Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Oct. 31, 2017 | Nov. 30, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | STREAMLINE HEALTH SOLUTIONS INC. | |
Entity Central Index Key | 1,008,586 | |
Document Type | 10-Q | |
Document Period End Date | Oct. 31, 2017 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --01-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 19,984,743 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Oct. 31, 2017 | Jan. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 1,892,182 | $ 5,654,093 |
Accounts receivable, net of allowance for doubtful accounts of $301,773 and $198,449, respectively | 2,532,941 | 4,489,789 |
Contract receivables | 283,973 | 466,423 |
Prepaid hardware and third-party software for future delivery | 5,858 | 5,858 |
Prepaid client maintenance contracts | 587,960 | 595,633 |
Other prepaid assets | 837,649 | 732,496 |
Other current assets | 392,449 | 439 |
Total current assets | 6,533,012 | 11,944,731 |
Property and equipment: | ||
Computer equipment | 2,971,361 | 3,110,274 |
Computer software | 725,700 | 827,642 |
Office furniture, fixtures and equipment | 683,443 | 683,443 |
Leasehold improvements | 729,348 | 729,348 |
Property and equipment, gross | 5,109,852 | 5,350,707 |
Accumulated depreciation and amortization | (3,762,821) | (3,447,198) |
Property and equipment, net | 1,347,031 | 1,903,509 |
Capitalized software development costs, net of accumulated amortization of $18,119,290 and $16,544,797, respectively | 4,346,694 | 4,584,245 |
Intangible assets, net of accumulated amortization of $6,729,799 and $5,807,338, respectively | 6,074,137 | 6,996,599 |
Goodwill | 15,537,281 | 15,537,281 |
Other | 677,319 | 672,133 |
Total non-current assets | 27,982,462 | 29,693,767 |
Total assets | 34,515,474 | 41,638,498 |
Current liabilities: | ||
Accounts payable | 807,778 | 1,116,525 |
Accrued compensation | 593,510 | 496,706 |
Accrued other expenses | 587,209 | 484,391 |
Current portion of term loan | 596,984 | 655,804 |
Deferred revenues | 6,130,259 | 9,916,454 |
Current portion of capital lease obligations | 0 | 91,337 |
Total current liabilities | 8,715,740 | 12,761,217 |
Non-current liabilities: | ||
Term loan, net of deferred financing cost of $146,009 and $199,211, respectively | 4,032,865 | 4,883,286 |
Warrants liability | 150,857 | 46,191 |
Royalty liability | 2,456,233 | 2,350,754 |
Lease incentive liability | 293,322 | 339,676 |
Deferred revenues, less current portion | 487,832 | 568,515 |
Total non-current liabilities | 7,421,109 | 8,188,422 |
Total liabilities | 16,136,849 | 20,949,639 |
Series A 0% Convertible Redeemable Preferred Stock, $.01 par value per share, $8,849,985 redemption value, 4,000,000 shares authorized, 2,949,995 shares issued and outstanding, net of unamortized preferred stock discount of $0 | 8,849,985 | 8,849,985 |
Stockholders’ equity: | ||
Common stock, $.01 par value per share, 45,000,000 shares authorized; 19,984,743 and 19,695,391 shares issued and outstanding, respectively | 199,847 | 196,954 |
Additional paid in capital | 81,491,728 | 80,667,771 |
Accumulated deficit | (72,162,935) | (69,025,851) |
Total stockholders’ equity | 9,528,640 | 11,838,874 |
Total liability and stockholders' equity | $ 34,515,474 | $ 41,638,498 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | 9 Months Ended | 12 Months Ended |
Oct. 31, 2017 | Jan. 31, 2017 | |
Allowance for doubtful accounts | $ 301,773 | $ 198,449 |
Accumulated amortization of capitalized software development costs | 18,119,290 | 16,544,797 |
Accumulated amortization of intangible assets | 6,729,799 | 5,807,338 |
Deferred financing costs, accumulated amortization | $ 146,009 | $ 199,211 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Number of authorized shares of common stock (in shares) | 45,000,000 | 45,000,000 |
Common stock, shares issued (in shares) | 19,984,743 | 19,695,391 |
Common stock, shares outstanding (in shares) | 19,984,743 | 19,695,391 |
Series A Preferred Stock | ||
Preferred stock dividend rate | 0.00% | 0.00% |
Convertible redeemable preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Convertible redeemable preferred stock, redemption value | $ 8,849,985 | $ 8,849,985 |
Convertible redeemable preferred stock, shares authorized (in shares) | 4,000,000 | 4,000,000 |
Convertible redeemable preferred stock, shares issued (in shares) | 2,949,995 | 2,949,995 |
Convertible redeemable preferred stock, shares outstanding (in shares) | 2,949,995 | 2,949,995 |
Unamortized preferred stock discount | $ 0 | $ 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2017 | Oct. 31, 2016 | |
Revenues: | ||||
Systems sales | $ 348,526 | $ 314,218 | $ 1,055,941 | $ 2,190,256 |
Professional services | 801,771 | 630,961 | 1,793,618 | 1,869,656 |
Audit services | 280,025 | 234,347 | 919,485 | 234,347 |
Maintenance and support | 3,250,229 | 3,749,596 | 9,883,563 | 11,237,637 |
Software as a service | 1,718,748 | 1,706,366 | 4,586,532 | 5,144,876 |
Total revenues | 6,399,299 | 6,635,488 | 18,239,139 | 20,676,772 |
Operating expenses: | ||||
Cost of systems sales | 434,138 | 663,148 | 1,596,988 | 2,080,263 |
Cost of professional services | 555,815 | 723,358 | 1,814,236 | 1,891,146 |
Cost of audit services | 404,280 | 595,575 | 1,236,358 | 595,575 |
Cost of maintenance and support | 667,307 | 790,291 | 2,241,969 | 2,483,462 |
Cost of software as a service | 289,503 | 450,695 | 914,711 | 1,390,308 |
Selling, general and administrative | 2,819,549 | 3,212,350 | 8,983,248 | 10,153,140 |
Research and development | 932,251 | 1,969,415 | 3,985,161 | 5,800,169 |
Total operating expenses | 6,102,843 | 8,404,832 | 20,772,671 | 24,394,063 |
Operating income (loss) | 296,456 | (1,769,344) | (2,533,532) | (3,717,291) |
Other expense: | ||||
Interest expense | (113,078) | (98,871) | (360,723) | (380,897) |
Miscellaneous expense | (177,282) | (60,555) | (235,007) | (39,089) |
Earnings (loss) before income taxes | 6,096 | (1,928,770) | (3,129,262) | (4,137,277) |
Income tax expense | (2,607) | (1,702) | (7,822) | (5,104) |
Net earnings (loss) | 3,489 | (1,930,472) | (3,137,084) | (4,142,381) |
Less: deemed dividends on Series A Preferred Shares | 0 | (72,710) | 0 | (875,935) |
Net earnings (loss) attributable to common stockholders | $ 3,489 | $ (2,003,182) | $ (3,137,084) | $ (5,018,316) |
Basic net earnings (loss) per common share (in dollars per share) | $ 0 | $ (0.10) | $ (0.16) | $ (0.26) |
Number of shares used in basic per common share computation (in shares) | 19,985,822 | 19,645,521 | 19,838,691 | 19,477,538 |
Diluted net earnings (loss) per common share (in dollars per share) | $ 0 | $ (0.10) | $ (0.16) | $ (0.26) |
Number of shares used in diluted per common share computation (in shares) | 23,068,423 | 19,645,521 | 19,838,691 | 19,477,538 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows - USD ($) | 9 Months Ended | |
Oct. 31, 2017 | Oct. 31, 2016 | |
Operating activities: | ||
Net loss | $ (3,137,084) | $ (4,142,381) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 595,866 | 895,438 |
Amortization of capitalized software development costs | 1,574,493 | 2,146,374 |
Amortization of intangible assets | 922,462 | 976,338 |
Amortization of other deferred costs | 229,780 | 192,947 |
Valuation adjustment for warrants liability | 104,666 | (36,875) |
Share-based compensation expense | 844,960 | 1,342,513 |
Other valuation adjustments | 124,423 | 120,912 |
(Gain) loss on disposal of property and equipment | (14,871) | 567 |
Provision for accounts receivable | 181,859 | 136,693 |
Changes in assets and liabilities, net of effects of acquisitions: | ||
Accounts and contract receivables | 1,957,439 | 1,679,810 |
Other assets | (671,254) | 130,875 |
Accounts payable | (308,747) | (78,320) |
Accrued expenses | 134,324 | (814,707) |
Deferred revenues | (3,866,878) | (3,793,603) |
Net cash used in operating activities | (1,328,562) | (1,243,419) |
Investing activities: | ||
Purchases of property and equipment | (24,517) | (501,148) |
Capitalization of software development costs | (1,336,942) | (1,420,678) |
Payment for acquisition, net of cash received | 0 | (1,400,000) |
Net cash used in investing activities | (1,361,459) | (3,321,826) |
Financing activities: | ||
Principal repayments on term loan | (962,443) | (2,243,624) |
