VerticalScope Taps TollBit to Unlock AI License Revenue and Protect Community Content Share Sep 29, 2025 5:05 PM Eastern Daylight Time TORONTO--(BUSINESS WIRE)--VerticalScope Holdings Inc. ("VerticalScope†or the "Company†) (TSX: FORA; OTCQX: VFORF), a technology company that has built and operates a cloud-based digital platform for online enthusiast communities, today announced a partnership with TollBit, an innovative platform that connects online platforms and publishers with AI companies seeking to lic ...

[PART I FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) This section presents Forian Inc.'s unaudited condensed consolidated financial statements and related notes for Q2 2025 and FY2024 [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents Forian Inc.'s unaudited condensed consolidated financial statements and related notes for Q2 2025 and FY2024 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section details the company's financial position, including assets, liabilities, and equity, as of June 30, 2025, and December 31, 2024 Condensed Consolidated Balance Sheets (Selected Items) | Item | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Cash and cash equivalents | $5,369,817 | $4,590,661 | | Marketable securities | $30,279,208 | $30,492,088 | | Total current assets | $46,541,103 | $44,460,091 | | Total assets | $48,462,637 | $47,169,843 | | Total current liabilities | $17,520,976 | $16,604,690 | | Total liabilities | $17,520,976 | $17,116,827 | | Total stockholders' equity | $30,941,661 | $30,053,016 | - Total assets increased by approximately **$1.3 million** from December 31, 2024, to June 30, 2025, driven by increases in cash and accounts receivable, partially offset by a slight decrease in marketable securities[10](index=10&type=chunk) - Total liabilities increased by approximately **$0.4 million**, primarily due to higher accounts payable and deferred revenues, while total stockholders' equity increased by approximately **$0.9 million**[10](index=10&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section outlines the company's revenues, expenses, and net income (loss) for the three and six months ended June 30, 2025 and 2024 Condensed Consolidated Statements of Operations (Selected Items) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $7,476,140 | $4,777,101 | $14,532,256 | $9,654,479 | | Total costs and expenses | $7,430,064 | $7,747,579 | $15,880,845 | $14,397,307 | | Operating Income (Loss) | $46,076 | $(2,970,478) | $(1,348,589) | $(4,742,828) | | Net income (loss) | $224,793 | $(2,553,259) | $(901,069) | $(3,765,874) | | Basic net income (loss) per common share | $0.01 | $(0.08) | $(0.03) | $(0.12) | | Diluted net income (loss) per common share | $0.01 | $(0.08) | $(0.03) | $(0.12) | - Revenue increased significantly for both the three-month (**56.5%**) and six-month (**50.5%**) periods ended June 30, 2025, compared to the same periods in 2024[12](index=12&type=chunk) - The company reported net income of **$224,793** for the three months ended June 30, 2025, a substantial improvement from a net loss of **$(2,553,259)** in the prior year period[12](index=12&type=chunk) - For the six months, the net loss narrowed from **$(3,765,874)** to **$(901,069)**[12](index=12&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) This section details changes in stockholders' equity, including common stock, additional paid-in capital, and accumulated deficit, for the reported periods Condensed Consolidated Statements of Stockholders' Equity (Selected Items) | Item | Balance at Jan 1, 2025 | Balance at June 30, 2025 | Balance at Jan 1, 2024 | Balance at June 30, 2024 | | :-------------------------------- | :--------------------- | :--------------------- | :--------------------- | :--------------------- | | Common Stock (Shares) | 31,010,788 | 31,202,312 | 30,920,450 | 31,110,187 | | Common Stock (Par Value) | $31,011 | $31,203 | $30,920 | $31,110 | | Additional Paid In Capital | $79,937,115 | $81,726,637 | $73,834,300 | $77,054,999 | | Accumulated Deficit | $(49,915,110) | $(50,816,179) | $(46,144,040) | $(49,909,914) | | Total Stockholders' Equity | $30,053,016 | $30,941,661 | $27,721,180 | $27,176,195 | - Total stockholders' equity increased from **$30,053,016** at January 1, 2025, to **$30,941,661** at June 30, 2025, primarily due to stock-based compensation expense and net income, partially offset by vesting of restricted stock[13](index=13&type=chunk) - The accumulated deficit increased from **$(49,915,110)** at January 1, 2025, to **$(50,816,179)** at June 30, 2025, reflecting the net loss for the six-month period[13](index=13&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section presents the cash flows from operating, investing, and financing activities for the six months ended June 30, 2025 and 2024 Condensed Consolidated Statements of Cash Flows (Six Months Ended June 30) | Activity | 2025 | 2024 | | :------------------------------------ | :----------- | :------------ | | Net cash provided by (used in) operating activities | $103,649 | $(2,231,180) | | Net cash provided by (used in) investing activities | $840,081 | $(762,026) | | Net cash used in financing activities | $(164,574) | $(1,050,662) | | Net change in cash and cash equivalents | $779,156 | $(4,043,868) | | Cash and cash equivalents, end of period | $5,369,817 | $1,999,118 | - Operating activities generated cash of **$103,649** in the first six months of 2025, a significant improvement from cash used of **$(2,231,180)** in the same period of 2024[16](index=16&type=chunk) - Investing activities provided **$840,081** in cash in 2025, reversing from cash used of **$(762,026)** in 2024, primarily due to changes in marketable securities[16](index=16&type=chunk) - Cash used in financing activities decreased by **$886,088**, from **$(1,050,662)** in 2024 to **$(164,574)** in 2025, mainly due to lower tax payments for vested restricted stock units and convertible note redemptions[16](index=16&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations of the company's business, accounting policies, acquisitions, and specific financial line items [Note 1 BUSINESS ORGANIZATION AND NATURE OF OPERATIONS](index=9&type=section&id=Note%201%20BUSINESS%20ORGANIZATION%20AND%20NATURE%20OF%20OPERATIONS) This note describes Forian Inc.'s business and the nature of its operations - Forian Inc. provides data management and analytics solutions for healthcare, life sciences, and financial services industries[18](index=18&type=chunk) - On October 31, 2024, Forian acquired Kyber Data Science, LLC, which offers data management and analytics solutions for the financial services industry, accounted for using the acquisition method[19](index=19&type=chunk) [Note 2 BASIS OF PRESENTATION](index=9&type=section&id=Note%202%20BASIS%20OF%20PRESENTATION) This note outlines the basis for preparing the condensed consolidated financial statements - The condensed consolidated financial statements are prepared in accordance with U.S. GAAP, with certain footnotes and information condensed or omitted per Form 10-Q instructions[20](index=20&type=chunk) - Management considers all necessary adjustments for fair presentation, and operating results are not necessarily indicative of full-year expectations[20](index=20&type=chunk) [Note 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=9&type=section&id=Note%203%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note