SCHEDULE: Forian Enters Confidentiality Pact for Potential Acquisition

Forian Inc. has entered into a confidentiality agreement with 2025 Acquisition Corporation, an affiliate of major shareholder Max Wygod, to facilitate evaluation of a possible negotiated transaction.

Summary

• Forian Inc. and 2025 Acquisition Corporation, an affiliate of Max Wygod, executed a Confidentiality Agreement on September 29, 2025, to facilitate the evaluation of a possible negotiated transaction (a potential acquisition of Forian).
• The agreement outlines strict confidentiality obligations for information disclosed by Forian to the Recipient and its Representatives.
• A 12-month standstill provision, effective from September 29, 2025, prohibits the Recipient and its Representatives from acquiring additional Forian securities, soliciting proxies, or initiating extraordinary transactions without prior written consent from Forian's Special Committee.
• The standstill provision will terminate if any person or group acquires or enters a definitive agreement to acquire over 50% of Forian's outstanding common stock, or if the Special Committee recommends such a transaction.
• The Recipient and its Representatives are restricted from soliciting Forian employees for employment for 12 months, with exceptions for generalized public advertisements.
• The Schedule 13D Amendment No. 2 updates beneficial ownership for Max C. Wygod, Emily Bushnell, the Administrative Trust U/ Wygod Family RV, the Wygod Family Rev Lt U/T/A, and the Estate of Martin J. Wygod.
• The Administrative Trust's beneficial ownership decreased by 500,834 shares as convertible notes were repaid on September 1, 2025.
• Max C. Wygod's aggregate beneficial ownership is 2,530,475 shares, representing 12.4% of Forian's common stock.
• Emily Bushnell's aggregate beneficial ownership is 3,431,699 shares, representing 11% of Forian's common stock.
• All percentages are calculated based on 31,112,312 shares of common stock outstanding as of August 13, 2025.

Sentiment

Score: 6

Explanation: The filing indicates a structured process for a potential acquisition, which can be positive for shareholders if a fair offer emerges. However, it's still an early stage with no guarantee of a transaction. The standstill provides stability, and the reduction in beneficial ownership from convertible notes repayment is a factual change rather than a direct positive or negative sentiment indicator for the company's operations.

Positives

• Engagement in discussions for a 'Possible Transaction' indicates potential strategic options for Forian, which could lead to a favorable outcome for shareholders.
• The Confidentiality Agreement provides a structured and secure framework for information exchange, protecting Forian's proprietary data during due diligence.
• The 12-month standstill agreement offers stability by preventing hostile takeover attempts or disruptive shareholder activism during the negotiation period.

Negatives

• The repayment of 500,834 shares from convertible notes held by the Administrative Trust reduces the beneficial ownership of the Wygod group, potentially signaling a reduction in their direct financial stake or influence.
• The standstill agreement, while providing stability, also limits the Recipient's ability to act aggressively in the market, which could be seen as a constraint on a potential acquirer's flexibility.

Risks

• Unauthorized use or disclosure of Confidential Information by the Recipient or its Representatives could lead to irreparable harm for Forian.
• There is no obligation for either party to consummate a Possible Transaction, meaning discussions may not lead to a definitive agreement, creating uncertainty.
• Public disclosure of a potential transaction could lead to market speculation and volatility in Forian's stock price.
• The non-solicitation clause aims to mitigate, but does not eliminate, the risk of employee attrition or distraction during a potential transaction process.
• Use of Confidential Information must comply with antitrust and other applicable laws, including federal securities laws, posing a compliance risk.

Future Outlook

The filing indicates a potential future negotiated transaction involving the acquisition of Forian Inc. by 2025 Acquisition Corporation, an affiliate of Max Wygod. The Confidentiality Agreement and standstill provisions establish the framework for these discussions over the next 12 months, with no obligation for a definitive agreement to be reached.

Management Comments

• Forian is willing to disclose Confidential Information for the purpose of facilitating Recipient's evaluation of a possible negotiated transaction.
• The Special Committee reserves the right, in its sole discretion, to conduct and change the process with respect to a Possible Transaction, including to reject any and all proposals made by Recipient.

Industry Context

This type of confidentiality and standstill agreement is standard practice when a significant shareholder or interested party explores a potential acquisition or strategic transaction with a public company. It allows for due diligence while protecting the target company from disruptive actions during negotiations. The involvement of a 'Special Committee' suggests the Board is managing potential conflicts of interest, which is common when an insider or large shareholder is the potential acquirer.

Comparison to Industry Standards

• The 12-month standstill provision is a common duration in confidentiality agreements for potential M&A, balancing the need for due diligence with preventing disruptive shareholder activism.
• The non-solicitation clause for employees for 12 months is a standard protective measure to retain key personnel during sensitive transaction discussions.
• The establishment of a 'Special Committee' by Forian's Board to oversee the potential transaction aligns with best practices in corporate governance, particularly when a related party (like a significant shareholder or director) is involved, ensuring an independent review and protecting the interests of all shareholders.
• The explicit disclaimer of representations or warranties regarding the accuracy or completeness of Confidential Information is standard in preliminary information exchange agreements, shifting the burden of verification to the recipient.

Corporate Governance

Related Party Transactions

• The Confidentiality Agreement is between Forian Inc. and 2025 Acquisition Corporation, an affiliate of Max Wygod, who is a director and significant shareholder of Forian, constituting a related-party dealing.
• Max Wygod, Emily Bushnell, and the Wygod Trusts are reporting persons in the Schedule 13D, indicating their significant beneficial ownership and involvement in the potential transaction.

Stakeholder Impact

• Shareholders: Potential for a future acquisition offer, which could lead to a premium for their shares. Uncertainty regarding the outcome of discussions may cause stock price volatility.
• Employees: The non-solicitation clause provides some protection against immediate poaching, but the uncertainty of a potential transaction could still impact morale.
• Management/Board: The Special Committee is tasked with navigating a complex potential transaction, requiring significant oversight and strategic decision-making.

Next Steps

• Recipient (2025 Acquisition Corporation) to evaluate Confidential Information for a Possible Transaction.
• Potential discussions and negotiations between Forian's Special Committee and the Recipient regarding a Possible Transaction.
• Possible proposals from the Recipient to Forian for an acquisition.
• Forian's Special Committee to decide on the process and any proposals.

Key Dates

Recommendation

The company has entered into a confidentiality agreement with a significant shareholder's affiliate to explore a 'Possible Transaction,' likely an acquisition. This creates potential upside if a favorable deal materializes. However, there is no certainty that a transaction will be consummated, and the terms are unknown. The standstill agreement provides a period of stability for negotiations. Given the early stage and inherent uncertainties, a 'hold' recommendation is appropriate, advising investors to monitor developments closely without making immediate buy or sell decisions based solely on this preliminary announcement.

Keywords

Forian Inc., 2025 Acquisition Corporation, Confidentiality Agreement, Possible Transaction, Acquisition, SEC Filing, Schedule 13D, Standstill Agreement, Corporate Governance, Shareholder Activism, Max Wygod, Emily Bushnell