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) |
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 |
Large accelerated filer ☐ | Accelerated filer ☐ | Non-accelerated filer ☒ | Smaller reporting company ☒ |
Emerging growth company ☒ |
PART I | FINANCIAL INFORMATION | |
Item 1. | 3 | |
3 | ||
4 | ||
5 | ||
8 | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
PART II | OTHER INFORMATION | |
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 5. | ||
Item 6. | ||
June 30, | December 31, | September 30, | December 31, | |||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Unaudited | Unaudited | |||||||||||||||
ASSETS | ||||||||||||||||
Current assets: | ||||||||||||||||
Cash and cash equivalents | $ | 4,763,324 | $ | 665,463 | $ | 23,535,098 | $ | 665,463 | ||||||||
Marketable securities | 12,505,118 | 11,501,844 | 12,399,243 | 11,501,844 | ||||||||||||
Accounts receivable, net | 1,390,277 | 22,996 | 2,179,979 | 22,996 | ||||||||||||
Contract assets | 582,597 | 196,701 | 364,480 | 196,701 | ||||||||||||
Prepaid expenses | 930,172 | 120,979 | 912,879 | 120,979 | ||||||||||||
Other assets | 450,000 | 0 | 300,000 | 0 | ||||||||||||
Total current assets | 20,621,488 | 12,507,983 | 39,691,679 | 12,507,983 | ||||||||||||
Property and equipment, net | 482,234 | 46,358 | 762,658 | 46,358 | ||||||||||||
Intangible assets, net | 10,163,914 | 0 | 9,596,702 | 0 | ||||||||||||
Goodwill | 8,700,912 | 0 | 9,125,372 | 0 | ||||||||||||
Right of use assets, net | 988,674 | 0 | 916,195 | 0 | ||||||||||||
Deposits and other assets | 344,920 | 0 | 329,682 | 0 | ||||||||||||
Total assets | $ | 41,302,142 | $ | 12,554,341 | $ | 60,422,288 | $ | 12,554,341 | ||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||||
Current liabilities: | ||||||||||||||||
Accounts payable | 1,977,152 | 647,601 | 1,095,328 | 647,601 | ||||||||||||
Accrued expenses | 2,346,567 | 480,741 | 2,993,013 | 480,741 | ||||||||||||
Short-term operating lease liabilities | 264,329 | 0 | 245,771 | 0 | ||||||||||||
Notes payable | 18,054 | 0 | 15,250 | 0 | ||||||||||||
Warrant liability | 752,888 | 0 | 501,110 | 0 | ||||||||||||
Deferred revenues | 658,894 | 158,884 | 682,157 | 158,884 | ||||||||||||
Total current liabilities | 6,017,884 | 1,287,226 | 5,532,629 | 1,287,226 | ||||||||||||
Long-term liabilities: | ||||||||||||||||
Long-term operating lease liabilities | 737,701 | 0 | 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 | 737,701 | 0 | 24,724,368 | 0 | ||||||||||||
Total liabilities | 6,755,585 | 1,287,226 | 30,256,997 | 1,287,226 | ||||||||||||
Commitments and contingencies (Note 15) | 0 | 0 | ||||||||||||||
Stockholders’ equity: | ||||||||||||||||
Preferred Stock; par value $0.001; 5,000,000 Shares authorized; 0 issued and outstanding as of June 30, 2021 and December 31, 2020 | 0 | 0 | ||||||||||||||
Common Stock; par value $0.001; 95,000,000 Shares authorized; 31,198,721 issued and outstanding as of June 30, 2021 and 21,233,039 issued and outstanding as of December 31, 2020 | 31,199 | 21,233 | ||||||||||||||
Commitments and contingencies (Note 16) | 0 | 0 | ||||||||||||||
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 | 52,264,976 | 17,514,907 | 54,905,098 | 17,514,907 | ||||||||||||
Accumulated other comprehensive loss | 145,250 | 0 | ||||||||||||||
Accumulated deficit | (17,894,868 | ) | (6,269,025 | ) | (24,771,340 | ) | (6,269,025 | ) | ||||||||
Total stockholders’ equity | 34,546,557 | 11,267,115 | ||||||||||||||
Total liabilities and stockholders’ equity | $ | 41,302,142 | $ | 12,554,341 | ||||||||||||
Total stockholders' equity | 30,165,291 | 11,267,115 | ||||||||||||||
Total liabilities and stockholders' equity | $ | 60,422,288 | $ | 12,554,341 |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||||||||||
For the Three Months Ended June 30, | For the Six Months Ended June 30, | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||
Information and Software | $ | 3,763,671 | $ | 108,750 | $ | 5,172,649 | $ | 175,417 | $ | 4,489,177 | $ | 159,504 | $ | 9,661,826 | $ | 334,921 | ||||||||||||||||
Services | 492,336 | 0 | 588,647 | 0 | 269,753 | 0 | 858,400 | 0 | ||||||||||||||||||||||||
Other | 291,978 | 0 | 407,298 | 0 | 202,825 | 0 | 610,123 | 0 | ||||||||||||||||||||||||
Total revenues | 4,547,985 | 108,750 | 6,168,594 | 175,417 | 4,961,755 | 159,504 | 11,130,349 | 334,921 | ||||||||||||||||||||||||
Costs and Expenses: | ||||||||||||||||||||||||||||||||
Cost of revenue | 1,232,790 | 0 | 1,690,676 | 0 | 1,337,981 | 0 | 3,028,657 | 0 | ||||||||||||||||||||||||
Research and development | 1,949,926 | 426,398 | 3,447,764 | 815,391 | 2,612,184 | 658,824 | 6,059,948 | 1,474,215 | ||||||||||||||||||||||||
Sales and marketing | 1,177,035 | 55,978 | 1,776,010 | 111,044 | 1,088,203 | 40,217 | 2,864,213 | 151,261 | ||||||||||||||||||||||||
