Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Jan. 31, 2019 | Mar. 24, 2019 | Jul. 31, 2018 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | STREAMLINE HEALTH SOLUTIONS INC. | ||
Entity Central Index Key | 0001008586 | ||
Document Type | 10-K | ||
Document Period End Date | Jan. 31, 2019 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --01-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Public Float | $ 20,232,964 | ||
Entity Common Stock, Shares Outstanding | 20,905,691 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jan. 31, 2019 | Jan. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 2,376,000 | $ 4,620,000 |
Accounts receivable, net of allowance for doubtful accounts of $345,000 and $349,000, respectively | 2,933,000 | 3,001,000 |
Contract receivables | 1,263,000 | 224,000 |
Prepaid assets | 901,000 | 1,255,000 |
Other current assets | 445,000 | 547,000 |
Total current assets | 7,918,000 | 9,647,000 |
Property and equipment: | ||
Accumulated depreciation and amortization | (1,516,000) | (3,835,000) |
Property and equipment, net of accumulated amortization of $1,516,000 and $3,835,000, respectively | 237,000 | 1,162,000 |
Contract receivables, less current portion | 407,000 | |
Capitalized software development costs, net of accumulated amortization of $19,689,000 and $18,658,000, respectively | 5,698,000 | 4,308,000 |
Intangible assets, net of accumulated amortization of $3,538,000 and $6,969,000, respectively | 1,669,000 | 5,835,000 |
Goodwill | 15,537,000 | 15,537,000 |
Other | 274,000 | 642,000 |
Total non-current assets | 23,822,000 | 27,484,000 |
Total assets | 31,740,000 | 37,131,000 |
Current liabilities: | ||
Accounts payable | 1,280,000 | 421,000 |
Accrued compensation | 789,000 | 342,000 |
Accrued other expenses | 1,025,000 | 610,000 |
Current portion of term loan | 597,000 | 597,000 |
Deferred revenues | 8,338,000 | 9,482,000 |
Other | 94,000 | |
Total current liabilities | 12,123,000 | 11,452,000 |
Non-current liabilities: | ||
Term loan, net of current portion and deferred financing cost of $82,000 and $128,000, respectively | 3,351,000 | 3,901,000 |
Royalty liability | 905,000 | 2,469,000 |
Deferred revenues, less current portion | 432,000 | 333,000 |
Other | 41,000 | 274,000 |
Total non-current liabilities | 4,729,000 | 6,977,000 |
Total liabilities | 16,852,000 | 18,429,000 |
Series A 0% Convertible Redeemable Preferred Stock, $.01 par value per share, $8,686,000 and $8,850,000 redemption value, 4,000,000 shares authorized, 2,895,464 and 2,949,995 shares issued and outstanding, respectively | 8,686,000 | 8,850,000 |
Stockholders’ equity: | ||
Common stock, $.01 par value per share, 45,000,000 shares authorized; 20,767,708 and 20,005,977 shares issued and outstanding, respectively | 208,000 | 200,000 |
Additional paid in capital | 82,544,000 | 81,777,000 |
Accumulated deficit | (76,550,000) | (72,125,000) |
Total stockholders’ equity | 6,202,000 | 9,852,000 |
Total liability and stockholders' equity | $ 31,740,000 | $ 37,131,000 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | 12 Months Ended | |
Jan. 31, 2019 | Jan. 31, 2018 | |
Allowance for doubtful accounts | $ 345,000 | $ 349,000 |
Accumulated amortization of property and equipment | 1,516,000 | 3,835,000 |
Accumulated amortization of capitalized software development costs | 19,689,000 | 18,658,000 |
Accumulated amortization of intangible assets | 3,858,000 | 6,969,000 |
Deferred financing costs, accumulated amortization | $ 82,000 | $ 128,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 45,000,000 | 45,000,000 |
Common stock, shares issued (in shares) | 20,767,708 | 20,005,977 |
Common stock, shares outstanding (in shares) | 20,767,708 | 20,005,977 |
Series A Preferred Stock | ||
Preferred stock dividend rate (as a percent) | 0.00% | 0.00% |
Convertible redeemable preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Convertible redeemable preferred stock, redemption value | $ 8,686,000 | $ 8,850,000 |
Convertible redeemable preferred stock, shares authorized (in shares) | 4,000,000 | 4,000,000 |
Convertible redeemable preferred stock, shares issued (in shares) | 2,895,464 | 2,949,995 |
Convertible redeemable preferred stock, shares outstanding (in shares) | 2,895,464 | 2,949,995 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Jan. 31, 2019 | Jan. 31, 2018 | |
Revenues: | ||
Professional services | $ 1,336,000 | $ 2,744,000 |
Audit services | 1,118,000 | 1,216,000 |
Software as a service | 4,853,000 | 5,864,000 |
Total revenues | 22,365,000 | 24,338,000 |
Operating expenses: | ||
Cost of professional services | 2,657,000 | 2,401,000 |
Cost of audit services | 1,373,000 | 1,604,000 |
Cost of software as a service | 992,000 | 1,319,000 |
Selling, general and administrative | 10,554,000 | 11,434,000 |
Research and development | 4,261,000 | 5,352,000 |
Impairment of long-lived assets | 3,681,000 | |
Loss on exit of operating lease | 1,034,000 | |
Total operating expenses | 27,667,000 | 26,960,000 |
Operating loss | (5,302,000) | (2,622,000) |
Other income (expense): | ||
Interest expense | (384,000) | (474,000) |
Miscellaneous (expense) income | (179,000) | (87,000) |
Loss before income taxes | (5,865,000) | (3,183,000) |
Income tax benefit | 84,000 | |
Net loss | $ (5,865,000) | $ (3,099,000) |
Net loss per common share - basic (in dollars per share) | $ (0.30) | $ (0.16) |
Weighted average number of common shares - basic (in shares) | 19,540,980 | 19,090,899 |
Net loss per common share - diluted (in dollars per share) | $ (0.30) | $ (0.16) |
Weighted average number of common shares - diluted (in shares) | 19,540,980 | 19,090,899 |
System Sales | ||
Revenues: | ||
Revenues | $ 2,472,000 | $ 1,343,000 |
Operating expenses: | ||
Cost of goods and services sold | 942,000 | 1,946,000 |
Maintenance and Support | ||
Revenues: | ||
Revenues | 12,586,000 | 13,171,000 |
Operating expenses: | ||
Cost of goods and services sold | $ 2,173,000 | $ 2,904,000 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) | Common Stock | Additional Paid-in Capital | Retained Earnings | Total |
Beginning balance (in shares) at Jan. 31, 2017 | 19,695,391 | |||
Beginning balance at Jan. 31, 2017 | $ 197,000 | $ 80,668,000 | $ (69,026,000) | $ 11,839,000 |
Statement of Changes in stockholders' equity | ||||
Stock issued pursuant to Employee Stock Purchase Plan | 45,000 | 45,000 | ||
Stock issued pursuant to Employee Stock Purchase Plan (in shares) | 47,282 | |||
Restricted stock issued | $ 3,000 | (3,000) | ||
Restricted stock issued (in shares) | 295,337 | |||
Surrender of stock upon vesting of restricted stock to satisfy tax withholding obligations (in shares) | (32,033) | |||
Surrender of stock upon vesting of restricted stock to satisfy tax withholding obligations | (42,000) | (42,000) | ||
Share-based compensation expense | 1,109,000 | 1,109,000 | ||
Net loss | (3,099,000) | (3,099,000) | ||
Ending balance (in shares) at Jan. 31, 2018 | 20,005,977 | |||
Ending balance at Jan. 31, 2018 | $ 200,000 | 81,777,000 | (72,125,000) | 9,852,000 |
Statement of Changes in stockholders' equity | ||||
Stock issued pursuant to Employee Stock Purchase Plan and exercise of stock options | 44,000 | 44,000 | ||
Stock issued pursuant to Employee Stock Purchase Plan and exercise of stock options (in shares) | 48,616 | |||
Restricted stock issued | $ 8,000 | (8,000) | ||
Restricted stock issued (in shares) | 826,666 | |||
Restricted stock forfeited | $ (1,000) | 1,000 | ||
Restricted stock forfeited (in shares) | (130,833) | |||
Surrender of stock upon vesting of restricted stock to satisfy tax withholding obligations (in shares) | (37,249) | |||
Surrender of stock upon vesting of restricted stock to satisfy tax withholding obligations | (62,000) | (62,000) | ||
Conversion of Series A Preferred Stock | $ 1,000 | 163,000 | 164,000 | |
Conversion of Series A Preferred Stock (in shares) | 54,531 | |||
Share-based compensation expense | 629,000 | 629,000 | ||
Net loss | (5,865,000) | (5,865,000) | ||
Ending balance (in shares) at Jan. 31, 2019 | 20,767,708 | |||
Ending balance at Jan. 31, 2019 | $ 208,000 | $ 82,544,000 | (76,550,000) | 6,202,000 |
Statement of Changes in stockholders' equity | ||||
Cumulative effect of ASC 606 implementation | $ 1,440,000 | $ 1,440,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Jan. 31, 2019 | Jan. 31, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (5,865,000) | $ (3,099,000) |
Adjustments to reconcile net loss to net cash provided by operating activities, net of effect of acquisitions: | ||
Depreciation | 450,000 | 774,000 |
Amortization of capitalized software development costs | 1,160,000 | 2,113,000 |
Amortization of intangible assets | 937,000 | 1,161,000 |
Amortization of other deferred costs | 415,000 | 341,000 |
Valuation adjustment | 126,000 | 95,000 |
Impairment of long-lived assets | 3,681,000 | |
Loss on exit of operating lease | 1,034,000 | |
Loss (gain) on disposal of fixed assets | 7,000 | (16,000) |
Share-based compensation expense | 629,000 | 1,109,000 |
Provision for accounts receivable | 13,000 | 234,000 |
Changes in assets and liabilities, net of assets acquired: | ||
Accounts and contract receivables | (640,000) | 1,498,000 |
Other assets | 466,000 | (696,000) |
Accounts payable | 859,000 | (695,000) |
Accrued expenses | 129,000 | (117,000) |
Deferred revenues | (2,004,000) | (671,000) |
Net cash provided by operating activities | 1,397,000 | 2,031,000 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (21,000) | (49,000) |
Proceeds from sales of property and equipment | 21,000 | 20,000 |
Capitalization of software development costs | (3,003,000) | (1,836,000) |
Net cash used in investing activities | (3,003,000) | (1,865,000) |
Cash flows from financing activities: | ||
Principal repayments on term loans | (597,000) | (1,112,000) |
Principal payments on capital lease obligations | (91,000) | |
Payments related to settlement of employee shared-based awards | (62,000) | (42,000) |
Proceeds from exercise of stock options and stock purchase plan | 44,000 | 45,000 |
Payment of deferred financing costs | (23,000) | |
Net cash used in financing activities | (638,000) | (1,200,000) |
Net decrease in cash and cash equivalents | (2,244,000) | (1,034,000) |
Cash and cash equivalents at beginning of year | 4,620,000 | 5,654,000 |
Cash and cash equivalents at end of year | 2,376,000 | 4,620,000 |
Supplemental cash flow disclosures: | ||
Interest paid | 417,000 | 418,000 |
Income taxes paid | 11,000 | $ 8,000 |
Supplemental disclosure of non-cash financing activities: | ||
Conversion of Series A Preferred Stock to common shares | $ 164,000 | |
Conversion of Series A Preferred Stock to common shares (in shares) | 54,531 | |
Modification of royalty liability associated with the acquisition of Clinical Analytics | $ 1,644,000 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Jan. 31, 2019 | |
Organization and Description of Business | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | NOTE 1 — ORGANIZATION AND DESCRIPTION OF BUSINESS Streamline Health Solutions, Inc. and its subsidiary (“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 HIM, Coding & CDI, eValuator Coding Analysis Platform, Financial Management and Patient Care solutions 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, 2019 | |
Significant Accounting Policies | |
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 subsidiary, Streamline Health, Inc. 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. Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles 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 stock-based compensation, capitalization of software development costs, intangible assets, allowance for doubtful accounts, 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. Receivables Accounts and contract receivables are comprised of amounts owed to the Company for licensed software, professional services, including coding audit, maintenance services, and software as a service and are presented net of the allowance for doubtful accounts. The timing of revenue recognition may not coincide with the billing terms of the client contract, resulting in unbilled receivables or deferred revenues; therefore certain contract receivables represent revenues recognized prior to client billings. Individual contract terms with clients or resellers determine when receivables are due. For billings where the criteria for revenue recognition have not been met, deferred revenue is recorded until all revenue recognition criteria have been met. Allowance for Doubtful Accounts In determining the allowance for doubtful accounts, aged receivables are analyzed periodically by management. Each identified receivable is reviewed based upon the most recent information available and the status of any open or unresolved issues with the client preventing the payment thereof. Corrective action, if necessary, is taken by the Company to resolve open issues related to unpaid receivables. During these periodic reviews, the Company determines the required allowances for doubtful accounts for estimated losses resulting from the unwillingness or inability of its clients or resellers to make required payments. The allowance for doubtful accounts was approximately $345,000 and $349,000 at January 31, 2019 and 2018, respectively. The Company believes that its reserve is adequate, however results may differ in future periods. Bad debt expense for fiscal years 2018 and 2017 was as follows: 2018 2017 Bad debt expense $ 13,000 $ 234,000 Concessions Accrual In determining the concessions accrual, the Company evaluates historical concessions granted relative to revenue. The concession accrual included in accrued other expenses on the Company’s consolidated balance sheets was $44,000 and $48,000 as of January 31, 2019 and 2018, respectively. 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: Computer equipment and software 3‑4 years Office equipment 5 years Office furniture and fixtures 7 years Leasehold improvements Term of lease or estimated useful life, whichever is shorter Depreciation expense for property and equipment in fiscal 2018 and 2017 was $450,000 and $774,000, respectively. Normal repair and maintenance is 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 On December 13, 2013, the Company entered into an amended lease obligation to lease 24,335 square feet of office space in Atlanta, Georgia. The lease commenced upon taking possession of the space and was scheduled to end in November 2022. The provisions of the lease provided for rent abatement for the first eight months of the lease term. Upon taking possession of the premises, the rent abatement and the unamortized balance of deferred rent associated with the previously leased premises were aggregated with the total expected rental payments and amortized on a straight-line basis over the term of the lease. In the third quarter of fiscal 2018, we assigned our Atlanta office lease and relocated our corporate office to a new space. See Note 12 – Commitments and Contingencies for further details on our new shared office arrangement. In fiscal 2014, the Company entered into a lease obligation to lease 10,350 square feet of office space in New York, New York. The lease commenced upon taking possession of the space and expires in November 2019. The lease agreement provided for rent abatement for the first two months of the lease term. Upon taking possession of the premises, the rent abatement was aggregated with the total expected rental payments and amortized on a straight-line basis over the term of the lease. In the second quarter of fiscal 2018, we closed our New York office and subleased the office space for the remaining period of the original lease term. See Note 4 – Operating Leases for further details on the closure of our New York office. The Company had capital leases to finance office equipment purchases that continued into the third quarter of fiscal 2017. The amortization expense of the leased equipment is included in depreciation expense. As of January 31, 2019 and 2018, the Company had no material capital lease obligations. Debt Issuance Costs Costs related to the issuance of debt are 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. Deferred financing costs are presented on the Company’s consolidated balance sheets as a direct deduction from the carrying amount of the non-current portion of our term loan. Impairment of Long-Lived Assets The Company reviews the carrying value of long-lived assets for impairment whenever facts and circumstances exist that would suggest that assets might be impaired or that the useful lives should be modified. Among the factors the Company considers in making the evaluation are changes in market position and profitability. If facts and circumstances are present which may indicate that the carrying amount of the assets may not be recoverable, the Company will prepare a projection of the undiscounted cash flows of the specific asset or asset group and determine if the long-lived assets are recoverable based on these undiscounted cash flows. If impairment is indicated, an adjustment will be made to reduce the carrying amount of these assets to their fair values. Capitalized Software Development Costs Software development costs associated with the planning and designing phase of software development, including coding and testing activities necessary to establish technological feasibility, are classified as research and development and are expensed as incurred. Once technological feasibility has been determined, a portion of the costs incurred in development, including coding, testing and quality assurance, are capitalized and subsequently reported at the lower of unamortized cost or net realizable value. The Company capitalized such costs, including interest, of $3,003,000 and $1,836,000 in fiscal 2018 and 2017, respectively. Amortization for the Company’s software systems is provided on a solution-by-solution basis over the estimated economic life of the software, typically three to five years, using the straight-line method. Amortization commences when a solution is available for general release to clients. Acquired internally-developed software from acquisitions is amortized using the straight-line method. Amortization expense on all internally-developed software was $1,160,000 and $2,113,000 in fiscal 2018 and 2017, respectively, and was included in the consolidated statements of operations as follows: Fiscal Year 2018 2017 Amortization expense on internally-developed software included in: Cost of systems sales $ 768,000 $ 1,914,000 Cost of software as a service 379,000 186,000 Cost of audit services 13,000 13,000 Total amortization expense on internally-developed software $ 1,160,000 $ 2,113,000 Research and development expense was $4,261,000 and $5,352,000 in fiscal 2018 and 2017, respectively. 