Forian Inc.

Greetings, and welcome to 4N's Inc. Second Quarter 2022 Financial Results Conference Call and Webcast. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal comments and webcast. Participating today from 4N are Max Weigod, Executive Chairman and Co-Founder, Daniel Barton, Chief Executive Officer, and Michael Vesey, Chief Financial Officer. Before we begin, I'd like to remind you that management's remarks today may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by those forward-looking statements due to a variety of important factors, including those discussed in the Risk Factors section of the Company's Annual Report on Form 10-K, filed with the SEC on March 31, 2022. In particular, management reaffirms its estimates of the company's full-year 2022 revenue outlook as of today. Estimating financial performance accurately for future performance is difficult, as it involves assumptions and internal estimates that may prove to be incorrect and is based on plans and circumstances that may change. There is therefore a significant risk that actual results could differ materially from the outlook provided today. Any forward-looking statements made on the call today represent the company's views as of this date, and the company undertakes no obligation to update them except as required by law. Words such as estimate, projected, expect, anticipate, forecast, plan, intend, believe, seek, may, will, should, future, propose, and variations of these words or similar expressions or versions of such words or expressions are intended to identify forward-looking statements. These statements include, but are not limited to, statements regarding future growth. anticipated performance, and prospects. Today's presenters will also refer to certain non-GAAP financial measures on our call, such as adjusted EBITDA, which the company believes may be important to investors to assess its operating performance and should be considered a supplement to and not a substitute for financial measures prepared in accordance with GAAP. A reconciliation of the comparable gap metric can be found in today's press release and webcast, both of which are available on the company's website. Those numbers are unaudited and any statements regarding the company's anticipated performance may be subject to change, including as a result of risk related to the changes in the cannabis and healthcare markets and risk related to the impact of the COVID-19 pandemic and the events in Ukraine. Today's call and webcast is being recorded. A copy of the recording webcast, as well as the full transcript and copies of today's press release and SEC filings will be available at forient.com forward slash investors. I am now pleased to introduce the company's executive chairman, Max Weigott. Please go ahead.

Good afternoon, everyone, and thank you for joining us today to review foreign second quarter results. I am pleased to share that we had another fiscal quarter of strong results which demonstrate that our differentiated products continue to resonate in the market, generating healthy demand. We are well underway in our plan to reach positive adjusted EBITDA in 2023 through organic revenue growth and our focus on expense controls to improve incremental margins. We believe that we have now passed the inflection point where our revenue growth, particularly the growth in our healthcare information business, will outpace our total expenditures, resulting in attractive and growing incremental margins. We had several key drivers that provide us with confidence in achieving our full year growth outlook and our trajectory into future years. First, we ended the quarter seeing continued strong market demand for our solutions. We have many large recurring contracts that provide a strong backlog. We continue to penetrate into the life science market with new contracts and are starting to get meaningful renewals, expanding the way we work with our clients to help them deliver improved operating and business performance. Secondly, we have implemented more financial controls and discipline that we will continue to execute upon to make sure we are receiving long-term value from all investments. We believe we can achieve these results and grow our incremental margins, evidencing the scalability of our business and the strength of our team. We expect the benefits of these actions to start being seen more meaningfully in our third and fourth quarter results. Finally, we do not feel like the recent macroinflationary trends will have an immediate negative trend on our business. We have multiyear contracts and mission-critical solutions that typically are not discretionary expenditures for our clients. Now for some key highlights from the quarter. First, overall second quarter revenue grew by 44% year-over-year, including healthcare information growth of 161% year-over-year. The company generated revenue of $6.5 million and a net loss and adjusted EBITDA loss of $5.4 million and $3.2 million, respectively. Now I will hand it over to our CEO, Dan, for his remarks. Dan?

Thanks, Max. Good afternoon, everyone. I'm very pleased with the results in the second quarter. We delivered strong financial results in line with our expectations for the quarter and at the midpoint in the year are on track to achieve our full year 2022 top line revenue guidance of $25.5 to $27 million. Max will share with you our top line financial results and I will provide some additional color. Our subscription-based revenue continues to grow and drives contracted backlog. Most of the subscription revenue is driven by our higher margin healthcare information products, which also improves our margin profile. Many of the new clients in the second quarter came from emerging biotech and emerging pharma markets. We now have the opportunity to expand our business into new markets that depend on first-party data, which will further strengthen our contracted backlog, resulting in continued sequential quarterly revenue growth. This is largely due to the fact that our differentiated data assets and analytic capabilities are designed such that they have multipurpose utility across industry. As discussed in previous quarters, our product investment peaked in the second quarter. Our R&D investments have strengthened our data factory, our healthcare information products, and our analytics capabilities. At the end of the quarter, we implemented the reduction of our R&D spend and are improving operational efficiencies going forward. The benefit of these reductions will be seen in the second half of 2022. Our plans in the coming quarters call for select, focused investments that will strengthen our product portfolio even further. As examples, we will continue to expand our Kronos healthcare information product with additional data to expand coverage and depth. We have plans to leverage our artificial intelligence and machine learning-based segmentation and targeting capabilities to power new services in adjacent markets. More to come on both of these efforts in the coming quarters. Our software products had a successful quarter in terms of new sales. The results were driven by strong sales and geographies that are expanding their medical programs into recreational. These gains were mostly offset by normal churn in this business line. As more states launch or expand their cannabis programs, this provides additional areas of opportunity for us. The US cannabis regulatory landscape has been active recently. While we see the likelihood of Schumer's current bill passing as low, the momentum behind it provides potential improvements in incremental reform around other bills, like safe banking, that would benefit the industry. In addition, some of the more challenging aspects impacting the taxation of clients like 280E are starting to be addressed. While our business does not rely on regulatory change, we believe the legislative reforms will positively impact our business. Our focus for the remainder of 2022 is on strong, high-margin revenue growth driven by healthcare information products and capitalizing on newly issued licenses in several states. We do not see a slowdown in client purchasing based on the economy, as our products are mission critical to our customers and the industries in which they operate. For the balance of 2022, we will continue to actively manage operating expenses to drive margin improvements. As such, we continue to expect to reach positive adjusted EBITDA in the second half of 2023 as discussed on previous calls. We continue to drive market penetration and offer customers value, unique offerings, and support to solve their complex needs. As a result, I am very proud of our team's work, and I continue to feel very confident in our opportunities. I will now turn the call over to Mike, who will review our financial performance for the quarter.