EX-99.3 5 ef20041506_ex99-3.htm EXHIBIT 99.3
Exhibit 99.3

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

Unless the context otherwise requires, the “Company” refers to Forian Inc., a Delaware corporation, and “Kyber” refers to Kyber Data Science LLC, a Delaware limited liability company.

Description of the Business Combination

On October 31, 2024, Forian Inc. (the “Company”) entered into a Membership Interest Assignment Agreement (the “Assignment Agreement”), by and among Cowen Inc. (“Cowen”), IMcK Holdings LLC (“Minority Seller” and together with Cowen, the “Sellers”), Kyber Data Science, LLC (“Kyber”) and the Company, pursuant to which the Company acquired all outstanding equity interests of Kyber (the “Transferred Interests”) from the Sellers, effective October 31, 2024 (the “Transaction”).

Pursuant to the terms of the Assignment Agreement, at the closing, Sellers transferred and assigned all of the Transferred Interests to the Company in consideration of the Company’s assumption of Kyber’s ordinary course liabilities. The Assignment Agreement also contains a customary post-closing working capital adjustment, if applicable. All outstanding Class B Units of Kyber were cancelled prior to the closing of the Transaction and no consideration was paid to the Class B Unit holders.

The Assignment Agreement contains customary representations, warranties and covenants, as well as customary indemnification provisions and post-closing covenants, including regarding employees, the preparation of post-closing financial statements and the Company’s commitment to continue to support existing customers of Kyber.

The Company is considered to be the accounting acquirer, as further discussed in “Note 1 — Basis of Presentation” of this unaudited pro forma condensed combined financial information.

The unaudited pro forma condensed combined financial statements are presented for informational purposes only, in accordance with Article 11 of Regulation S-X and are not intended to represent or to be indicative of the income or financial position that the Company would have reported had the Transaction been completed as of the dates set forth in the unaudited pro forma condensed combined financial statements due to various factors. The unaudited pro forma condensed combined statement of financial position does not purport to represent the future financial position of the Company and the unaudited pro forma condensed combined statements of operations do not purport to represent the future results of operations of the Company. The Company has not completed a formal valuation of Kyber’s assets and liabilities, including identifiable intangible assets as of the date of this Current Report on Form 8-K/A. As a result, estimates of fair value are based upon certain currently available information. Accordingly, actual adjustments to the combined company’s financial statements following the Transaction will differ, perhaps materially, from those reflected in the unaudited pro forma condensed combined financial statements.

The unaudited pro forma condensed combined balance sheet as of September 30, 2024 combines the historical unaudited condensed balance sheet of the Company as of September 30, 2024 and the historical unaudited balance sheet of Kyber as of September 30, 2024 on a pro forma basis as if the Transaction had been consummated on September 30, 2024. The unaudited pro forma condensed combined statement of operations for the nine months ended September 30, 2024 and the unaudited pro forma condensed statement of operations for the year ended December 31, 2023 combine the historical condensed statement of operations of the Company for the nine months ended September 30, 2024 and the year ended December 31, 2023 and the historical statement of operations of Kyber for the same periods on a pro forma basis as if the Transaction had been consummated immediately prior to January 1, 2023.

The unaudited pro forma condensed combined financial information does not give effect to any anticipated synergies, operating efficiencies, tax savings, or cost savings that may be associated with the Transaction.

The unaudited pro forma condensed combined financial information is presented to illustrate the estimated effects of the Transaction, and should be read in conjunction with the following:


 •
the audited financial statements of the Company included in its Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the Securities and Exchange Commission (the “SEC”) on March 29, 2024;


•
the unaudited financial statements of the Company for the nine months ended September 30, 2024, included in the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, as filed with the SEC on November 13, 2024;


•
the audited financial statements of Kyber as of and for the year ended December 31, 2023 and the unaudited financial statements of Kyber as of and for the nine months ended September 30, 2024, included in this Current Report on Form 8-K/A; and


•
the sections entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, and Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, as filed with the SEC on March 29, 2024, and November 13, 2024, respectively.