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. The carrying amount of the Company’s long-term debt approximates fair value since the variable interest rates being paid on the amounts approximate the market interest rate. Long-term debt is classified as Level 2. The table below provides information on our liabilities that are measured at fair value on a recurring basis: Quoted Prices in Significant Other Significant Total Fair Active Markets Observable Inputs Unobservable Inputs Value (Level 1) (Level 2) (Level 3) At January 31, 2019 Royalty liability (1) (3) $ 905,000 $ — $ — $ 905,000 At January 31, 2018 Royalty liability (1) (2) $ 2,469,000 $ — $ — $ 2,469,000 (1) The initial fair value of royalty liability was determined by management with the assistance of an independent third-party valuation specialist, and by management thereafter. Fair value adjustments are included within miscellaneous expense in the consolidated statements of operations. (2) The fair value of the royalty liability was determined based on the probability-weighted revenue scenarios for the Streamline Health® Clinical Analytics solution licensed from Montefiore Medical Center (discussed in Note 12 – Commitments and Contingencies). (3) Following the modification of the Royalty Agreement in the second quarter of fiscal 2018 (discussed in Note 12 – Commitments and Contingencies ), the royalty liability was significantly reduced as a result of the commitment to fulfill a portion of our obligation by providing incremental maintenance services. The fair value of the royalty liability was determined based on the portion of the modified royalty commitment payable in cash. In fiscal 2018, the Company determined that its strategic focus on serving the middle of the revenue cycle and the resulting decrease in the customer base for our Clinical Analytics solution constituted a triggering event for impairment analysis. We assessed the fair value of long-lived assets associated with our Clinical Analytics solution based on expected future cash flows from this solution, including the royalty liability , and determined that related intangible assets and capitalized software development costs classified as Level 3 were fully impaired, therefore had zero value as of December 31, 2018. For further details on the impairment loss and royalty liability associated with our Clinical Analytics solution, see Note 6 – Goodwill and Intangible Assets and Note 12 – Commitments and Contingencies, respectively. Revenue Recognition We derive revenue from the sale of internally-developed software, either by licensing for local installation or by a software as a service (“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 provided to help clients review their internal coding audit processes. Additional revenues are also derived from reselling third-party software and hardware components. We recognize revenue in accordance with Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers (“ASC 606”), the new revenue recognition standard established by ASU 2014‑09. The core principle of ASC 606 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. 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 customer · 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 We follow the accounting revenue guidance under ASC 606 to determine whether 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 customer. Revenue is recognized net of any taxes collected from customers and subsequently remitted to governmental authorities. If we determine that we have not satisfied a performance obligation, we will defer recognition of the revenue until the performance obligation is deemed to be satisfied. Maintenance and support and SaaS agreements are generally non-cancelable 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. Significant judgment is required to determine the standalone selling price (“SSP”) for each performance obligation, the amount allocated to each performance obligation and whether it depicts the amount that the Company expects to receive in exchange for the related product and/or service. As the selling prices of the Company’s software licenses are highly variable, 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, and audit services based on observable standalone sales. Contract Combination The Company may execute more than one contract or agreement with a single customer. 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. Systems Sales The Company’s software license arrangements provide the customer 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 customers 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. Software as a Service SaaS-based contracts include use of the Company’s platform, implementation, support and other services which represent a single promise to provide continuous access to its software solutions. The Company recognizes revenue over time for the life of the contract. We defer the direct costs, which include salaries and benefits, for professional services related to SaaS contracts. These deferred costs will be amortized over the identical term as the associated revenues. As of January 31, 2019 and 2018, we had deferred costs of $251,000 and $471,000, respectively, net of accumulated amortization of $399,000 and $312,000, respectively. Amortization expense of these costs was $346,000 and $270,000 in fiscal 2018 and 2017, respectively. 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. Comparative GAAP Financials The adoption of the new standard has the following impact to the Company’s condensed consolidated statements of operations for the year ended January 31, 2019: Year Ended January 31, 2019 As reported under Balances without Adjustments due to Revenues Systems sales $ 2,472,000 $ 2,322,000 $ 150,000 Maintenance and support 12,586,000 12,590,000 (4,000) As of January 31, 2019 As reported under Balances without Adjustments due to Assets Contract receivables, current $ 1,263,000 $ 803,000 $ 460,000 Contract receivables, noncurrent 407,000 27,000 380,000 Liabilities Deferred revenues, current 8,338,000 9,084,000 (746,000) Shareholders' Equity Accumulated deficit $ (76,550,000) $ (78,136,000) $ 1,586,000 The adoption of ASC 606 resulted in a decrease in deferred revenues and an increase in contract receivables driven by upfront recognition of revenue, rather than over the contract period, from certain multi-year term software license agreements that include both software licenses and software support and maintenance. Revenues related to SaaS-based offerings, hardware sales, maintenance and support, and audit services remain substantially unchanged. Disaggregation of Revenue The following table provides information about disaggregated revenue by type and nature of revenue stream: Year Ended January 31, 2019 Recurring Revenue Non-recurring Revenue Total Systems sales $ 899,000 $ 1,573,000 $ 2,472,000 Professional services — 1,336,000 1,336,000 Audit services — 1,118,000 1,118,000 Maintenance and support 12,586,000 — 12,586,000 Software as a service 4,853,000 — 4,853,000 Total revenue: $ 18,338,000 $ 4,027,000 $ 22,365,000 Contract Receivables and Deferred Revenues The Company receives payments from customers 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 customer. 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, 2019, we recognized $9,449,000 in revenue from deferred revenues outstanding as of January 31, 2018. The cumulative effect of changes related to the adoption of ASC 606 are reflected in the opening balance of accumulated deficit as shown below: As Reported Adjustments As Adjusted ASSETS Contract receivables, current $ 224,000 $ 283,000 $ 507,000 Contract receivables, noncurrent — 468,000 468,000 LIABILITIES Deferred revenues, current 9,482,000 (689,000) 8,793,000 STOCKHOLDERS' EQUITY Accumulated deficit $ (72,125,000) $ 1,440,000 $ (70,685,000) Transaction price allocated to the remaining performance obligations Revenue allocated to remaining performance obligations represents contracted revenue that will be recognized in future periods, which is comprised of deferred revenue and amounts that will be invoiced and recognized as revenue in future periods. Revenue allocated to remaining performance obligations was $27 million as of January 31, 2019, of which the Company expects to recognize approximately 65% over the next 12 months and the remainder thereafter. Deferred commissions costs (contract acquisition costs) Contract acquisition costs, which consist of sales commissions paid or payable, is considered incremental and recoverable costs of obtaining a contract with a customer. Sales commissions for initial and renewal contracts are deferred and then amortized on a straight-line basis over a period of benefit, which the Company has determined to be the customer life. 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 are included on the consolidated balance sheets within prepaid assets and other current assets, respectively, and totaled $185,000 and $114,000, respectively, as of January 31, 2019. As of January 31, 2018, deferred commissions costs paid and payable totaled $136,000 and $116,000, respectively. In fiscal 2018, $145,000 in amortization expense associated with deferred sales commissions was included in selling, general and administrative expenses on the condensed consolidated statements of operations. Concentrations Financial instruments, which potentially expose the Company to concentrations of credit risk, consist primarily of accounts receivable. The Company’s accounts receivable are concentrated in the healthcare industry. However, the Company’s clients typically are well-established hospitals, medical facilities or major health information systems companies that resell the Company’s solutions that have good credit histories. 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. The Company currently buys all of its hardware and some major software components of its healthcare information systems from third-party vendors. Although there are a limited number of vendors capable of supplying these components, management believes that other suppliers could provide similar components on comparable terms. Business Combinations The assets acquired, liabilities assumed and contingent consideration are recorded at their fair value on the acquisition date with subsequent changes recognized in earnings. These estimates are inherently uncertain and are subject to refinement. Management develops estimates based on assumptions as a part of the purchase price allocation process to value the assets acquired and liabilities assumed as of the business combination date. As a result, the Company may recognize adjustments to provisional amounts of assets acquired or liabilities assumed in operating expenses in the reporting period in which the adjustments are determined. The Company records acquisition and transaction related expenses in the period in which they are incurred. Acquisition and transaction-related expenses primarily consist of legal, banking, accounting and other advisory fees of third parties associated with potential acquisitions. Goodwill and Intangible Assets Goodwill and other intangible assets were recognized in conjunction with the Interpoint, Meta, CLG and Opportune IT acquisitions, as well as the Unibased acquisition (prior to divestiture of such assets). Identifiable intangible assets include purchased intangible assets with finite lives, which primarily consist of internally-developed software, client relationships, non-compete agreements and license agreements. Finite-lived purchased intangible assets are amortized over their expected period of benefit, which generally ranges from one to 10 years, using the straight-line and undiscounted expected future cash flows methods. The Company assesses the useful lives and possible impairment of intangible assets when an event occurs that may trigger such a review. Factors considered important which could trigger a review include: · significant underperformance relative to historical or projected future operating results; · significant changes in the manner of use of the acquired assets or the strategy for the overall business; · identification of other impaired assets within a reporting unit; · disposition of a significant portion of an operating segment; · significant negative industry or economic trends; · significant decline in the Company’s stock price for a sustained period; and · a decline in the market capitalization relative to the net book value. Determining whether a triggering event has occurred involves significant judgment by the Company. The Company assesses goodwill annually (as of November 1), or more frequently when events and circumstances, such as the ones mentioned above, occur indicating that the recorded goodwill may be impaired. During the years ended January 31, 2019 and 2018, the Company did not note any of the above qualitative factors, which would be considered a triggering event for goodwill impairment. In assessing qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company assesses relevant events and circumstances that may impact the fair value and the carrying amount of a reporting unit. The identification of relevant events and circumstances and how these may impact a reporting unit’s fair value or carrying amount involve significant judgments by management. These judgments include the consideration of macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, events which are specific to the Company and trends in the market price of the Company’s common stock. Each factor is assessed to determine whether it impacts the impairment test positively or negatively, and the magnitude of any such impact. The two-step goodwill impairment test requires the Company to identify its reporting units and to determine estimates of the fair values of those reporting units as of the impairment testing date. 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 customer for the products and services and the methods used to distribute the products and services). The Company determined that it has one operating segment and one reporting unit. To conduct a quantitative two-step goodwill impairment test, the fair value of the reporting unit is first compared to its carrying value. If the reporting unit’s carrying value exceeds its fair value, the Company performs the second step and records an impairment loss to the extent that the carrying value of goodwill exceeds its implied fair value. The Company estimates the fair value of its reporting unit using a blend of market and income approaches. The market approach consists of two separate methods, including reference to the Company’s market capitalization, as well as the guideline publicly traded company method. The market capitalization valuation method is based on an analysis of the Company’s stock price on and around the testing date, plus a control premium. The guideline publicly traded company method was made by reference to a list of publicly traded software companies providing services to healthcare organizations, as determined by management. The market value of common equity for each comparable company was derived by multiplying the price per share on the testing date by the total common shares outstanding, plus a control premium. Selected valuation multiples are then determined and applied to appropriate financial statistics based on the Company’s historical and forecasted results. The Company estimates the fair value of its reporting unit using the income approach, via discounted cash flow valuation models which include, but are not limited to, assumptions such as a “risk-free” rate of return on an investment, the weighted average cost of capital of a market participant and future revenue, operating margin, working capital and capital expenditure trends. Determining the fair value of reporting unit and goodwill include |
Preferred Stock
Preferred Stock | 12 Months Ended |
Jan. 31, 2019 | |
Equity [Abstract] | |