summarizes the key accounting policies used in preparing the financial statements - The consolidated financial statements include Forian LLC, Kyber Data Science LLC (effective Oct 31, 2024), and Helix Technologies, Inc. and their subsidiaries, with all intercompany transactions eliminated[21](index=21&type=chunk) - Revenue is recognized following the five-step model of ASC 606, primarily from information products, with recognition occurring when customers obtain control of goods/services[38](index=38&type=chunk)[39](index=39&type=chunk) - The company operates as a single reportable segment providing analytic and information services to healthcare, life science, and financial services industries[49](index=49&type=chunk) - Sales for the three months ended June 30, 2025, were primarily from the United States (**94%**), Australia (**5%**), and Great Britain/others (**1%**)[47](index=47&type=chunk) - The company faces vendor concentration risk, with two vendors representing **21.3%** and **12.7%** of purchases and expenses for the three months ended June 30, 2025[56](index=56&type=chunk) - The 2020 Equity Incentive Plan was amended on June 11, 2025, increasing authorized shares for issuance by **4,000,000** to a total of **10,400,000** shares[63](index=63&type=chunk) - The company is evaluating the impact of new FASB ASUs 2023-09 (Income Tax Disclosures), 2024-03 (Expense Disaggregation Disclosures), and 2025-05 (Credit Losses for Accounts Receivable and Contract Assets) on its financial statements[71](index=71&type=chunk)[73](index=73&type=chunk)[74](index=74&type=chunk) [Note 4 ACQUISITION](index=18&type=section&id=Note%204%20ACQUISITION) This note provides details regarding the acquisition of Kyber Data Science, LLC - Forian acquired Kyber Data Science, LLC on October 31, 2024, for no consideration other than the assumption of certain normal course working capital liabilities[76](index=76&type=chunk)[78](index=78&type=chunk) - The acquisition resulted in a bargain purchase gain of **$1,204,830**, as the fair value of net assets acquired exceeded the purchase price[78](index=78&type=chunk)[80](index=80&type=chunk) - Kyber contributed revenues of **$1,859,566** and **$3,552,913** for the three and six months ended June 30, 2025, respectively[81](index=81&type=chunk) [Note 5 MARKETABLE SECURITIES](index=20&type=section&id=Note%205%20MARKETABLE%20SECURITIES) This note describes the company's marketable securities holdings - Marketable securities, primarily U.S. Treasury Bills, are classified as available-for-sale and stated at estimated fair value (Level 2 inputs)[84](index=84&type=chunk) Marketable Securities (U.S. Treasury Bills) | Item | June 30, 2025 | December 31, 2024 | | :---------------- | :------------ | :---------------- | | Amortized Cost | $30,276,659 | $30,476,729 | | Fair Market Value | $30,279,208 | $30,492,088 | [Note 6 PREPAID EXPENSES AND OTHER CURRENT ASSETS](index=20&type=section&id=Note%206%20PREPAID%20EXPENSES%20AND%20OTHER%20CURRENT%20ASSETS) This note details the components of prepaid expenses and other current assets - Prepaid expenses increased to **$1,561,617** at June 30, 2025, from **$1,111,234** at December 31, 2024, mainly for software, information licenses, and insurance[85](index=85&type=chunk) - Other current assets at June 30, 2025, included income taxes receivable of **$362,560** and deferred license costs of **$969,184**[86](index=86&type=chunk) [Note 7 PROPERTY AND EQUIPMENT, NET](index=20&type=section&id=Note%207%20PROPERTY%20AND%20EQUIPMENT%2C%20NET) This note provides information on the company's property and equipment Property and Equipment, Net | Item | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Personal computing equipment | $48,143 | $94,521 | | Office equipment and capitalized software | $73,260 | $73,260 | | Total | $121,403 | $167,781 | | Less: Accumulated depreciation | $(83,899) | $(121,129) | | Property and equipment, net | $37,504 | $46,652 | - Depreciation expense for the three and six months ended June 30, 2025, was **$4,254** and **$9,148**, respectively[87](index=87&type=chunk) [Note 8 INTANGIBLE ASSETS](index=21&type=section&id=Note%208%20INTANGIBLE%20ASSETS) This note details the company's intangible assets Intangible Assets (Net Book Value) | Item | June 30, 2025 | December 31, 2024 | | :------------------------ | :------------ | :---------------- | | Customer relationships | $898,667 | $983,016 | | Tradenames and trademarks | $199,074 | $209,028 | | Total | $1,097,741 | $1,192,044 | - Amortization expense for the three and six months ended June 30, 2025, was **$48,097** and **$94,303**, respectively[88](index=88&type=chunk) - The weighted average remaining amortization period for intangible assets was **5.88 years** as of June 30, 2025[89](index=89&type=chunk) [Note 9 DEPOSITS AND OTHER ASSETS](index=21&type=section&id=Note%209%20DEPOSITS%20AND%20OTHER%20ASSETS) This note describes the company's deposits and other assets - Deposits and other assets included **$582,617** related to information license vendors as of June 30, 2025, down from **$1,357,482** at December 31, 2024[90](index=90&type=chunk) [Note 10 ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES](index=22&type=section&id=Note%2010%20ACCRUED%20EXPENSES%20AND%20OTHER%20CURRENT%20LIABILITIES) This note details the components of accrued expenses and other current liabilities Accrued Expenses and Other Current Liabilities | Item | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Employee compensation | $1,752,332 | $1,570,205 | | Information Contracts | $1,085,170 | $1,296,315 | | Other accrued expenses | $1,068,821 | $1,546,747 | | Total | $3,906,323 | $4,413,267 | - Total accrued expenses decreased by approximately **$0.5 million** from December 31, 2024, to June 30, 2025, primarily due to decreases in information contracts and other accrued expenses[91](index=91&type=chunk) [Note 11 CONVERTIBLE NOTES](index=22&type=section&id=Note%2011%20CONVERTIBLE%20NOTES) This note provides information on the company's convertible promissory notes - The company has **$6,000,000** in principal outstanding on 3.5% Convertible Promissory Notes due September 1, 2025[92](index=92&type=chunk) - Interest expense on the Notes was **$52,356** and **$103,701** for the three and six months ended June 30, 2025, respectively, significantly lower than the prior year due to 2024 redemptions[92](index=92&type=chunk) - The company redeemed **$1,000,000** in principal and **$87,356** of accrued interest on February 28, 2024, resulting in a gain of **$137,356**[95](index=95&type=chunk) [Note 12 STOCK-BASED COMPENSATION](index=23&type=section&id=Note%2012%20STOCK-BASED%20COMPENSATION) This note details the company's stock-based compensation arrangements Unvested Restricted Stock Awards and Units | Item | Number of Shares and Units | | :-------------------------- | :------------------------- | | Unvested at January 1, 2025 | 1,647,248 | | Issued | 200,000 | | Vested | (263,750) | | Canceled | (539,250) | | Unvested at June 30, 2025 | 1,044,248 | Stock-Based Compensation Expense | Period | 2025 | 2024 | | :------------------------------------ | :----------- | :----------- | | Three Months Ended June 30, Total | $661,502 | $1,662,636 | | Six Months Ended June 30, Total | $1,954,288 | $3,321,551 | - Total unrecognized stock compensation expense related to unvested awards was **$4,283,136** at June 30, 2025, expected to be recognized over approximately **1.5 years**[102](index=102&type=chunk) [Note 13 NET INCOME (LOSS) PER SHARE](index=25&type=section&id=Note%2013%20NET%20INCOME%20(LOSS)%20PER%20SHARE) This note provides the calculation of basic and diluted net income (loss) per share Net Income (Loss) Per Share | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) attributable to common shareholders | $224,793 | $(2,553,259) | $(901,069) | $(3,765,874) | | Basic net income (loss) per common share | $0.01 | $(0.08) | $(0.03) | $(0.12) | | Diluted net income (loss) per common share | $0.01 | $(0.08) | $(0.03) | $(0.12) | | Weighted average common shares outstanding - basic | 31,202,312 | 31,098,497 | 31,163,137 | 31,049,647 | | Weighted average common shares outstanding - diluted | 31,293,644 | 31,098,497 | 31,163,137 | 31,049,647 | - Potentially dilutive securities, including warrants, stock options, convertible notes, and unvested restricted stock, were excluded from diluted EPS calculation for periods with net losses as their impact would be antidilutive[105](index=105&type=chunk)[106](index=106&type=chunk) [Note 14 RELATED PARTY TRANSACTIONS](index=25&type=section&id=Note%2014%20RELATED%20PARTY%20TRANSACTIONS) This note discloses transactions involving related parties - Adam Dublin, Chief Strategy Officer, received runoff commissions from a former vendor, totaling **$7,975** for the six months ended June 30, 2025[107](index=107&type=chunk) - A director's spouse holds **$6,000,000** of the 3.5% Convertible Promissory Notes[108](index=108&type=chunk) - The company entered a customer agreement with an entity controlled by a director, generating **$113,391** and **$217,856** in revenues for the three and six months ended June 30, 2025, respectively[109](index=109&type=chunk) [Note 15 LEASES](index=26&type=section&id=Note%2015%20LEASES) This note provides information on the company's lease arrangements - The company has operating leases, primarily for facilities, with remaining terms of **1-2 years**, and has elected the short-term lease exemption for leases of **12 months or less**[110](index=110&type=chunk)[112](index=112&type=chunk) Operating Lease Liabilities | Item | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Right of use assets, net | $23,988 | $35,560 | | Short-term operating lease liabilities | $23,988 | $23,423 | | Long-term operating lease liabilities | $0 | $12,137 | | Total lease liabilities | $23,988 | $35,560 | - Total operating lease costs for the three and six months ended June 30, 2025, were **$12,365** and **$23,969**, respectively[116](index=116&type=chunk) [Note 16 COMMITMENTS AND CONTINGENCIES](index=27&type=section&id=Note%2016%20COMMITMENTS%20AND%20CONTINGENCIES) This note describes the company's commitments and contingent liabilities - The company has remaining payment obligations under service and license agreements totaling **$12,701,625** as of June 30, 2025[117](index=117&type=chunk) - Two significant legal proceedings, Audet v. Green Tree International, et. al. and Grant Whitus et al. v. Forian Inc., Zachary Venegas and Scott Ogur, were settled and dismissed with prejudice in March and June 2024, respectively[121](index=121&type=chunk)[122](index=122&type=chunk) [Note 17 SUBSEQUENT EVENTS](index=29&type=section&id=Note%2017%20SUBSEQUENT%20EVENTS) This note discloses events occurring after the balance sheet date - On July 15, 2025, the Board approved the grant of **600,000** restricted stock units to certain employees[125](index=125&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Forian Inc.'s financial condition and results of operations for the three and six months ended June 30, 2025 and 2024 [Overview](index=29&type=section&id=Overview) This section provides a general overview of Forian Inc.'s business and recent developments - Forian Inc. provides data management and analytics solutions for healthcare, life sciences, and financial services industries[127](index=127&type=chunk) - The company acquired Kyber Data Science, LLC on October 31, 2024, which offers financial services data solutions[128](index=128&type=chunk) [Financial Operations Overview](index=29&type=section&id=Financial%20Operations%20Overview) This section describes the key components of the company's financial operations - Revenues are primarily from proprietary information products and services, recognized as performance obligations are satisfied[130](index=130&type=chunk) - Cost of revenues includes labor, information licensing, hosting, infrastructure, and client service team costs[132](index=132&type=chunk) - Research and development efforts focus on adding new features and applications to product offerings[135](index=135&type=chunk) - Sales and marketing expenses are mainly salaries, commissions, and marketing program costs, with plans for continued investment[136](index=136&type=chunk) - General and administrative expenses cover administrative functions, professional fees, and other corporate support[137](index=137&type=chunk) - Litigation settlements and related expenses are associated with legacy claims from the Helix merger[138](index=138&type=chunk) - Depreciation and amortization relate to long-lived assets, including furniture, equipment, computers, and intangible assets[139](index=139&type=chunk) [Results of Operations For the Three and Six Months Ended June 30, 2025 and 2024](index=32&type=section&id=Results%20of%20Operations%20For%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) This section analyzes the company's financial performance for the three and six months ended June 30, 2025 and 2024 [Comparison of three months ended June 30, 2025 and 2024](index=32&type=section&id=Comparison%20of%20three%20months%20ended%20June%2030%2C%202025%20and%202024) This section compares the financial results for the three months ended June 30, 2025, and 2024 Key Financials (Three Months Ended June 30) | Item | 2025 | 2024 | Change ($) | Change (%) | | :------------------------------------ | :----------- | :----------- | :----------- | :----------- | | Revenues | $7,476,140 | $4,777,101 | $2,699,039 | 56.5% | | Cost of Revenues | $3,228,169 | $1,806,918 | $1,421,251 | 78.6% | | Research and Development | $675,731 | $307,201 | $368,530 | 120.0% | | Sales and Marketing | $1,495,710 | $1,017,659 | $478,051 | 47.0% | | General and Administrative | $1,971,959 | $3,229,757 | $(1,257,798) | (39.0%) | | Litigation settlements and related expenses | $0 | $942,311 | $(942,311) | (100.0%) | | Interest and Investment Income | $347,968 | $618,316 | $(270,348) | (43.7%) | | Interest Expense | $53,689 | $193,306 | $(139,617) | (72.2%) | - Revenue growth was primarily driven by the Kyber acquisition and organic growth in information products[142](index=142&type=chunk) - Gross profit as a percentage of revenues decreased to **57%** from **62%** due to higher information licensing and processing expenses[143](index=143&type=chunk) - General and administrative expenses decreased significantly due to lower stock compensation and credit loss expenses[147](index=147&type=chunk) [Comparison of six months ended June 30, 2025 and 2024](index=33&type=section&id=Comparison%20of%20six%20months%20ended%20June%2030%2C%202025%20and%202024) This section compares the financial results for the six months ended June 30, 2025, and 2024 Key Financials (Six Months Ended June 30) | Item | 2025 | 2024 | Change ($) | Change (%) | | :------------------------------------ | :----------- | :----------- | :----------- | :----------- | | Revenues | $14,532,256 | $9,654,479 | $4,877,777 | 50.5% | | Cost of Revenues | $6,359,791 | $3,510,275 | $2,849,516 | 81.2% | | Research and Development | $1,281,968 | $697,090 | $584,878 | 83.9% | | Sales and Marketing | $2,878,437 | $2,072,800 | $805,637 | 38.9% | | General and Administrative | $5,251,053 | $6,513,246 | $(1,262,193) | (19.4%) | | Litigation settlements and related expenses | $0 | $1,151,276 | $(1,151,276) | (100.0%) | | Interest and Investment Income | $676,816 | $1,293,473 | $(616,657) | (47.7%) | | Interest Expense | $106,367 | $392,269 | $(285,902) | (72.9%) | - Revenue growth for the six-month period was also primarily due to the Kyber acquisition and organic growth[152](index=152&type=chunk) - Gross profit as a percentage of revenues decreased to **56%** from **64%** for the six-month period due to increased costs[153](index=153&type=chunk) - Litigation settlements and related expenses were **zero** in 2025, down from over **$1.1 million** in 2024, reflecting the settlement of legacy claims[157](index=157&type=chunk) [Non-GAAP Financial Measures](index=34&type=section&id=Non-GAAP%20Financial%20Measures) This section provides a reconciliation of non-GAAP financial measures, specifically Adjusted EBITDA [Limitations on the use of non-GAAP financial measures](index=37&type=section&id=Limitations%20on%20the%20use%20of%20non-GAAP%20financial%20measures) This section outlines the inherent limitations of using non-GAAP financial measures - Non-GAAP financial measures are not prepared in accordance with U.S. GAAP and may differ from those of other companies, having inherent limitations due to excluded items[167](index=167&type=chunk)[168](index=168&type=chunk) - Management uses both GAAP and non-GAAP measures and encourages investors to review all financial information and compare non-GAAP measures with their most directly comparable GAAP counterparts[168](index=168&type=chunk)[169](index=169&type=chunk) [Adjusted EBITDA Reconciliation](index=38&type=section&id=Adjusted%20EBITDA%20Reconciliation) This section presents a reconciliation of net income (loss) to Adjusted EBITDA Adjusted EBITDA Reconciliation | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) | $224,793 | $(2,553,259) | $(901,069) | $(3,765,874) | | Depreciation and amortization | $52,350 | $7,889 | $103,451 | $16,776 | | Stock based compensation expense | $661,502 | $1,662,636 | $1,954,288 | $3,321,551 | | Interest and investment income | $(347,968) | $(618,316) | $(676,816) | $(1,293,473) | | Interest expense | $53,689 | $193,306 | $106,367 | $392,269 | | Litigation related expenses | $0 | $942,311 | $0 | $1,151,276 | | Strategic review and transaction related expenses | $6,145 | $435,844 | $6,145 | $435,844 | | Contract termination impacts | $(175,000) | $0 | $(175,000) | $0 | | Income tax expense | $115,562 | $8,221 | $122,929 | $110,761 | | **Adjusted EBITDA** | **$591,073** | **$78,202** | **$540,295** | **$182,619** | [Comparison of the Three Months Ended June 30, 2025 and 2024 (Adjusted EBITDA)](index=38&type=section&id=Comparison%20of%20the%20Three%20Months%20Ended%20June%2030%2C%202025%20and%202024%20(Adjusted%20EBITDA)) This section compares Adjusted EBITDA for the three months ended June 30, 2025, and 2024 - Adjusted EBITDA for the three months ended June 30, 2025, increased by **$512,871** to **$591,073**, compared to **$78,202** in the prior year, driven by higher revenues partially offset by increased costs[172](index=172&type=chunk) [Comparison of the Six Months Ended June 30, 2025 and 2024 (Adjusted EBITDA)](index=38&type=section&id=Comparison%20of%20the%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024%20(Adjusted%20EBITDA)) This section compares Adjusted EBITDA for the six months ended June 30, 2025, and 2024 - Adjusted EBITDA for the six months ended June 30, 2025, increased by **$357,676** to **$540,295**, compared to **$182,619** in the prior year, primarily due to higher revenues[173](index=173&type=chunk) [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's ability to meet its short-term and long-term financial obligations - The company's operations have been financed by cash flow from operating activities, sale of investments, equity issuances, and convertible notes[174](index=174&type=chunk) - As of June 30, 2025, cash and marketable securities totaled **$35,649,025**, with outstanding principal and accrued interest on convertible notes aggregating **$6,804,016**[174](index=174&type=chunk) - Future operations and acquisitions are expected to be funded through operating cash flow, available cash/marketable securities, debt financing, and/or equity issuances[174](index=174&type=chunk) [Cash Flows](index=39&type=section&id=Cash%20Flows) This section provides a detailed analysis of cash flows from operating, investing, and financing activities [Net Cash Provided by (Used In) Operating Activities](index=39&type=section&id=Net%20Cash%20Provided%20by%20(Used%20In)%20Operating%20Activities) This section analyzes cash flows generated from or used in the company's primary business operations - Net cash provided by operating activities was **$103,649** for the six months ended June 30, 2025, a **$2,334,829** increase from cash used in operating activities of **$2,231,180** in the prior year[176](index=176&type=chunk) - This improvement was due to increased Adjusted EBITDA, decreased litigation settlements, reduced strategic review expenses, and changes in working capital[176](index=176&type=chunk) [Net Cash Provided by (Used In) By Investing Activities](index=39&type=section&id=Net%20Cash%20Provided%20by%20(Used%20In)%20By%20Investing%20Activities) This section analyzes cash flows related to the acquisition and disposal of long-term assets and investments - Net cash provided by investing activities was **$840,081** for the six months ended June 30, 2025, an increase of **$1,602,107** from cash used in investing activities of **$762,026** in the prior year[177](index=177&type=chunk) - The change was primarily due to net additions to marketable securities, partially offset by cash from the sale of a discontinued operation in 2024[177](index=177&type=chunk) [Net Cash Used In Financing Activities](index=39&type=section&id=Net%20Cash%20Used%20In%20Financing%20Activities) This section analyzes cash flows related to debt, equity, and dividend transactions - Net cash used in financing activities decreased by **$886,088** to **$164,574** for the six months ended June 30, 2025, from **$1,050,662** in the prior year[178](index=178&type=chunk) - This decrease was mainly due to changes in tax payments for vested restricted stock units and redemptions of convertible notes[178](index=178&type=chunk) [Critical Accounting Estimates](index=39&type=section&id=Critical%20Accounting%20Estimates) This section discusses accounting estimates that require significant judgment and could materially impact financial results - Critical accounting estimates include judgments for revenue recognition (distinct performance obligations, variable revenue), share-based payments (fair value assumptions), income taxes (valuation allowance for deferred tax assets), and business combinations (fair value allocation of acquired assets and liabilities)[183](index=183&type=chunk)[184](index=184&type=chunk)[185](index=185&type=chunk)[186](index=186&type=chunk) - These estimates are based on historical experience and assumptions, but actual results