analytics software and solutions. Our solutions are purpose-built and delivered in an analytics-ready form to address
the needs of stakeholders across the patient journey. We can provide client-centric deliverables that address a specific need that may be satisfied with linked healthcare data, SDoH data and other permutations of integrated offerings. The
ability to offer a unified data asset due to our linkage and data factory capabilities allows for a deeper analysis with less human and processing costs, human agency, and time in precuring the disparate data sources. Our technology and
processes allow quick, flexible and accurate delivery, which differentiates our offerings larger incumbents that have longer contracting, pricing, and rigid delivery systems.
|
• |
Deep domain expertise. Our knowledge base in large transactional database platforms, commercial analytics, consumer and physician marketing, market access and healthcare
economics and pharmacoeconomics in healthcare enables us to develop solutions that address the unique demands of the industries we serve. Through the incorporation of industry best practices into solutions that are curated for our
stakeholders, our customers enjoy enhanced analytical solutions to drive their informed business decisions. Across various disciplines, our team has deep industry expertise in life sciences that translates into solutions by design that
enable our clients to solve problems unique to their sector.
|
• |
Diverse customer base. Our customer base extends across to a broad range of stakeholders within the healthcare industry carrying the mission to better understand and
improve the patient journey. This diverse customer set offers us a uniquely informed point of view from each customer vantage point of how our solutions can best assist in optimizing performance. While we serve the continuum of healthcare
ecosystem as clients, we have only started to penetrate pharmaceuticals. We believe there our products are uniquely suited for large pharma service and other companies servicing the life sciences market today and will be increasingly
attractive to pharmaceutical clients as our product offerings continues to evolve. Our information services team is defined by the innovative spirit of allowing the problems our healthcare customers face to shape the solutions that are
best for our customers.
|
• |
Large integrated longitudinal database and technology. Our data factory processes, integrates, deidentifies and standardizes
medical, hospital and pharmacy claims datasets along with point of sale data, consumer behavior and demographic-level data and other datasets to produce a longitudinal database that encompass the vast majority of the U.S. population. We
will continue to invest in and integrate unique data sources to further strengthen and differentiate our solutions.
|
• |
Innovate and advance our platform and services. We have a history of technological innovation, and plan to release new features
and upgrades on a regular basis. We intend to continue making significant investments in all information products, reporting and analytics solutions, database architecture and data science talent to further differentiate our products and
increase sales. In improving our ability to integrate with partners, we enable ourselves to capitalize on new data and services that add value to our customers and create further differentiation of our data assets and proprietary
offerings.
|
• |
Drive growth by acquiring new customers. We believe that nearly all organizations that discover, develop, produce and market healthcare products or services must embrace
data driven analytics to compete effectively. As such, the opportunity to continue growing our customer base is significant.
|
• |
Increase usage and upsell within our existing customer base. We plan to continue investing in sales and marketing, with a focus on cross selling additional information
solutions to deliver more value to and expand our relationships with our customers, leading to scale and operating leverage for our business. Many of our customers buy data or information products from different sources, and have an
ability to buy more from us as we bring new offerings to market.
|
• |
Leverage our products into new markets. Our information solutions provide innovative benefits to life sciences, payer and provider
customers as well as consulting and service providers to these customers. We believe there is significant opportunity to deploy the use of linked proprietary solutions in adjacent industries, such as media, government as well as the
financial services markets.
|
• |
Expand our data and strategic partner network. Our information products are derived partly from data acquired from strategic data
partners. As part of our growth strategy, we may seek to acquire assets, data-driven products or companies that are synergistic with our business and add value to our data assets and offering sets.
|
• |
Grow offerings through selective investments and acquisitions. We may seek out companies and opportunities that complement our
core strengths and can help us expand our capabilities, reach and impact. Our approach is deliberate and strategic, ensuring that each investment or acquisition is thoroughly vetted and aligned with our long-term goals.
|
Item 1A. |
Risk Factors
|
• |
the failure to predict market demand accurately in terms of product functionality and to supply offerings that meet this demand in a timely fashion;
|
• |
product defects, errors or failures or our inability to satisfy customer service level requirements;
|
• |
negative publicity or negative private statements about the security, performance or effectiveness of our platforms or product enhancements;
|
• |
delays in releasing to the market new offerings or enhancements to existing offerings;
|
• |
the introduction or anticipated introduction of competing platforms or functionalities by competitors;
|
• |
the inability of our platforms or product enhancements to scale and perform to meet customer demands; and
|
• |
receiving qualified or adverse opinions in connection with security or penetration testing, certifications or audits, such as those related to IT controls and security standards and frameworks or compliance.
|
• |
changes in stock market analyst recommendations or earnings estimates regarding our common stock, other companies comparable to us or companies in the industries we serve;
|
• |
actual or anticipated fluctuations in our operating results or future prospects;
|
• |
reaction to our public announcements;
|
• |
strategic actions taken by us or our competitors, such as any contemplated business separation, acquisitions or restructurings;
|
• |
adverse conditions in the financial market or general U.S. or international economic conditions, including those resulting from war, incidents of terrorism and responses to such events; and
|
• |
sales of common stock by us, members of our management team or significant stockholders.
|
Item 1B. |
Unresolved Staff Comments
|
Item 1C. |
Cybersecurity
|
Item 2. |
Properties
|
Item 4. |
Mine Safety Disclosure
|
Item 5. |
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
Period
|
(a) Total Number
of Shares (or Unit)
Purchased
|
(b) Average Price
Paid per Share (or
Unit)
|
(c) Total Number
of Shares (or
Units) Purchased
as Part of Publicly
Announced Plans
or Programs
|
(d) Maximum
Number (for
Approximate
Dollar Value) of
Shares (or Units)
that May Yet Be
Purchased Under
the Plans or
Programs
|
||||||||||||
October 1, 2023 through October 31, 2023
|
1,604,676
|
$
|
2.15
|
-
|
-
|
|||||||||||
November 1, 2023 through November 30, 2023
|
-
|
-
|
-
|
-
|
||||||||||||
December 1, 2023 through December 31, 2023
|
-
|
-
|
-
|
-
|
Item 6. |
[Reserved]
|
Item 7. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
For the Years Ended December
31,
|
||||||||
2023
|
2022
|
|||||||
Revenues
|
$
|
20,481,330
|
$
|
16,418,141
|
||||
Costs and Expenses
|
||||||||
Cost of revenues
|
5,477,032
|
5,049,701
|
||||||
Research and development
|
1,407,580
|
4,009,769
|
||||||
Sales and marketing
|
4,884,267
|
3,949,026
|
||||||
General and administrative
|
13,633,193
|
16,879,858
|
||||||
Separation expenses
|
599,832
|
5,417,043
|
||||||
Depreciation and amortization
|
74,438
|
65,554
|
||||||
Operating loss from continuing operations
|
$
|
(5,595,012
|
)
|
$
|
(18,952,810
|
)
|
• |
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 consolidated statements of operations.
On March 2, 2022, 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 of March 2, 2022. As a result, management 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, which is recognized in separation expenses in the 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”). 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 we invest. 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; (iii) gain on debt redemption which relates to a gain on the early retirement of a portion of the convertible notes (for further discussion, refer to “Note 10 – Warrant
Liability” and “Note 12 – Convertible Notes” in the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K) and (iv) litigation related expenses. Litigation related expenses relate
to certain litigation related to entities acquired in the Helix merger (for further discussion, refer to “Item 3. Legal Proceedings” and “Note 18 – Commitments and Contingencies” in the Notes to the Consolidated Financial Statements
included in Part II, Item 8 of this Annual Report on Form 10-K). 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 year ended December 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 our employees’ activities.
|
• |
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 Years Ended December 31,
|
||||||||
2023
|
2022
|
|||||||
Revenue
|
$
|
20,481,330
|
$
|
16,418,141
|
||||
Net Income (loss) from continuing operations
|
1,733,430
|
(19,191,990
|
)
|
|||||
Depreciation and amortization
|
74,438
|
65,554
|
||||||
Stock based compensation expense
|
6,573,969
|
11,920,575
|
||||||
Change in fair value of warrant liability
|
(3,984
|
)
|
(364,687
|
)
|
||||
Interest and investment income
|
(2,327,974
|
)
|
(266,213
|
)
|
||||
Interest expense
|
834,785
|
846,100
|
||||||
Gain on sale of investment
|
(5,805,858
|
)
|
—
|
|||||
Gain on debt redemption
|
(111,151
|
)
|
—
|
|||||
Severance expense
|
250,000
|
—
|
||||||
Litigation related expenses
|
1,032,985
|
258,872
|
||||||
Income tax expense
|
85,740
|
23,980
|
||||||
Adjusted EBITDA - continuing operations
|
$
|
2,336,380
|
$
|
(6,707,809
|
)
|
For the Years Ended December 31,
|
||||||||
2023
|
2022
|
|||||||
Net cash provided by (used in) operating activities - continuing operations
|
$
|
787,893
|
$
|
(6,071,014
|
)
|
|||
Net cash provided by (used in) investing activities - continuing operations
|
7,119,943
|
(4,797,267
|
)
|
|||||
Net cash used in financing activities - continuing operations
|
(4,601,518
|
)
|
(100,528
|
)
|
||||
Net increase in cash and cash equivalents - continuing operations
|
$
|
3,306,318
|
$
|
(10,968,809
|
)
|
Item 7A. |
Quantitative and Qualitative Disclosures About Market Risk
|
Report of Independent Registered Accounting Firm (PCAOB ID#
) |
35 |
Consolidated Balance Sheets as of December 31, 2023 and 2022
|
36 |
Consolidated Statements of Operations for the Years Ended December 31, 2023 and 2022
|
37 |
Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2023 and 2022
|
38 |
Consolidated Statements of Cash Flows for the Years Ended December 31, 2023 and 2022
|
39 |
Notes to Consolidated Financial Statements
|
40 |
December 31,
|
December 31,
|
|||||||
2023 |
2022 |
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
||||
Marketable securities
|
|
|
||||||
Accounts receivable
|
|
|
||||||
Proceeds receivable from sale of discontinued operations, net
|
||||||||
Contract assets
|
|
|
||||||
Prepaid expenses
|
|
|
||||||
Other current assets |
||||||||
Current assets of discontinued operations
|
||||||||
Total current assets
|
|
|
||||||
Property and equipment, net
|
||||||||
Right of use assets, net | ||||||||
Deposits and other assets
|
|
|
||||||
Non-current assets of discontinued operations
|
||||||||
Total assets
|
$
|
|
$
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
|
|
||||||
Accrued expenses
|
|
|
||||||
Short-term operating lease liabilities
|
||||||||
Warrant liability
|
||||||||
Deferred revenues
|
|
|
||||||
Current liabilities of discontinued operations
|
||||||||
Total current liabilities
|
|
|
||||||
Long-term liabilities:
|
||||||||
Other long-term liabilities
|
||||||||
Convertible notes payable, net of debt issuance costs (Note 12) ($
|
||||||||
Non-current liabilities of discontinued operations
|
||||||||
Total long-term liabilities
|
||||||||
Total liabilities
|
||||||||
Commitments and contingencies (Note 18)
|
||||||||
Stockholders’ equity:
|
||||||||
Preferred Stock; par value $
|
|
|
||||||
Common Stock; par value $
|
|
|
||||||
Additional paid-in capital
|
|
|
||||||
Accumulated deficit
|
(
|
)
|
(
|
)
|
||||
Total stockholders’ equity
|
|
|
||||||
Total liabilities and stockholders’ equity
|
$
|
|
$
|
|
For the Years Ended December 31, |
||||||||
|
2023
|
2022
|
||||||
Revenue
|
$ | $ | ||||||
|
||||||||
Costs and Expenses:
|
||||||||
Cost of revenues
|
|
|
||||||
Research and development
|
|
|
||||||
Sales and marketing
|
|
|
||||||
General and administrative | ||||||||
Separation expenses
|
||||||||
Depreciation and amortization | ||||||||
Total costs and expenses | ||||||||
Operating loss From Continuing Operations |
(
|
)
|
(
|
)
|
||||
|
||||||||
Other Income (Expense):
|
||||||||
Change in fair value of warrant liability
|
|
|
||||||
Interest and investment income
|
|
|
||||||
Gain on sale of investment
|
||||||||
Interest expense | ( |
) | ( |
) | ||||
Gain on debt redemption
|
||||||||
Total other income, net | ( |
) | ||||||
Income (loss) from continuing operations before income taxes
|
|
(
|
)
|
|||||
Income tax expense
|
( |
) | ( |
) | ||||
Income (loss) from continuing operations, net of tax
|
( |
) | ||||||
Loss from discontinued operations
|
( |
) | ( |
) | ||||
Gain on sale of discontinued operations
|
||||||||
Income tax effect on discontinued operations
|
( |
) | ||||||
Income (loss) from discontinued operations, net of tax
|
( |
) | ||||||
Net Income (Loss) | $ | $ | ( |
) | ||||
Net income (loss) per share:
|
||||||||
Basic
|
||||||||
Continuing operations
|
$ | $ | ( |
) | ||||
Discontinued operations
|
$ | $ | ( |
) | ||||
Net income (loss) per share - basic
|
$ | $ | ( |
) | ||||
|
||||||||
Diluted
|
||||||||
Continuing operations
|
$ | $ | ( |
) | ||||
Discontinued operations
|
$ | $ | ( |
) | ||||
Net income (loss) per share - diluted
|
$ | $ | ( |
) | ||||
Weighted-average shares outstanding - basic
|
|
|
||||||
Weighted-average shares outstanding - diluted
|
Preferred Stock
|
Common Stock
|
|||||||||||||||||||||||||||
Shares
|
Par Value @ $0.001 per share
|
Shares
|
Par Value @ $0.001 per share
|
Additional Paid In Capital
|
Accumulated Deficit
|
Stockholders’ Equity
|
||||||||||||||||||||||
Balance at January 1, 2023
|
|
$
|
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||||||||||
Vesting of Restricted Stock and Stock Awards, net of shares surrendered for taxes
|
|
|
|
|
(
|
)
|
|
(
|
)
|
|||||||||||||||||||
Repurchase and retirement of common stock, net of excise taxes
|
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||
Issuance of Forian common stock upon exercise of stock options
|
|
|
|
|
(
|
)
|
|
|
||||||||||||||||||||
Stock-based compensation expense
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Net income
|
—
|
|
—
|
|
|
|
|
|||||||||||||||||||||
Balance at December 31, 2023
|
|
$
|
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
Preferred Stock
|
Common Stock
|
|||||||||||||||||||||||||||
Shares
|
Par Value @ $0.001 per share
|
Shares
|
Par Value @ $0.001 per share
|
Additional Paid In Capital
|
Accumulated Deficit
|
Stockholders’ Equity
|
||||||||||||||||||||||
Balance at January 1, 2022
|
|
$
|
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||||||||||
Vesting of Restricted Stock and Stock Awards, net of shares surrendered for taxes
|
( |
) | ( |
) | ||||||||||||||||||||||||
Issuance of Forian common stock upon exercise of stock options
|
|
|
|
|
(
|
)
|
|
|
||||||||||||||||||||
Issuance of Forian common stock upon exercise of warrants
|
( |
) | ||||||||||||||||||||||||||
Stock-based compensation expense
|
||||||||||||||||||||||||||||
Net loss
|
—
|
|
—
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||||||||
Balance at December 31, 2022
|
|
$
|
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
For the Years Ended December 31,
|
||||||||
2023
|
2022
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net income (loss)
|
$
|
|
$
|
(
|
)
|
|||
Less: Income (loss) from discontinued operations
|
( |
) | ||||||
Income (loss) from continuing operations
|
( |
) | ||||||
|
||||||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating
activities:
|
||||||||
Depreciation and amortization