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEETS AS OF SEPTEMBER 30, 2024

               
Transcaction
                    
   
Forian Inc
    
Kyber
    
Accounting
    
Management
          
Pro Forma
  
   
(Historical)
    
(Historical)
    
Adjustments
    
Adjustments
    
Notes
    
Combined
  
ASSETS
                                    
Current assets:
                                    
Cash and cash equivalents
  
$
2,707,688
    
$
6,898,789
    
$
(3,910,156
)
  
$
-
       B

 
$
5,696,321
  
Marketable securities
    
46,650,200
      
-
      
-
      
-
              
46,650,200
  
Accounts receivable, net
    
3,546,582
      
665,497
      
-
      
-
              
4,212,079
  
Contract assets
    
875,032
                                      
875,032
  
Prepaid expenses
    
697,780
                                      
697,780
  
Other assets
    
1,349,364
      
11,536
      
-
      
-
              
1,360,900
  
Total current assets
    
55,826,646
      
7,575,822
      
(3,910,156
)
    
-
              
59,492,312
  
                                                 
Property and equipment, net
    
52,680
                                      
52,680
  
Right of use assets, net
    
41,244
                                      
41,244
  
Intangible assets
            
8,607,455
      
(8,607,455
)
    
-
       A

   
-
  
                     
1,295,000
      
-
       A

   
1,295,000
  
Deposits and other assets
    
1,591,420
              
-
      
-
              
1,591,420
  
Total assets
  
$
57,511,990
    
$
16,183,277
    
$
(11,222,611
)
  
$
-
            
$
62,472,656
  
                                                 
LIABILITIES AND STOCKHOLDERS’ EQUITY
                                                
Current liabilities:
                                                
Accounts payable
  
$
843,829
                                    
$
843,829
  
Accrued expenses and other liabilities
    
2,618,108
      
1,988,167
      
-
      
(1,864,988
)
     C

   
4,418,786
  
                     
-
      
1,677,499
       C

       
Payable to seller
                    
250,000
                      
250,000
  
Compensation payale
            
1,677,499
      
-
      
(1,677,499
)
     C

   
-
  
Short-term operating lease liabilities
    
23,146
                                      
23,146
  
Deferred revenues
    
2,243,719
      
-
              
1,864,988
       C

   
4,108,707
  
Payable to affiliates
            
38,457,447
      
(38,457,447
)
    
-
       B

   
-
  
Convertible notes payable, net of debt issuance costs ($6,000,000 in principal is held by a related party)
    
24,370,509
      
-
      
-
      
-
              
24,370,509
  
Total current liabilities
    
30,099,311
      
42,123,113
      
(38,207,447
)
    
-
              
34,014,977
  
                                                 
Long-term liabilities:
                                                
Other liabilities
    
518,098
                                      
518,098
  
Total long-term liabilities
    
518,098
      
-
      
-
      
-
              
518,098
  
                                                 
Total liabilities
    
30,617,409
      
42,123,113
      
(38,207,447
)
    
-
              
34,533,075
  
                                                 
Commitments and contingencies
                                                
Stockholders’ equity:
                                                
Preferred Stock; par value $0.001; 5,000,000 Shares authorized; 0 issued and outstanding as of September 30, 2024 and December 31, 2023
    
-
                                      
-
  
Common Stock; par value $0.001; 95,000,000 Shares authorized; 31,092,695 issued and outstanding as of  September 30, 2024 and 30,920,450 issued and outstanding as of December 31, 2023
    
31,093
                                      
31,093
  
Additional paid-in capital
    
78,519,683
      
-
      
-
      
-
              
78,519,683
  
Members equity
            
(25,939,836
)
    
(16,427,767
)
    
-
       B

   
-
  
                     
42,367,603
      
-
       B

       
Accumulated deficit
    
(51,656,195
)
    