PREFERRED STOCK | NOTE 3 — PREFERRED STOCK In connection with a 2012 private placement investment, the Company issued 2,416,785 shares of Series A Preferred Stock at $3.00 per share. The Series A Preferred Stock does not pay a dividend, however, the holders are entitled to receive dividends on shares of preferred stock equal (on an as-if-converted-to-common-stock basis) to and in the same form as dividends (other than dividends in the form of common stock) actually paid on shares of the common stock. The Series A Preferred Stock has voting rights on a modified as-if-converted-to-common-stock-basis. The Series A Preferred Stock has a non-participating liquidation right equal to the original issue price plus accrued unpaid dividends, which are senior to the Company’s common stock. The Series A Preferred Stock can be converted to common shares at any time by the holders or, at the option of the Company, if the arithmetic average of the daily volume weighted average price of the common stock for the ten day period prior to the measurement date is greater than $8.00 per share and the average daily trading volume for the sixty day period immediately prior to the measurement date exceeds 100,000 shares. The conversion price is $3.00 per share, subject to certain adjustments. On November 1, 2012, upon shareholder approval, convertible subordinated notes were converted into 1,583,210 shares of Series A Convertible Preferred Stock. Subject to the Subordination and Intercreditor Agreement among the preferred stockholders, the Company and Wells Fargo, each share of Series A Preferred Stock is redeemable at the option of the holder for an amount equal to the initial issuance price of $3.00 (adjusted to reflect stock splits, stock dividends or like events) plus any accrued and unpaid dividends thereon. The Series A Preferred Stock are classified as temporary equity as the securities are redeemable solely at the option of the holder. In fiscal 2018, 54,531 shares of the Company’s Series A Convertible Preferred Stock were converted into common stock. As a result, Series A Convertible Preferred Stock was reduced by $164,000, with the offsetting increase to Common Stock and Additional Paid-in Capital. As of January 31, 2019 and 2018, 2,895,464 and 2,949,995 shares of Series A Convertible Preferred Stock remained outstanding. |
Operating Leases
Operating Leases | 12 Months Ended |
Jan. 31, 2019 | |
Operating Leases | |
OPERATING LEASES | NOTE 4 — OPERATING LEASES In the second quarter of fiscal 2018, we closed our New York office and subleased the office space for the remaining period of the original lease term which expires in November 2019. As a result of vacating and subleasing the office, we recorded a $472,000 loss on exit of the operating lease in fiscal 2018 , which captures the future net cash flows associated with the vacated premises as of the office closure date, including $384,000 in rent receipts from our sublessee and $48,000 in loss incurred on the disposal of fixed assets . As of January 31, 2019, the total minimum rentals due and to be received under this non-cancelable sublease were $478,000 and $216,000, respectively. In the third quarter of fiscal 2018, we assigned our then current Atlanta office lease that would have expired in November 2022 and entered into a membership agreement to occupy shared office space in Atlanta. As a result of assigning the office lease, we recorded a $562,000 loss on exit of the operating lease in the third quarter of fiscal 2018, which is mainly comprised of $275,000 in broker commissions and a $499,000 loss on the disposal of leasehold improvements, furniture and equipment , net of a $239,000 gain from the write-off of associated lease incentive liability . See Note 12 – Commitments and Contingencies for further details on our shared office arrangement. Rent and leasing expense for facilities and equipment was $964,000 and $1,234,000 for fiscal years 2018 and 2017, respectively. |
Debt
Debt | 12 Months Ended |
Jan. 31, 2019 | |
Debt Disclosure [Abstract] | |
DEBT | NOTE 5 — DEBT Term Loan and Line of Credit On November 21, 2014, we entered into a Credit Agreement (the “Credit Agreement”) with Wells Fargo Bank, N.A., as administrative agent, and other lender parties thereto. Pursuant to the Credit Agreement, the lenders agreed to provide a $10,000,000 senior term loan and a $5,000,000 revolving line of credit to our primary operating subsidiary. Amounts outstanding under the Credit Agreement bear interest at either LIBOR or the base rate, as elected by the Company, plus an applicable margin. Subject to the Company’s leverage ratio, pursuant to the terms of the amendment to the Credit Agreement entered into as of April 15, 2015, the applicable LIBOR rate margin varies from 4.25% to 6.25%, and the applicable base rate margin varies from 3.25% to 5.25%. The term loan and line of credit provide support for working capital, capital expenditures and other general corporate purposes, including permitted acquisitions. The outstanding senior term loan is secured by substantially all of our assets. Pursuant to the terms of the fourth amendment to the Credit Agreement entered into as of November 20, 2018, the original term loan and line of credit maturity date of November 21, 2019 was extended to May 21, 2020. The senior term loan principal balance is payable in quarterly installments, which started in March 2015 and will continue through the maturity date, with the full remaining unpaid principal balance due at maturity. Financing costs associated with the new credit facility are being amortized over its term on a straight-line basis, which is not materially different from the effective interest method. The Credit Agreement includes customary financial covenants, including the requirements that the Company maintain minimum liquidity and achieve certain minimum EBITDA levels (as defined in the Credit Agreement). In addition, the Credit Agreement prohibits the Company from paying dividends on the common and preferred stock. Pursuant to the terms of the Credit Agreement, the Company is required to maintain minimum liquidity of at least (i) $5,000,000 through January 31, 2018, (ii) $4,000,000 from February 1, 2018 through November 19, 2018, (iii) $3,500,000 from November 20, 2018 through and including January 31, 2019, and (iv) $4,000,000 from February 1, 2019 through and including the maturity date of the credit facility. The following table shows our minimum EBITDA covenant thresholds, as modified by the fourth amendment to the Credit Agreement: Applicable period Minimum For the fiscal quarter ended October 31, 2018 $ (509,000) For the 2-quarter period ended January 31, 2019 20,000 For the 3-quarter period ending April 30, 2019 204,000 For the 4-quarter period ending July 31, 2019 180,000 For the 4-quarter period ending October 31, 2019 508,000 For the 4-quarter period ending January 31, 2020 408,000 For the 4-quarter period ending April 30, 2020 and each fiscal quarter thereafter 562,000 The Company was in compliance with the applicable financial loan covenants at January 31, 2019. As of January 31, 2019, the Company had no outstanding borrowings under the revolving line of credit, and had accrued $14,000 in interest and unused line fees. Based upon the borrowing base formula set forth in the Credit Agreement, as of January 31, 2019, the Company had access to the full amount of the $5,000,000 revolving line of credit. Outstanding principal balances on debt consisted of the following at: January 31, 2019 January 31, 2018 Senior term loan $ 4,030,000 $ 4,626,000 Deferred financing cost (82,000) (128,000) Total 3,948,000 4,498,000 Less: Current portion (597,000) (597,000) Non-current portion of debt $ 3,351,000 $ 3,901,000 Future principal payments of debt consisted of the following at January 31, 2019: Fiscal year Senior Term Loan (1) 2019 $ 597,000 2020 3,433,000 Total repayments $ 4,030,000 (1) Term loan balance on the consolidated balance sheet is reported net of deferred financing costs of $82,000. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Jan. 31, 2019 | |
Goodwill and Intangible Assets | |
GOODWILL AND INTANGIBLE ASSETS | NOTE 6 — GOODWILL AND INTANGIBLE ASSETS Intangible assets consist of the following: January 31, 2019 Estimated Accumulated Useful Life Gross Assets Amortization Net Assets Finite-lived assets: Client relationships 5-10 years $ 5,397,000 $ 3,756,000 $ 1,641,000 Covenants not to compete 3 years 130,000 102,000 28,000 Total $ 5,527,000 $ 3,858,000 $ 1,669,000 January 31, 2018 Estimated Accumulated Useful Life Gross Assets Amortization Net Assets Finite-lived assets: Client relationships 5-15 years 5,805,000 3,308,000 2,497,000 Covenants not to compete 0.5-15 years 986,000 823,000 163,000 Supplier agreements 5 years 1,582,000 1,582,000 — License agreement 15 years 4,431,000 1,256,000 3,175,000 Total $ 12,804,000 $ 6,969,000 $ 5,835,000 In fiscal 2018, we recognized an impairment charge of $3,681,000 as the carrying value of finite-lived intangible assets and capitalized product development cost relating to our Clinical Analytics solution no longer appeared recoverable. This impairment charge is included in the “ Impairment of long-lived assets ” line in our consolidated statements of operations for the year ended January 31, 2019. See Note 12 – Commitments and Contingencies for royalty liability associated with our Clinical Analytics solution. Future amortization expense for intangible assets is estimated as follows: Annual Amortization Expense 2019 $ 554,000 2020 491,000 2021 455,000 2022 169,000 Total $ 1,669,000 |
Income Taxes
Income Taxes | 12 Months Ended |
Jan. 31, 2019 | |
Income Taxes | |
INCOME TAXES | NOTE 7 — INCOME TAXES Income taxes consist of the following: Fiscal Year 2018 2017 Current tax (expense) benefit: Federal $ 7,000 $ — State (7,000) (11,000) Total current provision — (11,000) Deferred tax benefit: Federal — 95,000 State — — Total deferred tax benefit — 95,000 Current and deferred tax benefit $ — $ 84,000 The income tax benefit differs from the amount computed using the federal statutory income tax rates of 21% and 32.9% for fiscal 2018 and 2017, respectively, as follows: Fiscal Year 2018 2017 Federal tax benefit at statutory rate $ (1,232,000) $ 1,047,000 State and local taxes, net of federal benefit (expense) (95,000) 195,000 Change in valuation allowance (767,000) 4,505,000 Permanent items: Incentive stock options 18,000 (112,000) Change in fair value of warrants liability — 15,000 Other 1,000 (24,000) Reserve for uncertain tax position 32,000 (19,000) R&D Credit (Federal) (158,000) 219,000 R&D Credit (State) 134,000 (129,000) Tax Cuts and Jobs Act — (5,827,000) Expiring carryforwards 1,965,000 — Other 102,000 214,000 Income tax benefit $ — $ 84,000 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: January 31, 2019 2018 Deferred tax assets: Allowance for doubtful accounts $ 84,000 $ 91,000 Deferred revenue 63,000 155,000 Accruals 141,000 71,000 Net operating loss carryforwards 9,532,000 10,617,000 Stock compensation expense 205,000 236,000 Property and equipment 30,000 109,000 R&D credit 1,102,000 1,144,000 Other 133,000 117,000 Total deferred tax assets 11,290,000 12,540,000 Valuation allowance (11,045,000) (11,813,000) Net deferred tax assets 245,000 727,000 Deferred tax liabilities: Finite-lived intangible assets (245,000) (727,000) Total deferred tax liabilities (245,000) (727,000) Net deferred tax liabilities $ — $ — At January 31, 2019, the Company had U.S. federal net operating loss carry forwards of $36,800,000, which expire at various dates through fiscal 2037. The Company also had state net operating loss carry forwards of $17,170,000, which expire through fiscal 2038. Federal and state R&D credit carry forwards will expire through fiscal 2038 and 2028, respectively. The Tax Cuts and Jobs Act signed into law on December 22, 2017 eliminated the ability to carryback net operating losses and allows net operating losses to be carried forward indefinitely. At January 31, 2019, the Company had indefinite-lived federal net operating loss carry forwards of $3,900,000. 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 $11,045,000 and $11,813,000 at January 31, 2019 and 2018, respectively. The decrease in the valuation allowance of $768,000 was driven primarily by the expiration of federal net operating loss carry forwards. The Company and its subsidiary 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, 2014. All material state and local income tax matters have been concluded for years through January 31, 2013. The Company is no longer subject to IRS examination for periods prior to the tax year ended January 31, 2014; however, carryforward losses that were generated prior to the tax year ended January 31, 2014 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 $275,000 and $295,000 as of January 31, 2019 and 2018, respectively. As of January 31, 2019 and 2018, the Company had no accrued interest and penalties associated with unrecognized tax benefits. A reconciliation of the beginning and ending amounts of gross unrecognized tax benefits (excluding interest and penalties) is as follows: 2018 2017 Beginning of fiscal year $ 295,000 $ 290,000 Additions for tax positions for the current year 32,000 62,000 Additions for tax positions of prior years — 3,000 Subtractions for tax positions of prior years (52,000) (60,000) End of fiscal year $ 275,000 $ 295,000 Impact of the Tax Cuts and Jobs Act The Tax Act was signed into law on December 22, 2017. Among other things, the Tax Act reduces the U.S. federal corporate tax rate from 34.0 percent to 21.0 percent effective January 1, 2018 and allows for 100 percent expensing of certain fixed assets placed in service after September 27, 2017. On December 22, 2017, Staff Accounting Bulletin No. 118 (“SAB 118”) was issued to address the application of U.S. GAAP in situations where a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to finalize the calculations for certain income tax effects of the Tax Cuts and Jobs Act. In accordance with SAB 118, in fiscal 2017 the Company recorded a provisional estimated net tax expense of $5.8 million in connection with the tax effect of the Tax Act. Adjustments to this provisional amount recorded in fiscal 2018 did not have a significant impact on our consolidated financial statements. Our accounting for the effects of the Tax Act enactment is now complete. |
Major Clients
Major Clients | 12 Months Ended |
Jan. 31, 2019 | |
Major Clients | |
MAJOR CLIENTS | NOTE 8 — MAJOR CLIENTS In fiscal year 2018, no individual client accounted for 10% or more of our total revenues. Two clients represented 12% and 9%, respectively, of total accounts receivable as of January 31, 2019. In fiscal year 2017, no individual client accounted for 10% or more of our total revenues. Two clients represented 12% and 11%, respectively, of total accounts receivable as of January 31, 2018. |
Employee Retirement Plan
Employee Retirement Plan | 12 Months Ended |
Jan. 31, 2019 | |
Employee Retirement Plan | |
EMPLOYEE RETIREMENT PLAN | NOTE 9 — 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 matched 100% up to the first 4% of compensation deferred by each associate in the 401(k) plan through December 31, 2018. Effective January 1, 2019, the Company’s matched amount was decreased to 50% up to the first 4% of compensation deferred by each associate. The total compensation expense for this matching contribution was $483,000 and $524,000 in fiscal 2018 and 2017, respectively. |
Employee Stock Purchase Plan
Employee Stock Purchase Plan | 12 Months Ended |
Jan. 31, 2019 | |
Stock-Based Compensation | |
EMPLOYEE STOCK PURCHASE PLAN | NOTE 10 — EMPLOYEE STOCK PURCHASE PLAN The Company has an Employee Stock Purchase Plan under which associates may purchase up to 1,000,000 shares of common stock. Under the plan, eligible associates may elect to contribute, through payroll deductions, up to 10% of their base pay to a trust during any plan year, i.e., January 1 through December 31 of the same year. Semi-annually, typically in January and July of each year, the plan issues, for the benefit of the employees, shares of common stock at the lesser of (a) 85% of the fair market value of the common stock on the first day of the vesting period (January 1 or July 1), or (b) 85% of the fair market value of the common stock on the last day of the vesting period (June 30 or December 31 of the same year). At January 31, 2019, 431,556 shares remain that can be purchased under the plan. The Company recognized compensation expense of $4,000 and $19,000 for fiscal years 2018 and 2017, respectively, under this plan. During fiscal 2018, 13,339 shares were purchased at the price of $0.69 per share and 10,370 shares were purchased at the price of $1.20 per share; during fiscal 2017, 21,234 shares were purchased at the price of $0.98 per share and 26,048 shares were purchased at the price of $0.91 per share. The cash received for shares purchased from the plan was $22,000 and $45,000 in fiscal 2018 and 2017, respectively. The purchase price at June 30, 2019 will be 85% of the lower of (a) the closing price on January 2, 2019 ($0.88) or (b) the closing price on June 30, 2019. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Jan. 31, 2019 | |
Stock-Based Compensation | |
