Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2023 | May 10, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
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, $0.001 par value per share | |
Trading Symbol | FORA | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 32,583,971 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 839,715 | $ 2,795,743 |
Marketable securities | 39,164,720 | 17,396,487 |
Accounts receivable, net | 3,795,284 | 1,809,028 |
Proceeds receivable from sale of discontinued operations, net | 8,811,708 | 0 |
Contract assets | 1,840,714 | 2,252,958 |
Prepaid expenses | 425,986 | 835,786 |
Other assets | 435,736 | 432,338 |
Current assets of discontinued operations | 0 | 1,393,688 |
Total current assets | 55,313,863 | 26,916,028 |
Property and equipment, net | 112,093 | 75,030 |
Right of use assets, net | 27,346 | 32,560 |
Deposits and other assets | 181,436 | 196,675 |
Non-current assets of discontinued operations | 0 | 19,037,874 |
Total assets | 55,634,738 | 46,258,167 |
Current liabilities: | ||
Accounts payable | 350,784 | 316,105 |
Accrued expenses | 6,423,536 | 3,766,789 |
Short-term operating lease liabilities | 21,952 | 21,600 |
Warrant liability | 10,106 | 4,547 |
Deferred revenues | 3,100,682 | 2,581,287 |
Current liabilities of discontinued operations | 0 | 1,662,247 |
Total current liabilities | 9,907,060 | 8,352,575 |
Long-term liabilities: | ||
Long-term operating lease liabilities | 5,394 | 10,960 |
Convertible notes payable, net of debt issuance costs (Note 10) ($6,000,000 in principal is held by a related party. Refer to Note 14) | 25,315,003 | 25,106,547 |
Non-current liabilities of discontinued operations | 0 | 365,609 |
Total long-term liabilities | 25,320,397 | 25,483,116 |
Total liabilities | 35,227,457 | 33,835,691 |
Commitments and contingencies (Note 17) | ||
Stockholders' equity: | ||
Preferred Stock; par value $0.001; 5,000,000 Shares authorized; 0 issued and outstanding as of March 31, 2023 and December 31, 2022 | 0 | 0 |
Common Stock; par value $0.001; 95,000,000 Shares authorized; 32,418,842 issued and outstanding as of March 31, 2023 and 32,251,326 issued and outstanding as of December 31, 2022 | 32,419 | 32,251 |
Additional paid-in capital | 72,668,484 | 71,182,326 |
Accumulated deficit | (52,293,622) | (58,792,101) |
Total stockholders' equity | 20,407,281 | 12,422,476 |
Total liabilities and stockholders' equity | $ 55,634,738 | $ 46,258,167 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Long-term liabilities: | ||
Net of debt issuance costs | $ 6,000,000 | $ 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) | 32,418,842 | 32,251,326 |
Common Stock, shares outstanding (in shares) | 32,418,842 | 32,251,326 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract] | ||
Revenue | $ 4,870,387 | $ 3,534,861 |
Costs and Expenses: | ||
Cost of revenues | 1,252,215 | 1,243,030 |
Research and development | 531,689 | 1,089,879 |
Sales and marketing | 1,196,192 | 820,594 |
General and administrative | 3,639,826 | 5,273,968 |
Separation expenses | 599,832 | 5,417,043 |
Depreciation and amortization | 38,430 | 15,349 |
Total costs and expenses | 7,258,184 | 13,859,863 |
Loss From Continuing Operations | (2,387,797) | (10,325,002) |
Other Income (Expense): | ||
Change in fair value of warrant liability | (5,559) | 219,840 |
Interest and investment income | 382,922 | 3,795 |
Interest expense | (208,456) | (211,333) |
Total other income, net | 168,907 | 12,302 |
Loss from continuing operations before income taxes | (2,218,890) | (10,312,700) |
Income tax expense | (29,909) | (5,000) |
Loss from continuing operations, net of tax | (2,248,799) | (10,317,700) |
Loss from discontinued operations | (94,427) | (1,738,547) |
Gain on sale of discontinued operations | 11,531,849 | 202,159 |
Income tax effect on discontinued operations | (2,690,144) | 0 |
Income (loss) from discontinued operations, net of tax | 8,747,278 | (1,536,388) |
Net Income (Loss) | $ 6,498,479 | $ (11,854,088) |
Net income (loss) per share: | ||
Basic net income (loss) per share, continuing operations (in dollars per share) | $ (0.08) | $ (0.32) |
Diluted net income (loss) per share, continuing operations (in dollars per share) | (0.08) | (0.32) |
Basic net income (loss) per share, discontinuing operations (in dollars per share) | 0.27 | (0.05) |
Diluted net income (loss) per share, discontinuing operations (in dollars per share) | 0.27 | (0.05) |
Basic net income (loss) per share (in dollars per share) | 0.19 | (0.37) |
Diluted net income (loss) per share (in dollars per share) | $ 0.19 | $ (0.37) |
Weighted-average shares outstanding, basic (in shares) | 32,300,237 | 31,857,685 |
Weighted-average shares outstanding, diluted (in shares) | 32,300,237 | 31,857,685 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid In Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2021 | $ 0 | $ 31,773 | $ 57,959,622 | $ (32,820,130) | $ 25,171,265 |
Balance (in shares) at Dec. 31, 2021 | 0 | 31,773,154 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Vesting of Restricted Stock and Stock Awards, net of shares surrendered for taxes | $ 0 | $ 156 | 1,900 | 0 | 2,056 |
Vesting of Restricted Stock and Stock Awards, net of shares surrendered for taxes (in shares) | 0 | 155,547 | |||
Stock based compensation expense | $ 0 | $ 0 | 7,902,528 | 0 | 7,902,528 |
Stock based compensation expense (in shares) | 0 | 0 | |||
Net income (loss) | $ 0 | $ 0 | 0 | (11,854,088) | (11,854,088) |
Balance at Mar. 31, 2022 | $ 0 | $ 31,929 | 65,864,050 | (44,674,218) | 21,221,761 |
Balance (in shares) at Mar. 31, 2022 | 0 | 31,928,701 | |||
Balance at Dec. 31, 2022 | $ 0 | $ 32,251 | 71,182,326 | (58,792,101) | 12,422,476 |
Balance (in shares) at Dec. 31, 2022 | 0 | 32,251,326 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Vesting of Restricted Stock and Stock Awards, net of shares surrendered for taxes | $ 0 | $ 167 | (94,766) | 0 | (94,599) |
Vesting of Restricted Stock and Stock Awards, net of shares surrendered for taxes (in shares) | 0 | 166,615 | |||
Issuance of Forian common stock upon exercise of stock options | $ 0 | $ 1 | (1) | 0 | 0 |
Issuance of Forian common stock upon exercise of stock options (in shares) | 0 | 901 | |||
Stock based compensation expense | $ 0 | $ 0 | 1,580,925 | 0 | 1,580,925 |
Stock based compensation expense (in shares) | 0 | 0 | |||
Net income (loss) | $ 0 | $ 0 | 0 | 6,498,479 | 6,498,479 |
Balance at Mar. 31, 2023 | $ 0 | $ 32,419 | $ 72,668,484 | $ (52,293,622) | $ 20,407,281 |
Balance (in shares) at Mar. 31, 2023 | 0 | 32,418,842 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income (loss) | $ 6,498,479 | $ (11,854,088) |
Less: Income (loss) from discontinued operations | 8,747,278 | (1,536,388) |
Loss from continuing operations | (2,248,799) | (10,317,700) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 38,430 | 15,349 |
Amortization on right of use asset | 5,214 | 398 |
Amortization of debt issuance costs | 1,333 | 1,333 |
Amortization of discount - proceeds from sale of discontinued operations | (55,041) | 0 |
Accrued interest on convertible notes | 208,456 | 210,000 |
Realized and unrealized gain on marketable securities | (320,530) | (3,399) |
Provision for doubtful accounts | 0 | 22,210 |
Stock-based compensation expense | 1,828,233 | 7,613,978 |
Change in fair value of warrant liability | 5,559 | (219,840) |
Change in operating assets and liabilities: | ||
Accounts receivable | (1,986,256) | (1,864,910) |
Contract assets | 412,244 | (630,922) |
Prepaid expenses | 409,800 | 6,435 |
Changes in lease liabilities during the year | (5,214) | (398) |
Deposits and other assets | 11,841 | 523,814 |
Accounts payable | 33,346 | 619,192 |
Accrued expenses | (59,788) | (227,294) |
Deferred revenues | 519,395 | 1,852,302 |
Net cash used in operating activities - continuing operations | (1,201,777) | (2,399,452) |
Net cash used in operating activities - discontinued operations | (26,649) | (1,426,426) |
Net cash used in operating activities | (1,228,426) | (3,825,878) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Additions to property and equipment | (75,493) | (74,527) |
Purchase of marketable securities | (39,704,579) | (12,390,670) |
Net cash from sale of discontinued operations | 20,890,193 | 225,575 |
Sale of marketable securities | 18,256,876 | 12,400,000 |
Net cash provided by (used in) used in investing activities - continuing operations | (633,003) | 160,378 |
Net cash provided by (used in) investing activities - discontinued operations | 0 | (827,893) |
Net cash used in investing activities | (633,003) | (667,515) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payments on notes payable and financing arrangements | 0 | (13,122) |
Payment of employee withholding tax related to restricted stock units | (94,599) | 0 |
Net cash used in financing activities - continuing operations | (94,599) | (13,122) |
Net cash used in financing activities | (94,599) | (13,122) |
Net change in cash | (1,956,028) | (4,506,515) |
Cash and cash equivalents, beginning of period | 2,795,743 | 17,938,490 |
Cash and cash equivalents, end of period | 839,715 | 13,431,975 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 0 | 0 |
Cash paid for taxes | $ 0 | $ 0 |
BUSINESS ORGANIZATION AND NATUR
BUSINESS ORGANIZATION AND NATURE OF OPERATIONS | 3 Months Ended |
Mar. 31, 2023 | |
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 with Helix Technologies Inc. (“Helix”). Forian provides a unique suite of data management capabilities and proprietary information and analytics solutions to optimize and measure operational, clinical and financial performance for customers within the healthcare and related industries. The business combination with Helix was accounted for as a reverse acquisition using the acquisition method of accounting in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations (“ASC 805”), with the Company deemed the accounting acquirer for financial reporting purposes. Helix provides software and analytics solutions to state governments and licensed operators in the cannabis industry, primarily through its subsidiary, Bio-Tech Medical Software, Inc. (“BioTrack”), until its sale of BioTrack in 2023. On February 10, 2023, Helix completed the sale of 100% of the outstanding capital stock of BioTrack, on March 3, 2022 Helix completed the sale of the assets of its security monitoring business, and on October 31, 2022 Helix completed the sale of 100% of the outstanding membership interest of its Engeni LLC subsidiary (these businesses together are referred to as the “Helix Businesses”). As a result of these transactions, Helix has no remaining active operations and the Company no longer provides products or services to the cannabis industry. The results of the Helix Businesses are presented as discontinued operations in the Condensed Consolidated Statements of Operations and, as such, have been excluded from continuing operations. Further, the Company reclassified the assets and liabilities of the Helix Businesses to discontinued operations in the Consolidated Balance Sheet as of December 31, 2022. The Company will continue to provide analytics solutions to customers within the healthcare and related industries. For further discussion on the discontinued operations, refer to Note 4. |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2023 | |
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 condensed consolidated financial statements of the Company as of March 31, 2023. 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, 2022, as filed with the Securities and Exchange Commission (“SEC”) on March 30, 2023. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2023 | |
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 (ii) Helix Technologies, Inc. and its wholly owned subsidiaries including Helix TCS, LLC (through December 31, 2022), Security Consultants Group, LLC (through December 31, 2022), Helix Legacy, Inc. (f/k/a Security Grade Protective Services, Ltd.), Bio-Tech Medical Software, Inc (through February 10, 2023), Engeni, LLC (including Engeni S.A. (“Engeni SA”), which is 99% owned by Engeni, LLC) (through October 31, 2022). Effective October 31, 2022, 100% of the outstanding membership interest of Engeni, LLC held by Helix was sold. Effective December 31, 2022, (i) Security Consultants Group, LLC was merged with and into Helix TCS, LLC and (ii) Helix TCS, LLC was merged with and into Helix Legacy, Inc. On February 10, 2023, 100% of the capital stock of Bio-Tech Medical Software, Inc. was sold. All intercompany transactions have been eliminated in consolidation. Discontinued Operations On February 10, 2023, Helix completed the sale of 100% of the outstanding capital stock of its wholly owned subsidiary, BioTrack. On March 3, 2022, the Company sold certain assets, consisting of customer contracts, accounts receivable and other property related to its security monitoring services. On October 31, 2022, the Company sold 100% of its outstanding membership interest of Engeni, LLC for a note with payments of up to $100,000 if certain conditions are met. As the sale of BioTrack, the security monitoring business and Engeni, LLC, together, represented a strategic shift that will have a major effect on the Company’s operations and financial results, they have been presented in discontinued operations separate from continuing operations for the three months ended March 31, 2023 and 2022, as applicable. The results from operations and gain (loss) on sale of the security monitoring business and Engeni LLC, net, was previously classified as part of continuing operations as their disposition individually did not have a major impact on the business prior to the sale of BioTrack. For further discussion, refer to Note 4. 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. The significant areas of estimation include but are not limited to accounting for the allowance for doubtful accounts, income taxes, depreciation, amortization of intangible assets, contingencies, discontinued operations and stock-based compensation. Certain of the Company’s estimates could be affected by external conditions, including those unique to the Company and general economic conditions. It is possible that the external factors could have an effect on the Company’s estimates and could cause actual results to differ from those estimates. Reclassifications Certain reclassifications have been made to the prior period financial statements to conform to the current period financial statement presentation. Certain personnel, information licensing and data processing costs that were previously classified in research and development expenses when the Company’s healthcare information business was in its start-up stage were reclassified to cost of revenues and general and administrative expenses in the condensed consolidated statements of operations. 