Cover
Cover - USD ($) | 12 Months Ended | ||
Jan. 31, 2023 | Apr. 24, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Jan. 31, 2023 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2022 | ||
Current Fiscal Year End Date | --01-31 | ||
Entity File Number | 000-28132 | ||
Entity Registrant Name | STREAMLINE HEALTH SOLUTIONS, INC. | ||
Entity Central Index Key | 0001008586 | ||
Entity Tax Identification Number | 31-1455414 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Address, Address Line One | 2400 Old Milton Pkwy. | ||
Entity Address, Address Line Two | Box 1353 | ||
Entity Address, City or Town | Alpharetta | ||
Entity Address, State or Province | GA | ||
Entity Address, Postal Zip Code | 30009 | ||
City Area Code | (888) | ||
Local Phone Number | 997-8732 | ||
Title of 12(b) Security | Common Stock, $0.01 par value per share | ||
Trading Symbol | STRM | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 55,069,915 | ||
Entity Common Stock, Shares Outstanding | 58,610,540 | ||
Documents Incorporated by Reference | Information required by Part III is incorporated by reference from the Registrant’s Proxy Statement for its 2023 annual meeting of stockholders or an amendment to this Annual Report on Form 10-K, which will be filed with the Securities and Exchange Commission within 120 days after the end of its fiscal year ended January 31, 2023. | ||
ICFR Auditor Attestation Flag | false | ||
Document Financial Statement Error Correction | false | ||
Auditor Name | FORVIS, LLP | ||
Auditor Location | Atlanta, Georgia | ||
Auditor Firm ID | 686 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jan. 31, 2023 | Jan. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 6,598,000 | $ 9,885,000 |
Accounts receivable, net of allowance for doubtful accounts of $132,000 and $76,000, respectively | 7,719,000 | 3,823,000 |
Contract receivables | 960,000 | 843,000 |
Prepaid and other current assets | 710,000 | 568,000 |
Total current assets | 15,987,000 | 15,119,000 |
Non-current assets: | ||
Property and equipment, net of accumulated amortization of $246,000 and $192,000 respectively | 79,000 | 123,000 |
Right-of use asset for operating lease | 32,000 | 218,000 |
Capitalized software development costs, net of accumulated amortization of $6,224,000 and $5,202,000, respectively | 5,846,000 | 5,555,000 |
Intangible assets, net of accumulated amortization of $2,627,000 and $5,121,000, respectively | 14,793,000 | 16,763,000 |
Goodwill | 23,089,000 | 23,089,000 |
Other | 1,695,000 | 948,000 |
Total non-current assets | 45,534,000 | 46,696,000 |
Total assets | 61,521,000 | 61,815,000 |
Current liabilities: | ||
Accounts payable | 626,000 | 778,000 |
Accrued expenses | 3,265,000 | 1,803,000 |
Current portion of term loan | 750,000 | 250,000 |
Deferred revenues | 8,361,000 | 5,794,000 |
Current portion of operating lease obligation | 35,000 | 204,000 |
Current portion of acquisition earnout liability | 3,738,000 | 4,672,000 |
Total current liabilities | 16,775,000 | 13,501,000 |
Non-current liabilities: | ||
Term loan, net of deferred financing costs | 8,964,000 | 9,654,000 |
Deferred revenues, less current portion | 167,000 | 136,000 |
Operating lease obligations, less current portion | 33,000 | |
Acquisition earnout liability, less current portion | 4,161,000 | |
Other non-current liabilities | 104,000 | 286,000 |
Total non-current liabilities | 9,235,000 | 14,270,000 |
Total liabilities | 26,010,000 | 27,771,000 |
Commitments and contingencies – Note 12 | ||
Stockholders’ equity | ||
Common stock, $0.01 par value per share, 85,000,000 and 65,000,000 shares authorized, respectively; 57,567,210 and 47,840,950 shares issued and outstanding, respectively | 576,000 | 478,000 |
Additional paid in capital | 131,973,000 | 119,225,000 |
Accumulated deficit | (97,038,000) | (85,659,000) |
Total stockholders’ equity | 35,511,000 | 34,044,000 |
Total liabilities and stockholders’ equity | $ 61,521,000 | $ 61,815,000 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Jan. 31, 2023 | Jan. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 132,000 | $ 76,000 |
Accumulated amortization, property and equipment | 246,000 | 192,000 |
Accumulated amortization, capitalized software development costs | 6,224,000 | 5,202,000 |
Accumulated amortization, intangible assets | $ 2,627,000 | $ 5,121,000 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 85,000,000 | 65,000,000 |
Common stock, shares issued | 57,567,210 | 47,840,950 |
Common stock, shares outstanding | 57,567,210 | 47,840,950 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | ||
Jan. 31, 2023 | Jan. 31, 2022 | ||
Revenues: | |||
Total revenues | $ 24,889,000 | $ 17,379,000 | |
Operating expenses: | |||
Cost of software as a service | 6,358,000 | 3,417,000 | |
Cost of maintenance and support | 427,000 | 334,000 | |
Cost of professional fees and licenses | 6,610,000 | 4,826,000 | |
Selling, general and administrative expense | 16,134,000 | 11,931,000 | |
Research and development | 6,042,000 | 4,782,000 | |
Acquisition-related costs | 149,000 | 2,856,000 | |
Total operating expenses | 35,720,000 | 28,146,000 | |
Operating loss | (10,831,000) | (10,767,000) | |
Other expense: | |||
Interest expense | (749,000) | (236,000) | |
Loss on early extinguishment of debt | (43,000) | ||
Acquisition earnout valuation adjustments | 71,000 | 1,851,000 | |
Other | 201,000 | 60,000 | |
PPP loan forgiveness | 2,327,000 | ||
Loss from continuing operations before income taxes | (11,308,000) | (6,808,000) | |
Income tax expense | (71,000) | (109,000) | |
Loss from continuing operations | (11,379,000) | (6,917,000) | |
Income from discontinued operations: | |||
Income from discontinued operations | 401,000 | ||
Income tax expense | (26,000) | ||
Income from discontinued operations, net of tax | 375,000 | ||
Net loss | $ (11,379,000) | $ (6,542,000) | |
Basic Earnings Per Share: | |||
Continuing operations | $ (0.23) | $ (0.16) | |
Discontinued operations | 0.01 | ||
Net income | $ (0.23) | $ (0.15) | |
Weighted average number of common shares – basic | [1] | 49,324,858 | 42,815,239 |
Diluted Earnings Per Share: | |||
Continuing operations | $ (0.23) | $ (0.16) | |
Discontinued operations | 0.01 | ||
Net loss per common share – diluted | $ (0.23) | $ (0.15) | |
Weighted average number of common shares - diluted | 49,324,858 | 43,273,574 | |
Softwareas As A Service [Member] | |||
Revenues: | |||
Total revenues | $ 12,326,000 | $ 8,077,000 | |
Maintenance And Support [Member] | |||
Revenues: | |||
Total revenues | 4,483,000 | 4,323,000 | |
Professional Fees And Licenses [Member] | |||
Revenues: | |||
Total revenues | $ 8,080,000 | $ 4,979,000 | |
[1]Excludes the effect of unvested restricted shares of common stock, which are considered non-participating securities. As of January 31, 2023 and 2022, there were 1,848,031 1,043,350 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Balance at Jan. 31, 2021 | $ 316,000 | $ 96,290,000 | $ (79,117,000) | $ 17,489,000 |
Balance, shares at Jan. 31, 2021 | 31,597,975 | |||
Exercise of Stock Options | 4,000 | 4,000 | ||
Exercise of Stock Options, shares | 3,300 | |||
Restricted stock issued | $ 14,000 | (14,000) | ||
Restricted stock issued, shares | 1,462,874 | |||
Issuance of Common Stock | $ 151,000 | 22,503,000 | 22,654,000 | |
Issuance of Common Stock, shares | 15,084,472 | |||
Offering Expenses | (1,313,000) | (1,313,000) | ||
Restricted stock forfeited | ||||
Restricted stock forfeited, shares | (50,100) | |||
Surrender of stock | $ (3,000) | (461,000) | (464,000) | |
Surrender of stock, shares | (257,571) | |||
Share-based compensation expense | 2,216,000 | 2,216,000 | ||
Net income (loss) | (6,542,000) | (6,542,000) | ||
Balance at Jan. 31, 2022 | $ 478,000 | 119,225,000 | (85,659,000) | 34,044,000 |
Balance, shares at Jan. 31, 2022 | 47,840,950 | |||
Exercise of Stock Options | 6,000 | $ 6,000 | ||
Exercise of Stock Options, shares | 5,000 | 5,000 | ||
Restricted stock issued | $ 19,000 | (19,000) | ||
Restricted stock issued, shares | 1,876,962 | |||
Issuance of Common Stock | $ 82,000 | 11,246,000 | 11,328,000 | |
Issuance of Common Stock, shares | 8,171,027 | |||
Offering Expenses | (52,000) | (52,000) | ||
Restricted stock forfeited | $ (2,000) | 2,000 | ||
Restricted stock forfeited, shares | (199,300) | |||
Surrender of stock | $ (1,000) | (196,000) | (197,000) | |
Surrender of stock, shares | (127,429) | |||
Share-based compensation expense | 1,761,000 | 1,761,000 | ||
Net income (loss) | (11,379,000) | (11,379,000) | ||
Balance at Jan. 31, 2023 | $ 576,000 | $ 131,973,000 | $ (97,038,000) | $ 35,511,000 |
Balance, shares at Jan. 31, 2023 | 57,567,210 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Jan. 31, 2023 | Jan. 31, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (11,379,000) | $ (6,542,000) |
LESS: Income from discontinued operations, net of tax | (375,000) | |
Loss from continuing operations, net of tax | (11,379,000) | (6,917,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 4,313,000 | 3,697,000 |
Acquisition earnout valuation adjustments | (71,000) | (1,851,000) |
Loss on early extinguishment of debt | 43,000 | |
Provision for deferred income taxes | 9,000 | 95,000 |
Share-based compensation expense | 1,680,000 | 2,216,000 |
Provision for accounts receivable allowance | 189,000 | 11,000 |
Forgiveness of PPP loan | (2,327,000) | |
Changes in assets and liabilities: | ||
Accounts and contract receivables | (4,202,000) | (129,000) |
Other assets | (1,197,000) | (346,000) |
Accounts payable | (152,000) | 17,000 |
Accrued expenses and other liabilities | 1,069,000 | 533,000 |
Deferred revenues | 2,598,000 | 1,074,000 |
Net cash used in operating activities – continuing operations | (7,143,000) | (3,884,000) |
Net cash provided by operating activities – discontinued operations | 380,000 | |
Cash flows from investing activities: | ||
Investment in Avelead, net of cash acquired | (12,470,000) | |
Purchases of property and equipment | (10,000) | (41,000) |
Proceeds from sale of ECM Assets | 800,000 | |
Capitalization of software development costs | (1,925,000) | (1,458,000) |
Net cash used in investing activities – continuing operations | (1,935,000) | (13,169,000) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock | 8,316,000 | 16,100,000 |
Payment of acquisition earnout liabilities | (2,012,000) | |
Payments for costs directly attributable to the issuance of common stock | (52,000) | (1,313,000) |
Repayment of bank term loan | (250,000) | |
Proceeds from term loan payable | 10,000,000 | |
Payments related to settlement of employee shared-based awards | (197,000) | (464,000) |
Payment of deferred financing costs | (20,000) | (168,000) |
Other | 6,000 | (6,000) |
Net cash provided by financing activities – continuing operations | 5,791,000 | 24,149,000 |
Net (decrease) increase in cash and cash equivalents | (3,287,000) | 7,476,000 |
Cash and cash equivalents at beginning of period | 9,885,000 | 2,409,000 |
Cash and cash equivalents at end of period | 6,598,000 | 9,885,000 |
Supplemental cash flow disclosures: | ||
Interest paid, net of amounts capitalized | 651,000 | 153,000 |
Income taxes paid | $ 23,000 | $ 21,000 |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF BUSINESS | 12 Months Ended |
Jan. 31, 2023 | |
Accounting Policies [Abstract] | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | NOTE 1 — ORGANIZATION AND DESCRIPTION OF BUSINESS Streamline Health Solutions, Inc. and each of its wholly-owned subsidiaries, Streamline Health, LLC, Avelead Consulting, LLC, Streamline Consulting, LLC and Streamline Pay & Benefits, LLC, (collectively, unless the context requires otherwise, “we”, “us”, “our”, “Streamline”, or the “Company”) operates in one segment as a provider of healthcare information technology solutions and associated services. The Company provides these capabilities through the licensing of its Coding & CDI, eValuator coding analysis platform, RevID, and other workflow software applications and the use of such applications by software as a service (“SaaS”). The Company also provides audit services to help clients optimize their internal clinical documentation and coding functions, as well as implementation and consulting services to complement its software solutions. The Company’s software and services enable hospitals and integrated healthcare delivery systems in the United States and Canada to capture, store, manage, route, retrieve and process patient clinical, financial and other healthcare provider information related to the patient revenue cycle. Fiscal Year All references to a fiscal year refer to the fiscal year commencing February 1 in that calendar year and ending on January 31 of the following calendar year. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Jan. 31, 2023 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The consolidated financial statements include the accounts of Streamline Health Solutions, Inc. and its wholly-owned subsidiaries, Streamline Health, LLC, Avelead Consulting, LLC, Streamline Consulting Solutions, LLC and Streamline Pay & Benefits, LLC. All significant intercompany transactions and balances are eliminated in consolidation. All amounts in the consolidated financial statements, notes and tables have been rounded to the nearest thousand dollars, except share and per share amounts, unless otherwise indicated. Refer to Note – 3 Business Combination and Divestiture. Under ASC 280-10-50-11, two or more operating segments may be aggregated into a single operating segment if they are considered to be similar. Operating segments are considered to be similar if they can be expected to have essentially the same economic characteristics and future prospects. Using the aggregation guidance, the Company determined that it has one operating segment due to the similar economic characteristics of the Company’s products, product development, distribution, regulatory environment and client base as a provider of computer software-based solutions and services for acute-care healthcare organizations. For fiscal years 2022 and 2021, the Company has two reporting units for evaluation of goodwill. These two reporting units are the legacy Streamline business and Avelead. On February 24, 2020, the Company sold a portion of its business (the ECM Assets). The results of operations, cash flows and related balance sheet items associated with the ECM Assets are reported in discontinued operations in the accompanying consolidated statements of operations and cash flows and the consolidated balance sheet for the comparative prior periods. Refer to Note 13 – Discontinued Operations for further details. Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, management evaluates its estimates and judgments, including those related to the recognition of revenue, stock-based compensation, capitalization of software development costs, intangible assets, the allowance for doubtful accounts, contingent consideration and income taxes. Actual results could differ from those estimates. Cash and Cash Equivalents Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash demand deposits. Cash deposits are placed in Federal Deposit Insurance Corporation (“FDIC”) insured financial institutions. Cash deposits may exceed FDIC insured levels from time to time. For purposes of the consolidated balance sheets and consolidated statements of cash flows, the Company considers all highly-liquid investments purchased with an original maturity of three months or less to be cash equivalents. Non-Cash Items The Company had the following items that were non-cash items related to the consolidated statements of cash flows: SCHEDULE OF NON-CASH ITEMS RELATED TO CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 2022 2021 Fiscal Year 2022 2021 Forgiveness of PPP loan and accrued interest $ — $ 2,327,000 Payment of acquisition earnout liabilities in restricted common stock 3,012,000 — Capitalized software purchased with stock (Note 12) 81,000 — Receivables Accounts and contract receivables are comprised of amounts owed to the Company for licensed software, professional services, including coding audit services, consulting services, maintenance services, and software as a service and are presented net of the allowance for doubtful accounts. The timing of revenue recognition may not coincide with the billing terms of the client contract, resulting in unbilled receivables or deferred revenues; therefore, certain contract receivables represent revenues recognized prior to client billings. Individual contract terms with clients or resellers determine when receivables are due. Accounts receivable represent amounts that the entity has an unconditional right to consideration. For billings where the criteria for revenue recognition have not been met, deferred revenue is recorded until the Company satisfies the respective performance obligations. Allowance for Doubtful Accounts The Company adjusts accounts receivable down to net realizable value with its allowance methodology. In determining the allowance for doubtful accounts, aged receivables are analyzed periodically by management. Each identified receivable is reviewed based upon the most recent information available and the status of any open or unresolved issues with the client preventing the payment thereof. Corrective action, if necessary, is taken by the Company to resolve open issues related to unpaid receivables. During these periodic reviews, the Company determines the required allowances for doubtful accounts for estimated losses resulting from the unwillingness of its clients or resellers to make required payments. The Company believes that its reserve is adequate, however, results may differ in future periods. Accrued Expenses Accrued expenses consisted of the following: SCHEDULE OF ACCRUED EXPENSES 2023 2022 January 31, 2023 2022 Employee benefits and related compensation $ 2,079,000 $ 803,000 Professional fees and services 294,000 283,000 Third party licenses 285,000 77,000 Customer concessions 226,000 152,000 State income and sales taxes payable 331,000 460,000 Interest, primarily on Term Loan 50,000 28,000 Total accrued expenses $ 3,265,000 $ 1,803,000 Concessions Accrual The Company offers certain service line agreements within its client contracts such as uptime, support hours, and levels of support. Our contracts may include and we may offer credit to clients when these service line agreements are not met. The service line agreements are accounted for as variable consideration. As a result, we record an estimate of these concessions against our recorded revenue. In determining the concessions accrual, the Company evaluates historical concessions granted relative to revenue as well as future potential risk that these service line agreements will not be met. The Company records a provision, reducing revenue, each period for the estimated amount of concessions incurred on the revenue recorded. The Company evaluates the amount of the concession accrual each period. Historically, concessions have not been significant. The concession accrual included in accrued expenses on the Company’s consolidated balance sheets was $ 226,000 152,000 Property and Equipment Property and equipment are stated at cost. Depreciation is computed using the straight-line method, over the estimated useful lives of the related assets. Estimated useful lives are as follows: SCHEDULE OF ESTIMATED USEFUL LIFE OF PROPERTY AND EQUIPMENT Computer equipment and software 3 4 Office equipment 5 Office furniture and fixtures 5 7 Leasehold improvements Term of lease or estimated useful life, whichever is shorter Depreciation expense for property and equipment in fiscal 2022 and 2021 was $ 54,000 68,000 Normal repairs and maintenance are expensed as incurred. Replacements are capitalized and the property and equipment accounts are relieved of the items being replaced or disposed of, if no longer of value. The related cost and accumulated depreciation of the disposed assets are eliminated and any gain or loss on disposition is included in the results of operations in the year of disposal. The Company wrote-off fully depreciated fixed assets during fiscal 2021 of $ 198,000 Leases We determine whether an arrangement is a lease at inception. Right-of-use assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the expected lease term. Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Since our lease arrangements do not provide an implicit rate, we use our estimated incremental borrowing rate for the expected remaining lease term at commencement date in determining the present value of future lease payments. We recognize operating lease cost on a straight-line basis by aggregating any rent abatement with the total expected rental payments and amortizing the expense ratably over the term of the lease. Sublease income is recognized as other income over the period of the lease, as the sublease is outside of the Company’s normal business operations. See Note 4 – Operating Leases for further details. Debt Issuance Costs Cost related to the issuance of the Loan and Security Agreement and Second Amended and Restated Loan and Security Agreement were capitalized and amortized to interest expense on a straight-line basis, which is not materially different from the effective interest method, over the term of the related debt, and presented on the Company’s consolidated balance sheets as a direct deduction from the carrying amount of the non-current portion of our term loan. Impairment of Long-Lived Assets The Company reviews the carrying value of long-lived assets for impairment whenever facts and circumstances exist that would suggest that assets might be impaired or that the useful lives should be modified. Among the factors the Company considers in making the evaluation are changes in market position and profitability. If facts and circumstances are present which may indicate that the carrying amount of the assets may not be recoverable, the Company will prepare a projection of the undiscounted cash flows of the specific asset or asset group and determine if the long-lived assets are recoverable based on these undiscounted cash flows. If impairment is indicated, an adjustment will be made to reduce the carrying amount of these assets to their fair values. Capitalized Software Development Costs Software development costs for software to be sold, leased, or marketed are accounted for in accordance with ASC 985-20, Software — Costs of Software to be Sold, Leased or Marketed 522,000 846,000 Internal-use software development costs are accounted for in accordance with ASC 350-40, Internal-Use Software 5,324,000 4,709,000 The estimated useful lives of software (including software to be sold and internal-use software) are reviewed frequently and adjusted as appropriate to reflect upcoming development activities that may include significant upgrades and/or enhancements to the existing functionality. The Company reviews, on an on-going basis, the carrying value of its capitalized software development expenditures, net of accumulated amortization. Amortization expense on all capitalized software development was $ 2,423,000 2,173,000 0 84,000 694,000 The Company uses the “carry-over” method for amortizing capitalized software development costs. Under the “carry-over” method, the costs of the enhancements are added to the unamortized costs of the previous version of the product and the combined amount is amortized over the remaining useful life of the product. Including unamortized cost of the original product with the cost of the enhancement for purposes of applying the net realizable value test and amortization provisions is consistent with accounting guidance for software companies that improve their software and discontinue selling or marketing the older versions. SCHEDULE OF AMORTIZATION EXPENSE FOR INTERNALLY DEVELOPED SOFTWARE 2022 2021 Fiscal Year 2022 2021 Amortization expense on internally-developed software included in: Cost of software as a service $ 2,068,000 $ 1,675,000 Cost of professional fees and licenses 355,000 498.000 Total amortization expense on internally-developed software $ 2,423,000 $ 2,173,000 The interest capitalized to software development cost reduces the Company’s interest expense recognized in the consolidated statements of operations. Research and development expense was $ 6,042,000 4,782,000 Fair Value of Financial Instruments The FASB’s authoritative guidance on fair value measurements establishes a framework for measuring fair value, and expands disclosure about fair value measurements. This guidance enables the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. Under this guidance, assets and liabilities carried at fair value must be classified and disclosed in one of the following three categories: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs that are not corroborated by market data. The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value based on the short-term maturity of these instruments. Cash and cash equivalents are classified as Level 1. For fiscal years 2022 and 2021, there were no transfers of assets or liabilities between Levels 1, 2, or 3. The table below provides information on our liabilities that are measured at fair value on a recurring basis: SCHEDULE OF FAIR VALUE ASSETS AND LIABILITIES MEASURED ON RECURRING BASIS Total Fair Quoted Prices in Active Markets Significant Other Observable Inputs Significant Unobservable Inputs Value (Level 1) (Level 2) (Level 3) At January 31, 2023 Acquisition earnout liability (1) $ 3,738,000 $ — $ — $ 3,738,000 At January 31, 2022 Acquisition earnout liability (1) $ 8,833,000 $ — $ — $ 8,833,000 (1) The fair value of the acquisition earnout liability is based upon a probability-weighted discounted cash flow that was completed at the date of acquisition and updated as of January 31, 2023. The change in the fair value of the acquisition earnout ability decreased $ 5,095,000 5,024,000 71,000 The probability-weighted discounted cash flow is calculated using a Monte Carlo valuation method. The valuation model provides numerous outcomes. The outcomes are averaged and discounted to present value, which provides the current value point estimate. The significant inputs include our forecast of Avelead SaaS revenue, the probabilities associated with each of (i) a change in control or (ii) a certain client termination, as well as other normal and customary inputs to financial models, including but not limited to, risk factors and interest rates. The fair value of the Company’s term loan under its Second Amended and Restated Loan and Security Agreement was determined through an analysis of the interest rate spread from the date of closing the loan (August 2021) to the date of the most recent balance sheets, January 31, 2023 and January 31, 2022. The term loan bears interest at a per annum rate equal to the Prime Rate (as published in The Wall Street Journal) plus 1.5 3.25 1.5 0.5 9,550,000 9,798,000 200,000 202,000 Revenue Recognition We derive revenue from the sale of internally-developed software, either by licensing for local installation or by a SaaS delivery model, through our direct sales force or through third-party resellers. Licensed, locally-installed clients on a perpetual model utilize our support and maintenance services for a separate fee, whereas term-based locally installed license fees and SaaS fees include support and maintenance. We also derive revenue from professional services that support the implementation, configuration, training and optimization of the applications, as well as audit services and consulting services. We recognize revenue in accordance with Accounting Standards Codification (ASC) 606, Revenue from Contracts with Clients We commence revenue recognition (Step 5 below) in accordance with that core principle after applying the following steps: ● Step 1: Identify the contract(s) with a client ● Step 2: Identify the performance obligations in the contract ● Step 3: Determine the transaction price ● Step 4: Allocate the transaction price to the performance obligations in the contract ● Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation Often contracts contain more than one performance obligation. Performance obligations are the unit of accounting for revenue recognition and generally represent the distinct goods or services that are promised to the client. Revenue is recognized net of any taxes collected from clients and subsequently remitted to governmental authorities. If we determine that we have not satisfied a performance obligation, we defer recognition of the revenue until the performance obligation is satisfied. Maintenance and support and SaaS agreements are generally non-cancellable or contain significant penalties for early cancellation, although clients typically have the right to terminate their contracts for cause if we fail to perform material obligations. However, if non-standard acceptance periods, non-standard performance criteria, or cancellation or right of refund terms are required, revenue is recognized upon the satisfaction of such criteria. The determined transaction price is allocated based on the standalone selling price of the performance obligations in contract. Significant judgment is required to determine the standalone selling price (“SSP”) for each performance obligation, the amount allocated to each performance obligation and whether it depicts the amount that the Company expects to receive in exchange for the related product and/or service. The Company recognizes revenue for implementation of its eValuator SaaS solution over the contract term, as it has been determined that those implementation services are not a distinct performance obligation. Services for other SaaS and Software solutions such as CDI, RevID and Compare, have been determined as a distinct performance obligation. For these agreements, the Company estimates SSP of its software licenses using the residual approach when the software license is sold with other services and observable SSPs exist for the other services. The Company estimates the SSP for maintenance, professional services, software as a service and audit services based on observable standalone sales. Contract Combination The Company may execute more than one contract or agreement with a single client. The Company evaluates whether the agreements were negotiated as a package with a single objective, whether the amount of consideration to be paid in one agreement depends on the price and/or performance of another agreement, or whether the goods or services promised in the agreements represent a single performance obligation. The conclusions reached can impact the allocation of the transaction price to each performance obligation and the timing of revenue recognition related to those arrangements. The Company has utilized the portfolio approach as the practical expedient. We have applied the revenue model to a portfolio of contracts with similar characteristics where we expected that the financial statements would not differ materially from applying it to the individual contracts within that portfolio. Software Licenses The Company’s software license arrangements provide the client with the right to use functional intellectual property. Implementation, support, and other services are typically considered distinct performance obligations when sold with a software license unless these services are determined to significantly modify the software. Revenue is recognized at a point in time. Typically, this is upon shipment of components or electronic download of software. Maintenance and Support Services Our maintenance and support obligations include multiple discrete performance obligations, with the two largest being unspecified product upgrades or enhancements, and technical support, which can be offered at various points during a contract period. We believe that the multiple discrete performance obligations within our overall maintenance and support obligations can be viewed as a single performance obligation since both the unspecified upgrades and technical support are activities to fulfill the maintenance performance obligation and are rendered concurrently. Maintenance and support agreements entitle clients to technology support, version upgrades, bug fixes and service packs. We recognize maintenance and support revenue over the contract term. Software-Based Solution Professional Services The Company provides various professional services to clients with software licenses. These include project management, software implementation and software modification services. Revenues from arrangements to provide professional services are generally distinct from the other promises in the contract and are recognized as the related services are performed. Consideration payable under these arrangements is either fixed fee or on a time-and-materials basis and is recognized over time as the services are performed. Software as a Service SaaS-based contracts include a right to use of the Company’s platform and support which represent a single promise to provide continuous access to its software solutions. Implementation services for the Company’s eValuator product are included as part of the single promise for its respective contracts. The Company recognizes revenue for implementation of the eValuator product over the contract term as it is determined that the implementation on eValuator is not a distinct performance obligation. Implementation services for other SaaS products are deemed to be separate performance obligations. Audit Services The Company provides technology-enabled coding audit services to help clients review and optimize their internal clinical documentation and coding functions across the applicable segment of the client’s enterprise. Audit services are a separate performance obligation. We recognize revenue over time as the services are performed. Disaggregation of Revenue The following table provides information about disaggregated revenue by type and nature of revenue stream: SCHEDULE OF DISAGGREGATON OF REVENUE 2022 2021 Fiscal Year 2022 2021 Over time revenue $ 16,809,000 $ 12,400,000 Point in time revenue 8,080,000 4,979,000 Total revenue $ 24,889,000 $ 17,379,000 The Company disaggregates revenue into each of (i) over time and (ii) point in time revenue. For over time revenue, revenue is recognized incrementally, as each portion of the performance obligation is satisfied. The Company includes revenue categories of (i) SaaS and (ii) maintenance and support as over time revenue. For point in time revenue, the performance obligation is recognized at the point in time when the obligation is fully satisfied. The Company includes revenue categories of (i) software licenses, (ii) professional services, and (iii) audit services as point in time revenue. For fiscal years ended January 31, 2023 and January 31, 2022, Avelead accounts for $ 6,231,000 3,590,000 Contract Assets and Deferred Revenues The Company receives payments from clients based upon contractual billing schedules. Contract receivables include amounts related to the Company’s contractual right to consideration for completed performance obligations not yet invoiced. Deferred revenues include payments received in advance of performance under the contract. Our contract receivables and deferred revenue are reported on an individual contract basis at the end of each reporting period. Contract receivables are classified as current or noncurrent based on the timing of when we expect to bill the client. Deferred revenue is classified as current or noncurrent based on the timing of when we expect to recognize revenue. In the year ended January 31, 2023, we recognized approximately $ 5,636,000 25,070,000 the Company expects to recognize approximately 73% over the next 12 months and the remainder thereafter. Deferred costs (costs to fulfill a contract and contract acquisition costs) We defer the direct costs, which include salaries and benefits, for professional services related to SaaS contracts as a cost to fulfill a contract. These deferred costs will be amortized on a straight-line basis over the contractual term. As of January 31, 2023, and 2022, we had deferred costs of $ 94,000 125,000 176,000 93,000 83,000 110,000 Contract acquisition costs, which consist of sales commissions paid or payable, is considered incremental and recoverable costs of obtaining a contract with a client. Sales commissions for initial and renewal contracts are deferred and then amortized on a straight-line basis over the contract term. As a practical expedient, we expense sales commissions as incurred when the amortization period of related deferred commission costs would have been one year or less. Deferred commissions costs paid and payable, which are included on the consolidated balance sheets within other non-current assets totaled $ 1,534,000 806,000 411,000 339,000 Concentrations Financial instruments, which potentially expose the Company to concentrations of credit risk, consist primarily of accounts receivable. The Company’s accounts receivable are concentrated in the healthcare industry. However, the Company’s clients typically are well-established hospitals, medical facilities or major health information systems companies with good credit histories that resell the Company’s solutions. Payments from clients have been received within normal time frames for the industry. However, some hospitals and medical facilities have experienced significant operating losses as a result of limits on third-party reimbursements from insurance companies and governmental entities and extended payment of receivables from these entities is not uncommon. To date, the Company has relied on a limited number of clients and remarketing partners for a substantial portion of its total revenues. The Company expects that a significant portion of its future revenues will continue to be generated by a limited number of clients and its remarketing partners. Goodwill and Intangible Assets Goodwill and other intangible assets were recognized in conjunction with the Avelead acquisition, and certain other acquisitions from fiscal years 2013 and prior (prior to divestiture of such assets). Identifiable intangible assets include purchased intangible assets with finite lives, which primarily consist of internally-developed software and client relationships. Finite-lived purchased intangible assets are amortized over their expected period of benefit, which generally ranges from one 15 The Company assesses the useful lives and possible impairment of intangible assets when an event occurs that may trigger such a review. Factors considered important which could trigger a review include: ● significant underperformance relative to historical or projected future operating results; ● significant changes in the manner of use of the acquired assets or the strategy for the overall business; ● identification of other impaired assets within a reporting unit; ● disposition of a significant portion of an operating segment; ● significant negative industry or economic trends; ● significant decline in the Company’s stock price for a sustained period; and ● a decline in the market capitalization relative to the net book value. Determining whether a triggering event has occurred involves significant judgment by the Company. The Company assesses goodwill annually (as of November 1), or more frequently when events and circumstances, such as the ones mentioned above, occur indicating that the recorded goodwill may be impaired. During the years ended January 31, 2023 and 2022, the Company did not note any of the above qualitative factors, which would be considered a triggering event for goodwill impairment. In assessing qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company assesses relevant events and circumstances that may impact the fair value and the carrying amount of a reporting unit. The identification of relevant events and circumstances and how these may impact a reporting unit’s fair value or carrying amount involve significant judgments by management. These judgments include the consideration of macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, events which are specific to the Company and trends in the market price of the Company’s common stock. Each factor is assessed to determine whether it impacts the impairment test positively or negatively, and the magnitude of any such impact. Reporting units are determined based on the organizational structure the entity has in place at the date of the impairment test. A reporting unit is an operating segment or component business unit with the following characteristics: (a) it has discrete financial information, (b) segment management regularly reviews its operating results (generally an operating segment has a segment manager who is directly accountable to and maintains regular contact with the chief operating decision maker to discuss operating activities, financial results, forecasts or plans for the segment), and (c) its economic characteristics are dissimilar from other units (this contemplates the nature of the products and services, the nature of the production process, the type or class of client for the products and services and the methods used to distribute the products and services). The Company determined that it has one operating segment and two reporting units. The Company estimates the fair value of its reporting unit using the income approach, via discounted cash flow valuation models which include, but are not limited to, assumptions such as a “risk-free” rate of return on an investment, the weighted average cost of capital of a market participant and future revenue, operating margin, working capital and capital expenditure trends. Determining the fair value of reporting units and goodwill includes significant judgment by management, and different judgments could yield different results. The Company performed its annual assessment of goodwill, using the approach described above. Based on the analysis performed, the fair value of the reporting units exceeded the carrying amount of the reporting unit, including goodwill, and, therefore, a goodwill impairment loss was not recognized. Equity Awards The Company accounts for share-based payments based on the grant-date fair value of the awards with compensation cost recognized as expense over the requisite service period. For awards to non-employees, the Company recognizes compensation expense in the same manner as if the entity had paid cash for the goods or services. The Company incurred total annual compensation expense related to stock-based awards of $ 1,761,000 81,000 2,216,000 The fair value of the stock options granted are estimated at the date of grant using a Black-Scholes option pricing model. Option pricing model input assumptions such as expected term, expected volatility and risk-free interest rate impact the fair value estimate. The Company recognizes forfeitures as they occur. These assumptions are subjective and are generally derived from external (such as, risk-free rate of interest) and historical data (such as, volatility factor, expected term and forfeiture rates). Future grants of equity awards accounted for as stock-based compensation could have a material impact on reported expenses depending upon the number, value and vesting period of future awards. The Company issues restricted stock awards in the form of Company common stock. The fair value of these awards is based on the market close price per share on the grant date. The Company expenses the compensation cost of these awards as the restriction period lapses, which is typically a one- to four-year service period to the Company. In fiscal 2022 and 2021, 127,429 257,571 197,000 464,000 890,731 562,500 Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and for tax credit and loss carry-forwards. Defer |
BUSINESS COMBINATION AND DIVEST
BUSINESS COMBINATION AND DIVESTITURE | 12 Months Ended |
Jan. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