|
|
|
||||||
Amortization on right of use asset
|
|
|
||||||
Amortization of debt issuance costs
|
|
|
||||||
Amortization of discount - proceeds from sale of discontinued operations
|
( |
) | ||||||
Accrued interest on convertible notes
|
|
|
||||||
Accretion of discounts on marketable securities
|
(
|
)
|
(
|
)
|
||||
Gain on sale of investment
|
(
|
)
|
|
|||||
Gain on debt redemption
|
( |
) | ||||||
Stock-based compensation expense
|
|
|
||||||
Change in fair value of warrant liability
|
(
|
)
|
(
|
)
|
||||
Change in operating assets and liabilities:
|
||||||||
Accounts receivable
|
(
|
)
|
(
|
)
|
||||
Contract assets
|
|
(
|
)
|
|||||
Prepaid expenses
|
(
|
)
|
|
|||||
Changes in lease liabilities during the year
|
(
|
)
|
|
|||||
Deposits and other assets
|
(
|
)
|
|
|||||
Accounts payable
|
(
|
)
|
(
|
)
|
||||
Accrued expenses
|
|
|
||||||
Deferred revenues
|
(
|
)
|
|
|||||
Other liabilities
|
||||||||
Net cash provided by (used in) operating activities - continuing operations
|
( |
) | ||||||
Net cash used in operating activities - discontinued operations
|
( |
) | ( |
) | ||||
Net cash provided by (used in) operating activities
|
|
(
|
)
|
|||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Additions to property and equipment
|
(
|
)
|
(
|
)
|
||||
Purchase of marketable securities
|
(
|
)
|
(
|
)
|
||||
Sale and maturity of marketable securities
|
|
|
||||||
Proceeds from sale of investment
|
||||||||
Net cash from sale of discontinued operations
|
|
(
|
)
|
|||||
Net cash provided by (used in) investing activities - continuing operations
|
( |
) | ||||||
Net cash used in investing activities - discontinued operations
|
( |
) | ||||||
Net cash provided by (used in) investing activities
|
|
(
|
)
|
|||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Payments on notes payable and financing arrangements
|
|
(
|
)
|
|||||
Payment of employee withholding tax related to restricted stock units
|
( |
) | ( |
) | ||||
Repurchase of common stock
|
(
|
)
|
|
|||||
Cash used to redeem convertible notes
|
(
|
)
|
|
|||||
Net cash used in financing activities - continuing operations
|
(
|
)
|
(
|
)
|
||||
Net cash used in financing activities
|
(
|
)
|
(
|
)
|
||||
Net change in cash
|
|
(
|
)
|
|||||
|
||||||||
Cash and cash equivalents, beginning of period
|
|
|
||||||
|
||||||||
Cash and cash equivalents, end of period
|
$
|
|
$
|
|
||||
|
||||||||
Supplemental disclosure of cash flow information:
|
||||||||
Cash paid for taxes
|
$
|
|
$
|
|
Note 1 |
BUSINESS ORGANIZATION AND NATURE OF OPERATIONS
|
Note 2 |
BASIS OF PRESENTATION
|
Note 3 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
Contract Assets
|
Contract
Liability
|
|||||||||||||||
Costs of
obtaining
contracts
|
Unbilled
revenue
|
Total
|
Deferred
Revenue
|
|||||||||||||
Balance at January 1, 2022
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Beginning deferred revenue balance recognized during the period
|
|
|
|
(
|
)
|
|||||||||||
Net change due to timing of billings, payments and recognition
|
|
|
|
|
||||||||||||
Balance at December 31, 2022
|
|
|
|
|
||||||||||||
Beginning deferred revenue balance recognized during the period
|
( |
) | ||||||||||||||
Net change due to timing of billings, payments and recognition
|
( |
) | ( |
) | ( |
) | ||||||||||
Balance at December 31, 2023 | $ | $ | $ | $ |
December 31, 2023
|
December 31, 2022
|
|||||||
Estimated next
|
$ |
|
$ |
|
||||
|
|
|||||||
Total
|
$ |
|
$ |
|
Note 4 |
DISCONTINUED
OPERATIONS
|
December 31, 2022
|
||||
Carrying amounts of assets associated with Helix Businesses included as part of discontinued operations:
|
||||
Cash and cash equivalents
|
$
|
|
||
Accounts receivable, net
|
|
|||
Prepaid expenses
|
|
|||
Current assets of discontinued operations
|
$
|
|
||
Property and equipment, net
|
$
|
|
||
Intangible assets, net
|
|
|||
Goodwill
|
|
|||
Right of use assets, net
|
|
|||
Deposits and other assets
|
|
|||
Non-current assets of discontinued operations
|
$
|
|
||
Carrying amounts of liabilities associated with Helix Businesses included as part of discontinued operations:
|
||||
Accounts payable
|
$
|
|
||
Accrued expenses
|
|
|||
Short-term operating lease liabilities
|
|
|||
Deferred revenues
|
|
|||
Current liabilities of discontinued operations
|
$
|
|
||
Long-term operating lease liabilities
|
|
|||
Non-current liabilities of discontinued operations
|
$
|
|
For the Years Ended December 31,
|
||||||||
2023
|
2022
|
|||||||
Income and expense line items related to Helix Businesses:
|
||||||||
Revenues:
|
||||||||
Information and Software
|
$
|
|
$
|
|
||||
Services
|
|
|
||||||
Other
|
|
|
||||||
Total revenues
|
|
|
||||||
Costs and Expenses:
|
||||||||
Cost of revenues
|
|
|
||||||
Research and development
|
|
|
||||||
Sales and marketing
|
|
|
||||||
General and administrative
|
|
|
||||||
Depreciation and amortization
|
|
|
||||||
Total costs and expenses
|
|
|
||||||
Loss from discontinued operations for Helix Businesses
|
(
|
)
|
(
|
)
|
||||
Other Income (Expense):
|
||||||||
Interest and investment income
|
|
|
||||||
Interest expense
|
|
(
|
)
|
|||||
Foreign currency related gains, net
|
|
|
||||||
Total other income, net
|
|
|
||||||
Net loss from discontinued operations for Helix Businesses before income taxes
|
(
|
)
|
(
|
)
|
||||
Gain on sale of discontinued operations
|
|
|
||||||
Income tax expense
|
(
|
)
|
|
|||||
Net gain (loss) from discontinued operations, net of tax for Helix Businesses
|
$
|
|
$
|
(
|
)
|
Note 5 |
MARKETABLE SECURITIES
|
2023
|
2022
|
|||||||
United States Treasury Bills
|
||||||||
Amortized Cost
|
$
|
|
$
|
|
||||
Fair Market Value
|
$
|
|
$
|
|
Note 6 |
PREPAID EXPENSES AND OTHER CURRENT ASSETS
|
Note 7 |
PROPERTY AND EQUIPMENT, NET
|
|
2023
|
2022
|
||||||
Personal computing equipment
|
$
|
|
$
|
|
||||
Office equipment and capitalized software
|
||||||||
Total
|
||||||||
Less: Accumulated depreciation
|
(
|
)
|
(
|
)
|
||||
Property and equipment, net
|
$
|
|
$
|
|
Note 8
|
DEPOSITS AND OTHER ASSETS |
Note 9 |
ACCRUED EXPENSES
|
2023
|
2022
|
|||||||
Employee compensation |
||||||||
Information Contracts (see Note 3 - Vendors and Licensors)
|
$
|
|
$
|
|
||||
Accrued expenses
|
|
|
||||||
Total
|
$
|
|
$
|
|
Note 10 |
WARRANT LIABILITY |
As of December 31, 2023 |
As of December 31, 2022
|
|||||||
Fair value of Company’s common stock
|
$ |
$
|
|
|||||
Dividend yield
|
||||||||
Expected volatility
|
|
|
||||||
Risk free interest rate
|
|
|
||||||
Expected life (years)
|
|
|||||||
Exercise price
|
$ |
$
|
|
|||||
Fair value of financial instruments - warrants
|
$ |
$
|
|
Amount
|
||||
Balance as of January 1, 2023
|
$
|
|
||
Change in fair value of warrant liability | ( |
) | ||
Balance as of December 31, 2023 |
$ |
|
Amount |
|||
Balance as of January 1, 2022 |
$ | |||
Change in fair value of warrant liability
|
(
|
)
|
||
Balance as of December 31, 2022
|
$
|
|
Note 11 |
OTHER LONG-TERM LIABILITIES |
Note 12 |
CONVERTIBLE NOTES
|
December 31, 2023
|
December 31, 2022
|
|||||||
Principal outstanding
|
$
|
|
$
|
|
||||
Add: accrued interest
|
|
|
||||||
Less: unamortized debt issuance costs
|
(
|
)
|
(
|
)
|
||||
Convertible note payable, net of debt issuance costs
|
$
|
|
$
|
|
December 31, 2023 | December 31, 2022 | |||||||
Fair value of Company’s common stock
|
$
|
|
$
|
|
||||
Dividend yield
|
|
|
|
|
||||
Expected volatility
|
|
|
|
|
||||
Risk Free interest rate
|
|
|
|
|
||||
Expected life (years) remaining
|
|
|
||||||
Exercise price
|
$
|
|
$
|
|
Note 13 |
STOCK-BASED COMPENSATION
|
Number of Restricted
Shares and Units |
Weighted Average
Grant Date Fair Value
Per Share
|
|||||||
Unvested at January 1, 2022 |
$ | |||||||
Issued
|
|
|
||||||
Vested
|
(
|
)
|
|
|||||
Canceled
|
( |
) | ||||||
Unvested at December 31, 2022
|
|
|
||||||
Issued
|
|
|
||||||
Vested
|
(
|
)
|
|
|||||
Canceled
|
( |
) | ||||||
Unvested at December 31, 2023
|
|
$
|
|
2023 |
2022
|
|||||||
Exercise Price
|
$ |
$
|
|
|||||
Fair value of Company common stock
|
$ |
$
|
|
|||||
Dividend yield
|
||||||||
Expected volatility
|
|
|||||||
Risk Free interest rate
|
|
|||||||
Expected life (years) remaining
|
|
Shares Underlying
Options
|
Weighted Average
Exercise Price
|
Weighted Average
Remaining
Contractual Term
(in years)
|
||||||||||
Outstanding at January 1, 2022
|
|
$
|
|
|
||||||||
Granted
|
|
$
|
|
|
||||||||
Exercised
|
(
|
)
|
$
|
|
|
|||||||
Forfeited and expired
|
(
|
)
|
$
|
|
|
|||||||
Outstanding at December 31, 2022
|
|
$
|
|
|
||||||||
Granted | $ | |||||||||||
Exercised | ( |
) | $ | |||||||||
Forfeited and expired | ( |
) | $ | |||||||||
Outstanding at December 31, 2023 | $ | |||||||||||
Vested options at December 31, 2023
|
|
$
|
|
|
For the Years Ended December 31,
|
||||||||
2023
|
2022
|
|||||||
Services
|
$
|
|
$
|
|
||||
Research and development
|
|
|
||||||
Sales and marketing
|
|
|
||||||
General and administrative
|
|
|
||||||
Separation expenses |
||||||||
Subtotal | ||||||||
Discontinued operations | ( |
) | ||||||
Total
|
$
|
|
$
|
|
Note 14 |
NET INCOME (LOSS) PER SHARE
|
For the Years Ended December 31,
|
||||||||
2023
|
2022
|
|||||||
Net income (loss):
|
||||||||
Income (loss) from continuing operations
|
$
|
|
$
|
(
|
)
|
|||
Income (loss) from discontinued operations
|
|
(
|
)
|
|||||
Net Income (loss)
|
$
|
|
$
|
(
|
)
|
|||
Basic income (loss) from continuing operations per share attributable to common shareholders:
|
$
|
|
$
|
(
|
)
|
|||
Basic income (loss) from discontinued operations per share:
|
|
(
|
)
|
|||||
Net income (loss) per common share
|
$
|
|
$
|
(
|
)
|
|||
Diluted net loss per share:
|
||||||||
Income (loss) from continuing operations
|
|
(
|
)
|
|||||
Income from continuing operation after the effect of assumed conversions
|
$
|
|
$
|
(
|
)
|
|||
Income (loss) from discontinued operations
|
$
|
|
$
|
(
|
)
|
|||
Weighted average common shares outstanding - basic and diluted
|
|
|
||||||
Plus: Dilutive effect of restricted stock awards and stock options – treasury stock method
|
|
|
||||||
Weighted average common shares outstanding assuming dilution
|
|
|
||||||
Diluted income (loss) from continuing operations per common share
|
|
(
|
)
|
|||||
Diluted income (loss) from discontinued operations per common share
|
|
(
|
)
|
|||||
Net income (loss) per common share
|
$
|
|
$
|
(
|
)
|
For the Years Ended December 31,
|
||||||||
2023 |
2022 |
|||||||
Potentially dilutive securities: |
||||||||
Warrants
|
||||||||
Stock options
|
||||||||
Convertible notes
|
||||||||
Unvested restricted stock awards and units
|
|
|
||||||
Total
|
Note 15
|
RELATED PARTY
TRANSACTIONS
|
Note 16
|
INCOME TAXES
|
For the Years Ended December 31,
|
||||||||
2023 | 2022 | |||||||
United States
|
$ |
$
|
(
|
)
|
||||
Foreign
|
|
|||||||
Total loss before provision for income taxes
|
$ |
$
|
(
|
)
|
For the Years Ended December 31,
|
||||||||
2023 |
2022
|
|||||||
Current:
|
||||||||
Federal
|
$ |
$ |
|
|||||
State
|
|
|||||||
Foreign
|
|
|||||||
$ |
$
|
|
||||||
Deferred:
|
||||||||
Federal
|
||||||||
State
|
||||||||
Foreign
|
||||||||
Total
|
$ |
$
|
|
For the Years Ended December 31,
|
||||||||
2023 |
2022
|
|||||||
Income tax expense (benefit) at federal statutory rate
|
|
|
||||||
Nondeductible/nontaxable items
|
( |
|||||||
Stock-based compensation
|
|
|
||||||
Gain on sale of operations |
|
|||||||
State taxes
|
|
|
||||||
Rate change
|
( |
(
|
|
|||||
True-up and other
|
( |
(
|
|
|||||
Valuation
allowance |
( |
( |
||||||
Income tax expense
|
(
|
|
As of December 31,
|
||||||||
2023
|
2022
|
|||||||
Deferred tax assets
|
||||||||
Allowance for credit losses
|
$
|
|
$
|
|
||||
Reserves
|
|
|
||||||
Accrued expenses
|
|
|
||||||
Lease liability
|
|
|
||||||
Stock compensation
|
|
|
||||||
Depreciation
|
|
|
||||||
Amortization
|
|
|
||||||
Capitalized Sec. 174 expenses
|
|
|
||||||
Net operating loss carry forwards
|
|
|
||||||
Deferred income tax assets
|
$
|
|
$
|
|
||||
Valuation allowance
|
(
|
)
|
(
|
)
|
||||
Total net deferred income tax assets
|
$
|
|
$
|
|
||||
Prepaid expenses
|
(
|
)
|
(
|
)
|
||||
Unrealized FX gain/ loss
|
(
|
)
|
(
|
)
|
||||
Installment sale receivable
|
(
|
)
|
|
|||||
Right-of-use asset
|
(
|
)
|
(
|
)
|
||||
Deferred income tax liability
|
$
|
(
|
)
|
$
|
(
|
)
|
||
Net deferred taxes
|
$
|
|
$
|
|
Note 17 | LEASES |
For the Years Ended December 31,
|
||||||||
2023
|
2022
|
|||||||
Cash used in operating leases
|
$
|
|
$
|
|
December 31, 2023 | December 31, 2022 | |||||||
Right of use assets, net
|
$
|
|
$
|
|
||||
Short-term operating lease liabilities
|
$
|
|
$
|
|
||||
Long-term operating lease liabilities
|
|
|
||||||
Total lease liabilities
|
$
|
|
$
|
|
||||
Weighted average remaining lease term (in years)
|
|
|
||||||
Weighted average discount rate
|
|
|
|
|
For the Years Ended December 31,
|
||||||||
2023
|
2022
|
|||||||
Operating lease expense
|
$
|
|
$
|
|
||||
Short-term lease expense
|
|
|
|
|
||||
Total operating lease costs
|
$
|
|
$
|
|
December 31, 2023
|
||||
2024
|
$
|
|
||
Less imputed interest
|
(
|
)
|
||
Total
|
$
|
|
Note 18 |
COMMITMENTS AND CONTINGENCIES
|
December 31, 2023
|
||||
Year ending December 31, 2024
|
$ |
|
||
Year ending December 31, 2025
|
|
|||
Year ending December 31, 2026
|
|
|||
Thereafter
|
|
|||
$
|
|
Note 19 |
SUBSEQUENT EVENTS
|
Item 9. |
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
Item 9A. |
Controls and Procedures
|
• |
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets;
|
• |
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures
are being made only in accordance with authorizations of our management and directors; and
|
• |
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on the financial statements.
|
• |
we did not have properly designed general information technology controls surrounding logical access, change management, and vendor application management.
|
Item 9B. |
Other Information
|
Item 9C. |
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
|
Item 10. |
Directors, Executive Officers and Corporate Governance
|
Item 11. |
Executive Compensation
|
Item 12. |
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
Item 13. |
Certain Relationships and Related Transactions, and Director Independence
|
Item 14. |
Principal Accountant Fees and Services
|
Item 15. |
Exhibits and Financial Statement Schedules
|
(a) |
The following documents are filed or furnished as part of this Form 10-K:
|
1. |
Financial Statements
|
2. |
Financial Statement Schedules
|
3. |
Exhibits
|
Exhibit
Number
|
Description
|
|
Agreement and Plan of Merger, dated as of October 16, 2020, by and among Helix Technologies, Inc., Forian Inc., DNA Merger Sub, Inc. and Medical Outcomes Research Analytics, LLC (incorporated by reference to Appendix
A of the Company’s Form S-4 (Reg. No. 333-250938) filed with the SEC on November 24, 2020, as amended on December 31, 2020, January 19, 2021, February 1, 2021 and February 9, 2021).
|
||
Amendment to Agreement and Plan of Merger dated December 30, 2020, by and among Helix Technologies, Inc., Forian Inc., DNA Merger Sub, Inc. and Medical Outcomes Research Analytics, LLC (incorporated by reference to
Exhibit 2.2 of the Company’s Form S-4 (Reg. No. 333-250938) filed with the SEC on November 24, 2020, as amended on December 31, 2020, January 19, 2021, February 1, 2021 and February 9, 2021).
|
||
Equity Interest Contribution Agreement (incorporated by reference to Exhibit 2.4 of the Company’s Current Report on Form 8-K filed with the SEC on March 3, 2021).
|
||
Stock Purchase Agreement, dated February 10, 2023, by and among Helix Technologies, Inc., Bio-Tech Medical Software, Inc. and BT Assets Group, Inc. (incorporated by reference to Exhibit 2.1 of the Company’s Current
Report on Form 8-K filed with the SEC on February 13, 2023).
|
||
Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 of the Company’s Form S-4 (Reg. No. 333-250938) filed with the SEC on November 24, 2020, as amended on December 31, 2020,
January 19, 2021, February 1, 2021 and February 9, 2021).
|
Bylaws of the Registrant (incorporated by reference to Exhibit 3.2 of the Company’s Form S-4 (Reg. No. 333-250938) filed with the SEC on November 24, 2020, as amended on December 31, 2020, January 19, 2021, February
1, 2021 and February 9, 2021).
|
||
Description of Registrant’s Securities (incorporated by reference to Exhibit 4.1 of the Company’s Annual Report on Form 10-K, for the year ended December 31, 2021, filed with the SEC on March 31, 2021).
|
||
Forian Inc. 2020 Equity Incentive Plan (incorporated by reference to Exhibit 4.3 of the Company’s Form S-8 (Reg. No. 333-268470) filed with the SEC on November 18, 2022.
|
||
License Agreement, dated June 30, 2019 (portions of this exhibit (indicated by asterisks) have been redacted in compliance with Regulation S-K Item 601(b)(10)(iv) (incorporated by reference to Exhibit 10.2 of the
Company’s Form S-4 (Reg. No. 333-250938) filed with the SEC on November 24, 2020, as amended on December 31, 2020, January 19, 2021, February 1, 2021, February 9, 2021 and December 20, 2023).
|
||
Offer Letter, dated March 25, 2020, by and between MOR and Max Wygod.
