Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 09, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Document Transition Report | false | |
Entity File Number | 001-40146 | |
Entity Registrant Name | FORIAN INC. | |
Entity Central Index Key | 0001829280 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 85-3467693 | |
Entity Address, Address Line One | 41 University Drive | |
Entity Address, Address Line Two | Suite 400 | |
Entity Address, City or Town | Newtown | |
Entity Address, State or Province | PA | |
Entity Address, Postal Zip Code | 18940 | |
City Area Code | 267 | |
Local Phone Number | 225-6263 | |
Title of 12(b) Security | Common Stock, $0.001 par value per share | |
Trading Symbol | FORA | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 32,561,117 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Current Assets: | ||
Cash and cash equivalents | $ 23,535,098 | $ 665,463 |
Marketable securities | 12,399,243 | 11,501,844 |
Accounts receivable, net | 2,179,979 | 22,996 |
Contract assets | 364,480 | 196,701 |
Prepaid expenses | 912,879 | 120,979 |
Other assets | 300,000 | 0 |
Total current assets | 39,691,679 | 12,507,983 |
Property and equipment, net | 762,658 | 46,358 |
Intangible assets, net | 9,596,702 | 0 |
Goodwill | 9,125,372 | 0 |
Right of use assets, net | 916,195 | 0 |
Deposits and other assets | 329,682 | 0 |
Total assets | 60,422,288 | 12,554,341 |
Current liabilities: | ||
Accounts payable | 1,095,328 | 647,601 |
Accrued expenses | 2,993,013 | 480,741 |
Short-term operating lease liabilities | 245,771 | 0 |
Notes payable | 15,250 | 0 |
Warrant liability | 501,110 | 0 |
Deferred revenues | 682,157 | 158,884 |
Total current liabilities | 5,532,629 | 1,287,226 |
Long-term liabilities: | ||
Long-term operating lease liabilities | 675,254 | 0 |
Convertible notes payable, net of debt issuance costs ($6,000,000 in principal is held by a related party. Refer to Note 15) | 24,049,114 | 0 |
Total long-term liabilities | 24,724,368 | 0 |
Total liabilities | 30,256,997 | 1,287,226 |
Commitments and contingencies (Note 16) | ||
Stockholders' equity: | ||
Preferred Stock; par value $0.001; 5,000,000 Shares authorized; 0 issued and outstanding as of September 30, 2021 and December 31, 2020 | 0 | 0 |
Common Stock; par value $0.001; 95,000,000 Shares authorized; 31,533,083 issued and outstanding as of September 30, 2021 and 21,233,039 issued and outstanding as of December 31, 2020 | 31,533 | 21,233 |
Additional paid-in capital | 54,905,098 | 17,514,907 |
Accumulated deficit | (24,771,340) | (6,269,025) |
Total stockholders' equity | 30,165,291 | 11,267,115 |
Total liabilities and stockholders' equity | $ 60,422,288 | $ 12,554,341 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Long-term liabilities: | ||
Net of debt issuance costs | $ 6,000,000 | |
Stockholders' equity: | ||
Preferred Stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred Stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred Stock, shares issued (in shares) | 0 | 0 |
Preferred Stock, shares outstanding (in shares) | 0 | 0 |
Common Stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common Stock, shares authorized (in shares) | 95,000,000 | 95,000,000 |
Common Stock, shares issued (in shares) | 31,533,083 | 21,233,039 |
Common Stock, shares outstanding (in shares) | 31,533,083 | 21,233,039 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenues: | ||||
Total revenues | $ 4,961,755 | $ 159,504 | $ 11,130,349 | $ 334,921 |
Costs and Expenses: | ||||
Cost of revenue | 1,337,981 | 0 | 3,028,657 | 0 |
Research and development | 2,612,184 | 658,824 | 6,059,948 | 1,474,215 |
Sales and marketing | 1,088,203 | 40,217 | 2,864,213 | 151,261 |
General and administrative | 6,673,723 | 514,280 | 16,035,981 | 1,143,365 |
Depreciation and amortization | 598,565 | 3,059 | 1,381,637 | 4,932 |
Transaction related expenses | 0 | 105,128 | 1,210,279 | 195,634 |
Total costs and expenses | 12,310,656 | 1,321,508 | 30,580,715 | 2,969,407 |
Loss From Operations | (7,348,901) | (1,162,004) | (19,450,366) | (2,634,486) |
Other Income (Expense): | ||||
Change in fair value of warrant liability | 251,778 | 0 | 746,605 | 0 |
Interest and investment income | 1,903 | 89 | 4,601 | 5,796 |
Interest expense | (79,422) | 0 | (101,325) | 0 |
Foreign currency gain | 298,170 | 0 | 298,170 | 0 |
Total other income, net | 472,429 | 89 | 948,051 | 5,796 |
Net loss before income taxes | (6,876,472) | (1,161,915) | (18,502,315) | (2,628,690) |
Income tax expense | 0 | 0 | 0 | 0 |
Net Loss | (6,876,472) | (1,161,915) | (18,502,315) | (2,628,690) |
Other comprehensive loss: | ||||
Changes in foreign currency translation adjustment | (145,250) | 0 | 0 | 0 |
Total other comprehensive loss | (145,250) | 0 | 0 | 0 |
Total comprehensive loss | $ (7,021,722) | $ (1,161,915) | $ (18,502,315) | $ (2,628,690) |
Basic net loss per common share (in dollars per share) | $ (0.22) | $ (0.08) | $ (0.64) | $ (0.22) |
Diluted net loss per common share (in dollars per share) | $ (0.22) | $ (0.08) | $ (0.64) | $ (0.22) |
Weighted-average shares outstanding, basic (in shares) | 31,332,735 | 14,208,049 | 28,814,825 | 12,038,534 |
Weighted-average shares outstanding, diluted (in shares) | 31,332,735 | 14,208,049 | 28,814,825 | 12,038,534 |
Information and Software [Member] | ||||
Revenues: | ||||
Total revenues | $ 4,489,177 | $ 159,504 | $ 9,661,826 | $ 334,921 |
Service [Member] | ||||
Revenues: | ||||
Total revenues | 269,753 | 0 | 858,400 | 0 |
Other [Member] | ||||
Revenues: | ||||
Total revenues | $ 202,825 | $ 0 | $ 610,123 | $ 0 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT) - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Common Stock [Member]Series S Units [Member] | Common Stock [Member]Class B Profit Interests [Member] | Additional Paid In Capital [Member] | Additional Paid In Capital [Member]Series S Units [Member] | Additional Paid In Capital [Member]Class B Profit Interests [Member] | Accumulated Other Comprehensive Loss [Member] | Accumulated Deficit [Member] | Total | Series S Units [Member] | Class B Profit Interests [Member] |
Balance at Dec. 31, 2019 | $ 0 | $ 7,713 | $ 1,000,098 | $ (1,288,842) | $ (281,031) | |||||||
Balance (in shares) at Dec. 31, 2019 | 7,713,528 | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Issuance of Units | $ 5,316 | $ 3,310,384 | $ 3,315,700 | |||||||||
Issuance of Units (in shares) | 5,316,284 | |||||||||||
Conversion of Promissory Notes for MOR Series S Units in March 2020 | $ 296 | $ 184,004 | $ 184,300 | |||||||||
Conversion of Promissory Notes for MOR Series S Units in March 2020 (in shares) | 295,501 | |||||||||||
Vested MOR Class B Profit Interest Units | $ 1,281 | $ 19,050 | $ 20,331 | |||||||||
Vested MOR Class B Profit Interest Units (in shares) | 1,281,172 | |||||||||||
Foreign currency translation | 0 | |||||||||||
Net loss | (2,628,690) | (2,628,690) | ||||||||||
Balance at Sep. 30, 2020 | $ 0 | $ 14,606 | 4,513,536 | (3,917,532) | 610,610 | |||||||
Balance (in shares) at Sep. 30, 2020 | 0 | 14,606,485 | ||||||||||
Balance at Jun. 30, 2020 | $ 0 | $ 14,067 | 4,505,514 | (2,755,617) | 1,763,964 | |||||||
Balance (in shares) at Jun. 30, 2020 | 14,066,991 | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Vested MOR Class B Profit Interest Units | $ 539 | $ 8,022 | $ 8,561 | |||||||||
Vested MOR Class B Profit Interest Units (in shares) | 539,494 | |||||||||||
Foreign currency translation | 0 | |||||||||||
Net loss | (1,161,915) | (1,161,915) | ||||||||||
Balance at Sep. 30, 2020 | $ 0 | $ 14,606 | 4,513,536 | (3,917,532) | 610,610 | |||||||
Balance (in shares) at Sep. 30, 2020 | 0 | 14,606,485 | ||||||||||
Balance at Dec. 31, 2020 | $ 0 | $ 21,233 | 17,514,907 | (6,269,025) | 11,267,115 | |||||||
Balance (in shares) at Dec. 31, 2020 | 21,233,039 | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Issuance of Forian Common stock in Helix Acquisition | $ 8,408 | 18,446,376 | 0 | 18,454,784 | ||||||||
Issuance of Forian Common stock in Helix Acquisition (in shares) | 8,408,383 | |||||||||||
Forian Restricted Stock Vesting from MOR unvested restricted stock | $ 671 | 9,987 | 0 | 10,658 | ||||||||
Forian Restricted Stock Vesting from MOR unvested restricted stock (in shares) | 671,641 | |||||||||||
Issuance of common stock warrants | $ 0 | 389,976 | 0 | 389,976 | ||||||||
Forian shares issued upon exercise of MOR Class B options | $ 10 | 292,820 | 0 | 292,830 | ||||||||
Forian shares issued upon exercise of MOR Class B options (in shares) | 10,167 | |||||||||||
Stock based compensation expense | $ 0 | 6,235,021 | 0 | 6,235,021 | ||||||||
Stock based compensation expense (in shares) | 0 | |||||||||||
Issuance of Units | $ 1,192 | 11,967,460 | 0 | 11,968,652 | ||||||||
Issuance of Units (in shares) | 1,191,743 | |||||||||||
Issuance of Forian common stock upon exercise of stock options | $ 19 | 48,551 | 0 | 48,570 | ||||||||
Issuance of Forian common stock upon exercise of stock options (in shares) | 18,110 | |||||||||||
Foreign currency translation | 0 | |||||||||||
Net loss | (18,502,315) | (18,502,315) | ||||||||||
Balance at Sep. 30, 2021 | $ 0 | $ 31,533 | 54,905,098 | $ 0 | (24,771,340) | 30,165,291 | ||||||
Balance (in shares) at Sep. 30, 2021 | 0 | 31,533,083 | ||||||||||
Balance at Jun. 30, 2021 | $ 0 | $ 31,199 | 52,264,976 | 145,250 | (17,894,868) | 34,546,557 | ||||||
Balance (in shares) at Jun. 30, 2021 | 31,198,721 | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Forian Restricted Stock Vesting from MOR unvested restricted stock | $ 328 | 4,885 | 5,213 | |||||||||
Forian Restricted Stock Vesting from MOR unvested restricted stock (in shares) | 328,518 | |||||||||||
Stock based compensation expense | 2,622,293 | 2,622,293 | ||||||||||
Issuance of Forian common stock upon exercise of stock options | $ 6 | 12,944 | 12,950 | |||||||||
Issuance of Forian common stock upon exercise of stock options (in shares) | 5,844 | |||||||||||
Foreign currency translation | (145,250) | (145,250) | ||||||||||
Net loss | (6,876,472) | (6,876,472) | ||||||||||
Balance at Sep. 30, 2021 | $ 0 | $ 31,533 | $ 54,905,098 | $ 0 | $ (24,771,340) | $ 30,165,291 | ||||||
Balance (in shares) at Sep. 30, 2021 | 0 | 31,533,083 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (18,502,315) | $ (2,628,690) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 1,381,637 | 4,932 |
Amortization on right of use asset | 166,489 | 0 |
Amortization of debt issuance costs | 444 | 0 |
Accrued interest on Convertible Notes | 70,000 | 0 |
Realized and unrealized gain on marketable securities | (3,295) | (5,669) |
Provision for doubtful accounts | 89,130 | 0 |
Stock-based compensation expense | 6,245,679 | 20,331 |
Change in fair value of warrant liability | (746,605) | 0 |
Non-cash transaction expenses | 389,976 | 0 |
Change in operating assets and liabilities: | ||
Accounts receivable | (1,757,660) | 0 |
Contract assets | (147,651) | 0 |
Prepaid expenses | (576,836) | (249,823) |
Changes in lease liabilities during the period | (186,383) | 0 |
Deposits and other assets | (120,732) | 0 |
Accounts payable | (234,152) | 503,026 |
Accrued expense | 539,608 | 0 |
Deferred revenues | 202,337 | 0 |
Net cash used in operating activities | (13,190,329) | (2,355,893) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Additions to property and equipment | (640,080) | (34,206) |
Purchase of marketable securities | (24,903,107) | (2,888,648) |
Sale of marketable securities | 24,009,003 | 3,044,084 |
Cash acquired as part of business combination | 1,310,977 | 0 |
Net cash (used in) provided by investing activities | (223,207) | 121,230 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of MOR Series S units | 0 | 3,315,700 |
Proceeds from exercise of MOR Class B options | 292,830 | 0 |
Payments on notes payable and financing arrangements | (5,551) | 0 |
Proceeds from exercise of common stock options | 48,570 | 0 |
Proceeds from sale of common stock | 11,968,652 | 0 |
Proceeds from the issuance of convertible notes payable | 23,978,670 | 0 |
Net cash provided by financing activities | 36,283,171 | 3,315,700 |
Net change in cash | 22,869,635 | 1,081,037 |
Cash and cash equivalents, beginning of period | 665,463 | 494 |
Cash and cash equivalents, end of period | 23,535,098 | 1,081,531 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | 724 | 0 |
Cash paid for taxes | 0 | 0 |
Non-cash Investing and Financing Activities: | ||
Conversion of promissory notes to Series S units | 0 | 184,300 |
Non-cash consideration for Helix acquisition | $ 18,454,784 | $ 0 |
BUSINESS ORGANIZATION AND NATUR
BUSINESS ORGANIZATION AND NATURE OF OPERATIONS | 9 Months Ended |
Sep. 30, 2021 | |
BUSINESS ORGANIZATION AND NATURE OF OPERATIONS [Abstract] | |
BUSINESS ORGANIZATION AND NATURE OF OPERATIONS | Note 1 BUSINESS ORGANIZATION AND NATURE OF OPERATIONS Forian Inc. (the “Company” or “Forian”) was incorporated in Delaware on October 15, 2020 as a wholly owned subsidiary of Medical Outcomes Research Analytics, LLC (“MOR”) for the purpose of effecting the Business Combination (as defined below). All activity of the Company through March 2, 2021 relates only to MOR. MOR was established on May 6, 2019 in Delaware. MOR Analytics, LLC and COR Analytics, LLC are wholly owned subsidiaries of MOR. The Company provides innovative software solutions, proprietary data and predictive analytics to optimize the operational, clinical and financial performance of its customers within the healthcare and cannabis industries. The Company’s mission is to provide its customers with the best-in-class critical technology services through a single integrated platform that enables its customers to operate their businesses more safely, efficiently and profitably and to serve its customers and its customers’ stakeholders and constituencies more comprehensively. The Company represents the unique convergence of proprietary healthcare and consumer data, innovative data management capabilities and intelligent data science with a leading cannabis technology platform yielding the combined power to drive innovation and transparency across the industries it serves. On March 2, 2021 (the “Merger Closing Date”), pursuant to the Agreement and Plan of Merger, dated as of October 16, 2020, as amended by Amendment to Agreement and Plan of Merger, dated as of December 30, 2020, as further amended by Amendment No. 2 to Agreement and Plan of Merger, dated February 9, 2021 (together, the “Merger Agreement”), by and among Helix Technologies, Inc. (“Helix”), the Company and DNA Merger Sub, Inc., a wholly owned subsidiary of the Company (“Merger Sub”), Merger Sub merged with and into Helix, with Helix being the surviving corporation as a wholly owned subsidiary of the Company (the “Merger”). Each share of Helix common stock was exchanged for 0.05 shares of Company common stock in the Merger. Helix provides traceability and point of sale technology, analytics solutions and other products to customers within each vertical of the cannabis industry to help them improve the performance of their business. Immediately prior to the Merger Closing Date, pursuant to the Equity Interest Contribution Agreement, dated March 2, 2021 (the “Contribution Agreement”), by and among the Company, MOR and each equity holder of MOR, such equity holders contributed their interests in MOR to the Company in exchange for shares of Company common stock (the “Contribution” and, together with the Merger, the “Business Combination”). Upon the closing of the Contribution, MOR became a wholly owned subsidiary of the Company. Each unit of MOR was exchanged for 1.7776 shares of Company common stock in the Merger, subject to adjustments pursuant to the Contribution Agreement. Pursuant to the Merger Agreement, while the Company is the legal acquirer, the Merger was accounted for as a reverse acquisition using the acquisition method of accounting in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2021 | |
BASIS OF PRESENTATION [Abstract] | |