BUSINESS COMBINATION AND DIVESTITURE | NOTE 3 — BUSINESS COMBINATION AND DIVESTITURE Avelead Acquisition The Company acquired all of the equity interests of Avelead as part of the Company’s strategic expansion into the revenue cycle management, acute-care healthcare space (the “Transaction”). The Transaction was completed on August 16, 2021. The aggregate consideration for the purchase of Avelead was approximately $ 29.7 12.5 6.5 10.7 5,021,972 6.5 Additionally, the Company contracted two types of contingent consideration; the first is referred to herein as “SaaS Contingent Consideration” and the second is referred to herein as “Renewal Contingent Consideration.” The SaaS Contingent Consideration and Renewal Contingent Consideration have an aggregate value of approximately $10.7 million as of the date of closing. The Unit Purchase Agreement (hereafter referred to as the “UPA”), stated that the purchase price for Avelead at closing included a cash payment of $ 11.9 285,000 285,000 6.5 The Company acquired Avelead on a cash-free and debt-free basis. The Transaction was structured as a purchase of units (equity), however, Avelead was taxed as a partnership. Accordingly, the Company realized a step-up in the tax basis of the assets acquired and the goodwill is tax deductible. The gross deferred tax assets and liabilities will be consolidated, and the gross deferred tax assets have a full valuation allowance. The contingent consideration is comprised of “SaaS Contingent Consideration” and “Renewal Contingent Consideration” which are described in more detail as follows: ● The SaaS Contingent Consideration is calculated based upon Avelead’s recurring SaaS revenue recognized during the first and second year. The Company will pay the SaaS Contingent Consideration as follows: (i) 50 50 ● The first year of SaaS Contingent Consideration was calculated as 75% of Avelead’s recognized SaaS revenue from September 1, 2021 to August 31, 2022. The first-year payment was subject to a deduction of $665,000 spread equally between the cash and common stock portion of the earnout consideration. Assuming that Avelead is within 80% of its forecasted SaaS revenue in the first year earnout, the Company agreed to a floor and ceiling on the value of the Company’s restricted common stock issued as consideration for the earnout. That collar had a floor of $3.50 per share and a ceiling of $5.50 per share for the first year earnout. This first year SaaS Contingent Consideration was paid on November 21, 2022 (see below). ● The second year of SaaS Contingent Consideration is calculated as 40% of Avelead’s recognized SaaS revenue from September 1, 2022 to August 31, 2023. The second year earnout will be paid on or about October 15, 2023, subject to a dispute and resolution period. Assuming that Avelead is within 80% of its forecasted SaaS revenue in the second year earnout, the Company agreed to a floor and ceiling on the Company’s restricted common stock issued as consideration for the earnout. That collar has a floor of $4.50 per share and a ceiling of $6.50 per share for the second year earnout. 1 If Avelead does not achieve 80% of its forecasted revenue, the price per share will revert back to the Company’s market price based upon a 30-day average. ● The Renewal Contingent Consideration is tied directly to a successful renewal of a specific client of Avelead. To meet the definition of a renewal, Avelead must achieve a minimum threshold of contracted revenue in an updated, annual, renewed contract with the specified client. The renewal occurs on or about June 1, 2022 and June 1, 2023. The Company will remit the Renewal Contingent Consideration on or about each of October 15, 2022 and 2023, respectively. The Renewal Contingent Consideration is payable in shares of Company restricted common stock valued as of the date of closing. Accordingly, upon achieving the Renewal Contingent Consideration, the Company will issue 627,747 shares of restricted common stock on or about each of October 15, 2022 and October 15, 2023, subject to a dispute and resolution period. The Renewal Contingent Consideration is either earned or not earned based upon the renewal of the specified client at the minimum amount of contracted revenue. There is no pro-ration of the underlying Renewal Contingent Consideration. On November 21, 2022, the Company made the first year earnout payments and issued shares of common stock, par value $ 0.01 2,012,000 1,243,292 0.01 627,746 0.01 4,000,000 1,000,000 The components of the total consideration are as follows: COMPONENTS OF TOTAL CONSIDERATION (in thousands) Components of total consideration, net of cash acquired: Cash $ 11,900 Cash, seller expenses 285 Cash, working capital adjustment 285 Restricted Common Stock 6,554 Acquisition earnout liabilities 10,684 (a) (a) Total consideration $ 29,708 (a) Acquisition earnout liabilities represent the net present value and risk adjusted probability of the required future payments underlying the Company’s SaaS Contingent Consideration and Renewal Contingent Consideration as described above. The first year earnout paid out on November 21, 2022, consisting of cash in the amount $ 2,012,000 1,871,038 The acquisition earnout liability is re-measured on a quarterly basis and the change to the liability is recorded as a valuation adjustment recorded through “acquisition earnout valuation adjustments” in the accompanying consolidated statements of operations. The valuation adjustment recorded for the period ended January 31, 2023, was $ 71,000 The Company is presenting the allocation of the total consideration to net tangible and intangible assets as of the date of the closing of Avelead as follows: SCHEDULE OF ALLOCATION OF THE TOTAL CONSIDERATION (in thousands) Net tangible assets: Accounts receivable $ 1,246 Unbilled revenue 200 Prepaid expenses 178 Fixed assets 37 Accounts payable ( 490 ) Accrued expenses ( 397 ) Deferred revenues ( 863 ) Net tangible assets ( 89 ) Goodwill 12,377 Client Relationships (SaaS) 8,370 Client Relationships (Consulting) 1,330 Internally Developed Software 6,380 Trademarks and Tradenames 1,340 Net assets acquired and liabilities assumed $ 29,708 The Company determined the fair value of the client relationship intangible assets and the trade name and developed software technology intangible assets using the multi-period excess earning method and the relief from royalty method, respectively. The intangible assets recorded as a result of the Avelead acquisition, and their related estimated useful lives are as follows: SCHEDULE OF INTANGIBLE ASSETS ESTIMATED USEFUL LIVES Estimated Useful Lives Goodwill Indefinite Client Relationships (SaaS) 10 Client Relationships (Consulting) 8 Internally Developed Software 9 Trademarks and Tradenames 15 The Company’s unaudited pro forma revenues and (loss) income from continuing operations, assuming Avelead was acquired on February 1, 2020, are as follows. The unaudited pro forma information is not necessarily indicative of the results of operations that the Company would have reported had the acquisition actually occurred at the beginning of these periods nor is it necessarily indicative of future results. The unaudited pro forma financial information does not reflect the impact of events occurring after the acquisition. The nature and amount of any material, nonrecurring pro forma adjustments directly attributable to the business combination are included in the pro forma revenue and net earnings reflected below (unaudited): SCHEDULE OF PRO FORMA REVENUE AND NET EARNINGS 2022 Unaudited Pro forma Year Ended Revenues $ 22,631,000 Operating expenses (31,278,000 ) Acquisition-related costs (4,284,000 Operating loss (12,931,000 ) Other (expense) income 1,312,000 PPP loan forgiveness 3,059,000 Income tax expense (109,000 ) Loss from continuing operations $ (8,669,000 ) Included in the accompanying consolidated statement of operations for the year ended January 31, 2022 (following the closing of the Avelead acquisition) are $ 4,524,000 (1,506,000) Refer to Note 2 – Summary of Significant Accounting Policies – Other operating costs -Acquisition-related costs. Costs related to the acquisition of Avelead are expensed as incurred. The Company entered into one employment agreement and one separation agreement with each of the two Sellers. Included in the transaction costs of Avelead is the cost of a two-year separation agreement with one Seller. This separation agreement was expensed at the closing of the transaction as there were no material future obligations of the Seller to the Company within acquisition-related costs. The employment agreement is a two-year employment agreement that entitles the Seller to a six-month separation pay in the case of termination without cause. The expense for the employment agreement is recognized ratably over the service period customary with other employment agreements within selling, general, and administrative expense. The Company granted options to purchase 583,333 1.53 500,000 3 83,333 83,333 6,000 500,000 395,000 Additionally, the Company granted 100,000 |
OPERATING LEASES
OPERATING LEASES | 12 Months Ended |
Jan. 31, 2023 | |
Operating Leases | |
OPERATING LEASES | NOTE 4 — OPERATING LEASES We determine whether an arrangement is a lease at inception. Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the expected lease term. Since our lease arrangements do not provide an implicit rate, we use our incremental borrowing rate for the expected remaining lease term at commencement date for new and existing leases in determining the present value of future lease payments. Operating lease expense is recognized on a straight-line basis over the lease term. Alpharetta Office Lease On October 1, 2021, the Company entered into an agreement with a third-party to sublease its office space in Alpharetta, Georgia, (the “Sublease Agreement”). The sublease term is for 18 292,000 195,000 The Company entered into a lease for office space in Alpharetta, Georgia, on March 1, 2020. The lease expired on March 31, 2023. At inception, the Company recorded a right-of use asset of $ 540,000 32,000 35,000 6.5 194,000 194,000 210,000 203,000 Maturities of operating lease liabilities associated with the Company’s operating lease as of January 31, 2023 are as follows for payments due based upon the Company’s fiscal year: SCHEDULE OF MATURITIES OF OPERATING LEASE LIABILITIES 2023 $ 36,000 Total lease payments 36,000 Less present value adjustment (1,000 ) Present value of lease liabilities $ 35,000 Suwanee Office Lease Upon acquiring Avelead on August 16, 2021 (refer to Note 3 – Business Combination and Divestiture), the Company assumed an operating lease agreement for the corporate office space of Avelead. The 36-month term lease commenced March 1, 2019 and initially expired on February 28, 2022 73,000 5,998.67 71,984 |
DEBT
DEBT | 12 Months Ended |
Jan. 31, 2023 | |
Debt Disclosure [Abstract] | |
DEBT | NOTE 5 — DEBT Outstanding principal balances on debt consisted of the following at: SCHEDULE OF OUTSTANDING DEBT January 31, 2023 January 31, 2022 Term loan $ 9,750,000 $ 10,000,000 Deferred financing cost (36,000 ) (96,000 ) Total 9,714,000 9,904,000 Less: Current portion (750,000 ) (250,000 ) Non-current portion of debt $ 8,964,000 $ 9,654,000 Debt Modification On November 29, 2022, the Company executed the Second Modification to the Second Amended and Restated Debt Agreement (the “Second Modification Debt Agreement”). The Second Modification Debt Agreement includes an expansion of the Company’s total borrowing to include a $ 2,000,000 1.5 3.25 Under the Second Modification Debt Agreement, the Company has a term loan facility with an initial maximum principal amount of $ 10,000,000 1.5 3.25 The Second Modification Debt Agreement includes customary financial covenants as follows: a. Minimum Cash. Borrowers shall, at all times, maintain unrestricted cash in an amount not less than Two Million Dollars ($2,000,000). b. Maximum Debt to ARR Ratio. SCHEDULE OF MAXIMUM DEBT TO ARR RATIO Quarter Ending Maximum Debt to ARR Ratio October 31, 2022 0.80 1.00 January 31, 2023 0.70 1.00 April 30, 2023 0.65 1.00 July 31, 2023 0.60 1.00 October 31, 2023 0.55 1.00 January 31, 2024 0.50 1.00 c. Maximum Debt to Adjusted EBITDA Ratio. SCHEDULE OF MAXIMUM DEBT TO ADJUSTED EBITDA RATIO Quarter Ending Maximum Debt to April 30, 2024 3.50 1.00 July 31, 2024 and on the last day of each quarter, thereafter 2.00 1.00 d. Fixed Charge Coverage Ratio 1.20 1.00 The Second Modification Debt Agreement also includes customary negative covenants, subject to exceptions, which limit transfers, capital expenditures, indebtedness, certain liens, investments, acquisitions, dispositions of assets, restricted payments, and the business activities of the Company, as well as customary representations and warranties, affirmative covenants and events of default, including cross defaults and a change of control default. The line of credit also is subject to customary prepayment requirements. For the period ended January 31, 2023, the Company was in compliance with the Second Modification Debt Agreement covenants. Substantially all the assets of the Company are collateralized by the Second Modification Debt Agreement. The Company recorded $ 20,000 50,000 250,000 250,000 200,000 Term Loan Agreement On August 26, 2021, the Company and its subsidiaries entered into the Second Amended and Restated Loan and Security Agreement with Bridge Bank. Pursuant to the Second Amended and Restated Loan and Security Agreement, Bridge Bank agreed to provide the Company and its subsidiaries with a new term loan facility in the maximum principal amount of $ 10,000,000 1.5 3.25 The Second Amended and Restated Loan and Security Agreement has a five-year term, and the maximum principal amount was advanced in a single-cash advance on or about the closing date. Interest accrued under the Second Amended and Restated Loan and Security Agreement is due monthly, and the Company shall make monthly interest-only payments through the one-year anniversary of the closing date. From the first anniversary of the closing date through the maturity date, the Company shall make monthly payments of principal and interest that increase over the term of the agreement. The Second Amended and Restated Loan and Security Agreement requires principal repayments on the anniversary date of the closing of the debt agreement of $ 500,000 1,000,000 2,000,000 3,000,000 The Company recorded $ 130,000 200,000 200,000 Term Loan related to “The Coronavirus Aid, Relief, and Economic Security Act” The Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act, was signed into law on March 17, 2020. Among other things, the CARES Act provided for a business loan program known as the Paycheck Protection Program (“PPP”). Qualifying companies were able to borrow, through the U.S. Small Business Administration (“SBA”), up to two months of payroll expenses. On April 21, 2020, the Company received approximately $ 2,301,000 The PPP loan carried an interest rate of 1.0 In June 2021, the Company was notified that the full $ 2,301,000 26,000 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Jan. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | NOTE 6 — GOODWILL AND INTANGIBLE ASSETS Intangible assets consist of the following: SCHEDULE OF INTANGIBLE ASSETS January 31, 2023 Estimated Accumulated Useful Life Gross Assets Amortization Net Assets Finite-lived assets: Client relationships 8 10 $ 9,700,000 $ 1,463,000 $ 8,237,000 Internally Developed Software 9 $ 6,380,000 $ 1,034,000 $ 5,346,000 Trademarks and Tradenames 15 $ 1,340,000 $ 130,000 $ 1,210,000 Total $ 17,420,000 $ 2,627,000 $ 14,793,000 January 31, 2022 Estimated Accumulated Useful Life Gross Assets Amortization Net Assets Finite-lived assets: Client relationships 8 10 $ 14,164,000 $ 4,755,000 $ 9,409,000 Internally Developed Software 9 6,380,000 325,000 6,055,000 Trademarks and Tradenames 15 1,340,000 41,000 1,299,000 Total $ 21,884,000 $ 5,121,000 $ 16,763,000 The Company recognized amortization expense on intangible assets of $ 1,971,000 1,281,000 Amortization over the next five fiscal years for intangible assets is estimated as follows: SCHEDULE OF FUTURE AMORTIZATION EXPENSE FOR INTANGIBLE ASSETS Annual Amortization Expense 2023 $ 1,801,000 2024 1,801,000 2025 1,801,000 2026 1,801,000 2027 1,801,000 Thereafter 5,788,000 Total $ 14,793,000 The Company wrote-off fully amortized intangible assets during fiscal 2022 of $ 4,464,000 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Jan. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 7 — INCOME TAXES For fiscal 2022 and 2021, income taxes for continuing operations consist of the following: SCHEDULE OF INCOME TAXES FOR CONTINUING OPERATION 2022 2021 Fiscal Year 2022 2021 Current tax expense: Federal $ — $ — State (62,000 ) (14,000 ) Total current tax expense $ (62,000 ) $ (14,000 ) Deferred tax expense: Federal $ (6,000 ) $ (80,000 ) State (3,000 ) (15,000 ) Total deferred tax expense $ (9,000 ) $ (95,000 ) Total provision $ (71,000 ) $ (109,000 ) The income tax expense differs from the amount computed using the federal statutory income tax rates of 21 SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION 2022 2021 Fiscal Year 2022 2021 Federal tax benefit at statutory rate $ (2,390,000 ) $ (1,430,000 ) State and local tax expense, net of federal 52,000 26,000 Increase in valuation allowance 2,029,000 1,950,000 Permanent items: PPP loan — (483,000 ) Other 20,000 3,000 Reserve for uncertain tax position 18,000 (24,000 ) Federal R&D tax credit (91,000 ) (120,000 ) Stock-based compensation 289,000 (45,000 ) Other 2,000 (8,000 ) Income tax expense $ (71,000 ) $ (109,000 ) The Company provides deferred income taxes for temporary differences between assets and liabilities recognized for financial reporting and income tax purposes. The income tax effects of these temporary differences and credits are as follows: SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES 2023 2022 January 31, 2023 2022 Deferred tax assets: Allowance for doubtful accounts $ 39,000 $ 24,000 Deferred revenue 122,000 60,000 Accruals 232,000 168,000 Net operating loss carryforwards 11,242,000 10,908,000 Stock compensation expense 342,000 510,000 Finite-lived intangible assets 1,344,000 — R&D tax credit 1,407,000 1,334,000 Other 2,000 23,000 Total deferred tax assets 14,730,000 13,027,000 Valuation allowance (14,347,000 ) (12,318,000 ) Net deferred tax assets 383,000 709,000 Deferred tax liabilities: Property and equipment (5,000 ) (6,000 ) Finite-lived intangible liabilities (482,000 ) (798,000 ) Total deferred tax liabilities (487,000 ) (804,000 ) Net deferred tax liabilities $ (104,000 ) $ (95,000 ) At January 31, 2023, the Company had U.S. federal net operating loss carry forwards of $ 49,884,000 29,083,000 20,801,000 24,095,000 1,666,000 94,000 In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that all or some portion of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. The Company established a valuation allowance of $ 14,347,000 12,318,000 2,029,000 The Company and its subsidiaries are subject to U.S. federal income tax as well as income taxes in multiple state and local jurisdictions. The Company has concluded all U.S. federal tax matters for years through January 31, 2019. All material state and local income tax matters have been concluded for years through January 31, 2018. The Company is no longer subject to IRS examination for periods prior to the tax year ended January 31, 2019; however, carry forward losses that were generated prior to the tax year ended January 31, 2019 may still be adjusted by the IRS if they are used in a future period. The Company has recorded a reserve, including interest and penalties, for uncertain tax positions of $ 333,000 315,000 A reconciliation of the beginning and ending amounts of gross unrecognized tax benefits (excluding interest and penalties) is as follows: SCHEDULE OF GROSS UNRECOGNIZED TAX BENEFITS 2022 2021 Beginning of fiscal year $ 315,000 $ 339,000 Additions for tax positions for the current year 11,000 4,000 Additions for tax positions of prior years 7,000 — Subtractions for tax positions of prior years — (28,000 ) End of fiscal year $ 333,000 $ 315,000 |
EQUITY
EQUITY | 12 Months Ended |
Jan. 31, 2023 | |
Equity [Abstract] | |
EQUITY | NOTE 8 — EQUITY Capital Raise On October 24, 2022, the Company entered into purchase agreements with certain investors pursuant to which the Company agreed to issue and sell in a registered direct offering (the “2022 Offering”) an aggregate of 6,299,989 0.01 1.32 8,316,000 On February 25, 2021, the Company entered into an underwriting agreement with Craig-Hallum Capital Group LLC, as the sole managing underwriter, relating to the underwritten public offering of an aggregate of 10,062,500 0.01 1,312,500 1.60 16.1 million Registration of Shares Issued to 180 Consulting On May 3, 2021, the Company filed a Registration Statement on Form S-3 (Registration No. 333-255723), which was subsequently amended on June 23, 2021, for purposes of registering for resale 248,424 On June 22, 2022, the Company filed a Registration Statement on Form S-3 (Registration No. 333-265773) for purposes of registering for resale 272,653 Authorized Shares Increase On May 24, 2021, the Company amended its Certificate of Incorporation to increase the total number of authorized shares of the Company’s common stock from 45,000,000 shares to 65,000,000 shares (the “Charter Amendment”). The Charter Amendment was previously approved by the board of directors of the Company, subject to stockholder approval, approved by the Company’s stockholders at the 2021 Annual Meeting and ratified by the Company’s stockholders at the 2021 Special Meeting. Also at the 2021 Annual Meeting, the Company’s stockholders approved an amendment to the Streamline Health Solutions, Inc. Third Amended and Restated 2013 Stock Incentive Plan to increase the number of shares of the Company’s common stock authorized for issuance thereunder by 2,000,000 6,223,246 8,223,246 At the 2022 Annual Meeting, the Company’s stockholders approved an amendment to the Streamline Health Solutions, Inc. Third Amended and Restated 2013 Stock Incentive Plan to increase the number of shares of the Company’s common stock authorized for issuance thereunder by 2,000,000 8,223,246 10,223,246 65,000,000 85,000,000 |
