SCHEDULE: Forian Inc. Receives $2.10/Share Take-Private Offer

A consortium led by CEO Max Wygod proposes to acquire all outstanding shares of Forian Inc. not currently owned for $2.10 per share in cash, representing a 19% premium.

Summary

• A consortium led by CEO and Executive Chair Max Wygod, including other insiders, proposes to acquire all outstanding shares of Forian Inc. not currently owned for $2.10 per share in cash.
• The offer price represents a substantial 19% premium to the closing price as of August 22, 2025.
• The consortium, including inside directors Adam Dublin and Shahir Kassam-Adams, currently represents a majority of Forian's outstanding shares, in excess of approximately 63%.
• The transaction aims to address issues such as low float depressing liquidity, slow recognition of value, and valuation disparity compared to private peers.
• It also seeks to eliminate the expense, distraction, and administrative burden of quarterly reporting requirements and Sarbanes-Oxley compliance obligations.
• The acquisition will be structured as a two-step process: a cash tender offer followed by a short-form merger.
• Funding for the transaction will come from a combination of personal resources, third-party financing, and the Company's net cash at closing.
• The proposal is non-binding and subject to satisfactory completion of due diligence, approval by a special committee of independent directors, and execution of satisfactory employment agreements with key management personnel.

Sentiment

Score: 7

Explanation: The proposal offers a significant premium and a clear path to liquidity for public shareholders, addressing stated issues like low float and compliance costs. However, it is non-binding and subject to conditions, introducing some uncertainty.

Positives

• Provides immediate liquidity and certainty of value for public stockholders at a premium to current trading levels.
• Offers a substantial 19% premium to the closing price as of August 22, 2025.
• Eliminates the expense, distraction, and administrative burden of quarterly reporting and Sarbanes-Oxley compliance for the company.
• Addresses the issue of low float and depressed liquidity for the company's stock, which the consortium believes slows value recognition.
• Aims to close the valuation disparity between Forian and comparable private peers.
• The consortium, already holding over 63% of shares, demonstrates strong commitment and simplifies the financing structure by contributing existing equity.

Negatives

• Public shareholders will no longer participate in any potential future upside or growth of the company as a public entity.
• The offer is a non-binding expression of interest and may be withdrawn or modified at any time.
• The transaction is subject to several conditions, including due diligence and special committee approval, which may not be met.
• The involvement of the CEO and other insiders in the acquiring consortium raises potential conflicts of interest, necessitating careful oversight by an independent special committee.

Risks

• The proposal is non-binding and may be withdrawn or modified at any time by the consortium.
• No legal obligation with respect to the proposal or any other transaction shall arise unless and until definitive transaction documentation is executed.
• The transaction is conditioned upon satisfactory completion of customary due diligence, which could uncover unforeseen issues.
• Financing for the transaction, while the consortium is confident, is still subject to arrangement and receipt.
• Approval by a special committee of independent, disinterested directors is a condition and is not guaranteed.
• The execution of satisfactory employment agreements with key management personnel is a condition to the transaction.
• The tender offer is conditioned on acquiring at least a majority of outstanding shares of the Company.

Future Outlook

The consortium anticipates that if the transaction is consummated, Forian Inc. will be delisted from the Nasdaq Stock Market and deregistered under the Securities Exchange Act of 1934, transitioning to a private company. The consortium expects to execute a definitive agreement promptly and arrange financing on an expedited basis, with due diligence being limited in scope and quickly completed due to their existing knowledge of the company.

Management Comments

• "Our proposed Transaction is in the best interests of Forian stockholders and other stakeholders, including its employees, clients, and end-users."
• "As a public company, Forian's low float depresses liquidity, slows the recognition of value in the markets, and widens the valuation disparity between the Company and comparable private peers."
• "We do not believe that it makes sense for Forian to be subject to the expense, distraction and administrative burden of quarterly reporting requirements and Sarbanes-Oxley compliance obligations."
• "The Transaction addresses these considerations while providing public stockholders with immediate liquidity and certainty of value at a premium to current trading levels."
• "Given our knowledge of the Company, we expect to be in a position to execute a definitive agreement promptly."
• "We are highly confident the financing can be arranged on an expedited basis."
• "Given our history with Forian, we anticipate that the remaining due diligence will be limited in scope and can be completed quickly."

