UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended March 31, 2025

◻ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 001-40146

FORIAN INC.

(Exact name of registrant as specified in its charter)


Delaware		85-3467693
(State of Other Jurisdiction of incorporation or Organization)		(I.R.S. Employer Identification No.)


41 University Drive, Suite 400, Newtown, PA		18940
(Address of principal executive offices)		(Zip code)

Registrant’s telephone number, including area code: (267) 225-6263

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value per share	FORA	The Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically; every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.0405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b 2 of the Exchange Act.


Large accelerated filer ☐	Accelerated filer ☐	Non-accelerated filer ☒	Smaller reporting company ☒
			Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b 2 of the Act). Yes ☐ No ☒

As of May 12, 2025, there were 31,202,313 shares outstanding of the registrant’s common stock.


PART I	FINANCIAL INFORMATION

Item 1.	Financial Statements	1

	Condensed Consolidated Balance Sheets as of March 31, 2025 (unaudited) and December 31, 2024	1

	Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2025 and 2024 (unaudited)	2

	Condensed Consolidated Statements of Stockholders' Equity for the Three Months Ended March 31, 2025 and 2024 (unaudited)	3

	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2025 and 2024 (unaudited)	4

	Notes to Unaudited Condensed Consolidated Financial Statements	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33

Item 4.	Controls and Procedures	34

PART II	OTHER INFORMATION	34

Item 1.	Legal Proceedings	34

Item 1A.	Risk Factors	35

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35

Item 3.	Defaults Upon Senior Securities	35

Item 4.	Mine Safety Disclosures	35

Item 5.	Other Information	35

Item 6.	Exhibits	36

Signatures		37

FORIAN INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF MARCH 31, 2025 AND DECEMBER 31, 2024

Item 1. Financial Statements and Supplementary Unaudited Data


		March 31, 2025			December 31, 2024
ASSETS		Unaudited
Current assets:
Cash and cash equivalents	$	5,704,671		$	4,590,661
Marketable securities		29,961,761			30,492,088
Accounts receivable, net		5,222,540			3,971,702
Contract assets, net		2,659,399			2,586,712
Prepaid expenses		1,186,123			1,111,234
Other current assets		1,640,629			1,707,694
Total current assets		46,375,123			44,460,091

Property and equipment, net		41,758			46,652
Intangible assets, net		1,145,838			1,192,044
Right of use assets, net		29,808			35,560
Deposits and other assets		1,007,555			1,435,496
Total assets	$	48,600,082		$	47,169,843

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	2,269,731		$	982,665
Accrued expenses and other current liabilities		3,881,755			4,413,267
Short-term operating lease liabilities		23,703			23,423
Deferred revenues		5,620,817			4,487,686
Convertible notes payable, net of debt issuance costs (Note 11) ($6,000,000 in principal is held by a related party. Refer to Note 14)		6,750,326			6,697,649
Total current liabilities		18,546,332			16,604,690

Long-term liabilities:
Other long-term liabilities		6,105			512,137
Total long-term liabilities		6,105			512,137
Total liabilities		18,552,437			17,116,827
Commitments and contingencies (Note 16)

Stockholders' equity:
Preferred Stock; par value $0.001; 5,000,000 Shares authorized; 0 issued and outstanding as of March 31, 2025 and December 31, 2024		—			—
Common Stock; par value $0.001; 95,000,000 Shares authorized; 31,202,312 issued and outstanding as of March 31, 2025 and 31,010,788 issued and outstanding as of December 31, 2024		31,203			31,011
Additional paid-in capital		81,057,414			79,937,115
Accumulated deficit		(51,040,972	)		(49,915,110	)
Total stockholders' equity		30,047,645			30,053,016
Total liabilities and stockholders' equity	$	48,600,082		$	47,169,843

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

FORIAN INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024
(UNAUDITED)


	For the Three Months Ended March 31,
		2025			2024
Revenue	$	7,056,116		$	4,877,378

Costs and Expenses:
Cost of revenues		3,131,622			1,703,357
Research and development		606,237			389,889
Sales and marketing		1,382,727			1,055,141
General and administrative		3,279,094			3,283,489
Litigation settlements and related expenses		—			208,965
Depreciation and amortization		51,101			8,887
Total costs and expenses		8,450,781			6,649,728

Operating Loss		(1,394,665	)		(1,772,350	)

Other Income (Expense):
Change in fair value of warrant liability		—			113
Interest and investment income		328,848			675,157
Gain on sale of investment		—			48,612
Interest expense		(52,678	)		(198,963	)
Gain on debt redemption		—			137,356
Total other income, net		276,170			662,275

Net loss before income taxes		(1,118,495	)		(1,110,075	)
Income tax expense		(7,367	)		(102,540	)
Net loss	$	(1,125,862	)	$	(1,212,615	)

Basic and diluted net loss per common share	$	(0.04	)	$	(0.04	)
Weighted-average shares outstanding		31,123,075			30,999,433

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

FORIAN INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024
(UNAUDITED)


	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, 2025		—	$	—		31,010,788	$	31,011	$	79,937,115		$	(49,915,110	)	$	30,053,016
Vesting of Restricted Stock and Stock Awards, net of shares surrendered for taxes		—		—		190,584		191		(172,486	)		—			(172,295	)
Issuance of Forian common stock upon exercise of stock options		—		—		940		1		(1	)		—			—
Stock-based compensation expense		—		—		—		—		1,292,786			—			1,292,786
Net loss		—		—		—		—		—			(1,125,862	)		(1,125,862	)
Balance at March 31, 2025		—	$	—		31,202,312	$	31,203	$	81,057,414		$	(51,040,972	)	$	30,047,645


	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, 2024 (as restated)		—	$	—		30,920,450	$	30,920	$	73,834,300		$	(46,144,040	)	$	27,721,180
Vesting of Restricted Stock and Stock Awards, net of shares surrendered for taxes		—		—		170,260		170		(81,533	)		—			(81,363	)
Issuance of Forian common stock upon exercise of stock options		—		—		2,462		3		(3	)		—			—
Stock-based compensation expense		—		—		—		—		1,658,915			—			1,658,915
Net loss		—		—		—		—		—			(1,212,615	)		(1,212,615	)
Balance at Balance at March 31, 2024		—	$	—		31,093,172	$	31,093	$	75,411,679		$	(47,356,655	)	$	28,086,117

