10-Q

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 SEPTEMBER 30, 2021

OR

☐          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 November 9, 2021, there were 32,561,117 shares outstanding of the registrant’s common stock including shares of unvested restricted stock.

TABLE OF CONTENTS

PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements	3
	Condensed Consolidated Balance Sheets as of September 30, 2021 (unaudited) and December 31, 2020	3
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Nine Months Ended September 30, 2021 and 2020 (unaudited)	4
	Condensed Consolidated Statements of Stockholders’ Equity (Deficit) for the Three and Nine Months Ended September 30, 2021 and 2020 (unaudited)	5
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2021 and 2020 (unaudited)	8
	Notes to Condensed Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	43
Item 4.	Controls and Procedures	43
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	44
Item 1A.	Risk Factors	45
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	45
Item 3.	Defaults Upon Senior Securities	45
Item 4.	Mine Safety Disclosures	45
Item 5.	Other Information	45
Item 6.	Exhibits	46
Signatures		47

FORIAN INC.

(formerly known as MEDICAL OUTCOMES RESEARCH ANALYTICS, LLC)

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30, 2021 AND DECEMBER 31, 2020

Item 1. Financial Statements and Supplementary Data

	September 30,			December 31,
	2021			2020
	Unaudited
ASSETS
Current assets:
Cash and cash equivalents	$	23,535,098		$	665,463
Marketable securities		12,399,243			11,501,844
Accounts receivable, net		2,179,979			22,996
Contract assets		364,480			196,701
Prepaid expenses		912,879			120,979
Other assets		300,000			—
Total current assets		39,691,679			12,507,983
Property and equipment, net		762,658			46,358
Intangible assets, net		9,596,702			—
Goodwill		9,125,372			—
Right of use assets, net		916,195			—
Deposits and other assets		329,682			—
Total assets	$	60,422,288		$	12,554,341
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable		1,095,328			647,601
Accrued expenses		2,993,013			480,741
Short-term operating lease liabilities		245,771			—
Notes payable		15,250			—
Warrant liability		501,110			—
Deferred revenues		682,157			158,884
Total current liabilities		5,532,629			1,287,226
Long-term liabilities:
Long-term operating lease liabilities		675,254			—
Convertible notes payable, net of debt issuance costs ($6,000,000 in principal is held by a related party. Refer to Note 15)		24,049,114			—
Total long-term liabilities		24,724,368			—
Total liabilities		30,256,997			1,287,226
Commitments and contingencies (Note 16)
Stockholders' equity:
Preferred Stock; par value $0.001; 5,000,000 Shares authorized; 0 issued and outstanding as of September 30, 2021 and December 31, 2020		—			—
Common Stock; par value $0.001; 95,000,000 Shares authorized; 31,533,083 issued and outstanding as of September 30, 2021 and 21,233,039 issued and outstanding as of December 31, 2020		31,533			21,233
Additional paid-in capital		54,905,098			17,514,907
Accumulated deficit		(24,771,340	)		(6,269,025	)
Total stockholders' equity		30,165,291			11,267,115
Total liabilities and stockholders' equity	$	60,422,288		$	12,554,341

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

3

FORIAN INC.

(formerly known as MEDICAL OUTCOMES RESEARCH ANALYTICS, LLC)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(UNAUDITED)

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2021			2020			2021			2020
Revenues:
Information and Software	$	4,489,177		$	159,504		$	9,661,826		$	334,921
Services		269,753			—			858,400			—
Other		202,825			—			610,123			—
Total revenues		4,961,755			159,504			11,130,349			334,921
Costs and Expenses:
Cost of revenue		1,337,981			—			3,028,657			—
Research and development		2,612,184			658,824			6,059,948			1,474,215
Sales and marketing		1,088,203			40,217			2,864,213			151,261
General and administrative		6,673,723			514,280			16,035,981			1,143,365
Depreciation and amortization		598,565			3,059			1,381,637			4,932
Transaction related expenses		—			105,128			1,210,279			195,634
Total costs and expenses		12,310,656			1,321,508			30,580,715			2,969,407
Loss From Operations		(7,348,901	)		(1,162,004	)		(19,450,366	)		(2,634,486	)
Other Income (Expense):
Change in fair value of warrant liability		251,778			—			746,605			—
Interest and investment income		1,903			89			4,601			5,796
Interest expense		(79,422	)		—			(101,325	)		—
Foreign currency related gains		298,170			—			298,170			—
Total other income, net		472,429			89			948,051			5,796
Net loss before income taxes		(6,876,472	)		(1,161,915	)		(18,502,315	)		(2,628,690	)
Income tax expense		—			—			—			—
Net Loss	$	(6,876,472	)	$	(1,161,915	)	$	(18,502,315	)	$	(2,628,690	)
Other comprehensive loss:
Changes in foreign currency translation adjustment		(145,250	)		—			—			—
Total other comprehensive loss	$	(145,250	)	$	—		$	—		$	—
Total comprehensive loss	$	(7,021,722	)	$	(1,161,915	)	$	(18,502,315	)	$	(2,628,690	)
Basic and diluted net loss per common share	$	(0.22	)	$	(0.08	)	$	(0.64	)	$	(0.22	)
Weighted-average shares outstanding:		31,332,735			14,208,049			28,814,825			12,038,534

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

4

FORIAN INC.

(formerly known as MEDICAL OUTCOMES RESEARCH ANALYTICS, LLC)

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (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, 2021			$	—		21,233,039	$	21,233	$	17,514,907	$	(6,269,025	)	$	11,267,115
Issuance of Forian Common stock in Helix Acquisition						8,408,383		8,408		18,446,376		—			18,454,784
Forian Restricted Stock Vesting from MOR unvested restricted stock						671,641		671		9,987		—			10,658
Issuance of common stock warrants						—		—		389,976		—			389,976
Forian shares issued upon exercise of MOR Class B options						10,167		10		292,820		—			292,830
Stock based compensation expense						—		—		6,235,021		—			6,235,021
Issuance of Forian common stock						1,191,743		1,192		11,967,460		—			11,968,652
Issuance of Forian common stock upon exercise of stock options						18,110		19		48,551		—			48,570
Net loss												(18,502,315	)		(18,502,315	)
Balance at September 30, 2021		—	$	—		31,533,083		31,533		54,905,098		(24,771,340	)		30,165,291

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

5

FORIAN INC.

(formerly known as MEDICAL OUTCOMES RESEARCH ANALYTICS, LLC)

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (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 (Deficit)
Balance at January 1, 2020		$	—		7,713,528	$	7,713	$	1,000,098	$	(1,288,842	)	$	(281,031	)
Issuance of MOR Series S Units in March 2020					5,316,284		5,316		3,310,384					3,315,700
Conversion of Promissory Notes for MOR Series S Units in March 2020					295,501		296		184,004					184,300
Vested MOR Class B Profit Interest Units					1,281,172		1,281		19,050					20,331
Net loss											(2,628,690	)		(2,628,690	)
Balance at September 30, 2020	—	$	—		14,606,485	$	14,606	$	4,513,536	$	(3,917,532	)	$	610,610

	Preferred Stock			Common Stock						Accumulated
	Shares	Par Value @$0.001 per share		Shares		Par Value @ $0.001 per share		Additional Paid In Capital		Other Comprehensive Loss			Accumulated Deficit			Stockholders' Equity
Balance at July 1, 2021		$	—		31,198,721	$	31,199	$	52,264,976	$	145,250		$	(17,894,868	)	$	34,546,557
Forian Restricted Stock Vesting from MOR unvested restricted stock					328,518		328		4,885								5,213
Stock based compensation expense									2,622,293								2,622,293
Issuance of Forian common stock upon exercise of stock options					5,844		6		12,944								12,950
Foreign currency translation											(145,250	)					(145,250	)
Net loss														(6,876,472	)		(6,876,472	)
Balance at September 30, 2021	—	$	—		31,533,083	$	31,533	$	54,905,098	$	—		$	(24,771,340	)	$	30,165,291

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

6

FORIAN INC.

(formerly known as MEDICAL OUTCOMES RESEARCH ANALYTICS, LLC)

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (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 July 1, 2020			$	—		14,066,991	$	14,067	$	4,505,514	$	(2,755,617	)	$	1,763,964
Vested MOR Class B Profit Interest Units						539,494		539		8,022					8,561
Net loss												(1,161,915	)		(1,161,915	)
Balance at September 30, 2020		—	$	—		14,606,485	$	14,606	$	4,513,536	$	(3,917,532	)	$	610,610

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

7

FORIAN INC.

(Formerly known as MEDICAL OUTCOMES RESEARCH ANALYTICS, LLC)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

	For the Nine Months Ended September 30,
	2021			2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(18,502,315	)	$	(2,628,690	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		1,381,637			4,932
Amortization on right of use asset		166,489			—
Amortization of debt issuance costs		444			—
Accrued interest on Convertible Notes		70,000			—
Realized and unrealized gain on marketable securities		(3,295	)		(5,669	)
Provision for doubtful accounts		89,130			—
Stock-based compensation expense		6,245,679			20,331
Change in fair value of warrant liability		(746,605	)		—
Non-cash transaction expenses		389,976			—
Change in operating assets and liabilities:
Accounts receivable		(1,757,660	)		—
Contract assets		(147,651	)		—
Prepaid expenses		(576,836	)		(249,823	)
Changes in lease liabilities during the period		(186,383	)		—
Deposits and other assets		(120,732	)		—
Accounts payable		(234,152	)		503,026
Accrued expense		539,608			—
Deferred revenues		202,337			—
Net cash used in operating activities		(13,190,329	)		(2,355,893	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment		(640,080	)		(34,206	)
Purchase of marketable securities		(24,903,107	)		(2,888,648	)
Sale of marketable securities		24,009,003			3,044,084
Cash acquired as part of business combination		1,310,977			—
Net cash (used in) provided by investing activities		(223,207	)		121,230
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of MOR Series S units		—			3,315,700
Proceeds from exercise of MOR Class B options		292,830			—
Payments on notes payable and financing arrangements		(5,551	)		—
Proceeds from exercise of common stock options		48,570			—
Proceeds from sale of common stock		11,968,652			—
Proceeds from the issuance of convertible notes payable		23,978,670			—
Net cash provided by financing activities		36,283,171			3,315,700
Net change in cash		22,869,635			1,081,037
Cash and cash equivalents, beginning of period		665,463			494
Cash and cash equivalents, end of period	$	23,535,098		$	1,081,531

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

8

FORIAN INC.

(Formerly known as MEDICAL OUTCOMES RESEARCH ANALYTICS, LLC)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Supplemental disclosure of cash flow information:
Cash paid for interest	$	724	$	—
Cash paid for taxes	$	—	$	—
Non-cash Investing and Financing Activities:
Conversion of promissory notes to Series S units	$	—	$	184,300
Non-cash consideration for Helix acquisition	$	18,454,784	$	—

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

9

FORIAN INC.

(Formerly known as MEDICAL OUTCOMES RESEARCH ANALYTICS, LLC)

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 Medical Outcomes Research Analytics, LLC (“MOR”) for the purpose of effecting the Business Combination (as defined below). All activity of the Company through March 2, 2021 relates only to MOR. MOR was established on May 6, 2019 in Delaware. MOR Analytics, LLC and COR Analytics, LLC are wholly owned subsidiaries of MOR. The Company provides innovative software solutions, proprietary data and predictive analytics to optimize the operational, clinical and financial performance of its customers within the healthcare and cannabis industries. The Company’s mission is to provide its customers with the best-in-class critical technology services through a single integrated platform that enables its customers to operate their businesses more safely, efficiently and profitably and to serve its customers and its customers’ stakeholders and constituencies more comprehensively. The Company represents the unique convergence of proprietary healthcare and consumer data, innovative data management capabilities and intelligent data science with a leading cannabis technology platform yielding the combined power to drive innovation and transparency across the industries it serves.

On March 2, 2021 (the “Merger Closing Date”), pursuant to the Agreement and Plan of Merger, dated as of October 16, 2020, as amended by Amendment to Agreement and Plan of Merger, dated as of December 30, 2020, as further amended by Amendment No. 2 to Agreement and Plan of Merger, dated February 9, 2021 (together, the “Merger Agreement”), by and among Helix Technologies, Inc. (“Helix”), the Company and DNA Merger Sub, Inc., a wholly owned subsidiary of the Company (“Merger Sub”), Merger Sub merged with and into Helix, with Helix being the surviving corporation as a wholly owned subsidiary of the Company (the “Merger”). Each share of Helix common stock was exchanged for 0.05 shares of Company common stock in the Merger. Helix provides traceability and point of sale technology, analytics solutions and other products to customers within each vertical of the cannabis industry to help them improve the performance of their business.

Immediately prior to the Merger Closing Date, pursuant to the Equity Interest Contribution Agreement, dated March 2, 2021 (the “Contribution Agreement”), by and among the Company, MOR and each equity holder of MOR, such equity holders contributed their interests in MOR to the Company in exchange for shares of Company common stock (the “Contribution” and, together with the Merger, the “Business Combination”). Upon the closing of the Contribution, MOR became a wholly owned subsidiary of the Company. Each unit of MOR was exchanged for 1.7776 shares of Company common stock in the Merger, subject to adjustments pursuant to the Contribution Agreement.

Pursuant to the Merger Agreement, while the Company is the legal acquirer, the Merger was accounted for as a reverse acquisition using the acquisition method of accounting in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations (“ASC 805”). As such, MOR is deemed to be the accounting acquirer for financial reporting purposes.

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 consolidated financial statements of the Company as of September 30, 2021. 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, 2020, as filed with the Securities and Exchange Commission (“SEC”) on March 31, 2021.

10

The Contribution was completed on March 2, 2021 and the combination of MOR and Forian was accounted for as a transaction between entities under common control pursuant to ASC 805-50. Accordingly, the combination of Forian and MOR results in a change in reporting entity and the financial statements are presented as though the combination of Forian and MOR occurred as of the beginning of the periods presented. Additionally, the results of Helix are included in the accompanying condensed consolidated financial statements beginning on March 2, 2021, the Merger Closing Date.

Note 3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The condensed consolidated financial statements of the Company include the accounts of (i) Medical Outcomes Research Analytics, LLC and its wholly owned subsidiaries COR Analytics, LLC and MOR Analytics, LLC, and (ii) Helix Technologies, Inc. and its wholly owned subsidiaries Helix TCS, LLC, Security Consultants Group, LLC, Boss Security Solutions, LLC, Security Grade Protective Services, Ltd., Bio-Tech Medical Software, Inc, BT UCS, Inc., Engeni LLC (including Engeni S.A. (“Engeni SA”), which is 99% owned by Engeni LLC), Green Tree International, Inc. and AIE Exchange Canada, Inc. Effective October 7, 2021, AIE Exchange Canada, Inc. was voluntarily dissolved. All intercompany transactions have been eliminated in consolidation. The financial results of Helix and its subsidiaries are included in the condensed consolidated financial statements beginning on March 2, 2021, the Merger Closing Date.

Foreign Currency

ASC Topic 830-10, Foreign Currency Matters (“ASC 830-10”), requires the use of highly inflationary accounting when a country has experienced a cumulative inflation of approximately 100% or more over a 3-year period. Under highly inflationary accounting, financial statements are remeasured into the reporting currency with resulting gains and losses included in earnings. The Company acquired a subsidiary as part of the Helix acquisition that operates in Argentina, which has been designated a highly inflationary economy. Accordingly, the Company has remeasured the financial statements of the subsidiary under ASC 830-10 as if the US dollar is its functional currency with resulting gains or losses as other income or expense. During the period from March 2, 2021 through September 30, 2021, sales in Argentina represented less than 2% of the Company’s consolidated sales. Assets held in Argentina as of September 30, 2021 represented less than 1% of the Company’s consolidated assets. While the hyperinflationary conditions did not have a material impact on the Company’s business during the period from March 2, 2021 through September 30, 2021, in the future, we may incur larger currency devaluations.

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 related notes to the financial statements. 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 and Corrections

Certain reclassifications have been made to the prior period financial statements to conform to the current period financial statement presentation. The Company previously reported foreign currency related gains and losses related to Engeni SA, which was acquired as part of the acquisition of Helix, as part of other comprehensive income (loss) in the condensed consolidated financial statements for the three-month periods ended March 31, 2021 and June 30, 2021. The foreign currency gain of $298,170 for the three and nine-month periods ended September 30, 2021 includes $145,250 that was previously reported as other comprehensive income (loss). The Company assessed the impact of this correction and determined it was not material to the current or prior reporting periods. Please refer to Foreign Currency policy above.

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:

11

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. The portion of deposits in excess of FDIC coverage is not protected by such insurance and represents a credit risk to the Company. At times, the Company’s deposits exceed this coverage.

Accounts Receivable and Allowance for Doubtful Accounts

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

Outstanding account balances are reviewed individually for collectability. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. Allowance for doubtful accounts was $256,767 and $0 at September 30, 2021 and December 31, 2020, respectively.

Management charges account balances against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.

Long-Lived Assets, Including Definite Lived Intangible Assets

Long-lived assets, other than goodwill and other indefinite-lived intangibles, are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable through the estimated undiscounted future cash flows derived from such assets. Definite-lived intangible assets primarily consist of customer relationships, software technology and trade names. For long-lived assets used in operations, impairment losses are only recorded if the asset’s carrying amount is not recoverable through its undiscounted, probability-weighted future cash flows. The Company measures the impairment loss based on the difference between the carrying amount and the estimated fair value. When an impairment exists, the related assets are written down to fair value.

12

Goodwill

Goodwill, which represents the excess of purchase price over the fair value of net assets acquired, is carried at cost. Goodwill is not amortized; rather, it is subject to a periodic assessment for impairment by applying a fair value-based test. The Company reviews goodwill for possible impairment annually during the fourth quarter, or whenever events or circumstances indicate that the carrying amount may not be recoverable.

The impairment model prescribes a two-step method for determining goodwill impairment. However, an entity is permitted to first assess qualitative factors to determine whether the two-step goodwill impairment test is necessary.

The qualitative factors considered by Forian may include, but are not limited to, general economic conditions, the Company’s outlook, market performance of the Company’s industry and recent and forecasted financial performance. Further testing is only required if the entity determines, based on the qualitative assessment, that it is more likely than not that a reporting unit’s fair value is less than its carrying amount. Otherwise, no further impairment testing is required. In the first step, the Company determines the fair value of its reporting unit using a discounted cash flow analysis. If the net book value of the reporting unit exceeds its fair value, the Company then performs the second step of the impairment test, which requires allocation of the reporting unit’s fair value to all of its assets and liabilities using the acquisition method prescribed under authoritative guidance for business combinations with any residual fair value being allocated to goodwill. An impairment charge is recognized when the implied fair value of the Company’s goodwill is less than its carrying amount. No impairment losses have been recognized during the periods presented.

Business Combinations

The Company accounts for its business combinations under the provisions of ASC Topic 805-10, which requires that the purchase 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. ASC 805-10 also specifies criteria that intangible assets acquired in a business combination must meet to be recognized and reported apart from goodwill. Goodwill represents the excess purchase price over the fair value of the tangible net assets and intangible assets acquired in a business combination. Acquisition-related expenses are recognized separately from the business combinations and are expensed as incurred. If the business combination provides for contingent consideration, the Company records the contingent consideration at fair value at the acquisition date and any changes in fair value after the acquisition date are accounted for as measurement-period adjustments. Changes in fair value of contingent consideration resulting from events after the acquisition date, such as earn-outs, are recognized as follows: (i) if the contingent consideration is classified as equity, the contingent consideration is not re-measured and its subsequent settlement is accounted for within equity; or (ii) if the contingent consideration is classified as a liability, the changes in fair value are recognized in earnings.

Revenue Recognition

The Company recognizes revenue in accordance with Financial Accounting Standards Board (“FASB”) Topic 606, - Revenue from Contracts with Customers (“ASC 606”).

Under ASC 606, the Company recognizes revenue when the customer obtains 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. ASC 606-10-32-32 requires the determination of the price at which the Company would sell individual products or services to a customer. The Company does not always have sufficient data or experience related to the terms and pricing for products and services when components are sold on a standalone basis. In instances where insufficient data exists, the Company recognizes the contractual fees ratably over the term of the arrangement. In instances where a customer has limited operating history or the customer has recently been formed, management may determine that it is prudent to recognize only the first year’s fees ratably over the first year of the term or as amounts are billed and collectability is assured. Performance obligations that are distinct and remain undelivered would not be recognized until the end of the contract provided that the consideration is guaranteed. No significant judgements affect the determination of the amount and timing of revenue.

The Company generates revenue from three categories of product offerings: Information and Software, Services and Other.

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In 2020, the revenue generated by the Company was exclusively from Information and Software relating to MOR. In 2021, the Company also began to recognize Information and Software, Services and Other revenues related to its acquisition of Helix on March 2, 2021.

In most Information and Software contracts, payments are scheduled throughout the term and the contract may include one or more of the following performance obligations: (i) the provision of historical and/or current information as agreed upon, (ii) access to the information through a hosting provider, (iii) access to and use of software products, (iv) installation and training and (v) access to the Company’s analytical team throughout the term of the agreement, as agreed upon.

Information and Software contracts do not always have distinct pricing assigned to each performance obligation; rather, the price is bundled and the total bundled pricing is invoiced throughout the term of the agreement, with the exception of contracts for software products which provide separate pricing for implementation and training of such products.

The Company recognizes revenue resulting from Information and Software pursuant to agreements under which the Company receives payments for providing the customer access to its products over the contract period. The Company satisfies its performance obligations throughout the term of the contract. Any payments received prior to satisfying performance obligations are deferred and recognized as the performance obligations are satisfied. There are no variable considerations or financing component under such contracts. Prices are typically fixed, but certain contracts can also include royalties in excess of fixed fees. There were $62,500 of royalties in excess of fixed fees for the nine months ended September 30, 2021. Invoicing under contracts is set forth in an invoicing schedule as part of the contract and payments are typically due within 30 days.

Services revenues are primarily from contracts with government agencies and revenue is recognized upon completion of the various milestones within the contract. In the event that a contract does not specifically allocate revenue to the satisfaction of specific performance obligations or milestones, the purchase price of the contracts is allocated based on the percentage of time spent, or expected to be spent, to meet each performance obligation. Initial customization of the software to meet state specific requirements and the training to appropriately utilize the software are generally recognized upon completion of the customization and acceptance by the state agency. Support and service revenues are then recognized over a predetermined period of time as defined in the contract. Contract renewals may include an annual service fee that is recognized over the time period defined in the contract.

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Other revenues are primarily from security monitoring services offerings and the provision of web marketing services. Contracts for these services have a stated transaction price for monthly services and are recognized as the services are provided.

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. $45,714 and $53,784 of such costs were capitalized as of September 30, 2021 and December 31, 2020, respectively. There are no significant judgements affecting the determination of the amount and timing of the related revenue.

In the event the Company has not satisfied all performance obligations on its contracts with customers, any amounts of unbilled revenue or excess costs are recorded as contract assets and contract liabilities.

Contract assets result when the cumulative revenue recognized exceeds the cumulative invoicing under a contract. The value of the differential is reflected in Contract assets and represents the value of the revenue that was not billed to customers as of the balance sheet date.

Contract liabilities (“Deferred Revenue”) result when cumulative receipts under a contract for the same performance obligation exceeds the total revenue recognition and such excess is reflected in Deferred Revenue and represents the value of the performance obligations to be satisfied after September 30, 2021.

Contract assets and deferred revenues consist of the following as of September 30, 2021:

	Contract Assets									Contract Liability
	Costs of Obtaining Contracts			Unbilled Revenue			Total			Deferred Revenue
Balance at January 1, 2021	$	53,784		$	142,917		$	196,701		$	158,884
Acquired from Helix		—			20,128			20,128			320,936
Acquired balances recognized during period		—			(20,128	)		(20,128	)		(305,340	)
Beginning deferred revenue balance recognized during the period		—			—			—			(158,884	)
Net change due to timing of billings, payments and recognition		(8,070	)		175,849			167,779			666,561
Balance at September 30, 2021	$	45,714		$	318,766		$	364,480		$	682,157

Segment Information

ASC 280, Segment Reporting (“ASC 280”), establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker is the chief executive officer, who reviews the financial performance and the results of operations of the segments prepared in accordance with U.S. GAAP when making decisions about allocating resources and assessing performance of the Company.

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Customer Concentration

The Company did not have any customers that exceeded 10% of total revenue for the three and nine months ended September 30, 2021. The Company had a single customer that accounted for 84% and 90% of total revenue for the three and nine months ended September 30, 2020, respectively.

Concentration of Vendors

The Company licenses certain information assets from third parties as a key input to certain Information and Software Products. While information licensing fees represented less than 10% of the Company’s operating expenses for the three and nine months ended September 30, 2021, respectively, and for the three and nine months ended September 30, 2020, respectively, any disruption associated with these suppliers could have a material short-term impact on the business while alternate sources are secured.

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.

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. An impairment loss would be recognized when the present value of 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 and nine months ended September 30, 2021 and 2020, respectively.

Software Development Costs

The Company accounts for costs incurred in the development of computer software in accordance with ASC Subtopic 350-40, Intangibles – Goodwill and Other – Internal-Use Software. Costs incurred in the application development stage are subject to capitalization and subsequent amortization and possible impairment. Product development costs are primarily personnel related to activities for design and evaluating software development, testing, bug fixes, and other maintenance activities. Product development costs are expensed as incurred. The Company capitalized software development costs of $561,553 and $0 as of September 30, 2021 and December 31, 2020, respectively.

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.

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Advertising

Advertising costs are expensed as incurred and included in sales and marketing expenses and amounted to $18,011 and $39,009 for the three and nine months ended September 30, 2021, respectively, and $0 and $0 for the three and nine months ended September 30, 2020, respectively.

Net Loss per Share

Net loss per share of common stock is computed by dividing net loss by the weighted average number of common shares outstanding during the period. At September 30, 2021, the Company had potentially dilutive securities that could be exercised or converted into common stock. Refer to Note 14 for the Company’s disclosure on such potential dilution. Further, as the Company has incurred net losses for the three and nine months ended September 30, 2021 and 2020, respectively, 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, or cash received.

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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 are authorized and reserved for issuance under the 2020 Plan. 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, net of forfeitures, which are recorded as they occur.

Income Taxes

MOR was organized as a limited liability company and became a wholly owned subsidiary of the Company upon completion of the Merger with Helix on March 2, 2021. As a result, the Company was treated as a partnership for federal and state income tax purposes through March 2, 2021. Accordingly, the Company’s taxable income, deductions, assets and liabilities are reported by the members on their respective income tax returns. Therefore, no provision for federal or state income tax has been made by the Company for all business activity from its inception through March 2, 2021.

After March 2, 2021, the Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which 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 Company has an incurred net operating loss for financial-reporting and tax-reporting purposes. Accordingly, for federal and state income tax purposes, the benefit for income taxes has been offset entirely by a valuation allowance against the related federal and state deferred tax asset for the period since March 2, 2021.

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.

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Recent Accounting Pronouncements

In August 2020, the FASB issued ASU No. 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”). The update removes separation models for (i) convertible debt with a cash conversion feature and (ii) convertible instruments with a beneficial conversion feature. Under ASU 2020-06, these features will be combined with the host contract. ASU 2020-06 does not impact the accounting treatment for conversion features that are accounted for as a derivative under Topic 815. The update also requires the application of the if-converted method to be used for convertible instruments and the effect of potential share settlement be included in the diluted earnings per share calculation when an instrument may be settled in cash or shares. The amendments in this update are effective for public business entities for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. The amendment is to be adopted through either a fully retrospective or modified retrospective method of transition, only at the beginning of an entity’s fiscal year. Early adoption is permitted. The Company has elected to early adopt the standard as of January 1, 2021 using the modified retrospective method of transition. The Company evaluated the terms of its debt and concluded that the instrument does not require separation and that there were no other derivatives that required separation. As a result, there is no equity component and the Company recorded the convertible note as a single liability within long-term debt on its condensed consolidated balance sheet. The Company applies the if-converted method for calculation of diluted earnings per share for its convertible debt instruments.

In October 2021, the FASB issued Accounting Standards Update No. 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”). The FASB issued ASU 2021-08 to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to recognition of an acquired contract liability and payment terms and their effect on subsequent revenue recognized by the acquirer. The Company is evaluating the potential impact of ASU 2021-08 on its financial statements and related disclosures.

The Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its financial statements.

Note 4 BUSINESS COMBINATION

On March 2, 2021, pursuant to the Merger and the Merger Agreement, Forian acquired 100% of the issued and outstanding capital stock, options and warrants of Helix.

The total purchase consideration for the Merger was $18,454,784. The purchase consideration is equal to the product of (i) the total outstanding Helix common shares and common share equivalents for in-the-money warrants to purchase Helix common stock and vested stock options multiplied by the merger exchange ratio of 0.05 shares of Company common stock for 1 share of Helix common stock and (ii) $2.158 per share, which represented the fair value of Company common stock on the acquisition date.

The Merger was accounted for as a business combination in accordance with ASC 805. The Company has determined preliminary fair values of the assets acquired and liabilities assumed in the Merger. These values are subject to change as the Company completes its determination of the fair value of assets acquired and liabilities assumed.

The following table summarizes the preliminary purchase price allocations relating to the Merger:

Total purchase price	$	18,454,784
Assets acquired:
Cash		1,310,977
Accounts receivable, net		488,453
Prepaid expenses		215,064
Contract assets		20,128
Other assets		450,000
Property and equipment		146,559
Software Technology		5,279,000
Trade Names and Trademarks		386,000
Customer Relationships		5,243,000
Right of use assets		1,082,684
Deposits and other assets		58,950
Total assets acquired	$	14,680,815
Liabilities assumed:
Accounts payable and accrued liabilities	$	2,654,543
Short-term lease liabilities		295,364
Deferred revenues		320,936
Warrant liability		1,247,715
Notes payable and financing arrangements		20,801
Other long-term liabilities		812,044
Total liabilities assumed	$	5,351,403
Estimated fair value of net assets acquired:	$	9,329,412
Goodwill	$	9,125,372

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The Company adjusts provisional goodwill balance when new information is obtained regarding the valuation of acquired assets and liabilities during a one-year measurement period from the date of acquisition in accordance with ASC 805-10. During the three months ended September 30, 2021, the Company adjusted provisional goodwill by $424,460 based on new information obtained regarding certain contingent liabilities and other assets.

The preliminary estimates for useful lives of the identified intangibles are 8 years for Trade Names and Trademarks, 5 years for Customer Relationships and 2 and 7 years for Software Technology Intangibles with a weighted average useful life of 5.47 years.

Transaction costs incurred in connection with the Business Combination amounted to approximately $0 and $1,210,279 during the three and nine months ended September 30, 2021, respectively.

Unaudited Pro Forma Results

The following table represents the revenue, net loss and loss per share effect of the acquired company, as reported on a pro forma basis as if the acquisition occurred on January 1, 2020. These pro forma results are not necessarily indicative of the results that would have occurred if the acquisition had occurred on the first day of the periods presented, nor does the pro forma financial information purport to represent the results of operations for future periods.

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
Description	2021			2020			2021			2020
Revenues	$	4,961,755		$	3,062,557		$	13,139,257		$	9,135,273
Net loss		(6,876,472	)		(42,488,120	)		(21,265,019	)		(46,647,993	)
Net loss per share:
Basic and diluted-as pro forma (unaudited)	$	(0.22	)	$	(1.48	)	$	(0.69	)	$	(1.75	)

The pro forma financial information for all periods presented above has been calculated after adjusting the results of the Company and Helix to reflect the business combination accounting effects resulting from this acquisition, including the amortization expense from acquired intangible assets included in the pro forma financial information presented above. The Forian historical condensed consolidated financial statements have been adjusted in the pro forma combined financial statements to give effect to pro forma events that are directly attributable to the business combination and factually supportable. The pro forma financial information is for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of the periods presented.

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 Statement of Operations. The Company invests in short-term U.S. Treasuries and money market mutual funds. As of September 30, 2021 and 2020, the fair value of these investments approximated cost.

Note 6 PREPAID EXPENSES

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 September 30, 2021 and December 31, 2020, the Company’s balance sheet reflected other prepaid expenses of $912,879 and $120,979, respectively, primarily relating to various software licenses and insurance policies with durations ranging from 3 months to 1 year.

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Note 7
PROPERTY AND EQUIPMENT, NET

As of September 30, 2021 and December 31, 2020, property and equipment were comprised of the following:

	September 30, 2021			December 31, 2020
	Unaudited
Personal computing equipment	$	129,702		$	55,767
Furniture and equipment		117,343			—
Software development costs		561,553			—
Vehicles		25,876			—
Total		834,474			55,767
Less: Accumulated depreciation and amortization		(71,816	)		(9,409	)
Property and equipment, net	$	762,658		$	46,358

Depreciation and amortization expense for the three and nine months ended September 30, 2021 was $30,909 and $69,895, respectively, and for the three and nine months ended September 30, 2020 was $3,059 and $4,932, respectively.

Note 8 INTANGIBLE ASSETS, NET

The preliminary allocation of the purchase price for the acquisition was allocated based on information that is currently available. The Company's estimates and assumptions underlying the initial allocations is subject to the collection of information necessary to complete its allocations within the measurement period, which is up to one year from the acquisition date.

The following table summarizes the Company’s intangible assets as of September 30, 2021:

	Estimated Useful Life (Years)		Gross Carrying Amount at March 2, 2021		Accumulated Amortization			Net Book Value at 9/30/2021
Customer Relationships		5	$	5,243,000	$	(606,046	)	$	4,636,954
Software Technology		2		1,170,000		(338,105	)		831,895
Software Technology		7		4,109,000		(339,261	)	$	3,769,739
Tradenames and Trademarks		8		386,000		(27,886	)		358,114
			$	10,908,000	$	(1,311,298	)	$	9,596,702

The Company uses the straight-line method to determine the amortization expense for its definite lived intangible assets. Amortization expense related to the purchased intangible assets was $567,212 and 1,311,298 for the three and nine months ended September 30, 2021, respectively, and $0 for the three and nine months ended September 30, 2020.

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

Years Ending December 31,	Future amortization expense
2021 remaining	$	567,213
2022		2,268,850
2023		1,784,495
2024		1,683,850
2025		1,683,850
Thereafter		1,608,444
Total	$	9,596,702

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Note 9
ACCRUED EXPENSES

As of September 30, 2021 and December 31, 2020, accrued expenses were comprised of the following:

	September 30, 2021		December 31, 2020
Employee compensation		1,903,187		346,720
Accrued expenses		1,089,826		8,825
Transaction-related		—		125,196
Total	$	2,993,013	$	480,741

Transaction-related accrued expenses are associated with the Merger. See Note 4.

Note 10
WARRANT LIABILITY

In conjunction with the Merger, outstanding warrants to purchase Helix common stock were converted to warrants to purchase Company common stock. As the warrant holders have the option to receive cash in lieu of common stock in certain circumstances, the Company determined that the warrants require classification as a liability pursuant to ASC 815-40. In accordance with the applicable accounting guidance, the outstanding warrants are recognized as a warrant liability on the condensed consolidated balance sheet and are measured at their inception date fair value (the closing date of the Merger) and subsequently re-measured at each reporting period with changes being recorded in the condensed consolidated statement of operations. As of September 30, 2021, the Company had 97,058 warrants outstanding classified as liabilities.