BASIS OF PRESENTATION | Note 2 BASIS OF PRESENTATION The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Certain footnotes and other financial information normally required by U.S. GAAP have been condensed or omitted in accordance with instructions to Form 10-Q and Article 8 of Regulation S-X. In the opinion of management, such statements include all adjustments which are considered necessary for a fair presentation of the consolidated financial statements of the Company as of September 30, 2021. The operating results presented herein are not necessarily an indication of the results that may be expected for the year. The condensed consolidated financial statements should be read in conjunction with the Company’s audited Consolidated Financial Statements included in its Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the Securities and Exchange Commission (“SEC”) on March 31, 2021. The Contribution was completed on March 2, 2021 and the combination of MOR and Forian was accounted for as a transaction between entities under common control pursuant to ASC 805-50. Accordingly, the combination of Forian and MOR results in a change in reporting entity and the financial statements are presented as though the combination of Forian and MOR occurred as of the beginning of the periods presented. Additionally, the results of Helix are included in the accompanying condensed consolidated financial statements beginning on March 2, 2021, the Merger Closing Date. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Note 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The condensed consolidated financial statements of the Company include the accounts of (i) Medical Outcomes Research Analytics, LLC and its wholly owned subsidiaries COR Analytics, LLC and MOR Analytics, LLC, and (ii) Helix Technologies, Inc. and its wholly owned subsidiaries Helix TCS, LLC, Security Consultants Group, LLC, Boss Security Solutions, LLC, Security Grade Protective Services, Ltd., Bio-Tech Medical Software, Inc, BT UCS, Inc., Engeni LLC (including Engeni S.A. (“Engeni SA”), Foreign Currency ASC Topic 830-10, Foreign Currency Matters Use of Estimates Preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgements and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses together with amounts disclosed in related notes to the financial statements. Certain of the Company’s estimates could be affected by external conditions, including those unique to the Company and general economic conditions. It is possible that the external factors could have an effect on the Company’s estimates and could cause actual results to differ from those estimates. Reclassifications and Corrections Certain reclassifications have been made to the prior period financial statements to conform to the current period financial statement presentation. The Company previously reported foreign currency related gains and losses related to Engeni SA, which was acquired as part of the acquisition of Helix, as part of other comprehensive income (loss) in the condensed consolidated financial statements for the three-month periods ended March 31, 2021 and June 30, 2021. The foreign currency gain of $298,170 for the three and nine-month periods ended September 30, 2021 includes $145,250 that was previously reported as other comprehensive income (loss). The Company assessed the impact of this correction and determined it was not material to the current or prior reporting periods. Please refer to Foreign Currency policy above. Fair Value of Financial Instruments The Company measures the fair value of financial assets and liabilities based on the guidance of ASC 820, Fair Value Measurements and Disclosures ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an ordinary transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value: Level 1 — quoted prices in active markets for identical assets or liabilities; Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable; and Level 3 — inputs that are unobservable. The carrying value of the Company’s financial instruments, such as cash, marketable securities, accounts receivable and accrued liabilities and other liabilities approximate fair values due to the short-term nature of these instruments. Cash and Cash Equivalents and Credit Risk The Company considers all cash accounts that are not subject to withdrawal restrictions and highly liquid investments with a maturity of three months or less, when purchased, as cash and cash equivalents. The Company maintains cash with major financial institutions. Cash held at U.S. bank institutions is currently insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 at each institution. The portion of deposits in excess of FDIC coverage is not protected by such insurance and represents a credit risk to the Company. At times, the Company’s deposits exceed this coverage. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recorded at the invoiced amount, net of an allowance for doubtful accounts. The Company determines the allowance for doubtful accounts based on historical write-off experience, customer specific facts and economic conditions. Outstanding account balances are reviewed individually for collectability. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. Allowance for doubtful accounts was $256,767 and $0 at September 30, 2021 and December 31, 2020, respectively. Management charges account balances against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Long-Lived Assets, Including Definite Lived Intangible Assets Long-lived assets, other than goodwill and other indefinite-lived intangibles, are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable through the estimated undiscounted future cash flows derived from such assets. Definite-lived intangible assets primarily consist of customer relationships, software technology and trade names. For long-lived assets used in operations, impairment losses are only recorded if the asset’s carrying amount is not recoverable through its undiscounted, probability-weighted future cash flows. The Company measures the impairment loss based on the difference between the carrying amount and the estimated fair value. When an impairment exists, the related assets are written down to fair value. Goodwill Goodwill, which represents the excess of purchase price over the fair value of net assets acquired, is carried at cost. Goodwill is not amortized; rather, it is subject to a periodic assessment for impairment by applying a fair value-based test. The Company reviews goodwill for possible impairment annually during the fourth quarter, or whenever events or circumstances indicate that the carrying amount may not be recoverable. The impairment model prescribes a two-step method for determining goodwill impairment. However, an entity is permitted to first assess qualitative factors to determine whether the two-step goodwill impairment test is necessary. The qualitative factors considered by Forian may include, but are not limited to, general economic conditions, the Company’s outlook, market performance of the Company’s industry and recent and forecasted financial performance. Further testing is only required if the entity determines, based on the qualitative assessment, that it is more likely than not that a reporting unit’s fair value is less than its carrying amount. Otherwise, no further impairment testing is required. In the first step, the Company determines the fair value of its reporting unit using a discounted cash flow analysis. If the net book value of the reporting unit exceeds its fair value, the Company then performs the second step of the impairment test, which requires allocation of the reporting unit’s fair value to all of its assets and liabilities using the acquisition method prescribed under authoritative guidance for business combinations with any residual fair value being allocated to goodwill. An impairment charge is recognized when the implied fair value of the Company’s goodwill is less than its carrying amount. No impairment losses have been recognized during the periods presented. Business Combinations The Company accounts for its business combinations under the provisions of ASC Topic 805-10, which requires that the purchase method of accounting be used for all business combinations. Assets acquired and liabilities assumed, including non-controlling interests, are recorded at the date of acquisition at their respective fair values. ASC 805-10 also specifies criteria that intangible assets acquired in a business combination must meet to be recognized and reported apart from goodwill. Goodwill represents the excess purchase price over the fair value of the tangible net assets and intangible assets acquired in a business combination. Acquisition-related expenses are recognized separately from the business combinations and are expensed as incurred. If the business combination provides for contingent consideration, the Company records the contingent consideration at fair value at the acquisition date and any changes in fair value after the acquisition date are accounted for as measurement-period adjustments. Changes in fair value of contingent consideration resulting from events after the acquisition date, such as earn-outs, are recognized as follows: (i) if the contingent consideration is classified as equity, the contingent consideration is not re-measured and its subsequent settlement is accounted for within equity; or (ii) if the contingent consideration is classified as a liability, the changes in fair value are recognized in earnings. Revenue Recognition The Company recognizes revenue in accordance with Financial Accounting Standards Board (“FASB”) Topic 606, - Revenue from Contracts with Customers Under ASC 606, the Company recognizes revenue when the customer obtains control of promised goods or services, in an amount that reflects the consideration which is expected to be received in exchange for those goods or services. The Company recognizes revenue following the five-step model prescribed under ASC 606: (i) identify contract(s) with a customer; (ii) identify the performance obligation(s) in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligation(s) in the contract; and (v) recognize revenues when (or as) the Company satisfies a performance obligation. ASC 606-10-32-32 requires the determination of the price at which the Company would sell individual products or services to a customer. The Company does not always have sufficient data or experience related to the terms and pricing for products and services when components are sold on a standalone basis. In instances where insufficient data exists, the Company recognizes the contractual fees ratably over the term of the arrangement. In instances where a customer has limited operating history or the customer has recently been formed, management may determine that it is prudent to recognize only the first year’s fees ratably over the first year of the term or as amounts are billed and collectability is assured. Performance obligations that are distinct and remain undelivered would not be recognized until the end of the contract provided that the consideration is guaranteed. No significant judgements affect the determination of the amount and timing of revenue. The Company generates revenue from three categories of product offerings: Information and Software, Services and Other. In 2020, the revenue generated by the Company was exclusively from Information and Software relating to MOR. In 2021, the Company also began to recognize Information and Software, Services and Other revenues related to its acquisition of Helix on March 2, 2021. In most Information and Software contracts, payments are scheduled throughout the term and the contract may include one or more of the following performance obligations: (i) the provision of historical and/or current information as agreed upon, (ii) access to the information through a hosting provider, (iii) access to and use of software products, (iv) installation and training and (v) access to the Company’s analytical team throughout the term of the agreement, as agreed upon. Information and Software contracts do not always have distinct pricing assigned to each performance obligation; rather, the price is bundled and the total bundled pricing is invoiced throughout the term of the agreement, with the exception of contracts for software products which provide separate pricing for implementation and training of such products. The Company recognizes revenue resulting from Information and Software pursuant to agreements under which the Company receives payments for providing the customer access to its products over the contract period. The Company satisfies its performance obligations throughout the term of the contract. Any payments received prior to satisfying performance obligations are deferred and recognized as the performance obligations are satisfied. There are no variable considerations or financing component under such contracts. Prices are typically fixed, but certain contracts can also include royalties in excess of fixed fees. There were $62,500 of royalties in excess of fixed fees for the nine months ended September 30, 2021. Invoicing under contracts is set forth in an invoicing schedule as part of the contract and payments are typically due within 30 days. Services revenues are primarily from contracts with government agencies and revenue is recognized upon completion of the various milestones within the contract. In the event that a contract does not specifically allocate revenue to the satisfaction of specific performance obligations or milestones, the purchase price of the contracts is allocated based on the percentage of time spent, or expected to be spent, to meet each performance obligation. Initial customization of the software to meet state specific requirements and the training to appropriately utilize the software are generally recognized upon completion of the customization and acceptance by the state agency. Support and service revenues are then recognized over a predetermined period of time as defined in the contract. Contract renewals may include an annual service fee that is recognized over the time period defined in the contract. Other revenues are primarily from security monitoring services offerings and the provision of web marketing services. Contracts for these services have a stated transaction price for monthly services and are recognized as the services are provided. Contract acquisition costs, which consist of sales commissions paid or payable, are considered incremental and recoverable costs of obtaining a contract with a customer. Sales commissions for initial and renewal contracts are deferred and then amortized on a straight-line basis over the contract term. $45,714 and $53,784 of such costs were capitalized as of September 30, 2021 and December 31, 2020, respectively. There are no significant judgements affecting the determination of the amount and timing of the related revenue. In the event the Company has not satisfied all performance obligations on its contracts with customers, any amounts of unbilled revenue or excess costs are recorded as contract assets and contract liabilities. Contract assets result when the cumulative revenue recognized exceeds the cumulative invoicing under a contract. The value of the differential is reflected in Contract assets and represents the value of the revenue that was not billed to customers as of the balance sheet date. Contract liabilities (“Deferred Revenue”) result when cumulative receipts under a contract for the same performance obligation exceeds the total revenue recognition and such excess is reflected in Deferred Revenue and represents the value of the performance obligations to be satisfied after September 30, 2021. Contract assets and deferred revenues consist of the following as of September 30, 2021: Contract Assets Contract Liability Costs of Obtaining Contracts Unbilled Revenue Total Deferred Revenue Balance at January 1, 2021 $ 53,784 $ 142,917 $ 196,701 $ 158,884 Acquired from Helix — 20,128 20,128 320,936 Acquired balances recognized during period — (20,128 ) (20,128 ) (305,340 ) Beginning deferred revenue balance recognized during the period — — — (158,884 ) Net change due to timing of billings, payments and recognition (8,070 ) 175,849 167,779 666,561 Balance at September 30, 2021 $ 45,714 $ 318,766 $ 364,480 $ 682,157 Segment Information ASC 280, Segment Reporting Customer Concentration The Company did not have any customers that exceeded 10% of total revenue for the three and nine months ended September 30, 2021. The Company had a single Concentration of Vendors The Company licenses certain information assets from third parties as a key input to certain Information and Software Products. While information licensing fees represented less than 10% of the Company’s operating expenses for the three and nine months ended September 30, 2021, respectively, and for the three and nine months ended September 30, 2020, respectively, any disruption associated with these suppliers could have a material short-term impact on the business while alternate sources are secured. Property and Equipment, Net Property and equipment are stated at cost, net of accumulated depreciation, which is recorded commencing at the in-service date using the straight-line method at rates sufficient to charge the cost of depreciable assets to operations over their estimated useful lives, which are 1 to 7 years. Maintenance and repairs are charged to operations as incurred. The Company reviews for the impairment of long-lived assets annually and whenever events and or changes in circumstances indicate that the carrying value of an asset may not be recoverable. An impairment loss would be recognized when the present value of estimated future cash flows expected to result from the use of the asset and its eventual disposition is less than the carrying value. There were no impairment losses recognized during the three and nine months ended September 30, 2021 and 2020, respectively. Software Development Costs The Company accounts for costs incurred in the development of computer software in accordance with ASC Subtopic 350-40, Intangibles – Goodwill and Other – Internal-Use Software Contingencies Occasionally, the Company may be involved in claims and legal proceedings arising from the ordinary course of its business. The Company records a provision for a liability when it believes that it is both probable that a liability has been incurred, and the amount can be reasonably estimated. If these estimates and assumptions change or prove to be incorrect, it could have a material impact on the Company’s condensed consolidated financial statements. Contingencies are inherently unpredictable, and the assessments of the value can involve a series of complex judgments about future events and can rely heavily on estimates and assumptions. Advertising Advertising costs are expensed as incurred and included in sales and marketing expenses and amounted to $18,011 and $39,009 for the three and nine months ended September 30, 2021, respectively, and $0 and $0 for the three and nine months ended September 30, 2020, respectively. Net Loss per Share Net loss per share of common stock is computed by dividing net loss by the weighted average number of common shares outstanding during the period. At September 30, 2021, the Company had