STOCK-BASED COMPENSATION | NOTE 11 — STOCK-BASED COMPENSATION Stock Option Plans The Company’s Second Amended and Restated 2013 Stock Incentive Plan (the “2013 Plan”) replaced the 2005 Incentive Compensation Plan (the “2005 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. Outstanding awards under the 2005 Plan continue to be governed by the terms of the 2005 Plan until exercised, expired or otherwise terminated or canceled, but no further equity awards are allowed to be granted under the 2005 Plan. Under the 2013 Plan, the Company is authorized to issue a number of shares not to exceed (i) 2,300,000 plus (ii) the number of shares remaining available for issuance under the 2005 Plan as of the date the 2005 Plan was replaced, plus (iii) the number of shares that become available under the 2005 Plan pursuant to forfeiture, termination, lapse, or satisfaction of a 2005 Plan award in cash or property other than shares of common stock. The options granted under the 2013 Plan and 2005 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. At January 31, 2019 and 2018, options to purchase 1,355,657 and 1,873,156 shares of the Company’s common stock, respectively, have been granted and are outstanding under the 2013 Plan. There are no SARs outstanding. Inducement grants are approved by the Company’s compensation committee pursuant to NASDAQ Marketplace Rule 5635(c)(4). The terms of the grants were nearly identical to the terms and conditions of the Company’s stock incentive plans in effect at the time of each inducement grant. For the year ended January 31, 2019, with regard to inducement grants, no stock options were issued, no options expired, 75,000 options were forfeited and no stock options were exercised. For the year ended January 31, 2018, with regard to inducement grants, no stock options were issued, no options expired, no options were forfeited and no stock options were exercised. As of January 31, 2019 and 2018, there were 225,000 and 300,000 options outstanding, respectively, under inducement grants. Please see “Restricted Stock” section for information on the restricted shares. A summary of stock option activity follows: Weighted Average Remaining Aggregate Options Exercise Price Life in Years intrinsic value Outstanding as of February 1, 2018 2,173,156 $ 3.42 Granted 47,000 1.68 Exercised (50,694) 1.18 Expired (201,469) 2.55 Forfeited (387,336) 3.61 Outstanding as of January 31, 2019 1,580,657 $ 3.50 6.13 $ 15,000 Exercisable as of January 31, 2019 1,401,435 $ 3.73 5.91 $ 8,000 Vested or expected to vest as of January 31, 2019 1,542,516 $ 3.54 6.09 $ 14,000 (1) The exercise prices range from $1.10 to $8.10, of which 440,000 shares are between $1.10 and $2.00 per share, 362,240 shares are between $2.19 and $4.00 per share, and 778,417 shares are between $4.02 and $8.10 per share. (2) The exercise prices range from $1.18 to $8.10, of which 280,778 shares are between $1.18 and $2.00 per share, 362,240 shares are between $2.19 and $4.00 per share, and 758,417 shares are between $4.02 and $8.10 per share. For fiscal 2018 and 2017, the weighted average grant date fair value of options granted during the year was $1.03 and $0.65, respectively, and the total intrinsic value of options exercised during the year was $13,000 and zero for fiscal 2018 and 2017, respectively. The fiscal 2018 and 2017 stock-based compensation was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted average assumptions for each fiscal year: 2018 2017 Expected life 6 years 6 years Risk-free interest rate 2.89 % 2.65 % Weighted average volatility factor 0.65 0.65 Dividend yield — — Forfeiture rate 20 % 13 % At January 31, 2019, there was $98,000 of unrecognized compensation cost related to non-vested stock-option awards. That cost is expected to be recognized over a remaining weighted average period of 0.6 years. The expense associated with stock option awards was $244,000 and $563,000, respectively, for fiscal 2018 and 2017. Cash received from the exercise of options was zero in both fiscal 2018 and 2017. The 2005 Plan and the 2013 Plan contain 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% or more of the total of all of the Company’s then-outstanding voting securities, unless through a transaction arranged by or consummated with the prior approval of the Board of Directors. Other change in control provisions relate to mergers and acquisitions or a determination of change in control by the Company’s Board of Directors. 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. The grant date fair value per share of restricted stock, which is based on the closing price of our common stock on the grant date, is expensed on a straight-line basis as the restriction period lapses. The shares represented by restricted stock awards are considered outstanding at the grant date, as the recipients are entitled to voting rights. A summary of restricted stock award activity for fiscal 2018 and 2017 is presented below: Weighted Non-vested Average Number of Grant Date Shares Fair Value Non-vested balance at January 31, 2017 858,225 $ 1.59 Granted 295,337 1.17 Vested (331,975) 1.47 Forfeited — — Non-vested balance at January 31, 2018 821,587 $ 1.59 Granted 826,666 1.15 Vested (453,537) 1.34 Forfeited (130,850) 1.61 Non-vested balance at January 31, 2019 1,063,866 $ 1.27 At January 31, 2019, there was $1,110,000 of unrecognized compensation cost related to restricted stock awards. That cost is expected to be recognized over a remaining period of 2.3 years. The expense associated with restricted stock awards was $383,000 and $546,000, respectively, for fiscal 2018 and 2017. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jan. 31, 2019 | |
Commitments and Contingencies | |
COMMITMENTS AND CONTINGENCIES | NOTE 12 — COMMITMENTS AND CONTINGENCIES Membership agreement to occupy shared office space In fiscal 2018, the Company entered into a membership agreement to occupy shared office space in Atlanta, Georgia. Our new shared office arrangement commenced upon taking possession of the space and ends in November 2020. Fees due under the membership agreement are based on the number of contracted seats and the use of optional office services. As of January 31, 2019, minimum fees due under the shared office arrangement totaled $286,000. Royalty Liability On October 25, 2013, we entered into a Software License and Royalty Agreement (the “Royalty Agreement”) with Montefiore Medical Center (“Montefiore”) pursuant to which Montefiore granted us an exclusive, worldwide 15‑year license of Montefiore’s proprietary clinical analytics platform solution, Clinical Looking Glass® (“CLG”), now known as our Clinical Analytics solution. In addition, Montefiore assigned to us the existing license agreement with a customer using CLG. As consideration under the Royalty Agreement, we paid Montefiore a one-time initial base royalty fee of $3,000,000. Additionally, we originally committed that Montefiore would receive at least an additional $3,000,000 of on-going royalty payments related to future sublicensing of CLG by us within the first six and one-half years of the license term. On July 1, 2018, we entered into a joint amendment to the Royalty Agreement and the existing Software License and Support Agreement with Montefiore to modify the payment obligations of the parties under both agreements. According to the modified provisions, our obligation to pay on-going royalties under the Royalty Agreement was replaced with the obligation to (i) provide maintenance services for 24 months and waive associated maintenance fees, and (ii) pay $1,000,000 in cash by July 31, 2020. As a result of the commitment to fulfill a portion of our obligation by providing maintenance services at no cost, the royalty liability was significantly reduced, with a corresponding increase to deferred revenues. As of January 31, 2019, we had $1,172,000 in deferred revenues associated with this modified royalty liability. The fair value of the royalty liability as of January 31, 2019 was determined based on the amount payable in cash. As of January 31, 2019 and 2018, the present value of this royalty liability was $905,000 and $2,469,000, respectively. 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 could have a material adverse effect on the Company’s consolidated results of operations, financial position or cash flows. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Jan. 31, 2019 | |
Subsequent Events | |
SUBSEQUENT EVENTS | NOTE 13 — SUBSEQUENT EVENTS We have evaluated subsequent events occurring after January 31, 2019, and based on our evaluation we did not identify any events that would have required recognition or disclosure in these consolidated financial statements. |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts and Reserves | 12 Months Ended |
Jan. 31, 2019 | |
Valuation and Qualifying Accounts | |
Schedule II - Valuation and Qualifying Accounts and Reserves | Schedule II Valuation and Qualifying Accounts and Reserves Streamline Health Solutions, Inc. For the two years ended January 31, 2019 Additions Balance at Charged to Charged to Beginning of Costs and Other Balance at Description Period Expenses Accounts Deductions End of Period (in thousands) Year ended January 31, 2019: Allowance for doubtful accounts $ 349 $ 13 $ — $ (17) $ 345 Year ended January 31, 2018: Allowance for doubtful accounts $ 198 $ 234 $ — $ (83) $ 349 |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Jan. 31, 2019 | |
Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The consolidated financial statements include the accounts of Streamline Health Solutions, Inc. and its wholly-owned subsidiary, Streamline Health, Inc. 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. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles 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 stock-based compensation, capitalization of software development costs, intangible assets, allowance for doubtful accounts, 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. |
Receivables and Allowance for Doubtful Accounts | Receivables Accounts and contract receivables are comprised of amounts owed to the Company for licensed software, professional services, including coding audit, maintenance services, and software as a service and are presented net of the allowance for doubtful accounts. The timing of revenue recognition may not coincide with the billing terms of the client contract, resulting in unbilled receivables or deferred revenues; therefore certain contract receivables represent revenues recognized prior to client billings. Individual contract terms with clients or resellers determine when receivables are due. For billings where the criteria for revenue recognition have not been met, deferred revenue is recorded until all revenue recognition criteria have been met. Allowance for Doubtful Accounts In determining the allowance for doubtful accounts, aged receivables are analyzed periodically by management. Each identified receivable is reviewed based upon the most recent information available and the status of any open or unresolved issues with the client preventing the payment thereof. Corrective action, if necessary, is taken by the Company to resolve open issues related to unpaid receivables. During these periodic reviews, the Company determines the required allowances for doubtful accounts for estimated losses resulting from the unwillingness or inability of its clients or resellers to make required payments. The allowance for doubtful accounts was approximately $345,000 and $349,000 at January 31, 2019 and 2018, respectively. The Company believes that its reserve is adequate, however results may differ in future periods. Bad debt expense for fiscal years 2018 and 2017 was as follows: 2018 2017 Bad debt expense $ 13,000 $ 234,000 |
Concessions Accrual | Concessions Accrual In determining the concessions accrual, the Company evaluates historical concessions granted relative to revenue. The concession accrual included in accrued other expenses on the Company’s consolidated balance sheets was $44,000 and $48,000 as of January 31, 2019 and 2018, respectively. |
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: Computer equipment and software 3‑4 years Office equipment 5 years Office furniture and fixtures 7 years Leasehold improvements Term of lease or estimated useful life, whichever is shorter Depreciation expense for property and equipment in fiscal 2018 and 2017 was $450,000 and $774,000, respectively. Normal repair and maintenance is 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 On December 13, 2013, the Company entered into an amended lease obligation to lease 24,335 square feet of office space in Atlanta, Georgia. The lease commenced upon taking possession of the space and was scheduled to end in November 2022. The provisions of the lease provided for rent abatement for the first eight months of the lease term. Upon taking possession of the premises, the rent abatement and the unamortized balance of deferred rent associated with the previously leased premises were aggregated with the total expected rental payments and amortized on a straight-line basis over the term of the lease. In the third quarter of fiscal 2018, we assigned our Atlanta office lease and relocated our corporate office to a new space. See Note 12 – Commitments and Contingencies for further details on our new shared office arrangement. In fiscal 2014, the Company entered into a lease obligation to lease 10,350 square feet of office space in New York, New York. The lease commenced upon taking possession of the space and expires in November 2019. The lease agreement provided for rent abatement for the first two months of the lease term. Upon taking possession of the premises, the rent abatement was aggregated with the total expected rental payments and amortized on a straight-line basis over the term of the lease. In the second quarter of fiscal 2018, we closed our New York office and subleased the office space for the remaining period of the original lease term. See Note 4 – Operating Leases for further details on the closure of our New York office. The Company had capital leases to finance office equipment purchases that continued into the third quarter of fiscal 2017. The amortization expense of the leased equipment is included in depreciation expense. As of January 31, 2019 and 2018, the Company had no material capital lease obligations. |
Debt Issuance Costs | Debt Issuance Costs Costs related to the issuance of debt are 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. Deferred financing costs are presented on the Company’s consolidated balance sheets as a direct deduction from the carrying amount of the non-current portion of our term loan. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company reviews the carrying value of long-lived assets for impairment whenever facts and circumstances exist that would suggest that assets might be impaired or that the useful lives should be modified. Among the factors the Company considers in making the evaluation are changes in market position and profitability. If facts and circumstances are present which may indicate that the carrying amount of the assets may not be recoverable, the Company will prepare a projection of the undiscounted cash flows of the specific asset or asset group and determine if the long-lived assets are recoverable based on these undiscounted cash flows. If impairment is indicated, an adjustment will be made to reduce the carrying amount of these assets to their fair values. |
Capitalized Software Development Costs | Capitalized Software Development Costs Software development costs associated with the planning and designing phase of software development, including coding and testing activities necessary to establish technological feasibility, are classified as research and development and are expensed as incurred. Once technological feasibility has been determined, a portion of the costs incurred in development, including coding, testing and quality assurance, are capitalized and subsequently reported at the lower of unamortized cost or net realizable value. The Company capitalized such costs, including interest, of $3,003,000 and $1,836,000 in fiscal 2018 and 2017, respectively. Amortization for the Company’s software systems is provided on a solution-by-solution basis over the estimated economic life of the software, typically three to five years, using the straight-line method. Amortization commences when a solution is available for general release to clients. Acquired internally-developed software from acquisitions is amortized using the straight-line method. Amortization expense on all internally-developed software was $1,160,000 and $2,113,000 in fiscal 2018 and 2017, respectively, and was included in the consolidated statements of operations as follows: Fiscal Year 2018 2017 Amortization expense on internally-developed software included in: Cost of systems sales $ 768,000 $ 1,914,000 Cost of software as a service 379,000 186,000 Cost of audit services 13,000 13,000 Total amortization expense on internally-developed software $ 1,160,000 $ 2,113,000 Research and development expense was $4,261,000 and $5,352,000 in fiscal 2018 and 2017, respectively. |