may differ, potentially impacting financial statements[181](index=181&type=chunk)[187](index=187&type=chunk) [Recent Accounting Pronouncements](index=41&type=section&id=Recent%20Accounting%20Pronouncements) This section outlines recently issued accounting pronouncements and their potential impact - The company is evaluating the impact of ASU 2023-09 (Income Tax Disclosures), ASU 2024-03 (Expense Disaggregation Disclosures), and ASU 2025-05 (Credit Losses for Accounts Receivable and Contract Assets) on its financial statements[189](index=189&type=chunk)[190](index=190&type=chunk)[191](index=191&type=chunk) [Recently Adopted Accounting Pronouncements](index=41&type=section&id=Recently%20Adopted%20Accounting%20Pronouncements) This section details accounting pronouncements recently adopted by the company - All new applicable accounting pronouncements in effect have been implemented and did not have a material impact on the financial statements[192](index=192&type=chunk) [JOBS Act](index=41&type=section&id=JOBS%20Act) This section discusses the company's status and elections under the Jumpstart Our Business Startups Act - As an 'emerging growth company' under the JOBS Act, Forian Inc. elects to use the extended transition period for new or revised accounting standards[193](index=193&type=chunk) - The company benefits from reduced reporting requirements, including exemptions from auditor attestation on internal controls and certain compensation disclosures, until December 31, 2026, or when it no longer qualifies as an 'emerging growth company'[194](index=194&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=42&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This item is not required for the company [Item 4. Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) This section discusses the evaluation of the company's disclosure controls and procedures and changes in internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=42&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section details management's evaluation of the effectiveness of the company's disclosure controls and procedures - Management concluded that the company's disclosure controls and procedures were ineffective as of June 30, 2025, due to material weaknesses in internal controls over financial reporting[197](index=197&type=chunk) - Remediation efforts include implementing controls to validate accuracy of payables transactions, prevent fraudulent payments, and ensure proper application of ASC 606 for revenue recognition[198](index=198&type=chunk)[199](index=199&type=chunk) - The weaknesses will not be considered fully remediated until controls operate for a sufficient period and are tested for operating effectiveness[200](index=200&type=chunk) [Changes in Internal Control Over Financial Reporting](index=43&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) This section reports any material changes in the company's internal control over financial reporting - No material changes in internal control over financial reporting occurred during the three months ended June 30, 2025, other than the ongoing remediation efforts described[201](index=201&type=chunk) [PART II OTHER INFORMATION](index=43&type=section&id=PART%20II%20OTHER%20INFORMATION) This section contains other information not included in the financial statements, such as legal proceedings and exhibits [Item 1. Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any pending material litigation - The company does not currently have any pending litigation that it believes to be material[202](index=202&type=chunk) [Item 1A. Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) This item is not required for the company [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=43&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities or use of proceeds to report [Item 3. Defaults Upon Senior Securities](index=43&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities to report [Item 4. Mine Safety Disclosures](index=43&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company [Item 5. Other Information](index=43&type=section&id=Item%205.%20Other%20Information) No directors or executive officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the reported periods - No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the reported periods[207](index=207&type=chunk) [Item 6. Exhibits](index=44&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Quarterly Report on Form 10-Q - Exhibits include the Certificate of Incorporation, Bylaws, Section 302 and 906 certifications, and Inline XBRL documents[208](index=208&type=chunk) [SIGNATURES](index=45&type=section&id=SIGNATURES) The report is duly signed on behalf of Forian Inc. by Max Wygod, Chief Executive Officer, and Michael Vesey, Chief Financial Officer, on August 14, 2025 [Signatures](index=45&type=section&id=Signatures) The report is duly signed on behalf of Forian Inc. by Max Wygod, Chief Executive Officer, and Michael Vesey, Chief Financial Officer, on August 14, 2025 - The report was signed by Max Wygod, CEO, and Michael Vesey, CFO, on August 14, 2025[211](index=211&type=chunk)[213](index=213&type=chunk)

Financial Data and Key Metrics Changes - Forian reported second quarter revenue of $7.5 million, representing a 56% year-over-year growth, with the Kyber acquisition contributing approximately $1.9 million or 39% to this growth [8][15] - Net income for the quarter was $224,000, and adjusted EBITDA was $591,000, compared to a loss of $2.5 million and positive $78,000 year-over-year respectively [8][15] - Operating income was approximately $50,000 compared to a loss of $3 million in the same quarter last year, primarily due to higher revenues and lower stock-based compensation [16] Business Line Data and Key Metrics Changes - The growth in revenue was highlighted by key new pharma projects and analytical renewals, alongside the full quarter of Kyber Data Science's financials [8][15] - The company expanded its data coverage by securing new supply contracts and accelerating integrations with diverse clinical data sources [9] Market Data and Key Metrics Changes - The healthcare and financial services markets are experiencing a mixed spending environment, with pharma companies remaining cautious due to geopolitical and macroeconomic factors [7] - The demand for analytic-ready real-world data continues to grow, as companies seek to measure effectiveness, safety, and value [7] Company Strategy and Development Direction - Forian aims to continue entering into more strategic long-term data contracts and invest in enhancing its product portfolio [9] - The company is optimistic about 2025, expecting full-year revenue of $28 million to $30 million, representing 39% to 49% growth year-over-year [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the second half of the year based on contracted backlog and renewals in the pipeline [6] - The company is actively looking for strategic acquisitions to strengthen its financial position and expand its reach with pharmaceutical clients [13][21] Other Important Information - The company ended the period with $35.6 million in cash and marketable securities and $6.8 million in convertible notes maturing in September 2025 [17] - Adjusted EBITDA margin is expected to be between negative $1 million and positive $1 million for the full year [13] Q&A Session Summary Question: What will drive the delta between the top and bottom line of the guidance? - Management indicated that renewals in the back half of the year will significantly impact hitting the guidance range [20] Question: Can you discuss the acquisition environment and seller valuations? - Management noted that valuations are coming down from previous highs, and there are opportunities in the smaller market that align with the company's size [21][22] Question: Where were the strengths in organic growth and its sustainability? - The company highlighted health economics and outcomes research as strong growth areas, along with the Kyber data science division in financial services [25][26] Question: What factors could lead to a positive or negative adjusted EBITDA? - Management stated that discretionary spending on strategic initiatives and revenue performance will impact adjusted EBITDA [27] Question: Are new AI technologies improving productivity and cost efficiency? - Management is investigating the use of AI to enhance efficiency but noted that regulatory concerns limit rapid adoption [30][31]