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


	For the Three Months Ended March 31,
		2025			2024
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(1,125,862	)	$	(1,212,615	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		51,101			8,887
Amortization on right of use asset		5,752			5,269
Amortization of debt issuance costs		1,333			1,333
Amortization of discount - proceeds from sale of discontinued operations		—			(20,712	)
Accrued interest on convertible notes		51,344			197,630
Accretion of discounts on marketable securities		(307,799	)		(619,565	)
Gain on sale of investment		—			(48,612	)
Gain on debt redemption		—			(137,356	)
Allowance for credit losses		150,000			—
Stock-based compensation expense		1,292,786			1,658,915
Change in fair value of warrant liability		—			(113	)
Change in operating assets and liabilities:
Accounts receivable		(1,400,838	)		(1,694,851	)
Contract assets		(72,687	)		103,300
Prepaid expenses		(74,889	)		208,708
Lease liabilities		(5,752	)		(16,229	)
Deposits and other assets		495,006			211,646
Accounts payable		1,287,066			213,145
Accrued expenses		(531,512	)		(1,016,713	)
Deferred revenues		1,133,131			438,903
Other liabilities		(500,000	)		(489,040	)
Net cash provided by (used in) operating activities		448,180			(2,208,070	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of marketable securities		(29,707,875	)		(48,848,811	)
Sale and maturity of marketable securities		30,546,000			45,359,108
Proceeds from sale of investment		—			48,612
Net cash from sale of discontinued operations		—			1,666,666
Net cash provided by (used in) investing activities		838,125			(1,774,425	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Tax payments related to shares withheld for vested restricted stock units		(172,295	)		(81,363	)
Cash used to redeem convertible notes		—			(950,000	)
Net cash used in financing activities		(172,295	)		(1,031,363	)

Net change in cash		1,114,010			(5,013,858	)

Cash and cash equivalents, beginning of period		4,590,661			6,042,986

Cash and cash equivalents, end of period	$	5,704,671		$	1,029,128

Supplemental disclosure of cash flow information:
Cash paid for taxes	$	114,828		$	—

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

FORIAN INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1

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 Forian LLC (f/k/a 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 life sciences and financial services industries.

On October 31, 2024, (the “Kyber Acquisition Date”), 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 “Kyber Transferred Interests”) from the Sellers, effective October 31, 2024 (the “Kyber Transaction”). The business combination with Kyber was accounted for 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. Kyber provides a unique suite of data management capabilities and proprietary information and analytics solutions to optimize and measure financial performance for customers within the financial services industries.

Note 2

BASIS OF PRESENTATION

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Certain footnotes and other financial information normally required by U.S. GAAP have been condensed or omitted in accordance with instructions to Form 10-Q and Article 8 of Regulation S-X. In the opinion of management, such statements include all adjustments which are considered necessary for a fair presentation of the condensed consolidated financial statements of the Company as of March 31, 2025. The operating results presented herein are not necessarily an indication of the results that may be expected for the year. The condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the Securities and Exchange Commission (“SEC”) on April 11, 2025.

Note 3

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The condensed consolidated financial statements of the Company include the accounts of (i) Forian LLC (f/k/a Medical Outcomes Research Analytics, LLC); (ii) Kyber Data Science LLC and its wholly owned subsidiaries Kyber Aesthetic Data LLC, Kyber Data Sub LLC, Kyber Health Data LLC and Kyber Survey Data LLC (effective October 31, 2024) and (iii) Helix Technologies, Inc. and its wholly owned subsidiaries Helix Legacy, Inc. (f/k/a Security Grade Protective Services, Ltd.), and Green Tree International, Inc. All intercompany transactions have been eliminated in consolidation.

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 revenues, accounting for the allowance for credit losses, income taxes, contingencies, fair value of assets and intangible assets acquired in a business combination 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 litigation related costs that were previously included in general and administrative expenses in the prior period financial statements have been reclassified to litigation settlements and related expenses to be consistent with the current presentation.

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.

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 three months or less, 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, Contract Assets and Allowance for Credit Losses

The Company records accounts receivable when it has the unconditional right to issue an invoice and receive payment regardless of whether revenue has been recognized. If revenue is recognized in advance of the right to invoice, a contract asset (unbilled receivable) is recorded in the condensed consolidated balance sheets.

Accounts receivable are recorded at the invoiced amount, net of allowance for credit losses. The Company determines the allowance for credit losses based on historical write-off experience, customer specific facts and economic conditions.

Contract assets represent contractual rights to consideration in the future and are generated when contractual billing schedules differ from the timing of revenue recognition. The Company determines the allowance for credit losses based on historical payment experience, customer specific facts, expected performance over the duration of the contract and economic conditions.

Outstanding account balances are reviewed individually for collectability or realizability. 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 or contract assets. The allowance for credit losses for accounts receivable was $375,000 at March 31, 2025 and $225,000 at December 31, 2024. The allowance for credit losses for contract assets was $225,000 at March 31, 2025 and $225,000 at December 31, 2024.

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 Bio-Tech Medical Software, Inc., a Florida corporation (“BioTrack”). As of March 31, 2025 and December 31, 2024 the note has been fully paid. The Company recognized $0 and $20,712 of amortization of the $410,000 original discount recorded on the note interest as investment income for the three months ended March 31, 2025 and 2024, respectively.

Business Combinations

The Company accounts for its business combinations under the provisions of ASC Topic 805-10, which requires that the acquisition method of accounting be used for all business combinations. Assets acquired and liabilities assumed, including non-controlling interests, are recorded at the date of acquisition at their respective fair values. Any excess fair value of the net tangible and intangible assets acquired over the purchase price is recorded as bargain purchase gain in the statements of operations at the acquisition closing date. During the measurement period, which extends no later than one year from the acquisition date, the Company may record certain adjustments to the carrying value of the assets acquired and liabilities assumed. After the measurement period, all adjustments are recorded in the condensed consolidated statements of operations as operating expenses or income. Acquisition-related expenses are recognized separately from the business combinations and are expensed as incurred.

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 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 and the volume of data available for future information updates. 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 variable 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.

