FORIAN INC. Cautionary Statement for Forward-Looking Information
The following discussion of our financial condition and results of operations for the three months endedMarch 31, 2022 and 2021 should be read in conjunction with our unaudited condensed consolidated financial statements and the notes to those statements that are included elsewhere in this report. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under Item 1A. Risk Factors appearing in our Annual Report on Form 10-K for the year endedDecember 31, 2021 , as filed with theSEC onMarch 31, 2022 . We use words such as "anticipate," "estimate," "plan," "project," "continuing," "ongoing," "expect," "believe," "intend," "may," "will," "should," "could," and similar expressions to identify forward-looking statements.
Unless expressly indicated or the context requires otherwise, the terms
"Forian", the "Company", "we", "us", and "our" refer to
Overview
The Company was initially incorporated inDelaware onOctober 15, 2020 as a wholly owned subsidiary ofMedical Outcomes Research Analytics, LLC ("MOR"), which was founded inDelaware onMay 6, 2019 , in connection with the Business Combination described below. OnOctober 16, 2020 , the Company entered into a definitive agreement withHelix Technologies, Inc. ("Helix") and MOR, pursuant to whichDNA Merger Sub, Inc. , a wholly owned subsidiary of the Company ("Merger Sub"), merged with and into Helix, with Helix surviving the merger as a wholly owned subsidiary of the Company (the "Merger"). OnMarch 2, 2021 , the Company entered into a definitive agreement with the equity holders of MOR, pursuant to which the equity holders of MOR contributed their interests in MOR to the Company in exchange for shares of Company common stock (the "Contribution" and together with the Merger, the "Business Combination"). Following consummation of the Business Combination onMarch 2, 2021 , the Company became the parent company of both Helix and MOR. Helix provides traceability and point of sale technology, analytics solutions and other products to customers within each vertical of the cannabis industry to help them improve the performance of their business. The Company provides innovative software solutions, proprietary data and predictive analytics to optimize the operational and financial performance of our customers. Given the prior experience of our management team, our initial focus is on stakeholders within the healthcare and cannabis industries. However, we believe the application of our offerings across other verticals to enhance the transparency and efficacy of our customers' relationships with their communities and customers is equally compelling. The Company represents the unique convergence of proprietary healthcare, consumer and cannabis data, SaaS analytics, innovative data management capabilities and intelligent data science with a leading cannabis technology platform yielding the combined power to drive innovation and transparency across the industries we serve. In MOR, there was early recognition of the opportunity to bring the sophistication of proven data science technology and analytics solutions to a prominent cannabis technology platform provider, creating innovation in both the applications that are key to supporting customer success within the cannabis industry and to the data science powered insights that drive healthcare and other mature regulated growth industries. In Helix, there was realization that the capability set of a technology solutions provider within more evolved sectors together with the track record of the MOR management team offered a unique opportunity to enhance the value that Helix brings to its cannabis customers and to the industry generally. 31
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The Company's mission is to provide our customers with the best-in-class critical technology services through a single integratedForian platform that enables our customers within the healthcare and cannabis industries to operate their businesses more safely, efficiently and profitably and to serve our customers and our customers' stakeholders and constituencies more comprehensively. A novel strain of coronavirus (COVID-19) was first identified inDecember 2019 , and subsequently declared a pandemic by theWorld Health Organization . Our business has largely operated in a work-from-home environment since the inception of the pandemic and, as a result, has experienced limited business disruption to date. Our management team continues to focus on the highest level of safety measures to protect our employees. We have not experienced a material impact to our financial results to date, however, COVID-19 continues to present significant uncertainty in the future economic outlook for our customers and the markets we serve.
Financial Operations Overview
The following discussion sets forth certain components of our statements of operations as well as factors that impact those items.
Revenues
Revenues are derived from Information and Software Products, Services and Other Products. Information and Software revenues are generated from licensing fees for our proprietary information and software products. The Company recognizes revenues from Information and Software products as performance obligations under customer contracts are satisfied. Services revenues are primarily from contracts with government agencies and revenue is recognized upon completion of the various milestones within the contract. Other revenues are primarily from security monitoring services offerings and the provision of web marketing services. Contracts for these services have a stated transaction price for monthly services and are recognized as the services are provided.