MAJOR CLIENTS
MAJOR CLIENTS | 12 Months Ended |
Jan. 31, 2023 | |
Risks and Uncertainties [Abstract] | |
MAJOR CLIENTS | NOTE 9 — MAJOR CLIENTS During fiscal 2022, two individual clients accounted for 10% or more of our continuing operations revenue. 20 12 one individual client accounted for 10% or more of our continuing operations revenue 13 12 12 10 24 16 15 |
EMPLOYEE RETIREMENT PLAN
EMPLOYEE RETIREMENT PLAN | 12 Months Ended |
Jan. 31, 2023 | |
Retirement Benefits [Abstract] | |
EMPLOYEE RETIREMENT PLAN | NOTE 10 — EMPLOYEE RETIREMENT PLAN The Company has established a 401(k) retirement plan that covers all associates. Company contributions to the plan may be made at the discretion of the board of directors. The Company’s matched amount is 50% up to the first 4% of compensation deferred by each associate. The total compensation expense for this matching contribution was $ 258,000 188,000 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Jan. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | NOTE 11 — STOCK-BASED COMPENSATION Stock Option Plans The Company’s Third Amended and Restated 2013 Stock Incentive Plan (the “2013 Plan”) replaced the 2005 Incentive Compensation Plan (the “2005 Plan”). The 2005 Plan expired based upon its terms. Accordingly, all the outstanding awards and any unallocated pool of un-issued options under the 2005 Plan were re-characterized to the 2013 Plan. Under these plans, the Company is authorized to issue equity awards (stock options, stock appreciation rights or “SARs”, and restricted stock) to directors and associates of the Company. Under the 2013 Plan, as amended, the Company is authorized to issue a number of shares not to exceed 10,223,246 628,958 937,130 Inducement grants are approved by the Company’s compensation committee pursuant to NASDAQ Marketplace Rule 5635(c)(4). The terms of the grants were nearly identical to the terms and conditions of the Company’s stock incentive plans in effect at the time of each inducement grant. For the year ended January 31, 2023 and 2022, with regard to inducement grants, no stock options were issued, no options expired, no options were forfeited, and no stock options were exercised. As of January 31, 2023 and 2022, there were 0 125,000 A summary of stock option activity follows: SCHEDULE OF STOCK OPTION ACTIVITY Weighted Average Remaining Aggregate Options Exercise Life in intrinsic Outstanding as of January 31, 2022 1,062,130 $ 2.65 6.11 $ 21,000 Granted — — Exercised (5,000 ) 1.18 Expired (428,172 ) 3.68 Forfeited — — Outstanding as of January 31, 2023 628,958 $ 1.95 7.31 $ 360,000 Exercisable as of January 31, 2023 365,069 $ 3.36 3.72 $ 193,000 Vested or expected to vest as of January 31, 2023 628,958 $ 1.95 7.31 $ 360,000 No options were granted in fiscal 2022. 583,333 1.53 The fiscal 2022 and 2021 stock-based compensation was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted average assumptions for each fiscal year: SCHEDULE OF WEIGHTED AVERAGE ASSUMPTIONS 2022 2021 Expected life — 5.01 Risk-free interest rate — 0.75 % Weighted average volatility factor — 0.72 Dividend yield — — Forfeiture rate — — At January 31, 2023, there was $ 203,000 1.54 132,000 69,000 6,000 The 2013 Plan contains change in control provisions whereby any outstanding equity awards under the plans subject to vesting, which have not fully vested as of the date of the change in control, shall automatically vest and become immediately exercisable. One of the change in control provisions is deemed to occur if there is a change in beneficial ownership, or authority to vote, directly or indirectly, of securities representing 20 Restricted Stock The Company is authorized to grant restricted stock awards to associates and directors under the 2013 Plan. The Company has also issued restricted stock as inducement grants to certain new employees. The restrictions on the shares granted generally lapse over a one- to four-year term of continuous employment from the date of grant. On November 1, 2022, our CEO was awarded 50,000 150,000 150,000 SCHEDULE OF RESTRICTED STOCK AWARD ACTIVITY Weighted Non-vested Average Number of Grant Date Shares Fair Value Non-vested balance at January 31, 2021 931,125 $ 1.09 Granted 1,257,500 1.71 Vested (1,095,175 ) 1.33 Forfeited (50,100 ) 1.48 Non-vested balance at January 31, 2022 1,043,350 $ 1.57 Granted 1,505,731 1.47 Vested (501,750 ) 1.63 Forfeited (199,300 ) 1.49 Non-vested balance at January 31, 2023 1,848,031 $ 1.48 At January 31, 2023, there was $ 1,958,000 2.20 The expense associated with restricted stock awards for associates and directors was $ 983,000 1,667,000 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Jan. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 12— COMMITMENTS AND CONTINGENCIES Consulting Agreement with 180 Consulting On March 19, 2020 the Company entered into a Master Services Agreement (the “MSA”) with 180 Consulting, pursuant to which 180 Consulting has provided and will continue to provide a variety of consulting services in support of eValuator products including product management, operational consulting, staff augmentation, internal systems platform integration and software engineering services, among others, through separate executed statements of work (“SOWs”). On September 20, 2021, the Company entered into a separate MSA in support of Avelead products. The Company has entered into twelve SOWs under the eValuator MSA, and two under the Avelead MSA. Some of the SOWs include the ability to earn stock at a conversion rate to be calculated 20 days after the execution of the related SOW. The MSA includes a termination clause upon a 90-day written notice. While no related party has a direct or indirect material interest in this MSA or the related SOWs, individuals providing services to us under the MSA and the SOWs may share workspace and administrative costs with 121G Consulting. 180 Consulting earned 394,127 915,204 2,540,000 81,000 100,927 100,927 1,439,000 Inclusive of the MSA executed with 180 Consulting are SOWs that provide for the Company to sublicense a software through 180 Consulting that is owned by 121G. This is a services agreement for access to software that assists the Company in implementing and integrating with our clients’ technology. The license agreement is designed such that there is no material financial benefit that accrues to 121G. 180 Consulting licenses the software from 121G at cost. The Company paid approximately $ 301,000 227,000 Litigation We are, from time to time, a party to various legal proceedings and claims, which arise in the ordinary course of business. We are not aware of any legal matters that are reasonably possible to have a material adverse effect on the Company’s consolidated results of operations, financial position or cash flows. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 12 Months Ended |
Jan. 31, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | NOTE 13 – DISCONTINUED OPERATIONS On February 24, 2020, the Company consummated the previously announced sale of the Company’s legacy Enterprise Content Management business (the “ECM Assets”) pursuant to that certain Asset Purchase Agreement, dated December 17, 2019, as amended (the “Asset Purchase Agreement”), to Hyland Software, Inc. (the “Purchaser”), Pursuant to the Asset Purchase Agreement, the Purchaser acquired the ECM Assets and assumed certain liabilities of the Company for a purchase price of $ 16.0 At closing, the Company received approximately $ 5.4 4.0 800,000 SCHEDULE OF GAIN ON SALE OF ASSETS Net Proceeds, including escrowed funds $ 12,088,000 Net tangible assets sold: Accounts Receivable (1,130,000 ) Prepaid Expenses (576,000 ) Deferred Revenues 4,010,000 Net tangible assets sold 2,304,000 Capitalized software development costs (1,772,000 ) Goodwill (4,825,000 ) Transaction cost (1,782,000 ) Gain on sale of discontinued operations $ 6,013,000 The transaction costs were primarily broker costs and costs of legal and accounting to effect the transaction. The Company allocated $ 4,825,000 For fiscal 2021, the Company recorded the following into discontinued operations in the accompanying consolidated statements of operations: SCHEDULE OF DISCONTINUED OPERATIONS IN STATEMENTS OF OPERATIONS 2021 Revenues: Transition service fees $ 498,000 Total revenues $ 498,000 Expenses: Cost of Sales $ 5,000 Transition service cost 92,000 Total expenses $ 97,000 Income from discontinued operations $ 401,000 The Company entered into an agreement with the Purchaser of the ECM Assets to maintain the current data center through a transition period. The transition services did not have a finite ending date at the signing of the agreement. However, the transition services were completed in the third quarter of fiscal 2021. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Jan. 31, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 14 - RELATED PARTY TRANSACTIONS Refer to Note 3 – Business Combination and Divestiture. The Company acquired Avelead on August 16, 2021. In addition, the Company assumed a consulting agreement with AscendTek, LLC (“AscendTek”), a software development and system design company. AscendTek is owned by one of the Sellers of Avelead. The Company entered into a separation agreement with this Seller of Avelead on closing of the Avelead acquisition. From the acquisition date to the year ended January 31, 2022, the Company incurred approximately $ 64,000 40,000 73,000 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Jan. 31, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 15 — SUBSEQUENT EVENTS We have evaluated subsequent events occurring after January 31, 2023, and based on our evaluation we did not identify any events that would have required recognition or disclosure in these consolidated financial statements, except for the following: Silicon Valley Bank (“SVB”) and Signature Bank were closed on March 10, 2023 and March 12, 2023, respectively, by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. At the time of closing, the Company did not maintain any of its cash or cash equivalents with SVB or Signature Bank, and the Company has no current direct investment in or contractual relationships with SVB, Signature Bank or their respective holding companies. The Company does not believe it will be impacted by the closure of SVB or Signature Bank and will continue to monitor the situation as it evolves. |
Valuation and Qualifying Accoun
Valuation and Qualifying Accounts and Reserves | 12 Months Ended |
Jan. 31, 2023 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Valuation and Qualifying Accounts and Reserves | Valuation and Qualifying Accounts and Reserves Streamline Health Solutions, Inc and Subsidiaries. For the two years ended January 31, 2023 (in thousands of dollars) Description Balance at Beginning of Period Charged to Costs and Expenses (1) Deductions Balance at End of Period Year ended January 31, 2023: Allowance for doubtful accounts $ 76 $ 189 $ (133 ) $ 132 Year ended January 31, 2022: Allowance for doubtful accounts $ 65 $ 11 $ — $ 76 (1) Uncollectible accounts written off, net of recoveries. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Jan. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial statements include the accounts of Streamline Health Solutions, Inc. and its wholly-owned subsidiaries, Streamline Health, LLC, Avelead Consulting, LLC, Streamline Consulting Solutions, LLC and Streamline Pay & Benefits, LLC. All significant intercompany transactions and balances are eliminated in consolidation. All amounts in the consolidated financial statements, notes and tables have been rounded to the nearest thousand dollars, except share and per share amounts, unless otherwise indicated. Refer to Note – 3 Business Combination and Divestiture. Under ASC 280-10-50-11, two or more operating segments may be aggregated into a single operating segment if they are considered to be similar. Operating segments are considered to be similar if they can be expected to have essentially the same economic characteristics and future prospects. Using the aggregation guidance, the Company determined that it has one operating segment due to the similar economic characteristics of the Company’s products, product development, distribution, regulatory environment and client base as a provider of computer software-based solutions and services for acute-care healthcare organizations. For fiscal years 2022 and 2021, the Company has two reporting units for evaluation of goodwill. These two reporting units are the legacy Streamline business and Avelead. On February 24, 2020, the Company sold a portion of its business (the ECM Assets). The results of operations, cash flows and related balance sheet items associated with the ECM Assets are reported in discontinued operations in the accompanying consolidated statements of operations and cash flows and the consolidated balance sheet for the comparative prior periods. Refer to Note 13 – Discontinued Operations for further details. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, management evaluates its estimates and judgments, including those related to the recognition of revenue, stock-based compensation, capitalization of software development costs, intangible assets, the allowance for doubtful accounts, contingent consideration and income taxes. Actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash demand deposits. Cash deposits are placed in Federal Deposit Insurance Corporation (“FDIC”) insured financial institutions. Cash deposits may exceed FDIC insured levels from time to time. For purposes of the consolidated balance sheets and consolidated statements of cash flows, the Company considers all highly-liquid investments purchased with an original maturity of three months or less to be cash equivalents. Non-Cash Items The Company had the following items that were non-cash items related to the consolidated statements of cash flows: SCHEDULE OF NON-CASH ITEMS RELATED TO CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 2022 2021 Fiscal Year 2022 2021 Forgiveness of PPP loan and accrued interest $ — $ 2,327,000 Payment of acquisition earnout liabilities in restricted common stock 3,012,000 — Capitalized software purchased with stock (Note 12) 81,000 — |
Receivables | Receivables Accounts and contract receivables are comprised of amounts owed to the Company for licensed software, professional services, including coding audit services, consulting services, maintenance services, and software as a service and are presented net of the allowance for doubtful accounts. The timing of revenue recognition may not coincide with the billing terms of the client contract, resulting in unbilled receivables or deferred revenues; therefore, certain contract receivables represent revenues recognized prior to client billings. Individual contract terms with clients or resellers determine when receivables are due. Accounts receivable represent amounts that the entity has an unconditional right to consideration. For billings where the criteria for revenue recognition have not been met, deferred revenue is recorded until the Company satisfies the respective performance obligations. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The Company adjusts accounts receivable down to net realizable value with its allowance methodology. In determining the allowance for doubtful accounts, aged receivables are analyzed periodically by management. Each identified receivable is reviewed based upon the most recent information available and the status of any open or unresolved issues with the client preventing the payment thereof. Corrective action, if necessary, is taken by the Company to resolve open issues related to unpaid receivables. During these periodic reviews, the Company determines the required allowances for doubtful accounts for estimated losses resulting from the unwillingness of its clients or resellers to make required payments. The Company believes that its reserve is adequate, however, results may differ in future periods. |
Accrued Expenses | Accrued Expenses Accrued expenses consisted of the following: SCHEDULE OF ACCRUED EXPENSES 2023 2022 January 31, 2023 2022 Employee benefits and related compensation $ 2,079,000 $ 803,000 Professional fees and services 294,000 283,000 Third party licenses 285,000 77,000 Customer concessions 226,000 152,000 State income and sales taxes payable 331,000 460,000 Interest, primarily on Term Loan 50,000 28,000 Total accrued expenses $ 3,265,000 $ 1,803,000 |
Concessions Accrual | Concessions Accrual The Company offers certain service line agreements within its client contracts such as uptime, support hours, and levels of support. Our contracts may include and we may offer credit to clients when these service line agreements are not met. The service line agreements are accounted for as variable consideration. As a result, we record an estimate of these concessions against our recorded revenue. In determining the concessions accrual, the Company evaluates historical concessions granted relative to revenue as well as future potential risk that these service line agreements will not be met. The Company records a provision, reducing revenue, each period for the estimated amount of concessions incurred on the revenue recorded. The Company evaluates the amount of the concession accrual each period. Historically, concessions have not been significant. The concession accrual included in accrued expenses on the Company’s consolidated balance sheets was $ 226,000 152,000 |
Property and Equipment | Property and Equipment Property and equipment are stated at cost. Depreciation is computed using the straight-line method, over the estimated useful lives of the related assets. Estimated useful lives are as follows: SCHEDULE OF ESTIMATED USEFUL LIFE OF PROPERTY AND EQUIPMENT Computer equipment and software 3 4 Office equipment 5 Office furniture and fixtures 5 7 Leasehold improvements Term of lease or estimated useful life, whichever is shorter Depreciation expense for property and equipment in fiscal 2022 and 2021 was $ 54,000 68,000 Normal repairs and maintenance are expensed as incurred. Replacements are capitalized and the property and equipment accounts are relieved of the items being replaced or disposed of, if no longer of value. The related cost and accumulated depreciation of the disposed assets are eliminated and any gain or loss on disposition is included in the results of operations in the year of disposal. The Company wrote-off fully depreciated fixed assets during fiscal 2021 of $ 198,000 |
Leases | Leases We determine whether an arrangement is a lease at inception. Right-of-use assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the expected lease term. Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Since our lease arrangements do not provide an implicit rate, we use our estimated incremental borrowing rate for the expected remaining lease term at commencement date in determining the present value of future lease payments. We recognize operating lease cost on a straight-line basis by aggregating any rent abatement with the total expected rental payments and amortizing the expense ratably over the term of the lease. Sublease income is recognized as other income over the period of the lease, as the sublease is outside of the Company’s normal business operations. See Note 4 – Operating Leases for further details. |
Debt Issuance Costs | Debt Issuance Costs Cost related to the issuance of the Loan and Security Agreement and Second Amended and Restated Loan and Security Agreement were capitalized and amortized to interest expense on a straight-line basis, which is not materially different from the effective interest method, over the term of the related debt, and presented on the Company’s consolidated balance sheets as a direct deduction from the carrying amount of the non-current portion of our term loan. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company reviews the carrying value of long-lived assets for impairment whenever facts and circumstances exist that would suggest that assets might be impaired or that the useful lives should be modified. Among the factors the Company considers in making the evaluation are changes in market position and profitability. If facts and circumstances are present which may indicate that the carrying amount of the assets may not be recoverable, the Company will prepare a projection of the undiscounted cash flows of the specific asset or asset group and determine if the long-lived assets are recoverable based on these undiscounted cash flows. If impairment is indicated, an adjustment will be made to reduce the carrying amount of these assets to their fair values. |