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”) 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. The estimated fair value of the Company’s warrant liabilities as of March 31, 2023 and December 31, 2022 was $10,106 and $149,394, respectively, based on Level 3 inputs. Refer to Note 10. 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 $0 and $78,422 at March 31, 2023 and December 31, 2022, respectively. Management charges account balances against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Proceeds from sale of discontinued operations, net Proceeds from sale of discontinued operations consists of eleven remaining monthly payments due through February 10, 2024 aggregating $9,166,667, less an unamortized discount of $354,959. 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. 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 consists of the excess of cost over the fair value of net assets acquired in business combinations. Goodwill is not amortized. Instead, it is tested annually for impairment, or more frequently if events occur or circumstances change that would more likely than not reduce its fair value below its carrying amount. All goodwill has been allocated to non-current assets of discontinued operations at December 31, 2022. Goodwill is evaluated for impairment annually or whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. 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. The Company has the option to first assess qualitative factors to determine whether events or circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount and to determine whether further action is needed. If, after assessing the totality of events or circumstances, the Company determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the quantitative impairment test is unnecessary. An impairment charge is recognized when the fair value of the Company’s goodwill is less than its carrying amount. No impairment losses have been recognized during the periods presented. 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 (or as) customers obtain control of promised goods or services, in an amount that reflects the consideration which is expected to be received in exchange for those goods or services. The Company recognizes revenue following the five-step model prescribed under ASC 606: (i) identify contract(s) with a customer; (ii) identify the performance obligation(s) in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligation(s) in the contract; and (v) recognize revenues when (or as) the Company satisfies a performance obligation. The Company applies the provisions of ASC 606 to an arrangement when a substantive contract exists and collectability is probable. The Company derives revenue primarily from license fees for the Company’s information products. Information products contracts are generally for a period of one month to five years. Information products’ customers may access data analytics products through the use of tools provided by the Company or by utilizing their own tools per the contract. Data products may consist of historical information as it exists at the time of delivery or information that will be updated over a period of time as agreed with the customer. In most cases, the provision of information products is considered a single performance obligation. In cases where the Company is not obligated to update information over the access period and control over the use of the products passes to the customer when delivered, revenue is recognized when the information products are made available to the customer. In cases where information updates are provided over the contract term, they are considered highly interrelated with the information product delivered upon contract inception and revenue is recognized ratably over the life of the contract. Customers are generally invoiced according to monthly, quarterly or annual amounts specified in the contract. Any amounts invoiced in excess of revenue recognized are recorded as deferred revenue. Revenue recognized in excess of amounts invoiced is recorded as a contract asset. In some cases, contracts provide for variable consideration that is contingent upon the occurrence of uncertain future events, which can either increase or decrease the transaction price, including sales of products by customers derived from data analytics products the Company provides. Variable consideration based on sales of products by customers is recognized in the period of sales, subject to minimum amounts specified in contracts. Variable consideration is estimated at the expected value or at the most likely amount depending on the type of consideration. Estimated amounts are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. The estimate of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of anticipated performance and all information (historical, current and forecasted) that is reasonably available to the Company and reevaluated each reporting period. The effect of revisions in recognized estimated variable consideration in excess of minimums are recorded beginning in the period in which the estimates are revised. Actual results could differ from periodic estimates. Significant judgments and estimates are sometimes necessary for the determination of whether performance obligations in a contract are distinct and whether they are delivered at a point in time or over time. Judgement is also necessary to assess revenue recognized under contingent revenue arrangements. Contract acquisition costs, which consist of sales commissions paid or payable, are considered incremental and recoverable costs of obtaining a contract with a customer. Sales commissions for initial and renewal contracts are deferred and then amortized on a straight-line basis over the contract term. During November 2020, the Company entered into a Master Services Agreement (the “November 2020 Agreement”) with a customer to provide information services described in certain statements of work under the November 2020 Agreement. As part of the November 2020 Agreement, the Company was granted shares of restricted stock representing approximately 23.4% of the outstanding common stock of the customer at the time of issuance, vesting in quarterly increments specified in the November 2020 Agreement through December 2023. Concurrently, the Company entered into a Stockholders Agreement specifying its voting and other rights as a stockholder. As a result, the Company determined that it does not exert influence over the customer. ASC 606-10-32-21 requires an entity to measure the fair value of noncash consideration at contract inception. The fair value of the restricted stock was determined to be $0 on the date of inception. The Company recorded revenue from the customer of $651,762 and $377,190 for the three months ended March 31, 2023 and 2022, respectively. The Company has outstanding accounts receivable of $1,134,941 and $469,786 at March 31, 2023 and December 31, 2022, respectively. Contract assets and deferred revenues consist of the following as of March 31, 2023: Contract Assets Contract Liability Costs of obtaining contracts Unbilled revenue Total Deferred Revenue Balance at January 1, 2022 $ 70,278 $ 986,613 $ 1,056,891 $ 637,563 Beginning deferred revenue balance recognized during the period — — — (637,562 ) Net change due to timing of billings, payments and recognition 87,738 1,108,329 1,196,067 2,581,286 Balance at December 31, 2022 158,016 2,094,942 2,252,958 2,581,287 Beginning deferred revenue balance recognized during the period — — — (1,667,028 ) Net change due to timing of billings, payments and recognition 7,373 (419,617 ) (412,244 ) 2,186,423 Balance at March 31 2023 $ 165,389 $ 1,675,325 $ 1,840,714 $ 3,100,682 Transaction price allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes unearned revenue and unbilled amounts that will be recognized as revenue in future periods. The majority of the Company’s noncurrent remaining performance obligations will be recognized over the next 36 months. The transaction price allocated to remaining performance obligations consisted of the following: March 31, 2023 December 31, 2022 Estimated next twelve months $ 16,677,597 $ 15,790,233 Thereafter 20,637,969 22,192,028 $ 37,315,566 $ 37,982,261 Segment Information FASB ASC 280, Segment Reporting Customer Concentration During the three months ended March 31, 2023, the Company had two customers representing 13.4% and 12.6% of revenue. During the three months ended March 31, 2022, the Company had four customers representing 14.5%, 14.4%, 11.7% and 10.7% of revenue. Concentration of Vendors The Company licenses certain information assets from third parties as a key input to certain Information and Software products, 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. Such indicators include, among others, the nature of the asset, the projected future economic benefit of the asset, historical and future cash flows and profitability measurements. An impairment loss would be recognized when the value of the undiscounted estimated future cash flows expected to result from the use of the asset and its eventual disposition is less than the carrying value. There were no impairment losses recognized during the three months ended March 31, 2023 and 2022. 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 Software –Costs of Software to be Sold, Leased or Marketed 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 $15,125 and $2,255 Net Income (Loss) per Share The calculation of earnings per share is based on the weighted average number of ordinary shares or ordinary stock equivalents outstanding during the applicable period. The dilutive effect of ordinary stock equivalents is excluded from basic earnings per share and is included in the calculation of diluted earnings per share, unless their impact is antidilutive to the “control number”, which is loss from continuing operations. Employee equity share options and similar equity instruments granted by the Company are treated as potential ordinary shares outstanding in computing diluted earnings per share. Diluted shares outstanding are calculated based on the average share price for each fiscal period using the treasury stock method. Under the treasury stock method, the amount the employee must pay for exercising stock options, the amount of compensation cost for future service that the Company has not yet recognized and the amount of benefits that would be recorded in ordinary shares when the award becomes deductible for tax purposes are assumed to be used to repurchase shares. 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 were originally authorized and reserved for issuance under the 2020 Plan. On June 15, 2022, the Company’s stockholders approved an amendment to the 2020 Plan, which amended the 2020 Plan to increase the number of shares available for issuance by 2,400,000 shares to a total of 6,400,000 shares. Stock options represent the right to purchase Company common stock at the exercise price on the date of grant of the stock option at a future date. Restricted stock awards are grants of shares of Company common stock. Restricted stock units represent the right to receive shares of Company common stock on future specified dates. Stock options, restricted stock awards and restricted stock units granted contain restrictions that cause them to be subject to substantial risk of forfeiture and restrict their exercise, sale or other transfer by the grantee until they vest. The terms of the stock options, restricted stock awards and units granted under the 2020 Plan are determined by the Board of Directors in the agreement evidencing the award, including the number of shares, period of restriction or vesting schedule and other terms. The fair value of the stock options, restricted stock awards and restricted stock units is based on the underlying grant date fair value of Company common stock. The fair value is then expensed over the requisite service periods of the awards, net of forfeitures, which is generally the service period and the related amount is recognized in the condensed consolidated statements of operations. Income Taxes The Company accounts for income taxes in accordance with FASB ASC 740 (“ASC 740”). Deferred income tax assets and liabilities are determined based upon differences between financial reporting and tax bases of assets and liabilities, which are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The provision for income taxes represents Federal and state and local income taxes. The effective rate differs from statutory rates due to the effect of state and local income taxes, tax benefit of R&D credits and certain nondeductible expenses. Our effective tax rate will change from quarter to quarter based on recurring and non-recurring factors including, but not limited to, the geographical mix of earnings, enacted tax legislation and state and local income taxes. In addition, changes in judgment from the evaluation of new information resulting in the recognition derecognition or re-measurement of a tax position taken in a prior annual period is recognized separately in the quarter of the change. For the three months ended March 31, 2023 and March 31, 2022, the Company recognized net income tax expense of $29,909 and $5,000, respectively. The Company claims R&D tax credits on eligible R&D expenditures. The R&D tax credits are recognized as a reduction to income tax expense. The Company recognized a taxable gain on sale of discontinued operations during the three months ended March 31, 2023, which resulted in utilization of certain available federal and state net operating loss carryforwards. As a result, the Company recorded income taxes related to discontinued operations of $2,690,144 after utilization of federal and state net operating losses during the three months ended March 31, 2023. The Company files a consolidated U.S. income tax return and tax returns in certain state and local jurisdictions. As of March 31, 2023, the Company is not subject to examination in any tax jurisdictions. 