potentially dilutive securities that could be exercised or converted into common stock. Refer to Note 14 for the Company’s disclosure on such potential dilution. Further, as the Company has incurred net losses for the three and nine months ended September 30, 2021 and 2020, respectively, the diluted loss per share is the same as basic loss per share for the periods presented. Distinguishing Liabilities from Equity The Company relies on the guidance provided by ASC Topic 480, Distinguishing Liabilities from Equity Derivatives and Hedging: Contracts in Entity’s Own Equity Once the Company determines that a financial instrument should not be classified as a liability, the Company determines whether the financial instrument should be presented between the liability section and the equity section of the balance sheet (“temporary equity”). The Company will determine temporary equity classification if the redemption of the financial instrument is outside the control of the Company (i.e. at the option of the holder). Otherwise, the Company accounts for the financial instrument as permanent equity. Initial Measurement The Company records its financial instruments classified as liability, temporary equity or permanent equity at issuance at the fair value, or cash received. Subsequent Measurement – Financial instruments classified as liabilities The Company records the fair value of its financial instruments classified as liabilities at each subsequent measurement date. The changes in fair value of its financial instruments classified as liabilities are recorded as other expense/income. Stock-based Compensation The Company’s 2020 Equity Incentive Plan (“2020 Plan”) permits the grant of stock options, restricted stock awards and/or restricted stock units. A total of 4,000,000 shares of Company common stock are authorized and reserved for issuance under the 2020 Plan. Income Taxes MOR was organized as a limited liability company and became a wholly owned subsidiary of the Company upon completion of the Merger with Helix on March 2, 2021. As a result, the Company was treated as a partnership for federal and state income tax purposes through March 2, 2021. Accordingly, the Company’s taxable income, deductions, assets and liabilities are reported by the members on their respective income tax returns. Therefore, no provision for federal or state income tax has been made by the Company for all business activity from its inception through March 2, 2021. After March 2, 2021, the Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company has an incurred net operating loss for financial-reporting and tax-reporting purposes. Accordingly, for federal and state income tax purposes, the benefit for income taxes has been offset entirely by a valuation allowance against the related federal and state deferred tax asset for the period since March 2, 2021. Tax contingencies are recorded, if needed, to address potential exposure involving tax positions the Company has taken that could be challenged by tax authorities. These potential exposures could result from applications of various statutes, rules, regulations and interpretations. Any estimates of tax contingencies contain assumptions and judgments about potential actions by taxing jurisdictions. Any interest and penalties related to uncertain tax positions would be included as part of the income tax provision. The Company’s conclusions regarding uncertain tax positions may be subject to review and adjustment at a later date based upon ongoing analysis of or changes in tax laws, regulations and interpretations thereof as well as other factors. Recent Accounting Pronouncements In August 2020, the FASB issued ASU No. 2020-06, Debt - Debt with Conversion and Other Options Derivatives and Hedging - Contracts in Entity’s Own Equity In October 2021, the FASB issued Accounting Standards Update No. 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers 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. |
BUSINESS COMBINATION
BUSINESS COMBINATION | 9 Months Ended |
Sep. 30, 2021 | |
BUSINESS COMBINATION [Abstract] | |
BUSINESS COMBINATION | Note 4 BUSINESS COMBINATION On March 2, 2021, pursuant to the Merger and the Merger Agreement, Forian acquired 100% of the issued and outstanding capital stock, options and warrants of Helix. The total purchase consideration for the Merger was $18,454,784. The purchase consideration is equal to the product of (i) the total outstanding Helix common shares and common share equivalents for in-the-money warrants to purchase Helix common stock and vested stock options multiplied by the merger exchange ratio of 0.05 shares of Company common stock for 1 share of Helix common stock and (ii) $2.158 per share, which represented the fair value of Company common stock on the acquisition date. The Merger was accounted for as a business combination in accordance with ASC 805. The Company has determined preliminary fair values of the assets acquired and liabilities assumed in the Merger. These values are subject to change as the Company completes its determination of the fair value of assets acquired and liabilities assumed. The following table summarizes the preliminary purchase price allocations relating to the Merger: Total purchase price $ 18,454,784 Assets acquired: Cash 1,310,977 Accounts receivable, net 488,453 Prepaid expenses 215,064 Contract assets 20,128 Other assets 450,000 Property and equipment 146,559 Software Technology 5,279,000 Trade Names and Trademarks 386,000 Customer Relationships 5,243,000 Right of use assets 1,082,684 Deposits and other assets 58,950 Total assets acquired $ 14,680,815 Liabilities assumed: Accounts payable and accrued liabilities $ 2,654,543 Short-term lease liabilities 295,364 Deferred revenues 320,936 Warrant liability 1,247,715 Notes payable and financing arrangements 20,801 Other long-term liabilities 812,044 Total liabilities assumed $ 5,351,403 Estimated fair value of net assets acquired: $ 9,329,412 Goodwill $ 9,125,372 The Company adjusts provisional goodwill balance when new information is obtained regarding the valuation of acquired assets and liabilities during a one-year measurement period from the date of acquisition in accordance with ASC 805-10. During the three months ended September 30, 2021, the Company adjusted provisional goodwill by $424,460 based on new information obtained regarding certain contingent liabilities and other assets. The preliminary estimates for useful lives of the identified intangibles are 8 years for Trade Names and Trademarks, 5 years for Customer Relationships and 2 and 7 years for Software Technology Intangibles with a weighted average useful life of 5.47 years. Transaction costs incurred in connection with the Business Combination amounted to approximately $0 and $1,210,279 during the three and nine months ended September 30, 2021, respectively. Unaudited Pro Forma Results The following table represents the revenue, net loss and loss per share effect of the acquired company, as reported on a pro forma basis as if the acquisition occurred on January 1, 2020. These pro forma results are not necessarily indicative of the results that would have occurred if the acquisition had occurred on the first day of the periods presented, nor does the pro forma financial information purport to represent the results of operations for future periods. For the Three Months Ended September 30, For the Nine Months Ended September 30, Description 2021 2020 2021 2020 Revenues $ 4,961,755 $ 3,062,557 $ 13,139,257 $ 9,135,273 Net loss (6,876,472 ) (42,488,120 ) (21,265,019 ) (46,647,993 ) Net loss per share: Basic and diluted-as pro forma (unaudited) $ (0.22 ) $ (1.48 ) $ (0.69 ) $ (1.75 ) The pro forma financial information for all periods presented above has been calculated after adjusting the results of the Company and Helix to reflect the business combination accounting effects resulting from this acquisition, including the amortization expense from acquired intangible assets included in the pro forma financial information presented above. The Forian historical condensed consolidated financial statements have been adjusted in the pro forma combined financial statements to give effect to pro forma events that are directly attributable to the business combination and factually supportable. The pro forma financial information is for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of the periods presented. |
MARKETABLE SECURITIES
MARKETABLE SECURITIES | 9 Months Ended |
Sep. 30, 2021 | |
MARKETABLE SECURITIES [Abstract] | |
MARKETABLE SECURITIES | Note 5 MARKETABLE SECURITIES Marketable securities are stated at estimated fair value based upon current market quotes (level 1 inputs) and are classified as available-for-sale. Realized gains and losses are included in investment income. Unrealized gains and losses are immaterial and therefore the Company has presented such amounts within Investment income in the Statement of Operations. The Company invests in short-term U.S. Treasuries and money market mutual funds. As of September 30, 2021 and 2020, the fair value of these investments approximated cost. |
PREPAID EXPENSES
PREPAID EXPENSES | 9 Months Ended |
Sep. 30, 2021 | |
PREPAID EXPENSES [Abstract] | |
PREPAID EXPENSES | Note 6 PREPAID EXPENSES The Company has various agreements which require upfront and periodic payments. The Company records the expenses related to these agreements ratably over the annual terms. As of September 30, 2021 and December 31, 2020, the Company’s balance sheet reflected other prepaid expenses of $912,879 and $120,979, respectively, primarily relating to various software licenses and insurance policies with durations ranging from 3 months to 1 year. |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 9 Months Ended |
Sep. 30, 2021 | |
PROPERTY AND EQUIPMENT, NET [Abstract] | |
PROPERTY AND EQUIPMENT, NET | Note 7 PROPERTY AND EQUIPMENT, NET As of September 30, 2021 and December 31, 2020, property and equipment were comprised of the following: September 30, 2021 December 31, 2020 Unaudited Personal computing equipment $ 129,702 $ 55,767 Furniture and equipment 117,343 — Software development costs 561,553 — Vehicles 25,876 — Total 834,474 55,767 Less: Accumulated depreciation and amortization (71,816 ) (9,409 ) Property and equipment, net $ 762,658 $ 46,358 Depreciation and amortization expense for the three and nine months ended September 30, 2021 was $30,909 and $69,895, respectively, and for the three and nine months ended September 30, 2020 was $3,059 and $4,932, respectively. |
INTANGIBLE ASSETS, NET
INTANGIBLE ASSETS, NET | 9 Months Ended |
Sep. 30, 2021 | |
INTANGIBLE ASSETS, NET [Abstract] | |
INTANGIBLE ASSETS, NET | Note 8 INTANGIBLE ASSETS, NET The preliminary allocation of the purchase price for the acquisition was allocated based on information that is currently available. The Company's estimates and assumptions underlying the initial allocations is subject to the collection of information necessary to complete its allocations within the measurement period, which is up to one year from the acquisition date. The following table summarizes the Company’s intangible assets as of September 30, 2021: Estimated Useful Life (Years) Gross Carrying Amount at March 2, 2021 Accumulated Amortization Net Book Value at 9/30/2021 Customer Relationships 5 $ 5,243,000 $ (606,046 ) $ 4,636,954 Software Technology 2 1,170,000 (338,105 ) 831,895 Software Technology 7 4,109,000 (339,261 ) $ 3,769,739 Tradenames and Trademarks 8 386,000 (27,886 ) 358,114 $ 10,908,000 $ (1,311,298 ) $ 9,596,702 The Company uses the straight-line method to determine the amortization expense for its definite lived intangible assets. Amortization expense related to the purchased intangible assets was $567,212 and 1,311,298 . The estimated future amortization expense for the next five years and thereafter is as follows: Years Ending December 31, Future amortization expense 2021 remaining $ 567,213 2022 2,268,850 2023 1,784,495 2024 1,683,850 2025 1,683,850 Thereafter 1,608,444 Total $ 9,596,702 |
ACCRUED EXPENSES
ACCRUED EXPENSES | 9 Months Ended |
Sep. 30, 2021 | |
ACCRUED EXPENSES [Abstract] | |
ACCRUED EXPENSES | Note 9 ACCRUED EXPENSES As of September 30, 2021 and December 31, 2020, accrued expenses were comprised of the following: September 30, 2021 December 31, 2020 Employee compensation 1,903,187 346,720 Accrued expenses 1,089,826 8,825 Transaction-related — 125,196 Total $ 2,993,013 $ 480,741 Transaction-related accrued expenses are associated with the Merger. See Note 4. |
WARRANT LIABILITY
WARRANT LIABILITY | 9 Months Ended |
Sep. 30, 2021 | |
WARRANT LIABILITY [Abstract] | |
WARRANT LIABILITY | Note 10 WARRANT LIABILITY In conjunction with the Merger, outstanding warrants to purchase Helix common stock were converted to warrants to purchase Company common stock. As the warrant holders have the option to receive cash in lieu of common stock in certain circumstances, the Company determined that the warrants require classification as a liability pursuant to ASC 815-40. In accordance with the applicable accounting guidance, the outstanding warrants are recognized as a warrant liability on the condensed consolidated balance sheet and are measured at their inception date fair value (the closing date of the Merger) and subsequently re-measured at each reporting period with changes being recorded in the condensed consolidated statement of operations. As of September 30, 2021, the Company had 97,058 warrants outstanding classified as liabilities. The fair value of the Company’s warrant liability was calculated using the Black-Scholes model and the following assumptions: As of September 30, 2021 Fair value of company's common stock $ 10.32 Dividend yield 0 % Expected volatility 80% - 145 % Risk Free interest rate 0.05% - 0.58 % Expected life (years) 2.07 Exercise price $ 8.00 - $28.00 Fair value of financial instruments - warrants $ 501,110 The change in fair value of the financial instruments – warrants is as follows: Amount Balance at January 1, 2021 $ — Fair value of warrant liability assumed in connection with Helix Merger 1,247,715 Change in fair value of warrant liability (746,605 ) Balance at September 30 2021 $ 501,110 Amount Balance at July 1, 2021 $ 752,888 Change in fair value of warrant liability (251,778 ) Balance at September 30 2021 $ 501,110 |
CONVERTIBLE NOTES
CONVERTIBLE NOTES | 9 Months Ended |
Sep. 30, 2021 | |
CONVERTIBLE NOTES [Abstract] | |
CONVERTIBLE NOTES | Note 11 CONVERTIBLE NOTES September 30, 2021 December 31, 2020 Principal outstanding $ 24,000,000 $ — Add: accrued interest 70,000 — Less: unamortized debt issuance costs (20,886 ) — Convertible note payable, net of debt issuance costs $ 24,049,114 $ — On September 1, 2021, the Company entered into a Note Purchase Agreement with certain accredited investors and a director of the Company, pursuant to which the Company issued at 100% of par value $24,000,000 in aggregate principal balance of 3.5% Convertible Promissory Notes due September 1, 2025 (the “Notes”), convertible into (i) shares of Company common stock, and (ii) warrants to purchase shares of Company common stock equal to 20% of the principal amount of the Notes divided by the conversion price of the Notes (the “Warrants”). The Notes will mature on the fourth-year anniversary of the date of issuance, which time is also the termination date of the Warrants if issued. The conversion price of the Notes and the exercise price of the Warrants is $11.98 per share, which was the consolidated closing bid price of the Company common stock as reported by Nasdaq on August 31, 2021, the most recently completed trading day preceding the Company entering into the Note Purchase Agreement with investors with respect to the Notes. The holders of the Notes may, at any time, convert all or a portion of the Notes plus accrued interest (subject to a minimum principal amount of $100,000) at the conversion price. The Company may redeem all or a portion of any Notes then outstanding at any time after the first anniversary of issuance at a price of 112.5% of par value plus accrued interest. In the event of a change of control of the Company, the Company may redeem all Notes then outstanding at a price of 108% of par value plus accrued interest. Interest expense on the Notes is payable upon maturity or earlier redemption unless the Notes are converted prior to such time. In the event the holders of the Note convert all or a portion of the Notes, the related accrued interest is converted at the conversion price. Interest expense related to the Notes was $70,000 for the three and nine months ended September 30, 2021. The Company evaluated the embedded features in accordance with ASC 815-15-25 and determined embedded features are all clearly and closely related to the debt host instrument and therefore are not required to be bifurcated and separately measured at fair value. The Warrants were not issued in connection with the Notes, and issuance of the Warrants is contingent upon conversion of the Notes at the option of the Holder, therefore no portion of the proceeds are allocated to the Warrants. The Company incurred debt issuance costs associated with the Notes in the amount of $21,330, which will be deferred and amortized over the term of the Notes. During the three months ended September 30, 2021, the Company recognized $444 in amortization of debt issuance costs. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2021 | |
STOCK-BASED COMPENSATION [Abstract] | |