Capitalized Software Development Costs | Capitalized Software Development Costs Software development costs for software to be sold, leased, or marketed are accounted for in accordance with ASC 985-20, Software — Costs of Software to be Sold, Leased or Marketed 522,000 846,000 Internal-use software development costs are accounted for in accordance with ASC 350-40, Internal-Use Software 5,324,000 4,709,000 The estimated useful lives of software (including software to be sold and internal-use software) are reviewed frequently and adjusted as appropriate to reflect upcoming development activities that may include significant upgrades and/or enhancements to the existing functionality. The Company reviews, on an on-going basis, the carrying value of its capitalized software development expenditures, net of accumulated amortization. Amortization expense on all capitalized software development was $ 2,423,000 2,173,000 0 84,000 694,000 The Company uses the “carry-over” method for amortizing capitalized software development costs. Under the “carry-over” method, the costs of the enhancements are added to the unamortized costs of the previous version of the product and the combined amount is amortized over the remaining useful life of the product. Including unamortized cost of the original product with the cost of the enhancement for purposes of applying the net realizable value test and amortization provisions is consistent with accounting guidance for software companies that improve their software and discontinue selling or marketing the older versions. SCHEDULE OF AMORTIZATION EXPENSE FOR INTERNALLY DEVELOPED SOFTWARE 2022 2021 Fiscal Year 2022 2021 Amortization expense on internally-developed software included in: Cost of software as a service $ 2,068,000 $ 1,675,000 Cost of professional fees and licenses 355,000 498.000 Total amortization expense on internally-developed software $ 2,423,000 $ 2,173,000 The interest capitalized to software development cost reduces the Company’s interest expense recognized in the consolidated statements of operations. Research and development expense was $ 6,042,000 4,782,000 |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The FASB’s authoritative guidance on fair value measurements establishes a framework for measuring fair value, and expands disclosure about fair value measurements. This guidance enables the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. Under this guidance, assets and liabilities carried at fair value must be classified and disclosed in one of the following three categories: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs that are not corroborated by market data. The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value based on the short-term maturity of these instruments. Cash and cash equivalents are classified as Level 1. For fiscal years 2022 and 2021, there were no transfers of assets or liabilities between Levels 1, 2, or 3. The table below provides information on our liabilities that are measured at fair value on a recurring basis: SCHEDULE OF FAIR VALUE ASSETS AND LIABILITIES MEASURED ON RECURRING BASIS Total Fair Quoted Prices in Active Markets Significant Other Observable Inputs Significant Unobservable Inputs Value (Level 1) (Level 2) (Level 3) At January 31, 2023 Acquisition earnout liability (1) $ 3,738,000 $ — $ — $ 3,738,000 At January 31, 2022 Acquisition earnout liability (1) $ 8,833,000 $ — $ — $ 8,833,000 (1) The fair value of the acquisition earnout liability is based upon a probability-weighted discounted cash flow that was completed at the date of acquisition and updated as of January 31, 2023. The change in the fair value of the acquisition earnout ability decreased $ 5,095,000 5,024,000 71,000 The probability-weighted discounted cash flow is calculated using a Monte Carlo valuation method. The valuation model provides numerous outcomes. The outcomes are averaged and discounted to present value, which provides the current value point estimate. The significant inputs include our forecast of Avelead SaaS revenue, the probabilities associated with each of (i) a change in control or (ii) a certain client termination, as well as other normal and customary inputs to financial models, including but not limited to, risk factors and interest rates. The fair value of the Company’s term loan under its Second Amended and Restated Loan and Security Agreement was determined through an analysis of the interest rate spread from the date of closing the loan (August 2021) to the date of the most recent balance sheets, January 31, 2023 and January 31, 2022. The term loan bears interest at a per annum rate equal to the Prime Rate (as published in The Wall Street Journal) plus 1.5 3.25 1.5 0.5 9,550,000 9,798,000 200,000 202,000 |
Revenue Recognition | Revenue Recognition We derive revenue from the sale of internally-developed software, either by licensing for local installation or by a SaaS delivery model, through our direct sales force or through third-party resellers. Licensed, locally-installed clients on a perpetual model utilize our support and maintenance services for a separate fee, whereas term-based locally installed license fees and SaaS fees include support and maintenance. We also derive revenue from professional services that support the implementation, configuration, training and optimization of the applications, as well as audit services and consulting services. We recognize revenue in accordance with Accounting Standards Codification (ASC) 606, Revenue from Contracts with Clients We commence revenue recognition (Step 5 below) in accordance with that core principle after applying the following steps: ● Step 1: Identify the contract(s) with a client ● Step 2: Identify the performance obligations in the contract ● Step 3: Determine the transaction price ● Step 4: Allocate the transaction price to the performance obligations in the contract ● Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation Often contracts contain more than one performance obligation. Performance obligations are the unit of accounting for revenue recognition and generally represent the distinct goods or services that are promised to the client. Revenue is recognized net of any taxes collected from clients and subsequently remitted to governmental authorities. If we determine that we have not satisfied a performance obligation, we defer recognition of the revenue until the performance obligation is satisfied. Maintenance and support and SaaS agreements are generally non-cancellable or contain significant penalties for early cancellation, although clients typically have the right to terminate their contracts for cause if we fail to perform material obligations. However, if non-standard acceptance periods, non-standard performance criteria, or cancellation or right of refund terms are required, revenue is recognized upon the satisfaction of such criteria. The determined transaction price is allocated based on the standalone selling price of the performance obligations in contract. Significant judgment is required to determine the standalone selling price (“SSP”) for each performance obligation, the amount allocated to each performance obligation and whether it depicts the amount that the Company expects to receive in exchange for the related product and/or service. The Company recognizes revenue for implementation of its eValuator SaaS solution over the contract term, as it has been determined that those implementation services are not a distinct performance obligation. Services for other SaaS and Software solutions such as CDI, RevID and Compare, have been determined as a distinct performance obligation. For these agreements, the Company estimates SSP of its software licenses using the residual approach when the software license is sold with other services and observable SSPs exist for the other services. The Company estimates the SSP for maintenance, professional services, software as a service and audit services based on observable standalone sales. Contract Combination The Company may execute more than one contract or agreement with a single client. The Company evaluates whether the agreements were negotiated as a package with a single objective, whether the amount of consideration to be paid in one agreement depends on the price and/or performance of another agreement, or whether the goods or services promised in the agreements represent a single performance obligation. The conclusions reached can impact the allocation of the transaction price to each performance obligation and the timing of revenue recognition related to those arrangements. The Company has utilized the portfolio approach as the practical expedient. We have applied the revenue model to a portfolio of contracts with similar characteristics where we expected that the financial statements would not differ materially from applying it to the individual contracts within that portfolio. Software Licenses The Company’s software license arrangements provide the client with the right to use functional intellectual property. Implementation, support, and other services are typically considered distinct performance obligations when sold with a software license unless these services are determined to significantly modify the software. Revenue is recognized at a point in time. Typically, this is upon shipment of components or electronic download of software. Maintenance and Support Services Our maintenance and support obligations include multiple discrete performance obligations, with the two largest being unspecified product upgrades or enhancements, and technical support, which can be offered at various points during a contract period. We believe that the multiple discrete performance obligations within our overall maintenance and support obligations can be viewed as a single performance obligation since both the unspecified upgrades and technical support are activities to fulfill the maintenance performance obligation and are rendered concurrently. Maintenance and support agreements entitle clients to technology support, version upgrades, bug fixes and service packs. We recognize maintenance and support revenue over the contract term. Software-Based Solution Professional Services The Company provides various professional services to clients with software licenses. These include project management, software implementation and software modification services. Revenues from arrangements to provide professional services are generally distinct from the other promises in the contract and are recognized as the related services are performed. Consideration payable under these arrangements is either fixed fee or on a time-and-materials basis and is recognized over time as the services are performed. Software as a Service SaaS-based contracts include a right to use of the Company’s platform and support which represent a single promise to provide continuous access to its software solutions. Implementation services for the Company’s eValuator product are included as part of the single promise for its respective contracts. The Company recognizes revenue for implementation of the eValuator product over the contract term as it is determined that the implementation on eValuator is not a distinct performance obligation. Implementation services for other SaaS products are deemed to be separate performance obligations. Audit Services The Company provides technology-enabled coding audit services to help clients review and optimize their internal clinical documentation and coding functions across the applicable segment of the client’s enterprise. Audit services are a separate performance obligation. We recognize revenue over time as the services are performed. Disaggregation of Revenue The following table provides information about disaggregated revenue by type and nature of revenue stream: SCHEDULE OF DISAGGREGATON OF REVENUE 2022 2021 Fiscal Year 2022 2021 Over time revenue $ 16,809,000 $ 12,400,000 Point in time revenue 8,080,000 4,979,000 Total revenue $ 24,889,000 $ 17,379,000 The Company disaggregates revenue into each of (i) over time and (ii) point in time revenue. For over time revenue, revenue is recognized incrementally, as each portion of the performance obligation is satisfied. The Company includes revenue categories of (i) SaaS and (ii) maintenance and support as over time revenue. For point in time revenue, the performance obligation is recognized at the point in time when the obligation is fully satisfied. The Company includes revenue categories of (i) software licenses, (ii) professional services, and (iii) audit services as point in time revenue. For fiscal years ended January 31, 2023 and January 31, 2022, Avelead accounts for $ 6,231,000 3,590,000 Contract Assets and Deferred Revenues The Company receives payments from clients based upon contractual billing schedules. Contract receivables include amounts related to the Company’s contractual right to consideration for completed performance obligations not yet invoiced. Deferred revenues include payments received in advance of performance under the contract. Our contract receivables and deferred revenue are reported on an individual contract basis at the end of each reporting period. Contract receivables are classified as current or noncurrent based on the timing of when we expect to bill the client. Deferred revenue is classified as current or noncurrent based on the timing of when we expect to recognize revenue. In the year ended January 31, 2023, we recognized approximately $ 5,636,000 25,070,000 the Company expects to recognize approximately 73% over the next 12 months and the remainder thereafter. Deferred costs (costs to fulfill a contract and contract acquisition costs) We defer the direct costs, which include salaries and benefits, for professional services related to SaaS contracts as a cost to fulfill a contract. These deferred costs will be amortized on a straight-line basis over the contractual term. As of January 31, 2023, and 2022, we had deferred costs of $ 94,000 125,000 176,000 93,000 83,000 110,000 Contract acquisition costs, which consist of sales commissions paid or payable, is considered incremental and recoverable costs of obtaining a contract with a client. Sales commissions for initial and renewal contracts are deferred and then amortized on a straight-line basis over the contract term. As a practical expedient, we expense sales commissions as incurred when the amortization period of related deferred commission costs would have been one year or less. Deferred commissions costs paid and payable, which are included on the consolidated balance sheets within other non-current assets totaled $ 1,534,000 806,000 411,000 339,000 |
Concentrations | Concentrations Financial instruments, which potentially expose the Company to concentrations of credit risk, consist primarily of accounts receivable. The Company’s accounts receivable are concentrated in the healthcare industry. However, the Company’s clients typically are well-established hospitals, medical facilities or major health information systems companies with good credit histories that resell the Company’s solutions. Payments from clients have been received within normal time frames for the industry. However, some hospitals and medical facilities have experienced significant operating losses as a result of limits on third-party reimbursements from insurance companies and governmental entities and extended payment of receivables from these entities is not uncommon. To date, the Company has relied on a limited number of clients and remarketing partners for a substantial portion of its total revenues. The Company expects that a significant portion of its future revenues will continue to be generated by a limited number of clients and its remarketing partners. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill and other intangible assets were recognized in conjunction with the Avelead acquisition, and certain other acquisitions from fiscal years 2013 and prior (prior to divestiture of such assets). Identifiable intangible assets include purchased intangible assets with finite lives, which primarily consist of internally-developed software and client relationships. Finite-lived purchased intangible assets are amortized over their expected period of benefit, which generally ranges from one 15 The Company assesses the useful lives and possible impairment of intangible assets when an event occurs that may trigger such a review. Factors considered important which could trigger a review include: ● significant underperformance relative to historical or projected future operating results; ● significant changes in the manner of use of the acquired assets or the strategy for the overall business; ● identification of other impaired assets within a reporting unit; ● disposition of a significant portion of an operating segment; ● significant negative industry or economic trends; ● significant decline in the Company’s stock price for a sustained period; and ● a decline in the market capitalization relative to the net book value. Determining whether a triggering event has occurred involves significant judgment by the Company. The Company assesses goodwill annually (as of November 1), or more frequently when events and circumstances, such as the ones mentioned above, occur indicating that the recorded goodwill may be impaired. During the years ended January 31, 2023 and 2022, the Company did not note any of the above qualitative factors, which would be considered a triggering event for goodwill impairment. In assessing qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company assesses relevant events and circumstances that may impact the fair value and the carrying amount of a reporting unit. The identification of relevant events and circumstances and how these may impact a reporting unit’s fair value or carrying amount involve significant judgments by management. These judgments include the consideration of macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, events which are specific to the Company and trends in the market price of the Company’s common stock. Each factor is assessed to determine whether it impacts the impairment test positively or negatively, and the magnitude of any such impact. Reporting units are determined based on the organizational structure the entity has in place at the date of the impairment test. A reporting unit is an operating segment or component business unit with the following characteristics: (a) it has discrete financial information, (b) segment management regularly reviews its operating results (generally an operating segment has a segment manager who is directly accountable to and maintains regular contact with the chief operating decision maker to discuss operating activities, financial results, forecasts or plans for the segment), and (c) its economic characteristics are dissimilar from other units (this contemplates the nature of the products and services, the nature of the production process, the type or class of client for the products and services and the methods used to distribute the products and services). The Company determined that it has one operating segment and two reporting units. The Company estimates the fair value of its reporting unit using the income approach, via discounted cash flow valuation models which include, but are not limited to, assumptions such as a “risk-free” rate of return on an investment, the weighted average cost of capital of a market participant and future revenue, operating margin, working capital and capital expenditure trends. Determining the fair value of reporting units and goodwill includes significant judgment by management, and different judgments could yield different results. The Company performed its annual assessment of goodwill, using the approach described above. Based on the analysis performed, the fair value of the reporting units exceeded the carrying amount of the reporting unit, including goodwill, and, therefore, a goodwill impairment loss was not recognized. |
Equity Awards | Equity Awards The Company accounts for share-based payments based on the grant-date fair value of the awards with compensation cost recognized as expense over the requisite service period. For awards to non-employees, the Company recognizes compensation expense in the same manner as if the entity had paid cash for the goods or services. The Company incurred total annual compensation expense related to stock-based awards of $ 1,761,000 81,000 2,216,000 The fair value of the stock options granted are estimated at the date of grant using a Black-Scholes option pricing model. Option pricing model input assumptions such as expected term, expected volatility and risk-free interest rate impact the fair value estimate. The Company recognizes forfeitures as they occur. These assumptions are subjective and are generally derived from external (such as, risk-free rate of interest) and historical data (such as, volatility factor, expected term and forfeiture rates). Future grants of equity awards accounted for as stock-based compensation could have a material impact on reported expenses depending upon the number, value and vesting period of future awards. The Company issues restricted stock awards in the form of Company common stock. The fair value of these awards is based on the market close price per share on the grant date. The Company expenses the compensation cost of these awards as the restriction period lapses, which is typically a one- to four-year service period to the Company. In fiscal 2022 and 2021, 127,429 257,571 197,000 464,000 890,731 562,500 |
Income Taxes | Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and for tax credit and loss carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. In assessing net deferred tax assets, the Company considers whether it is more likely than not that some or all of the deferred tax assets will not be realized. The Company establishes a valuation allowance when it is more likely than not that all or a portion of deferred tax assets will not be realized. See Note 7 - Income Taxes for further details. The Company provides for uncertain tax positions and the related interest and penalties based upon management’s assessment of whether certain tax positions are more likely than not to be sustained upon examination by tax authorities. At January 31, 2023, the Company believes it has appropriately accounted for any uncertain tax positions. |