Contract assets and deferred revenues consist of the following as of March 31, 2025 and December 31, 2024:


	Contract Assets										Contract Liability
		Costs of obtaining contracts			Unbilled revenue			Total			Deferred Revenue
Balance at January 1, 2024	$	107,332		$	2,543,477		$	2,650,809		$	2,225,009
Beginning deferred revenue balance recognized during the period		—			—			—			(1,975,009	)
Net change due to acquisition		—			—			—			2,059,560
Net change due to timing of billings, payments and recognition		(44,882	)		(19,215	)		(64,097	)		2,178,126
Balance at December 31, 2024		62,450			2,524,262			2,586,712			4,487,686
Beginning deferred revenue balance recognized during the period		—			—			—			(2,723,593	)
Net change due to timing of billings, payments and recognition		70,596			2,091			72,687			3,856,724
Balance at March 31, 2025	$	133,046		$	2,526,353		$	2,659,399		$	5,620,817

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:

		March 31, 2025		December 31, 2024
Estimated next twelve months	$	21,664,682	$	20,550,004
Thereafter		12,944,675		13,397,200
Total	$	34,609,357	$	33,947,204

Segment Information

FASB ASC Topic 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 (“CODM”), the Chief Executive Officer, manages the Company’s business activities as a single operating and reportable segment at the consolidated level. Accordingly, the CODM uses consolidated net income to measure segment profit or loss, allocate resources and assess performance. Further, the CODM reviews and utilizes functional expenses (cost of revenues, sales and marketing, research and development and general and administrative) at the consolidated level to manage the Company’s operations. Other segment items included in consolidated net income are interest income, other expense, net and the provision for (benefit from) income taxes and infrequent items such as gain on redemption of debt, gain on sale of investment and gain on bargain purchase, which are reflected in the condensed consolidated statements of operations.

Sales for the three months ended March 31, 2025 by country as a percentage of total sales were: United States (93%), Australia (5%) and Great Britain/others (2%) compared to sales for the three months ended March 31, 2024 by country as a percentage of total sales which were: United States (87%), Australia (8%) and Canada (5%).

The Company’s long-lived assets consist primarily of intangible assets, deposits and other assets. As of March 31, 2025 and December 31, 2024, all of the Company’s long-lived assets were in the U.S.

The Company’s operations are comprised of a single reportable segment providing analytic and information services to the healthcare, life science and financial services industries.

Customer Concentration

During the three months ended March 31, 2025, the Company had one customer representing 12.1% of revenue. At March 31, 2025, the Company had three customers representing 18.6%, 14.9% and 10.5% of accounts receivable.

During the three months ended March 31, 2024, the Company had two customers representing 16.4% and 13.8% of revenue. At March 31, 2024, the Company three customers representing 18.6%, 11.6% and 10.9% 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 expensed and payments incurred as other assets or liabilities on a contract by contract basis. Payments for licensed information, including the changes in related assets and liabilities, are classified within “Net cash provided by operating activities” on the condensed consolidated statements of cash flows. In cases where the Company pays variable fees based on content usage, such costs are expensed as incurred.

On July 31, 2024, the Company was informed by one of its information vendors that effective December 31, 2024, the vendor would no longer include certain data within the information products it licenses to the Company. The vendor stated this was due to clarifications and updates to the licensing relationship between the vendor and one of its data suppliers. In February 2025, the vendor announced that it intended to exit the data licensing business by the end of 2026. The Company plans to license data from additional vendors in consideration of the above changes; however, there can be no assurance that the alternate sources of comparable data can be obtained, and if so, on terms and conditions substantially equivalent to those under the Company’s previous agreement. As a result of this event, the Company is evaluating its rights under the contract and the impact of the vendors announced wind down on future obligations under the agreement. The Company reduced the expected period of benefit under the agreement effective with the vendors announcement. The resulting change in accounting estimate did not have a material impact on operating results for the three months ended March 31, 2025.

Vendor Concentration

During the three months ended March 31, 2025, the Company had one vendor representing 21.0% of purchases and expenses.

During the three months ended March 31, 2024, the Company had three vendors representing 15.2%, 12.7% and 10.5% of purchases and expenses.

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.

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 three months ended March 31, 2025 or 2024.

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 condensed 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 $18,443 and $35,642 for the three months ended March 31, 2025 and 2024, respectively.

Net Loss per Share

The calculation of net loss per share is based on the weighted average number of common shares or common stock equivalents outstanding during the applicable period. The dilutive effect of common 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 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 common shares when the award becomes deductible for tax purposes are assumed to be used to repurchase shares. As the Company has incurred net losses for the three months ended March 31, 2025 and 2024, the diluted loss per share is the same as basic loss per share for the periods presented.

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.

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 condensed consolidated statements of operations.

Income Taxes

The Company accounts for income taxes in accordance with FASB ASC Topic 740, Income Taxes (“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. The Company’s effective tax rate will change from period to period 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 period of the change.

For the three months ended March 31, 2025, the Company recognized net income tax expense of $7,367. For the three months ended March 31, 2024, the Company recognized net income tax expense of $102,540. 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 files a consolidated U.S. income tax return and tax returns in certain state and local jurisdictions. As of March 31, 2025, the Company is not currently under any examination in any tax jurisdiction.

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.

Litigation Settlements and Related Expenses

Litigation settlements and related expenses consist of incremental third-party legal expenses and settlement expenses, net of any insurance recoveries, associated with litigation, which pertains to entities acquired in the Helix merger (see “Note 16 – Commitments and Contingencies”).

Recent Accounting Pronouncements

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.

In November 2024, the FASB issued Accounting Standards Update No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Topic 220): Disaggregation of Income Statement Expenses (“ASU 2024-03”). ASU 2024-03 requires additional disclosure of certain amounts included in the expense captions presented on the condensed consolidated statement of operations as well as disclosures about selling expenses. The ASU is effective on a prospective basis, with the option for retrospective application, for annual periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. Early adoption is permitted for annual financial statements that have not yet been issued. The Company is currently evaluating the impact of ASU 2024-03 on its consolidated financial statements and related disclosures.

Recently Adopted Accounting Pronouncements

The Company has implemented all new applicable accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements.

Note 4 ACQUISITION

The Company entered into the Assignment Agreement, by and among the Sellers, Kyber, and the Company, pursuant to which the Company acquired the Kyber Transferred Interests from the Sellers, effective as of the Kyber Acquisition Date. Pursuant to the terms of the Assignment Agreement, at the closing, Sellers transferred and assigned all of the Kyber 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, which was resolved without material impact to the Transaction. All outstanding Class B Units of Kyber were cancelled prior to the closing of the Kyber Transaction and no consideration was paid to the Class B Unit holders.

In accordance with ASC 805, the Company has been considered as the acquirer for financial reporting purposes. Accordingly, for accounting purposes, the Company has recorded the assets, including the acquired identified intangible assets, and liabilities assumed in the Kyber 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 has been recorded as a bargain purchase gain.