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. The carrying amount of the Company’s long-term debt approximates fair value since the variable interest rates being paid on the amounts approximate the market interest rate. Long-term debt is classified as Level 2. The table below provides information on our liabilities that are measured at fair value on a recurring basis: Quoted Prices in Significant Other Significant Total Fair Active Markets Observable Inputs Unobservable Inputs Value (Level 1) (Level 2) (Level 3) At January 31, 2019 Royalty liability (1) (3) $ 905,000 $ — $ — $ 905,000 At January 31, 2018 Royalty liability (1) (2) $ 2,469,000 $ — $ — $ 2,469,000 (1) The initial fair value of royalty liability was determined by management with the assistance of an independent third-party valuation specialist, and by management thereafter. Fair value adjustments are included within miscellaneous expense in the consolidated statements of operations. (2) The fair value of the royalty liability was determined based on the probability-weighted revenue scenarios for the Streamline Health® Clinical Analytics solution licensed from Montefiore Medical Center (discussed in Note 12 – Commitments and Contingencies). (3) Following the modification of the Royalty Agreement in the second quarter of fiscal 2018 (discussed in Note 12 – Commitments and Contingencies ), the royalty liability was significantly reduced as a result of the commitment to fulfill a portion of our obligation by providing incremental maintenance services. The fair value of the royalty liability was determined based on the portion of the modified royalty commitment payable in cash. In fiscal 2018, the Company determined that its strategic focus on serving the middle of the revenue cycle and the resulting decrease in the customer base for our Clinical Analytics solution constituted a triggering event for impairment analysis. We assessed the fair value of long-lived assets associated with our Clinical Analytics solution based on expected future cash flows from this solution, including the royalty liability , and determined that related intangible assets and capitalized software development costs classified as Level 3 were fully impaired, therefore had zero value as of December 31, 2018. For further details on the impairment loss and royalty liability associated with our Clinical Analytics solution, see Note 6 – Goodwill and Intangible Assets and Note 12 – Commitments and Contingencies, respectively. |
Revenue Recognition | Revenue Recognition We derive revenue from the sale of internally-developed software, either by licensing for local installation or by a software as a service (“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 provided to help clients review their internal coding audit processes. Additional revenues are also derived from reselling third-party software and hardware components. We recognize revenue in accordance with Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers (“ASC 606”), the new revenue recognition standard established by ASU 2014‑09. The core principle of ASC 606 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. 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 customer · 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 We follow the accounting revenue guidance under ASC 606 to determine whether 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 customer. Revenue is recognized net of any taxes collected from customers and subsequently remitted to governmental authorities. If we determine that we have not satisfied a performance obligation, we will defer recognition of the revenue until the performance obligation is deemed to be satisfied. Maintenance and support and SaaS agreements are generally non-cancelable 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. Significant judgment is required to determine the standalone selling price (“SSP”) for each performance obligation, the amount allocated to each performance obligation and whether it depicts the amount that the Company expects to receive in exchange for the related product and/or service. As the selling prices of the Company’s software licenses are highly variable, 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, and audit services based on observable standalone sales. Contract Combination The Company may execute more than one contract or agreement with a single customer. 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. Systems Sales The Company’s software license arrangements provide the customer 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 customers 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. Software as a Service SaaS-based contracts include use of the Company’s platform, implementation, support and other services which represent a single promise to provide continuous access to its software solutions. The Company recognizes revenue over time for the life of the contract. We defer the direct costs, which include salaries and benefits, for professional services related to SaaS contracts. These deferred costs will be amortized over the identical term as the associated revenues. As of January 31, 2019 and 2018, we had deferred costs of $251,000 and $471,000, respectively, net of accumulated amortization of $399,000 and $312,000, respectively. Amortization expense of these costs was $346,000 and $270,000 in fiscal 2018 and 2017, respectively. 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. Comparative GAAP Financials The adoption of the new standard has the following impact to the Company’s condensed consolidated statements of operations for the year ended January 31, 2019: Year Ended January 31, 2019 As reported under Balances without Adjustments due to Revenues Systems sales $ 2,472,000 $ 2,322,000 $ 150,000 Maintenance and support 12,586,000 12,590,000 (4,000) As of January 31, 2019 As reported under Balances without Adjustments due to Assets Contract receivables, current $ 1,263,000 $ 803,000 $ 460,000 Contract receivables, noncurrent 407,000 27,000 380,000 Liabilities Deferred revenues, current 8,338,000 9,084,000 (746,000) Shareholders' Equity Accumulated deficit $ (76,550,000) $ (78,136,000) $ 1,586,000 The adoption of ASC 606 resulted in a decrease in deferred revenues and an increase in contract receivables driven by upfront recognition of revenue, rather than over the contract period, from certain multi-year term software license agreements that include both software licenses and software support and maintenance. Revenues related to SaaS-based offerings, hardware sales, maintenance and support, and audit services remain substantially unchanged. Disaggregation of Revenue The following table provides information about disaggregated revenue by type and nature of revenue stream: Year Ended January 31, 2019 Recurring Revenue Non-recurring Revenue Total Systems sales $ 899,000 $ 1,573,000 $ 2,472,000 Professional services — 1,336,000 1,336,000 Audit services — 1,118,000 1,118,000 Maintenance and support 12,586,000 — 12,586,000 Software as a service 4,853,000 — 4,853,000 Total revenue: $ 18,338,000 $ 4,027,000 $ 22,365,000 Contract Receivables and Deferred Revenues The Company receives payments from customers 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 customer. 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, 2019, we recognized $9,449,000 in revenue from deferred revenues outstanding as of January 31, 2018. The cumulative effect of changes related to the adoption of ASC 606 are reflected in the opening balance of accumulated deficit as shown below: As Reported Adjustments As Adjusted ASSETS Contract receivables, current $ 224,000 $ 283,000 $ 507,000 Contract receivables, noncurrent — 468,000 468,000 LIABILITIES Deferred revenues, current 9,482,000 (689,000) 8,793,000 STOCKHOLDERS' EQUITY Accumulated deficit $ (72,125,000) $ 1,440,000 $ (70,685,000) Transaction price allocated to the remaining performance obligations Revenue allocated to remaining performance obligations represents contracted revenue that will be recognized in future periods, which is comprised of deferred revenue and amounts that will be invoiced and recognized as revenue in future periods. Revenue allocated to remaining performance obligations was $27 million as of January 31, 2019, of which the Company expects to recognize approximately 65% over the next 12 months and the remainder thereafter. Deferred commissions costs (contract acquisition costs) Contract acquisition costs, which consist of sales commissions paid or payable, is considered incremental and recoverable costs of obtaining a contract with a customer. Sales commissions for initial and renewal contracts are deferred and then amortized on a straight-line basis over a period of benefit, which the Company has determined to be the customer life. 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 are included on the consolidated balance sheets within prepaid assets and other current assets, respectively, and totaled $185,000 and $114,000, respectively, as of January 31, 2019. As of January 31, 2018, deferred commissions costs paid and payable totaled $136,000 and $116,000, respectively. In fiscal 2018, $145,000 in amortization expense associated with deferred sales commissions was included in selling, general and administrative expenses on the condensed consolidated statements of operations. |
Concentrations | Concentrations Financial instruments, which potentially expose the Company to concentrations of credit risk, consist primarily of accounts receivable. The Company’s accounts receivable are concentrated in the healthcare industry. However, the Company’s clients typically are well-established hospitals, medical facilities or major health information systems companies that resell the Company’s solutions that have good credit histories. 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. The Company currently buys all of its hardware and some major software components of its healthcare information systems from third-party vendors. Although there are a limited number of vendors capable of supplying these components, management believes that other suppliers could provide similar components on comparable terms. |
Business Combinations | Business Combinations The assets acquired, liabilities assumed and contingent consideration are recorded at their fair value on the acquisition date with subsequent changes recognized in earnings. These estimates are inherently uncertain and are subject to refinement. Management develops estimates based on assumptions as a part of the purchase price allocation process to value the assets acquired and liabilities assumed as of the business combination date. As a result, the Company may recognize adjustments to provisional amounts of assets acquired or liabilities assumed in operating expenses in the reporting period in which the adjustments are determined. The Company records acquisition and transaction related expenses in the period in which they are incurred. Acquisition and transaction-related expenses primarily consist of legal, banking, accounting and other advisory fees of third parties associated with potential acquisitions. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill and other intangible assets were recognized in conjunction with the Interpoint, Meta, CLG and Opportune IT acquisitions, as well as the Unibased acquisition (prior to divestiture of such assets). Identifiable intangible assets include purchased intangible assets with finite lives, which primarily consist of internally-developed software, client relationships, non-compete agreements and license agreements. Finite-lived purchased intangible assets are amortized over their expected period of benefit, which generally ranges from one to 10 years, using the straight-line and undiscounted expected future cash flows methods. The Company assesses the useful lives and possible impairment of intangible assets when an event occurs that may trigger such a review. Factors considered important which could trigger a review include: · significant underperformance relative to historical or projected future operating results; · significant changes in the manner of use of the acquired assets or the strategy for the overall business; · identification of other impaired assets within a reporting unit; · disposition of a significant portion of an operating segment; · significant negative industry or economic trends; · significant decline in the Company’s stock price for a sustained period; and · a decline in the market capitalization relative to the net book value. Determining whether a triggering event has occurred involves significant judgment by the Company. The Company assesses goodwill annually (as of November 1), or more frequently when events and circumstances, such as the ones mentioned above, occur indicating that the recorded goodwill may be impaired. During the years ended January 31, 2019 and 2018, the Company did not note any of the above qualitative factors, which would be considered a triggering event for goodwill impairment. In assessing qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company assesses relevant events and circumstances that may impact the fair value and the carrying amount of a reporting unit. The identification of relevant events and circumstances and how these may impact a reporting unit’s fair value or carrying amount involve significant judgments by management. These judgments include the consideration of macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, events which are specific to the Company and trends in the market price of the Company’s common stock. Each factor is assessed to determine whether it impacts the impairment test positively or negatively, and the magnitude of any such impact. The two-step goodwill impairment test requires the Company to identify its reporting units and to determine estimates of the fair values of those reporting units as of the impairment testing date. 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 customer for the products and services and the methods used to distribute the products and services). The Company determined that it has one operating segment and one reporting unit. To conduct a quantitative two-step goodwill impairment test, the fair value of the reporting unit is first compared to its carrying value. If the reporting unit’s carrying value exceeds its fair value, the Company performs the second step and records an impairment loss to the extent that the carrying value of goodwill exceeds its implied fair value. The Company estimates the fair value of its reporting unit using a blend of market and income approaches. The market approach consists of two separate methods, including reference to the Company’s market capitalization, as well as the guideline publicly traded company method. The market capitalization valuation method is based on an analysis of the Company’s stock price on and around the testing date, plus a control premium. The guideline publicly traded company method was made by reference to a list of publicly traded software companies providing services to healthcare organizations, as determined by management. The market value of common equity for each comparable company was derived by multiplying the price per share on the testing date by the total common shares outstanding, plus a control premium. Selected valuation multiples are then determined and applied to appropriate financial statistics based on the Company’s historical and forecasted results. The Company estimates the fair value of its reporting unit using the income approach, via discounted cash flow valuation models which include, but are not limited to, assumptions such as a “risk-free” rate of return on an investment, the weighted average cost of capital of a market participant and future revenue, operating margin, working capital and capital expenditure trends. Determining the fair value of reporting unit and goodwill includes significant judgment by management, and different judgments could yield different results. The Company performed its annual assessment of goodwill during the fourth quarter of fiscal 2018, using the two-step approach described above. The first step of the goodwill impairment test, used to identify potential impairment, compares the fair value of a reporting unit with its carrying amount, including goodwill. Based on the analysis performed for step one, the fair value of the reporting unit exceeded the carrying amount of the reporting unit, including goodwill, and, therefore, a goodwill impairment loss was not recognized. As the Company passed step one of the analysis, step two was not required. In fiscal 2018, long-lived assets associated with our Clinical Analytics solution were deemed impaired and their corresponding balance was fully written off (see Note 6 - Goodwill and Intangible Assets to our consolidated financial statements included herein). |
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. The Company incurred total annual compensation expense related to stock-based awards of $629,000 and $1,109,000 in fiscal 2018 and 2017, respectively. The fair value of the stock options granted in fiscal 2018 and 2017 was 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. Further, the forfeiture rate impacts the amount of aggregate compensation. 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 2018 and 2017, 37,249 and 32,033 shares of common stock were surrendered to the Company to satisfy tax withholding obligations totaling $62,000 and $42,000, respectively, in connection with the vesting of restricted stock awards. Shares surrendered by the restricted stock award recipients in accordance with the applicable plan are deemed canceled, and therefore are not available to be reissued. The Company awarded 501,666 and 220,337 shares of restricted stock to officers and directors of the Company in fiscal 2018 and 2017, respectively. |
Income Taxes | Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and for tax credit and loss carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. In assessing net deferred tax assets, the Company considers whether it is more likely than not that some or all of the deferred tax assets will not be realized. The Company establishes a valuation allowance when it is more likely than not that all or a portion of deferred tax assets will not be realized. See Note 7 - Income Taxes for further details. The Company provides for uncertain tax positions and the related interest and penalties based upon management’s assessment of whether certain tax positions are more likely than not to be sustained upon examination by tax authorities. At January 31, 2019, the Company believes it has appropriately accounted for any uncertain tax positions. The Company has recorded $275,000 and $295,000 in reserves for uncertain tax positions and corresponding interest and penalties, respectively, as of January 31, 2019 and 2018. |