Net Earnings (Loss) Per Common Share | Net Earnings (Loss) Per Common Share The Company presents basic and diluted earnings per share (“EPS”) data for our common stock. Our unvested restricted stock awards are considered non-participating securities because holders are not entitled to non-forfeitable rights to dividends or dividend equivalents during the vesting term. In accordance with ASC 260, securities are deemed not to be participating in losses if there is no obligation to fund such losses. Diluted EPS for our common stock is computed using the treasury stock method. The following is the calculation of the basic and diluted net loss per share of common stock: SCHEDULE OF BASIC AND DILUTED NET LOSS PER SHARE OF COMMON STOCK 2022 2021 Fiscal Year 2022 2021 Basic earnings (loss) per share: Continuing operations Loss from continuing operations, net of tax $ (11,379,000 ) $ (6,917,000 ) Basic net loss per share of common stock from continuing operations $ (0.23 ) $ (0.16 ) Discontinued operations Income available to common stockholders from discontinued operations $ — $ 375,000 Basic net earnings per share of common stock from discontinued operations $ — $ 0.01 Diluted earnings (loss) per share (1): Continuing operations Loss available to common stockholders from continuing operations $ (11,379,000 ) $ (6,917,000 ) Diluted net loss per share of common stock from continuing operations $ (0.23 ) $ (0.16 ) Discontinued operations Income available to common stockholders from discontinued operations $ — $ 375,000 Diluted net earnings per share of common stock from discontinued operations $ — $ 0.01 Net loss $ (11,379,000 ) $ (6,542,000 ) Weighted average shares outstanding - Basic (1) (1) 49,324,858 42,815,239 Effect of dilutive securities - Stock options and Restricted stock (2) (2) — 458,335 Weighted average shares outstanding – Diluted 49,324,858 43,273,574 Basic net loss per share of common stock $ (0.23 ) $ (0.15 ) Diluted net loss per share of common stock $ (0.23 ) $ (0.15 ) (1) Excludes the effect of unvested restricted shares of common stock, which are considered non-participating securities. As of January 31, 2023 and 2022, there were 1,848,031 1,043,350 (2) Diluted net loss per share excludes the effect of shares that are anti-dilutive. As of January 31, 2023, there were 628,598 1,848,031 1,062,130 1,043,350 |
Other Operating Costs | Other Operating Costs Acquisition-related Costs SCHEDULE OF NON ROUTINE COSTS Fiscal Year 2022 Fiscal Year Separation agreement expense $ — $ 706,000 Broker fees — 553,000 Professional fees 149,000 850,000 Executive bonuses — 705,000 Loss on exit from operating lease — 42,000 Total $ 149,000 $ 2,856,000 For fiscal 2022 and 2021, the Company incurred certain acquisition-related costs relating to the acquisition of Avelead totaling $ 149,000 2,856,000 705,000 850,000 |
Loss Contingencies | Loss Contingencies We are subject to the possibility of various loss contingencies arising in the normal course of business. We consider the likelihood of the loss or impairment of an asset or the incurrence of a liability as well as our ability to reasonably estimate the amount of loss in determining loss contingencies. An estimated loss contingency is accrued when it is probable that a liability has been incurred or an asset has been impaired, and the amount of loss can be reasonably estimated. We regularly evaluate current information available to us to determine whether to accrue for a loss contingency and adjust any previous accrual. |
Accounting Pronouncements Recently Adopted | Accounting Pronouncements Recently Adopted In July 2021, the FASB issued ASU 2021-05, Lessors - Certain Leases with Variable Lease Payments to ASC Topic 842, Leases (“ASC 842”) (“ASU 2021-05”). ASU 2021-05 provides additional ASC 842 classification guidance as it relates to a lessor’s accounting for certain leases with variable lease payments. ASU 2021-05 requires a lessor to classify a lease with variable payments that do not depend on an index or rate as an operating lease if either a sales-type lease or direct financing lease classification would trigger a day-one loss. ASU 2021-05 became effective for the Company on February 1, 2022. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements or disclosures. |
Recent Accounting Pronouncements Not Yet Adopted | Recent Accounting Pronouncements Not Yet Adopted In November 2019, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which improves guidance around accounting for financial losses on accounts receivable. For smaller reporting entities, ASU 2016-13 is effective for annual periods beginning after December 15, 2022, including interim periods within those fiscal years. The Company’s adoption of ASU 2016-13 is effective February 1, 2023. An analysis of contract receivables, including credit losses, was conducted during the first quarter of fiscal 2023. Based on the balance of the allowance for bad debt reserve as of January 31, 2023 and the result of the analysis of contract receivables during first quarter of fiscal 2023, the Company does not anticipate that the adoption of this ASU will have a material impact on our consolidated financial statements. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Jan. 31, 2023 | |
Accounting Policies [Abstract] | |
SCHEDULE OF NON-CASH ITEMS RELATED TO CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | The Company had the following items that were non-cash items related to the consolidated statements of cash flows: SCHEDULE OF NON-CASH ITEMS RELATED TO CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 2022 2021 Fiscal Year 2022 2021 Forgiveness of PPP loan and accrued interest $ — $ 2,327,000 Payment of acquisition earnout liabilities in restricted common stock 3,012,000 — Capitalized software purchased with stock (Note 12) 81,000 — |
SCHEDULE OF ACCRUED EXPENSES | SCHEDULE OF ACCRUED EXPENSES 2023 2022 January 31, 2023 2022 Employee benefits and related compensation $ 2,079,000 $ 803,000 Professional fees and services 294,000 283,000 Third party licenses 285,000 77,000 Customer concessions 226,000 152,000 State income and sales taxes payable 331,000 460,000 Interest, primarily on Term Loan 50,000 28,000 Total accrued expenses $ 3,265,000 $ 1,803,000 |
SCHEDULE OF ESTIMATED USEFUL LIFE OF PROPERTY AND EQUIPMENT | Property and equipment are stated at cost. Depreciation is computed using the straight-line method, over the estimated useful lives of the related assets. Estimated useful lives are as follows: SCHEDULE OF ESTIMATED USEFUL LIFE OF PROPERTY AND EQUIPMENT Computer equipment and software 3 4 Office equipment 5 Office furniture and fixtures 5 7 Leasehold improvements Term of lease or estimated useful life, whichever is shorter |
SCHEDULE OF AMORTIZATION EXPENSE FOR INTERNALLY DEVELOPED SOFTWARE | SCHEDULE OF AMORTIZATION EXPENSE FOR INTERNALLY DEVELOPED SOFTWARE 2022 2021 Fiscal Year 2022 2021 Amortization expense on internally-developed software included in: Cost of software as a service $ 2,068,000 $ 1,675,000 Cost of professional fees and licenses 355,000 498.000 Total amortization expense on internally-developed software $ 2,423,000 $ 2,173,000 |
SCHEDULE OF FAIR VALUE ASSETS AND LIABILITIES MEASURED ON RECURRING BASIS | The table below provides information on our liabilities that are measured at fair value on a recurring basis: SCHEDULE OF FAIR VALUE ASSETS AND LIABILITIES MEASURED ON RECURRING BASIS Total Fair Quoted Prices in Active Markets Significant Other Observable Inputs Significant Unobservable Inputs Value (Level 1) (Level 2) (Level 3) At January 31, 2023 Acquisition earnout liability (1) $ 3,738,000 $ — $ — $ 3,738,000 At January 31, 2022 Acquisition earnout liability (1) $ 8,833,000 $ — $ — $ 8,833,000 (1) The fair value of the acquisition earnout liability is based upon a probability-weighted discounted cash flow that was completed at the date of acquisition and updated as of January 31, 2023. The change in the fair value of the acquisition earnout ability decreased $ 5,095,000 5,024,000 71,000 The probability-weighted discounted cash flow is calculated using a Monte Carlo valuation method. The valuation model provides numerous outcomes. The outcomes are averaged and discounted to present value, which provides the current value point estimate. The significant inputs include our forecast of Avelead SaaS revenue, the probabilities associated with each of (i) a change in control or (ii) a certain client termination, as well as other normal and customary inputs to financial models, including but not limited to, risk factors and interest rates. |
SCHEDULE OF DISAGGREGATON OF REVENUE | The following table provides information about disaggregated revenue by type and nature of revenue stream: SCHEDULE OF DISAGGREGATON OF REVENUE 2022 2021 Fiscal Year 2022 2021 Over time revenue $ 16,809,000 $ 12,400,000 Point in time revenue 8,080,000 4,979,000 Total revenue $ 24,889,000 $ 17,379,000 |
SCHEDULE OF BASIC AND DILUTED NET LOSS PER SHARE OF COMMON STOCK | The following is the calculation of the basic and diluted net loss per share of common stock: SCHEDULE OF BASIC AND DILUTED NET LOSS PER SHARE OF COMMON STOCK 2022 2021 Fiscal Year 2022 2021 Basic earnings (loss) per share: Continuing operations Loss from continuing operations, net of tax $ (11,379,000 ) $ (6,917,000 ) Basic net loss per share of common stock from continuing operations $ (0.23 ) $ (0.16 ) Discontinued operations Income available to common stockholders from discontinued operations $ — $ 375,000 Basic net earnings per share of common stock from discontinued operations $ — $ 0.01 Diluted earnings (loss) per share (1): Continuing operations Loss available to common stockholders from continuing operations $ (11,379,000 ) $ (6,917,000 ) Diluted net loss per share of common stock from continuing operations $ (0.23 ) $ (0.16 ) Discontinued operations Income available to common stockholders from discontinued operations $ — $ 375,000 Diluted net earnings per share of common stock from discontinued operations $ — $ 0.01 Net loss $ (11,379,000 ) $ (6,542,000 ) Weighted average shares outstanding - Basic (1) (1) 49,324,858 42,815,239 Effect of dilutive securities - Stock options and Restricted stock (2) (2) — 458,335 Weighted average shares outstanding – Diluted 49,324,858 43,273,574 Basic net loss per share of common stock $ (0.23 ) $ (0.15 ) Diluted net loss per share of common stock $ (0.23 ) $ (0.15 ) (1) Excludes the effect of unvested restricted shares of common stock, which are considered non-participating securities. As of January 31, 2023 and 2022, there were 1,848,031 1,043,350 (2) Diluted net loss per share excludes the effect of shares that are anti-dilutive. As of January 31, 2023, there were 628,598 1,848,031 1,062,130 1,043,350 |
SCHEDULE OF NON ROUTINE COSTS | SCHEDULE OF NON ROUTINE COSTS Fiscal Year 2022 Fiscal Year Separation agreement expense $ — $ 706,000 Broker fees — 553,000 Professional fees 149,000 850,000 Executive bonuses — 705,000 Loss on exit from operating lease — 42,000 Total $ 149,000 $ 2,856,000 |
BUSINESS COMBINATION AND DIVE_2
BUSINESS COMBINATION AND DIVESTITURE (Tables) | 12 Months Ended |
Jan. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
COMPONENTS OF TOTAL CONSIDERATION | The components of the total consideration are as follows: COMPONENTS OF TOTAL CONSIDERATION (in thousands) Components of total consideration, net of cash acquired: Cash $ 11,900 Cash, seller expenses 285 Cash, working capital adjustment 285 Restricted Common Stock 6,554 Acquisition earnout liabilities 10,684 (a) (a) Total consideration $ 29,708 (a) Acquisition earnout liabilities represent the net present value and risk adjusted probability of the required future payments underlying the Company’s SaaS Contingent Consideration and Renewal Contingent Consideration as described above. The first year earnout paid out on November 21, 2022, consisting of cash in the amount $ 2,012,000 1,871,038 The acquisition earnout liability is re-measured on a quarterly basis and the change to the liability is recorded as a valuation adjustment recorded through “acquisition earnout valuation adjustments” in the accompanying consolidated statements of operations. The valuation adjustment recorded for the period ended January 31, 2023, was $ 71,000 |
SCHEDULE OF ALLOCATION OF THE TOTAL CONSIDERATION | The Company is presenting the allocation of the total consideration to net tangible and intangible assets as of the date of the closing of Avelead as follows: SCHEDULE OF ALLOCATION OF THE TOTAL CONSIDERATION (in thousands) Net tangible assets: Accounts receivable $ 1,246 Unbilled revenue 200 Prepaid expenses 178 Fixed assets 37 Accounts payable ( 490 ) Accrued expenses ( 397 ) Deferred revenues ( 863 ) Net tangible assets ( 89 ) Goodwill 12,377 Client Relationships (SaaS) 8,370 Client Relationships (Consulting) 1,330 Internally Developed Software 6,380 Trademarks and Tradenames 1,340 Net assets acquired and liabilities assumed $ 29,708 |
SCHEDULE OF INTANGIBLE ASSETS ESTIMATED USEFUL LIVES | SCHEDULE OF INTANGIBLE ASSETS ESTIMATED USEFUL LIVES Estimated Useful Lives Goodwill Indefinite Client Relationships (SaaS) 10 Client Relationships (Consulting) 8 Internally Developed Software 9 Trademarks and Tradenames 15 |
SCHEDULE OF PRO FORMA REVENUE AND NET EARNINGS | SCHEDULE OF PRO FORMA REVENUE AND NET EARNINGS 2022 Unaudited Pro forma Year Ended Revenues $ 22,631,000 Operating expenses (31,278,000 ) Acquisition-related costs (4,284,000 Operating loss (12,931,000 ) Other (expense) income 1,312,000 PPP loan forgiveness 3,059,000 Income tax expense (109,000 ) Loss from continuing operations $ (8,669,000 ) |
OPERATING LEASES (Tables)
OPERATING LEASES (Tables) | 12 Months Ended |
Jan. 31, 2023 | |
Operating Leases | |
SCHEDULE OF MATURITIES OF OPERATING LEASE LIABILITIES | Maturities of operating lease liabilities associated with the Company’s operating lease as of January 31, 2023 are as follows for payments due based upon the Company’s fiscal year: SCHEDULE OF MATURITIES OF OPERATING LEASE LIABILITIES 2023 $ 36,000 Total lease payments 36,000 Less present value adjustment (1,000 ) Present value of lease liabilities $ 35,000 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Jan. 31, 2023 | |
Debt Disclosure [Abstract] | |
SCHEDULE OF OUTSTANDING DEBT | Outstanding principal balances on debt consisted of the following at: SCHEDULE OF OUTSTANDING DEBT January 31, 2023 January 31, 2022 Term loan $ 9,750,000 $ 10,000,000 Deferred financing cost (36,000 ) (96,000 ) Total 9,714,000 9,904,000 Less: Current portion (750,000 ) (250,000 ) Non-current portion of debt $ 8,964,000 $ 9,654,000 |
SCHEDULE OF MAXIMUM DEBT TO ARR RATIO | SCHEDULE OF MAXIMUM DEBT TO ARR RATIO Quarter Ending Maximum Debt to ARR Ratio October 31, 2022 0.80 1.00 January 31, 2023 0.70 1.00 April 30, 2023 0.65 1.00 July 31, 2023 0.60 1.00 October 31, 2023 0.55 1.00 January 31, 2024 0.50 1.00 |
SCHEDULE OF MAXIMUM DEBT TO ADJUSTED EBITDA RATIO | SCHEDULE OF MAXIMUM DEBT TO ADJUSTED EBITDA RATIO Quarter Ending Maximum Debt to April 30, 2024 3.50 1.00 July 31, 2024 and on the last day of each quarter, thereafter 2.00 1.00 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Jan. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
SCHEDULE OF INTANGIBLE ASSETS | Intangible assets consist of the following: SCHEDULE OF INTANGIBLE ASSETS January 31, 2023 Estimated Accumulated Useful Life Gross Assets Amortization Net Assets Finite-lived assets: Client relationships 8 10 $ 9,700,000 $ 1,463,000 $ 8,237,000 Internally Developed Software 9 $ 6,380,000 $ 1,034,000 $ 5,346,000 Trademarks and Tradenames 15 $ 1,340,000 $ 130,000 $ 1,210,000 Total $ 17,420,000 $ 2,627,000 $ 14,793,000 January 31, 2022 Estimated Accumulated Useful Life Gross Assets Amortization Net Assets Finite-lived assets: Client relationships 8 10 $ 14,164,000 $ 4,755,000 $ 9,409,000 Internally Developed Software 9 6,380,000 325,000 6,055,000 Trademarks and Tradenames 15 1,340,000 41,000 1,299,000 Total $ 21,884,000 $ 5,121,000 $ 16,763,000 |
SCHEDULE OF FUTURE AMORTIZATION EXPENSE FOR INTANGIBLE ASSETS | Amortization over the next five fiscal years for intangible assets is estimated as follows: SCHEDULE OF FUTURE AMORTIZATION EXPENSE FOR INTANGIBLE ASSETS Annual Amortization Expense 2023 $ 1,801,000 2024 1,801,000 2025 1,801,000 2026 1,801,000 2027 1,801,000 Thereafter 5,788,000 Total $ 14,793,000 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Jan. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
SCHEDULE OF INCOME TAXES FOR CONTINUING OPERATION | For fiscal 2022 and 2021, income taxes for continuing operations consist of the following: SCHEDULE OF INCOME TAXES FOR CONTINUING OPERATION 2022 2021 Fiscal Year 2022 2021 Current tax expense: Federal $ — $ — State (62,000 ) (14,000 ) Total current tax expense $ (62,000 ) $ (14,000 ) Deferred tax expense: Federal $ (6,000 ) $ (80,000 ) State (3,000 ) (15,000 ) Total deferred tax expense $ (9,000 ) $ (95,000 ) Total provision $ (71,000 ) $ (109,000 ) |
SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION | SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION 2022 2021 Fiscal Year 2022 2021 Federal tax benefit at statutory rate $ (2,390,000 ) $ (1,430,000 ) State and local tax expense, net of federal 52,000 26,000 Increase in valuation allowance 2,029,000 1,950,000 Permanent items: PPP loan — (483,000 ) Other 20,000 3,000 Reserve for uncertain tax position 18,000 (24,000 ) Federal R&D tax credit (91,000 ) (120,000 ) Stock-based compensation 289,000 (45,000 ) Other 2,000 (8,000 ) Income tax expense $ (71,000 ) $ (109,000 ) |
SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES | The Company provides deferred income taxes for temporary differences between assets and liabilities recognized for financial reporting and income tax purposes. The income tax effects of these temporary differences and credits are as follows: SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES 2023 2022 January 31, 2023 2022 Deferred tax assets: Allowance for doubtful accounts $ 39,000 $ 24,000 Deferred revenue 122,000 60,000 Accruals 232,000 168,000 Net operating loss carryforwards 11,242,000 10,908,000 Stock compensation expense 342,000 510,000 Finite-lived intangible assets 1,344,000 — R&D tax credit 1,407,000 1,334,000 Other 2,000 23,000 Total deferred tax assets 14,730,000 13,027,000 Valuation allowance (14,347,000 ) (12,318,000 ) Net deferred tax assets 383,000 709,000 Deferred tax liabilities: Property and equipment (5,000 ) (6,000 ) Finite-lived intangible liabilities (482,000 ) (798,000 ) Total deferred tax liabilities (487,000 ) (804,000 ) Net deferred tax liabilities $ (104,000 ) $ (95,000 ) |
SCHEDULE OF GROSS UNRECOGNIZED TAX BENEFITS | A reconciliation of the beginning and ending amounts of gross unrecognized tax benefits (excluding interest and penalties) is as follows: SCHEDULE OF GROSS UNRECOGNIZED TAX BENEFITS 2022 2021 Beginning of fiscal year $ 315,000 $ 339,000 Additions for tax positions for the current year 11,000 4,000 Additions for tax positions of prior years 7,000 — Subtractions for tax positions of prior years — (28,000 ) End of fiscal year $ 333,000 $ 315,000 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Jan. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
SCHEDULE OF STOCK OPTION ACTIVITY | A summary of stock option activity follows: SCHEDULE OF STOCK OPTION ACTIVITY Weighted Average Remaining Aggregate Options Exercise Life in intrinsic Outstanding as of January 31, 2022 1,062,130 $ 2.65 6.11 $ 21,000 Granted — — Exercised (5,000 ) 1.18 Expired (428,172 ) 3.68 Forfeited — — Outstanding as of January 31, 2023 628,958 $ 1.95 7.31 $ 360,000 Exercisable as of January 31, 2023 365,069 $ 3.36 3.72 $ 193,000 Vested or expected to vest as of January 31, 2023 628,958 $ 1.95 7.31 $ 360,000 |
SCHEDULE OF WEIGHTED AVERAGE ASSUMPTIONS | The fiscal 2022 and 2021 stock-based compensation was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted average assumptions for each fiscal year: SCHEDULE OF WEIGHTED AVERAGE ASSUMPTIONS 2022 2021 Expected life — 5.01 Risk-free interest rate — 0.75 % Weighted average volatility factor — 0.72 Dividend yield — — Forfeiture rate — — |
SCHEDULE OF RESTRICTED STOCK AWARD ACTIVITY | SCHEDULE OF RESTRICTED STOCK AWARD ACTIVITY Weighted Non-vested Average Number of Grant Date Shares Fair Value Non-vested balance at January 31, 2021 931,125 $ 1.09 Granted 1,257,500 1.71 Vested (1,095,175 ) 1.33 Forfeited (50,100 ) 1.48 Non-vested balance at January 31, 2022 1,043,350 $ 1.57 Granted 1,505,731 1.47 Vested (501,750 ) 1.63 Forfeited (199,300 ) 1.49 Non-vested balance at January 31, 2023 1,848,031 $ 1.48 |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 12 Months Ended |
Jan. 31, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
SCHEDULE OF GAIN ON SALE OF ASSETS | SCHEDULE OF GAIN ON SALE OF ASSETS Net Proceeds, including escrowed funds $ 12,088,000 Net tangible assets sold: Accounts Receivable (1,130,000 ) Prepaid Expenses (576,000 ) Deferred Revenues 4,010,000 Net tangible assets sold 2,304,000 Capitalized software development costs (1,772,000 ) Goodwill (4,825,000 ) Transaction cost (1,782,000 ) Gain on sale of discontinued operations $ 6,013,000 |
SCHEDULE OF DISCONTINUED OPERATIONS IN STATEMENTS OF OPERATIONS | For fiscal 2021, the Company recorded the following into discontinued operations in the accompanying consolidated statements of operations: SCHEDULE OF DISCONTINUED OPERATIONS IN STATEMENTS OF OPERATIONS 2021 Revenues: Transition service fees $ 498,000 Total revenues $ 498,000 Expenses: Cost of Sales $ 5,000 Transition service cost 92,000 Total expenses $ 97,000 Income from discontinued operations $ 401,000 |
SCHEDULE OF NON-CASH ITEMS RELA
SCHEDULE OF NON-CASH ITEMS RELATED TO CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2023 | Jan. 31, 2022 | |
Accounting Policies [Abstract] | ||
Forgiveness of PPP loan and accrued interest | $ 2,327,000 | |
Payment of acquisition earnout liabilities in restricted common stock | 3,012,000 | |
Capitalized software purchased with stock (Note 12) | $ 81,000 |
SCHEDULE OF ACCRUED EXPENSES (D
SCHEDULE OF ACCRUED EXPENSES (Details) - USD ($) | Jan. 31, 2023 | Jan. 31, 2022 |
Accounting Policies [Abstract] | ||
Employee benefits and related compensation | $ 2,079,000 | $ 803,000 |
Professional fees and services | 294,000 | 283,000 |
Third party licenses | 285,000 | 77,000 |
Customer concessions | 226,000 | 152,000 |
State income and sales taxes payable | 331,000 | 460,000 |
Interest, primarily on Term Loan | 50,000 | 28,000 |
Total accrued expenses | $ 3,265,000 | $ 1,803,000 |
SCHEDULE OF ESTIMATED USEFUL LI
SCHEDULE OF ESTIMATED USEFUL LIFE OF PROPERTY AND EQUIPMENT (Details) | 12 Months Ended |
Jan. 31, 2023 | |
Computer Equipment and Software [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful lives | 3 years |