The fair value of the Company’s warrant liability was calculated using the Black-Scholes model and the following assumptions:

	As of September 30, 2021
Fair value of company's common stock	$	10.32
Dividend yield		0	%
Expected volatility		80% - 145	%
Risk Free interest rate		0.05% - 0.58	%
Expected life (years)		2.07
Exercise price	$	8.00 - $28.00
Fair value of financial instruments - warrants	$	501,110

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The change in fair value of the financial instruments – warrants is as follows:

	Amount
Balance at January 1, 2021	$	—
Fair value of warrant liability assumed in connection with Helix Merger		1,247,715
Change in fair value of warrant liability		(746,605	)
Balance at September 30, 2021	$	501,110

	Amount
Balance at July 1, 2021	$	752,888
Change in fair value of warrant liability		(251,778	)
Balance at September 30, 2021	$	501,110

Note 11 CONVERTIBLE NOTES

	September 30, 2021			December 31, 2020
Principal outstanding	$	24,000,000		$	—
Add: accrued interest		70,000			—
Less: unamortized debt issuance costs		(20,886	)		—
Convertible note payable, net of debt issuance costs	$	24,049,114		$	—

On September 1, 2021, the Company entered into a Note Purchase Agreement with certain accredited investors and a director of the Company, pursuant to which the Company issued at 100% of par value $24,000,000 in aggregate principal balance of 3.5% Convertible Promissory Notes due September 1, 2025 (the “Notes”), convertible into (i) shares of Company common stock, and (ii) warrants to purchase shares of Company common stock equal to 20% of the principal amount of the Notes divided by the conversion price of the Notes (the “Warrants”). The Notes will mature on the fourth-year anniversary of the date of issuance, which time is also the termination date of the Warrants if issued. The conversion price of the Notes and the exercise price of the Warrants is $11.98 per share, which was the consolidated closing bid price of the Company common stock as reported by Nasdaq on August 31, 2021, the most recently completed trading day preceding the Company entering into the Note Purchase Agreement with investors with respect to the Notes. The holders of the Notes may, at any time, convert all or a portion of the Notes plus accrued interest (subject to a minimum principal amount of $100,000) at the conversion price. The Company may redeem all or a portion of any Notes then outstanding at any time after the first anniversary of issuance at a price of 112.5% of par value plus accrued interest. In the event of a change of control of the Company, the Company may redeem all Notes then outstanding at a price of 108% of par value plus accrued interest. Interest expense on the Notes is payable upon maturity or earlier redemption unless the Notes are converted prior to such time. In the event the holders of the Note convert all or a portion of the Notes, the related accrued interest is converted at the conversion price. Interest expense related to the Notes was $70,000 for the three and nine months ended September 30, 2021.

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 will be deferred and amortized over the term of the Notes. During the three months ended September 30, 2021, the Company recognized $444 in amortization of debt issuance costs.

Note 12 STOCK-BASED COMPENSATION

Restricted Stock Awards and Restricted Stock Units

Unvested equity interests of MOR were converted into restricted Company common stock based upon the exchange ratio of 1.7776 shares of Company common stock for each 1 MOR unit, subject to any adjustments required under the Contribution Agreement. The information regarding the 2020 Plan below is presented as though the combination occurred as of the beginning of the periods presented.

	Number of Restricted Shares and Units			Weighted Average Grant Date Fair Value Per Share
Unvested at January 1, 2020		1,237,396		$	0.62
Issued		2,191,869			1.21
Vested		1,729,589			0.72
Canceled		—			—
Unvested at December 31, 2020		1,699,676			1.28
Issued		444,000			11.76
Vested		671,642			0.03
Canceled		(50,000	)		12.18
Unvested at September 30, 2021		1,422,034		$	3.35

The 1,422,034 of unvested awards at September 30, 2021 consists of 444,000 restricted stock units and 1,028,034 shares of restricted stock.

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Stock Options

As part of the Merger (see Note 4), the Company assumed the Helix TCS, Inc. Omnibus Stock Incentive Plan and the Bio-Tech Medical Software, Inc. 2014 Stock Incentive Plan, each as amended, pursuant to which options exercisable at prices between $2.00 and $51.80 per share for 455,089 shares of Company common stock were outstanding. The value attributable to service subsequent to the Merger will be recognized as compensation cost by the Company.

The fair value of the stock options was estimated 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 at the inception date are as follows:

	September 30, 2021
Exercise Price	$	2.00 to $51.80
Fair value of Company common stock	$	9.39 to $22.90
Dividend yield		0	%
Expected volatility	118.0		%
Risk Free interest rate	0.9% to 1.0		%
Expected life (years) remaining	0 to 9.93

Stock option activity for the period ended September 30, 2021 is as follows:

	Shares Underlying Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)
Outstanding at January 1, 2021		—		$	—		—
Options assumed in Helix Merger		455,089		$	15.13		3.44
Granted		3,815,214		$	12.85		9.53
Exercised		(22,437	)	$	4.57		1.92
Forfeited and expired		(161,893	)	$	11.74		9.16
Outstanding at September 30, 2021		4,085,973		$	14.25		8.84
Vested options at September 30, 2021		455,089		$	15.13		3.44

Stock Compensation Expense

The grant date fair value per share for the stock options granted was $11.94 and $0.02 for the nine months ended September 30, 2021 and 2020, respectively.

At September 30, 2021, the total unrecognized stock compensation expense related to unvested stock option awards and restricted stock awards and restricted stock units granted was $42,992,330, which the Company expects to recognize over a weighted-average period of approximately 3.88 years. Stock compensation expense for the three and nine months ended September 30, 2021 and 2020 is as follows:

	Three Months Ended September 30,					Nine Months Ended September 30,
	2021			2020		2021		2020
Cost of revenue		14,823			—		19,479		—
Research and development		(131,774	)		2,868		6,215		8,666
Sales and marketing		108,477			1,476		315,140		3,505
General and administrative		2,635,980			4,217		5,904,845		8,160
Total		2,627,506			8,561		6,245,679		20,331

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Note 13
STOCKHOLDERS’ EQUITY

The Condensed Consolidated Statement of Stockholders’ Equity reflects the exchange of MOR Members Equity for Company common stock as of the beginning of the periods presented. See Note 2.

All of MOR’s Class A, Class B vested profit interests’ units, Series S, Series S-1, and vested Restricted Class B units were converted to Company common stock on March 2, 2021 based upon the exchange ratio of 1.7776 shares of Company common stock to 1 MOR member unit, subject to adjustment pursuant to the Contribution Agreement. Unvested Class B profit interest units, unvested restricted Class B units and options to acquire Restricted Class B Units were converted to unvested restricted Company common stock on March 2, 2021 based upon the exchange ratio of 1.7776 shares of Company common stock to 1 MOR member unit, subject to adjustment pursuant to the Contribution Agreement. The applicable vesting provisions of such MOR units carried over to the restricted Company common stock.

In December 2020, MOR completed a Series S-1 financing with cash proceeds of $13,000,000 in exchange for 3,388,947 Series S-1 preferred units.

In March 2020, MOR completed a Series S financing with cash proceeds of $3,300,000 and converted a promissory note of $184,300 in exchange for 3,078,276 Series S preferred units.

In 2019 and 2020, Class B profit interest units, restricted Class B units and options to acquire Class B units were issued to employees, consultants and advisors.

In March 2021, the Company issued warrants to purchase 17,031 shares of Company common stock at a per-share purchase price equal to $0.01. The warrants terminate after a period of 2 years from the issuance date. The warrants were issued in exchange for services provided with a fair value of $389,976 included in transaction related expenses for the nine months ended September 30, 2021.

On April 16, 2021, the Company raised proceeds of $11,968,652, net of transaction expenses of $31,348, resulting from the sale of 1,194,743 shares of Company common stock at an average purchase price equal to $10.21 per share to a select group of institutional and accredited investors. Investors included both unaffiliated investors as well as directors of the Company. Directors purchased 560,461 shares of common stock at a purchase price of $11.33 per share, which amount represented the consolidated closing bid price of Company common stock as reported by the Nasdaq on April 9, 2021, the last trading day prior to execution of the securities purchase agreement. Unaffiliated investors purchased 631,282 shares of Company common stock at a purchase price of $8.95 per share, which price was negotiated on April 9, 2021, and represents an approximately 15% discount to the preceding day’s volume weighted average price.

See Note 4 for additional details on shares issued pursuant to the Merger.

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Note 14 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 September 30,						For the Nine Months Ended September 30,
	2021			2020			2021			2020
Net loss attributable to common shareholders	$	(6,876,472	)	$	(1,161,915	)	$	(18,502,315	)	$	(2,628,690	)
Net loss per share attributable to common shareholders:
Basic	$	(0.22	)	$	(0.08	)	$	(0.64	)	$	(0.22	)
Diluted	$	(0.22	)	$	(0.08	)	$	(0.64	)	$	(0.22	)
Weighted average common shares outstanding:
Basic		31,332,735			14,208,049			28,814,825			12,038,534
Diluted		31,332,735			14,208,049			28,814,825			12,038,534

The following table sets forth the outstanding potentially dilutive securities that have been excluded in the calculation of diluted net loss per share because their inclusion would be anti-dilutive:

	For the Three and Nine Months ended September 30,
	2021		2020
Potentially dilutive securities:
Warrants		124,087		—
Stock options		4,085,973		—
Convertible notes		2,411,018		—
Unvested Restricted Stock Awards and Units		1,422,034		2,148,093
Total		8,043,112		2,148,093

Note 15 RELATED PARTY TRANSACTIONS

On May 6, 2019, MOR entered into an arrangement with family trusts controlled by Max Wygod and Martin Wygod, directors of MOR, to issue two separate promissory notes (“Promissory Note(s)”) entitling MOR to secure up to $100,000 per Promissory Note to fund operations. The Promissory Notes had no interest rate and were due on the sooner of the initial closing of MOR’s Series S Preferred Unit financing or December 31, 2020. In March 2020, in connection with MOR’s Series S Preferred Unit financing, the aggregate outstanding balance of the Promissory Notes of $184,300, was converted, at the option of the holders, into 295,501 shares of Company common stock.

Adam Dublin, Chief Strategy Officer, was previously a consultant for a current vendor of MOR. Mr. Dublin’s consultancy with the vendor ended on December 11, 2020 and the parties have not agreed to renew the agreement. Pursuant to Mr. Dublin’s consulting agreement with the vendor, Mr. Dublin received payments from the vendor for the three and nine months ended September 30, 2021 and 2020 of $107,125 and $303,274, and $66,040 and $310,315, respectively.

On April 16, 2021, the Company raised net proceeds of $11,968,652 resulting from the sale of Company common stock to a select group of institutional and accredited investors, which included directors of the Company. See Note 13 for additional information.

On September 1, 2021, the Company issued at 100% of par value $24,000,000 in aggregate principal balance of 3.5% Convertible Promissory Notes due 2025 convertible into (i) shares of Company common stock, and (ii) warrants to purchase shares of Company common stock equal to 20% of the principal amount of the Notes divided by the conversion price to a select group of institutional and accredited investors, which included a director of the Company who holds $6,000,000 of the Notes. See Note 11 for additional information.

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Note 16 COMMITMENTS AND CONTINGENCIES

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 one year to five years. The lease term represents the period up to the early termination date unless it is reasonably certain that the Company will not exercise the early termination option. Certain leases include rental payments that are adjusted periodically based on changes in consumer price and other indices.

Leases are classified as finance or operating in accordance with the guidance in ASC 842. The Company does not hold any finance leases.

The Company is obligated under operating lease agreements for office facilities in (i) Florida (two), (ii) Washington, (iii) Colorado and (iv) Argentina that expire in (i) December 2021 and 2024, (ii) December 2022, (iii) February 2026 and (iv) December 2021, respectively. The Company also has three short-term leases related to offices in Pennsylvania, Massachusetts and Virginia. These short-term leases are currently leased on a month-to-month basis. A short-term lease is a lease with a term of 12 months or less and does not include the option to purchase the underlying asset that we would expect to exercise. The Company has elected to adopt the short-term lease exemption in ASC 842 and as such have not recognized a “right of use” asset or lease liability for these three 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 for the nine months ended September 30, 2021 and 2020 were as follows:

	Nine Months Ended September 30,
	2021		2020
Cash used in operating leases	$	211,077	$	—
ROU assets obtained in exchange for lease obligations	$	166,489	$	—

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

	As of September 30, 2021			As of December 31, 2020
Right of use assets, net	$	916,195		$	—
Short-term operating lease liabilities	$	245,771		$	—
Long-term operating lease liabilities		675,254			—
Total lease liabilities	$	921,025		$	—
Weighted average remaining lease term (in years)		3.41			—
Weighted average discount rate		8.5	%		0.0	%

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The components of lease expense were as follows for each of the period presented:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Operating lease expense	$	81,936	$	—	$	191,182	$	—
Short-term lease expense	$	19,393	$	3,928	$	62,916	$	12,074
Total operating lease costs	$	101,329	$	3,928	$	254,098	$	12,074

Future lease payments included in the measurement of lease liabilities on the condensed consolidated balance sheet as of September 30, 2021, for the following five fiscal years and thereafter were as follows:

	As of September 30, 2021
2021 remaining	$	69,901
2022		308,470
2023		286,670
2024		291,161
2025		85,726
Thereafter		14,288
Total future minimum lease payments	$	1,056,216
Less imputed interest		(135,191	)
Total	$	921,025

Service Agreements

The Company entered into certain service 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 licenses as of September 30, 2021:

	September 30, 2021		December 31, 2020
	Unaudited
Year ending December 31, 2021	$	500,000	$	533,488
Year ending December 31, 2022		772,188		272,188
Year ending December 31, 2023		1,000,000		—
Year ending December 31, 2024		1,500,000		—
Year ending December 31, 2025		1,600,000		—
Thereafter		400,000		—
	$	5,772,188	$	805,676

From time to time the Company may be involved in claims that arise during the ordinary course of business. For any matters where management currently believes it is probable that the Company will incur a loss and that the probable loss or range of loss can be reasonably estimated, the Company records reserves in the consolidated financial statements based on its best estimates of such loss. In other instances, because of the uncertainties related to either the probable outcome or the amount or range of loss, management is unable to make a reasonable estimate of a liability, if any. Regardless of the outcome, litigation can be costly and time consuming, and it can divert management’s attention from important business matters and initiatives, negatively impacting the Company’s overall operations. Although the results of litigation and claims cannot be predicted with certainty, the Company does not currently have any pending litigation to which it is a party or to which its property is subject that we believe to be material, except for the below.

Legal Proceedings

Kenney, et al. v. Helix TCS, Inc.

On July 20, 2017, one former employee of Helix filed a lawsuit in the United States District Court for the District of Colorado alleging violations of the Fair Labor Standards Act on behalf of himself and other employees. The plaintiff seeks damages for Helix’s alleged failure to compensate employees appropriately for the overtime hours they worked as purported “non-exempt” employees. The matter has been conditionally certified as a collective action and the court has authorized the plaintiff to send notice and consent forms to putative class members. Notice and consent forms have been sent. The period for returning consent forms has ended. No decision has been made on the merits of the claim. The case is in the early stages of discovery. The Company will vigorously defend the claims in the lawsuit.

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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 Forian, claiming that he owned 10% of GTI. The Company believes the lawsuit is wholly without merit and will vigorously defend the claims in the lawsuit. The case is in the process of discovery. A hearing on motions for summary judgement is expected after January 17, 2022, with trial on an eight-week trial docket scheduled to begin on January 17, 2022.

Helix Stockholder Lawsuits

Beginning on February 16, 2021, four lawsuits were filed by purported Helix stockholders (captioned Dillion v. Helix Technologies, Inc., et al., No. 1:21-cv-01365 (filed February 16, 2021 in the United States District Court for the Southern District of New York) (the “Dillion Complaint”); Baros v. Helix Technologies, Inc., et al., No. 1:21-cv-01425 (filed February 17, 2021 in the United States District Court for the Southern District of New York) (the “Baros Complaint”); Anderson v. Helix Technologies, Inc., et al., No. 1:21-cv-00464 (filed February 17, 2021 in the United States District Court for the District of Colorado) (the “Anderson Complaint”); and Robinson v. Helix Technologies, Inc., et al., No. 1:21-cv-00484 (filed February 18, 2021 in the United States District Court for the District of Colorado) (the “Robinson Complaint” and, together with the Dillion Complaint, the Anderson Complaint and the Baros Complaint, the “Stockholder Complaints”)). The Stockholder Complaints were filed against (a) Helix and (b) the members of Helix’s board of directors (the “Individual Defendants”) and the Baros Complaint was also filed against Forian, MOR and Merger Sub. The Stockholder Complaints generally allege that the defendants violated Section 14(a) of the Exchange Act, by, among other things, failing to disclose material information in the Proxy Statement regarding the sales process, reconciliation of certain financial projections regarding Helix certain inputs underlying Management Planning, Inc.’s financial analysis, and potential conflicts of interest of involving Helix’s insiders. The Stockholder Complaints also allege the Individual Defendants (and the Baros Complaint alleges Forian, Merger Sub and MOR) violated Section 20(a) of the Exchange Act as controlling persons who had the ability to prevent the Proxy Statement from being materially false and misleading. The Stockholder Complaints seek, among other things, an injunction against the consummation of the transactions contemplated by the Merger Agreement and an award of costs and expenses, including a reasonable allowance for attorneys’ and experts’ fees. Despite seeking an injunction in the complaints, none of the plaintiffs followed up with a motion to enjoin the transactions. As of October 25, 2021, the four Stockholder Complaints have been dismissed and are no longer pending. Specifically, On March 11, 2021, the Robinson Complaint was voluntarily dismissed. On September 7, 2021, the Baros Complaint was voluntarily dismissed. On September 13, 2021, the Dillion Complaint was voluntarily dismissed. On October 25, 2021, the Anderson Complaint was voluntarily dismissed.

Nykiah Thomas v. Security Consultants Group, LLC d/b/a Helix TCS, Helix Technologies, Inc. and Shamson Sundra

On July 16, 2021, Nykiah Thomas, individually and on behalf of M’Seiya Thomas, a minor, filed a complaint in the District Court, City and County of Denver, Colorado, against Security Consultants Group, LLC d/b/a Helix TCS and Helix Technologies, Inc., subsidiaries of Forian, and Shamson Sundra, a former employee of Security Consultants Group, LLC, alleging negligence in the performance of security services in connection with a school shooting at STEM School Highlands Ranch that occurred on May 7, 2019. The case is in the early stages of discovery and the parties have agreed to voluntary mediation scheduled for December 13, 2021. Trial is scheduled to begin on August 8, 2022. The Company will vigorously defend the claims in the lawsuit.

Note 17
SEGMENT RESULTS

ASC 280-10-50 requires use of the “management approach” model for segment reporting. The management approach is based on the way a company’s management organized segments within the company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company.

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-making group is composed of the chief executive officer and the chief financial officer. The Company operates in three segments, Information & Software, Services and Other.

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Asset information by operating segment is not presented below since the chief operating decision maker does not review this information by segment. The reporting segments follow the same accounting policies used in the preparation of the Company’s unaudited condensed consolidated financial statements.

The following represents selected information for the Company’s reportable segments:

	Three months ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Information and Software
Revenue	$	4,489,177		$	159,504		$	9,661,826		$	334,921
Costs and expenses		7,661,631			1,007,777			17,813,947		$	2,177,550
Loss from operations		(3,172,454	)		(848,273	)		(8,152,121	)		(1,842,629	)
Total other income/(expense)		—			—			—			—
Net loss before income taxes		(3,172,454	)		(848,273	)		(8,152,121	)		(1,842,629	)
Services
Revenue	$	269,753		$	—		$	858,400		$	—
Costs and expenses		369,507			—			755,627			—
Loss from operations		(99,754	)		—			102,773			—
Total other income/(expense)		—			—			—			—
Net loss before income taxes		(99,754	)		—			102,773			—
Other
Revenue	$	202,825		$	—		$	610,123		$	—
Costs and expenses		228,014			—			698,001			—
Loss from operations		(25,189	)		—			(87,878	)		—
Total other income/(expense)		(275	)		—			(607	)		—
Net income before income taxes		(25,464	)		—			(88,485	)		—
Centrally Managed Costs
Revenue	$	—		$	—		$	—		$	—
Costs and expenses		4,051,504			313,731			11,313,140			791,857
Loss from operations		(4,051,504	)		(313,731	)		(11,313,140	)		(791,857	)
Total other income/(expense)		472,704			89			948,658			5,796
Net loss before income taxes		(3,578,800	)		(313,642	)		(10,364,482	)		(786,061	)
Totals
Revenue	$	4,961,755		$	159,504		$	11,130,349		$	334,921
Costs and expenses		12,310,656			1,321,508			30,580,715			2,969,407
Loss from operations		(7,348,901	)		(1,162,004	)		(19,450,366	)		(2,634,486	)
Total other income/(expense)		472,429			89			948,051			5,796
Net loss	$	(6,876,472	)	$	(1,161,915	)	$	(18,502,315	)	$	(2,628,690	)

Approximately 97% of revenues were attributable to customers in the United States for the three and nine months ended September 30, 2021. All of the Company’s revenues were attributable to customers in the United States for the three and nine months ended September 30, 2020.

Note 18
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.

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

Cautionary Statement for Forward-Looking Information

The following discussion of our financial condition and results of operations for the three and nine months ended September 30, 2021 and 2020, respectively, should be read in conjunction with our unaudited condensed consolidated financial statements and the notes to those statements that are included elsewhere in this report. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. 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 our Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the SEC on March 31, 2021. We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions to identify forward-looking statements.

Unless expressly indicated or the context requires otherwise, the terms “Forian”, the “Company”, “we”, “us”, and “our” refer to Forian Inc.

Overview

The Company was initially incorporated in Delaware on October 15, 2020 as a wholly owned subsidiary of Medical Outcomes Research Analytics, LLC (“MOR”), which was founded in Delaware on May 6, 2019, in connection with the Business Combination described below. On October 16, 2020, the Company entered into a definitive agreement with Helix Technologies, Inc. (“Helix”) and MOR, pursuant to which DNA Merger Sub, Inc., a wholly owned subsidiary of the Company (“Merger Sub”), merged with and into Helix, with Helix surviving the merger as a wholly owned subsidiary of the Company (the “Merger”). On March 2, 2021, the Company entered into a definitive agreement with the equity holders of MOR, pursuant to which the equity holders of MOR contributed their interests in MOR to the Company in exchange for shares of Company common stock (the “Contribution” and together with the Merger, the “Business Combination”). Following consummation of the Business Combination on March 2, 2021, the Company became the parent company of both Helix and MOR. Helix provides traceability and point of sale technology, analytics solutions and other products to customers within each vertical of the cannabis industry to help them improve the performance of their business.

The Company provides innovative software solutions, proprietary data and predictive analytics to optimize the operational and financial performance of our customers. Given the prior experience of our management team, our initial focus is on stakeholders within the healthcare and cannabis industries. However, we believe the application of our offerings across other verticals to enhance the transparency and efficacy of our customers’ relationships with their communities and customers is equally compelling.

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The Company represents the unique convergence of proprietary healthcare, consumer and cannabis data, SaaS analytics, innovative data management capabilities and intelligent data science with a leading cannabis technology platform yielding the combined power to drive innovation and transparency across the industries we serve. In MOR, there was early recognition of the opportunity to bring the sophistication of proven data science technology and analytics solutions to a prominent cannabis technology platform provider, creating innovation in both the applications that are key to supporting customer success within the cannabis industry and to the data science powered insights that drive healthcare and other mature regulated growth industries. In Helix, there was realization that the capability set of a technology solutions provider within more evolved sectors together with the track record of the MOR management team offered a unique opportunity to enhance the value that Helix brings to its cannabis customers and to the industry generally.

The Company’s mission is to provide our customers with the best-in-class critical technology services through a single integrated Forian platform that enables our customers within the healthcare and cannabis industries to operate their businesses more safely, efficiently and profitably and to serve our customers and our customers’ stakeholders and constituencies more comprehensively.

A novel strain of coronavirus (COVID-19) was first identified in December 2019, and subsequently declared a pandemic by the World Health Organization. Our business has largely operated in a work-from-home environment since the inception of the pandemic and, as a result, has experienced limited business disruption to date. Our management team continues to focus on the highest level of safety measures to protect our employees. We have not experienced a material impact to our financial results to date, however, COVID-19 continues to present significant uncertainty in the future economic outlook for our customers and the markets we serve.

Financial Operations Overview

The following discussion sets forth certain components of our statements of operations as well as factors that impact those items.

Revenues

Revenues are derived from Information and Software Products, Services and Other Products. Information and Software revenues are generated from licensing fees for our proprietary information and software products. The Company recognizes revenues from Information and Software products as performance obligations under customer contracts are satisfied. Services revenues are primarily from contracts with government agencies and revenue is recognized upon completion of the various milestones within the contract. Other revenues are primarily from security monitoring services offerings and the provision of web marketing services. Contracts for these services have a stated transaction price for monthly services and are recognized as the services are provided.

Cost of Revenues

Cost of revenue is generated from direct costs associated with the delivery of our products and services to our customers. The cost of revenue relates primarily to labor costs, hosting and infrastructure costs and client service team costs. We record the cost of direct fulfillment as cost of revenue. Infrastructure and licensed data costs, which are shared across all projects or groups of projects, are not charged to cost of revenue.

Research and Development

Research and development expenses consist primarily of employee-related expenses, subcontractor and third-party consulting fees, data fees, and hosted infrastructure costs. We continue to focus our research and development efforts on adding new features and applications to our product offerings. Once our prototypes are proven, we begin to capitalize costs that qualify with the associated development rather than recording those costs as research and development.

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Sales and Marketing

Sales and marketing expense is primarily salaries and related expenses, including commissions, for our 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 to invest in marketing and sales by expanding our selling and marketing staff, building brand awareness, attracting new clients and sponsoring additional marketing events. The timing of these marketing events will affect our marketing costs in any particular quarter.

General and Administrative Expenses

General and administrative expenses include salaries and 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 revenue, product and development or sales and marketing.

Depreciation and Amortization Expenses

Depreciation and Amortization relate to long lived assets used in our business. Depreciation expense relates primarily to furniture and equipment, computers and vehicles. Amortization expense relates primarily to identifiable intangibles of acquired companies.

Transaction Related Expenses

Transaction related expenses relate to the acquisition of Helix on March 2, 2021 and include professional, legal, accounting and finance advisory fees and other direct expenses.

Critical Accounting Policies and Use of Estimates

Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which we have prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). We believe that several accounting policies are important to understanding our historical and future performance. We refer to these policies as critical because these specific areas generally require us to make judgments and estimates about matters that are uncertain at the time we make the estimate, and different estimates – which also would have been reasonable – could have been used. On an ongoing basis, we evaluate our estimates and judgments, including those described in greater detail below. We base our estimates on historical experience and other market-specific or other relevant assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Critical accounting policies and estimates are further discussed in our Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the SEC on March 31, 2021.

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Results of Operations for the three and nine months ended September 30, 2021 and 2020

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

	For the Three Months Ended,						For the Nine Months Ended,
	September 30, 2021			September 30, 2020			September 30, 2021			September 30, 2020
Revenues	$	4,961,755			159,504		$	11,130,349		$	334,921
Costs and Expenses
Cost of Revenues		1,337,981			—			3,028,657			—
Research and development		2,612,184			658,824			6,059,948			1,474,215
Sales and marketing		1,088,203			40,217			2,864,213			151,261
General and administrative		6,673,723			514,280			16,035,981			1,143,365
Depreciation and amortization		598,565			3,059			1,381,637			4,932
Transaction related expenses		—			105,128			1,210,279			195,634
Loss from operations	$	(7,348,901	)	$	(1,162,004	)	$	(19,450,366	)	$	(2,634,486	)

Comparison of Three Months Ended September 30, 2021 and 2020

Revenues

Revenues for the three months ended September 30, 2021 were $4,961,755, which represented an increase of $4,802,251, compared to total revenue of $159,504 for the three months ended September 30, 2020. These revenues were primarily from Information and Software products. The increase is due to the inclusion of revenues from the Helix acquisition, which contributed 59% of the increase, and higher revenues from the Company’s Information products, which contributed 41% of the increase. Revenues from the Company’s Information products increased $1,986,699, or 1246%, compared to the three months ended September 30, 2020.

Cost of Revenues

Cost of revenues increased by $1,337,981 for the three months ended September 30, 2021, from $0 for the three months ended September 30, 2020. The increase related to direct costs related to the delivery of revenues. This increase was primarily from increased revenues of the Company’s Information and Software products. The increase is due to the inclusion of the Helix acquisition, which contributed 92% of the increase, and higher cost of revenues from the Company’s Information products, which contributed 8% of the increase.

Research and Development

Research and development expenses for the three months ended September 30, 2021 were $2,612,184, which represented an increase of $1,953,360 compared to total research and development expenses of $658,824 for the three months ended September 30, 2020. The increase is due to higher R&D expenses related to scaling the Company’s products, which contributed 92% of the increase, offset by 7% due to forfeitures of stock-based compensation awards, and the inclusion of the Helix acquisition, which contributed 15% of the increase.

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Sales and Marketing

Sales and marketing expenses for the three months ended September 30, 2021 were $1,088,203, which represented an increase of $1,047,986 compared to total sales and marketing expenses of $40,217 for the three months ended September 30, 2020. The increase is due to higher expenses related to scaling the Company’s products, which contributed 65% of the increase, stock-based compensation expenses related to equity awards granted to new Company employees after we became a public company on March 2, 2021, which contributed approximately 10% of the increase, and the inclusion of the Helix acquisition, which contributed 25% of the increase.

General and Administrative

General and administrative expenses for the three months ended September 30, 2021 were $6,673,723, which represented an increase of $6,159,443 compared to general and administrative expenses of $514,280 for the three months ended September 30, 2020. The increase is due to higher expenses related to scaling the Company’s management organization, which contributed 38% of the increase, stock-based compensation expenses related to equity awards granted to key Helix employees and new Company hires after we became a public company on March 2, 2021, which contributed approximately 43% of the increase, and the inclusion of the Helix acquisition which contributed 19% of the increase.

Transaction Related Expenses

Transaction related expenses for the three months ended September 30, 2021 were $0, which represented a decrease of $105,128 compared to transaction related expenses of $105,128 for the three months ended September 30, 2020. These expenses related to the acquisition of Helix, which was completed on March 2, 2021.

Comparison of Nine Months Ended September 30, 2021 and 2020

Revenues

Revenues for the nine months ended September 30, 2021 were $11,130,349, which represented an increase of $10,795,428 compared to total revenue of $334,921 for the nine months ended September 30, 2020. These revenues were primarily from Information and Software products. The increase is due to the inclusion of revenues from the Helix acquisition since March 2, 2021, which contributed 65% of the increase, and higher revenues from the Company’s products, which contributed 35% of the increase. Revenues from the Company’s Information products increased $3,780,749 or 1129% compared to the nine months ended September 30, 2020.

Cost of Revenues

Cost of revenues increased by $3,028,657 for the nine months ended September 30, 2021 from $0 for the nine months ended September 30, 2020. The increase related to direct costs related to the delivery of revenues. This increase was primarily from increased revenues of the Company’s Information and Software products. The increase is due to the inclusion of the Helix acquisition since March 2, 2021, which contributed 89% of the increase, and higher cost of revenues from the Company’s Information products, which contributed 11% of the increase.

Research and Development

Research and development expenses for the nine months ended September 30, 2021 were $6,059,948, which represented an increase of $4,585,733 compared to total research and development expenses of $1,474,215 for the nine months ended September 30, 2020. The increase is due to higher R&D expenses related to scaling the Company’s products, which contributed 87% of the increase, and the inclusion of the Helix acquisition since March 2, 2021, which contributed 13% of the increase.

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Sales and Marketing

Sales and marketing expenses for the nine months ended September 30, 2021 were $2,864,213, which represented an increase of $2,712,952 compared to total sales and marketing expenses of $151,261 for the nine months ended September 30, 2020. The increase is due to higher expenses related to scaling the Company’s products, which contributed 65% of the increase, stock-based compensation expenses related to equity awards granted to new Company employees after we became a public company on March 2, 2021, which contributed approximately 12% of the increase, and the inclusion of the Helix acquisition since March 2, 2021, which contributed 23% of the increase.

General and Administrative

General and administrative expenses for the nine months ended September 30, 2021 were $16,035,981, which represented an increase of $14,892,616 compared to general and administrative expenses of $1,143,365 for the nine months ended September 30, 2020. The increase is due to higher expenses related to scaling the Company’s management organization, which contributed 42% of the increase, stock-based compensation expenses related to equity awards granted to key Helix employees and new Company hires after we became a public company on March 2, 2021, which contributed approximately 40% of the increase, and the inclusion of the Helix acquisition since March 2, 2021, which contributed 18% of the increase.

Transaction Related Expenses

Transaction related expenses for the nine months ended September 30, 2021 were $1,210,279, which represented an increase of $1,014,645 compared to transaction related expenses of $195,634 for the nine months ended September 30, 2020. These expenses related to the acquisition of Helix, which was completed on March 2, 2021.

Non-GAAP Financial Measures

In this Quarterly Report on Form 10-Q we have provided a non-GAAP measure, 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”) presented on both a historical basis and a “pro forma” basis reflecting the acquisition of Helix as of the beginning of the periods presented. Adjusted EBITDA 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 contained in Management’s Discussion and Analysis of Financial Condition and Results of Operations.

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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, as more fully described below, we believe that providing Adjusted EBITDA, together with a reconciliation of net loss to 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.

The following is an explanation of the items excluded by us 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. We exclude depreciation and amortization expense from Adjusted EBITDA because we believe that (i) the amount of such expenses in any specific period may not directly correlate to the underlying performance of our 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, we believe 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. We believe that excluding the effect of stock-based compensation from Adjusted EBITDA assists management and investors in making period-to-period comparisons in our Company’s operating performance because (i) the amount of such expenses in any specific period may not directly correlate to the underlying performance of our 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. Additionally, we believe that excluding stock-based compensation from Adjusted EBITDA assists management and investors in making meaningful comparisons between our 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 Notes entered into on September 1, 2021 in the amount of $24,000,000. The Notes are due on September 1, 2025 and accrued interest at an annual rate of 3.5%. We exclude interest expense from Adjusted EBITDA (i) because it is not directly attributable to the performance of our 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.

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• Investment Income. Investment income is associated with the level of marketable debt securities and other interest-bearing accounts in which we invest. Interest and investment income can vary over time due to a variety of financing transactions, changes in interest rates, cash used to fund operations and capital expenditures and acquisitions that we have entered into or may enter into in the future. We exclude interest and investment income from Adjusted EBITDA (i) because these items are not directly attributable to the performance of our business operations and, accordingly, their exclusion assists management and investors in making period-to-period comparisons of operating performance and (ii) to assist management and investors in making comparisons to companies with different capital structures. Investors should note that interest income will recur in future periods.

