TABLE OF CONTENTS

PART I	FINANCIAL INFORMATION

Item 1.	Financial Statements	3 1

	Condensed Consolidated Balance Sheets as of September 30, ~~2021~~2022 (unaudited) and December 31, ~~2020~~2021	3 1

	Condensed Consolidated Statements of Operations ~~and Comprehensive Loss~~ for the Three and Nine Months Ended September 30, ~~2021~~2022 and ~~2020~~2021 (unaudited)	4 2

	Condensed Consolidated Statements of Stockholders’ Equity ~~(Deficit)~~ for the Three and Nine Months Ended September 30, ~~2021~~2022 and ~~2020~~2021 (unaudited)	5 3

	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, ~~2021~~2022 and ~~2020~~2021 (unaudited)	8 5

	Notes to Unaudited Condensed Consolidated Financial Statements	106

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 42

Item 4.	Controls and Procedures	43

PART II	OTHER INFORMATION	44

Item 1.	Legal Proceedings	44

Item 1A.	Risk Factors	45 44

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	45 44

Item 3.	Defaults Upon Senior Securities	45 44

Item 4.	Mine Safety Disclosures	45

Item 5.	Other Information	45

Item 6.	Exhibits	46 45

Signatures		47 46

FORIAN INC.

~~(formerly known as MEDICAL OUTCOMES RESEARCH ANALYTICS, LLC)~~

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30, ~~2021~~2022 AND DECEMBER 31, ~~2020~~2021

Item 1.

Financial Statements and Supplementary Unaudited Data

	September 30,			December 31,			September 30,			December 31,
	2021			2020			2022			2021
	Unaudited						Unaudited
ASSETS
Current assets:
Cash and cash equivalents	$	23,535,098		$	665,463		$	1,585,594		$	18,663,805
Marketable securities		12,399,243			11,501,844			19,046,961			12,399,361
Accounts receivable, net		2,179,979			22,996			3,553,323			1,947,540
Contract assets		364,480			196,701			1,978,181			1,056,891
Prepaid expenses		912,879			120,979			1,205,630			1,017,927
Other assets		300,000			0			436,101			900,242
Total current assets		39,691,679			12,507,983			27,805,790			35,985,766

Property and equipment, net		762,658			46,358			2,870,667			1,531,959
Intangible assets, net		9,596,702			0			7,344,677			9,051,184
Goodwill		9,125,372			0			9,099,372			9,099,372
Right of use assets, net		916,195			0			706,272			859,637
Deposits and other assets		329,682			0			274,532			314,443
Total assets	$	60,422,288		$	12,554,341		$	48,101,310		$	56,842,361

LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:
Accounts payable		1,095,328			647,601			896,916			1,125,067
Accrued expenses		2,993,013			480,741			4,557,385			4,068,109
Short-term operating lease liabilities		245,771			0			265,474			247,325
Notes payable		15,250			0			—			13,122
Warrant liability		501,110			0			26,079			369,234
Deferred revenues		682,157			158,884			2,685,027			976,268
Total current liabilities		5,532,629			1,287,226			8,430,881			6,799,125

Long-term liabilities:
Long-term operating lease liabilities		675,254			0			444,996			611,523
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			24,893,488			24,260,448
Total long-term liabilities		24,724,368			0			25,338,484			24,871,971

Total liabilities		30,256,997			1,287,226			33,769,365			31,671,096

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
Commitments and contingencies (Note 18)								—			—
Stockholders’ equity:
Preferred Stock; par value $0.001; 5,000,000 Shares authorized; 0 issued and outstanding as of September 30, 2022 and December 31, 2021								—			—
Common Stock; par value $0.001; 95,000,000 Shares authorized; 32,138,000 issued and outstanding as of September 30, 2022 and 31,773,154 issued and outstanding as of December 31, 2021								32,138			31,773
Additional paid-in capital		54,905,098			17,514,907			69,535,194			57,959,622
Accumulated deficit		(24,771,340	)		(6,269,025	)		(55,235,387	)		(32,820,130	)
Total stockholders' equity		30,165,291			11,267,115
Total liabilities and stockholders' equity	$	60,422,288		$	12,554,341
Total stockholders’ equity								14,331,945			25,171,265
Total liabilities and stockholders’ equity							$	48,101,310		$	56,842,361

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

Table of Contents

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,						For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2021			2020			2021			2020			2022			2021			2022			2021

Revenues:
Information and Software	$	4,489,177		$	159,504		$	9,661,826		$	334,921		$	6,780,680		$	4,489,177		$	18,674,213		$	9,661,826
Services		269,753			0			858,400			0			341,173			269,753			1,168,034			858,400
Other		202,825			0			610,123			0			54,475			202,825			259,618			610,123
Total revenues		4,961,755			159,504			11,130,349			334,921			7,176,328			4,961,755			20,101,865			11,130,349

Costs and Expenses:
Cost of revenue		1,337,981			0			3,028,657			0
Cost of revenues														1,839,996			1,337,981			5,154,353			3,028,657
Research and development		2,612,184			658,824			6,059,948			1,474,215			3,259,511			2,612,184			9,869,435			6,059,948
Sales and marketing		1,088,203			40,217			2,864,213			151,261			1,525,286			1,088,203			4,455,269			2,864,213
General and administrative		6,673,723			514,280			16,035,981			1,143,365			4,659,959			6,673,723			15,618,570			16,035,981
Separation expenses														—			—			5,611,857			—
Gain on sale of assets														—			—			(202,159	)		—
Depreciation and amortization		598,565			3,059			1,381,637			4,932			842,933			598,565			2,052,729			1,381,637
Transaction related expenses		0			105,128			1,210,279			195,634			—			—			—			1,210,279
Total costs and expenses		12,310,656			1,321,508			30,580,715			2,969,407			12,127,685			12,310,656			42,560,054			30,580,715

Loss From Operations		(7,348,901	)		(1,162,004	)		(19,450,366	)		(2,634,486	)		(4,951,357	)		(7,348,901	)		(22,458,189	)		(19,450,366	)

Other Income (Expense):
Change in fair value of warrant liability		251,778			0			746,605			0			8,539			251,778			343,155			746,605
Interest and investment income		1,903			89			4,601			5,796			89,160			1,903			112,602			4,601
Interest expense		(79,422	)		0			(101,325	)		0			(198,738	)		(79,422	)		(659,425	)		(101,325	)
Foreign currency related gains		298,170			0			298,170			0
Total other income, net		472,429			89			948,051			5,796
Foreign currency related gains (losses)														(65,228	)		152,920			266,600			298,170
Total other income (expense), net														(166,267	)		327,179			62,932			948,051

Net loss before income taxes		(6,876,472	)		(1,161,915	)		(18,502,315	)		(2,628,690	)		(5,117,624	)		(7,021,722	)		(22,395,257	)		(18,502,315	)
Income tax expense		0			0			0			0			(10,000	)		—			(20,000	)		—

Net Loss	$	(6,876,472	)	$	(1,161,915	)	$	(18,502,315	)	$	(2,628,690	)	$	(5,127,624	)	$	(7,021,722	)	$	(22,415,257	)	$	(18,502,315	)

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 and diluted net loss per common share	$	(0.22	)	$	(0.08	)	$	(0.64	)	$	(0.22	)	$	(0.16	)	$	(0.22	)	$	(0.70	)	$	(0.64	)
Weighted-average shares outstanding:		31,332,735			14,208,049			28,814,825			12,038,534			32,088,358			31,332,735			31,978,719			28,814,825

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

Table of Contents

FORIAN INC.

~~(formerly known as MEDICAL OUTCOMES RESEARCH ANALYTICS, LLC)~~

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(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, 2022		—	$	—		31,773,154	$	31,773	$	57,959,622		$	(32,820,130	)	$	25,171,265
Vesting of Restricted Stock and Stock Awards, net of shares surrendered for taxes		—		—		339,742		340		(58,425	)		—			(58,085	)
Issuance of Forian common stock upon exercise of stock options		—		—		8,114		8		(8	)		—			—
Issuance of Forian common stock upon exercise of warrants		—		—		16,990		17		(17	)		—			—
Stock based compensation expense		—		—		—		—		11,634,022			—			11,634,022
Net loss		—		—		—		—		—			(22,415,257	)		(22,415,257	)
Balance at September 30, 2022		—	$	—		32,138,000	$	32,138	$	69,535,194		$	(55,235,387	)	$	14,331,945

	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 unaudited condensed consolidated financial statements

Table of Contents

FORIAN INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(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, 2022		—	$	—		32,045,011	$	32,045	$	67,572,043		$	(50,107,763	)	$	17,496,325
Vesting of Restricted Stock and Stock Awards, net of shares surrendered for taxes		—		—		75,999		76		(76	)		—			—
Issuance of Forian common stock upon exercise of warrants		—		—		16,990		17		(17	)		—			—
Stock based compensation expense		—		—		—		—		1,963,244			—			1,963,244
Net loss		—		—		—		—		—			(5,127,624	)		(5,127,624	)
Balance at September 30, 2022		—	$	—		32,138,000	$	32,138	$	69,535,194		$	(55,235,387	)	$	14,331,945

	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, 2021		—	$	—		31,198,721	$	31,199	$	52,264,976	$	(17,749,618	)	$	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
Net loss		—		—		—		—		—		(7,021,722	)		(7,021,722	)
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 unaudited condensed consolidated financial statements

Table of Contents

~~STOCKHOLDERS' EQUITY (DEFICIT)~~ FORIAN INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(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
$ 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 18,454,784
Forian Restricted Stock Vesting from MOR unvested restricted stock 671,641 671 9,987 0 10,658
Issuance of common stock warrants —
0
389,976
0
389,976

Forian shares issued upon exercise of MOR Class B options 10,167 10 292,820 0 292,830
Stock based compensation expense 0 0 6,235,021 0 6,235,021
Issuance of Forian common stock 1,191,743 1,192 11,967,460 0 11,968,652
Issuance of Forian common stock upon exercise of stock options 18,110 19 48,551 0 48,570
Net loss
(18,502,315 ) (18,502,315 )
Balance at September 30, 2021
0
$ 0 31,533,083 31,533 54,905,098 (24,771,340 ) 30,165,291