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. On August 16, 2022, the Inflation Reduction Act of 2022 (the “IRA”) was enacted and signed into law. Regarded as the reduced version of the proposed Build Back Better Act, the IRA contains two main corporate income tax provisions, including a 15% minimum tax on the average annual adjusted financial statement income of corporations with profits over $1 billion over a three-year period as well as a 1% excise tax on the corporate stock buybacks by domestic publicly traded corporations. The Company is currently evaluating the impact of the IRA on its financial statements for tax year 2023 but does not expect a material impact to the Company’s tax position. Separation Expenses Effective February 10, 2023, the Company’s Chief Executive Officer, President and Class II member of the Board of Directors resigned. In connection with the resignation, the Company entered into a separation agreement providing for, among other things (i) salary continuation for twelve months and (ii) accelerated vesting of 106,656 unvested restricted shares of Company common stock. Separation expenses for the three months ended March 31, 2023 include $250,000 related to the salary continuation and $349,832 related to the accelerated vesting of stock. On March 2, 2022, the Company and two advisors agreed not to renew special advisor agreements between the advisors and the Company. The advisors were the former chief executive officer and chief financial officer of Helix who were granted stock options in conjunction with their respective advisory agreements that were entered into upon the completion of the Helix acquisition. The Company and the advisors mutually agreed not to renew the advisory agreements. The services provided by these advisors included transition planning and consulting services related to integration of the business operations of Helix and Forian. Per the terms of the agreements, options to purchase 366,166 shares of common stock continued to vest according to their original terms through March 2, 2023, and unvested stock options to purchase 732,332 shares of common stock were forfeited. The advisors were not required to perform services to the Company beyond the non-renewal date of March 2, 2022. As a result, the Company recorded $5,417,043 of stock compensation expense during March 2022 related to the options that vested through March 2, 2023. In addition, the Company records normal course of business severance expenses in the operating expense line item related to the employee’s activities. Recent Accounting Pronouncements 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. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 3 Months Ended |
Mar. 31, 2023 | |
DISCONTINUED OPERATIONS [Abstract] | |
DISCONTINUED OPERATIONS | Note 4 DISCONTINUED OPERATIONS Helix Businesses Discontinued Operations On February 10, 2023, Helix completed the sale of 100% of the outstanding capital stock of its wholly owned subsidiary, BioTrack, in exchange for $30.0 million, consisting of $20.0 million paid at closing and $10.0 million paid in twelve unconditional monthly installments thereafter. In March 2022, Helix sold its security monitoring business and in October 2022, sold its Argentinian subsidiary Engeni LLC. The security monitoring business, BioTrack and Engeni are collectively referred to as the “Helix Businesses.” As a result of these transactions, as of February 10, 2023, the Company no longer provides products or services to the cannabis industry. The Company continues to provide analytics solutions to customers in the healthcare and related industries. The Company recognized a gain on sale of BioTrack of $11,531,849 and a loss from discontinued operations of $94,427 during the three months ended March 31, 2023, which is included as part of discontinued operations. The Company also recorded income taxes related to discontinued operations of $2,690,144 during the three months ended March 31, 2023. The Company recorded a gain on the sale of assets related to its security monitoring business of $202,159 during the three months ended March 31, 2022. The amount was reclassified to discontinued operations in 2023 as it was part of a strategic shift which became significant to the Company’s operations upon the sale of BioTrack. The following table summarizes the major classes of assets and liabilities of the Helix Businesses as reported on the consolidated balance sheets as of December 31, 2022: December 31, 2022 Carrying amounts of assets associated with Helix Businesses included as part of discontinued operations: Cash and cash equivalents $ 524,155 Accounts receivable, net 738,510 Prepaid expenses 131,023 Current assets of discontinued operations $ 1,393,688 Property and equipment, net 2,500,376 Intangible assets, net 6,775,841 Goodwill 9,099,372 Right of use assets, net 603,636 Deposits and other assets 58,649 Non-current assets of discontinued operations $ 19,037,874 Carrying amounts of liabilities associated with Helix Businesses included as part of discontinued operations: Accounts payable $ 258,960 Accrued expenses 661,981 Short-term operating lease liabilities 243,888 Deferred revenues 497,418 Current liabilities of discontinued operations $ 1,662,247 Long-term operating lease liabilities 365,609 Non-current liabilities of discontinued operations $ 365,609 The following table summarizes the major income and expense line items of the Helix Businesses as reported in the condensed consolidated statements of operations for the three months ended March 31, 2023 and 2022: For the Three Months Ended March 31, 2023 2022 Income and expense line items related to Helix Businesses: Revenues: Information and Software 1,121,677 2,274,233 Services 179,798 428,706 Other — 153,479 Total revenues 1,301,475 2,856,418 Costs and Expenses: Cost of revenues 699,015 1,365,227 Research and development 160,164 990,036 Sales and marketing 35,005 559,344 General and administrative 129,283 1,142,924 Depreciation and amortization 372,435 590,325 Total costs and expenses 1,395,902 4,647,856 Loss from discontinued operations for Helix Businesses (94,427 ) (1,791,438 ) Other Income (Expense): Interest and investment income — 693 Interest expense — (25,778 ) Foreign currency related gains, net — 77,976 Total other income, net — 52,891 Net loss from discontinued operations for Helix Businesses before income taxes (94,427 ) (1,738,547 ) Gain on sale of discontinued operations 11,531,849 202,159 Income tax expense (2,690,144 ) — Net gain (loss) from discontinued operations, net of tax for Helix Businesses $ 8,747,278 $ (1,536,388 ) |
MARKETABLE SECURITIES
MARKETABLE SECURITIES | 3 Months Ended |
Mar. 31, 2023 | |
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 condensed consolidated statements of operations As of March 31, 2023 and December 31, 2022, marketable securities consisted of the following: March 31, 2023 December 31, 2022 United States Treasury Bills Cost $ 38,854,166 $ 17,234,633 Fair Market Value $ 39,164,720 $ 17,396,487 |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 3 Months Ended |
Mar. 31, 2023 | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS [Abstract] | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | Note 6 PREPAID EXPENSES AND OTHER CURRENT ASSETS The Company has various agreements which require upfront and periodic payments. The Company records the expenses related to these agreements ratably over the annual terms. As of March 31, 2023 and December 31, 2022, the Company’s balance sheet reflected prepaid expenses of $425,986 and $835,786, respectively, primarily relating to various software licenses and insurance policies with durations ranging from 3 months to 1 year. Included in other current assets as of March 31, 2023 are amounts receivable from employees totaling $342,986. |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 3 Months Ended |
Mar. 31, 2023 | |
PROPERTY AND EQUIPMENT, NET [Abstract] | |
PROPERTY AND EQUIPMENT, NET | Note 7 PROPERTY AND EQUIPMENT, NET As of March 31, 2023 and December 31, 2022, property and equipment were comprised of the following: March 31, 2023 December 31, 2022 Personal computing equipment $ 101,466 $ 160,079 Furniture and equipment — 7,991 Software development costs 73,260 — Total 174,726 168,070 Less: Accumulated depreciation (62,633 ) (93,040 ) Property and equipment, net $ 112,093 $ 75,030 Depreciation and amortization expense for the three months ended March 31, 2023 and 2022 was $38,430 and $ |
ACCRUED EXPENSES
ACCRUED EXPENSES | 3 Months Ended |
Mar. 31, 2023 | |
ACCRUED EXPENSES [Abstract] | |
ACCRUED EXPENSES | Note 8 ACCRUED EXPENSES As of March 31, 2023 and December 31, 2022, accrued expenses were comprised of the following: March 31, 2023 December 31, 2022 Accrued salary, commission and bonus $ 1,659,762 $ 2,112,482 Income taxes payable 2,746,515 — Accrued expenses 2,017,259 1,654,307 Total $ 6,423,536 $ 3,766,789 |
WARRANT LIABILITY
WARRANT LIABILITY | 3 Months Ended |
Mar. 31, 2023 | |
WARRANT LIABILITY [Abstract] | |
WARRANT LIABILITY | Note 9 WARRANT LIABILITY In conjunction with the business combination with Helix, 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 were 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 statements of operations. As of March 31, 2023 and 2022, the Company had 86,502 and 92,058 warrants outstanding classified as liabilities, respectively. During the three months ended March 31, 2023, 5,556 warrants expired. The fair value of the Company’s warrant liability, measured at Level 3 in the fair value hierarchy, was calculated using the Black-Scholes model and the following inputs: As of March 31, 2023 As of December 31, 2022 Fair value of Company's common stock $ 3.81 $ 2.73 Dividend yield 0 % 0 % Expected volatility 79% - 95 % 76% - 92 % Risk free interest rate 4.21% - 4.93 % 4.34% - 4.75 % Expected life (years) 0.71 0.91 Exercise price $ 8.00 - $28.00 $ 8.00 - $28.00 Fair value of financial instruments - warrants $ 10,106 $ 4,547 The change in fair value of the Company’s financial instruments – warrants, measured at Level 3 in the fair value hierarchy, was calculated using the Black-Scholes model and the following inputs: Amount Balance as of January 1, 2023 $ 4,547 Change in fair value of warrant liability 5,559 Balance as of March 31, 2023 $ 10,106 Amount Balance as of January 1, 2022 $ 369,234 Change in fair value of warrant liability (219,840 ) Balance as of March 31, 2022 $ 149,394 |
CONVERTIBLE NOTES
CONVERTIBLE NOTES | 3 Months Ended |
Mar. 31, 2023 | |
CONVERTIBLE NOTES [Abstract] | |
CONVERTIBLE NOTES | Note 10 CONVERTIBLE NOTES March 31, 2023 December 31, 2022 Principal outstanding $ 24,000,000 $ 24,000,000 Add: accrued interest 1,327,890 1,120,767 Less: unamortized debt issuance costs (12,887 ) (14,220 ) Convertible note payable, net of debt issuance costs $ 25,315,003 $ 25,106,547 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 $208,456 and $210,000 for the three months ended March 31, 2023 and 2022, respectively. 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 March 31, 2023 and 2022, the Company recognized $1,333 and $1,333 in amortization of debt issuance costs, respectively. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2023 | |
STOCK-BASED COMPENSATION [Abstract] | |
STOCK-BASED COMPENSATION | Note 11 STOCK-BASED COMPENSATION Restricted Stock Awards and Restricted Stock Units The table below includes issuances of restricted stock awards and units under the 2020 Plan and unvested equity interests of MOR which were converted into restricted Company common stock. Number of Restricted Shares and Units Weighted Average Grant Date Fair Value Per Share Unvested at January 1, 2022 1,146,131 $ 1.28 Issued — 11.71 Vested (474,768 ) 0.03 Canceled (120,105 ) 12.18 Unvested at December 31 2022 551,258 3.28 Issued 570,000 3.79 Vested (189,885 ) 4.39 Canceled (20,653 ) 0.16 Unvested at March 31 2023 910,720 $ 5.78 The 910,720 of unvested awards at March 31, 2023 consisted of 163,720 restricted stock units and 747,000 shares of restricted stock. Stock Options As part of the Merger, 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 is recognized as compensation cost by the Company. The fair value of the stock options was estimated at Level 3 in the fair value hierarchy 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 used to calculate the grant date fair value of the options outstanding at March 31, 2023 and December 31, 2022 are as follows: March 31, December 31, 2023 2022 Exercise Price $ 2.00 to $51.80 $ 2.00 to $51.80 Fair value of Company common stock $ 2.98 to $15.61 $ 2.98 to $15.61 Dividend yield 0% 0% Expected volatility 79% to 188% 83% to 188% Risk Free interest rate 0.27% to 4.52% 0.27% to 4.52% Expected life (years) remaining 0.01 to 9.62 0.01 to 9.62 Stock option activity for the three months ended March 31, 2023 and 2022 is as follows: Shares Underlying Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Outstanding at January 1, 2022 4,046,973 $ 14.25 8.75 Granted 1,203,250 $ 4.02 9.14 Exercised (33,334 ) $ 2.47 2.55 Forfeited and expired (1,233,081 ) $ 13.87 8.12 Outstanding at December 31, 2022 3,983,808 $ 10.53 8.23 Granted 1,097,500 $ 3.79 8.70 Exercised (2,452 ) $ 8.09 8.09 Forfeited and expired (444,554 ) $ 11.09 8.13 Outstanding at March 31, 2023 4,634,302 $ 8.89 8.36 Vested options at March 31 2023 2,076,200 $ 12.59 6.94 The weighted average exercise price and remaining contractual life of exercisable options as of March 31, 2023 is $12.59 and 6.94 years, respectively. The total aggregate intrinsic value of the exercisable options as of March 31, 2023 was approximately $161,817. Stock Compensation Expense The weighted-average grant date fair value per share for the stock options granted was $3.42 and $6.17 for the three months ended March 31, 2023 and 2022, respectively. On February 10, 2023, the Company’s Chief Executive Officer, President and Class II member of the Board of Directors resigned. In connection with the resignation, the Company entered into a separation agreement providing for, among other things, accelerated vesting of 106,656 unvested restricted shares of the Company common stock. Stock based compensation expense for the three months ended March 31, 2023 includes $349,832 related to the accelerated vesting of stock. On March 2, 2022, the Company and the former chief executive officer and the former chief financial officer of Helix mutually agreed not to renew special advisor agreements between the advisors and the Company. Per the terms of the agreements, options to purchase 366,166 shares of common stock continued to vest according to their original terms through March 2, 2023, and unvested stock options to purchase 732,332 shares of common stock were forfeited. The advisors were not required to perform services to the Company beyond the non-renewal date of March 2, 2022. As a result, the Company recorded $5,417,043 of stock compensation expense during March 2022 related to the options that vested through March 2, 2023. At March 31, 2023, the total unrecognized stock compensation expense related to unvested stock option awards and restricted stock awards and restricted stock units granted was $15,390,535, which the Company expects to recognize over a weighted-average period of approximately 2.83 years. Stock compensation expense for the three months ended March 31, 2023 and 2022 is as follows: For the Three Months Ended March 31, 2023 2022 Services $ 37,926 $ 19,629 Research and development 38,192 47,441 Sales and marketing 54,002 51,821 General and administrative 1,348,281 2,078,044 Separation expenses 349,832 5,417,043 Subtotal 1,828,233 7,613,978 Discontinued operations (247,308 ) 290,606 Total $ 1,580,925 $ 7,904,584 Total intrinsic value of options exercised during the period ended March 31, 2023 was $3,948. The total fair value of restricted shares vested during the period ended March 31, 2023 was $820,418. |