STOCK-BASED COMPENSATION | Note 12 STOCK-BASED COMPENSATION Restricted Stock Awards and Restricted Stock Units Unvested equity interests of MOR were converted into restricted Company common stock based upon the exchange ratio of 1.7776 shares of Company common stock for each 1 MOR unit, subject to any adjustments required under the Contribution Agreement. The information regarding the 2020 Plan below is presented as though the combination occurred as of the beginning of the periods presented. Number of Restricted Shares and Units Weighted Average Grant Date Fair Value Per Share Unvested at January 1, 2020 1,237,396 $ 0.62 Issued 2,191,869 1.21 Vested 1,729,589 0.72 Canceled — — Unvested at December 31 2020 1,699,676 1.28 Issued 444,000 11.76 Vested 671,642 0.03 Canceled (50,000 ) 12.18 Unvested at September 30 2021 1,422,034 $ 3.35 The 1,422,034 of unvested awards at September 30, 2021 consists of 444,000 restricted stock units and 1,028,034 shares of restricted stock. Stock Options As part of the Merger (see Note 4), the Company assumed the Helix TCS, Inc. Omnibus Stock Incentive Plan and the Bio-Tech Medical Software, Inc. 2014 Stock Incentive Plan, each as amended, pursuant to which options exercisable at prices between $2.00 and $51.80 per share for 455,089 shares of Company common stock were outstanding. The value attributable to service subsequent to the Merger will be recognized as compensation cost by the Company. The fair value of the stock options was estimated using the Black-Scholes option pricing model, and the assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgement. The assumptions at the inception date are as follows: September 30, 2021 Exercise Price $ 2.00 to $51.80 Fair value of Company common stock $ 9.39 to $22.90 Dividend yield 0 % Expected volatility 118.0 % Risk Free interest rate 0.9% to 1.0 % Expected life (years) remaining 0 to 9.93 Stock option activity for the period ended September 30, 2021 is as follows: Shares Underlying Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Outstanding at January 1, 2021 — $ — — Options assumed in Helix Merger 455,089 $ 15.13 3.44 Granted 3,815,214 $ 12.85 9.53 Exercised (22,437 ) $ 4.57 1.92 Forfeited and expired (161,893 ) $ 11.74 9.16 Outstanding at September 30 2021 4,085,973 $ 14.25 8.84 Vested options at September 30 2021 455,089 $ 15.13 3.44 Stock Compensation Expense The grant date fair value per share for the stock options granted was $11.94 and $0.02 for the nine months ended September 30, 2021 and 2020, respectively. At September 30, 2021, the total unrecognized stock compensation expense related to unvested stock option awards and restricted stock awards and restricted stock units granted was $42,992,330, which the Company expects to recognize over a weighted-average period of approximately 3.88 years. Stock compensation expense for the three and nine months ended September 30, 2021 and 2020 is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Cost of revenue 14,823 — 19,479 — Research and development (131,774 ) 2,868 6,215 8,666 Sales and marketing 108,477 1,476 315,140 3,505 General and administrative 2,635,980 4,217 5,904,845 8,160 Total 2,627,506 8,561 6,245,679 20,331 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2021 | |
STOCKHOLDERS' EQUITY [Abstract] | |
STOCKHOLDERS' EQUITY | Note 13 STOCKHOLDERS’ EQUITY The Condensed Consolidated Statement of Stockholders’ Equity reflects the exchange of MOR Members Equity for Company common stock as of the beginning of the periods presented. See Note 2. All of MOR’s Class A, Class B vested profit interests’ units, Series S, Series S-1, and vested Restricted Class B units were converted to Company common stock on March 2, 2021 based upon the exchange ratio of 1.7776 shares of Company common stock to 1 MOR member unit, subject to adjustment pursuant to the Contribution Agreement. Unvested Class B profit interest units, unvested restricted Class B units and options to acquire Restricted Class B Units were converted to unvested restricted Company common stock on March 2, 2021 based upon the exchange ratio of 1.7776 shares of Company common stock to 1 MOR member unit, subject to adjustment pursuant to the Contribution Agreement. The applicable vesting provisions of such MOR units carried over to the restricted Company common stock. In December 2020, MOR completed a Series S-1 financing with cash proceeds of $13,000,000 in exchange for 3,388,947 Series S-1 preferred units. In March 2020, MOR completed a Series S financing with cash proceeds of $3,300,000 and converted a promissory note of $184,300 in exchange for 3,078,276 Series S preferred units. In 2019 and 2020, Class B profit interest units, restricted Class B units and options to acquire Class B units were issued to employees, consultants and advisors. In March 2021, the Company issued warrants to purchase 17,031 shares of Company common stock at a per-share purchase price equal to $0.01. The warrants terminate after a period of 2 years from the issuance date. The warrants were issued in exchange for services provided with a fair value of $389,976 included in transaction related expenses for the nine months ended September 30, 2021. On April 16, 2021, the Company raised proceeds of $11,968,652, net of transaction expenses of $31,348, resulting from the sale of 1,194,743 shares of Company common stock at an average purchase price equal to $10.21 per share to a select group of institutional and accredited investors. Investors included both unaffiliated investors as well as directors of the Company. Directors purchased 560,461 shares of common stock at a purchase price of $11.33 per share, which amount represented the consolidated closing bid price of Company common stock as reported by the Nasdaq on April 9, 2021, the last trading day prior to execution of the securities purchase agreement. Unaffiliated investors purchased 631,282 shares of Company common stock at a purchase price of $8.95 per share, which price was negotiated on April 9, 2021, and represents an approximately 15% discount to the preceding day’s volume weighted average price. See Note 4 for additional details on shares issued pursuant to the Merger. |
NET LOSS PER SHARE
NET LOSS PER SHARE | 9 Months Ended |
Sep. 30, 2021 | |
NET LOSS PER SHARE [Abstract] | |
NET LOSS PER SHARE | Note 14 NET LOSS PER SHARE The following table sets forth the computation of the basic and diluted net loss per share: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2021 2020 2021 2020 Net loss attributable to common shareholders $ (6,876,472 ) $ (1,161,915 ) $ (18,502,315 ) $ (2,628,690 ) Net loss per share attributable to common shareholders: Basic $ (0.22 ) $ (0.08 ) $ (0.64 ) $ (0.22 ) Diluted $ (0.22 ) $ (0.08 ) $ (0.64 ) $ (0.22 ) Weighted average common shares outstanding: Basic 31,332,735 14,208,049 28,814,825 12,038,534 Diluted 31,332,735 14,208,049 28,814,825 12,038,534 The following table sets forth the outstanding potentially dilutive securities that have been excluded in the calculation of diluted net loss per share because their inclusion would be anti-dilutive: For the Three and Nine Months ended September 30, 2021 2020 Potentially dilutive securities: Warrants 124,087 — Stock options 4,085,973 — Convertible notes 2,411,018 — Unvested Restricted Stock Awards and Units 1,422,034 2,148,093 Total 8,043,112 2,148,093 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2021 | |
RELATED PARTY TRANSACTIONS [Abstract] | |
RELATED PARTY TRANSACTIONS | Note 15 RELATED PARTY TRANSACTIONS On May 6, 2019, MOR entered into an arrangement with family trusts controlled by Max Wygod and Martin Wygod, directors of MOR, to issue two separate promissory notes (“Promissory Note(s)”) entitling MOR to secure up to $100,000 per Promissory Note to fund operations. The Promissory Notes had no interest rate and were due on the sooner of the initial closing of MOR’s Series S Preferred Unit financing or December 31, 2020. In March 2020, in connection with MOR’s Series S Preferred Unit financing, the aggregate outstanding balance of the Promissory Notes of $184,300, was converted, at the option of the holders, into 295,501 shares of Company common stock. Adam Dublin, Chief Strategy Officer, was previously a consultant for a current vendor of MOR. Mr. Dublin’s consultancy with the vendor ended on December 11, 2020 and the parties have not agreed to renew the agreement. Pursuant to Mr. Dublin’s consulting agreement with the vendor, Mr. Dublin received payments from the vendor for the three and nine months ended September 30, 2021 and 2020 of $107,125 and $303,274, and $66,040 and $310,315, respectively. On April 16, 2021, the Company raised net proceeds of $11,968,652 resulting from the sale of Company common stock to a select group of institutional and accredited investors, which included directors of the Company. See Note 13 for additional information. On September 1, 2021, the Company issued at 100% of par value $24,000,000 in aggregate principal balance of 3.5% Convertible Promissory Notes due 2025 convertible into (i) shares of Company common stock, and (ii) warrants to purchase shares of Company common stock equal to 20% of the principal amount of the Notes divided by the conversion price to a select group of institutional and accredited investors, which included a director of the Company who holds $6,000,000 of the Notes. See Note 11 for additional information. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2021 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
COMMITMENTS AND CONTINGENCIES | Note 16 COMMITMENTS AND CONTINGENCIES Operating Leases The Company accounts for leases in accordance with ASC Topic 842, Leases Leases are classified as finance or operating in accordance with the guidance in ASC 842. The Company does not hold any finance leases. The Company is obligated under operating lease agreements for office facilities in (i) Florida (two), (ii) Washington, (iii) Colorado and (iv) Argentina that expire in (i) December 2021 and 2024, (ii) December 2022, (iii) February 2026 and (iv) December 2021, respectively. The Company also has three short-term leases related to offices in Pennsylvania, Massachusetts and Virginia. These short-term leases are currently leased on a month-to-month basis. A short-term lease is a lease with a term of 12 months or less and does not include the option to purchase the underlying asset that we would expect to exercise. The Company has elected to adopt the short-term lease exemption in ASC 842 and as such have not recognized a “right of use” asset or lease liability for these three short-term leases. The Company’s lease agreements generally do not provide an implicit borrowing rate, therefore an internal incremental borrowing rate is determined based on information available at lease commencement date for purposes of determining the present value of lease payments. Supplemental cash flow information and non-cash activity related to leases for the nine months ended September 30, 2021 and 2020 were as follows: Nine Months Ended September 30, 2021 2020 Cash used in operating leases $ 211,077 $ — ROU assets obtained in exchange for lease obligations $ 166,489 $ — ROU lease assets and lease liabilities for the Company’s operating leases were recorded in the condensed consolidated balance sheet as follows: As of September 30, 2021 As of December 31, 2020 Right of use assets, net $ 916,195 $ — Short-term operating lease liabilities $ 245,771 $ — Long-term operating lease liabilities 675,254 — Total lease liabilities $ 921,025 $ — Weighted average remaining lease term (in years) 3.41 — Weighted average discount rate 8.5 % 0.0 % The components of lease expense were as follows for each of the period presented: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Operating lease expense $ 81,936 $ — $ 191,182 $ — Short-term lease expense $ 19,393 $ 3,928 $ 62,916 $ 12,074 Total operating lease costs $ 101,329 $ 3,928 $ 254,098 $ 12,074 Future lease payments included in the measurement of lease liabilities on the condensed consolidated balance sheet as of September 30, 2021, for the following five fiscal years and thereafter were as follows: As of September 30, 2021 2021 $ 69,901 2022 308,470 2023 286,670 2024 291,161 2025 85,726 Thereafter 14,288 Total future minimum lease payments $ 1,056,216 Less imputed interest (135,191 ) Total $ 921,025 Service Agreements The Company entered into certain service agreements that provide for future minimum payments. The terms of these agreements vary in length. The following table shows the remaining payment obligations under these licenses as of September 30, 2021: September 30, 2021 December 31, 2020 Unaudited Year ending December 31, 2021 $ 500,000 $ 533,488 Year ending December 31, 2022 772,188 272,188 Year ending December 31, 2023 1,000,000 — Year ending December 31, 2024 1,500,000 — Year ending December 31, 2025 1,600,000 — Thereafter 400,000 — $ 5,772,188 $ 805,676 From time to time the Company may be involved in claims that arise during the ordinary course of business. For any matters where management currently believes it is probable that the Company will incur a loss and that the probable loss or range of loss can be reasonably estimated, the Company records reserves in the consolidated financial statements based on its best estimates of such loss. In other instances, because of the uncertainties related to either the probable outcome or the amount or range of loss, management is unable to make a reasonable estimate of a liability, if any. Regardless of the outcome, litigation can be costly and time consuming, and it can divert management’s attention from important business matters and initiatives, negatively impacting the Company’s overall operations. Although the results of litigation and claims cannot be predicted with certainty, the Company does not currently have any pending litigation to which it is a party or to which its property is subject that we believe to be material, except for the below. Legal Proceedings Kenney, et al. v. Helix TCS, Inc. On July 20, 2017, one former employee of Helix filed a lawsuit in the United States District Court for the District of Colorado alleging violations of the Fair Labor Standards Act on behalf of himself and other employees. The plaintiff seeks damages for Helix’s alleged failure to compensate employees appropriately for the overtime hours they worked as purported “non-exempt” employees. The matter has been conditionally certified as a collective action and the court has authorized the plaintiff to send notice and consent forms to putative class members. Notice and consent forms have been sent. The period for returning consent forms has ended. No decision has been made on the merits of the claim. The case is in the early stages of discovery. The Company will vigorously defend the claims in the lawsuit. Audet v. Green Tree International, et. al. On February 14, 2020, John Audet filed a complaint in 15th Judicial Circuit in and for Palm Beach County, Florida against multiple parties, including Green Tree International (“GTI”), an indirect subsidiary of Forian, claiming that he owned 10% of GTI. The Company believes the lawsuit is wholly without merit and will vigorously defend the claims in the lawsuit. The case is in the process of discovery. A hearing on motions for summary judgement is expected after January 17, 2022, with trial on an eight Helix Stockholder Lawsuits Beginning on February 16, 2021, four lawsuits were filed by purported Helix stockholders (captioned Dillion v. Helix Technologies, Inc., et al. Baros v. Helix Technologies, Inc., et al. Anderson v. Helix Technologies, Inc., et al. Robinson v. Helix Technologies, Inc., et al. Nykiah Thomas v. Security Consultants Group, LLC d/b/a Helix TCS, Helix Technologies, Inc. and Shamson Sundra On July 16, 2021, Nykiah Thomas, individually and on behalf of M’Seiya Thomas, a minor, filed a complaint in the District Court, City and County of Denver, Colorado, against Security Consultants Group, LLC d/b/a Helix TCS and Helix Technologies, Inc., subsidiaries of Forian, and Shamson Sundra, a former employee of Security Consultants Group, LLC, alleging negligence in the performance of security services in connection with a school shooting at STEM School Highlands Ranch that occurred on May 7, 2019. The case is in the early stages of discovery and the parties have agreed to voluntary mediation scheduled for December 13, 2021. Trial is scheduled to begin on August 8, 2022. The Company will vigorously defend the claims in the lawsuit. |
SEGMENT RESULTS
SEGMENT RESULTS | 9 Months Ended |
Sep. 30, 2021 | |
SEGMENT RESULTS [Abstract] | |