General and administrative | 6,577,696 | 326,832 | 9,362,258 | 629,085 | 6,673,723 | 514,280 | 16,035,981 | 1,143,365 | ||||||||||||||||||||||||
Depreciation and amortization | 595,488 | 1,419 | 783,072 | 1,873 | 598,565 | 3,059 | 1,381,637 | 4,932 | ||||||||||||||||||||||||
Transaction related expenses | 0 | 90,506 | 1,210,279 | 90,506 | 0 | 105,128 | 1,210,279 | 195,634 | ||||||||||||||||||||||||
Total costs and expenses | 11,532,935 | 901,133 | 18,270,059 | 1,647,899 | 12,310,656 | 1,321,508 | 30,580,715 | 2,969,407 | ||||||||||||||||||||||||
Loss From Operations | (6,984,950 | ) | (792,383 | ) | (12,101,465 | ) | (1,472,482 | ) | (7,348,901 | ) | (1,162,004 | ) | (19,450,366 | ) | (2,634,486 | ) | ||||||||||||||||
Other Income (Expense): | ||||||||||||||||||||||||||||||||
Change in fair value of warrant liability | (128,800 | ) | 0 | 494,827 | 0 | 251,778 | 0 | 746,605 | 0 | |||||||||||||||||||||||
Interest and investment income, net | (20,446 | ) | 744 | (19,205 | ) | 5,707 | ||||||||||||||||||||||||||
Interest and investment income | 1,903 | 89 | 4,601 | 5,796 | ||||||||||||||||||||||||||||
Interest expense | (79,422 | ) | 0 | (101,325 | ) | 0 | ||||||||||||||||||||||||||
Foreign currency related gains | 298,170 | 0 | 298,170 | 0 | ||||||||||||||||||||||||||||
Total other income, net | (149,246 | ) | 744 | 475,622 | 5,707 | 472,429 | 89 | 948,051 | 5,796 | |||||||||||||||||||||||
Net loss before income taxes | (7,134,196 | ) | (791,639 | ) | (11,625,843 | ) | (1,466,775 | ) | (6,876,472 | ) | (1,161,915 | ) | (18,502,315 | ) | (2,628,690 | ) | ||||||||||||||||
Income tax expense | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||
Net Loss | $ | (7,134,196 | ) | $ | (791,639 | ) | $ | (11,625,843 | ) | $ | (1,466,775 | ) | $ | (6,876,472 | ) | $ | (1,161,915 | ) | $ | (18,502,315 | ) | $ | (2,628,690 | ) | ||||||||
Other comprehensive loss: | ||||||||||||||||||||||||||||||||
Changes in foreign currency translation adjustment | 169,256 | 0 | 145,250 | 0 | (145,250 | ) | 0 | 0 | 0 | |||||||||||||||||||||||
Total other comprehensive loss | $ | 169,256 | $ | 0 | $ | 145,250 | $ | 0 | $ | (145,250 | ) | $ | 0 | $ | 0 | $ | 0 | |||||||||||||||
Total comprehensive loss | $ | (6,964,940 | ) | $ | (791,639 | ) | $ | (11,480,593 | ) | $ | (1,466,775 | ) | $ | (7,021,722 | ) | $ | (1,161,915 | ) | $ | (18,502,315 | ) | $ | (2,628,690 | ) | ||||||||
Basic and diluted net loss per common share | $ | (0.23 | ) | $ | (0.06 | ) | $ | (0.42 | ) | $ | (0.13 | ) | $ | (0.22 | ) | $ | (0.08 | ) | $ | (0.64 | ) | $ | (0.22 | ) | ||||||||
Weighted-average shares outstanding: | 30,996,735 | 13,797,652 | 27,534,359 | 11,066,456 | 31,332,735 | 14,208,049 | 28,814,825 | 12,038,534 |
Preferred Stock | Common Stock | Preferred Stock | Common Stock | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Par Value @$0.001 per share | Shares | Par Value @$0.001 per share | Additional Paid In Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Stockholders’ Equity | 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 | $ | 0 | 21,233,039 | $ | 21,233 | $ | 17,514,907 | $ | 0 | $ | (6,269,025) | $ | 11,267,115 | $ | 0 | 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 | 0 | 0 | 18,454,784 | 8,408,383 | 8,408 | 18,446,376 | 0 | 18,454,784 | ||||||||||||||||||||||||||||||||||||||||||||||
Forian Restricted Stock Vesting from MOR unvested restricted stock | 343,123 | 343 | 5,102 | 0 | 0 | 5,445 | 671,641 | 671 | 9,987 | 0 | 10,658 | ||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock warrants | 0 | 0 | 389,976 | 0 | 0 | 389,976 | — | 0 | 389,976 | 0 | 389,976 | ||||||||||||||||||||||||||||||||||||||||||||||
Forian shares issued upon exercise of MOR Class B options | 10,167 | 10 | 292,820 | 0 | 0 | 292,830 | 10,167 | 10 | 292,820 | 0 | 292,830 | ||||||||||||||||||||||||||||||||||||||||||||||
Stock based compensation expense | 0 | 0 | 3,612,728 | 0 | 0 | 3,612,728 | 0 | 0 | 6,235,021 | 0 | 6,235,021 | ||||||||||||||||||||||||||||||||||||||||||||||
Issuance of Forian common stock | 1,191,743 | 1,192 | 11,967,460 | 0 | 0 | 11,968,652 | 1,191,743 | 1,192 | 11,967,460 | 0 | 11,968,652 | ||||||||||||||||||||||||||||||||||||||||||||||
Issuance of Forian common stock upon exercise of stock options | 12,266 | 13 | 35,607 | 0 | 0 | 35,620 | 18,110 | 19 | 48,551 | 0 | 48,570 | ||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation | — | 0 | 0 | 145,250 | 0 | 145,250 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | (11,625,843) | (11,625,843) | (18,502,315 | ) | (18,502,315 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2021 | 0 | $ | 0 | 31,198,721 | $ | 31,199 | $ | 52,264,976 | $ | 145,250 | $ | (17,894,868) | $ | 34,546,557 | |||||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2021 | 0 | $ | 0 | 31,533,083 | 31,533 | 54,905,098 | (24,771,340 | ) | 30,165,291 |