Cost of Revenues
Cost of revenues is generated from direct costs associated with the delivery of our products and services to our customers. The cost of revenues relates primarily to labor costs, hosting and infrastructure costs and client service team costs. We record the cost of direct fulfillment as cost of revenues. Infrastructure and licensed data costs, which are shared across all projects or groups of projects, are not charged to cost of revenues.
Research and Development
Research and development expenses consist primarily of employee-related expenses, subcontractor and third-party consulting fees, data fees, and hosted infrastructure costs. We continue to focus our research and development efforts on adding new features and applications to our product offerings. Once our prototypes are proven, we begin to capitalize costs that qualify with the associated development rather than recording those costs as research and development.
Sales and Marketing
Sales and marketing expense is primarily salaries and related expenses,
including commissions, for our sales, marketing and product management staff.
Marketing program costs are also recorded as sales and marketing expense
including advertising, market research, and events (such as trade shows,
corporate communications, brand building, etc.). The Company plans to continue
to invest in marketing and sales by expanding our selling and marketing staff,
building brand awareness, attracting new clients and sponsoring additional
marketing events. The timing of these marketing events will affect our marketing
costs in any particular quarter.
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General and Administrative Expenses
General and administrative expenses include salaries and benefits and other costs of departments serving administrative functions, such as executives, finance and accounting and human resources. In addition, general and administrative expense includes non-personnel costs, such as professional fees, legal fees, accounting and finance advisory fees and other supporting corporate expenses not allocated to cost of revenues, product and development or sales and marketing.
Depreciation and Amortization Expenses
Depreciation and Amortization relate to long lived assets used in our business. Depreciation expense relates primarily to furniture and equipment, computers and vehicles. Amortization expense relates primarily to identifiable intangibles of acquired companies.
Transaction Related Expenses
Transaction related expenses relate to the acquisition of Helix onMarch 2, 2021 and include professional, legal, accounting and finance advisory fees and other direct expenses.
Results of Operations for the Three Months Ended
The following table summarizes our condensed results of operations for the
periods indicated:
For the Three Months Ended,
March 31, 2022 March 31, 2021
Revenues $ 6,391,279 $ 1,620,609
Costs and Expenses
Cost of Revenues 1,567,549 457,886
Research and development 3,222,871 1,497,838
Sales and marketing 1,411,314 598,975
General and administrative 6,088,454 2,784,562
Separation expenses 5,611,857 -
Gain on sale of assets (202,159 ) -
Depreciation and amortization 605,674 187,584
Transaction related expenses - 1,210,279
Loss from operations $ (11,914,281 ) $ (5,116,515 )
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Comparison of Three Months Ended
Revenues
Revenues for the three months endedMarch 31, 2022 were$6,391,279 , which represented an increase of$4,770,670 compared to total revenue of$1,620,609 for the three months endedMarch 31, 2021 . These revenues were primarily from Information and Software products. The increase is due to the inclusion of revenues from the Helix acquisition sinceMarch 2, 2021 , which contributed 38% of the increase, and higher revenues from the Company's healthcare information products, which contributed 62% of the increase. Revenues from the Company's Information products increased$2,961,025 or 416% compared to the three months endedMarch 31, 2021 . Cost of Revenues Cost of revenues increased by$1,109,663 for the three months endedMarch 31, 2022 from$457,886 for the three months endedMarch 31, 2021 . The increase is due to higher cost of revenues from the Company's Information products.
Research and Development
Research and development expenses for the three months endedMarch 31, 2022 were$3,222,871 , which represented an increase of$1,725,033 compared to total research and development expenses of$1,497,838 for the three months endedMarch 31, 2021 . The increase is due to higher personnel, subcontracted labor, data licensing and processing expenses related to scaling the Company's products, which contributed 79% of the increase, and the inclusion of the Helix acquisition sinceMarch 2, 2021 , which contributed 21% of the increase.