Principal payments on capital lease obligation | (91,337) | (535,896) |
Proceeds from exercise of stock options and stock purchase plan | 23,703 | 14,793 |
Payments related to settlement of employee shared-based awards | (41,813) | (11,702) |
Net cash used in financing activities | (1,071,890) | (2,776,429) |
Net decrease in cash and cash equivalents | (3,761,911) | (7,341,674) |
Cash and cash equivalents at beginning of period | 5,654,093 | 9,882,136 |
Cash and cash equivalents at end of period | $ 1,892,182 | $ 2,540,462 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Oct. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The accompanying unaudited Condensed Consolidated Financial Statements have been prepared by Streamline Health Solutions, Inc. (“we”, “us”, “our”, “Streamline”, or the “Company”), pursuant to the rules and regulations applicable to quarterly reports on Form 10-Q of the U.S. Securities and Exchange Commission. Certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although we believe that the disclosures made are adequate to make the information not misleading. In the opinion of our management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the Condensed Consolidated Financial Statements have been included. These Condensed Consolidated Financial Statements should be read in conjunction with the consolidated financial statements and notes thereto included in our most recent annual report on Form 10-K, Commission File Number 0-28132. Operating results for the nine months ended October 31, 2017 are not necessarily indicative of the results that may be expected for the fiscal year ending January 31, 2018 . |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Oct. 31, 2017 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Our significant accounting policies are presented in “Note 2 – Significant Accounting Policies” in the fiscal year 2016 Annual Report on Form 10-K. Users of financial information for interim periods are encouraged to refer to the footnotes to the consolidated financial statements contained in the Annual Report on Form 10-K when reviewing interim financial results. Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Fair Value of Financial Instruments The Financial Accounting Standards Board’s (“FASB”) 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 our 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: Total Fair Value Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) At October 31, 2017 Warrants liability (1) $ 151,000 $ — $ — $ 151,000 Royalty liability (2) 2,456,000 — — 2,456,000 At January 31, 2017 Warrants liability (1) $ 46,000 $ — $ — $ 46,000 Royalty liability (2) 2,351,000 — — 2,351,000 _______________ (1) The initial fair value of warrants liability was determined by management with the assistance of an independent third-party valuation specialist, and by management thereafter. Changes in fair value of the warrants are recognized within miscellaneous expense in the condensed consolidated statements of operations. (2) 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. The fair value of the royalty liability is determined based on the probability-weighted revenue scenarios for the Streamline Health® Clinical Analytics TM solution (“Clinical Analytics”) licensed from Montefiore Medical Center (discussed in Note 3 - Acquisitions and Divestitures). Fair value adjustments are included within miscellaneous expense in the condensed consolidated statements of operations. Revenue Recognition We derive revenue from the sale of internally-developed software, either by licensing for local installation or by 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) 985-605, Software-Revenue Recognition, ASC 605-25, Revenue Recognition — Multiple-Element Arrangements , and ASC 605-10-S99. We commence revenue recognition when all of the following criteria have been met: • Persuasive evidence of an arrangement exists, • Delivery has occurred or services have been rendered, • The arrangement fees are fixed or determinable, and • Collectibility is reasonably assured. If we determine that any of the above criteria have not been met, we will defer recognition of the revenue until all the criteria have been met. 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, as applicable. Multiple Element Arrangements We follow the accounting revenue guidance under Accounting Standards Update (ASU) 2009-13, Multiple-Deliverable Revenue Arrangements — a consensus of the FASB Emerging Issues Task Force . Terms used in evaluation are as follows: • VSOE (vendor-specific objective evidence) — the price at which an element is sold as a separate stand-alone transaction • TPE (third-party evidence) — the price of an element charged by another company that is largely interchangeable in any particular transaction • ESP (estimated selling price) — our best estimate of the selling price of an element of the transaction We follow accounting guidance for revenue recognition of multiple-element arrangements to determine whether such arrangements contain more than one unit of accounting. Multiple-element arrangements require the delivery or performance of multiple solutions, services and/or right-to-use assets. To qualify as a separate unit of accounting, the delivered item must have value to the client on a stand-alone basis. An item has stand-alone value to a client when it can be sold separately by any vendor or the client could resell the item on a stand-alone basis. Additionally, if the arrangement includes a general right of return relative to the delivered item, delivery or performance of the undelivered item or items must be considered probable and substantially in the control of the vendor. We have a defined pricing methodology for all elements of the arrangement and proper review of pricing to ensure adherence to our policies. Pricing decisions include cross-functional teams of senior management, which use market conditions, expected contribution margin, size of the client’s organization and pricing history for similar solutions when establishing the selling price. Software as a Service We use ESP to determine the value for a software-as-a-service arrangement as we cannot establish VSOE, and TPE is not a practical alternative due to differences in functionality from our competitors. Similar to proprietary license sales, pricing decisions rely on the relative size of the client purchasing the solution and include calculating the equivalent value of maintenance and support on a present value basis over the term of the initial agreement period. Typically, revenue recognition commences once the client goes live on the system and is recognized ratably over the contract term. Systems Sales We use the residual method to determine fair value for proprietary perpetual software licenses sold in a multi-element arrangement. Under the residual method, we allocate the total value of the arrangement first to the undelivered elements based on their VSOE and allocate the remainder to the proprietary perpetual software license fees. Typically, pricing decisions for proprietary software rely on the relative size and complexity of the client purchasing the solution. Third-party components are resold at prices based on a cost-plus margin analysis. The proprietary software and third-party components do not need any significant modification to achieve their intended use. When these revenues meet all criteria for revenue recognition, and are determined to be separate units of accounting, revenue is recognized. Typically, this is upon shipment of components or electronic download of software. Proprietary licenses are perpetual in nature, and license fees do not include rights to version upgrades, bug fixes or service packs. Maintenance and Support Services The maintenance and support components are not essential to the functionality of the software, and clients renew maintenance contracts separately from software purchases at renewal rates materially similar to the initial rate charged for maintenance on the initial purchase of software. We use VSOE of fair value to determine fair value of maintenance and support services. Rates are set based on market rates for these types of services, and our rates are