Cover
Cover - USD ($) | 12 Months Ended | ||
Jan. 31, 2024 | Apr. 26, 2024 | Jul. 31, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Jan. 31, 2024 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2024 | ||
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 | $ 57,165,443 | ||
Entity Common Stock, Shares Outstanding | 65,362,533 | ||
Documents incorporated by reference | Information required by Part III is incorporated by reference from the Registrant’s Proxy Statement for its 2024 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, 2024 | ||
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, 2024 | Jan. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 3,190,000 | $ 6,598,000 |
Accounts receivable, net of allowance for credit losses of $86,000 and $132,000, respectively | 4,237,000 | 7,719,000 |
Contract receivables | 780,000 | 960,000 |
Prepaid and other current assets | 629,000 | 710,000 |
Total current assets | 8,836,000 | 15,987,000 |
Non-current assets: | ||
Property and equipment, net of accumulated amortization of $291,000 and $246,000 respectively | 88,000 | 79,000 |
Right-of use asset for operating lease | 32,000 | |
Capitalized software development costs, net of accumulated amortization of $7,960,000 and $6,224,000, respectively | 5,798,000 | 5,846,000 |
Intangible assets, net of accumulated amortization of $4,019,000 and $2,627,000, respectively | 12,071,000 | 14,793,000 |
Goodwill | 13,276,000 | 23,089,000 |
Other | 1,666,000 | 1,695,000 |
Total non-current assets | 32,899,000 | 45,534,000 |
Total assets | 41,735,000 | 61,521,000 |
Current liabilities: | ||
Accounts payable | 1,253,000 | 626,000 |
Accrued expenses | 2,023,000 | 3,265,000 |
Current portion of term loan | 1,500,000 | 750,000 |
Deferred revenues | 7,112,000 | 8,361,000 |
Operating lease obligations | 35,000 | |
Acquisition earnout liability | 1,794,000 | 3,738,000 |
Total current liabilities | 13,682,000 | 16,775,000 |
Non-current liabilities: | ||
Term loan, net of deferred financing costs | 7,566,000 | 8,964,000 |
Line of credit | 1,500,000 | |
Deferred revenues, less current portion | 173,000 | 167,000 |
Other non-current liabilities | 104,000 | |
Total non-current liabilities | 9,239,000 | 9,235,000 |
Total liabilities | 22,921,000 | 26,010,000 |
Commitments and contingencies – Note 12 | ||
Stockholders’ equity | ||
Common stock, $0.01 par value per share, 85,000,000 shares authorized; 58,945,498 and 57,567,210 shares issued and outstanding, respectively | 590,000 | 576,000 |
Additional paid in capital | 133,923,000 | 131,973,000 |
Accumulated deficit | (115,699,000) | (97,038,000) |
Total stockholders’ equity | 18,814,000 | 35,511,000 |
Total liabilities and stockholders’ equity | $ 41,735,000 | $ 61,521,000 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Jan. 31, 2024 | Jan. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 86,000 | $ 132,000 |
Accumulated amortization, property and equipment | 291,000 | 246,000 |
Capitalized Computer Software, Accumulated Amortization | 7,960,000 | 6,224,000 |
Accumulated amortization, intangible assets | $ 4,019,000 | $ 2,627,000 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 85,000,000 | 85,000,000 |
Common stock, shares issued | 58,945,498 | 57,567,210 |
Common stock, shares outstanding | 58,945,498 | 57,567,210 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | ||
Jan. 31, 2024 | Jan. 31, 2023 | ||
Revenues: | |||
Total revenues | $ 22,596,000 | $ 24,889,000 | |
Operating expenses: | |||
Cost of software as a service | 6,573,000 | 6,358,000 | |
Cost of maintenance and support | 315,000 | 427,000 | |
Cost of professional fees and licenses | 4,165,000 | 6,610,000 | |
Selling, general and administrative expense | 14,710,000 | 16,283,000 | |
Research and development | 5,704,000 | 6,042,000 | |
Impairment of goodwill | 9,813,000 | ||
Impairment of long-lived assets | 963,000 | ||
Total operating expenses | 42,243,000 | 35,720,000 | |
Operating loss | (19,647,000) | (10,831,000) | |
Other income (expense): | |||
Interest expense | (1,071,000) | (749,000) | |
Acquisition earnout valuation adjustments | 1,944,000 | 71,000 | |
Other | 31,000 | 201,000 | |
Loss before income taxes | (18,743,000) | (11,308,000) | |
Income tax benefit (expense) | 46,000 | (71,000) | |
Net loss | $ (18,697,000) | $ (11,379,000) | |
Basic Earnings Per Share | $ (0.33) | $ (0.23) | |
Diluted Earnings Per Share | $ (0.33) | $ (0.23) | |
Weighted average number of common shares - basic | [1] | 56,510,419 | 49,324,858 |
Weighted average number of common shares - diluted | 56,510,419 | 49,324,858 | |
Softwareas As A Service [Member] | |||
Revenues: | |||
Total revenues | $ 14,075,000 | $ 12,326,000 | |
Maintenance And Support [Member] | |||
Revenues: | |||
Total revenues | 4,318,000 | 4,483,000 | |
Professional Fees And Licenses [Member] | |||
Revenues: | |||
Total revenues | $ 4,203,000 | $ 8,080,000 | |
[1]Excludes the effect of unvested restricted shares of common stock, which are considered non-participating securities. As of January 31, 2024 and 2023, there were 1,970,521 1,848,031 |
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, 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 | |||
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 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 | |||
Exercise of Stock Options, shares | ||||
Restricted stock issued | $ 20,000 | (20,000) | ||
Restricted stock issued, shares | 1,947,738 | |||
Restricted stock forfeited | $ (4,000) | 4,000 | ||
Restricted stock forfeited, shares | (378,500) | |||
Surrender of stock | $ (2,000) | (278,000) | (280,000) | |
Surrender of stock, shares | (190,950) | |||
Share-based compensation expense | 2,244,000 | 2,244,000 | ||
Net loss | (18,697,000) | (18,697,000) | ||
Adoption of ASU 2016-13 | 36,000 | 36,000 | ||
Balance at Jan. 31, 2024 | $ 590,000 | $ 133,923,000 | $ (115,699,000) | $ 18,814,000 |
Balance, shares at Jan. 31, 2024 | 58,945,498 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Jan. 31, 2024 | Jan. 31, 2023 | |
Cash flows from operating activities: | ||
Net loss | $ (18,697,000) | $ (11,379,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 4,331,000 | 4,313,000 |
Acquisition earnout valuation adjustments | (1,944,000) | (71,000) |
Provision for deferred income taxes | (104,000) | 9,000 |
Share-based compensation expense | 2,102,000 | 1,680,000 |
Impairment of goodwill | 9,813,000 | |
Impairment of long-lived assets | 963,000 | |
Provision for credit losses | (10,000) | 189,000 |
Changes in assets and liabilities: | ||
Accounts and contract receivables | 3,708,000 | (4,202,000) |
Other assets | (401,000) | (1,197,000) |
Accounts payable | 544,000 | (152,000) |
Accrued expenses and other liabilities | (1,277,000) | 1,069,000 |
Deferred revenues | (1,243,000) | 2,598,000 |
Net cash used in operating activities | (2,215,000) | (7,143,000) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (54,000) | (10,000) |
Capitalization of software development costs | (1,567,000) | (1,925,000) |
Net cash used in investing activities | (1,621,000) | (1,935,000) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock | 8,316,000 | |
Payment of acquisition earnout liabilities | (2,012,000) | |
Payments for costs directly attributable to the issuance of common stock | (52,000) | |
Repayment of bank term loan | (750,000) | (250,000) |
Proceeds from line of credit | 1,500,000 | |
Payments related to settlement of employee shared-based awards | (280,000) | (197,000) |
Payment of deferred financing costs | (44,000) | (20,000) |
Other | 2,000 | 6,000 |
Net cash provided by financing activities | 428,000 | 5,791,000 |
Net decrease in cash and cash equivalents | (3,408,000) | (3,287,000) |
Cash and cash equivalents at beginning of period | 6,598,000 | 9,885,000 |
Cash and cash equivalents at end of period | 3,190,000 | 6,598,000 |
Supplemental cash flow disclosures: | ||
Interest paid, net of amounts capitalized | 989,000 | 651,000 |
Income taxes paid | $ 66,000 | $ 23,000 |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF BUSINESS | 12 Months Ended |
Jan. 31, 2024 | |
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 Solutions, 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, 2024 | |
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. The Company has determined it has only one operating segment based on the guidance of ASC 280-10-50 For fiscal 2022, the Company had two reporting units for evaluation of goodwill: Streamline Solutions and Avelead Solutions. The Company determined that, effective January 1, 2023, it has one reporting unit for purposes of evaluation of goodwill, which was used for evaluation of goodwill for fiscal 2023. At the end of fiscal 2022, the Company consolidated and combined its operations for Streamline Solutions and Avelead Solutions. For total assets at January 31, 2024 and 2023 and total revenue and net loss for the fiscal years ended January 31, 2024 and 2023, see our consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data” herein. Going Concern The Company’s financial statements are prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of obligations in the normal course of business. In the Company’s Quarterly Report on Form 10-Q for the period ended October 31, 2023, the Company raised substantial doubt about its ability to continue as a going concern. It cited the “ability to achieve cash from operations and raise additional debt or equity capital to fund its ongoing operations” as requirements to mitigate the substantial doubt. As of this filing, the Company has been able to successfully implement a cost reduction plan, obtain additional capital, and restructure the covenants for its existing credit facility. Collectively, these initiatives alleviated the substantial doubt about the Company’s ability to continue as a going concern. Refer to the “Restructuring” subtopic of this Note 1 (Organization and Description of Business) and Note 14 – Subsequent Events to our consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data” for additional information. Reclassification Certain amounts for fiscal 2022 were reclassified to conform to the current period classification. The Company incurred certain acquisition-related costs related to the acquisition of Avelead totaling $ 149,000 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 credit losses, 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 2023 2022 Fiscal Year 2023 2022 Payment of acquisition earnout liabilities in restricted common stock — 3,012,000 Capitalized software purchased with stock ( See Note 12 140,000 81,000 Deferred financing costs 83,000 — 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 credit losses. 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 Credit Losses The Company adjusts accounts receivable down to net realizable value. Effective February 1, 2023, the Company implemented ASC 326-10, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“CECL”). CECL provides the framework for the Company to evaluate its allowance for credit losses. In determining the allowance for credit losses, the Company established a historical credit loss rate adjusted for a premium, addressing any prospective changes to the risk of credit loss, that is applied against current sales. The Company evaluates individual receivables 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, significant judgement is required for the Company to determine the appropriate allowances for doubtful accounts for estimated losses resulting from the unwillingness of its clients or resellers to make required payments. The Company believes its reserve is adequate, however, results may differ in future periods. The following table summarizes the changes to the allowance account with the adoption of CECL: SCHEDULE OF RESERVE RESULTS IN FUTURE PERIODS January 31, 2023 CECL Adoption Provision adjustments Write-offs & Recoveries January 31, 2024 Allowance for credit losses $ 132,000 $ (36,000 ) $ (10,000 ) $ — $ 86,000 Accrued Expenses Accrued expenses consisted of the following: SCHEDULE OF ACCRUED EXPENSES 2024 2023 January 31, 2024 2023 Employee benefits and related compensation $ 1,071,000 $ 2,079,000 Professional fees and services 389,000 294,000 Third party licenses 43,000 285,000 Customer concessions 233,000 226,000 State income and sales taxes payable 226,000 331,000 Interest, primarily on term loan 61,000 50,000 Total accrued expenses $ 2,023,000 $ 3,265,000 Concessions Accrual The Company offers certain service level agreements within its client contracts such as uptime, support hours, and levels of support. Our contracts may include, and we may offer, credits to clients when these service line agreements are not met. The service level agreements are accounted for as variable consideration using a portfolio approach. 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 level agreements will not be met. The Company records a provision, reducing revenue, for the estimated amount of concessions incurred on the revenue recorded. The Company evaluates the amount of the concession accrual each period for adequacy. Historically, concessions have not been significant. The concession accrual included in accrued expenses on the Company’s consolidated balance sheet was $ 233,000 226,000 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 2023 and 2022 was $ 45,000 54,000 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. 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 Second Amended and Restated Loan and Security Agreement (as amended and modified, the “Loan Agreement”) with Western Alliance Bank (“WAB”) was 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. For fiscal 2023, an impairment of long-lived assets in the amount of $963,000 was recorded. Refer to Note 6 – Goodwill and Intangible Assets to our consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data” for additional information. 