The Company obtained control of Kyber for no consideration other than the assumption of certain normal course working capital liabilities. The Company recorded an estimated gain on bargain purchase upon completion of the transaction. The bargain purchase was a result of the Sellers’ plan to wind down and terminate Kyber’s operations if a sale was not completed by October 31, 2024, due to a previous change in ownership.

During the measurement period of up to one year from the Kyber Acquisition Date, the Company will record adjustments identified, if any, to the acquisition-date fair values of assets acquired and liabilities assumed with the corresponding offset to gain on bargain purchase. Upon the conclusion of the measurement period, any subsequent adjustments will be included in the Company's condensed consolidated statements of operations.

The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed on the Kyber Acquisition Date:


Description		Purchase Price
Purchase price	$	—
Total consideration transferred	$	—


		As of October 31, 2024	Estimated Useful Life (Years)
Assets acquired
Cash	$	1,415,696
Accounts receivables from customers, net		767,052
Prepaid expenses and other assets		109,934
Due from seller		67,443
Customer relationship intangible		1,011,000	6
Trademarks		215,000	9
Total assets acquired		3,586,125

Liabilities assumed
Accrued expenses		321,735
Deferred revenue		2,059,560
Total liabilities assumed		2,381,295

Gain on bargain purchase		1,204,830
Total consideration transferred	$	—

No expenses relating to strategic review and transaction related expenses were incurred during the three months ended March 31, 2025 and 2024.

The results of operations of Kyber since the Kyber Acquisition Date have been included in the Company’s condensed consolidated financial statements. Kyber contributed revenues of $1,693,347 for the three months ended March 31, 2025 and $0 for the three months ended March 31, 2024 which was included in the Company’s consolidated statements of operations. It is impractical for the Company to provide Kyber’s amount of contributed income from operations during the same period due to the level of integration and shared costs post-acquisition.

Supplemental Pro Forma Financial Information

The following table presents certain unaudited pro forma financial information for the combined entity as if the Kyber acquisition occurred on January 1, 2024. The unaudited pro forma financial information for the periods presented is provided for illustrative purposes only and is not necessarily indicative of the historical results of operations had the acquisition occurred on January 1, 2024, nor is it indicative of the results of operations in future periods.

		Three Months Ended March 31, 2024
Revenues	$	5,956,088
Net loss	$	(2,549,803	)
Basic and diluted net loss per share – on a pro forma basis	$	(0.08	)

Note 5

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 condensed consolidated statements of operations. Marketable securities consists of U.S. Treasury Bills. As of March 31, 2025 and December 31, 2024, marketable securities consisted of the following:


		March 31, 2025		December 31, 2024
United States Treasury Bills
Amortized Cost	$	29,962,773	$	30,476,729
Fair Market Value	$	29,961,761	$	30,492,088

Note 6

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 March 31, 2025 and December 31, 2024, the Company’s balance sheet reflected prepaid expenses of $1,186,123 and $1,111,234, respectively, primarily relating to various software and information licenses and insurance policies with durations ranging from 3 months to 1 year.

Included in other current assets as of March 31, 2025, are income taxes receivable of $141,132 and deferred license costs of $916,531.

Included in other current assets as of December 31, 2024, are income taxes receivable of $199,131, deferred license costs of $825,563 and amounts receivable from employees of $485,000.

Note 7

PROPERTY AND EQUIPMENT, NET

As of March 31, 2025 and December 31, 2024, property and equipment were comprised of the following:

		March 31, 2025			December 31, 2024
Personal computing equipment	$	48,142		$	94,521
Office equipment and capitalized software		73,260			73,260
Total		121,402			167,781
Less: Accumulated depreciation		(79,644	)		(121,129	)
Property and equipment, net	$	41,758		$	46,652

Depreciation expense for the three months ended March 31, 2025 and 2024 was $4,895 and $8,887.

Note 8 INTANGIBLE ASSETS

As of March 31, 2025, intangible assets were comprised of the following:

	Estimated Useful Life (Years)		Gross Carrying Amount at March 31, 2025		Accumulated Amortization		Net Book Value at March 31, 2025
Customer relationships	6	$	1,011,000		70,208	$	940,792
Tradenames and trademarks	9		215,000		9,954		205,046
		$	1,226,000	$	80,162	$	1,145,838

As of December 31, 2024, intangible assets were comprised of the following:

	Estimated Useful Life (Years)		Gross Carrying Amount at December 31, 2024		Accumulated Amortization		Net Book Value at December 31, 2024
Customer relationships	6	$	1,011,000		27,984	$	983,016
Tradenames and trademarks	9		215,000		5,972		209,028
		$	1,226,000	$	33,956	$	1,192,044

Amortization expense for the three months ended March 31, 2025 and 2024 was $46,206 and $0.

The estimated future amortization expense for the next five years and thereafter is as follows:


Years ending December 31,		Future Amortization Expense
2025 (Remaining)	$	144,292
2026		192,389
2027		192,389
2028		192,389
2029		192,389
Thereafter		231,990
Total	$	1,145,838

The weighted average remaining amortization period for the Company’s intangible assets as of March 31, 2025 and December 31, 2024 was 6.12 and 6.36 years.

Note 9 DEPOSITS AND OTHER ASSETS

As of March 31, 2025 and December 31, 2024, deposits and other assets included $945,663 and $1,357,482 of assets related to information license vendors, respectively (see “Note 3 – Summary of Significant Accounting Policies – Vendors and Licensors”).

Note 10

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

As of March 31, 2025 and December 31, 2024, accrued expenses were comprised of the following:


		March 31, 2025		December 31, 2024
Employee compensation	$	1,600,415	$	1,570,205
Information Contracts (see "Note 3 - Vendors and Licensors")		955,238		1,296,315
Accrued expenses		1,326,102		1,546,747
Total	$	3,881,755	$	4,413,267

Note 11 CONVERTIBLE NOTES


		March 31, 2025			December 31, 2024
Principal outstanding	$	6,000,000		$	6,000,000
Add: accrued interest		752,548			701,204
Less: unamortized debt issuance costs		(2,222	)		(3,555	)
Convertible note payable, net of debt issuance costs	$	6,750,326		$	6,697,649

On September 1, 2021, the Company entered into a Note Purchase Agreement with certain accredited investors and a former 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 Notes 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 $51,344 and $197,630 for the three months ended March 31, 2025 and 2024, 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 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 three months ended March 31, 2025 and 2024, the Company recognized $1,333 and $1,333 in amortization of debt issuance costs, respectively, which is recognized in interest expense in the condensed consolidated statements of operations.