Preferred Stock | Common Stock | Preferred Stock | Common Stock | |||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Par Value @$0.001 per share | Shares | Par Value @$0.001 per share | Additional Paid In Capital | Accumulated Other Comprehensive Income | Accumulated Deficit | Stockholders’ Equity (Deficit) | 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 | $ | 0 | 7,713,528 | $ | 7,713 | $ | 1,000,098 | $ | 0 | $ | (1,288,842 | ) | $ | (281,031 | ) | $ | 0 | 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 | 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 | 295,501 | 296 | 184,004 | 184,300 | ||||||||||||||||||||||||||||||||||||||||||||||
Vested MOR Class B Profit Interest Units | 741,677 | 742 | 11,028 | 11,770 | 1,281,172 | 1,281 | 19,050 | 20,331 | ||||||||||||||||||||||||||||||||||||||||||||||
Net loss | $ | (1,466,775 | ) | (1,466,775 | ) | (2,628,690 | ) | (2,628,690 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2020 | 0 | $ | 0 | 14,066,990 | $ | 14,067 | $ | 4,505,514 | $ | 0 | $ | (2,755,617 | ) | $ | 1,763,964 | |||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2020 | 0 | $ | 0 | 14,606,485 | $ | 14,606 | $ | 4,513,536 | $ | (3,917,532 | ) | $ | 610,610 |
Preferred Stock | Common Stock | Preferred Stock | Common Stock | Accumulated | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Par Value @$0.001 per share | Shares | Par Value @$0.001 per share | Additional Paid In Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Stockholders’ Equity | 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 April 1, 2021 | $ | 0 | 29,824,424 | $ | 29,824 | $ | 37,510,532 | $ | (24,006 | ) | $ | (10,760,672 | ) | $ | 26,755,678 | |||||||||||||||||||||||||||||||||||||||||||
Balance at July 1, 2021 | $ | 0 | 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 | 170,288 | 170 | 2,532 | 2,702 | 328,518 | 328 | 4,885 | 5,213 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of Forian common stock | 1,191,743 | 1,192 | 11,967,460 | 11,968,652 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock based compensation expense | 2,748,845 | 2,748,845 | 2,622,293 | 2,622,293 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of Forian common stock upon exercise of stock options | 12,266 | 13 | 35,607 | 35,620 | 5,844 | 6 | 12,944 | 12,950 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation | 169,256 | 169,256 | (145,250 | ) | (145,250 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | (7,134,196 | ) | (7,134,196 | ) | (6,876,472 | ) | (6,876,472 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2021 | 0 | $ | 0 | 31,198,721 | $ | 31,199 | $ | 52,264,976 | $ | 145,250 | $ | (17,894,868 | ) | $ | 34,546,557 | |||||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2021 | 0 | $ | 0 | 31,533,083 | $ | 31,533 | $ | 54,905,098 | $ | 0 | $ | (24,771,340 | ) | $ | 30,165,291 |
Preferred Stock | Common Stock | Preferred Stock | Common Stock | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Par Value @$0.001 per share | Shares | Par Value @$0.001 per share | Additional Paid In Capital | Accumulated Other Comprehensive Income | Accumulated Deficit | Stockholders’ Equity | Shares | Par Value @$0.001 per share | Shares | Par Value @ $0.001 per share | Additional Paid In Capital | Accumulated Deficit | Stockholders' Equity | |||||||||||||||||||||||||||||||||||||||||||
Balance at April 1, 2020 | $ | 0 | 13,654,750 | $ | 13,655 | $ | 4,499,384 | $ | 0 | $ | (1,963,978 | ) | $ | 2,549,061 | |||||||||||||||||||||||||||||||||||||||||||
Balance at July 1, 2020 | $ | 0 | 14,066,991 | $ | 14,067 | $ | 4,505,514 | $ | (2,755,617 | ) | $ | 1,763,964 | |||||||||||||||||||||||||||||||||||||||||||||
Vested MOR Class B Profit Interest Units | 412,240 | 412 | 6,130 | 6,542 | 539,494 | 539 | 8,022 | 8,561 | |||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | (791,639 | ) | (791,639 | ) | (1,161,915 | ) | (1,161,915 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2020 | 0 | $ | 0 | 14,066,990 | $ | 14,067 | $ | 4,505,514 | $ | 0 | $ | (2,755,617 | ) | $ | 1,763,964 | ||||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2020 | 0 | $ | 0 | 14,606,485 | $ | 14,606 | $ | 4,513,536 | $ | (3,917,532 | ) | $ | 610,610 |
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 | 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 |
For the Six Months Ended June 30, | ||||||||
2021 | 2020 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net loss | $ | (11,625,843 | ) | $ | (1,466,775 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation and amortization | 783,072 | 1,873 | ||||||
Amortization on right of use asset | 94,010 | 0 | ||||||
Realized and unrealized gain on marketable securities | (2,331 | ) | (5,621 | ) | ||||
Provision for doubtful accounts | 50,813 | 0 | ||||||
