Forian Inc.

Forian Inc. is a leading provider of data science-driven information and analytics solutions primarily serving the life sciences, healthcare, and financial services industries. The company leverages its expertise in data management and data science to cleanse, link, and enhance structured and unstructured data, generating proprietary information products. These solutions are delivered through subscription and services-based models, aiming to optimize and measure operational, clinical, and financial performance for its customers. The U.S. healthcare market, which accounts for approximately 17% of GDP, is expanding and evolving due to an aging population, treatment innovations, and a shift towards digitized medical records. This environment creates challenges in making disparate data interoperable and actionable, which Forian addresses by providing accessible and statistically significant data sets for longitudinal analyses. The company has also expanded its addressable market to include financial services, specifically hedge funds and portfolio managers investing in U.S. healthcare, biotechnology, and pharmaceutical companies, through its acquisition of Kyber Data Science LLC ¹.

Forian's competitive strengths include a flexible and scalable approach to privacy-focused analytics software and solutions, deep domain expertise in large transactional database platforms, commercial analytics, consumer and physician marketing, market access, and healthcare economics. The company also benefits from a diverse customer base across the healthcare and financial services industries and a large integrated longitudinal database and technology platform. Its data factory processes and integrates de-identified medical, hospital, and pharmacy claims data, along with point-of-sale data, consumer behavior, and demographic information, encompassing the vast majority of the U.S. population. The company faces competition from information and clinical analytics providers such as ICON plc, information and commercial analytics providers like IQVIA, and technology and services providers such as Veeva Systems, Inc. and Definitive Healthcare Corp., as well as client in-house developed technologies.

The core business model revolves around providing data-based subscription products and customized or productized solutions. A significant portion of revenue is generated through multi-year contracts for information products that are updated over time. Customers include service providers, end-users in healthcare, life sciences, and financial services, and institutional investors such as hedge funds, mutual funds, and pension funds. The company's offerings assist clients in understanding the value and efficacy of healthcare products and services, providing critical business insights, and improving patient health outcomes. Revenue recognition primarily occurs when information products are made available to the customer, with some services under milestone contracts recognized over the period services are performed based on expected labor hours.

Forian's offerings include innovative commercial, Real World Evidence (RWE), and market access solutions, as well as proprietary data-driven insights. These solutions are built upon a HIPAA-compliant repository of linked longitudinal de-identified patient health information in the United States, updated daily, weekly, or monthly, and containing billions of de-identified patient events dating back to 2014. The RWE and data management solutions are designed to integrate unconnected and disparate data for near real-time surveillance of adverse events and to study the clinical, economic, and social impacts of various therapeutic alternatives. These solutions support the delivery of evidence-based insights into the safety and efficacy of pharmaceuticals, empower regulators, and aim to create new standards for product and treatment classification in emerging therapeutic markets.

In the fiscal year ended December 31, 2025, Forian reported total revenues of $30,256,919 ², an increase of $10,103,656 ³ from $20,153,263 ⁴ in the prior year. Cost of revenues increased to $14,156,840 ⁵ from $7,334,163 ⁶, leading to a gross profit margin of 53% ⁷ for 2025, down from 64% ⁸ in 2024. Operating loss improved to $(3,764,252) ⁹ in 2025 from $(6,986,961) ¹⁰ in 2024. The company reported a net loss of $(2,874,042) ¹¹ for 2025, compared to a net loss of $(3,771,070) ¹² in 2024. Basic and diluted net loss per common share was $(0.09) ¹³ in 2025, an improvement from $(0.12) ¹⁴ in 2024. Cash and cash equivalents stood at $12,903,760 ¹⁵ as of December 31, 2025, with marketable securities of $18,647,229 ¹⁶. Total current liabilities were $14,352,147 ¹⁷, and there was no remaining outstanding principal and accrued interest on convertible notes payable ¹⁸ as of December 31, 2025.