|
||
Offer Letter, dated March 25, 2020, by and between MOR and Adam Dublin.
|
||
Employment Agreement, dated August 1, 2019, by and between MOR and Daniel Barton.
|
||
Employment Agreement, dated March 1, 2021, by and between the Registrant and Edward Spaniel, Jr.
|
||
Form of Indemnification Agreement (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on March 3, 2021).
|
||
Helix TCS, Inc. 2017 Omnibus Stock Incentive Plan (incorporated by reference to Exhibit 4.4 of the Company’s Form S-8 filed with the SEC on March 5, 2021).
|
||
Bio-Tech Medical Software, Inc. 2014 Stock Incentive Plan (incorporated by reference to Exhibit 10.32 of Helix’s Form 8-K filed with the SEC on June 5, 2018).
|
||
Form of Securities Purchase Agreement, dated April 12, 2021, entered into between the Company and each of the Investors and the Affiliates (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on
Form 8-K filed with the SEC April 13, 2021).
|
||
Employment Agreement, dated as of September 2, 2021, by and between the Company and Michael Vesey (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed with the SEC September 2,
2021).
|
||
Form of Note Purchase Agreement, dated September 1, 2021, by and between the Company and the Investors (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q filed with the SEC
November 15, 2021).
|
||
Separation Agreement, dated February 10, 2023, by and between the Company and Daniel Barton (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed with the SEC on February 13,
2023).
|
||
License Agreement, dated February 10, 2023, by and among the Company, Helix Technologies, Inc., BT Assets Group, Inc. and Bio-Tech Medical Software, Inc. (incorporated by reference to Exhibit 10.1 of the Company’s
Current Report on Form 8-K filed with the SEC on February 13, 2023).
|
||
Forian Inc. Insider Trading Policy.
|
||
List of Subsidiaries
|
||
Consent of Marcum LLP
|
||
Certification of Chief Executive Officer Pursuant to Rule 13a‑15(e) or Rule 15d‑15(e)
|
||
Certification of Chief Financial Officer Pursuant to Rule 13a‑15(e) or Rule 15d‑15(e)
|
||
Certification of Chief Executive Officer and Chief Financial Officer of Periodic Report Pursuant to 18 U.S.C. Section 1350
|
||
Forian Inc. Incentive Compensation Recoupment Policy.
|
||
101.INS
|
Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document ).
|
|
101.SCH
|
Inline XBRL Taxonomy Extension Schema Document.
|
|
101.CAL
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
101.PRE
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
101.LAB
|
Inline XBRL Taxonomy Extension Label Linkbase Document.
|
|
101.DEF
|
Inline XBRL Taxonomy Extension Definition Linkbase.
|
|
104
|
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).
|
* |
Filed with this Annual Report on Form 10‑K.
|
+ |
Indicates management contract or compensatory plan.
|
Item 16. |
Form 10‑K Summary
|
FORIAN INC.
|
||
By:
|
/s/ Max Wygod | |
Max Wygod
|
||
Chief Executive Officer
|
Signature
|
Title
|
|
/s/ Max Wygod |
Executive Chairman and Chief Executive Officer
|
|
Max Wygod
|
(Principal Executive Officer)
|
|
/s/ Michael Vesey |
Chief Financial Officer
|
|
Michael Vesey
|
(Principal Financial Officer and Principal Accounting Officer)
|
|
/s/ Mark Adler, M.D. |
Director
|
|
Mark Adler, M.D.
|
||
/s/ Ian Banwell |
Director
|
|
Ian Banwell
|
||
/s/ Adam Dublin |
Director and Chief Strategy Officer
|
|
Adam Dublin
|
||
/s/ Jennifer Hajj |
Director
|
|
Jennifer Hajj
|
||
/s/ Shahir Kassam-Adams |
Director
|
|
Shahir Kassam-Adams
|
||
/s/ Stanley Trotman, Jr. |
Director
|
|
Stanley Trotman, Jr.
|
||
/s/ Alyssa Varadhan |
Director
|
|
Alyssa Varadhan
|
||
/s/ Kristiina Vuori, M.D., Ph.D. |
Director
|
|
Kristiina Vuori, M.D., Ph.D.
|
||
/s/ Martin Wygod |
Director
|
|
Martin Wygod
|
I. |
Introduction
|
II. |
Insider Trading Policy
|
A. |
Securities Transactions
|
B. |
Inside Information
|
(a) |
financial results or forecasts;
|
(b) |
strategic plans;
|
(c) |
potential mergers, acquisitions or dispositions of assets, divisions, companies, etc.;
|
(d) |
pending public or private sales of debt or equity securities;
|
(e) |
declaration of stock splits, dividends or changes in dividend policy;
|
(f) |
major contract awards or cancellations;
|
(g) |
key management or control changes;
|
(h) |
possible tender offers or proxy fights;
|
(i) |
significant write-offs;
|
(j) |
significant litigation;
|
(k) |
impending bankruptcy; and
|
(l) |
corporate partner relationships.
|
III. |
Stock Trading by Directors, Officers and Others.
|
A. |
Pre-Clearance
|
B. |
Window and Blackout Periods
|
C. |
Trading Plan Exceptions to Blackout Period or Closure of Trading Window for Material News
|
D. |
Pre-Clearance and Advance Notice of Transactions
|
E. |
Prohibition of Speculative or Short-Term Trading
|
F. |
Short-Swing Trading/Control Stock/Section 16 Reports
|
G. |
Prohibition of Trading During Pension Fund Blackouts
|
IV. |
Duration of Policy’s Applicability
|
V. |
Penalties
|
VI. |
Amendments
|
1. |
What is insider trading?
|
2. |
Why is insider trading illegal?
|
3. |
What is material nonpublic information?
|
4. |
What are examples of material information?
|
• |
financial results or forecasts;
|
• |
strategic plans;
|
• |
potential mergers, acquisitions or dispositions of assets, divisions, companies, etc.
|
• |
pending public or private sales of debt or equity securities;
|
• |
declaration of stock splits, dividends or changes in dividend policy;
|
• |
major contract awards or cancellations;
|
• |
key management or control changes;
|
• |
possible tender offers or proxy fights;
|
• |
significant write-offs;
|
• |
significant litigation;
|
• |
impending bankruptcy; and
|
• |
corporate partner relationships.
|
5. |
When is information considered public?
|
6. |
Who can be guilty of insider trading?
|
7. |
Does Forian have an insider trading policy?
|
8. |
Does this Policy or the insider trading laws apply to me if I work outside the U.S.?
|
9. |
What if I am aware of material nonpublic information when I trade, but the reason I trade is because of something else, like to pay medical bills?
|
10. |
Do the U.S. securities laws take into account mitigating circumstance, like avoiding a loss or planning a transaction before I had material nonpublic information?
|
11. |
What if I don’t buy or sell anything, but I tell someone else the information and they buy or sell?
|
12. |
What if I don’t tell them the information itself, I just tell them whether they should buy or sell?
|
13. |
What are the penalties if I trade on inside information or tip off someone else?
|
14. |
What is “loss avoided”?
|
15. |
Am I restricted from trading securities of any companies other than Forian (for example a customer or competitor of Forian)?
|
16. |
So if I do not trade Forian securities when I have material nonpublic information, and I don’t “tip” other people, I am in the clear, right?
|
17. |
So when can I buy or sell my Forian securities?
|
18. |
What is a quarterly trading blackout period?
|
19. |
What are Forian’s quarterly trading blackout periods?
|
20. |
Can Forian’s quarterly trading blackout periods change?
|
21. |
Does Forian have blackout periods other than quarterly trading blackout periods?
|
22. |
If I have an open order to buy or sell Forian securities on the date a trading window closes, my broker will cancel the open order and won’t execute the trade, right?
|
23. |
Am I allowed to trade derivative securities of Forian? Or short Forian common stock?
|
24. |
Why does Forian prohibit trading in derivative securities and short selling?
|
25. |
Can I purchase Forian securities on margin or hold them in a margin account?
|
26. |
Why does Forian prohibit me from purchasing Forian securities on margin or holding them in a margin account?
|
27. |
Can I exercise stock options during a trading blackout period or when I possess material nonpublic information?
|
28. |
Am I subject to the trading blackout period if I am no longer a director, officer or covered employee, advisor or consultant of Forian?
|
29. |
Can I gift stock while I possess material nonpublic information or during a trading blackout period?
|
30. |
What if I purchased publicly traded options or other derivative securities before I became an individual covered by this Policy?
|
31. |
May I own shares of a mutual fund that invests in Forian?
|
32. |
Are mutual fund shares holding Forian subject to the trading blackout periods?
|
33. |
May I use a “routine trading program” or “10b5-1 plan”?
|
34. |
What happens if I violate this Policy?
|
35. |
Who should I contact if I have questions about the Policy?
|
Subsidiary
|
Jurisdiction
|
Helix Technologies, Inc.
|
Delaware
|
Medical Outcomes Research Analytics, LLC
|
Delaware
|
Helix Legacy, Inc.
|
Delaware
|
Green Tree International, Inc.
|
Colorado
|
1. |
I have reviewed this Annual Report on Form 10-K of Forian Inc.;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report;
|
4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and
|
(d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case
of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5. |
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the
registrant’s board of directors (or persons performing the equivalent functions):
|
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information; and
|
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: March 29, 2024
|
By:
|
/s/ Max Wygod |
|
Name:
|
Max Wygod
|
|
Title:
|
Chief Executive Officer
(Principal Executive Officer)
|
1. |
I have reviewed this Annual Report on Form 10-K of Forian Inc.;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report;
|
4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and
|
(d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case
of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5. |
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the
registrant’s board of directors (or persons performing the equivalent functions):
|
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information; and
|
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: March 29, 2024
|
By:
|
/s/ Michael Vesey |
|
Name:
|
Michael Vesey
|
|
Title:
|
Chief Financial Officer
(Principal Financial and Accounting Officer)
|
(1) |
the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2) |
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: March 29, 2024
|
By:
|
/s/ Max Wygod |
|
Name:
|
Max Wygod
|
|
Title:
|
Chief Executive Officer
(Principal Executive Officer)
|
Date: March 29, 2024
|
By:
|
/s/ Michael Vesey |
|
Name:
|
Michael Vesey
|
|
Title:
|
Chief Financial Officer
(Principal Financial and Accounting Officer)
|
1. |
I have received and read the attached Incentive Compensation Recoupment Policy (the “Policy”).
|
2. |
I am a Covered Person as defined in the Policy.
|
3. |
I will be bound by all of the terms and conditions of the Policy, Section 10D of the Exchange Act and any applicable rules or standards adopted by the SEC, and any applicable Nasdaq Requirements both during and after my employment with
the Company, including, without limitation, by promptly repaying or returning any Recoverable Compensation to the Company as determined in accordance with the Policy and this Acknowledgement.
|
Signature:
|
|||||
Printed Name:
|
|||||
Date:
|
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Long-term liabilities: | ||
Convertible note payable, net of debt issuance costs | $ 24,870,181 | $ 25,106,547 |
Stockholders' equity: | ||
Preferred Stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred Stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred Stock, shares issued (in shares) | 0 | 0 |
Preferred Stock, shares outstanding (in shares) | 0 | 0 |
Common Stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common Stock, shares authorized (in shares) | 95,000,000 | 95,000,000 |
Common Stock, shares issued (in shares) | 30,920,450 | 32,251,326 |
Common Stock, shares outstanding (in shares) | 30,920,450 | 32,251,326 |
Related Party [Member] | ||
Long-term liabilities: | ||
Convertible note payable, net of debt issuance costs | $ 6,000,000 | $ 6,000,000 |
BUSINESS ORGANIZATION AND NATURE OF OPERATIONS |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 | |||
BUSINESS ORGANIZATION AND NATURE OF OPERATIONS [Abstract] | |||
BUSINESS ORGANIZATION AND NATURE OF OPERATIONS |
Forian Inc. (the “Company” or “Forian”) was incorporated in Delaware on October 15, 2020 as a wholly owned subsidiary of Medical Outcomes Research Analytics, LLC (“MOR”) for the purpose of effecting the business combination with Helix Technologies Inc, (“Helix”). 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 healthcare and related industries.
The business combination with Helix in March 2021 was accounted for as a reverse acquisition using the acquisition method of accounting in
accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations (“ASC 805”), with the Company deemed the accounting acquirer for financial reporting purposes. Helix provided
software and analytics solutions to state governments and licensed operators in the cannabis industry, primarily through its subsidiary, Bio-Tech Medical Software, Inc. (“BioTrack”), until its sale of BioTrack in 2023.
On February 10, 2023, Helix completed the sale of 100% of the outstanding capital stock of BioTrack; on March 3, 2022, Helix completed the sale of the assets of its security monitoring business: and
on October 31, 2022, Helix completed the sale of 100% of the outstanding membership interest of its Engeni LLC subsidiary (these
businesses are collectively referred to as the “Helix Businesses”). As a result of these transactions, Helix has no remaining active operations and the Company no longer provides products or services to the cannabis industry. The results of the
Helix Businesses are presented as discontinued operations in the Consolidated Statements of Operations and, as such, have been excluded from continuing operations. Further, the Company reclassified the assets and liabilities of the Helix
Businesses to discontinued operations in the Consolidated Balance Sheet as of December 31, 2022. The Company will continue to provide analytics solutions to customers within the healthcare and related industries. For further discussion on the
discontinued operations, refer to Note 4.
|
BASIS OF PRESENTATION |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 | |||
BASIS OF PRESENTATION [Abstract] | |||
BASIS OF PRESENTATION |
The consolidated financial statements
have been prepared in accordance with U.S. GAAP. The Financial Accounting Standards Board (“FASB”) establishes these principles to ensure financial condition, results of operations, and cash flows are consistently reported. Any reference in
these notes to applicable accounting guidance is meant to refer to the authoritative nongovernmental GAAP as found in the FASB ASC.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Principles of Consolidation
The consolidated financial statements of the Company include the accounts of (i) Medical Outcomes Research Analytics, LLC and (ii) Helix Technologies, Inc. and its wholly owned subsidiaries including Helix TCS, LLC (through
December 31, 2022), Security Consultants Group, LLC (through December 31, 2022), Helix Legacy, Inc. (f/k/a Security Grade Protective Services, Ltd.), Bio-Tech Medical Software, Inc. (through February 10, 2023), and Engeni, LLC (including Engeni S.A.
(“Engeni SA”), which is 99% owned by Engeni, LLC) (through October 31, 2022). Effective October 31, 2022, 100% of the outstanding membership interest of Engeni, LLC held by Helix was sold. Effective December 31, 2022, (i) Security Consultants Group, LLC was
merged with and into Helix TCS, LLC and (ii) Helix TCS, LLC was merged with and into Helix Legacy, Inc. On February 10, 2023, 100% of the
outstanding capital stock of Bio-Tech Medical Software, Inc. was sold. All intercompany transactions have been eliminated in consolidation.
Discontinued Operations
On February 10, 2023, Helix completed the sale of 100%
of the outstanding capital stock of its wholly owned subsidiary, BioTrack. On March 3, 2022, the Company sold certain assets, consisting of customer contracts, accounts receivable and other property related to its security monitoring services. On
October 31, 2022, the Company sold 100% of its outstanding membership interest of Engeni, LLC for a note with payments of up to $100,000 if certain conditions are met.
As the sale of BioTrack, the security monitoring business and Engeni, LLC, together, represented a strategic shift that will have a major effect on the
Company’s operations and financial results, they have been presented in discontinued operations separate from continuing operations for the years ended December 31, 2023 and 2022, as applicable. The
results from operations and gain (loss) on sale of the security monitoring business and Engeni LLC, net was previously classified as part of continuing operations as their disposition individually did not have a major impact on the business prior
to the sale of BioTrack. For further discussion, refer to Note 4.
Foreign Currency
ASC Topic 830-10, Foreign Currency Matters (“ASC 830-10”), requires the use of
highly inflationary accounting when a country has experienced a cumulative inflation of approximately 100% or more over a 3-year period. Under highly inflationary accounting, financial statements are remeasured into the reporting currency with
resulting gains and losses included in earnings. The Company acquired a subsidiary as part of the Helix acquisition that operates in Argentina, which has been designated a highly inflationary economy. Accordingly, the Company has remeasured the
financial statements of the subsidiary under ASC 830-10 as if the US dollar is its functional currency with resulting gains or losses recorded as other income or expense. The Company sold all of the assets of its operations in Argentina, Engeni LLC
and Engeni SA, during October 2022. The financial results of the Company’s Argentina operations are included in discontinued operations for the years ended December 31, 2022. During the years ended December 31, 2022, sales in Argentina, which are
included in discontinued operations, were less than 1% of the Company’s consolidated sales. The hyperinflationary conditions did not have a material impact on the Company’s business during 2022.
Use of Estimates
Preparation of financial statements in conformity with U.S. GAAP requires management to
make estimates, judgements and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses together with amounts disclosed in the related notes to the financial statements. The significant areas of estimation include but
are not limited to accounting for the allowance for credit losses, income taxes, depreciation, amortization of intangible assets, contingencies, discontinued operations and stock-based compensation. Certain of the Company’s estimates could be affected
by external conditions, including those unique to the Company and general economic conditions. It is possible that the external factors could have an effect on the Company’s estimates and could cause actual results to differ from those estimates.
Reclassifications
Certain reclassifications have been made to
the prior period financial statements to conform to the current period financial statement presentation. Certain personnel, information licensing and data processing costs that were previously classified in research and development expenses when the Company’s healthcare information business was in its start-up stage were
reclassified to cost of revenues and general and administrative expenses in the consolidated statements of operations.
Fair Value of Financial Instruments
The Company measures the fair value of financial assets and liabilities based on the
guidance of ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), which defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements.
ASC 820 defines fair value as the exchange price that would be received for an asset or
paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an ordinary transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which
requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:
Level 1 — quoted prices in active markets for identical assets or
liabilities;
Level 2 — quoted prices for similar assets and liabilities in active
markets or inputs that are observable; and
Level 3 — inputs that are unobservable.