Stock-based compensation expense | 3,618,173 | 11,770 | ||||||
Change in fair value of warrant liability | (494,827 | ) | 0 | |||||
Non-cash transaction expenses | 389,976 | 0 | ||||||
Change in operating assets and liabilities: | ||||||||
Accounts receivable | (931,715 | ) | (200,000 | ) | ||||
Contract assets | (108,808 | ) | 0 | |||||
Prepaid expenses | (589,859 | ) | (387,845 | ) | ||||
Changes in lease liabilities during the period | (105,378) | ) | 0 | |||||
Deposits and other assets | (344,338 | ) | 0 | |||||
Accounts payable | (1,105,422 | ) | 268,876 | |||||
Accrued expenses | 1,944,639 | 0 | ||||||
Deferred revenues | 179,074 | 259,583 | ||||||
Other long-term liabilities | 0 | 0 | ||||||
Net cash used in operating activities | (8,248,764 | ) | (1,518,139 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Additions to property and equipment | (328,303 | ) | (13,937 | ) | ||||
Purchase of marketable securities | (12,504,788 | ) | (2,888,648 | ) | ||||
Sale of marketable securities | 11,503,845 | 1,757,701 | ||||||
Cash acquired as part of business combination | 1,310,977 | 0 | ||||||
Net cash used in investing activities | (18,269 | ) | (1,144,884 | ) | ||||
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 | (2,747 | ) | 0 | |||||
Proceeds from exercise of common stock options | 35,620 | 0 | ||||||
Proceeds from sale of common stock | 11,968,652 | 0 | ||||||
Net cash provided by financing activities | 12,294,355 | 3,315,700 | ||||||
Effect of foreign exchange rate changes on cash | 70,539 | 0 | ||||||
Net change in cash | 4,097,861 | 652,677 | ||||||
Cash and cash equivalents, beginning of period | 665,463 | 494 | ||||||
Cash and cash equivalents, end of period | $ | 4,763,324 | $ | 653,171 | ||||
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 |
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 |
Note 1 | BUSINESS ORGANIZATION AND NATURE OF OPERATIONS |
Note 2 | BASIS OF PRESENTATION |
Note 3 | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
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 | 0 | 20,128 | 20,128 | 320,936 | ||||||||||||
Acquired balances recognized during period | 0 | (20,128 | ) | (20,128 | ) | (305,340 | ) | |||||||||
Beginning deferred revenue balance recognized during the period | 0 | 0 | 0 | (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 |
Contract assets | ||||
Balance at January 1, 2021 | $ | 196,701 | ||
Contract assets acquired from Helix | 277,088 | |||
Add: Revenue recognized from related contract assets | 879,097 | |||
Less: Contract acquisition costs amortized during the six months ended June 30, 2021 | (45,622 | ) | ||
Less: Payments received during the six months ended June 30, 2021 | (724,667 | ) | ||
Balance at June 30, 2021 | $ | 582,597 | ||
Contract liabilities (Deferred Revenue) | ||||
Balance at January 1, 2021 | $ | 158,884 | ||
Contract liabilities assumed from Helix | 320,936 | |||
Add: Payments received during the six months ended June 30, 2021 | 1,410,760 | |||
Less: Revenue recognized during the six months ended June 30, 2021 | (1,231,686 | ) | ||
Balance at June 30, 2021 | $ | 658,894 |
Note 4 | BUSINESS COMBINATION |
Total purchase price | $ | 18,454,784 | ||
Assets acquired: | ||||
Cash | 1,310,977 | |||
Accounts receivable, net | 488,453 | |||
Prepaid expenses | 215,064 | |||
Contract assets | 277,088 | |||
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 | 582 | |||
Total assets acquired | $ | 14,879,407 | ||
Liabilities assumed: | ||||
Accounts payable and accrued liabilities | $ | 2,428,675 | ||
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 | $ | 5,125,535 | ||
Estimated fair value of net assets acquired: | $ | 9,753,872 | ||
Goodwill | $ | 8,700,912 |
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 |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||||||||
Description | 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||||
Revenues | 4,547,985 | 2,948,881 | 8,177,502 | 6,072,716 | $ | 4,961,755 | $ | 3,062,557 | $ | 13,139,257 | $ | 9,135,273 | ||||||||||||||||||||
Net loss | (7,134,196 | ) | (2,907,056 | ) | (14,388,547 | ) | (6,140,962 | ) | (6,876,472 | ) | (42,488,120 | ) | (21,265,019 | ) | (46,647,993 | ) | ||||||||||||||||
Net loss per share: | ||||||||||||||||||||||||||||||||
Basic and diluted-as pro forma (unaudited) | $ | (0.26 | ) | $ | (0.11 | ) | $ | (0.47 | ) | $ | (0.24 | ) | $ | (0.22 | ) | $ | (1.48 | ) | $ | (0.69 | ) | $ | (1.75 | ) |
Note 5 | MARKETABLE SECURITIES |
Note 6 | PREPAID EXPENSES |
Note 7 | PROPERTY AND EQUIPMENT, NET |
June 30, 2021 | December 31, 2020 | September 30, 2021 | December 31, 2020 | |||||||||||||
Unaudited | Unaudited | |||||||||||||||
Personal computing equipment | $ | 103,478 | $ | 55,767 | $ | 129,702 | $ | 55,767 | ||||||||
Furniture and equipment | 131,065 | 0 | 117,343 | 0 | ||||||||||||