The year-over-year revenue increase of $10,103,656 ³ was primarily driven by the acquisition of Kyber, which contributed approximately $6.2 million ¹⁹ in revenue, and organic growth in sales of information products. Health sciences revenues increased to $22,963,413 ²⁰ in 2025 from $19,052,937 ²¹ in 2024, while financial services revenues significantly grew to $7,293,506 ²² from $1,100,326 ²³. The gross profit margin decreased from 64% ⁸ to 53% ⁷ due to the impact of the Kyber acquisition and higher information licensing and processing expenses. Research and development expenses increased by $1,471,977 ²⁴ to $2,916,722 ²⁵, and sales and marketing expenses rose by $1,699,936 ²⁶ to $6,034,225 ²⁷, both primarily due to the Kyber acquisition and increased employee-related costs. General and administrative expenses decreased by $3,126,837 ²⁸ to $9,410,103 ²⁹, mainly due to lower stock compensation expense of approximately $3.3 million ³⁰. Interest and investment income decreased by $1,161,728 ³¹ to $1,260,533 ³², attributed to lower interest rates and a reduced marketable securities balance following the redemption of convertible notes.

Significant operational developments during the period include the acquisition of Kyber Data Science LLC on October 31, 2024, which expanded Forian's market into financial services. The company also completed the redemption of all outstanding principal and accrued interest on its convertible notes, totaling $6,840,000 ³³ in 2025, following $18,881,466 ³⁴ in redemptions during 2024. A material weakness in internal control over financial reporting related to revenue recognition for certain contracts under ASC 606 was identified as of December 31, 2025, though management believes the consolidated financial statements are fairly presented. The company also redomiciled from a Delaware corporation to a Maryland corporation, effective January 9, 2026, which does not change its business, jobs, management, properties, or financial obligations.

Forian intends to continue investing in commercial sales, research and development, and strategic partnerships to achieve its growth objectives across multiple industry verticals. A key element of its strategy is to innovate and advance its platform and services, with plans to release new features and upgrades regularly. This involves significant investments in information products, reporting and analytics solutions, database architecture, and data science talent to differentiate its products and increase sales. The company also aims to improve its ability to integrate with partners to capitalize on new data and services that add value to customers.

Another major growth vector is driving growth by acquiring new customers. Forian believes there is a significant opportunity to expand its customer base, as nearly all organizations involved in discovering, developing, producing, and marketing healthcare products or services need to embrace data-driven analytics to compete effectively. The company also plans to increase usage and upsell within its existing customer base by investing in sales and marketing, focusing on cross-selling additional information solutions to deliver more value and expand relationships, which is expected to lead to scale and operating leverage.

Forian also plans to leverage its products into new markets. Its linked proprietary solutions are believed to offer innovative benefits to life sciences, payer, and provider customers, as well as consulting and service providers. The company sees significant opportunities to deploy these solutions in adjacent industries, such as media, government, and the financial services markets.

Expanding its data and strategic partner network is another growth strategy. Forian's information products are partly derived from data acquired from strategic data partners. As part of its growth strategy, the company may seek to acquire assets, data-driven products, or companies that are synergistic with its business and add value to its data assets and offering sets. This includes growing offerings through selective investments and acquisitions, with a deliberate and strategic approach to ensure each investment or acquisition aligns with long-term goals.

Regarding capital allocation, Forian currently anticipates retaining future earnings for the development, operation, and expansion of its business. The company does not intend to pay cash dividends for the foreseeable future. It expects to fund operations and potential future acquisitions through a combination of cash flow from operating activities, available cash and marketable securities, debt financing, and/or additional equity issuances. The company's 2020 Equity Incentive Plan was amended on June 11, 2025, to increase the number of shares available for issuance by 4,000,000 ³⁵ shares, bringing the total to 10,400,000 ³⁶ shares. As of December 31, 2025, the total unrecognized stock compensation expense related to unvested stock option awards and restricted stock awards and units was $4,570,137 ³⁷, expected to be recognized over a weighted-average period of approximately 1.7 years ³⁸.