	For the Nine Months Ended September 30,
	2022			2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(22,415,257	)	$	(18,502,315	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		2,052,729			1,381,637
Amortization on right of use asset		153,365			166,489
Gain on sale of assets		(202,159	)		—
Amortization of debt issuance costs		3,999			444
Accrued interest on Convertible Notes		629,041			70,000
Realized and unrealized gain on marketable securities		(110,914	)		(3,295	)
Provision for doubtful accounts		142,846			89,130
Stock-based compensation expense		11,634,022			6,245,679
Change in fair value of warrant liability		(343,155	)		(746,605	)
Unrealized foreign currency related (gains) and losses		14,803			(15,030	)
Issuance of warrants in connection with transaction expenses		—			389,976
Change in operating assets and liabilities:
Accounts receivable		(1,761,038	)		(1,757,660	)
Contract assets		(921,290	)		(147,651	)
Prepaid expenses		(187,703	)		(576,836	)
Changes in lease liabilities during the period		(148,378	)		(186,383	)
Deposits and other assets		504,052			(120,732	)
Accounts payable		(228,151	)		(234,152	)
Accrued expenses		481,159			559,770
Deferred revenues		1,708,759			202,337
Net cash used in operating activities		(8,993,270	)		(13,185,197	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment		(1,695,937	)		(640,080	)
Proceeds from sale of assets		225,575			—
Purchase of marketable securities		(42,929,102	)		(24,903,107	)
Sale of marketable securities		36,392,416			24,009,003
Cash acquired as part of business combination		—			1,310,977
Net cash used in investing activities		(8,007,048	)		(223,207	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of MOR Class B options		—			292,830
Payments on notes payable and financing arrangements		(13,122	)		(5,551	)
Payment of employee withholding tax related to restricted stock units		(58,085	)		—
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 (used in) provided by financing activities		(71,207	)		36,283,171

Effect of foreign exchange rate changes on cash		(6,686	)		(5,132	)

Net change in cash		(17,078,211	)		22,869,635

Cash and cash equivalents, beginning of period		18,663,805			665,463

Cash and cash equivalents, end of period	$	1,585,594		$	23,535,098

Supplemental disclosure of cash flow information:
Cash paid for interest	$	—		$	724
Cash paid for taxes	$	2,550		$	—
Non-cash Investing Activities:
Non-cash consideration for Helix acquisition	$	—		$	18,454,784

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

~~Table of Contents~~

~~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 $ 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
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
0 $ 0 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
$ 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 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
0 $ 0 31,533,083 $ 31,533 $ 54,905,098 $ 0 $ (24,771,340 ) $ 30,165,291

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

~~Table of Contents~~

~~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

$ 0 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
0 $ 0 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~~

~~Table of Contents~~

~~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 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

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

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~~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 $ 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

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

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FORIAN INC.

~~(Formerly known as MEDICAL OUTCOMES RESEARCH ANALYTICS, LLC)~~

NOTES TO UNAUDITED 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,~~31, 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 condensed consolidated financial statements of the Company as of September 30, ~~2021.~~2022. 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,~~2021, as filed with the Securities and Exchange Commission (“SEC”) on March 31, ~~2021.~~2022.

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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 Boss Security Solutions, Inc., BT UCS, Inc. and AIE Exchange Canada, Inc. Effective October 7, 2021, AIE Exchange Canada, Inc. was voluntarily dissolved. Effective December 31, 2021, (i) each of COR Analytics, LLC and MOR Analytics, LLC was merged with and into Medical Outcomes Research Analytics, LLC and (ii) each of BT UCS, Inc. and BOSS Security Solutions was merged with and into Security Grade Protective Services, Ltd., which entity was re-domesticated from Colorado to Delaware and renamed Helix Legacy, Inc. Effective October 31, 2022, 100% of the equity interest of Engeni, LLC held by Helix was sold. 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~~three months ended September 30, 2022 and 2021, sales in Argentina represented less than 1% of the Company’s consolidated sales. During the nine months ended September 30, 2022 and 2021, sales in Argentina represented less than 1% and 2%, respectively, of the Company’s consolidated sales. Assets held in Argentina as of September 30, 2022 and December 31, 2021 represented less than 1% of the Company’s consolidated assets. While the hyperinflationary conditions did 0tnot have a material impact on the Company’s business during the ~~period from March 2, 2021 through~~three and nine months ended September 30, ~~2021,~~2022, 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. The significant areas of estimation include but are not limited to accounting for allowance for doubtful accounts, income taxes, depreciation, amortization of intangible assets, contingencies and stock-based compensation. Certain of the Company’s estimates could be affected by external conditions, including those unique to the Company and general economic conditions. It is possible that the external factors could have an effect on the Company’s estimates and could cause actual results to differ from those estimates.

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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~~Foreign currency related gains ~~and losses related to Engeni SA, which was acquired as part of the acquisition of Helix, as part of~~were reclassified from other comprehensive income ~~(loss)~~to other income (expense) for Engeni SA, the Company’s former Argentinian subsidiary, which operates 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.

a highly inflationary country.

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:

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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. The estimated fair value of the Company’s warrant liability as of September 30, 2022 and December 31, 2021 was $26,079 and $369,234, respectively, based on Level 3 inputs.

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.

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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~~$303,588 and $0$350,991 at September 30, ~~2021~~2022 and December 31, ~~2020,~~2021, 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.

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Goodwill

Goodwill ~~which represents~~consists of the excess of ~~purchase price~~cost over the fair value of net assets acquired ~~is carried at cost.~~in business combinations. Goodwill is not ~~amortized; rather,~~amortized. Instead, it is ~~subject to a periodic assessment~~tested annually for impairment, ~~by applying a~~or more frequently if events occur or circumstances change that would more likely than not reduce its fair ~~value-based test. The Company reviews~~value below its carrying amount. All goodwill is reported in the Information and Software reporting unit.

Goodwill is evaluated for ~~possible~~ impairment annually ~~during the fourth quarter,~~ or whenever events or changes in circumstances indicate ~~that~~ the carrying ~~amount~~value of goodwill 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. InThe Company has the option to first ~~step, the Company determines~~assess qualitative factors to determine whether events or circumstances indicate that it is more likely than not that the fair value of ~~its~~a reporting unit ~~using a discounted cash flow analysis.~~is less than its carrying amount and to determine whether further action is needed. If, after assessing the ~~net book~~totality of events or circumstances, the Company determines it is not more likely than not that the fair value of ~~the~~a reporting unit ~~exceeds~~is less than its ~~fair value,~~carrying amount, then performing the ~~Company then performs the second step of the~~quantitative 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.is unnecessary. An impairment charge is recognized when the ~~implied~~ fair value of the Company’s goodwill is less than its carrying amount. ~~NaN~~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.

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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~~(or as) customers obtain control of promised goods or services, in an amount that reflects the consideration which is expected to be received in exchange for those goods or services. The Company recognizes revenue following the five-step model prescribed under ASC 606: (i) identify contract(s) with a customer; (ii) identify the performance obligation(s) in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligation(s) in the contract; and (v) recognize revenues when (or as) the Company satisfies a performance obligation. The Company applies the provisions of ASC ~~606-10-32-32 requires~~606 to an arrangement when a substantive contract exists and collectability is probable.

The Company generates revenue from the ~~determination~~following categories of offerings: Information and Software subscriptions, Services and Other products.

The Company derives Information and Software revenue primarily from license fees for the Company’s Information products and subscription revenue for the Company’s Software products. Information products contracts are generally for a period of one month to five years. Information products’ customers may access data analytics products through the use of tools provided by the Company or by utilizing their own tools per the contract. Data products may consist of historical information as it exists at the time of delivery or information that will be updated over a period of time as agreed with the customer. In most cases, the provision of information products is considered a single performance obligation. In cases where the Company is not obligated to update information over the access period, and control over the use of the ~~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~~passes to the ~~terms~~customer when delivered, revenue is recognized when the information products are made available to the customer. In cases where information updates are provided over the contract term, they are considered highly interrelated with the information product delivered upon contract inception, and ~~pricing for~~revenue is recognized ratably over the life of the contract. Customers are generally invoiced according to monthly, quarterly or annual amounts specified in the contract. Any amounts invoiced in excess of revenue recognized are recorded as deferred revenue. Revenue recognized in excess of amounts invoiced is recorded as a contract asset.

Software revenue is primarily comprised of subscriptions to point of sale and business intelligence products and ~~services when components are sold on~~related hosting services. Subscription revenue is considered a ~~standalone basis. In instances where insufficient data exists, the Company recognizes the contractual fees~~single performance obligation recognized ratably over the term of the ~~arrangement. In instances where a customer has limited operating history or~~contract, beginning when access to the applicable software is provided to the customer. Customers are typically billed at the beginning of each month under agreements, which the customer ~~has recently been formed, management~~ may ~~determine that it~~cancel with 30 days’ notice. When collection of fees occurs in advance of service delivery, revenue recognition is ~~prudent to recognize only the first year’s~~deferred until such services commence. Revenue for implementation fees ~~ratably over the first year of the term or~~is recognized as ~~amounts~~training and installation services 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.

performed.

~~The Company generates revenue from 3 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 fixed price contracts with government agencies ~~and revenue is recognized~~where amounts are billed upon completion of the ~~various~~ milestones within the contract. Revenue is recognized as the company satisfies its performance obligations under the contract. In the event that a contract does not specifically allocate revenue to the satisfaction of specific performance obligations or milestones, the ~~purchase~~transaction 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.

In some cases, contracts provide for variable consideration that is contingent upon the occurrence of uncertain future events, which can either increase or decrease the transaction price, including sales of products by customers derived from data analytics products the Company provides. Variable consideration based on sales of products by customers is recognized in the period of sales, subject to minimum amounts specified in contracts. Variable consideration is estimated at the expected value or at the most likely amount depending on the type of consideration. Estimated amounts are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. The estimate of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of anticipated performance and all information (historical, current and forecasted) that is reasonably available to the Company and reevaluated each reporting period. The effect of revisions in recognized estimated variable consideration in excess of minimums are recorded beginning in the period in which the estimates are revised. Actual results could differ from periodic estimates.