SEGMENT RESULTS | Note 17 SEGMENT RESULTS ASC 280-10-50 requires use of the “management approach” model for segment reporting. The management approach is based on the way a company’s management organized segments within the company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision-making group is composed of the chief executive officer and the chief financial officer. The Company operates in three segments, Information & Software, Services and Other. Asset information by operating segment is not presented below since the chief operating decision maker does not review this information by segment. The reporting segments follow the same accounting policies used in the preparation of the Company’s unaudited condensed consolidated financial statements. The following represents selected information for the Company’s reportable segments: Three months ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Information and Software Revenue $ 4,489,177 $ 159,504 $ 9,661,826 $ 334,921 Costs and expenses 7,661,631 1,007,777 17,813,947 $ 2,177,550 Loss from operations (3,172,454 ) (848,273 ) (8,152,121 ) (1,842,629 ) Total other income/(expense) — — — — Net loss before income taxes (3,172,454 ) (848,273 ) (8,152,121 ) (1,842,629 ) Services Revenue $ 269,753 $ — $ 858,400 $ — Costs and expenses 369,507 — 755,627 — Loss from operations (99,754 ) — 102,773 — Total other income/(expense) — — — — Net loss before income taxes (99,754 ) — 102,773 — Other Revenue $ 202,825 $ — $ 610,123 $ — Costs and expenses 228,014 — 698,001 — Loss from operations (25,189 ) — (87,878 ) — Total other income/(expense) (275 ) — (607 ) — Net income before income taxes (25,464 ) — (88,485 ) — Centrally Managed Costs Revenue $ — $ — $ — $ — Costs and expenses 4,051,504 313,731 11,313,140 791,857 Loss from operations (4,051,504 ) (313,731 ) (11,313,140 ) (791,857 ) Total other income/(expense) 472,704 89 948,658 5,796 Net loss before income taxes (3,578,800 ) (313,642 ) (10,364,482 ) (786,061 ) Totals Revenue $ 4,961,755 $ 159,504 $ 11,130,349 $ 334,921 Costs and expenses 12,310,656 1,321,508 30,580,715 2,969,407 Loss from operations (7,348,901 ) (1,162,004 ) (19,450,366 ) (2,634,486 ) Total other income/(expense) 472,429 89 948,051 5,796 Net loss $ (6,876,472 ) $ (1,161,915 ) $ (18,502,315 ) $ (2,628,690 ) Approximately 97% of revenues were attributable to customers in the United States for the three and nine months ended September 30, 2021. All of the Company’s revenues were attributable to customers in the United States for the three and nine months ended September 30, 2020. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2021 | |
SUBSEQUENT EVENTS [Abstract] | |
SUBSEQUENT EVENTS | Note 18 SUBSEQUENT EVENTS The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements of the Company include the accounts of (i) Medical Outcomes Research Analytics, LLC and its wholly owned subsidiaries COR Analytics, LLC and MOR Analytics, LLC, and (ii) Helix Technologies, Inc. and its wholly owned subsidiaries Helix TCS, LLC, Security Consultants Group, LLC, Boss Security Solutions, LLC, Security Grade Protective Services, Ltd., Bio-Tech Medical Software, Inc, BT UCS, Inc., Engeni LLC (including Engeni S.A. (“Engeni SA”), |
Foreign Currency | Foreign Currency ASC Topic 830-10, Foreign Currency Matters |
Use of Estimates | Use of Estimates Preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgements and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses together with amounts disclosed in related notes to the financial statements. Certain of the Company’s estimates could be affected by external conditions, including those unique to the Company and general economic conditions. It is possible that the external factors could have an effect on the Company’s estimates and could cause actual results to differ from those estimates. |
Reclassifications and Corrections | Reclassifications and Corrections Certain reclassifications have been made to the prior period financial statements to conform to the current period financial statement presentation. The Company previously reported foreign currency related gains and losses related to Engeni SA, which was acquired as part of the acquisition of Helix, as part of other comprehensive income (loss) in the condensed consolidated financial statements for the three-month periods ended March 31, 2021 and June 30, 2021. The foreign currency gain of $298,170 for the three and nine-month periods ended September 30, 2021 includes $145,250 that was previously reported as other comprehensive income (loss). The Company assessed the impact of this correction and determined it was not material to the current or prior reporting periods. Please refer to Foreign Currency policy above. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company measures the fair value of financial assets and liabilities based on the guidance of ASC 820, Fair Value Measurements and Disclosures ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an ordinary transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value: Level 1 — quoted prices in active markets for identical assets or liabilities; Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable; and Level 3 — inputs that are unobservable. The carrying value of the Company’s financial instruments, such as cash, marketable securities, accounts receivable and accrued liabilities and other liabilities approximate fair values due to the short-term nature of these instruments. |
Cash and Cash Equivalents and Credit Risk | Cash and Cash Equivalents and Credit Risk The Company considers all cash accounts that are not subject to withdrawal restrictions and highly liquid investments with a maturity of three months or less, when purchased, as cash and cash equivalents. The Company maintains cash with major financial institutions. Cash held at U.S. bank institutions is currently insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 at each institution. The portion of deposits in excess of FDIC coverage is not protected by such insurance and represents a credit risk to the Company. At times, the Company’s deposits exceed this coverage. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recorded at the invoiced amount, net of an allowance for doubtful accounts. The Company determines the allowance for doubtful accounts based on historical write-off experience, customer specific facts and economic conditions. Outstanding account balances are reviewed individually for collectability. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. Allowance for doubtful accounts was $256,767 and $0 at September 30, 2021 and December 31, 2020, respectively. Management charges account balances against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. |
Long-Lived Assets, Including Definite Lived Intangible Assets | Long-Lived Assets, Including Definite Lived Intangible Assets Long-lived assets, other than goodwill and other indefinite-lived intangibles, are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable through the estimated undiscounted future cash flows derived from such assets. Definite-lived intangible assets primarily consist of customer relationships, software technology and trade names. For long-lived assets used in operations, impairment losses are only recorded if the asset’s carrying amount is not recoverable through its undiscounted, probability-weighted future cash flows. The Company measures the impairment loss based on the difference between the carrying amount and the estimated fair value. When an impairment exists, the related assets are written down to fair value. |
Goodwill | Goodwill Goodwill, which represents the excess of purchase price over the fair value of net assets acquired, is carried at cost. Goodwill is not amortized; rather, it is subject to a periodic assessment for impairment by applying a fair value-based test. The Company reviews goodwill for possible impairment annually during the fourth quarter, or whenever events or circumstances indicate that the carrying amount may not be recoverable. The impairment model prescribes a two-step method for determining goodwill impairment. However, an entity is permitted to first assess qualitative factors to determine whether the two-step goodwill impairment test is necessary. The qualitative factors considered by Forian may include, but are not limited to, general economic conditions, the Company’s outlook, market performance of the Company’s industry and recent and forecasted financial performance. Further testing is only required if the entity determines, based on the qualitative assessment, that it is more likely than not that a reporting unit’s fair value is less than its carrying amount. Otherwise, no further impairment testing is required. In the first step, the Company determines the fair value of its reporting unit using a discounted cash flow analysis. If the net book value of the reporting unit exceeds its fair value, the Company then performs the second step of the impairment test, which requires allocation of the reporting unit’s fair value to all of its assets and liabilities using the acquisition method prescribed under authoritative guidance for business combinations with any residual fair value being allocated to goodwill. An impairment charge is recognized when the implied fair value of the Company’s goodwill is less than its carrying amount. No impairment losses have been recognized during the periods presented. |
Business Combinations | Business Combinations The Company accounts for its business combinations under the provisions of ASC Topic 805-10, which requires that the purchase method of accounting be used for all business combinations. Assets acquired and liabilities assumed, including non-controlling interests, are recorded at the date of acquisition at their respective fair values. ASC 805-10 also specifies criteria that intangible assets acquired in a business combination must meet to be recognized and reported apart from goodwill. Goodwill represents the excess purchase price over the fair value of the tangible net assets and intangible assets acquired in a business combination. Acquisition-related expenses are recognized separately from the business combinations and are expensed as incurred. If the business combination provides for contingent consideration, the Company records the contingent consideration at fair value at the acquisition date and any changes in fair value after the acquisition date are accounted for as measurement-period adjustments. Changes in fair value of contingent consideration resulting from events after the acquisition date, such as earn-outs, are recognized as follows: (i) if the contingent consideration is classified as equity, the contingent consideration is not re-measured and its subsequent settlement is accounted for within equity; or (ii) if the contingent consideration is classified as a liability, the changes in fair value are recognized in earnings. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue in accordance with Financial Accounting Standards Board (“FASB”) Topic 606, - Revenue from Contracts with Customers Under ASC 606, the Company recognizes revenue when the customer obtains control of promised goods or services, in an amount that reflects the consideration which is expected to be received in exchange for those goods or services. The Company recognizes revenue following the five-step model prescribed under ASC 606: (i) identify contract(s) with a customer; (ii) identify the performance obligation(s) in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligation(s) in the contract; and (v) recognize revenues when (or as) the Company satisfies a performance obligation. ASC 606-10-32-32 requires the determination of the price at which the Company would sell individual products or services to a customer. The Company does not always have sufficient data or experience related to the terms and pricing for products and services when components are sold on a standalone basis. In instances where insufficient data exists, the Company recognizes the contractual fees ratably over the term of the arrangement. In instances where a customer has limited operating history or the customer has recently been formed, management may determine that it is prudent to recognize only the first year’s fees ratably over the first year of the term or as amounts are billed and collectability is assured. Performance obligations that are distinct and remain undelivered would not be recognized until the end of the contract provided that the consideration is guaranteed. No significant judgements affect the determination of the amount and timing of revenue. The Company generates revenue from three categories of product offerings: Information and Software, Services and Other. In 2020, the revenue generated by the Company was exclusively from Information and Software relating to MOR. In 2021, the Company also began to recognize Information and Software, Services and Other revenues related to its acquisition of Helix on March 2, 2021. In most Information and Software contracts, payments are scheduled throughout the term and the contract may include one or more of the following performance obligations: (i) the provision of historical and/or current information as agreed upon, (ii) access to the information through a hosting provider, (iii) access to and use of software products, (iv) installation and training and (v) access to the Company’s analytical team throughout the term of the agreement, as agreed upon. Information and Software contracts do not always have distinct pricing assigned to each performance obligation; rather, the price is bundled and the total bundled pricing is invoiced throughout the term of the agreement, with the exception of contracts for software products which provide separate pricing for implementation and training of such products. The Company recognizes revenue resulting from Information and Software pursuant to agreements under which the Company receives payments for providing the customer access to its products over the contract period. The Company satisfies its performance obligations throughout the term of the contract. Any payments received prior to satisfying performance obligations are deferred and recognized as the performance obligations are satisfied. There are no variable considerations or financing component under such contracts. Prices are typically fixed, but certain contracts can also include royalties in excess of fixed fees. There were $62,500 of royalties in excess of fixed fees for the nine months ended September 30, 2021. Invoicing under contracts is set forth in an invoicing schedule as part of the contract and payments are typically due within 30 days. Services revenues are primarily from contracts with government agencies and revenue is recognized upon completion of the various milestones within the contract. In the event that a contract does not specifically allocate revenue to the satisfaction of specific performance obligations or milestones, the purchase price of the contracts is allocated based on the percentage of time spent, or expected to be spent, to meet each performance obligation. Initial customization of the software to meet state specific requirements and the training to appropriately utilize the software are generally recognized upon completion of the customization and acceptance by the state agency. Support and service revenues are then recognized over a predetermined period of time as defined in the contract. Contract renewals may include an annual service fee that is recognized over the time period defined in the contract. Other revenues are primarily from security monitoring services offerings and the provision of web marketing services. Contracts for these services have a stated transaction price for monthly services and are recognized as the services are provided. Contract acquisition costs, which consist of sales commissions paid or payable, are considered incremental and recoverable costs of obtaining a contract with a customer. Sales commissions for initial and renewal contracts are deferred and then amortized on a straight-line basis over the contract term. $45,714 and $53,784 of such costs were capitalized as of September 30, 2021 and December 31, 2020, respectively. There are no significant judgements affecting the determination of the amount and timing of the related revenue. In the event the Company has not satisfied all performance obligations on its contracts with customers, any amounts of unbilled revenue or excess costs are recorded as contract assets and contract liabilities. Contract assets result when the cumulative revenue recognized exceeds the cumulative invoicing under a contract. The value of the differential is reflected in Contract assets and represents the value of the revenue that was not billed to customers as of the balance sheet date. Contract liabilities (“Deferred Revenue”) result when cumulative receipts under a contract for the same performance obligation exceeds the total revenue recognition and such excess is reflected in Deferred Revenue and represents the value of the performance obligations to be satisfied after September 30, 2021. Contract assets and deferred revenues consist of the following as of September 30, 2021: Contract Assets Contract Liability Costs of Obtaining Contracts Unbilled Revenue Total Deferred Revenue Balance at January 1, 2021 $ 53,784 $ 142,917 $ 196,701 $ 158,884 Acquired from Helix — 20,128 20,128 320,936 Acquired balances recognized during period — (20,128 ) (20,128 ) (305,340 ) Beginning deferred revenue balance recognized during the period — — — (158,884 ) Net change due to timing of billings, payments and recognition (8,070 ) 175,849 167,779 666,561 Balance at September 30, 2021 $ 45,714 $ 318,766 $ 364,480 $ 682,157 |
Segment Information | Segment Information ASC 280, Segment Reporting |
Customer Concentration | Customer Concentration The Company did not have any customers that exceeded 10% of total revenue for the three and nine months ended September 30, 2021. The Company had a single |
Concentration of Vendors | Concentration of Vendors The Company licenses certain information assets from third parties as a key input to certain Information and Software Products. While information licensing fees represented less than 10% of the Company’s operating expenses for the three and nine months ended September 30, 2021, respectively, and for the three and nine months ended September 30, 2020, respectively, any disruption associated with these suppliers could have a material short-term impact on the business while alternate sources are secured. |
