BUSINESS COMBINATION

12 Months Ended

Dec. 31, 2021

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 fair values of the assets acquired and liabilities assumed in the Merger.

The following table summarizes the 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		5,269,000
Right of use assets		1,082,684
Deposits and other assets		58,950
Total assets acquired	$	14,706,815

Liabilities assumed:
Accounts payable and accrued liabilities	$	681,879
Accrued expenses		1,972,663
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		812,045
Total liabilities assumed	$	5,351,403
Estimated fair value of net assets acquired:	$	9,355,412

Goodwill	$	9,099,372

The 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 $1,210,279 and $863,409 for the years ended December 31, 2021 and 2020, respectively.

Unaudited 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 Years Ended December 31,
Description	2021			2020
Revenues	$	18,889,025		$	12,323,000
Net loss	$	(28,980,168	)	$	(50,001,000	)
Net loss per share:
Basic and diluted-as pro forma (unaudited)	$	(0.94	)	$	(1.87	)

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 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.