Significant judgments and estimates are sometimes necessary for the determination of whether performance obligations in a contract are distinct and whether they are delivered at a point in time or over time. Judgement is also necessary to assess revenue recognized under contingent revenue arrangements.

Contract acquisition costs, which consist of sales commissions paid or payable, are considered incremental and recoverable costs of obtaining a contract with a customer. Sales commissions for initial and renewal contracts are deferred and then amortized on a straight-line basis over the contract term. ~~$45,714 and $53,784~~

During November 2020, the Company entered into a Master Services Agreement (the “November 2020 Agreement”) with a customer to provide information services described in certain statements of ~~such costs were capitalized as of September 30, 2021 and December 31,~~work under the November 2020 ~~respectively. There are no significant judgements affecting the determination~~Agreement. As part of the ~~amount and timing~~November 2020 Agreement, the Company was granted shares of restricted stock representing approximately 23.4% of the ~~related revenue.~~

Inoutstanding stock of the ~~event~~customer, vesting in quarterly increments specified in the November 2020 Agreement through December 2023. Concurrently, the Company ~~has~~entered into a Stockholders Agreement specifying its voting and other rights as a stockholder. As a result, the Company determined that it does not ~~satisfied all performance obligations on its contracts with customers, any amounts~~exert influence over the customer. ASC 606-10-32-21 requires an entity to measure the fair value of ~~unbilled revenue or excess costs are recorded as~~noncash consideration at contract ~~assets and contract liabilities.~~

~~Contract assets result when the cumulative revenue recognized exceeds the cumulative invoicing under a contract.~~inception. The fair value of the ~~differential is reflected in Contract assets~~restricted stock was determined to be $0 on the date of inception. The Company recorded revenue from the customer of $388,393 and ~~represents~~$350,000 for the ~~value of~~three months ended September 30, 2022 and 2021, respectively, and $1,138,393 and $700,000 for the ~~revenue that was not billed to customers as of the balance sheet date.~~

nine months ended September 30, 2022 and 2021, respectively.

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:~~2022:

	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	)		(263,787	)
Beginning deferred revenue balance recognized during the period		—		—			—			(158,884	)
Net change due to timing of billings, payments and recognition		16,494		843,696			860,190			919,119
Balance at December 31, 2021		70,278		986,613			1,056,891			976,268
Beginning deferred revenue balance recognized during the period		—		—			—			(887,798	)
Net change due to timing of billings, payments and recognition		105,358		815,932			921,290			2,596,557
Balance at September 30, 2022	$	175,636	$	1,802,545		$	1,978,181		$	2,685,027

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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

Transaction price allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes unearned revenue and unbilled amounts that will be recognized as revenue in future periods. The majority of the Company’s noncurrent remaining performance obligations will be recognized over the next 36 months.

The transaction price allocated to remaining performance obligations consisted of the following:

	September 30, 2022		December 31, 2021
Estimated next twelve months	$	14,657,461	$	8,525,736
Thereafter		14,597,945		11,424,934
Total	$	29,255,406	$	19,950,670

~~Segment Information~~

Remaining performance obligations include $2,685,027 and $976,268 of billed and deferred revenue at September 30, 2022 and December 31, 2021, respectively.

The Company’s disaggregated revenue categories as of September 30, 2022 and 2021 are as follows:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2022		2021		2022		2021
Healthcare Information	$	4,310,694	$	2,146,203	$	11,448,468	$	4,102,550
Software Subscriptions		2,469,986		2,342,974		7,225,745		5,559,276
Services		341,173		269,753		1,168,034		858,400
Other		54,475		202,825		259,618		610,123
Total	$	7,176,328	$	4,961,755	$	20,101,865	$	11,130,349

Segment Information

FASB 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 0tnot have any customers that exceeded 10% of total revenue for the three and nine months ended September 30, 2022 or 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,~~2022 and ~~for the three and nine months ended September 30, 2020, respectively,~~2021, any disruption associated with these suppliers could have a material short-term impact on the business while alternate sources are secured.

During the three and nine months ended September 30,2022, the Company had two vendors representing 17% and 19% and 20% and 17% of purchases for outside development and cloud computing services, respectively.

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. Such indicators include, among others, the nature of the asset, the projected future economic benefit of the asset, historical and future cash flows and profitability measurements. An impairment loss would be recognized when the ~~present~~ value of the undiscounted estimated future cash flows expected to result from the use of the asset and its eventual disposition is less than the carrying value. There were 0no impairment losses recognized during the three and nine months ended September 30, ~~2021~~2022 and ~~2020, respectively.~~2021.

Software Development Costs

~~The~~The Company accounts for costs incurred in the development of computer software in accordance with ASC Subtopic ~~350-40,~~ 350-40,Intangibles – Goodwill and Other – Internal-Use Software~~. Costs incurred in the application development stage are subject~~and ASC Subtopic 985-20,Software –Costs of Software to ~~capitalization and subsequent amortization and possible impairment.~~be Sold, Leased or Marketed. Product development costs are primarily ~~personnel~~ related to ~~activities~~Company personnel and contractors for design and evaluating software development, testing, bug fixes, and other maintenance activities. Product development costs incurred in the application development stage for internal use software are subject to capitalization and subsequent amortization, and possible impairment. The Company begins to capitalize these costs when preliminary development efforts are successfully completed, management has authorized and committed project funding, and it is probable that the project will be completed and the software would be used as intended. Capitalization ceases upon completion of all substantial testing. Such costs are amortized when placed in service, on a straight-line basis over the estimated useful life of the related asset, generally estimated to be three years. Product development costs not pertaining to the application development stage are expensed as incurred. The Company capitalized software development costs of ~~$561,553~~$0 and ~~$0 as of~~$1,624,991during the three and nine months ended September 30, ~~2021~~2022, respectively, and ~~December 31, 2020,~~$295,143 and $561,553 during the three and nine months ended September 30,2021, 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~~$68,245 and ~~$39,009~~$100,427 for the three and nine months ended September 30, ~~2021,~~2022, respectively, and $0$18,011 and $0$39,009 for the three and nine months ended September 30, ~~2020,~~2021, 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,~~2022, 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~~2022 and ~~2020,~~2021, 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.

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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~~were originally authorized and reserved for issuance under the 2020 Plan. On June 15,2022, the Company’s stockholders approved an amendment to the 2020 Plan, which amended the Plan to increase the number of shares available for issuance by 2,400,000 shares to a total of 6,400,000 shares.Stock options represent the right to purchase Company common stock at the exercise price on the date of grant of the stock option at a future date. Restricted stock awards are grants of shares of Company common stock. Restricted stock units represent the right to receive shares of Company common stock on future specified dates. Stock options, restricted stock awards and restricted stock units granted contain restrictions that cause them to be subject to substantial risk of forfeiture and restrict their exercise, sale or other transfer by the grantee until they vest. The terms of the stock options, restricted stock awards and units granted under the 2020 Plan are determined by the Board of Directors in the agreement evidencing the award, including the number of shares, period of restriction or vesting schedule and other terms. The fair value of the stock options, restricted stock awards and restricted stock units is based on the underlying grant date fair value of Company common stock. The fair value is then expensed over the requisite service periods of the awards, net of forfeitures, which is generally the service period ~~net~~and the related amount is recognized in the condensed consolidated statements of ~~forfeitures, which are recorded as they occur.~~operations.

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, 0no 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~~accordance with FASB ASC 740 (“ASC 740”). Deferred income tax assets and liabilities are determined based ~~on the~~upon differences between ~~the~~ financial ~~statements~~reporting and tax ~~basis~~bases of assets and liabilities, which are measured using the enacted tax rates and laws that will be in effect ~~for the year in which~~when the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The 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.

The Company recorded a provision for state taxes of $10,000 and $20,000 for the three and nine months ended September 30,2022, respectively, and $0 for the three and nine months ended September 30,2021.

Gain on Sale of Assets

On March 3, 2022, the Company sold certain assets, consisting of customer contracts, accounts receivable, and other property related to its security monitoring services for $225,575 resulting in a gain of $202,159,18 which is included in operating expenses in the condensed consolidated statements of operations for the nine months ended September 30,2022.

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Separation Expenses

During March 2022, the Company transferred certain development activities from its Engeni SA subsidiary to outsourced development facilities. As a result, the Company incurred $194,814 in severance and related costs to be recorded as a charge to operating expenses in 2022 during the nine months ended September 30,2022.

On March 2, 2022, the Company and two advisors agreed not to renew special advisor agreements between the advisors and the Company. The advisors were the former chief executive officer and chief financial officer of Helix who were granted stock options in conjunction with their respective advisory agreements that were entered into upon the completion of the Helix acquisition. The Company and the advisors mutually agreed not to renew the advisory agreements. The services provided by these advisors included transition planning and consulting services related to integration of the business operations of Helix and Forian. Per the terms of the agreements, options to purchase 366,166 shares of common stock will continue to vest according to their original terms through March 2, 2023, and unvested stock options to purchase 732,332 shares of common stock were forfeited. The advisors are not required to perform services to the Company beyond the non-renewal date of March 2, 2022. As a result, the Company recorded $5,417,043 of stock compensation expenses related to the options that will vest over the twelve months ending March 2, 2023 during March 2022.

Foreign Currency Related Gains

Foreign currency related gains result from foreign currency transactions and translation gains related to our former Engeni SA subsidiary.

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~~amendment is ~~evaluating the potential impact of ASU 2021-08 on its~~effective for financial statements for interim and ~~related disclosures.~~annual periods beginning after December 15, 2022. The adoption of this standard is not expected to have a material impact on the condensed consolidated financial statements.

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.