Property and Equipment, Net | Property and Equipment, Net Property and equipment are stated at cost, net of accumulated depreciation, which is recorded commencing at the in-service date using the straight-line method at rates sufficient to charge the cost of depreciable assets to operations over their estimated useful lives, which are 1 to 7 years. Maintenance and repairs are charged to operations as incurred. The Company reviews for the impairment of long-lived assets annually and whenever events and or changes in circumstances indicate that the carrying value of an asset may not be recoverable. An impairment loss would be recognized when the present value of estimated future cash flows expected to result from the use of the asset and its eventual disposition is less than the carrying value. There were no impairment losses recognized during the three and nine months ended September 30, 2021 and 2020, respectively. |
Software Development Costs | Software Development Costs The Company accounts for costs incurred in the development of computer software in accordance with ASC Subtopic 350-40, Intangibles – Goodwill and Other – Internal-Use Software |
Contingencies | Contingencies Occasionally, the Company may be involved in claims and legal proceedings arising from the ordinary course of its business. The Company records a provision for a liability when it believes that it is both probable that a liability has been incurred, and the amount can be reasonably estimated. If these estimates and assumptions change or prove to be incorrect, it could have a material impact on the Company’s condensed consolidated financial statements. Contingencies are inherently unpredictable, and the assessments of the value can involve a series of complex judgments about future events and can rely heavily on estimates and assumptions. |
Advertising | Advertising Advertising costs are expensed as incurred and included in sales and marketing expenses and amounted to $18,011 and $39,009 for the three and nine months ended September 30, 2021, respectively, and $0 and $0 for the three and nine months ended September 30, 2020, respectively. |
Net Loss per Share | Net Loss per Share Net loss per share of common stock is computed by dividing net loss by the weighted average number of common shares outstanding during the period. At September 30, 2021, the Company had potentially dilutive securities that could be exercised or converted into common stock. Refer to Note 14 for the Company’s disclosure on such potential dilution. Further, as the Company has incurred net losses for the three and nine months ended September 30, 2021 and 2020, respectively, the diluted loss per share is the same as basic loss per share for the periods presented. |
Distinguishing Liabilities from Equity | Distinguishing Liabilities from Equity The Company relies on the guidance provided by ASC Topic 480, Distinguishing Liabilities from Equity Derivatives and Hedging: Contracts in Entity’s Own Equity Once the Company determines that a financial instrument should not be classified as a liability, the Company determines whether the financial instrument should be presented between the liability section and the equity section of the balance sheet (“temporary equity”). The Company will determine temporary equity classification if the redemption of the financial instrument is outside the control of the Company (i.e. at the option of the holder). Otherwise, the Company accounts for the financial instrument as permanent equity. Initial Measurement The Company records its financial instruments classified as liability, temporary equity or permanent equity at issuance at the fair value, or cash received. Subsequent Measurement – Financial instruments classified as liabilities The Company records the fair value of its financial instruments classified as liabilities at each subsequent measurement date. The changes in fair value of its financial instruments classified as liabilities are recorded as other expense/income. |
Stock-based Compensation | Stock-based Compensation The Company’s 2020 Equity Incentive Plan (“2020 Plan”) permits the grant of stock options, restricted stock awards and/or restricted stock units. A total of 4,000,000 shares of Company common stock are authorized and reserved for issuance under the 2020 Plan. |
Income Taxes | Income Taxes MOR was organized as a limited liability company and became a wholly owned subsidiary of the Company upon completion of the Merger with Helix on March 2, 2021. As a result, the Company was treated as a partnership for federal and state income tax purposes through March 2, 2021. Accordingly, the Company’s taxable income, deductions, assets and liabilities are reported by the members on their respective income tax returns. Therefore, no provision for federal or state income tax has been made by the Company for all business activity from its inception through March 2, 2021. After March 2, 2021, the Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company has an incurred net operating loss for financial-reporting and tax-reporting purposes. Accordingly, for federal and state income tax purposes, the benefit for income taxes has been offset entirely by a valuation allowance against the related federal and state deferred tax asset for the period since March 2, 2021. Tax contingencies are recorded, if needed, to address potential exposure involving tax positions the Company has taken that could be challenged by tax authorities. These potential exposures could result from applications of various statutes, rules, regulations and interpretations. Any estimates of tax contingencies contain assumptions and judgments about potential actions by taxing jurisdictions. Any interest and penalties related to uncertain tax positions would be included as part of the income tax provision. The Company’s conclusions regarding uncertain tax positions may be subject to review and adjustment at a later date based upon ongoing analysis of or changes in tax laws, regulations and interpretations thereof as well as other factors. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2020, the FASB issued ASU No. 2020-06, Debt - Debt with Conversion and Other Options Derivatives and Hedging - Contracts in Entity’s Own Equity In October 2021, the FASB issued Accounting Standards Update No. 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers 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. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Contract Assets and Deferred Revenues | Contract assets and deferred revenues consist of the following as of September 30, 2021: Contract Assets Contract Liability Costs of Obtaining Contracts Unbilled Revenue Total Deferred Revenue Balance at January 1, 2021 $ 53,784 $ 142,917 $ 196,701 $ 158,884 Acquired from Helix — 20,128 20,128 320,936 Acquired balances recognized during period — (20,128 ) (20,128 ) (305,340 ) Beginning deferred revenue balance recognized during the period — — — (158,884 ) Net change due to timing of billings, payments and recognition (8,070 ) 175,849 167,779 666,561 Balance at September 30, 2021 $ 45,714 $ 318,766 $ 364,480 $ 682,157 |
BUSINESS COMBINATION (Tables)
BUSINESS COMBINATION (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
BUSINESS COMBINATION [Abstract] | |
Preliminary Purchase Price Allocations | The following table summarizes the preliminary purchase price allocations relating to the Merger: Total purchase price $ 18,454,784 Assets acquired: Cash 1,310,977 Accounts receivable, net 488,453 Prepaid expenses 215,064 Contract assets 20,128 Other assets 450,000 Property and equipment 146,559 Software Technology 5,279,000 Trade Names and Trademarks 386,000 Customer Relationships 5,243,000 Right of use assets 1,082,684 Deposits and other assets 58,950 Total assets acquired $ 14,680,815 Liabilities assumed: Accounts payable and accrued liabilities $ 2,654,543 Short-term lease liabilities 295,364 Deferred revenues 320,936 Warrant liability 1,247,715 Notes payable and financing arrangements 20,801 Other long-term liabilities 812,044 Total liabilities assumed $ 5,351,403 Estimated fair value of net assets acquired: $ 9,329,412 Goodwill $ 9,125,372 |
Pro Forma Financial Information | The following table represents the revenue, net loss and loss per share effect of the acquired company, as reported on a pro forma basis as if the acquisition occurred on January 1, 2020. These pro forma results are not necessarily indicative of the results that would have occurred if the acquisition had occurred on the first day of the periods presented, nor does the pro forma financial information purport to represent the results of operations for future periods. For the Three Months Ended September 30, For the Nine Months Ended September 30, Description 2021 2020 2021 2020 Revenues $ 4,961,755 $ 3,062,557 $ 13,139,257 $ 9,135,273 Net loss (6,876,472 ) (42,488,120 ) (21,265,019 ) (46,647,993 ) Net loss per share: Basic and diluted-as pro forma (unaudited) $ (0.22 ) $ (1.48 ) $ (0.69 ) $ (1.75 ) |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
PROPERTY AND EQUIPMENT, NET [Abstract] | |
Property and Equipment | As of September 30, 2021 and December 31, 2020, property and equipment were comprised of the following: September 30, 2021 December 31, 2020 Unaudited Personal computing equipment $ 129,702 $ 55,767 Furniture and equipment 117,343 — Software development costs 561,553 — Vehicles 25,876 — Total 834,474 55,767 Less: Accumulated depreciation and amortization (71,816 ) (9,409 ) Property and equipment, net $ 762,658 $ 46,358 |
INTANGIBLE ASSETS, NET (Tables)
INTANGIBLE ASSETS, NET (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
INTANGIBLE ASSETS, NET [Abstract] | |
Intangible Assets | The following table summarizes the Company’s intangible assets as of September 30, 2021: Estimated Useful Life (Years) Gross Carrying Amount at March 2, 2021 Accumulated Amortization Net Book Value at 9/30/2021 Customer Relationships 5 $ 5,243,000 $ (606,046 ) $ 4,636,954 Software Technology 2 1,170,000 (338,105 ) 831,895 Software Technology 7 4,109,000 (339,261 ) $ 3,769,739 Tradenames and Trademarks 8 386,000 (27,886 ) 358,114 $ 10,908,000 $ (1,311,298 ) $ 9,596,702 |
Estimated Future Amortization Expense | The estimated future amortization expense for the next five years and thereafter is as follows: Years Ending December 31, Future amortization expense 2021 remaining $ 567,213 2022 2,268,850 2023 1,784,495 2024 1,683,850 2025 1,683,850 Thereafter 1,608,444 Total $ 9,596,702 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
ACCRUED EXPENSES [Abstract] | |
Accrued Expenses | As of September 30, 2021 and December 31, 2020, accrued expenses were comprised of the following: September 30, 2021 December 31, 2020 Employee compensation 1,903,187 346,720 Accrued expenses 1,089,826 8,825 Transaction-related — 125,196 Total $ 2,993,013 $ 480,741 |
WARRANT LIABILITY (Tables)
WARRANT LIABILITY (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
WARRANT LIABILITY [Abstract] | |
Fair Value of Warrant Liability Assumptions | The fair value of the Company’s warrant liability was calculated using the Black-Scholes model and the following assumptions: As of September 30, 2021 Fair value of company's common stock $ 10.32 Dividend yield 0 % Expected volatility 80% - 145 % Risk Free interest rate 0.05% - 0.58 % Expected life (years) 2.07 Exercise price $ 8.00 - $28.00 Fair value of financial instruments - warrants $ 501,110 |
Change in Fair Value of Financial Instruments | The change in fair value of the financial instruments – warrants is as follows: Amount Balance at January 1, 2021 $ — Fair value of warrant liability assumed in connection with Helix Merger 1,247,715 Change in fair value of warrant liability (746,605 ) Balance at September 30 2021 $ 501,110 Amount Balance at July 1, 2021 $ 752,888 Change in fair value of warrant liability (251,778 ) Balance at September 30 2021 $ 501,110 |
CONVERTIBLE NOTES (Tables)
CONVERTIBLE NOTES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
CONVERTIBLE NOTES [Abstract] | |
Convertible Note Payable | September 30, 2021 December 31, 2020 Principal outstanding $ 24,000,000 $ — Add: accrued interest 70,000 — Less: unamortized debt issuance costs (20,886 ) — Convertible note payable, net of debt issuance costs $ 24,049,114 $ — |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
STOCK-BASED COMPENSATION [Abstract] | |
Information Regarding Equity Incentive Plan | The information regarding the 2020 Plan below is presented as though the combination occurred as of the beginning of the periods presented. Number of Restricted Shares and Units Weighted Average Grant Date Fair Value Per Share Unvested at January 1, 2020 1,237,396 $ 0.62 Issued 2,191,869 1.21 Vested 1,729,589 0.72 Canceled — — Unvested at December 31 2020 1,699,676 1.28 Issued 444,000 11.76 Vested 671,642 0.03 Canceled (50,000 ) 12.18 Unvested at September 30 2021 1,422,034 $ 3.35 |
Fair Value of Stock Option Assumptions | The assumptions at the inception date are as follows: September 30, 2021 Exercise Price $ 2.00 to $51.80 Fair value of Company common stock $ 9.39 to $22.90 Dividend yield 0 % Expected volatility 118.0 % Risk Free interest rate 0.9% to 1.0 % Expected life (years) remaining 0 to 9.93 |
Stock Option Activity | Stock option activity for the period ended September 30, 2021 is as follows: Shares Underlying Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Outstanding at January 1, 2021 — $ — — Options assumed in Helix Merger 455,089 $ 15.13 3.44 Granted 3,815,214 $ 12.85 9.53 Exercised (22,437 ) $ 4.57 1.92 Forfeited and expired (161,893 ) $ 11.74 9.16 Outstanding at September 30 2021 4,085,973 $ 14.25 8.84 Vested options at September 30 2021 455,089 $ 15.13 3.44 |
Stock Compensation Expense | Stock compensation expense for the three and nine months ended September 30, 2021 and 2020 is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Cost of revenue 14,823 — 19,479 — Research and development (131,774 ) 2,868 6,215 8,666 Sales and marketing 108,477 1,476 315,140 3,505 General and administrative 2,635,980 4,217 5,904,845 8,160 Total 2,627,506 8,561 6,245,679 20,331 |
NET LOSS PER SHARE (Tables)
NET LOSS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
NET LOSS PER SHARE [Abstract] | |
Computation of Basic and Diluted Net Loss Per Share | The following table sets forth the computation of the basic and diluted net loss per share: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2021 2020 2021 2020 Net loss attributable to common shareholders $ (6,876,472 ) $ (1,161,915 ) $ (18,502,315 ) $ (2,628,690 ) Net loss per share attributable to common shareholders: Basic $ (0.22 ) $ (0.08 ) $ (0.64 ) $ (0.22 ) Diluted $ (0.22 ) $ (0.08 ) $ (0.64 ) $ (0.22 ) Weighted average common shares outstanding: Basic 31,332,735 14,208,049 28,814,825 12,038,534 Diluted 31,332,735 14,208,049 28,814,825 12,038,534 |
Antidilutive Securities Excluded from Computation of Loss Per Share | The following table sets forth the outstanding potentially dilutive securities that have been excluded in the calculation of diluted net loss per share because their inclusion would be anti-dilutive: For the Three and Nine Months ended September 30, 2021 2020 Potentially dilutive securities: Warrants 124,087 — Stock options 4,085,973 — Convertible notes 2,411,018 — Unvested Restricted Stock Awards and Units 1,422,034 2,148,093 Total 8,043,112 2,148,093 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
Supplemental Cash Flow Information and Non-Cash Activity Related to Leases | Supplemental cash flow information and non-cash activity related to leases for the nine months ended September 30, 2021 and 2020 were as follows: Nine Months Ended September 30, 2021 2020 Cash used in operating leases $ 211,077 $ — ROU assets obtained in exchange for lease obligations $ 166,489 $ — |
ROU Lease Assets and Lease Liabilities | ROU lease assets and lease liabilities for the Company’s operating leases were recorded in the condensed consolidated balance sheet as follows: As of September 30, 2021 As of December 31, 2020 Right of use assets, net $ 916,195 $ — Short-term operating lease liabilities $ 245,771 $ — Long-term operating lease liabilities 675,254 — Total lease liabilities $ 921,025 $ — Weighted average remaining lease term (in years) 3.41 — Weighted average discount rate 8.5 % 0.0 % |
Components of Lease Expenses | The components of lease expense were as follows for each of the period presented: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Operating lease expense $ 81,936 $ — $ 191,182 $ — Short-term lease expense $ 19,393 $ 3,928 $ 62,916 $ 12,074 Total operating lease costs $ 101,329 $ 3,928 $ 254,098 $ 12,074 |
Future Lease Payments Included in Measurement of Lease Liabilities | Future lease payments included in the measurement of lease liabilities on the condensed consolidated balance sheet as of September 30, 2021, for the following five fiscal years and thereafter were as follows: As of September 30, 2021 2021 $ 69,901 2022 308,470 2023 286,670 2024 291,161 2025 85,726 Thereafter 14,288 Total future minimum lease payments $ 1,056,216 Less imputed interest (135,191 ) Total $ 921,025 |
Remaining Payment Obligations under these Licenses | The following table shows the remaining payment obligations under these licenses as of September 30, 2021: September 30, 2021 December 31, 2020 Unaudited Year ending December 31, 2021 $ 500,000 $ 533,488 Year ending December 31, 2022 772,188 272,188 Year ending December 31, 2023 1,000,000 — Year ending December 31, 2024 1,500,000 — Year ending December 31, 2025 1,600,000 — Thereafter 400,000 — $ 5,772,188 $ 805,676 |
SEGMENT RESULTS (Tables)
SEGMENT RESULTS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
SEGMENT RESULTS [Abstract] | |