Net Loss Per Common Share | Net Loss Per Common Share The Company presents basic and diluted earnings per share (“EPS”) data for its common stock. Basic EPS is calculated by dividing the net loss attributable to common stockholders of the Company by the weighted average number of shares of common stock outstanding during the period. Diluted EPS is calculated based on the profit or loss attributable to common stockholders and the weighted average number of shares of common stock outstanding adjusted for the effects of all potential dilutive common stock issuances related to options, unvested restricted stock, and convertible preferred stock. Potential common stock dilution related to outstanding stock options and unvested restricted stock is determined using the treasury stock method, while potential common stock dilution related to Series A Convertible Preferred Stock is determined using the “if converted” method. The Company’s unvested restricted stock awards and Series A Convertible Preferred Stock are considered participating securities under ASC 260, Earnings Per Share , which means the security may participate in undistributed earnings with common stock. The Company’s unvested restricted stock awards are considered participating securities because they entitle holders to non-forfeitable rights to dividends or dividend equivalents during the vesting term. The holders of the Series A Convertible Preferred Stock would be entitled to share in dividends, on an as-converted basis, if the holders of common stock were to receive dividends, other than dividends in the form of common stock. In accordance with ASC 260, a company is required to use the two-class method when computing EPS when a company has a security that qualifies as a “participating security.” The two-class method is an earnings allocation formula that determines EPS for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. In determining the amount of net earnings to allocate to common stockholders, earnings are allocated to both common and participating securities based on their respective weighted-average shares outstanding for the period. Diluted EPS for the Company’s common stock is computed using the more dilutive of the two-class method or the if-converted method. In accordance with ASC 260, securities are deemed not to be participating in losses if there is no obligation to fund such losses. For the years ended January 31, 2019 and 2018, the unvested restricted stock awards and the Series A Convertible Preferred Stock were deemed not to be participating since there was a net loss. As of January 31, 2019 and 2018, there were 2,895,464 and 2,949,995 shares of Series A Convertible Preferred Stock outstanding, respectively, each share being convertible into one share of the Company’s common stock. For the years ended January 31, 2019 and 2018, 169,959 and 293,568, respectively, unvested restricted shares of common stock were excluded from the diluted EPS calculation as their effect would have been anti-dilutive. The following is the calculation of the basic and diluted net loss per share of common stock: Fiscal Year 2018 2017 Net earnings (loss) $ (5,865,000) $ (3,099,000) Weighted average shares outstanding - Basic 19,540,980 19,090,899 Stock options, Restricted stock and Series A Convertible Preferred Stock — — Weighted average shares outstanding - Diluted 19,540,980 19,090,899 Basic net earnings (loss) per share of common stock $ (0.30) $ (0.16) Diluted net earnings (loss) per share of common stock $ (0.30) $ (0.16) Diluted net loss per share excludes the effect of stock options as their inclusion would have been anti-dilutive. As of January 31, 2019 and 2018, there were 1,580,657 and 2,173,156 outstanding stock options, respectively. |
Loss Contingencies | Loss Contingencies We are subject to the possibility of various loss contingencies arising in the 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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued ASU 2014‑09, Revenue from Contracts with Customers, Topic 606 (“ASC 606”), which supersedes the revenue recognition requirements in ASC 605, Revenue Recognition. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014‑09 defines a five-step process to achieve this principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than required under existing GAAP, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. The ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In July 2016, the FASB delayed the effective date by one year and the guidance became effective for us on February 1, 2018. The new revenue recognition guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application as an adjustment to retained earnings (modified retrospective method). We adopted the standard effective February 1, 2018 using the modified retrospective method. We have completed our assessment of our systems, available data and processes affected by the implementation of this new revenue recognition guidance. The Company’s formal accounting policies have been established. As a result of the implementation of this standard, the Company recorded an adjustment to reduce accumulated deficit as of February 1, 2018 by $1.4 million, related primarily to the timing of revenue. The most significant impact relates to our accounting for term software license revenue. Revenues related to SaaS-based offerings, hardware sales, maintenance and support, and audit services remain substantially unchanged. For arrangements which include both software license and maintenance and support components, we expect to recognize the revenue attributed to license upfront at a point in time rather than over the term of the contract. We also expect to recognize license revenues upfront rather than be restricted to payment amounts due under extended payment term contracts as required under the previous guidance. Additionally, the new revenue recognition guidance requires the capitalization of all incremental costs of obtaining a contract with a customer that an entity expects to recover. We had already been capitalizing sales commissions associated with new and renewal contracts. We did not identify any other costs that would be eligible for capitalization under the new guidance. As a result, we did not record any additional deferral for such costs upon adoption of the new guidance on February 1, 2018. In February 2016, the FASB issued ASU 2016‑02, Leases (Topic 842), to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The ASU is effective for annual periods beginning after December 15, 2018, including interim periods within those fiscal years. The update became effective for us on February 1, 2019. Early adoption of the update is permitted. We currently expect to record right of use assets of approximately $175,000 and additional lease liability of approximately $175,000 upon the adoption of ASU 2016-02. We do not anticipate any material changes to our operating results or liquidity as a result of the adoption of ASU 2016-12. In August 2016, the FASB issued ASU 2016‑15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments , to clarify how certain cash receipts and cash payments should be presented and classified in the statement of cash flows. The ASU should be applied using a retrospective transition method to each period presented. The standard became effective for us on February 1, 2018. The adoption of this ASU did not have a significant impact on our consolidated financial statements. In January 2017, the FASB issued ASU 2017‑01, Business Combinations (Topic 805): Clarifying the Definition of a Business , to clarify the definition of a business to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The standard became effective for us on February 1, 2018. For the periods included in this report, there was no impact on our financial position or results of operations as a result of the adoption of this update. In January 2017, the FASB issued ASU 2017‑04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment , which removes Step 2 from the goodwill impairment test. The standard will be effective for us on February 1, 2020. Early adoption of this update is permitted. We do not expect that the adoption of this ASU will have a significant impact on our consolidated financial statements. In May 2017, the FASB issued ASU 2017‑09, Compensation - Stock Compensation (Topic 718), Scope of Modification Accounting , to clarify which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. The update became effective for us on February 1, 2018. For the periods included in this report, there was no impact on our financial position or results of operations as a result of the adoption of this update. In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting , which expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The update specifies that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in its own operations by issuing share-based payment awards. ASU 2018-07 also clarifies that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under ASC 606. The standard is effective for interim and annual periods beginning after December 15, 2018. Early adoption of the update is permitted. We adopted the ASU early effective February 1, 2018. The adoption of this ASU did not have a significant impact on our consolidated financial statements. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Jan. 31, 2019 | |
Significant Accounting Policies | |
Schedule of Bad Debt Expense | 2018 2017 Bad debt expense $ 13,000 $ 234,000 |
Property and Equipment | Computer equipment and software 3‑4 years Office equipment 5 years Office furniture and fixtures 7 years Leasehold improvements Term of lease or estimated useful life, whichever is shorter |
Schedule of Capitalized Software Development Costs | Fiscal Year 2018 2017 Amortization expense on internally-developed software included in: Cost of systems sales $ 768,000 $ 1,914,000 Cost of software as a service 379,000 186,000 Cost of audit services 13,000 13,000 Total amortization expense on internally-developed software $ 1,160,000 $ 2,113,000 |
Fair Value of Liabilities on a Recurring Basis | Quoted Prices in Significant Other Significant Total Fair Active Markets Observable Inputs Unobservable Inputs Value (Level 1) (Level 2) (Level 3) At January 31, 2019 Royalty liability (1) (3) $ 905,000 $ — $ — $ 905,000 At January 31, 2018 Royalty liability (1) (2) $ 2,469,000 $ — $ — $ 2,469,000 (1) The initial fair value of royalty liability was determined by management with the assistance of an independent third-party valuation specialist, and by management thereafter. Fair value adjustments are included within miscellaneous expense in the consolidated statements of operations. (2) The fair value of the royalty liability was determined based on the probability-weighted revenue scenarios for the Streamline Health® Clinical Analytics solution licensed from Montefiore Medical Center (discussed in Note 12 – Commitments and Contingencies). Following the modification of the Royalty Agreement in the second quarter of fiscal 2018 (discussed in Note 12 – Commitments and Contingencies ), the royalty liability was significantly reduced as a result of the commitment to fulfill a portion of our obligation by providing incremental maintenance services. The fair value of the royalty liability was determined based on the portion of the modified royalty commitment payable in cash. |
Schedule of Impact of Adoption of New Accounting Pronouncement | Year Ended January 31, 2019 As reported under Balances without Adjustments due to Revenues Systems sales $ 2,472,000 $ 2,322,000 $ 150,000 Maintenance and support 12,586,000 12,590,000 (4,000) As of January 31, 2019 As reported under Balances without Adjustments due to Assets Contract receivables, current $ 1,263,000 $ 803,000 $ 460,000 Contract receivables, noncurrent 407,000 27,000 380,000 Liabilities Deferred revenues, current 8,338,000 9,084,000 (746,000) Shareholders' Equity Accumulated deficit $ (76,550,000) $ (78,136,000) $ 1,586,000 |
Schedule of Disaggregated Revenue | Year Ended January 31, 2019 Recurring Revenue Non-recurring Revenue Total Systems sales $ 899,000 $ 1,573,000 $ 2,472,000 Professional services — 1,336,000 1,336,000 Audit services — 1,118,000 1,118,000 Maintenance and support 12,586,000 — 12,586,000 Software as a service 4,853,000 — 4,853,000 Total revenue: $ 18,338,000 $ 4,027,000 $ 22,365,000 |
Schedule of Cumulative Effect of Adoption of Accounting Pronouncement | As Reported Adjustments As Adjusted ASSETS Contract receivables, current $ 224,000 $ 283,000 $ 507,000 Contract receivables, noncurrent — 468,000 468,000 LIABILITIES Deferred revenues, current 9,482,000 (689,000) 8,793,000 STOCKHOLDERS' EQUITY Accumulated deficit $ (72,125,000) $ 1,440,000 $ (70,685,000) |
Schedule of Earnings Per Share, Basic and Diluted | Fiscal Year 2018 2017 Net earnings (loss) $ (5,865,000) $ (3,099,000) Weighted average shares outstanding - Basic 19,540,980 19,090,899 Stock options, Restricted stock and Series A Convertible Preferred Stock — — Weighted average shares outstanding - Diluted 19,540,980 19,090,899 Basic net earnings (loss) per share of common stock $ (0.30) $ (0.16) Diluted net earnings (loss) per share of common stock $ (0.30) $ (0.16) |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Jan. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Minimum EBITDA Levels | Applicable period Minimum For the fiscal quarter ended October 31, 2018 $ (509,000) For the 2-quarter period ended January 31, 2019 20,000 For the 3-quarter period ending April 30, 2019 204,000 For the 4-quarter period ending July 31, 2019 180,000 For the 4-quarter period ending October 31, 2019 508,000 For the 4-quarter period ending January 31, 2020 408,000 For the 4-quarter period ending April 30, 2020 and each fiscal quarter thereafter 562,000 |
Summary of Term Loan and Line of Credit | Outstanding principal balances on debt consisted of the following at: January 31, 2019 January 31, 2018 Senior term loan $ 4,030,000 $ 4,626,000 Deferred financing cost (82,000) (128,000) Total 3,948,000 4,498,000 Less: Current portion (597,000) (597,000) Non-current portion of debt $ 3,351,000 $ 3,901,000 |
Schedule of Future Principal Repayments of Long-Term Debt | Fiscal year Senior Term Loan (1) 2019 $ 597,000 2020 3,433,000 Total repayments $ 4,030,000 Term loan balance on the consolidated balance sheet is reported net of deferred financing costs of $82,000. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Jan. 31, 2019 | |
Goodwill and Intangible Assets | |
Schedule of Intangible Assets | January 31, 2019 Estimated Accumulated Useful Life Gross Assets Amortization Net Assets Finite-lived assets: Client relationships 5-10 years $ 5,397,000 $ 3,756,000 $ 1,641,000 Covenants not to compete 3 years 130,000 102,000 28,000 Total $ 5,527,000 $ 3,858,000 $ 1,669,000 January 31, 2018 Estimated Accumulated Useful Life Gross Assets Amortization Net Assets Finite-lived assets: Client relationships 5-15 years 5,805,000 3,308,000 2,497,000 Covenants not to compete 0.5-15 years 986,000 823,000 163,000 Supplier agreements 5 years 1,582,000 1,582,000 — License agreement 15 years 4,431,000 1,256,000 3,175,000 Total $ 12,804,000 $ 6,969,000 $ 5,835,000 |
Amortization Schedule of Intangible Assets | Annual Amortization Expense 2019 $ 554,000 2020 491,000 2021 455,000 2022 169,000 Total $ 1,669,000 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jan. 31, 2019 | |
Income Taxes | |
Schedule of Components of Income Tax (Expense) Benefit | Income taxes consist of the following: Fiscal Year 2018 2017 Current tax (expense) benefit: Federal $ 7,000 $ — State (7,000) (11,000) Total current provision — (11,000) Deferred tax benefit: Federal — 95,000 State — — Total deferred tax benefit — 95,000 Current and deferred tax benefit $ — $ 84,000 |
Schedule of Effective Income Tax Rate Reconciliation | The income tax benefit differs from the amount computed using the federal statutory income tax rates of 21% and 32.9% for fiscal 2018 and 2017, respectively, as follows: Fiscal Year 2018 2017 Federal tax benefit at statutory rate $ (1,232,000) $ 1,047,000 State and local taxes, net of federal benefit (expense) (95,000) 195,000 Change in valuation allowance (767,000) 4,505,000 Permanent items: Incentive stock options 18,000 (112,000) Change in fair value of warrants liability — 15,000 Other 1,000 (24,000) Reserve for uncertain tax position 32,000 (19,000) R&D Credit (Federal) (158,000) 219,000 R&D Credit (State) 134,000 (129,000) Tax Cuts and Jobs Act — (5,827,000) Expiring carryforwards 1,965,000 — Other 102,000 214,000 Income tax benefit $ — $ 84,000 |
Schedule of Deferred Tax Assets and Liabilities | The income tax effects of these temporary differences and credits are as follows: January 31, 2019 2018 Deferred tax assets: Allowance for doubtful accounts $ 84,000 $ 91,000 Deferred revenue 63,000 155,000 Accruals 141,000 71,000 Net operating loss carryforwards 9,532,000 10,617,000 Stock compensation expense 205,000 236,000 Property and equipment 30,000 109,000 R&D credit 1,102,000 1,144,000 Other 133,000 117,000 Total deferred tax assets 11,290,000 12,540,000 Valuation allowance (11,045,000) (11,813,000) Net deferred tax assets 245,000 727,000 Deferred tax liabilities: Finite-lived intangible assets (245,000) (727,000) Total deferred tax liabilities (245,000) (727,000) Net deferred tax liabilities $ — $ — |