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 287,000 522,000 Internal-use software development costs are accounted for in accordance with ASC 350-40, Internal-Use Software 5,511,000 5,324,000 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 $ 2,463,000 and $ 2,423,000 in fiscal 2023 and 2022, respectively. Further, the Company recognized an impairment of approximately $ 18,000 and $ 0 in fiscal 2023 and fiscal 2022, respectively, related to cancelled or abandoned enhancement projects during fiscal 2023 and fiscal 2022 that have been recognized within amortization expense. Additionally, in fiscal 2023, entries of approximately $ 18,000 for fully amortized and abandoned assets were offset from their corresponding capitalization and accumulated amortization balance sheet accounts. 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 2023 2022 Fiscal Year 2023 2022 Amortization expense on internally-developed software included in: Cost of software as a service $ 2,229,000 $ 2,068,000 Cost of professional fees and licenses 234,000 355,000 Total amortization expense on internally-developed software $ 2,463,000 $ 2,423,000 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 $ 5,704,000 6,042,000 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 2023 and 2022, 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, 2024 Acquisition earnout liability (1) $ 1,794,000 $ — $ — $ 1,794,000 At January 31, 2023 Acquisition earnout liability (1) $ 3,738,000 $ — $ — $ 3,738,000 (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, 2024. The change in the fair value of the acquisition earnout liability decreased $ 1,944,000 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 Loan 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, 2024 and January 31, 2023. 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 8,807,000 9,550,000 193,000 200,000 1,463,000 37,000 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 transaction price is determined by summing all the consideration the Company expects to receive from the client under the contract. At times, a contract may have variable attributes (i.e., performance guarantees, service level agreements, optional terms) that the Company must consider when establishing the transaction price to mitigate significant revenue reversals for the contract. The determined transaction price is allocated based on the standalone selling price (“SSP”) of the performance obligations in contract. Significant judgment is required to determine the SSP for each performance obligation, inclusion of variable consideration, 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 that are recognized over time as the services are performed. 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 2023 2022 Fiscal Year 2023 2022 Over time revenue $ 22,358,000 $ 23,670,000 Point in time revenue 238,000 1,219,000 Total revenue $ 22,596,000 $ 24,889,000 The Company includes revenue categories of (i) over time and (ii) point in time revenue. The Company includes revenue categories of (i) SaaS, (ii) maintenance and support, (iii) professional services, and (iv) audit services as over time revenue. For point in time revenue, the performance obligation is recognized as the point in time when the obligation is fully satisfied. The Company includes software licenses as point in time revenue. 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, 2024, we recognized approximately $ 7,642,000 31,414,000 the Company expects to recognize approximately 46% 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, 2024, and 2023, we had deferred costs of $ 77,000 94,000 102,000 176,000 82,000 83,000 155,000 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 $ 1,461,000 1,534,000 588,000 411,000 35,000 no Concentrations Financial instruments, which potentially expose the Company to concentrations of credit risk, consist primarily of accounts receivable. The Company’s accounts receivables 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 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. 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. During the year ended January 31, 2023, the Company did not note any of the above qualitative factors, which would be considered a triggering event for goodwill impairment. During the year ended January 31, 2024, the Company identified one or more factors that triggered goodwill impairment as of October 31, 2023, as described below. In the third quarter of fiscal 2023, the Company received a notice from a significant SaaS client of its intent not to renew its contract following the expiration of the current term on December 31, 2023. At that time, the Company elected to accelerate the execution of the 2023 Restructuring that was designed to reduce costs while maintaining the Company’s ability to expand its SaaS business. Both the client termination and the execution of the Strategic Restructuring were announced on October 16, 2023. Following these announcements, the Company’s share price declined significantly. Based on these events (collectively, the “Triggering Events”), the Company identified indicators of possible impairment and initiated testing using a valuation date of October 31, 2023. The impairment tests were conducted under guidance of ASC Topic 360, Impairment and Disposal of Long-Lived Assets (“ASC 360”) for certain long-lived assets, including capitalized contract costs, developed technology, client relationships and trade names, and in accordance with ASC Topic 350, |
BUSINESS COMBINATION
BUSINESS COMBINATION | 12 Months Ended |
Jan. 31, 2024 | |
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] | |
BUSINESS COMBINATION | NOTE 3 — BUSINESS COMBINATION 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 Transaction included 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 had 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 million. Additionally, the Company paid $ 285,000 of the Sellers’ closing costs, $ 285,000 related to the working capital adjustment as defined in the UPA. Finally, at closing, the Company issued the Acquisition Restricted Common Stock with a fair value of approximately $ 6.5 million, based on a 30-day average of the closing price of the Company’s common stock prior to the closing date. The SaaS Contingent Consideration and the Renewal Contingent Consideration described in more detail below were included in the UPA as potential future consideration for the Transaction. These are reflected on the Company’s consolidated balance sheet as “Acquisition earnout liability.” 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 following the closing of the Transaction. The Company will pay the SaaS Contingent Consideration as follows: (i) 50 50 ● The first year 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 was 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. The first year SaaS Contingent Consideration was paid on November 21, 2022, as discussed in more detail below. ● The second year SaaS Contingent Consideration was calculated as 40% of Avelead’s recognized SaaS revenue from September 1, 2022 to August 31, 2023. Assuming that Avelead was 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 had a floor of $4.50 per share and a ceiling of $6.50 per share for the second year earnout. The second year SaaS Contingent Consideration remained outstanding as of January 31, 2024, as the Company and the Sellers work towards a resolution regarding the payment of the second year SaaS Contingent Consideration. 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 was tied directly to a successful renewal of a specific client of Avelead. To meet the definition of a renewal, Avelead was required to achieve a minimum threshold of contracted revenue in an updated, annual, renewed contract with the specified client. The renewal occurred on or about June 1, 2022 and June 1, 2023. The Renewal Contingent Consideration was payable in shares of Company restricted common stock valued as of the date of closing. 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 issued 627,746 shares of restricted common stock to the Sellers in connection with the first year Renewal Contingent Consideration. The second year Renewal Contingent Consideration remained outstanding as of January 31, 2024, as the Company and the Sellers work towards a resolution regarding the payment of the second year Renewal Contingent Consideration. On November 21, 2022, the Company made the first year earnout payments and issued shares of restricted common stock to the Sellers in accordance with the UPA. In connection with the first year earnout payment, the Company made an aggregate cash payment of $ 2,012,000 1,243,292 0.01 627,746 4,000,000 1,000,000 As of January 31, 2024, the Company has not made the second year earnout payments to the Sellers or issued shares of common stock in connection therewith. In connection with the second year earnout payment, the Company has estimated cash payments of $ 1,214,000 and will issue 961,640 shares of restricted common stock for the SaaS Contingent Consideration and 627,746 shares of restricted common stock for the Renewal Contingent Consideration. The estimated aggregate value of the second year earnout payment is $ 1,550,000 for the SaaS Contingent Consideration and $ 244,000 for the Renewal Contingent Consideration. The Company and the Sellers reached an agreement to defer the cash portion of the SaaS Contingent Consideration and Renewal Contingent Consideration payments over time through October 31, 2024. On March 27, 2024, the Company issued 961,640 shares of restricted common stock to the Sellers for the SaaS Contingent Consideration and 627,746 shares of restricted common stock for the Renewal Contingent Consideration. These liabilities are reflected at the fair value of the future commitment on the Company’s consolidated balance sheet, as Acquisition Earnout Liability. The Company entered into an employment agreement and a separation agreement with each of the two Sellers. Acquisition-related costs include the cost of a two-year separation agreement with one of the Sellers. The 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 with the other Seller had a two-year term and entitled the Seller to six-months separation pay in the event 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. On September 1, 2023, the Company terminated the employment agreement. In exchange for a general release from the Seller, the Company agreed to accelerate the vesting of 150,000 outstanding and unvested shares of restricted common stock of the Company previously granted to the Seller, subject to such Seller’s non-revocation of a general release of claims against the Company. |
OPERATING LEASES
OPERATING LEASES | 12 Months Ended |
Jan. 31, 2024 | |
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. The Company has moved to a virtual office model and does not have a physical office space. Membership agreements and daily space rentals are leveraged by the Company when groups need to meet in person with the costs expensed as incurred. As of January 31, 2024, the Company recorded $ 30,000 Alpharetta Office Lease 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 32,000 194,000 36,000 210,000 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 33,000 Suwanee Office Lease Upon acquiring Avelead on August 16, 2021 (refer to Note 3 – Business Combination), 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 6,000 5,999 71,984 |
DEBT
DEBT | 12 Months Ended |
Jan. 31, 2024 | |
Debt Disclosure [Abstract] | |
DEBT | NOTE 5 — DEBT Outstanding principal balances on debt consisted of the following at: SCHEDULE OF OUTSTANDING PRINCIPAL BALANCES January 31, 2024 January 31, 2023 Term loan $ 9,000,000 $ 9,750,000 Financing cost payable 135,000 69,000 Less: Deferred financing cost (69,000 ) (105,000 ) Total 9,066,000 9,714,000 Less: Current portion (1,500,000 ) (750,000 ) Non-current portion of debt $ 7,566,000 $ 8,964,000 Term Loan Agreement On August 26, 2021, the Company and its subsidiaries entered into the Loan Agreement with WAB. Pursuant to the Loan Agreement, WAB agreed to provide the Company and its subsidiaries with a term loan facility in the maximum principal amount of $ 10,000,000 1.5 3.25 The Loan 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 Loan Agreement is due monthly, and the Company is required to 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 is required to make monthly payments of principal and interest that increase over the term of the agreement. The Loan 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 Debt Modification and Revolving Line of Credit On November 29, 2022, the Company executed the Second Modification (the “Second Modification”) to the Second Amended and Restated Loan and Security Agreement (as amended and modified, the “Loan Agreement”). The Second Modification expanded the Company’s total borrowing to include a $ 2,000,000 August 26, 2026 1.5 3.25 1,500,000 The Second Modification 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 Loan 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, 2024, the Company was not in compliance with the Maximum Debt to ARR Ratio covenant pursuant to the Second Modification; however, on February 7, 2024, the Company was provided a waiver exception for being non-compliant. (Refer to Note 14 – Subsequent to our consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data” for additional information.). Substantially all the assets of the Company are collateralized by the Loan Agreement. The Company recorded $ 20,000 50,000 250,000 250,000 200,000 On February 7, 2024, the Company executed the Third Modification and Waiver (the “Third Modification”) to the Loan Agreement. Refer to Note 14 – Subsequent Events to our consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data” for additional information regarding the Third Modification. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Jan. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | NOTE 6 — GOODWILL AND INTANGIBLE ASSETS Goodwill The changes in the carrying amount of goodwill were as follows: SCHEDULE OF CARRYING AMOUNT OF GOODWILL Balance Balance as of January 31, 2023 $ 23,089,000 Impairment (9,813,000 ) Balance as of January 31, 2024 $ 13,276,000 In October 2023, the Company was notified by a legacy client of its intent to not renew its contract as of its expiration on December 31, 2023. At that time, the Company elected to accelerate the execution of a planned strategic restructuring that was designed to reduce costs while maintaining the Company’s ability to expand its SaaS business. Both the client termination and the execution of the strategic restructuring were announced on October 16, 2023. Following these announcements, the Company’s share price declined significantly. Based on these events (collectively, the “Triggering Events”), the Company identified indicators of possible impairment and initiated testing using a valuation date of October 31, 2023. The impairment tests were conducted under guidance of ASC Topic 360, Impairment and Disposal of Long-Lived Assets (“ASC 360”) for certain long-lived assets, including capitalized contract costs, developed technology, client relationships and trade names, and in accordance with ASC Topic 350, Intangibles – Goodwill and Other (“ASC 350”) with respect to the reporting unit’s goodwill. The Company determined that, effective January 31, 2023, it had one reporting unit for purposes of evaluation of goodwill. Based on the Triggering Events and in conjunction with the preparation of the Company’s financial statements for the three and nine months ended October 31, 2023, the Company tested the reporting unit’s goodwill for possible impairment as of October 31, 2023. The testing for impairment was performed under the guidance of ASC 350. The testing utilized a discounted debt-free net cash flow (“DCF”) method under the income approach and the market capitalization method (“MCM”) under the market approach. The sum of the weighted values of each method was used to derive the fair value of the Company’s equity. The MCM calculates the aggregate market value of the Company based on the total number of shares outstanding and the current market price of the shares as of the valuation date. Data on similar mergers and acquisitions within the healthcare technology sector are observed to determine control premium that represents a stock premium percentage offered by an acquirer to a public company. The control premium applied to the aggregate market value represents MCM calculated fair value. The DCF incorporates the use of projected financial information and a discount rate using a weighted average cost of capital with cost of equity estimated based on the capital asset pricing model. The cash-flow projections are based on financial forecasts developed by management that include forecasts of future operating results based on internal budgets and strategic plans to invest in working capital to support anticipated revenue growth. External factors and business conditions are considered by management when setting the long-term growth rates. The selected discount rate considers the risk and nature of the reporting unit’s cash flows and the rates of return market participants would require to invest their capital in the Company. The Company concluded that its goodwill was impaired based on the weighted combination of the DCF and MCM value estimates which resulted in a calculated fair value lower than the equity carrying value. The Company recorded an impairment of goodwill in the amount of $ 9,813,000 Intangible assets consist of the following: SCHEDULE OF FINITE-LIVED INTANGIBLE ASSETS January 31, 2024 Estimated Useful Life Gross Assets Accumulated Amortization Net Assets Finite-lived assets: Client relationships 10 $ 8,370,000 $ 2,058,000 $ 6,312,000 Internally developed software 9 6,380,000 1,742,000 $ 4,638,000 Trademarks and tradenames 15 1,340,000 219,000 $ 1,121,000 Total $ 16,090,000 $ 4,019,000 $ 12,071,000 January 31, 2023 Estimated Gross Accumulated Useful Life 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 ASC 360 defines a multi-step process to test long-lived assets, including intangible assets, for recoverability that if failed would indicate impairment. First, the Company must consider whether indicators of impairment of long-lived assets are present, which the Company determined the Triggering Events provided such indication. Next, the Company must review the long-lived assets to define asset group(s) that would reflect the lowest level of assets to which discrete cash flows are identifiable. In performing this review, the Company identified that the long-lived asset “client relationships” related to Avelead should be classified as abandoned (the “Abandoned Asset”) with the Company determining that it no longer has plans to provide the corresponding consulting service. The Abandoned Asset’s carrying value would need to be set to its salvage value which would be zero given no future cash flows. The Company determined the lowest level of discrete cash flows is at the reporting unit level, and all remaining long-lived assets (excluding the Abandoned Asset) and goodwill would represent its only asset group. Recoverability is assessed by comparing that the sum of the discrete undiscounted cash flows exceeds the carrying value of the asset group. The undiscounted cash flow projections are based on 8-year (representing the useful life of the primary asset in the asset group) financial forecasts developed by management that include forecasts of future operating results based on internal budgets and strategic plans to investment in working capital to support anticipated revenue growth. The undiscounted cash flows for the long-lived assets were above the carrying amounts indicating that the long-lived asset group is recoverable and no further impairment to long-lived assets exists as of October 31, 2023. In fiscal 2023, the Company recorded $ 963,000 The Company recognized amortization expense on intangible assets of $ 1,760,000 1,971,000 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 2024 $ 1,635,000 2025 1,635,000 2026 1,635,000 2027 1,635,000 2028 1,635,000 Thereafter 3,896,000 Total $ 12,071,000 The Company wrote-off the Abandoned Asset during fiscal 2023 with a gross asset value of $ 1,330,000 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Jan. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 7 — INCOME TAXES For fiscal 2023 and 2022, income taxes consist of the following: SCHEDULE OF INCOME TAXES FOR CONTINUING OPERATION 2023 2022 Fiscal Year 2023 2022 Current tax expense: Federal $ — $ — State (58,000 ) (62,000 ) Total current tax benefit (expense) $ (58,000 ) $ (62,000 ) Deferred tax expense: Federal $ 86,000 $ (6,000 ) State 18,000 (3,000 ) Total deferred tax benefit (expense) $ 104,000 $ (9,000 ) Income tax benefit (expense) $ 46,000 $ (71,000 ) The income tax expense differs from the amount computed using the federal statutory income tax rate of 21 SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION 2023 2022 Fiscal Year 2023 2022 Federal tax benefit at statutory rate $ 3,887,000 $ 2,348,000 State and local tax expense, net of federal (28,000 ) (52,000 ) Increase in valuation allowance (3,994,000 ) (2,128,000 ) Permanent items: Other (36,000 ) (20,000 ) Reserve for uncertain tax position (7,000 ) (18,000 ) Federal research and development (R&D) tax credit 33,000 91,000 Stock-based compensation 135,000 (289,000 ) Other 56,000 (3,000 ) Income tax benefit (expense) $ 46,000 $ (71,000 ) 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 2024 2023 January 31, 2024 2023 Deferred tax assets: Allowance for credit losses $ 26,000 $ 39,000 Deferred revenue 209,000 122,000 Accruals 67,000 232,000 Net operating loss carryforwards 15,748,000 11,242,000 Stock-based compensation 427,000 342,000 Finite-lived intangible assets 1,739,000 1,344,000 R&D tax credit 1,434,000 1,407,000 Other 1,000 2,000 Total deferred tax assets 19,651,000 14,730,000 Valuation allowance (19,646,000 ) (14,347,000 ) Net deferred tax assets 5,000 383,000 Deferred tax liabilities: Property and equipment (5,000 ) (5,000 ) Finite-lived intangible liabilities — (482,000 ) Total deferred tax liabilities (5,000 ) (487,000 ) Net deferred tax liabilities $ — $ (104,000 ) At January 31, 2024, the Company had U.S. federal net operating loss carry forwards of $ 65,107,000 29,083,000 36,024,000 37,650,000 1,699,000 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 $ 19,646,000 14,347,000 3,994,000 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, 2020. All material state and local income tax matters have been concluded for years through January 31, 2019. The Company is no longer subject to IRS examination for periods prior to the tax year ended January 31, 2020; however, carry forward losses that were generated prior to the tax year ended January 31, 2020 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 $ 340,000 333,000 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 2023 2022 Beginning of fiscal year $ 333,000 $ 315,000 Additions for tax positions for the current year 9,000 11,000 Additions for tax positions of prior years — 7,000 Subtractions for tax positions of prior years (2,000 ) — End of fiscal year $ 340,000 $ 333,000 |
EQUITY
EQUITY | 12 Months Ended |
Jan. 31, 2024 | |
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 Registration of Shares Issued to 180 Consulting 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 On June 28, 2023, the Company filed a Registration Statement on Form S-3 (Registration No. 333-272993) for purposes of registering for resale 394,127 Authorized Shares Increase 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 At the 2023 Annual Meeting, the Company’s stockholders approved an amendment to the 2013 Plan to increase the number of shares of the Company’s common stock authorized for issuance thereunder by 1,000,000 10,223,246 11,223,246 |
MAJOR CLIENTS
MAJOR CLIENTS | 12 Months Ended |
Jan. 31, 2024 | |
Risks and Uncertainties [Abstract] | |
MAJOR CLIENTS | NOTE 9 — MAJOR CLIENTS During fiscal 2023, one individual client accounted for 10% or more of our revenue. This client accounted for 23 % of total revenue for fiscal 2023. In the third quarter of fiscal 2023, the Company received a notice from this client of its intent not to renew its contract following the expiration of the current term on December 31, 2023. During fiscal 2022, two individual clients accounted for 10% or more of our revenue. These clients accounted for 20 % and 12 %, respectively, of total revenue for fiscal 2022. Four clients represented 14 12 12 %, and 11 %, respectively, of accounts receivable as of January 31, 2024, and four clients represented 13 %, 12 %, 12 % and 10 %, respectively, of accounts receivable as of January 31, 2023. Many of our clients are invoiced on an annual basis. |
EMPLOYEE RETIREMENT PLAN
EMPLOYEE RETIREMENT PLAN | 12 Months Ended |
Jan. 31, 2024 | |
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 $ 242,000 258,000 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Jan. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | NOTE 11 — STOCK-BASED COMPENSATION Stock Option Plans The 2013 Plan replaced the Company’s 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 11,223,246 67,500 628,958 A summary of stock option activity in fiscal 2023 follows: SCHEDULE OF STOCK OPTION ACTIVITY Weighted Average Remaining Aggregate Options Exercise Life in intrinsic Outstanding as of January 31, 2023 628,958 $ 1.95 7.31 $ 360,000 Granted — — Exercised — — Expired (39,250 ) 7.14 Forfeited (522,208 ) 1.55 Outstanding as of January 31, 2024 67,500 $ 1.73 2.37 $ — Exercisable as of January 31, 2024 67,500 $ 1.73 2.37 $ — Vested as of January 31, 2024 67,500 $ 1.73 2.37 $ — No options were granted in fiscal 2023 or fiscal 2022. At January 31, 2024, there was no 71,000 132,000 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 then-serving CEO, Wyche T. Green, III, was awarded 50,000 150,000 200,000 170,000 SCHEDULE OF RESTRICTED STOCK AWARD ACTIVITY Weighted Non-vested Average Number of Grant Date Shares Fair Value 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 Granted 1,488,621 1.57 Vested (982,631 ) 1.48 Forfeited (383,500 ) 1.67 Non-vested balance at January 31, 2024 1,970,521 $ 1.51 At January 31, 2024, there was $ 1,938,000 1.80 The expense associated with restricted stock awards for associates and directors was $ 1,590,000 983,000 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Jan. 31, 2024 | |
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. As of December 2023, all outstanding SOWs under both MSAs were effectively replaced by two new SOWs. As of the end of fiscal 2023, there were two active SOWs under the eValuator MSA, and no active SOWS under the Avelead MSA. One of the active 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 related SOWs may share workspace and administrative costs with 121G Consulting LLC (“121G”). 180 Consulting earned 564,707 shares for the year ended January 31, 2024 and has earned an aggregate of 1,479,911 shares through January 31, 2024. For services rendered by 180 Consulting, the Company recorded total cash fees of $ 2,580,000 and non-employee stock compensation of $ 582,000 for fiscal 2023 as compared to $ 1,281,000 and $ 640,000 . In addition, as of the date of this report, the Company has not issued to 180 Consulting an aggregate of 206,517 shares as compensation for services previously rendered during the three-months ended January 31, 2024. Such 564,707 shares will be issued in reliance on an exemption from registration available under Section 4(a)(2) of the Securities Act. 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 $ 563,000 301,000 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. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Jan. 31, 2024 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 13 - RELATED PARTY TRANSACTIONS Refer to Note 3 – Business Combination. The Company acquired Avelead on August 16, 2021. We assumed a lease for corporate office space from one of the selling shareholders of Avelead who was employed by the Company through August 2023. This lease term ended February 2022 but was renewed for a term of 12 months through February 2023. For the year ended January 31, 2024, the Company recorded rent expense of $ 6,000 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Jan. 31, 2024 | |