Software development costs | 266,410 | 0 | 561,553 | 0 | ||||||||||||
Vehicles | 25,876 | 0 | 25,876 | 0 | ||||||||||||
Total | 526,829 | 55,767 | 834,474 | 55,767 | ||||||||||||
Less: Accumulated depreciation and amortization | (44,595 | ) | (9,409 | ) | (71,816 | ) | (9,409 | ) | ||||||||
Property and equipment, net | $ | 482,234 | $ | 46,358 | $ | 762,658 | $ | 46,358 |
Note 8 | INTANGIBLE ASSETS, NET |
Estimated Useful Life (Years) | Gross Carrying Amount at March 2, 2021 | Accumulated Amortization | Net Book Value at 6/30/2021 | 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 | $ | (343,896 | ) | $ | 4,899,104 | 5 | $ | 5,243,000 | $ | (606,046 | ) | $ | 4,636,954 | ||||||||||||||||
Software Technology | 2 | 1,170,000 | (191,855 | ) | 978,145 | 2 | 1,170,000 | (338,105 | ) | 831,895 | ||||||||||||||||||||||
Software Technology | 7 | 4,109,000 | (192,511 | ) | 3,916,489 | 7 | 4,109,000 | (339,261 | ) | $ | 3,769,739 | |||||||||||||||||||||
Tradenames and Trademarks | 8 | 386,000 | (15,824 | ) | 370,176 | 8 | 386,000 | (27,886 | ) | 358,114 | ||||||||||||||||||||||
$ | 10,908,000 | $ | (744,086 | ) | $ | 10,163,914 | $ | 10,908,000 | $ | (1,311,298 | ) | $ | 9,596,702 |
Years Ending December 31, | Future amortization expense | Future amortization expense | ||||||
2021 | $ | 1,134,425 | ||||||
2021 remaining | $ | 567,213 | ||||||
2022 | 2,268,850 | 2,268,850 | ||||||
2023 | 1,784,495 | 1,784,495 | ||||||
2024 | 1,683,850 | 1,683,850 | ||||||
2025 | 1,683,850 | 1,683,850 | ||||||
Thereafter | 1,608,444 | 1,608,444 | ||||||
Total | $ | 10,163,914 | $ | 9,596,702 |
Note 9 | ACCRUED EXPENSES |
June 30, 2021 | December 31, 2020 | September 30, 2021 | December 31, 2020 | |||||||||||||
Employee compensation | 1,376,218 | 346,720 | 1,903,187 | 346,720 | ||||||||||||
Accrued expenses | 970,349 | 8,825 | 1,089,826 | 8,825 | ||||||||||||
Transaction-related | 0 | 125,196 | 0 | 125,196 | ||||||||||||
Total | $ | 2,346,567 | $ | 480,741 | $ | 2,993,013 | $ | 480,741 |
Note 10 | WARRANT LIABILITY |
As of June 30, 2021 | As of September 30, 2021 | |||||||
Fair value of company’s common stock | $ | 12.57 | ||||||
Fair value of company's common stock | $ | 10.32 | ||||||
Dividend yield | 0 | % | 0 | % | ||||
Expected volatility | 121% - 153 | % | 80% - 145 | % | ||||
Risk Free interest rate | 0.06% - 0.56 | % | 0.05% - 0.58 | % | ||||
Expected life (years) | 2.33 | 2.07 | ||||||
Exercise price | $8.00 - $28.00 | $ | 8.00 - $28.00 | |||||
Fair value of financial instruments - warrants | $ | 752,888 | $ | 501,110 |
Amount | Amount | |||||||
Balance as of January 1, 2021 | $ | 0 | ||||||
Balance at January 1, 2021 | $ | 0 | ||||||
Fair value of warrant liability assumed in connection with Helix Merger | 1,247,715 | 1,247,715 | ||||||
Change in fair value of warrant liability | (494,827 | ) | (746,605 | ) | ||||
Balance as of June 30, 2021 | $ | 752,888 | ||||||
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 | $ | 0 | ||||
Add: accrued interest | 70,000 | 0 | ||||||
Less: unamortized debt issuance costs | (20,886 | ) | 0 | |||||
Convertible note payable, net of debt issuance costs | $ | 24,049,114 | $ | 0 |
Note | STOCK-BASED COMPENSATION |
Number of Restricted Shares and Units | Weighted Average Grant Date Fair Value Per Share | Number of Restricted Shares and Units | Weighted Average Grant Date Fair Value Per Share | |||||||||||||
Unvested at January 1, 2020 | 1,237,396 | $ | 0.62 | 1,237,396 | $ | 0.62 | ||||||||||
Issued | 2,191,869 | 1.21 | 2,191,869 | 1.21 | ||||||||||||
Vested | 1,729,589 | 0.72 | 1,729,589 | 0.72 | ||||||||||||
Canceled | 0 | 0 | 0 | 0 | ||||||||||||
Unvested at December 31, 2020 | 1,699,676 | 1.28 | 1,699,676 | 1.28 | ||||||||||||
Issued | 404,000 | 11.86 | 444,000 | 11.76 | ||||||||||||
Vested | 343,125 | 0.03 | 671,642 | 0.03 | ||||||||||||
Canceled | 0 | 0 | (50,000 | ) | 12.18 | |||||||||||
Unvested at June 30, 2021 | 1,760,551 | $ | 2.73 | |||||||||||||
Unvested at September 30, 2021 | 1,422,034 | $ | 3.35 |
2021 | ||||
Exercise Price | $ | 2.00 to $51.80 | ||
Fair value of Company common stock | $ | 9.39 to $22.90 | ||
Dividend yield | 0 | % | ||
Expected volatility | % | |||
Risk Free interest rate | % | |||
Expected life (years) remaining | 0 to |
Shares Underlying Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (in years) | Shares Underlying Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (in years) | |||||||||||||||||||
Outstanding at January 1, 2021 | 0 | $ | 0 | — | 0 | $ | 0 | — | ||||||||||||||||
Options assumed in Helix Merger | 455,089 | $ | 15.13 | 3.69 | 455,089 | $ | 15.13 | 3.44 | ||||||||||||||||
Granted | 3,264,714 | $ | 13.21 | 9.72 | 3,815,214 | $ | 12.85 | 9.53 | ||||||||||||||||
Exercised | (12,437 | ) | $ | 3.02 | 1.77 | (22,437 | ) | $ | 4.57 | 1.92 | ||||||||||||||