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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	$	18,454,784

Assets acquired:
Cash		1,310,977		1,310,977
Accounts receivable, net		488,453		488,453
Prepaid expenses		215,064		215,064
Contract assets		20,128		20,128
Other assets		450,000		450,000
Property and equipment		146,559		146,559
Software Technology		5,279,000		5,279,000
Trade Names and Trademarks		386,000		386,000
Customer Relationships		5,243,000		5,269,000
Right of use assets		1,082,684		1,082,684
Deposits and other assets		58,950		58,950
Total assets acquired	$	14,680,815	$	14,706,815

Liabilities assumed:
Accounts payable and accrued liabilities	$	2,654,543
Accounts payable			$	681,879
Accrued expenses				1,972,663
Short-term lease liabilities		295,364		295,364
Deferred revenues		320,936		320,936
Warrant liability		1,247,715		1,247,715
Notes payable and financing arrangements		20,801		20,801
Other long-term liabilities		812,044		812,045
Total liabilities assumed	$	5,351,403	$	5,351,403
Estimated fair value of net assets acquired:	$	9,329,412	$	9,355,412

Goodwill	$	9,125,372	$	9,099,372

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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~~ for the ~~three and~~ nine months ended September 30,2022 and 2021, respectively.

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Unaudited Pro Forma Financial Information

~~Unaudited Pro Forma Results~~

~~The~~he 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,						For the Nine Months Ended September 30,
Description	2021			2020			2021			2020			2021
Revenues	$	4,961,755		$	3,062,557		$	13,139,257		$	9,135,273		$	13,139,261
Net loss		(6,876,472	)		(42,488,120	)		(21,265,019	)		(46,647,993	)	$	(21,246,168	)
Net loss per share:
Basic and diluted-as pro forma (unaudited)	$	(0.22	)	$	(1.48	)	$	(0.69	)	$	(1.75	)	$	(0.69	)

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~~2022 and ~~2020,~~2021, the fair value of these investments approximated cost.

Note 6

PREPAID EXPENSES AND OTHER CURRENT ASSETS

The Company has various agreements which require upfront and periodic payments. The Company records the expenses related to these agreements ratably over the annual terms. As of September 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company’s balance sheet reflected other prepaid expenses of ~~$912,879~~$1,205,630 and ~~$120,979,~~$1,017,927, respectively, primarily relating to various software licenses and insurance policies with durations ranging from 3 months to 1 year.

20Included in other current assets as of September 30, 2022 are amounts receivable from employees totaling $436,101.

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Note 7

PROPERTY AND EQUIPMENT, NET

As of September 30, ~~2021~~2022 and December 31, ~~2020,~~2021, property and equipment were comprised of the following:

	September 30, 2021			December 31, 2020
	Unaudited						September 30, 2022			December 31, 2021
Personal computing equipment	$	129,702		$	55,767		$	195,089		$	131,137
Furniture and equipment		117,343			0			123,309			119,381
Software development costs		561,553			0			2,985,827			1,338,044
Vehicles		25,876			0			—			25,876
Total		834,474			55,767			3,304,225			1,614,438
Less: Accumulated depreciation and amortization		(71,816	)		(9,409	)
Less: Accumulated depreciation								(433,558	)		(82,479	)
Property and equipment, net	$	762,658		$	46,358		$	2,870,667		$	1,531,959

Depreciation and amortization expense for the three and nine months ended September 30, 2022 was $274,097 and $346,222,respectively, andfor the three and nine months ended September 30, 2021 was $30,909 and $69,895, respectively. Amortization of software development costs for the three and nine months ended September 30, 2022 was $248,819 and $292,545, respectively, and for the three and nine months ended September 30, ~~2020~~2021 was ~~$3,059~~$6,943 and ~~$4,932,~~$9,623, 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~~tables summarize the Company’s intangible assets as of September 30, 2022 and December 31, 2021:

	Estimated Useful Life (Years)		Gross Carrying Amount at December 31, 2021		Accumulated Amortization			Net Book Value at September 30, 2022
Customer Relationships		5	$	5,269,000	$	(1,663,834	)	$	3,605,166
Software Technology		2		1,170,000		(923,060	)		246,940
Software Technology		7		4,109,000		(926,273	)		3,182,727
Tradenames and Trademarks		8		386,000		(76,156	)		309,844
			$	10,934,000	$	(3,589,323	)	$	7,344,677

	Estimated Useful Life (Years)		Gross Carrying Amount at March 2, 2021		Accumulated Amortization			Net Book Value at 9/30/2021		Estimated Useful Life (Years)		Gross Carrying Amount at March 2, 2021		Accumulated Amortization			Net Book Value at December 31, 2021
Customer Relationships		5	$	5,243,000	$	(606,046	)	$	4,636,954		5	$	5,269,000	$	(872,501	)	$	4,396,499
Software Technology		2		1,170,000		(338,105	)		831,895		2		1,170,000		(484,355	)		685,645
Software Technology		7		4,109,000		(339,261	)	$	3,769,739		7		4,109,000		(486,011	)		3,622,989
Tradenames and Trademarks		8		386,000		(27,886	)		358,114		8		386,000		(39,949	)		346,051
			$	10,908,000	$	(1,311,298	)	$	9,596,702			$	10,934,000	$	(1,882,816	)	$	9,051,184

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 $568,836 and $1,706,507 for the three and nine months ended September 30, 2022, respectively, and $567,212 and ~~1,311,298~~$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~~respectively.

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

Years Ending December 31,	Future amortization expense		Future amortization expense
2021 remaining	$	567,213
2022		2,268,850
2022 (Remaining)			$	567,543
2023		1,784,495		1,789,695
2024		1,683,850		1,689,050
2025		1,683,850		1,689,050
2026				816,549
Thereafter		1,608,444		792,790
Total	$	9,596,702	$	7,344,677

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Note 9

ACCRUED EXPENSES

As of September 30, ~~2021~~2022 and December 31, ~~2020,~~2021, accrued expenses were comprised of the following:

	September 30, 2021		December 31, 2020		September 30, 2022		December 31, 2021
Employee compensation		1,903,187		346,720
Accrued salary, commission and bonus					$	2,487,667	$	2,046,584
Accrued expenses		1,089,826		8,825		2,069,718		2,021,525
Transaction-related		0		125,196
Total	$	2,993,013	$	480,741	$	4,557,385	$	4,068,109

~~Transaction-related~~Accrued expenses primarily consists of accrued ~~expenses are associated with the Merger. See Note 4.~~fees to vendors.

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,~~2022, the Company had ~~97,058~~92,058 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			As of September 30, 2022		As of December 31, 2021
Fair value of company's common stock	$	10.32		$	3.35	$	9.02
Dividend yield		0	%		0%		0%
Expected volatility		80% - 145	%		104% - 134%		118% - 149%
Risk Free interest rate		0.05% - 0.58	%		3.81% - 4.23%		0.06% - 0.97%
Expected life (years)		2.07			1.16		1.82
Exercise price	$	8.00 - $28.00		$	8.00 - $28.00	$	8.00 - $28.00
Fair value of financial instruments - warrants	$	501,110		$	26,079	$	369,234

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

Amount
Balance at January 1, 2021 $ 0

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 as of January 1, 2022	$	369,234

Change in fair value of warrant liability		(343,155	)

Balance as of September 30, 2022	$	26,079

Amount
Balance at July 1, 2021
$
752,888

Change in fair value of warrant liability
(251,778
)

Balance at September 30, 2021

$
501,110

	Amount
Balance as of 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 as of September 30, 2021	$	501,110

	Amount
Balance as of July 1, 2022	$	34,618

Change in fair value of warrant liability		(8,539	)

Balance as of September 30, 2022	$	26,079

	Amount
Balance as of July 1, 2021	$	752,888

Change in fair value of warrant liability		(251,778	)

Balance as of September 30, 2021	$	501,110

Note 11

CONVERTIBLE NOTES

	September 30, 2021			December 31, 2020		September 30, 2022			December 31, 2021
Principal outstanding	$	24,000,000		$	0	$	24,000,000		$	24,000,000
Add: accrued interest		70,000			0		909,041			280,000
Less: unamortized debt issuance costs		(20,886	)		0		(15,553	)		(19,552	)
Convertible note payable, net of debt issuance costs	$	24,049,114		$	0	$	24,893,488		$	24,260,448

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 $211,726 and $629,041 for the three and nine months ended September 30, 2022, respectively, and $70,000 for the three and nine months ended September 30, 2021.

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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 and nine months ended September 30, 2022, the Company recognized $1,333 and $3,999 in amortization of debt issuance costs, respectively, and during the three and nine 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		Number of Restricted Shares and Units			Weighted Average Grant Date Fair Value Per Share
Unvested at January 1, 2020		1,237,396		$	0.62
Unvested at January 1, 2021							1,699,676		$	1.28
Issued		2,191,869			1.21		454,000			11.71
Vested		1,729,589			0.72		(907,545	)		0.03
Canceled		0			0		(100,000	)		12.18
Unvested at December 31, 2020		1,699,676			1.28
Unvested at December 31, 2021							1,146,131			3.28
Issued		444,000			11.76		—			—
Vested		671,642			0.03		(349,478	)		2.05
Canceled		(50,000	)		12.18		(115,105	)		0.21
Unvested at September 30, 2021		1,422,034		$	3.35
Unvested at September 30, 2022							681,548		$	4.45

The ~~1,422,034~~681,548 of unvested awards at September 30, ~~2021~~2022 consists of ~~444,000~~263,000 restricted stock units and ~~1,028,034~~418,548 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~~September 30, 2022 and December 31, 2021 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~~

	September 30, 2022		December 31, 2021
Exercise Price	$	2.00 to $51.80	$	2.00 to $51.80
Fair value of Company common stock	$	2.98 - $15.61	$	7.85 to $22.90
Dividend yield		0%		0%
Expected volatility		117% to 188%		117% to 188%
Risk Free interest rate	0.27% to 2.96%			0.27% to 1.59%
Expected life (years) remaining	0.09 to 9.87			0.84 to 10.00

Stock option activity for the period ended September 30, ~~2021~~2022 is as follows:

	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		—		—		$	—		—
Options assumed in Helix Merger		455,089		$	15.13		3.44		455,089		$	15.13		3.24
Granted		3,815,214		$	12.85		9.53		3,893,714		$	12.73		9.31
Exercised		(22,437	)	$	4.57		1.92		(29,937	)	$	6.03		1.02
Forfeited and expired		(161,893	)	$	11.74		9.16		(271,893	)	$	7.31		6.65
Outstanding at September 30, 2021		4,085,973		$	14.25		8.84
Vested options at September 30, 2021		455,089		$	15.13		3.44
Outstanding at December 31, 2021									4,046,973		$	14.25		8.75
Granted									1,203,250		$	4.02		9.58
Exercised									(33,334	)	$	2.47		2.80
Forfeited and expired									(1,027,181	)	$	14.69		8.28
Outstanding at September 30, 2022									4,189,708		$	10.49		8.54
Vested options at September 30, 2022									1,475,670		$	11.36		7.58

The weighted average exercise price and remaining contractual life of exercisable options as of September 30, 2022 is $11.36 and 7.58 years, respectively. The total aggregate intrinsic value of the exercisable options as of September 30, 2022 was approximately $51,911.