Subsequent Events | |
SUBSEQUENT EVENTS | NOTE 14 — SUBSEQUENT EVENTS Debt Private Placement On February 1, 2024, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with certain accredited investors, including certain directors and officers of the Company (collectively, the “Investors”), pursuant to which the Company agreed to sell to the Investors unsecured subordinated promissory notes (the “Notes”) in the aggregate principal amount of $ 4.4 4,052,631 In connection with the Debt Private Placement, the Investors and each of the Company’s directors and officers agreed, subject to certain exceptions set forth in the lock-up agreements, not to offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale or otherwise dispose of any shares of Common Stock, or any options or warrants to purchase any shares of Common Stock, or any securities convertible into, exchangeable for or that represent the right to receive shares of Common Stock, for a period commencing on the date of the lock-up agreement and ending 90 days from the Closing Date. Notes The Notes bear interest at a rate of 15 August 7, 2026 The rights of each Investor to receive payments under the Notes are subordinate to the rights of Western Alliance Bank (“WAB”), pursuant to a subordination agreement which the Investors entered into with WAB concurrently with the Debt Private Placement. Warrants The Warrants have an exercise price of $ 0.38 0.39 9.99 The Notes and the Warrants described above were offered in a private placement under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and/or Regulation D promulgated thereunder and, along with the Common Stock underlying the Warrants, have not been registered under the Securities Act or applicable state securities laws. Accordingly, the Notes, the Warrants and the Common Stock underlying the Warrants may not be offered or sold in the United States absent registration with the SEC or an applicable exemption from such registration requirements and in accordance with applicable state securities laws. The securities were offered and sold to “accredited investors” as that term is defined in Rule 501(a) under the Securities Act. Common Stock Private Placement On February 6, 2024, the Company completed the sale of 263,158 0.38 100,000 The common stock described above was offered in a private placement under Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder and has not been registered under the Securities Act or applicable state securities laws. Accordingly, such common stock may not be offered or sold in the United States absent registration with the SEC or an applicable exemption from such registration requirements and in accordance with applicable state securities laws. The Common Stock was offered and sold to an “accredited investor” as that term is defined in Rule 501(a) under the Securities Act. Loan Modification On February 7, 2024, the Company and certain of its subsidiaries entered into a Third Modification and Waiver (the “Third Modification”) to the Loan Agreement with Western Alliance Bank. The Third Modification waived the Company’s non-compliance with the Maximum Debt to ARR Ratio under the Loan Agreement and amended certain financial covenants as follows: a. Maximum ARR Net Leverage Ratio. SCHEDULE OF MAXIMUM ARR NET LEVERAGE RATIO Quarter Ending Maximum ARR Net Leverage Ratio April 30, 2024 0.50 1.00 July 31, 2024 0.45 1.00 October 31, 2024 0.40 1.00 January 31, 2025 0.35 1.00 c. Maximum Debt to Adjusted EBITDA Ratio. SCHEDULE OF MAXIMUM DEBT TO ADJUSTMENTS EBITDA RATIO Quarter Ending Maximum Debt to Adjusted EBITDA Ratio April 30, 2025 3.50 1.00 July 31, 2025 3.00 1.00 October 31, 2025 2.50 1.00 January 31, 2026 and on the last day of each quarter thereafter 2.00 1.00 d. Fixed Charge Coverage Ratio 1.20 1.00 e. Minimum Adjusted EBITDA. SCHEDULE OF MINIMUM ADJUSTED EBITDA Quarter Ending Minimum Adjusted EBITDA January 31, 2024 $ (5,750,000 ) April 30, 2024 $ (4,560,000 ) July 31, 2024 $ (2,960,000 ) October 31, 2024 $ (1,500,000 ) January 31, 2025 $ 430,000 |
Valuation and Qualifying Accoun
Valuation and Qualifying Accounts and Reserves | 12 Months Ended |
Jan. 31, 2024 | |
Valuation And Qualifying Accounts And Reserves | |
Valuation and Qualifying Accounts and Reserves | Schedule II Valuation and Qualifying Accounts and Reserves Streamline Health Solutions, Inc and Subsidiaries. For the two years ended January 31, 2024 (in thousands of dollars) Description Balance at Beginning of Period Charged to Costs and Expenses (1) Deductions – Other Accounts (2) Deductions Balance at End of Period Year ended January 31, 2024: Allowance for doubtful accounts $ 132 $ (10 ) $ (36 ) $ — $ 86 Year ended January 31, 2023: Allowance for doubtful accounts $ 76 $ 189 $ — $ (133 ) $ 132 (1) Adjustments to retained earnings for adoption of ASC 326-10, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (Refer to the subtopic of Accounting Pronouncements Recently Adopted in Note 2 – Significant Accounting Policies to our consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data” for more information.) (2) Uncollectible accounts written off, net of recoveries. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Jan. 31, 2024 | |
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. The Company has determined it has only one operating segment based on the guidance of ASC 280-10-50 For fiscal 2022, the Company had two reporting units for evaluation of goodwill: Streamline Solutions and Avelead Solutions. The Company determined that, effective January 1, 2023, it has one reporting unit for purposes of evaluation of goodwill, which was used for evaluation of goodwill for fiscal 2023. At the end of fiscal 2022, the Company consolidated and combined its operations for Streamline Solutions and Avelead Solutions. For total assets at January 31, 2024 and 2023 and total revenue and net loss for the fiscal years ended January 31, 2024 and 2023, see our consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data” herein. |
Going Concern | Going Concern The Company’s financial statements are prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of obligations in the normal course of business. In the Company’s Quarterly Report on Form 10-Q for the period ended October 31, 2023, the Company raised substantial doubt about its ability to continue as a going concern. It cited the “ability to achieve cash from operations and raise additional debt or equity capital to fund its ongoing operations” as requirements to mitigate the substantial doubt. As of this filing, the Company has been able to successfully implement a cost reduction plan, obtain additional capital, and restructure the covenants for its existing credit facility. Collectively, these initiatives alleviated the substantial doubt about the Company’s ability to continue as a going concern. Refer to the “Restructuring” subtopic of this Note 1 (Organization and Description of Business) and Note 14 – Subsequent Events to our consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data” for additional information. |
Reclassification | Reclassification Certain amounts for fiscal 2022 were reclassified to conform to the current period classification. The Company incurred certain acquisition-related costs related to the acquisition of Avelead totaling $ 149,000 |
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 credit losses, 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 2023 2022 Fiscal Year 2023 2022 Payment of acquisition earnout liabilities in restricted common stock — 3,012,000 Capitalized software purchased with stock ( See Note 12 140,000 81,000 Deferred financing costs 83,000 — |
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 credit losses. 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 Credit Losses | Allowance for Credit Losses The Company adjusts accounts receivable down to net realizable value. Effective February 1, 2023, the Company implemented ASC 326-10, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“CECL”). CECL provides the framework for the Company to evaluate its allowance for credit losses. In determining the allowance for credit losses, the Company established a historical credit loss rate adjusted for a premium, addressing any prospective changes to the risk of credit loss, that is applied against current sales. The Company evaluates individual receivables 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, significant judgement is required for the Company to determine the appropriate allowances for doubtful accounts for estimated losses resulting from the unwillingness of its clients or resellers to make required payments. The Company believes its reserve is adequate, however, results may differ in future periods. The following table summarizes the changes to the allowance account with the adoption of CECL: SCHEDULE OF RESERVE RESULTS IN FUTURE PERIODS January 31, 2023 CECL Adoption Provision adjustments Write-offs & Recoveries January 31, 2024 Allowance for credit losses $ 132,000 $ (36,000 ) $ (10,000 ) $ — $ 86,000 |
Accrued Expenses | Accrued Expenses Accrued expenses consisted of the following: SCHEDULE OF ACCRUED EXPENSES 2024 2023 January 31, 2024 2023 Employee benefits and related compensation $ 1,071,000 $ 2,079,000 Professional fees and services 389,000 294,000 Third party licenses 43,000 285,000 Customer concessions 233,000 226,000 State income and sales taxes payable 226,000 331,000 Interest, primarily on term loan 61,000 50,000 Total accrued expenses $ 2,023,000 $ 3,265,000 |
Concessions Accrual | Concessions Accrual The Company offers certain service level agreements within its client contracts such as uptime, support hours, and levels of support. Our contracts may include, and we may offer, credits to clients when these service line agreements are not met. The service level agreements are accounted for as variable consideration using a portfolio approach. 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 level agreements will not be met. The Company records a provision, reducing revenue, for the estimated amount of concessions incurred on the revenue recorded. The Company evaluates the amount of the concession accrual each period for adequacy. Historically, concessions have not been significant. The concession accrual included in accrued expenses on the Company’s consolidated balance sheet was $ 233,000 226,000 |
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 2023 and 2022 was $ 45,000 54,000 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. |
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 Second Amended and Restated Loan and Security Agreement (as amended and modified, the “Loan Agreement”) with Western Alliance Bank (“WAB”) was 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. For fiscal 2023, an impairment of long-lived assets in the amount of $963,000 was recorded. Refer to Note 6 – Goodwill and Intangible Assets to our consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data” for additional information. |
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 287,000 522,000 Internal-use software development costs are accounted for in accordance with ASC 350-40, Internal-Use Software 5,511,000 5,324,000 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 $ 2,463,000 and $ 2,423,000 in fiscal 2023 and 2022, respectively. Further, the Company recognized an impairment of approximately $ 18,000 and $ 0 in fiscal 2023 and fiscal 2022, respectively, related to cancelled or abandoned enhancement projects during fiscal 2023 and fiscal 2022 that have been recognized within amortization expense. Additionally, in fiscal 2023, entries of approximately $ 18,000 for fully amortized and abandoned assets were offset from their corresponding capitalization and accumulated amortization balance sheet accounts. 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 2023 2022 Fiscal Year 2023 2022 Amortization expense on internally-developed software included in: Cost of software as a service $ 2,229,000 $ 2,068,000 Cost of professional fees and licenses 234,000 355,000 Total amortization expense on internally-developed software $ 2,463,000 $ 2,423,000 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 $ 5,704,000 6,042,000 |
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 2023 and 2022, 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, 2024 Acquisition earnout liability (1) $ 1,794,000 $ — $ — $ 1,794,000 At January 31, 2023 Acquisition earnout liability (1) $ 3,738,000 $ — $ — $ 3,738,000 (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, 2024. The change in the fair value of the acquisition earnout liability decreased $ 1,944,000 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 Loan 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, 2024 and January 31, 2023. 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 8,807,000 9,550,000 193,000 200,000 1,463,000 37,000 |