-
      
1,045,000
      
-
       A

   
(50,611,195
)
Total stockholders’ equity
    
26,894,581
      
(25,939,836
)
    
26,984,836
      
-
              
27,939,581
  
Total liabilities and stockholders’ equity
  
$
57,511,990
    
$
16,183,277
    
$
(11,222,611
)
  
$
-
            
$
62,472,656
  

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024

               
Transcaction
                
   
Forian Inc
    
Kyber
    
Accounting
    
Management
      
Pro Forma
  
   
(Historical)
    
(Historical)
    
Adjustments
    
Adjustments
  
Notes
  
Combined
  
                                 
Revenue
  
$
14,340,791
    
$
3,428,880
    
$
-
    
$
-
      
$
17,769,671
  
                                           
Costs and Expenses:
                                          
Cost of revenue
    
4,913,195
                      
6,174,240
  
BB
    
11,087,435
  
Research and development
    
989,052
      
-
      
-
      
523,845
  
BB
    
1,512,897
  
Sales and marketing
    
3,029,783
      
-
      
-
      
1,026,375
  
BB
    
4,056,158
  
General and administrative
    
9,771,343
              
-
      
3,913,558
  
BB
    
13,684,901
  
Kyber operating expenses
            
11,638,018
              
(11,638,018
)
BB
    
0
  
Litigation Settlements and related expenses
    
1,152,670
                                
1,152,670
  
Depreciation and amortization
    
23,405
      
-
      
151,667
          
 AA
    
175,072
  
Total costs and expenses
    
19,879,448
      
11,638,018
      
151,667
      
-
        
31,669,133
  
                                           
Operating loss From Continuing Operations
    
(5,538,657
)
    
(8,209,138
)
    
(151,667
)
    
-
        
(13,899,462
)
                                           
Other Income (Expense):
                                          
Change in fair value of warrant liability
    
563
      
-
      
-
      
-
        
563
  
Interest and investment income
    
1,951,812
      
-
      
-
      
-
        
1,951,812
  
Gain on sale of investment
    
80,694
      
-
      
-
      
-
        
80,694
  
Interest expense
    
(587,684
)
    
-
      
-
      
-
        
(587,684
)
Gain on debt redemption
    
137,356
      
-
      
-
      
-
        
137,356
  
Total other income (expense), net
    
1,582,741
      
-
      
-
      
-
        
1,582,741
  
                                           
(Loss) from continuing operations before income taxes
    
(3,955,916
)
    
(8,209,138
)
    
(151,667
)
    
-
        
(12,316,721
)
Income taxes
    
(14,865
)
                              
(14,865
)
Net income (loss)
  
$
(3,970,781
)
  
$
(8,209,138
)
  
$
(151,667
)
  
$
-
      
$
(12,331,586
)
                                           
Net loss per share - basic and diluted
  
$
(0.13
)
  
$
(0.26
)
  
$
(0.00
)
  
$
-
      
$
(0.40
)
                                           
Weighted-average shares outstanding- basic and diluted
    
31,064,418
      
31,064,418
      
31,064,418
      
31,064,418
        
31,064,418
  

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2023

   
Forian Inc
(Historical)
    
Kyber
(Historical)
    
Transcaction
Accounting
Adjustments
    
Management
Adjustments
  
Notes
  
Pro Forma
Combined
  
                                 
Revenue
  
$
20,481,330
    
$
4,166,374
    
$
-
    
$
(6,230
)
BB
  
$
24,641,474
  
 
                                          
Costs and Expenses:
                                          