Schedule of Gross Unrecognized Tax Benefits | 2018 2017 Beginning of fiscal year $ 295,000 $ 290,000 Additions for tax positions for the current year 32,000 62,000 Additions for tax positions of prior years — 3,000 Subtractions for tax positions of prior years (52,000) (60,000) End of fiscal year $ 275,000 $ 295,000 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Jan. 31, 2019 | |
Stock-Based Compensation | |
Schedule of Stock Option Activity | A summary of stock option activity follows: Weighted Average Remaining Aggregate Options Exercise Price Life in Years intrinsic value Outstanding as of February 1, 2018 2,173,156 $ 3.42 Granted 47,000 1.68 Exercised (50,694) 1.18 Expired (201,469) 2.55 Forfeited (387,336) 3.61 Outstanding as of January 31, 2019 1,580,657 $ 3.50 6.13 $ 15,000 Exercisable as of January 31, 2019 1,401,435 $ 3.73 5.91 $ 8,000 Vested or expected to vest as of January 31, 2019 1,542,516 $ 3.54 6.09 $ 14,000 (1) The exercise prices range from $1.10 to $8.10, of which 440,000 shares are between $1.10 and $2.00 per share, 362,240 shares are between $2.19 and $4.00 per share, and 778,417 shares are between $4.02 and $8.10 per share. (2) The exercise prices range from $1.18 to $8.10, of which 280,778 shares are between $1.18 and $2.00 per share, 362,240 shares are between $2.19 and $4.00 per share, and 758,417 shares are between $4.02 and $8.10 per share. |
Schedule of Weighted-Average Assumptions | The fiscal 2018 and 2017 stock-based compensation was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted average assumptions for each fiscal year: 2018 2017 Expected life 6 years 6 years Risk-free interest rate 2.89 % 2.65 % Weighted average volatility factor 0.65 0.65 Dividend yield — — Forfeiture rate 20 % 13 % |
Schedule of Restricted Stock Award Activity | A summary of restricted stock award activity for fiscal 2018 and 2017 is presented below: Weighted Non-vested Average Number of Grant Date Shares Fair Value Non-vested balance at January 31, 2017 858,225 $ 1.59 Granted 295,337 1.17 Vested (331,975) 1.47 Forfeited — — Non-vested balance at January 31, 2018 821,587 $ 1.59 Granted 826,666 1.15 Vested (453,537) 1.34 Forfeited (130,850) 1.61 Non-vested balance at January 31, 2019 1,063,866 $ 1.27 |
Organization and Description _2
Organization and Description of Business (Details) - segment | 12 Months Ended | |
Jan. 31, 2019 | Jan. 31, 2018 | |
Organization and Description of Business | ||
Number of operating segments | 1 | 1 |
Significant Accounting Polici_4
Significant Accounting Policies - Additional Information (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2019 | Jan. 31, 2018 | |
Allowance for Doubtful Accounts | ||
Allowance for doubtful accounts | $ 345,000 | $ 349,000 |
Bad debt expense | 13,000 | 234,000 |
Concessions Accrual | ||
Concessions Costs | $ 44,000 | $ 48,000 |
Significant Accounting Polici_5
Significant Accounting Policies - Property, Plant, and Equipment (Details) | Dec. 13, 2013 | Jan. 31, 2019USD ($) | Jan. 31, 2018USD ($) | Jan. 31, 2015 |
Property, Plant and Equipment | ||||
Depreciation expense | $ 450,000 | $ 774,000 | ||
Leases | ||||
Area under lease (sq. ft.) | 24,335 | 10,350 | ||
Duration of rent allowance | 8 months | 2 months | ||
Computer equipment and software | Minimum | ||||
Property, Plant and Equipment | ||||
Property, plant and equipment, useful life | 3 years | |||
Computer equipment and software | Maximum | ||||
Property, Plant and Equipment | ||||
Property, plant and equipment, useful life | 4 years | |||
Office equipment | ||||
Property, Plant and Equipment | ||||
Property, plant and equipment, useful life | 5 years | |||
Office furniture and fixtures | ||||
Property, Plant and Equipment | ||||
Property, plant and equipment, useful life | 7 years |
Significant Accounting Polici_6
Significant Accounting Policies - Capitalized Software Development Costs (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2019 | Jan. 31, 2018 | |
Capitalized Software Development Costs | ||
Capitalized computer software, additions | $ 3,003,000 | $ 1,836,000 |
Cost of systems sales | 768,000 | 1,914,000 |
Cost of software as a service | 379,000 | 186,000 |
Cost of audit services | 13,000 | 13,000 |
Total amortization expense on internally-developed software | 1,160,000 | 2,113,000 |
Research and development expense | $ 4,261,000 | $ 5,352,000 |
Minimum | ||
Capitalized Software Development Costs | ||
Useful life of capitalized computer software | 3 years | |
Maximum | ||
Capitalized Software Development Costs | ||
Useful life of capitalized computer software | 5 years |
Significant Accounting Polici_7
Significant Accounting Policies - Fair Value of Liabilities (Details) - USD ($) | Jan. 31, 2019 | Jan. 31, 2018 |
Fair Value, Liabilities Measured on Recurring Basis | ||
Royalty liability | $ 905,000 | $ 2,469,000 |
Significant Unobservable Inputs (Level 3) | ||
Fair Value, Liabilities Measured on Recurring Basis | ||
Royalty liability | $ 905,000 | $ 2,469,000 |
Significant Accounting Polici_8
Significant Accounting Policies - Software as a Service (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2019 | Jan. 31, 2018 | |
Revenue Recognition | ||
Deferred professional costs | $ 251,000 | $ 471,000 |
Accumulated amortization of deferred costs | 399,000 | 312,000 |
Amortization of professional expenses | $ 346,000 | $ 270,000 |
Significant Accounting Polici_9
Significant Accounting Policies - Impact on the Financial Statements from Adoption of New Accounting Standard (Details) - USD ($) | 12 Months Ended | ||
Jan. 31, 2019 | Jan. 31, 2018 | Feb. 01, 2018 | |
Revenues | |||
Professional services | $ 1,336,000 | $ 2,744,000 | |
Audit services | 1,118,000 | 1,216,000 | |
Software as a service | 4,853,000 | 5,864,000 | |
Total revenues | 22,365,000 | 24,338,000 | |
Revenue recognized | 9,449,000 | ||
Assets | |||
Contract receivables, current | 1,263,000 | 224,000 | $ 507,000 |
Contract receivables, noncurrent | 407,000 | 468,000 | |
Liabilities | |||
Deferred revenues, current | 8,338,000 | 9,482,000 | 8,793,000 |
Stockholders’ equity | |||
Accumulated deficit | (76,550,000) | (72,125,000) | $ (70,685,000) |
Recurring Revenue | |||
Revenues | |||
Software as a service | 4,853,000 | ||
Total revenues | 18,338,000 | ||
Non-recurring Revenue | |||
Revenues | |||
Professional services | 1,336,000 | ||
Audit services | 1,118,000 | ||
Total revenues | 4,027,000 | ||
System Sales | |||
Revenues | |||
Revenues | 2,472,000 | 1,343,000 | |
System Sales | Recurring Revenue | |||
Revenues | |||
Revenues | 899,000 | ||
System Sales | Non-recurring Revenue | |||
Revenues | |||
Revenues | 1,573,000 | ||
Maintenance and Support | |||
Revenues | |||
Revenues | 12,586,000 | 13,171,000 | |
Maintenance and Support | Recurring Revenue | |||
Revenues | |||
Revenues | 12,586,000 | ||
Balances without adoption of ASC 606 | |||
Assets | |||
Contract receivables, current | 803,000 | ||
Contract receivables, noncurrent | 27,000 | ||
Liabilities | |||
Deferred revenues, current | 9,084,000 | ||
Stockholders’ equity | |||
Accumulated deficit | (78,136,000) | ||
Balances without adoption of ASC 606 | System Sales | |||
Revenues | |||
Revenues | 2,322,000 | ||
Balances without adoption of ASC 606 | Maintenance and Support | |||
Revenues | |||
Revenues | 12,590,000 | ||
Adjustments due to ASC 606 | |||
Assets | |||
Contract receivables, current | 460,000 | 283,000 | |
Contract receivables, noncurrent | 380,000 | 468,000 | |
Liabilities | |||
Deferred revenues, current | (746,000) | (689,000) | |
Stockholders’ equity | |||
Accumulated deficit | 1,586,000 | $ 1,440,000 | |
Adjustments due to ASC 606 | System Sales | |||
Revenues | |||
Revenues | 150,000 | ||
Adjustments due to ASC 606 | Maintenance and Support | |||
Revenues | |||
Revenues | $ (4,000) |
Significant Accounting Polic_10
Significant Accounting Policies - Revenue Performance Obligations (Details) $ in Millions | 12 Months Ended |
Jan. 31, 2019USD ($) | |
Significant Accounting Policies | |
Revenue, Remaining Performance Obligation | $ 27 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-02-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Percentage of remaining performance obligation to be recognized over the next 12 months | 65.00% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 12 months |
Significant Accounting Polic_11
Significant Accounting Policies - Contract Acquisition Costs (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2019 | Jan. 31, 2018 | |
Capitalized Contract Costs, Net | ||
Capitalized contract costs, amortization | $ 145,000 | |
Prepaid Assets | ||
Capitalized Contract Costs, Net | ||
Capitalized contract costs, net | 185,000 | $ 136,000 |
Other Current Assets | ||
Capitalized Contract Costs, Net | ||
Capitalized contract costs, net | $ 114,000 | $ 116,000 |
Significant Accounting Polic_12
Significant Accounting Policies - Other (Details) | Dec. 13, 2013 | Jan. 31, 2019USD ($)segmentshares | Jan. 31, 2018USD ($)segmentshares | Jan. 31, 2015 | Feb. 01, 2019USD ($) | Feb. 01, 2018USD ($) |
Allowance for Doubtful Accounts | ||||||
Allowance for doubtful accounts | $ 345,000 | $ 349,000 | ||||
Bad debt expense | 13,000 | 234,000 | ||||
Concessions Accrual | ||||||
Concessions Costs | 44,000 | 48,000 | ||||
Leases | ||||||
Area under lease (sq. ft.) | 24,335 | 10,350 | ||||
Duration of rent allowance | 8 months | 2 months | ||||
Capitalized Software Development Costs | ||||||
Capitalized computer software, additions | 3,003,000 | 1,836,000 | ||||
Capitalized computer software, amortization | 1,160,000 | 2,113,000 | ||||
Research and development expense | $ 4,261,000 | $ 5,352,000 | ||||
Goodwill and Intangible Assets | ||||||
Number of operating segments | segment | 1 | 1 | ||||
Number of reportable segments | segment | 1 | |||||
Equity Awards | ||||||
Share-based compensation expense | $ 629,000 | $ 1,109,000 | ||||
Income Taxes | ||||||
Reserves for uncertain tax positions and corresponding interest and penalties | $ 275,000 | $ 295,000 | ||||
Net Earnings (Loss) Per Common Share | ||||||
Preferred stock to common stock conversion ratio | 1 | |||||
New Accounting Pronouncements and Changes in Accounting Principles | ||||||
Cumulative impact of new accounting principle | $ 1,440,000 | |||||
Convertible Preferred Stock | ||||||
Net Earnings (Loss) Per Common Share | ||||||
Antidilutive securities (in shares) | shares | 2,895,464 | 2,949,995 | ||||
Stock Options | ||||||
Net Earnings (Loss) Per Common Share | ||||||
Antidilutive securities (in shares) | shares | 1,580,657 | 2,173,156 | ||||
Minimum | ||||||
Capitalized Software Development Costs | ||||||
Useful life of capitalized computer software | 3 years | |||||
Maximum | ||||||
Capitalized Software Development Costs | ||||||
Useful life of capitalized computer software | 5 years | |||||
Restricted Stock | ||||||
Equity Awards | ||||||
Shares surrendered for tax withholding (in shares) | shares | 37,249 | 32,033 | ||||
Tax withholding obligations | $ 62,000 | $ 42,000 | ||||
Shares awarded (in shares) | shares | 501,666 | 220,337 | ||||
Restricted Stock | Minimum | ||||||
Equity Awards | ||||||
Required service period | 1 year | |||||
Restricted Stock | Maximum | ||||||
Equity Awards | ||||||
Required service period | 4 years | |||||
Internally-developed software | Minimum | ||||||
Goodwill and Intangible Assets | ||||||
Estimated useful life | 1 year | |||||
Internally-developed software | Maximum | ||||||
Goodwill and Intangible Assets | ||||||
Estimated useful life | 10 years | |||||
ASU 2016-02 | ||||||
Leases | ||||||
Right of use assets | $ 175,000 | |||||
Additional lease liability | $ 175,000 | |||||
Retained Earnings | ||||||
New Accounting Pronouncements and Changes in Accounting Principles | ||||||
Cumulative impact of new accounting principle | $ 1,440,000 | |||||
Retained Earnings | ASU 2014-09 | ||||||
New Accounting Pronouncements and Changes in Accounting Principles | ||||||
Cumulative impact of new accounting principle | $ 1,400,000 |
Significant Accounting Polic_13
Significant Accounting Policies - Earnings Per Share (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2019 | Jan. 31, 2018 | |
Significant Accounting Policies | ||
Net earnings (loss) | $ (5,865,000) | $ (3,099,000) |
Weighted average shares outstanding - Basic (in shares) | 19,540,980 | 19,090,899 |
Weighted average shares outstanding - Diluted (in shares) | 19,540,980 | 19,090,899 |
Basic net earnings (loss) per common stock (in dollars per share) | $ (0.30) | $ (0.16) |
Diluted net earnings (loss) per common stock (in dollars per share) | $ (0.30) | $ (0.16) |
Preferred Stock - Series A Conv
Preferred Stock - Series A Convertible Preferred Stock Narrative (Details) - USD ($) | Nov. 01, 2012 | Jan. 31, 2019 | Jan. 31, 2018 | Aug. 16, 2012 |
Class of Stock [Line Items] | ||||
Shares converted (in shares) | 54,531 | |||
Amount converted | $ 164,000 | |||
Series A Preferred Stock | ||||
Class of Stock [Line Items] | ||||
Shares converted (in shares) | 54,531 | |||
Amount converted | $ 164,000 | |||
Convertible redeemable preferred stock, shares outstanding (in shares) | 2,895,464 | 2,949,995 | ||
Private Placement | Series A Preferred Stock | ||||
Class of Stock [Line Items] | ||||
New issuance of series A convertible preferred stock (in shares) | 2,416,785 | |||
Preferred stock, par value (in USD per share) | $ 3 | |||
Period over which share price is evaluated | 10 days | |||
Share price (in USD per share) | $ 8 | |||
Period over which trade volume is evaluated | 60 days | |||
Average daily trading volume for period (in shares) | 100,000 | |||
Stock price at time of conversion (in USD per share) | $ 3 | |||
Common shares issued for convertible note and accrued interest (in shares) | 1,583,210 |
Operating Leases (Details)
Operating Leases (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Oct. 31, 2018 | Jul. 31, 2018 | Jan. 31, 2019 | Jan. 31, 2018 | |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||||
Loss on exit of operating lease | $ 1,034,000 | |||
Rent and leasing expense | 964,000 | $ 1,234,000 | ||
NEW YORK | ||||
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||||
Total due | 478,000 | |||
Loss on exit of operating lease | $ 472,000 | |||
Total sublease rentals to be received | 384,000 | $ 216,000 | ||
Loss on disposal of fixed assets | $ (48,000) | |||
GEORGIA | ||||
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||||
Loss on exit of operating lease | $ 562,000 | |||
Broker commissions | 275,000 | |||
Loss on disposal of fixed assets | 499,000 | |||
Loss on write-off of lease incentive liability | $ 239,000 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | Apr. 15, 2015 | Jan. 31, 2019 | Jan. 31, 2018 | Nov. 21, 2014 |
Debt Instrument [Line Items] | ||||
Payment of principal | $ 597,000 | $ 1,112,000 | ||
Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Deferred finance costs | 82,000 | $ 128,000 | ||
Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Commitment fee in connection with the term loan | 14,000 | |||
Credit Agreement | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Revolving line of credit | 5,000,000 | $ 5,000,000 | ||
Borrowings outstanding | 0 | |||
Credit Agreement | Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Revolving line of credit | $ 10,000,000 | |||
Minimum | LIBOR | Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Basis spread on interest rate (as a percent) | 4.25% | |||
Minimum | Base Rate | Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Basis spread on interest rate (as a percent) | 3.25% | |||
Maximum | LIBOR | Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Basis spread on interest rate (as a percent) | 6.25% | |||
Maximum | Base Rate | Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Basis spread on interest rate (as a percent) | 5.25% | |||
January 31, 2018 | ||||
Debt Instrument [Line Items] | ||||
Minimum liquidity | 5,000,000 | |||
February 1, 2018 through January 31, 2019 | ||||
Debt Instrument [Line Items] | ||||
Minimum liquidity | 4,000,000 | |||
February 1, 2019 | ||||
Debt Instrument [Line Items] | ||||
Minimum liquidity | 3,500,000 | |||
February 1, 2019 and Later | ||||
Debt Instrument [Line Items] | ||||
Minimum liquidity | $ 4,000,000 |
Debt - Minimum EBITDA Levels (D
Debt - Minimum EBITDA Levels (Details) - Credit Agreement | 12 Months Ended |
Jan. 31, 2019USD ($) | |
July 31, 2017 | |
Debt Instrument [Line Items] | |
Minimum EBITDA level | $ (509,000) |
October 31, 2017 | |
Debt Instrument [Line Items] | |
Minimum EBITDA level | 20,000 |
January 31, 2018 | |
Debt Instrument [Line Items] | |
Minimum EBITDA level | 204,000 |
April 30, 2018 | |
Debt Instrument [Line Items] | |
Minimum EBITDA level | 180,000 |
July 31, 2018 | |
Debt Instrument [Line Items] | |
Minimum EBITDA level | 508,000 |
October 31, 2018 | |
Debt Instrument [Line Items] | |
Minimum EBITDA level | 408,000 |
January 31, 2019 | |
Debt Instrument [Line Items] | |
Minimum EBITDA level | $ 562,000 |
Debt - Outstanding Principal Ba
Debt - Outstanding Principal Balances (Details) - USD ($) | Jan. 31, 2019 | Jan. 31, 2018 |
Debt Instrument [Line Items] | ||
Less: Current portion | $ 597,000 | $ 597,000 |
Senior Notes | ||
Debt Instrument [Line Items] | ||
Senior term loan | 4,030,000 | 4,626,000 |
Deferred financing cost | (82,000) | (128,000) |
Long-term Debt | 3,948,000 | 4,498,000 |
Less: Current portion | 597,000 | 597,000 |
Non-current portion of debt | $ 3,351,000 | $ 3,901,000 |
Debt - Schedule of Future Princ
Debt - Schedule of Future Principal Repayments of Long-Term Debt (Details) - Senior Notes - USD ($) | Jan. 31, 2019 | Jan. 31, 2018 |
Debt Instrument [Line Items] | ||
2019 | $ 597,000 | |
2020 | 3,433,000 | |
Total repayments | 4,030,000 | $ 4,626,000 |