• Foreign Currency Related Gains. Foreign currency related gains result from foreign currency transactions and translation gains and losses related to Engeni SA, a subsidiary of the Company acquired as part of the acquisition of Helix. We exclude foreign currency related gains from Adjusted EBITDA because these items are not directly attributable to the performance of our business operations and, accordingly, their exclusion assists management and investors in making period-to-period comparisons of operating performance. Investors should note that foreign currency related gains or losses are expected to recur in future periods.

• Other Items. We engage in other activities and transactions that can impact our net loss. In the periods being reported, these other items included (i) change in fair value of warrant liability which related to warrants assumed in the acquisition of Helix; (ii) transaction related expenses which consist of professional fees and other expenses incurred in connection with the acquisition of Helix; (iii) other income which consists of profits on marketable security investments; and (iv) loss on impairment of goodwill. We exclude these other items from Adjusted EBITDA because we believe these activities or transactions are not directly attributable to the performance of our 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.

• Income tax expense. MOR was organized as a limited liability company until the completion of the Helix acquisition. As a result, we were treated as a partnership for federal and state income tax purposes through March 2, 2021, and our taxable income and losses are reported by our members on their individual tax returns for such period. Therefore, we did not record any income tax expense or benefit through March 2, 2021. We expect to incur a net loss for financial reporting and income tax reporting purposes for this year. Accordingly, any benefit for federal and state income taxes benefit has been entirely offset by a valuation allowance against the related deferred tax net assets. We exclude the income tax expense from Adjusted EBITDA (i) because we believe that the income tax expense is not directly attributable to the underlying performance of our 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.

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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.

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. We encourage investors and others to review our financial information in its entirety, not to rely on any single financial measure to evaluate our business and to view our non-GAAP financial measures in conjunction with the most directly comparable U.S. GAAP financial measures.

The following tables reconciles the specific items excluded from U.S. GAAP metrics in the calculation of non-GAAP metrics for the periods shown below:

	Historical (Unaudited)						Historical (Unaudited)
	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Revenues:
Information and Software	$	4,489,177		$	159,504		$	9,661,826		$	334,921
Services		269,753		$	—			858,400			—
Other		202,825		$	—			610,123			—
Total revenues	$	4,961,755		$	159,504		$	11,130,349		$	334,921
Net loss	$	(6,876,472	)		(1,161,915	)	$	(18,502,315	)	$	(2,628,690	)
Depreciation & amortization		598,565			3,059			1,381,637			4,932
Stock based compensation expense		2,627,506			8,561			6,245,679			20,331
Change in fair value of warrant liability		(251,778	)		—			(746,605	)		—
Loss on impairment of goodwill		—			—			—			—
Transaction related expenses		—			105,128			1,210,279			195,634
Interest and investment income		(1,903	)		(89	)		(4,601	)		(5,796	)
Interest expense		79,422			—			101,325			—
Foreign currency related gains		(298,170	)		—			(298,170	)		—
Other income		—			—			—			—
Income tax expense		—			—			—			—
Adjusted EBITDA	$	(4,122,830	)		(1,045,256	)	$	(10,612,771	)	$	(2,413,589	)

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Three Months ended September 30, 2021 (Historical)

Adjusted EBITDA

Adjusted EBITDA for the three months ended September 30, 2021 was a loss of $4,122,830 compared to a loss of $1,045,256 for the three months ended September 30, 2020, an increase of $3,077,574. The increase is primarily due to investments in product development, customer service, infrastructure and human capital and the inclusion of the Helix acquisition since March 2, 2021.

Nine Months ended September 30, 2021 (Historical)

Adjusted EBITDA

Adjusted EBITDA for the nine months ended September 30, 2021 was a loss of $10,612,771 compared to a loss of $2,413,589 for the nine months ended September 30, 2020, an increase of $8,199,182. The increase is primarily due to investments in product development, customer service, infrastructure, and human capital and the inclusion of Helix.

	Pro Forma (Unaudited)						Pro Forma (Unaudited)
	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Revenues:
Information and Software	$	4,489,177		$	2,559,049		$	11,290,503		$	7,343,422
Services		269,753			330,000			1,092,089			981,455
Other		202,825			173,508			756,665			810,396
Total revenues	$	4,961,755		$	3,062,557		$	13,139,257		$	9,135,273
Net loss	$	(6,876,472	)	$	(42,488,120	)	$	(21,265,019	)	$	(46,647,993	)
Depreciation & amortization		598,565			585,371			1,802,865			1,770,219
Stock based compensation expense		2,627,506			563,599			6,408,622			1,635,203
Change in fair value of warrant liability		(251,778	)		(67,039	)		469,619			(682,717	)
Loss on impairment of goodwill		—			39,963,107			—			41,333,085
Transaction related expenses		—			199,697			2,096,054			375,507
Interest and investment income		(1,903	)		5,630			(4,601	)		(2,459	)
Interest expense		79,422			74,911			106,181			195,136
Foreign currency related gains		(298,170	)		—			(298,170	)		—
Other income		—			—			(55,006	)		—
Income tax expense		—			—			—			—
Adjusted EBITDA	$	(4,122,830	)	$	(1,162,844	)	$	(10,739,455	)	$	(2,024,019	)

Three Months ended September 30, 2021 (Pro Forma)

Revenues

Pro forma revenues for the three months ended September 30, 2021 were $4,961,755, which represented an increase of $1,899,198 compared to total revenue of $3,062,557 for the three months ended September 30, 2020. The increase was primarily due to growth in the number of customers utilizing the Company’s Information products.

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Adjusted EBITDA

Pro forma Adjusted EBITDA for the three months ended September 30, 2021 was a loss of $4,122,830 compared to a loss of $1,162,844 for the three months ended September 30, 2020, an increase of $2,959,986. The increase is primarily due to investments in product development, customer service, infrastructure and human capital.

Nine Months ended September 30, 2021 (Pro Forma)

Revenues

Pro forma revenues for the nine months ended September 30, 2021 were $13,139,257, which represented an increase of $4,003,984 compared to total revenue of $9,135,273 for the nine months ended September 30, 2020. The increase was primarily due to growth in the number of customers utilizing these products.

Adjusted EBITDA

Pro forma Adjusted EBITDA for the nine months ended September 30, 2021 was a loss of $10,739,455 compared to a loss of $2,024,019 for the nine months ended September 30, 2020, an increase of $8,715,436. The increase is primarily due to investments in product development, customer service, infrastructure and human capital.

Liquidity and Capital Resources

Since the Company’s inception in 2019, most of the Company’s resources have been devoted to scaling its research and development, sales and marketing, and management infrastructure. The Company’s operations have been financed primarily from the cash proceeds received from equity issuances. The Company expects to continue to fund its operations and future acquisitions through a combination of cash flow generated from operating activities, debt financing, and/or additional equity issuances. To date, the Company has generated limited revenues from the licensing of information products and the Company has incurred losses and generated negative cash flows from operations since inception. On September 1, 2021, the Company raised proceeds of $24 million through the sale of 3.5% convertible promissory notes maturing on September 1, 2025. As of September 30, 2021, the Company’s principal source of liquidity was aggregate cash and marketable securities of $35.9 million.

Cash Flows

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

	For the Nine Months Ended,
	September 30, 2021			September 30, 2020
Net cash used in operating activities	$	(13,190,329	)	$	(2,355,893	)
Net cash (used in) provided by investing activities		(223,207	)		121,230
Net cash provided by financing activities		36,283,171			3,315,700
Net increase in cash and cash equivalents	$	22,869,635		$	1,081,037

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Net Cash Used in Operating Activities

Net cash used in operating activities increased by $10,834,436 for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. The increase was primarily the result of scaling up the Company’s operations from the initial start-up phase.

Net Cash Used in Investing Activities

Net cash used in investing activities increased by $344,437 for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. This is the result of an increase in additions to property and equipment of $605,874, and an increase in the purchase of marketable securities of $22,014,459 offset by an increase in the sale of marketable securities of $20,964,919 and cash acquired of $1,310,977 as part of the Business Combination.

Net Cash Provided by Financing Activities

Net cash provided by financing activities increased by $32,967,471 for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. The increase was primarily related to the cash proceeds received from the Company’s equity issuance in April 2021 and the convertible notes issuance in September 2021.

Off Balance Sheet Arrangements

The Company does not have relationships with other organizations or process any transactions that would constitute off balance sheet arrangements.

Recent Accounting Pronouncements

In August 2020, the FASB issued ASU No. 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”). The update removes separation models for (i) convertible debt with a cash conversion feature and (ii) convertible instruments with a beneficial conversion feature. Under ASU 2020-06, these features will be combined with the host contract. ASU 2020-06 does not impact the accounting treatment for conversion features that are accounted for as a derivative under Topic 815. The update also requires the application of the if-converted method to be used for convertible instruments and the effect of potential share settlement be included in the diluted earnings per share calculation when an instrument may be settled in cash or shares. The amendments in this update are effective for public business entities for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. The amendment is to be adopted through either a fully retrospective or modified retrospective method of transition, only at the beginning of an entity’s fiscal year. Early adoption is permitted. The Company has  elected to early adopt the standard as of January 1, 2021 using the modified retrospective method of transition. The Company evaluated the terms of its debt and concluded that the instrument does not require separation and that there were no other derivatives that required separation. As a result, there is no equity component and the Company recorded the convertible note as a single liability within long-term debt on its condensed consolidated balance sheet. The Company applies the if-converted method for calculation of diluted earnings per share for its convertible debt instruments.

The Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its financial statements.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

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 our 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 our management, including our chief executive officer (who is also the Company’s principal executive officer), and our 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, we carried out an evaluation, under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, of the effectiveness of our disclosure controls and procedures as of September 30, 2021, which is the end of the three-month period covered by this Quarterly Report on Form 10-Q.

The Company identified material weaknesses in our 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, 2020, as filed with the SEC on March 31, 2021. Our chief executive officer and chief financial officer therefore concluded that our disclosure controls and procedures as of the fiscal quarter ended September 30, 2021 remain ineffective to the extent of the material weaknesses identified.

We are committed to remediating the control deficiencies that gave rise to the material weaknesses, certain of which were the result of the evaluation of MOR as the financial successor to Helix for the twelve-months ended December 31, 2021. Our management is responsible for implementing changes and improvements to internal control over financial reporting and for remediating the control deficiencies that gave rise to the material weaknesses we identified. With oversight from our Audit Committee, we have taken steps to remediate the internal control deficiencies and expect to implement further remediation actions during 2021 that we believe will improve our internal control over financial reporting. Certain improvements to our internal control over financial reporting occurred as a consequence of the Merger (e.g., additional finance resources and protocols employed by Helix), supplemented by the Company’s engagement of outside firms to assist the Company with additional accounting expertise and with the review of our internal controls framework for the Company’s compliance with the Sarbanes Oxley Act of 2002, as amended. Until the remediation actions are fully implemented and the operational effectiveness of related internal controls is validated through testing, the material weaknesses noted above will continue to exist.

Notwithstanding the identified material weaknesses, the Company’s management, including our chief executive officer and chief financial officer, has determined, based on the procedures we have performed, that the consolidated financial statements included in this Quarterly Report on Form 10-Q present fairly, in all material respects, our financial condition, results of operations and cash flows at September 30, 2021 and for the periods presented in accordance with U.S. GAAP.

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Changes in Internal Control Over Financial Reporting

Our remediation efforts for material weaknesses previously reported were ongoing during the three months ended September 30, 2021, as described in Item 9A of our 2020 Annual Report on Form 10-K for the fiscal year ended December 31, 2020, as filed with the SEC on March 31, 2021. There were no other material changes in our internal control over financial reporting that occurred during the nine months ended September 30, 2021 that materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

Part II — OTHER INFORMATION

Item 1. Legal Proceedings

From time to time we may be involved in claims that arise during the ordinary course of business. For any matters where management currently believes it is probable that the Company will incur a loss and that the probable loss or range of loss can be reasonably estimated, the Company records reserves in the consolidated financial statements based on its best estimates of such loss. In other instances, because of the uncertainties related to either the probable outcome or the amount or range of loss, management is unable to make a reasonable estimate of a liability, if any. Regardless of the outcome, litigation can be costly and time consuming, and it can divert management’s attention from important business matters and initiatives, negatively impacting our overall operations. Although the results of litigation and claims cannot be predicted with certainty, we do not currently have any pending litigation to which we are a party or to which our property is subject that we believe to be material, except for the below.

Kenney, et al. v. Helix TCS, Inc.

On July 20, 2017, one former employee of Helix filed a lawsuit in the United States District Court for the District of Colorado alleging violations of the Fair Labor Standards Act on behalf of himself and other employees. The plaintiff seeks damages for Helix’s alleged failure to compensate employees appropriately for the overtime hours they worked as purported “non-exempt” employees. The matter has been conditionally certified as a collective action and the court has authorized the plaintiff to send notice and consent forms to putative class members. Notice and consent forms have been sent. The period for returning consent forms has ended. No decision has been made on the merits of the claim. The case is in the early stages of discovery. The Company will vigorously defend the claims in the lawsuit.

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 Forian, claiming that he owned 10% of GTI. We believe the lawsuit is wholly without merit and will vigorously defend the claims in the lawsuit. The case is in the process of discovery. A hearing on motions for summary judgement is expected after January 17, 2022, with trial on an eight-week trial docket scheduled to begin on January 17, 2022.

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Helix Stockholder Lawsuits

Beginning on February 16, 2021, four lawsuits were filed by purported Helix stockholders (captioned Dillion v. Helix Technologies, Inc., et al., No. 1:21-cv-01365 (filed February 16, 2021 in the United States District Court for the Southern District of New York) (the “Dillion Complaint”); Baros v. Helix Technologies, Inc., et al., No. 1:21-cv-01425 (filed February 17, 2021 in the United States District Court for the Southern District of New York) (the “Baros Complaint”); Anderson v. Helix Technologies, Inc., et al., No. 1:21-cv-00464 (filed February 17, 2021 in the United States District Court for the District of Colorado) (the “Anderson Complaint”); and Robinson v. Helix Technologies, Inc., et al., No. 1:21-cv-00484 (filed February 18, 2021 in the United States District Court for the District of Colorado) (the “Robinson Complaint” and, together with the Dillion Complaint, the Anderson Complaint and the Baros Complaint, the “Stockholder Complaints”)). The Stockholder Complaints were filed against (a) Helix and (b) the members of Helix’s board of directors (the “Individual Defendants”) and the Baros Complaint was also filed against Forian, MOR and Merger Sub. The Stockholder Complaints generally allege that the defendants violated Section 14(a) of the Exchange Act, by, among other things, failing to disclose material information in the Proxy Statement regarding the sales process, reconciliation of certain financial projections regarding Helix certain inputs underlying Management Planning, Inc.’s financial analysis, and potential conflicts of interest of involving Helix’s insiders. The Stockholder Complaints also allege the Individual Defendants (and the Baros Complaint alleges Forian, Merger Sub and MOR) violated Section 20(a) of the Exchange Act as controlling persons who had the ability to prevent the Proxy Statement from being materially false and misleading. The Stockholder Complaints seek, among other things, an injunction against the consummation of the transactions contemplated by the Merger Agreement and an award of costs and expenses, including a reasonable allowance for attorneys’ and experts’ fees. Despite seeking an injunction in the complaints, none of the plaintiffs followed up with a motion to enjoin the transactions. As of October 25, 2021, the four Stockholder Complaints have been dismissed and are no longer pending. Specifically, On March 11, 2021, the Robinson Complaint was voluntarily dismissed. On September 7, 2021, the Baros Complaint was voluntarily dismissed. On September 13, 2021, the Dillion Complaint was voluntarily dismissed. On October 25, 2021, the Anderson Complaint was voluntarily dismissed.

Nykiah Thomas v. Security Consultants Group, LLC d/b/a Helix TCS, Helix Technologies, Inc. and Shamson Sundra

On July 16, 2021, Nykiah Thomas, individually and on behalf of M’Seiya Thomas, a minor, filed a complaint in the District Court, City and County of Denver, Colorado, against Security Consultants Group, LLC d/b/a Helix TCS and Helix Technologies, Inc., subsidiaries of Forian, and Shamson Sundra, a former employee of Security Consultants Group, LLC, alleging negligence in the performance of security services in connection with a school shooting at STEM School Highlands Ranch that occurred on May 7, 2019. The case is in the early stages of discovery and the parties have agreed to voluntary mediation scheduled for December 13, 2021. Trial is scheduled to begin on August 8, 2022. The Company will vigorously defend the claims in the lawsuit.

Item 1A. Risk Factors

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

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

See our Current Report on Form 8-K filed on September 2, 2021 for a description of our unregistered sale of convertible notes.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

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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).
10.1*	Form of Note Purchase Agreement, dated September 1, 2021, by and between the Registrant and each of the investors and the affiliate.
10.2+	Employment Agreement, dated as of September 2, 2021, by and between the Company and Michael Vesey (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the SEC on September 2).
10.3+	Transition and Release Agreement, dated as of September 2, 2021, by and between the Company and Clifford Farren (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, filed with the SEC on September 2).
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 pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Certification of 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.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.
101.CAL	Inline XBRL Taxonomy Calculation 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 herewith.

+ Indicates management contract or compensatory plan.

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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 November 15, 2021.

FORIAN INC.
By:	/s/ Daniel Barton
	Daniel Barton
	Chief Executive Officer
	(Principal Executive Officer)
By:	/s/ Michael Vesey
	Michael Vesey
	Chief Financial Officer
	(Principal Financial Officer and Principal Accounting Officer)

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EX-10.1

Exhibit 10.1

NOTE PURCHASE AGREEMENT

THIS NOTE PURCHASE AGREEMENT (this “Agreement”), dated as of September 1, 2021, is made by and among Forian Inc., a Delaware corporation (the “Company”), and each purchaser identified on the signature pages hereto (each, including its successors and permitted assigns, a “Purchaser” and collectively, the “Purchasers”).

BACKGROUND

A.         The Company and the Purchasers are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by Section 4(a)(2) of the Securities Act (as defined below) and Rule 506 of Regulation D as promulgated by the United States Securities and Exchange Commission (the “SEC”) under the Securities Act.

B.         Each Purchaser, severally and not jointly, desires to lend the Company, upon the terms and conditions stated in this Agreement, the amount set forth opposite such Purchaser’s name on the Schedule of Purchasers attached as Exhibit A to this Agreement (each, a “Loan Amount”) against the issuance and delivery by the Company of a convertible promissory note for such amount, in substantially the form attached hereto as Exhibit B to this Agreement (each, a “Note” and collectively, the “Notes”).

AGREEMENT

In consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Purchasers (severally and not jointly) agree as follows:

ARTICLE 1

DEFINITIONS

1.1         Definitions.  As used in this Agreement and the Notes, and unless the context requires a different meaning, the following terms have the meanings indicated:

“Agreement” has the meaning set forth in the preamble.

“Affiliate” means, with respect to any Person (as defined below), any other Person controlling, controlled by or under direct or indirect common control with such Person (for the purposes of this definition “control,” when used with respect to any specified Person, shall mean the power to direct the management and policies of such person, directly or indirectly, whether through ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” shall have meanings correlative to the foregoing).

“Board” means the Board of Directors of the Company.

“Business Day” means a day Monday through Friday on which banks are generally open for business in New York City.

“Bylaws” means the Bylaws of the Company, effective as of October 15, 2020.

“Certificate of Incorporation” means the Company’s Certificate of Incorporation, dated October 15, 2020.

“Change of Control” means: (i) the Company becomes aware (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) that any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), is or has become the “beneficial owner” (as such term is used in Rules 13d-3 and 13d-5 under the Exchange Act) of more than 50% of the Voting Stock of the Company; provided, however, that for purposes of this clause (i) such person or group shall be deemed to have “beneficial ownership” of all shares that any such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time, directly or indirectly; and provided, further, that a transaction will not be deemed to involve a Change of Control under this clause (i) if (a) the Company becomes a direct or indirect wholly owned subsidiary of a holding company and (b)(1) the direct or indirect holders of the Voting Stock of such holding company immediately following that transaction are substantially the same as the holders of the Voting Stock of the Company immediately prior to that transaction; or (2) immediately following that transaction, no “person” or “group” (other than a holding company satisfying the requirements of this sentence) is the beneficial owner, directly or indirectly, of more than 50% of the Voting Stock of such holding company; or (ii) the Company sells, conveys, transfers or leases (either in one transaction or a series of related transactions) all or substantially all assets of the Company and its Subsidiaries taken as a whole to, or merges or consolidates with, a Person (other than the Company or any of its Subsidiaries) where the shares of Common Stock outstanding immediately prior to such transaction constitute, or are converted into or exchanged for, a majority of the Voting Stock of the surviving person or parent entity thereof immediately after giving effect to such transaction.

“Closing” has the meaning set forth in Section 2.2.

“Closing Date” has the meaning set forth in Section 2.2.

“Common Stock” means the common stock, $0.001 par value per share, of the Company.

“Company” has the meaning set forth in the preamble.

“Company Party” has the meaning set forth in Section 6.7(b).

“Disclosure Materials” has the meaning set forth in Section 3.6.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Financial Statements” means the financial statements of the Company included in the SEC Documents.

“Governmental Authority” means any foreign, domestic, federal, territorial, state or local governmental authority, quasi-governmental authority, instrumentality, court, government or self-regulatory organization, commission, tribunal or organization or any regulatory, administrative or other agency, or any political or other subdivision, department or branch of any of the foregoing.

“Indemnifying Party” has the meaning set forth in Section 6.7(c)(i).

“Indemnified Party” has the meaning set forth in Section 6.7(c)(i).

“Investment Company Act” means the Investment Company Act of 1940, as amended.

“Losses” has the meaning set forth in Section 6.7(a).

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“Material Adverse Effect” means any material adverse effect on the business, prospects, management, properties, assets, operations, stockholders’ equity, results of operations or financial condition of the Company or on the transactions contemplated hereby, or on the authority or ability of the Company to perform its obligations under this Agreement; provided, however, that none of the following shall be deemed to constitute a Material Adverse Effect: (i) a change in the market price or trading volume of the Common Stock; (ii) any effect resulting from entering into this Agreement or the announcement of the transactions contemplated by this Agreement; (iii) changes in United States generally accepted accounting principles; (iv) changes in law, regulation or other binding directives or orders issued by any Governmental Authority so long as such changes do not have a materially disproportionate effect on the Company; or (v) changes in general economic conditions or changes affecting the industry in which the Company operates generally (as opposed to Company specific changes) so long as such changes do not have a materially disproportionate effect on the Company.

“Note” or “Notes” has the meaning set forth in the Recitals.

“Offering” means the private placement of the Notes contemplated by the Private Placement Memorandum and this Agreement.

“Person” means any person, individual, corporation, limited liability company, partnership, trust or other nongovernmental entity or any governmental agency, court, authority or other body (whether foreign, federal, state, local or otherwise).

“Principal Market” has the meaning set forth in Section 3.5(a).

“Private Placement Memorandum” means that certain Confidential Private Placement Memorandum, dated August 29, 2021, relating to the offering of the Notes by the Company.

“Purchasers” has the meaning set forth in the preamble.

“Purchaser Party” has the meaning set forth in Section 6.7(a).

The terms “register,” “registered” and “registration” refer to the registration effected by preparing and filing a registration statement in compliance with the Securities Act, and the declaration or ordering of the effectiveness of such registration statement.

“Registrable Securities” has the meaning set forth in Section 5.1.

“Registration Statement” has the meaning set forth in Section 5.1.

“Required Holders” means (1) prior to the Closing, the Purchasers entitled to purchase at least sixty percent (60%) of the then outstanding principal balance of the Notes issuable hereunder, and (2) after the Closing, the holders of at least sixty percent (60%) of the Registrable Securities, assuming conversion of all outstanding Notes and the exercise of all Warrants.

“Rule 144” means Rule 144 promulgated under the Securities Act, or any successor rule.

“SEC” has the meaning set forth in the Recitals.

“SEC Documents” has the meaning set forth in Section 3.6.

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“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute.

“Subsidiary” of the Company means any corporation, association, partnership or other business entity of which more than fifty percent (50%) of the total voting power of shares of capital stock or other interests (including partnership interests) entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers, general partners or trustees thereof is at the time owned or controlled, directly or indirectly, by (i) the Company; (ii) the Company and one or more of its Subsidiaries; or (iii) one or more Subsidiaries of the Company.

“Suspension Event” has the meaning set forth in Section 5.2.

“Third Party Proceedings” has the meaning set forth in Section 6.7(c)(ii).

“Voting Stock” of a Person means all classes of capital stock or other interests (including partnership interests) of such Person then outstanding and normally entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof.

“Warrants” means those certain warrants to purchase Common Stock issuable upon conversion of the Notes.

ARTICLE 2

PURCHASE AND SALE OF NOTES

2.1         Closing.  At the Closing, the Company shall deliver to each Purchaser an executed Note in the amount of such Purchaser’s Loan Amount, in each case against payment of the Loan Amount by wire transfer to a bank account designated by the Company and each Purchaser shall execute and delivery a counterpart signature page to this Agreement.

2.2        Closing Date.  The closing of the transactions contemplated by this Agreement (the “Closing”) will take place remotely via the electronic exchange of documents and signatures following the satisfaction or waiver of all conditions to Closing set forth in Article 7 on the date hereof (the “Closing Date”), or at such other time and place as shall be agreed upon by the Company and the Purchasers.

2.3        Closing Deliveries. At the Closing, the Company shall deliver to each Purchaser an executed Note in the amount of such Purchaser’s Loan Amount, in each case against payment of the Loan Amount by wire transfer to a bank account designated by the Company and each Purchaser shall execute and delivery a counterpart signature page to this Agreement.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company hereby represents and warrants to the Purchasers that:

3.1         Organization and Qualification.  The Company is duly incorporated and validly existing in good standing under the laws of the State of Delaware, and has the requisite power and authorization to own its properties and to carry on its business as now being conducted.  The  Company is duly qualified as a foreign entity to do business and is in good standing or its equivalent under any applicable foreign jurisdiction in every jurisdiction in which its ownership of property or the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would not reasonably be expected to have a Material Adverse Effect.

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3.2       Authorization; Enforcement.  The Company has all requisite corporate power and authority to enter into and to perform its obligations under this Agreement, to consummate the transactions contemplated hereby and to issue the Notes in accordance with the terms hereof.  The execution, delivery and performance of this Agreement by the Company and the consummation by it of the transactions contemplated hereby (including the issuance of the Notes) have been duly authorized by the Board or an authorized committee thereof, and no further consent or authorization of the Company, its Board, or its stockholders is required.  This Agreement has been duly executed by the Company and constitutes a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, or moratorium or similar laws affecting creditors’ and contracting parties’ rights generally and except as enforceability may be subject to general principles of equity and except as rights to indemnity and contribution may be limited by state or federal securities laws or public policy underlying such laws.

3.3       Capitalization.  The number of shares and type of all authorized, issued and outstanding capital stock, options and other securities of the Company (whether or not presently convertible into or exercisable or exchangeable for shares of capital stock of the Company) has been set forth in Schedule 3.3.  All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and non-assessable, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase any capital stock of the Company.  Other than as described in the Disclosure Materials, (a) none of the Company’s capital stock is subject to preemptive rights or any other similar rights or any liens or encumbrances suffered or permitted by the Company; (b) there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any shares of capital stock of the Company, or contracts, commitments, understandings or arrangements by which the Company is or may become bound to issue additional shares of capital stock of the Company or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any shares of capital stock of the Company; (c) there are no outstanding debt securities, notes, credit agreements, credit facilities or other agreements, documents or instruments evidencing indebtedness of the Company or by which the Company is or may become bound; (d) there are no financing statements securing obligations in any material amounts, either singly or in the aggregate, filed in connection with the Company; and (e) there are no outstanding securities or instruments of the Company which contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company is or may become bound to redeem a security of the Company.

3.4        Issuance of Notes.  The issuance of the Notes is duly authorized and, upon issuance in accordance with the terms hereof, the Notes shall be validly issued, fully paid and nonassessable. The shares of Common Stock issuable upon conversion of the Notes and exercise of the Warrants have been duly reserved for issuance, and upon issuance in accordance with the terms of the Certificate of Incorporation of the Company, will be validly issued, fully paid and nonassessable and free of restrictions on transfer other than applicable federal and state securities laws and restrictions, and liens or encumbrances created by or imposed by a Purchaser and will not have been issued in violation of, and will not be subject to, any preemptive or subscription rights. Based in part upon the representations of the Purchasers in this Agreement, the shares of Common Stock issuable upon conversion of the Notes and exercise of the Warrants will be issued in compliance with all applicable federal and state securities laws.

3.5         No Conflicts; Government Consents and Permits.

(a)       The execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the transactions contemplated (including the issuance of the Notes) will not (i) result in a violation of the Certificate of Incorporation or the Bylaws; (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) in any respect under, or give to others any rights of termination, amendment, acceleration or cancellation of, any material agreement, indenture or instrument to which the Company is a party; or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including foreign, federal and state securities laws and regulations and the rules and regulations of any self-regulatory organizations to which the Company or its securities are subject, including The Nasdaq Stock Market LLC (the “Principal Market”) and laws of the State of Delaware) applicable to the Company or by which any property or asset of the Company or is bound or affected except, in the cases of (ii) above, to the extent such violations would not reasonably be expected to have a Material Adverse Effect.

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(b)         The Company is not required to obtain any consent, authorization or order of, or make any filing or registration with, any Governmental Authority or any other Person in order for it to execute, deliver or perform any of its obligations under or contemplated by this Agreement in accordance with the terms hereof other than such as have been made or obtained, and except for the registration of the Notes under the Securities Act pursuant to Article 5, any filings required to be made under federal or state securities laws, and any filings or notifications required to be made after the Closing regarding the issuance and listing of additional shares with the Principal Market. The issuance by the Company of the Notes shall not have the effect of delisting or suspending the Common Stock from the Principal Market.

3.6        SEC Documents, Financial Statements.  The Company has filed all reports, schedules, forms, and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the Exchange Act, as amended, and all exhibits included therein and financial statements and schedules thereto and documents (other than exhibits) incorporated by reference therein that were filed prior to the date hereof (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC Documents” and together with this Agreement, the Schedules to this Agreement (if any) and the Private Placement Memorandum, the “Disclosure Materials”).  As of their respective dates, the SEC Documents complied in all material respects with the requirements of the Exchange Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.  As of their respective dates, the Financial Statements and the related notes complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto.  The audited Financial Statements and the related notes have been prepared in accordance with accounting principles generally accepted in the United States, consistently applied, during the periods involved (except as may be otherwise indicated in the Financial Statements or the notes thereto) and fairly present in all material respects the consolidated financial position of the Company as of the dates thereof and the consolidated results of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal and recurring year-end audit adjustments).

3.7       Absence of Litigation.  There is no action, suit, proceeding, inquiry or investigation before or by the Principal Market, any Governmental Authority, self-regulatory organization or body pending or, to the Company’s knowledge, threatened against or affecting the Company, the Common Stock or any of the Company’s officers or directors in their capacities as such that if determined adversely to the Company or other such party would reasonably be expected to have a Material Adverse Effect or would reasonably be expected to impair the ability of the Company to perform its obligations under this Agreement.

3.8        Compliance with Applicable Laws.  The Company has not violated or infringed, nor is it in violation or infringement of, any order, writ, injunction or decree of any Governmental Authority in connection with its activities or use or operation of its real properties, except where such violation or infringement would not reasonably be expected to have a Material Adverse Effect on the Company.  The Company is in compliance with all applicable laws, except where such non-compliance would not reasonably be expected to have a Material Adverse Effect on the Company.  Except to the extent resolved, dismissed or withdrawn, (i) to the Company’s knowledge, no claims have been filed against the Company alleging a violation of any applicable law and (ii) the Company has not received any written notice of non-compliance with any applicable laws.

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3.9       Investment Company.  The Company is not and, after giving effect to the offering and sale of the Notes, will not be an “investment company” or a “promoter” or “principal underwriter” for, an “investment company” as such terms is defined in the Investment Company Act.

3.10      The Principal Market.  The Common Stock is listed on the Principal Market, and, to the Company’s knowledge, there are no proceedings to revoke or suspend such listing. The Company is in compliance with the requirements of the Principal Market for continued listing of the Common Stock thereon, and the execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby (including the issuance of the Notes) will not result in any noncompliance by the Company with any such requirements.

3.11      Private Placement.  Neither the Company, nor any Affiliates of the Company, nor any Person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with the offer or sale of the Notes.  None of the Company, its Affiliates, and any Person acting on their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would require registration of any of the Notes under the Securities Act, whether through integration with prior offerings or otherwise, or cause this offering of the Notes to require approval of stockholders of the Company for purposes of the Securities Act or any applicable stockholder approval provisions, including, without limitation, under the rules and regulations of the Principal Market or any other exchange or automated quotation system on which any of the securities of the Company are listed or designated.  Except as required pursuant to Article 5, none of the Company, its Affiliates and any Person acting on their behalf will take any action or steps referred to in the preceding sentence that would require registration of any of the Notes under the Securities Act or cause the offering of the Notes to be integrated with other offerings for purposes of any such applicable stockholder approval provisions.  Assuming the accuracy of the representations and warranties of the Purchasers contained in Article 4, the issuance of the Notes are exempt from registration under the Securities Act.

3.12      Disclosure.  All disclosure to the Purchasers regarding the Company, its business and the transactions contemplated hereby, including the disclosure schedules to this Agreement, furnished by or on behalf of the Company is true and correct in all material respects and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading.  The Company acknowledges and agrees that no Purchaser makes or has made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Article 4.

ARTICLE 4

PURCHASER’S REPRESENTATIONS AND WARRANTIES

Each Purchaser represents and warrants to the Company, severally and not jointly, with respect to itself only that:

4.1        Organization; Authority.  Purchaser is either an individual or an entity duly organized, validly existing under the laws of the jurisdiction of its organization with the requisite legal capacity, power, and authority or corporate or partnership power and authority, as applicable, to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder.  The execution and delivery by such Purchaser of this Agreement and the performance by such Purchaser of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate or, if such Purchaser is not a corporation, such partnership, limited liability company or other applicable like action, on the part of such Purchaser. This Agreement has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of such Purchaser, enforceable against it in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general application.

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4.2       No Conflicts.  The execution, delivery and performance by such Purchaser of this Agreement and the consummation by such Purchaser of the transactions contemplated hereby will not (i) result in a violation of the organizational documents of such Purchaser, (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which such Purchaser is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment  or decree (including federal and state securities laws) applicable to such Purchaser, except in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of such Purchaser to perform its obligations hereunder.

4.3         Investment Purpose.  Such Purchaser understands that the Notes are “restricted securities” and have not been registered under the Securities Act or any applicable state securities law and is acquiring the Notes as principal for its own account and not with a view to, or for distributing or reselling such Notes or any part thereof in violation of the Securities Act or any applicable state securities laws; provided, however, that by making the representations herein, such Purchaser does not agree to hold any of the Notes for any minimum period of time and reserves the right, subject to the provisions of this Agreement, at all times to sell or otherwise dispose of all or any part of such Notes pursuant to an effective registration statement under the Securities Act or under an exemption from such registration and in compliance with applicable federal and state securities laws.  Such Purchaser is acquiring the Notes hereunder in the ordinary course of its business. Such Purchaser does not presently have any agreement, plan or understanding, directly or indirectly, with any Person to distribute or effect any distribution of any of the Notes (or any securities which are derivatives thereof) to or through any person or entity; such Purchaser is not a registered broker-dealer under Section 15 of the Exchange Act or an entity engaged in a business that would require it to be so registered as a broker-dealer.