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Stock Compensation Expense

The grant date fair value per share for the stock options granted was ~~$11.94~~$3.66 and ~~$0.02~~$11.94 for the nine months ended September 30, 2022 and 2021, respectively.

On March 2, 2022, the Company and ~~2020, respectively.~~the former chief executive officer and the former chief financial officer of Helix mutually agreed not to renew special advisor agreements between the advisors and the Company. Per the terms of the agreements, options to purchase 366,166 shares of common stock will continue to vest according to their original terms through March 2, 2023, and unvested stock options to purchase 732,332 shares of common stock were forfeited. The advisors are not required to perform services to the Company beyond the non-renewal date of March 2, 2022. As a result, the Company recorded $5,417,043 of stock compensation expenses related to the options that will vest over the twelve months ending March 2, 2023 during March 2022.

At September 30, ~~2021,~~2022, 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,~~$17,781,687, which the Company expects to recognize over a weighted-average period of approximately ~~3.88~~2.94 years. Stock compensation expense for the three and nine months ended September 30, ~~2021~~2022 and ~~2020~~2021 is as follows:

	Three Months Ended September 30,					Nine Months Ended September 30,				For the Three Months Ended September 30,					For the Nine Months Ended September 30,
	2021			2020		2021		2020		2022		2021			2022		2021
Cost of revenue		14,823			0		19,479		0
Services										$	42,768	$	14,823		$	107,928	$	19,479
Research and development		(131,774	)		2,868		6,215		8,666		118,822		(131,774	)		348,788		6,215
Sales and marketing		108,477			1,476		315,140		3,505		196,724		108,477			439,343		315,140
General and administrative		2,635,980			4,217		5,904,845		8,160		1,604,930		2,635,980			5,320,920		5,904,845
Separation expenses											—		—			5,417,043		—
Total		2,627,506			8,561		6,245,679		20,331	$	1,963,244	$	2,627,506		$	11,634,022	$	6,245,679

~~Table~~Total intrinsic value of ~~Contents~~

options exercised in the period ended September 30, 2022 was $26,472. The total fair value of restricted shares vested during the period ended September 30, 2022 was $1,959,295.

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~~year ended ~~September 30,~~December 31, 2021. On August 24, 2022, all 17,031 warrants were exercised in a cashless exercise. As a result, 16,990 shares of the Company’s common stock were issued upon exercise of the warrants.

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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~~1,191,743 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,						For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2021			2020			2021			2020			2022			2021			2022			2021
Net loss attributable to common shareholders	$	(6,876,472	)	$	(1,161,915	)	$	(18,502,315	)	$	(2,628,690	)	$	(5,127,624	)	$	(7,021,722	)	$	(22,415,257	)	$	(18,502,315	)

Net loss per share attributable to common shareholders:
Basic	$	(0.22	)	$	(0.08	)	$	(0.64	)	$	(0.22	)	$	(0.16	)	$	(0.22	)	$	(0.70	)	$	(0.64	)
Diluted	$	(0.22	)	$	(0.08	)	$	(0.64	)	$	(0.22	)	$	(0.16	)	$	(0.22	)	$	(0.70	)	$	(0.64	)

Weighted average common shares outstanding:
Basic		31,332,735			14,208,049			28,814,825			12,038,534			32,088,358			31,332,735			31,978,719			28,814,825
Diluted		31,332,735			14,208,049			28,814,825			12,038,534			32,088,358			31,332,735			31,978,719			28,814,825

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,				As of September 30,
	2021		2020		2022		2021
Potentially dilutive securities:
Warrants		124,087		0		102,056		124,087
Stock options		4,085,973		0		4,189,708		4,085,973
Convertible notes		2,411,018		0		2,479,887		2,411,018
Unvested Restricted Stock Awards and Units		1,422,034		2,148,093		681,548		1,422,034
Total		8,043,112		2,148,093		7,453,199		8,043,112

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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 2 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.~~the Company. Mr. Dublin’s consultancy with the vendor ended on December 11, 2020 and the parties have agreed not ~~agreed~~ to renew the consulting agreement. Pursuant to Mr. Dublin’s consulting agreement with the vendor, Mr. Dublin received payments from the vendor for the three and nine months ended September 30, ~~2021~~2022 of $50,813 and ~~2020~~$285,448, respectively, and for the three and nine months ended September 30, 2021 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.

Note 16

SEGMENT RESULTS

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.

ASC 280 requires that public companies report profits and losses and certain other information on their “reportable operating segments” in their annual and interim financial statements. The internal organization used by the public company’s Chief Operating Decision Maker (CODM) to assess performance and allocate resources determines the basis for reportable operating segments. The Company’s CODM is the Chief Executive Officer. The CODM evaluates financial performance based on Revenues and Operating Income. The CODM does not review assets by operating segment for the purposes of assessing performance or allocated resources.

The Company has three operating and reportable segments, which are consistent with its reporting units as follows:

The “Information and Software” segment licenses information and software products to customers. Revenues in this segment are currently derived from customers in the healthcare or cannabis industries; however, the Company’s information may be licensed to other customer segments as the Company leverages its analytics platform.

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The “Services” segment provides implementation, support and training on a contractual basis to customers. Revenues in this segment are primarily generated from the operation of cannabis related “seed to sale” traceability platforms for government entities.

The “Other” segment consists of certain other business operations, primarily in security and marketing services.

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

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2022			2021			2022			2021
Information and Software
Revenue	$	6,780,680		$	4,489,177		$	18,674,213		$	9,661,826
Costs and expenses		7,229,791			7,661,631			22,035,166			17,813,947
Loss from operations	$	(449,111	)	$	(3,172,454	)	$	(3,360,953	)	$	(8,152,121	)
Total other income/(expense)		—			—			—			—
Loss before income taxes	$	(449,111	)	$	(3,172,454	)	$	(3,360,953	)	$	(8,152,121	)

Services
Revenue	$	341,173		$	269,753		$	1,168,034		$	858,400
Costs and expenses		270,172			369,507			869,525			755,627
Income (loss) from operations	$	71,001		$	(99,754	)	$	298,509		$	102,773
Total other income/(expense)		—			—			—			—
Income (loss) before income taxes	$	71,001		$	(99,754	)	$	298,509		$	102,773


Other
Revenue	$	54,475		$	202,825		$	259,618		$	610,123
Costs and expenses		137,465			228,014			559,342			698,001
Loss from operations	$	(82,990	)	$	(25,189	)	$	(299,724	)	$	(87,878	)
Total other income/(expense)		—			(275	)		50			(607	)
Loss before income taxes	$	(82,990	)	$	(25,464	)	$	(299,674	)	$	(88,485	)

Centrally Managed Costs
Revenue	$	—		$	—		$	—		$	—
Costs and expenses		4,490,257			4,051,504			19,096,021			11,313,140
Loss from operations	$	(4,490,257	)	$	(4,051,504	)	$	(19,096,021	)	$	(11,313,140	)
Total other income/(expense)		(166,267	)		327,454			62,882			948,658
Loss before income taxes	$	(4,656,524	)	$	(3,724,050	)	$	(19,033,139	)	$	(10,364,482	)
Income tax expense		(10,000	)		—			(20,000	)		—
Net loss	$	(4,666,524	)	$	(3,724,050	)	$	(19,053,139	)	$	(10,364,482	)

Totals
Revenue	$	7,176,328		$	4,961,755		$	20,101,865		$	11,130,349
Costs and expenses		12,127,685			12,310,656			42,560,054			30,580,715
Loss from operations	$	(4,951,357	)	$	(7,348,901	)	$	(22,458,189	)	$	(19,450,366	)
Total other income/(expense)		(166,267	)		327,179			62,932			948,051
Loss before income taxes	$	(5,117,624	)	$	(7,021,722	)	$	(22,395,257	)	$	(18,502,315	)
Income tax expense		(10,000	)		—			(20,000	)		—
Net loss	$	(5,127,624	)	$	(7,021,722	)	$	(22,415,257	)	$	(18,502,315	)

Approximately 99% of the Company’s revenues were attributable to customers in the United States for the three and nine months ended September 30, 2022. Approximately 97% of revenues were attributable to customers in the United States for the three and nine months ended September 30, 2021.