Deferred finance costs | $ 82,000 | $ 128,000 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Schedule of Intangibles (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2019 | Jan. 31, 2018 | |
Intangible Assets, Net (Including Goodwill) [Abstract] | ||
Gross Assets | $ 5,527,000 | $ 12,804,000 |
Accumulated Amortization | 3,858,000 | 6,969,000 |
Net Assets | 1,669,000 | 5,835,000 |
Impairment of long-lived assets | 3,681,000 | |
Client relationships | ||
Intangible Assets, Net (Including Goodwill) [Abstract] | ||
Gross Assets | 5,397,000 | 5,805,000 |
Accumulated Amortization | 3,756,000 | 3,308,000 |
Net Assets | $ 1,641,000 | $ 2,497,000 |
Client relationships | Minimum | ||
Intangible Assets, Net (Including Goodwill) [Abstract] | ||
Estimated Useful Life | 5 years | 5 years |
Client relationships | Maximum | ||
Intangible Assets, Net (Including Goodwill) [Abstract] | ||
Estimated Useful Life | 10 years | 15 years |
Covenants not to compete | ||
Intangible Assets, Net (Including Goodwill) [Abstract] | ||
Gross Assets | $ 130,000 | $ 986,000 |
Accumulated Amortization | 102,000 | 823,000 |
Net Assets | $ 28,000 | $ 163,000 |
Covenants not to compete | Minimum | ||
Intangible Assets, Net (Including Goodwill) [Abstract] | ||
Estimated Useful Life | 3 years | 6 months |
Covenants not to compete | Maximum | ||
Intangible Assets, Net (Including Goodwill) [Abstract] | ||
Estimated Useful Life | 15 years | |
Supplier agreements | ||
Intangible Assets, Net (Including Goodwill) [Abstract] | ||
Estimated Useful Life | 5 years | |
Gross Assets | $ 1,582,000 | |
Accumulated Amortization | $ 1,582,000 | |
License agreement | ||
Intangible Assets, Net (Including Goodwill) [Abstract] | ||
Estimated Useful Life | 15 years | |
Gross Assets | $ 4,431,000 | |
Accumulated Amortization | 1,256,000 | |
Net Assets | $ 3,175,000 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Schedule of Future Amortization Expense (Details) - USD ($) | Jan. 31, 2019 | Jan. 31, 2018 |
Goodwill and Intangible Assets | ||
2019 | $ 554,000 | |
2020 | 491,000 | |
2021 | 455,000 | |
2022 | 169,000 | |
Net Assets | $ 1,669,000 | $ 5,835,000 |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Expense (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2019 | Jan. 31, 2018 | |
Current tax (expense) benefit: | ||
Federal | $ 7,000 | |
State | $ (7,000) | $ (11,000) |
Total current provision | (11,000) | |
Deferred tax benefit: | ||
Federal | 95,000 | |
Total Deferred tax benefit | 95,000 | |
Income tax benefit | $ 84,000 |
Income Taxes - Tax Provision at
Income Taxes - Tax Provision at Statutory Rate Reconciliation (Details) - USD ($) | Jan. 01, 2018 | Dec. 22, 2017 | Jan. 31, 2019 | Jan. 31, 2018 |
Income Tax Contingency [Line Items] | ||||
Statutory income tax rate | 21.00% | 34.00% | 21.00% | 32.90% |
Income Tax Expense (Benefit), Continuing Operations, Income Tax Reconciliation [Abstract] | ||||
Federal tax benefit at statutory rate of 32.9 percent | $ (1,232,000) | $ 1,047,000 | ||
State and local taxes, net of federal benefit (expense) | (95,000) | 195,000 | ||
Change in valuation allowance | (767,000) | 4,505,000 | ||
Incentive stock options | 18,000 | (112,000) | ||
Change in fair value of warrants liability | 15,000 | |||
Other | 1,000 | (24,000) | ||
Reserve for uncertain tax position | 32,000 | (19,000) | ||
Tax Cuts and Jobs Act | (5,827,000) | |||
Expiring carryforwards | 1,965,000 | |||
Other | 102,000 | 214,000 | ||
Income tax benefit | 84,000 | |||
Federal | ||||
Income Tax Expense (Benefit), Continuing Operations, Income Tax Reconciliation [Abstract] | ||||
R&D Credit | (158,000) | 219,000 | ||
State | ||||
Income Tax Expense (Benefit), Continuing Operations, Income Tax Reconciliation [Abstract] | ||||
R&D Credit | $ 134,000 | $ (129,000) |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Tax Carryforwards (Details) - USD ($) | Jan. 31, 2019 | Jan. 31, 2018 |
Deferred tax assets: | ||
Allowance for doubtful accounts | $ 84,000 | $ 91,000 |
Deferred revenue | 63,000 | 155,000 |
Accruals | 141,000 | 71,000 |
Net operating loss carryforwards | 9,532,000 | 10,617,000 |
Stock compensation expense | 205,000 | 236,000 |
Property and equipment | 30,000 | 109,000 |
R&D credit | 1,102,000 | 1,144,000 |
Other | 133,000 | 117,000 |
Total deferred tax assets | 11,290,000 | 12,540,000 |
Valuation allowance | (11,045,000) | (11,813,000) |
Net deferred tax assets | 245,000 | 727,000 |
Deferred tax liabilities: | ||
Definite-lived intangible assets | (245,000) | (727,000) |
Total deferred tax liabilities | $ (245,000) | $ (727,000) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2019 | Jan. 31, 2018 | |
Income Tax Contingency [Line Items] | ||
Operating loss carryforwards, not subject to expiration | $ 3,900,000 | |
Valuation allowance | 11,045,000 | $ 11,813,000 |
Change in valuation allowance | (767,000) | 4,505,000 |
Reserves for uncertain tax positions and corresponding interest and penalties | 275,000 | 295,000 |
Accrued interest and penalties | 0 | $ 0 |
Internal Revenue Service (IRS) | ||
Income Tax Contingency [Line Items] | ||
Operating loss carryforwards | 36,800,000 | |
Change in valuation allowance | 768,000 | |
State | ||
Income Tax Contingency [Line Items] | ||
Operating loss carryforwards, subject to expire next twenty fiscal years | $ 17,170,000 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2019 | Jan. 31, 2018 | |
Reconciliation of Unrecognized Tax Benefits [Roll Forward] | ||
Beginning of fiscal year | $ 295,000 | $ 290,000 |
Additions for tax positions for the current year | 32,000 | 62,000 |
Additions for tax positions of prior years | 3,000 | |
Subtractions for tax positions of prior years | (52,000) | (60,000) |
End of fiscal year | $ 275,000 | $ 295,000 |
Income Taxes - Tax Cuts and Job
Income Taxes - Tax Cuts and Jobs Act (Details) - USD ($) | Jan. 01, 2018 | Dec. 22, 2017 | Jan. 31, 2019 | Jan. 31, 2018 |
Income Taxes | ||||
Statutory income tax rate | 21.00% | 34.00% | 21.00% | 32.90% |
Tax Cuts and Jobs Act | $ (5,827,000) |
Major Clients - (Details)
Major Clients - (Details) - Customer Concentration Risk - item | 12 Months Ended | |
Jan. 31, 2019 | Jan. 31, 2018 | |
Total Revenues | Customer One | ||
Concentration Risk | ||
Number of customers | 0 | 0 |
Accounts Receivable | Customer One | ||
Concentration Risk | ||
Concentration risk, percentage | 12.00% | 12.00% |
Accounts Receivable | Customer Two | ||
Concentration Risk | ||
Concentration risk, percentage | 9.00% | 11.00% |
Employee Retirement Plan (Detai
Employee Retirement Plan (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2019 | Jan. 31, 2019 | Dec. 31, 2018 | Jan. 31, 2018 | |
Employee Retirement Plan | ||||
Matching contribution percent (up to) | 50.00% | 100.00% | ||
Maximum contribution as a percent of participant compensation | 4.00% | 4.00% | ||
Defined contribution plan, cost recognized | $ 483,000 | $ 524,000 |
Employee Stock Purchase Plan (D
Employee Stock Purchase Plan (Details) - USD ($) | Jun. 30, 2019 | Jan. 02, 2019 | Jan. 31, 2019 | Jan. 31, 2018 |
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Closing price | $ 0.88 | |||
$0.98 per share | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Closing price | $ 1.10 | |||
$0.91 per share | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Closing price | 1.10 | |||
$1.02 per share | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Closing price | $ 2.19 | |||
Employee Stock Purchase Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Number of shares authorized to be purchased under Employee Stock Purchase Plan (in shares) | 1,000,000 | |||
Employee Stock Purchase Plan, maximum annual contribution per employee, percent | 10.00% | |||
Employee Stock Purchase Plan, percent of fair market value, prior year | 85.00% | |||
Employee Stock Purchase Plan, percent of fair market value, current year | 85.00% | |||
Shares remaining available for grant (in shares) | 431,556 | |||
Allocated share-based compensation expense | $ 4,000 | $ 19,000 | ||
Cash received from purchase of shares under Employee Stock Purchase Plan | $ 22,000 | $ 45,000 | ||
Employee Stock Purchase Plan | $0.69 per share | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Stock purchased during period, shares, Employee Stock Purchase Plan (in shares) | 13,339 | |||
Stock purchased during period, price per share, Employee Stock Purchase Plan (in USD per share) | $ 0.69 | |||
Employee Stock Purchase Plan | $1.20 per share | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Stock purchased during period, shares, Employee Stock Purchase Plan (in shares) | 10,370 | |||
Stock purchased during period, price per share, Employee Stock Purchase Plan (in USD per share) | $ 1.20 | |||
Employee Stock Purchase Plan | $0.98 per share | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Stock purchased during period, shares, Employee Stock Purchase Plan (in shares) | 21,234 | |||
Stock purchased during period, price per share, Employee Stock Purchase Plan (in USD per share) | $ 0.98 | |||
Employee Stock Purchase Plan | $0.91 per share | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Stock purchased during period, shares, Employee Stock Purchase Plan (in shares) | 26,048 | |||
Stock purchased during period, price per share, Employee Stock Purchase Plan (in USD per share) | $ 0.91 | |||
Scenario, Forecast | Employee Stock Purchase Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Purchase price discount | 85.00% |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) | Jan. 02, 2019$ / shares | Jan. 31, 2019USD ($)$ / sharesshares | Jan. 31, 2018USD ($)$ / sharesshares |
Share-based Compensation Arrangement by Share-based Payment Award | |||
Options outstanding | 1,580,657 | 2,173,156 | |
Options issued (in shares) | 47,000 | ||
Options expired (in shares) | 201,469 | ||
Options forfeited (in shares) | 387,336 | ||
Options exercised (in shares) | 50,694 | ||
Exercise price range, lower range limit (in USD per share) | $ / shares | $ 0.88 | ||
Options exercisable (in shares) | 1,401,435 | ||
Weighted average grant date fair value (in USD per share) | $ / shares | $ 1.03 | $ 0.65 | |
Total intrinsic value | $ | $ 13,000 | $ 0 | |
Compensation cost not yet recognized | $ | $ 98,000 | ||
Weighted average period of recognition for compensation cost | 7 months 6 days | ||
Cash received from the exercise of options | $ | $ 0 | 0 | |
Change in control percentage | 20 | ||
$0.98 per share | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Exercise price range, lower range limit (in USD per share) | $ / shares | $ 1.10 | ||
Exercise price range, upper range limit (in USD per share) | $ / shares | $ 8.10 | ||
$0.91 per share | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Options outstanding | 440,000 | ||
Exercise price range, lower range limit (in USD per share) | $ / shares | $ 1.10 | ||
Exercise price range, upper range limit (in USD per share) | $ / shares | $ 2 | ||
$1.02 per share | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Options outstanding | 362,240 | ||
Exercise price range, lower range limit (in USD per share) | $ / shares | $ 2.19 | ||
Exercise price range, upper range limit (in USD per share) | $ / shares | $ 4 | ||
Options exercisable (in shares) | 362,240 | ||
$4.02 to $8.10 | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Options outstanding | 778,417 | ||
Exercise price range, lower range limit (in USD per share) | $ / shares | $ 4.02 | ||
Exercise price range, upper range limit (in USD per share) | $ / shares | $ 8.10 | ||
Options exercisable (in shares) | 758,417 | ||
$1.18 to $8.10 | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Exercise price range, lower range limit (in USD per share) | $ / shares | $ 1.18 | ||
Exercise price range, upper range limit (in USD per share) | $ / shares | 8.10 | ||
$1.18 to $2.00 | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Exercise price range, lower range limit (in USD per share) | $ / shares | 1.18 | ||
Exercise price range, upper range limit (in USD per share) | $ / shares | $ 2 | ||
Options exercisable (in shares) | 280,778 | ||
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Allocated share-based compensation expense | $ | $ 244,000 | 563,000 | |
Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Weighted average period of recognition for compensation cost | 2 years 3 months 18 days | ||
Allocated share-based compensation expense | $ | $ 383,000 | $ 546,000 | |
Compensation cost not yet recognized | $ | $ 1,110,000 | ||
2013 Incentive Compensation Plan | Blended Equity Awards (Stock Options, Stock Appreciation Rights, Resticted Stock) | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Shares authorized to issue | 2,300,000 | ||
Term of options granted (or less) | 10 years | ||
Vesting period | 3 years | ||
Options outstanding | 1,355,657 | 1,873,156 | |
2013 Incentive Compensation Plan | SAR's | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
SAR's outstanding (in shares) | 0 | ||
Executive Inducement Grants | Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Options outstanding | 225,000 | 300,000 | |
Options issued (in shares) | 0 | 0 | |
Options expired (in shares) | 0 | 0 | |
Options forfeited (in shares) | 75,000 | 0 | |
Options exercised (in shares) | 0 | 0 | |
Minimum | 2013 Incentive Compensation Plan | Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Vesting period | 1 year | ||
Maximum | 2013 Incentive Compensation Plan | Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Vesting period | 4 years |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock Option Activity (Details) | 12 Months Ended |
Jan. 31, 2019USD ($)$ / sharesshares | |
Options | |
Outstanding - beginning of year (in shares) | shares | 2,173,156 |
Granted (in shares) | shares | 47,000 |
Exercised (in shares) | shares | (50,694) |
Expired (in shares) | shares | (201,469) |
Forfeited (in shares) | shares | (387,336) |
Outstanding - end of year (in shares) | shares | 1,580,657 |
Options exercisable (in shares) | shares | 1,401,435 |
Vested or expected to vest - end of year (in shares) | shares | 1,542,516 |
Weighted Average Exercise Price | |
Outstanding - beginning of year (USD per share) | $ / shares | $ 3.42 |
Granted (USD per share) | $ / shares | 1.68 |
Exercised (USD per share) | $ / shares | 1.18 |
Expired (USD per share) | $ / shares | 2.55 |
Forfeited (USD per share) | $ / shares | 3.61 |
Outstanding - end of year (USD per share) | $ / shares | 3.50 |
Weighted Average Exercise Price, Exercisable - end of year (USD per share) | $ / shares | 3.73 |
Weighted Average Exercise Price, Vested or expected to vest - end of year (USD per share) | $ / shares | $ 3.54 |
Remaining Life in Years, Outstanding | 6 years 1 month 17 days |
Remaining Life in Years, Exercisable | 5 years 10 months 28 days |
Remaining Life in Years, Vested or expected to vest | 6 years 1 month 2 days |
Aggregate intrinsic value of outstanding options at year end | $ | $ 15,000 |
Aggregate intrinsic value of exercisable options at year end | $ | 8,000 |
Aggregate intrinsic value of options vested or expected to vest at year end | $ | $ 14,000 |
Stock-Based Compensation - Weig
Stock-Based Compensation - Weighted Average Assumptions (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2019 | Jan. 31, 2018 | |
Stock-Based Compensation | ||
Expected life | 6 years | 6 years |
Risk-free interest rate | 2.89% | 2.65% |
Weighted average volatility factor | 65.00% | 65.00% |
Dividend yield | $ 0 | $ 0 |
Forfeiture rate | 20.00% | 13.00% |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Restricted Stock Award Activity (Details) - Restricted Stock - $ / shares | 12 Months Ended | |
Jan. 31, 2019 | Jan. 31, 2018 | |
Non-vested Number of Shares | ||
Non-vested number of shares, beginning of period (in shares) | 821,587 | 858,225 |
Granted (in shares) | 826,666 | 295,337 |
Vested (in shares) | (453,537) | (331,975) |
Forfeited (in shares) | (130,850) | 0 |
Non-vested number of shares, end of period (in shares) | 1,063,866 | 821,587 |
Weighted Average Grant Date Fair Value | ||
Non-vested at beginning of period (USD per share) | $ 1.59 | $ 1.59 |
Granted (USD per share) | 1.15 | 1.17 |
Vested (USD per share) | 1.34 | 1.47 |
Forfeited (USD per share) | 1.61 | 0 |
Non-vested at end of period (USD per share) | $ 1.27 | $ 1.59 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | Jul. 01, 2018 | Oct. 25, 2013 | Jan. 31, 2019 | Jan. 31, 2018 |
Commitments and Contingencies | ||||
Minimum fees due under shared office arrangement | $ 286,000 | |||
Royalty liability | 905,000 | $ 2,469,000 | ||
Royalty Agreement with Montefiore | ||||
Commitments and Contingencies | ||||
Term of licensing agreement | 15 years | |||
One-time initial base royalty fee | $ 3,000,000 | |||
Minimum commitment for additional royalty payments | $ 3,000,000 | |||
Period of time over which additional royalty payments are to be made | 6 years 6 months | |||
Term of maintenance and service | 24 months | |||
Cash payment due per royalty agreement | $ 1,000,000 | |||
Deferred revenue | $ 1,172,000 |
Schedule II - Valuation and Q_2
Schedule II - Valuation and Qualifying Accounts and Reserves (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2019 | Jan. 31, 2018 | |
Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance at Beginning of Period | $ 349,000 | |
Charged to Costs and Expenses | (126,000) | $ (95,000) |
Balance at End of Period | 345,000 | 349,000 |
Allowance for doubtful accounts | ||
Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance at Beginning of Period | 349,000 | 198,000 |
Charged to Costs and Expenses | 13,000 | 234,000 |
Deductions | (17,000) | (83,000) |
Balance at End of Period | $ 345,000 | $ 349,000 |