4.4       Purchaser Status.  At the time such Purchaser was offered the Notes, it was, and at the date hereof it is, an “accredited investor” as defined in Rule 501(a) of the Securities Act.

4.5        General Solicitation.  Such Purchaser is not purchasing the Notes as a result of any advertisement, article, notice or other communication regarding the Notes published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general advertisement.

4.6        Reliance on Exemptions.  Such Purchaser understands that the Notes being offered and sold to it in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying in part upon the truth and accuracy of, and such Purchaser’s compliance with, the representations, warranties, agreements, acknowledgements and understandings of such Purchaser set forth herein in order to determine the availability of such exemptions and the eligibility of such Purchaser to acquire the Notes.

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4.7       Acknowledgement of Risk.  Such Purchaser: (i) understands that its investment in the Notes involves a high degree of risk, including the risks set forth in the SEC Documents and Private Placement Memorandum; (ii) either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Notes, and has so evaluated the merits and risks of such investment; (iii) is able to bear the economic risk of an investment in the Notes and, at the present time, is able to afford a complete loss of such investment; and (iv) has, in connection with such Purchaser’s decision to purchase Notes, not relied upon any representations or other information (whether oral or written) other than as set forth in the representations and warranties of the Company contained herein, the SEC Documents and the Private Placement Memorandum.

4.8        Access to Information.  Such Purchaser acknowledges that it has had the opportunity to review the Disclosure Materials and has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Notes and the merits and risks of investing in the Notes; (ii) access to information about the Company and the subsidiaries and their respective financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment. Neither such inquiries nor any other investigation conducted by or on behalf of such Purchaser or its representatives or counsel shall modify, amend or affect such Purchaser’s right to rely on the truth, accuracy and completeness of the Disclosure Materials and the Company’s representations and warranties contained in this Agreement. Such Purchaser has sought such accounting, legal and tax advice as it has considered necessary to make an informed decision with respect to its acquisition of the Notes.

4.9       Independent Investment Decision.  Such Purchaser has independently evaluated the merits of its decision to purchase Notes pursuant to this Agreement, and such Purchaser confirms that it has not relied on the advice of any other Purchaser’s business and/or legal counsel in making such decision. Such Purchaser understands that nothing in this Agreement or any other materials presented by or on behalf of the Company to the Purchaser in connection with the purchase of the Notes constitutes legal, tax or investment advice. Such Purchaser has consulted such legal, tax and investment advisors as it, in its sole discretion, has deemed necessary or appropriate in connection with its purchase of the Notes.

4.10       Governmental Review.  Such Purchaser understands that no United States federal or state agency or any other government or Governmental Authority has passed on or made any recommendation or endorsement of the Notes or the fairness or suitability of the investment in the Notes nor have such authorities passed upon or endorsed the merits of the offering of the Notes.

4.11       Transfer or Resale.  Such Purchaser understands that: (i) the Notes have not been and, except as provided in Article 5, are not being registered under the Securities Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless (A) pursuant to an effective registration statement pursuant to the Securities Act, (B) such Purchaser shall have delivered to the Company an opinion of counsel, in a form reasonably acceptable to the Company, to the effect that such Notes to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from such registration, or (C) such Purchaser provides the Company with reasonable assurance (in the form of seller and, if applicable, broker representation letters) that such Notes can be sold, assigned or transferred pursuant to Rule 144 or Rule 144A promulgated under the Securities Act, as amended (or a successor rule thereto); (ii) any sale of the Notes made in reliance on Rule 144 or Rule 144A may be made only in accordance with the terms of Rule 144 or Rule 144A, as applicable, and further, if neither Rule 144 nor Rule 144A is applicable, any resale of the Notes under circumstances in which the seller (or the Person (as defined below) through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the Securities Act) may require compliance with some other exemption under the Securities Act or the rules and regulations of the SEC thereunder; and (iii) except as provided in Article 5, neither the Company nor any other Person is under any obligation to register the Notes under the Securities Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder.

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4.12       Residency.  Such Purchaser’s residence (if an individual) or offices in which its investment decision with respect to the Notes was made (if an entity) are located at the address immediately below such Purchaser’s name on its signature page hereto.

4.13     Brokers and Finders.  No Person will have, as a result of the transactions contemplated by this Agreement, any valid right, interest or claim against or upon the Company or any Purchaser for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of the Purchaser.

ARTICLE 5

REGISTRATION STATEMENT

5.1        Registration Statement. The Company will use its reasonable commercial efforts to file a Registration Statement on Form S-3 (the “Registration Statement”) covering the resale of the Notes, the shares of Common Stock issuable upon conversion of the Notes, the Warrants issuable upon conversion of the Notes and the shares of Common Stock issuable upon exercise of the Warrants (the “Registrable Securities”) as soon as practicable after the later of (i) the date on which the Company becomes eligible to use a Registration Statement on Form S-3 and (ii) six (6) months from the Closing Date. The Company shall cause such Registration Statement to be declared effective by the SEC as soon as practicable, and maintain the effectiveness of the Registration Statement at all times through the date on which the Purchasers shall have sold all of the Registrable Securities covered by such Registration Statement; provided, however, that the Company shall not be obligated to effect any such registration, qualification or compliance pursuant to this Section 5.1 if the Company shall furnish to the Purchasers a certificate signed by the Executive Chairman of the Board stating that in the good faith and reasonable judgment of the Board, it would be seriously detrimental to the Company and its shareholders for such Form S-3 registration to be effected at such time (but excluding any detriment to the Company and its shareholders solely as a result of its effect on the share price), in which event the Company shall have the right to defer the filing of the Form S-3 registration statement for a period of not more than 90 days. Notwithstanding anything to the contrary in this Agreement, the Company’s obligations to include such shares held by a Purchaser in the Registration Statement are contingent upon such Purchaser furnishing in writing to the Company such information regarding such Purchaser and its Affiliates, the securities of the Company held by Purchaser and its Affiliates and the intended method of disposition of the Registrable Securities as shall be reasonably requested by the Company to effect the registration of the Registrable Securities, and such Purchaser and such Affiliates shall execute such documents in connection with such registration as the Company may reasonably request that are customary of a selling shareholder in similar situations, including providing that the Company shall be entitled to postpone and suspend the effectiveness or use of the Registration Statement during any customary blackout or similar period or as permitted hereunder but for no longer than 60 days at a time and no more than twice during any calendar year. Notwithstanding the foregoing, if the SEC prevents the Company from including any or all of the shares proposed to be registered under the Registration Statement due to limitations on the use of Rule 415 of the Securities Act for the resale of the Registrable Securities by the applicable shareholders or otherwise, such Registration Statement shall register for resale such number of Registrable Securities which is equal to the maximum number of Registrable Securities as is permitted by the SEC.  In such event, the number of Registrable Securities to be registered for each selling shareholder named in the Registration Statement shall be reduced pro rata among all such selling shareholders. Notwithstanding anything herein to the contrary, the Company shall have no obligation to file or maintain the effectiveness of a Registration Statement if at the time the Registrable Securities may be sold pursuant to Rule 144 without being subject to any volume limit or manner of sale limitations.

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5.2       Suspensions. Notwithstanding anything to the contrary in this Agreement, the Company shall be entitled to delay or postpone the effectiveness of the Registration Statement, and from time to time to require the Purchasers not to sell under the Registration Statement or to suspend the effectiveness thereof, if the negotiation or consummation of a transaction by the Company or its subsidiaries is pending or an event has occurred, which negotiation, consummation or event the Board reasonably believes, upon the advice of legal counsel (which may be in-house legal counsel), would require additional disclosure by the Company in the Registration Statement of material information that the Company has a bona fide business purpose for keeping confidential and the non-disclosure of which in the Registration Statement would be expected, in the reasonable determination of the Board, upon the advice of legal counsel (which may be in-house legal counsel), to cause the Registration Statement to fail to comply with applicable disclosure requirements (each such circumstance, a “Suspension Event”). Upon receipt of any written notice from the Company of the happening of any Suspension Event during the period that the Registration Statement is effective or if as a result of a Suspension Event the Registration Statement or related prospectus contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made (in the case of the prospectus) not misleading, each Purchaser agrees that (i) such Purchaser will immediately discontinue offers and sales of the Notes under the Registration Statement (excluding, for the avoidance of doubt, sales conducted pursuant to Rule 144) until such Purchaser receives copies of a supplemental or amended prospectus that corrects the misstatement(s) or omission(s) referred to above and receives notice that any post-effective amendment has become effective or unless otherwise notified by the Company that it may resume such offers and sales, and (ii) such Purchaser will maintain the confidentiality of any information included in such written notice delivered by the Company unless (a) otherwise required by law or subpoena or (b) disclosed to such Purchaser’s employees, agents and professional advisors (as applicable) who need to know such information and are obligated to keep it confidential. If so directed by the Company, each Purchaser will deliver to the Company or, in such Purchaser’s sole discretion destroy, all copies of the prospectus covering the Notes in such Purchaser’s possession; provided, however, that this obligation to deliver or destroy all copies of the prospectus covering the Notes shall not apply (i) to the extent such Purchaser is required to retain a copy of such prospectus (a) in order to comply with applicable legal, regulatory, self-regulatory or professional requirements or (b) in accordance with a bona fide pre-existing document retention policy or (ii) to copies stored electronically on archival servers as a result of automatic data back-up.

ARTICLE 6

COVENANTS; ADDITIONAL AGREEMENTS

6.1       Expenses.  Each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement.  The Company shall pay all transfer agent fees, stamp taxes and other taxes and duties levied in connection with the sale and issuance of the applicable Notes.

6.2        Securities Laws Disclosure; Publicity.  On or before 9:00 a.m., New York City time, on the Business Day immediately following the date hereof, the Company shall issue a press release, reasonably acceptable to the Purchasers, announcing the signing of this Agreement and describing the terms of the transactions contemplated by this Agreement.  On or before the fourth Business Day after the date of this Agreement, the Company shall file a Current Report on Form 8-K with the SEC describing the terms of the transactions contemplated by this Agreement and including as an exhibit to such Current Report on Form 8-K this Agreement, in the form required by the Exchange Act.

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6.3        Sales by Purchasers.  Each Purchaser will sell any Notes held by it in compliance with applicable prospectus delivery requirements, if any, or otherwise in compliance with the requirements for an exemption from registration under the Securities Act and the rules and regulations promulgated thereunder.  No Purchaser will make any sale, transfer or other disposition of the Notes in violation of federal or state securities laws.

6.4        Conduct of Business.  Until the Closing or the Termination of this Agreement, the Company shall conduct its business in the ordinary course and its business shall not be conducted in violation of any law, ordinance or regulation of any Governmental Authority, except where such violations would not result, either individually or in the aggregate, in a Material Adverse Effect.

6.5         Form D and Blue Sky; Rule 144.  The Company agrees to file a Form D with respect to the Notes as required under Regulation D.  The Company shall, on or promptly after the Closing Date, take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for or to qualify the Notes for sale to the Purchasers at the Closing pursuant to this Agreement under applicable securities or “Blue Sky” laws of the states of the United States (or to obtain an exemption from such qualification). The Company shall make all filings and reports relating to the offer and sale of the Notes required under applicable securities or “Blue Sky” laws of the states of the United States following the Closing Date. The Company shall take such action as the Company shall reasonably determine is necessary (including the issuance of legal opinions) in order to facilitate the sales pursuant to Rule 144 of the Securities Act.

6.6        Non-Public Information.  Except with respect to the material terms and conditions of the transactions contemplated by this Agreement, or as expressly required by any applicable securities law, the Company covenants and agrees that neither it, nor any other Person acting on its behalf, will provide any Purchaser or its agents (other than any Person that serves on the Board or that serves on the Board as a designee of any Purchaser) or counsel with any information regarding the Company that the Company believes constitutes material non-public information without the express written consent of such Purchaser, unless prior thereto such Purchaser shall have executed a written agreement regarding the confidentiality and use of such information. The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company.

6.7         Indemnification.

(a)         Indemnification by the Company.  The Company shall, notwithstanding any termination of this Agreement, indemnify and hold harmless each Purchaser (to the extent a seller under, or named as a selling shareholder in, the Registration Statement), its directors, officers, stockholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, stockholders, agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title) of such controlling person (each, a “Purchaser Party”) to the fullest extent permitted by applicable law, from and against all reasonable losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation (collectively, “Losses”) that any such Purchaser Party may suffer or incur arising out of, resulting from or based upon:

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(i)          any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement, except that the Company will not be liable to any Purchaser Party under this Agreement to the extent, but only to the extent that a Loss is attributable solely to any of such Purchaser Party’s material breach of any of the representations, warranties, covenants or agreements made by such Purchaser Party in this Agreement; or

(ii)       any untrue or alleged untrue statement of a material fact contained in the Registration Statement, any prospectus included in the Registration Statement or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein (in the case of any prospectus or form of prospectus or supplement thereto, in the light of the circumstances under which they were made) not misleading, except to the extent that such untrue statements, alleged untrue statements, omissions or alleged omissions are based upon information regarding the Purchaser furnished in writing to the Company by the Purchaser expressly for use therein, or that such Losses result from the use of the Registration Statement during a notified blackout period and the Company has complied with all of its obligations under this Agreement with respect thereto;

provided, however, that the indemnification contained in this Section 6.7(a) shall not apply to amounts paid in settlement of any Losses if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld, conditioned or delayed).

(b)         Indemnification by the Purchasers.  Each Purchaser shall, severally and not jointly with any other Purchaser, indemnify and hold harmless the Company, its directors, officers, stockholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, stockholders, agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title) of such controlling person (each, a “Company Party”), to the fullest extent permitted by applicable law, from and against all Losses that any such Company Party may suffer or incur arising out of, resulting from or based upon:

(i)          any breach of any of the representations, warranties, covenants or agreements made by such Purchaser in this Agreement, except that such Purchaser will not be liable to any Company Party under this Agreement to the extent, but only to the extent that a Loss is attributable to the Company’s breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement; or

(ii)       any untrue or alleged untrue statement of a material fact contained in any Registration Statement, any prospectus included in the Registration Statement, or any form of prospectus, or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any prospectus, or any form of prospectus or supplement thereto, in the light of the circumstances under which they were made) not misleading to the extent, but only to the extent, that such untrue statements or omissions are based upon information regarding the Purchaser furnished in writing to the Company by the Purchaser expressly for use therein;

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provided, however, that the indemnification contained in this Section 6.7(b) shall not apply to amounts paid in settlement of any Losses if such settlement is effected without the consent of the Purchaser (which consent shall not be unreasonably withheld, conditioned or delayed).

(c)          Indemnification Proceedings.

(i)         For the purposes of this Agreement, “Indemnifying Party” shall mean the party with an obligation to indemnify another party pursuant to Section 6.7(a) or Section 6.7(b) (as applicable) and “Indemnified Party” shall mean the party seeking indemnification pursuant to Section 6.7(a) or Section 6.7(b) (as applicable).

(ii)        The Indemnified Party shall promptly notify the Indemnifying Party in writing of the institution, threat or assertion of any proceeding against the Indemnified Party that the Indemnified Party believes relates to Losses the subject of indemnification pursuant to Section 6.7(a) or Section 6.7(b) (as applicable) and of which such Indemnified Party is aware (“Third Party Proceedings”). In the case of any delay or failure by an Indemnified Party to provide the notice required by the preceding sentence, the obligation of the Indemnifying Party to indemnify the Indemnified Party shall be reduced to the extent that such Indemnifying Party is prejudiced by such delay or failure. The Indemnifying Party will be entitled to participate in any Third Party Proceeding and to assume the defense thereof with counsel it elects, in its sole discretion, and in the event the Indemnifying Party assumes such defense, the Indemnifying Party will not be liable to the Indemnified Party for any legal or other expenses subsequently incurred by the Indemnified Party in connection with the defense thereof other than reasonable costs of investigation.

(iii)        If the indemnification provided under Section 6.7(a) or Section 6.7(b) from the Indemnifying Party is unavailable or insufficient to hold harmless an Indemnified Party in respect of any Losses referred to herein, then the Indemnifying Party, in lieu of indemnifying the Indemnified Party, shall contribute to the amount paid or payable by the Indemnified Party as a result of such Losses in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and the Indemnified Party, as well as any other relevant equitable considerations. The relative fault of the Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, was made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the Indemnifying Party’s and Indemnified Party’s relative intent, knowledge, access to information and opportunity to correct or prevent such action. The amount paid or payable by a party as a result of the Losses referred to above shall be subject to the limitations set forth in Section 6.7(a) or Section 6.7(b) and deemed to include any legal or other fees, charges or expenses reasonably incurred by such party in connection with any investigation or proceeding. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution pursuant to this Section 6.7(c)(iii) from any person who was not guilty of such fraudulent misrepresentation.  Each Indemnifying Party’s obligation to make a contribution pursuant to this Section 6.7(c)(iii) shall be individual, not joint and several, and in no event shall the liability of any Purchaser hereunder exceed the net proceeds received by Purchaser upon the sale of the shares giving rise to such indemnification obligation.

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ARTICLE 7

CONDITIONS TO CLOSING

7.1       Conditions to Purchasers’ Obligations at the Closing.  Each Purchaser’s obligation to complete the purchase and sale of the Notes is subject to the waiver by such Purchaser or fulfillment as of the Closing Date of the following conditions:

(a)         Representations and Warranties.  The representations and warranties made by the Company in Article 3 shall be true and correct (i) in all respects as of the date hereof, and (ii) in all material respects as of the Closing Date (if different than the date hereof) (except for those representations and warranties which are qualified as to materiality, in which case such representations and warranties shall be true and correct in all respects), as though made on the Closing Date, except, in the case of clauses (i) and (ii) above, (y) for representations and warranties that speak as of a specific date, which shall be required to be true and correct (to the extent specified above) only as of such specific date and (z) for the representations and warranties continued in Sections 3.1, 3.2 and 3.3, which shall be true and correct in all respects).

(b)         Performance.  All covenants, agreements and conditions contained in this Agreement to be performed by the Company on or prior to the Closing Date shall have been performed or complied with in all material respects.

(c)        Adverse Changes.  Since the date of execution of this Agreement, no event or series of events shall have occurred that has had or reasonably would be expected to have or result in a Material Adverse Effect.

(d)       No Governmental Prohibition or Injunction.  No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated, endorsed or threatened in writing by any Governmental Authority of competent jurisdiction that prohibits or, if threatened in writing, could reasonably be expected to prohibit, the consummation of any of the transactions contemplated by this Agreement.

7.2        Conditions to Obligations of the Company.  The Company’s obligation to complete the purchase and sale of the Notes and deliver the Notes to each Purchaser is subject to the waiver by the Company or fulfillment as of the Closing Date of the following conditions:

(a)        Receipt of Funds.  The Company shall have received immediately available funds in the full amount of the Purchase Price for the Notes being purchased hereunder as set forth below such Purchaser’s name on the signature page of this Agreement.

(b)         Representations and Warranties.  The representations and warranties made by each Purchaser in Article 4 shall be true and correct (i) in all respects as of the date hereof, and (ii) in all material respects as of the Closing Date (if different than the date hereof) (except for those representations and warranties which are qualified as to materiality, in which case such representations and warranties shall be true and correct in all respects), as though made on the Closing Date, except, in the case of clauses (i) and (ii) above, for representations and warranties that speak as of a specific date, which shall be required to be true and correct (to the extent specified above) only as of such specific date.

(c)          Performance.  All covenants, agreements and conditions contained in this Agreement to be performed by such Purchaser on or prior to the Closing Date shall have been performed or complied with in all material respects.

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(d)          No Governmental Prohibition.  The sale of the Notes by the Company shall not be prohibited by any law or order or regulation of a Governmental Authority.

(e)          Closing Purchase Deliverables.  Each Purchaser shall have delivered its Closing Purchaser Deliverables in accordance with Section 2.3.

ARTICLE 8

TERMINATION

8.1         Termination.  This Agreement may be terminated at any time prior to the Closing:

(a)          by mutual written consent of the Company and each Purchaser; or

(b)         by either the Company or any Purchaser (with respect to itself only) if the Closing has not occurred by 4:00 p.m., New York City time, on September 10, 2021; provided, however, that the right to terminate this Agreement under this Section 8.1(b) shall not be available to any Person whose failure to comply with its obligations under this Agreement has been the cause of or resulted in the failure of the Closing to occur on or before such time.

8.2       Effect of Termination.  Each party’s right of termination under Section 8.1 is in addition to any other right it may have under this Agreement or otherwise, and the exercise of a party’s right to terminate this Agreement in accordance with Section 8.1 will not constitute an election of remedies.  If this Agreement is terminated pursuant to Section 8.1, this Agreement will be of no further force or effect; provided, however, that (i) this Section 8.2 and Article 9 shall survive the termination of this Agreement and will remain in full force and effect, and (ii) the termination of this Agreement will not relieve any party from any liability for any breach of this Agreement occurring prior to termination.

ARTICLE 9

MISCELLANEOUS

9.1     Governing Law.  THIS AGREEMENT, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE AND ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE) DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE, REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER ANY APPLICABLE PRINCIPLES OF CHOICE OR CONFLICTS OF LAWS OF THE STATE OF DELAWARE.

9.2        Jurisdiction; Venue.  Each of the parties hereto irrevocably agrees that any legal action or proceeding arising out of or relating to this Agreement brought by any party or its Affiliates against any other party or its Affiliates shall be brought and determined in the Court of Chancery of the State of Delaware; provided, however, that if jurisdiction is not then available in the Court of Chancery of the State of Delaware, then any such legal action or proceeding may be brought in any federal court located in the State of Delaware or any other Delaware state court. Each of the parties hereby irrevocably submits to the jurisdiction of the aforesaid courts for itself and with respect to its property, generally and unconditionally, with regard to any such action or proceeding arising out of or relating to this Agreement and the Reorganization and the other transactions contemplated by this Agreement.  Each of the parties agrees not to commence any action, suit or proceeding relating thereto except in the courts described above in Delaware, other than actions in any court of competent jurisdiction to enforce any Order rendered by any such court in Delaware as described herein.  Each of the parties hereby irrevocably and unconditionally waives, and agrees not to assert, by way of motion or as a defense, counterclaim or otherwise, in any action or proceeding arising out of or relating to this Agreement or the Reorganization or the other transactions contemplated by this Agreement, (a) any claim that it is not personally subject to the jurisdiction of the courts in Delaware as described herein for any reason, (b) that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) that (i) the suit, action or proceeding in any such court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper or (iii) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.

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9.3        Waiver of Jury Trial.  EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF THIS AGREEMENT OR THE REORGANIZATION.  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH PARTY WOULD NOT, IN THE EVENT OF ANY ACTION, SUIT OR PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS IN THIS SECTION 9.3.

9.4         Execution.  This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that all parties need not sign the same counterpart.  In the event that any signature is delivered by facsimile transmission, or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile signature page were an original thereof.

9.5          Severability.  If any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then such provision will be deemed modified in order to conform with such statute or rule of law.  Any provision hereof that may prove invalid or unenforceable under any law will not affect the validity or enforceability of any other provision hereof.

9.6          Entire Agreement; Amendment; Waiver.  This Agreement supersedes all other prior oral or written agreements between the Purchasers, the Company, their respective Affiliates and Persons acting on their behalf with respect to the matters discussed herein, and this Agreement and the instruments referenced herein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor any Purchaser makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be amended or waived other than by an instrument in writing signed by the Company and the Required Holders, and any amendment or waiver to this Agreement made in conformity with the provisions of this Section 9.6 shall be binding on all Purchasers and holders of Notes and the Company; provided that any such amendment or waiver that complies with the foregoing but that disproportionately, materially and adversely affects the rights and obligations of any Purchaser relative to the comparable rights and obligations of the other Purchasers shall require the prior written consent of such adversely affected Purchaser.

9.7          Notices.  All notices required or permitted hereunder shall be in writing and shall be deemed effectively given:  (i) upon personal delivery to the party to be notified, (ii) when sent by confirmed email if sent during normal business hours of the recipient, if not, then on the next Business Day, or (iii) one Business Day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt.  The addresses for such communications are:

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If to the Company:

Forian Inc.

41 University Drive, Suite 400

Newtown, PA 18940

Email: dan.barton@forian.com

Attn: Daniel Barton, Chief Executive Officer

with a copy (which shall not constitute notice) to:

Forian Inc.

41 University Drive, Suite 400

Newtown, PA 18940

Email: legal@forian.com

Attn: Legal Notice

If to a Purchaser:  To the address set forth immediately below such Purchaser’s name on the signature pages hereto, with a copy to its legal representative, if any, set forth below such Purchaser’s name on the signature page of this Agreement.  Each party will provide written notice to the other parties of any change in its address in accordance with this Section 9.7.

9.8        Successors and Assigns.  This Agreement is binding upon and inures to the benefit of the parties and their successors and assigns.  The Company will not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Required Holders, and no Purchaser may assign this Agreement or any rights or obligations hereunder without the prior written consent of the Company.  Any attempted assignment in violation of this Section 9.8 shall be null and void.

9.9       No Third Party Beneficiaries.  This Agreement is intended for the benefit of the parties hereto, their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

9.10     Further Assurances.  Each party will do and perform, or cause to be done and performed, all such further acts and things, and will execute and deliver all other agreements, certificates, instruments and documents, as another party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

9.11      Interpretation.  When a reference is made in this Agreement to an Article, a Section, an Exhibit or a Schedule, such reference shall be to an Article, a Section, an Exhibit or a Schedule of or to this Agreement unless otherwise indicated.  The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.  Any capitalized term used in any Exhibit or Schedule but not otherwise defined therein shall have the meaning assigned to such term in this Agreement.  Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.”  The words “hereof,” “hereto,” “hereby,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.  The term “or” is not exclusive.  The word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply “if.”  The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms.  All pronouns and all variations thereof shall be deemed to refer to the masculine, feminine or neuter, singular or plural, as the identity of the person or persons or entity may require.  Any agreement, instrument or law defined or referred to herein means such agreement, instrument or law as from time to time amended, modified or supplemented, unless otherwise specifically indicated.  References to a Person are also to its permitted successors and assigns.  Unless otherwise specifically indicated, all references to “dollars” and “$” will be deemed references to the lawful money of the U.S.  The parties hereto have participated jointly in the negotiation and drafting of this Agreement.  In the event an ambiguity or a question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto, and no presumption or burden of proof shall arise favoring or disfavoring by virtue of the authorship of any provisions of this Agreement.  Any reference to “days” means calendar days unless Business Days are expressly specified. When calculating the period of time before which, within which or following which any act is to be done pursuant to this Agreement, the date that is the reference date in calculating such period shall be excluded and if the last day of such period is not a Business Day, the period shall end on the next succeeding Business Day.

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9.12      Equitable Relief.  The Company recognizes that, if it fails to perform or discharge any of its obligations under this Agreement, any remedy at law may prove to be inadequate relief to the Purchasers.  The Company therefore agrees that the Purchasers are entitled to seek temporary and permanent injunctive relief in any such case.  Each Purchaser also recognizes that, if it fails to perform or discharge any of its obligations under this Agreement, any remedy at law may prove to be inadequate relief to the Company.  Each Purchaser therefore agrees that the Company is entitled to seek temporary and permanent injunctive relief in any such case.

9.13      Survival of Representations and Warranties.  Notwithstanding any investigation made by any party to this Agreement, all representations and warranties made by the Company and the Purchasers herein shall survive the Closing Date.

9.14      Independent Nature of Purchasers’ Obligations and Rights.  The obligations of each Purchaser under this Agreement are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance of the obligations of any other Purchaser under this Agreement.  Nothing contained herein and no action taken by any Purchaser pursuant thereto shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group, or are deemed Affiliates with respect to such obligations or the transactions contemplated by this Agreement.  Each Purchaser shall be entitled to independently protect and enforce its rights, including without limitation the rights arising out of this Agreement, and it shall not be necessary for any other Purchaser to be joined as an additional party in any proceeding for such purpose.  Nothing contained in this Section 9.14 shall be deemed to adversely affect the other provisions in this Agreement providing for action of the Required Holders to bind all of the Purchasers

9.15       Adjustments in Share Numbers and Prices.  In the event of any stock split, subdivision, dividend or distribution payable in shares of Common Stock (or other securities or rights convertible into, or entitling the holder thereof to receive directly or indirectly shares of Common Stock), combination or other similar recapitalization or event occurring after the date hereof, each reference in this Agreement to a number of shares or a price per share shall be deemed to be amended to appropriately account for such event.

9.16      Exculpation.  Each Purchaser acknowledges that it is not relying upon any person, firm or corporation, other than the Company and its officers and directors, in making its investment or decision to invest in the Company.  Each Purchaser agrees that no other Purchaser nor the respective controlling persons, officers, directors, partners, agents or employees of any other Purchaser shall be liable to any other Purchaser for any action heretofore or hereafter taken or omitted to be taken by any of them in connection with the purchase of the Notes.

[Signatures Follow]

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IN WITNESS WHEREOF, the parties hereto have caused this Note Purchase Agreement to be duly executed as of the date first above written.

FORIAN INC.
By:
	Daniel Barton
	Chief Executive Officer

IN WITNESS WHEREOF, the parties hereto have caused this Note Purchase Agreement to be duly executed as of the date first above written.

Name of Purchaser:
	(print name of purchaser)

By:
	(signature)
Name:
	(print name of signatory)
Title:
	(print title of signatory, if applicable)

Principal Amount of Note to be Purchased: $

Address for Notice:

Email:

Attn:

Legal Representative (if any):

Email:

Attn:

EXHIBIT A

SCHEDULE OF PURCHASERS

[Available at Company]

EXHIBIT B

FORM OF CONVERTIBLE PROMISSORY NOTE

[See attached]

THIS CONVERTIBLE PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NO SALE OR DISPOSITION MAY BE EFFECTED EXCEPT IN COMPLIANCE WITH RULE 144 UNDER SAID ACT OR AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL FOR THE HOLDER SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT OR RECEIPT OF A NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION.

FORIAN INC.

3.5% CONVERTIBLE PROMISSORY NOTE DUE 2025

No. [•]
$[•]	September 1, 2021

For value received FORIAN INC.,a Delaware corporation (the “Company”), promises to pay to[•]or its assigns (“Holder”) the principal sum of $[•]together with accrued and unpaid interest thereon, which principal amount, taken together with the principal amounts of all other outstanding Notes (as defined below), shall not exceed $24,000,000 in the aggregate at any time, each due and payable on the date and in the manner set forth below.

This convertible promissory note (the “Note”) is issued as part of a series of similar convertible promissory notes (collectively, the “Notes”) pursuant to the terms of that certain Note Purchase Agreement (as amended, the “Agreement”) dated as of the date hereof to the persons and entities listed on the Schedule of Investors attached to the Agreement (collectively, the “Holders”). Capitalized terms used herein without definition shall have the meanings given to such terms in the Agreement.

1.           Repayment. Unless otherwise set forth herein, all payments of interest and principal shall be in lawful money of the United States of America and shall be made pro rata among all Holders. All payments shall be applied first to accrued interest, and thereafter to principal. The outstanding principal amount of the Loan shall be due and payable on the fourth-year anniversary of the date hereof (i.e. September 1, 2025) (the “Maturity Date”).

2.          Interest Rate. The Company promises to paysimple interest on the outstanding principal amount hereof from the date hereof until payment in full, which interest shall be payable at the rate of three and one half percent (3.5%) per annum or the maximum rate permissible by law, whichever is less. Interest shall be due and payable on the Maturity Date and shall be calculated on the basis of a 365-day year for the actual number of days elapsed.

3.            Conversion.

(a)         Holder is entitled, at its option, to convert (an “Optional Conversion”) all or any lesser portion of the principal into (i) shares of Common Stock at a conversion price for each share of Common Stock equal to $11.98, which amount equals the consolidated closing bid price as reported by Nasdaq on the most recently completed trading day preceding the Company entering into the Agreement (as equitably adjusted to reflect subsequent stock dividends, stock splits, combinations or recapitalizations, the “Conversion Price”), and (ii) a warrant to purchase the number of shares of Common Stock equal to (x) twenty percent (20%) of the converted principal amount, divided by (y) the Conversion Price (the “Warrant”), in the form attached to this Note as Exhibit A, which warrant shall have an exercise price equal to the Conversion Price, by providing a Notice of Conversion in the form attached to this Note as Exhibit B completed and executed by Holder evidencing such Holder’s intention to convert the Note. Notwithstanding the foregoing, for any partial conversion, Holder must convert at least $100,000 in principal amount of Notes. In connection with an Optional Conversion, the Notice of Conversion must be given to the Company as provided below not less than thirty (30) days prior to the Maturity Date. In connection with any Optional Conversion, the number of shares of Common Stock to be issued shall be determined by dividing that portion of the principal of this Note to be converted at such time by the Conversion Price. With respect to all Optional Conversions of this Note, interest accrued (but not previously paid or converted) shall be converted into shares of Common Stock determined by dividing that portion of the interest accrued by the Conversion Price. Promptly following any conversion of all outstanding principal and accrued interest, Holder shall promptly return the Note to the Company.

(b)         If, after aggregation, the conversion of this Note would result in the issuance of a fractional share, the Company shall, in lieu of issuance of any fractional share, pay Holder otherwise entitled to such fraction a sum in cash equal to the product resulting from multiplying the then current fair market value of one share of Common Stock by such fraction.

4.           Conversion Mechanics.

(a)         The Company shall, as soon as practicable after conversion and at its own expense, use commercially reasonable efforts to (i) cause its transfer agent to electronically transmit such shares issuable upon conversion to Holder (or its designee), by crediting the account of Holder’s (or such designee’s) prime broker with DTC through its Deposit Withdrawal Agent Commission system (provided that the same time periods herein as for stock certificates shall apply) and (ii) issue to Holder a Warrant, in the form attached hereto as Exhibit A, for such number of shares as determined in accordance with Section 3(a).

(b)       Restricted Shares. Holder understands that the shares of Common Stock issuable upon conversion of this Note will be “restricted securities” within the meaning of Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”), and may not be sold, pledged, assigned or transferred and must be held indefinitely in the absence of (i) an effective registration statement under the Securities Act and applicable state securities laws with respect thereto or (ii) an opinion of counsel satisfactory to the Company that such registration is not required. The Common Stock issuable upon conversion of this Note shall bear the following or similar legend:

“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATES. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. UNLESS SOLD PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS.”

Holder consents to the Company giving instructions to its transfer agent in order to implement the restrictions on transfer set forth and described herein. Notwithstanding the foregoing, the legend set forth above shall be removed and the Company shall issue to Holder by electronic delivery at the applicable account at DTC, if (i) such shares of Common Stock are registered for resale under the Securities Act; (ii) such shares of Common Stock are sold or transferred pursuant to Rule 144 (assuming the transferor is not an Affiliate of the Company); (iii) such shares of Common Stock are eligible for sale under Rule 144; or (iv) if such legend is not required under applicable requirements.