Computer Equipment and Software [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful lives | 4 years |
Office Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful lives | 5 years |
Office Furniture and Fixtures [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful lives | 5 years |
Office Furniture and Fixtures [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful lives | 7 years |
Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful lives | Term of lease or estimated useful life, whichever is shorter |
SCHEDULE OF AMORTIZATION EXPENS
SCHEDULE OF AMORTIZATION EXPENSE FOR INTERNALLY DEVELOPED SOFTWARE (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2023 | Jan. 31, 2022 | |
Property, Plant and Equipment [Line Items] | ||
Total amortization expense on internally-developed software | $ 2,423,000 | $ 2,173,000 |
Cost of Software as a Service [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total amortization expense on internally-developed software | 2,068,000 | 1,675,000 |
Cost of Professional Fees and Licenses [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total amortization expense on internally-developed software | $ 355,000 | $ 498 |
SCHEDULE OF FAIR VALUE ASSETS A
SCHEDULE OF FAIR VALUE ASSETS AND LIABILITIES MEASURED ON RECURRING BASIS (Details) - USD ($) | Jan. 31, 2023 | Jan. 31, 2022 |
Platform Operator, Crypto-Asset [Line Items] | ||
Acquisition earn out liability fair value, observable inputs | $ 3,738,000 | $ 8,833,000 |
Fair Value, Inputs, Level 1 [Member] | ||
Platform Operator, Crypto-Asset [Line Items] | ||
Acquisition earn out liability fair value, observable inputs | ||
Fair Value, Inputs, Level 2 [Member] | ||
Platform Operator, Crypto-Asset [Line Items] | ||
Acquisition earn out liability fair value, observable inputs | ||
Fair Value, Inputs, Level 3 [Member] | ||
Platform Operator, Crypto-Asset [Line Items] | ||
Acquisition earn out liability fair value, observable inputs | $ 3,738,000 | $ 8,833,000 |
SCHEDULE OF FAIR VALUE ASSETS_2
SCHEDULE OF FAIR VALUE ASSETS AND LIABILITIES MEASURED ON RECURRING BASIS (Details) (Parenthetical) | 12 Months Ended |
Jan. 31, 2023 USD ($) | |
Accounting Policies [Abstract] | |
Acquisition earnout liability, change in valuation | $ 5,095,000 |
Acquisition payment | 5,024,000 |
Acquisition payment recognised | $ 71,000 |
SCHEDULE OF DISAGGREGATON OF RE
SCHEDULE OF DISAGGREGATON OF REVENUE (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2023 | Jan. 31, 2022 | |
Product Information [Line Items] | ||
Total revenue | $ 24,889,000 | $ 17,379,000 |
Overtime Time Revenue [Member] | ||
Product Information [Line Items] | ||
Total revenue | 16,809,000 | 12,400,000 |
Point In Time Revenue [Member] | ||
Product Information [Line Items] | ||
Total revenue | $ 8,080,000 | $ 4,979,000 |
SCHEDULE OF BASIC AND DILUTED N
SCHEDULE OF BASIC AND DILUTED NET LOSS PER SHARE OF COMMON STOCK (Details) - USD ($) | 12 Months Ended | ||
Jan. 31, 2023 | Jan. 31, 2022 | ||
Continuing operations | |||
Loss from continuing operations, net of tax | $ (11,379,000) | $ (6,917,000) | |
Basic net loss per share of common stock from continuing operations | $ (0.23) | $ (0.16) | |
Discontinued operations | |||
Income available to common stockholders from discontinued operations | $ 375,000 | ||
Basic net earnings per share of common stock from discontinued operations | $ 0.01 | ||
Continuing operations | |||
Loss available to common stockholders from continuing operations | $ (11,379,000) | $ (6,917,000) | |
Diluted net loss per share of common stock from continuing operations | $ (0.23) | $ (0.16) | |
Discontinued operations | |||
Income available to common stockholders from discontinued operations | $ 375,000 | ||
Diluted net earnings per share of common stock from discontinued operations | $ 0.01 | ||
Net loss | $ (11,379,000) | $ (6,542,000) | |
Weighted average shares outstanding - Basic (1) | [1] | 49,324,858 | 42,815,239 |
Effect of dilutive securities - Stock options and Restricted stock (2) | [2] | 458,335 | |
Weighted average shares outstanding – Diluted | 49,324,858 | 43,273,574 | |
Basic net loss per share of common stock | $ (0.23) | $ (0.15) | |
Diluted net loss per share of common stock | $ (0.23) | $ (0.15) | |
[1]Excludes the effect of unvested restricted shares of common stock, which are considered non-participating securities. As of January 31, 2023 and 2022, there were 1,848,031 1,043,350 628,598 1,848,031 1,062,130 1,043,350 |
SCHEDULE OF BASIC AND DILUTED_2
SCHEDULE OF BASIC AND DILUTED NET LOSS PER SHARE OF COMMON STOCK (Details) (Parenthetical) - shares | 12 Months Ended | |
Jan. 31, 2023 | Jan. 31, 2022 | |
Unvested Restricted Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Diluted earnings per share | 1,848,031 | 1,043,350 |
Share-Based Payment Arrangement, Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Diluted earnings per share | 628,598 | 1,062,130 |
Unvested Restricted Shares [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Diluted earnings per share | 1,848,031 | 1,043,350 |
SCHEDULE OF NON ROUTINE COSTS (
SCHEDULE OF NON ROUTINE COSTS (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2023 | Jan. 31, 2022 | |
Restructuring Cost and Reserve [Line Items] | ||
Executive bonuses | $ 705,000 | |
Total | $ 149,000 | 2,856,000 |
Avelead Consulting LLC [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Separation agreement expense | 706,000 | |
Broker fees | 553,000 | |
Professional fees | 149,000 | 850,000 |
Executive bonuses | 705,000 | |
Loss on exit from operating lease | 42,000 | |
Total | $ 149,000 | $ 2,856,000 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | |
Jan. 31, 2023 | Jan. 31, 2022 | |
Property, Plant and Equipment [Line Items] | ||
Concession accrual amount | $ 226,000 | $ 152,000 |
Depreciation expense | 54,000 | 68,000 |
Depreciation fixed asset | 198,000 | |
Amortization expense | 2,423,000 | 2,173,000 |
Impairment charge | 0 | 84,000 |
Amortized and abandoned assets | 694,000 | |
Research and development expense | $ 6,042,000 | 4,782,000 |
Interest rate | 1.50% | |
Debt instrument carrying amount | $ 9,750,000 | 10,000,000 |
Revenue from contract with customer, excluding assessed tax | 24,889,000 | 17,379,000 |
Deferred revenue | 5,636,000 | |
Revenue remaining performance obligation | $ 25,070,000 | |
Revenue, remaining performance obligation, expected timing of satisfaction, explanation | the Company expects to recognize approximately 73% over the next 12 months and the remainder thereafter. | |
Deferred costs, net | $ 94,000 | 125,000 |
Accumulated amortization of deferred costs | 176,000 | 93,000 |
Deferred costs, amortization expense | 83,000 | 110,000 |
Compensation expense related to stock-based award | 1,680,000 | 2,216,000 |
Cost of shares for tax withholding | 197,000 | 464,000 |
Acquisition related costs | $ 149,000 | 2,856,000 |
Executive bonuses | 705,000 | |
Professional fees | $ 850,000 | |
Officers and Directors [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Number shares of restricted stock | 890,731 | 562,500 |
Common Stock [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Surrender of stock, shares | 127,429 | 257,571 |
Number shares of restricted stock | 1,876,962 | 1,462,874 |
Equity Award [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Compensation expense related to stock-based award | $ 1,761,000 | $ 2,216,000 |
Equity Award [Member] | Share-Based Payment Arrangement, Nonemployee [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Compensation expense related to stock-based award | $ 81,000 | |
Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Finite-lived intangible assets amortized period | 1 year | |
Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Finite-lived intangible assets amortized period | 15 years | |
Selling, General and Administrative Expenses [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Amortization expense with deferred sales commissions | $ 411,000 | 339,000 |
Other Noncurrent Assets [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Deferred commissions costs paid and payable | 1,534,000 | 806,000 |
Services [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Revenue from contract with customer, excluding assessed tax | $ 6,231,000 | 3,590,000 |
Second Amended and Restated Loan and Security Agreement [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Variable rate, description | The term loan bears interest at a per annum rate equal to the Prime Rate (as published in The Wall Street Journal) plus 1.5%, with a Prime “floor” rate of 3.25%. The prime rate is variable and, thus accommodates changes in the market interest rate. However, the interest rate spread (the 1.5% added to the Prime Rate) is fixed. We estimated the impact of the changes in the interest rate spread by analogizing the effect of the change in the Corporate bond rates, reduced for any changes in the market interest rate. | |
Interest rate | 0.50% | |
Security Agreement [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Interest rate | 1.50% | |
Prime interest rate percentage | 3.25% | |
Debt Agreement [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Debt instrument carrying amount | $ 9,550,000 | 9,798,000 |
Term loan | 200,000 | 202,000 |
Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Capitalized software development costs, net of accumulated amortization | 522,000 | 846,000 |
Internal-Use Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Capitalized software development costs, net of accumulated amortization | 5,324,000 | 4,709,000 |
Software and Software Development Costs [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Amortization expense | $ 2,423,000 | $ 2,173,000 |
COMPONENTS OF TOTAL CONSIDERATI
COMPONENTS OF TOTAL CONSIDERATION (Details) - USD ($) | Nov. 21, 2022 | Aug. 16, 2021 | |
Unit Purchase Agreement [Member] | |||
Business Acquisition [Line Items] | |||
Cash | $ 2,012,000 | ||
Avelead Consulting LLC [Member] | |||
Business Acquisition [Line Items] | |||
Cash | $ 12,500,000 | ||
Total consideration | 29,700,000 | ||
Avelead Consulting LLC [Member] | Unit Purchase Agreement [Member] | |||
Business Acquisition [Line Items] | |||
Cash | 11,900,000 | ||
Cash, seller expenses | 285,000 | ||
Cash, working capital adjustment | 285,000 | ||
Restricted Common Stock | 6,554,000 | ||
Acquisition earnout liabilities | [1] | 10,684,000 | |
Total consideration | $ 29,708,000 | ||
[1]Acquisition earnout liabilities represent the net present value and risk adjusted probability of the required future payments underlying the Company’s SaaS Contingent Consideration and Renewal Contingent Consideration as described above. The first year earnout paid out on November 21, 2022, consisting of cash in the amount $ 2,012,000 1,871,038 |
COMPONENTS OF TOTAL CONSIDERA_2
COMPONENTS OF TOTAL CONSIDERATION (Parenthetical) (Details) - USD ($) | 12 Months Ended | ||
Jan. 31, 2023 | Nov. 21, 2022 | Aug. 16, 2021 | |
Business Acquisition [Line Items] | |||
Acquisition earnout liability change in valuation | $ 5,095,000 | ||
Avelead Consulting LLC [Member] | |||
Business Acquisition [Line Items] | |||
Business combination, earnout cash | $ 2,012,000 | $ 10,700,000 | |
Business combination, earnout shares | 1,871,038 | ||
Acquisition earnout liability change in valuation | $ 71,000 |
SCHEDULE OF ALLOCATION OF THE T
SCHEDULE OF ALLOCATION OF THE TOTAL CONSIDERATION (Details) - USD ($) | Jan. 31, 2023 | Jan. 31, 2022 | Aug. 16, 2021 | Feb. 24, 2020 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 23,089,000 | $ 23,089,000 | $ 4,825,000 | |
Avelead Consulting LLC [Member] | ||||
Business Acquisition [Line Items] | ||||
Accounts receivable | $ 1,246,000 | |||
Unbilled revenue | 200,000 | |||
Prepaid expenses | 178,000 | |||
Fixed assets | 37,000 | |||
Accounts payable | 490,000 | |||
Accrued expenses | 397,000 | |||
Deferred revenues | 863,000 | |||
Net tangible assets | 89,000 | |||
Goodwill | 12,377,000 | |||
Client Relationships (SaaS) | 8,370,000 | |||
Customer Relationships (Consulting) | 1,330,000 | |||
Internally Developed Software | 6,380,000 | |||
Trademarks and Tradenames | 1,340,000 | |||
Net assets acquired and liabilities assumed | $ 29,708,000 |
SCHEDULE OF INTANGIBLE ASSETS E
SCHEDULE OF INTANGIBLE ASSETS ESTIMATED USEFUL LIVES (Details) | Aug. 16, 2021 |
Customer Relationships [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Estimated useful lives | Indefinite |
Estimated useful life, intangible assets | 10 years |
Customer Relationships (Consulting) [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life, intangible assets | 8 years |
Computer Software, Intangible Asset [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life, intangible assets | 9 years |
Trademarks and Trade Names [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life, intangible assets | 15 years |
SCHEDULE OF PRO FORMA REVENUE A
SCHEDULE OF PRO FORMA REVENUE AND NET EARNINGS (Details) - Avelead Consulting LLC [Member] | 12 Months Ended |
Jan. 31, 2022 USD ($) | |
Business Acquisition [Line Items] | |
Revenues | $ 22,631,000 |
Operating expenses | (31,278,000) |
Acquisition-related costs | (4,284,000) |
Operating loss | (12,931,000) |
Other (expense) income | 1,312,000 |
PPP loan forgiveness | 3,059,000 |
Income tax expense | (109,000) |
Loss from continuing operations | $ (8,669,000) |
BUSINESS COMBINATION AND DIVE_3
BUSINESS COMBINATION AND DIVESTITURE (Details Narrative) - USD ($) | 12 Months Ended | |||
Nov. 21, 2022 | Aug. 16, 2021 | Jan. 31, 2023 | Jan. 31, 2022 | |
Business Acquisition [Line Items] | ||||
Common stock par or stated value per share | $ 0.01 | $ 0.01 | ||
Total revenues | $ 24,889,000 | $ 17,379,000 | ||
Income loss from continuing operations | $ (11,379,000) | $ (6,917,000) | ||
Number of stock options granted | 583,333 | |||
Options, strike price per share | $ 1.95 | $ 2.65 | ||
Business combination acquisition related costs | $ 149,000 | $ 2,856,000 | ||
Share based compensation arrangement by share based payment award, options, outstanding, intrinsic value | 360,000 | 21,000 | ||
Unit Purchase Agreement [Member] | ||||
Business Acquisition [Line Items] | ||||
Business combination, cash payments | $ 2,012,000 | |||
Common stock par or stated value per share | $ 0.01 | |||
Unit Purchase Agreement [Member] | First Year Earnout [Member] | ||||
Business Acquisition [Line Items] | ||||
Sale of stock | $ 4,000,000 | |||
Unit Purchase Agreement [Member] | Renewal Contingent Consideration [Member] | ||||
Business Acquisition [Line Items] | ||||
Common stock par or stated value per share | $ 0.01 | |||
Sale of stock number of shares issued in transaction | 627,746 | |||
Sale of stock | $ 1,000,000 | |||
Avelead Consulting LLC [Member] | ||||
Business Acquisition [Line Items] | ||||
Business Combination, Consideration Transferred | $ 29,700,000 | |||
Business combination, cash payments | 12,500,000 | |||
Business Acquisition, Equity Interest Issued or Issuable, Value Assigned | 6,500,000 | |||
Business Combination, Contingent Consideration, Liability | $ 2,012,000 | $ 10,700,000 | ||
Total revenues | 4,524,000 | |||
Income loss from continuing operations | (1,506,000) | |||
Number of stock options granted | 583,333 | |||
Options, strike price per share | $ 1.53 | |||
Business combination acquisition related costs | $ 149,000 | $ 2,856,000 | ||
Avelead Consulting LLC [Member] | Share-Based Payment Arrangement, Tranche One [Member] | ||||
Business Acquisition [Line Items] | ||||
Number of stock options granted | 500,000 | |||
Share based compensation arrangement by share based payment award, award vesting period | 3 years | |||
Share based compensation arrangement by share based payment award, options, outstanding, intrinsic value | $ 395,000 | |||
Avelead Consulting LLC [Member] | Share-Based Payment Arrangement, Tranche Two [Member] | ||||
Business Acquisition [Line Items] | ||||
Number of stock options granted | 83,333 | |||
Business combination acquisition related costs | $ 6,000 | |||
Avelead Consulting LLC [Member] | Unit Purchase Agreement [Member] | ||||
Business Acquisition [Line Items] | ||||
Business Combination, Consideration Transferred | 29,708,000 | |||
Business combination, cash payments | 11,900,000 | |||
Business acquisition, equity interest issued or issuable, number of shares | 1,243,292 | |||
Payments to acquire businesses seller expenses | 285,000 | |||
Payment for estimated working capital adjustment | $ 285,000 | |||
Payment of SaaS contingent consideration in cash, percentage | 50% | |||
Payment of SaaS contingent consideration in cash, percentage | 50% | |||
First year payment of SaaS contingent consideration, description | The first year of SaaS Contingent Consideration was calculated as 75% of Avelead’s recognized SaaS revenue from September 1, 2021 to August 31, 2022. The first-year payment was subject to a deduction of $665,000 spread equally between the cash and common stock portion of the earnout consideration. Assuming that Avelead is within 80% of its forecasted SaaS revenue in the first year earnout, the Company agreed to a floor and ceiling on the value of the Company’s restricted common stock issued as consideration for the earnout. That collar had a floor of $3.50 per share and a ceiling of $5.50 per share for the first year earnout. This first year SaaS Contingent Consideration was paid on November 21, 2022 (see below). | |||
Second year payment of SaaS contingent consideration, description | The second year of SaaS Contingent Consideration is calculated as 40% of Avelead’s recognized SaaS revenue from September 1, 2022 to August 31, 2023. The second year earnout will be paid on or about October 15, 2023, subject to a dispute and resolution period. Assuming that Avelead is within 80% of its forecasted SaaS revenue in the second year earnout, the Company agreed to a floor and ceiling on the Company’s restricted common stock issued as consideration for the earnout. That collar has a floor of $4.50 per share and a ceiling of $6.50 per share for the second year earnout. | |||
Forecasted revenue description | If Avelead does not achieve 80% of its forecasted revenue, the price per share will revert back to the Company’s market price based upon a 30-day average. | |||
Renewal contingent consideration, description | The Renewal Contingent Consideration is tied directly to a successful renewal of a specific client of Avelead. To meet the definition of a renewal, Avelead must achieve a minimum threshold of contracted revenue in an updated, annual, renewed contract with the specified client. The renewal occurs on or about June 1, 2022 and June 1, 2023. The Company will remit the Renewal Contingent Consideration on or about each of October 15, 2022 and 2023, respectively. The Renewal Contingent Consideration is payable in shares of Company restricted common stock valued as of the date of closing. Accordingly, upon achieving the Renewal Contingent Consideration, the Company will issue 627,747 shares of restricted common stock on or about each of October 15, 2022 and October 15, 2023, subject to a dispute and resolution period. The Renewal Contingent Consideration is either earned or not earned based upon the renewal of the specified client at the minimum amount of contracted revenue. There is no pro-ration of the underlying Renewal Contingent Consideration. | |||
Avelead Consulting LLC [Member] | Acquisition Restricted Common Stock [Member] | ||||
Business Acquisition [Line Items] | ||||
Business acquisition, equity interest issued or issuable, number of shares | 5,021,972 | |||
Acquisition restricted common stock with a fair value | $ 6,500,000 | |||
Business combination description | Additionally, the Company contracted two types of contingent consideration; the first is referred to herein as “SaaS Contingent Consideration” and the second is referred to herein as “Renewal Contingent Consideration.” The SaaS Contingent Consideration and Renewal Contingent Consideration have an aggregate value of approximately $10.7 million as of the date of closing. | |||
Avelead Consulting LLC [Member] | Acquisition Restricted Common Stock [Member] | Unit Purchase Agreement [Member] | ||||
Business Acquisition [Line Items] | ||||
Acquisition restricted common stock with a fair value | $ 6,500,000 | |||
Avelead Consulting LLC [Member] | Restricted Stock Units (RSUs) [Member] | ||||
Business Acquisition [Line Items] | ||||
Number of stock options granted | 100,000 |
SCHEDULE OF MATURITIES OF OPERA
SCHEDULE OF MATURITIES OF OPERATING LEASE LIABILITIES (Details) | Jan. 31, 2023 USD ($) |
Operating Leases | |
2023 | $ 36,000 |
Total lease payments | 36,000 |
Less present value adjustment | (1,000) |
Present value of lease liabilities | $ 35,000 |
OPERATING LEASES (Details Narra
OPERATING LEASES (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||||
Oct. 02, 2021 | Aug. 16, 2021 | Feb. 28, 2023 | Jan. 31, 2023 | Jan. 31, 2022 | Oct. 31, 2021 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Sublease income | $ 195,000 | |||||
Operating lease | 32,000 | $ 218,000 | ||||
Current portion of operating lease obligation | $ 35,000 | 204,000 | ||||
Lesee discount rate | 6.50% | |||||
Operating lease cost | $ 194,000 | 194,000 | ||||
Payments for rent | 73,000 | |||||
Operating lease | 35,000 | |||||
At inception [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Operating lease | $ 540,000 | |||||
Sublease Agreement [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Sublease, term | 18 months | |||||
Sublease income | $ 292,000 | |||||
Alpharetta Office Lease [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Operating lease, payments | 210,000 | $ 203,000 | ||||
Suwanee Office Lease [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Operating lease, payments | $ 5,998.67 | |||||
Lease expiration date | Feb. 28, 2022 | |||||
Payments for rent | $ 73,000 | |||||
Operating lease | $ 71,984 |
SCHEDULE OF OUTSTANDING DEBT (D
SCHEDULE OF OUTSTANDING DEBT (Details) - USD ($) | Jan. 31, 2023 | Jan. 31, 2022 |
Debt Disclosure [Abstract] | ||
Term loan | $ 9,750,000 | $ 10,000,000 |