Financial Performance - Q2 2025 revenue increased by 56% to $7476000 compared to $4777000 in Q2 2024[6] - Net income for Q2 2025 was $225000, a 109% increase compared to a net loss of $2553000 in Q2 2024[6] - Adjusted EBITDA for Q2 2025 was $591000, a 656% increase compared to $78000 in Q2 2024[6] - For the first six months of 2025, revenue increased by 51% to $14532000 compared to $9654000 in the same period of 2024[6] - Net loss for the first six months of 2025 was $901000, a 76% decrease compared to a net loss of $3766000 in the same period of 2024[6] - Adjusted EBITDA for the first six months of 2025 was $540000, a 196% increase compared to $183000 in the same period of 2024[6] Growth Drivers - The Kyber acquisition contributed $1900000 to revenue growth in Q2 2025 and $3600000 year-to-date[11] - The Kyber acquisition accounted for approximately 39% of the Q2 revenue increase[11] - Internal growth accounted for approximately 17% of the Q2 revenue increase and 13% year-to-date[11] Outlook - The company expects full year 2025 revenue to be between $28000000 and $30000000, representing a 39% to 49% increase over 2024 revenue of $20200000[25] - The company expects adjusted EBITDA for full year 2025 to be between ($1000000) and $1000000[25]

Executive Summary and Q2 2025 Highlights Forian Inc. reported strong Q2 2025 financial results with significant growth and reconfirmed its positive full-year 2025 outlook [Announcement and CEO Commentary](index=1&type=section&id=Announcement%20and%20CEO%20Commentary) Forian Inc. announced strong Q2 2025 results, with CEO emphasizing successful business development and strategic investments - Forian Inc. announced strong second quarter 2025 financial results, reflecting continued execution and extending its track record of growth and operational discipline[3](index=3&type=chunk) - CEO Max Wygod emphasized successful business development, expanding core capabilities, and generating positive momentum, while remaining focused on organic and strategic investments[3](index=3&type=chunk) [Second Quarter 2025 Financial Performance](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Results) Forian delivered significant Q2 2025 financial improvements, with **56% revenue growth** and **656% Adjusted EBITDA growth** Second Quarter 2025 Financial Results (Unaudited) | Metric | Q2 2025 | Q2 2024 | Period over Period % Change | | :--------------------------------- | :---------- | :---------- | :-------------------------- | | Revenue | $7,476,140 | $4,777,101 | 56% | | Net income (loss) | $224,793 | $(2,553,259) | 109% | | Income (loss) per share - basic and diluted | $0.01 | $(0.08) | 113% | | Adjusted EBITDA | $591,073 | $78,202 | 656% | - Revenue for the quarter was **$7.5 million**, a **$2.7 million increase** from **$4.8 million** in the prior year[5](index=5&type=chunk) - Net income for the quarter was **$0.2 million**, or **$0.01 per share**, compared to a net loss of **$2.6 million**, or **$0.08 per share**, in the prior year[5](index=5&type=chunk) [Full Year 2025 Outlook](index=1&type=section&id=Full%20Year%202025%20Outlook) Forian reconfirmed its full-year 2025 outlook, projecting revenue of **$28-30 million** and Adjusted EBITDA of **($1.0)-1.0 million** - The Company reconfirmed its full-year 2025 outlook based on information as of August 13, 2025[5](index=5&type=chunk) Full Year 2025 Outlook | Metric | Expected Range | | :---------------- | :--------------------- | | Revenue | $28 to $30 million | | Adjusted EBITDA | ($1.0) to $1.0 million | - The outlook is supported by strong quarterly revenue (reflecting acquisition impacts, strategic contract renewals, and new wins), strong profitability from operational efficiencies, and signed strategic deals to enhance data assets and offerings[5](index=5&type=chunk) Company Information and Investor Relations This section outlines Forian's business, conference call details, and forward-looking statement cautions [About Forian](index=2&type=section&id=About%20Forian) Forian Inc. provides data science-driven information and analytics solutions for life science, healthcare, and financial services - Forian provides a unique suite of data management capabilities and proprietary information and analytics solutions to optimize and measure operational, clinical and financial performance[8](index=8&type=chunk) - The company serves customers within the traditional and emerging life sciences and healthcare payer and provider segments, and the financial services industry through its acquisition of Kyber Data Science[8](index=8&type=chunk) - Forian has industry-leading expertise in acquiring, integrating, normalizing, and commercializing large scale healthcare data assets, using sophisticated data management and data science capabilities[8](index=8&type=chunk) [Quarterly Conference Call and Webcast](index=2&type=section&id=Quarterly%20Conference%20Call%20and%20Webcast) Forian will host a conference call and webcast on August 13, 2025, at 4:30 p.m. ET to discuss financial results - Forian will host a conference call and webcast at 4:30 p.m. ET on August 13, 2025, to discuss its financial results with the investment community[7](index=7&type=chunk) - Registration for the conference call and a live webcast link are available, with additional information on the company's investor relations website[7](index=7&type=chunk) [Cautionary Statements Regarding Forward-Looking Statements](index=2&type=section&id=Cautionary%20Statements%20Regarding%20Forward-Looking%20Statements) This release contains forward-looking statements subject to risks, cautioning investors against undue reliance and advising review of SEC filings - The release contains 'forward-looking statements' regarding expected future business and financial performance, including management's outlook for 2025, which are based on current estimates[9](index=9&type=chunk) - Forward-looking statements involve risks and uncertainties, many beyond the company's control, that could cause actual results to differ materially from those expressed[9](index=9&type=chunk) - Investors should not place undue reliance on these statements and are directed to review the 'Risk Factors' in Forian's Annual Report on Form 10-K for the year ended December 31, 2024, and other SEC filings[9](index=9&type=chunk) Condensed Consolidated Financial Statements This section presents Forian's unaudited condensed consolidated balance