United States securities and exchange commission logo
December 21, 2020
Daniel Barton
Chief Executive Officer
Forian Inc.
41 University Drive, Suite 400
Newtown, Pennsylvania 18940
Re: Forian Inc.
Registration
Statement on Form S-4
Filed November 24,
2020
File No. 333-250938
Dear Mr. Barton:
We have reviewed your registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe our comments apply to your
facts and
circumstances or do not believe an amendment is appropriate, please tell
us why in your
response.
After reviewing any amendment to your registration statement and
the information you
provide in response to these comments, we may have additional comments.
Registration Statement on Form S-4
Questions and Answers, page 1
1. Please include a Q&A
discussing the vote required to approve the Helix merger. Include
a discussion of the
total voting power held by those parties who have agreed to vote in
favor of the proposal
pursuant to voting agreements.
What will happen in the merger?, page 1
2. You state here that
Helix will be acquired by Forian. Please revise here to clarify that
Helix will become a
wholly-owned subsidiary of Forian and that former Helix
stockholders, as a
group, will own 28% of Forian.
Daniel Barton
FirstName
Forian Inc. LastNameDaniel Barton
Comapany21,
December NameForian
2020 Inc.
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3. While we note that this Q&A states that each share of Helix common
stock outstanding
will be converted into the right to receive 0.02731 shares of Forian
common stock, please
revise here or in a separate Q&A to more fully discuss what each Helix
shareholder will
receive as a result of the merger. For example, clarify that a Helix
shareholder will only
receive shares of Forian common stock (i.e., clarify that no cash will
be received as
consideration) and discuss the treatment of fractional shares.
Summary, page 9
4. Please revise to include a discussion of the private placement that
Medical Outcomes
Research Analytics (MOR) will conduct concurrently with the business
combination,
including clarification as to whether the private placement has been
entered into.
5. Please revise to include a diagram depicting the organizational
structure of Forian after the
business combination. Include the voting power percentages of the
former securityholders
of Helix and MOR.
Risk Factors
The certificate of incorporation of Forian contains forum limitations..., page
26
6. You disclose here that the Forian charter provides for an exclusive
forum provision;
however, it appears that this provision is in Forian's bylaws. Please
revise to reconcile
this inconsistency. Furthermore, please revise your disclosure here
and on page 163 to
clarify that the provision designating the Delaware Chancery Court as
the exclusive forum
for certain claims does not apply to claims brought under the
Securities Act or the
Exchange Act, as indicated in Section 14.1 of Forian's bylaws.
Additionally, with respect
to the provision designating the federal district courts of the
District of Delaware as the
exclusive forum for claims brought under the Securities Act, please
revise your risk factor
discussion to highlight potential enforceability concerns arising from
the fact that Section
22 of the Securities Act creates concurrent jurisdiction for federal
and state courts over all
suits brought to enforce any duty or liability created by the
Securities Act or the rules and
regulations thereunder. Lastly, please disclose that investors cannot
waive compliance
with the federal securities laws and the rules and regulations
thereunder.
The Merger, page 40
7. In comparative columnar form, disclose historical and pro forma per
share data of MOR
and historical and equivalent pro forma per share data of Helix in
accordance with Item 3,
Part I.A of Form S-4.
Unaudited Financial Forecast of Helix and Mor, page 55
8. We note your disclosure representing that "the Helix's and MOR
forecasts were prepared
solely for internal purposes and not with a view toward public
disclosure or toward
compliance with ... the published guidelines of the SEC". Please fully
comply with the
guidance under Item 10b(b) of Regulation S-K or omit such forecasts.
In accordance with
Daniel Barton
FirstName
Forian Inc. LastNameDaniel Barton
Comapany21,
December NameForian
2020 Inc.
December
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Item 10(b)(1) of Regulation S-K, a forecast may be presented however
management must
have a reasonable basis for its assessment of future performance. When
management
chooses to include its forecasts in a Commission filing, the
accompanying disclosures
should facilitate investor understanding of the forecast's underlying
assumptions and the
presentations limitations in accordance with the guidance of Item
10(b)(3) of Regulation
S-K.
9. In light of MOR's limited operating history, please explain to us why
you believe you
have a reasonable basis for presenting financial forecasts beyond one
year.
Information Regarding Helix
Legal Proceedings, page 95
10. You disclose that a former Helix employee filed a lawsuit in the
United States District
Court for the District of Colorado alleging violations of the Fair
Labor Standards Act on
behalf of themselves and other employees. Please clarify the status of
this legal
proceeding. In this regard, while you state that "the claim is
currently in the process of
appeal," it is unclear as whether the District Court ruled on the
claim and whether Helix or
the plaintiff appealed the ruling.
Management's Discussion and Analysis of Financial Condition and Results of
Operations of
Helix
Results of Operations for the Years Ended December 31, 2019 and 2018
Revenues, page 99
11. In your discussion, you cite two factors as impacting your revenues
but provide no
quantification of the contribution of each factor nor do you address
apparent trends in
revenues reported for your operating segments. Please see the guidance
provided by
Section III.D of Release No. 33-6835. Revise your discussions of
revenues and costs of
revenues for you annual and interim results to quantify the impact of
each material factor
impacting your results. In this regard, quantify the impact of
business acquisitions and
organic growth on a consolidated and a reporting segment basis.
Include a robust
discussion of trends in your segment operations. Address for example
how your widely
varying advertising expenses impact your segment results.
12. It appears the impact of the COVID-19 pandemic on your revenue
generating activities
may vary in significance, such as its impact on revenues earned from
your private-sector
clients as compared to public-sector clients. Please address in your
discussion of
operations the impact of the pandemic on your operations, including
any trends or
uncertainties in revenues earned from your various customer bases.