comparable to rates charged by our competitors, which are based on the knowledge of the marketplace by senior management. Generally, maintenance and support is calculated as a percentage of the list price of the proprietary license being purchased by a client. Clients have the option of purchasing additional annual maintenance service renewals each year for which rates are not materially different from the initial rate but typically include a nominal rate increase based on the consumer price index. Annual maintenance and support agreements entitle clients to technology support, version upgrades, bug fixes and service packs. Term Licenses We cannot establish VSOE fair value of the undelivered element in term license arrangements. However, as the only undelivered element is post-contract customer support, the entire fee is recognized ratably over the contract term. Typically, revenue recognition commences once the client goes live on the system. Similar to proprietary license sales, pricing decisions rely on the relative size of the client purchasing the solution. The software portion of our Streamline Health® Coding & CDI TM (“CDI”) products generally does not require material modification to achieve its contracted function. Software-Based Solution Professional Services Professional services components that are not essential to the functionality of the software, from time to time, are sold separately by us. Similar services are sold by other vendors, and clients can elect to perform similar services in-house. When professional services revenues are a separate unit of accounting, revenues are recognized as the services are performed. Professional services related to coding compliance, recovery audit contractor consulting, and ICD-10 readiness are considered a single unit of accounting where we recognize revenue using proportional performance over the service period when all applicable revenue recognition criteria have been met. Professional services components related to SaaS and term licenses that are essential to the functionality of the software and are not considered a separate unit of accounting are recognized in revenue ratably over the life of the client, which approximates the duration of the initial contract term. We defer the associated direct costs for salaries and benefits expense for professional services contracts. These deferred costs will be amortized over the identical term as the associated revenues. As of October 31, 2017 and January 31, 2017 , we had deferred costs of $506,000 and $500,000 , respectively, net of accumulated amortization of $283,000 and $370,000 , respectively. Amortization expense of these costs was $51,000 and $36,000 for the three months ended October 31, 2017 and 2016 , respectively, and $177,000 and $80,000 for the nine months ended October 31, 2017 and 2016 , respectively. Professional service components that are essential to the functionality of perpetually licensed software and are not considered a separate unit of accounting are recognized using the percentage-of-completion method over the professional service period. If services are sold with perpetually licensed software, we use VSOE of fair value based on the hourly rate charged when services are sold separately to determine fair value of professional services. We typically sell professional services on an hourly or fixed fee basis. We monitor projects to assure that the expected and historical rate earned remains within a reasonable range to the established selling price. Audit Services Professional services relating to audit services are provided separately from software solutions, even those that may relate to coding and coding audit processes. These services are not essential to any software offering and are a separate unit of accounting. Accordingly, the revenues are recognized as the services are performed. Severance From time to time, we enter into termination agreements with associates that may include supplemental cash payments, as well as contributions to health and other benefits for a specific time period subsequent to termination. For the three months ended October 31, 2017 and 2016 , we incurred zero and $110,000 in severance expenses, respectively, and $58,000 and $227,000 for the nine months ended October 31, 2017 and 2016 , respectively. At October 31, 2017 and January 31, 2017 , we had accrued severance expenses of zero and $9,000 , respectively. Equity Awards We account for share-based payments based on the grant-date fair value of the awards with compensation cost recognized as expense over the requisite vesting period. We incurred total compensation expense related to stock-based awards of $290,000 and $432,000 for the three months ended October 31, 2017 and 2016 , respectively, and $845,000 and $1,343,000 for the nine months ended October 31, 2017 and 2016 , respectively. The fair value of the stock options granted is estimated at the date of grant using a Black-Scholes option pricing model. The option pricing model inputs (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 (such as volatility factor, expected term, and forfeiture rates) data. 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. We issue restricted stock awards in the form of our common stock. The fair value of these awards is based on the market closing price per share on the date of grant. We expense the compensation cost of these awards as the restriction period lapses, which is typically a one -year service period to the Company. In the nine months ended October 31, 2017 , 32,033 shares of common stock were surrendered to the Company to satisfy tax withholding obligations totaling $42,000 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. In the nine months ended October 31, 2017 , the Company awarded 220,337 shares of restricted stock to directors of the Company. 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 basis 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, we consider whether it is more likely than not that some or all of the deferred tax assets will not be realized. We establish a valuation allowance when it is more likely than not that all or a portion of deferred tax assets will not be realized. We provide 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. We believe we have appropriately accounted for any uncertain tax positions. The Company has recorded $262,000 and $263,000 in reserves for uncertain tax positions and corresponding interest and penalties as of October 31, 2017 and January 31, 2017 , respectively. Net Earnings (Loss) Per Common Share We present basic and diluted earnings per share (“EPS”) data for our common stock. Basic EPS is calculated by dividing the net earnings (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, warrants and convertible preferred stock. Potential common stock dilution related to outstanding stock options, unvested restricted stock and warrants 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. Our 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. Our 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 our 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. As of October 31, 2017 , there were 2,949,995 shares of preferred stock outstanding, each of which is convertible into one share of our common stock. For the three and nine months ended October 31, 2017 and 2016 , the Series A Convertible Preferred Stock would have an anti-dilutive effect if included in diluted EPS and therefore, was not included in the calculation. For the three months ended October 31, 2016 and the nine months ended October 31, 2017 and 2016 , 821,587 and 828,225 , respectively, unvested restricted shares of common stock were excluded from the diluted EPS calculation as their effect would have been anti-dilutive. For the three months ended October 31, 2017 , the effect of unvested restricted stock awards and the Series A Convertible Preferred Stock to the earnings per share calculation was immaterial. The following is the calculation of the basic and diluted net earnings (loss) per share of common stock: Three Months Ended October 31, 2017 October 31, 2016 Net earnings (loss) $ 3,489 $ (1,930,472 ) Less: deemed dividends on Series A Preferred Stock — (72,710 ) Net earnings (loss) attributable