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5.          Maturity. Unless this Note has been previously converted in accordance with the terms of Section 3 above, the entire outstanding principal balance and all unpaid accrued interest shall become fully due and payable on the Maturity Date. No sinking fund is provided for the Notes.

6.            Optional Redemption.

(a)         On or after September 1, 2022 and before the Maturity Date, the Company may redeem on any one or more occasions some or all of this Note. The redemption price will equal the sum of an amount equal to (i) 112.5% of the principal amount being redeemed plus (ii) accrued and unpaid interest up to, but not including, the date of redemption. The Company shall provide Holder with written notice at least five (5) Business Days prior to a redemption pursuant to this Section 6(a).

(b)         In the event of a Change of Control, the Company may redeem all of this Note. The redemption price will equal the sum of an amount equal to (i) 108% of the outstanding principal amount of this Note plus (ii) accrued and unpaid interest up to, but not including, the date of the Change of Control. The Company shall provide Holder with written notice at least five (5) Business Days prior to a redemption pursuant to this Section 6(b).

(c)         The provision by the Company of notice of its intention to redeem the Notes pursuant to Sections 6(a) or 6(b) shall not affect Holder’s right to Optional Conversion in accordance with Section 3(a).

7.         Unsecured Obligation; Non-Recourse; Subordination. The obligations under this Note are an unsecured obligation of the Company and no manager, director, officer, employee, consultant or equity holder of the Company shall have any liability for any obligations of the Company hereunder or for any claim based on, in respect or by reasons of, such obligations or their creation. Holder, by accepting this Note, waives and releases all such liability. The obligations under this Note will be subordinated to the prior payment in full of all other indebtedness for borrowed money that the Company may incur, and Holder agrees to take such commercially reasonable actions as are necessary to effectuate such subordination.

8.          Expenses. In the event of any default hereunder, the Company shall pay all reasonable attorneys’ fees and court costs incurred by Holder in enforcing and collecting this Note.

9.           Default. This Note shall accelerate and all principal and unpaid accrued interest shall become immediately due and payable upon the occurrence of any one or more of the following:

(a)        The Company fails to timely issue shares of Common Stock due upon conversion of this Note on the date such shares become due and issuable under this Note;

(b)        The Company fails to timely issue the Warrant due upon conversion of this Note on the date such Warrant becomes issuable under this Note;

(c)        The Company fails to pay timely any of the principal amount due under this Note on the date the same becomes due and payable or any accrued interest or other amounts due under this Note on the date the same becomes due and payable;

(d)         The Company shall default in its performance of any material covenant under the Agreement or any Note;

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(e)        The Company files any petition or action for relief under any bankruptcy, reorganization, insolvency or moratorium law or any other law for the relief of, or relating to, debtors, now or hereafter in effect, or makes any assignment for the benefit of creditors or takes any corporate action in furtherance of any of the foregoing; or

(f)         An involuntary petition is filed against the Company (unless such petition is dismissed or discharged within 60 days under any bankruptcy statute now or hereafter in effect, or a custodian, receiver, trustee, assignee for the benefit of creditors (or other similar official) is appointed to take possession, custody or control of any property of the Company.

10.         Reservation. So long as this Note is outstanding, the Company shall take all action necessary to reserve and keep available out of its authorized and unissued Common Stock, solely for the purpose of effecting the conversion of this Note, such number of shares of Common Stock as shall from time to time be necessary to effect the conversion of this Note in full.

11.         Waiver. The Company hereby waives demand, notice, presentment, protest and notice of dishonor.

12.        Governing Law. This Note shall be governed by and construed under the laws of the State of Delaware, as applied to agreements among Delaware residents, made and to be performed entirely within the State of Delaware, without giving effect to conflicts of laws principles.

13.        Parity with Other Notes. The Company’s repayment obligation to Holder under this Note shall be on parity with the Company’s obligation to repay all Notes issued pursuant to the Agreement. In the event that the Company is obligated to repay the Notes and does not have sufficient funds to repay all the Notes in full, payment shall be made to the Holders of the Notes on a pro rata basis. The preceding sentence shall not, however, relieve the Company of its obligations to Holder hereunder.

14.         Modification; Waiver. Any term of this Note may be amended or waived with the written consent of the Company and the Required Holders; provided, however, any change that materially adversely affects Holder in a manner that does not affect the other Holders in the same or similar fashion shall require the specific consent of Holder.

15.         Assignment. This Note may be transferred other than to an Affiliate of Holder only with the written consent of the Company and in the case of any transfer only upon its surrender to the Company for registration of transfer, duly endorsed, or accompanied by a duly executed written instrument of transfer in form satisfactory to the Company. Thereupon, this Note shall be reissued to, and registered in the name of, the transferee, or a new Note for like principal amount and interest shall be issued to, and registered in the name of, the transferee. Interest and principal shall be paid solely to the registered holder of this Note. Such payment shall constitute full discharge of the Company’s obligation to pay such interest and principal.

[Signature page follows]

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The Company has caused this Note to be issued as of the date first written above.

FORIAN INC.

By:

Name: Daniel Barton

Title: Chief Executive Officer

Holder:

(Print Legal Name)

(Signature of Holder or Duly Authorized Representative of Holder)

Holder address:

Holder Phone:

Holder Email:

Principal Amount of Note:	$[•]
Issuance Date of Note:	September 1, 2021

[Signature Page to 3.5% Convertible Promissory Note Due 2025 of Forian Inc.]

EXHIBIT A

TO

FORIAN INC.

3.5% CONVERTIBLE PROMISSORY NOTE DUE 2025

FORM OF WARRANT

[See attached]

2

THIS WARRANT (AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT) HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAWS AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS OR UNLESS AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS IS AVAILABLE.

WARRANT TO PURCHASE COMMON STOCK

FORIAN INC.

Warrant Shares: [•] [Insert Date of Issuance]

THIS WARRANT TO PURCHASE COMMON STOCK (the “Warrant”) certifies that, for value received, [•] (the “Holder”) has exercised its Optional Conversion (as defined in the Note (as defined below)) and is therefore entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time prior to at 5:00 p.m. (New York time) September 1, 2025 (such date, the “Termination Date”), to subscribe for and purchase from Forian Inc., a Delaware corporation (the “Company”), up to [•] shares of Common Stock, par value $0.001 per share, of the Company (the “Warrant Shares”), as subject to adjustment hereunder. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).

1.          Definitions. In addition to the terms defined elsewhere in this Agreement, the following terms have the meanings indicated in this Section 1:

“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.

“Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

“Change of Control” means: (i) the Company becomes aware (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) that any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), is or has become the “beneficial owner” (as such term is used in Rules 13d-3 and 13d-5 under the Exchange Act) of more than 50% of the Voting Stock of the Company; provided, however, that for purposes of this clause (i) such person or group shall be deemed to have “beneficial ownership” of all shares that any such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time, directly or indirectly; and provided, further, that a transaction will not be deemed to involve a Change of Control under this clause (i) if (a) the Company becomes a direct or indirect wholly owned subsidiary of a holding company and (b)(1) the direct or indirect holders of the Voting Stock of such holding company immediately following that transaction are substantially the same as the holders of the Voting Stock of the Company immediately prior to that transaction; or (2) immediately following that transaction, no “person” or “group” (other than a holding company satisfying the requirements of this sentence) is the beneficial owner, directly or indirectly, of more than 50% of the Voting Stock of such holding company; or (ii) the Company sells, conveys, transfers or leases (either in one transaction or a series of related transactions) all or substantially all assets of the Company and its subsidiaries taken as a whole to, or merges or consolidates with, a Person (other than the Company or any of its subsidiaries) where the shares of Common Stock outstanding immediately prior to such transaction constitute, or are converted into or exchanged for, a majority of the Voting Stock of the surviving person or parent entity thereof immediately after giving effect to such transaction.

“Commission” means the United States Securities and Exchange Commission.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“Note” means that certain 3.5% Convertible Promissory Note due 2025 made by the Company in favor of the Holder pursuant to the Note Purchase Agreement.

“Note Purchase Agreement” means that certain Note Purchase Agreement by and among the Company, the Holder and the other purchasers set forth therein.

“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Trading Day” means a day on which the New York Stock Exchange is open for trading.

“Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, or the New York Stock Exchange (or any successors to any of the foregoing).

“Voting Stock” of a Person means all classes of capital stock or other interests (including partnership interests) of such Person then outstanding and normally entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof.

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2.           Exercise.

a.           Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times before the Termination Date by delivery to the Company (or such other office or agency of the Company as it may designate by notice in writing to the registered Holder at the address of the Holder appearing on the books of the Company) of a duly executed Notice of Exercise Form annexed hereto. Within two (2) Trading Days following the date of exercise, the Holder shall deliver the aggregate Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank. The Company shall have no obligation to issue the Warrant Shares until its receipt of payment of the Exercise Price in full. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise form be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within five (5) Trading Days of the date the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise Form within three (3) Business Days of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.

b.          Exercise Price. The exercise price per share of the Common Stock under this Warrant shall be $11.98, which amount equals the consolidated closing bid price as reported by Nasdaq on August 31, 2021, the trading day preceding the Company entering into the Note Purchase Agreement pursuant to which the Note was issued and in accordance with which the Holder is entitled to receive this Warrant, subject to adjustment hereunder (the “Exercise Price”).

c.           Mechanics of Exercise.

i.          Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by its transfer agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by Holder, or (B) the Warrant Shares are eligible for resale by the Holder without volume or manner-of-sale limitations pursuant to Rule 144 and, in either case, the Warrant Shares have been sold by the Holder prior to the Warrant Share Delivery Date (as defined below), and otherwise by a book entry account at the Company’s transfer agent, registered in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise by the date that is two (2) Trading Days after the delivery to the Company of the Notice of Exercise and payment in full of the Exercise Price (such date, the “Warrant Share Delivery Date”). If the Warrant Shares can be delivered via DWAC, the transfer agent shall have received from the Company, at the expense of the Company, any legal opinions or other documentation required by it to deliver such Warrant Shares without legend (subject to receipt by the Company of reasonable back up documentation from the Holder, including with respect to affiliate status) and, if applicable and requested by the Company prior to the Warrant Share Delivery Date, the transfer agent shall have received from the Holder a confirmation of sale of the Warrant Shares. The Warrant Shares shall be deemed to have been issued, and Holder or any other person so designated to be named therein shall be deemed to have become a holder of record of such shares for all purposes, as of the date the Warrant has been exercised, with payment to the Company of the Exercise Price and all taxes required to be paid by the Holder, if any, pursuant to Section 2(c)(vi) prior to the issuance of such shares, having been paid.

ii.         Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.

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iii.      Rescission Rights. If the Company fails to cause its transfer agent to deliver to the Holder the Warrant Shares pursuant to Section 2(c)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise; provided, however, that the Holder shall be required to return any Warrant Shares or Common Stock subject to any such rescinded exercise notice concurrently with the return to Holder of the aggregate Exercise Price paid to the Company for such Warrant Shares and the restoration of Holder’s right to acquire such Warrant Shares pursuant to this Warrant (including, issuance of a replacement warrant certificate evidencing such restored right).

v.         No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share.

vi.        Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all transfer agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.

vii.       Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.

viii.      Signature. This Section 2 and the exercise form attached hereto set forth the totality of the procedures required of the Holder in order to exercise this Purchase Warrant. Without limiting the preceding sentences, no ink-original exercise form shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any exercise form be required in order to exercise this Purchase Warrant.  No additional legal opinion, other information or instructions shall be required of the Holder to exercise this Purchase Warrant.  The Company shall honor exercises of this Purchase Warrant and shall deliver Shares underlying this Purchase Warrant in accordance with the terms, conditions and time periods set forth herein.

3.           Certain Adjustments.

a.         Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.  For the purposes of clarification, the Exercise Price of this Warrant will not be adjusted in the event that the Company or any subsidiary thereof, as applicable, sells or grants any option to purchase, or sell or grant any right to reprice, or otherwise dispose of or issue (or announce any offer, sale, grant or any option to purchase or other disposition) any Common Stock or Common Stock Equivalents, at an effective price per share less than the Exercise Price then in effect.

4

b.          Change of Control. If, at any time while this Warrant is outstanding, there is a Change of Control, then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Change of Control the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (together, the “Alternate Consideration”) receivable by holders of Common Stock as a result of such Change of Control for each share of Common Stock for which this Warrant is exercisable immediately prior to such Change of Control (without regard to any limitation in Section 2(c) on the exercise of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Change of Control, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. The Company shall cause any successor entity in a Change of Control in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant in accordance with the provisions of this Section 3(b). Upon the occurrence of any such Change of Control, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Change of Control, the provisions of this Warrant referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of, the Company under this Warrant with the same effect as if such Successor Entity had been named as the Company herein.

c.           Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

d.          Notice to Holder. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly mail to the Holder a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.

4.           Transfer of Warrant.

a.          Transferability. This Warrant may be transferred other than to an Affiliate of the Holder only with the written consent of the Company and in the case of any transfer the Holder shall surrender this Warrant to the Company, together with, if requested by the Company, an opinion of counsel in customary form and substance and reasonably satisfactory to the Company from an attorney regularly engaged in the practice of securities law, or other evidence reasonably satisfactory to the Company, in either case relating to the availability of an exemption from registration under the Securities Act of 1933, as amended, with respect to such transfer, whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 4(b)), registered as the Holder may request, representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if less than the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section 4(b)) to the Warrant Holder representing the right to purchase the number of Warrant Shares not being transferred.

5

b.         New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or their agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the initial issuance date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.

c.           Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

d.           Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon any exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling such Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exempted under the Securities Act.

5.           Miscellaneous.

a.          No Rights as Stockholder Until Exercise. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a stockholder of the Company prior to the exercise hereof.

b.          Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.

c.         Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Trading Day, then, such action may be taken or such right may be exercised on the next succeeding Trading Day.

d.        Authorized Shares.  The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).

6

Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.

Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

e.        Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance with the provisions of that certain Note Purchase Agreement, of even date herewith, by and among the Company, the Holder and the other signatories thereto.

f.           Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, will have restrictions upon resale imposed by state and federal securities laws.

g.           Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision of this Warrant, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

h.           Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered in accordance with the notice provisions of the Note Purchase Agreement.

i.           Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

7

j.           Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

k.          Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.

l.          Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Majority Holders.

m.        Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.

n.          Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

[Signature Page Follows]

8

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.

FORIAN INC.
By:
	Name:
	Title:

9

NOTICE OF EXERCISE

TO:          FORIAN INC.

(1)         The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant, and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any, of $__________________.

(2)          Please register and issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:

The Warrant Shares shall be delivered to the following DWAC Account Number or a book entry account at the Company’s transfer agent to:

(4)        Accredited Investor. The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933, as amended

[SIGNATURE OF HOLDER]

Name of Investing Entity:

Signature of Authorized Signatory of Investing Entity:

Name of Authorized Signatory:

Title of Authorized Signatory:

Date:

EXHIBIT B

TO

FORIAN INC.

3.5% CONVERTIBLE PROMISSORY NOTE DUE 2025

NOTICE OF CONVERSION

(To Be Executed by the Registered Holder in Order to Convert the Note)

The Undersigned hereby irrevocably elects to convert $____________ of the 3.5% Convertible Promissory  Note due 2025 (the “Note”) issued by Forian Inc. (the “Company”) and held by the Undersigned into (i) shares of common stock of the Company according to the terms and conditions set forth in the Note and (ii) a warrant to purchase shares of common stock of the Company according to the terms and conditions set forth in the Note, as of the date written below. If the securities issuable pursuant to this Notice of Conversion are to be issued to a person other than the Undersigned, the Undersigned agrees to pay all applicable transfer taxes with respect thereto and provide a legal opinion in form and substance acceptable to the Company with respect to the legality of the issuance to a person other than the Undersigned.

The Undersigned represents that the securities issuable pursuant to this Notice of Conversion are being acquired for Holder’s own account and not as a nominee for any other party. The Undersigned represents and warrants that all offers and sales by the Undersigned of the securities issuable pursuant to this Notice shall be made pursuant to either an effective registration statement or an exemption from registration under the Securities Act of 1933, as amended.

Holder:

(Print Legal Name (signature must correspond to name as written

on the signature page of the Note))

(Signature of Holder or Duly Authorized Representative of Holder)

Holder Address:

Holder Phone:

Holder Email:

Principal Amount of Note Retained (if any): $

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Daniel Barton, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Forian Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) (Paragraph omitted pursuant to SEC Release Nos. 33-8238/34-47986 and 33-8392/34-49313);

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 15, 2021
	By:/s/ Daniel Barton
	Name: Daniel Barton
	Title: Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF INTERIM CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Michael Vesey, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Forian Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) (Paragraph omitted pursuant to SEC Release Nos. 33-8238/34-47986 and 33-8392/34-49313);

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 15, 2021	By: /s/ Michael Vesey
	Name: Michael Vesey
	Title: Chief Financial Officer
	(Principal Financial and Accounting Officer)

EX-32.1

Exhibits 32.1 and 32.2

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Forian Inc. (the “Company”) for the fiscal quarter ended September 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned officers of the Company hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of their knowledge:

(1) the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 15, 2021	By: /s/ Daniel Barton
	Name: Daniel Barton
	Title: Chief Executive Officer
	(Principal Executive Officer)
Date: November 15, 2021	By: /s/ Michael Vesey
	Name: Michael Vesey
	Title: Chief Financial Officer
	(Principal Financial and Accounting Officer)

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2021	Nov. 09, 2021
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2021
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q3
Document Transition Report	false
Entity File Number	001-40146
Entity Registrant Name	FORIAN INC.
Entity Central Index Key	0001829280
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	85-3467693
Entity Address, Address Line One	41 University Drive
Entity Address, Address Line Two	Suite 400
Entity Address, City or Town	Newtown
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	18940
City Area Code	267
Local Phone Number	225-6263
Title of 12(b) Security	Common Stock, $0.001 par value per share
Trading Symbol	FORA
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		32,561,117

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Sep. 30, 2021	Dec. 31, 2020
Current Assets:
Cash and cash equivalents	$ 23,535,098	$ 665,463
Marketable securities	12,399,243	11,501,844
Accounts receivable, net	2,179,979	22,996
Contract assets	364,480	196,701
Prepaid expenses	912,879	120,979
Other assets	300,000	0
Total current assets	39,691,679	12,507,983
Property and equipment, net	762,658	46,358
Intangible assets, net	9,596,702	0
Goodwill	9,125,372	0
Right of use assets, net	916,195	0
Deposits and other assets	329,682	0
Total assets	60,422,288	12,554,341
Current liabilities:
Accounts payable	1,095,328	647,601
Accrued expenses	2,993,013	480,741
Short-term operating lease liabilities	245,771	0
Notes payable	15,250	0
Warrant liability	501,110	0
Deferred revenues	682,157	158,884
Total current liabilities	5,532,629	1,287,226
Long-term liabilities:
Long-term operating lease liabilities	675,254	0
Convertible notes payable, net of debt issuance costs ($6,000,000 in principal is held by a related party. Refer to Note 15)	24,049,114	0
Total long-term liabilities	24,724,368	0
Total liabilities	30,256,997	1,287,226
Commitments and contingencies (Note 16)
Stockholders' equity:
Preferred Stock; par value $0.001; 5,000,000 Shares authorized; 0 issued and outstanding as of September 30, 2021 and December 31, 2020	0	0
Common Stock; par value $0.001; 95,000,000 Shares authorized; 31,533,083 issued and outstanding as of September 30, 2021 and 21,233,039 issued and outstanding as of December 31, 2020	31,533	21,233
Additional paid-in capital	54,905,098	17,514,907
Accumulated deficit	(24,771,340)	(6,269,025)
Total stockholders' equity	30,165,291	11,267,115
Total liabilities and stockholders' equity	$ 60,422,288	$ 12,554,341

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)	Sep. 30, 2021	Dec. 31, 2020
Long-term liabilities:
Net of debt issuance costs	$ 6,000,000
Stockholders' equity:
Preferred Stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred Stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred Stock, shares issued (in shares)	0	0
Preferred Stock, shares outstanding (in shares)	0	0
Common Stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common Stock, shares authorized (in shares)	95,000,000	95,000,000
Common Stock, shares issued (in shares)	31,533,083	21,233,039
Common Stock, shares outstanding (in shares)	31,533,083	21,233,039

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Revenues:
Total revenues	$ 4,961,755	$ 159,504	$ 11,130,349	$ 334,921
Costs and Expenses:
Cost of revenue	1,337,981	0	3,028,657	0
Research and development	2,612,184	658,824	6,059,948	1,474,215
Sales and marketing	1,088,203	40,217	2,864,213	151,261
General and administrative	6,673,723	514,280	16,035,981	1,143,365
Depreciation and amortization	598,565	3,059	1,381,637	4,932
Transaction related expenses	0	105,128	1,210,279	195,634
Total costs and expenses	12,310,656	1,321,508	30,580,715	2,969,407
Loss From Operations	(7,348,901)	(1,162,004)	(19,450,366)	(2,634,486)
Other Income (Expense):
Change in fair value of warrant liability	251,778	0	746,605	0
Interest and investment income	1,903	89	4,601	5,796
Interest expense	(79,422)	0	(101,325)	0
Foreign currency gain	298,170	0	298,170	0
Total other income, net	472,429	89	948,051	5,796
Net loss before income taxes	(6,876,472)	(1,161,915)	(18,502,315)	(2,628,690)
Income tax expense	0	0	0	0
Net Loss	(6,876,472)	(1,161,915)	(18,502,315)	(2,628,690)
Other comprehensive loss:
Changes in foreign currency translation adjustment	(145,250)	0	0	0
Total other comprehensive loss	(145,250)	0	0	0
Total comprehensive loss	$ (7,021,722)	$ (1,161,915)	$ (18,502,315)	$ (2,628,690)
Basic net loss per common share (in dollars per share)	$ (0.22)	$ (0.08)	$ (0.64)	$ (0.22)
Diluted net loss per common share (in dollars per share)	$ (0.22)	$ (0.08)	$ (0.64)	$ (0.22)
Weighted-average shares outstanding, basic (in shares)	31,332,735	14,208,049	28,814,825	12,038,534
Weighted-average shares outstanding, diluted (in shares)	31,332,735	14,208,049	28,814,825	12,038,534
Information and Software [Member]
Revenues:
Total revenues	$ 4,489,177	$ 159,504	$ 9,661,826	$ 334,921
Service [Member]
Revenues:
Total revenues	269,753	0	858,400	0
Other [Member]
Revenues:
Total revenues	$ 202,825	$ 0	$ 610,123	$ 0

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CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT) - USD ($)	Preferred Stock [Member]	Common Stock [Member]	Common Stock [Member] Series S Units [Member]	Common Stock [Member] Class B Profit Interests [Member]	Additional Paid In Capital [Member]	Additional Paid In Capital [Member] Series S Units [Member]	Additional Paid In Capital [Member] Class B Profit Interests [Member]	Accumulated Other Comprehensive Loss [Member]	Accumulated Deficit [Member]	Total	Series S Units [Member]	Class B Profit Interests [Member]
Balance at Dec. 31, 2019	$ 0	$ 7,713			$ 1,000,098				$ (1,288,842)	$ (281,031)
Balance (in shares) at Dec. 31, 2019		7,713,528
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of Units			$ 5,316			$ 3,310,384					$ 3,315,700
Issuance of Units (in shares)			5,316,284
Conversion of Promissory Notes for MOR Series S Units in March 2020			$ 296			$ 184,004					$ 184,300
Conversion of Promissory Notes for MOR Series S Units in March 2020 (in shares)			295,501
Vested MOR Class B Profit Interest Units				$ 1,281			$ 19,050					$ 20,331
Vested MOR Class B Profit Interest Units (in shares)				1,281,172
Foreign currency translation										0
Net loss									(2,628,690)	(2,628,690)
Balance at Sep. 30, 2020	$ 0	$ 14,606			4,513,536				(3,917,532)	610,610
Balance (in shares) at Sep. 30, 2020	0	14,606,485
Balance at Jun. 30, 2020	$ 0	$ 14,067			4,505,514				(2,755,617)	1,763,964
Balance (in shares) at Jun. 30, 2020		14,066,991
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Vested MOR Class B Profit Interest Units				$ 539			$ 8,022					$ 8,561
Vested MOR Class B Profit Interest Units (in shares)				539,494
Foreign currency translation										0
Net loss									(1,161,915)	(1,161,915)
Balance at Sep. 30, 2020	$ 0	$ 14,606			4,513,536				(3,917,532)	610,610
Balance (in shares) at Sep. 30, 2020	0	14,606,485
Balance at Dec. 31, 2020	$ 0	$ 21,233			17,514,907				(6,269,025)	11,267,115
Balance (in shares) at Dec. 31, 2020		21,233,039
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of Forian Common stock in Helix Acquisition		$ 8,408			18,446,376				0	18,454,784
Issuance of Forian Common stock in Helix Acquisition (in shares)		8,408,383
Forian Restricted Stock Vesting from MOR unvested restricted stock		$ 671			9,987				0	10,658
Forian Restricted Stock Vesting from MOR unvested restricted stock (in shares)		671,641
Issuance of common stock warrants		$ 0			389,976				0	389,976
Forian shares issued upon exercise of MOR Class B options		$ 10			292,820				0	292,830
Forian shares issued upon exercise of MOR Class B options (in shares)		10,167
Stock based compensation expense		$ 0			6,235,021				0	6,235,021
Stock based compensation expense (in shares)		0
Issuance of Units		$ 1,192			11,967,460				0	11,968,652
Issuance of Units (in shares)		1,191,743
Issuance of Forian common stock upon exercise of stock options		$ 19			48,551				0	48,570
Issuance of Forian common stock upon exercise of stock options (in shares)		18,110
Foreign currency translation										0
Net loss									(18,502,315)	(18,502,315)
Balance at Sep. 30, 2021	$ 0	$ 31,533			54,905,098			$ 0	(24,771,340)	30,165,291
Balance (in shares) at Sep. 30, 2021	0	31,533,083
Balance at Jun. 30, 2021	$ 0	$ 31,199			52,264,976			145,250	(17,894,868)	34,546,557
Balance (in shares) at Jun. 30, 2021		31,198,721
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Forian Restricted Stock Vesting from MOR unvested restricted stock		$ 328			4,885					5,213
Forian Restricted Stock Vesting from MOR unvested restricted stock (in shares)		328,518
Stock based compensation expense					2,622,293					2,622,293
Issuance of Forian common stock upon exercise of stock options		$ 6			12,944					12,950
Issuance of Forian common stock upon exercise of stock options (in shares)		5,844
Foreign currency translation								(145,250)		(145,250)
Net loss									(6,876,472)	(6,876,472)
Balance at Sep. 30, 2021	$ 0	$ 31,533			$ 54,905,098			$ 0	$ (24,771,340)	$ 30,165,291
Balance (in shares) at Sep. 30, 2021	0	31,533,083

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (18,502,315)	$ (2,628,690)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	1,381,637	4,932
Amortization on right of use asset	166,489	0
Amortization of debt issuance costs	444	0
Accrued interest on Convertible Notes	70,000	0
Realized and unrealized gain on marketable securities	(3,295)	(5,669)
Provision for doubtful accounts	89,130	0
Stock-based compensation expense	6,245,679	20,331
Change in fair value of warrant liability	(746,605)	0
Non-cash transaction expenses	389,976	0
Change in operating assets and liabilities:
Accounts receivable	(1,757,660)	0
Contract assets	(147,651)	0
Prepaid expenses	(576,836)	(249,823)
Changes in lease liabilities during the period	(186,383)	0
Deposits and other assets	(120,732)	0
Accounts payable	(234,152)	503,026
Accrued expense	539,608	0
Deferred revenues	202,337	0
Net cash used in operating activities	(13,190,329)	(2,355,893)
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment	(640,080)	(34,206)
Purchase of marketable securities	(24,903,107)	(2,888,648)
Sale of marketable securities	24,009,003	3,044,084
Cash acquired as part of business combination	1,310,977	0
Net cash (used in) provided by investing activities	(223,207)	121,230
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of MOR Series S units	0	3,315,700
Proceeds from exercise of MOR Class B options	292,830	0
Payments on notes payable and financing arrangements	(5,551)	0
Proceeds from exercise of common stock options	48,570	0
Proceeds from sale of common stock	11,968,652	0
Proceeds from the issuance of convertible notes payable	23,978,670	0
Net cash provided by financing activities	36,283,171	3,315,700
Net change in cash	22,869,635	1,081,037
Cash and cash equivalents, beginning of period	665,463	494
Cash and cash equivalents, end of period	23,535,098	1,081,531
Supplemental disclosure of cash flow information
Cash paid for interest	724	0
Cash paid for taxes	0	0
Non-cash Investing and Financing Activities:
Conversion of promissory notes to Series S units	0	184,300
Non-cash consideration for Helix acquisition	$ 18,454,784	$ 0

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BUSINESS ORGANIZATION AND NATURE OF OPERATIONS

9 Months Ended

Sep. 30, 2021

BUSINESS ORGANIZATION AND NATURE OF OPERATIONS [Abstract]

BUSINESS ORGANIZATION AND NATURE OF OPERATIONS

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 Medical Outcomes Research Analytics, LLC (“MOR”) for the purpose of effecting the Business Combination (as defined below). All activity of the Company through March 2, 2021 relates only to MOR. MOR was established on May 6, 2019 in Delaware. MOR Analytics, LLC and COR Analytics, LLC are wholly owned subsidiaries of MOR. The Company provides innovative software solutions, proprietary data and predictive analytics to optimize the operational, clinical and financial performance of its customers within the healthcare and cannabis industries. The Company’s mission is to provide its customers with the best-in-class critical technology services through a single integrated platform that enables its customers to operate their businesses more safely, efficiently and profitably and to serve its customers and its customers’ stakeholders and constituencies more comprehensively. The Company represents the unique convergence of proprietary healthcare and consumer data, innovative data management capabilities and intelligent data science with a leading cannabis technology platform yielding the combined power to drive innovation and transparency across the industries it serves.

On March 2, 2021 (the “Merger Closing Date”), pursuant to the Agreement and Plan of Merger, dated as of October 16, 2020, as amended by Amendment to Agreement and Plan of Merger, dated as of December 30, 2020, as further amended by Amendment No. 2 to Agreement and Plan of Merger, dated February 9, 2021 (together, the “Merger Agreement”), by and among Helix Technologies, Inc. (“Helix”), the Company and DNA Merger Sub, Inc., a wholly owned subsidiary of the Company (“Merger Sub”), Merger Sub merged with and into Helix, with Helix being the surviving corporation as a wholly owned subsidiary of the Company (the “Merger”). Each share of Helix common stock was exchanged for 0.05 shares of Company common stock in the Merger. Helix provides traceability and point of sale technology, analytics solutions and other products to customers within each vertical of the cannabis industry to help them improve the performance of their business.

Immediately prior to the Merger Closing Date, pursuant to the Equity Interest Contribution Agreement, dated March 2, 2021 (the “Contribution Agreement”), by and among the Company, MOR and each equity holder of MOR, such equity holders contributed their interests in MOR to the Company in exchange for shares of Company common stock (the “Contribution” and, together with the Merger, the “Business Combination”). Upon the closing of the Contribution, MOR became a wholly owned subsidiary of the Company. Each unit of MOR was exchanged for 1.7776 shares of Company common stock in the Merger, subject to adjustments pursuant to the Contribution Agreement.

Pursuant to the Merger Agreement, while the Company is the legal acquirer, the Merger was accounted for as a reverse acquisition using the acquisition method of accounting in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations (“ASC 805”). As such, MOR is deemed to be the accounting acquirer for financial reporting purposes.

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BASIS OF PRESENTATION

9 Months Ended

Sep. 30, 2021

BASIS OF PRESENTATION [Abstract]

BASIS OF PRESENTATION

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 consolidated financial statements of the Company as of September 30, 2021. 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, 2020, as filed with the Securities and Exchange Commission (“SEC”) on March 31, 2021.

The Contribution was completed on March 2, 2021 and the combination of MOR and Forian was accounted for as a transaction between entities under common control pursuant to ASC 805-50. Accordingly, the combination of Forian and MOR results in a change in reporting entity and the financial statements are presented as though the combination of Forian and MOR occurred as of the beginning of the periods presented. Additionally, the results of Helix are included in the accompanying condensed consolidated financial statements beginning on March 2, 2021, the Merger Closing Date.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2021

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Note 3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The condensed consolidated financial statements of the Company include the accounts of (i) Medical Outcomes Research Analytics, LLC and its wholly owned subsidiaries COR Analytics, LLC and MOR Analytics, LLC, and (ii) Helix Technologies, Inc. and its wholly owned subsidiaries Helix TCS, LLC, Security Consultants Group, LLC, Boss Security Solutions, LLC, Security Grade Protective Services, Ltd., Bio-Tech Medical Software, Inc, BT UCS, Inc., Engeni LLC (including Engeni S.A. (“Engeni SA”), which is 99% owned by Engeni LLC), Green Tree International, Inc. and AIE Exchange Canada, Inc. Effective October 7, 2021, AIE Exchange Canada, Inc. was voluntarily dissolved. All intercompany transactions have been eliminated in consolidation. The financial results of Helix and its subsidiaries are included in the condensed consolidated financial statements beginning on March 2, 2021, the Merger Closing Date.

Foreign Currency

ASC Topic 830-10, Foreign Currency Matters (“ASC 830-10”), requires the use of highly inflationary accounting when a country has experienced a cumulative inflation of approximately 100% or more over a 3-year period. Under highly inflationary accounting, financial statements are remeasured into the reporting currency with resulting gains and losses included in earnings. The Company acquired a subsidiary as part of the Helix acquisition that operates in Argentina, which has been designated a highly inflationary economy. Accordingly, the Company has remeasured the financial statements of the subsidiary under ASC 830-10 as if the US dollar is its functional currency with resulting gains or losses as other income or expense. During the period from March 2, 2021 through September 30, 2021, sales in Argentina represented less than 2% of the Company’s consolidated sales. Assets held in Argentina as of September 30, 2021 represented less than 1% of the Company’s consolidated assets. While the hyperinflationary conditions did not have a material impact on the Company’s business during the period from March 2, 2021 through September 30, 2021, in the future, we may incur larger currency devaluations.

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 related notes to the financial statements. 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 and Corrections

Certain reclassifications have been made to the prior period financial statements to conform to the current period financial statement presentation. The Company previously reported foreign currency related gains and losses related to Engeni SA, which was acquired as part of the acquisition of Helix, as part of other comprehensive income (loss) in the condensed consolidated financial statements for the three-month periods ended March 31, 2021 and June 30, 2021. The foreign currency gain of $298,170 for the three and nine-month periods ended September 30, 2021 includes $145,250 that was previously reported as other comprehensive income (loss). The Company assessed the impact of this correction and determined it was not material to the current or prior reporting periods. Please refer to Foreign Currency policy above.