Business Overview, page 118
13. You disclose that MOR has developed a patient health information
database for the United
States. Please clarify the sources from which MOR obtains the data
that populates this
Daniel Barton
FirstName
Forian Inc. LastNameDaniel Barton
Comapany21,
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database and whether MOR has material agreements with any third-party
data providers.
To the extent MOR has material agreements with third-party data
providers, please
summarize the agreements and file each as an exhibit.
Information Regarding MOR, page 118
14. Please revise to disclose MOR's current number of customers and
clarify whether any
customer has accounted for a material portion of MOR's business for
the nine months
ended September 30, 2020.
Our Offerings, page 119
15. You disclose here that you are developing SaaS analytics business
intelligence solutions
and data management solutions. Please clarify the current
developmental status of these
solutions, including a discussion of remaining developmental steps,
remaining material
developmental costs and when you expect these solutions to be
commercially available.
16. On page 125, you disclose that MOR recognized $334,921 in revenue
during the nine
months ended September 30, 2020 primarily from its data products.
Please revise the
discussion of MOR's offerings to include a discussion of these data
products.
Certain Relationships and Related Party Transactions, page 131
17. We note that you discuss related party transactions for MOR here and
for Helix on page
97. Please ensure you also provide related party disclosure for
Forian.
Information Regarding Forian, page 133
18. Please revise to include a discussion of Forian's expected business
operations after the
business combination. In this regard, discuss whether you expect to
continue the
historical business operations of both Helix and MOR and, if so,
whether and how you
expect to integrate the operations of both entities.
Unaudited Pro Forma Condensed Combined Financial Information, page 148
19. Disclose the terms of the MOR private placement, including the number
of preferred units
of MOR to be issued. Clarify if these preferred units will be
converted to stock in the
reorganization with Forian.
20. Please revise the pro forma balance sheet to first present MOR
(Historical) followed by a
column to present the adjustments to give effect to the reorganization
with Forian and the
$13 million private placement of securities. This should be followed
by a subtotal column
to present MOR/Forian on a pro forma basis before giving effect to the
merger with Helix.
Unaudited Pro Form Combined Statement of Operations, page 152
21. Disclose under the MOR historic columns, pro forma per share data of
MOR to give effect
to the reorganization with Forian.
Daniel Barton
Forian Inc.
December 21, 2020
Page 5
5. Reverse acquisition and purchase price allocation, page 156
22. We note the fair value of the purchase consideration will be
determined based upon the
Helix closing price per share. In light of the pending private
placement of approximately
26% of MOR, please tell us your consideration of using the per share
value of MOR
established in this transaction as a basis to value the purchase
consideration. Business
combination consideration should ordinarily be measured at the fair
value of the equity
interest issued by the acquirer in accordance with ASC 805-30-30-7.
7. Unaudited Pro Forma Condensed Combined Statement of Operations Adjustments,
page 159
23. Please expand footnote 7(c) so that your methodology for calculating
the incremental
amortization adjustments is transparent.
Helix Financial Statements
3. Summary of Significant Accounting Policies
Revenue Recognition, page F-16
24. We note that you provide various services such as your Cannalytics
platform, which
appears to be dependent on the installation and operation of your
BioTrack seed-to-sale
platform. We also note that you generate revenue from on-going
training, support and
software customization service. As your contracts generally include a
single performance
obligation, tell us the degree to which your revenues are dependent on
multi-element
contracts and, if material, tell us and disclose how you identify
performance obligations
and allocate purchase price in multi-element contracts under ASC 606.
Medical Outcomes Research Analytics, LLC (MOR) Financial Statements
Consolidated Statements of Cash Flows from Inception (May 6, 2019) through
December 31,
2019, page F-96
25. Please either revise or reconcile for us the $419,504 of cash used to
purchase marketable
securities for the period from inception through September 30, 2019,
as indicated on page
F-106, to the purchase of $149,767 disclosed on page F-96. Recognized
material declines
of fair value of marketable securities should be reported in results
of operations as a non-
operating line-item and addressed in MD&A as appropriate.
Condensed Consolidated Statements of Operations, page F-104
FirstName LastNameDaniel Barton
26. Explain for us why the forecasted statement of operations of MOR for the
year ending
Comapany NameForian
December Inc.on page 56, reflects material costs of revenues, a
line-item that is
31, 2020,
absent
December 21,here.
2020 Page 5
FirstName LastName
Daniel Barton
FirstName
Forian Inc. LastNameDaniel Barton
Comapany21,
December NameForian
2020 Inc.
December
Page 6 21, 2020 Page 6
FirstName LastName
Item 21. Exhibits and Financial Statement Schedules, page II-2
27. Please ensure you include all of the exhibits required by Item 601 of
Regulation S-K, such
as the voting agreement and material agreements required by Item
601(b)(10) of
Regulation S-K.
General
28. Please include a form of the proxy card with your next amendment.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Refer to Rules 460 and 461 regarding requests for acceleration. Please
allow adequate
time for us to review any amendment prior to the requested effective date of
the registration
statement.
You may contact Joseph M. Kempf, Senior Staff Accountant, at (202)
551-3352 or
Robert Littlepage, Accounting Branch Chief, at (202) 551-3361 if you have
questions regarding
comments on the financial statements and related matters. Please contact
Mitchell Austin, Staff
Attorney, at (202) 551-3574 or Jan Woo, Legal Branch Chief, at (202) 551-3453
with any other
questions.
Sincerely,
Division of
Corporation Finance
Office of
Technology
cc: Darrick Mix, Esq.