Forfeited and expired | (4,037 | ) | $ | 14.91 | 6.13 | (161,893 | ) | $ | 11.74 | 9.16 | ||||||||||||||
Outstanding at June 30, 2021 | 3,703,329 | $ | 14.25 | 8.96 | ||||||||||||||||||||
Vested options at June 30, 2021 | 455,089 | $ | 15.13 | 3.69 | ||||||||||||||||||||
Outstanding at September 30, 2021 | 4,085,973 | $ | 14.25 | 8.84 | ||||||||||||||||||||
Vested options at September 30, 2021 | 455,089 | $ | 15.13 | 3.44 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Cost of revenue | 4,656 | 0 | 4,656 | 0 | ||||||||||||
Research and development | 83,099 | 3,222 | 137,989 | 5,798 | ||||||||||||
Sales and marketing | 174,919 | 1,128 | 206,663 | 2,029 | ||||||||||||
General and administrative | 2,488,873 | 2,192 | 3,268,865 | 3,943 | ||||||||||||
Total | 2,751,547 | 6,542 | 3,618,173 | 11,770 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Cost of revenue | 14,823 | 0 | 19,479 | 0 | ||||||||||||
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 |
Note | STOCKHOLDERS’ EQUITY |
Note | NET LOSS PER SHARE |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||||
Net loss attributable to common shareholders | $ | (7,134,196 | ) | $ | (791,639 | ) | $ | (11,625,843 | ) | $ | (1,466,775 | ) | $ | (6,876,472 | ) | $ | (1,161,915 | ) | $ | (18,502,315 | ) | $ | (2,628,690 | ) | ||||||||
Net loss per share attributable to common shareholders: | ||||||||||||||||||||||||||||||||
Basic | $ | (0.23 | ) | $ | (0.06 | ) | $ | (0.42 | ) | $ | (0.13 | ) | $ | (0.22 | ) | $ | (0.08 | ) | $ | (0.64 | ) | $ | (0.22 | ) | ||||||||
Diluted | $ | (0.23 | ) | $ | (0.06 | ) | $ | (0.42 | ) | $ | (0.13 | ) | $ | (0.22 | ) | $ | (0.08 | ) | $ | (0.64 | ) | $ | (0.22 | ) | ||||||||
Weighted average common shares outstanding: | ||||||||||||||||||||||||||||||||
Basic | 30,996,735 | 13,797,652 | 27,534,359 | 11,066,456 | 31,332,735 | 14,208,049 | 28,814,825 | 12,038,534 | ||||||||||||||||||||||||
Diluted | 30,996,735 | 13,797,652 | 27,534,359 | 11,066,456 | 31,332,735 | 14,208,049 | 28,814,825 | 12,038,534 |
For the Three and Six Months Ended June 30, | For the Three and Nine Months ended September 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Potentially dilutive securities: | ||||||||||||||||
Warrants | 124,087 | 0 | 124,087 | 0 | ||||||||||||
Stock options | 3,703,329 | 0 | 4,085,973 | 0 | ||||||||||||
Convertible notes | 2,411,018 | 0 | ||||||||||||||
Unvested Restricted Stock Awards and Units | 1,760,551 | 1,846,338 | 1,422,034 | 2,148,093 | ||||||||||||
Total | 5,587,967 | 1,846,338 | 8,043,112 | 2,148,093 |
Note | RELATED PARTY TRANSACTIONS |
Note | COMMITMENTS AND CONTINGENCIES |
Six Months Ended June 30, | Nine Months Ended September 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Cash used in operating leases | $ | 120,615 | $ | 0 | $ | 211,077 | $ | 0 | ||||||||
ROU assets obtained in exchange for lease obligations | $ | 94,010 | $ | 0 | $ | 166,489 | $ | 0 |
As of June 30, 2021 | As of December 31, 2020 | As of September 30, 2021 | As of December 31, 2020 | |||||||||||||
Right of use assets, net | $ | 988,674 | $ | 0 | $ | 916,195 | $ | 0 | ||||||||
Short-term operating lease liabilities | 264,330 | 0 | $ | 245,771 | $ | 0 | ||||||||||
Long-term operating lease liabilities | $ | 737,701 | $ | 0 | 675,254 | 0 | ||||||||||
Total lease liabilities | $ | 1,002,031 | $ | 0 | $ | 921,025 | $ | 0 | ||||||||
Weighted average remaining lease term (in years) | 3.47 | — | 3.41 | — | ||||||||||||
Weighted average discount rate | 8.5 | % | 0.0 | % | 8.5 | % | 0.0 | % |
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||||
Operating lease expense | $ | 81,935 | $ | 0 | $ | 109,247 | $ | 0 | $ | 81,936 | $ | 0 | $ | 191,182 | $ | 0 | |||||||||||||||
Short-term lease expense | $ | 26,541 | $ | 3,152 | $ | 34,493 | $ | 8,146 | $ | 19,393 | $ | 3,928 | $ | 62,916 | $ | 12,074 | |||||||||||||||
Total operating lease costs | $ | 108,476 | $ | 3,152 | $ | 143,740 | $ | 8,146 | $ | 101,329 | $ | 3,928 | $ | 254,098 | $ | 12,074 |
As of June 30, 2021 | ||||
2021 | $ | 160,363 | ||
2022 | 308,470 | |||
2023 | 286,670 | |||
2024 | 291,161 | |||
2025 | 85,726 | |||
Thereafter | 14,288 | |||
Total future minimum lease payments | $ | 1,146,678 | ||
Less imputed interest | (144,647 | ) | ||
Total | $ | 1,002,031 |
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 |
June 30, 2021 | December 31, 2020 | September 30, 2021 | December 31, 2020 | |||||||||||||
Unaudited | Unaudited | |||||||||||||||
Year ending December 31, 2021 | $ | 0 | $ | 533,488 | $ | 500,000 | $ | 533,488 | ||||||||
Year ending December 31, 2022 | 272,188 | 272,188 | 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 | ||||||||||||||
$ | 272,188 | $ | 805,676 | $ | 5,772,188 | $ | 805,676 |
Note | SEGMENT RESULTS |
Three months ended June 30, | Six months ended June 30, | Three months ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||||