sheets, statements of operations, and cash flows for Q2 and YTD 2025 [Condensed Consolidated Balance Sheets](index=3&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of June 30, 2025, total assets increased to **$48.46 million**, driven by higher cash and accounts receivable, with stockholders' equity reaching **$30.94 million** Condensed Consolidated Balance Sheets (Unaudited) | ASSETS (Unaudited) | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :-------------- | :---------------- | | Cash and cash equivalents | $5,369,817 | $4,590,661 | | Marketable securities | $30,279,208 | $30,492,088 | | Accounts receivable, net | $5,267,632 | $3,971,702 | | Total current assets | $46,541,103 | $44,460,091 | | Total assets | $48,462,637 | $47,169,843 | | Total current liabilities | $17,520,976 | $16,604,690 | | Total liabilities | $17,520,976 | $17,116,827 | | Total stockholders' equity | $30,941,661 | $30,053,016 | - Total assets increased by approximately **$1.3 million** from December 31, 2024, to June 30, 2025[12](index=12&type=chunk) - Cash and cash equivalents increased by **$779,156**, and accounts receivable, net, increased by **$1,295,930** during the period[12](index=12&type=chunk) [Condensed Consolidated Statements of Operations](index=4&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) For Q2 2025, Forian reported a net income of **$224,793**, a significant improvement from a prior-year loss, driven by **56% revenue growth** and reduced expenses Condensed Consolidated Statements of Operations (Unaudited) | Metric | Q2 2025 (3 Months) | Q2 2024 (3 Months) | YTD 2025 (6 Months) | YTD 2024 (6 Months) | | :--------------------------------- | :----------------- | :----------------- | :------------------ | :------------------ | | Revenue | $7,476,140 | $4,777,101 | $14,532,256 | $9,654,479 | | Total costs and expenses | $7,430,064 | $7,747,579 | $15,880,845 | $14,397,307 | | Operating income (loss) | $46,076 | $(2,970,478) | $(1,348,589) | $(4,742,828) | | Net income (loss) | $224,793 | $(2,553,259) | $(901,069) | $(3,765,874) | | Basic net income (loss) per common share | $0.01 | $(0.08) | $(0.03) | $(0.12) | - Revenue increased by **56%** for the three months ended June 30, 2025, compared to the same period in 2024[14](index=14&type=chunk) - General and administrative expenses decreased from **$3,229,757** in Q2 2024 to **$1,971,959** in Q2 2025, and there were no litigation settlements in Q2 2025 compared to **$942,311** in Q2 2024[14](index=14&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) For YTD June 30, 2025, operating activities generated **$103,649** in cash, a significant improvement from a prior-year usage, with cash and cash equivalents ending at **$5,369,817** Condensed Consolidated Statements of Cash Flows (Unaudited) | Cash Flow Activity (6 Months Ended June 30) | 2025 | 2024 |

Financial Performance - Q1 2025 - Revenue increased by $2.2 million, representing a 45% increase compared to Q1 2024[9], with total revenue reaching $7.056 million[6, 31] - The Kyber acquisition contributed $1.7 million, accounting for 35% of the revenue increase[9] - Internal growth accounted for $0.5 million, representing 10% of the revenue increase[9] - Net loss decreased by 7%, from $(1.213) million in Q1 2024 to $(1.126) million in Q1 2025[6] - Adjusted EBITDA was marginally negative at $(51) thousand, a -149% change from $104 thousand in Q1 2024[6, 31] Balance Sheet - Cash and equivalents increased to $35.666 million as of March 31, 2025[20] - Net working capital remained relatively stable at $27.829 million as of March 31, 2025[20] Full Year 2025 Outlook - The company expects full-year 2025 revenue to be between $28 million and $30 million[21] - This represents a 39% to 49% increase over the 2024 revenue of $20.2 million[21] - Adjusted EBITDA is expected to be between $(1.0) million and $1.0 million for the full year 2025[21]

Revenue Performance - Revenues for the three months ended March 31, 2025, were $7,056,116, an increase of $2,178,738 (approximately 44.7%) compared to $4,877,378 for the same period in 2024[138]. - Revenue for Q1 2025 was $7,056,116, up from $4,877,378 in Q1 2024, indicating a significant increase in sales[154]. Cost and Expenses - Cost of revenues for the three months ended March 31, 2025, was $3,131,622, an increase of $1,428,265 (approximately 83.8%) compared to $1,703,357 for the same period in 2024, resulting in a gross profit margin decrease to 56% from 65%[140]. - Research and development expenses increased to $606,237 for the three months ended March 31, 2025, up $216,348 (approximately 55.5%) from $389,889 in 2024, primarily due to the Kyber acquisition[141]. - Sales and marketing expenses rose to $1,382,727 for the three months ended March 31, 2025, an increase of $327,586 (approximately 31%) compared to $1,055,141 in 2024, driven by the Kyber acquisition and higher compensation expenses[142]. - General and administrative expenses slightly decreased to $3,279,094 for the three months ended March 31, 2025, down $4,395 (approximately 0.1%) from $3,283,489 in 2024[143]. Operating Performance - The operating loss for the three months ended March 31, 2025, was $1,394,665, an improvement compared to an operating loss of $1,772,350 for the same period in 2024[138]. - Adjusted EBITDA for Q1 2025 was $(50,778), a decrease of $155,195 compared to $104,417 in Q1 2024, primarily due to higher costs of revenues and operating expenses[155]. - Adjusted EBITDA is used by management as a performance measure, excluding items such as depreciation, stock-based compensation, and interest expenses, to provide a clearer view of operational performance[146]. Cash Flow and Financial Position - Net cash provided by operating activities increased to $448,180 in Q1 2025, a rise of $2,656,250 compared to cash used of $(2,208,070) in Q1 2024[159]. - Net cash provided by investing activities was $838,125 in Q1 2025, an increase of $2,612,550 compared to $(1,774,425) in Q1 2024[160]. - As of March 31, 2025, the company's cash and marketable securities totaled $35,666,432, with outstanding principal and accrued interest on notes amounting to $6,750,326[156]. - The company sold BioTrack for $30,000,000, consisting of $20,000,000 in cash at closing and $10,000,000 in future payments, enhancing liquidity[156]. - Net cash used in financing activities decreased to $172,295 in Q1 2025, down by $859,068 from $(1,031,363) in Q1 2024, primarily due to changes in tax payments[161]. - The company expects to fund future operations and acquisitions through a combination of cash flow, available cash, marketable securities, and debt financing[156]. - The company redeemed $18,881,466 in outstanding principal and interest on its notes during 2024, improving its financial position[156]. Strategic Initiatives - The company acquired all outstanding equity interests of Kyber Data Science, LLC on October 31, 2024, which is expected to enhance its data management capabilities[128]. - The company plans to license data from additional vendors due to a vendor exiting the data licensing business by the end of 2026, which may impact future operations[132]. - The company continues to focus on expanding its marketing and sales efforts to build brand awareness and attract new clients[134]. Accounting and Compliance - The company is currently evaluating the impact of new accounting standards on its consolidated financial statements and disclosures[173].