On February 28, 2024, the Company redeemed $1,000,000 in principal and $87,356 of accrued interest thereon for an aggregate redemption price of $950,000 resulting in a gain of $137,356, which was included in other income and expense in the condensed consolidated statements of operations.

On November 11, 2024, the Company redeemed $16,000,000 in principal amount and $1,794,110 of accrued interest thereon for an aggregate redemption price of $17,648,406 resulting in a gain of $145,703.

Note 12

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.


	Number of Restricted Shares and Units			Weighted Average Grant Date Fair Value Per Share
Unvested at January 1, 2024	744,985		$	2.05
Issued	1,176,000			2.22
Vested	(268,737	)		4.78
Canceled	(5,000	)		9.47
Unvested at December 31, 2024	1,647,248			3.03
Issued	200,000			2.06
Vested	(263,750	)		4.94
Canceled	(8,000	)		2.02
Unvested at March 31, 2025	1,575,498		$	2.51

The 1,575,498 of unvested awards at March 31, 2025 consisted of restricted stock units.

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. As of March 31, 2025, options to purchase 133,059 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 granted during three months ended March 31, 2025 and 2024, are as follows:


	For the Three Months Ended March 31,
		2025		2024
Exercise Price		$2.00 to $2.06		$2.67 to $3.69
Fair value of Company common stock		$2.00 to $2.06		$2.68 to $3.69
Dividend yield		0	%	0	%
Expected volatility		75.0	%	78% to 79	%
Risk Free interest rate		4.00% to 4.20	%	3.90% to 4.20	%
Expected life (years) remaining		6.10 to 6.25		6.10 to 6.25

The following summarizes option activity under the Company’s stock plan for the three months ended March 31, 2025 and for the year ended December 31, 2024:


	Shares Underlying Options			Weighted Average Exercise Price
Outstanding at January 1, 2024	3,840,544		$	7.12
Granted	483,500		$	2.79
Exercised	(14,375	)	$	2.98
Forfeited and expired	(357,873	)	$	7.49
Outstanding at December 31, 2024	3,951,796		$	6.47
Granted	160,000		$	2.06
Exercised	(7,837	)	$	2.20
Forfeited and expired	(22,600	)	$	2.22
Outstanding at March 31, 2025	4,081,359		$	6.33
Vested options at March 31, 2025	2,606,510		$	8.01

The weighted average exercise price and remaining contractual life of options outstanding as of March 31, 2025 was $6.33 and 7.22 years, respectively. The total aggregate intrinsic value of the options outstanding as of March 31, 2025 was approximately $0.

The weighted average exercise price and remaining contractual life of exercisable options as of March 31, 2025 was $8.01 and 6.64 years, respectively. The total aggregate intrinsic value of the exercisable options as of March 31, 2025 was approximately $0.

Stock Compensation Expense

The weighted-average grant date fair value per share for the stock options granted was $1.43 and $2.00 for the three months ended March 31, 2025 and 2024, respectively.

At March 31, 2025, the total unrecognized stock compensation expense related to unvested stock option awards and restricted stock awards and restricted stock units granted was $7,132,096, which the Company expects to recognize over a weighted-average period of approximately 1.6 years. Stock compensation expense for the three months ended March 31, 2025 and 2024 was as follows:


	For the Three Months Ended March 31,
		2025		2024
Services	$	40,634	$	32,321
Research and development		29,323		58,491
Sales and marketing		76,985		75,348
General and administrative		1,145,844		1,492,755
Total	$	1,292,786	$	1,658,915

Total intrinsic value of options exercised during the year ended March 31, 2025 was $2,351. The total fair value of restricted shares vested during the year ended March 31, 2025 was $642,204.

Note 13

NET LOSS PER SHARE

The following table sets forth the computation of the basic and diluted net loss per share:


	For the Three Months Ended March 31,
		2025			2024
Net loss attributable to common shareholders	$	(1,125,862	)	$	(1,212,615	)

Net loss per share attributable to common shareholders:
Basic	$	(0.04	)	$	(0.04	)
Diluted	$	(0.04	)	$	(0.04	)

Weighted average common shares outstanding - basic and diluted
Basic		31,123,075			30,999,433
Diluted		31,123,075			30,999,433

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 to the Company’s “control number,” which is net loss.


	For the Three Months Ended March 31,
		2025	2024
Potentially dilutive securities:
Warrants		—	16,132
Stock options		4,081,359	4,207,668
Convertible notes		673,925	2,369,728
Unvested restricted stock awards and units		1,575,498	895,266
Total		6,330,782	7,488,794

Note 14 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 three months ended March 31, 2025 and 2024 of $24,375 and $52,050, 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 held $6,000,000 of the Notes until his death on April 11, 2024, which notes are held by the spouse of the deceased director. See “Note 11 - Convertible Notes” for additional information.

On September 4, 2024, the Company entered into a customer agreement with an entity controlled by one of its directors providing for products and services over a three-year period for variable consideration with aggregate minimum billings of $1,200,000. Revenues for the three months ended March 31, 2025, include $100,000 resulting from the agreement.

Note 15 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 1-2 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 renewed its lease agreement for office space in Hingham, Massachusetts, commencing on July 1, 2024. The lease has an initial term of two years and base rent per year is approximately $25,000.

The Company is also obligated under a short-term lease related to offices in Pennsylvania. This short-term lease is 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:


	For the Three Months Ended March 31,
		2025		2024
Cash used in operating leases	$	6,153	$	5,481

ROU lease assets and lease liabilities for the Company’s operating leases were recorded in the condensed consolidated balance sheet as follows:

		March 31, 2025			December 31, 2024
Right of use assets, net	$	29,808		$	35,560

Short-term operating lease liabilities	$	23,703		$	23,423
Long-term operating lease liabilities		6,105			12,137
Total lease liabilities	$	29,808		$	35,560
Weighted average remaining lease term (in years)		1.25			1.50
Weighted average discount rate		4.8	%		4.8	%

Long-term operating lease liabilities are included in other long-term liabilities on the Company’s condensed consolidated balance sheets.