Sales and Marketing
Sales and marketing expenses for the three months endedMarch 31, 2022 were$1,411,314 , which represented an increase of$812,339 compared to total sales and marketing expenses of$598,975 for the three months endedMarch 31, 2021 . The increase is due to higher salary, commission and consulting expenses related to scaling the Company's products, which contributed 64% of the increase and the inclusion of the Helix acquisition sinceMarch 2, 2021 , which contributed 36% of the increase. General and Administrative General and administrative expenses for the three months endedMarch 31, 2022 were$6,088,454 , which represented an increase of$3,303,892 compared to general and administrative expenses of$2,784,562 for the three months endedMarch 31, 2021 . The increase is due to higher expenses related to scaling the Company's management organization, which contributed 13% of the increase, stock-based compensation expenses related to equity awards granted to key Helix employees and new Company hires after we became a public company onMarch 2, 2021 , which contributed approximately 47% of the increase, and the inclusion of the Helix acquisition sinceMarch 2, 2021 , which contributed 24% of the increase.
Separation Expenses
Separation expenses for the three months endedMarch 31, 2022 were$5,611,857 , consisting of$194,814 of severance expenses related to the transfer of development activities from ourEngeni SA subsidiary and$5,417,043 related to the continued vesting of stock options throughMarch 2, 2023 related to the separation of two advisors to the Company in accordance with the terms of their original advisory agreements. 34
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Gain on Sale of Assets
On
Transaction Related Expenses
Transaction related expenses for the three months endedMarch 31, 2022 were$0 , which represented a decrease of$1,210,279 compared to transaction related expenses of$1,210,279 for the three months endedMarch 31, 2021 . These 2021 expenses related to the acquisition of Helix, which was completed onMarch 2, 2021 . Non-GAAP Financial Measures In this Quarterly Report on Form 10-Q we have provided a non-GAAP measure, which we define as financial information that has not been prepared in accordance withU.S. GAAP. The non-GAAP financial measure provided herein is earnings before interest, taxes, non-cash and other items ("Adjusted EBITDA"), which should be viewed as supplemental to, and not as an alternative for, net income or loss calculated in accordance withU.S. GAAP (referred to below as "Net loss"). Adjusted EBITDA is used by our management as an additional measure of our Company's performance for purposes of business decision-making, including developing budgets, managing expenditures and evaluating potential acquisitions or divestitures. Period-to-period comparisons of Adjusted EBITDA help our management identify additional trends in our Company's financial results that may not be shown solely by period-to-period comparisons of net income. In addition, we may use Adjusted EBITDA in the incentive compensation programs applicable to some of our employees in order to evaluate our Company's performance. Our management recognizes that Adjusted EBITDA has inherent limitations because of the excluded items, particularly those items that are recurring in nature. In order to compensate for those limitations, management also reviews the specific items that are excluded from Adjusted EBITDA, but included in net income, as well as trends in those items contained in Management's Discussion and Analysis of Financial Condition and Results of Operations. We believe that the presentation of Adjusted EBITDA is useful to investors in their analysis of our results for reasons similar to the reasons why our management finds it useful and because it helps facilitate investor understanding of decisions made by management in light of the performance metrics used in making those decisions. In addition, as more fully described below, we believe that providing Adjusted EBITDA, together with a reconciliation of net loss to Adjusted EBITDA, helps investors make comparisons between our Company and other companies that may have different capital structures, different effective income tax rates and tax attributes, different capitalized asset values and/or different forms of employee compensation. However, Adjusted EBITDA is not intended as a substitute for comparisons based on net loss. In making any comparisons to other companies, investors need to be aware that companies use different non-GAAP measures to evaluate their financial performance. Investors should pay close attention to the specific definition being used and to the reconciliation between such measures and the correspondingU.S. GAAP measures provided by each company under applicableSEC rules. 35
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The following is an explanation of the items excluded by us from Adjusted EBITDA but included in net loss:
• Depreciation and Amortization. Depreciation and amortization expense is a
non-cash expense relating to capital expenditures and intangible assets arising
from acquisitions that are expensed on a straight-line basis over the estimated
useful life of the related assets. We exclude depreciation and amortization
expense from Adjusted EBITDA because we believe that (i) the amount of such
expenses in any specific period may not directly correlate to the underlying
performance of our business operations and (ii) such expenses can vary
significantly between periods as a result of new acquisitions and full
amortization of previously acquired tangible and intangible assets.