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Note 17

LEASES

Operating Leases

The Company accounts for leases in accordance with ASC Topic 842, Leases (“ASC 842”). All contracts are evaluated to determine whether or not they represent a lease. A lease conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company has operating leases primarily consisting of facilities with remaining lease terms of 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, (ii) Washington, (iii) Colorado and (iv) Argentina that expire in (i) December 2024, (ii) December 2022, (iii) February 2026 and (iv) July 2024, respectively. The Company also has two short-term leases related to offices in Pennsylvania and Massachusetts. 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 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, 2022 and 2021 were as follows:

	For the Nine Months Ended September 30,
	2022		2021
Cash used in operating leases	$	236,832	$	211,077
ROU assets obtained in exchange for new operating lease liabilities	$	39,791	$	1,082,684

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

	September 30, 2022		December 31, 2021
Right of use assets, net	$	706,272	$	859,637

Short-term operating lease liabilities	$	265,474	$	247,325
Long-term operating lease liabilities		444,996		611,523
Total lease liabilities	$	710,470	$	858,848
Weighted average remaining lease term (in years)		2.60		3.32
Weighted average discount rate		8.5%		8.5%

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

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2022		2021		2022		2021
Operating lease expense	$	84,262	$	81,936	$	241,824	$	191,182
Short-term lease expense	$	55,965	$	19,393	$	174,374	$	62,916
Total operating lease costs	$	140,227	$	101,329	$	416,198	$	254,098

Future lease payments included in the measurement of lease liabilities on the condensed consolidated balance sheet as of September 30, 2022, for the following five fiscal years and thereafter were as follows:

	September 30, 2022
2022 (Remaining)	$	82,598
2023		308,594
2024		302,123
2025		85,726
2026		14,287
Total future minimum lease payments	$	793,328
Less imputed interest		(82,858	)
Total	$	710,470

Note 1618

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 (2), (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 3 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 3 short-term 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
$ 0

ROU assets obtained in exchange for lease obligations $ 166,489
$ 0

~~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 $ 0

Short-term operating lease liabilities
$
245,771 $
0
Long-term operating lease liabilities

675,254
0
Total lease liabilities $ 921,025 $ 0
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 $ 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 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:~~2022:

	September 30, 2021		December 31, 2020		September 30, 2022
	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		0		1,741,439
Year ending December 31, 2024		1,500,000		0		1,887,595
Year ending December 31, 2025		1,600,000		0		1,600,000
Thereafter		400,000		0
Year ending December 31, 2026						400,000
	$	5,772,188	$	805,676	$	5,629,034

Legal Proceedings

From time to time the Company may be involved in claims that arise during the ordinary course of business. For any matters where management currently believes it is probable that the Company will incur a loss and that the probable loss or range of loss can be reasonably estimated, the Company records reserves in the condensed consolidated financial statements based on its best estimates of such loss. In other instances, because of the uncertainties related to either the probable outcome or the amount or range of loss, management is unable to make a reasonable estimate of a liability, if any. Regardless of the outcome, litigation can be costly and time consuming, and it can divert management’s attention from important business matters and initiatives, negatively impacting the Company’s overall operations. Although the results of litigation and claims cannot be predicted with certainty, the Company does not currently have any pending 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, 1 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.

2829

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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,~~the Company, claiming that he owned 10% of GTI. The complaint seeks unspecified monetary damages equivalent to the value a 10% shareholder of GTI would have received in the subsequent Helix and Forian transactions, along with an equitable accounting and constructive trust to determine if Audet suffered any loss of profit distributions. The case is in the process of discovery and trial is scheduled for February 2023. Each of the parties’ motions for summary judgment were recently denied. The Company believes the lawsuit is wholly without merit and will vigorously defend the claims in the ~~lawsuit. The case is~~lawsuit.

Grant Whitus et al. v. Forian Inc., Zachary Venegas and Scott Ogur

On July 30, 2021, four former Helix employees filed a lawsuit in the ~~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, 4 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~~Arapahoe County, Colorado District Court ~~for~~against the ~~Southern District~~Company and Helix’s former managers asserting claims of ~~New York) (the “Dillion Complaint”);~~ ~~Baros v.~~breach of contract, promissory estoppel, breach of the covenant of good faith and fair dealing, civil theft and conversion, fraudulent misrepresentation, civil conspiracy, and unjust enrichment / quantum meruit, all relating to the plaintiffs’ claims that they were promised equity interest in Helix ~~Technologies, Inc., et al., No. 1:21-cv-01425 (filed February 17,~~or compensation that they never received. The original complaint was never served, and in November 2021 the plaintiffs filed and served an amended complaint adding a fifth plaintiff, and seeking over $27.5 million in damages as well as attorneys’ fees and costs. The Company removed the ~~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~~matter to the United States District Court for the District of ~~Colorado) (the “Anderson Complaint”);~~Colorado in December 2021 and ~~Robinson v. Helix Technologies, Inc., et al., No. 1:21-cv-00484 (filed February 18, 2021 in~~both the ~~United States District Court for the District of Colorado) (the “Robinson Complaint” and, together with the Dillion Complaint, the Anderson Complaint~~Company and the ~~Baros Complaint, the “Stockholder Complaints”)). The Stockholder Complaints were~~individual defendants 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, failingmotions 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 4 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~~dismiss on January 20, 2022. Plaintiffs subsequently amended their complaint on April 21, 2022, adding 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~~ as defendants and advancing additional claims for breach of ~~Forian,~~fiduciary duty and ~~Shamson Sundra, a former employee~~violation of ~~Security Consultants Group, LLC, alleging negligence in~~ the ~~performance~~Colorado Wage Claims Act. The Company and the individual defendants filed their separate motions to dismiss on June 1, 2022, and briefing of ~~security services in connection with a school shooting at STEM School Highlands Ranch that occurred~~those motions was completed on ~~May 7, 2019. The case is in~~July 13, 2022. Although the ~~early stages of~~motions are still pending, the Court ordered the parties to begin discovery and ~~the parties have agreed to voluntary mediation scheduled for December 13, 2021. Trial is scheduled to begin on August 8,~~written discovery commenced in July 2022. The Company ~~will~~intends to defend vigorously ~~defend~~against 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 3 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) 0 0 0 0
Net loss before income taxes (3,172,454 ) (848,273 ) (8,152,121 ) (1,842,629 )

Services
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

Other
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 income before income taxes (25,464 ) 0 (88,485 ) 0

Centrally Managed Costs
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 )

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 1819

SUBSEQUENT EVENTS

~~The~~

During October 2022, the Company ~~evaluated subsequent events~~realigned its human resources incurring approximately $200,000 of severance expenses related to the departure of seven employees, and ~~transactions that occurred after~~suspending the ~~balance sheet date~~development of certain software projects with a third-party developer.

On October 31, 2022, the Company sold its equity interest in Engeni, LLC for a note with payments of up to $100,000 if certain conditions are met. The resulting gain or loss on the ~~date that~~sale is not expected to have a material impact on 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~~Company’s 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~~2022 and ~~2020,~~2021, 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,~~2021, as filed with the SEC on March 31, ~~2021.~~2022. 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.

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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~~revenues is generated from direct costs associated with the delivery of our products and services to our customers. The cost of ~~revenue~~revenues 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.~~revenues. Infrastructure and licensed data costs, which are shared across all projects or groups of projects, are not charged to cost of ~~revenue.~~revenues and included in research and development.

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.

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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,~~revenues, 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~~Three and ~~nine months ended~~Nine Months Ended September 30, ~~2021~~2022 and ~~2020~~2021:

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

	For the Three Months Ended,						For the Nine Months Ended,						For the Three Months Ended,						For the Nine Months Ended,
	September 30, 2021			September 30, 2020			September 30, 2021			September 30, 2020			September 30, 2022			September 30, 2021			September 30, 2022			September 30, 2021
Revenues	$	4,961,755			159,504		$	11,130,349		$	334,921		$	7,176,328		$	4,961,755		$	20,101,865		$	11,130,349
Costs and Expenses
Cost of Revenues		1,337,981			—			3,028,657			—			1,839,996			1,337,981			5,154,353			3,028,657
Research and development		2,612,184			658,824			6,059,948			1,474,215			3,259,511			2,612,184			9,869,435			6,059,948
Sales and marketing		1,088,203			40,217			2,864,213			151,261			1,525,286			1,088,203			4,455,269			2,864,213
General and administrative		6,673,723			514,280			16,035,981			1,143,365			4,659,959			6,673,723			15,618,570			16,035,981
Separation expenses														—			—			5,611,857			—
Gain on sale of assets														—			—			(202,159	)		—
Depreciation and amortization		598,565			3,059			1,381,637			4,932			842,933			598,565			2,052,729			1,381,637
Transaction related expenses		—			105,128			1,210,279			195,634			—			—			—			1,210,279
Loss from operations	$	(7,348,901	)	$	(1,162,004	)	$	(19,450,366	)	$	(2,634,486	)	$	(4,951,357	)	$	(7,348,901	)	$	(22,458,189	)	$	(19,450,366	)

Comparison of Three Months Ended September 30, ~~2021~~2022 and ~~2020~~2021

Revenues

Revenuesfor the three months ended September 30, 2022 were $7,176,328, which represented an increase of $2,214,573 compared to total revenue of $4,961,755 for the three months ended September 30, 2021 ~~were $4,961,755, which represented an~~. The increase is primarily due to a $2,164,491, or 101%, increase in revenues from the Company’s healthcare information products, partially offset by a decline in Other revenues resulting from the disposition of ~~$4,802,251, compared to total revenue~~a non-core security monitoring business in the first quarter of ~~$159,504~~ 2022.

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Cost of Revenues

Cost of revenues for the three months ended September 30, ~~2020. These~~2022 were $1,839,996, which represented an increase of $502,015 compared to total cost of revenues of $1,337,981 for the three months ended September 30, 2021. The increase is due to higher cost of revenues from the Company’s information products and increased support costs related to sales of software subscriptions.

Research and Development

Research and development expenses for the three months ended September 30, 2022were $3,259,511, which represented an increase of $647,327 compared to total research and development expenses of $2,612,184 for the three months ended September 30, 2021. The increase is due to higher personnel, subcontracted labor, data licensing and processing expenses related to scaling the Company’s products.

Sales and Marketing

Sales and marketing expenses for the three months ended September 30, 2022 were $1,525,286, which represented an increase of $437,083 compared to total sales and marketing expenses of $1,088,203 for the three months ended September 30, 2021. The increase is due to higher salary, commission and expenses related to scaling the Company’s products.

General and Administrative

General and administrative expenses for the three months ended September 30, 2022 were $4,659,959, which represented a decrease of $2,013,764 compared to general and administrative expenses of $6,673,723 for the three months ended September 30, 2021. The decrease is primarily due to a decrease of $1,098,373 in stock-based compensation expenses related to the departure of the former chief executive officer and the former chief financial officer of Helix, who were advisors to the Company through March 2, 2022, and lower consulting and salary costs resulting from efficiencies in administrative functions.

Comparison of Nine Months Ended September 30, 2022 and 2021

Revenues

Revenues for the nine months ended September 30, 2022 were $20,101,865, representing an increase of $8,971,516 over $11,130,349 for the nine months ended September 30, 2021. The increase in revenues was primarily from ~~Information and Software products.~~sales of healthcare information products which increased $7,137,774 to $11,448,468 for the nine months ended September 30, 2022, compared to $4,102,550 in the same period last year. The remaining 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.since March 2, 2021.