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 transaction price is determined by summing all the consideration the Company expects to receive from the client under the contract. At times, a contract may have variable attributes (i.e., performance guarantees, service level agreements, optional terms) that the Company must consider when establishing the transaction price to mitigate significant revenue reversals for the contract. The determined transaction price is allocated based on the standalone selling price (“SSP”) of the performance obligations in contract. Significant judgment is required to determine the SSP for each performance obligation, inclusion of variable consideration, 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 that are recognized over time as the services are performed. 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 2023 2022 Fiscal Year 2023 2022 Over time revenue $ 22,358,000 $ 23,670,000 Point in time revenue 238,000 1,219,000 Total revenue $ 22,596,000 $ 24,889,000 The Company includes revenue categories of (i) over time and (ii) point in time revenue. The Company includes revenue categories of (i) SaaS, (ii) maintenance and support, (iii) professional services, and (iv) audit services as over time revenue. For point in time revenue, the performance obligation is recognized as the point in time when the obligation is fully satisfied. The Company includes software licenses as point in time revenue. 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, 2024, we recognized approximately $ 7,642,000 31,414,000 the Company expects to recognize approximately 46% 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, 2024, and 2023, we had deferred costs of $ 77,000 94,000 102,000 176,000 82,000 83,000 155,000 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 $ 1,461,000 1,534,000 588,000 411,000 35,000 no |
Concentrations | Concentrations Financial instruments, which potentially expose the Company to concentrations of credit risk, consist primarily of accounts receivable. The Company’s accounts receivables 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 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. 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. During the year ended January 31, 2023, the Company did not note any of the above qualitative factors, which would be considered a triggering event for goodwill impairment. During the year ended January 31, 2024, the Company identified one or more factors that triggered goodwill impairment as of October 31, 2023, as described below. In the third quarter of fiscal 2023, the Company received a notice from a significant SaaS client of its intent not to renew its contract following the expiration of the current term on December 31, 2023. At that time, the Company elected to accelerate the execution of the 2023 Restructuring that was designed to reduce costs while maintaining the Company’s ability to expand its SaaS business. Both the client termination and the execution of the Strategic Restructuring were announced on October 16, 2023. Following these announcements, the Company’s share price declined significantly. Based on these events (collectively, the “Triggering Events”), the Company identified indicators of possible impairment and initiated testing using a valuation date of October 31, 2023. The impairment tests were conducted under guidance of ASC Topic 360, Impairment and Disposal of Long-Lived Assets (“ASC 360”) for certain long-lived assets, including capitalized contract costs, developed technology, client relationships and trade names, and in accordance with ASC Topic 350, Intangibles – Goodwill and Other (“ASC 350”) with respect to the reporting unit’s goodwill. 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 for fiscal 2023 it has one operating segment and one reporting unit, while for fiscal 2022 it had one operating segment and two reporting units. The Company estimates the fair value of its reporting unit using a combination of the market approach and 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 goodwill assessment for fiscal 2023 as of October 31, 2023 using the approaches described above. The assessment identified a goodwill impairment of $9,813,000 that was recorded. Based on the analysis performed for fiscal 2022, 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. Refer to Note 6 – Goodwill and Intangible Assets to our consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data” for additional information. |
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 $ 2,102,000 140,000 1,680,000 81,000 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 2023 and 2022, 190,950 127,429 280,000 197,000 1,203,621 890,731 |
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. Refer to Note 7 – Income Taxes to our consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data” 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, 2024, 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 2023 2022 Fiscal Year 2023 2022 Basic earnings (loss) per share: Loss, net of tax $ (18,697,000 ) $ (11,379,000 ) Basic net loss per share of common stock $ (0.33 ) $ (0.23 ) Diluted earnings (loss) per share (1): Loss available to common stockholders $ (18,697,000 ) $ (11,379,000 ) Diluted net loss per share of common stock $ (0.33 ) $ (0.23 ) Net loss $ (18,697,000 ) $ (11,379,000 ) Weighted average shares outstanding – Basic (1) (1) 56,510,419 49,324,858 Effect of dilutive securities - Stock options and Restricted stock (2) (2) — — Weighted average shares outstanding – Diluted 56,510,419 49,324,858 Basic and diluted net loss per share of common stock $ (0.33 ) $ (0.23 ) (1) Excludes the effect of unvested restricted shares of common stock, which are considered non-participating securities. As of January 31, 2024 and 2023, there were 1,970,521 1,848,031 (2) Diluted net loss per share excludes the effect of shares that are anti-dilutive. As of January 31, 2024, there were 67,500 1,970,521 628,598 1,848,031 |
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. |
Restructuring | Restructuring On October 16, 2023, the Company announced it was executing a Strategic Restructuring designed to reduce expenses while maintaining the Company’s ability to expand its SaaS business. The Strategic Restructuring initiatives included a reduction in force, resulting in the termination of 26 24 759,000 SCHEDULE OF RECONCILIATION OF THE RESTRUCTURING LIABILITY (in thousands) Accrued Accrued As of January 31, 2024 Balance as of January 31, 2023 2023 Expenses to Date 2023 Cash Payments Balance as of January 31, 2024 Total Costs Incurred to Date Total Expected Costs Severance expense Cost of sales $ — $ 154 $ 154 $ — $ 154 $ 154 Selling, general, and administrative — 350 276 74 350 350 Research and development — 227 227 — 227 227 Total severance expense $ — $ 731 $ 657 $ 74 $ 731 $ 731 Professional fees — 28 28 — 28 $ 28 Total $ — $ 759 $ 685 $ 74 $ 759 759 |
Accounting Pronouncements Recently Adopted | Accounting Pronouncements Recently 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 was effective February 1, 2023. An analysis of contract receivables, including credit losses, was conducted during the first quarter of fiscal 2024. The adoption of this ASU did not have a material impact on our consolidated financial statements or disclosures. |
Recent Accounting Pronouncements Not Yet Adopted | Recent Accounting Pronouncements Not Yet Adopted In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which improves guidance around the disclosures about a public entity’s reportable segments and additional details about a reportable segment’s expenses. ASU 2023-07 is effective for all public entities for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company’s adoption of ASU 2023-07 will be effective in the annual report for the fiscal year ending January 31, 2025. The adoption of this ASU is not expected to have a material impact on our consolidated financial statements or disclosures. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which enhance the transparency and decision usefulness of income tax disclosures. For public entities, ASU 2023-09 is effective for annual periods beginning after December 15, 2024. The adoption of this ASU is not expected to have a material impact on our consolidated financial statements or disclosures. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Jan. 31, 2024 | |
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 2023 2022 Fiscal Year 2023 2022 Payment of acquisition earnout liabilities in restricted common stock — 3,012,000 Capitalized software purchased with stock ( See Note 12 140,000 81,000 Deferred financing costs 83,000 — |
SCHEDULE OF RESERVE RESULTS IN FUTURE PERIODS | SCHEDULE OF RESERVE RESULTS IN FUTURE PERIODS January 31, 2023 CECL Adoption Provision adjustments Write-offs & Recoveries January 31, 2024 Allowance for credit losses $ 132,000 $ (36,000 ) $ (10,000 ) $ — $ 86,000 |
SCHEDULE OF ACCRUED EXPENSES | SCHEDULE OF ACCRUED EXPENSES 2024 2023 January 31, 2024 2023 Employee benefits and related compensation $ 1,071,000 $ 2,079,000 Professional fees and services 389,000 294,000 Third party licenses 43,000 285,000 Customer concessions 233,000 226,000 State income and sales taxes payable 226,000 331,000 Interest, primarily on term loan 61,000 50,000 Total accrued expenses $ 2,023,000 $ 3,265,000 |
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 2023 2022 Fiscal Year 2023 2022 Amortization expense on internally-developed software included in: Cost of software as a service $ 2,229,000 $ 2,068,000 Cost of professional fees and licenses 234,000 355,000 Total amortization expense on internally-developed software $ 2,463,000 $ 2,423,000 |
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, 2024 Acquisition earnout liability (1) $ 1,794,000 $ — $ — $ 1,794,000 At January 31, 2023 Acquisition earnout liability (1) $ 3,738,000 $ — $ — $ 3,738,000 (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, 2024. The change in the fair value of the acquisition earnout liability decreased $ 1,944,000 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 2023 2022 Fiscal Year 2023 2022 Over time revenue $ 22,358,000 $ 23,670,000 Point in time revenue 238,000 1,219,000 Total revenue $ 22,596,000 $ 24,889,000 |
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 2023 2022 Fiscal Year 2023 2022 Basic earnings (loss) per share: Loss, net of tax $ (18,697,000 ) $ (11,379,000 ) Basic net loss per share of common stock $ (0.33 ) $ (0.23 ) Diluted earnings (loss) per share (1): Loss available to common stockholders $ (18,697,000 ) $ (11,379,000 ) Diluted net loss per share of common stock $ (0.33 ) $ (0.23 ) Net loss $ (18,697,000 ) $ (11,379,000 ) Weighted average shares outstanding – Basic (1) (1) 56,510,419 49,324,858 Effect of dilutive securities - Stock options and Restricted stock (2) (2) — — Weighted average shares outstanding – Diluted 56,510,419 49,324,858 Basic and diluted net loss per share of common stock $ (0.33 ) $ (0.23 ) (1) Excludes the effect of unvested restricted shares of common stock, which are considered non-participating securities. As of January 31, 2024 and 2023, there were 1,970,521 1,848,031 (2) Diluted net loss per share excludes the effect of shares that are anti-dilutive. As of January 31, 2024, there were 67,500 1,970,521 628,598 1,848,031 |
SCHEDULE OF RECONCILIATION OF THE RESTRUCTURING LIABILITY | SCHEDULE OF RECONCILIATION OF THE RESTRUCTURING LIABILITY (in thousands) Accrued Accrued As of January 31, 2024 Balance as of January 31, 2023 2023 Expenses to Date 2023 Cash Payments Balance as of January 31, 2024 Total Costs Incurred to Date Total Expected Costs Severance expense Cost of sales $ — $ 154 $ 154 $ — $ 154 $ 154 Selling, general, and administrative — 350 276 74 350 350 Research and development — 227 227 — 227 227 Total severance expense $ — $ 731 $ 657 $ 74 $ 731 $ 731 Professional fees — 28 28 — 28 $ 28 Total $ — $ 759 $ 685 $ 74 $ 759 759 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Jan. 31, 2024 | |
Debt Disclosure [Abstract] | |
SCHEDULE OF OUTSTANDING PRINCIPAL BALANCES | Outstanding principal balances on debt consisted of the following at: SCHEDULE OF OUTSTANDING PRINCIPAL BALANCES January 31, 2024 January 31, 2023 Term loan $ 9,000,000 $ 9,750,000 Financing cost payable 135,000 69,000 Less: Deferred financing cost (69,000 ) (105,000 ) Total 9,066,000 9,714,000 Less: Current portion (1,500,000 ) (750,000 ) Non-current portion of debt $ 7,566,000 $ 8,964,000 |
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, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
SCHEDULE OF CARRYING AMOUNT OF GOODWILL | The changes in the carrying amount of goodwill were as follows: SCHEDULE OF CARRYING AMOUNT OF GOODWILL Balance Balance as of January 31, 2023 $ 23,089,000 Impairment (9,813,000 ) Balance as of January 31, 2024 $ 13,276,000 |
SCHEDULE OF FINITE-LIVED INTANGIBLE ASSETS | Intangible assets consist of the following: SCHEDULE OF FINITE-LIVED INTANGIBLE ASSETS January 31, 2024 Estimated Useful Life Gross Assets Accumulated Amortization Net Assets Finite-lived assets: Client relationships 10 $ 8,370,000 $ 2,058,000 $ 6,312,000 Internally developed software 9 6,380,000 1,742,000 $ 4,638,000 Trademarks and tradenames 15 1,340,000 219,000 $ 1,121,000 Total $ 16,090,000 $ 4,019,000 $ 12,071,000 January 31, 2023 Estimated Gross Accumulated Useful Life 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 |
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 2024 $ 1,635,000 2025 1,635,000 2026 1,635,000 2027 1,635,000 2028 1,635,000 Thereafter 3,896,000 Total $ 12,071,000 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Jan. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
SCHEDULE OF INCOME TAXES FOR CONTINUING OPERATION | For fiscal 2023 and 2022, income taxes consist of the following: SCHEDULE OF INCOME TAXES FOR CONTINUING OPERATION 2023 2022 Fiscal Year 2023 2022 Current tax expense: Federal $ — $ — State (58,000 ) (62,000 ) Total current tax benefit (expense) $ (58,000 ) $ (62,000 ) Deferred tax expense: Federal $ 86,000 $ (6,000 ) State 18,000 (3,000 ) Total deferred tax benefit (expense) $ 104,000 $ (9,000 ) Income tax benefit (expense) $ 46,000 $ (71,000 ) |
SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION | SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION 2023 2022 Fiscal Year 2023 2022 Federal tax benefit at statutory rate $ 3,887,000 $ 2,348,000 State and local tax expense, net of federal (28,000 ) (52,000 ) Increase in valuation allowance (3,994,000 ) (2,128,000 ) Permanent items: Other (36,000 ) (20,000 ) Reserve for uncertain tax position (7,000 ) (18,000 ) Federal research and development (R&D) tax credit 33,000 91,000 Stock-based compensation 135,000 (289,000 ) Other 56,000 (3,000 ) Income tax benefit (expense) $ 46,000 $ (71,000 ) |
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 2024 2023 January 31, 2024 2023 Deferred tax assets: Allowance for credit losses $ 26,000 $ 39,000 Deferred revenue 209,000 122,000 Accruals 67,000 232,000 Net operating loss carryforwards 15,748,000 11,242,000 Stock-based compensation 427,000 342,000 Finite-lived intangible assets 1,739,000 1,344,000 R&D tax credit 1,434,000 1,407,000 Other 1,000 2,000 Total deferred tax assets 19,651,000 14,730,000 Valuation allowance (19,646,000 ) (14,347,000 ) Net deferred tax assets 5,000 383,000 Deferred tax liabilities: Property and equipment (5,000 ) (5,000 ) Finite-lived intangible liabilities — (482,000 ) Total deferred tax liabilities (5,000 ) (487,000 ) Net deferred tax liabilities $ — $ (104,000 ) |
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 2023 2022 Beginning of fiscal year $ 333,000 $ 315,000 Additions for tax positions for the current year 9,000 11,000 Additions for tax positions of prior years — 7,000 Subtractions for tax positions of prior years (2,000 ) — End of fiscal year $ 340,000 $ 333,000 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Jan. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
SCHEDULE OF STOCK OPTION ACTIVITY | A summary of stock option activity in fiscal 2023 follows: SCHEDULE OF STOCK OPTION ACTIVITY Weighted Average Remaining Aggregate Options Exercise Life in intrinsic Outstanding as of January 31, 2023 628,958 $ 1.95 7.31 $ 360,000 Granted — — Exercised — — Expired (39,250 ) 7.14 Forfeited (522,208 ) 1.55 Outstanding as of January 31, 2024 67,500 $ 1.73 2.37 $ — Exercisable as of January 31, 2024 67,500 $ 1.73 2.37 $ — Vested as of January 31, 2024 67,500 $ 1.73 2.37 $ — |
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, 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 Granted 1,488,621 1.57 Vested (982,631 ) 1.48 Forfeited (383,500 ) 1.67 Non-vested balance at January 31, 2024 1,970,521 $ 1.51 |
SUBSEQUENT EVENTS (Tables)
SUBSEQUENT EVENTS (Tables) | 12 Months Ended |
Jan. 31, 2024 | |
Subsequent Events | |
SCHEDULE OF MAXIMUM ARR NET LEVERAGE RATIO | SCHEDULE OF MAXIMUM ARR NET LEVERAGE RATIO Quarter Ending Maximum ARR Net Leverage Ratio April 30, 2024 0.50 1.00 July 31, 2024 0.45 1.00 October 31, 2024 0.40 1.00 January 31, 2025 0.35 1.00 |
SCHEDULE OF MAXIMUM DEBT TO ADJUSTMENTS EBITDA RATIO | SCHEDULE OF MAXIMUM DEBT TO ADJUSTMENTS EBITDA RATIO Quarter Ending Maximum Debt to Adjusted EBITDA Ratio April 30, 2025 3.50 1.00 July 31, 2025 3.00 1.00 October 31, 2025 2.50 1.00 January 31, 2026 and on the last day of each quarter thereafter 2.00 1.00 |
SCHEDULE OF MINIMUM ADJUSTED EBITDA | SCHEDULE OF MINIMUM ADJUSTED EBITDA Quarter Ending Minimum Adjusted EBITDA January 31, 2024 $ (5,750,000 ) April 30, 2024 $ (4,560,000 ) July 31, 2024 $ (2,960,000 ) October 31, 2024 $ (1,500,000 ) January 31, 2025 $ 430,000 |
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, 2024 | Jan. 31, 2023 | |
Accounting Policies [Abstract] | ||
Payment of acquisition earnout liabilities in restricted common stock | $ 3,012,000 | |
Capitalized software purchased with stock (See Note 12) | 140,000 | 81,000 |
Deferred financing costs | $ 83,000 |
SCHEDULE OF RESERVE RESULTS IN
SCHEDULE OF RESERVE RESULTS IN FUTURE PERIODS (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2024 | Jan. 31, 2023 | |
Accounting Policies [Abstract] | ||
Allowance for credit losses, Balance | $ 132,000 | $ 76,000 |
Allowance for credit losses, CECL Adoption | (36,000) | |
Allowance for credit losses, Provision adjustments | (10,000) | 189,000 |
Allowance for credit losses, Write-offs & Recoveries | ||
Allowance for credit losses, Balance | $ 86,000 | $ 132,000 |
SCHEDULE OF ACCRUED EXPENSES (D
SCHEDULE OF ACCRUED EXPENSES (Details) - USD ($) | Jan. 31, 2024 | Jan. 31, 2023 |
Accounting Policies [Abstract] | ||
Employee benefits and related compensation | $ 1,071,000 | $ 2,079,000 |
Professional fees and services | 389,000 | 294,000 |
Third party licenses | 43,000 | 285,000 |
Customer concessions | 233,000 | 226,000 |
State income and sales taxes payable | 226,000 | 331,000 |
Interest, primarily on term loan | 61,000 | 50,000 |
Total accrued expenses | $ 2,023,000 | $ 3,265,000 |
SCHEDULE OF ESTIMATED USEFUL LI
SCHEDULE OF ESTIMATED USEFUL LIFE OF PROPERTY AND EQUIPMENT (Details) | Jan. 31, 2024 |
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, Plant, and Equipment, Useful Life, Term, Description [Extensible Enumeration] | us-gaap:UsefulLifeShorterOfTermOfLeaseOrAssetUtilityMember |
SCHEDULE OF AMORTIZATION EXPENS
SCHEDULE OF AMORTIZATION EXPENSE FOR INTERNALLY DEVELOPED SOFTWARE (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2024 | Jan. 31, 2023 | |
Property, Plant and Equipment [Line Items] | ||
Total amortization expense on internally-developed software | $ 2,463,000 | $ 2,423,000 |
Cost Of Software As A Sevice [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total amortization expense on internally-developed software | 2,229,000 | 2,068,000 |
Cost Of Professional Fees And Licenses [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total amortization expense on internally-developed software | $ 234,000 | $ 355,000 |
SCHEDULE OF FAIR VALUE ASSETS A
SCHEDULE OF FAIR VALUE ASSETS AND LIABILITIES MEASURED ON RECURRING BASIS (Details) - USD ($) | Jan. 31, 2024 | Jan. 31, 2023 | |
Platform Operator, Crypto Asset [Line Items] | |||
Acquisition earn out liability fair value, observable inputs | [1] | $ 1,794,000 | $ 3,738,000 |
Fair Value, Inputs, Level 1 [Member] | |||
Platform Operator, Crypto Asset [Line Items] | |||
Acquisition earn out liability fair value, observable inputs | [1] | ||
Fair Value, Inputs, Level 2 [Member] | |||
Platform Operator, Crypto Asset [Line Items] | |||
Acquisition earn out liability fair value, observable inputs | [1] | ||
Fair Value, Inputs, Level 3 [Member] | |||
Platform Operator, Crypto Asset [Line Items] | |||
Acquisition earn out liability fair value, observable inputs | [1] | $ 1,794,000 | $ 3,738,000 |
[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, 2024. The change in the fair value of the acquisition earnout liability decreased $ 1,944,000 |
SCHEDULE OF FAIR VALUE ASSETS_2
SCHEDULE OF FAIR VALUE ASSETS AND LIABILITIES MEASURED ON RECURRING BASIS (Details) (Parenthetical) | 12 Months Ended |
Jan. 31, 2024 USD ($) | |
Accounting Policies [Abstract] | |
Acquisition earnout liability, change in valuation | $ 1,944,000 |
SCHEDULE OF DISAGGREGATON OF RE
SCHEDULE OF DISAGGREGATON OF REVENUE (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2024 | Jan. 31, 2023 | |
Total revenue | $ 22,596,000 | $ 24,889,000 |
Transferred over Time [Member] | ||
Total revenue | 22,358,000 | 23,670,000 |
Transferred at Point in Time [Member] | ||
Total revenue | $ 238,000 | $ 1,219,000 |
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, 2024 | Dec. 31, 2023 | Jan. 31, 2023 | Dec. 31, 2022 | ||
Accounting Policies [Abstract] | |||||
Loss, net of tax | $ (18,697,000) | $ (11,379,000) | |||
Basic net loss per share of common stock | $ (0.33) | $ (0.23) | |||
Loss available to common stockholders | $ (18,697,000) | $ (11,379,000) | |||
Diluted net loss per share of common stock | $ (0.33) | $ (0.23) | |||
Net loss | $ (18,697,000) | $ (11,379,000) | |||
Weighted average shares outstanding – Basic (1) | [1] | 56,510,419 | 49,324,858 | ||
Effect of dilutive securities - Stock options and Restricted stock (2) | [2] | ||||
Weighted average shares outstanding – Diluted | 56,510,419 | 49,324,858 | |||
Basic and diluted net loss per share of common stock | $ (0.33) | $ (0.33) | $ (0.23) | $ (0.23) | |
Earnings Per Share, Diluted | $ (0.33) | $ (0.33) | $ (0.23) | $ (0.23) | |
[1]Excludes the effect of unvested restricted shares of common stock, which are considered non-participating securities. As of January 31, 2024 and 2023, there were 1,970,521 1,848,031 67,500 1,970,521 628,598 1,848,031 |
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, 2024 | Jan. 31, 2023 | |
Unvested Restricted Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Diluted earnings per share | 1,970,521 | 1,848,031 |
Share-Based Payment Arrangement, Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Diluted earnings per share | 67,500 | 628,598 |
Unvested Restricted Shares [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Diluted earnings per share | 1,970,521 |
SCHEDULE OF RECONCILIATION OF T
SCHEDULE OF RECONCILIATION OF THE RESTRUCTURING LIABILITY (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2024 | Jan. 31, 2023 | |
Accrued Balance as of January 31, 2023 | $ 3,265,000 | |
2023 Expenses to Date | (1,277,000) | $ 1,069,000 |
Accrued Balance as of October 31, 2023 | 2,023,000 | 3,265,000 |
Cost of Sales [Member] | ||
Accrued Balance as of January 31, 2023 | ||
2023 Expenses to Date | 154,000 | |
2023 Cash Payments | 154,000 | |
Accrued Balance as of October 31, 2023 | ||
Total Costs Incurred to Date | 154,000 | |
Total Expected Costs | 154,000 | |
Selling, General and Administrative Expenses [Member] | ||
Accrued Balance as of January 31, 2023 | ||
2023 Expenses to Date | 350,000 | |
2023 Cash Payments | 276,000 | |
Accrued Balance as of October 31, 2023 | 74,000 | |
Total Costs Incurred to Date | 350,000 | |
Total Expected Costs | 350,000 | |
Research and Development Expense [Member] | ||
Accrued Balance as of January 31, 2023 | ||
2023 Expenses to Date | 227,000 | |
2023 Cash Payments | 227,000 | |
Accrued Balance as of October 31, 2023 | ||
Total Costs Incurred to Date | 227,000 | |
Total Expected Costs | 227,000 | |
Severance Expenses [Member] | ||
Accrued Balance as of January 31, 2023 | ||
2023 Expenses to Date | 731,000 | |
2023 Cash Payments | 657,000 | |
Accrued Balance as of October 31, 2023 | 74,000 | |
Total Costs Incurred to Date | 731,000 | |
Total Expected Costs | 731,000 | |
Professional Fees [Member] | ||
Accrued Balance as of January 31, 2023 | ||
2023 Expenses to Date | 28,000 | |
2023 Cash Payments | 28,000 | |
Accrued Balance as of October 31, 2023 | ||
Total Costs Incurred to Date | 28,000 | |
Total Expected Costs | 28,000 | |
Accrued Expenses [Member] | ||
Accrued Balance as of January 31, 2023 | ||
2023 Expenses to Date | 759,000 | |
2023 Cash Payments | 685,000 | |
Accrued Balance as of October 31, 2023 | 74,000 | |
Total Costs Incurred to Date | 759,000 | |
Total Expected Costs | $ 759,000 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | 12 Months Ended | ||
Oct. 16, 2023 USD ($) Integer | Jan. 31, 2024 USD ($) shares | Jan. 31, 2023 USD ($) shares | |
Property, Plant and Equipment [Line Items] | |||
Acquisition related costs | $ 149,000 | ||
Concession accrual amount | 233,000 | $ 226,000 | |
Depreciation expense | 45,000 | 54,000 | |
Capitalized software development costs, net of accumulated amortization | 7,960,000 | 6,224,000 | |
Capitalized Computer Software, Amortization | 2,463,000 | 2,423,000 | |
Asset Impairment Charges | 18,000 | 0 | |
Amortized and abandoned assets | 18,000 | ||
Research and development expense | $ 5,704,000 | 6,042,000 | |
Interest rate | 1.50% | ||
Debt instrument carrying amount | $ 9,000,000 | 9,750,000 | |
Deferred revenue | 7,642,000 | ||
Revenue remaining performance obligation | $ 31,414,000 | ||
Revenue, remaining performance obligation, expected timing of satisfaction, explanation | the Company expects to recognize approximately 46% over the next 12 months and the remainder thereafter. | ||
Deferred costs, net | $ 77,000 | 94,000 | |
Accumulated amortization of deferred costs | 102,000 | 176,000 | |
Deferred costs, amortization expense | 82,000 | 83,000 | |
Amortized contracts | 155,000 | ||
Impairment loss | 35,000 | 0 | |
Compensation expense related to stock-based award | 2,102,000 | 1,680,000 | |
Cost of shares for tax withholding | $ 280,000 | $ 197,000 | |
Number of employees terminated | Integer | 26 | ||
Percentage of workforce terminated | 24% | ||
Restructuring costs | $ 759,000 | ||
Officers and Directors [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Number shares of restricted stock | shares | 1,203,621 | 890,731 | |
Common Stock [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Surrender of stock, shares | shares | 190,950 | 127,429 | |
Number shares of restricted stock | shares | 1,947,738 | 1,876,962 | |
Equity Award [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Compensation expense related to stock-based award | $ 2,102,000 | $ 1,680,000 | |
Equity Award [Member] | Share-Based Payment Arrangement, Nonemployee [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Compensation expense related to stock-based award | 140,000 | 81,000 | |
Restricted Stock [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost of shares for tax withholding | $ 280,000 | 197,000 | |
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 | $ 588,000 | 411,000 | |
Other Noncurrent Assets [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Deferred commissions costs paid and payable | $ 1,461,000 | 1,534,000 | |
Security Agreement [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Interest rate | 1.50% | ||
Prime interest rate percentage | 3.25% | ||
Second Amended and Restated Loan and Security Agreement [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Interest rate | 0.50% | ||
Debt Agreement [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Debt instrument carrying amount | $ 8,807,000 | 9,550,000 | |
Term loan | 193,000 | 200,000 | |
Debt Agreement [Member] | Fair Value, Inputs, Level 2 [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Debt instrument carrying amount | 1,463,000 | ||
Term loan | 37,000 | ||