to common stockholders $ 3,489 $ (2,003,182 ) Weighted average shares outstanding used in basic per common share computations 19,985,822 19,645,521 Restricted stock and Series A Convertible Preferred Stock 3,082,601 — Number of shares used in diluted per common share computation 23,068,423 19,645,521 Basic net earnings (loss) per share of common stock $ 0.00 $ (0.10 ) Diluted net earnings (loss) per share of common stock $ 0.00 $ (0.10 ) Nine Months Ended October 31, 2017 October 31, 2016 Net loss $ (3,137,084 ) $ (4,142,381 ) Less: deemed dividends on Series A Preferred Stock — (875,935 ) Net loss attributable to common stockholders $ (3,137,084 ) $ (5,018,316 ) Weighted average shares outstanding used in basic per common share computations 19,838,691 19,477,538 Restricted stock and Series A Convertible Preferred Stock — — Number of shares used in diluted per common share computation 19,838,691 19,477,538 Basic net loss per share of common stock $ (0.16 ) $ (0.26 ) Diluted net loss per share of common stock $ (0.16 ) $ (0.26 ) Diluted net earnings (loss) per share excludes the effect of outstanding stock options that relate to 2,203,156 and 2,172,480 shares of common stock for the three and nine months ended October 31, 2017 and 2016 , respectively. The inclusion of these stock options would have been anti-dilutive. For the three and nine months ended October 31, 2017 and 2016 , the warrants to purchase 1,400,000 shares of common stock would have an anti-dilutive effect if included in diluted net earnings (loss) per share, and therefore were not included in the calculation. Recent Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 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. 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 will now be effective for us on February 1, 2018. Early adoption of the update is permitted. The guidance is to be applied using one of two retrospective application methods. We are in the process of applying the five-step model of the new standard to customer contracts and will compare the results to our current accounting practices. We plan to adopt ASU 2014-09, as well as other clarifications and technical guidance issued by the FASB related to this new revenue standard, on February 1, 2018. We elected the modified retrospective transition method, which would result in an adjustment to retained earnings for the cumulative effect, if any, of applying the standard to contracts in process as of the adoption date. Under this method, we would not restate the prior financial statements presented. Therefore, the new standard requires additional disclosures of the amount by which each financial statement line item is affected in the fiscal year 2018 reporting period. We are currently in the process of assessing the impact of the new standard and have not yet determined the effect of the standard on our consolidated financial statements. 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 will be effective for us on February 1, 2019. Early adoption of the update is permitted. We are currently evaluating the impact of the adoption of this update on our consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718), to improve the accounting for employee share-based payments. The guidance simplifies the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The guidance is effective for annual and interim periods beginning after December 15, 2016, and early adoption is permitted. The update became effective for us on February 1, 2017. The adoption of this ASU did not have a significant impact on our consolidated financial statements. 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 will be effective for us on February 1, 2018. Early adoption of this update is permitted. We are currently evaluating the impact of the adoption of this new standard on our consolidated financial statements and related disclosures. 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 will be effective for us on February 1, 2018. We do not expect that the adoption of this ASU will have a significant impact on our consolidated financial statements. 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 will be effective for us on February 1, 2018. We do not expect that the adoption of this ASU will have a significant impact on our consolidated financial statements. |
Acquisitions and Divestitures
Acquisitions and Divestitures | 9 Months Ended |
Oct. 31, 2017 | |
Business Combinations [Abstract] | |
ACQUISITIONS AND DIVESTITURES | ACQUISITIONS AND DIVESTITURES Acquisition of a Montefiore Medical Center Solution 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 , and we are obligated to pay on-going quarterly royalty amounts related to future sublicensing of CLG by us. Additionally, we have committed that Montefiore will receive at least an additional $3,000,000 of on-going royalty payments within the first six and one-half years of the license term. As of October 31, 2017 and January 31, 2017 , the present value of this royalty liability was $2,456,000 and $2,351,000 , respectively. Acquisition of Unibased Systems Architecture, Inc. and Related Divestiture On February 3, 2014, we completed the acquisition of Unibased Systems Architecture, Inc. (“Unibased”), a provider of patient access solutions, including enterprise scheduling and surgery management software, for healthcare organizations throughout the United States, pursuant to an Agreement and Plan of Merger dated January 16, 2014 (the “Merger Agreement”). The total purchase price for Unibased was $6,500,000 , subject to net working capital and other customary adjustments. On December 1, 2016, we received a cash payment of $2,000,000 for the sale of our Patient Engagement suite of solutions (“Patient Engagement”), which is based upon the legacy ForSite2020 solution acquired from Unibased in February 2014. As a result, we recognized a gain on sale of business of $238,000 in the fourth quarter of fiscal 2016, which represents the amount by which the sale proceeds exceeded net assets associated with Patient Engagement operations, including accounts receivable, intangible assets and deferred revenue. We used the proceeds to make two prepayments of $500,000 on our term loan with Wells Fargo, one in the fourth quarter of fiscal 2016 and another in the second quarter of fiscal 2017. Acquisition of Opportune IT Healthcare Solutions, Inc. On September 8, 2016, we completed the acquisition of substantially all of the assets of Opportune IT Healthcare Solutions, Inc. (“Opportune IT”), a provider of coding compliance, recovery audit contractor consulting, and ICD-10 readiness and training to hospitals, physicians and medical groups. As consideration under the asset purchase agreement, we made a cash payment for the total purchase price of $1,400,000 . The Company also assumed certain current operating liabilities of Opportune IT. The purchase price has been allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date as follows, pending final valuation of internally-developed software and intangible assets: Balance at September 8, 2016 Assets purchased: Accounts and contracts receivable 792,000 Other assets 32,000 Internally-developed software 350,000 Intangible assets 650,000 Total assets purchased 1,824,000 Liabilities assumed: Accounts payable and accrued liabilities 424,000 Net assets acquired $ 1,400,000 Cash paid $ 1,400,000 The operating results of Opportune IT are not material for purposes of proforma disclosure. |
Leases
Leases | 9 Months Ended |
Oct. 31, 2017 | |
Leases [Abstract] | |
LEASES | LEASES We rent office space and equipment under non-cancelable operating leases that expire at various times through fiscal year 2022 . Future minimum lease payments under non-cancelable operating leases for the next five fiscal years are as follows: Facilities Equipment Fiscal Year Totals 2017 (three months remaining) $ 256,000 $ 3,000 $ 259,000 2018 1,039,000 11,000 1,050,000 2019 967,000 11,000 978,000 2020 504,000 11,000 515,000 2021 519,000 2,000 521,000 Thereafter 445,000 — 445,000 Total $ 3,730,000 $ 38,000 $ 3,768,000 Rent and leasing expense for facilities and equipment was $295,000 and $309,000 for the three months ended October 31, 2017 and 2016 , respectively, and $920,000 and $955,000 for the nine months ended October 31, 2017 and 2016 , respectively. 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 was included in depreciation expense. As of October 31, 2017 , the Company had no capital lease obligations outstanding. |