The components of lease expense were as follows for each of the periods presented, which are included in general and administrative expenses in the condensed consolidated statements of operations:


	For the Three Months Ended March 31,
		2025		2024
Operating lease expense	$	6,153	$	5,481
Short-term lease expense		6,212		8,042
Total operating lease costs	$	12,365	$	13,523

Future lease payments included in the measurement of lease liabilities on the condensed consolidated balance sheet as of March 31, 2025, were as follows:


		March 31, 2025
2025		18,459
2026		12,306
Total future minimum lease payments		30,765
Less imputed interest		(957	)
Total	$	29,808

Note 16

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 March 31, 2025:


		March 31, 2025
Year ending December 31, 2025		4,224,160
Year ending December 31, 2026		4,627,500
Year ending December 31, 2027		2,525,000
Thereafter		1,050,000
	$	12,426,660

Commitments and contingencies includes $455,238 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 condensed 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 or recently resolved litigation to which it is a party or to which its property is subject that the Company believes 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 sought 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. On November 22, 2023, the Company entered into a Settlement Agreement and Release with the fifth plaintiff, which included a release of the Company and its subsidiaries and all related parties. That plaintiff filed a stipulation dismissing her claims on December 12, 2023. On May 31, 2024, the remaining parties entered into a Settlement Agreement and Release, which included a release of the Company and its subsidiaries and all related parties. Plaintiffs filed a Stipulation of Dismissal on June 7, 2024. The Court entered a Minute Order dismissing the case with prejudice on June 7, 2024.

The Company classified related legal and settlement expenses as “Litigation and related expenses” within Operating loss. Any insurance reimbursements related to the settlements are treated as gain contingencies and will be recorded when all contingencies are resolved.

Note 17 SUBSEQUENT EVENTS

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Statement for Forward-Looking Information

The following discussion of the Company’s financial condition and results of operations for the three months ended March 31, 2025 and 2024 should be read in conjunction with the unaudited condensed consolidated financial statements and the notes to those statements that are included elsewhere in this Annual Report on Form 10-K. The following discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, including plans, objectives, expectations, intentions and those set forth under “Cautionary Statement for Forward-Looking Information.” Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under “Item 1A. Risk Factors” appearing in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the SEC on April 11, 2025. The Company uses words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions to identify forward-looking statements.

Overview

On October 31, 2024, the Company entered into a Membership Interest 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 from the Sellers, effective October 31, 2024. The business combination with Kyber was accounted for using the acquisition method of accounting in accordance with ASC 805, with the Company deemed the accounting acquirer for financial reporting purposes.

Financial Operations Overview

The following discussion sets forth certain components of the Company’s condensed consolidated statements of operations as well as factors that impact those items.

Revenues

Revenues are derived from fees for the Company’s proprietary information products and services. The Company recognizes revenues from information products as performance obligations under customer contracts are satisfied. Sales for the three months ended March 31, 2025 by country as a percentage of total sales were: United States (93%), Australia (5%) and Great Britain/others (2%) compared to sales for the three months ended March 31, 2024 by country as a percentage of total sales which were: United States (87%), Australia (8%) and Canada (5%).

Cost of Revenues

Cost of revenues is generated from direct costs associated with the delivery of the Company’s products and services to its customers. The cost of revenues relates primarily to labor costs, information licensing, hosting and infrastructure costs and client service team costs.

On July 31, 2024, the Company was informed by one of its information vendors that effective December 31, 2024, the vendor will no longer include certain data within the information products it licenses to the Company. The vendor stated this was due to clarifications and updates to the licensing relationship between the vendor and one of its data suppliers. In February 2025, the vendor announced that it intended to exit the data licensing business by the end of 2026. The Company plans to license data from additional vendors in consideration of the above changes; however, there can be no assurance that the alternate sources of comparable data can be obtained, and if so, on terms and conditions substantially equivalent to those under the Company’s previous agreement. As a result of this event, the Company is evaluating its rights under the contract and the impact of the vendors announced wind down on future obligations under the agreement. The Company reduced the expected period of benefit under the agreement effective with the vendors announcement. The resulting change in accounting estimate did not have a material impact on operating results for the three months ended March 31, 2025.

Research and Development

Research and development expenses consist primarily of employee-related expenses, subcontractor and third-party consulting fees and hosted infrastructure costs. The Company continues to focus research and development efforts on adding new features and applications to its product offerings.

Sales and Marketing

Sales and marketing expense is primarily salaries and related expenses, including commissions, for sales, marketing and product management staff. Marketing program costs are also recorded as sales and marketing expense including advertising, market research and events (such as trade shows, corporate communications, brand building, etc.). The Company plans to continue investing in marketing and sales by expanding selling and marketing staff, building brand awareness, attracting new clients and sponsoring additional marketing events. The timing of these marketing events may affect marketing costs in any particular period.

General and Administrative Expenses

General and administrative expenses include salaries, benefits and other costs of departments serving administrative functions, such as executives, finance and accounting and human resources. In addition, general and administrative expense includes non-personnel costs, such as professional fees, legal fees, accounting and finance advisory fees and other supporting corporate expenses not allocated to cost of revenues, product and development or sales and marketing.

Litigation Settlements and Related Expenses

Litigation settlements and related expenses result from the defense and settlement of legacy claims assumed in the Helix merger.

Depreciation and Amortization Expenses

Depreciation and amortization relate to long lived assets used in the Company’s business. Depreciation expense relates primarily to furniture and equipment and computers.

Results of Operations For the Three Months Ended March 31, 2025 and 2024

The following table summarizes the results of operations for the periods indicated:


	For the Three Months Ended March 31,
		2025			2024
Revenues	$	7,056,116		$	4,877,378

Costs and Expenses
Cost of revenues		3,131,622			1,703,357
Research and development		606,237			389,889
Sales and marketing		1,382,727			1,055,141
General and administrative		3,279,094			3,283,489
Litigation settlements and related expenses		—			208,965
Depreciation and amortization		51,101			8,887
Operating loss	$	(1,394,665	)	$	(1,772,350	)

Comparison of Three Months Ended March 31, 2025 and 2024

Revenues

Revenues for the for the three months ended March 31, 2025, were $7,056,116, which represented an increase of $2,178,738 compared to revenues of $4,877,378 for the three months ended March 31, 2024. The increase is primarily due to the impact of the acquisition of Kyber and organic growth in sales of the Company’s information products.

Cost of Revenues

Cost of revenues for the three months ended March 31, 2025, was $3,131,622, which represented an increase of $1,428,265 compared to cost of revenues of $1,703,357 for the three months ended March 31, 2024. Cost of revenues increased primarily due to the impact of the Kyber acquisition and higher information licensing expenses. As a result, gross profit as a percentage of revenues decreased to 56% for the three months ended March 31, 2025, compared to 65% for the same period in 2024.