Financial Data and Key Metrics Changes - The total first quarter revenue was $7,100,000, representing a 45% year-over-year growth [8][16] - The net loss for the quarter was $1,100,000, while adjusted EBITDA was a negative $51,000, compared to a loss of $1,200,000 and $104,000 year-over-year respectively [8][16] - The operating loss decreased to approximately $1,400,000 from $1,800,000 in the same quarter last year [46] Business Line Data and Key Metrics Changes - Revenue growth was driven by key new pharma projects and health services renewals, as well as the full first quarter financials of Kyber Data Science [8][37] - The Kyber acquisition contributed approximately $1,700,000 or 35% to the revenue growth, with the remaining increase resulting from organic growth in the Life Sciences data business [16][45] Market Data and Key Metrics Changes - The company has approximately $34,000,000 of committed contracted backlog, which includes unearned revenue and unbilled amounts that will be recognized as revenue in future periods [42] - The expected full year 2025 revenue is projected to be between $28,000,000 and $30,000,000, reflecting a growth of 39% to 49% year-over-year [42][48] Company Strategy and Development Direction - The company aims to enhance its offerings by integrating Kyber with its data factory and capitalizing on advanced analytics and predictive capabilities in the life sciences markets [10][41] - The company continues to seek accretive and strategic mergers and acquisitions to enhance its financial profile and expand access to pharmaceutical clients [12][41] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about 2025, highlighting the momentum and opportunities in the market [14][42] - The company has not seen significant negative impacts from executive actions or FDA developments, although there is some hesitation among companies waiting for FDA approvals [27][56] Other Important Information - The company ended the period with $35,700,000 in cash and marketable securities and $6,800,000 in convertible notes maturing in September 2025 [18][47] - Adjusted EBITDA is expected to range from negative $1,000,000 to positive $1,000,000, primarily dependent on the speed at which Kyber achieves profitability [42][48] Q&A Session Summary Question: Can you characterize Kyber's revenue stream? - Kyber's revenue is typically based on one-year contracts, and the company is working to implement auto-renewals [21][50] Question: What will determine Kyber's move to profitability? - The move to profitability is expected to be driven by top-line growth and the flow down of revenue, with cost-cutting already implemented [23][51] Question: How do you feel about the M&A environment? - The market is bifurcated, with stronger private companies demanding premiums, while VC-backed companies are struggling with valuations, presenting more opportunities for acquisitions like Kyber [25][53] Question: Have you seen any hesitation in new deals due to executive orders affecting the pharma market? - There has been some hesitation among companies waiting for FDA approvals, but overall, the company has been insulated from larger impacts [27][56]

Financial Data and Key Metrics Changes - Total first quarter revenue was $7,100,000, representing a 45% year-over-year growth [7][17] - Net loss for the quarter was $1,100,000, with adjusted EBITDA at a negative $51,000, compared to a loss of $1,200,000 and $104,000 year-over-year respectively [7][38] - Operating loss decreased to approximately $1,400,000 from $1,800,000 in the same quarter last year [48] Business Line Data and Key Metrics Changes - Revenue growth was driven by key new pharmaceutical projects and health services renewals, as well as the full first quarter contribution from Kyber Data Sciences [7][38] - The Kyber acquisition contributed approximately $1,700,000 or 35% to the revenue growth, with the remaining increase resulting from organic growth in the Life Sciences data business [17][47] Market Data and Key Metrics Changes - The company has approximately $34,000,000 of committed contracted backlog, which includes unearned revenue and unbilled amounts that will be recognized as revenue in future periods [44] - The expected full year 2025 revenue is projected to be between $28,000,000 and $30,000,000, reflecting a growth of 39% to 49% year-over-year [44][50] Company Strategy and Development Direction - The company aims to enhance its offerings by integrating Kyber with its data factory and capitalizing on advanced analytics and predictive capabilities in the life sciences market [10][43] - The company continues to seek accretive and strategic mergers and acquisitions to enhance its financial profile and expand access to pharmaceutical clients [12][43] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about 2025, highlighting the momentum and opportunities in the market despite a turbulent macroeconomic environment [5][14] - The company is comfortable with its process of integrating new vendors and expects this to be a recurring theme in 2025 and into 2026 [11][42] Other Important Information - The company ended the period with $35,700,000 in cash and marketable securities and $6,800,000 in convertible notes maturing in September 2025 [49] - Adjusted EBITDA is expected to range from negative $1,000,000 to positive $1,000,000, primarily dependent on the speed at which Kyber achieves profitability [44][50] Q&A Session Summary Question: Can you characterize Kyber's revenue stream? - Kyber's revenue is typically based on one-year contracts, and the company is working to implement auto-renewals [22][52] Question: What will determine Kyber's move to profitability? - The expectation is that as Kyber grows its top line, it will flow down to EBITDA, with most expectations driven by revenue growth [25][53] Question: How do you feel about the M&A environment? - The market is bifurcated, with stronger private companies demanding premiums, while VC-backed companies are struggling with valuations, leading to more opportunities for acquisitions like Kyber [27][55] Question: Have you seen any hesitation in new deals due to executive orders affecting the pharma market? - There has been hesitation among companies waiting for FDA approvals, but overall, the company has been insulated from larger executive actions [29][57]

Revenue Performance - Revenue for Q1 2025 was $7.1 million, a 45% increase from $4.9 million in Q1 2024[5] - Revenue for the period ended March 31, 2025, was $7,056,116, compared to $4,877,378 for the same period in 2024, representing a year-over-year increase of approximately 44.7%[26] - For the full year 2025, revenue is expected to be in the range of $28 to $30 million[11] Net Loss and Adjusted EBITDA - Net loss for the quarter was $1.1 million, or $0.04 per share, compared to a net loss of $1.2 million, or $0.04 per share, in the prior year[5] - Net loss for the period ended March 31, 2025, was $(1,125,862), an improvement from a net loss of $(1,212,615) in the prior year, indicating a reduction in losses of about 7.1%[26] - Adjusted EBITDA for the quarter was $(0.1) million, a decline of 149% from $0.1 million in the prior year[5] - Adjusted EBITDA for the full year 2025 is expected to be in the range of ($1.0) to $1.0 million[11] - Adjusted EBITDA for the period ended March 31, 2025, was $(50,778), compared to $104,417 in the same period of 2024, reflecting a decline in operational performance[26] Cash and Liquidity - Cash, cash equivalents, and marketable securities totaled $35.7 million as of March 31, 2025[5] - Cash and cash equivalents at the end of the period were $5,704,671, up from $1,029,128 at the end of the previous year, marking a significant increase in liquidity[17] - Net cash provided by operating activities was $448,180 for the period, a substantial recovery from $(2,208,070) in the prior year[17] - Cash used in financing activities was $(172,295) for the period, a decrease from $(1,031,363) in the prior year, indicating improved cash management[17] Assets and Liabilities - Total current assets increased to $46.4 million from $44.5 million as of December 31, 2024[13] - Total liabilities increased to $18.6 million from $17.1 million as of December 31, 2024[13] Operational Improvements - The company achieved continued growth from pharmaceutical and biotech companies, reflecting increased adoption of its data solutions[5] - The company integrated Kyber Data Science's platform, enhancing its predictive analytics and financial services capabilities[5] - The company incurred stock-based compensation expense of $1,292,786 for the period, down from $1,658,915 in the previous year, indicating a reduction of approximately 22.1%[26] - The company reported accrued interest on convertible notes of $51,344 for the period, significantly lower than $197,630 in the previous year, reflecting a decrease of approximately 74.0%[17] - The company’s accounts receivable decreased by $(1,400,838) compared to $(1,694,851) in the previous year, indicating improved collection efforts[17] Marketable Securities - The company reported a gain on sale of marketable securities amounting to $30,546,000, compared to $45,359,108 in the previous year, showing a decrease of about 32.6%[17]