Information and Software | ||||||||||||||||||||||||||||||||
Revenue | $ | 3,763,671 | $ | 108,750 | $ | 5,172,649 | $ | 175,417 | $ | 4,489,177 | $ | 159,504 | $ | 9,661,826 | $ | 334,921 | ||||||||||||||||
Costs and expenses | 6,514,714 | 598,220 | 10,152,316 | $ | 1,169,773 | 7,661,631 | 1,007,777 | 17,813,947 | $ | 2,177,550 | ||||||||||||||||||||||
Loss from operations | (2,751,043 | ) | (489,470 | ) | (4,979,667 | ) | (994,356 | ) | (3,172,454 | ) | (848,273 | ) | (8,152,121 | ) | (1,842,629 | ) | ||||||||||||||||
Total other income/(expense) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||
Net loss before income taxes | (2,751,043 | ) | (489,470 | ) | (4,979,667 | ) | (994,356 | ) | (3,172,454 | ) | (848,273 | ) | (8,152,121 | ) | (1,842,629 | ) | ||||||||||||||||
Services | ||||||||||||||||||||||||||||||||
Revenue | $ | 492,336 | $ | 0 | $ | 588,647 | $ | 0 | $ | 269,753 | $ | 0 | $ | 858,400 | $ | 0 | ||||||||||||||||
Costs and expenses | 305,830 | 0 | 386,120 | 0 | 369,507 | 0 | 755,627 | 0 | ||||||||||||||||||||||||
Loss from operations | 186,506 | 0 | 202,527 | 0 | (99,754 | ) | 0 | 102,773 | 0 | |||||||||||||||||||||||
Total other income/(expense) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||
Net loss before income taxes | 186,506 | 0 | 202,527 | 0 | (99,754 | ) | 0 | 102,773 | 0 | |||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||||||
Revenue | $ | 291,978 | $ | 0 | $ | 407,298 | $ | 0 | $ | 202,825 | $ | 0 | $ | 610,123 | $ | 0 | ||||||||||||||||
Costs and expenses | 390,100 | 0 | 469,987 | 0 | 228,014 | 0 | 698,001 | 0 | ||||||||||||||||||||||||
Loss from operations | (98,122 | ) | 0 | (62,689 | ) | 0 | (25,189 | ) | 0 | (87,878 | ) | 0 | ||||||||||||||||||||
Total other income/(expense) | (244 | ) | 0 | (332 | ) | 0 | (275 | ) | 0 | (607 | ) | 0 | ||||||||||||||||||||
Net income before income taxes | (98,366 | ) | 0 | (63,021 | ) | 0 | (25,464 | ) | 0 | (88,485 | ) | 0 | ||||||||||||||||||||
Centrally Managed Costs | ||||||||||||||||||||||||||||||||
Revenue | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||||
Costs and expenses | 4,322,291 | 302,913 | 7,261,636 | 478,126 | 4,051,504 | 313,731 | 11,313,140 | 791,857 | ||||||||||||||||||||||||
Loss from operations | (4,322,291 | ) | (302,913 | ) | (7,261,636 | ) | (478,126 | ) | (4,051,504 | ) | (313,731 | ) | (11,313,140 | ) | (791,857 | ) | ||||||||||||||||
Total other income/(expense) | (149,002 | ) | 744 | 475,954 | 5,707 | 472,704 | 89 | 948,658 | 5,796 | |||||||||||||||||||||||
Net loss before income taxes | (4,471,293 | ) | (302,169 | ) | (6,785,682 | ) | (472,419 | ) | (3,578,800 | ) | (313,642 | ) | (10,364,482 | ) | (786,061 | ) | ||||||||||||||||
Totals | ||||||||||||||||||||||||||||||||
Revenue | $ | 4,547,985 | $ | 108,750 | $ | 6,168,594 | $ | 175,417 | $ | 4,961,755 | $ | 159,504 | $ | 11,130,349 | $ | 334,921 | ||||||||||||||||
Costs and expenses | 11,532,935 | 901,133 | 18,270,059 | 1,647,899 | 12,310,656 | 1,321,508 | 30,580,715 | 2,969,407 | ||||||||||||||||||||||||
Loss from operations | (6,984,950 | ) | (792,383 | ) | (12,101,465 | ) | (1,472,482 | ) | (7,348,901 | ) | (1,162,004 | ) | (19,450,366 | ) | (2,634,486 | ) | ||||||||||||||||
Total other income/(expense) | (149,246 | ) | 744 | 475,622 | 5,707 | 472,429 | 89 | 948,051 | 5,796 | |||||||||||||||||||||||
Net loss | $ | (7,134,196 | ) | $ | (791,639 | ) | $ | (11,625,843 | ) | $ | (1,466,775 | ) | $ | (6,876,472 | ) | $ | (1,161,915 | ) | $ | (18,502,315 | ) | $ | (2,628,690 | ) |
Note | SUBSEQUENT EVENTS |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
For the Three Months Ended, | For the Six Months Ended, | |||||||||||||||
June 30, 2021 | June 30, 2020 | June 30, 2021 | June 30, 2020 | |||||||||||||
Revenues | $ | 4,547,985 | $ | 108,750 | $ | 6,168,594 | $ | 175,417 | ||||||||
Costs and Expenses | ||||||||||||||||
Cost of Revenues | 1,232,790 | — | 1,690,676 | — | ||||||||||||
Research and development | 1,949,926 | 426,398 | 3,447,764 | 815,391 | ||||||||||||
Sales and marketing | 1,177,035 | 55,978 | 1,776,010 | 111,044 | ||||||||||||
General and administrative | 6,577,696 | 326,832 | 9,362,258 | 629,085 | ||||||||||||
Depreciation and amortization | 595,488 | 1,419 | 783,072 | 1,873 | ||||||||||||
Transaction related expenses | — | 90,506 | 1,210,279 | 90,506 | ||||||||||||
Loss from operations | $ | (6,984,950 | ) | $ | (792,383 | ) | $ | (12,101,465 | ) | $ | (1,472,482 | ) |
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 | ) |
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. |
• |
• | 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; |
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. |
Historical (Unaudited) | Historical (Unaudited) | Historical (Unaudited) | Historical (Unaudited) | |||||||||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||