NET INCOME (LOSS) PER SHARE
NET INCOME (LOSS) PER SHARE | 3 Months Ended |
Mar. 31, 2023 | |
NET INCOME (LOSS) PER SHARE [Abstract] | |
NET INCOME (LOSS) PER SHARE | Note 12 NET INCOME (LOSS) PER SHARE The following table sets forth the computation of the basic and diluted net loss per share: For the Three Months Ended March 31, 2023 2022 Net income (loss): Loss from continuing operations $ (2,248,799 ) $ (10,317,700 ) Income (loss) from discontinued operations 8,747,278 (1,536,388 ) Net Income (Loss) $ 6,498,479 $ (11,854,088 ) Basic and diluted loss from continuing operations per share attributable to common shareholders: $ (0.08 ) $ (0.32 ) Basic and diluted income (loss) from discontinued operations per share: 0.27 (0.05 ) Net loss per common share $ 0.19 $ (0.37 ) Weighted average common shares outstanding - basic and diluted 32,300,237 31,857,685 The following table sets forth the outstanding potentially dilutive securities that have been excluded in the calculation of diluted net loss per share for the three months ended March 31, 2023 and 2022 because their inclusion would be anti-dilutive to the Company’s “control number”, which is loss from continuing operations. As of March 31, 2023 2022 Potentially dilutive securities: Warrants 96,500 119,087 Stock options 4,634,302 3,467,891 Convertible notes 2,514,849 2,453,088 Unvested Restricted Stock Awards and Units 910,720 990,584 Total 8,156,371 7,030,650 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2023 | |
RELATED PARTY TRANSACTIONS [Abstract] | |
RELATED PARTY TRANSACTIONS | Note 13 RELATED PARTY TRANSACTIONS Adam Dublin, the Company’s Chief Strategy Officer, was previously a consultant for a current vendor of the Company. Mr. Dublin’s consultancy with the vendor ended on December 11, 2020 and the parties have agreed not to renew the consulting agreement. Pursuant to Mr. Dublin’s consulting agreement with the vendor, Mr. Dublin received payments from the vendor for the three months ended March 31, 2023 and 2022 of $49,032 and $92,369, 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. 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 10 for additional information. |
SEGMENT RESULTS
SEGMENT RESULTS | 3 Months Ended |
Mar. 31, 2023 | |
SEGMENT RESULTS [Abstract] | |
SEGMENT RESULTS | Note 14 SEGMENT RESULTS The Company provides innovative solutions, proprietary data and predictive analytics to optimize the operational, clinical and financial performance of its customers. ASC 280 requires that public companies report profits and losses and certain other information on their “reportable operating segments” in their annual and interim financial statements. The internal organization used by the public company’s Chief Operating Decision Maker (CODM) to assess performance and allocate resources determines the basis for reportable operating segments. The Company’s CODM is the Chief Executive Officer. The CODM evaluates financial performance based on revenues and operating income. As discussed above, the Company disposed of its businesses servicing the cannabis industry in 2023, and has reclassified their historical results as discontinued operations. As such, the Company’s continuing operations are comprised of a single |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2023 | |
LEASES [Abstract] | |
LEASES | Note 15 LEASES 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 two short-term leases related to offices in Pennsylvania and Massachusetts. These short-term leases are currently leased on a month-to-month basis. A short-term lease is a lease with a term of 12 months or less and does not include the option to purchase the underlying asset that we would expect to exercise. The Company has elected to adopt the short-term lease exemption in ASC 842 and as such has not recognized a “right of use” asset or lease liability for these short-term leases. The Company’s lease agreements generally do not provide an implicit borrowing rate, therefore an internal incremental borrowing rate is determined based on information available at lease commencement date for purposes of determining the present value of lease payments. Supplemental cash flow information and non-cash activity related to leases for the three months ended March 31, 2023 and 2022 are as follows: Three Months Ended March 31, 2023 2022 Cash used in operating leases $ 5,931 $ 450 ROU assets obtained in exchange for new operating lease liabilities $ — $ 398 ROU lease assets and lease liabilities for the Company’s operating leases were recorded in the condensed consolidated balance sheet as follows: March 31, 2023 December 31, 2022 Right of use assets, net $ 27,346 $ 32,560 Short-term operating lease liabilities $ 21,952 $ 21,600 Long-term operating lease liabilities 5,394 10,960 Total lease liabilities $ 27,346 $ 32,560 Weighted average remaining lease term (in years) 1.23 1.48 Weighted average discount rate 9.3% 9.3% The components of lease expense were as follows for each of the periods presented, which are included in operating expenses in the condensed consolidated statements of operations: Three Months Ended March 31, 2023 2022 Operating lease expense $ 5,931 $ 450 Short-term lease expense $ 4,812 $ — Total operating lease costs $ 10,743 $ 450 Future lease payments included in the measurement of lease liabilities on the condensed consolidated balance sheet as of March 31, 2023, were as follows: March 31, 2023 2023 $ 17,794 2024 11,262 Total future minimum lease payments $ 29,056 Less imputed interest (1,710 ) Total $ 27,346 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2023 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
COMMITMENTS AND CONTINGENCIES | Note 16 COMMITMENTS AND CONTINGENCIES Service and License Agreements The Company entered into certain service and license 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 agreements as of March 31, 2023: March 31, 2023 Year ending December 31, 2023 $ 1,137,595 Year ending December 31, 2024 1,887,595 Year ending December 31, 2025 1,600,000 Year ending December 31, 2026 400,000 $ 5,025,190 Legal Proceedings From time to time, the Company may be involved in claims that arise during the ordinary course of business. For any matters where management currently believes it is probable that the Company will incur a loss and that the probable loss or range of loss can be reasonably estimated, the Company records reserves in the condensed consolidated financial statements based on its best estimates of such loss. In other instances, because of the uncertainties related to either the probable outcome or the amount or range of loss, management is unable to make a reasonable estimate of a liability, if any. Regardless of the outcome, litigation can be costly and time consuming and it can divert management’s attention from important business matters and initiatives, negatively impacting the Company’s overall operations. Although the results of litigation and claims cannot be predicted with certainty, the Company does not currently have any pending litigation to which it is a party or to which its property is subject that we believe to be material, except for the below. 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 the Company, claiming that he owned 10% of GTI. The complaint seeks unspecified monetary damages equivalent to the value a 10% shareholder of GTI would have received in the subsequent Helix and Forian transactions, along with an equitable accounting and constructive trust to determine if Audet suffered any loss of profit distributions. The case is in the process of discovery and trial is scheduled for June 2023. Each of the parties’ motions for summary judgment were denied. The Company believes the lawsuit is wholly without merit and intends to defend vigorously against the claims in the lawsuit Grant Whitus et al. v. Forian Inc., Zachary Venegas and Scott Ogur On July 30, 2021, four former Helix employees filed a lawsuit in the Arapahoe County, Colorado District Court against the Company and Helix’s former managers asserting claims of breach of contract, promissory estoppel, breach of the covenant of good faith and fair dealing, civil theft and conversion, fraudulent misrepresentation, civil conspiracy and unjust enrichment/quantum meruit, all relating to the plaintiffs’ claims that they were promised equity interest in Helix or compensation that they never received. The original complaint was never served and in November 2021 the plaintiffs filed and served an amended complaint adding a fifth plaintiff, and seeking over $27.5 million in damages as well as attorneys’ fees and costs. The Company removed the matter to the United States District Court for the District of Colorado in December 2021, and both the Company and the individual defendants filed motions to dismiss on January 20, 2022. Plaintiffs subsequently amended their complaint on April 21, 2022, adding Helix TCS LLC and Helix Technologies, Inc. as defendants and advancing additional claims for breach of fiduciary duty and violation of the Colorado Wage Claims Act. The Company and the individual defendants filed their separate motions to dismiss on June 1, 2022, and briefing of those motions was completed on July 1 3, 2022. Although the motions are still pending, the Court ordered the parties to begin discovery. Written discovery, which commenced in July 2022, is ongoing. The Company believes the lawsuit is wholly without merit and intends to defend vigorously against the claims in the lawsuit. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2023 | |
SUBSEQUENT EVENTS [Abstract] | |
SUBSEQUENT EVENTS | Note 17 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) | 3 Months Ended |
Mar. 31, 2023 | |
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 (ii) Helix Technologies, Inc. and its wholly owned subsidiaries including Helix TCS, LLC (through December 31, 2022), Security Consultants Group, LLC (through December 31, 2022), Helix Legacy, Inc. (f/k/a Security Grade Protective Services, Ltd.), Bio-Tech Medical Software, Inc (through February 10, 2023), Engeni, LLC (including Engeni S.A. (“Engeni SA”), which is 99% owned by Engeni, LLC) (through October 31, 2022). Effective October 31, 2022, 100% of the outstanding membership interest of Engeni, LLC held by Helix was sold. Effective December 31, 2022, (i) Security Consultants Group, LLC was merged with and into Helix TCS, LLC and (ii) Helix TCS, LLC was merged with and into Helix Legacy, Inc. On February 10, 2023, 100% of the capital stock of Bio-Tech Medical Software, Inc. was sold. All intercompany transactions have been eliminated in consolidation. |
Discontinued Operations | Discontinued Operations On February 10, 2023, Helix completed the sale of 100% of the outstanding capital stock of its wholly owned subsidiary, BioTrack. On March 3, 2022, the Company sold certain assets, consisting of customer contracts, accounts receivable and other property related to its security monitoring services. On October 31, 2022, the Company sold 100% of its outstanding membership interest of Engeni, LLC for a note with payments of up to $100,000 if certain conditions are met. As the sale of BioTrack, the security monitoring business and Engeni, LLC, together, represented a strategic shift that will have a major effect on the Company’s operations and financial results, they have been presented in discontinued operations separate from continuing operations for the three months ended March 31, 2023 and 2022, as applicable. The results from operations and gain (loss) on sale of the security monitoring business and Engeni LLC, net, was previously classified as part of continuing operations as their disposition individually did not have a major impact on the business prior to the sale of BioTrack. For further discussion, refer to Note 4. |
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. The significant areas of estimation include but are not limited to accounting for the allowance for doubtful accounts, income taxes, depreciation, amortization of intangible assets, contingencies, discontinued operations and stock-based compensation. Certain of the Company’s estimates could be affected by external conditions, including those unique to the Company and general economic conditions. It is possible that the external factors could have an effect on the Company’s estimates and could cause actual results to differ from those estimates. |
Reclassifications | Reclassifications Certain reclassifications have been made to the prior period financial statements to conform to the current period financial statement presentation. Certain personnel, information licensing and data processing costs that were previously classified in research and development expenses when the Company’s healthcare information business was in its start-up stage were reclassified to cost of revenues and general and administrative expenses in the condensed consolidated statements of operations. |
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”) 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. The estimated fair value of the Company’s warrant liabilities as of March 31, 2023 and December 31, 2022 was $10,106 and $149,394, respectively, based on Level 3 inputs. Refer to Note 10. |