Cost of Revenues

Cost of revenues ~~increased by $1,337,981~~ for the ~~three~~nine months ended September 30, ~~2021, from $0~~2022 were $5,154,353, which represented and increase of $2,125,696 compared to $3,028,657 for the ~~three~~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.~~2021. The increase is due to higher support costs for the ~~inclusion of the Helix acquisition, which contributed 92% of the increase,~~Company’s software subscription products and higher ~~cost~~sales of ~~revenues from~~ the Company’s Information ~~products, which contributed 8%~~products.

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Research and Development

Research and development expenses for the ~~three~~nine months ended September 30, ~~2021~~2022 were ~~$2,612,184,~~$9,869,435, which represented an increase of ~~$1,953,360~~$3,809,487 compared to total research and development expenses of ~~$658,824~~$6,059,948 for the ~~three~~nine months ended September 30, ~~2020.~~2021. The increase is primarily due to higher ~~R&D~~personnel, subcontracted labor, data licensing and processing 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.new product development.

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Sales and Marketing

Sales and marketing expenses for the ~~three~~nine months ended September 30, ~~2021~~2022 were ~~$1,088,203,~~$4,455,269, which represented an increase of ~~$1,047,986~~$1,591,056 compared to total sales and marketing expenses of ~~$40,217~~$2,864,213 for the ~~three~~nine months ended September 30, ~~2020.~~2021. The increase is primarily due to higher salary, commission and consulting 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.products.

General and Administrative

General and administrative expenses for the ~~three~~nine months ended September 30, ~~2021~~2022 were ~~$6,673,723,~~$15,618,570, which represented ~~an increase~~a decrease of ~~$6,159,443~~$417,411 compared to general and administrative expenses of ~~$514,280~~$16,035,981 for the ~~three~~nine months ended September 30, ~~2020.~~2021. The ~~increase~~decrease is primarily due to ~~higher expenses related to scaling the Company’s management organization, which contributed 38%~~a decrease of ~~the increase,~~$583,925 in stock-based compensation expenses related to ~~equity awards granted~~the departure of the former chief executive officer and the former chief financial officer of Helix who were advisors to ~~key Helix employees and new~~the Company ~~hires after we became a public company on~~through March 2, ~~2021, which contributed approximately 43%~~2022, and lower consulting and salary costs resulting from efficiencies in administrative functions.

Separation Expenses

Separation expenses for the nine months ended September 30, 2022 were $5,611,857, consisting of $194,814 of severance expenses related to the ~~increase,~~transfer of development activities from our former Engeni SA subsidiary and $5,417,043 related to the continued vesting of stock options through March 2, 2023 related to the separation of two advisors to the Company, in accordance with the terms of their original advisory agreements. The advisors were the former chief executive officer and the ~~inclusion~~former chief financial officer of Helix who were granted stock options in conjunction with their respective advisory agreements that were entered into upon the completion of the Helix ~~acquisition which contributed 19%~~acquisition. The Company and the advisors mutually agreed not to renew the advisory agreements. The services provided by these advisors included transition planning and consulting services related to the integration of the ~~increase.~~business operations of Helix and Forian. Per the terms of the agreements, options to purchase 366,166 shares of common stock will continue to vest according to their original terms through March 2, 2023, and unvested stock options to purchase 732,332 shares of common stock were forfeited. The advisors are not required to perform services to the Company beyond the non-renewal date of March 2, 2022. As a result, the Company recorded $5,417,043 of stock compensation expenses related to the options that will vest over the twelve months ending March 2, 2023 during March 2022.

Gain on Sale of Assets

On March 3, 2022, the Company sold certain assets, consisting of customer contracts, accounts receivable, and other property related to our security monitoring services for $225,575 resulting in a gain of $202,159, which is included in operating expenses in the condensed consolidated statements of operations.

Transaction Related Expenses

Transaction related expenses for the ~~three~~nine months ended September 30, ~~2021~~2022 were $0, which represented a decrease of ~~$105,128~~$1,210,279 compared to transaction related expenses of ~~$105,128~~$1,210,279 for the ~~three~~nine months ended September 30, ~~2020.~~2021. These 2021 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~~, which should be viewed as supplemental to, and not as an alternative for, net income or loss calculated in accordance with U.S. GAAP (referred to below as ~~“Net~~“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~~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.

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•

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~~accrue 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.~~Gains (Losses). Foreign currency related gains (losses) result from foreign currency transactions and translation gains ~~and losses~~(losses) related to our former Engeni SA ~~a subsidiary of the Company acquired as part of the acquisition of Helix.~~subsidiary. We exclude foreign currency related gains (losses) 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.~~performance and (ii) to assist management and investors in making comparisons to companies with different capital structures. Investors should note that foreign currency related gains ~~or losses are expected to~~(losses) may 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; and (iii) other income which consists of profits on marketable security ~~investments; and (iv) loss on impairment of goodwill.~~investments. 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.

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•

Gain on sale of assets. On March 3, 2022, we sold certain assets, consisting of customer contracts, accounts receivable, and other property related to our security monitoring services for $225,575 resulting in a gain of $202,159, which is included in operating expenses in the condensed consolidated statements of operations.

•

Separation expenses. During March 2022, we transferred certain development activities from our former Engeni SA subsidiary to outsourced development facilities. As a result, we incurred $194,814 in severance and related costs to be recorded as a charge to operating expenses in 2022. Additionally, on March 2, 2022, we and the former chief executive officer and the former chief financial officer of Helix mutually agreed not to renew special advisor agreements. Per the terms of the agreements, options to purchase 366,166 shares of common stock will continue to vest according to their original terms through March 2, 2023, and unvested stock options to purchase 732,332 shares of common stock were forfeited. The advisors are not required to perform services to the Company beyond the non-renewal date of March 2, 2022. As a result, we recorded $5,417,043 of stock compensation expenses related to the options that will vest over the twelve months ending March 2, 2023 during March 2022. We exclude these other items from Adjusted EBITDA because we believe these costs 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 separation expenses are non-recurring.

•

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~~incurred 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.

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The following ~~tables~~table 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,						For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2021			2020			2021			2020			2022			2021			2022			2021
Revenues:
Information and Software	$	4,489,177		$	159,504		$	9,661,826		$	334,921		$	6,780,680		$	4,489,177		$	18,674,213		$	9,661,826
Services		269,753		$	—			858,400			—			341,173			269,753			1,168,034			858,400
Other		202,825		$	—			610,123			—			54,475			202,825			259,618			610,123
Total revenues	$	4,961,755		$	159,504		$	11,130,349		$	334,921		$	7,176,328		$	4,961,755		$	20,101,865		$	11,130,349

Net loss	$	(6,876,472	)		(1,161,915	)	$	(18,502,315	)	$	(2,628,690	)	$	(5,127,624	)	$	(7,021,722	)	$	(22,415,257	)	$	(18,502,315	)

Depreciation & amortization		598,565			3,059			1,381,637			4,932
Depreciation and amortization														842,933			598,565			2,052,729			1,381,637
Stock based compensation expense		2,627,506			8,561			6,245,679			20,331			1,963,244			2,627,506			11,634,022			6,245,679
Change in fair value of warrant liability		(251,778	)		—			(746,605	)		—			(8,539	)		(251,778	)		(343,155	)		(746,605	)
Loss on impairment of goodwill		—			—			—			—
Transaction related expenses		—			105,128			1,210,279			195,634			—			—			—			1,210,279
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		—			—			—			—
Interest and investment (income) expense														109,578			77,519			546,823			96,724
Foreign currency related (gains) losses														65,228			(152,920	)		(266,600	)		(298,170	)
Gain on sale of security monitoring assets														—			—			(202,159	)		—
Severance expense														—			—			194,814			—
Income tax expense		—			—			—			—			10,000			—			20,000			—

Adjusted EBITDA	$	(4,122,830	)		(1,045,256	)	$	(10,612,771	)	$	(2,413,589	)	$	(2,145,180	)	$	(4,122,830	)	$	(8,778,783	)	$	(10,612,771	)

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For the Three Months ~~ended~~Ended September 30, ~~2021 (Historical)~~2022

Adjusted EBITDA

Adjusted EBITDA for the three months ended September 30, 2022 was a loss of $2,145,180 compared to a loss of $4,122,830 for the three months ended September 30, 2021 ~~was~~, a ~~loss~~decrease 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.~~$1,977,650. The ~~increase~~decrease is primarily due to higher revenues, partially offset by increased investments in product development, customer service, infrastructure and ~~human capital and the inclusion of the Helix acquisition since March 2, 2021.~~sales expenses.

For the Nine Months ~~ended~~Ended September 30, ~~2021 (Historical)~~2022

Adjusted EBITDA

Adjusted EBITDA for the nine months ended September 30, 2022 was a loss of $8,778,783 compared to a loss of $10,612,771 for the nine months ended September 30, 2021, a decrease of $1,833,988. The decrease is primarily due to higher revenues, partially offset by investments in product development, customer service and infrastructure.

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Revenues

Revenues for the nine months ended September 30, 2022 were $20,101,865 compared to pro forma revenues of $13,139,261 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~~includes Helix pre-acquisition revenues for the nine months ended September 30, 2021 ~~were $13,139,257, which represented an~~of $2,008,912. The increase ~~of $4,003,984 compared to total~~in pro forma 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$6,962,604 is primarily due to ~~investments~~increased sales of healthcare information products, partially offset by declines in ~~product development, customer service, infrastructure and human capital.~~other revenues resulting from the sale of the security monitoring business.

Liquidity and Capital Resources

Since the Company’s inception in 2019, most of the Company’s resources have been devoted to scaling ~~its~~our 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.~~issuances and the issuance of convertible notes. The Company expects to continue to fund ~~its~~our operations and potential future acquisitions through a combination of cash flow generated from operating activities, debt financing, and/or additional equity issuances. To date, the Company has not generated ~~limited~~sufficient revenues from the licensing of information products and software products to fund all of our operating expenses and as a result the Company has incurred losses and generated negative cash flows from operations since inception. On April 12, 2021 the Company entered into a securities purchase agreement with certain accredited investors and certain of the Company’s directors, pursuant to which the Company issued 1,191,743 shares of common stock for aggregate gross proceeds of $12,000,000. 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,~~2022, the Company’s principal source of liquidity was aggregate cash and marketable securities of ~~$35.9 million.~~$20,632,555.