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. The portion of deposits in excess of FDIC coverage is not protected by such insurance and represents a credit risk to the Company. At times, the Company’s deposits exceed this coverage.

Accounts Receivable and Allowance for Doubtful Accounts

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

Outstanding account balances are reviewed individually for collectability. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. Allowance for doubtful accounts was $256,767 and $0 at September 30, 2021 and December 31, 2020, respectively.

Management charges account balances against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.

Long-Lived Assets, Including Definite Lived Intangible Assets

Long-lived assets, other than goodwill and other indefinite-lived intangibles, are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable through the estimated undiscounted future cash flows derived from such assets. Definite-lived intangible assets primarily consist of customer relationships, software technology and trade names. For long-lived assets used in operations, impairment losses are only recorded if the asset’s carrying amount is not recoverable through its undiscounted, probability-weighted future cash flows. The Company measures the impairment loss based on the difference between the carrying amount and the estimated fair value. When an impairment exists, the related assets are written down to fair value.

Goodwill

Goodwill, which represents the excess of purchase price over the fair value of net assets acquired, is carried at cost. Goodwill is not amortized; rather, it is subject to a periodic assessment for impairment by applying a fair value-based test. The Company reviews goodwill for possible impairment annually during the fourth quarter, or whenever events or circumstances indicate that the carrying amount may not be recoverable.

The impairment model prescribes a two-step method for determining goodwill impairment. However, an entity is permitted to first assess qualitative factors to determine whether the two-step goodwill impairment test is necessary.

The qualitative factors considered by Forian may include, but are not limited to, general economic conditions, the Company’s outlook, market performance of the Company’s industry and recent and forecasted financial performance. Further testing is only required if the entity determines, based on the qualitative assessment, that it is more likely than not that a reporting unit’s fair value is less than its carrying amount. Otherwise, no further impairment testing is required. In the first step, the Company determines the fair value of its reporting unit using a discounted cash flow analysis. If the net book value of the reporting unit exceeds its fair value, the Company then performs the second step of the impairment test, which requires allocation of the reporting unit’s fair value to all of its assets and liabilities using the acquisition method prescribed under authoritative guidance for business combinations with any residual fair value being allocated to goodwill. An impairment charge is recognized when the implied fair value of the Company’s goodwill is less than its carrying amount. No impairment losses have been recognized during the periods presented.

Business Combinations

The Company accounts for its business combinations under the provisions of ASC Topic 805-10, which requires that the purchase 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. ASC 805-10 also specifies criteria that intangible assets acquired in a business combination must meet to be recognized and reported apart from goodwill. Goodwill represents the excess purchase price over the fair value of the tangible net assets and intangible assets acquired in a business combination. Acquisition-related expenses are recognized separately from the business combinations and are expensed as incurred. If the business combination provides for contingent consideration, the Company records the contingent consideration at fair value at the acquisition date and any changes in fair value after the acquisition date are accounted for as measurement-period adjustments. Changes in fair value of contingent consideration resulting from events after the acquisition date, such as earn-outs, are recognized as follows: (i) if the contingent consideration is classified as equity, the contingent consideration is not re-measured and its subsequent settlement is accounted for within equity; or (ii) if the contingent consideration is classified as a liability, the changes in fair value are recognized in earnings.

Revenue Recognition

The Company recognizes revenue in accordance with Financial Accounting Standards Board (“FASB”) Topic 606, - Revenue from Contracts with Customers (“ASC 606”).

Under ASC 606, the Company recognizes revenue when the customer obtains 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. ASC 606-10-32-32 requires the determination of the price at which the Company would sell individual products or services to a customer. The Company does not always have sufficient data or experience related to the terms and pricing for products and services when components are sold on a standalone basis. In instances where insufficient data exists, the Company recognizes the contractual fees ratably over the term of the arrangement. In instances where a customer has limited operating history or the customer has recently been formed, management may determine that it is prudent to recognize only the first year’s fees ratably over the first year of the term or as amounts are billed and collectability is assured. Performance obligations that are distinct and remain undelivered would not be recognized until the end of the contract provided that the consideration is guaranteed. No significant judgements affect the determination of the amount and timing of revenue.

The Company generates revenue from three categories of product offerings: Information and Software, Services and Other.

In 2020, the revenue generated by the Company was exclusively from Information and Software relating to MOR. In 2021, the Company also began to recognize Information and Software, Services and Other revenues related to its acquisition of Helix on March 2, 2021.

In most Information and Software contracts, payments are scheduled throughout the term and the contract may include one or more of the following performance obligations: (i) the provision of historical and/or current information as agreed upon, (ii) access to the information through a hosting provider, (iii) access to and use of software products, (iv) installation and training and (v) access to the Company’s analytical team throughout the term of the agreement, as agreed upon.

Information and Software contracts do not always have distinct pricing assigned to each performance obligation; rather, the price is bundled and the total bundled pricing is invoiced throughout the term of the agreement, with the exception of contracts for software products which provide separate pricing for implementation and training of such products.

The Company recognizes revenue resulting from Information and Software pursuant to agreements under which the Company receives payments for providing the customer access to its products over the contract period. The Company satisfies its performance obligations throughout the term of the contract. Any payments received prior to satisfying performance obligations are deferred and recognized as the performance obligations are satisfied. There are no variable considerations or financing component under such contracts. Prices are typically fixed, but certain contracts can also include royalties in excess of fixed fees. There were $62,500 of royalties in excess of fixed fees for the nine months ended September 30, 2021. Invoicing under contracts is set forth in an invoicing schedule as part of the contract and payments are typically due within 30 days.

Services revenues are primarily from contracts with government agencies and revenue is recognized upon completion of the various milestones within the contract. In the event that a contract does not specifically allocate revenue to the satisfaction of specific performance obligations or milestones, the purchase price of the contracts is allocated based on the percentage of time spent, or expected to be spent, to meet each performance obligation. Initial customization of the software to meet state specific requirements and the training to appropriately utilize the software are generally recognized upon completion of the customization and acceptance by the state agency. Support and service revenues are then recognized over a predetermined period of time as defined in the contract. Contract renewals may include an annual service fee that is recognized over the time period defined in the contract.

Other revenues are primarily from security monitoring services offerings and the provision of web marketing services. Contracts for these services have a stated transaction price for monthly services and are recognized as the services are provided.

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. $45,714 and $53,784 of such costs were capitalized as of September 30, 2021 and December 31, 2020, respectively. There are no significant judgements affecting the determination of the amount and timing of the related revenue.

In the event the Company has not satisfied all performance obligations on its contracts with customers, any amounts of unbilled revenue or excess costs are recorded as contract assets and contract liabilities.

Contract assets result when the cumulative revenue recognized exceeds the cumulative invoicing under a contract. The value of the differential is reflected in Contract assets and represents the value of the revenue that was not billed to customers as of the balance sheet date.

Contract liabilities (“Deferred Revenue”) result when cumulative receipts under a contract for the same performance obligation exceeds the total revenue recognition and such excess is reflected in Deferred Revenue and represents the value of the performance obligations to be satisfied after September 30, 2021.

Contract assets and deferred revenues consist of the following as of September 30, 2021:

	Contract Assets									Contract Liability
	Costs of Obtaining Contracts			Unbilled Revenue			Total			Deferred Revenue
Balance at January 1, 2021	$	53,784		$	142,917		$	196,701		$	158,884
Acquired from Helix		—			20,128			20,128			320,936
Acquired balances recognized during period		—			(20,128	)		(20,128	)		(305,340	)
Beginning deferred revenue balance recognized during the period		—			—			—			(158,884	)
Net change due to timing of billings, payments and recognition		(8,070	)		175,849			167,779			666,561
Balance at September 30, 2021	$	45,714		$	318,766		$	364,480		$	682,157

Segment Information

ASC 280, Segment Reporting (“ASC 280”), establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker is the chief executive officer, who reviews the financial performance and the results of operations of the segments prepared in accordance with U.S. GAAP when making decisions about allocating resources and assessing performance of the Company.

Customer Concentration

The Company did not have any customers that exceeded 10% of total revenue for the three and nine months ended September 30, 2021. The Company had a single customer that accounted for 84% and 90% of total revenue for the three and nine months ended September 30, 2020, respectively.

Concentration of Vendors

The Company licenses certain information assets from third parties as a key input to certain Information and Software Products. While information licensing fees represented less than 10% of the Company’s operating expenses for the three and nine months ended September 30, 2021, respectively, and for the three and nine months ended September 30, 2020, respectively, any disruption associated with these suppliers could have a material short-term impact on the business while alternate sources are secured.

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.

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. An impairment loss would be recognized when the present value of 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 and nine months ended September 30, 2021 and 2020, respectively.

Software Development Costs

The Company accounts for costs incurred in the development of computer software in accordance with ASC Subtopic 350-40, Intangibles – Goodwill and Other – Internal-Use Software. Costs incurred in the application development stage are subject to capitalization and subsequent amortization and possible impairment. Product development costs are primarily personnel related to activities for design and evaluating software development, testing, bug fixes, and other maintenance activities. Product development costs are expensed as incurred. The Company capitalized software development costs of $561,553 and $0 as of September 30, 2021 and December 31, 2020, respectively.

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 $18,011 and $39,009 for the three and nine months ended September 30, 2021, respectively, and $0 and $0 for the three and nine months ended September 30, 2020, respectively.

Net Loss per Share

Net loss per share of common stock is computed by dividing net loss by the weighted average number of common shares outstanding during the period. At September 30, 2021, the Company had potentially dilutive securities that could be exercised or converted into common stock. Refer to Note 14 for the Company’s disclosure on such potential dilution. Further, as the Company has incurred net losses for the three and nine months ended September 30, 2021 and 2020, respectively, 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, or cash received.

Subsequent Measurement – Financial instruments classified as liabilities

The Company records the fair value of its financial instruments classified as liabilities at each subsequent measurement date. The changes in fair value of its financial instruments classified as liabilities are recorded as other expense/income.

Stock-based Compensation

The Company’s 2020 Equity Incentive Plan (“2020 Plan”) permits the grant of stock options, restricted stock awards and/or restricted stock units. A total of 4,000,000 shares of Company common stock are authorized and reserved for issuance under the 2020 Plan. 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, net of forfeitures, which are recorded as they occur.

Income Taxes

MOR was organized as a limited liability company and became a wholly owned subsidiary of the Company upon completion of the Merger with Helix on March 2, 2021. As a result, the Company was treated as a partnership for federal and state income tax purposes through March 2, 2021. Accordingly, the Company’s taxable income, deductions, assets and liabilities are reported by the members on their respective income tax returns. Therefore, no provision for federal or state income tax has been made by the Company for all business activity from its inception through March 2, 2021.

After March 2, 2021, the Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which 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 Company has an incurred net operating loss for financial-reporting and tax-reporting purposes. Accordingly, for federal and state income tax purposes, the benefit for income taxes has been offset entirely by a valuation allowance against the related federal and state deferred tax asset for the period since March 2, 2021.

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.

Recent Accounting Pronouncements

In August 2020, the FASB issued ASU No. 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”). The update removes separation models for (i) convertible debt with a cash conversion feature and (ii) convertible instruments with a beneficial conversion feature. Under ASU 2020-06, these features will be combined with the host contract. ASU 2020-06 does not impact the accounting treatment for conversion features that are accounted for as a derivative under Topic 815. The update also requires the application of the if-converted method to be used for convertible instruments and the effect of potential share settlement be included in the diluted earnings per share calculation when an instrument may be settled in cash or shares. The amendments in this update are effective for public business entities for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. The amendment is to be adopted through either a fully retrospective or modified retrospective method of transition, only at the beginning of an entity’s fiscal year. Early adoption is permitted. The Company has elected to early adopt the standard as of January 1, 2021 using the modified retrospective method of transition. The Company evaluated the terms of its debt and concluded that the instrument does not require separation and that there were no other derivatives that required separation. As a result, there is no equity component and the Company recorded the convertible note as a single liability within long-term debt on its condensed consolidated balance sheet. The Company applies the if-converted method for calculation of diluted earnings per share for its convertible debt instruments.

In October 2021, the FASB issued Accounting Standards Update No. 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”). The FASB issued ASU 2021-08 to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to recognition of an acquired contract liability and payment terms and their effect on subsequent revenue recognized by the acquirer. The Company is evaluating the potential impact of ASU 2021-08 on its financial statements and related disclosures.

The Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its financial statements.

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BUSINESS COMBINATION

9 Months Ended

Sep. 30, 2021

BUSINESS COMBINATION [Abstract]

BUSINESS COMBINATION

Note 4 BUSINESS COMBINATION

On March 2, 2021, pursuant to the Merger and the Merger Agreement, Forian acquired 100% of the issued and outstanding capital stock, options and warrants of Helix.

The total purchase consideration for the Merger was $18,454,784. The purchase consideration is equal to the product of (i) the total outstanding Helix common shares and common share equivalents for in-the-money warrants to purchase Helix common stock and vested stock options multiplied by the merger exchange ratio of 0.05 shares of Company common stock for 1 share of Helix common stock and (ii) $2.158 per share, which represented the fair value of Company common stock on the acquisition date.

The Merger was accounted for as a business combination in accordance with ASC 805. The Company has determined preliminary fair values of the assets acquired and liabilities assumed in the Merger. These values are subject to change as the Company completes its determination of the fair value of assets acquired and liabilities assumed.

The following table summarizes the preliminary purchase price allocations relating to the Merger:

Total purchase price	$	18,454,784
Assets acquired:
Cash		1,310,977
Accounts receivable, net		488,453
Prepaid expenses		215,064
Contract assets		20,128
Other assets		450,000
Property and equipment		146,559
Software Technology		5,279,000
Trade Names and Trademarks		386,000
Customer Relationships		5,243,000
Right of use assets		1,082,684
Deposits and other assets		58,950
Total assets acquired	$	14,680,815
Liabilities assumed:
Accounts payable and accrued liabilities	$	2,654,543
Short-term lease liabilities		295,364
Deferred revenues		320,936
Warrant liability		1,247,715
Notes payable and financing arrangements		20,801
Other long-term liabilities		812,044
Total liabilities assumed	$	5,351,403
Estimated fair value of net assets acquired:	$	9,329,412
Goodwill	$	9,125,372

The Company adjusts provisional goodwill balance when new information is obtained regarding the valuation of acquired assets and liabilities during a one-year measurement period from the date of acquisition in accordance with ASC 805-10. During the three months ended September 30, 2021, the Company adjusted provisional goodwill by $424,460 based on new information obtained regarding certain contingent liabilities and other assets.

The preliminary estimates for useful lives of the identified intangibles are 8 years for Trade Names and Trademarks, 5 years for Customer Relationships and 2 and 7 years for Software Technology Intangibles with a weighted average useful life of 5.47 years.

Transaction costs incurred in connection with the Business Combination amounted to approximately $0 and $1,210,279 during the three and nine months ended September 30, 2021, respectively.

Unaudited Pro Forma Results

The following table represents the revenue, net loss and loss per share effect of the acquired company, as reported on a pro forma basis as if the acquisition occurred on January 1, 2020. These pro forma results are not necessarily indicative of the results that would have occurred if the acquisition had occurred on the first day of the periods presented, nor does the pro forma financial information purport to represent the results of operations for future periods.

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
Description	2021			2020			2021			2020
Revenues	$	4,961,755		$	3,062,557		$	13,139,257		$	9,135,273
Net loss		(6,876,472	)		(42,488,120	)		(21,265,019	)		(46,647,993	)
Net loss per share:
Basic and diluted-as pro forma (unaudited)	$	(0.22	)	$	(1.48	)	$	(0.69	)	$	(1.75	)

The pro forma financial information for all periods presented above has been calculated after adjusting the results of the Company and Helix to reflect the business combination accounting effects resulting from this acquisition, including the amortization expense from acquired intangible assets included in the pro forma financial information presented above. The Forian historical condensed consolidated financial statements have been adjusted in the pro forma combined financial statements to give effect to pro forma events that are directly attributable to the business combination and factually supportable. The pro forma financial information is for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of the periods presented.

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MARKETABLE SECURITIES

9 Months Ended

Sep. 30, 2021

MARKETABLE SECURITIES [Abstract]

MARKETABLE SECURITIES

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 Statement of Operations. The Company invests in short-term U.S. Treasuries and money market mutual funds. As of September 30, 2021 and 2020, the fair value of these investments approximated cost.

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PREPAID EXPENSES

9 Months Ended

Sep. 30, 2021

PREPAID EXPENSES [Abstract]

PREPAID EXPENSES

Note 6 PREPAID EXPENSES

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 September 30, 2021 and December 31, 2020, the Company’s balance sheet reflected other prepaid expenses of $912,879 and $120,979, respectively, primarily relating to various software licenses and insurance policies with durations ranging from 3 months to 1 year.

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PROPERTY AND EQUIPMENT, NET

9 Months Ended

Sep. 30, 2021

PROPERTY AND EQUIPMENT, NET [Abstract]

PROPERTY AND EQUIPMENT, NET

Note 7
PROPERTY AND EQUIPMENT, NET

As of September 30, 2021 and December 31, 2020, property and equipment were comprised of the following:

	September 30, 2021			December 31, 2020
	Unaudited
Personal computing equipment	$	129,702		$	55,767
Furniture and equipment		117,343			—
Software development costs		561,553			—
Vehicles		25,876			—
Total		834,474			55,767
Less: Accumulated depreciation and amortization		(71,816	)		(9,409	)
Property and equipment, net	$	762,658		$	46,358

Depreciation and amortization expense for the three and nine months ended September 30, 2021 was $30,909 and $69,895, respectively, and for the three and nine months ended September 30, 2020 was $3,059 and $4,932, respectively.

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INTANGIBLE ASSETS, NET

9 Months Ended

Sep. 30, 2021

INTANGIBLE ASSETS, NET [Abstract]

INTANGIBLE ASSETS, NET

Note 8 INTANGIBLE ASSETS, NET

The preliminary allocation of the purchase price for the acquisition was allocated based on information that is currently available. The Company's estimates and assumptions underlying the initial allocations is subject to the collection of information necessary to complete its allocations within the measurement period, which is up to one year from the acquisition date.

The following table summarizes the Company’s intangible assets as of September 30, 2021:

	Estimated Useful Life (Years)		Gross Carrying Amount at March 2, 2021		Accumulated Amortization			Net Book Value at 9/30/2021
Customer Relationships		5	$	5,243,000	$	(606,046	)	$	4,636,954
Software Technology		2		1,170,000		(338,105	)		831,895
Software Technology		7		4,109,000		(339,261	)	$	3,769,739
Tradenames and Trademarks		8		386,000		(27,886	)		358,114
			$	10,908,000	$	(1,311,298	)	$	9,596,702

The Company uses the straight-line method to determine the amortization expense for its definite lived intangible assets. Amortization expense related to the purchased intangible assets was $567,212 and 1,311,298 for the three and nine months ended September 30, 2021, respectively, and $0 for the three and nine months ended September 30, 2020.

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

Years Ending December 31,	Future amortization expense
2021 remaining	$	567,213
2022		2,268,850
2023		1,784,495
2024		1,683,850
2025		1,683,850
Thereafter		1,608,444
Total	$	9,596,702

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ACCRUED EXPENSES

9 Months Ended

Sep. 30, 2021

ACCRUED EXPENSES [Abstract]

ACCRUED EXPENSES

Note 9
ACCRUED EXPENSES

As of September 30, 2021 and December 31, 2020, accrued expenses were comprised of the following:

	September 30, 2021		December 31, 2020
Employee compensation		1,903,187		346,720
Accrued expenses		1,089,826		8,825
Transaction-related		—		125,196
Total	$	2,993,013	$	480,741

Transaction-related accrued expenses are associated with the Merger. See Note 4.

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WARRANT LIABILITY

9 Months Ended

Sep. 30, 2021

WARRANT LIABILITY [Abstract]

WARRANT LIABILITY

Note 10
WARRANT LIABILITY

In conjunction with the Merger, outstanding warrants to purchase Helix common stock were converted to warrants to purchase Company common stock. As the warrant holders have the option to receive cash in lieu of common stock in certain circumstances, the Company determined that the warrants require classification as a liability pursuant to ASC 815-40. In accordance with the applicable accounting guidance, the outstanding warrants are recognized as a warrant liability on the condensed consolidated balance sheet and are measured at their inception date fair value (the closing date of the Merger) and subsequently re-measured at each reporting period with changes being recorded in the condensed consolidated statement of operations. As of September 30, 2021, the Company had 97,058 warrants outstanding classified as liabilities.

The fair value of the Company’s warrant liability was calculated using the Black-Scholes model and the following assumptions:

	As of September 30, 2021
Fair value of company's common stock	$	10.32
Dividend yield		0	%
Expected volatility		80% - 145	%
Risk Free interest rate		0.05% - 0.58	%
Expected life (years)		2.07
Exercise price	$	8.00 - $28.00
Fair value of financial instruments - warrants	$	501,110

The change in fair value of the financial instruments – warrants is as follows:

	Amount
Balance at January 1, 2021	$	—
Fair value of warrant liability assumed in connection with Helix Merger		1,247,715
Change in fair value of warrant liability		(746,605	)
Balance at September 30, 2021	$	501,110

	Amount
Balance at July 1, 2021	$	752,888
Change in fair value of warrant liability		(251,778	)
Balance at September 30, 2021	$	501,110

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CONVERTIBLE NOTES

9 Months Ended

Sep. 30, 2021

CONVERTIBLE NOTES [Abstract]

CONVERTIBLE NOTES

Note 11 CONVERTIBLE NOTES

	September 30, 2021			December 31, 2020
Principal outstanding	$	24,000,000		$	—
Add: accrued interest		70,000			—
Less: unamortized debt issuance costs		(20,886	)		—
Convertible note payable, net of debt issuance costs	$	24,049,114		$	—

On September 1, 2021, the Company entered into a Note Purchase Agreement with certain accredited investors and a director of the Company, pursuant to which the Company issued at 100% of par value $24,000,000 in aggregate principal balance of 3.5% Convertible Promissory Notes due September 1, 2025 (the “Notes”), convertible into (i) shares of Company common stock, and (ii) warrants to purchase shares of Company common stock equal to 20% of the principal amount of the Notes divided by the conversion price of the Notes (the “Warrants”). The Notes will mature on the fourth-year anniversary of the date of issuance, which time is also the termination date of the Warrants if issued. The conversion price of the Notes and the exercise price of the Warrants is $11.98 per share, which was the consolidated closing bid price of the Company common stock as reported by Nasdaq on August 31, 2021, the most recently completed trading day preceding the Company entering into the Note Purchase Agreement with investors with respect to the Notes. The holders of the Notes may, at any time, convert all or a portion of the Notes plus accrued interest (subject to a minimum principal amount of $100,000) at the conversion price. The Company may redeem all or a portion of any Notes then outstanding at any time after the first anniversary of issuance at a price of 112.5% of par value plus accrued interest. In the event of a change of control of the Company, the Company may redeem all Notes then outstanding at a price of 108% of par value plus accrued interest. Interest expense on the Notes is payable upon maturity or earlier redemption unless the Notes are converted prior to such time. In the event the holders of the Note convert all or a portion of the Notes, the related accrued interest is converted at the conversion price. Interest expense related to the Notes was $70,000 for the three and nine months ended September 30, 2021.

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 will be deferred and amortized over the term of the Notes. During the three months ended September 30, 2021, the Company recognized $444 in amortization of debt issuance costs.

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STOCK-BASED COMPENSATION

9 Months Ended

Sep. 30, 2021

STOCK-BASED COMPENSATION [Abstract]

STOCK-BASED COMPENSATION

Note 12 STOCK-BASED COMPENSATION

Restricted Stock Awards and Restricted Stock Units

Unvested equity interests of MOR were converted into restricted Company common stock based upon the exchange ratio of 1.7776 shares of Company common stock for each 1 MOR unit, subject to any adjustments required under the Contribution Agreement. The information regarding the 2020 Plan below is presented as though the combination occurred as of the beginning of the periods presented.

	Number of Restricted Shares and Units			Weighted Average Grant Date Fair Value Per Share
Unvested at January 1, 2020		1,237,396		$	0.62
Issued		2,191,869			1.21
Vested		1,729,589			0.72
Canceled		—			—
Unvested at December 31, 2020		1,699,676			1.28
Issued		444,000			11.76
Vested		671,642			0.03
Canceled		(50,000	)		12.18
Unvested at September 30, 2021		1,422,034		$	3.35

The 1,422,034 of unvested awards at September 30, 2021 consists of 444,000 restricted stock units and 1,028,034 shares of restricted stock.

Stock Options

As part of the Merger (see Note 4), the Company assumed the Helix TCS, Inc. Omnibus Stock Incentive Plan and the Bio-Tech Medical Software, Inc. 2014 Stock Incentive Plan, each as amended, pursuant to which options exercisable at prices between $2.00 and $51.80 per share for 455,089 shares of Company common stock were outstanding. The value attributable to service subsequent to the Merger will be recognized as compensation cost by the Company.

The fair value of the stock options was estimated 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 at the inception date are as follows:

	September 30, 2021
Exercise Price	$	2.00 to $51.80
Fair value of Company common stock	$	9.39 to $22.90
Dividend yield		0	%
Expected volatility	118.0		%
Risk Free interest rate	0.9% to 1.0		%
Expected life (years) remaining	0 to 9.93

Stock option activity for the period ended September 30, 2021 is as follows:

	Shares Underlying Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)
Outstanding at January 1, 2021		—		$	—		—
Options assumed in Helix Merger		455,089		$	15.13		3.44
Granted		3,815,214		$	12.85		9.53
Exercised		(22,437	)	$	4.57		1.92
Forfeited and expired		(161,893	)	$	11.74		9.16
Outstanding at September 30, 2021		4,085,973		$	14.25		8.84
Vested options at September 30, 2021		455,089		$	15.13		3.44

Stock Compensation Expense

The grant date fair value per share for the stock options granted was $11.94 and $0.02 for the nine months ended September 30, 2021 and 2020, respectively.

At September 30, 2021, the total unrecognized stock compensation expense related to unvested stock option awards and restricted stock awards and restricted stock units granted was $42,992,330, which the Company expects to recognize over a weighted-average period of approximately 3.88 years. Stock compensation expense for the three and nine months ended September 30, 2021 and 2020 is as follows:

	Three Months Ended September 30,					Nine Months Ended September 30,
	2021			2020		2021		2020
Cost of revenue		14,823			—		19,479		—
Research and development		(131,774	)		2,868		6,215		8,666
Sales and marketing		108,477			1,476		315,140		3,505
General and administrative		2,635,980			4,217		5,904,845		8,160
Total		2,627,506			8,561		6,245,679		20,331

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STOCKHOLDERS' EQUITY

9 Months Ended

Sep. 30, 2021

STOCKHOLDERS' EQUITY [Abstract]

STOCKHOLDERS' EQUITY

Note 13
STOCKHOLDERS’ EQUITY

The Condensed Consolidated Statement of Stockholders’ Equity reflects the exchange of MOR Members Equity for Company common stock as of the beginning of the periods presented. See Note 2.

All of MOR’s Class A, Class B vested profit interests’ units, Series S, Series S-1, and vested Restricted Class B units were converted to Company common stock on March 2, 2021 based upon the exchange ratio of 1.7776 shares of Company common stock to 1 MOR member unit, subject to adjustment pursuant to the Contribution Agreement. Unvested Class B profit interest units, unvested restricted Class B units and options to acquire Restricted Class B Units were converted to unvested restricted Company common stock on March 2, 2021 based upon the exchange ratio of 1.7776 shares of Company common stock to 1 MOR member unit, subject to adjustment pursuant to the Contribution Agreement. The applicable vesting provisions of such MOR units carried over to the restricted Company common stock.

In December 2020, MOR completed a Series S-1 financing with cash proceeds of $13,000,000 in exchange for 3,388,947 Series S-1 preferred units.

In March 2020, MOR completed a Series S financing with cash proceeds of $3,300,000 and converted a promissory note of $184,300 in exchange for 3,078,276 Series S preferred units.

In 2019 and 2020, Class B profit interest units, restricted Class B units and options to acquire Class B units were issued to employees, consultants and advisors.

In March 2021, the Company issued warrants to purchase 17,031 shares of Company common stock at a per-share purchase price equal to $0.01. The warrants terminate after a period of 2 years from the issuance date. The warrants were issued in exchange for services provided with a fair value of $389,976 included in transaction related expenses for the nine months ended September 30, 2021.

On April 16, 2021, the Company raised proceeds of $11,968,652, net of transaction expenses of $31,348, resulting from the sale of 1,194,743 shares of Company common stock at an average purchase price equal to $10.21 per share to a select group of institutional and accredited investors. Investors included both unaffiliated investors as well as directors of the Company. Directors purchased 560,461 shares of common stock at a purchase price of $11.33 per share, which amount represented the consolidated closing bid price of Company common stock as reported by the Nasdaq on April 9, 2021, the last trading day prior to execution of the securities purchase agreement. Unaffiliated investors purchased 631,282 shares of Company common stock at a purchase price of $8.95 per share, which price was negotiated on April 9, 2021, and represents an approximately 15% discount to the preceding day’s volume weighted average price.

See Note 4 for additional details on shares issued pursuant to the Merger.

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NET LOSS PER SHARE

9 Months Ended

Sep. 30, 2021

NET LOSS PER SHARE [Abstract]

NET LOSS PER SHARE

Note 14 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 September 30,						For the Nine Months Ended September 30,
	2021			2020			2021			2020
Net loss attributable to common shareholders	$	(6,876,472	)	$	(1,161,915	)	$	(18,502,315	)	$	(2,628,690	)
Net loss per share attributable to common shareholders:
Basic	$	(0.22	)	$	(0.08	)	$	(0.64	)	$	(0.22	)
Diluted	$	(0.22	)	$	(0.08	)	$	(0.64	)	$	(0.22	)
Weighted average common shares outstanding:
Basic		31,332,735			14,208,049			28,814,825			12,038,534
Diluted		31,332,735			14,208,049			28,814,825			12,038,534

The following table sets forth the outstanding potentially dilutive securities that have been excluded in the calculation of diluted net loss per share because their inclusion would be anti-dilutive:

	For the Three and Nine Months ended September 30,
	2021		2020
Potentially dilutive securities:
Warrants		124,087		—
Stock options		4,085,973		—
Convertible notes		2,411,018		—
Unvested Restricted Stock Awards and Units		1,422,034		2,148,093
Total		8,043,112		2,148,093

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RELATED PARTY TRANSACTIONS

9 Months Ended

Sep. 30, 2021

RELATED PARTY TRANSACTIONS [Abstract]

RELATED PARTY TRANSACTIONS

Note 15 RELATED PARTY TRANSACTIONS

On May 6, 2019, MOR entered into an arrangement with family trusts controlled by Max Wygod and Martin Wygod, directors of MOR, to issue two separate promissory notes (“Promissory Note(s)”) entitling MOR to secure up to $100,000 per Promissory Note to fund operations. The Promissory Notes had no interest rate and were due on the sooner of the initial closing of MOR’s Series S Preferred Unit financing or December 31, 2020. In March 2020, in connection with MOR’s Series S Preferred Unit financing, the aggregate outstanding balance of the Promissory Notes of $184,300, was converted, at the option of the holders, into 295,501 shares of Company common stock.

Adam Dublin, Chief Strategy Officer, was previously a consultant for a current vendor of MOR. Mr. Dublin’s consultancy with the vendor ended on December 11, 2020 and the parties have not agreed to renew the agreement. Pursuant to Mr. Dublin’s consulting agreement with the vendor, Mr. Dublin received payments from the vendor for the three and nine months ended September 30, 2021 and 2020 of $107,125 and $303,274, and $66,040 and $310,315, respectively.

On April 16, 2021, the Company raised net proceeds of $11,968,652 resulting from the sale of Company common stock to a select group of institutional and accredited investors, which included directors of the Company. See Note 13 for additional information.

On September 1, 2021, the Company issued at 100% of par value $24,000,000 in aggregate principal balance of 3.5% Convertible Promissory Notes due 2025 convertible into (i) shares of Company common stock, and (ii) warrants to purchase shares of Company common stock equal to 20% of the principal amount of the Notes divided by the conversion price to a select group of institutional and accredited investors, which included a director of the Company who holds $6,000,000 of the Notes. See Note 11 for additional information.

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COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2021

COMMITMENTS AND CONTINGENCIES [Abstract]

COMMITMENTS AND CONTINGENCIES

Note 16 COMMITMENTS AND CONTINGENCIES

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 one year to five years. The lease term represents the period up to the early termination date unless it is reasonably certain that the Company will not exercise the early termination option. Certain leases include rental payments that are adjusted periodically based on changes in consumer price and other indices.

Leases are classified as finance or operating in accordance with the guidance in ASC 842. The Company does not hold any finance leases.

The Company is obligated under operating lease agreements for office facilities in (i) Florida (two), (ii) Washington, (iii) Colorado and (iv) Argentina that expire in (i) December 2021 and 2024, (ii) December 2022, (iii) February 2026 and (iv) December 2021, respectively. The Company also has three short-term leases related to offices in Pennsylvania, Massachusetts and Virginia. These short-term leases are currently leased on a month-to-month basis. A short-term lease is a lease with a term of 12 months or less and does not include the option to purchase the underlying asset that we would expect to exercise. The Company has elected to adopt the short-term lease exemption in ASC 842 and as such have not recognized a “right of use” asset or lease liability for these three 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 for the nine months ended September 30, 2021 and 2020 were as follows:

	Nine Months Ended September 30,
	2021		2020
Cash used in operating leases	$	211,077	$	—
ROU assets obtained in exchange for lease obligations	$	166,489	$	—

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

	As of September 30, 2021			As of December 31, 2020
Right of use assets, net	$	916,195		$	—
Short-term operating lease liabilities	$	245,771		$	—
Long-term operating lease liabilities		675,254			—
Total lease liabilities	$	921,025		$	—
Weighted average remaining lease term (in years)		3.41			—
Weighted average discount rate		8.5	%		0.0	%

The components of lease expense were as follows for each of the period presented:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Operating lease expense	$	81,936	$	—	$	191,182	$	—
Short-term lease expense	$	19,393	$	3,928	$	62,916	$	12,074
Total operating lease costs	$	101,329	$	3,928	$	254,098	$	12,074

Future lease payments included in the measurement of lease liabilities on the condensed consolidated balance sheet as of September 30, 2021, for the following five fiscal years and thereafter were as follows:

	As of September 30, 2021
2021 remaining	$	69,901
2022		308,470
2023		286,670
2024		291,161
2025		85,726
Thereafter		14,288
Total future minimum lease payments	$	1,056,216
Less imputed interest		(135,191	)
Total	$	921,025

Service Agreements

The Company entered into certain service 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 licenses as of September 30, 2021:

	September 30, 2021		December 31, 2020
	Unaudited
Year ending December 31, 2021	$	500,000	$	533,488
Year ending December 31, 2022		772,188		272,188
Year ending December 31, 2023		1,000,000		—
Year ending December 31, 2024		1,500,000		—
Year ending December 31, 2025		1,600,000		—
Thereafter		400,000		—
	$	5,772,188	$	805,676

From time to time the Company may be involved in claims that arise during the ordinary course of business. For any matters where management currently believes it is probable that the Company will incur a loss and that the probable loss or range of loss can be reasonably estimated, the Company records reserves in the consolidated financial statements based on its best estimates of such loss. In other instances, because of the uncertainties related to either the probable outcome or the amount or range of loss, management is unable to make a reasonable estimate of a liability, if any. Regardless of the outcome, litigation can be costly and time consuming, and it can divert management’s attention from important business matters and initiatives, negatively impacting the Company’s overall operations. Although the results of litigation and claims cannot be predicted with certainty, the Company does not currently have any pending litigation to which it is a party or to which its property is subject that we believe to be material, except for the below.