Accordingly, we believe that this exclusion assists management and investors in
making period-to-period comparisons of operating performance. Investors should
note that the use of tangible and intangible assets contributed to revenue in
the periods presented and will contribute to future revenue generation and
should also note that such expense will recur in future periods.
• Stock-Based Compensation Expense. Stock-based compensation expense is a
non-cash expense arising from the grant of stock-based awards to employees. We
believe that excluding the effect of stock-based compensation from Adjusted
EBITDA assists management and investors in making period-to-period comparisons
in our Company's operating performance because (i) the amount of such expenses
in any specific period may not directly correlate to the underlying performance
of our business operations and (ii) such expenses can vary significantly
between periods as a result of the timing of grants of new stock-based awards,
including grants in connection with acquisitions. Additionally, we believe that
excluding stock-based compensation from Adjusted EBITDA assists management and
investors in making meaningful comparisons between our Company's operating
performance and the operating performance of other companies that may use
different forms of employee compensation or different valuation methodologies
for their stock-based compensation. Investors should note that stock-based
compensation is a key incentive offered to employees whose efforts contributed
to the operating results in the periods presented and are expected to
contribute to operating results in future periods. Investors should also note
that such expenses will recur in the future.
• Interest Expense. Interest expense is associated with the Notes entered into on
1, 2025 and accrue interest at an annual rate of 3.5%. We exclude interest
expense from Adjusted EBITDA (i) because it is not directly attributable to the
performance of our business operations and, accordingly, its exclusion assists
management and investors in making period-to-period comparisons of operating
performance and (ii) to assist management and investors in making comparisons
to companies with different capital structures. Investors should note that
interest expense associated with the Notes will recur in future periods.
• Investment Income. Investment income is associated with the level of marketable
debt securities and other interest-bearing accounts in which we invest.
Interest and investment income can vary over time due to a variety of financing
transactions, changes in interest rates, cash used to fund operations and
capital expenditures and acquisitions that we have entered into or may enter
into in the future. We exclude interest and investment income from Adjusted
EBITDA (i) because these items are not directly attributable to the performance
of our business operations and, accordingly, their exclusion assists management
and investors in making period-to-period comparisons of operating performance
and (ii) to assist management and investors in making comparisons to companies
with different capital structures. Investors should note that interest income
will recur in future periods.
• Foreign Currency Related Gains (Losses). Foreign currency related gains
(losses) result from foreign currency transactions and translation gains and
losses related to our
gains (losses) from Adjusted EBITDA (i) because these items are not directly
attributable to the performance of our business operations and, accordingly,
their exclusion assists management and investors in making period-to-period
comparisons of operating performance and (ii) to assist management and
investors in making comparisons to companies with different capital structures.
Investors should note that foreign currency related gains (losses) will recur
in future periods.
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• Other Items. We engage in other activities and transactions that can impact our
net loss. In the periods being reported, these other items included (i) change
in fair value of warrant liability which related to warrants assumed in the
acquisition of Helix; (ii) transaction related expenses which consist of
professional fees and other expenses incurred in connection with the
acquisition of Helix; and (iii) other income which consists of profits on
marketable security investments. We exclude these other items from Adjusted
EBITDA because we believe these activities or transactions are not directly
attributable to the performance of our business operations and, accordingly,
their exclusion assists management and investors in making period-to-period
comparisons of operating performance. Investors should note that some of these
other items may recur in future periods.
• Gain on sale of assets. On
customer contracts, accounts receivable, and other property related to our
security monitoring services for
which is included in operating expenses in the condensed consolidated statements of operations.
• Separation expenses. During
activities from our
As a result, we incurred
as a charge to operating expenses in 2022. Additionally, on
and two advisors to our Company mutually agreed not to renew special advisor
agreements. Per the terms of the agreements, options to purchase 366,166 shares
of our common stock will continue to vest according to their original terms
through
our common stock were forfeited. The advisors were not required to perform
services to our Company beyond the
we recorded
that will vest over the twelve months ending
We exclude these other items from Adjusted EBITDA because we believe these
costs are not directly attributable to the performance of our business
operations and, accordingly, their exclusion assists management and investors
in making period-to-period comparisons of operating performance. Investors
should note that separation expenses are non-recurring.