Debt
Debt | 9 Months Ended |
Oct. 31, 2017 | |
Debt Disclosure [Abstract] | |
DEBT | 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, under the terms of the original Credit Agreement, the applicable LIBOR rate margin varied from 4.25% to 5.25% , and the applicable base rate margin varied from 3.25% to 4.25% . Pursuant to the terms of the amendment to the Credit Agreement entered into as of April 15, 2015, the applicable LIBOR rate margin was amended to vary from 4.25% to 6.25% , and the applicable base rate margin was amended to vary from 3.25% to 5.25% . The term loan and line of credit mature on November 21, 2019 and 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. 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. In November 2014, the Company repaid indebtedness under its prior credit facility using approximately $7,400,000 of the proceeds provided by the term loan. The prior credit facility with Fifth Third Bank was terminated concurrent with the entry into the Credit Agreement. Financing costs of $355,000 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 third amendment to the Credit Agreement entered into as of June 19, 2017, 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 and including January 31, 2019, and (iii) $3,000,000 from February 1, 2019 through and including the maturity date of the credit facility. The following table shows our minimum trailing four quarter period EBITDA covenant thresholds, as modified by the third amendment to the Credit Agreement: For the four-quarter period ending Minimum EBITDA July 31, 2017 $ (1,250,000 ) October 31, 2017 (1,000,000 ) January 31, 2018 (700,000 ) April 30, 2018 (35,869 ) July 31, 2018 414,953 October 31, 2018 1,080,126 January 31, 2019 1,634,130 April 30, 2019 1,842,610 July 31, 2019 2,657,362 October 31, 2019 and each fiscal quarter thereafter 3,613,810 The Company was in compliance with the applicable loan covenants at October 31, 2017 . As of October 31, 2017 , the Company had no outstanding borrowings under the revolving line of credit, and had accrued $12,000 in unused line fees. Based upon the borrowing base formula set forth in the Credit Agreement, as of October 31, 2017 , 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: October 31, 2017 January 31, 2017 Senior term loan $ 4,630,000 $ 5,539,000 Capital lease — 91,000 Total 4,630,000 5,630,000 Less: Current portion (597,000 ) (747,000 ) Non-current portion of debt $ 4,033,000 $ 4,883,000 In May 2016, as a result of excess cash flows achieved as of January 31, 2016 and as required pursuant to the mandatory prepayment provisions of the Credit Agreement, we made a $1,738,000 payment of principal towards the term loan with Wells Fargo. We used the proceeds from the sale of our Patient Engagement suite of solutions to make two prepayments on our term loan with Wells Fargo, one in December 2016 and one in June 2017, each in the amount of $500,000 . As a result of these prepayments, the schedule of future principal payments was revised to reduce each future principal payment on a pro rata basis. Future principal repayments of debt consisted of the following at October 31, 2017 : Senior Term Loan (1) 2017 $ 149,000 2018 597,000 2019 4,030,000 Total repayments $ 4,776,000 _______________ (1) Term loan balance on the condensed consolidated balance sheet is reported net of deferred financing costs of $146,000 . |
Convertible Preferred Stock
Convertible Preferred Stock | 9 Months Ended |
Oct. 31, 2017 | |
Equity [Abstract] | |
CONVERTIBLE PREFERRED STOCK | CONVERTIBLE PREFERRED STOCK Series A Convertible Preferred Stock At October 31, 2017 , we had 2,949,995 shares of Series A Convertible Redeemable Preferred Stock (the “Preferred Stock”) outstanding. Each share of the Preferred Stock is convertible into one share of the Company's common stock. The Preferred Stock does not pay a dividend; however, the holders are entitled to receive dividends 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 Preferred Stock has voting rights on a modified as-if-converted-to-common-stock-basis. The 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 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 10 day period prior to the measurement date is greater than $8.00 per share, and the average daily trading volume for the 60 day period immediately prior to the measurement date exceeds 100,000 shares. The conversion price is $3.00 per share, subject to certain adjustments. At any time following August 31, 2016, subject to the terms of the Subordination and Intercreditor Agreement among the preferred stockholders, the Company and Wells Fargo, which prohibits the redemption of the Preferred Stock without the consent of Wells Fargo, each share of 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 similar events) plus any accrued and unpaid dividends thereon. The Preferred Stock is classified as temporary equity as the securities are redeemable solely at the option of the holder. |
Income Taxes
Income Taxes | 9 Months Ended |
Oct. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Income tax expense consists of federal, state and local tax provisions. For the nine months ended October 31, 2017 and 2016 , we recorded federal tax expense of zero . For the nine months ended October 31, 2017 and 2016 , we recorded state and local tax expense of $8,000 and $5,000 , respectively. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Oct. 31, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS We have evaluated subsequent events occurring after October 31, 2017 , and based on our evaluation we did not identify any events that would have required recognition or disclosure in these condensed consolidated financial statements. |
Summary of Significant Accoun14
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Oct. 31, 2017 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Financial Accounting Standards Board’s (“FASB”) 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 our 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. |
Revenue Recognition | Revenue Recognition We derive revenue from the sale of internally-developed software, either by licensing for local installation or by 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) 985-605, Software-Revenue Recognition, ASC 605-25, Revenue Recognition — Multiple-Element Arrangements , and ASC 605-10-S99. We commence revenue recognition when all of the following criteria have been met: • Persuasive evidence of an arrangement exists, • Delivery has occurred or services have been rendered, • The arrangement fees are fixed or determinable, and • Collectibility is reasonably assured. If we determine that any of the above criteria have not been met, we will defer recognition of the revenue until all the criteria have been met. 