Information and Software | $ | 3,763,671 | $ | 108,750 | $ | 5,172,649 | $ | 175,417 | $ | 4,489,177 | $ | 159,504 | $ | 9,661,826 | $ | 334,921 | ||||||||||||||||
Services | 492,336 | $ | — | 588,647 | — | 269,753 | $ | — | 858,400 | — | ||||||||||||||||||||||
Other | 291,978 | $ | — | 407,298 | — | 202,825 | $ | — | 610,123 | — | ||||||||||||||||||||||
Total revenues | $ | 4,547,985 | $ | 108,750 | $ | 6,168,594 | $ | 175,417 | $ | 4,961,755 | $ | 159,504 | $ | 11,130,349 | $ | 334,921 | ||||||||||||||||
Net loss | $ | (7,134,196 | ) | $ | (791,639 | ) | $ | (11,625,843 | ) | $ | (1,466,775 | ) | $ | (6,876,472 | ) | (1,161,915 | ) | $ | (18,502,315 | ) | $ | (2,628,690 | ) | |||||||||
Depreciation & amortization | 595,488 | 1,419 | 783,072 | 1,873 | 598,565 | 3,059 | 1,381,637 | 4,932 | ||||||||||||||||||||||||
Stock based compensation expense | 2,751,547 | 6,542 | 3,618,173 | 11,770 | 2,627,506 | 8,561 | 6,245,679 | 20,331 | ||||||||||||||||||||||||
Change in fair value of warrant liability | 128,800 | — | (494,827 | ) | — | (251,778 | ) | — | (746,605 | ) | — | |||||||||||||||||||||
Loss on impairment of goodwill | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Transaction related expenses | — | 90,506 | 1,210,279 | 90,506 | — | 105,128 | 1,210,279 | 195,634 | ||||||||||||||||||||||||
Interest and investment income, net | 20,446 | (744 | ) | 19,205 | (5,707 | ) | ||||||||||||||||||||||||||
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 | $ | (3,637,915 | ) | $ | (693,916 | ) | $ | (6,489,941 | ) | $ | (1,368,333 | ) | $ | (4,122,830 | ) | (1,045,256 | ) | $ | (10,612,771 | ) | $ | (2,413,589 | ) |
Pro Forma (Unaudited) | Pro Forma (Unaudited) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2021 | 2020 | 2021 (1) | 2020 | |||||||||||||
Revenues: | ||||||||||||||||
Information and Software | $ | 3,763,671 | $ | 2,378,605 | $ | 6,801,326 | $ | 4,784,373 | ||||||||
Services | 492,336 | 283,732 | 822,336 | 651,455 | ||||||||||||
Other | 291,978 | 286,544 | 553,840 | 636,888 | ||||||||||||
Total revenues | $ | 4,547,985 | $ | 2,948,881 | $ | 8,177,502 | $ | 6,072,716 | ||||||||
Net loss | $ | (7,134,196 | ) | $ | (2,907,056 | ) | $ | (14,388,547 | ) | $ | (6,140,962 | ) | ||||
Depreciation & amortization | 595,488 | 589,688 | 1,204,300 | 1,184,848 | ||||||||||||
Stock based compensation expense | 2,751,547 | 322,314 | 3,781,116 | 1,071,604 | ||||||||||||
Change in fair value of warrant liability | 128,800 | 41,847 | 721,397 | (615,678 | ) | |||||||||||
Loss on impairment of goodwill | — | — | — | 1,369,978 | ||||||||||||
Transaction related expenses | — | 141,385 | 2,096,054 | 175,810 | ||||||||||||
Interest and investment income, net | 20,446 | 170,960 | 24,060 | 668,803 | ||||||||||||
Other income | — | — | (55,006 | ) | — | |||||||||||
Income tax expense | — | — | — | — | ||||||||||||
Adjusted EBITDA | $ | (3,637,915 | ) | $ | (1,640,862 | ) | $ | (6,616,626 | ) | $ | (2,285,597 | ) |
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 | ) |
For the Six Months Ended, | For the Nine Months Ended, | |||||||||||||||
June 30, 2021 | June 30, 2020 | September 30, 2021 | September 30, 2020 | |||||||||||||
Net cash used in operating activities | $ | (8,248,764 | ) | $ | (1,518,139 | ) | $ | (13,190,329 | ) | $ | (2,355,893 | ) | ||||
Net cash used in investing activities | (18,269 | ) | (1,144,884 | ) | ||||||||||||
Net cash (used in) provided by investing activities | (223,207 | ) | 121,230 | |||||||||||||
Net cash provided by financing activities | 12,294,355 | 3,315,700 | 36,283,171 | 3,315,700 | ||||||||||||
Effect of foreign exchange rate changes on cash | 70,539 | — | ||||||||||||||
Net increase in cash and cash equivalents | $ | 4,097,861 | $ | 652,677 | $ | 22,869,635 | $ | 1,081,037 |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
Item 4. | Controls and Procedures |
Item 1. | Legal Proceedings |
Item 1A. | Risk Factors |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Item 3. | Defaults Upon Senior Securities |
Item 4. | Mine Safety Disclosures |
Item 5. | Other Information |
Item 6. | Exhibits |
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). | |
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). | |
Form of | |
Employment Agreement, dated as of September 2, 2021, by and between the Company and Michael Vesey (incorporated by reference to Exhibit | |
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). | |
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
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) |
FORIAN INC. | ||
By: | /s/ Daniel Barton | |
Daniel Barton | ||
Chief Executive Officer | ||
(Principal Executive Officer) | ||
By: | /s/ Michael Vesey | |
Chief Financial Officer | ||
(Principal Financial Officer and Principal Accounting Officer) |