Research and Development

Research and development expenses for the three months ended March 31, 2025, were $606,237, which represented an increase of $216,348 compared to research and development expenses of $389,889 for the three months ended March 31, 2024. The increase is primarily due to the impact of the Kyber acquisition.

Sales and Marketing

Sales and marketing expenses for the three months ended March 31, 2025, were $1,382,727, which represented an increase of $327,586 compared to sales and marketing expenses of $1,055,141 for the three months ended March 31, 2024. The increase is due to the impact of the Kyber acquisition and increased salesperson compensation expenses.

General and Administrative

General and administrative expenses for the three months ended March 31, 2025, were $3,279,094, which represented a decrease of $4,395 compared to general and administrative expenses of 3,283,489 for the three months ended March 31, 2024. The decrease is primarily due to lower stock compensation expense, partially offset by increased salaries, other professional and credit loss expenses.

Litigation Settlements and Related Expenses

Litigation settlements and related expenses of $208,965 for the three months ended March 31, 2024 result from the defense and settlement of legacy claims assumed in the Helix merger, net of any insurance recoveries.

Non-GAAP Financial Measures

In this Quarterly Report on Form 10-Q the Company has provided a non-GAAP measure, which is defined as financial information that has not been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The non-GAAP financial measure provided herein is earnings before interest, taxes, non-cash and other items (“Adjusted EBITDA”), which should be viewed as supplemental to, and not as an alternative for, net income or loss calculated in accordance with U.S. GAAP (referred to below as “net loss”).

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

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

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

•

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. 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.

•

Interest and Investment Income. Interest and Investment income is associated with the level of marketable debt securities and other interest-bearing accounts in which the Company invests. Interest and investment income can vary over time due to changes in interest rates and level of investments. Management excludes interest and investment income from Adjusted EBITDA (i) because these items are not directly attributable to the performance of business operations and, accordingly, their exclusion assists management and investors in making period-to-period comparisons of operating performance and (ii) to assist management and investors in making comparisons to companies with different capital structures. Investors should note that interest and investment income will recur in future periods.

•

Other Items. The Company engages in other activities and transactions that can impact net loss. In the periods reported, these other items included (i) gain on sale of investment relating to the sale of a minority equity interest and (ii) gain on debt redemption which relates to a gain on the early retirement of a portion of the Notes (for further discussion, refer to “Note 11 – Convertible Notes” to the financial statements). 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.

•

Litigation related expenses. Management excludes litigation expenses that are extraordinary in nature and are unrelated to the Company’s day-to-day business operations. The nature of these expenses is primarily related to direct and incremental third-party legal expenses and settlement expenses, net of any insurance recoveries, associated with such litigation, which pertains to entities acquired in the Helix merger, see “Item 1. Legal Proceedings” and “Note 16 – Commitments and Contingencies” to the financial statements for further information.

•

Income tax (benefit) expense. Management excludes the income tax (benefit) expense from Adjusted EBITDA (i) because management believes that the income tax (benefit) 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.

Limitations on the use of non-GAAP financial measures

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

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

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

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


	For the Three Months Ended March 31,
		2025			2024
Revenue	$	7,056,116		$	4,877,378

Net loss		(1,125,862	)		(1,212,615	)

Depreciation and amortization		51,101			8,887
Stock based compensation expense		1,292,786			1,658,915
Change in fair value of warrant liability		—			(113	)
Interest and investment income		(328,848	)		(675,157	)
Interest expense		52,678			198,963
Gain on sale of investment		—			(48,612	)
Gain on debt redemption		—			(137,356	)
Litigation related expenses		—			208,965
Income tax expense		7,367			102,540
Adjusted EBITDA	$	(50,778	)	$	104,417

Comparison of the Three Months Ended March 31, 2025 and 2024

Adjusted EBITDA

Adjusted EBITDA for the three months ended March 31, 2025, was $(50,778) compared to $104,417 three months ended March 31, 2024, a decrease of $155,195. The decrease is primarily due to higher cost of revenues and other operating expenses, partially offset by other increases in revenues discussed above.

Liquidity and Capital Resources

Historically, the Company’s operations have been financed primarily from cash flow from operating activities, cash proceeds received from the sale of investments, equity issuances and the issuance of the Notes. On February 10, 2023, the Company sold BioTrack for $30,000,000 consisting of $20,000,000 in cash at closing and twelve unconditional monthly payments aggregating $10,000,000 thereafter. On July 21, 2023, the Company sold a minority equity interest in a customer for cash proceeds of $5,805,858 and future contingent earnout payments aggregating up to $3,600,000 in 2025 and 2026. These transactions have provided additional cash and liquidity to the Company. During 2024, the Company redeemed $18,881,466 in outstanding principal and interest on its Notes. As of March 31, 2025, the Company’s balance of cash and marketable securities aggregated $35,666,432 and outstanding principal and accrued interest on the Notes, due September 1, 2025, aggregated $6,750,326. The Company expects to continue to fund its operations and potential future acquisitions through a combination of cash flow generated from operating activities, available cash and marketable securities, debt financing and/or additional equity issuances.

Cash Flows

The following table summarizes selected information about sources and uses of cash and cash equivalents for the periods presented:


	For the Three Months Ended March 31,
		2025			2024
Net cash provided by (used in) operating activities	$	448,180		$	(2,208,070	)
Net cash provided by (used in) investing activities		838,125			(1,774,425	)
Net cash used in financing activities		(172,295	)		(1,031,363	)
Net (decrease) increase in cash and cash equivalents	$	1,114,010		$	(5,013,858	)

Net Cash Provided by (Used In) Operating Activities

Net cash provided by operating activities of $448,180 increased by $2,656,250 for the three months ended March 31, 2025 compared to cash used in operating activities of $2,208,070 three months ended March 31, 2024. This primarily is the result of changes in working capital accounts related to the timing of cash flows from operations.

Net Cash Provided by (Used In) By Investing Activities

Net cash provided by investing activities of $838,125 increased by $2,612,550 for the three months ended March 31, 2025 compared to cash used in investing activities of $1,774,425 three months ended March 31, 2024. This is primarily the result of changes in net additions to marketable securities, partially offset by cash received from the sale of discontinued operation during 2024.

Net Cash Used In Financing Activities

Net cash used in financing activities of $172,295 for the three months ended March 31, 2025 decreased by $859,068 compared to cash used in financing activities of $1,031,363 three months ended March 31, 2024. The decrease was primarily due to changes in tax payments for vested restricted stock units and redemptions of certain of the Notes.