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, as applicable. Multiple Element Arrangements We follow the accounting revenue guidance under Accounting Standards Update (ASU) 2009-13, Multiple-Deliverable Revenue Arrangements — a consensus of the FASB Emerging Issues Task Force . Terms used in evaluation are as follows: • VSOE (vendor-specific objective evidence) — the price at which an element is sold as a separate stand-alone transaction • TPE (third-party evidence) — the price of an element charged by another company that is largely interchangeable in any particular transaction • ESP (estimated selling price) — our best estimate of the selling price of an element of the transaction We follow accounting guidance for revenue recognition of multiple-element arrangements to determine whether such arrangements contain more than one unit of accounting. Multiple-element arrangements require the delivery or performance of multiple solutions, services and/or right-to-use assets. To qualify as a separate unit of accounting, the delivered item must have value to the client on a stand-alone basis. An item has stand-alone value to a client when it can be sold separately by any vendor or the client could resell the item on a stand-alone basis. Additionally, if the arrangement includes a general right of return relative to the delivered item, delivery or performance of the undelivered item or items must be considered probable and substantially in the control of the vendor. We have a defined pricing methodology for all elements of the arrangement and proper review of pricing to ensure adherence to our policies. Pricing decisions include cross-functional teams of senior management, which use market conditions, expected contribution margin, size of the client’s organization and pricing history for similar solutions when establishing the selling price. Software as a Service We use ESP to determine the value for a software-as-a-service arrangement as we cannot establish VSOE, and TPE is not a practical alternative due to differences in functionality from our competitors. Similar to proprietary license sales, pricing decisions rely on the relative size of the client purchasing the solution and include calculating the equivalent value of maintenance and support on a present value basis over the term of the initial agreement period. Typically, revenue recognition commences once the client goes live on the system and is recognized ratably over the contract term. Systems Sales We use the residual method to determine fair value for proprietary perpetual software licenses sold in a multi-element arrangement. Under the residual method, we allocate the total value of the arrangement first to the undelivered elements based on their VSOE and allocate the remainder to the proprietary perpetual software license fees. Typically, pricing decisions for proprietary software rely on the relative size and complexity of the client purchasing the solution. Third-party components are resold at prices based on a cost-plus margin analysis. The proprietary software and third-party components do not need any significant modification to achieve their intended use. When these revenues meet all criteria for revenue recognition, and are determined to be separate units of accounting, revenue is recognized. Typically, this is upon shipment of components or electronic download of software. Proprietary licenses are perpetual in nature, and license fees do not include rights to version upgrades, bug fixes or service packs. Maintenance and Support Services The maintenance and support components are not essential to the functionality of the software, and clients renew maintenance contracts separately from software purchases at renewal rates materially similar to the initial rate charged for maintenance on the initial purchase of software. We use VSOE of fair value to determine fair value of maintenance and support services. Rates are set based on market rates for these types of services, and our rates are comparable to rates charged by our competitors, which are based on the knowledge of the marketplace by senior management. Generally, maintenance and support is calculated as a percentage of the list price of the proprietary license being purchased by a client. Clients have the option of purchasing additional annual maintenance service renewals each year for which rates are not materially different from the initial rate but typically include a nominal rate increase based on the consumer price index. Annual maintenance and support agreements entitle clients to technology support, version upgrades, bug fixes and service packs. Term Licenses We cannot establish VSOE fair value of the undelivered element in term license arrangements. However, as the only undelivered element is post-contract customer support, the entire fee is recognized ratably over the contract term. Typically, revenue recognition commences once the client goes live on the system. Similar to proprietary license sales, pricing decisions rely on the relative size of the client purchasing the solution. The software portion of our Streamline Health® Coding & CDI TM (“CDI”) products generally does not require material modification to achieve its contracted function. Software-Based Solution Professional Services Professional services components that are not essential to the functionality of the software, from time to time, are sold separately by us. Similar services are sold by other vendors, and clients can elect to perform similar services in-house. When professional services revenues are a separate unit of accounting, revenues are recognized as the services are performed. Professional services related to coding compliance, recovery audit contractor consulting, and ICD-10 readiness are considered a single unit of accounting where we recognize revenue using proportional performance over the service period when all applicable revenue recognition criteria have been met. Professional services components related to SaaS and term licenses that are essential to the functionality of the software and are not considered a separate unit of accounting are recognized in revenue ratably over the life of the client, which approximates the duration of the initial contract term. We defer the associated direct costs for salaries and benefits expense for professional services contracts. These deferred costs will be amortized over the identical term as the associated revenues. As of October 31, 2017 and January 31, 2017 , we had deferred costs of $506,000 and $500,000 , respectively, net of accumulated amortization of $283,000 and $370,000 , respectively. Amortization expense of these costs was $51,000 and $36,000 for the three months ended October 31, 2017 and 2016 , respectively, and $177,000 and $80,000 for the nine months ended October 31, 2017 and 2016 , respectively. Professional service components that are essential to the functionality of perpetually licensed software and are not considered a separate unit of accounting are recognized using the percentage-of-completion method over the professional service period. If services are sold with perpetually licensed software, we use VSOE of fair value based on the hourly rate charged when services are sold separately to determine fair value of professional services. We typically sell professional services on an hourly or fixed fee basis. We monitor projects to assure that the expected and historical rate earned remains within a reasonable range to the established selling price. Audit Services Professional services relating to audit services are provided separately from software solutions, even those that may relate to coding and coding audit processes. These services are not essential to any software offering and are a separate unit of accounting. Accordingly, the revenues are recognized as the services are performed. |
Severance | Severance From time to time, we enter into termination agreements with associates that may include supplemental cash payments, as well as contributions to health and other benefits for a specific time period subsequent to termination. |
Equity Awards | Equity Awards We account for share-based payments based on the grant-date fair value of the awards with compensation cost recognized as expense over the requisite vesting period. We incurred total compensation expense related to stock-based awards of $290,000 and $432,000 for the three months ended October 31, 2017 and 2016 , respectively, and $845,000 and $1,343,000 for the nine months ended October 31, 2017 and 2016 , respectively. The fair value of the stock options granted is estimated at the date of grant using a Black-Scholes option pricing model. The option pricing model inputs (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 (such as volatility factor, expected term, and forfeiture rates) data. 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. We issue restricted stock awards in the form of our common stock. The fair value of these awards is based on the market closing price per share on the date of grant. We expense the compensation cost of these awards as the restriction period lapses, which is typically a one -year service period to the Company. In the nine months ended October 31, 2017 , 32,033 shares of common stock were surrendered to the Company to satisfy tax withholding obligations totaling $42,000 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. In the nine months ended October 31, 2017 , the Company awarded 220,337 shares of restricted stock to directors of the Company. |