• Income tax expense. MOR was organized as a limited liability company until the
completion of the Helix acquisition. As a result, we were treated as a
partnership for federal and state income tax purposes through
and our taxable income and losses are reported by our members on their
individual tax returns for such period. Therefore, we did not record any income
tax expense or benefit through
financial reporting and income tax reporting purposes for this year.
Accordingly, any benefit for federal and state income taxes benefit has been
entirely offset by a valuation allowance against the related deferred tax net
assets. We exclude the income tax expense from Adjusted EBITDA (i) because we
believe that the income tax expense is not directly attributable to the underlying performance of our business operations and, accordingly, its exclusion assists management and investors in making period-to-period comparisons of operating performance and (ii) to assist management and
investors in making comparisons to companies with different tax attributes.
Limitations on the use of non-GAAP financial measures
There are limitations to using non-GAAP financial measures because non-GAAP
financial measures are not prepared in accordance with
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The non-GAAP financial measures are limited in value because they exclude certain items that may have a material impact upon our reported financial results. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by management about which items are adjusted to calculate our non-GAAP financial measures. We compensate for these limitations by analyzing current and future results on aU.S. GAAP basis as well as a non-GAAP basis and also by providingU.S. GAAP measures in our public disclosures. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance withU.S. GAAP. We encourage investors and others to review our financial information in its entirety, not to rely on any single financial measure to evaluate our business and to view our non-GAAP financial measures in conjunction with the most directly comparableU.S. GAAP financial measures.
The following table reconciles the specific items excluded from
For the
Three Months Ended
2022 2021
Revenues:
Information and Software $ 5,809,094$ 1,408,978 Services 428,706 96,311 Other 153,479 115,320 Total revenues $ 6,391,279$ 1,620,609 Net loss$ (11,854,088 ) $ (4,515,653 ) Depreciation & amortization 605,674 187,584 Stock based compensation expense 7,904,584 863,883 Change in fair value of warrant liability (219,840 ) (623,627 ) Transaction related expenses - 1,210,279 Interest and investment income (expense) 232,623 (1,241 ) Foreign currency related (gains) losses (77,976 ) 24,006 Gain on sale of security monitoring assets (202,159 ) - Severance expense 194,814 - Income tax expense 5,000 - Adjusted EBITDA$ (3,411,368 ) $ (2,854,769 )
For the Three Months Ended
Adjusted EBITDA
Adjusted EBITDA for the three months endedMarch 31, 2022 was a loss of$3,411,368 compared to a loss of$2,854,769 for the three months endedMarch 31, 2021 , an increase of$556,599 . The increase is primarily due to investments in product development, customer service, infrastructure, and human capital and the inclusion of Helix. 38
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Revenues
Revenues for the three months endedMarch 31, 2022 were$6,391,279 , which represented an increase of$4,770,670 compared to total revenue of$1,620,609 for the three months endedMarch 31, 2021 . These revenues were primarily from Information and Software products. The increase is due to the inclusion of revenues from the Helix acquisition sinceMarch 2, 2021 , which contributed 38% of the increase, and higher revenues from the Company's healthcare information products, which contributed 62% of the increase. Revenues from the Company's Information products increased$2,961,025 or 416% compared to the three months endedMarch 31, 2021 . Revenues for the three months endedMarch 31, 2022 was$6,391,279 compared to pro forma revenues adjusted to include revenues from Helix for the period, for the three months endedMarch 31, 2021 of$3,629,521 . Helix pre-acquisition revenues during the three months endedMarch 31, 2021 were$2,008,912 . The increase in pro forma revenue of$2,761,758 is primarily due to increased sales of healthcare information products.
