Forian Inc.

Greetings, and welcome to Forens Inc. Third Quarter 2022 Financial Results Conference Call and Webcast. At this time, all participants are now in listen-only mode. A question and answer session will follow the formal comments and webcasts. Participants today from Forens are Max Bygod, 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. 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 estimates, projected, expect, anticipate, forecast, planned, 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 statement 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 forian.com forward slash investors. I am now pleased to introduce the company's Executive Chairman, Max Weigott. Please go ahead.

Good afternoon, and thank you all for joining us today to review 4IN's 2022 third quarter financial and business performance. 4IN provides innovative software solutions, proprietary data, and predictive analytics to optimize the operational, clinical, and financial performance of our healthcare, cannabis, and government customers. I am pleased to share that we had a strong fiscal quarter with improvements in all key metrics. Strong demand continues for innovative and business-critical products in the markets we serve, and as a result, we are delivering an attractive combination of organic growth and improved profitability. We are still on course in our plan to reach a positive adjusted EBITDA in 2023. Our healthcare information business continues to be our key growth driver as we sign more important wins with new customers and expanded existing customer revenue through cross-sales of additional offerings. Our team has industry-leading deep domain expertise, and we take a customer-focused approach in partnering with our clients from the initial sale to support, ensuring we create value for our customers, and drive growth for foreign through upsell and cross-sale successes. These qualities combine to position us to continue to grow our healthcare base. With a multitude of data assets, we have the size, scope, and coverage of data to compete for increasingly large contracts, and our unique technology and delivery capabilities enable us to provide accurate and timely offerings. Our BioTrack business competes in a very different and competitive market, but its scale, offerings, and the number of government contracts identify it as a leader in the space. As additional states award new contracts, The entire legal U.S. cannabis market can continue to grow responsibly. We believe as new states come online, we are well positioned to maintain and grow BioTrack as a leading software provider to the legal cannabis industry. Now, for some key highlights from the quarter. First, overall third quarter revenue grew by 45% year over year, including healthcare information growth of 101%. In the third quarter, the company generated revenue of $7.2 million and net loss of $5.1 million and adjusted EBITDA loss of $2.1 million, respectively. I will hand it over now to our CEO, Dan, for his remarks. Dan?

Thanks, Max. I am very pleased with our third quarter 2022 results. We had strong revenue growth driven primarily by our healthcare information business. As Max mentioned, top line revenue grew by 45% year over year to $7.2 million. As we discussed on last quarter's call, we continue to execute against our cost optimization efforts, which netted improvement in net loss and adjusted EBITDA of $1.9 million and $2 million this quarter, respectively. We are on track to exceed the high end of our revenue guidance for the year of $27 million. Additionally, we expect both strong revenue growth and improved operational cost to continue, setting the foundation to be adjusted even a positive in the second half of 2023. As I mentioned, healthcare information revenue continues to demonstrate strong growth. Market demand has not slowed, showing the value our clients see in and derive from foreign information and analytics products. We offer our clients the optionality of open, closed, and hybrid information products and analytics on a subscription basis or one-time sale. Almost all of our business is subscription-based. Clients use our information products for commercial, clinical, operational, and payer-based analytics to help drive and measure their sales and marketing initiatives, inform R&D, track product outcomes, and optimize operations. Our healthcare information pipeline continues to grow. We saw the highest revenue in a quarter to date at $4.3 million, which represented 101% year-on-year growth. We expect the growth to continue due to the fact that sales are strong and we signed the highest amount of total deal, total contract value in any quarter to date. This brings our contracted backlog to $29.3 million, covering 2023 and beyond. If you were to include contracted backlog with termination rights, the total backlog amount is substantially greater than the $29.3 million. We continue to diversify client portfolio in the third quarter, And in Q3, we nearly surpassed our entire annual net new number of contracts. New client penetration in life sciences continues with another significant win in the quarter, and we are now upselling and cross-selling to existing customers. As our platform is industry agnostic, we have the opportunity to offer product and services and other healthcare verticals, further enhancing our ability to grow this business. Our brand continues to expand across life sciences as well. Clients have powered their RWE research efforts, leveraging Forian products that are expertise in hybrid data and analytics and power our Kronos offering. Research into the rare disease spinal muscular atrophy in infants informed by Kronos will be presented at the ISPOR Europe Conference in November. The Kronos Hybrid Healthcare Information product is a best-in-class solution when it comes to studying patient longitudinal disease burden in all disease states and particularly in the rare disease arena offering substantial growth opportunity for our business. FireTrack commercial software new sales were positive in the quarter, building on the momentum of second quarter. These sales were driven in states that have expanded the number of available licenses, which demonstrates our ability to generate new sales as states launch their medical marijuana programs or expand into adult use. I have mentioned before the nature of this marketplace being competitive and fragmented. We are experiencing our share of anticipated churn with our commercial software. New sales are covering the churn, leading to flat growth in the business. One important thing to note is that our cultivator and manufacturer customer base for BioTrack has a strong footprint as we deliver high-value software to these non-retail customers, in addition to our retail customers. This strong footprint provides additional opportunity as new geographies start to open their recreational programs like New York. We also have opportunities for expanding incremental business in key growth markets such as Illinois, Florida, Mississippi, and Georgia, to name a few. We do not expect any federal regulation changes in the near term, although we continue to hear along with everyone else some form of banking legislation is on the horizon. While we are not impacted either way based on federal regulation, any movement on passing banking or other cannabis legislation would be good for everyone in the cannabis industry. As I spoke about last quarter, we're implementing our cost improvement initiatives and prioritizing our investment spending to capitalize on near-term growth opportunities, such as healthcare information products, higher-track commercial, and state government business. In summary, we are well positioned based on the foundation we have put in place this year. Subscription revenue is growing nicely, driving very good year-on-year and sequential quarterly revenue growth. Our cost management initiatives are well underway, and we are focused on supporting near-term revenue opportunities. We are confident in hitting the high end of our guidance range for revenue this year and being cash flow positive in the second half of 2023. It has been a great effort by the entire team. I will now turn it over to Mike to run through the financials in detail.