The carrying value of the Company’s financial instruments, such as cash, marketable
securities, accounts receivable and accrued liabilities and other liabilities approximate fair values due to the short-term nature of these instruments. The estimated fair value of the Company’s warrant liabilities as of December 31, 2023 and December 31, 2022 was $563
and $4,547, respectively, based on Level 3 inputs. Refer to Note
10 and Note 12.
Cash and Cash Equivalents and Credit Risk
The Company considers all cash accounts that are not subject to withdrawal restrictions
and highly liquid investments with a maturity of less than three months, when purchased, as cash and cash equivalents.
The Company maintains cash with major financial institutions. Cash held at U.S. bank
institutions is currently insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 at each institution, as the coverage is based on individually titled accounts. The portion of deposits in
excess of FDIC coverage is not protected by such insurance and represents a credit risk to the Company. At times, the Company’s deposits exceed this coverage.
Accounts Receivable and Allowance for Credit Losses
Accounts receivable are recorded at the
invoiced amount, net of an allowance for credit losses. The Company determines the allowance for credit losses based on historical write-off experience, customer specific facts and economic conditions.
Outstanding account balances are reviewed
individually for collectability. The allowance for credit losses is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. Allowance for credit losses was $0 at December 31, 2023 and December 31, 2022.
Management charges account balances against
the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.
Proceeds Receivable From Sale of Discontinued Operations, Net
In February 2023, the Company received a note
for $10,000,000 payable in twelve
equal monthly installments as partial consideration for the sale of BioTrack (see Note 4 – Discontinued Operations). As of December 31, 2023, proceeds from sale of discontinued operations consisted of two remaining monthly payments on the note due through February 10, 2024, aggregating $1,666,667, less an unamortized discount of $20,712. The Company recognized $389,288 of amortization of the $410,000
original discount recorded on the note interest and investment income for the year ended December 31, 2023.
Long-Lived Assets, Including
Definite Lived Intangible Assets
The Company reviews for the impairment of long-lived assets annually and whenever events and or changes in circumstances
indicate that the carrying value of an asset may not be recoverable. Such indicators include, among others, the nature of the asset, the projected future economic benefit of the asset, historical and future cash flows and profitability
measurements. An impairment loss would be recognized when the value of the undiscounted estimated future cash flows expected to result from the use of the asset and its eventual disposition is less than the carrying value. There were no impairment losses recognized during the years ended December 31, 2023 and 2022.
Goodwill
Goodwill consists of the excess of cost over
the fair value of net assets acquired in business combinations. Goodwill is not amortized. Instead, it is tested annually for impairment, or more frequently if events occur or circumstances change that would more likely than not reduce its fair value
below its carrying amount.
Goodwill is evaluated for impairment annually or whenever events or changes in circumstances indicate the carrying value
of goodwill may not be recoverable.The Company has the option to first assess qualitative factors to determine whether events or circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its
carrying amount and to determine whether further action is needed. The qualitative factors considered by Forian may include, but are not limited to, general economic conditions, the Company’s outlook, market performance of the Company’s industry
and recent and forecasted financial performance. Further testing is only required if the entity determines, based on the qualitative assessment, that it is more likely than not that a reporting unit’s fair value is less than its carrying amount.
Otherwise, no further impairment testing is required. If, after assessing the totality of events or circumstances, the Company determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then
performing the quantitative impairment test is unnecessary. If a quantitative test is required, the Company will compare the fair value of the relevant reporting unit to its carrying value. An impairment charge is then recognized for the amount for
which the carrying amount of the reporting unit exceeds its fair value; however, the loss recognized will be limited to the amount of goodwill allocated to the reporting unit. No impairment losses have been recognized during the periods presented.
All of the Company’s previously reported goodwill related to discontinued operations and has been classified as
non-current assets of discontinued operations at December 31, 2022. See Note 4 – Discontinued Operations.
Revenue Recognition
The Company recognizes revenue in accordance
with FASB Topic 606, Revenue from Contracts with Customers (“ASC 606”).
Under ASC 606, the Company recognizes
revenue when (or as) customers obtain control of promised goods or services, in an amount that reflects the consideration which is expected to be received in exchange for those goods or services. The Company recognizes revenue following the
five-step model prescribed under ASC 606: (i) identify contract(s) with a customer; (ii) identify the performance obligation(s) in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance
obligation(s) in the contract; and (v) recognize revenues when (or as) the Company satisfies a performance obligation. The Company applies the provisions of ASC 606 to an arrangement when a substantive contract exists, and collectability is
probable.
The Company derives revenue primarily from
license fees for the Company’s information products. Information products contracts are generally for a period of one month to five years. Information products’ customers may access data analytics products through the use of tools provided by the Company or by utilizing their
own tools per the contract. Data products may consist of historical information as it exists at the time of delivery or information that will be updated over a period of time as agreed with the customer. In most cases, the provision of information
products is considered a single performance obligation. In cases where the Company is not obligated to update information over the access period, and control over the use of the products passes to the customer when delivered, revenue is recognized
when the information products are made available to the customer. In cases where information updates are provided over the contract term, they are considered highly interrelated with the information product delivered upon contract inception, and
revenue is recognized ratably over the life of the contract. Customers are generally invoiced according to monthly, quarterly or annual amounts specified in the contract. Any amounts invoiced in excess of revenue recognized are recorded as deferred
revenue. Revenue recognized in excess of amounts invoiced is recorded as a contract asset.
In some cases, contracts provide for variable
consideration that is contingent upon the occurrence of uncertain future events, which can either increase or decrease the transaction price, including sales of products by customers derived from data analytics products the Company provides. Variable
consideration based on sales of products by customers is recognized in the period of sales, subject to minimum amounts specified in contracts. Variable consideration is estimated at the expected value or at the most likely amount depending on the type
of consideration. Estimated amounts are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is
resolved. The estimate of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of anticipated performance and all information (historical, current and forecasted)
that is reasonably available to the Company and reevaluated each reporting period. The effect of revisions in recognized estimated variable consideration in excess of minimums are recorded beginning in the period in which the estimates are revised.
Actual results could differ from periodic estimates.
Significant judgments and estimates are
sometimes necessary for the determination of whether performance obligations in a contract are distinct and whether they are delivered at a point in time or over time. Judgement is also necessary to assess revenue recognized under contingent revenue
arrangements.
Contract acquisition costs, which consist of
sales commissions paid or payable, are considered incremental and recoverable costs of obtaining a contract with a customer. Sales commissions for initial and renewal contracts are deferred and then amortized on a straight-line basis over the contract
term.
During November 2020, the
Company entered into a Master Services Agreement (the “November 2020 Agreement”) with a customer to provide information services described in certain statements of work under the November 2020 Agreement. As part of the November 2020 Agreement,
the Company was granted shares of restricted stock representing approximately 23.4% of the outstanding common stock of the customer at
the time of issuance, vesting in quarterly increments specified in the November 2020 Agreement through December 2023. Concurrently, the Company entered into a Stockholders Agreement specifying its voting and other rights as a stockholder. As a
result, the Company determined that it did not exert influence over the customer. ASC 606-10-32-21 requires an entity to measure the fair value of noncash consideration at contract inception. The fair value of the restricted stock was determined
to be $0 on the date of inception. The Company recorded revenue from the customer of $2,679,524 and $1,887,605 for the years ended December 31, 2023
and 2022, respectively. The Company has outstanding accounts receivable from this customer of $1,827 and $469,786 at December 31, 2023 and December 31, 2022, respectively. See Note 19.
On July 21, 2023 the customer merged with Vox Merger Sub, Inc. As a result of the merger, the Company received $5,805,858 of cash proceeds, net of holdbacks, in consideration for all of its equity interest in the customer, which was recorded as gain on sale of investment during the year ended December 31, 2023. Forian may receive additional earnout payments in 2025 and 2026 in an aggregate amount of up to
approximately $3,600,000 if certain conditions are met.
Contract assets and deferred revenues consist
of the following as of December 31, 2023:
Transaction price allocated to remaining
performance obligations represents contracted revenue that has not yet been recognized, which includes unearned revenue and unbilled amounts that will be recognized as revenue in future periods. The majority of the Company’s noncurrent remaining
performance obligations will be recognized over the next 36 months.
The transaction price allocated to remaining
performance obligations consisted of the following:
Segment Information
FASB ASC 280, Segment Reporting (“ASC 280”), establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is
evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker is the chief executive officer, who reviews the
financial performance and the results of operations of the segments prepared in accordance with U.S. GAAP when making decisions about allocating resources and assessing performance of the Company.
As discussed above, the Company disposed of its businesses servicing the cannabis industry in 2023, and has
reclassified their historical results as discontinued operations. As such, the Company’s continuing operations are comprised of a single reportable segment providing analytic and information services to the healthcare and related industries.
Customer Concentration
During the year ended December 31, 2023, the
Company has two customers representing 13.1% and 12.0% of revenue. At December 31, 2023 the Company had two customers
representing 15.8% and 15.1%
of accounts receivable.
During the year ended December 31, 2022, the Company had two customers representing 11.5%
and 14.3% of revenue. At December 31, 2022 the Company had three customers representing 25.9%, 14.8% and 14.6% of accounts receivable.
Vendors and Licensors
The Company licenses certain information
assets from third parties as a key input to certain Information and Software products. Any disruptions associated with these suppliers could have a material short-term impact on the business while alternate sources are secured. The information
licenses specify content deliverables and specified use rights for a fixed fee and time period. Payment terms for information licenses generally consist of upfront payments and annual licensing fees. The Company expenses the contract costs over the
expected period of benefit, and records any differences between amounts expenses and payments incurred as other assets or liabilities on a contract by contract basis. Payments for licensed information, including additions to content assets and the
changes in related liabilities, are classified within “Net cash provided by operating activities” on the consolidated statements of cash flows. In cases where the Company pays variable fees based on content usage, such costs are expensed as
incurred.
Vendor Concentration
During the year ended December 31, 2023, the Company has two vendors representing 14.3% and 11.6% of purchases.
Property and Equipment, Net
Property and equipment are stated at cost, net of accumulated depreciation, which is
recorded commencing at the in-service date using the straight-line method at rates sufficient to charge the cost of depreciable assets to operations over their estimated useful lives, which are 1 to 7 years. Maintenance and repairs are charged to operations as
incurred.
Software Development Costs
The Company accounts for costs incurred in the development of computer software in
accordance with ASC Subtopic 350-40, Intangibles – Goodwill and Other – Internal-Use Software and ASC Subtopic 985-20, Software Costs of Software to be Sold, Leased or Marketed. Product development costs are primarily related to Company personnel and contractors for design and evaluating software development, testing, bug fixes, and
other maintenance activities. Product development costs incurred in the application development stage for internal use software are subject to capitalization and subsequent amortization, and possible impairment. The Company begins to capitalize these
costs when preliminary development efforts are successfully completed, management has authorized and committed project funding, and it is probable that the project will be completed and the software would be used as intended. Capitalization ceases upon
completion of all substantial testing. Such costs are amortized when placed in service, on a straight-line basis over the estimated useful life of the related asset, generally estimated to be three years. Product development costs not pertaining to the application development stage are expensed as incurred.
Contingencies
Occasionally, the Company may be involved in
claims and legal proceedings arising from the ordinary course of its business. The Company records a provision for a liability when it believes that it is both probable that a liability has been incurred, and the amount can be reasonably estimated.
If these estimates and assumptions change or prove to be incorrect, it could have a material impact on the Company’s consolidated financial statements. Contingencies are inherently unpredictable, and the assessments of the value can involve a series
of complex judgments about future events and can rely heavily on estimates and assumptions.
Advertising
Advertising costs are expensed as incurred and
included in sales and marketing expenses and amounted to $56,800 and $10,563 for the years ended December 31, 2023 and 2022, respectively.
Net Income (Loss) per Share
The calculation of earnings per share is based on the weighted
average number of ordinary shares or ordinary stock equivalents outstanding during the applicable period. The dilutive effect of ordinary stock equivalents is excluded from basic earnings per share and is included in the calculation of diluted earnings
per share, unless their impact is antidilutive to the “control number”, which is income (loss) from operations. Convertible notes, employee stock options, employee restricted stock awards and similar equity instruments granted by the Company are
treated as potential ordinary shares outstanding in computing diluted earnings per share. Diluted shares outstanding are calculated using the as if converted method for convertible notes and the treasury stock method for other potentially dilutive
securities. Under the as if converted method, the dilutive impact of securities is calculated as if conversion occurred at the beginning of the reporting period. Under the treasury stock method, the amount the employee must pay for exercising stock
options, the amount of compensation cost for future service that the Company has not yet recognized, and the amount of benefits that would be recorded in ordinary shares when the award becomes deductible for tax purposes are assumed to be used to
repurchase shares.
Distinguishing Liabilities from
Equity
The Company relies on the guidance provided by
ASC Topic 480, Distinguishing Liabilities from Equity and ASC 815-40, Derivatives and Hedging: Contracts in Entity’s Own Equity (“ASC 815-40”), to classify certain redeemable and/or convertible instruments.
The Company first determines whether a financial instrument should be classified as a liability. The Company will determine the liability classification if the financial instrument is mandatorily redeemable, or if the financial instrument, other than
outstanding shares, embodies a conditional obligation that the Company must or may settle by issuing a variable number of its equity shares.
Once the Company determines that a financial
instrument should not be classified as a liability, the Company determines whether the financial instrument should be presented between the liability section and the equity section of the balance sheet (“temporary equity”). The Company will determine
temporary equity classification if the redemption of the financial instrument is outside the control of the Company (i.e. at the option of the holder). Otherwise, the Company accounts for the financial instrument as permanent equity.
Initial Measurement
The Company records its financial instruments
classified as liability, temporary equity or permanent equity at issuance at the fair value, or cash received.
Subsequent Measurement – Financial instruments classified as liabilities
The Company records the fair value of its
financial instruments classified as liabilities at each subsequent measurement date. The changes in fair value of its financial instruments classified as liabilities are recorded as other expense/income.
Stock-based Compensation
The Company’s 2020 Equity Incentive Plan
(“2020 Plan”) permits the grant of stock options, restricted stock awards and/or restricted stock units. A total of 4,000,000 shares of
Company common stock were originally authorized and reserved for issuance under the 2020 Plan. On June 15, 2022, the Company’s stockholders approved an amendment to the 2020 Plan, which amended the 2020 Plan to increase the number of shares available
for issuance by 2,400,000 shares to a total of 6,400,000 shares. Stock options represent the right to purchase Company common stock at the exercise price on the date of grant of the stock option at a future date. Restricted stock awards are grants of shares of
Company common stock. Restricted stock units represent the right to receive shares of Company common stock on future specified dates. Stock options, restricted stock awards and restricted stock units granted contain restrictions that cause them to be
subject to substantial risk of forfeiture and restrict their exercise, sale or other transfer by the grantee until they vest. The terms of the stock options, restricted stock awards and units granted under the 2020 Plan are determined by the Board of
Directors in the agreement evidencing the award, including the number of shares, period of restriction or vesting schedule and other terms. The fair value of the stock options, restricted stock awards and restricted stock units is based on the
underlying grant date fair value of Company common stock. The fair value is then expensed over the requisite service periods of the awards, net of forfeitures, which is generally the service period and the related amount is recognized in the
consolidated statements of operations.
Income Taxes
The Company accounts for income taxes in
accordance with FASB ASC 740 (“ASC 740”). Deferred income tax assets and liabilities are determined based upon differences between financial reporting and tax bases of assets and liabilities, which are measured using the enacted tax rates and laws
that will be in effect when the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.
The provision for income taxes represents
Federal and state and local income taxes. The effective rate differs from statutory rates due to the effect of state and local income taxes, tax benefit of R&D credits, and certain nondeductible expenses. Our effective tax rate will change from
quarter to quarter based on recurring and non-recurring factors including, but not limited to, the geographical mix of earnings, enacted tax legislation and state and local income taxes. In addition, changes in judgment from the evaluation of new
information resulting in the recognition, derecognition, or re-measurement of a tax position taken in a prior annual period is recognized separately in the quarter of the change.
For the years
ended December 31, 2023 and 2022, the Company recognized net income tax expense of $85,740
and $23,980, respectively. The Company claims R&D tax credits on eligible R&D
expenditures. The R&D tax credits are recognized as a reduction to income tax expense.
The Company recognized a taxable gain on sale
of discontinued operations during the for the year ended December 31, 2023 which resulted in utilization of certain available federal and state net operating loss carryforwards. As a result, the Company
recorded income taxes related to discontinued operations of $2,064,165 after utilization of
federal and state net operating losses during the years ended December 31, 2023.
The Company files a consolidated U.S. income
tax return and tax returns in certain state and local jurisdictions. As of December 31, 2023, the Company is not subject to examination in any tax jurisdictions.
Tax contingencies are recorded, if needed, to
address potential exposure involving tax positions the Company has taken that could be challenged by tax authorities. These potential exposures could result from applications of various statutes, rules, regulations and interpretations. Any estimates
of tax contingencies contain assumptions and judgments about potential actions by taxing jurisdictions. Any interest and penalties related to uncertain tax positions would be included as part of the income tax provision. The Company’s conclusions
regarding uncertain tax positions may be subject to review and adjustment at a later date based upon ongoing analysis of or changes in tax laws, regulations and interpretations thereof as well as other factors.
On August 16, 2022, the Inflation Reduction
Act of 2022 (the “IRA”) was enacted and signed into law. Regarded as the reduced version of the proposed Build Back Better Act, the IRA contains two main corporate income tax provisions, including a 15% minimum tax on the average annual adjusted financial statement income of corporations with profits over $1 billion over a three-year period, as well as a 1% excise tax on the corporate stock buybacks by domestic publicly traded corporations. The Company has evaluated the impact of the IRA on its financial
statements for tax year 2023 and the IRA did not have a material impact on the Company’s financial statements.
Separation 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 Company common stock. Separation expenses for the years ended December 31, 2023, include $250,000 related
to the salary continuation and $349,832 related to the accelerated vesting of stock.