Deferred financing cost | (36,000) | (96,000) |
Total | 9,714,000 | 9,904,000 |
Current portion | (750,000) | (250,000) |
Non-current portion of debt | $ 8,964,000 | $ 9,654,000 |
SCHEDULE OF MAXIMUM DEBT TO ARR
SCHEDULE OF MAXIMUM DEBT TO ARR RATIO (Details) | Jan. 31, 2023 |
October Thirty One Two Thousand And Twenty Two [Member] | Minimum [Member] | |
Debt Instrument [Line Items] | |
Maximum Debt to ARR Ratio | 0.80% |
October Thirty One Two Thousand And Twenty Twoi [Member] | Maximum [Member] | |
Debt Instrument [Line Items] | |
Maximum Debt to ARR Ratio | 1% |
January 31, 2023 [Member] | Minimum [Member] | |
Debt Instrument [Line Items] | |
Maximum Debt to ARR Ratio | 0.70% |
January 31, 2023 [Member] | Maximum [Member] | |
Debt Instrument [Line Items] | |
Maximum Debt to ARR Ratio | 1% |
April Thirty Two Thousand Twenty Three [Member] | Minimum [Member] | |
Debt Instrument [Line Items] | |
Maximum Debt to ARR Ratio | 0.65% |
April Thirty Two Thousand Twenty Three [Member] | Maximum [Member] | |
Debt Instrument [Line Items] | |
Maximum Debt to ARR Ratio | 1% |
July Thirty One Two Thousand Twenty Three [Member] | Minimum [Member] | |
Debt Instrument [Line Items] | |
Maximum Debt to ARR Ratio | 0.60% |
July Thirty One Two Thousand Twenty Three [Member] | Maximum [Member] | |
Debt Instrument [Line Items] | |
Maximum Debt to ARR Ratio | 1% |
October Thirty One Two Thousand Twenty Three [Member] | Minimum [Member] | |
Debt Instrument [Line Items] | |
Maximum Debt to ARR Ratio | 0.55% |
October Thirty One Two Thousand Twenty Three [Member] | Maximum [Member] | |
Debt Instrument [Line Items] | |
Maximum Debt to ARR Ratio | 1% |
January Thirty One Two Thousand Twenty Four [Member] | Minimum [Member] | |
Debt Instrument [Line Items] | |
Maximum Debt to ARR Ratio | 0.50% |
SCHEDULE OF MAXIMUM DEBT TO ADJ
SCHEDULE OF MAXIMUM DEBT TO ADJUSTED EBITDA RATIO (Details) | Jan. 31, 2023 |
April Thirty Two Thousand Twenty Four [Member] | Minimum [Member] | |
Debt Instrument [Line Items] | |
Maximum Debt to Adjusted EBITDA Ratio | 3.50% |
April Thirty Two Thousand Twenty Four [Member] | Maximum [Member] | |
Debt Instrument [Line Items] | |
Maximum Debt to Adjusted EBITDA Ratio | 1% |
July Thirty One Two Thousand Twenty Four And Thereafter [Member] | Minimum [Member] | |
Debt Instrument [Line Items] | |
Maximum Debt to Adjusted EBITDA Ratio | 2% |
July Thirty One Two Thousand Twenty Four And Thereafter [Member] | Maximum [Member] | |
Debt Instrument [Line Items] | |
Maximum Debt to Adjusted EBITDA Ratio | 1% |
DEBT (Details Narrative)
DEBT (Details Narrative) - USD ($) | 1 Months Ended | ||||
Nov. 29, 2022 | Aug. 26, 2021 | Apr. 21, 2020 | Jun. 30, 2021 | Jan. 31, 2023 | |
Debt Instrument [Line Items] | |||||
Debt interest rate | 1.50% | ||||
PPP Loan forgiven | $ 2,301,000 | ||||
Accrued interest forgiveness | $ 26,000 | ||||
Base Rate [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, basis spread on variable rate | 1.50% | ||||
Debt interest rate | 3.25% | ||||
Second Modification Debt Agreement [Member] | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | $ 2,000,000 | ||||
Debt financial covenants, description | Borrowers shall, at all times, maintain unrestricted cash in an amount not less than Two Million Dollars ($2,000,000). | ||||
Deferred offering costs | $ 20,000 | ||||
Amortization of debt issuance costs | 50,000 | ||||
Accretion expense | $ 250,000 | ||||
Second Modification Debt Agreement [Member] | Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Fixed charge coverage ratio | 1.20% | ||||
Second Modification Debt Agreement [Member] | Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Fixed charge coverage ratio | 1% | ||||
Second Modification Debt Agreement [Member] | Base Rate [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, basis spread on variable rate | 1.50% | ||||
Debt interest rate | 3.25% | ||||
Second Modification Debt Agreement Member 1 [Member] | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | $ 10,000,000 | ||||
Second Modification Debt Agreement 1 [Member] | Base Rate [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, basis spread on variable rate | 1.50% | ||||
Debt interest rate | 3.25% | ||||
Loan and Security Agreement [Member] | |||||
Debt Instrument [Line Items] | |||||
Deferred offering costs | $ 130,000 | ||||
Amortization of debt issuance costs | $ 200,000 | 200,000 | |||
Accretion expense | $ 250,000 | 200,000 | |||
Security Agreement [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt interest rate | 1.50% | ||||
Security Agreement [Member] | Bridge Bank [Member] | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | 10,000,000 | ||||
Long term debt, maturity, year two | 500,000 | ||||
Long term debt, maturity, year three | 1,000,000 | ||||
Long term debt, maturity, year four | 2,000,000 | ||||
Long term debt, maturity, year five | $ 3,000,000 | ||||
Paycheck Protection Program [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt interest rate | 1% | ||||
Term loan | $ 2,301,000 |
SCHEDULE OF INTANGIBLE ASSETS (
SCHEDULE OF INTANGIBLE ASSETS (Details) - USD ($) | Jan. 31, 2023 | Jan. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Assets | $ 17,420,000 | $ 21,884,000 |
Accumulated Amortization | 2,627,000 | 5,121,000 |
Net Assets | 14,793,000 | 16,763,000 |
Client Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Assets | 9,700,000 | 14,164,000 |
Accumulated Amortization | 1,463,000 | 4,755,000 |
Net Assets | $ 8,237,000 | $ 9,409,000 |
Client Relationships [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 8 years | 8 years |
Client Relationships [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 10 years | 10 years |
Internally Developed Software [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 9 years | 9 years |
Gross Assets | $ 6,380,000 | $ 6,380,000 |
Accumulated Amortization | 1,034,000 | 325,000 |
Net Assets | $ 5,346,000 | $ 6,055,000 |
Trademarks and Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 15 years | 15 years |
Gross Assets | $ 1,340,000 | $ 1,340,000 |
Accumulated Amortization | 130,000 | 41,000 |
Net Assets | $ 1,210,000 | $ 1,299,000 |
SCHEDULE OF FUTURE AMORTIZATION
SCHEDULE OF FUTURE AMORTIZATION EXPENSE FOR INTANGIBLE ASSETS (Details) - USD ($) | Jan. 31, 2023 | Jan. 31, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2023 | $ 1,801,000 | |
2024 | 1,801,000 | |
2025 | 1,801,000 | |
2026 | 1,801,000 | |
2027 | 1,801,000 | |
Thereafter | 5,788,000 | |
Total | $ 14,793,000 | $ 16,763,000 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS (Details Narrative) - USD ($) | 12 Months Ended | |
Jan. 31, 2023 | Jan. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense on intangible assets | $ 1,971,000 | $ 1,281,000 |
Amortization of intangible assets Written-off | $ 4,464,000 |
SCHEDULE OF INCOME TAXES FOR CO
SCHEDULE OF INCOME TAXES FOR CONTINUING OPERATION (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2023 | Jan. 31, 2022 | |
Current tax expense: | ||
Federal | ||
State | (62,000) | (14,000) |
Total current tax expense | (62,000) | (14,000) |
Deferred tax expense: | ||
Federal | (6,000) | (80,000) |
State | (3,000) | (15,000) |
Total deferred tax expense | (9,000) | (95,000) |
Total provision | $ (71,000) | $ (109,000) |
SCHEDULE OF EFFECTIVE INCOME TA
SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2023 | Jan. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Federal tax benefit at statutory rate | $ (2,390,000) | $ (1,430,000) |
State and local tax expense, net of federal | 52,000 | 26,000 |
Increase in valuation allowance | 2,029,000 | 1,950,000 |
PPP loan | (483,000) | |
Other | 20,000 | 3,000 |
Reserve for uncertain tax position | 18,000 | (24,000) |
Federal R&D tax credit | (91,000) | (120,000) |
Stock-based compensation | 289,000 | (45,000) |
Other | 2,000 | (8,000) |
Income tax expense | $ (71,000) | $ (109,000) |
SCHEDULE OF DEFERRED TAX ASSETS
SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES (Details) - USD ($) | Jan. 31, 2023 | Jan. 31, 2022 |
Income Tax Disclosure [Abstract] | ||
Allowance for doubtful accounts | $ 39,000 | $ 24,000 |
Deferred revenue | 122,000 | 60,000 |
Accruals | 232,000 | 168,000 |
Net operating loss carryforwards | 11,242,000 | 10,908,000 |
Stock compensation expense | 342,000 | 510,000 |
Finite-lived intangible assets | 1,344,000 | |
R&D tax credit | 1,407,000 | 1,334,000 |
Other | 2,000 | 23,000 |
Total deferred tax assets | 14,730,000 | 13,027,000 |
Valuation allowance | (14,347,000) | (12,318,000) |
Net deferred tax assets | 383,000 | 709,000 |
Property and equipment | (5,000) | (6,000) |
Finite-lived intangible liabilities | (482,000) | (798,000) |
Total deferred tax liabilities | (487,000) | (804,000) |
Net deferred tax liabilities | $ (104,000) | $ (95,000) |
SCHEDULE OF GROSS UNRECOGNIZED
SCHEDULE OF GROSS UNRECOGNIZED TAX BENEFITS (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2023 | Jan. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Beginning of fiscal year | $ 315,000 | $ 339,000 |
Additions for tax positions for the current year | 11,000 | 4,000 |
Additions for tax positions of prior years | 7,000 | |
Subtractions for tax positions of prior years | (28,000) | |
End of fiscal year | $ 333,000 | $ 315,000 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | ||
Jan. 31, 2023 | Jan. 31, 2022 | Jan. 31, 2021 | |
Operating Loss Carryforwards [Line Items] | |||
Federal statutory income tax rates | 21% | 21% | |
Operating loss carry forwards | $ 49,884,000 | ||
Valuation allowance | 14,347,000 | $ 12,318,000 | |
Increase in the valuation allowance | 2,029,000 | 1,950,000 | |
Uncertain tax positions | 333,000 | $ 315,000 | $ 339,000 |
Tax Cuts and Jobs Act [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carry forwards | 20,801,000 | ||
State [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carry forwards | 24,095,000 | ||
Federal RD [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carry forwards | 1,666,000 | ||
Georgia RD [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carry forwards | 94,000 | ||
Through Fiscal 2038 [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carry forwards | $ 29,083,000 |
EQUITY (Details Narrative)
EQUITY (Details Narrative) - USD ($) | 12 Months Ended | |||||||
Oct. 24, 2022 | Feb. 25, 2021 | Jan. 31, 2023 | Jan. 31, 2022 | Jun. 22, 2022 | May 24, 2021 | May 23, 2021 | May 03, 2021 | |
Subsidiary, Sale of Stock [Line Items] | ||||||||
Common stock par value | $ 0.01 | $ 0.01 | ||||||
Proceeds from issuance of common stock | $ 8,316,000 | $ 16,100,000 | ||||||
Common stock, shares authorized | 85,000,000 | 65,000,000 | 65,000,000 | 45,000,000 | ||||
Number of additional shares authorized to issue | 2,000,000 | 2,000,000 | ||||||
180 Consulting LLC [Member] | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Common stock issued for resale | 272,653 | 248,424 | ||||||
2013 Incentive Compensation Plan [Member] | Stock Options [Member] | Minimum [Member] | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Number of shares authorized to issue | 8,223,246 | 6,223,246 | ||||||
2013 Incentive Compensation Plan [Member] | Stock Options [Member] | Maximum [Member] | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Number of shares authorized to issue | 10,223,246 | 8,223,246 | ||||||
Purchase Agreement [Member]. | 2022 Offering [Member] | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Shares issued in public offering | 6,299,989 | |||||||
Common stock par value | $ 0.01 | |||||||
Shares issued, price per share | $ 1.32 | |||||||
Proceeds from issuance of common stock | $ 8,316,000 | |||||||
Underwriting Agreement [Member] | Craig-Hallum Capital Group LLC [Member] | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Shares issued in public offering | 10,062,500 | |||||||
Common stock par value | $ 0.01 | |||||||
Shares issued, price per share | $ 1.60 | |||||||
Proceeds from issuance of common stock | $ 16,100,000 | |||||||
Underwriting Agreement [Member] | Craig-Hallum Capital Group LLC [Member] | Over-Allotment Option [Member] | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Number of shares sold | 1,312,500 |
MAJOR CLIENTS (Details Narrativ
MAJOR CLIENTS (Details Narrative) | 12 Months Ended | |
Jan. 31, 2023 | Jan. 31, 2022 | |
Concentration Risk [Line Items] | ||
Concentration risk customer | two individual clients accounted for 10% or more of our continuing operations revenue. | |
Two Customer [Member] | Customer Concentration Risk [Member] | Revenue Benchmark [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk customer | one individual client accounted for 10% or more of our continuing operations revenue | |
Concentration Risk, Percentage | 20% | |
One Customer [Member] | Customer Concentration Risk [Member] | Revenue Benchmark [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 12% | |
Customer One [Member] | Customer Concentration Risk [Member] | Accounts Receivable [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 24% | 13% |
Customer Two [Member] | Customer Concentration Risk [Member] | Accounts Receivable [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 16% | 12% |
Customer Three [Member] | Customer Concentration Risk [Member] | Accounts Receivable [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 15% | 12% |
Customer Four [Member] | Customer Concentration Risk [Member] | Accounts Receivable [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 10% |
EMPLOYEE RETIREMENT PLAN (Detai
EMPLOYEE RETIREMENT PLAN (Details Narrative) - USD ($) | 12 Months Ended | |
Jan. 31, 2023 | Jan. 31, 2022 | |
Retirement Benefits [Abstract] | ||
Defined contribution plan, cost recognized | $ 258,000 | $ 188,000 |
SCHEDULE OF STOCK OPTION ACTIVI
SCHEDULE OF STOCK OPTION ACTIVITY (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2023 | Jan. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | ||
Number of options, Outstanding | 1,062,130 | |
Weighted average exercise price, Outstanding | $ 2.65 | |
Remaining Life in Years, Outstanding | 7 years 3 months 21 days | 6 years 1 month 9 days |
Aggregate intrinsic value, Outstanding | $ 21,000 | |
Number of options, Granted | 583,333 | |
Weighted average exercise price, Granted | ||
Number of options, Exercised | (5,000) | |
Weighted average exercise price, Exercised | $ 1.18 | |
Number of options, Expired | (428,172) | |
Weighted average exercise price, Expired | $ 3.68 | |
Number of options, Forfeited | ||
Weighted average exercise price, Forfeited | ||
Number of options, Outstanding | 628,958 | 1,062,130 |
Weighted average exercise price, Outstanding | $ 1.95 | $ 2.65 |
Aggregate intrinsic value, Outstanding | $ 360,000 | $ 21,000 |
Number of options, Exercisable | 365,069 | |
Weighted average exercise price, Exercisable | $ 3.36 | |
Remaining Life in Years, Exercisable | 3 years 8 months 19 days | |
Aggregate intrinsic value, Exercisable | $ 193,000 | |
Number of options, Vested or expected to vest | 628,958 | |
Weighted average exercise price, Vested or expected to vest | $ 1.95 | |
Remaining Life in Years, Vested or expected to vest | 7 years 3 months 21 days | |
Aggregate intrinsic value, Vested or expected to vest | $ 360,000 |
SCHEDULE OF WEIGHTED AVERAGE AS
SCHEDULE OF WEIGHTED AVERAGE ASSUMPTIONS (Details) - Stock Options [Member] | 12 Months Ended | |
Jan. 31, 2023 | Jan. 31, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Expected life | 5 years 3 days | |
Risk-free interest rate | 0.75% | |
Weighted average volatility factor | 0.72% | |
Dividend yield | ||
Forfeiture rate |
SCHEDULE OF RESTRICTED STOCK AW
SCHEDULE OF RESTRICTED STOCK AWARD ACTIVITY (Details) - $ / shares | 12 Months Ended | |
Jan. 31, 2023 | Jan. 31, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Number of RSUs, Non vested, Outstanding, Beginning balance | 1,043,350 | 931,125 |
Weighted Average Grant Date Fair Value, Beginniing balance | $ 0.0157 | $ 0.0109 |
Number of RSUs, Non vested, Outstanding, Ending balance | 1,848,031 | 1,043,350 |
Weighted Average Grant Date Fair Value, Ending balance | $ 0.0148 | $ 0.0157 |
Restricted Stock [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Number of RSUs, granted | 1,505,731 | 1,257,500 |
Weighted Average Grant Date Fair Value, RSUs granted | $ 0.0147 | $ 0.0171 |
Number of RSUs, vested | (501,750) | (1,095,175) |
Weighted Average Grant Date Fair Value, RSUs vested | $ 0.0163 | $ 0.0133 |
Number RSUs, forfeited | (199,300) | (50,100) |
Weighted Average Grant Date Fair Value, RSUs forfeited | $ 0.0149 | $ 0.0148 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details Narrative) - USD ($) | 12 Months Ended | ||||
Nov. 01, 2022 | May 20, 2022 | Mar. 04, 2021 | Jan. 31, 2023 | Jan. 31, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Number of options outstanding | 628,958 | 1,062,130 | |||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross | 583,333 | ||||
Weighted average grant date fair value of options granted | $ 153 | ||||
Ownership Percentage | 20% | ||||
Restricted Stock [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Cost unrecognized, remaining weighted average period | 2 years 2 months 12 days | ||||
Number of restricted stocks awarded, shares | 1,505,731 | 1,257,500 | |||
2013 Incentive Compensation Plan [Member] | Stock Options [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Stock options plan, description | Under these plans, the Company is authorized to issue equity awards (stock options, stock appreciation rights or “SARs”, and restricted stock) to directors and associates of the Company. Under the 2013 Plan, as amended, the Company is authorized to issue a number of shares not to exceed 10,223,246. The options granted under the 2013 Plan have terms of ten years or less, and typically vest and become fully exercisable ratably over three years of continuous service to the Company from the date of grant | ||||
Number of shares authorized to issue | 10,223,246 | ||||
Number of options to purchase common stock | 937,130 | 628,958 | |||
Number of options outstanding | 0 | 125,000 | |||
Unrecognized Compensation cost, stock options | $ 203,000 | ||||
Stock option expense | 132,000 | $ 69,000 | |||
Cash received from exercise options | $ 6,000 | ||||
2013 Incentive Compensation Plan [Member] | Restricted Stock [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Cost unrecognized, remaining weighted average period | 1 year 6 months 14 days | ||||
Stock option expense | $ 983,000 | $ 1,667,000 | |||
Number of restricted stocks awarded, shares | 150,000 | ||||
Unrecognized compensation cost, restricted stock | $ 1,958,000 | ||||
2013 Incentive Compensation Plan [Member] | Restricted Stock [Member] | Vest in Four Equal Quarterly Installments [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Number of restricted stocks awarded, shares | 50,000 | 150,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Mar. 08, 2023 | Jan. 31, 2023 | Jan. 31, 2023 | Jan. 31, 2022 | Jan. 31, 2021 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Professional fees | $ 850,000 | ||||
Master Services Agreement [Member] | 180 Consulting LLC [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Number of share issued service | 100,927 | 915,204 | 394,127 | ||
Professional fees | $ 2,540,000 | $ 1,439,000 | |||
Capitalized non-employee stock compensation | 81,000 | ||||
Master Services Agreement [Member] | 180 Consulting LLC [Member] | Private Placement [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Number of share issued service | 100,927 | ||||
SOW [Member] | 180 Consulting LLC [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Professional fees | $ 301,000 | $ 227,000 |
SCHEDULE OF GAIN ON SALE OF ASS
SCHEDULE OF GAIN ON SALE OF ASSETS (Details) - USD ($) | Feb. 24, 2020 | Jan. 31, 2023 | Jan. 31, 2022 |
Discontinued Operations and Disposal Groups [Abstract] | |||
Net Proceeds, including escrowed funds | $ 12,088,000 | ||
Accounts Receivable | (1,130,000) | ||
Prepaid Expenses | (576,000) | ||
Deferred Revenues | 4,010,000 | ||
Net tangible assets sold | 2,304,000 | ||
Capitalized software development costs | (1,772,000) | $ (6,224,000) | $ (5,202,000) |
Goodwill | (4,825,000) | $ (23,089,000) | $ (23,089,000) |
Transaction cost | (1,782,000) | ||
Gain on sale of discontinued operations | $ 6,013,000 |
SCHEDULE OF DISCONTINUED OPERAT
SCHEDULE OF DISCONTINUED OPERATIONS IN STATEMENTS OF OPERATIONS (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2023 | Jan. 31, 2022 | |
Total revenues | $ 498,000 | |
Expenses: Cost of sales | 5,000 | |
Expenses: Transition service cost | 92,000 | |
Total expenses | 97,000 | |
Income from discontinued operations | 401,000 | |
Transition Service Fees [Member] | ||
Total revenues | $ 498,000 |
DISCONTINUED OPERATIONS (Detail
DISCONTINUED OPERATIONS (Details Narrative) - USD ($) | Feb. 24, 2020 | Jan. 31, 2023 | Jan. 31, 2022 |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Goodwill | $ 4,825,000 | $ 23,089,000 | $ 23,089,000 |
Asset Purchase Agreement [Member] | Enterprise Content Management Business [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Purchase price | 16,000,000 | ||
Proceed from sale of asset | 5,400,000 | ||
Repayment of bank debt | 4,000,000 | ||
Escrow Deposit | 800,000 | ||
Goodwill | $ 4,825,000 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 5 Months Ended | 12 Months Ended | |
Jan. 31, 2022 | Jan. 31, 2023 | Jan. 31, 2022 | |
Related Party Transaction [Line Items] | |||
Research and development services | $ 6,042,000 | $ 4,782,000 | |
Rent expense | 73,000 | ||
AscendTek, LLC [Member] | |||
Related Party Transaction [Line Items] | |||
Research and development services | $ 64,000 | $ 40,000 |
Valuation and Qualifying Acco_2
Valuation and Qualifying Accounts and Reserves (Details) - USD ($) | 12 Months Ended | ||
Jan. 31, 2023 | Jan. 31, 2022 | ||
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |||
Balance at Beginning of Period | $ 76,000 | $ 65,000 | |
Charged to Costs and Expenses | 189,000 | 11,000 | |
Deductions | [1] | (133,000) | |
Balance at End of Period | $ 132,000 | $ 76,000 | |
[1]Uncollectible accounts written off, net of recoveries. |