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 basis 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, we consider whether it is more likely than not that some or all of the deferred tax assets will not be realized. We establish a valuation allowance when it is more likely than not that all or a portion of deferred tax assets will not be realized. We provide 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. We believe we have appropriately accounted for any uncertain tax positions. |
Net Earnings (Loss) Per Common Share | Net Earnings (Loss) Per Common Share We present basic and diluted earnings per share (“EPS”) data for our common stock. Basic EPS is calculated by dividing the net earnings (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, warrants and convertible preferred stock. Potential common stock dilution related to outstanding stock options, unvested restricted stock and warrants 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. Our 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. Our 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 our common stock is computed using the more dilutive of the two-class method or the if-converted method. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 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. 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 will now be effective for us on February 1, 2018. Early adoption of the update is permitted. The guidance is to be applied using one of two retrospective application methods. We are in the process of applying the five-step model of the new standard to customer contracts and will compare the results to our current accounting practices. We plan to adopt ASU 2014-09, as well as other clarifications and technical guidance issued by the FASB related to this new revenue standard, on February 1, 2018. We elected the modified retrospective transition method, which would result in an adjustment to retained earnings for the cumulative effect, if any, of applying the standard to contracts in process as of the adoption date. Under this method, we would not restate the prior financial statements presented. Therefore, the new standard requires additional disclosures of the amount by which each financial statement line item is affected in the fiscal year 2018 reporting period. We are currently in the process of assessing the impact of the new standard and have not yet determined the effect of the standard on our consolidated financial statements. 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 will be effective for us on February 1, 2019. Early adoption of the update is permitted. We are currently evaluating the impact of the adoption of this update on our consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718), to improve the accounting for employee share-based payments. The guidance simplifies the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The guidance is effective for annual and interim periods beginning after December 15, 2016, and early adoption is permitted. The update became effective for us on February 1, 2017. The adoption of this ASU did not have a significant impact on our consolidated financial statements. 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 will be effective for us on February 1, 2018. Early adoption of this update is permitted. We are currently evaluating the impact of the adoption of this new standard on our consolidated financial statements and related disclosures. 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 will be effective for us on February 1, 2018. We do not expect that the adoption of this ASU will have a significant impact on our consolidated financial statements. 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 will be effective for us on February 1, 2018. We do not expect that the adoption of this ASU will have a significant impact on our consolidated financial statements. |
Summary of Significant Accoun15
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Oct. 31, 2017 | |
Accounting Policies [Abstract] | |
Fair Value of Liabilities on a Recurring Basis | The table below provides information on our liabilities that are measured at fair value on a recurring basis: Total Fair Value Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) At October 31, 2017 Warrants liability (1) $ 151,000 $ — $ — $ 151,000 Royalty liability (2) 2,456,000 — — 2,456,000 At January 31, 2017 Warrants liability (1) $ 46,000 $ — $ — $ 46,000 Royalty liability (2) 2,351,000 — — 2,351,000 _______________ (1) The initial fair value of warrants liability was determined by management with the assistance of an independent third-party valuation specialist, and by management thereafter. Changes in fair value of the warrants are recognized within miscellaneous expense in the condensed consolidated statements of operations. (2) 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. The fair value of the royalty liability is determined based on the probability-weighted revenue scenarios for the Streamline Health® Clinical Analytics TM solution (“Clinical Analytics”) licensed from Montefiore Medical Center (discussed in Note 3 - Acquisitions and Divestitures). Fair value adjustments are included within miscellaneous expense in the condensed consolidated statements of operations. |
Schedule of Earnings Per Share, Basic and Diluted | The following is the calculation of the basic and diluted net earnings (loss) per share of common stock: Three Months Ended October 31, 2017 October 31, 2016 Net earnings (loss) $ 3,489 $ (1,930,472 ) Less: deemed dividends on Series A Preferred Stock — (72,710 ) Net earnings (loss) attributable to common stockholders $ 3,489 $ (2,003,182 ) Weighted average shares outstanding used in basic per common share computations 19,985,822 19,645,521 Restricted stock and Series A Convertible Preferred Stock 3,082,601 — Number of shares used in diluted per common share computation 23,068,423 19,645,521 Basic net earnings (loss) per share of common stock $ 0.00 $ (0.10 ) Diluted net earnings (loss) per share of common stock $ 0.00 $ (0.10 ) Nine Months Ended October 31, 2017 October 31, 2016 Net loss $ (3,137,084 ) $ (4,142,381 ) Less: deemed dividends on Series A Preferred Stock — (875,935 ) Net loss attributable to common stockholders $ (3,137,084 ) $ (5,018,316 ) Weighted average shares outstanding used in basic per common share computations 19,838,691 19,477,538 Restricted stock and Series A Convertible Preferred Stock — — Number of shares used in diluted per common share computation 19,838,691 19,477,538 Basic net loss per share of common stock $ (0.16 ) $ (0.26 ) Diluted net loss per share of common stock $ (0.16 ) $ (0.26 ) |
Acquisitions and Divestitures (
Acquisitions and Divestitures (Tables) | 9 Months Ended |
Oct. 31, 2017 | |
Business Combinations [Abstract] | |
Schedule of Purchase Price Allocation | The purchase price has been allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date as follows, pending final valuation of internally-developed software and intangible assets: Balance at September 8, 2016 Assets purchased: Accounts and contracts receivable 792,000 Other assets 32,000 Internally-developed software 350,000 Intangible assets 650,000 Total assets purchased 1,824,000 Liabilities assumed: Accounts payable and accrued liabilities 424,000 Net assets acquired $ 1,400,000 Cash paid $ 1,400,000 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Oct. 31, 2017 | |
Leases [Abstract] | |
Schedule of Future Minimum Lease Payment | Future minimum lease payments under non-cancelable operating leases for the next five fiscal years are as follows: Facilities Equipment Fiscal Year Totals 2017 (three months remaining) $ 256,000 $ 3,000 $ 259,000 2018 1,039,000 11,000 1,050,000 2019 967,000 11,000 978,000 2020 504,000 11,000 515,000 2021 519,000 2,000 521,000 Thereafter 445,000 — 445,000 Total $ 3,730,000 $ 38,000 $ 3,768,000 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Oct. 31, 2017 | |
Debt Disclosure [Abstract] | |