On March 2, 2022, the Company and two advisors agreed not to renew special advisor agreements between the
advisors and the Company. The advisors were the former chief executive officer and chief financial officer of Helix who were granted stock options in conjunction with their respective advisory agreements that were entered into upon the
completion of the Helix acquisition. The Company and the advisors mutually agreed not to renew the advisory agreements. The services provided by these advisors included transition planning and consulting services related to integration of
the business operations of Helix and Forian. 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, the Company recorded $5,417,043 of stock compensation expense during March 2022 related to the options that vested through March 2, 2023.
In addition, the Company records normal course of business
severance expenses in the operating expense line item related to its employees’ activities.
Stock Repurchase
On October 3, 2023, the Company repurchased 1,604,676 shares of its common stock from a group of affiliated investors in a privately negotiated transaction at a redemption price of $2.15 per share for an aggregate purchase price of $3,450,053.
The shares were cancelled and retired and returned to authorized and unissued shares. The Company recorded $34,501 of excise taxes
related to the stock repurchase to additional paid in capital as transaction costs.
Recent Accounting Pronouncements
In June 2016, the FASB issued ASU No. 2016-13—Financial Instruments – Credit
Losses (Topic 326) – Measurement of Credit Losses on Financial Instruments. This standard is intended to improve financial reporting by requiring earlier recognition of credit losses on financing receivables and other financial assets in scope, such as trade receivables. The amendment is
effective for fiscal years beginning after December 15, 2022. The Company adopted the update effective January 1, 2023 and the adoption of the standard did not have a material impact on the Company’s consolidated financial statements.
In October 2021, the FASB issued Accounting Standards Update No. 2021-08, Accounting for Contract Assets and
Contract Liabilities from Contracts with Customers (“ASU 2021-08”). The FASB issued ASU 2021-08 to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and
inconsistency related to recognition of an acquired contract liability and payment terms and their effect on subsequent revenue recognized by the acquirer. The amendment is effective for financial statements for interim and annual periods beginning
after December 15, 2022. ASU 2021-08 was adopted on January 1, 2023. The adoption of ASU 2021-08 did not have a material impact on the consolidated financial statements.
In December 2023, the FASB issued Accounting Standards
Update No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires additional disclosures related to rate reconciliation, income taxes paid, and
other disclosures. Under ASU 2023-09, for each annual periods presented, public entities are required to (1) disclose specific categories in the tabular rate reconciliation and (2) provide additional information for reconciling items that meet a
quantitative threshold. In addition, ASU 2023-09 requires all reporting entities to disclose on an annual basis the amount of income taxes paid disaggregated by federal, state, and foreign taxes as well as the amount of income taxes paid by
individual jurisdiction. ASU 2023-09 is effective for public business entities for annual periods beginning after December 15, 2024 and can be applied on a prospective basis with an option to apply the standard retrospectively. Early adoption is
permitted. The Company is currently evaluating the impact of ASU 2023-09 on its consolidated financial statements and related disclosures.
The Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a
material impact on its financial statements.
|
DISCONTINUED OPERATIONS |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DISCONTINUED OPERATIONS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DISCONTINUED OPERATIONS |
Helix Businesses Discontinued Operations
On February 10, 2023, Helix completed the sale of 100% of the outstanding capital stock of its wholly owned subsidiary, BioTrack, in exchange for $30,000,000, consisting of $20,000,000 paid at closing and $10,000,000 paid in twelve unconditional monthly installments
thereafter. In March 2022, Helix sold its security monitoring business and in October 2022, sold its Argentinian subsidiary Engeni LLC. The security monitoring business, BioTrack and Engeni are collectively referred to as the “Helix Businesses.” As
a result of these transactions, as of February 10, 2023, the Company no longer provides products or services to the cannabis industry. The Company continues to provide analytics solutions to customers in the healthcare and life sciences industries.
As the sale of BioTrack, the security monitoring business and Engeni, LLC, together,
represented a strategic shift that will have a major effect on the Company’s operations and financial results, they have been presented in discontinued operations separate from continuing operations for the years ended December 31, 2023 and 2022,
as applicable.
The Company recognized a gain on sale of BioTrack of $11,531,849 and a loss from discontinued operations of $94,427
during the year ended December 31, 2023 which is included as part of discontinued operations. The Company also recorded income taxes related to discontinued operations of $2,064,165 during the year ended December 31, 2023.
The Company recorded a gain on the sale of assets related to its security monitoring business
of $202,159 during the year ended December 31, 2022. The amount was reclassified to
discontinued operations in 2023 as it was part of a strategic shift which became significant to the Company’s operations upon the sale of BioTrack.
The following table summarizes the major classes of assets and liabilities of the Helix
Businesses as reported on the consolidated balance sheets as of December 31, 2022:
The following table summarizes the major income and expense line items of the Helix Businesses
as reported in the consolidated statements of operations for the years ended December 31, 2023 and 2022, 2023 represents operations through the date of sale:
|
MARKETABLE SECURITIES |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||
MARKETABLE SECURITIES [Abstract] | |||||||||||||||||||||||||||||||||||||||
MARKETABLE SECURITIES |
Marketable securities are stated at estimated fair value based upon current market quotes (level 1 inputs) and are classified as available-for-sale. Realized gains and losses are included in investment income. Unrealized
gains and losses are immaterial and therefore the Company has presented such amounts within investment income in the consolidated statements of operations. The Company invests in short-term U.S. Treasuries and money market mutual
funds. As of December 31, marketable securities consisted of the following:
|
PREPAID EXPENSES AND OTHER CURRENT ASSETS |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 | |||
PREPAID EXPENSES AND OTHER CURRENT ASSETS [Abstract] | |||
PREPAID EXPENSES AND OTHER CURRENT ASSETS |
The Company has various agreements which require upfront and periodic payments. The Company records the expenses related to these agreements ratably over the annual terms. As of December 31, 2023 and December 31, 2022, the Company’s balance sheet reflected prepaid expenses of $1,077,233
and $835,786, respectively, primarily relating to various software licenses and insurance policies with durations ranging from 3 months to 1 year.
Included in other current assets as of December 31, 2023, are income taxes receivable of $1,890,391, deferred license costs of $381,820
and amounts receivable from employees of $236,364.
Included in current other assets as of December 31, 2022, are amounts receivable from
employees totaling $432,338.
|
PROPERTY AND EQUIPMENT, NET |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PROPERTY AND EQUIPMENT, NET [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PROPERTY AND EQUIPMENT, NET |
As of December 31, property and equipment were comprised of the following:
|
DEPOSITS AND OTHER ASSETS |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 | |||
DEPOSITS AND OTHER ASSETS [Abstract] | |||
DEPOSITS AND OTHER ASSETS |
As of December 31, 2023, deposits and other assets included $1,390,156 of assets related to information license vendors (see Note 3 – Summary of Significant Accounting Policies – Vendors and Licensors).
|
ACCRUED EXPENSES |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||
ACCRUED EXPENSES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||
ACCRUED EXPENSES |
As of December 31, accrued expenses were comprised of the following:
|
WARRANT LIABILITY |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
WARRANT LIABILITY [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
WARRANT LIABILITY |
In conjunction with the business combination with Helix, outstanding warrants to purchase Helix common stock were converted to warrants to purchase Company common
stock. As the warrant holders have the option to receive cash in lieu of common stock in certain circumstances, the Company determined that the warrants require classification as a liability pursuant to ASC 815-40. In accordance with the applicable
accounting guidance, the outstanding warrants are recognized as a warrant liability on the consolidated balance sheet and were measured at their inception date fair value (the closing date of the business combination with Helix) and subsequently re-measured at each reporting period with
changes being recorded in the consolidated statements of operations. As of December 31, 2023 and 2022, the Company had 50,954 and 92,058 warrants outstanding classified as liabilities, respectively. During the year ended December 31, 2023, 51,102 warrants expired.
The fair value of the Company’s warrant liability, measured at Level 3 in the fair value hierarchy, was calculated using the
Black-Scholes model using the following inputs:
The following table
summarizes the change in fair value of the Company’s financial instruments – warrants, measured at Level 3 in the fair value hierarchy:
|
OTHER LONG-TERM LIABILITIES |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 | |||
OTHER LONG-TERM LIABILITIES [Abstract] | |||
OTHER LONG-TERM LIABILITIES |
Other
long-term liabilities at December 31, 2023 consists of liabilities related to the Company’s information license vendors (see Note 3 – Summary of Significant Accounting Policies – Vendors and Licensors). Other long-term liabilities at December 31,
2022 consists of operating lease liabilities.
|
CONVERTIBLE NOTES |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CONVERTIBLE NOTES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CONVERTIBLE NOTES |
On September 1, 2021, the Company entered into a Note Purchase Agreement with certain accredited investors and a director of the
Company, pursuant to which the Company issued at 100% of par value $24,000,000 in aggregate principal balance of 3.5% Convertible Promissory Notes
due September 1, 2025 (the “Notes”), convertible into (i) shares of Company common stock, and (ii) warrants to purchase shares of Company common stock equal to 20% of the principal amount of the Notes divided by the conversion price of the Notes (the “Warrants”). The Notes will mature on the fourth-year anniversary of the date of issuance, which time
is also the termination date of the Warrants if issued. The conversion price of the Notes and the exercise price of the Warrants is $11.98
per share, which was the consolidated closing bid price of the Company common stock as reported by Nasdaq on August 31, 2021, the most recently completed trading day preceding the Company entering into the Note Purchase Agreement with investors with
respect to the Notes. The holders of the Notes may, at any time, convert all or a portion of the Notes plus accrued interest (subject to a minimum principal amount of $100,000) at the conversion price. The Company may redeem all or a portion of any Notes then outstanding at any time after the first anniversary of issuance at a price of 112.5% of par value plus accrued interest. In the event of a change of control of the Company, the Company may redeem all Notes then outstanding at a
price of 108% of par value plus accrued interest. Interest expense on the Notes is payable upon maturity or earlier redemption unless the
Notes are converted prior to such time. In the event the holders of the Note convert all or a portion of the Notes, the related accrued interest is converted at the conversion price. Interest expense related to the Notes was $829,452 and $840,767 for the years ended December 31, 2023 and 2022,
respectively.
The Company evaluated the embedded features in accordance with ASC 815-15-25 and determined embedded features are all clearly and
closely related to the debt host instrument and therefore are not required to be bifurcated and separately measured at fair value. The Warrants were not issued in connection with the Notes, and issuance of the Warrants is contingent upon conversion
of the Notes at the option of the Holder, therefore no portion of the proceeds are allocated to the Warrants.
The Company did not elect the fair value measurement option
for the Notes. The estimated fair value of the Notes was $22,609,000 and $21,450,000 as of December 31, 2023 and December 31, 2022, respectively.
The fair value of the Notes was calculated using the present value of the Notes and the estimated fair value of the conversion option calculated using the Black-Scholes model and the following Level 3 inputs:
The Company incurred debt issuance costs associated with the Notes in the amount of $21,330, which were deferred and are being amortized over the term of the Notes. During the years ended December 31, 2023 and 2022, the Company recognized $5,333 and $5,333 in amortization of debt issuance costs, respectively.
On
September 12, 2023, the Company redeemed $1,000,000 in principal and $71,151 of accrued interest thereon for an aggregate redemption price of $960,000
resulting in a gain of $111,151, which is included in other income and expense in the Consolidated Statements of Operations.
|
STOCK-BASED COMPENSATION |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK-BASED COMPENSATION [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK-BASED COMPENSATION |
Restricted Stock Awards and Restricted Stock Units
The table
below includes issuances of restricted stock awards and units under the 2020 Plan and unvested equity interests of MOR which were converted into restricted common stock.
The 744,985 of unvested awards at December 31, 2023 consisted of 699,748 restricted stock units and 45,237 shares of restricted
stock.
Stock Options
As part of the business combination with Helix, the Company assumed the Helix TCS, Inc. Omnibus Stock Incentive Plan and the Bio-Tech Medical Software, Inc. 2014 Stock Incentive Plan, each as amended, pursuant to which options
exercisable at prices between $2.00 and $51.80
per share for 455,089 shares of Company common stock were outstanding. The value attributable to service subsequent to the business
combination is recognized as compensation cost by the Company. As of December 31, 2023, options to purchase 281,494
shares of common stock remain outstanding.
The fair value of the stock options was estimated at Level 3 in the fair value hierarchy using the Black-Scholes
option pricing model, and the assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgement. The
assumptions used to calculate the grant date fair value of the options outstanding as of December 31, are as follows:
The following summarizes option activity under the Company’s stock plan for the years ended December 31, 2023 and 2022:
The weighted average exercise price and remaining contractual life of exercisable options as of December 31, 2023 is $12.98
and 6.11 respectively. The total aggregate intrinsic value of the exercisable options as of December 31, 2023 was approximately $34,299.
Stock Compensation Expense
The weighted-average grant date fair value per share for the stock options granted was $2.53 and $3.62 for the years ended December 31, 2023 and 2022, respectively.
On
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 years
ended December 31, 2023 includes $349,832 related to the accelerated vesting of stock, which is included in “separation expenses” in the
consolidated statements of operations.
On March 2, 2022, the Company and the former chief executive officer and the former chief financial officer of Helix mutually agreed not to renew special
advisor agreements between the advisors and the Company. 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, the Company recorded $5,417,043 of stock compensation expense during March 2022 related to the options that vested through March 2, 2023.
At December 31, 2023, the total unrecognized stock compensation expense related to unvested stock option awards and restricted stock awards and restricted
stock units granted was $11,359,575, which the Company expects to recognize over a weighted-average period of approximately 3.08 years. Stock compensation expense for the years ended December 31, 2023 and 2022 is as follows:
Total
intrinsic value of options exercised during the period ended December 31, 2023 was $3,139. The total fair value of restricted shares vested
during the period ended December 31, 2023 was $972,567.
|
NET INCOME (LOSS) PER SHARE |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NET INCOME (LOSS) PER SHARE [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NET INCOME (LOSS) PER SHARE |
The following table sets forth the computation of the basic and diluted net income (loss) per share:
The following table sets forth all outstanding potentially dilutive securities which were not included in the calculation of diluted
earnings per share because their impact would have been antidilutive.
|
RELATED PARTY TRANSACTIONS |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 | |||
RELATED PARTY TRANSACTIONS [Abstract] | |||
RELATED PARTY TRANSACTIONS |
Adam Dublin, the Company’s Chief
Strategy Officer, was previously a consultant for a current vendor of the Company. Mr. Dublin’s consultancy with the vendor ended on December 11, 2020, and the parties agreed not to renew the consulting agreement. Pursuant to Mr. Dublin’s
consulting agreement with the vendor, Mr. Dublin received payments from the vendor for the years ended December 31, 2023 and 2022 of $317,722
and $467,324 respectively, as he is entitled to runoff commissions on accounts he sold.
On
September 1, 2021, the Company issued, at 100% of par value, $24,000,000 in aggregate principal balance of 3.5% Convertible Promissory Notes
due 2025 convertible into (i) shares of Company common stock and (ii) warrants to purchase shares of Company common stock equal to 20%
of the principal amount of the Notes divided by the conversion price to a select group of institutional and accredited investors, which included a director of the Company who holds $6,000,000 of the Notes. See Note 12 for additional information.
On
October 3, 2023, the Company repurchased 1,604,676 shares of its common stock from a group of affiliated investors in a privately
negotiated transaction at a redemption price of $2.15 per share for an aggregate purchase price of $3,450,053. The shares were cancelled and retired and returned to authorized and unissued shares.
|
INCOME TAXES |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES |
The Company accounts for income taxes under
ASC 740. Deferred income tax assets and liabilities are determined based upon differences between financial reporting and tax bases of assets and liabilities, which are measured using the enacted tax rates and laws that will be in effect when the
differences are expected to reverse.
For financial reporting purposes, the
Company’s consolidated income from continuing operations before income taxes for the U.S. and foreign entities, in the aggregate, is as follows:
The income tax expense for continuing
operations consisted of the following for the years ending December 31, 2023 and December 31, 2022:
The reconciliation between the Company’s
effective tax rate on income from continuing operations and statutory tax rate for the years ended December 31, 2023 and 2022 is as follows:
Effective
for tax years beginning after December 31, 2021, taxpayers are required to capitalize any expenses incurred that are considered incidental to research and experimentation (“R&E”) activities under IRC Section 174. While taxpayers historically
had the option of deducting these expenses under IRC Section 174, the December 2017 Tax Cuts and Jobs Act mandates capitalization and amortization of R&E expenses for tax years beginning after December 31, 2021. Expenses incurred in connection
with R&E activities in the U.S. must be amortized over a 5-year period if incurred, and R&E expenses incurred outside the U.S. must be amortized over a 15-year period. R&E activities are broader in scope than qualified research
activities that are considered under IRC Section 41 (relating to the research tax credit).
For the
year ended December 31, 2023, the Company performed an analysis based on available guidance and determined that it will increase taxable income. The Company will continue to monitor this issue for future developments and its impact on taxable
income.
Deferred
income taxes reflect the net tax effects of temporary differences between carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Realization of net deferred tax assets is dependent
upon future earnings, if any, the timing and amount of which are uncertain.
The following items comprise the Company’s net
deferred tax assets and liabilities from continuing operations as of December 31, 2023 and December 31, 2022:
As of the year ended December 31, 2023, the
Company has federal and state net operating loss carryforwards of approximately $19,744,461 and $24,522,199, respectively. Federal net operating loss carryforwards in the amount of approximately $19,744,461 have an indefinite life. Federal NOL carryforwards generated after tax year 2021 are subject to an 80% limitation on taxable income, do not expire and will carryforward indefinitely.
State net operating loss carryforwards in the
amount of $9,131,824 begin expiring in
and approximately $15,390,375 have an indefinite life.The utilization of the Company’s net operating
losses may be subject to a U.S. federal limitation due to the “change in ownership provisions” under Section 382 of the Internal Revenue Code and other similar limitations in various state jurisdictions. Such limitations may result in a reduction of
the amount of net operating loss carryforwards in future years and possibly the expiration of certain net operating loss carryforwards before their utilization.