Cost of revenue
    
5,477,032
              
-
      
8,511,754
  
BB
    
13,988,786
  
Research and development
    
1,407,580
      
-
      
-
      
872,901
  
BB
    
2,280,481
  
Sales and marketing
    
4,884,267
      
-
      
-
      
1,826,634
  
BB
    
6,710,901
  
General and administrative
    
13,633,193
      
-
      
-
      
5,270,056
  
BB
    
18,903,249
  
Kyber operating expenses
            
16,486,603
      
-
      
(16,486,603
)
BB
        
Separation expenses
    
599,832
      
-
      
-
      
-
        
599,832
  
Depreciation and amortization
    
74,438
      
-
      
202,222
      
-
  
AA
    
276,660
  
Total costs and expenses
    
26,076,342
      
16,486,603
      
202,222
      
(5,257
)
      
42,759,910
  
 
                                          
Operating loss From Continuing Operations
    
(5,595,012
)
    
(12,320,229
)
    
(202,222
)
    
(973
)
      
(18,118,436
)
 
                                          
Other Income (Expense):
                                          
Change in fair value of warrant liability
    
3,984
      
-
      
-
      
-
        
3,984
  
Interest and investment income
    
2,327,974
      
-
      
-
      
6,230
  
BB
    
2,334,204
  
Gain on sale of investment
    
5,805,858
      
-
      
-
      
-
        
5,805,858
  
Interest expense
    
(834,785
)
    
-
      
-
      
(5,257
)
BB
    
(840,042
)
Gain on debt redemption
    
111,151
      
-
      
-
      
-
        
111,151
  
Total other income (expense), net
    
7,414,182
      
-
      
-
      
973
        
7,415,155
  
 
                                          
Income (loss) from continuing operations before income taxes
    
1,819,170
      
(12,320,229
)
    
(202,222
)
    
-
        
(10,703,281
)
Income taxes
    
(85,740
)
                              
(85,740
)
Income (loss) from continuing operations, net of tax
  
$
1,733,430
    
$
(12,320,229
)
  
$
(202,222
)
  
$
-
      
$
(10,789,021
)
 
                                          
 
                                          
Income (loss) from continuing operations per share
                                          
Basic
  
$
0.05
    
$
(0.38
)
  
$
(0.01
)
  
$
-
      
$
(0.34
)
Diluted
  
$
0.05
    
$
(0.38
)
  
$
(0.01
)
  
$
-
      
$
(0.33
)
 
                                          
Weighted-average shares outstanding- basic
    
32,030,855
      
32,030,855
      
32,030,855
      
32,030,855
        
32,030,855
  
 
                                          
Weighted-average shares outstanding- diluted
    
32,230,845
      
32,230,845
      
32,230,845
      
32,230,845
        
32,230,845
  

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

Note 1. Basis of Presentation

In accordance with ASC 805 – Business Combination, the Company will be considered as the acquirer for financial reporting purposes. Accordingly, for accounting purposes, the Company will record the assets and identifiable intangibles acquired and liabilities assumed in the Transaction at their fair values at the date of acquisition. Any excess of the fair value of the net assets acquired over the purchase price will be recorded as a bargain purchase gain.

The unaudited pro forma condensed combined balance sheet as of September 30, 2024, gives pro forma effect to the Transaction as if it had occurred on September 30, 2024. The unaudited pro forma condensed combined statements of operations for the nine months ended September 30, 2024, and for the year ended December 31, 2023, give pro forma effect to the Transaction as if it had been completed immediately prior to January 1, 2023. These periods are presented on the basis of the Company as the accounting acquirer.

The pro forma adjustments reflecting the consummation of the Transaction and related transactions are based on certain currently available information and certain assumptions and methodologies that the Company believes are reasonable under the circumstances. The Company has not completed a formal valuation of Kyber’s assets and liabilities, including identifiable intangible assets, as of the date of this Current Report on Form 8-K/A. As a result, the unaudited condensed pro forma adjustments, which are described in the accompanying notes, may be revised as additional information becomes available and is evaluated. Therefore, it is likely that the actual adjustments will differ from the pro forma adjustments, and it is possible the differences may be material. The Company believes that its assumptions and methodologies provide a reasonable basis for presenting all of the significant effects of the Transaction and related transactions based on information available to management at the time and that the pro forma adjustments give appropriate effect to those assumptions and are properly applied in the unaudited pro forma condensed combined financial information.
 
