Forian Inc. to Restate Financial Statements, Maintains 2024 Revenue Outlook

Technology and data analytics company Forian Inc. revealed plans to restate its historical financial statements after discovering a technical accounting issue related to revenue recognition. The company's Audit Committee determined that previously issued financial statements from 2021 through 2024 should no longer be relied upon, necessitating a comprehensive restatement.

The restatement stems from a specific accounting standard, ASC 606 (Revenue from Contracts with Customers), which requires the company to recognize aggregate annual minimum contract payments on a straight-line basis rather than individually. This adjustment applies to a limited number of contracts where variable fees are earned based on customer sales thresholds.

Despite the accounting correction, Forian emphasized that the restatement will not impact its actual cash flows. The company expects the restatement will result in increases to previously reported revenues and net income across all affected periods.

Financially, Forian maintains its original revenue projections for 2024, anticipating total revenues between $19 million and $20 million, with Adjusted EBITDA expected to range from negative $0.5 million to positive $0.5 million. The company will file a notification of late filing with the Securities and Exchange Commission and plans to submit its Form 10-K within the allowed 15-calendar-day extension period.

As a result of the restatement process, Forian will defer its previously scheduled earnings conference call and webcast until it reports first-quarter financial results for 2025. This delay will allow the company to complete its comprehensive financial review and ensure accurate reporting.

The accounting adjustment underscores the complexity of revenue recognition in technology and service-based industries, where contract structures can create nuanced financial reporting challenges. While the restatement represents a technical correction, it demonstrates Forian's commitment to transparent and accurate financial reporting.