Software [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Capitalized software development costs, net of accumulated amortization | 287,000 | 522,000 | |
Internal-Use Software [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Capitalized software development costs, net of accumulated amortization | 5,511,000 | 5,324,000 | |
Software and Software Development Costs [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Capitalized Computer Software, Amortization | $ 2,463,000 | $ 2,423,000 |
BUSINESS COMBINATION (Details N
BUSINESS COMBINATION (Details Narrative) - USD ($) | 12 Months Ended | |||||
Mar. 27, 2024 | Sep. 01, 2023 | Nov. 21, 2022 | Aug. 16, 2021 | Jan. 31, 2024 | Jan. 31, 2023 | |
Business Acquisition [Line Items] | ||||||
Common stock par or stated value per share | $ 0.01 | $ 0.01 | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross | ||||||
Unit Purchase Agreement [Member] | First Year Earnout [Member] | Renewal Contingent Consideration [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Sale of stock number of shares issued in transaction | 627,746 | |||||
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 | 10,700,000 | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross | 150,000 | |||||
Avelead Consulting LLC [Member] | Second Year Earnout [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Business Combination, Contingent Consideration, Liability | $ 1,550,000 | |||||
Business acquisition, equity interest issued or issuable, number of shares | 961,640 | |||||
Sale of stock number of shares issued in transaction | 627,746 | |||||
Sale of stock | $ 244,000 | |||||
Payments to Acquire Businesses, Gross | $ 1,214,000 | |||||
Avelead Consulting LLC [Member] | Second Year Earnout [Member] | Subsequent Event [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Business acquisition, equity interest issued or issuable, number of shares | 961,640 | |||||
Sale of stock number of shares issued in transaction | 627,746 | |||||
Avelead Consulting LLC [Member] | Unit Purchase Agreement [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Business combination, cash payments | 11,900,000 | |||||
[custom:PaymentsToAcquireBusinessesSellerExpenses] | 285,000 | |||||
[custom:PaymentsToAcquireBusinessesEstimatedWorkingCapitalAdjustment] | $ 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 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 was 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. The first year SaaS Contingent Consideration was paid on November 21, 2022, as discussed in more detail below. | |||||
Second year payment of SaaS contingent consideration, description | The second year SaaS Contingent Consideration was calculated as 40% of Avelead’s recognized SaaS revenue from September 1, 2022 to August 31, 2023. Assuming that Avelead was 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 had a floor of $4.50 per share and a ceiling of $6.50 per share for the second year earnout. The second year SaaS Contingent Consideration remained outstanding as of January 31, 2024, as the Company and the Sellers work towards a resolution regarding the payment of the second year SaaS Contingent Consideration. | |||||
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 was tied directly to a successful renewal of a specific client of Avelead. To meet the definition of a renewal, Avelead was required to achieve a minimum threshold of contracted revenue in an updated, annual, renewed contract with the specified client. The renewal occurred on or about June 1, 2022 and June 1, 2023. The Renewal Contingent Consideration was payable in shares of Company restricted common stock valued as of the date of closing. 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 issued 627,746 shares of restricted common stock to the Sellers in connection with the first year Renewal Contingent Consideration. The second year Renewal Contingent Consideration remained outstanding as of January 31, 2024, as the Company and the Sellers work towards a resolution regarding the payment of the second year Renewal Contingent Consideration. | |||||
Avelead Consulting LLC [Member] | Unit Purchase Agreement [Member] | Renewal Contingent Consideration [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Sale of stock | $ 1,000,000 | |||||
Avelead Consulting LLC [Member] | Unit Purchase Agreement [Member] | First Year Earnout [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Business combination, cash payments | $ 2,012,000 | |||||
Business acquisition, equity interest issued or issuable, number of shares | 1,243,292 | |||||
Common stock par or stated value per share | $ 0.01 | |||||
Sale of stock | $ 4,000,000 | |||||
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 | |||||
Business acquisition equity fair value | $ 6,500,000 | |||||
Business combination description | Additionally, the Transaction included 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 had 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] | ||||||
Business acquisition equity fair value | $ 6,500,000 |
OPERATING LEASES (Details Narra
OPERATING LEASES (Details Narrative) - USD ($) | 12 Months Ended | |||||
Oct. 02, 2021 | Aug. 16, 2021 | Jan. 31, 2024 | Jan. 31, 2023 | Feb. 28, 2023 | Oct. 31, 2021 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Related to space rental | $ 30,000 | |||||
Operating Lease, Right-of-Use Asset | $ 32,000 | $ 540,000 | ||||
Operating Lease, Liability, Current | $ 35,000 | |||||
Lessee, Operating Lease, Discount Rate | 6.50% | |||||
Operating Lease, Cost | 32,000 | $ 194,000 | ||||
Payments for rent | 6,000 | |||||
Alpharetta Office Lease [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Operating lease, payments | 36,000 | $ 210,000 | ||||
Sublease Agreement [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Sublease, term | 18 months | |||||
Sublease income | $ 292,000 | |||||
Other income related to sublease | 33,000 | |||||
Suwanee Office Lease [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Operating lease, payments | 5,999 | |||||
Lease expiration date | Feb. 28, 2022 | |||||
Payments for rent | $ 6,000 | |||||
Operating lease | $ 71,984 |
SCHEDULE OF OUTSTANDING PRINCIP
SCHEDULE OF OUTSTANDING PRINCIPAL BALANCES (Details) - USD ($) | Jan. 31, 2024 | Jan. 31, 2023 |
Debt Disclosure [Abstract] | ||
Term loan | $ 9,000,000 | $ 9,750,000 |
Financing cost payable | 135,000 | 69,000 |
Less: Deferred financing cost | (69,000) | (105,000) |
Total | 9,066,000 | 9,714,000 |
Less: Current portion | (1,500,000) | (750,000) |
Non-current portion of debt | $ 7,566,000 | $ 8,964,000 |
SCHEDULE OF MAXIMUM DEBT TO ARR
SCHEDULE OF MAXIMUM DEBT TO ARR RATIO (Details) | Jan. 31, 2024 |
October 31, 2022 [Member] | Minimum [Member] | |
Debt Instrument [Line Items] | |
Maximum Debt to ARR Ratio | 0.80% |
October 31, 2022 [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 30, 2023 [Member] | Minimum [Member] | |
Debt Instrument [Line Items] | |
Maximum Debt to ARR Ratio | 0.65% |
April 30, 2023 [Member] | Maximum [Member] | |
Debt Instrument [Line Items] | |
Maximum Debt to ARR Ratio | 1% |
July 31, 2023 [Member] | Minimum [Member] | |
Debt Instrument [Line Items] | |
Maximum Debt to ARR Ratio | 0.60% |
July 31, 2023 [Member] | Maximum [Member] | |
Debt Instrument [Line Items] | |
Maximum Debt to ARR Ratio | 1% |
October 31, 2023 [Member] | Minimum [Member] | |
Debt Instrument [Line Items] | |
Maximum Debt to ARR Ratio | 0.55% |
October 31, 2023 [Member] | Maximum [Member] | |
Debt Instrument [Line Items] | |
Maximum Debt to ARR Ratio | 1% |
January 31, 2024 [Member] | Minimum [Member] | |
Debt Instrument [Line Items] | |
Maximum Debt to ARR Ratio | 0.50% |
January 31, 2024 [Member] | Maximum [Member] | |
Debt Instrument [Line Items] | |
Maximum Debt to ARR Ratio | 1% |
SCHEDULE OF MAXIMUM DEBT TO ADJ
SCHEDULE OF MAXIMUM DEBT TO ADJUSTED EBITDA RATIO (Details) | Jan. 31, 2024 |
April 30, 2024 [Member] | Maximum [Member] | |
Debt Instrument [Line Items] | |
Maximum Debt to Adjusted EBITDA Ratio | 3.50% |
April 30, 2024 [Member] | Minimum [Member] | |
Debt Instrument [Line Items] | |
Maximum Debt to Adjusted EBITDA Ratio | 1% |
July 31, 2024 and Thereafter [Member] | Maximum [Member] | |
Debt Instrument [Line Items] | |
Maximum Debt to Adjusted EBITDA Ratio | 2% |
July 31, 2024 and Thereafter [Member] | Minimum [Member] | |
Debt Instrument [Line Items] | |
Maximum Debt to Adjusted EBITDA Ratio | 1% |
DEBT (Details Narrative)
DEBT (Details Narrative) - USD ($) | Nov. 29, 2022 | Aug. 26, 2021 | Jan. 31, 2024 | Jan. 31, 2023 |
Debt Instrument [Line Items] | ||||
Debt instrument, interest rate, stated percentage | 1.50% | |||
Line of credit | $ 1,500,000 | |||
Prime Rate [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, interest rate, effective percentage | 1.50% | |||
Base Rate [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, interest rate, stated percentage | 3.25% | |||
Loan 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 | ||
Loan Agreement [Member] | Western Alliance 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 | |||
Security Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, interest rate, stated percentage | 1.50% | |||
Security Agreement [Member] | Bridge Bank [Member] | ||||
Debt Instrument [Line Items] | ||||
Long term debt, maturity, year five | $ 3,000,000 | |||
Second Modification Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | 2,000,000 | |||
Deferred offering costs | 20,000 | |||
Amortization of debt issuance costs | 50,000 | |||
Accretion expense | $ 250,000 | |||
Line of credit facility, matures | Aug. 26, 2026 | |||
Debt financial covenants, description | Borrowers shall, at all times, maintain unrestricted cash in an amount not less than Two Million Dollars ($2,000,000). | |||
Second Modification Agreement [Member] | Prime Rate [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, interest rate, effective percentage | 1.50% | |||
Second Modification Agreement [Member] | Base Rate [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, interest rate, effective percentage | 3.25% | |||
Second Amended And Restated Loan Agreement [Member] | Maximum [Member] | ||||
Debt Instrument [Line Items] | ||||
Fixed charge coverage ratio | 1.20% | |||
Second Amended And Restated Loan Agreement [Member] | Minimum [Member] | ||||
Debt Instrument [Line Items] | ||||
Fixed charge coverage ratio | 1% |
SCHEDULE OF CARRYING AMOUNT OF
SCHEDULE OF CARRYING AMOUNT OF GOODWILL (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2024 | Jan. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Beginning Balance | $ 23,089,000 | |
Impairment | (9,813,000) | |
Ending Balance | $ 13,276,000 | $ 23,089,000 |
SCHEDULE OF FINITE-LIVED INTANG
SCHEDULE OF FINITE-LIVED INTANGIBLE ASSETS (Details) - USD ($) | Jan. 31, 2024 | Jan. 31, 2023 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Assets | $ 16,090,000 | $ 17,420,000 |
Accumulated Amortization | 4,019,000 | 2,627,000 |
Net Assets | $ 12,071,000 | 14,793,000 |
Client Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 10 years | |
Gross Assets | $ 8,370,000 | 9,700,000 |
Accumulated Amortization | 2,058,000 | 1,463,000 |
Net Assets | $ 6,312,000 | $ 8,237,000 |
Client Relationships [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 8 years | |
Client Relationships [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 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 | 1,742,000 | 1,034,000 |
Net Assets | $ 4,638,000 | $ 5,346,000 |
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 | 219,000 | 130,000 |
Net Assets | $ 1,121,000 | $ 1,210,000 |
SCHEDULE OF FUTURE AMORTIZATION
SCHEDULE OF FUTURE AMORTIZATION EXPENSE FOR INTANGIBLE ASSETS (Details) - USD ($) | Jan. 31, 2024 | Jan. 31, 2023 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2024 | $ 1,635,000 | |
2025 | 1,635,000 | |
2026 | 1,635,000 | |
2027 | 1,635,000 | |
2028 | 1,635,000 | |
Thereafter | 3,896,000 | |
Total | $ 12,071,000 | $ 14,793,000 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS (Details Narrative) - USD ($) | 12 Months Ended | |
Jan. 31, 2024 | Jan. 31, 2023 | |
Finite-Lived Intangible Assets [Line Items] | ||
Iimpairment of goodwill | $ 9,813,000 | |
Impairment of intangible assets | 963,000 | |
Amortization expense on intangible assets | 1,760,000 | $ 1,971,000 |
Abandoned asset wrote off | 1,330,000 | |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Impairment of intangible assets | $ 963,000 |
SCHEDULE OF INCOME TAXES FOR CO
SCHEDULE OF INCOME TAXES FOR CONTINUING OPERATION (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2024 | Jan. 31, 2023 | |
Current tax expense: | ||
Federal | ||
State | (58,000) | (62,000) |
Total current tax benefit (expense) | (58,000) | (62,000) |
Deferred tax expense: | ||
Federal | 86,000 | (6,000) |
State | 18,000 | (3,000) |
Total deferred tax benefit (expense) | 104,000 | (9,000) |
Income tax benefit (expense) | $ 46,000 | $ (71,000) |
SCHEDULE OF EFFECTIVE INCOME TA
SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2024 | Jan. 31, 2023 | |
Income Tax Disclosure [Abstract] | ||
Federal tax benefit at statutory rate | $ 3,887,000 | $ 2,348,000 |
State and local tax expense, net of federal | (28,000) | (52,000) |
Increase in valuation allowance | (3,994,000) | (2,128,000) |
Other | (36,000) | (20,000) |
Reserve for uncertain tax position | (7,000) | (18,000) |
Federal research and development (R&D) tax credit | 33,000 | 91,000 |
Stock-based compensation | 135,000 | (289,000) |
Other | 56,000 | (3,000) |
Income tax benefit (expense) | $ 46,000 | $ (71,000) |
SCHEDULE OF DEFERRED TAX ASSETS
SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES (Details) - USD ($) | Jan. 31, 2024 | Jan. 31, 2023 |
Income Tax Disclosure [Abstract] | ||
Allowance for credit losses | $ 26,000 | $ 39,000 |
Deferred revenue | 209,000 | 122,000 |
Accruals | 67,000 | 232,000 |
Net operating loss carryforwards | 15,748,000 | 11,242,000 |
Stock-based compensation | 427,000 | 342,000 |