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 $0 and $78,422 at March 31, 2023 and December 31, 2022, respectively. Management charges account balances against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. |
Proceeds from Sale of Discontinued Operations | Proceeds from sale of discontinued operations, net Proceeds from sale of discontinued operations consists of eleven remaining monthly payments due through February 10, 2024 aggregating $9,166,667, less an unamortized discount of $354,959. |
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. 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 consists of the excess of cost over the fair value of net assets acquired in business combinations. Goodwill is not amortized. Instead, it is tested annually for impairment, or more frequently if events occur or circumstances change that would more likely than not reduce its fair value below its carrying amount. All goodwill has been allocated to non-current assets of discontinued operations at December 31, 2022. Goodwill is evaluated for impairment annually or whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. 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. The Company has the option to first assess qualitative factors to determine whether events or circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount and to determine whether further action is needed. If, after assessing the totality of events or circumstances, the Company determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the quantitative impairment test is unnecessary. An impairment charge is recognized when the fair value of the Company’s goodwill is less than its carrying amount. No impairment losses have been recognized during the periods presented. |
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 (or as) customers obtain control of promised goods or services, in an amount that reflects the consideration which is expected to be received in exchange for those goods or services. The Company recognizes revenue following the five-step model prescribed under ASC 606: (i) identify contract(s) with a customer; (ii) identify the performance obligation(s) in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligation(s) in the contract; and (v) recognize revenues when (or as) the Company satisfies a performance obligation. The Company applies the provisions of ASC 606 to an arrangement when a substantive contract exists and collectability is probable. The Company derives revenue primarily from license fees for the Company’s information products. Information products contracts are generally for a period of one month to five years. Information products’ customers may access data analytics products through the use of tools provided by the Company or by utilizing their own tools per the contract. Data products may consist of historical information as it exists at the time of delivery or information that will be updated over a period of time as agreed with the customer. In most cases, the provision of information products is considered a single performance obligation. In cases where the Company is not obligated to update information over the access period and control over the use of the products passes to the customer when delivered, revenue is recognized when the information products are made available to the customer. In cases where information updates are provided over the contract term, they are considered highly interrelated with the information product delivered upon contract inception and revenue is recognized ratably over the life of the contract. Customers are generally invoiced according to monthly, quarterly or annual amounts specified in the contract. Any amounts invoiced in excess of revenue recognized are recorded as deferred revenue. Revenue recognized in excess of amounts invoiced is recorded as a contract asset. In some cases, contracts provide for variable consideration that is contingent upon the occurrence of uncertain future events, which can either increase or decrease the transaction price, including sales of products by customers derived from data analytics products the Company provides. Variable consideration based on sales of products by customers is recognized in the period of sales, subject to minimum amounts specified in contracts. Variable consideration is estimated at the expected value or at the most likely amount depending on the type of consideration. Estimated amounts are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. The estimate of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of anticipated performance and all information (historical, current and forecasted) that is reasonably available to the Company and reevaluated each reporting period. The effect of revisions in recognized estimated variable consideration in excess of minimums are recorded beginning in the period in which the estimates are revised. Actual results could differ from periodic estimates. Significant judgments and estimates are sometimes necessary for the determination of whether performance obligations in a contract are distinct and whether they are delivered at a point in time or over time. Judgement is also necessary to assess revenue recognized under contingent revenue arrangements. Contract acquisition costs, which consist of sales commissions paid or payable, are considered incremental and recoverable costs of obtaining a contract with a customer. Sales commissions for initial and renewal contracts are deferred and then amortized on a straight-line basis over the contract term. During November 2020, the Company entered into a Master Services Agreement (the “November 2020 Agreement”) with a customer to provide information services described in certain statements of work under the November 2020 Agreement. As part of the November 2020 Agreement, the Company was granted shares of restricted stock representing approximately 23.4% of the outstanding common stock of the customer at the time of issuance, vesting in quarterly increments specified in the November 2020 Agreement through December 2023. Concurrently, the Company entered into a Stockholders Agreement specifying its voting and other rights as a stockholder. As a result, the Company determined that it does not exert influence over the customer. ASC 606-10-32-21 requires an entity to measure the fair value of noncash consideration at contract inception. The fair value of the restricted stock was determined to be $0 on the date of inception. The Company recorded revenue from the customer of $651,762 and $377,190 for the three months ended March 31, 2023 and 2022, respectively. The Company has outstanding accounts receivable of $1,134,941 and $469,786 at March 31, 2023 and December 31, 2022, respectively. Contract assets and deferred revenues consist of the following as of March 31, 2023: Contract Assets Contract Liability Costs of obtaining contracts Unbilled revenue Total Deferred Revenue Balance at January 1, 2022 $ 70,278 $ 986,613 $ 1,056,891 $ 637,563 Beginning deferred revenue balance recognized during the period — — — (637,562 ) Net change due to timing of billings, payments and recognition 87,738 1,108,329 1,196,067 2,581,286 Balance at December 31, 2022 158,016 2,094,942 2,252,958 2,581,287 Beginning deferred revenue balance recognized during the period — — — (1,667,028 ) Net change due to timing of billings, payments and recognition 7,373 (419,617 ) (412,244 ) 2,186,423 Balance at March 31 2023 $ 165,389 $ 1,675,325 $ 1,840,714 $ 3,100,682 Transaction price allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes unearned revenue and unbilled amounts that will be recognized as revenue in future periods. The majority of the Company’s noncurrent remaining performance obligations will be recognized over the next 36 months. The transaction price allocated to remaining performance obligations consisted of the following: March 31, 2023 December 31, 2022 Estimated next twelve months $ 16,677,597 $ 15,790,233 Thereafter 20,637,969 22,192,028 $ 37,315,566 $ 37,982,261 |
Segment Information | Segment Information FASB ASC 280, Segment Reporting |
Customer Concentration | Customer Concentration During the three months ended March 31, 2023, the Company had two customers representing 13.4% and 12.6% of revenue. During the three months ended March 31, 2022, the Company had four customers representing 14.5%, 14.4%, 11.7% and 10.7% of revenue. |
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, 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. Such indicators include, among others, the nature of the asset, the projected future economic benefit of the asset, historical and future cash flows and profitability measurements. An impairment loss would be recognized when the value of the undiscounted estimated future cash flows expected to result from the use of the asset and its eventual disposition is less than the carrying value. There were no impairment losses recognized during the three months ended March 31, 2023 and 2022. |
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 Software –Costs of Software to be Sold, Leased or Marketed |
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 $15,125 and $2,255 |
Net Income (Loss) per Share | Net Income (Loss) per Share The calculation of earnings per share is based on the weighted average number of ordinary shares or ordinary stock equivalents outstanding during the applicable period. The dilutive effect of ordinary stock equivalents is excluded from basic earnings per share and is included in the calculation of diluted earnings per share, unless their impact is antidilutive to the “control number”, which is loss from continuing operations. Employee equity share options and similar equity instruments granted by the Company are treated as potential ordinary shares outstanding in computing diluted earnings per share. Diluted shares outstanding are calculated based on the average share price for each fiscal period using the treasury stock method. Under the treasury stock method, the amount the employee must pay for exercising stock options, the amount of compensation cost for future service that the Company has not yet recognized and the amount of benefits that would be recorded in ordinary shares when the award becomes deductible for tax purposes are assumed to be used to repurchase shares. |
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 were originally authorized and reserved for issuance under the 2020 Plan. On June 15, 2022, the Company’s stockholders approved an amendment to the 2020 Plan, which amended the 2020 Plan to increase the number of shares available for issuance by 2,400,000 shares to a total of 6,400,000 shares. Stock options represent the right to purchase Company common stock at the exercise price on the date of grant of the stock option at a future date. Restricted stock awards are grants of shares of Company common stock. Restricted stock units represent the right to receive shares of Company common stock on future specified dates. Stock options, restricted stock awards and restricted stock units granted contain restrictions that cause them to be subject to substantial risk of forfeiture and restrict their exercise, sale or other transfer by the grantee until they vest. The terms of the stock options, restricted stock awards and units granted under the 2020 Plan are determined by the Board of Directors in the agreement evidencing the award, including the number of shares, period of restriction or vesting schedule and other terms. The fair value of the stock options, restricted stock awards and restricted stock units is based on the underlying grant date fair value of Company common stock. The fair value is then expensed over the requisite service periods of the awards, net of forfeitures, which is generally the service period and the related amount is recognized in the condensed consolidated statements of operations. |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with FASB ASC 740 (“ASC 740”). Deferred income tax assets and liabilities are determined based upon differences between financial reporting and tax bases of assets and liabilities, which are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The provision for income taxes represents Federal and state and local income taxes. The effective rate differs from statutory rates due to the effect of state and local income taxes, tax benefit of R&D credits and certain nondeductible expenses. Our effective tax rate will change from quarter to quarter based on recurring and non-recurring factors including, but not limited to, the geographical mix of earnings, enacted tax legislation and state and local income taxes. In addition, changes in judgment from the evaluation of new information resulting in the recognition derecognition or re-measurement of a tax position taken in a prior annual period is recognized separately in the quarter of the change. For the three months ended March 31, 2023 and March 31, 2022, the Company recognized net income tax expense of $29,909 and $5,000, respectively. The Company claims R&D tax credits on eligible R&D expenditures. The R&D tax credits are recognized as a reduction to income tax expense. The Company recognized a taxable gain on sale of discontinued operations during the three months ended March 31, 2023, which resulted in utilization of certain available federal and state net operating loss carryforwards. As a result, the Company recorded income taxes related to discontinued operations of $2,690,144 after utilization of federal and state net operating losses during the three months ended March 31, 2023. The Company files a consolidated U.S. income tax return and tax returns in certain state and local jurisdictions. As of March 31, 2023, the Company is not subject to examination in any tax jurisdictions. 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. On August 16, 2022, the Inflation Reduction Act of 2022 (the “IRA”) was enacted and signed into law. Regarded as the reduced version of the proposed Build Back Better Act, the IRA contains two main corporate income tax provisions, including a 15% minimum tax on the average annual adjusted financial statement income of corporations with profits over $1 billion over a three-year period as well as a 1% excise tax on the corporate stock buybacks by domestic publicly traded corporations. The Company is currently evaluating the impact of the IRA on its financial statements for tax year 2023 but does not expect a material impact to the Company’s tax position. |