Industry Context

This take-private proposal for Forian Inc. aligns with a broader trend where smaller public companies, particularly those with low trading liquidity or facing significant regulatory compliance costs relative to their market capitalization, opt to go private. The stated reasons, such as depressed liquidity due to low float and the burden of Sarbanes-Oxley compliance, are common drivers for such transactions. This move could allow Forian to operate with greater strategic flexibility, reduced public scrutiny, and potentially a longer-term investment horizon, similar to how many private companies in specialized data or technology sectors are structured.

Comparison to Industry Standards

• The stated rationale for going private, including low float, depressed liquidity, and the burden of public company compliance (Sarbanes-Oxley), is a common theme for smaller-cap companies in various industries, particularly those where public market valuation may not fully reflect intrinsic value or growth potential.
• The 19% premium offered is within the typical range for take-private transactions, which often see premiums between 15-30% over the unaffected share price, though specific comparable transactions are not named in the filing.
• The two-step tender offer followed by a short-form merger is a standard and efficient structure for take-private transactions, especially when a significant majority shareholder (like this consortium) already exists.
• The requirement for a special committee of independent directors to approve the transaction is a standard corporate governance practice to mitigate conflicts of interest arising from insider-led buyouts.

Corporate Governance

Related Party Transactions

• The acquisition proposal is led by Max Wygod, the current CEO and Executive Chair of Forian Inc., along with other current inside directors (Adam Dublin and Shahir Kassam-Adams) and entities associated with them.
• The consortium collectively owns in excess of approximately 63% of the company's outstanding shares, making this an insider-led take-private transaction.
• The transaction is explicitly conditioned upon the approval of a special committee of independent directors to address potential conflicts of interest inherent in such a related-party deal.

Stakeholder Impact

• **Shareholders (Public)**: Will receive immediate cash liquidity at a 19% premium to the recent closing price, but will no longer participate in any future growth or value appreciation of the company as a public entity.
• **Shareholders (Consortium)**: Will consolidate ownership, gain full control, and potentially realize long-term value in a private setting, free from public market pressures and compliance costs.
• **Employees**: The transaction is conditioned on satisfactory employment agreements with key management personnel, suggesting continuity for some, but broader employee impact is not detailed.
• **Clients and End-Users**: The consortium believes the transaction is in their best interests, implying continued or improved service, but no specific operational changes or direct impacts are outlined.
• **Creditors**: The transaction involves third-party financing and the use of the company's net cash, which could impact the company's capital structure and debt profile, potentially affecting creditors.

Next Steps

• The Founder (Max Wygod) will lead negotiations of the transaction with the Company on behalf of the consortium.
• The Board of Directors is expected to establish a Special Committee of disinterested, independent directors to consider the proposal.
• The consortium will commence confirmatory due diligence review immediately.
• Following the execution of a definitive agreement, a tender offer will be commenced to acquire outstanding shares.
• A short-form merger will immediately follow the tender offer.
• Consortium stockholders will form a Purchaser entity prior to entry into the Merger Agreement.
• The parties will negotiate in good faith the final form of an investors agreement applicable to the special purpose vehicle (SPV) and other definitive documents.

Key Dates

Recommendation

The non-binding take-private offer at a 19% premium provides immediate value and liquidity for public shareholders. While the premium is attractive, the offer is still subject to several conditions, including due diligence and special committee approval, which introduces uncertainty. Given the non-binding nature and the potential for negotiation or withdrawal, a 'hold' recommendation is appropriate for existing shareholders to await further developments, while new investors should exercise caution due to the limited upside from the current offer price and the inherent risks of a non-binding proposal.

Keywords

Forian Inc., take-private, tender offer, merger, Max Wygod, consortium, SEC filing, Schedule 13D, stock acquisition, private company, corporate governance, liquidity, valuation, Sarbanes-Oxley, delisting