The Company obtained control of Kyber for no consideration other than payment of certain professional fees incurred by Kyber resulting from the transaction. The Company recorded an estimated gain on bargain purchase representing the excess of the acquisition date fair value of assets acquired over the acquisition date fair value of the consideration transferred. The bargain purchase was a result of the Sellers’ plan to wind down and terminate Kyber’s operations if a sale were not completed by October 31, 2024.
 
The unaudited pro forma condensed combined financial information does not give effect to any anticipated synergies, operating efficiencies, tax savings, or cost savings that may be associated with the Transaction. The unaudited pro forma condensed combined financial information is not necessarily indicative of what the actual results of operations and financial position would have been had the Transaction and related transactions taken place on the dates indicated, nor are they indicative of the future consolidated results of operations or financial position of the Company. They should be read in conjunction with the historical financial statements and notes thereto of the Company and Kyber.

Note 2. Accounting Policies

In connection with the consummation of the Transaction, management is performing a comprehensive review of the two entities’ accounting policies. As a result of the review, management may identify differences between the accounting policies of the two entities which, when conformed, could have a material impact on the financial statements of the Company. Based on its initial analysis, management did not identify any differences that would have a material impact on the unaudited pro forma condensed combined financial information. As a result, the unaudited pro forma condensed combined financial information does not assume any differences in accounting policies.

Note 3. Preliminary Purchase Price Allocation and Intangible Assets

The following table summarizes the components of the purchase consideration.

Consideration transferred at closing
  
$
-
  
Payment for Sellers’ professional fees
    
250,000
  
Total consideration
  
$
250,000
  

A preliminary allocation of the purchase consideration to the estimated fair value of the assets acquired and liabilities assumed by the Company in connection with the Transaction is as follows:

       
Estimated useful life
Assets Acquired
         
Cash
  
$
2,988,633
    
Accounts receivable, net
    
665,497
    
Prepaid expenses and other assets
    
11,536
    
Customer relationship intangible
    
1,050,000
  
6 years
Trademark intangible
    
245,000
  
9 years
     
4,960,666
    
Liabilities Assumed
            
Accrued expenses
    
1,800,678
    
Deferred revenues
    
1,864,988
    

   
3,665,666
    
Gain on bargain purchase
    
(1,045,000
)
  
Fair value of consideration transferred
  
$
250,000
    

The pro forma purchase price allocation presented above is preliminary and, as a result, the amounts presented could change materially when the purchase price allocation is finalized.

Note 4. Adjustments to Unaudited Pro Forma Condensed Combined Financial Statements

The adjustments included in the unaudited pro forma condensed combined balance sheet as of September 30, 2024, are as follows:

  A.
Reflects preliminary purchase price allocation and elimination of Kyber’s historical members’ equity.

B.
Reflects elimination of assets not included in the Transaction and elimination of historical balance of Kyber intangibles, which were recorded at fair value in A above.

C.
Reflects reclassification of Kyber’s historical balances to be consistent with the Company’s historical presentation.
 
The pro forma adjustments included in the unaudited pro forma condensed combined statement of operations for year ended December 31, 2023 and for the nine month period ended September 30, 2024 are as follows:


 AA.
Represents the amortization of the identifiable intangibles acquired in the Transaction.

BB.
Reflects reclassification of Kyber’s historical balances to be consistent with the Company’s historical presentation.

The Company’s net deferred tax assets as of September 30, 2024, are subject to a full valuation allowance, therefore the Condensed Combined Statements of Operation do not reflect any income tax benefit that may arise from the adjustments in AA above.

Note 5. Loss per Share

Loss per share was calculated using the Company’s historical weighted average basic and diluted shares outstanding for the periods ended December 31, 2023, and September 30, 2024.