Separation Expenses | Separation Expenses Effective February 10, 2023, the Company’s Chief Executive Officer, President and Class II member of the Board of Directors resigned. In connection with the resignation, the Company entered into a separation agreement providing for, among other things (i) salary continuation for twelve months and (ii) accelerated vesting of 106,656 unvested restricted shares of Company common stock. Separation expenses for the three months ended March 31, 2023 include $250,000 related to the salary continuation and $349,832 related to the accelerated vesting of stock. On March 2, 2022, the Company and two advisors agreed not to renew special advisor agreements between the advisors and the Company. The advisors were the former chief executive officer and chief financial officer of Helix who were granted stock options in conjunction with their respective advisory agreements that were entered into upon the completion of the Helix acquisition. The Company and the advisors mutually agreed not to renew the advisory agreements. The services provided by these advisors included transition planning and consulting services related to integration of the business operations of Helix and Forian. Per the terms of the agreements, options to purchase 366,166 shares of common stock continued to vest according to their original terms through March 2, 2023, and unvested stock options to purchase 732,332 shares of common stock were forfeited. The advisors were not required to perform services to the Company beyond the non-renewal date of March 2, 2022. As a result, the Company recorded $5,417,043 of stock compensation expense during March 2022 related to the options that vested through March 2, 2023. In addition, the Company records normal course of business severance expenses in the operating expense line item related to the employee’s activities. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements 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) | 3 Months Ended |
Mar. 31, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Contract Balances | Contract assets and deferred revenues consist of the following as of March 31, 2023: Contract Assets Contract Liability Costs of obtaining contracts Unbilled revenue Total Deferred Revenue Balance at January 1, 2022 $ 70,278 $ 986,613 $ 1,056,891 $ 637,563 Beginning deferred revenue balance recognized during the period — — — (637,562 ) Net change due to timing of billings, payments and recognition 87,738 1,108,329 1,196,067 2,581,286 Balance at December 31, 2022 158,016 2,094,942 2,252,958 2,581,287 Beginning deferred revenue balance recognized during the period — — — (1,667,028 ) Net change due to timing of billings, payments and recognition 7,373 (419,617 ) (412,244 ) 2,186,423 Balance at March 31 2023 $ 165,389 $ 1,675,325 $ 1,840,714 $ 3,100,682 |
Transaction Price Allocated to Remaining Performance Obligations | The transaction price allocated to remaining performance obligations consisted of the following: March 31, 2023 December 31, 2022 Estimated next twelve months $ 16,677,597 $ 15,790,233 Thereafter 20,637,969 22,192,028 $ 37,315,566 $ 37,982,261 |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
DISCONTINUED OPERATIONS [Abstract] | |
Discontinued operations | The following table summarizes the major classes of assets and liabilities of the Helix Businesses as reported on the consolidated balance sheets as of December 31, 2022: December 31, 2022 Carrying amounts of assets associated with Helix Businesses included as part of discontinued operations: Cash and cash equivalents $ 524,155 Accounts receivable, net 738,510 Prepaid expenses 131,023 Current assets of discontinued operations $ 1,393,688 Property and equipment, net 2,500,376 Intangible assets, net 6,775,841 Goodwill 9,099,372 Right of use assets, net 603,636 Deposits and other assets 58,649 Non-current assets of discontinued operations $ 19,037,874 Carrying amounts of liabilities associated with Helix Businesses included as part of discontinued operations: Accounts payable $ 258,960 Accrued expenses 661,981 Short-term operating lease liabilities 243,888 Deferred revenues 497,418 Current liabilities of discontinued operations $ 1,662,247 Long-term operating lease liabilities 365,609 Non-current liabilities of discontinued operations $ 365,609 The following table summarizes the major income and expense line items of the Helix Businesses as reported in the condensed consolidated statements of operations for the three months ended March 31, 2023 and 2022: For the Three Months Ended March 31, 2023 2022 Income and expense line items related to Helix Businesses: Revenues: Information and Software 1,121,677 2,274,233 Services 179,798 428,706 Other — 153,479 Total revenues 1,301,475 2,856,418 Costs and Expenses: Cost of revenues 699,015 1,365,227 Research and development 160,164 990,036 Sales and marketing 35,005 559,344 General and administrative 129,283 1,142,924 Depreciation and amortization 372,435 590,325 Total costs and expenses 1,395,902 4,647,856 Loss from discontinued operations for Helix Businesses (94,427 ) (1,791,438 ) Other Income (Expense): Interest and investment income — 693 Interest expense — (25,778 ) Foreign currency related gains, net — 77,976 Total other income, net — 52,891 Net loss from discontinued operations for Helix Businesses before income taxes (94,427 ) (1,738,547 ) Gain on sale of discontinued operations 11,531,849 202,159 Income tax expense (2,690,144 ) — Net gain (loss) from discontinued operations, net of tax for Helix Businesses $ 8,747,278 $ (1,536,388 ) |
MARKETABLE SECURITIES (Tables)
MARKETABLE SECURITIES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
MARKETABLE SECURITIES [Abstract] | |
Marketable Securities | As of March 31, 2023 and December 31, 2022, marketable securities consisted of the following: March 31, 2023 December 31, 2022 United States Treasury Bills Cost $ 38,854,166 $ 17,234,633 Fair Market Value $ 39,164,720 $ 17,396,487 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
PROPERTY AND EQUIPMENT, NET [Abstract] | |
Property and Equipment | As of March 31, 2023 and December 31, 2022, property and equipment were comprised of the following: March 31, 2023 December 31, 2022 Personal computing equipment $ 101,466 $ 160,079 Furniture and equipment — 7,991 Software development costs 73,260 — Total 174,726 168,070 Less: Accumulated depreciation (62,633 ) (93,040 ) Property and equipment, net $ 112,093 $ 75,030 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
ACCRUED EXPENSES [Abstract] | |
Accrued Expenses | As of March 31, 2023 and December 31, 2022, accrued expenses were comprised of the following: March 31, 2023 December 31, 2022 Accrued salary, commission and bonus $ 1,659,762 $ 2,112,482 Income taxes payable 2,746,515 — Accrued expenses 2,017,259 1,654,307 Total $ 6,423,536 $ 3,766,789 |
WARRANT LIABILITY (Tables)
WARRANT LIABILITY (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
WARRANT LIABILITY [Abstract] | |
Fair Value of Warrant Liability Assumptions | The fair value of the Company’s warrant liability, measured at Level 3 in the fair value hierarchy, was calculated using the Black-Scholes model and the following inputs: As of March 31, 2023 As of December 31, 2022 Fair value of Company's common stock $ 3.81 $ 2.73 Dividend yield 0 % 0 % Expected volatility 79% - 95 % 76% - 92 % Risk free interest rate 4.21% - 4.93 % 4.34% - 4.75 % Expected life (years) 0.71 0.91 Exercise price $ 8.00 - $28.00 $ 8.00 - $28.00 Fair value of financial instruments - warrants $ 10,106 $ 4,547 |
Change in Fair Value of Financial Instruments | The change in fair value of the Company’s financial instruments – warrants, measured at Level 3 in the fair value hierarchy, was calculated using the Black-Scholes model and the following inputs: Amount Balance as of January 1, 2023 $ 4,547 Change in fair value of warrant liability 5,559 Balance as of March 31, 2023 $ 10,106 Amount Balance as of January 1, 2022 $ 369,234 Change in fair value of warrant liability (219,840 ) Balance as of March 31, 2022 $ 149,394 |
CONVERTIBLE NOTES (Tables)
CONVERTIBLE NOTES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
CONVERTIBLE NOTES [Abstract] | |
Convertible Note Payable | March 31, 2023 December 31, 2022 Principal outstanding $ 24,000,000 $ 24,000,000 Add: accrued interest 1,327,890 1,120,767 Less: unamortized debt issuance costs (12,887 ) (14,220 ) Convertible note payable, net of debt issuance costs $ 25,315,003 $ 25,106,547 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
STOCK-BASED COMPENSATION [Abstract] | |
Information Regarding Equity Incentive Plan | The table below includes issuances of restricted stock awards and units under the 2020 Plan and unvested equity interests of MOR which were converted into restricted Company common stock. Number of Restricted Shares and Units Weighted Average Grant Date Fair Value Per Share Unvested at January 1, 2022 1,146,131 $ 1.28 Issued — 11.71 Vested (474,768 ) 0.03 Canceled (120,105 ) 12.18 Unvested at December 31 2022 551,258 3.28 Issued 570,000 3.79 Vested (189,885 ) 4.39 Canceled (20,653 ) 0.16 Unvested at March 31 2023 910,720 $ 5.78 |
Fair Value of Stock Option Assumptions | The assumptions used to calculate the grant date fair value of the options outstanding at March 31, 2023 and December 31, 2022 are as follows: March 31, December 31, 2023 2022 Exercise Price $ 2.00 to $51.80 $ 2.00 to $51.80 Fair value of Company common stock $ 2.98 to $15.61 $ 2.98 to $15.61 Dividend yield 0% 0% Expected volatility 79% to 188% 83% to 188% Risk Free interest rate 0.27% to 4.52% 0.27% to 4.52% Expected life (years) remaining 0.01 to 9.62 0.01 to 9.62 |
Stock Option Activity | Stock option activity for the three months ended March 31, 2023 and 2022 is as follows: Shares Underlying Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Outstanding at January 1, 2022 4,046,973 $ 14.25 8.75 Granted 1,203,250 $ 4.02 9.14 Exercised (33,334 ) $ 2.47 2.55 Forfeited and expired (1,233,081 ) $ 13.87 8.12 Outstanding at December 31, 2022 3,983,808 $ 10.53 8.23 Granted 1,097,500 $ 3.79 8.70 Exercised (2,452 ) $ 8.09 8.09 Forfeited and expired (444,554 ) $ 11.09 8.13 Outstanding at March 31, 2023 4,634,302 $ 8.89 8.36 Vested options at March 31 2023 2,076,200 $ 12.59 6.94 |
Stock Compensation Expense | Stock compensation expense for the three months ended March 31, 2023 and 2022 is as follows: For the Three Months Ended March 31, 2023 2022 Services $ 37,926 $ 19,629 Research and development 38,192 47,441 Sales and marketing 54,002 51,821 General and administrative 1,348,281 2,078,044 Separation expenses 349,832 5,417,043 Subtotal 1,828,233 7,613,978 Discontinued operations (247,308 ) 290,606 Total $ 1,580,925 $ 7,904,584 |
NET INCOME (LOSS) PER SHARE (Ta
NET INCOME (LOSS) PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
NET INCOME (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 March 31, 2023 2022 Net income (loss): Loss from continuing operations $ (2,248,799 ) $ (10,317,700 ) Income (loss) from discontinued operations 8,747,278 (1,536,388 ) Net Income (Loss) $ 6,498,479 $ (11,854,088 ) Basic and diluted loss from continuing operations per share attributable to common shareholders: $ (0.08 ) $ (0.32 ) Basic and diluted income (loss) from discontinued operations per share: 0.27 (0.05 ) Net loss per common share $ 0.19 $ (0.37 ) Weighted average common shares outstanding - basic and diluted 32,300,237 31,857,685 |
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 for the three months ended March 31, 2023 and 2022 because their inclusion would be anti-dilutive to the Company’s “control number”, which is loss from continuing operations. As of March 31, 2023 2022 Potentially dilutive securities: Warrants 96,500 119,087 Stock options 4,634,302 3,467,891 Convertible notes 2,514,849 2,453,088 Unvested Restricted Stock Awards and Units 910,720 990,584 Total 8,156,371 7,030,650 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
LEASES [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 three months ended March 31, 2023 and 2022 are as follows: Three Months Ended March 31, 2023 2022 Cash used in operating leases $ 5,931 $ 450 ROU assets obtained in exchange for new operating lease liabilities $ — $ 398 |
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: March 31, 2023 December 31, 2022 Right of use assets, net $ 27,346 $ 32,560 Short-term operating lease liabilities $ 21,952 $ 21,600 Long-term operating lease liabilities 5,394 10,960 Total lease liabilities $ 27,346 $ 32,560 Weighted average remaining lease term (in years) 1.23 1.48 Weighted average discount rate 9.3% 9.3% |
Components of Lease Expenses | The components of lease expense were as follows for each of the periods presented, which are included in operating expenses in the condensed consolidated statements of operations: Three Months Ended March 31, 2023 2022 Operating lease expense $ 5,931 $ 450 Short-term lease expense $ 4,812 $ — Total operating lease costs $ 10,743 $ 450 |
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 March 31, 2023, were as follows: March 31, 2023 2023 $ 17,794 2024 11,262 Total future minimum lease payments $ 29,056 Less imputed interest (1,710 ) Total $ 27,346 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
Remaining Payment Obligations under these Licenses | The following table shows the remaining payment obligations under these agreements as of March 31, 2023: March 31, 2023 Year ending December 31, 2023 $ 1,137,595 Year ending December 31, 2024 1,887,595 Year ending December 31, 2025 1,600,000 Year ending December 31, 2026 400,000 $ 5,025,190 |
BUSINESS ORGANIZATION AND NAT_2
BUSINESS ORGANIZATION AND NATURE OF OPERATIONS (Details) | Feb. 10, 2023 | Oct. 31, 2022 | Mar. 02, 2022 |
Engeni LLC [Member] | |||
Business Organization and Nature of Operations Description [Abstract] | |||
Ownership percentage in subsidiary sold | 100% | 100% | |
Bio Track [Member] | |||
Business Organization and Nature of Operations Description [Abstract] | |||
Ownership percentage in subsidiary sold | 100% |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Principles of Consolidation (Details) | Mar. 31, 2023 | Feb. 10, 2023 | Oct. 31, 2022 | Mar. 02, 2022 |
Bio-Tech Medical Software, Inc. [Member] | ||||
Principles of Consolidation [Abstract] | ||||
Ownership percentage in subsidiary sold | 100% | |||
Engeni LLC [Member] | ||||
Principles of Consolidation [Abstract] | ||||
Percentage of owned subsidiaries | 99% | |||
