Company: FORA
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001140361-25-042313
Chunk: 44

Company: Forian Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Item 8
Chunk 44
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 about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

   The Company believes the following critical accounting estimates used in the preparation of its condensed consolidated financial statements affect its more significant judgments and estimates.

   Revenue

   The Company utilizes judgement to determine whether performance obligations in a contract are distinct and whether they are delivered at a point in time or over time. Judgement is also necessary to assess revenue recognized under variable revenue arrangements.

   Share-Based Payments

   Under the fair value recognition provision, stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense on a straight-line basis over the requisite service period. The Company makes certain assumptions in order to value and expense its various share-based payment awards.

   Income Taxes

   The Company utilizes judgement and estimates in assessing the need for the valuation allowance related to deferred tax assets, including net operating loss carry-forwards. In the event the Company were to determine that it would not be able to realize all or part of its net deferred tax assets, an adjustment to the deferred tax assets would be charged to income in the period such determination was made.

   Business Combinations

   The Company allocates the fair value of the consideration transferred to the assets acquired and liabilities assumed, including trademarks and customer relationships based on their estimated fair values at the acquisition date. Any excess over the consideration transferred is recorded as gain on bargain purchase. The purchase price allocation requires the Company to make significant estimates and assumptions, especially at the acquisition date, with respect to intangible assets and deferred revenue obligations.

   Although the Company believes the assumptions and estimates it has made are reasonable, they are based in part on historical experience and information obtained from the management of the acquired companies and are inherently uncertain. Examples of critical estimates used in valuing certain of the intangible assets the Company has acquired or may acquire in the future include but are not limited to:

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     future expected cash flows from sales, maintenance agreements, and acquired developed technologies;

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     the acquired company’s trade name and customer relationships as well as assumptions about the period of time the acquired trade name and customer relationships will continue to be used in the Company’s product portfolio;

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     expected costs to develop the in-process research and development into commercially viable software and estimated cash flows from the projects when completed; and

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     discount rates used to determine the present value of estimated future cash flows.

   These estimates are inherently uncertain