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

	For the Nine Months Ended,
	September 30, 2022			September 30, 2021
Net cash used in operating activities	$	(8,993,270	)	$	(13,185,197	)
Net cash used in investing activities		(8,007,048	)		(223,207	)
Net cash (used in) provided by financing activities		(71,207	)		36,283,171
Effect of foreign exchange rate changes on cash		(6,686	)		(5,132	)
Net (decrease) increase in cash and cash equivalents	$	(17,078,211	)	$	22,869,635

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Net Cash Used in Operating Activities

Net cash used in operating activities ~~increased~~decreased by ~~$10,834,436~~$4,191,927 for the nine months ended September 30, ~~2021~~2022 compared to the nine months ended September 30, ~~2020.~~2021. The ~~increase~~decrease was primarily the result a decreased Adjusted EBITDA loss, partially offset by changes in deferred revenue, accounts payable, and other working capital accounts related to the timing of ~~scaling up the Company’s operations~~cash flows from ~~the initial start-up phase.~~operations.

Net Cash Used in Investing Activities

Net cash used in investing activities of $8,007,048increased by ~~$344,437~~$7,783,841 for the nine months ended September 30, ~~2021~~2022 compared to cash used in investing activities of $223,207 for the nine months ended September 30, ~~2020.~~ 2021. This is primarily the result of an increase in additions to property and equipment of ~~$605,874,~~$1,055,857, which was primarily related to capitalized software development costs and ~~an increase~~short-term investments in ~~the purchase~~marketable securities.

Table 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.~~Contents

Net Cash Provided by Financing Activities

Net cash ~~provided by~~used in financing activities ~~increased by $32,967,471~~of $71,207 for the nine months ended September 30, ~~2021~~2022 decreased by $36,354,378 compared to cash provided by financing activities of $36,283,171 for the nine months ended September 30, ~~2020.~~2021. The ~~increase~~decrease was primarily related to ~~the~~a reduction in cash proceeds received from the ~~Company’s equity~~sale of common stock and issuance ~~in April 2021 and the~~of 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.

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. 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, 2021, as filed with the SEC on March 31, 2022. There have been no changes other than the below:

Goodwill and other intangible assets. Intangible assets arise from acquisitions and principally consist of goodwill, trademarks, customer relationships, andacquired software and technology. Intangible assets, other than goodwill, are amortized on a straight‑line basis over their estimated useful lives, which range from two to eight years.

Goodwill consists of the excess of cost over the fair value of net assets acquired in business combinations. Goodwill is not amortized. Instead, it is tested annually for impairment, or more frequently if events occur or circumstances change that would more likely than not reduce its fair value below its carrying amount. All goodwill is reported in the Information and Software reporting unit.

In testing for goodwill impairment, we may first qualitatively assess whether it is more likely than not (a likelihood of more than 50 percent) that a goodwill impairment exists. If it is determined that a quantitative assessment is required, we will recognize goodwill impairment as the difference between the carrying amount of the reporting unit and its fair value, but not to exceed the carrying amount of goodwill within the reporting unit. Based upon our most recent annual impairment assessment, there were no indicators of impairment, and no impairment losses were recorded.

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Capitalized Software Development Costs. We capitalize certain costs related to the development and enhancement of computer software. In accordance with authoritative guidance, we begin to capitalize these costs when preliminary development efforts are successfully completed, management has authorized and committed project funding, and it is probable that the project will be completed and the software would be used as intended. Such costs are amortized when the software is ready for its intended use, on a straight-line basis over the estimated useful life of the related asset, generally estimated to be three years. Costs incurred prior to meeting these criteria together are expensed as incurred and recorded in product development expenses on our consolidated statements of operations. The accounting for website and internal-use software costs requires us to make significant judgement, assumptions and estimates related to the timing and amount of recognized capitalized software development costs and estimates of useful lives. We capitalized software development costs of $0 and $1,624,991 during the three and nine months ended September 30, 2022, respectively, and $295,143 and $561,553 during the three and nine months ended September 30, 2021, respectively.

Recent Accounting Pronouncements

In ~~August 2020,~~October 2021, the FASB issued Accounting Standards Update No. 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“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”~~2021-08”). The ~~update removes separation models for (i) convertible debt with a cash conversion feature and (ii) convertible instruments with a beneficial conversion feature. Under~~FASB issued ASU ~~2020-06, these features will be combined with the host contract. ASU 2020-06 does not impact~~2021-08 to improve the accounting ~~treatment~~ for ~~conversion features that are accounted for as~~acquired revenue contracts with customers in a ~~derivative under Topic 815.~~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 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 areamendment is effective for ~~public business entities~~financial statements for ~~fiscal years~~interim and annual periods beginning after December 15, ~~2021, and interim periods within those fiscal years.~~2022. The ~~amendment~~adoption of this standard is not expected to ~~be adopted through either~~have a ~~fully retrospective or modified retrospective method of transition, only at~~material impact on 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.~~financial statements.

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~~our financial statements.

42JOBS Act

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

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

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~~This item is not ~~required to provide the information under this item.~~required.

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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,~~2022, 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,~~2021, as filed with the SEC on March 31, ~~2021.~~2022. 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~~2022 remain ineffective to the extent of the material weaknesses identified.

We ~~are committed to remediating the~~have implemented several processes and 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 stepsprocedures in 2021, including those outlined below, to remediate the ~~internal control~~ deficiencies noted above. We currently are assessing and improving the operating effectiveness of these controls to ensure they will operate at an acceptable level of assurance.

We have hired additional personnel and outside consultants to fill accounting functions and expect to hire and train additional personnel. In addition, we are in the process of upgrading our accounting and finance systems, which we expect will enhance our ability to implement ~~further remediation actions during 2021 that we believe will improve our~~appropriate internal ~~control over financial reporting. Certain improvements~~controls.

We have contracted an outside consulting firm to ~~our internal control over financial reporting occurred as a consequence~~assist in the overall evaluation and documentation of the ~~Merger (e.g., additional finance resources~~design 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~~operating effectiveness of our internal controls ~~framework~~over financial reporting. We are implementing newly designed controls and testing their operating effectiveness.

We believe these actions, when complete, will remediate the control weaknesses. However, the weaknesses will not be considered fully remediated until the applicable controls operate for a sufficient period of time for management to test the ~~Company’s compliance with~~results for operating effectiveness. Once implemented, we intend to continue periodic testing and reporting of 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.~~ensure continuity of compliance.

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.

~~Table of Contents~~

Changes in Internal Control Over Financial Reporting

~~Our remediation efforts~~Except for ~~material weaknesses previously reported were ongoing~~the items described above, there has been no change in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) under the Exchange Act that occurred during the three months ended 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 reporting2022, that ~~occurred during the nine months ended September 30, 2021 that~~has materially affected, or ~~that are~~is reasonably likely to materially affect, our internal control over financial reporting.

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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~~we will incur a loss and that the probable loss or range of loss can be reasonably estimated, ~~the Company records~~we record reserves in ~~the~~our condensed consolidated financial statements based on ~~its~~our 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,~~the Company, claiming that he owned 10% of GTI. ~~We believe~~The complaint seeks unspecified monetary damages equivalent to the value a 10% shareholder of GTI would have received in the subsequent Helix and Forian transactions, along with an equitable accounting and constructive trust to determine if Audet suffered any loss of profit distributions. The case is in the process of discovery and trial is scheduled for February 2023. Each of the parties’ motions for summary judgment were recently denied. The Company believes the lawsuit is wholly without merit and will vigorously defend the claims in the lawsuit. ~~The case is~~

Grant Whitus et al. v. Forian Inc., Zachary Venegas and Scott Ogur

On July 30, 2021, four former Helix employees filed a lawsuit in the ~~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.~~

~~Table of Contents~~

~~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~~Arapahoe County, Colorado District Court ~~for~~against the ~~Southern District~~Company and Helix’s former managers asserting claims of ~~New York) (the “Dillion Complaint”);~~ ~~Baros v.~~breach of contract, promissory estoppel, breach of the covenant of good faith and fair dealing, civil theft and conversion, fraudulent misrepresentation, civil conspiracy, and unjust enrichment / quantum meruit, all relating to the plaintiffs’ claims that they were promised equity interest in Helix ~~Technologies, Inc., et al., No. 1:21-cv-01425 (filed February 17,~~or compensation that they never received. The original complaint was never served, and in November 2021, the plaintiffs filed and served an amended complaint adding a fifth plaintiff and seeking over $27.5 million in damages as well as attorneys’ fees and costs. The Company removed the ~~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~~matter to the United States District Court for the District of ~~Colorado) (the “Anderson Complaint”);~~Colorado in December 2021, and ~~Robinson v. Helix Technologies, Inc., et al., No. 1:21-cv-00484 (filed February 18, 2021 in~~both the ~~United States District Court for the District of Colorado) (the “Robinson Complaint” and, together with the Dillion Complaint, the Anderson Complaint~~Company and the ~~Baros Complaint, the “Stockholder Complaints”))~~individual defendants filed motions to dismiss on January 20, 2022. 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~~Plaintiffs subsequently amended their complaint on April 21, 2022, adding Helix TCS ~~Helix Technologies, Inc. and Shamson Sundra~~

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~~This item is not ~~required to provide the information under this item.~~required.

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~~.None.

Item 3.

Defaults Upon Senior Securities

None.

Table of Contents

Item 4.

Mine Safety Disclosures

Not applicable.

Item 5.

Other Information

None.

~~Table of Contents~~

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 ).~~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.~~

*	Filed with this Quarterly Report on Form10‑Q.

4645

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SIGNATURES~~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.~~14, 2022.

	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)

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 ☒

	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		$	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					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	0	$	0		31,533,083	$	31,533	$	54,905,098	$	0		$	(24,771,340	)	$	30,165,291

	As of September 30, 2021			As of December 31, 2020
Right of use assets, net	$	916,195		$	0

Short-term operating lease liabilities	$	245,771		$	0
Long-term operating lease liabilities		675,254			0
Total lease liabilities	$	921,025		$	0
Weighted average remaining lease term (in years)		3.41			—
Weighted average discount rate		8.5	%		0.0	%

	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

	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	)