Percentage of outstanding interest in subsidiaries | 100% | 100% |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Discontinued Operations (Details) - USD ($) | Oct. 31, 2022 | Feb. 10, 2023 | Mar. 02, 2022 |
Engeni LLC [Member] | |||
Discontinued Operations [Abstract] | |||
Percentage of outstanding interest subsidiaries | 100% | 100% | |
Maximum amount to be received from sale of equity interest | $ 100,000 | ||
Bio-Tech Medical Software, Inc. [Member] | |||
Discontinued Operations [Abstract] | |||
Ownership percentage in subsidiary sold | 100% |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Foreign Currency (Details) | 3 Months Ended | |
Oct. 31, 2022 | Mar. 31, 2022 | |
Engeni LLC [Member] | Revenue Benchmark [Member] | Geographic Concentration Risk [Member] | ||
Foreign Currency [Abstract] | ||
Percentage of consolidated net sales | 100% | 1% |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Fair Value of Financial Instruments (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Warrant Liability [Member] | Level 3 Inputs [Member] | ||
Debt Instrument, Fair Value Disclosure [Abstract] | ||
Estimated fair value of Convertible Note | $ 10,106 | $ 149,394 |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Cash and Cash Equivalents and Credit Risk (Details) | Mar. 31, 2023 USD ($) |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Cash, FDIC insured amount | $ 250,000 |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Accounts Receivable and Allowance for Doubtful Accounts (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Accounts Receivable and Allowance for Doubtful Accounts [Abstract] | ||
Allowance for doubtful accounts | $ 0 | $ 78,422 |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Proceeds from Sale of Discontinued Operations, Net (Details) | 3 Months Ended |
Mar. 31, 2023 USD ($) MonthlyPayment | |
Proceeds from Sale of Discontinued Operations [Abstract] | |
Number of monthly payments pending | MonthlyPayment | 11 |
Receivables from sale of discontinued operations amount | $ 9,166,667 |
Unamortized discount | $ 354,959 |
SUMMARY OF SIGNIFICANT ACCOU_11
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Goodwill (Details) | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Goodwill [Abstract] | |
Impairment losses | $ 0 |
SUMMARY OF SIGNIFICANT ACCOU_12
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Revenue Recognition (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Nov. 30, 2020 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Revenue Recognition [Abstract] | ||||
Revenue from the customer | $ 4,870,387 | $ 3,534,861 | ||
Accounts receivable | 3,795,284 | $ 1,809,028 | ||
Contract assets [Abstract] | ||||
Beginning balance | 2,252,958 | 1,056,891 | 1,056,891 | |
Beginning deferred revenue balance recognized during the period | 0 | 0 | ||
Net change due to timing of billings, payments and recognition | (412,244) | 1,196,067 | ||
Ending balance | 1,840,714 | 2,252,958 | ||
Revenue, Performance Obligation [Abstract] | ||||
Remaining performance obligation | 37,315,566 | 37,982,261 | ||
November 2020 Agreement [Member] | ||||
Revenue Recognition [Abstract] | ||||
Revenue from the customer | 651,762 | 377,190 | ||
Accounts receivable | $ 1,134,941 | $ 469,786 | ||
Restricted Stock [Member] | November 2020 Agreement [Member] | ||||
Revenue Recognition [Abstract] | ||||
Percentage of outstanding stock granted | 23.40% | |||
Fair value of restricted stock | $ 0 | |||
Minimum [Member] | ||||
Revenue Recognition [Abstract] | ||||
Period of information products contracts | 1 month | |||
Maximum [Member] | ||||
Revenue Recognition [Abstract] | ||||
Period of information products contracts | 5 years | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | ||||
Revenue, Performance Obligation [Abstract] | ||||
Period of recognized noncurrent remaining performance obligations | 1 year | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | ||||
Revenue, Performance Obligation [Abstract] | ||||
Period of recognized noncurrent remaining performance obligations | 1 year | |||
Remaining performance obligation | $ 16,677,597 | $ 15,790,233 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | ||||
Revenue, Performance Obligation [Abstract] | ||||
Period of recognized noncurrent remaining performance obligations | ||||
Remaining performance obligation | $ 20,637,969 | 22,192,028 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | ||||
Revenue, Performance Obligation [Abstract] | ||||
Period of recognized noncurrent remaining performance obligations | 36 months | |||
Costs of Obtaining Contracts [Member] | ||||
Contract assets [Abstract] | ||||
Beginning balance | $ 158,016 | 70,278 | 70,278 | |
Beginning deferred revenue balance recognized during the period | 0 | 0 | ||
Net change due to timing of billings, payments and recognition | 7,373 | 87,738 | ||
Ending balance | 165,389 | 158,016 | ||
Unbilled Revenue [Member] | ||||
Contract assets [Abstract] | ||||
Beginning balance | 2,094,942 | 986,613 | 986,613 | |
Beginning deferred revenue balance recognized during the period | 0 | 0 | ||
Net change due to timing of billings, payments and recognition | (419,617) | 1,108,329 | ||
Ending balance | 1,675,325 | 2,094,942 | ||
Deferred Revenue [Member] | ||||
Contract liabilities (Deferred Revenue) [Abstract] | ||||
Beginning balance | 2,581,287 | $ 637,563 | 637,563 | |
Beginning deferred revenue balance recognized during the period | (1,667,028) | (637,562) | ||
Net change due to timing of billings, payments and recognition | 2,186,423 | 2,581,286 | ||
Ending balance | $ 3,100,682 | $ 2,581,287 |
SUMMARY OF SIGNIFICANT ACCOU_13
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Customer Concentration (Details) - Revenue Benchmark [Member] - Customer Concentration Risk [Member] - Customer | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Customer One [Member] | ||
Customer Concentration [Abstract] | ||
Revenue percentage | 13.40% | 14.50% |
Customer Two [Member] | ||
Customer Concentration [Abstract] | ||
Number of major customers | 2 | |
Revenue percentage | 12.60% | 14.40% |
Customer Three [Member] | ||
Customer Concentration [Abstract] | ||
Revenue percentage | 11.70% | |
Customer Four [Member] | ||
Customer Concentration [Abstract] | ||
Number of major customers | 4 | |
Revenue percentage | 10.70% |
SUMMARY OF SIGNIFICANT ACCOU_14
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Property and Equipment, Net (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Property and Equipment, Net [Abstract] | ||
Impairment losses | $ 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_15
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Software Development Costs (Details) | 3 Months Ended |
Mar. 31, 2023 | |
Software Development Costs [Member] | |
Software Development Costs [Abstract] | |
Asset estimated useful life | 3 years |
SUMMARY OF SIGNIFICANT ACCOU_16
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Advertising (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Advertising [Abstract] | ||
Advertising costs | $ 15,125 | $ 2,255 |
SUMMARY OF SIGNIFICANT ACCOU_17
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Stock-Based Compensation (Details) - shares | Jun. 15, 2022 | Jun. 14, 2022 |
Stock-based Compensation [Abstract] | ||
Number of shares authorized and reserved for issuance under 2020 Plan (in shares) | 6,400,000 | 4,000,000 |
Increase in number of shares authorized and reserved for issuance under 2020 Plan (in shares) | 2,400,000 |
SUMMARY OF SIGNIFICANT ACCOU_18
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Income Taxes (Details) - USD ($) | 3 Months Ended | ||
Aug. 16, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | |
Income Taxes [Abstract] | |||
Net income tax expense | $ 29,909 | $ 5,000 | |
Income tax effect on discontinued operations | $ (2,690,144) | $ 0 | |
Corporate income tax rate | 15% | ||
Percentage of excise tax rate | 1% |
SUMMARY OF SIGNIFICANT ACCOU_19
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Separation Expenses (Details) | 3 Months Ended | |||
Feb. 10, 2023 USD ($) shares | Mar. 02, 2022 USD ($) Advisor shares | Mar. 31, 2023 USD ($) shares | Mar. 31, 2022 USD ($) | |
Separation Expenses [Abstract] | ||||
Unvested restricted shares (in shares) | 349,832 | |||
Number of advisors | Advisor | 2 | |||
Options to purchase shares of common stock (in shares) | 366,166 | |||
Shares of common stock forfeited (in shares) | 732,332 | |||
Stock compensation expenses | $ | $ 5,417,043 | $ 1,828,233 | $ 7,613,978 | |
Separation Agreement [Member] | Mr. Daniel Barton [Member] | ||||
Separation Expenses [Abstract] | ||||
Period for continuation of Salary | 12 months | |||
Unvested restricted shares (in shares) | 106,656 | |||
Salary | $ | $ 250,000 | |||
Amount of accelerated vesting stock | $ | $ 349,832 |
DISCONTINUED OPERATIONS, Summar
DISCONTINUED OPERATIONS, Summary (Details) | 3 Months Ended | ||
Feb. 10, 2023 USD ($) Installment | Mar. 31, 2023 USD ($) | Mar. 31, 2022 USD ($) | |
Disposal Group Discontinued Operation Disposal Disclosures [Abstract] | |||
Loss from discontinued operations | $ (94,427) | $ (1,738,547) | |
Income tax effect on discontinued operations | 2,690,144 | 0 | |
Bio-Tech Medical Software, Inc. [Member] | |||
Disposal Group Discontinued Operation Disposal Disclosures [Abstract] | |||
Ownership percentage in subsidiary sold | 100% | ||
Consideration paid by buyer | $ 30,000,000 | ||
Cash paid by buyer | 20,000,000 | ||
Pending consideration receivable | $ 10,000,000 | ||
Number of monthly installment payments | Installment | 12 | ||
Gain on sale of discontinued operations | 11,531,849 | $ 202,159 | |
Loss from discontinued operations | (94,427) | ||
Income tax effect on discontinued operations | $ 2,690,144 |
DISCONTINUED OPERATIONS, Summ_2
DISCONTINUED OPERATIONS, Summary of Balance sheet, Income and Expense (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Carrying amounts of assets associated with Helix Businesses included as part of discontinued operations [Abstract] | |||
Current assets of discontinued operations | $ 0 | $ 1,393,688 | |
Non-current assets of discontinued operations | 0 | 19,037,874 | |
Carrying amounts of liabilities associated with Helix Businesses included as part of discontinued operations [Abstract] | |||
Current liabilities of discontinued operations | 0 | 1,662,247 | |
Non-current liabilities of discontinued operations | 0 | 365,609 | |
Other Income (Expense): | |||
Net loss from discontinued operations for Helix Businesses before income taxes | (94,427) | $ (1,738,547) | |
Income tax expense | (2,690,144) | 0 | |
Income (loss) from discontinued operations, net of tax | 8,747,278 | (1,536,388) | |
Helix Technologies, Inc [Member] | |||
Carrying amounts of assets associated with Helix Businesses included as part of discontinued operations [Abstract] | |||
Cash and cash equivalents | 524,155 | ||
Accounts receivable, net | 738,510 | ||
Prepaid expenses | 131,023 | ||
Current assets of discontinued operations | 1,393,688 | ||
Property and equipment, net | 2,500,376 | ||
Intangible assets, net | 6,775,841 | ||
Goodwill | 9,099,372 | ||
Right of use assets, net | 603,636 | ||
Deposits and other assets | 58,649 | ||
Non-current assets of discontinued operations | 19,037,874 | ||
Carrying amounts of liabilities associated with Helix Businesses included as part of discontinued operations [Abstract] | |||
Accounts payable | 258,960 | ||
Accrued expenses | 661,981 | ||
Short-term operating lease liabilities | 243,888 | ||
Deferred revenues | 497,418 | ||
Current liabilities of discontinued operations | 1,662,247 | ||
Long-term operating lease liabilities | 365,609 | ||
Non-current liabilities of discontinued operations | $ 365,609 | ||
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | |||
Total revenues | 1,301,475 | 2,856,418 | |
Costs and Expenses: | |||
Cost of revenues | 699,015 | 1,365,227 | |
Research and development | 160,164 | 990,036 | |
Sales and marketing | 35,005 | 559,344 | |
General and administrative | 129,283 | 1,142,924 | |
Depreciation and amortization | 372,435 | 590,325 | |
Total costs and expenses | 1,395,902 | 4,647,856 | |
Loss from discontinued operations for Helix Businesses | (94,427) | (1,791,438) | |
Other Income (Expense): | |||
Interest and investment income | 0 | 693 | |
Interest expense | 0 | (25,778) | |
Foreign currency related gains, net | 0 | 77,976 | |
Total other income, net | 0 | 52,891 | |
Net loss from discontinued operations for Helix Businesses before income taxes | (94,427) | (1,738,547) | |
Gain on sale of discontinued operations | 11,531,849 | 202,159 | |
Income tax expense | (2,690,144) | 0 | |
Income (loss) from discontinued operations, net of tax | 8,747,278 | (1,536,388) | |
Helix Technologies, Inc [Member] | Information and Software [Member] | |||
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | |||
Total revenues | 1,121,677 | 2,274,233 | |
Helix Technologies, Inc [Member] | Service [Member] | |||
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | |||
Total revenues | 179,798 | 428,706 | |
Helix Technologies, Inc [Member] | Other [Member] | |||
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | |||
Total revenues | $ 0 | $ 153,479 |
MARKETABLE SECURITIES (Details)
MARKETABLE SECURITIES (Details) - US Treasury Bill Securities [Member] - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Marketable Securities, Classification [Abstract] | ||
Cost | $ 38,854,166 | $ 17,234,633 |
Fair Market Value | $ 39,164,720 | $ 17,396,487 |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Prepaid Expense [Abstract] | ||
Other prepaid expenses | $ 425,986 | $ 835,786 |
Other Current Assets [Member] | ||
Prepaid Expense [Abstract] | ||
Receivable from employees | $ 342,986 | |
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 | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Property, Plant and Equipment, Net, by Type [Abstract] | |||
Property and equipment | $ 174,726 | $ 168,070 | |
Less: Accumulated depreciation | (62,633) | (93,040) | |
Property and equipment, net | 112,093 | 75,030 | |
Depreciation [Abstract] | |||
Depreciation and amortization expense | 38,430 | $ 15,349 | |
Personal Computing Equipment [Member] | |||
Property, Plant and Equipment, Net, by Type [Abstract] | |||
Property and equipment | 101,466 | 160,079 | |
Furniture and Equipment [Member] | |||
Property, Plant and Equipment, Net, by Type [Abstract] | |||
Property and equipment | 0 | 7,991 | |
Software Development Costs [Member] | |||