Critical Accounting Estimates

Management’s discussion and analysis of the Company’s financial condition and results of operations are based upon the Company’s condensed consolidated financial statements that have been prepared in accordance with US GAAP. The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities.

On an on-going basis, the Company evaluates its estimates, including those related to revenues, stock-based compensation, income taxes, contingencies and litigation.

The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The Company believes the following critical accounting estimates used in the preparation of its condensed consolidated financial statements affect its more significant judgments and estimates.

Revenue

The Company utilizes judgement to determine 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 variable revenue arrangements.

Share-Based Payments

Under the fair value recognition provision, stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense on a straight-line basis over the requisite service period. The Company makes certain assumptions in order to value and expense its various share-based payment awards.

Income Taxes

The Company utilizes judgement and estimates in assessing the need for the valuation allowance related to deferred tax assets, including net operating loss carry-forwards. In the event the Company were to determine that it would not be able to realize all or part of its net deferred tax assets, an adjustment to the deferred tax assets would be charged to income in the period such determination was made.

Business Combinations

The Company allocates the fair value of the consideration transferred to the assets acquired and liabilities assumed, including trademarks and customer relationships based on their estimated fair values at the acquisition date. Any excess over the consideration transferred is recorded as gain on bargain purchase. The purchase price allocation requires the Company to make significant estimates and assumptions, especially at the acquisition date, with respect to intangible assets and deferred revenue obligations.

Although the Company believes the assumptions and estimates it has made are reasonable, they are based in part on historical experience and information obtained from the management of the acquired companies and are inherently uncertain. Examples of critical estimates used in valuing certain of the intangible assets the Company has acquired or may acquire in the future include but are not limited to:

•

future expected cash flows from sales, maintenance agreements, and acquired developed technologies;

•

the acquired company’s trade name and customer relationships as well as assumptions about the period of time the acquired trade name and customer relationships will continue to be used in the Company’s product portfolio;

•

expected costs to develop the in-process research and development into commercially viable software and estimated cash flows from the projects when completed; and

•

discount rates used to determine the present value of estimated future cash flows.

These estimates are inherently uncertain and unpredictable, and if different estimates were used the purchase price for the acquisition could be allocated to the acquired assets and liabilities differently from the allocation that the Company has made. In addition, unanticipated events and circumstances may occur, which may affect the accuracy or validity of such estimates, and, if such events occur, the Company may be required to recognize a loss in the condensed consolidated statement of operations due to an overestimation of the value ascribed to an acquired asset or an increase in the amounts recorded for assumed liabilities.

Recent Accounting Pronouncements

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 period 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.

In November 2024, the FASB issued Accounting Standards Update No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Topic 220): Disaggregation of Income Statement Expenses (“ASU 2024-03”). ASU 2024-03 requires additional disclosure of certain amounts included in the expense captions presented on the condensed consolidated statement of operations as well as disclosures about selling expenses. The ASU is effective on a prospective basis, with the option for retrospective application, for annual periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. Early adoption is permitted for annual financial statements that have not yet been issued. The Company is currently evaluating the impact of ASU 2024-03 on its condensed consolidated financial statements and related disclosures.

Recently Adopted Accounting Pronouncements

The Company has implemented all new applicable accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements.

JOBS Act

On April 5, 2012, the JOBS Act was signed into law. The JOBS Act contains provisions that, among other things, reduce certain reporting requirements for an “emerging growth company.” As an “emerging growth company,” the Company is electing to take advantage of the extended transition period afforded by the JOBS Act for the implementation of new or revised accounting standards.

Subject to certain conditions set forth in the JOBS Act, as an “emerging growth company,” the Company is not required to, among other things, (i) provide an auditor’s attestation report on its system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis) and (iv) disclose certain executive compensation-related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer’s compensation to median employee compensation. These exemptions will apply until the fifth anniversary of the business combination with Helix or until the Company no longer meets the requirements for being an “emerging growth company,” whichever occurs first.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

This item is not required.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to the Company’s management, including its chief executive officer (who is also the Company’s principal executive officer) and its chief financial officer (who is also the Company’s principal financial and accounting officer), to allow for timely decisions regarding required disclosure. In accordance with Rules 13a-15(b) under the Exchange Act, the Company carried out an evaluation, under the supervision and with the participation of its management, including its chief executive officer and chief financial officer, of the effectiveness of its disclosure controls and procedures as of March 31, 2025, which is the end of the three-month period covered by this Quarterly Report on Form 10-Q.

The Company identified material weaknesses in its internal controls over financial reporting as disclosed in Item 9A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, as filed with the SEC on April 11, 2025. The Company’s chief executive officer and chief financial officer therefore concluded that the Company’s disclosure controls and procedures as of the fiscal quarter ended March 31, 2025 remain ineffective to the extent of the material weaknesses identified.

The Company has implemented several processes and control procedures in 2025, including those outlined below, to remediate the deficiencies noted above and from the prior year. The Company is currently assessing and improving the operating effectiveness of these controls to ensure they will operate at an acceptable level of assurance.

The Company has implemented additional controls to validate the accuracy and appropriateness of payables transactions and to prevent the possibility of fraudulent or fictitious payments.

The Company has implemented controls over the application of ASC 606, particularly to contracts containing fixed minimum payments and variable revenues based on customer sales.

The Company believes these actions, when complete, will remediate the control weaknesses. However, the weaknesses will not be considered fully remediated until the applicable controls operate for a sufficient period of time for management to test the results for operating effectiveness. Once implemented, the Company intends to continue periodic testing and reporting of the internal controls to ensure continuity of compliance.

Changes in Internal Control Over Financial Reporting

Except for the items described above, there has been no change in the Company’s internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) under the Exchange Act that occurred during the three months ended March 31, 2025, that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.

Part II – OTHER INFORMATION

Item 1. 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, it records reserves in its condensed 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 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 it believes to be material.

Item 1A. Risk Factors

This item is not required.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Trading Arrangements of Directors and Executive Officers

During the three months ended March 31, 2025, no director of officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

Item 6. Exhibits


3.1	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).
3.2	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).
31.1*	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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.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 Document.
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

* Filed with this Quarterly Report on Form 10‑Q.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on May 15, 2025.


	FORIAN INC.

	By:	/s/ Max Wygod
		Max Wygod
		Chief Executive Officer
		(Principal Executive Officer)

	By:	/s/ Michael Vesey
		Michael Vesey
		Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer)