Forian Inc., a provider of data science and analytics solutions, has announced a restatement of its historical financial statements for specific periods spanning from 2021 to 2024. This decision comes after the company's Audit Committee concluded that the previously issued financial statements should no longer be relied upon, citing technical adjustments in revenue recognition as the primary reason. The restatement is a result of applying the Accounting Standards Codification (ASC) 606, which mandates the recognition of aggregate annual minimum payments for certain contracts on a straight-line basis over the contract's duration. This change will notably alter how Forian reports revenues for contracts that include variable fee structures based on customer sales thresholds.
The implications of this financial restatement are significant, as it is expected to increase the previously reported revenues and net income for all affected periods. However, Forian has clarified that these adjustments are purely technical and will not have any impact on the company's actual cash flows. Despite the restatement, Forian remains confident in its financial outlook for 2024, maintaining its revenue expectations between $19 million and $20 million, with Adjusted EBITDA projected to range between negative $0.5 million and $0.5 million.
As a direct consequence of the restatement, Forian anticipates a delay in filing its Annual Report on Form 10-K. The company intends to file a notification of late filing and aims to submit the updated financial report within a 15-calendar-day extension period, as allowed by SEC regulations. Additionally, Forian has postponed its previously scheduled conference call and webcast, rescheduling it to align with the financial results for the first quarter of 2025. This move underscores the company's commitment to transparency and regulatory compliance, ensuring that stakeholders receive accurate and up-to-date financial information.
For more information on Accounting Standards Codification (ASC) 606, visit https://www.fasb.org. This restatement highlights the complexities of revenue recognition standards and their impact on financial reporting, serving as a reminder of the importance of adherence to accounting principles for companies like Forian Inc.