Management assesses the available positive and
negative evidence to estimate if sufficient future taxable income will be generated to utilize the existing deferred tax assets. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the
periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. The Company cannot rely on
a history of earnings. Based on this assessment, management has established a full valuation allowance against all of the deferred tax assets because it is more likely than not that all of the deferred tax assets will not be realized.
As of December 31, 2023, deferred tax assets
were offset by deferred tax liabilities and a valuation allowance on any remaining balance. A valuation allowance of $8,119,492 has been
recorded to measure only the portion of the deferred tax asset that more likely than not will be realized. The valuation allowance changed by $9,212,889
in the year. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income are improved or if objective negative evidence in the form of cumulative losses is no longer present and
additional weight may be given to subjective evidence such as our projections for growth in the relevant jurisdictions.
As required by the uncertain tax position
guidance in ASC 740, the Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the
more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company applied the
uncertain tax position guidance in ASC No. 740, Accounting for Income to all tax positions for which the statute of limitations remained open. Any estimates of tax contingencies contain assumptions and
judgments about potential actions by taxing jurisdictions. Any interest and penalties related to uncertain tax positions would be included as part of the income tax provision.
The Company’s conclusions regarding uncertain
tax positions may be subject to review and adjustment at a later date based upon ongoing analysis of or changes in tax laws, regulations and interpretations thereof as well as other factors.
The Company files tax returns as prescribed by
the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examinations by federal, and state and local jurisdictions, where applicable. There are currently no pending tax examinations. The
Company’s tax years are still open under statute from 2019 to the present in the U.S. To the extent the Company has tax attribute carryforwards, the tax years in which the attribute was generated may still be adjusted upon examination by the Internal
Revenue Service and state and local tax authorities to the extent utilized in a future period.
The Company is also subject to certain
non-income taxes such as value added taxes, sales taxes, and property taxes. The Company has taken certain positions that management feels, although not free from doubt, should not result in a successful challenge by certain tax authorities.
|
LEASES |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LEASES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LEASES |
Operating Leases
The
Company accounts for leases in accordance with ASC Topic 842, Leases (“ASC 842”). All contracts are evaluated to determine whether or not they represent a lease. A lease conveys the right to control the use
of an identified asset for a period of time in exchange for consideration. The Company has operating leases primarily consisting of facilities with remaining lease terms of 1-5 years. The lease term represents the period up to the early termination date
unless it is reasonably certain that the Company will not exercise the early termination option. Certain leases include rental payments that are adjusted periodically based on changes in consumer price and other indices.
Leases
are classified as finance or operating in accordance with the guidance in ASC 842. The Company does not hold any finance leases.
The
Company is obligated under two short-term leases related to offices in Pennsylvania and Massachusetts. These short-term leases are
currently leased on a month-to-month basis. A short-term lease is a lease with a term of 12 months or less and does not include the option to purchase the underlying asset that the Company would expect to exercise. The Company has elected to adopt
the short-term lease exemption in ASC 842 and as such has not recognized a “right of use” asset or lease liability for these short-term leases.
The
Company’s lease agreements generally do not provide an implicit borrowing rate; therefore an internal incremental borrowing rate is determined based on information available at lease commencement date for purposes of determining the present value of
lease payments.
Supplemental
cash flow information and non-cash activity related to leases are as follows:
ROU lease assets and lease liabilities
for the Company’s operating leases were recorded in the consolidated balance sheet as follows:
The
components of lease expense were as follows for each of the periods presented, which are included in operating expenses in the consolidated statements of operations:
Future lease payments
included in the measurement of lease liabilities on the consolidated balance sheet as of December 31, 2023, were as follows:
|
COMMITMENTS AND CONTINGENCIES |
12 Months Ended | ||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | |||||||||||||||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES [Abstract] | |||||||||||||||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES |
Service and License Agreements
The
Company entered into certain service and license agreements that provide for future minimum payments. The terms of these agreements vary in length. The following table shows the remaining payment obligations under these agreements as of December
31, 2023:
Commitments and contingencies includes $2,553,861 recorded in accrued expenses and other liabilities, representing information license liabilities under various licensing agreements (see Note
3 – Summary of Significant Accounting Policies – Vendors and Licensors).
Legal
Proceedings
From time to time the
Company may be involved in claims that arise during the ordinary course of business. For any matters where management currently believes it is probable that the Company will incur a loss and that the probable loss or range of loss can be
reasonably estimated, the Company records reserves in the consolidated financial statements based on its best estimates of such loss. In other instances, because of the uncertainties related to either the probable outcome or the amount or range
of loss, management is unable to make a reasonable estimate of a liability, if any. Regardless of the outcome, litigation can be costly and time consuming, and it can divert management’s attention from important business matters and initiatives,
negatively impacting the Company’s overall operations. Although the results of litigation and claims cannot be predicted with certainty, the Company does not currently have any pending litigation to which it is a party or to which its property is
subject that we believe to be material, except for the below.
Audet
v. Green Tree International, et. al.
On
February 14, 2020, John Audet filed a complaint in 15th Judicial Circuit in and for Palm Beach County, Florida against multiple parties, including Green Tree International (“GTI”), an indirect subsidiary of the Company, claiming that he owned 10% of GTI. The complaint seeks unspecified monetary damages equivalent to the value a 10% shareholder of GTI would have received in the subsequent Helix and Forian transactions, along with an equitable accounting and constructive trust to determine if Audet
suffered any loss of profit distributions. On March 8, 2024, the parties entered into a Settlement Agreement and General Release, which included a release of GTI, the Company and its subsidiaries and all related parties. The parties filed a Joint
Stipulation to Dismiss with Prejudice with respect to this matter on March 18, 2024. The Court entered a Final Order of Dismissal with Prejudice with respect to this matter on March 27, 2024.
Grant
Whitus et al. v. Forian Inc., Zachary Venegas and Scott Ogur
On July 30, 2021, four former Helix employees filed a lawsuit in the Arapahoe County, Colorado District Court against the Company and Helix’s former managers asserting
claims of breach of contract, promissory estoppel, breach of the covenant of good faith and fair dealing, civil theft and conversion, fraudulent misrepresentation, civil conspiracy, and unjust enrichment / quantum meruit, all relating to the
plaintiffs’ claims that they were promised equity interest in Helix or compensation that they never received. The original complaint was never served, and in November 2021, the plaintiffs filed and served an amended complaint adding a fifth
plaintiff and seeking over $27.5 million in damages as well as attorneys’ fees and costs. The Company removed the matter to the United
States District Court for the District of Colorado in December 2021, and both the Company and the individual defendants filed motions to dismiss on January 20, 2022. Plaintiffs subsequently amended their complaint on April 21, 2022, adding Helix
TCS LLC and Helix Technologies, Inc. as defendants and advancing additional claims for breach of fiduciary duty and violation of the Colorado Wage Claims Act. The Company and the individual defendants
filed separate motions to dismiss on June 1, 2022, which were granted in part and denied in part by the Court on February 28, 2023. Plaintiffs supplemented their complaint on March 3, 2023, consistent with the Court’s ruling. Discovery has been
completed, and dispositive motions are currently being briefed. The Company believes the lawsuit is wholly without merit and intends to defend vigorously against the claims in the lawsuit.
|
SUBSEQUENT EVENTS |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 | |||
SUBSEQUENT EVENTS [Abstract] | |||
SUBSEQUENT EVENTS |
On January 2, 2024, the Company granted nonqualified stock options to a new employee
to purchase 2,500 shares of common stock of the Company at an exercise price of $3.69 per share, which amount represents the closing price of the Company’s common stock on such date, which grant was approved by the Board on December 28, 2023.
On January 12, 2024, the Company’s Board of Directors approved (a) the grant of
nonqualified stock options to employees to purchase an aggregate of 350,000 shares of common stock of the Company at an exercise price of
$2.68 per share, which amount represents the closing price of the Company’s common stock on such date, and (b) the grant of 350,000 restricted stock units to employees at a value of $2.60
per share.
On February 28, 2024, the Company redeemed $1,000,000 in principal and $87,356 of accrued interest on
convertible notes for an aggregate redemption price of $950,000 resulting in an anticipated gain of $137,356.
On March 27, 2024, the Company’s Board of Directors approved the grant of nonqualified
stock options to a new employee and its independent directors to purchase an aggregate of 115,000 shares of common stock of the Company at
an exercise price of $3.20 per share, which amount represents the closing price of the Company’s common stock on such date.
|
Insider Trading Arrangements |
3 Months Ended |
---|---|
Dec. 31, 2023 | |
Insider Trading Arrangements [Line Items] | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Principles of Consolidation |
Principles of Consolidation
The consolidated financial statements of the Company include the accounts of (i) Medical Outcomes Research Analytics, LLC and (ii) Helix Technologies, Inc. and its wholly owned subsidiaries including Helix TCS, LLC (through
December 31, 2022), Security Consultants Group, LLC (through December 31, 2022), Helix Legacy, Inc. (f/k/a Security Grade Protective Services, Ltd.), Bio-Tech Medical Software, Inc. (through February 10, 2023), and Engeni, LLC (including Engeni S.A.
(“Engeni SA”), which is 99% owned by Engeni, LLC) (through October 31, 2022). Effective October 31, 2022, 100% of the outstanding membership interest of Engeni, LLC held by Helix was sold. Effective December 31, 2022, (i) Security Consultants Group, LLC was
merged with and into Helix TCS, LLC and (ii) Helix TCS, LLC was merged with and into Helix Legacy, Inc. On February 10, 2023, 100% of the
outstanding capital stock of Bio-Tech Medical Software, Inc. was sold. All intercompany transactions have been eliminated in consolidation.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations |
Discontinued Operations
On February 10, 2023, Helix completed the sale of 100%
of the outstanding capital stock of its wholly owned subsidiary, BioTrack. On March 3, 2022, the Company sold certain assets, consisting of customer contracts, accounts receivable and other property related to its security monitoring services. On
October 31, 2022, the Company sold 100% of its outstanding membership interest of Engeni, LLC for a note with payments of up to $100,000 if certain conditions are met.
As the sale of BioTrack, the security monitoring business and Engeni, LLC, together, represented a strategic shift that will have a major effect on the
Company’s operations and financial results, they have been presented in discontinued operations separate from continuing operations for the years ended December 31, 2023 and 2022, as applicable. The
results from operations and gain (loss) on sale of the security monitoring business and Engeni LLC, net was previously classified as part of continuing operations as their disposition individually did not have a major impact on the business prior
to the sale of BioTrack. For further discussion, refer to Note 4.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign Currency |
Foreign Currency
ASC Topic 830-10, Foreign Currency Matters (“ASC 830-10”), requires the use of
highly inflationary accounting when a country has experienced a cumulative inflation of approximately 100% or more over a 3-year period. Under highly inflationary accounting, financial statements are remeasured into the reporting currency with
resulting gains and losses included in earnings. The Company acquired a subsidiary as part of the Helix acquisition that operates in Argentina, which has been designated a highly inflationary economy. Accordingly, the Company has remeasured the
financial statements of the subsidiary under ASC 830-10 as if the US dollar is its functional currency with resulting gains or losses recorded as other income or expense. The Company sold all of the assets of its operations in Argentina, Engeni LLC
and Engeni SA, during October 2022. The financial results of the Company’s Argentina operations are included in discontinued operations for the years ended December 31, 2022. During the years ended December 31, 2022, sales in Argentina, which are
included in discontinued operations, were less than 1% of the Company’s consolidated sales. The hyperinflationary conditions did not have a material impact on the Company’s business during 2022.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Use of Estimates |
Use of Estimates
Preparation of financial statements in conformity with U.S. GAAP requires management to
make estimates, judgements and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses together with amounts disclosed in the related notes to the financial statements. The significant areas of estimation include but
are not limited to accounting for the allowance for credit losses, income taxes, depreciation, amortization of intangible assets, contingencies, discontinued operations and stock-based compensation. Certain of the Company’s estimates could be affected
by external conditions, including those unique to the Company and general economic conditions. It is possible that the external factors could have an effect on the Company’s estimates and could cause actual results to differ from those estimates.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reclassifications |
Reclassifications
Certain reclassifications have been made to
the prior period financial statements to conform to the current period financial statement presentation. Certain personnel, information licensing and data processing costs that were previously classified in research and development expenses when the Company’s healthcare information business was in its start-up stage were
reclassified to cost of revenues and general and administrative expenses in the consolidated statements of operations.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments |
Fair Value of Financial Instruments
The Company measures the fair value of financial assets and liabilities based on the
guidance of ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), which defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements.
ASC 820 defines fair value as the exchange price that would be received for an asset or
paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an ordinary transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which
requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:
Level 1 — quoted prices in active markets for identical assets or
liabilities;
Level 2 — quoted prices for similar assets and liabilities in active
markets or inputs that are observable; and
Level 3 — inputs that are unobservable.
The carrying value of the Company’s financial instruments, such as cash, marketable
securities, accounts receivable and accrued liabilities and other liabilities approximate fair values due to the short-term nature of these instruments. The estimated fair value of the Company’s warrant liabilities as of December 31, 2023 and December 31, 2022 was $563
and $4,547, respectively, based on Level 3 inputs. Refer to Note
10 and Note 12.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and Cash Equivalents and Credit Risk |
Cash and Cash Equivalents and Credit Risk
The Company considers all cash accounts that are not subject to withdrawal restrictions
and highly liquid investments with a maturity of less than three months, when purchased, as cash and cash equivalents.
The Company maintains cash with major financial institutions. Cash held at U.S. bank
institutions is currently insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 at each institution, as the coverage is based on individually titled accounts. The portion of deposits in
excess of FDIC coverage is not protected by such insurance and represents a credit risk to the Company. At times, the Company’s deposits exceed this coverage.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable and Allowance for Credit Losses |
Accounts Receivable and Allowance for Credit Losses
Accounts receivable are recorded at the
invoiced amount, net of an allowance for credit losses. The Company determines the allowance for credit losses based on historical write-off experience, customer specific facts and economic conditions.
Outstanding account balances are reviewed
individually for collectability. The allowance for credit losses is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. Allowance for credit losses was $0 at December 31, 2023 and December 31, 2022.
Management charges account balances against
the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Proceeds Receivable From Sale of Discontinued Operations, Net |
Proceeds Receivable From Sale of Discontinued Operations, Net
In February 2023, the Company received a note
for $10,000,000 payable in twelve
equal monthly installments as partial consideration for the sale of BioTrack (see Note 4 – Discontinued Operations). As of December 31, 2023, proceeds from sale of discontinued operations consisted of two remaining monthly payments on the note due through February 10, 2024, aggregating $1,666,667, less an unamortized discount of $20,712. The Company recognized $389,288 of amortization of the $410,000
original discount recorded on the note interest and investment income for the year ended December 31, 2023.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Lived Assets, Including Definite Lived Intangible Assets |
Long-Lived Assets, Including
Definite Lived Intangible Assets
The Company reviews for the impairment of long-lived assets annually and whenever events and or changes in circumstances
indicate that the carrying value of an asset may not be recoverable. Such indicators include, among others, the nature of the asset, the projected future economic benefit of the asset, historical and future cash flows and profitability
measurements. An impairment loss would be recognized when the value of the undiscounted estimated future cash flows expected to result from the use of the asset and its eventual disposition is less than the carrying value. There were no impairment losses recognized during the years ended December 31, 2023 and 2022.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill |
Goodwill
Goodwill consists of the excess of cost over
the fair value of net assets acquired in business combinations. Goodwill is not amortized. Instead, it is tested annually for impairment, or more frequently if events occur or circumstances change that would more likely than not reduce its fair value
below its carrying amount.
Goodwill is evaluated for impairment annually or whenever events or changes in circumstances indicate the carrying value
of goodwill may not be recoverable.The Company has the option to first assess qualitative factors to determine whether events or circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its
carrying amount and to determine whether further action is needed. The qualitative factors considered by Forian may include, but are not limited to, general economic conditions, the Company’s outlook, market performance of the Company’s industry
and recent and forecasted financial performance. Further testing is only required if the entity determines, based on the qualitative assessment, that it is more likely than not that a reporting unit’s fair value is less than its carrying amount.
Otherwise, no further impairment testing is required. If, after assessing the totality of events or circumstances, the Company determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then
performing the quantitative impairment test is unnecessary. If a quantitative test is required, the Company will compare the fair value of the relevant reporting unit to its carrying value. An impairment charge is then recognized for the amount for
which the carrying amount of the reporting unit exceeds its fair value; however, the loss recognized will be limited to the amount of goodwill allocated to the reporting unit. No impairment losses have been recognized during the periods presented.
All of the Company’s previously reported goodwill related to discontinued operations and has been classified as
non-current assets of discontinued operations at December 31, 2022. See Note 4 – Discontinued Operations.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition |
Revenue Recognition
The Company recognizes revenue in accordance
with FASB Topic 606, Revenue from Contracts with Customers (“ASC 606”).
Under ASC 606, the Company recognizes
revenue when (or as) customers obtain control of promised goods or services, in an amount that reflects the consideration which is expected to be received in exchange for those goods or services. The Company recognizes revenue following the
five-step model prescribed under ASC 606: (i) identify contract(s) with a customer; (ii) identify the performance obligation(s) in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance
obligation(s) in the contract; and (v) recognize revenues when (or as) the Company satisfies a performance obligation. The Company applies the provisions of ASC 606 to an arrangement when a substantive contract exists, and collectability is
probable.
The Company derives revenue primarily from
license fees for the Company’s information products. Information products contracts are generally for a period of one month to five years. Information products’ customers may access data analytics products through the use of tools provided by the Company or by utilizing their
own tools per the contract. Data products may consist of historical information as it exists at the time of delivery or information that will be updated over a period of time as agreed with the customer. In most cases, the provision of information
products is considered a single performance obligation. In cases where the Company is not obligated to update information over the access period, and control over the use of the products passes to the customer when delivered, revenue is recognized
when the information products are made available to the customer. In cases where information updates are provided over the contract term, they are considered highly interrelated with the information product delivered upon contract inception, and
revenue is recognized ratably over the life of the contract. Customers are generally invoiced according to monthly, quarterly or annual amounts specified in the contract. Any amounts invoiced in excess of revenue recognized are recorded as deferred
revenue. Revenue recognized in excess of amounts invoiced is recorded as a contract asset.