Finite-lived intangible assets | 1,739,000 | 1,344,000 |
R&D tax credit | 1,434,000 | 1,407,000 |
Other | 1,000 | 2,000 |
Total deferred tax assets | 19,651,000 | 14,730,000 |
Valuation allowance | (19,646,000) | (14,347,000) |
Net deferred tax assets | 5,000 | 383,000 |
Property and equipment | (5,000) | (5,000) |
Finite-lived intangible liabilities | (482,000) | |
Total deferred tax liabilities | (5,000) | (487,000) |
Net deferred tax liabilities | $ (104,000) |
SCHEDULE OF GROSS UNRECOGNIZED
SCHEDULE OF GROSS UNRECOGNIZED TAX BENEFITS (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2024 | Jan. 31, 2023 | |
Income Tax Disclosure [Abstract] | ||
Beginning of fiscal year | $ 333,000 | $ 315,000 |
Additions for tax positions for the current year | 9,000 | 11,000 |
Additions for tax positions of prior years | 7,000 | |
Subtractions for tax positions of prior years | (2,000) | |
End of fiscal year | $ 340,000 | $ 333,000 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | ||
Jan. 31, 2024 | Jan. 31, 2023 | Jan. 31, 2022 | |
Effective Income Tax Rate Reconciliation [Line Items] | |||
Federal statutory income tax rates | 21% | 21% | |
Operating loss carry forwards | $ 65,107,000 | ||
Valuation allowance | 19,646,000 | $ 14,347,000 | |
Increase in the valuation allowance | 3,994,000 | 2,128,000 | |
Uncertain tax positions | 340,000 | $ 333,000 | $ 315,000 |
Tax Cuts and Jobs Act [Member] | |||
Effective Income Tax Rate Reconciliation [Line Items] | |||
Operating loss carry forwards | 36,024,000 | ||
State [Member] | |||
Effective Income Tax Rate Reconciliation [Line Items] | |||
Operating loss carry forwards | 37,650,000 | ||
Federal RD [Member] | |||
Effective Income Tax Rate Reconciliation [Line Items] | |||
Operating loss carry forwards | 1,699,000 | ||
Georgia RD [Member] | |||
Effective Income Tax Rate Reconciliation [Line Items] | |||
Operating loss carry forwards | 94,000 | ||
Through Fiscal Two Thousand Thirty Eight [Member] | |||
Effective Income Tax Rate Reconciliation [Line Items] | |||
Operating loss carry forwards | $ 29,083,000 |
EQUITY (Details Narrative)
EQUITY (Details Narrative) - USD ($) | 12 Months Ended | ||||||
Jun. 15, 2023 | Oct. 24, 2022 | Jan. 31, 2024 | Jan. 31, 2023 | Jun. 28, 2023 | Jun. 22, 2022 | Jun. 07, 2022 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Common stock par value | $ 0.01 | $ 0.01 | |||||
Proceeds from issuance of common stock | $ 8,316,000 | ||||||
Number of additional shares authorized to issue | 1,000,000 | ||||||
Common stock, shares authorized | 85,000,000 | 85,000,000 | 65,000,000 | ||||
180 Consulting LLC [Member] | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Common stock issued for resale | 394,127 | 272,653 | |||||
Third Amended And Restated 2013 Stock Incentive Plan [Member] | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Number of additional shares authorized to issue | 2,000,000 | ||||||
Number of shares authorized to issue | 10,223,246 | 8,223,246 | |||||
Third Amended And Restated 2013 Stock Incentive Plan [Member] | Maximum [Member] | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Number of shares authorized to issue | 11,223,246 | 10,223,246 | |||||
Purchase Agreement [Member] | 2022 Offering [Member] | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Number of shares issued | 6,299,989 | ||||||
Common stock par value | $ 0.01 | ||||||
Purchase price | $ 1.32 | ||||||
Proceeds from issuance of common stock | $ 8,316,000 |
MAJOR CLIENTS (Details Narrativ
MAJOR CLIENTS (Details Narrative) | 12 Months Ended | ||
Jan. 31, 2024 | Jan. 31, 2023 | Jan. 31, 2022 | |
Concentration Risk [Line Items] | |||
Concentration Risk, Customer | one individual client accounted for 10% or more of our revenue. | two individual clients accounted for 10% or more of our revenue. | |
One Customer [Member] | Customer Concentration Risk [Member] | Revenue Benchmark [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 23% | 12% | |
Two Customer [Member] | Customer Concentration Risk [Member] | Revenue Benchmark [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 20% | ||
Customer One [Member] | Customer Concentration Risk [Member] | Accounts Receivable [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 14% | 13% | |
Customer Two [Member] | Customer Concentration Risk [Member] | Accounts Receivable [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 12% | 12% | |
Customer Three [Member] | Customer Concentration Risk [Member] | Accounts Receivable [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 12% | 12% | |
Customer Four [Member] | Customer Concentration Risk [Member] | Accounts Receivable [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 11% | 10% |
EMPLOYEE RETIREMENT PLAN (Detai
EMPLOYEE RETIREMENT PLAN (Details Narrative) - USD ($) | 12 Months Ended | |
Jan. 31, 2024 | Jan. 31, 2023 | |
Retirement Benefits [Abstract] | ||
Defined contribution plan, cost recognized | $ 242,000 | $ 258,000 |
SCHEDULE OF STOCK OPTION ACTIVI
SCHEDULE OF STOCK OPTION ACTIVITY (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2024 | Jan. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | ||
Number of options, Outstanding | 628,958 | |
Weighted average exercise price, Outstanding | $ 1.95 | |
Remaining Life in Years, Outstanding | 2 years 4 months 13 days | 7 years 3 months 21 days |
Aggregate intrinsic value, Outstanding | $ 360,000 | |
Number of options, Granted | ||
Weighted average exercise price, Granted | ||
Number of options, Exercised | ||
Weighted average exercise price, Exercised | ||
Number of options, Expired | (39,250) | |
Weighted average exercise price, Expired | $ 7.14 | |
Number of options, Forfeited | (522,208) | |
Weighted average exercise price, Forfeited | $ 1.55 | |
Number of options, Outstanding | 67,500 | 628,958 |
Weighted average exercise price, Outstanding | $ 1.73 | $ 1.95 |
Aggregate intrinsic value, Outstanding | $ 360,000 | |
Number of options, Exercisable | 67,500 | |
Weighted average exercise price, Exercisable | $ 1.73 | |
Remaining Life in Years, Exercisable | 2 years 4 months 13 days | |
Aggregate intrinsic value, Exercisable | ||
Number of options, Vested or expected to vest | 67,500 | |
Weighted average exercise price, Vested or expected to vest | $ 1.73 | |
Remaining Life in Years, Vested or expected to vest | 2 years 4 months 13 days | |
Aggregate intrinsic value, Vested or expected to vest |
SCHEDULE OF RESTRICTED STOCK AW
SCHEDULE OF RESTRICTED STOCK AWARD ACTIVITY (Details) - $ / shares | 12 Months Ended | |
Jan. 31, 2024 | Jan. 31, 2023 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Number of RSUs, Non vested, Outstanding, Beginning balance | 1,848,031 | 1,043,350 |
Weighted Average Grant Date Fair Value, Beginning balance | $ 1.48 | $ 1.57 |
Number of RSUs, Non vested, Outstanding, Ending balance | 1,970,521 | 1,848,031 |
Weighted Average Grant Date Fair Value, Ending balance | $ 1.51 | $ 1.48 |
Restricted Stock [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Number of RSUs, granted | 1,488,621 | 1,505,731 |
Weighted Average Grant Date Fair Value, RSUs granted | $ 1.57 | $ 1.47 |
Number of RSUs, vested | (982,631) | (501,750) |
Weighted Average Grant Date Fair Value, RSUs vested | $ 1.48 | $ 1.63 |
Number RSUs, forfeited | (383,500) | (199,300) |
Weighted Average Grant Date Fair Value, RSUs forfeited | $ 1.67 | $ 1.49 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details Narrative) - USD ($) | 12 Months Ended | |||||
Apr. 01, 2023 | Nov. 01, 2022 | May 20, 2022 | Jan. 31, 2024 | Jan. 31, 2023 | Jan. 31, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Ownership Percentage | 20% | |||||
Restricted Stock [Member] | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Stock option expense | $ 1,938,000 | |||||
Number of restricted stocks awarded, shares | 1,488,621 | 1,505,731 | ||||
Cost expected remaining period | 1 year 9 months 18 days | |||||
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 11,223,246. 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 | 11,223,246 | |||||
Number of options to purchase common stock | 67,500 | 628,958 | ||||
Unrecognized Compensation cost, stock options | $ 0 | |||||
Stock option expense | $ 71,000 | $ 132,000 | ||||
2013 Incentive Compensation Plan [Member] | Restricted Stock [Member] | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Stock option expense | $ 1,590,000 | $ 983,000 | ||||
Number of restricted stocks awarded, shares | 50,000 | 150,000 | ||||
2013 Incentive Compensation Plan [Member] | Restricted Stock [Member] | Mr Green [Member] | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Number of restricted stocks awarded, shares | 200,000 | |||||
2013 Incentive Compensation Plan [Member] | Restricted Stock [Member] | Mr Stil will [Member] | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Number of restricted stocks awarded, shares | 170,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - 180 Consulting LLC [Member] - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Jan. 31, 2024 | Jan. 31, 2024 | Oct. 31, 2023 | Jan. 31, 2024 | Jan. 31, 2023 | |
Master services agreement [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Stock Issued During Period, Shares, Issued for Services | 1,479,911 | 206,517 | 564,707 | ||
Professional fees | $ 2,580,000 | $ 582,000 | |||
[custom:NonEmployeeStockCompensation] | $ 1,281,000 | 640,000 | |||
Master services agreement [Member] | Private Placement [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Stock Issued During Period, Shares, New Issues | 564,707 | ||||
SOW [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Professional fees | $ 563,000 | $ 301,000 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) | 12 Months Ended |
Jan. 31, 2024 USD ($) | |
Related Party Transactions [Abstract] | |
Rent expense | $ 6,000 |
SCHEDULE OF MAXIMUM ARR NET LEV
SCHEDULE OF MAXIMUM ARR NET LEVERAGE RATIO (Details) - Subsequent Event [Member] | Feb. 07, 2024 |
April 30, 2024 [Member] | Minimum [Member] | |
Maximum ARR net leverage ratio | 0.50% |
April 30, 2024 [Member] | Maximum [Member] | |
Maximum ARR net leverage ratio | 1% |
July 31, 2024 [Member] | Minimum [Member] | |
Maximum ARR net leverage ratio | 0.45% |
July 31, 2024 [Member] | Maximum [Member] | |
Maximum ARR net leverage ratio | 1% |
October 31, 2024 [Member] | Minimum [Member] | |
Maximum ARR net leverage ratio | 0.40% |
October 31, 2024 [Member] | Maximum [Member] | |
Maximum ARR net leverage ratio | 1% |
January 31, 2025 [Member] | Minimum [Member] | |
Maximum ARR net leverage ratio | 0.35% |
January 31, 2025 [Member] | Maximum [Member] | |
Maximum ARR net leverage ratio | 1% |
SCHEDULE OF MAXIMUM DEBT TO A_2
SCHEDULE OF MAXIMUM DEBT TO ADJUSTMENTS EBITDA RATIO (Details) - Subsequent Event [Member] | Feb. 07, 2024 |
April 30, 2025 [Member] | Minimum [Member] | |
Maximum Debt to Adjusted EBITDA Ratio | 3.50% |
April 30, 2025 [Member] | Maximum [Member] | |
Maximum Debt to Adjusted EBITDA Ratio | 1% |
July 31, 2025 [Member] | Minimum [Member] | |
Maximum Debt to Adjusted EBITDA Ratio | 3% |
July 31, 2025 [Member] | Maximum [Member] | |
Maximum Debt to Adjusted EBITDA Ratio | 1% |
October 31, 2025 [Member] | Minimum [Member] | |
Maximum Debt to Adjusted EBITDA Ratio | 2.50% |
October 31, 2025 [Member] | Maximum [Member] | |
Maximum Debt to Adjusted EBITDA Ratio | 1% |
January 31, 2026 And Thereafter [Member] | Minimum [Member] | |
Maximum Debt to Adjusted EBITDA Ratio | 2% |
January 31, 2026 And Thereafter [Member] | Maximum [Member] | |
Maximum Debt to Adjusted EBITDA Ratio | 1% |
SCHEDULE OF MINIMUM ADJUSTED EB
SCHEDULE OF MINIMUM ADJUSTED EBITDA (Details) - Subsequent Event [Member] | Feb. 07, 2024 USD ($) |
January 31, 2024 [Member] | |
Minimum Adjusted EBITDA | $ (5,750,000) |
April 30, 2024 [Member] | |
Minimum Adjusted EBITDA | (4,560,000) |
July 31, 2024 [Member] | |
Minimum Adjusted EBITDA | (2,960,000) |
October 31, 2024 [Member] | |
Minimum Adjusted EBITDA | (1,500,000) |
January 31, 2025 [Member] | |
Minimum Adjusted EBITDA | $ 430,000 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - Subsequent Event [Member] - USD ($) | Feb. 06, 2024 | Feb. 01, 2024 | Apr. 30, 2024 | Feb. 07, 2024 |
Warrant exercise price | $ 0.38 | |||
Affiliates effective percentage | 9.99% | |||
Private Placement [Member] | ||||
Number of shares issued | 263,158 | |||
Purchase price per share | $ 0.38 | |||
Aggregate purchase price | $ 100,000 | |||
Except Directors And Officers [Member] | ||||
Warrant exercise price | $ 0.39 | |||
Notes [Member] | ||||
Notes bear interest rate | 15% | |||
Notes maturity date | Aug. 07, 2026 | |||
Securities Purchase Agreement [Member] | ||||
Debt principal amount | $ 4,400,000 | |||
Number of shares purchase | 4,052,631 | |||
Third Modification Loan Agreement [Member] | Maximum [Member] | ||||
Fixed charge coverage ratio | 1.20% | |||
Third Modification Loan Agreement [Member] | Minimum [Member] | ||||
Fixed charge coverage ratio | 1% |
Valuation and Qualifying Acco_2
Valuation and Qualifying Accounts and Reserves (Details) - USD ($) | 12 Months Ended | ||
Jan. 31, 2024 | Jan. 31, 2023 | ||
Valuation And Qualifying Accounts And Reserves | |||
Allowance for credit losses, Balance | $ 132,000 | $ 76,000 | |
SEC Schedule, 12-09, Valuation Allowances and Reserves, Additions, Charge to Cost and Expense | (10,000) | 189,000 | |
SEC Schedule, 12-09, Valuation Allowances and Reserves, Additions, Charge to Other Account | [1] | (36,000) | |
SEC Schedule, 12-09, Valuation Allowances and Reserves, Deduction | [2] | (133,000) | |
Allowance for credit losses, Balance | $ 86,000 | $ 132,000 | |
[1]Adjustments to retained earnings for adoption of ASC 326-10, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (Refer to the subtopic of Accounting Pronouncements Recently Adopted in Note 2 – Significant Accounting Policies to our consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data” for more information.)[2]Uncollectible accounts written off, net of recoveries. |