The company has identified structural headwinds and execution risks. It depends on data from external sources, and the loss of access to these sources or increased pricing could prevent it from providing solutions. During 2024, data licensed from certain suppliers was reduced due to restrictions, leading to one supplier terminating its agreement. Another supplier announced its intention to wind down its data licensing business by the end of 2026. There is no assurance that alternate data sources can be obtained on substantially equivalent terms. Acquisitions, a component of the growth strategy, involve risks such as difficulty identifying suitable candidates, consummating acquisitions on acceptable terms, or successfully integrating acquired businesses. Failure to develop and deploy new products and technologies to address customer needs could also adversely affect the business.

Forian faces several material risks, including its limited operating and financial history as an emerging growth company, which may necessitate additional capital that might not be available on favorable terms, potentially diluting current stockholders ³⁹. A critical operational risk is the dependence on external data sources; the loss of access to key data suppliers, as experienced in 2024 with reductions from certain suppliers and the termination of one license agreement, and the announced wind-down of another supplier's data licensing business by the end of 2026, could prevent the company from providing its solutions and materially harm its business ⁴⁰. Acquisitions, a component of the growth strategy, carry risks such as the inability to identify suitable candidates, secure financing, or successfully integrate acquired businesses, which could disrupt operations and divert management's attention ⁴¹. The company's success also hinges on its ability to continuously develop and deploy new products and technologies, and failure to do so could lead to obsolescence or loss of market acceptance ⁴². Reliance on third-party computing infrastructure and services exposes Forian to risks of errors, disruptions, or performance problems, which could harm its reputation and lead to customer loss ⁴³. Intellectual property protection is crucial, and the inability to safeguard proprietary rights or defend against infringement claims could adversely impact profitability and distract management ⁴⁴. Real or perceived errors, defects, or bugs in its complex platforms, products, or services could result in customer terminations, claims for losses, and significant costs ⁴⁵. The ability to attract, recruit, retain, and develop qualified employees is vital, and failure to do so in a competitive market could materially affect business operations ⁴⁶. The company has identified a material weakness in its internal control over financial reporting related to revenue recognition under ASC 606, which, if not timely remediated, may adversely affect the accuracy and reliability of financial statements and investor confidence ⁴⁷. Inaccurate forecasting of operating results and growth rates could lead to unexpected shortfalls and a decline in stock price ⁴⁸. Consolidation among customers could reduce service volume and revenue ⁴⁹. Evolving federal and state privacy and data protection laws, including HIPAA and new state-specific regulations, could increase operating costs, limit data use, or subject the company to significant liabilities if compliance is not maintained ⁵⁰. Security breaches and unauthorized use of systems and information pose a risk of data loss, reputational damage, and financial penalties, with current insurance coverage potentially insufficient for significant attacks ⁵¹. Finally, the market price of Forian's common stock may be volatile due to various factors, and the company does not intend to pay dividends, limiting stockholder returns to stock appreciation ⁵².

Management's message to shareholders emphasizes a commitment to leveraging data science expertise to provide information and analytics solutions that optimize operational, clinical, and financial performance for customers in the life sciences, healthcare, and financial services industries. They highlight the company's mission to promote safer, more efficient, and profitable business operations for clients, while also striving to improve patient health outcomes. Management is focused on growth through continuous innovation, expanding the platform and services, and making significant investments in information products, reporting and analytics solutions, database architecture, and data science talent. Strategic priorities include driving growth by acquiring new customers, increasing usage and cross-selling within the existing customer base, and leveraging products into new markets such as media and government. The company also intends to expand its data and strategic partner network and pursue selective investments and acquisitions that are synergistic with its core business. Management explicitly states that they currently anticipate retaining future earnings for business development, operation, and expansion, and do not intend to pay cash dividends for the foreseeable future ⁵³. They also acknowledge the material weakness in internal control over financial reporting related to ASC 606 revenue recognition, stating that while improvements have been implemented, full remediation requires a sufficient period of effective operation and testing ⁵⁴.