In some cases, contracts provide for variable
consideration that is contingent upon the occurrence of uncertain future events, which can either increase or decrease the transaction price, including sales of products by customers derived from data analytics products the Company provides. Variable
consideration based on sales of products by customers is recognized in the period of sales, subject to minimum amounts specified in contracts. Variable consideration is estimated at the expected value or at the most likely amount depending on the type
of consideration. Estimated amounts are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is
resolved. The estimate of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of anticipated performance and all information (historical, current and forecasted)
that is reasonably available to the Company and reevaluated each reporting period. The effect of revisions in recognized estimated variable consideration in excess of minimums are recorded beginning in the period in which the estimates are revised.
Actual results could differ from periodic estimates.
Significant judgments and estimates are
sometimes necessary for the determination of whether performance obligations in a contract are distinct and whether they are delivered at a point in time or over time. Judgement is also necessary to assess revenue recognized under contingent revenue
arrangements.
Contract acquisition costs, which consist of
sales commissions paid or payable, are considered incremental and recoverable costs of obtaining a contract with a customer. Sales commissions for initial and renewal contracts are deferred and then amortized on a straight-line basis over the contract
term.
During November 2020, the
Company entered into a Master Services Agreement (the “November 2020 Agreement”) with a customer to provide information services described in certain statements of work under the November 2020 Agreement. As part of the November 2020 Agreement,
the Company was granted shares of restricted stock representing approximately 23.4% of the outstanding common stock of the customer at
the time of issuance, vesting in quarterly increments specified in the November 2020 Agreement through December 2023. Concurrently, the Company entered into a Stockholders Agreement specifying its voting and other rights as a stockholder. As a
result, the Company determined that it did not exert influence over the customer. ASC 606-10-32-21 requires an entity to measure the fair value of noncash consideration at contract inception. The fair value of the restricted stock was determined
to be $0 on the date of inception. The Company recorded revenue from the customer of $2,679,524 and $1,887,605 for the years ended December 31, 2023
and 2022, respectively. The Company has outstanding accounts receivable from this customer of $1,827 and $469,786 at December 31, 2023 and December 31, 2022, respectively. See Note 19.
On July 21, 2023 the customer merged with Vox Merger Sub, Inc. As a result of the merger, the Company received $5,805,858 of cash proceeds, net of holdbacks, in consideration for all of its equity interest in the customer, which was recorded as gain on sale of investment during the year ended December 31, 2023. Forian may receive additional earnout payments in 2025 and 2026 in an aggregate amount of up to
approximately $3,600,000 if certain conditions are met.
Contract assets and deferred revenues consist
of the following as of December 31, 2023:
Transaction price allocated to remaining
performance obligations represents contracted revenue that has not yet been recognized, which includes unearned revenue and unbilled amounts that will be recognized as revenue in future periods. The majority of the Company’s noncurrent remaining
performance obligations will be recognized over the next 36 months.
The transaction price allocated to remaining
performance obligations consisted of the following:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information |
Segment Information
FASB ASC 280, Segment Reporting (“ASC 280”), establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is
evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker is the chief executive officer, who reviews the
financial performance and the results of operations of the segments prepared in accordance with U.S. GAAP when making decisions about allocating resources and assessing performance of the Company.
As discussed above, the Company disposed of its businesses servicing the cannabis industry in 2023, and has
reclassified their historical results as discontinued operations. As such, the Company’s continuing operations are comprised of a single reportable segment providing analytic and information services to the healthcare and related industries.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Customer Concentration |
Customer Concentration
During the year ended December 31, 2023, the
Company has two customers representing 13.1% and 12.0% of revenue. At December 31, 2023 the Company had two customers
representing 15.8% and 15.1%
of accounts receivable.
During the year ended December 31, 2022, the Company had two customers representing 11.5%
and 14.3% of revenue. At December 31, 2022 the Company had three customers representing 25.9%, 14.8% and 14.6% of accounts receivable.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Vendors and Licensors |
Vendors and Licensors
The Company licenses certain information
assets from third parties as a key input to certain Information and Software products. Any disruptions associated with these suppliers could have a material short-term impact on the business while alternate sources are secured. The information
licenses specify content deliverables and specified use rights for a fixed fee and time period. Payment terms for information licenses generally consist of upfront payments and annual licensing fees. The Company expenses the contract costs over the
expected period of benefit, and records any differences between amounts expenses and payments incurred as other assets or liabilities on a contract by contract basis. Payments for licensed information, including additions to content assets and the
changes in related liabilities, are classified within “Net cash provided by operating activities” on the consolidated statements of cash flows. In cases where the Company pays variable fees based on content usage, such costs are expensed as
incurred.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Vendor Concentration |
Vendor Concentration
During the year ended December 31, 2023, the Company has two vendors representing 14.3% and 11.6% of purchases.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment, Net |
Property and Equipment, Net
Property and equipment are stated at cost, net of accumulated depreciation, which is
recorded commencing at the in-service date using the straight-line method at rates sufficient to charge the cost of depreciable assets to operations over their estimated useful lives, which are 1 to 7 years. Maintenance and repairs are charged to operations as
incurred.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Software Development Costs |
Software Development Costs
The Company accounts for costs incurred in the development of computer software in
accordance with ASC Subtopic 350-40, Intangibles – Goodwill and Other – Internal-Use Software and ASC Subtopic 985-20, Software Costs of Software to be Sold, Leased or Marketed. Product development costs are primarily related to Company personnel and contractors for design and evaluating software development, testing, bug fixes, and
other maintenance activities. Product development costs incurred in the application development stage for internal use software are subject to capitalization and subsequent amortization, and possible impairment. The Company begins to capitalize these
costs when preliminary development efforts are successfully completed, management has authorized and committed project funding, and it is probable that the project will be completed and the software would be used as intended. Capitalization ceases upon
completion of all substantial testing. Such costs are amortized when placed in service, on a straight-line basis over the estimated useful life of the related asset, generally estimated to be three years. Product development costs not pertaining to the application development stage are expensed as incurred.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contingencies |
Contingencies
Occasionally, the Company may be involved in
claims and legal proceedings arising from the ordinary course of its business. The Company records a provision for a liability when it believes that it is both probable that a liability has been incurred, and the amount can be reasonably estimated.
If these estimates and assumptions change or prove to be incorrect, it could have a material impact on the Company’s consolidated financial statements. Contingencies are inherently unpredictable, and the assessments of the value can involve a series
of complex judgments about future events and can rely heavily on estimates and assumptions.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Advertising |
Advertising
Advertising costs are expensed as incurred and
included in sales and marketing expenses and amounted to $56,800 and $10,563 for the years ended December 31, 2023 and 2022, respectively.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income (Loss) per Share |
Net Income (Loss) per Share
The calculation of earnings per share is based on the weighted
average number of ordinary shares or ordinary stock equivalents outstanding during the applicable period. The dilutive effect of ordinary stock equivalents is excluded from basic earnings per share and is included in the calculation of diluted earnings
per share, unless their impact is antidilutive to the “control number”, which is income (loss) from operations. Convertible notes, employee stock options, employee restricted stock awards and similar equity instruments granted by the Company are
treated as potential ordinary shares outstanding in computing diluted earnings per share. Diluted shares outstanding are calculated using the as if converted method for convertible notes and the treasury stock method for other potentially dilutive
securities. Under the as if converted method, the dilutive impact of securities is calculated as if conversion occurred at the beginning of the reporting period. Under the treasury stock method, the amount the employee must pay for exercising stock
options, the amount of compensation cost for future service that the Company has not yet recognized, and the amount of benefits that would be recorded in ordinary shares when the award becomes deductible for tax purposes are assumed to be used to
repurchase shares.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Distinguishing Liabilities from Equity |
Distinguishing Liabilities from
Equity
The Company relies on the guidance provided by
ASC Topic 480, Distinguishing Liabilities from Equity and ASC 815-40, Derivatives and Hedging: Contracts in Entity’s Own Equity (“ASC 815-40”), to classify certain redeemable and/or convertible instruments.
The Company first determines whether a financial instrument should be classified as a liability. The Company will determine the liability classification if the financial instrument is mandatorily redeemable, or if the financial instrument, other than
outstanding shares, embodies a conditional obligation that the Company must or may settle by issuing a variable number of its equity shares.
Once the Company determines that a financial
instrument should not be classified as a liability, the Company determines whether the financial instrument should be presented between the liability section and the equity section of the balance sheet (“temporary equity”). The Company will determine
temporary equity classification if the redemption of the financial instrument is outside the control of the Company (i.e. at the option of the holder). Otherwise, the Company accounts for the financial instrument as permanent equity.
Initial Measurement
The Company records its financial instruments
classified as liability, temporary equity or permanent equity at issuance at the fair value, or cash received.
Subsequent Measurement – Financial instruments classified as liabilities
The Company records the fair value of its
financial instruments classified as liabilities at each subsequent measurement date. The changes in fair value of its financial instruments classified as liabilities are recorded as other expense/income.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based Compensation |
Stock-based Compensation
The Company’s 2020 Equity Incentive Plan
(“2020 Plan”) permits the grant of stock options, restricted stock awards and/or restricted stock units. A total of 4,000,000 shares of
Company common stock were originally authorized and reserved for issuance under the 2020 Plan. On June 15, 2022, the Company’s stockholders approved an amendment to the 2020 Plan, which amended the 2020 Plan to increase the number of shares available
for issuance by 2,400,000 shares to a total of 6,400,000 shares. Stock options represent the right to purchase Company common stock at the exercise price on the date of grant of the stock option at a future date. Restricted stock awards are grants of shares of
Company common stock. Restricted stock units represent the right to receive shares of Company common stock on future specified dates. Stock options, restricted stock awards and restricted stock units granted contain restrictions that cause them to be
subject to substantial risk of forfeiture and restrict their exercise, sale or other transfer by the grantee until they vest. The terms of the stock options, restricted stock awards and units granted under the 2020 Plan are determined by the Board of
Directors in the agreement evidencing the award, including the number of shares, period of restriction or vesting schedule and other terms. The fair value of the stock options, restricted stock awards and restricted stock units is based on the
underlying grant date fair value of Company common stock. The fair value is then expensed over the requisite service periods of the awards, net of forfeitures, which is generally the service period and the related amount is recognized in the
consolidated statements of operations.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes |
Income Taxes
The Company accounts for income taxes in
accordance with FASB ASC 740 (“ASC 740”). Deferred income tax assets and liabilities are determined based upon differences between financial reporting and tax bases of assets and liabilities, which are measured using the enacted tax rates and laws
that will be in effect when the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.
The provision for income taxes represents
Federal and state and local income taxes. The effective rate differs from statutory rates due to the effect of state and local income taxes, tax benefit of R&D credits, and certain nondeductible expenses. Our effective tax rate will change from
quarter to quarter based on recurring and non-recurring factors including, but not limited to, the geographical mix of earnings, enacted tax legislation and state and local income taxes. In addition, changes in judgment from the evaluation of new
information resulting in the recognition, derecognition, or re-measurement of a tax position taken in a prior annual period is recognized separately in the quarter of the change.
For the years
ended December 31, 2023 and 2022, the Company recognized net income tax expense of $85,740
and $23,980, respectively. The Company claims R&D tax credits on eligible R&D
expenditures. The R&D tax credits are recognized as a reduction to income tax expense.
The Company recognized a taxable gain on sale
of discontinued operations during the for the year ended December 31, 2023 which resulted in utilization of certain available federal and state net operating loss carryforwards. As a result, the Company
recorded income taxes related to discontinued operations of $2,064,165 after utilization of
federal and state net operating losses during the years ended December 31, 2023.
The Company files a consolidated U.S. income
tax return and tax returns in certain state and local jurisdictions. As of December 31, 2023, the Company is not subject to examination in any tax jurisdictions.
Tax contingencies are recorded, if needed, to
address potential exposure involving tax positions the Company has taken that could be challenged by tax authorities. These potential exposures could result from applications of various statutes, rules, regulations and interpretations. Any estimates
of tax contingencies contain assumptions and judgments about potential actions by taxing jurisdictions. Any interest and penalties related to uncertain tax positions would be included as part of the income tax provision. The Company’s conclusions
regarding uncertain tax positions may be subject to review and adjustment at a later date based upon ongoing analysis of or changes in tax laws, regulations and interpretations thereof as well as other factors.
On August 16, 2022, the Inflation Reduction
Act of 2022 (the “IRA”) was enacted and signed into law. Regarded as the reduced version of the proposed Build Back Better Act, the IRA contains two main corporate income tax provisions, including a 15% minimum tax on the average annual adjusted financial statement income of corporations with profits over $1 billion over a three-year period, as well as a 1% excise tax on the corporate stock buybacks by domestic publicly traded corporations. The Company has evaluated the impact of the IRA on its financial
statements for tax year 2023 and the IRA did not have a material impact on the Company’s financial statements.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Separation Expenses |
Separation 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 Company common stock. Separation expenses for the years ended December 31, 2023, include $250,000 related
to the salary continuation and $349,832 related to the accelerated vesting of stock.
On March 2, 2022, the Company and two advisors agreed not to renew special advisor agreements between the
advisors and the Company. The advisors were the former chief executive officer and chief financial officer of Helix who were granted stock options in conjunction with their respective advisory agreements that were entered into upon the
completion of the Helix acquisition. The Company and the advisors mutually agreed not to renew the advisory agreements. The services provided by these advisors included transition planning and consulting services related to integration of
the business operations of Helix and Forian. 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, the Company recorded $5,417,043 of stock compensation expense during March 2022 related to the options that vested through March 2, 2023.
In addition, the Company records normal course of business
severance expenses in the operating expense line item related to its employees’ activities.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Repurchase |
Stock Repurchase
On October 3, 2023, the Company repurchased 1,604,676 shares of its common stock from a group of affiliated investors in a privately negotiated transaction at a redemption price of $2.15 per share for an aggregate purchase price of $3,450,053.
The shares were cancelled and retired and returned to authorized and unissued shares. The Company recorded $34,501 of excise taxes
related to the stock repurchase to additional paid in capital as transaction costs.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Recent Accounting Pronouncements |
Recent Accounting Pronouncements
In June 2016, the FASB issued ASU No. 2016-13—Financial Instruments – Credit
Losses (Topic 326) – Measurement of Credit Losses on Financial Instruments. This standard is intended to improve financial reporting by requiring earlier recognition of credit losses on financing receivables and other financial assets in scope, such as trade receivables. The amendment is
effective for fiscal years beginning after December 15, 2022. The Company adopted the update effective January 1, 2023 and the adoption of the standard did not have a material impact on the Company’s consolidated financial statements.
In October 2021, the FASB issued Accounting Standards Update No. 2021-08, Accounting for Contract Assets and
Contract Liabilities from Contracts with Customers (“ASU 2021-08”). The FASB issued ASU 2021-08 to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and
inconsistency related to recognition of an acquired contract liability and payment terms and their effect on subsequent revenue recognized by the acquirer. The amendment is effective for financial statements for interim and annual periods beginning
after December 15, 2022. ASU 2021-08 was adopted on January 1, 2023. The adoption of ASU 2021-08 did not have a material impact on the consolidated financial statements.
In December 2023, the FASB issued Accounting Standards
Update No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires additional disclosures related to rate reconciliation, income taxes paid, and
other disclosures. Under ASU 2023-09, for each annual periods presented, public entities are required to (1) disclose specific categories in the tabular rate reconciliation and (2) provide additional information for reconciling items that meet a
quantitative threshold. In addition, ASU 2023-09 requires all reporting entities to disclose on an annual basis the amount of income taxes paid disaggregated by federal, state, and foreign taxes as well as the amount of income taxes paid by
individual jurisdiction. ASU 2023-09 is effective for public business entities for annual periods beginning after December 15, 2024 and can be applied on a prospective basis with an option to apply the standard retrospectively. Early adoption is
permitted. The Company is currently evaluating the impact of ASU 2023-09 on its consolidated financial statements and related disclosures.
The Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a
material impact on its financial statements.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contract Balances |
Contract assets and deferred revenues consist
of the following as of December 31, 2023:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Remaining Performance Obligations |
The transaction price allocated to remaining
performance obligations consisted of the following:
|
DISCONTINUED OPERATIONS (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DISCONTINUED OPERATIONS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations |
The following table summarizes the major classes of assets and liabilities of the Helix
Businesses as reported on the consolidated balance sheets as of December 31, 2022:
The following table summarizes the major income and expense line items of the Helix Businesses
as reported in the consolidated statements of operations for the years ended December 31, 2023 and 2022, 2023 represents operations through the date of sale:
|
MARKETABLE SECURITIES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||
MARKETABLE SECURITIES [Abstract] | |||||||||||||||||||||||||||||||||||||
Marketable Securities | The Company invests in short-term U.S. Treasuries and money market mutual
funds. As of December 31, marketable securities consisted of the following:
|
PROPERTY AND EQUIPMENT, NET (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
PROPERTY AND EQUIPMENT, NET [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment |
As of December 31, property and equipment were comprised of the following:
|
ACCRUED EXPENSES (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||
ACCRUED EXPENSES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
Accrued Expenses |
As of December 31, accrued expenses were comprised of the following:
|
WARRANT LIABILITY (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
WARRANT LIABILITY [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Warrant Liability Assumptions |
The fair value of the Company’s warrant liability, measured at Level 3 in the fair value hierarchy, was calculated using the
Black-Scholes model using the following inputs:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Change in Fair Value of Financial Instruments |
The following table
summarizes the change in fair value of the Company’s financial instruments – warrants, measured at Level 3 in the fair value hierarchy:
|
CONVERTIBLE NOTES (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CONVERTIBLE NOTES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Convertible Note Payable |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated Fair Value of the Conversion Option | The fair value of the Notes was calculated using the present value of the Notes and the estimated fair value of the conversion option calculated using the Black-Scholes model and the following
Level 3 inputs:
|
STOCK-BASED COMPENSATION (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK-BASED COMPENSATION [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Information Regarding Equity Incentive Plan |
The table
below includes issuances of restricted stock awards and units under the 2020 Plan and unvested equity interests of MOR which were converted into restricted common stock.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Stock Option Assumptions | The
assumptions used to calculate the grant date fair value of the options outstanding as of December 31, are as follows:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Option Activity | The following summarizes option activity under the Company’s stock plan for the years ended December 31, 2023 and 2022:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Compensation Expense | Stock compensation expense for the years ended December 31, 2023 and 2022 is as follows:
|
NET INCOME (LOSS) PER SHARE (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NET INCOME (LOSS) PER SHARE [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of Basic and Diluted Net Income (Loss) Per Share |
The following table sets forth the computation of the basic and diluted net income (loss) per share:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Antidilutive Securities Excluded from Computation of Loss Per Share |
The following table sets forth all outstanding potentially dilutive securities which were not included in the calculation of diluted
earnings per share because their impact would have been antidilutive.
|
INCOME TAXES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated Loss Before Income Taxes |
For financial reporting purposes, the
Company’s consolidated income from continuing operations before income taxes for the U.S. and foreign entities, in the aggregate, is as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Income Tax Expense |
The income tax expense for continuing
operations consisted of the following for the years ending December 31, 2023 and December 31, 2022:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Statutory to Effective Federal Income Tax Rate Reconciliation |
The reconciliation between the Company’s
effective tax rate on income from continuing operations and statutory tax rate for the years ended December 31, 2023 and 2022 is as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Net Deferred Tax Assets and Liabilities |
The following items comprise the Company’s net
deferred tax assets and liabilities from continuing operations as of December 31, 2023 and December 31, 2022:
|
LEASES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LEASES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Information and Non-Cash Activity Related to Leases |
Supplemental
cash flow information and non-cash activity related to leases are as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ROU Lease Assets and Lease Liabilities |
ROU lease assets and lease liabilities
for the Company’s operating leases were recorded in the consolidated balance sheet as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Lease Expenses |
The
components of lease expense were as follows for each of the periods presented, which are included in operating expenses in the consolidated statements of operations:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Future Lease Payments Included in Measurement of Lease Liabilities |
Future lease payments
included in the measurement of lease liabilities on the consolidated balance sheet as of December 31, 2023, were as follows:
|
COMMITMENTS AND CONTINGENCIES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | |||||||||||||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES [Abstract] | |||||||||||||||||||||||||||||||
Remaining Payment Obligations under these Licenses | The following table shows the remaining payment obligations under these agreements as of December
31, 2023:
|
BUSINESS ORGANIZATION AND NATURE OF OPERATIONS (Details) |
Feb. 10, 2023 |
Oct. 31, 2022 |
Mar. 02, 2022 |
---|---|---|---|
Engeni LLC [Member] | |||
Business Organization and Nature of Operations Description [Abstract] | |||
Ownership percentage in subsidiary sold | 100.00% | 100.00% | |
Bio-Track [Member] | |||
Business Organization and Nature of Operations Description [Abstract] | |||
Ownership percentage in subsidiary sold | 100.00% |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Principles of Consolidation (Details) |
Dec. 31, 2023 |
Feb. 10, 2023 |
Oct. 31, 2022 |
Mar. 02, 2022 |
---|---|---|---|---|
Bio-Tech Medical Software, Inc. [Member] | ||||
Principles of Consolidation [Abstract] | ||||
Ownership percentage in subsidiary sold | 100.00% | |||
Engeni LLC [Member] | ||||
Principles of Consolidation [Abstract] | ||||
Percentage of owned subsidiaries | 99.00% | |||
Percentage of equity interest in subsidiaries | 100.00% | 100.00% |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Discontinued Operations (Details) - USD ($) |
Oct. 31, 2022 |
Feb. 10, 2023 |
Mar. 02, 2022 |
---|---|---|---|
Engeni LLC [Member] | |||
Discontinued Operations [Abstract] | |||
Percentage of outstanding interest subsidiaries | 100.00% | 100.00% | |
Maximum amount to be received from sale of equity interest | $ 100,000 | ||
Bio-Tech Medical Software, Inc. [Member] | |||
Discontinued Operations [Abstract] | |||
Ownership percentage in subsidiary sold | 100.00% |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Foreign Currency (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Foreign Currency [Abstract] | ||
Revenue | $ 20,481,330 | $ 16,418,141 |
Engeni LLC [Member] | Revenue Benchmark [Member] | Geographic Concentration Risk [Member] | ||
Foreign Currency [Abstract] | ||
Percentage of consolidated net sales | 1.00% | |
Revenue | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Fair Value of Financial Instruments (Details) - USD ($) |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Warrant Liability [Member] | Level 3 Inputs [Member] | ||
Debt Instrument, Fair Value Disclosure [Abstract] | ||
Estimated fair value of Convertible Note | $ 563 | $ 4,547 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Cash and Cash Equivalents (Details) |
Dec. 31, 2023
USD ($)
|
---|---|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Cash, FDIC insured amount | $ 250,000 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Accounts Receivable and Allowance for Credit Losses (Details) - USD ($) |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Accounts Receivable and Allowance for Credit Losses [Abstract] | ||
Allowance for credit losses | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Proceeds Receivable from Sale of Discontinued Operations, Net (Details) |
1 Months Ended | 12 Months Ended | |
---|---|---|---|
Feb. 28, 2023
USD ($)
Installment
|
Dec. 31, 2023
USD ($)
MonthlyPayment
|
Dec. 31, 2022
USD ($)
|
|
Proceeds from Sale of Discontinued Operations [Abstract] | |||
Number of monthly payments pending | MonthlyPayment | 2 | ||
Receivables from sale of discontinued operations amount | $ 1,666,667 | ||
Unamortized discount | 20,712 | ||
Amortization | 389,288 | $ 0 | |
Discount in interest and investment income | $ 410,000 | ||
Bio-Track [Member] | |||
Proceeds from Sale of Discontinued Operations [Abstract] | |||
Consideration receivable | $ 10,000,000 | ||
Number of monthly installment payments | Installment | 12 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Long-Lived Assets, Including Definite Lived Intangible Assets (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Long-Lived Assets, Including Definite Lived Intangible Assets [Abstract] | ||
Impairment losses | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Goodwill (Details) |
12 Months Ended |
---|---|
Dec. 31, 2023
USD ($)
| |
Goodwill [Abstract] | |
Impairment losses | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Customer Concentration (Details) - Customer Concentration Risk [Member] - Customer |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Revenue Benchmark [Member] | Customer One [Member] | ||
Customer Concentration [Abstract] | ||
Number of major customers | 2 | 2 |
Revenue percentage | 13.10% | 11.50% |
Revenue Benchmark [Member] | Customer Two [Member] | ||
Customer Concentration [Abstract] | ||
Number of major customers | 2 | 2 |
Revenue percentage | 12.00% | 14.30% |
Accounts Receivable [Member] | Customer One [Member] | ||
Customer Concentration [Abstract] | ||
Number of major customers | 2 | 3 |
Revenue percentage | 15.80% | 25.90% |
Accounts Receivable [Member] | Customer Two [Member] | ||
Customer Concentration [Abstract] | ||
Number of major customers | 2 | 3 |
Revenue percentage | 15.10% | 14.80% |
Accounts Receivable [Member] | Customer Three [Member] | ||
Customer Concentration [Abstract] | ||
Number of major customers | 3 | |
Revenue percentage | 14.60% |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Vendor Concentration (Details) |
12 Months Ended |
---|---|
Dec. 31, 2023
Vendor
| |
Reliance on Key Vendors [Abstract] | |
Number of vendors | 2 |
Outside Development [Member] | |
Reliance on Key Vendors [Abstract] | |
Percentage of licensing fees | 14.30% |
Cloud Computing Services [Member] | |
Reliance on Key Vendors [Abstract] | |
Percentage of licensing fees | 11.60% |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Property and Equipment (Details) |
Dec. 31, 2023 |
---|---|
Minimum [Member] | |
Property and Equipment [Abstract] | |
Estimated useful lives | 1 year |
Maximum [Member] | |
Property and Equipment [Abstract] | |
Estimated useful lives | 7 years |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Software Development Costs (Details) |
Dec. 31, 2023 |
---|---|
Software Development Costs [Member] | |
Software Development Costs [Abstract] | |
Asset estimated useful life | 3 years |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Advertising (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Advertising [Abstract] | ||
Advertising costs | $ 56,800 | $ 10,563 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Stock-Based Compensation (Details) - shares |
Jun. 15, 2022 |
Jun. 14, 2022 |
---|---|---|
Stock-based Compensation [Abstract] | ||
Number of shares authorized and reserved for issuance under 2020 Plan (in shares) | 6,400,000 | 4,000,000 |
Increase in number of shares authorized and reserved for issuance under 2020 Plan (in shares) | 2,400,000 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Income Taxes (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Aug. 16, 2022 |
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Income Taxes [Abstract] | |||
Net income tax expense | $ 85,740 | $ 23,980 | |
Income tax effect on discontinued operations | $ (2,064,165) | $ 0 | |
Corporate income tax rate | 15.00% | 21.00% | 21.00% |
Percentage of excise tax rate | 1.00% |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Separation Expenses (Details) |
12 Months Ended | |||
---|---|---|---|---|
Feb. 10, 2023
USD ($)
shares
|
Mar. 02, 2022
USD ($)
Advisor
shares
|
Dec. 31, 2023
USD ($)
shares
|
Dec. 31, 2022
USD ($)
|
|
Compensation Related Costs [Abstract] | ||||
Amount of accelerated vesting stock | $ 349,832 | |||
Number of advisors | Advisor | 2 | |||
Options to purchase shares of common stock (in shares) | shares | 366,166 | 281,494 | ||
Shares of common stock forfeited (in shares) | shares | 732,332 | |||
Stock compensation expenses | $ 5,417,043 | $ 6,573,969 | $ 11,920,575 | |
Separation Agreement [Member] | Mr. Daniel Barton [Member] | ||||
Compensation Related Costs [Abstract] | ||||
Period for continuation of Salary | 12 months | |||
Unvested restricted shares (in shares) | shares | 106,656 | |||
Salary | $ 250,000 | |||
Amount of accelerated vesting stock | $ 349,832 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Stock Repurchase (Details) |
Oct. 03, 2023
USD ($)
$ / shares
shares
|
---|---|
Stock Repurchase [Abstract] | |
Common stock repurchased (in shares) | shares | 1,604,676 |
Share price (in dollars per share) | $ / shares | $ 2.15 |
Common stock repurchased | $ 3,450,053 |
Common Stock [Member] | |
Stock Repurchase [Abstract] | |
Common stock repurchased (in shares) | shares | 1,604,676 |
Share price (in dollars per share) | $ / shares | $ 2.15 |
Common stock repurchased | $ 3,450,053 |
Additional Paid-in Capital [Member] | |
Stock Repurchase [Abstract] | |
Excise taxes related to the stock repurchase | $ 34,501 |
DISCONTINUED OPERATIONS, Summary (Details) |
12 Months Ended | ||
---|---|---|---|
Feb. 10, 2023
USD ($)
Installment
|
Dec. 31, 2023
USD ($)
|
Dec. 31, 2022
USD ($)
|
|
Disposal Group Discontinued Operation Disposal Disclosures [Abstract] | |||
Loss from discontinued operations | $ (94,427) | $ (6,812,913) | |
Income tax effect on discontinued operations | 2,064,165 | 0 | |
Bio-Tech Medical Software, Inc. [Member] | |||
Disposal Group Discontinued Operation Disposal Disclosures [Abstract] | |||
Ownership percentage in subsidiary sold | 100.00% | ||
Consideration paid by buyer | $ 30,000,000 | ||
Cash paid by buyer | 20,000,000 | ||
Pending consideration receivable | $ 10,000,000 | ||
Number of monthly installment payments | Installment | 12 | ||
Gain on sale of discontinued operations | 11,531,849 | $ 202,159 | |
Loss from discontinued operations | (94,427) | ||
Income tax effect on discontinued operations | $ 2,064,165 |
MARKETABLE SECURITIES (Details) - US Treasury Bill Securities [Member] - USD ($) |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Marketable Securities, Classification [Abstract] | ||
Amortized Cost | $ 42,289,441 | $ 17,392,503 |
Fair Market Value | $ 42,296,589 | $ 17,396,487 |
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Prepaid Expense [Abstract] | ||
Prepaid expenses | $ 1,077,233 | $ 835,786 |
Other Current Assets [Member] | ||
Prepaid Expense [Abstract] | ||
Income taxes receivable | 1,890,391 | |
Deferred license cost | 381,820 | |
Employee [Member] | Other Current Assets [Member] | ||
Prepaid Expense [Abstract] | ||
Receivable from employees | $ 236,364 | $ 432,338 |
Minimum [Member] | ||
Prepaid Expense [Abstract] | ||
Prepaid expense related to software licenses and insurance policies period | 3 months | |
Maximum [Member] | ||
Prepaid Expense [Abstract] | ||
Prepaid expense related to software licenses and insurance policies period | 1 year |
PROPERTY AND EQUIPMENT, NET (Details) - USD ($) |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment | $ 167,781 | $ 168,070 |
Less: Accumulated depreciation | (91,696) | (93,040) |
Property and equipment, net | 76,085 | 75,030 |
Personal Computing Equipment [Member] | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment | 94,521 | 160,079 |
Office Equipment and Capitalized Software [Member] | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment | $ 73,260 | $ 7,991 |
DEPOSITS AND OTHER ASSETS (Details) - USD ($) |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Vendors and Licensors [Abstract] | ||
Deposits and other assets | $ 1,523,948 | $ 196,675 |
Information License Vendors [Member] | ||
Vendors and Licensors [Abstract] | ||
Deposits and other assets | $ 1,390,156 |
ACCRUED EXPENSES (Details) - USD ($) |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
ACCRUED EXPENSES [Abstract] | ||
Employee compensation | $ 1,546,614 | $ 2,077,232 |
Information Contracts (see Note 3 - Vendors and Licensors) | 1,533,861 | 0 |
Accrued expenses | 1,171,782 | 1,689,557 |
Total | $ 4,252,257 | $ 3,766,789 |
RELATED PARTY TRANSACTIONS (Details) - USD ($) |
12 Months Ended | |||
---|---|---|---|---|
Oct. 03, 2023 |
Dec. 31, 2023 |
Dec. 31, 2022 |
Sep. 01, 2021 |
|
Related Party Transactions [Abstract] | ||||
Total Revenues | $ 20,481,330 | $ 16,418,141 | ||
Notes held by directors | 24,870,181 | 25,106,547 | ||
Common stock repurchased (in shares) | 1,604,676 | |||
Share price (in dollars per share) | $ 2.15 | |||
Common stock repurchased | $ 3,450,053 | |||
Convertible Promissory Notes [Member] | ||||
Related Party Transactions [Abstract] | ||||
Percentage of issuance cost on principal amount | 100.00% | |||
Principal outstanding | 23,000,000 | 24,000,000 | $ 24,000,000 | |
Interest percentage on convertible promissory note | 3.50% | |||
Percentage of warrant to purchase common stock on principal amount | 20.00% | |||
Notes held by directors | 24,870,181 | 25,106,547 | $ 6,000,000 | |
Adam Dublin [Member] | ||||
Related Party Transactions [Abstract] | ||||
Total Revenues | $ 317,722 | $ 467,324 |
COMMITMENTS AND CONTINGENCIES (Details) |
Jul. 30, 2021
USD ($)
Employee
|
Dec. 31, 2023
USD ($)
|
Dec. 31, 2022
USD ($)
|
Feb. 14, 2020 |
---|---|---|---|---|
Remaining payment obligations [Abstract] | ||||
Year ending December 31, 2024 | $ 3,245,250 | |||
Year ending December 31, 2025 | 3,652,500 | |||
Year ending December 31, 2026 | 2,854,641 | |||
Thereafter | 5,077,184 | |||
Total payment obligations | 14,829,575 | |||
Commitments and Contingencies | ||||
Accrued Expenses and Other Liabilities [Member] | ||||
Remaining payment obligations [Abstract] | ||||
Commitments and Contingencies | $ 2,553,861 | |||
Audet v. Green Tree International, et. al. [Member] | John Audet [Member] | ||||
Loss Contingency [Abstract] | ||||
Ownership percentage | 10.00% | |||
Grant Whitus et al. v. Forian Inc., Zachary Venegas and Scott Ogur [Member] | ||||
Loss Contingency [Abstract] | ||||
Number of former employees to file lawsuit | Employee | 4 | |||
Loss contingency, damages, attorneys' fees and costs | $ 27,500,000 |
$/5 ]^]
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M\9SH+=NZ/XL0@]IT.%>.\WS2#EDU^/ CA[9.ME 7
M6]^?+CQ"YQE78:#.%#;3RA9H99MK90MUL?6+H$N<4!XYGV4Q!JICJ ""N+5G
M*(BBT(>NR=W4J /I ) =>7$^W!U^=K@T
M;]OWXN8W"[0!M%[%:[& JH<3QH2WYG< <]')C7[W/I-=)]?ZZTH4.".1 )XO
MI.QV%[3 \&/,Q?\!4$L#!!0 ( $N+?5A'D5/\G 0 .H+ 9 >&PO
M=V]R:W-H965T CN??X8 C;S?S)<.H/QR/\QOIH//_\0EAV/G&>%'O&.7@RE'6?DPYPMLW1Z/1X&3JBU*Y9UD-3\"']J!6
M:/9_@K6*8)SVH?1!)
/P8M(S\3;@H82MVK.)R60IQ*-QKO.1&QA!4$&F#0/#SQ-,
MH:H,$/S
MX706NSQ4!Q@<)^NYJ"#P/0/2$L4GI82]%"Z_&N;KJM*I/=VP>S=[B
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MAX.1Y\11!+T4V^*9FR>63PS5?9(F8$W/BSS?P=&>_0H8M\0F(%7,UV Q](*1NA>+L5I 1 S?DL1WTB""8T=]
ME>^:]X!G-NUG!DX)L@;JF.0<2