Liquidity and Capital Resources
Since the Company's inception in 2019, most of the Company's resources have been devoted to scaling its research and development, sales and marketing, and management infrastructure. The Company's operations have been financed primarily from the cash proceeds received from equity issuances and the issuance of convertible notes. The Company expects to continue to fund its operations and potential future acquisitions through a combination of cash flow generated from operating activities, debt financing, and/or additional equity issuances. To date, the Company has not generated sufficient revenues from the licensing of information products and software products to fund all of its operating expenses and as a result the Company has incurred losses and generated negative cash flows from operations since inception. OnApril 12, 2021 the Company entered into a securities purchase agreement with certain accredited investors and certain of the Company's directors, pursuant to which the Company issued 1,191,743 shares of common stock for aggregate gross proceeds of$12,000,000 . OnSeptember 1, 2021 , the Company raised proceeds of$24 million through the sale of 3.5% convertible promissory notes maturing onSeptember 1, 2025 . As ofMarch 31, 2022 , the Company's principal source of liquidity was aggregate cash and marketable securities of$27,146,824 .
Cash Flows
The following table summarizes selected information about our sources and uses of cash and cash equivalents for the periods presented:
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For the Three Months Ended,
March 31, 2022 March 31, 2021
Net cash used in operating activities $ (3,229,774 ) $ (3,608,800 )
Net cash (used in) provided by investing activities (667,515 ) 5,246,936
Net cash (used in) provided by financing activities (13,122 ) 292,148
Net (decrease) increase in cash and cash equivalents $
(3,910,411 )
Net cash used in operating activities decreased by$379,026 for the three months endedMarch 31, 2022 compared to the three months endedMarch 31, 2021 The decrease was primarily the result of increased revenues and decreased transaction related expenses, partially offset by increased operating expense related to the scaling up of the Company's operations as well as a result of the Helix acquisition and its operations.
Net Cash Provided by Investing Activities
Net cash used in investing activities of$667,515 decreased by$5,914,451 for the three months endedMarch 31, 2022 compared to cash provided by investing activities of$5,246,936 for the three months endedMarch 31, 2021 . This is primarily the result of an increase in additions to property and equipment of$838,379 , a net increase in cash invested in marketable securities of$3,990,670 and a decrease in cash acquired of$1,310,977 .
Net Cash Provided by Financing Activities
Net cash used in financing activities of$13,122 for the three months endedMarch 31, 2022 decreased by$305,270 compared to cash provided by investing activities of$292,148 for the three months endedMarch 31, 2021 . The decrease was primarily related to a reduction in cash proceeds received from the exercise of stock options.
Critical Accounting Policies and Use of Estimates
Our management's discussion and analysis of our financial condition and results of operations is based on our financial statements, which we have prepared in accordance withU.S. generally accepted accounting principles ("U.S. GAAP"). We believe that several accounting policies are important to understanding our historical and future performance. We refer to these policies as critical because these specific areas generally require us to make judgments and estimates about matters that are uncertain at the time we make the estimate, and different estimates - which also would have been reasonable - could have been used. On an ongoing basis, we evaluate our estimates and judgments. We base our estimates on historical experience and other market-specific or other relevant assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Critical accounting policies and estimates are further discussed in our Annual Report on Form 10-K for the year endedDecember 31, 2021 , as filed with theSEC onMarch 31, 2022 .
Off Balance Sheet Arrangements
The Company does not have relationships with other organizations or process any transactions that would constitute off balance sheet arrangements.
Recent Accounting Pronouncements
InOctober 2021 , the FASB issued Accounting Standards Update No. 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers ("ASU 2021-08"). The FASB issued ASU 2021-08 to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to recognition of an acquired contract liability and payment terms and their effect on subsequent revenue recognized by the acquirer. The amendment is effective for financial statements for interim and annual periods beginning afterDecember 15, 2022 . The adoption of this standard is not expected to have a material impact on the condensed consolidated financial statements. The Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its financial statements. 40
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JOBS Act
OnApril 5, 2012 , the JOBS Act was signed into law. The JOBS Act contains provisions that, among other things, reduce certain reporting requirements for an "emerging growth company." As an "emerging growth company," the Company is electing to take advantage of the extended transition period afforded by the JOBS Act for the implementation of new or revised accounting standards. Subject to certain conditions set forth in the JOBS Act, as an "emerging growth company," the Company is not required to, among other things, (i) provide an auditor's attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by thePublic Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements (auditor discussion and analysis), and (iv) disclose certain executive compensation-related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer's compensation to median employee compensation. These exemptions will apply until the fifth anniversary of the business combination or until we no longer meet the requirements for being an "emerging growth company," whichever occurs first.
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