Segment Reporting Information by Segment | The following represents selected information for the Company’s reportable segments: Three months ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Information and Software Revenue $ 4,489,177 $ 159,504 $ 9,661,826 $ 334,921 Costs and expenses 7,661,631 1,007,777 17,813,947 $ 2,177,550 Loss from operations (3,172,454 ) (848,273 ) (8,152,121 ) (1,842,629 ) Total other income/(expense) — — — — Net loss before income taxes (3,172,454 ) (848,273 ) (8,152,121 ) (1,842,629 ) Services Revenue $ 269,753 $ — $ 858,400 $ — Costs and expenses 369,507 — 755,627 — Loss from operations (99,754 ) — 102,773 — Total other income/(expense) — — — — Net loss before income taxes (99,754 ) — 102,773 — Other Revenue $ 202,825 $ — $ 610,123 $ — Costs and expenses 228,014 — 698,001 — Loss from operations (25,189 ) — (87,878 ) — Total other income/(expense) (275 ) — (607 ) — Net income before income taxes (25,464 ) — (88,485 ) — Centrally Managed Costs Revenue $ — $ — $ — $ — Costs and expenses 4,051,504 313,731 11,313,140 791,857 Loss from operations (4,051,504 ) (313,731 ) (11,313,140 ) (791,857 ) Total other income/(expense) 472,704 89 948,658 5,796 Net loss before income taxes (3,578,800 ) (313,642 ) (10,364,482 ) (786,061 ) Totals Revenue $ 4,961,755 $ 159,504 $ 11,130,349 $ 334,921 Costs and expenses 12,310,656 1,321,508 30,580,715 2,969,407 Loss from operations (7,348,901 ) (1,162,004 ) (19,450,366 ) (2,634,486 ) Total other income/(expense) 472,429 89 948,051 5,796 Net loss $ (6,876,472 ) $ (1,161,915 ) $ (18,502,315 ) $ (2,628,690 ) |
BUSINESS ORGANIZATION AND NAT_2
BUSINESS ORGANIZATION AND NATURE OF OPERATIONS (Details) | Mar. 02, 2021 | Sep. 30, 2021 |
Business Organization and Nature of Operations Description [Abstract] | ||
Exchange ratio | 1.7776 | |
Medical Outcomes Research Analytics, LLC [Member] | ||
Business Organization and Nature of Operations Description [Abstract] | ||
Exchange ratio | 1.7776 | |
Helix Technologies, Inc [Member] | ||
Business Organization and Nature of Operations Description [Abstract] | ||
Exchange ratio | 0.05 | 0.05 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Principles of Consolidation (Details) | Sep. 30, 2021 |
Engeni S.A. [Member] | |
Principles of Consolidation [Abstract] | |
Percentage of owned subsidiaries | 99.00% |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Foreign Currency (Details) - USD ($) | 3 Months Ended | 7 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | |
Foreign Currency [Abstract] | |||||
Net sales | $ 4,961,755 | $ 159,504 | $ 11,130,349 | $ 334,921 | |
Engeni S.A. [Member] | Revenue Benchmark [Member] | Geographic Concentration Risk [Member] | |||||
Foreign Currency [Abstract] | |||||
Percentage of consolidated net sales | 2.00% | 1.00% | |||
Net sales | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Reclassifications and Corrections (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Reclassifications and Corrections [Abstract] | ||||
Foreign currency gain | $ 298,170 | $ 0 | $ 298,170 | $ 0 |
Other comprehensive income (loss) | (145,250) | $ 0 | 0 | $ 0 |
Previously Reported [Member] | ||||
Reclassifications and Corrections [Abstract] | ||||
Other comprehensive income (loss) | $ (145,250) | $ (145,250) |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Cash and Cash Equivalents and Credit Risk (Details) | Sep. 30, 2021USD ($) |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Cash, FDIC insured amount | $ 250,000 |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Accounts Receivable and Allowance for Doubtful Accounts (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Accounts Receivable and Allowance for Doubtful Accounts [Abstract] | ||
Allowance for doubtful accounts | $ 256,767 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Goodwill (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Goodwill [Abstract] | ||
Impairment losses | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Revenue Recognition (Details) | 9 Months Ended | |
Sep. 30, 2021USD ($)Offering | Dec. 31, 2020USD ($) | |
Revenue Recognition [Abstract] | ||
Number of revenue generating offerings | Offering | 3 | |
Excess amount of royalties | $ 62,500 | |
Payment term after billed date | 30 days | |
Capitalized contract costs | $ 45,714 | $ 53,784 |
Contract assets [Abstract] | ||
Beginning balance | 196,701 | |
Acquired from Helix | (20,128) | |
Beginning deferred revenue balance recognized during the period | 0 | |
Net change due to timing of billings, payments and recognition | 167,779 | |
Ending balance | 364,480 | |
Helix Technologies, Inc [Member] | ||
Contract assets [Abstract] | ||
Acquired from Helix | 20,128 | |
Costs of Obtaining Contracts [Member] | ||
Contract assets [Abstract] | ||
Beginning balance | 53,784 | |
Acquired from Helix | 0 | |
Beginning deferred revenue balance recognized during the period | 0 | |
Net change due to timing of billings, payments and recognition | (8,070) | |
Ending balance | 45,714 | |
Costs of Obtaining Contracts [Member] | Helix Technologies, Inc [Member] | ||
Contract assets [Abstract] | ||
Acquired from Helix | 0 | |
Unbilled Revenue [Member] | ||
Contract assets [Abstract] | ||
Beginning balance | 142,917 | |
Acquired from Helix | (20,128) | |
Beginning deferred revenue balance recognized during the period | 0 | |
Net change due to timing of billings, payments and recognition | 175,849 | |
Ending balance | 318,766 | |
Unbilled Revenue [Member] | Helix Technologies, Inc [Member] | ||
Contract assets [Abstract] | ||
Acquired from Helix | 20,128 | |
Deferred Revenue [Member] | ||
Contract liabilities (Deferred Revenue) [Abstract] | ||
Beginning balance | 158,884 | |
Acquired from Helix | (305,340) | |
Beginning deferred revenue balance recognized during the period | (158,884) | |
Net change due to timing of billings, payments and recognition | 666,561 | |
Ending balance | 682,157 | |
Deferred Revenue [Member] | Helix Technologies, Inc [Member] | ||
Contract liabilities (Deferred Revenue) [Abstract] | ||
Acquired from Helix | $ 320,936 |
SUMMARY OF SIGNIFICANT ACCOU_11
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Customer Concentration (Details) - Revenue Benchmark [Member] - Customer Concentration Risk [Member] - Customer | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Customer Concentration [Abstract] | ||||
Number of major customers | 0 | 0 | ||
Customer One [Member] | ||||
Customer Concentration [Abstract] | ||||
Number of major customers | 1 | 1 | ||
Percentage of revenues generated from customer sales | 84.00% | 90.00% |
SUMMARY OF SIGNIFICANT ACCOU_12
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Property and Equipment, Net (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Property and Equipment, Net [Abstract] | ||||
Impairment losses | $ 0 | $ 0 | $ 0 | $ 0 |
Minimum [Member] | ||||
Property and Equipment, Net [Abstract] | ||||
Estimated useful lives | 1 year | |||
Maximum [Member] | ||||
Property and Equipment, Net [Abstract] | ||||
Estimated useful lives | 7 years |
SUMMARY OF SIGNIFICANT ACCOU_13
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Software Development Costs (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Software Development Costs [Abstract] | ||
Capitalized software development costs | $ 561,553 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOU_14
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Advertising (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Advertising [Abstract] | ||||
Advertising costs | $ 18,011 | $ 0 | $ 39,009 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOU_15
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Stock-Based Compensation (Details) | Sep. 30, 2021shares |
Stock-based Compensation [Abstract] | |
Number of shares authorized and reserved for issuance under 2020 Plan (in shares) | 4,000,000 |
SUMMARY OF SIGNIFICANT ACCOU_16
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Income Taxes (Details) | 22 Months Ended |
Mar. 02, 2021USD ($) | |
Income Taxes [Abstract] | |
Provision for federal or state income tax | $ 0 |
BUSINESS COMBINATION, Summary o
BUSINESS COMBINATION, Summary of Purchase Price Allocation (Details) | Mar. 02, 2021USD ($)$ / shares | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) |
Business Combination [Abstract] | ||||||
Stock exchange ratio | 1.7776 | |||||
Goodwill, measurement period | 1 year | |||||
Adjustment to goodwill | $ 424,460 | |||||
Liabilities assumed [Abstract] | ||||||
Goodwill | 9,125,372 | $ 9,125,372 | $ 0 | |||
Transaction costs incurred for business combination | 0 | $ 105,128 | $ 1,210,279 | $ 195,634 | ||
Trade Names and Trademarks [Member] | ||||||
Liabilities assumed [Abstract] | ||||||
Estimated useful life | 8 years | |||||
Customer Relationships [Member] | ||||||
Liabilities assumed [Abstract] | ||||||
Estimated useful life | 5 years | |||||
Helix Technologies, Inc [Member] | ||||||
Business Combination [Abstract] | ||||||
Percentage of voting interest acquired | 100.00% | |||||
Stock exchange ratio | 0.05 | 0.05 | ||||
Acquisition price (in dollars per share) | $ / shares | $ 2.158 | |||||
Purchase Price Allocations [Abstract] | ||||||
Total purchase price | $ 18,454,784 | |||||
Assets acquired [Abstract] | ||||||
Cash | 1,310,977 | |||||
Accounts receivable, net | 488,453 | |||||
Prepaid expenses | 215,064 | |||||
Contract assets | 20,128 | |||||
Other assets | 450,000 | |||||
Property and equipment | 146,559 | |||||
Right of use assets | 1,082,684 | |||||
Deposits and other assets | 58,950 | |||||
Total assets acquired | 14,680,815 | |||||
Liabilities assumed [Abstract] | ||||||
Accounts payable and accrued liabilities | 2,654,543 | |||||
Short-term lease liabilities | 295,364 | |||||
Deferred revenues | 320,936 | |||||
Warrant liability | 1,247,715 | |||||
Notes payable and financing arrangements | 20,801 | |||||
Other long-term liabilities | 812,044 | |||||
Total liabilities assumed | 5,351,403 | |||||
Estimated fair value of net assets acquired | 9,329,412 | |||||
Goodwill | 9,125,372 | |||||
Weighted average useful life | 5 years 5 months 19 days | |||||
Transaction costs incurred for business combination | $ 0 | $ 1,210,279 | ||||
Helix Technologies, Inc [Member] | Software Technology [Member] | ||||||
Assets acquired [Abstract] | ||||||
Intangibles | 5,279,000 | |||||
Helix Technologies, Inc [Member] | Software Technology [Member] | Minimum [Member] | ||||||
Liabilities assumed [Abstract] | ||||||
Estimated useful life | 2 years | |||||
Helix Technologies, Inc [Member] | Software Technology [Member] | Maximum [Member] | ||||||
Liabilities assumed [Abstract] | ||||||
Estimated useful life | 7 years | |||||
Helix Technologies, Inc [Member] | Trade Names and Trademarks [Member] | ||||||
Assets acquired [Abstract] | ||||||
Intangibles | 386,000 | |||||
Liabilities assumed [Abstract] | ||||||
Estimated useful life | 8 years | |||||
Helix Technologies, Inc [Member] | Customer Relationships [Member] | ||||||
Assets acquired [Abstract] | ||||||
Intangibles | $ 5,243,000 | |||||
Liabilities assumed [Abstract] | ||||||
Estimated useful life | 5 years |
BUSINESS COMBINATION, Unaudited
BUSINESS COMBINATION, Unaudited Pro Forma Results (Details) - Helix Technologies, Inc [Member] - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Pro Forma Financial Information [Abstract] | ||||
Revenues | $ 4,961,755 | $ 3,062,557 | $ 13,139,257 | $ 9,135,273 |
Net loss | $ (6,876,472) | $ (42,488,120) | $ (21,265,019) | $ (46,647,993) |
Net loss per share [Abstract] | ||||
Basic as pro forma (in dollars per share) | $ (0.22) | $ (1.48) | $ (0.69) | $ (1.75) |
Diluted as pro forma (in dollars per share) | $ (0.22) | $ (1.48) | $ (0.69) | $ (1.75) |
PREPAID EXPENSES (Details)
PREPAID EXPENSES (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Prepaid Expense [Abstract] | ||
Other prepaid expenses | $ 912,879 | $ 120,979 |
Minimum [Member] | ||
Prepaid Expense [Abstract] | ||
Prepaid expense related to software licenses and insurance policies period | 3 months | |
Maximum [Member] | ||
Prepaid Expense [Abstract] | ||
Prepaid expense related to software licenses and insurance policies period | 1 year |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Property, Plant and Equipment, Net, by Type [Abstract] | |||||
Property and equipment | $ 834,474 | $ 834,474 | $ 55,767 | ||
Less: Accumulated depreciation and amortization | (71,816) | (71,816) | (9,409) | ||
Property and equipment, net | 762,658 | 762,658 | 46,358 | ||
Depreciation [Abstract] | |||||
Depreciation and amortization expense | 30,909 | $ 3,059 | 69,895 | $ 4,932 | |
Personal Computing Equipment [Member] | |||||
Property, Plant and Equipment, Net, by Type [Abstract] | |||||
Property and equipment | 129,702 | 129,702 | 55,767 | ||
Furniture and Equipment [Member] | |||||
Property, Plant and Equipment, Net, by Type [Abstract] | |||||
Property and equipment | 117,343 | 117,343 | 0 | ||
Software Development Costs [Member] | |||||
Property, Plant and Equipment, Net, by Type [Abstract] | |||||
Property and equipment | 561,553 | 561,553 | 0 | ||
Vehicles [Member] | |||||
Property, Plant and Equipment, Net, by Type [Abstract] | |||||
Property and equipment | $ 25,876 | $ 25,876 | $ 0 |
INTANGIBLE ASSETS, NET, Summary
INTANGIBLE ASSETS, NET, Summary (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Intangible Assets [Abstract] | ||||
Measurement period from acquisition date to complete allocations | 1 year | |||
Gross carrying amount | $ 10,908,000 | $ 10,908,000 | ||
Accumulated amortization | (1,311,298) | (1,311,298) | ||
Net book value | 9,596,702 | 9,596,702 | ||
Amortization expense for intangible assets | 567,212 | $ 0 | $ 1,311,298 | $ 0 |
Customer Relationships [Member] | ||||
Intangible Assets [Abstract] | ||||
Estimated useful life | 5 years | |||
Gross carrying amount | 5,243,000 | $ 5,243,000 | ||
Accumulated amortization | (606,046) | (606,046) | ||
Net book value | 4,636,954 | $ 4,636,954 | ||
Software Technology [Member] | ||||
Intangible Assets [Abstract] | ||||
Estimated useful life | 2 years | |||
Gross carrying amount | 1,170,000 | $ 1,170,000 | ||
Accumulated amortization | (338,105) | (338,105) | ||
Net book value | 831,895 | $ 831,895 | ||
Software Technology [Member] | ||||
Intangible Assets [Abstract] | ||||
Estimated useful life | 7 years | |||
Gross carrying amount | 4,109,000 | $ 4,109,000 | ||
Accumulated amortization | (339,261) | (339,261) | ||
Net book value | 3,769,739 | $ 3,769,739 | ||
Tradenames and Trademarks [Member] | ||||
Intangible Assets [Abstract] | ||||
Estimated useful life | 8 years | |||
Gross carrying amount | 386,000 | $ 386,000 | ||
Accumulated amortization | (27,886) | (27,886) | ||
Net book value | $ 358,114 | $ 358,114 |
INTANGIBLE ASSETS, NET, Estimat
INTANGIBLE ASSETS, NET, Estimated Future Amortization Expense (Details) | Sep. 30, 2021USD ($) |
Estimated Future Amortization Expense [Abstract] | |
2021 remaining | $ 567,213 |
2022 | 2,268,850 |
2023 | 1,784,495 |
2024 | 1,683,850 |
2025 | 1,683,850 |
Thereafter | 1,608,444 |
Net book value | $ 9,596,702 |
ACCRUED EXPENSES (Details)
ACCRUED EXPENSES (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
ACCRUED EXPENSES [Abstract] | ||
Employee compensation | $ 1,903,187 | $ 346,720 |
Accrued expenses | 1,089,826 | 8,825 |
Transaction-related | 0 | 125,196 |
Total accrued expenses | $ 2,993,013 | $ 480,741 |
WARRANT LIABILITY (Details)
WARRANT LIABILITY (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | |
WARRANT LIABILITY [Abstract] | |||
Number of warrants outstanding (in shares) | 97,058 | 97,058 | |
Fair Value of Warrant Liability Assumptions [Abstract] | |||
Fair value of financial instruments - warrants | $ 501,110 | $ 501,110 | |
Change in Fair Value of Financial Instruments [Abstract] | |||
Beginning Balance | 752,888 | 0 | |
Fair value of warrant liability assumed in connection with Helix Merger | 1,247,715 | ||
Change in fair value of warrant liability | (251,778) | (746,605) | $ 0 |
Ending Balance | $ 501,110 | $ 501,110 | |
Warrant Liability [Member] | |||
Fair Value of Warrant Liability Assumptions [Abstract] | |||
Fair value of company's common stock (in dollars per share) | $ 10.32 | $ 10.32 | |
Dividend yield | 0.00% | ||
Expected volatility, minimum | 80.00% | ||
Expected volatility, maximum | 145.00% | ||
Risk Free interest rate, minimum | 0.05% | ||
Risk Free interest rate, maximum | 0.58% | ||
Expected life (years) | 2 years 25 days | ||
Fair value of financial instruments - warrants | $ 501,110 | $ 501,110 | |
Change in Fair Value of Financial Instruments [Abstract] | |||
Ending Balance | $ 501,110 | $ 501,110 | |
Warrant Liability [Member] | Minimum [Member] | |||
Fair Value of Warrant Liability Assumptions [Abstract] | |||
Exercise price (in dollars per share) | $ 8 | $ 8 | |
Warrant Liability [Member] | Maximum [Member] | |||
Fair Value of Warrant Liability Assumptions [Abstract] | |||
Exercise price (in dollars per share) | $ 28 | $ 28 |
CONVERTIBLE NOTES (Details)
CONVERTIBLE NOTES (Details) - USD ($) | Sep. 01, 2021 | Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Mar. 31, 2021 | Dec. 31, 2020 |
Convertible Notes [Abstract] | ||||||
Convertible note payable, net of debt issuance costs | $ 24,049,114 | $ 24,049,114 | $ 0 | |||
Exercise price of warrants (in dollars per share) | $ 0.01 | |||||
Interest expense on convertible notes | 70,000 | $ 0 | ||||
Amortization of debt issuance costs | 444 | $ 0 | ||||
Convertible Notes [Member] | ||||||
Convertible Notes [Abstract] | ||||||
Principal outstanding | $ 24,000,000 | 24,000,000 | 24,000,000 | 0 | ||
Add: accrued interest | 70,000 | 70,000 | 0 | |||
Less: unamortized debt issuance costs | (20,886) | (20,886) | 0 | |||
Convertible note payable, net of debt issuance costs | 24,049,114 | 24,049,114 | $ 0 | |||
