NEWTOWN, PA - March 31, 2025 (NEWMEDIAWIRE) - Forian Inc.(Nasdaq: FORA), a leading provider of data science driven information and analytics solutions to the life science, healthcare and financial services industries, today announced that it would restate certain historical financial statements in its Annual Report on Form 10-K for the year ended December 31, 2024 (the "2024 Form 10-K").
Restatement of Historical Financial Results
On March 30, 2025, the Audit Committee (the "Audit Committee") of the Board of Directors of the Company (the "Board"), based on the recommendation of, and after consultation with, the Company's management and independent auditors, determined that the Company's previously issued unaudited and audited consolidated financial statements as of and for each of the quarterly and year to date periods in 2023 and the quarterly period ended September 30, 2024 (the "Non-Reliance Periods") should no longer be relied upon. Similarly, any previously issued or filed reports, press releases, earnings releases, and investor presentations or other communications describing the Company's financial statements and other related financial information covering the Non-Reliance Periods should no longer be relied upon.
During the course of the audit of the Company's 2024 financial statements, management of the Company, after discussion with its independent auditors, determined that under ASC 606, Revenue from Contracts with Customers ("ASC 606"), aggregate annual minimum payments for certain contracts should be recognized on a straight line basis over the life of the contract, as opposed to individually in the year in which the minimum fee applies under the terms of the contract. As a result, the Company will restate its previously reported financial statements for the periods that were affected. This restatement applied only to the technical application of ASC 606 to a limited number of contracts where the Company may earn variable fees based on customer sales over certain thresholds specified in the contract and had no impact on the Company's cash flows. This restatement is expected to result in an increase to previously reported revenues and net income for all periods since 2021.
The Company will disclose in its 2024 Form 10-K the restated financial statements for each of the Non-Reliance Periods (the "Restatements"), and is currently working to complete the filing of the 2024 Form 10-K as soon as practicable.
Business Outlook
The Company continues to expect that its revenues and Adjusted EBITDA for the year ended December 31, 2024, will be within the previously provided ranges of revenues between $19 million and $20 million and Adjusted EBITDA between $(0.5) and $0.5 million.
Next Steps
As a result of the Restatements, the Company will experience a delay in the filing of its 2024 Form 10-K and expects to file a notification of late filing on Form 12b-25 with the SEC. The Company expects to file the 2024 Form 10-K, which will include the Restatements, within the extension period of fifteen (15) calendar days as provided by Rule 12b-25 under the Securities Exchange Act of 1934, as amended.
Deferred Conference Call and Webcast
Forian will defer its previously announced conference call and webcast until it reports its financial results for the quarter ended March 31, 2025.
Non-GAAP Financial Measures
In this press release, we have provided certain non-GAAP measures, which we define as financial information that has not been prepared in accordance with U.S. GAAP. The non-GAAP financial measure provided herein is earnings before interest, taxes, non-cash and other items ("Adjusted EBITDA"), which should be viewed as supplemental to, and not as an alternative for, net income or loss calculated in accordance with U.S. GAAP (referred to below as "net loss").
Adjusted EBITDA is used by our management as an additional measure of our Company's performance for purposes of business decision-making, including developing budgets, managing expenditures and evaluating potential acquisitions or divestitures. Period-to-period comparisons of Adjusted EBITDA help our management identify additional trends in our Company's financial results that may not be shown solely by period-to-period comparisons of net income. In addition, we may use Adjusted EBITDA in the incentive compensation programs applicable to some of our employees in order to evaluate our Company's performance. Our management recognizes that Adjusted EBITDA has inherent limitations because of the excluded items, particularly those items that are recurring in nature. In order to compensate for those limitations, management also reviews the specific items that are excluded from Adjusted EBITDA, but included in net income, as well as trends in those items, including depreciation and amortization, stock-based compensation expense, interest expense, interest and investment income, severance expenses, litigation and related expenses, strategic review and acquisition related expenses, contract termination impacts, income tax (benefit) expense and other items.
We believe that the presentation of Adjusted EBITDA is useful to investors in their analysis of our results for reasons similar to the reasons why our management finds it useful and because it helps facilitate investor understanding of decisions made by management in light of the performance metrics used in making those decisions. In addition, we believe that providing Adjusted EBITDA helps investors make comparisons between our Company and other companies that may have different capital structures, different effective income tax rates and tax attributes, different capitalized asset values and/or different forms of employee compensation. However, Adjusted EBITDA is not intended as a substitute for comparisons based on net loss. In making any comparisons to other companies, investors need to be aware that companies use different non-GAAP measures to evaluate their financial performance. Investors should pay close attention to the specific definition being used and to the reconciliation between such measures and the corresponding U.S. GAAP measures provided by each company under applicable SEC rules.
There are limitations to using non-GAAP financial measures because non-GAAP financial measures are not prepared in accordance with U.S. GAAP and may be different from non-GAAP financial measures provided by other companies.
The non-GAAP financial measures are limited in value because they exclude certain items that may have a material impact upon our reported financial results. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by management about which items are adjusted to calculate our non-GAAP financial measures. We compensate for these limitations by analyzing current and future results on a U.S. GAAP basis as well as a non-GAAP basis and also by providing U.S. GAAP measures in our public disclosures.
About Forian
Forian provides a unique suite of data management capabilities and proprietary information and analytics solutions to optimize and measure operational, clinical and financial performance for customers within the traditional and emerging life sciences and healthcare payer and provider segments and, with its recent acquisition of Kyber Data Science, the financial services industry. Forian has industry leading expertise in acquiring, integrating, normalizing and commercializing large scale healthcare data assets. Forian's information products overlay sophisticated data management and data science capabilities on top of a comprehensive clinical data lake to identify unique relationships, create distinctive information assets and generate proprietary insights. For more information, please visit the Company's website at www.forian.com.
This Release contains "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. The Company advises caution in reliance on forward-looking statements. Forward-looking statements include, without limitation, the Company's plans and estimates related to the Restatements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those implied by forward-looking statements, including the outcome of the Company's completion of the quantification and evaluation of the specific impact of the Restatements, including the possibility of material adjustments thereto and the discovery of additional and unanticipated information during the procedures required to be completed before the Company is able to file its 2024 Form 10-K. See also additional risk factors set forth in the Company's periodic filings with the SEC, including, but not limited to, those risks and uncertainties listed in the section entitled "Risk Factors," in the Company's Annual Report on Form 10-K filed with the SEC. All forward-looking statements in this Release are based on information available to the Company as of the date of this filing. The Company expressly disclaims any obligation to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.