Legal Proceedings

Kenney, et al. v. Helix TCS, Inc.

On July 20, 2017, one former employee of Helix filed a lawsuit in the United States District Court for the District of Colorado alleging violations of the Fair Labor Standards Act on behalf of himself and other employees. The plaintiff seeks damages for Helix’s alleged failure to compensate employees appropriately for the overtime hours they worked as purported “non-exempt” employees. The matter has been conditionally certified as a collective action and the court has authorized the plaintiff to send notice and consent forms to putative class members. Notice and consent forms have been sent. The period for returning consent forms has ended. No decision has been made on the merits of the claim. The case is in the early stages of discovery. The Company will vigorously defend the claims in the lawsuit.

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 Forian, claiming that he owned 10% of GTI. The Company believes the lawsuit is wholly without merit and will vigorously defend the claims in the lawsuit. The case is in the process of discovery. A hearing on motions for summary judgement is expected after January 17, 2022, with trial on an eight-week trial docket scheduled to begin on January 17, 2022.

Helix Stockholder Lawsuits

Beginning on February 16, 2021, four lawsuits were filed by purported Helix stockholders (captioned Dillion v. Helix Technologies, Inc., et al., No. 1:21-cv-01365 (filed February 16, 2021 in the United States District Court for the Southern District of New York) (the “Dillion Complaint”); Baros v. Helix Technologies, Inc., et al., No. 1:21-cv-01425 (filed February 17, 2021 in the United States District Court for the Southern District of New York) (the “Baros Complaint”); Anderson v. Helix Technologies, Inc., et al., No. 1:21-cv-00464 (filed February 17, 2021 in the United States District Court for the District of Colorado) (the “Anderson Complaint”); and Robinson v. Helix Technologies, Inc., et al., No. 1:21-cv-00484 (filed February 18, 2021 in the United States District Court for the District of Colorado) (the “Robinson Complaint” and, together with the Dillion Complaint, the Anderson Complaint and the Baros Complaint, the “Stockholder Complaints”)). The Stockholder Complaints were filed against (a) Helix and (b) the members of Helix’s board of directors (the “Individual Defendants”) and the Baros Complaint was also filed against Forian, MOR and Merger Sub. The Stockholder Complaints generally allege that the defendants violated Section 14(a) of the Exchange Act, by, among other things, failing to disclose material information in the Proxy Statement regarding the sales process, reconciliation of certain financial projections regarding Helix certain inputs underlying Management Planning, Inc.’s financial analysis, and potential conflicts of interest of involving Helix’s insiders. The Stockholder Complaints also allege the Individual Defendants (and the Baros Complaint alleges Forian, Merger Sub and MOR) violated Section 20(a) of the Exchange Act as controlling persons who had the ability to prevent the Proxy Statement from being materially false and misleading. The Stockholder Complaints seek, among other things, an injunction against the consummation of the transactions contemplated by the Merger Agreement and an award of costs and expenses, including a reasonable allowance for attorneys’ and experts’ fees. Despite seeking an injunction in the complaints, none of the plaintiffs followed up with a motion to enjoin the transactions. As of October 25, 2021, the four Stockholder Complaints have been dismissed and are no longer pending. Specifically, On March 11, 2021, the Robinson Complaint was voluntarily dismissed. On September 7, 2021, the Baros Complaint was voluntarily dismissed. On September 13, 2021, the Dillion Complaint was voluntarily dismissed. On October 25, 2021, the Anderson Complaint was voluntarily dismissed.

Nykiah Thomas v. Security Consultants Group, LLC d/b/a Helix TCS, Helix Technologies, Inc. and Shamson Sundra

On July 16, 2021, Nykiah Thomas, individually and on behalf of M’Seiya Thomas, a minor, filed a complaint in the District Court, City and County of Denver, Colorado, against Security Consultants Group, LLC d/b/a Helix TCS and Helix Technologies, Inc., subsidiaries of Forian, and Shamson Sundra, a former employee of Security Consultants Group, LLC, alleging negligence in the performance of security services in connection with a school shooting at STEM School Highlands Ranch that occurred on May 7, 2019. The case is in the early stages of discovery and the parties have agreed to voluntary mediation scheduled for December 13, 2021. Trial is scheduled to begin on August 8, 2022. The Company will vigorously defend the claims in the lawsuit.

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SEGMENT RESULTS

9 Months Ended

Sep. 30, 2021

SEGMENT RESULTS [Abstract]

SEGMENT RESULTS

Note 17
SEGMENT RESULTS

ASC 280-10-50 requires use of the “management approach” model for segment reporting. The management approach is based on the way a company’s management organized segments within the company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company.

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-making group is composed of the chief executive officer and the chief financial officer. The Company operates in three segments, Information & Software, Services and Other.

Asset information by operating segment is not presented below since the chief operating decision maker does not review this information by segment. The reporting segments follow the same accounting policies used in the preparation of the Company’s unaudited condensed consolidated financial statements.

The following represents selected information for the Company’s reportable segments:

	Three months ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Information and Software
Revenue	$	4,489,177		$	159,504		$	9,661,826		$	334,921
Costs and expenses		7,661,631			1,007,777			17,813,947		$	2,177,550
Loss from operations		(3,172,454	)		(848,273	)		(8,152,121	)		(1,842,629	)
Total other income/(expense)		—			—			—			—
Net loss before income taxes		(3,172,454	)		(848,273	)		(8,152,121	)		(1,842,629	)
Services
Revenue	$	269,753		$	—		$	858,400		$	—
Costs and expenses		369,507			—			755,627			—
Loss from operations		(99,754	)		—			102,773			—
Total other income/(expense)		—			—			—			—
Net loss before income taxes		(99,754	)		—			102,773			—
Other
Revenue	$	202,825		$	—		$	610,123		$	—
Costs and expenses		228,014			—			698,001			—
Loss from operations		(25,189	)		—			(87,878	)		—
Total other income/(expense)		(275	)		—			(607	)		—
Net income before income taxes		(25,464	)		—			(88,485	)		—
Centrally Managed Costs
Revenue	$	—		$	—		$	—		$	—
Costs and expenses		4,051,504			313,731			11,313,140			791,857
Loss from operations		(4,051,504	)		(313,731	)		(11,313,140	)		(791,857	)
Total other income/(expense)		472,704			89			948,658			5,796
Net loss before income taxes		(3,578,800	)		(313,642	)		(10,364,482	)		(786,061	)
Totals
Revenue	$	4,961,755		$	159,504		$	11,130,349		$	334,921
Costs and expenses		12,310,656			1,321,508			30,580,715			2,969,407
Loss from operations		(7,348,901	)		(1,162,004	)		(19,450,366	)		(2,634,486	)
Total other income/(expense)		472,429			89			948,051			5,796
Net loss	$	(6,876,472	)	$	(1,161,915	)	$	(18,502,315	)	$	(2,628,690	)

Approximately 97% of revenues were attributable to customers in the United States for the three and nine months ended September 30, 2021. All of the Company’s revenues were attributable to customers in the United States for the three and nine months ended September 30, 2020.

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SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2021

SUBSEQUENT EVENTS [Abstract]

SUBSEQUENT EVENTS

Note 18
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.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 30, 2021

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]

Principles of Consolidation

Principles of Consolidation

The condensed consolidated financial statements of the Company include the accounts of (i) Medical Outcomes Research Analytics, LLC and its wholly owned subsidiaries COR Analytics, LLC and MOR Analytics, LLC, and (ii) Helix Technologies, Inc. and its wholly owned subsidiaries Helix TCS, LLC, Security Consultants Group, LLC, Boss Security Solutions, LLC, Security Grade Protective Services, Ltd., Bio-Tech Medical Software, Inc, BT UCS, Inc., Engeni LLC (including Engeni S.A. (“Engeni SA”), which is 99% owned by Engeni LLC), Green Tree International, Inc. and AIE Exchange Canada, Inc. Effective October 7, 2021, AIE Exchange Canada, Inc. was voluntarily dissolved. All intercompany transactions have been eliminated in consolidation. The financial results of Helix and its subsidiaries are included in the condensed consolidated financial statements beginning on March 2, 2021, the Merger Closing Date.

Foreign Currency

Foreign Currency

ASC Topic 830-10, Foreign Currency Matters (“ASC 830-10”), requires the use of highly inflationary accounting when a country has experienced a cumulative inflation of approximately 100% or more over a 3-year period. Under highly inflationary accounting, financial statements are remeasured into the reporting currency with resulting gains and losses included in earnings. The Company acquired a subsidiary as part of the Helix acquisition that operates in Argentina, which has been designated a highly inflationary economy. Accordingly, the Company has remeasured the financial statements of the subsidiary under ASC 830-10 as if the US dollar is its functional currency with resulting gains or losses as other income or expense. During the period from March 2, 2021 through September 30, 2021, sales in Argentina represented less than 2% of the Company’s consolidated sales. Assets held in Argentina as of September 30, 2021 represented less than 1% of the Company’s consolidated assets. While the hyperinflationary conditions did not have a material impact on the Company’s business during the period from March 2, 2021 through September 30, 2021, in the future, we may incur larger currency devaluations.

Use of Estimates

Use of Estimates

Preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgements and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses together with amounts disclosed in related notes to the financial statements. 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 and Corrections

Reclassifications and Corrections

Certain reclassifications have been made to the prior period financial statements to conform to the current period financial statement presentation. The Company previously reported foreign currency related gains and losses related to Engeni SA, which was acquired as part of the acquisition of Helix, as part of other comprehensive income (loss) in the condensed consolidated financial statements for the three-month periods ended March 31, 2021 and June 30, 2021. The foreign currency gain of $298,170 for the three and nine-month periods ended September 30, 2021 includes $145,250 that was previously reported as other comprehensive income (loss). The Company assessed the impact of this correction and determined it was not material to the current or prior reporting periods. Please refer to Foreign Currency policy above.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The Company measures the fair value of financial assets and liabilities based on the guidance of ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), which defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements.

ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an ordinary transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:

Level 1 — quoted prices in active markets for identical assets or liabilities;

Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable; and

Level 3 — inputs that are unobservable.

The carrying value of the Company’s financial instruments, such as cash, marketable securities, accounts receivable and accrued liabilities and other liabilities approximate fair values due to the short-term nature of these instruments.

Cash and Cash Equivalents and Credit Risk

Cash and Cash Equivalents and Credit Risk

The Company considers all cash accounts that are not subject to withdrawal restrictions and highly liquid investments with a maturity of 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. The portion of deposits in excess of FDIC coverage is not protected by such insurance and represents a credit risk to the Company. At times, the Company’s deposits exceed this coverage.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts Receivable and Allowance for Doubtful Accounts

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

Outstanding account balances are reviewed individually for collectability. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. Allowance for doubtful accounts was $256,767 and $0 at September 30, 2021 and December 31, 2020, respectively.

Management charges account balances against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.

Long-Lived Assets, Including Definite Lived Intangible Assets

Long-Lived Assets, Including Definite Lived Intangible Assets

Long-lived assets, other than goodwill and other indefinite-lived intangibles, are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable through the estimated undiscounted future cash flows derived from such assets. Definite-lived intangible assets primarily consist of customer relationships, software technology and trade names. For long-lived assets used in operations, impairment losses are only recorded if the asset’s carrying amount is not recoverable through its undiscounted, probability-weighted future cash flows. The Company measures the impairment loss based on the difference between the carrying amount and the estimated fair value. When an impairment exists, the related assets are written down to fair value.

Goodwill

Goodwill

Goodwill, which represents the excess of purchase price over the fair value of net assets acquired, is carried at cost. Goodwill is not amortized; rather, it is subject to a periodic assessment for impairment by applying a fair value-based test. The Company reviews goodwill for possible impairment annually during the fourth quarter, or whenever events or circumstances indicate that the carrying amount may not be recoverable.

The impairment model prescribes a two-step method for determining goodwill impairment. However, an entity is permitted to first assess qualitative factors to determine whether the two-step goodwill impairment test is necessary.

The qualitative factors considered by Forian may include, but are not limited to, general economic conditions, the Company’s outlook, market performance of the Company’s industry and recent and forecasted financial performance. Further testing is only required if the entity determines, based on the qualitative assessment, that it is more likely than not that a reporting unit’s fair value is less than its carrying amount. Otherwise, no further impairment testing is required. In the first step, the Company determines the fair value of its reporting unit using a discounted cash flow analysis. If the net book value of the reporting unit exceeds its fair value, the Company then performs the second step of the impairment test, which requires allocation of the reporting unit’s fair value to all of its assets and liabilities using the acquisition method prescribed under authoritative guidance for business combinations with any residual fair value being allocated to goodwill. An impairment charge is recognized when the implied fair value of the Company’s goodwill is less than its carrying amount. No impairment losses have been recognized during the periods presented.

Business Combinations

Business Combinations

The Company accounts for its business combinations under the provisions of ASC Topic 805-10, which requires that the purchase 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. ASC 805-10 also specifies criteria that intangible assets acquired in a business combination must meet to be recognized and reported apart from goodwill. Goodwill represents the excess purchase price over the fair value of the tangible net assets and intangible assets acquired in a business combination. Acquisition-related expenses are recognized separately from the business combinations and are expensed as incurred. If the business combination provides for contingent consideration, the Company records the contingent consideration at fair value at the acquisition date and any changes in fair value after the acquisition date are accounted for as measurement-period adjustments. Changes in fair value of contingent consideration resulting from events after the acquisition date, such as earn-outs, are recognized as follows: (i) if the contingent consideration is classified as equity, the contingent consideration is not re-measured and its subsequent settlement is accounted for within equity; or (ii) if the contingent consideration is classified as a liability, the changes in fair value are recognized in earnings.

Revenue Recognition

Revenue Recognition

The Company recognizes revenue in accordance with Financial Accounting Standards Board (“FASB”) Topic 606, - Revenue from Contracts with Customers (“ASC 606”).

Under ASC 606, the Company recognizes revenue when the customer obtains 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. ASC 606-10-32-32 requires the determination of the price at which the Company would sell individual products or services to a customer. The Company does not always have sufficient data or experience related to the terms and pricing for products and services when components are sold on a standalone basis. In instances where insufficient data exists, the Company recognizes the contractual fees ratably over the term of the arrangement. In instances where a customer has limited operating history or the customer has recently been formed, management may determine that it is prudent to recognize only the first year’s fees ratably over the first year of the term or as amounts are billed and collectability is assured. Performance obligations that are distinct and remain undelivered would not be recognized until the end of the contract provided that the consideration is guaranteed. No significant judgements affect the determination of the amount and timing of revenue.

The Company generates revenue from three categories of product offerings: Information and Software, Services and Other.

In 2020, the revenue generated by the Company was exclusively from Information and Software relating to MOR. In 2021, the Company also began to recognize Information and Software, Services and Other revenues related to its acquisition of Helix on March 2, 2021.

In most Information and Software contracts, payments are scheduled throughout the term and the contract may include one or more of the following performance obligations: (i) the provision of historical and/or current information as agreed upon, (ii) access to the information through a hosting provider, (iii) access to and use of software products, (iv) installation and training and (v) access to the Company’s analytical team throughout the term of the agreement, as agreed upon.

Information and Software contracts do not always have distinct pricing assigned to each performance obligation; rather, the price is bundled and the total bundled pricing is invoiced throughout the term of the agreement, with the exception of contracts for software products which provide separate pricing for implementation and training of such products.

The Company recognizes revenue resulting from Information and Software pursuant to agreements under which the Company receives payments for providing the customer access to its products over the contract period. The Company satisfies its performance obligations throughout the term of the contract. Any payments received prior to satisfying performance obligations are deferred and recognized as the performance obligations are satisfied. There are no variable considerations or financing component under such contracts. Prices are typically fixed, but certain contracts can also include royalties in excess of fixed fees. There were $62,500 of royalties in excess of fixed fees for the nine months ended September 30, 2021. Invoicing under contracts is set forth in an invoicing schedule as part of the contract and payments are typically due within 30 days.

Services revenues are primarily from contracts with government agencies and revenue is recognized upon completion of the various milestones within the contract. In the event that a contract does not specifically allocate revenue to the satisfaction of specific performance obligations or milestones, the purchase price of the contracts is allocated based on the percentage of time spent, or expected to be spent, to meet each performance obligation. Initial customization of the software to meet state specific requirements and the training to appropriately utilize the software are generally recognized upon completion of the customization and acceptance by the state agency. Support and service revenues are then recognized over a predetermined period of time as defined in the contract. Contract renewals may include an annual service fee that is recognized over the time period defined in the contract.

Other revenues are primarily from security monitoring services offerings and the provision of web marketing services. Contracts for these services have a stated transaction price for monthly services and are recognized as the services are provided.

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. $45,714 and $53,784 of such costs were capitalized as of September 30, 2021 and December 31, 2020, respectively. There are no significant judgements affecting the determination of the amount and timing of the related revenue.

In the event the Company has not satisfied all performance obligations on its contracts with customers, any amounts of unbilled revenue or excess costs are recorded as contract assets and contract liabilities.

Contract assets result when the cumulative revenue recognized exceeds the cumulative invoicing under a contract. The value of the differential is reflected in Contract assets and represents the value of the revenue that was not billed to customers as of the balance sheet date.

Contract liabilities (“Deferred Revenue”) result when cumulative receipts under a contract for the same performance obligation exceeds the total revenue recognition and such excess is reflected in Deferred Revenue and represents the value of the performance obligations to be satisfied after September 30, 2021.

Contract assets and deferred revenues consist of the following as of September 30, 2021:

	Contract Assets									Contract Liability
	Costs of Obtaining Contracts			Unbilled Revenue			Total			Deferred Revenue
Balance at January 1, 2021	$	53,784		$	142,917		$	196,701		$	158,884
Acquired from Helix		—			20,128			20,128			320,936
Acquired balances recognized during period		—			(20,128	)		(20,128	)		(305,340	)
Beginning deferred revenue balance recognized during the period		—			—			—			(158,884	)
Net change due to timing of billings, payments and recognition		(8,070	)		175,849			167,779			666,561
Balance at September 30, 2021	$	45,714		$	318,766		$	364,480		$	682,157

Segment Information

Segment Information

ASC 280, Segment Reporting (“ASC 280”), establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker is the chief executive officer, who reviews the financial performance and the results of operations of the segments prepared in accordance with U.S. GAAP when making decisions about allocating resources and assessing performance of the Company.

Customer Concentration

Customer Concentration

The Company did not have any customers that exceeded 10% of total revenue for the three and nine months ended September 30, 2021. The Company had a single customer that accounted for 84% and 90% of total revenue for the three and nine months ended September 30, 2020, respectively.

Concentration of Vendors

Concentration of Vendors

The Company licenses certain information assets from third parties as a key input to certain Information and Software Products. While information licensing fees represented less than 10% of the Company’s operating expenses for the three and nine months ended September 30, 2021, respectively, and for the three and nine months ended September 30, 2020, respectively, any disruption associated with these suppliers could have a material short-term impact on the business while alternate sources are secured.

Property and Equipment, Net

Property and Equipment, Net

Property and equipment are stated at cost, net of accumulated depreciation, which is recorded commencing at the in-service date using the straight-line method at rates sufficient to charge the cost of depreciable assets to operations over their estimated useful lives, which are 1 to 7 years. Maintenance and repairs are charged to operations as incurred.

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. An impairment loss would be recognized when the present value of 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 and nine months ended September 30, 2021 and 2020, respectively.

Software Development Costs

Software Development Costs

The Company accounts for costs incurred in the development of computer software in accordance with ASC Subtopic 350-40, Intangibles – Goodwill and Other – Internal-Use Software. Costs incurred in the application development stage are subject to capitalization and subsequent amortization and possible impairment. Product development costs are primarily personnel related to activities for design and evaluating software development, testing, bug fixes, and other maintenance activities. Product development costs are expensed as incurred. The Company capitalized software development costs of $561,553 and $0 as of September 30, 2021 and December 31, 2020, respectively.

Contingencies

Contingencies

Occasionally, the Company may be involved in claims and legal proceedings arising from the ordinary course of its business. The Company records a provision for a liability when it believes that it is both probable that a liability has been incurred, and the amount can be reasonably estimated. If these estimates and assumptions change or prove to be incorrect, it could have a material impact on the Company’s 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

Advertising costs are expensed as incurred and included in sales and marketing expenses and amounted to $18,011 and $39,009 for the three and nine months ended September 30, 2021, respectively, and $0 and $0 for the three and nine months ended September 30, 2020, respectively.

Net Loss per Share

Net Loss per Share

Net loss per share of common stock is computed by dividing net loss by the weighted average number of common shares outstanding during the period. At September 30, 2021, the Company had potentially dilutive securities that could be exercised or converted into common stock. Refer to Note 14 for the Company’s disclosure on such potential dilution. Further, as the Company has incurred net losses for the three and nine months ended September 30, 2021 and 2020, respectively, the diluted loss per share is the same as basic loss per share for the periods presented.

Distinguishing Liabilities from Equity

Distinguishing Liabilities from Equity

The Company relies on the guidance provided by ASC Topic 480, Distinguishing Liabilities from Equity and ASC 815-40, Derivatives and Hedging: Contracts in Entity’s Own Equity (“ASC 815-40”), to classify certain redeemable and/or convertible instruments. The Company first determines whether a financial instrument should be classified as a liability. The Company will determine the liability classification if the financial instrument is mandatorily redeemable, or if the financial instrument, other than outstanding shares, embodies a conditional obligation that the Company must or may settle by issuing a variable number of its equity shares.

Once the Company determines that a financial instrument should not be classified as a liability, the Company determines whether the financial instrument should be presented between the liability section and the equity section of the balance sheet (“temporary equity”). The Company will determine temporary equity classification if the redemption of the financial instrument is outside the control of the Company (i.e. at the option of the holder). Otherwise, the Company accounts for the financial instrument as permanent equity.

Initial Measurement

The Company records its financial instruments classified as liability, temporary equity or permanent equity at issuance at the fair value, or cash received.

Subsequent Measurement – Financial instruments classified as liabilities

The Company records the fair value of its financial instruments classified as liabilities at each subsequent measurement date. The changes in fair value of its financial instruments classified as liabilities are recorded as other expense/income.

Stock-based Compensation

Stock-based Compensation

The Company’s 2020 Equity Incentive Plan (“2020 Plan”) permits the grant of stock options, restricted stock awards and/or restricted stock units. A total of 4,000,000 shares of Company common stock are authorized and reserved for issuance under the 2020 Plan. 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, net of forfeitures, which are recorded as they occur.

Income Taxes

Income Taxes

MOR was organized as a limited liability company and became a wholly owned subsidiary of the Company upon completion of the Merger with Helix on March 2, 2021. As a result, the Company was treated as a partnership for federal and state income tax purposes through March 2, 2021. Accordingly, the Company’s taxable income, deductions, assets and liabilities are reported by the members on their respective income tax returns. Therefore, no provision for federal or state income tax has been made by the Company for all business activity from its inception through March 2, 2021.

After March 2, 2021, the Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which 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 Company has an incurred net operating loss for financial-reporting and tax-reporting purposes. Accordingly, for federal and state income tax purposes, the benefit for income taxes has been offset entirely by a valuation allowance against the related federal and state deferred tax asset for the period since March 2, 2021.

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.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In August 2020, the FASB issued ASU No. 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”). The update removes separation models for (i) convertible debt with a cash conversion feature and (ii) convertible instruments with a beneficial conversion feature. Under ASU 2020-06, these features will be combined with the host contract. ASU 2020-06 does not impact the accounting treatment for conversion features that are accounted for as a derivative under Topic 815. The update also requires the application of the if-converted method to be used for convertible instruments and the effect of potential share settlement be included in the diluted earnings per share calculation when an instrument may be settled in cash or shares. The amendments in this update are effective for public business entities for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. The amendment is to be adopted through either a fully retrospective or modified retrospective method of transition, only at the beginning of an entity’s fiscal year. Early adoption is permitted. The Company has elected to early adopt the standard as of January 1, 2021 using the modified retrospective method of transition. The Company evaluated the terms of its debt and concluded that the instrument does not require separation and that there were no other derivatives that required separation. As a result, there is no equity component and the Company recorded the convertible note as a single liability within long-term debt on its condensed consolidated balance sheet. The Company applies the if-converted method for calculation of diluted earnings per share for its convertible debt instruments.

In October 2021, the FASB issued Accounting Standards Update No. 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”). The FASB issued ASU 2021-08 to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to recognition of an acquired contract liability and payment terms and their effect on subsequent revenue recognized by the acquirer. The Company is evaluating the potential impact of ASU 2021-08 on its financial statements and related disclosures.

The Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its financial statements.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Sep. 30, 2021

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]

Contract Assets and Deferred Revenues

Contract assets and deferred revenues consist of the following as of September 30, 2021:

	Contract Assets									Contract Liability
	Costs of Obtaining Contracts			Unbilled Revenue			Total			Deferred Revenue
Balance at January 1, 2021	$	53,784		$	142,917		$	196,701		$	158,884
Acquired from Helix		—			20,128			20,128			320,936
Acquired balances recognized during period		—			(20,128	)		(20,128	)		(305,340	)
Beginning deferred revenue balance recognized during the period		—			—			—			(158,884	)
Net change due to timing of billings, payments and recognition		(8,070	)		175,849			167,779			666,561
Balance at September 30, 2021	$	45,714		$	318,766		$	364,480		$	682,157

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BUSINESS COMBINATION (Tables)

9 Months Ended

Sep. 30, 2021

BUSINESS COMBINATION [Abstract]

Preliminary Purchase Price Allocations

The following table summarizes the preliminary purchase price allocations relating to the Merger:

Total purchase price	$	18,454,784
Assets acquired:
Cash		1,310,977
Accounts receivable, net		488,453
Prepaid expenses		215,064
Contract assets		20,128
Other assets		450,000
Property and equipment		146,559
Software Technology		5,279,000
Trade Names and Trademarks		386,000
Customer Relationships		5,243,000
Right of use assets		1,082,684
Deposits and other assets		58,950
Total assets acquired	$	14,680,815
Liabilities assumed:
Accounts payable and accrued liabilities	$	2,654,543
Short-term lease liabilities		295,364
Deferred revenues		320,936
Warrant liability		1,247,715
Notes payable and financing arrangements		20,801
Other long-term liabilities		812,044
Total liabilities assumed	$	5,351,403
Estimated fair value of net assets acquired:	$	9,329,412
Goodwill	$	9,125,372

Pro Forma Financial Information

The following table represents the revenue, net loss and loss per share effect of the acquired company, as reported on a pro forma basis as if the acquisition occurred on January 1, 2020. These pro forma results are not necessarily indicative of the results that would have occurred if the acquisition had occurred on the first day of the periods presented, nor does the pro forma financial information purport to represent the results of operations for future periods.

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
Description	2021			2020			2021			2020
Revenues	$	4,961,755		$	3,062,557		$	13,139,257		$	9,135,273
Net loss		(6,876,472	)		(42,488,120	)		(21,265,019	)		(46,647,993	)
Net loss per share:
Basic and diluted-as pro forma (unaudited)	$	(0.22	)	$	(1.48	)	$	(0.69	)	$	(1.75	)

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PROPERTY AND EQUIPMENT, NET (Tables)

9 Months Ended

Sep. 30, 2021

PROPERTY AND EQUIPMENT, NET [Abstract]

Property and Equipment

As of September 30, 2021 and December 31, 2020, property and equipment were comprised of the following:

	September 30, 2021			December 31, 2020
	Unaudited
Personal computing equipment	$	129,702		$	55,767
Furniture and equipment		117,343			—
Software development costs		561,553			—
Vehicles		25,876			—
Total		834,474			55,767
Less: Accumulated depreciation and amortization		(71,816	)		(9,409	)
Property and equipment, net	$	762,658		$	46,358

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INTANGIBLE ASSETS, NET (Tables)

9 Months Ended

Sep. 30, 2021

INTANGIBLE ASSETS, NET [Abstract]

Intangible Assets

The following table summarizes the Company’s intangible assets as of September 30, 2021:

	Estimated Useful Life (Years)		Gross Carrying Amount at March 2, 2021		Accumulated Amortization			Net Book Value at 9/30/2021
Customer Relationships		5	$	5,243,000	$	(606,046	)	$	4,636,954
Software Technology		2		1,170,000		(338,105	)		831,895
Software Technology		7		4,109,000		(339,261	)	$	3,769,739
Tradenames and Trademarks		8		386,000		(27,886	)		358,114
			$	10,908,000	$	(1,311,298	)	$	9,596,702

Estimated Future Amortization Expense

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

Years Ending December 31,	Future amortization expense
2021 remaining	$	567,213
2022		2,268,850
2023		1,784,495
2024		1,683,850
2025		1,683,850
Thereafter		1,608,444
Total	$	9,596,702

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ACCRUED EXPENSES (Tables)

9 Months Ended

Sep. 30, 2021

ACCRUED EXPENSES [Abstract]

Accrued Expenses

As of September 30, 2021 and December 31, 2020, accrued expenses were comprised of the following:

	September 30, 2021		December 31, 2020
Employee compensation		1,903,187		346,720
Accrued expenses		1,089,826		8,825
Transaction-related		—		125,196
Total	$	2,993,013	$	480,741

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WARRANT LIABILITY (Tables)

9 Months Ended

Sep. 30, 2021

WARRANT LIABILITY [Abstract]

Fair Value of Warrant Liability Assumptions

The fair value of the Company’s warrant liability was calculated using the Black-Scholes model and the following assumptions:

	As of September 30, 2021
Fair value of company's common stock	$	10.32
Dividend yield		0	%
Expected volatility		80% - 145	%
Risk Free interest rate		0.05% - 0.58	%
Expected life (years)		2.07
Exercise price	$	8.00 - $28.00
Fair value of financial instruments - warrants	$	501,110

Change in Fair Value of Financial Instruments

The change in fair value of the financial instruments – warrants is as follows:

	Amount
Balance at January 1, 2021	$	—
Fair value of warrant liability assumed in connection with Helix Merger		1,247,715
Change in fair value of warrant liability		(746,605	)
Balance at September 30, 2021	$	501,110

	Amount
Balance at July 1, 2021	$	752,888
Change in fair value of warrant liability		(251,778	)
Balance at September 30, 2021	$	501,110

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CONVERTIBLE NOTES (Tables)

9 Months Ended

Sep. 30, 2021

CONVERTIBLE NOTES [Abstract]

Convertible Note Payable

	September 30, 2021			December 31, 2020
Principal outstanding	$	24,000,000		$	—
Add: accrued interest		70,000			—
Less: unamortized debt issuance costs		(20,886	)		—
Convertible note payable, net of debt issuance costs	$	24,049,114		$	—

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STOCK-BASED COMPENSATION (Tables)

9 Months Ended

Sep. 30, 2021

STOCK-BASED COMPENSATION [Abstract]

Information Regarding Equity Incentive Plan

The information regarding the 2020 Plan below is presented as though the combination occurred as of the beginning of the periods presented.

	Number of Restricted Shares and Units			Weighted Average Grant Date Fair Value Per Share
Unvested at January 1, 2020		1,237,396		$	0.62
Issued		2,191,869			1.21
Vested		1,729,589			0.72
Canceled		—			—
Unvested at December 31, 2020		1,699,676			1.28
Issued		444,000			11.76
Vested		671,642			0.03
Canceled		(50,000	)		12.18
Unvested at September 30, 2021		1,422,034		$	3.35

Fair Value of Stock Option Assumptions

The assumptions at the inception date are as follows:

	September 30, 2021
Exercise Price	$	2.00 to $51.80
Fair value of Company common stock	$	9.39 to $22.90
Dividend yield		0	%
Expected volatility	118.0		%
Risk Free interest rate	0.9% to 1.0		%
Expected life (years) remaining	0 to 9.93

Stock Option Activity

Stock option activity for the period ended September 30, 2021 is as follows:

	Shares Underlying Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)
Outstanding at January 1, 2021		—		$	—		—
Options assumed in Helix Merger		455,089		$	15.13		3.44
Granted		3,815,214		$	12.85		9.53
Exercised		(22,437	)	$	4.57		1.92
Forfeited and expired		(161,893	)	$	11.74		9.16
Outstanding at September 30, 2021		4,085,973		$	14.25		8.84
Vested options at September 30, 2021		455,089		$	15.13		3.44

Stock Compensation Expense

Stock compensation expense for the three and nine months ended September 30, 2021 and 2020 is as follows:

	Three Months Ended September 30,					Nine Months Ended September 30,
	2021			2020		2021		2020
Cost of revenue		14,823			—		19,479		—
Research and development		(131,774	)		2,868		6,215		8,666
Sales and marketing		108,477			1,476		315,140		3,505
General and administrative		2,635,980			4,217		5,904,845		8,160
Total		2,627,506			8,561		6,245,679		20,331

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NET LOSS PER SHARE (Tables)

9 Months Ended

Sep. 30, 2021

NET LOSS PER SHARE [Abstract]

Computation of Basic and Diluted 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 September 30,						For the Nine Months Ended September 30,
	2021			2020			2021			2020
Net loss attributable to common shareholders	$	(6,876,472	)	$	(1,161,915	)	$	(18,502,315	)	$	(2,628,690	)
Net loss per share attributable to common shareholders:
Basic	$	(0.22	)	$	(0.08	)	$	(0.64	)	$	(0.22	)
Diluted	$	(0.22	)	$	(0.08	)	$	(0.64	)	$	(0.22	)
Weighted average common shares outstanding:
Basic		31,332,735			14,208,049			28,814,825			12,038,534
Diluted		31,332,735			14,208,049			28,814,825			12,038,534

Antidilutive Securities Excluded from Computation of Loss Per Share

The following table sets forth the outstanding potentially dilutive securities that have been excluded in the calculation of diluted net loss per share because their inclusion would be anti-dilutive:

	For the Three and Nine Months ended September 30,
	2021		2020
Potentially dilutive securities:
Warrants		124,087		—
Stock options		4,085,973		—
Convertible notes		2,411,018		—
Unvested Restricted Stock Awards and Units		1,422,034		2,148,093
Total		8,043,112		2,148,093

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COMMITMENTS AND CONTINGENCIES (Tables)

9 Months Ended

Sep. 30, 2021

COMMITMENTS AND CONTINGENCIES [Abstract]

Supplemental Cash Flow Information and Non-Cash Activity Related to Leases

Supplemental cash flow information and non-cash activity related to leases for the nine months ended September 30, 2021 and 2020 were as follows:

	Nine Months Ended September 30,
	2021		2020
Cash used in operating leases	$	211,077	$	—
ROU assets obtained in exchange for lease obligations	$	166,489	$	—

ROU Lease Assets and Lease Liabilities

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

	As of September 30, 2021			As of December 31, 2020
Right of use assets, net	$	916,195		$	—
Short-term operating lease liabilities	$	245,771		$	—
Long-term operating lease liabilities		675,254			—
Total lease liabilities	$	921,025		$	—
Weighted average remaining lease term (in years)		3.41			—
Weighted average discount rate		8.5	%		0.0	%

Components of Lease Expenses

The components of lease expense were as follows for each of the period presented:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Operating lease expense	$	81,936	$	—	$	191,182	$	—
Short-term lease expense	$	19,393	$	3,928	$	62,916	$	12,074
Total operating lease costs	$	101,329	$	3,928	$	254,098	$	12,074

Future Lease Payments Included in Measurement of Lease Liabilities

Future lease payments included in the measurement of lease liabilities on the condensed consolidated balance sheet as of September 30, 2021, for the following five fiscal years and thereafter were as follows:

	As of September 30, 2021
2021 remaining	$	69,901
2022		308,470
2023		286,670
2024		291,161
2025		85,726
Thereafter		14,288
Total future minimum lease payments	$	1,056,216
Less imputed interest		(135,191	)
Total	$	921,025

Remaining Payment Obligations under these Licenses

The following table shows the remaining payment obligations under these licenses as of September 30, 2021:

	September 30, 2021		December 31, 2020
	Unaudited
Year ending December 31, 2021	$	500,000	$	533,488
Year ending December 31, 2022		772,188		272,188
Year ending December 31, 2023		1,000,000		—
Year ending December 31, 2024		1,500,000		—
Year ending December 31, 2025		1,600,000		—
Thereafter		400,000		—
	$	5,772,188	$	805,676

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SEGMENT RESULTS (Tables)

9 Months Ended

Sep. 30, 2021

SEGMENT RESULTS [Abstract]

Segment Reporting Information by Segment

The following represents selected information for the Company’s reportable segments:

	Three months ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Information and Software
Revenue	$	4,489,177		$	159,504		$	9,661,826		$	334,921
Costs and expenses		7,661,631			1,007,777			17,813,947		$	2,177,550
Loss from operations		(3,172,454	)		(848,273	)		(8,152,121	)		(1,842,629	)
Total other income/(expense)		—			—			—			—
Net loss before income taxes		(3,172,454	)		(848,273	)		(8,152,121	)		(1,842,629	)
Services
Revenue	$	269,753		$	—		$	858,400		$	—
Costs and expenses		369,507			—			755,627			—
Loss from operations		(99,754	)		—			102,773			—
Total other income/(expense)		—			—			—			—
Net loss before income taxes		(99,754	)		—			102,773			—
Other
Revenue	$	202,825		$	—		$	610,123		$	—
Costs and expenses		228,014			—			698,001			—
Loss from operations		(25,189	)		—			(87,878	)		—
Total other income/(expense)		(275	)		—			(607	)		—
Net income before income taxes		(25,464	)		—			(88,485	)		—
Centrally Managed Costs
Revenue	$	—		$	—		$	—		$	—
Costs and expenses		4,051,504			313,731			11,313,140			791,857
Loss from operations		(4,051,504	)		(313,731	)		(11,313,140	)		(791,857	)
Total other income/(expense)		472,704			89			948,658			5,796
Net loss before income taxes		(3,578,800	)		(313,642	)		(10,364,482	)		(786,061	)
Totals
Revenue	$	4,961,755		$	159,504		$	11,130,349		$	334,921
Costs and expenses		12,310,656			1,321,508			30,580,715			2,969,407
Loss from operations		(7,348,901	)		(1,162,004	)		(19,450,366	)		(2,634,486	)
Total other income/(expense)		472,429			89			948,051			5,796
Net loss	$	(6,876,472	)	$	(1,161,915	)	$	(18,502,315	)	$	(2,628,690	)

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BUSINESS ORGANIZATION AND NATURE OF OPERATIONS (Details)		9 Months Ended
	Mar. 02, 2021	Sep. 30, 2021
Business Organization and Nature of Operations Description [Abstract]
Exchange ratio		1.7776
Medical Outcomes Research Analytics, LLC [Member]
Business Organization and Nature of Operations Description [Abstract]
Exchange ratio		1.7776
Helix Technologies, Inc [Member]
Business Organization and Nature of Operations Description [Abstract]
Exchange ratio	0.05	0.05

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Principles of Consolidation (Details)	Sep. 30, 2021
Engeni S.A. [Member]
Principles of Consolidation [Abstract]
Percentage of owned subsidiaries	99.00%

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Foreign Currency (Details) - USD ($)	3 Months Ended		7 Months Ended	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2021	Sep. 30, 2020
Foreign Currency [Abstract]
Net sales	$ 4,961,755	$ 159,504		$ 11,130,349	$ 334,921
Engeni S.A. [Member] | Revenue Benchmark [Member] | Geographic Concentration Risk [Member]
Foreign Currency [Abstract]
Percentage of consolidated net sales			2.00%	1.00%
Net sales			$ 0

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Reclassifications and Corrections (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Reclassifications and Corrections [Abstract]
Foreign currency gain	$ 298,170	$ 0	$ 298,170	$ 0
Other comprehensive income (loss)	(145,250)	$ 0	0	$ 0
Previously Reported [Member]
Reclassifications and Corrections [Abstract]
Other comprehensive income (loss)	$ (145,250)		$ (145,250)

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Cash and Cash Equivalents and Credit Risk (Details)	Sep. 30, 2021 USD ($)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]
Cash, FDIC insured amount	$ 250,000

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Accounts Receivable and Allowance for Doubtful Accounts (Details) - USD ($)	Sep. 30, 2021	Dec. 31, 2020
Accounts Receivable and Allowance for Doubtful Accounts [Abstract]
Allowance for doubtful accounts	$ 256,767	$ 0

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Goodwill (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
Goodwill [Abstract]
Impairment losses	$ 0	$ 0

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Revenue Recognition (Details)	9 Months Ended
	Sep. 30, 2021 USD ($) Offering	Dec. 31, 2020 USD ($)
Revenue Recognition [Abstract]
Number of revenue generating offerings | Offering	3
Excess amount of royalties	$ 62,500
Payment term after billed date	30 days
Capitalized contract costs	$ 45,714	$ 53,784
Contract assets [Abstract]
Beginning balance	196,701
Acquired from Helix	(20,128)
Beginning deferred revenue balance recognized during the period	0
Net change due to timing of billings, payments and recognition	167,779
Ending balance	364,480
Helix Technologies, Inc [Member]
Contract assets [Abstract]
Acquired from Helix	20,128
Costs of Obtaining Contracts [Member]
Contract assets [Abstract]
Beginning balance	53,784
Acquired from Helix	0
Beginning deferred revenue balance recognized during the period	0
Net change due to timing of billings, payments and recognition	(8,070)
Ending balance	45,714
Costs of Obtaining Contracts [Member] | Helix Technologies, Inc [Member]
Contract assets [Abstract]
Acquired from Helix	0
Unbilled Revenue [Member]
Contract assets [Abstract]
Beginning balance	142,917
Acquired from Helix	(20,128)
Beginning deferred revenue balance recognized during the period	0
Net change due to timing of billings, payments and recognition	175,849
Ending balance	318,766
Unbilled Revenue [Member] | Helix Technologies, Inc [Member]
Contract assets [Abstract]
Acquired from Helix	20,128
Deferred Revenue [Member]
Contract liabilities (Deferred Revenue) [Abstract]
Beginning balance	158,884
Acquired from Helix	(305,340)
Beginning deferred revenue balance recognized during the period	(158,884)
Net change due to timing of billings, payments and recognition	666,561
Ending balance	682,157
Deferred Revenue [Member] | Helix Technologies, Inc [Member]
Contract liabilities (Deferred Revenue) [Abstract]
Acquired from Helix	$ 320,936

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Customer Concentration (Details) - Revenue Benchmark [Member] - Customer Concentration Risk [Member] - Customer	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Customer Concentration [Abstract]
Number of major customers	0		0
Customer One [Member]
Customer Concentration [Abstract]
Number of major customers		1		1
Percentage of revenues generated from customer sales		84.00%		90.00%

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Property and Equipment, Net (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Property and Equipment, Net [Abstract]
Impairment losses	$ 0	$ 0	$ 0	$ 0
Minimum [Member]
Property and Equipment, Net [Abstract]
Estimated useful lives			1 year
Maximum [Member]
Property and Equipment, Net [Abstract]
Estimated useful lives			7 years

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Software Development Costs (Details) - USD ($)	Sep. 30, 2021	Dec. 31, 2020
Software Development Costs [Abstract]
Capitalized software development costs	$ 561,553	$ 0

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Advertising (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Advertising [Abstract]
Advertising costs	$ 18,011	$ 0	$ 39,009	$ 0

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Stock-Based Compensation (Details)	Sep. 30, 2021 shares
Stock-based Compensation [Abstract]
Number of shares authorized and reserved for issuance under 2020 Plan (in shares)	4,000,000

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Income Taxes (Details)	22 Months Ended
	Mar. 02, 2021 USD ($)
Income Taxes [Abstract]
Provision for federal or state income tax	$ 0

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BUSINESS COMBINATION, Summary of Purchase Price Allocation (Details)		3 Months Ended		9 Months Ended
	Mar. 02, 2021 USD ($) $ / shares	Sep. 30, 2021 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2020 USD ($)	Dec. 31, 2020 USD ($)
Business Combination [Abstract]
Stock exchange ratio				1.7776
Goodwill, measurement period				1 year
Adjustment to goodwill		$ 424,460
Liabilities assumed [Abstract]
Goodwill		9,125,372		$ 9,125,372		$ 0
Transaction costs incurred for business combination		0	$ 105,128	$ 1,210,279	$ 195,634
Trade Names and Trademarks [Member]
Liabilities assumed [Abstract]
Estimated useful life				8 years
Customer Relationships [Member]
Liabilities assumed [Abstract]
Estimated useful life				5 years
Helix Technologies, Inc [Member]
Business Combination [Abstract]
Percentage of voting interest acquired	100.00%
Stock exchange ratio	0.05			0.05
Acquisition price (in dollars per share) | $ / shares	$ 2.158
Purchase Price Allocations [Abstract]
Total purchase price	$ 18,454,784
Assets acquired [Abstract]
Cash	1,310,977
Accounts receivable, net	488,453
Prepaid expenses	215,064
Contract assets	20,128
Other assets	450,000
Property and equipment	146,559
Right of use assets	1,082,684
Deposits and other assets	58,950
Total assets acquired	14,680,815
Liabilities assumed [Abstract]
Accounts payable and accrued liabilities	2,654,543
Short-term lease liabilities	295,364
Deferred revenues	320,936
Warrant liability	1,247,715
Notes payable and financing arrangements	20,801
Other long-term liabilities	812,044
Total liabilities assumed	5,351,403
Estimated fair value of net assets acquired	9,329,412
Goodwill	9,125,372
Weighted average useful life				5 years 5 months 19 days
Transaction costs incurred for business combination		$ 0		$ 1,210,279
Helix Technologies, Inc [Member] | Software Technology [Member]
Assets acquired [Abstract]
Intangibles	5,279,000
Helix Technologies, Inc [Member] | Software Technology [Member] | Minimum [Member]
Liabilities assumed [Abstract]
Estimated useful life				2 years
Helix Technologies, Inc [Member] | Software Technology [Member] | Maximum [Member]
Liabilities assumed [Abstract]
Estimated useful life				7 years
Helix Technologies, Inc [Member] | Trade Names and Trademarks [Member]
Assets acquired [Abstract]
Intangibles	386,000
Liabilities assumed [Abstract]
Estimated useful life				8 years
Helix Technologies, Inc [Member] | Customer Relationships [Member]
Assets acquired [Abstract]
Intangibles	$ 5,243,000
Liabilities assumed [Abstract]
Estimated useful life				5 years

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BUSINESS COMBINATION, Unaudited Pro Forma Results (Details) - Helix Technologies, Inc [Member] - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Pro Forma Financial Information [Abstract]
Revenues	$ 4,961,755	$ 3,062,557	$ 13,139,257	$ 9,135,273
Net loss	$ (6,876,472)	$ (42,488,120)	$ (21,265,019)	$ (46,647,993)
Net loss per share [Abstract]
Basic as pro forma (in dollars per share)	$ (0.22)	$ (1.48)	$ (0.69)	$ (1.75)
Diluted as pro forma (in dollars per share)	$ (0.22)	$ (1.48)	$ (0.69)	$ (1.75)

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PREPAID EXPENSES (Details) - USD ($)	9 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
Prepaid Expense [Abstract]
Other prepaid expenses	$ 912,879	$ 120,979
Minimum [Member]
Prepaid Expense [Abstract]
Prepaid expense related to software licenses and insurance policies period	3 months
Maximum [Member]
Prepaid Expense [Abstract]
Prepaid expense related to software licenses and insurance policies period	1 year

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PROPERTY AND EQUIPMENT, NET (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Property, Plant and Equipment, Net, by Type [Abstract]
Property and equipment	$ 834,474		$ 834,474		$ 55,767
Less: Accumulated depreciation and amortization	(71,816)		(71,816)		(9,409)
Property and equipment, net	762,658		762,658		46,358
Depreciation [Abstract]
Depreciation and amortization expense	30,909	$ 3,059	69,895	$ 4,932
Personal Computing Equipment [Member]
Property, Plant and Equipment, Net, by Type [Abstract]
Property and equipment	129,702		129,702		55,767
Furniture and Equipment [Member]
Property, Plant and Equipment, Net, by Type [Abstract]
Property and equipment	117,343		117,343		0
Software Development Costs [Member]
Property, Plant and Equipment, Net, by Type [Abstract]
Property and equipment	561,553		561,553		0
Vehicles [Member]
Property, Plant and Equipment, Net, by Type [Abstract]
Property and equipment	$ 25,876		$ 25,876		$ 0

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INTANGIBLE ASSETS, NET, Summary (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Intangible Assets [Abstract]
Measurement period from acquisition date to complete allocations			1 year
Gross carrying amount	$ 10,908,000		$ 10,908,000
Accumulated amortization	(1,311,298)		(1,311,298)
Net book value	9,596,702		9,596,702
Amortization expense for intangible assets	567,212	$ 0	$ 1,311,298	$ 0
Customer Relationships [Member]
Intangible Assets [Abstract]
Estimated useful life			5 years
Gross carrying amount	5,243,000		$ 5,243,000
Accumulated amortization	(606,046)		(606,046)
Net book value	4,636,954		$ 4,636,954
Software Technology [Member]
Intangible Assets [Abstract]
Estimated useful life			2 years
Gross carrying amount	1,170,000		$ 1,170,000
Accumulated amortization	(338,105)		(338,105)
Net book value	831,895		$ 831,895
Software Technology [Member]
Intangible Assets [Abstract]
Estimated useful life			7 years
Gross carrying amount	4,109,000		$ 4,109,000
Accumulated amortization	(339,261)		(339,261)
Net book value	3,769,739		$ 3,769,739
Tradenames and Trademarks [Member]
Intangible Assets [Abstract]
Estimated useful life			8 years
Gross carrying amount	386,000		$ 386,000
Accumulated amortization	(27,886)		(27,886)
Net book value	$ 358,114		$ 358,114

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INTANGIBLE ASSETS, NET, Estimated Future Amortization Expense (Details)	Sep. 30, 2021 USD ($)
Estimated Future Amortization Expense [Abstract]
2021 remaining	$ 567,213
2022	2,268,850
2023	1,784,495
2024	1,683,850
2025	1,683,850
Thereafter	1,608,444
Net book value	$ 9,596,702

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ACCRUED EXPENSES (Details) - USD ($)	Sep. 30, 2021	Dec. 31, 2020
ACCRUED EXPENSES [Abstract]
Employee compensation	$ 1,903,187	$ 346,720
Accrued expenses	1,089,826	8,825
Transaction-related	0	125,196
Total accrued expenses	$ 2,993,013	$ 480,741

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WARRANT LIABILITY (Details) - USD ($)	3 Months Ended	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2021	Sep. 30, 2020
WARRANT LIABILITY [Abstract]
Number of warrants outstanding (in shares)	97,058	97,058
Fair Value of Warrant Liability Assumptions [Abstract]
Fair value of financial instruments - warrants	$ 501,110	$ 501,110
Change in Fair Value of Financial Instruments [Abstract]
Beginning Balance	752,888	0
Fair value of warrant liability assumed in connection with Helix Merger		1,247,715
Change in fair value of warrant liability	(251,778)	(746,605)	$ 0
Ending Balance	$ 501,110	$ 501,110
Warrant Liability [Member]
Fair Value of Warrant Liability Assumptions [Abstract]
Fair value of company's common stock (in dollars per share)	$ 10.32	$ 10.32
Dividend yield		0.00%
Expected volatility, minimum		80.00%
Expected volatility, maximum		145.00%
Risk Free interest rate, minimum		0.05%
Risk Free interest rate, maximum		0.58%
Expected life (years)		2 years 25 days
Fair value of financial instruments - warrants	$ 501,110	$ 501,110
Change in Fair Value of Financial Instruments [Abstract]
Ending Balance	$ 501,110	$ 501,110
Warrant Liability [Member] | Minimum [Member]
Fair Value of Warrant Liability Assumptions [Abstract]
Exercise price (in dollars per share)	$ 8.00	$ 8.00
Warrant Liability [Member] | Maximum [Member]
Fair Value of Warrant Liability Assumptions [Abstract]
Exercise price (in dollars per share)	$ 28.00	$ 28.00

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CONVERTIBLE NOTES (Details) - USD ($)		3 Months Ended	9 Months Ended
	Sep. 01, 2021	Sep. 30, 2021	Sep. 30, 2021	Sep. 30, 2020	Mar. 31, 2021	Dec. 31, 2020
Convertible Notes [Abstract]
Convertible note payable, net of debt issuance costs		$ 24,049,114	$ 24,049,114			$ 0
Exercise price of warrants (in dollars per share)					$ 0.01
Interest expense on convertible notes			70,000	$ 0
Amortization of debt issuance costs			444	$ 0
Convertible Notes [Member]
Convertible Notes [Abstract]
Principal outstanding	$ 24,000,000	24,000,000	24,000,000			0
Add: accrued interest		70,000	70,000			0
Less: unamortized debt issuance costs		(20,886)	(20,886)			0
Convertible note payable, net of debt issuance costs		24,049,114	24,049,114			$ 0
Percentage of issuance cost on principal amount	100.00%
Interest percentage on convertible promissory note	3.50%
Percentage of warrant to purchase common stock on principal amount	20.00%
Exercise price of warrants (in dollars per share)	$ 11.98
Minimum principal amount	$ 100,000
Interest expense on convertible notes		70,000	70,000
Debt issuance costs		21,330	$ 21,330
Amortization of debt issuance costs		$ 444
Convertible Notes [Member] | Period One [Member]
Convertible Notes [Abstract]
Percentage of redemption price	112.50%
Convertible Notes [Member] | Period Two [Member]
Convertible Notes [Abstract]
Percentage of redemption price	108.00%

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STOCK-BASED COMPENSATION, Restricted Stock Awards and Restricted Stock Units (Details)	9 Months Ended	12 Months Ended
	Sep. 30, 2021 $ / shares shares	Dec. 31, 2020 $ / shares shares
STOCK-BASED COMPENSATION [Abstract]
Exchange ratio	1.7776
Restricted Stock Awards and Restricted Stock Units [Member]
Number of Restricted Shares [Roll Forward]
Outstanding at beginning of period (in shares)	1,699,676	1,237,396
Issued (in shares)	444,000	2,191,869
Vested (in shares)	671,642	1,729,589
Canceled (in shares)	(50,000)	0
Outstanding at end of period (in shares)	1,422,034	1,699,676
Weighted Average Grant Date Fair Value Per Share [Abstract]
Outstanding at beginning of period (in dollars per share) | $ / shares	$ 1.28	$ 0.62
Issued (in dollars per share) | $ / shares	11.76	1.21
Vested (in dollars per share) | $ / shares	0.03	0.72
Cancelled (in dollars per share) | $ / shares	12.18	0
Outstanding at end of period (in dollars per share) | $ / shares	$ 3.35	$ 1.28
Restricted Stock Units [Member]
Number of Restricted Shares [Roll Forward]
Outstanding at end of period (in shares)	444,000
Restricted Stock Awards [Member]
Number of Restricted Shares [Roll Forward]
Outstanding at end of period (in shares)	1,028,034

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STOCK-BASED COMPENSATION, Stock Options (Details) - Stock Options [Member] - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
Fair Value of Stock Option Assumptions [Abstract]
Dividend yield	0.00%
Expected volatility	118.00%
Risk Free interest rate, minimum	0.90%
Risk Free interest rate, maximum	1.00%
Shares Underlying Options [Roll Forward]
Outstanding at beginning of period (in shares)	0
Options assumed in Helix Merger (in shares)	455,089
Options granted (in shares)	3,815,214
Options exercised (in shares)	(22,437)
Options forfeited and expired (in shares)	(161,893)
Outstanding at end of period (in shares)	4,085,973	0
Vested options outstanding (in shares)	455,089
Weighted Average Exercise Price [Abstract]
Weighted average exercise price, options outstanding (in dollars per share)	$ 0
Weighted average exercise price, options assumed in Helix Merger (in dollars per share)	15.13
Weighted average exercise price, options granted (in dollars per share)	12.85
Weighted average exercise price, options exercises (in dollars per share)	4.57
Weighted average exercise price, options forfeited and expired (in dollars per share)	11.74
Weighted average exercise price, options outstanding (in dollars per share)	14.25	$ 0
Weighted average exercise price, Vested options outstanding (in dollars per share)	$ 15.13
Weighted Average Remaining Contractual Term (in years) [Abstract]
Weighted average remaining contractual term, options outstanding	8 years 10 months 2 days	0 years
Weighted average remaining contractual term, options assumed in Helix Merger	3 years 5 months 8 days
Weighted average remaining contractual term, options granted	9 years 6 months 10 days
Weighted average remaining contractual term, options exercised	1 year 11 months 1 day
Weighted average remaining contractual term, options forfeited and expired	9 years 1 month 28 days
Weighted average remaining contractual term, vested options outstanding	3 years 5 months 8 days
Minimum [Member]
Fair Value of Stock Option Assumptions [Abstract]
Exercise price (in dollars per share)	$ 2.00
Fair value of company common stock (in dollars per share)	$ 9.39
Expected life (years) remaining	0 years
Maximum [Member]
Fair Value of Stock Option Assumptions [Abstract]
Exercise price (in dollars per share)	$ 51.80
Fair value of company common stock (in dollars per share)	$ 22.90
Expected life (years) remaining	9 years 11 months 4 days

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STOCK-BASED COMPENSATION, Stock Compensation Expense (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Stock Compensation Expense [Abstract]
Stock options granted date fair value (in dollars per share)			$ 11.94	$ 0.02
Total unrecognized compensation	$ 42,992,330		$ 42,992,330
Weighted-average period			3 years 10 months 17 days
Stock compensation expense	2,627,506	$ 8,561	$ 6,245,679	$ 20,331
Cost of Revenue [Member]
Stock Compensation Expense [Abstract]
Stock compensation expense	14,823	0	19,479	0
Research and Development [Member]
Stock Compensation Expense [Abstract]
Stock compensation expense	(131,774)	2,868	6,215	8,666
Sales and Marketing [Member]
Stock Compensation Expense [Abstract]
Stock compensation expense	108,477	1,476	315,140	3,505
General and Administrative [Member]
Stock Compensation Expense [Abstract]
Stock compensation expense	$ 2,635,980	$ 4,217	$ 5,904,845	$ 8,160

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STOCKHOLDERS' EQUITY (Details)			1 Months Ended	9 Months Ended		12 Months Ended
	Apr. 16, 2021 USD ($) $ / shares shares	Apr. 09, 2021 $ / shares shares	Mar. 31, 2020 USD ($) shares	Sep. 30, 2021 USD ($)	Sep. 30, 2020 USD ($)	Dec. 31, 2020 USD ($) shares	Mar. 31, 2021 $ / shares shares
Stockholders' Equity [Abstract]
Exchange ratio				1.7776
Converted promissory notes				$ 0	$ 184,300
Warrant to purchase shares of common stock (in shares) | shares							17,031
Warrant to purchase shares of common stock price per share (in dollars per share) | $ / shares							$ 0.01
Warrants termination period (in years)				2 years
Warrants issued in exchange for services				$ 389,976
Gross proceeds from sale of common stock	$ 11,968,652			$ 11,968,652	$ 0
Net of transaction expenses	$ 31,348
Sale of common stock (in shares) | shares	1,194,743
Purchase price (in dollars per share) | $ / shares	$ 10.21
Directors [Member]
Stockholders' Equity [Abstract]
Sale of common stock (in shares) | shares		560,461
Purchase price (in dollars per share) | $ / shares		$ 11.33
Unaffiliated Investors [Member]
Stockholders' Equity [Abstract]
Sale of common stock (in shares) | shares		631,282
Purchase price (in dollars per share) | $ / shares		$ 8.95
Discount rate to preceding day's volume weighted average price		15.00%
Series S-1 Preferred Units [Member]
Stockholders' Equity [Abstract]
Cash proceeds						$ 13,000,000
Units exchanged (in shares) | shares						3,388,947
Series S Preferred Units [Member]
Stockholders' Equity [Abstract]
Cash proceeds			$ 3,300,000
Converted promissory notes			$ 184,300
Units exchanged (in shares) | shares			3,078,276

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NET LOSS PER SHARE (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
NET LOSS PER SHARE [Abstract]
Net loss attributable to common shareholders	$ (6,876,472)	$ (1,161,915)	$ (18,502,315)	$ (2,628,690)
Net Loss per Share Attributable to Common Shareholders [Abstract]
Basic (in dollars per share)	$ (0.22)	$ (0.08)	$ (0.64)	$ (0.22)
Diluted (in dollars per share)	$ (0.22)	$ (0.08)	$ (0.64)	$ (0.22)
Weighted Average Common Shares Outstanding [Abstract]
Basic (in shares)	31,332,735	14,208,049	28,814,825	12,038,534
Diluted (in shares)	31,332,735	14,208,049	28,814,825	12,038,534
Potentially Dilutive Securities [Abstract]
Antidilutive securities excluded from computation of loss per share (in shares)	8,043,112	2,148,093	8,043,112	2,148,093
Warrants [Member]
Potentially Dilutive Securities [Abstract]
Antidilutive securities excluded from computation of loss per share (in shares)	124,087	0	124,087	0
Stock Options [Member]
Potentially Dilutive Securities [Abstract]
Antidilutive securities excluded from computation of loss per share (in shares)	4,085,973	0	4,085,973	0
Convertible Notes [Member]
Potentially Dilutive Securities [Abstract]
Antidilutive securities excluded from computation of loss per share (in shares)	2,411,018	0	2,411,018	0
Unvested Restricted Stock Awards and Units [Member]
Potentially Dilutive Securities [Abstract]
Antidilutive securities excluded from computation of loss per share (in shares)	1,422,034	2,148,093	1,422,034	2,148,093

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RELATED PARTY TRANSACTIONS (Details)			1 Months Ended	3 Months Ended		9 Months Ended
	Apr. 16, 2021 USD ($)	May 06, 2019 Promissorynote	Mar. 31, 2020 USD ($) shares	Sep. 30, 2021 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2020 USD ($)	Sep. 01, 2021 USD ($)	Dec. 31, 2020 USD ($)	May 05, 2019 USD ($)
Related Party Transactions [Abstract]
Outstanding balance of the promissory notes				$ 15,250		$ 15,250			$ 0
Net proceeds from sale of common stock	$ 11,968,652					11,968,652	$ 0
Notes held by directors				6,000,000		6,000,000
Convertible Promissory Notes [Member]
Related Party Transactions [Abstract]
Percentage of issuance cost on principal amount								100.00%
Principal outstanding				24,000,000		24,000,000		$ 24,000,000	$ 0
Interest percentage on convertible promissory note								3.50%
Percentage of warrant to purchase common stock on principal amount								20.00%
Notes held by directors								$ 6,000,000
Common Stock [Member]
Related Party Transactions [Abstract]
Converted at the option of the holders (in shares) | shares			295,501
Medical Outcomes Research Analytics, LLC [Member]
Related Party Transactions [Abstract]
Number of promissory notes | Promissorynote		2
Medical Outcomes Research Analytics, LLC [Member] | Max Wygod [Member] | Promissory Notes [Member] | Maximum [Member]
Related Party Transactions [Abstract]
Secure amount promissory note to fund operations										$ 100,000
Medical Outcomes Research Analytics, LLC [Member] | Martin Wygod [Member] | Promissory Notes [Member] | Maximum [Member]
Related Party Transactions [Abstract]
Secure amount promissory note to fund operations										$ 100,000
Medical Outcomes Research Analytics, LLC [Member] | Adam Dublin [Member]
Related Party Transactions [Abstract]
Received payments				$ 107,125	$ 66,040	$ 303,274	$ 310,315
Medical Outcomes Research Analytics, LLC [Member] | Series S Preferred Units [Member]
Related Party Transactions [Abstract]
Outstanding balance of the promissory notes			$ 184,300

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COMMITMENTS AND CONTINGENCIES, Operating Leases (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2021 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2021 USD ($) Lease Facility	Sep. 30, 2020 USD ($)	Dec. 31, 2020 USD ($)
Operating Leases [Abstract]
Number of office facilities | Facility			2
Number of short-term leases | Lease			3
ROU lease assets and lease liabilities [Abstract]
Cash used in operating leases			$ 211,077	$ 0
ROU assets obtained in exchange for lease obligations			166,489	0
Lease liabilities	$ 921,025		$ 921,025		$ 0
Weighted average remaining lease term (in years)	3 years 4 months 28 days		3 years 4 months 28 days		0 years
Weighted average discount rate	8.50%		8.50%		0.00%
Lease, Cost [Abstract]
Operating lease expense	$ 81,936	$ 0	$ 191,182	0
Short-term lease expense	19,393	3,928	62,916	12,074
Total operating lease costs	101,329	$ 3,928	254,098	$ 12,074
Future Lease Payments [Abstract]
2021 remaining	69,901		69,901
2022	308,470		308,470
2023	286,670		286,670
2024	291,161		291,161
2025	85,726		85,726
Thereafter	14,288		14,288
Total future minimum lease payments	1,056,216		1,056,216
Less imputed interest	(135,191)		(135,191)
Total	921,025		921,025		$ 0
Right of Use Assets, Net [Member]
ROU lease assets and lease liabilities [Abstract]
Lease liabilities	916,195		916,195		0
Future Lease Payments [Abstract]
Total	916,195		916,195		0
Short-Term Operating Lease Liabilities [Member]
ROU lease assets and lease liabilities [Abstract]
Lease liabilities	245,771		245,771		0
Future Lease Payments [Abstract]
Total	245,771		245,771		0
Long-Term Operating Lease Liabilities [Member]
ROU lease assets and lease liabilities [Abstract]
Lease liabilities	675,254		675,254		0
Future Lease Payments [Abstract]
Total	$ 675,254		$ 675,254		$ 0
Minimum [Member]
Operating Leases [Abstract]
Operating lease term	1 year		1 year
Maximum [Member]
Operating Leases [Abstract]
Operating lease term	5 years		5 years

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COMMITMENTS AND CONTINGENCIES, Service Agreements and Legal Proceedings (Details)	9 Months Ended
	Sep. 30, 2021 USD ($)	Oct. 25, 2021 Complaint	Feb. 16, 2021 Lawsuit	Dec. 31, 2020 USD ($)	Feb. 14, 2020	Jul. 20, 2017 Employee
Remaining payment obligations [Abstract]
Year ending December 31, 2021	$ 500,000			$ 533,488
Year ending December 31, 2022	772,188			272,188
Year ending December 31, 2023	1,000,000			0
Year ending December 31, 2024	1,500,000			0
Year ending December 31, 2025	1,600,000			0
Thereafter	400,000			0
Total payment obligations	$ 5,772,188			$ 805,676
Helix Stockholder Lawsuits [Abstract]
Number of lawsuits | Lawsuit			4
Subsequent Event [Member]
Helix Stockholder Lawsuits [Abstract]
Number of complaints dismissed | Complaint		4
Kenney, et al. v. Helix TCS, Inc. [Member]
Loss Contingency [Abstract]
Number of former employees to file lawsuit | Employee						1
Audet v. Green Tree International, et. al. [Member]
Loss Contingency [Abstract]
Ownership percentage					10.00%
Number of weeks for case trial docket	2 months

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SEGMENT RESULTS (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2021 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2021 USD ($) Segment	Sep. 30, 2020 USD ($)
SEGMENT RESULTS [Abstract]
Number of operating segments | Segment			3
Selected Information for Reportable Segments [Abstract]
Revenue	$ 4,961,755	$ 159,504	$ 11,130,349	$ 334,921
Costs and expenses	12,310,656	1,321,508	30,580,715	2,969,407
Loss From Operations	(7,348,901)	(1,162,004)	(19,450,366)	(2,634,486)
Total other income/(expense)	472,429	89	948,051	5,796
Net loss before income taxes	(6,876,472)	(1,161,915)	(18,502,315)	(2,628,690)
Net Loss	(6,876,472)	(1,161,915)	(18,502,315)	(2,628,690)
Reportable Segments [Member] | Information and Software [Member]
Selected Information for Reportable Segments [Abstract]
Revenue	4,489,177	159,504	9,661,826	334,921
Costs and expenses	7,661,631	1,007,777	17,813,947	2,177,550
Loss From Operations	(3,172,454)	(848,273)	(8,152,121)	(1,842,629)
Total other income/(expense)	0	0	0	0
Net loss before income taxes	(3,172,454)	(848,273)	(8,152,121)	(1,842,629)
Reportable Segments [Member] | Services [Member]
Selected Information for Reportable Segments [Abstract]
Revenue	269,753	0	858,400	0
Costs and expenses	369,507	0	755,627	0
Loss From Operations	(99,754)	0	102,773	0
Total other income/(expense)	0	0	0	0
Net loss before income taxes	(99,754)	0	102,773	0
Reportable Segments [Member] | Other [Member]
Selected Information for Reportable Segments [Abstract]
Revenue	202,825	0	610,123	0
Costs and expenses	228,014	0	698,001	0
Loss From Operations	(25,189)	0	(87,878)	0
Total other income/(expense)	(275)	0	(607)	0
Net loss before income taxes	(25,464)	0	(88,485)	0
Centrally Managed Costs [Member]
Selected Information for Reportable Segments [Abstract]
Revenue	0	0	0	0
Costs and expenses	4,051,504	313,731	11,313,140	791,857
Loss From Operations	(4,051,504)	(313,731)	(11,313,140)	(791,857)
Total other income/(expense)	472,704	89	948,658	5,796
Net loss before income taxes	$ (3,578,800)	$ (313,642)	$ (10,364,482)	$ (786,061)
Revenue [Member] | Geographic Concentration Risk [Member] | United States [Member]
Customer Concentration [Abstract]
Percentage of revenues generated from customer sales	97.00%		97.00%