Percentage of issuance cost on principal amount | 100.00% | |||||
Interest percentage on convertible promissory note | 3.50% | |||||
Percentage of warrant to purchase common stock on principal amount | 20.00% | |||||
Exercise price of warrants (in dollars per share) | $ 11.98 | |||||
Minimum principal amount | $ 100,000 | |||||
Interest expense on convertible notes | 70,000 | 70,000 | ||||
Debt issuance costs | 21,330 | $ 21,330 | ||||
Amortization of debt issuance costs | $ 444 | |||||
Convertible Notes [Member] | Period One [Member] | ||||||
Convertible Notes [Abstract] | ||||||
Percentage of redemption price | 112.50% | |||||
Convertible Notes [Member] | Period Two [Member] | ||||||
Convertible Notes [Abstract] | ||||||
Percentage of redemption price | 108.00% |
STOCK-BASED COMPENSATION, Restr
STOCK-BASED COMPENSATION, Restricted Stock Awards and Restricted Stock Units (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021$ / sharesshares | Dec. 31, 2020$ / sharesshares | |
STOCK-BASED COMPENSATION [Abstract] | ||
Exchange ratio | 1.7776 | |
Restricted Stock Awards and Restricted Stock Units [Member] | ||
Number of Restricted Shares [Roll Forward] | ||
Outstanding at beginning of period (in shares) | 1,699,676 | 1,237,396 |
Issued (in shares) | 444,000 | 2,191,869 |
Vested (in shares) | 671,642 | 1,729,589 |
Canceled (in shares) | (50,000) | 0 |
Outstanding at end of period (in shares) | 1,422,034 | 1,699,676 |
Weighted Average Grant Date Fair Value Per Share [Abstract] | ||
Outstanding at beginning of period (in dollars per share) | $ / shares | $ 1.28 | $ 0.62 |
Issued (in dollars per share) | $ / shares | 11.76 | 1.21 |
Vested (in dollars per share) | $ / shares | 0.03 | 0.72 |
Cancelled (in dollars per share) | $ / shares | 12.18 | 0 |
Outstanding at end of period (in dollars per share) | $ / shares | $ 3.35 | $ 1.28 |
Restricted Stock Units [Member] | ||
Number of Restricted Shares [Roll Forward] | ||
Outstanding at end of period (in shares) | 444,000 | |
Restricted Stock Awards [Member] | ||
Number of Restricted Shares [Roll Forward] | ||
Outstanding at end of period (in shares) | 1,028,034 |
STOCK-BASED COMPENSATION, Stock
STOCK-BASED COMPENSATION, Stock Options (Details) - Stock Options [Member] - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Fair Value of Stock Option Assumptions [Abstract] | ||
Dividend yield | 0.00% | |
Expected volatility | 118.00% | |
Risk Free interest rate, minimum | 0.90% | |
Risk Free interest rate, maximum | 1.00% | |
Shares Underlying Options [Roll Forward] | ||
Outstanding at beginning of period (in shares) | 0 | |
Options assumed in Helix Merger (in shares) | 455,089 | |
Options granted (in shares) | 3,815,214 | |
Options exercised (in shares) | (22,437) | |
Options forfeited and expired (in shares) | (161,893) | |
Outstanding at end of period (in shares) | 4,085,973 | 0 |
Vested options outstanding (in shares) | 455,089 | |
Weighted Average Exercise Price [Abstract] | ||
Weighted average exercise price, options outstanding (in dollars per share) | $ 0 | |
Weighted average exercise price, options assumed in Helix Merger (in dollars per share) | 15.13 | |
Weighted average exercise price, options granted (in dollars per share) | 12.85 | |
Weighted average exercise price, options exercises (in dollars per share) | 4.57 | |
Weighted average exercise price, options forfeited and expired (in dollars per share) | 11.74 | |
Weighted average exercise price, options outstanding (in dollars per share) | 14.25 | $ 0 |
Weighted average exercise price, Vested options outstanding (in dollars per share) | $ 15.13 | |
Weighted Average Remaining Contractual Term (in years) [Abstract] | ||
Weighted average remaining contractual term, options outstanding | 8 years 10 months 2 days | 0 years |
Weighted average remaining contractual term, options assumed in Helix Merger | 3 years 5 months 8 days | |
Weighted average remaining contractual term, options granted | 9 years 6 months 10 days | |
Weighted average remaining contractual term, options exercised | 1 year 11 months 1 day | |
Weighted average remaining contractual term, options forfeited and expired | 9 years 1 month 28 days | |
Weighted average remaining contractual term, vested options outstanding | 3 years 5 months 8 days | |
Minimum [Member] | ||
Fair Value of Stock Option Assumptions [Abstract] | ||
Exercise price (in dollars per share) | $ 2 | |
Fair value of company common stock (in dollars per share) | $ 9.39 | |
Expected life (years) remaining | 0 years | |
Maximum [Member] | ||
Fair Value of Stock Option Assumptions [Abstract] | ||
Exercise price (in dollars per share) | $ 51.80 | |
Fair value of company common stock (in dollars per share) | $ 22.90 | |
Expected life (years) remaining | 9 years 11 months 4 days |
STOCK-BASED COMPENSATION, Sto_2
STOCK-BASED COMPENSATION, Stock Compensation Expense (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Stock Compensation Expense [Abstract] | ||||
Stock options granted date fair value (in dollars per share) | $ 11.94 | $ 0.02 | ||
Total unrecognized compensation | $ 42,992,330 | $ 42,992,330 | ||
Weighted-average period | 3 years 10 months 17 days | |||
Stock compensation expense | 2,627,506 | $ 8,561 | $ 6,245,679 | $ 20,331 |
Cost of Revenue [Member] | ||||
Stock Compensation Expense [Abstract] | ||||
Stock compensation expense | 14,823 | 0 | 19,479 | 0 |
Research and Development [Member] | ||||
Stock Compensation Expense [Abstract] | ||||
Stock compensation expense | (131,774) | 2,868 | 6,215 | 8,666 |
Sales and Marketing [Member] | ||||
Stock Compensation Expense [Abstract] | ||||
Stock compensation expense | 108,477 | 1,476 | 315,140 | 3,505 |
General and Administrative [Member] | ||||
Stock Compensation Expense [Abstract] | ||||
Stock compensation expense | $ 2,635,980 | $ 4,217 | $ 5,904,845 | $ 8,160 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) | Apr. 16, 2021USD ($)$ / sharesshares | Apr. 09, 2021$ / sharesshares | Mar. 31, 2020USD ($)shares | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($)shares | Mar. 31, 2021$ / sharesshares |
Stockholders' Equity [Abstract] | |||||||
Exchange ratio | 1.7776 | ||||||
Converted promissory notes | $ 0 | $ 184,300 | |||||
Warrant to purchase shares of common stock (in shares) | shares | 17,031 | ||||||
Warrant to purchase shares of common stock price per share (in dollars per share) | $ / shares | $ 0.01 | ||||||
Warrants termination period (in years) | 2 years | ||||||
Warrants issued in exchange for services | $ 389,976 | ||||||
Gross proceeds from sale of common stock | $ 11,968,652 | $ 11,968,652 | $ 0 | ||||
Net of transaction expenses | $ 31,348 | ||||||
Sale of common stock (in shares) | shares | 1,194,743 | ||||||
Purchase price (in dollars per share) | $ / shares | $ 10.21 | ||||||
Directors [Member] | |||||||
Stockholders' Equity [Abstract] | |||||||
Sale of common stock (in shares) | shares | 560,461 | ||||||
Purchase price (in dollars per share) | $ / shares | $ 11.33 | ||||||
Unaffiliated Investors [Member] | |||||||
Stockholders' Equity [Abstract] | |||||||
Sale of common stock (in shares) | shares | 631,282 | ||||||
Purchase price (in dollars per share) | $ / shares | $ 8.95 | ||||||
Discount rate to preceding day's volume weighted average price | 15.00% | ||||||
Series S-1 Preferred Units [Member] | |||||||
Stockholders' Equity [Abstract] | |||||||
Cash proceeds | $ 13,000,000 | ||||||
Units exchanged (in shares) | shares | 3,388,947 | ||||||
Series S Preferred Units [Member] | |||||||
Stockholders' Equity [Abstract] | |||||||
Cash proceeds | $ 3,300,000 | ||||||
Converted promissory notes | $ 184,300 | ||||||
Units exchanged (in shares) | shares | 3,078,276 |
NET LOSS PER SHARE (Details)
NET LOSS PER SHARE (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
NET LOSS PER SHARE [Abstract] | ||||
Net loss attributable to common shareholders | $ (6,876,472) | $ (1,161,915) | $ (18,502,315) | $ (2,628,690) |
Net Loss per Share Attributable to Common Shareholders [Abstract] | ||||
Basic (in dollars per share) | $ (0.22) | $ (0.08) | $ (0.64) | $ (0.22) |
Diluted (in dollars per share) | $ (0.22) | $ (0.08) | $ (0.64) | $ (0.22) |
Weighted Average Common Shares Outstanding [Abstract] | ||||
Basic (in shares) | 31,332,735 | 14,208,049 | 28,814,825 | 12,038,534 |
Diluted (in shares) | 31,332,735 | 14,208,049 | 28,814,825 | 12,038,534 |
Potentially Dilutive Securities [Abstract] | ||||
Antidilutive securities excluded from computation of loss per share (in shares) | 8,043,112 | 2,148,093 | 8,043,112 | 2,148,093 |
Warrants [Member] | ||||
Potentially Dilutive Securities [Abstract] | ||||
Antidilutive securities excluded from computation of loss per share (in shares) | 124,087 | 0 | 124,087 | 0 |
Stock Options [Member] | ||||
Potentially Dilutive Securities [Abstract] | ||||
Antidilutive securities excluded from computation of loss per share (in shares) | 4,085,973 | 0 | 4,085,973 | 0 |
Convertible Notes [Member] | ||||
Potentially Dilutive Securities [Abstract] | ||||
Antidilutive securities excluded from computation of loss per share (in shares) | 2,411,018 | 0 | 2,411,018 | 0 |
Unvested Restricted Stock Awards and Units [Member] | ||||
Potentially Dilutive Securities [Abstract] | ||||
Antidilutive securities excluded from computation of loss per share (in shares) | 1,422,034 | 2,148,093 | 1,422,034 | 2,148,093 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) | Apr. 16, 2021USD ($) | May 06, 2019Promissorynote | Mar. 31, 2020USD ($)shares | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 01, 2021USD ($) | Dec. 31, 2020USD ($) | May 05, 2019USD ($) |
Related Party Transactions [Abstract] | ||||||||||
Outstanding balance of the promissory notes | $ 15,250 | $ 15,250 | $ 0 | |||||||
Net proceeds from sale of common stock | $ 11,968,652 | 11,968,652 | $ 0 | |||||||
Notes held by directors | 6,000,000 | 6,000,000 | ||||||||
Convertible Promissory Notes [Member] | ||||||||||
Related Party Transactions [Abstract] | ||||||||||
Percentage of issuance cost on principal amount | 100.00% | |||||||||
Principal outstanding | 24,000,000 | 24,000,000 | $ 24,000,000 | $ 0 | ||||||
Interest percentage on convertible promissory note | 3.50% | |||||||||
Percentage of warrant to purchase common stock on principal amount | 20.00% | |||||||||
Notes held by directors | $ 6,000,000 | |||||||||
Common Stock [Member] | ||||||||||
Related Party Transactions [Abstract] | ||||||||||
Converted at the option of the holders (in shares) | shares | 295,501 | |||||||||
Medical Outcomes Research Analytics, LLC [Member] | ||||||||||
Related Party Transactions [Abstract] | ||||||||||
Number of promissory notes | Promissorynote | 2 | |||||||||
Medical Outcomes Research Analytics, LLC [Member] | Max Wygod [Member] | Promissory Notes [Member] | Maximum [Member] | ||||||||||
Related Party Transactions [Abstract] | ||||||||||
Secure amount promissory note to fund operations | $ 100,000 | |||||||||
Medical Outcomes Research Analytics, LLC [Member] | Martin Wygod [Member] | Promissory Notes [Member] | Maximum [Member] | ||||||||||
Related Party Transactions [Abstract] | ||||||||||
Secure amount promissory note to fund operations | $ 100,000 | |||||||||
Medical Outcomes Research Analytics, LLC [Member] | Adam Dublin [Member] | ||||||||||
Related Party Transactions [Abstract] | ||||||||||
Received payments | $ 107,125 | $ 66,040 | $ 303,274 | $ 310,315 | ||||||
Medical Outcomes Research Analytics, LLC [Member] | Series S Preferred Units [Member] | ||||||||||
Related Party Transactions [Abstract] | ||||||||||
Outstanding balance of the promissory notes | $ 184,300 |
COMMITMENTS AND CONTINGENCIES,
COMMITMENTS AND CONTINGENCIES, Operating Leases (Details) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)LeaseFacility | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) | |
Operating Leases [Abstract] | |||||
Number of office facilities | Facility | 2 | ||||
Number of short-term leases | Lease | 3 | ||||
ROU lease assets and lease liabilities [Abstract] | |||||
Cash used in operating leases | $ 211,077 | $ 0 | |||
ROU assets obtained in exchange for lease obligations | 166,489 | 0 | |||
Lease liabilities | $ 921,025 | $ 921,025 | $ 0 | ||
Weighted average remaining lease term (in years) | 3 years 4 months 28 days | 3 years 4 months 28 days | 0 years | ||
Weighted average discount rate | 8.50% | 8.50% | 0.00% | ||
Lease, Cost [Abstract] | |||||
Operating lease expense | $ 81,936 | $ 0 | $ 191,182 | 0 | |
Short-term lease expense | 19,393 | 3,928 | 62,916 | 12,074 | |
Total operating lease costs | 101,329 | $ 3,928 | 254,098 | $ 12,074 | |
Future Lease Payments [Abstract] | |||||
2021 remaining | 69,901 | 69,901 | |||
2022 | 308,470 | 308,470 | |||
2023 | 286,670 | 286,670 | |||
2024 | 291,161 | 291,161 | |||
2025 | 85,726 | 85,726 | |||
Thereafter | 14,288 | 14,288 | |||
Total future minimum lease payments | 1,056,216 | 1,056,216 | |||
Less imputed interest | (135,191) | (135,191) | |||
Total | 921,025 | 921,025 | $ 0 | ||
Right of Use Assets, Net [Member] | |||||
ROU lease assets and lease liabilities [Abstract] | |||||
Lease liabilities | 916,195 | 916,195 | 0 | ||
Future Lease Payments [Abstract] | |||||
Total | 916,195 | 916,195 | 0 | ||
Short-Term Operating Lease Liabilities [Member] | |||||
ROU lease assets and lease liabilities [Abstract] | |||||
Lease liabilities | 245,771 | 245,771 | 0 | ||
Future Lease Payments [Abstract] | |||||
Total | 245,771 | 245,771 | 0 | ||
Long-Term Operating Lease Liabilities [Member] | |||||
ROU lease assets and lease liabilities [Abstract] | |||||
Lease liabilities | 675,254 | 675,254 | 0 | ||
Future Lease Payments [Abstract] | |||||
Total | $ 675,254 | $ 675,254 | $ 0 | ||
Minimum [Member] | |||||
Operating Leases [Abstract] | |||||
Operating lease term | 1 year | 1 year | |||
Maximum [Member] | |||||
Operating Leases [Abstract] | |||||
Operating lease term | 5 years | 5 years |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES, Service Agreements and Legal Proceedings (Details) | 9 Months Ended | |||||
Sep. 30, 2021USD ($) | Oct. 25, 2021Complaint | Feb. 16, 2021Lawsuit | Dec. 31, 2020USD ($) | Feb. 14, 2020 | Jul. 20, 2017Employee | |
Remaining payment obligations [Abstract] | ||||||
Year ending December 31, 2021 | $ 500,000 | $ 533,488 | ||||
Year ending December 31, 2022 | 772,188 | 272,188 | ||||
Year ending December 31, 2023 | 1,000,000 | 0 | ||||
Year ending December 31, 2024 | 1,500,000 | 0 | ||||
Year ending December 31, 2025 | 1,600,000 | 0 | ||||
Thereafter | 400,000 | 0 | ||||
Total payment obligations | $ 5,772,188 | $ 805,676 | ||||
Helix Stockholder Lawsuits [Abstract] | ||||||
Number of lawsuits | Lawsuit | 4 | |||||
Subsequent Event [Member] | ||||||
Helix Stockholder Lawsuits [Abstract] | ||||||
Number of complaints dismissed | Complaint | 4 | |||||
Kenney, et al. v. Helix TCS, Inc. [Member] | ||||||
Loss Contingency [Abstract] | ||||||
Number of former employees to file lawsuit | Employee | 1 | |||||
Audet v. Green Tree International, et. al. [Member] | ||||||
Loss Contingency [Abstract] | ||||||
Ownership percentage | 10.00% | |||||
Number of weeks for case trial docket | 2 months |
SEGMENT RESULTS (Details)
SEGMENT RESULTS (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)Segment | Sep. 30, 2020USD ($) | |
SEGMENT RESULTS [Abstract] | ||||
Number of operating segments | Segment | 3 | |||
Selected Information for Reportable Segments [Abstract] | ||||
Revenue | $ 4,961,755 | $ 159,504 | $ 11,130,349 | $ 334,921 |
Costs and expenses | 12,310,656 | 1,321,508 | 30,580,715 | 2,969,407 |
Loss From Operations | (7,348,901) | (1,162,004) | (19,450,366) | (2,634,486) |
Total other income/(expense) | 472,429 | 89 | 948,051 | 5,796 |
Net loss before income taxes | (6,876,472) | (1,161,915) | (18,502,315) | (2,628,690) |
Net Loss | (6,876,472) | (1,161,915) | (18,502,315) | (2,628,690) |
Reportable Segments [Member] | Information and Software [Member] | ||||
Selected Information for Reportable Segments [Abstract] | ||||
Revenue | 4,489,177 | 159,504 | 9,661,826 | 334,921 |
Costs and expenses | 7,661,631 | 1,007,777 | 17,813,947 | 2,177,550 |
Loss From Operations | (3,172,454) | (848,273) | (8,152,121) | (1,842,629) |
Total other income/(expense) | 0 | 0 | 0 | 0 |
Net loss before income taxes | (3,172,454) | (848,273) | (8,152,121) | (1,842,629) |
Reportable Segments [Member] | Services [Member] | ||||
Selected Information for Reportable Segments [Abstract] | ||||
Revenue | 269,753 | 0 | 858,400 | 0 |
Costs and expenses | 369,507 | 0 | 755,627 | 0 |
Loss From Operations | (99,754) | 0 | 102,773 | 0 |
Total other income/(expense) | 0 | 0 | 0 | 0 |
Net loss before income taxes | (99,754) | 0 | 102,773 | 0 |
Reportable Segments [Member] | Other [Member] | ||||
Selected Information for Reportable Segments [Abstract] | ||||
Revenue | 202,825 | 0 | 610,123 | 0 |
Costs and expenses | 228,014 | 0 | 698,001 | 0 |
Loss From Operations | (25,189) | 0 | (87,878) | 0 |
Total other income/(expense) | (275) | 0 | (607) | 0 |
Net loss before income taxes | (25,464) | 0 | (88,485) | 0 |
Centrally Managed Costs [Member] | ||||
Selected Information for Reportable Segments [Abstract] | ||||
Revenue | 0 | 0 | 0 | 0 |
Costs and expenses | 4,051,504 | 313,731 | 11,313,140 | 791,857 |
Loss From Operations | (4,051,504) | (313,731) | (11,313,140) | (791,857) |
Total other income/(expense) | 472,704 | 89 | 948,658 | 5,796 |
Net loss before income taxes | $ (3,578,800) | $ (313,642) | $ (10,364,482) | $ (786,061) |
Revenue [Member] | Geographic Concentration Risk [Member] | United States [Member] | ||||
Customer Concentration [Abstract] | ||||
Percentage of revenues generated from customer sales | 97.00% | 97.00% |