Property, Plant and Equipment, Net, by Type [Abstract] | |||
Property and equipment | $ 73,260 | $ 0 |
ACCRUED EXPENSES (Details)
ACCRUED EXPENSES (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
ACCRUED EXPENSES [Abstract] | ||
Accrued salary, commission and bonus | $ 1,659,762 | $ 2,112,482 |
Income taxes payable | 2,746,515 | 0 |
Accrued expenses | 2,017,259 | 1,654,307 |
Total | $ 6,423,536 | $ 3,766,789 |
WARRANT LIABILITY (Details)
WARRANT LIABILITY (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
WARRANT LIABILITY [Abstract] | |||
Number of warrants outstanding (in shares) | 86,502 | 92,058 | |
Warrants expired (in shares) | 5,556 | ||
Fair Value of Warrant Liability Assumptions [Abstract] | |||
Fair value of financial instruments - warrants | $ 10,106 | $ 149,394 | $ 4,547 |
Change in Fair Value of Financial Instruments [Abstract] | |||
Beginning Balance | 4,547 | 369,234 | 369,234 |
Change in fair value of warrant liability | 5,559 | (219,840) | |
Ending Balance | $ 10,106 | $ 149,394 | $ 4,547 |
Warrant Liability [Member] | |||
Fair Value of Warrant Liability Assumptions [Abstract] | |||
Fair value of Company's common stock (in dollars per share) | $ 3.81 | $ 2.73 | |
Dividend yield | 0% | 0% | |
Expected volatility, minimum | 79% | 76% | |
Expected volatility, maximum | 95% | 92% | |
Risk free interest rate, minimum | 4.21% | 4.34% | |
Risk free interest rate, maximum | 4.93% | 4.75% | |
Expected life (years) | 8 months 15 days | 10 months 28 days | |
Fair value of financial instruments - warrants | $ 10,106 | $ 4,547 | |
Change in Fair Value of Financial Instruments [Abstract] | |||
Beginning Balance | 4,547 | ||
Ending Balance | $ 10,106 | $ 4,547 | |
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 ($) | 3 Months Ended | |||
Sep. 01, 2021 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Convertible Notes [Abstract] | ||||
Convertible note payable, net of debt issuance costs | $ 25,315,003 | $ 25,106,547 | ||
Interest expense on convertible notes | 208,456 | $ 210,000 | ||
Amortization of debt issuance costs | 1,333 | 1,333 | ||
Convertible Notes [Member] | ||||
Convertible Notes [Abstract] | ||||
Principal outstanding | $ 24,000,000 | 24,000,000 | 24,000,000 | |
Add: accrued interest | 1,327,890 | 1,120,767 | ||
Less: unamortized debt issuance costs | (12,887) | (14,220) | ||
Convertible note payable, net of debt issuance costs | 25,315,003 | $ 25,106,547 | ||
Percentage of issuance cost on principal amount | 100% | |||
Interest percentage on convertible promissory note | 3.50% | |||
Percentage of warrant to purchase common stock on principal amount | 20% | |||
Exercise price of warrants (in dollars per share) | $ 11.98 | |||
Minimum principal amount | $ 100,000 | |||
Interest expense on convertible notes | 208,456 | 210,000 | ||
Debt issuance costs | 21,330 | |||
Amortization of debt issuance costs | $ 1,333 | $ 1,333 | ||
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% |
STOCK-BASED COMPENSATION, Restr
STOCK-BASED COMPENSATION, Restricted Stock Awards and Restricted Stock Units (Details) - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Number of Restricted Shares and Units [Roll Forward] | ||
Outstanding at end of period (in shares) | 349,832 | |
Restricted Stock Awards and Restricted Stock Units [Member] | ||
Number of Restricted Shares and Units [Roll Forward] | ||
Outstanding at beginning of period (in shares) | 551,258 | 1,146,131 |
Issued (in shares) | 570,000 | 0 |
Vested (in shares) | (189,885) | (474,768) |
Canceled (in shares) | (20,653) | (120,105) |
Outstanding at end of period (in shares) | 910,720 | 551,258 |
Weighted Average Grant Date Fair Value Per Share [Abstract] | ||
Outstanding at beginning of period (in dollars per share) | $ 3.28 | $ 1.28 |
Issued (in dollars per share) | 3.79 | 11.71 |
Vested (in dollars per share) | 4.39 | 0.03 |
Cancelled (in dollars per share) | 0.16 | 12.18 |
Outstanding at end of period (in dollars per share) | $ 5.78 | $ 3.28 |
Restricted Stock Units [Member] | ||
Number of Restricted Shares and Units [Roll Forward] | ||
Outstanding at end of period (in shares) | 163,720 | |
Restricted Stock Awards [Member] | ||
Number of Restricted Shares and Units [Roll Forward] | ||
Outstanding at end of period (in shares) | 747,000 |
STOCK-BASED COMPENSATION, Stock
STOCK-BASED COMPENSATION, Stock Options (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 02, 2022 | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Shares Underlying Options [Roll Forward] | ||||
Options granted (in shares) | 366,166 | |||
Stock Options [Member] | ||||
Fair Value of Stock Option Assumptions [Abstract] | ||||
Dividend yield | 0% | 0% | ||
Expected volatility | 79% | 83% | ||
Expected volatility, maximum | 188% | 188% | ||
Risk Free interest rate, minimum | 0.27% | 0.27% | ||
Risk Free interest rate, maximum | 4.52% | 4.52% | ||
Shares Underlying Options [Roll Forward] | ||||
Outstanding at beginning of period (in shares) | 3,983,808 | 4,046,973 | ||
Options assumed in Helix Merger (in shares) | 455,089 | |||
Options granted (in shares) | 1,097,500 | 1,203,250 | ||
Options exercised (in shares) | (2,452) | (33,334) | ||
Options forfeited and expired (in shares) | (444,554) | (1,233,081) | ||
Outstanding at end of period (in shares) | 4,634,302 | 3,983,808 | 4,046,973 | |
Vested options outstanding (in shares) | 2,076,200 | |||
Weighted Average Exercise Price [Abstract] | ||||
Weighted average exercise price, options outstanding (in dollars per share) | $ 10.53 | $ 14.25 | ||
Weighted average exercise price, options granted (in dollars per share) | 3.79 | 4.02 | ||
Weighted average exercise price, options exercises (in dollars per share) | 8.09 | 2.47 | ||
Weighted average exercise price, options forfeited and expired (in dollars per share) | 11.09 | 13.87 | ||
Weighted average exercise price, options outstanding (in dollars per share) | 8.89 | $ 10.53 | $ 14.25 | |
Weighted average exercise price, Vested options outstanding (in dollars per share) | $ 12.59 | |||
Weighted Average Remaining Contractual Term (in years) [Abstract] | ||||
Weighted average remaining contractual term, options outstanding | 8 years 4 months 9 days | 8 years 2 months 23 days | 8 years 9 months | |
Weighted average remaining contractual term, options granted | 8 years 8 months 12 days | 9 years 1 month 20 days | ||
Weighted average remaining contractual term, options exercised | 8 years 1 month 2 days | 2 years 6 months 18 days | ||
Weighted average remaining contractual term, options forfeited and expired | 8 years 1 month 17 days | 8 years 1 month 13 days | ||
Weighted average remaining contractual term, vested options outstanding | 6 years 11 months 8 days | |||
Aggregate intrinsic value of exercisable options | $ 161,817 | |||
Stock Options [Member] | Minimum [Member] | ||||
Fair Value of Stock Option Assumptions [Abstract] | ||||
Exercise price (in dollars per share) | $ 2 | $ 2 | ||
Share price (in dollars per share) | $ 2.98 | $ 2.98 | ||
Expected life (years) remaining | 3 days | 3 days | ||
Stock Options [Member] | Maximum [Member] | ||||
Fair Value of Stock Option Assumptions [Abstract] | ||||
Exercise price (in dollars per share) | $ 51.8 | $ 51.8 | ||
Share price (in dollars per share) | $ 15.61 | $ 15.61 | ||
Expected life (years) remaining | 9 years 7 months 13 days | 9 years 7 months 13 days |
STOCK-BASED COMPENSATION, Sto_2
STOCK-BASED COMPENSATION, Stock Compensation Expense (Details) - USD ($) | 3 Months Ended | |||
Mar. 02, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | Feb. 10, 2023 | |
Stock Compensation Expense [Abstract] | ||||
Stock options granted date fair value (in dollars per share) | $ 3.42 | $ 6.17 | ||
Unvested restricted shares (in shares) | 349,832 | |||
Options to purchase shares of common stock (in shares) | 366,166 | |||
Shares of common stock forfeited (in shares) | 732,332 | |||
Total unrecognized compensation | $ 15,390,535 | |||
Weighted-average period | 2 years 9 months 29 days | |||
Stock compensation expense | $ 5,417,043 | $ 1,828,233 | $ 7,613,978 | |
Discontinued operations | (247,308) | 290,606 | ||
Total | 1,580,925 | 7,904,584 | ||
Intrinsic value of options exercised | $ 3,948 | |||
Restricted Stock [Member] | ||||
Stock Compensation Expense [Abstract] | ||||
Unvested restricted shares (in shares) | 747,000 | 106,656 | ||
Fair value of restricted shares vested | $ 820,418 | |||
Services [Member] | ||||
Stock Compensation Expense [Abstract] | ||||
Stock compensation expense | 37,926 | 19,629 | ||
Research and Development [Member] | ||||
Stock Compensation Expense [Abstract] | ||||
Stock compensation expense | 38,192 | 47,441 | ||
Sales and Marketing [Member] | ||||
Stock Compensation Expense [Abstract] | ||||
Stock compensation expense | 54,002 | 51,821 | ||
General and Administrative [Member] | ||||
Stock Compensation Expense [Abstract] | ||||
Stock compensation expense | 1,348,281 | 2,078,044 | ||
Separation Expenses [Member] | ||||
Stock Compensation Expense [Abstract] | ||||
Stock compensation expense | $ 349,832 | $ 5,417,043 |
NET INCOME (LOSS) PER SHARE (De
NET INCOME (LOSS) PER SHARE (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Net income (loss): | ||
Loss from continuing operations | $ (2,248,799) | $ (10,317,700) |
Less: Income (loss) from discontinued operations | 8,747,278 | (1,536,388) |
Net Income (Loss) | $ 6,498,479 | $ (11,854,088) |
Basic loss from continuing operations per share attributable to common shareholders (in dollars per share) | $ (0.08) | $ (0.32) |
Diluted loss from continuing operations per share attributable to common shareholders (in dollars per share) | (0.08) | (0.32) |
Basic income (loss) from discontinued operations per share (in dollars per share) | 0.27 | (0.05) |
Diluted income (loss) from discontinued operations per share (in dollars per share) | 0.27 | (0.05) |
Net loss per common share, basic (in dollars per share) | 0.19 | (0.37) |
Net loss per common share, diluted (in dollars per share) | $ 0.19 | $ (0.37) |
Weighted average common shares outstanding, basic (in shares) | 32,300,237 | 31,857,685 |
Weighted average common shares outstanding, diluted (in shares) | 32,300,237 | 31,857,685 |
Potentially Dilutive Securities [Abstract] | ||
Antidilutive securities excluded from computation of loss per share (in shares) | 8,156,371 | 7,030,650 |
Warrants [Member] | ||
Potentially Dilutive Securities [Abstract] | ||
Antidilutive securities excluded from computation of loss per share (in shares) | 96,500 | 119,087 |
Stock Options [Member] | ||
Potentially Dilutive Securities [Abstract] | ||
Antidilutive securities excluded from computation of loss per share (in shares) | 4,634,302 | 3,467,891 |
Convertible Notes [Member] | ||
Potentially Dilutive Securities [Abstract] | ||
Antidilutive securities excluded from computation of loss per share (in shares) | 2,514,849 | 2,453,088 |
Unvested Restricted Stock Awards and Units [Member] | ||
Potentially Dilutive Securities [Abstract] | ||
Antidilutive securities excluded from computation of loss per share (in shares) | 910,720 | 990,584 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 3 Months Ended | ||||
Apr. 16, 2021 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Sep. 01, 2021 | |
Related Party Transactions [Abstract] | |||||
Net proceeds from sale of common stock | $ 11,968,652 | ||||
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% | ||||
Principal outstanding | 24,000,000 | $ 24,000,000 | $ 24,000,000 | ||
Interest percentage on convertible promissory note | 3.50% | ||||
Percentage of warrant to purchase common stock on principal amount | 20% | ||||
Notes held by directors | $ 6,000,000 | ||||
Adam Dublin [Member] | |||||
Related Party Transactions [Abstract] | |||||
Received payments | $ 49,032 | $ 92,369 |
SEGMENT RESULTS (Details)
SEGMENT RESULTS (Details) | 3 Months Ended |
Mar. 31, 2023 Segment | |
SEGMENT RESULTS [Abstract] | |
Number of reportable segments | 1 |
LEASES (Details)
LEASES (Details) | 3 Months Ended | ||
Mar. 31, 2023 USD ($) Lease | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Operating Leases [Abstract] | |||
Number of short-term leases | Lease | 2 | ||
ROU lease assets and lease liabilities [Abstract] | |||
Cash used in operating leases | $ 5,931 | $ 450 | |
ROU assets obtained in exchange for new operating lease liabilities | 0 | 398 | |
Lease liabilities | $ 27,346 | $ 32,560 | |
Weighted average remaining lease term (in years) | 1 year 2 months 23 days | 1 year 5 months 23 days | |
Weighted average discount rate | 9.30% | 9.30% | |
Lease, Cost [Abstract] | |||
Operating lease expense | $ 5,931 | 450 | |
Short-term lease expense | 4,812 | 0 | |
Total operating lease costs | 10,743 | $ 450 | |
Future Lease Payments [Abstract] | |||
2023 (remaining) | 17,794 | ||
2024 | 11,262 | ||
Total future minimum lease payments | 29,056 | ||
Less imputed interest | (1,710) | ||
Total | 27,346 | $ 32,560 | |
Right of Use Assets, Net [Member] | |||
ROU lease assets and lease liabilities [Abstract] | |||
Lease liabilities | 27,346 | 32,560 | |
Future Lease Payments [Abstract] | |||
Total | 27,346 | 32,560 | |
Short-Term Operating Lease Liabilities [Member] | |||
ROU lease assets and lease liabilities [Abstract] | |||
Lease liabilities | 21,952 | 21,600 | |
Future Lease Payments [Abstract] | |||
Total | 21,952 | 21,600 | |
Long-Term Operating Lease Liabilities [Member] | |||
ROU lease assets and lease liabilities [Abstract] | |||
Lease liabilities | 5,394 | 10,960 | |
Future Lease Payments [Abstract] | |||
Total | $ 5,394 | $ 10,960 | |
Minimum [Member] | |||
Operating Leases [Abstract] | |||
Operating lease term | 1 year | ||
Maximum [Member] | |||
Operating Leases [Abstract] | |||
Operating lease term | 5 years |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) | Jul. 30, 2021 USD ($) Employee | Mar. 31, 2023 USD ($) | Feb. 14, 2020 |
Remaining payment obligations [Abstract] | |||
Year ending December 31, 2023 | $ 1,137,595 | ||
Year ending December 31, 2024 | 1,887,595 | ||
Year ending December 31, 2025 | 1,600,000 | ||
Year ending December 31, 2026 | 400,000 | ||
Total payment obligations | $ 5,025,190 | ||
Audet v. Green Tree International, et. al. [Member] | John Audet [Member] | |||
Loss Contingency [Abstract] | |||
Ownership percentage | 10% | ||
Grant Whitus et al. v. Forian Inc., Zachary Venegas and Scott Ogur [Member] | |||
Loss Contingency [Abstract] | |||
Number of former employees to file lawsuit | Employee | 4 | ||
Loss contingency, damages, attorneys' fees and costs | $ 27,500,000 |