Minimum Trailing Four Quarter Period EBITDA Covenant Thresholds | The following table shows our minimum trailing four quarter period EBITDA covenant thresholds, as modified by the third amendment to the Credit Agreement: For the four-quarter period ending Minimum EBITDA July 31, 2017 $ (1,250,000 ) October 31, 2017 (1,000,000 ) January 31, 2018 (700,000 ) April 30, 2018 (35,869 ) July 31, 2018 414,953 October 31, 2018 1,080,126 January 31, 2019 1,634,130 April 30, 2019 1,842,610 July 31, 2019 2,657,362 October 31, 2019 and each fiscal quarter thereafter 3,613,810 |
Summary of Term Loan and Line of Credit | Outstanding principal balances on debt consisted of the following at: October 31, 2017 January 31, 2017 Senior term loan $ 4,630,000 $ 5,539,000 Capital lease — 91,000 Total 4,630,000 5,630,000 Less: Current portion (597,000 ) (747,000 ) Non-current portion of debt $ 4,033,000 $ 4,883,000 |
Schedule of Future Minimum Lease Payments for Debt and Capital Leases | Future principal repayments of debt consisted of the following at October 31, 2017 : Senior Term Loan (1) 2017 $ 149,000 2018 597,000 2019 4,030,000 Total repayments $ 4,776,000 _______________ (1) Term loan balance on the condensed consolidated balance sheet is reported net of deferred financing costs of $146,000 . |
Summary of Significant Accoun19
Summary of Significant Accounting Policies - Fair Value of Liabilities (Details) - USD ($) $ in Thousands | Oct. 31, 2017 | Jan. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Warrants liability | $ 151 | $ 46 |
Royalty liability | 2,456 | 2,351 |
Quoted Prices in Active Markets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Warrants liability | 0 | 0 |
Royalty liability | 0 | 0 |
Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Warrants liability | 0 | 0 |
Royalty liability | 0 | 0 |
Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Warrants liability | 151 | 46 |
Royalty liability | $ 2,456 | $ 2,351 |
Summary of Significant Accoun20
Summary of Significant Accounting Policies - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2017 | Oct. 31, 2016 | Jan. 31, 2017 | |
Class of Stock [Line Items] | |||||
Deferred professional costs | $ 506,000 | $ 506,000 | $ 500,000 | ||
Accumulated amortization of deferred costs | 283,000 | 283,000 | 370,000 | ||
Amortization expense | 51,000 | $ 36,000 | 177,000 | $ 80,000 | |
Severance expenses | 0 | 110,000 | 58,000 | 227,000 | |
Accrued severances | 0 | 0 | 9,000 | ||
Share-based compensation expense | 290,000 | $ 432,000 | 844,960 | 1,342,513 | |
Cost of shares for tax withholding | 41,813 | $ 11,702 | |||
Reserves for uncertain tax positions and corresponding interest and penalties | $ 262,000 | $ 262,000 | $ 263,000 | ||
Restricted Stock | |||||
Class of Stock [Line Items] | |||||
Antidilutive securities (in shares) | 821,587 | 828,225 | 828,225 | ||
Stock Option | |||||
Class of Stock [Line Items] | |||||
Antidilutive securities (in shares) | 2,203,156 | 2,172,480 | 2,203,156 | 2,172,480 | |
Warrant | |||||
Class of Stock [Line Items] | |||||
Antidilutive securities (in shares) | 1,400,000 | 1,400,000 | 1,400,000 | 1,400,000 | |
Series A Preferred Stock | |||||
Class of Stock [Line Items] | |||||
Convertible redeemable preferred stock, shares outstanding (in shares) | 2,949,995 | 2,949,995 | 2,949,995 | ||
Number of common shares for each convertible preferred share (in shares) | 1 | 1 | |||
Restricted Stock | |||||
Class of Stock [Line Items] | |||||
Service period (in years) | 1 year | ||||
Shares surrendered for tax withholding (in shares) | 32,033 | ||||
Cost of shares for tax withholding | $ 42,000 | ||||
Number of restricted stock awarded to directors (in shares) | 220,337 |
Summary of Significant Accoun21
Summary of Significant Accounting Policies - Earnings Per Share (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2017 | Oct. 31, 2016 | |
Accounting Policies [Abstract] | ||||
Net earnings (loss) | $ 3,489 | $ (1,930,472) | $ (3,137,084) | $ (4,142,381) |
Less: deemed dividends on Series A Preferred Stock | 0 | (72,710) | 0 | (875,935) |
Net earnings (loss) attributable to common stockholders | $ 3,489 | $ (2,003,182) | $ (3,137,084) | $ (5,018,316) |
Weighted average shares outstanding used in basic per common share computations (in shares) | 19,985,822 | 19,645,521 | 19,838,691 | 19,477,538 |
Restricted stock and Series A Convertible Preferred Stock (in shares) | 3,082,601 | 0 | 0 | 0 |
Number of shares used in diluted per common share computation (in shares) | 23,068,423 | 19,645,521 | 19,838,691 | 19,477,538 |
Basic net earnings (loss) per common stock (in dollars per share) | $ 0 | $ (0.10) | $ (0.16) | $ (0.26) |
Diluted net earnings (loss) per common stock (in dollars per share) | $ 0 | $ (0.10) | $ (0.16) | $ (0.26) |
Acquisitions and Divestitures -
Acquisitions and Divestitures - Narrative (Details) - USD ($) | Dec. 01, 2016 | Sep. 08, 2016 | Feb. 03, 2014 | Oct. 25, 2013 | Jun. 30, 2017 | Dec. 31, 2016 | Nov. 30, 2014 | Jul. 31, 2017 | Jan. 31, 2017 | Oct. 31, 2017 |
Business Acquisition [Line Items] | ||||||||||
Royalty liability | $ 2,350,754 | $ 2,456,233 | ||||||||
Credit Agreement | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Repayments of debt | $ 7,400,000 | |||||||||
Senior Notes | Credit Agreement | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Repayments of debt | $ 500,000 | $ 500,000 | $ 500,000 | 500,000 | ||||||
Looking Glass Patient Engagement | Disposal Group, Not Discontinued Operations | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Cash received for sale of assets | $ 2,000,000 | |||||||||
Gain on sale of business | $ 238,000 | |||||||||
Montefiore Medical Center | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Proprietary lease term (in years) | 15 years | |||||||||
Royalty fee | $ 3,000,000 | |||||||||
Additional royalty payment | $ 3,000,000 | |||||||||
Periodic royalty payment, term (in years) | 6 years 6 months | |||||||||
Unibased Systems Architecture, Inc | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Total purchase price | $ 6,500,000 | |||||||||
Opportune IT Healthcare Solutions, Inc. | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Total purchase price | $ 1,400,000 |
Acquisitions and Divestitures23
Acquisitions and Divestitures - Schedule of Purchase Price Allocation (Details) - Opportune IT Healthcare Solutions, Inc. $ in Thousands | Sep. 08, 2016USD ($) |
Assets purchased: | |
Accounts and contracts receivable | $ 792 |
Other assets | 32 |
Intangible assets | 650 |
Total assets purchased | 1,824 |
Liabilities assumed: | |
Accounts payable and accrued liabilities | 424 |
Net assets acquired | 1,400 |
Cash paid | 1,400 |
Internally-developed software | |
Assets purchased: | |
Internally-developed software | $ 350 |
Leases (Details)
Leases (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2017 | Oct. 31, 2016 | |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||||
2017 (three months remaining) | $ 259,000 | $ 259,000 | ||
2,018 | 1,050,000 | 1,050,000 | ||
2,019 | 978,000 | 978,000 | ||
2,020 | 515,000 | 515,000 | ||
2,021 | 521,000 | 521,000 | ||
Thereafter | 445,000 | 445,000 | ||
Total | 3,768,000 | 3,768,000 | ||
Rent expense | 295,000 | $ 309,000 | 920,000 | $ 955,000 |
Capital lease obligations | 0 | 0 | ||
Facilities | ||||
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||||
2017 (three months remaining) | 256,000 | 256,000 | ||
2,018 | 1,039,000 | 1,039,000 | ||
2,019 | 967,000 | 967,000 | ||
2,020 | 504,000 | 504,000 | ||
2,021 | 519,000 | 519,000 | ||
Thereafter | 445,000 | 445,000 | ||
Total | 3,730,000 | 3,730,000 | ||
Equipment | ||||
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||||
2017 (three months remaining) | 3,000 | 3,000 | ||
2,018 | 11,000 | 11,000 | ||
2,019 | 11,000 | 11,000 | ||
2,020 | 11,000 | 11,000 | ||
2,021 | 2,000 | 2,000 | ||
Thereafter | 0 | 0 | ||
Total | $ 38,000 | $ 38,000 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | Apr. 15, 2015 | Nov. 21, 2014 | Jun. 30, 2017 | Dec. 31, 2016 | May 31, 2016 | Nov. 30, 2014 | Jul. 31, 2017 | Jan. 31, 2017 | Oct. 31, 2017 |
Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of credit amount outstanding | $ 0 | ||||||||
Commitment fee in connection with the term loan | 12,000 | ||||||||
Credit Agreement | |||||||||
Debt Instrument [Line Items] | |||||||||
Repayments of debt | $ 7,400,000 | ||||||||
Amortization of financing costs | $ 355,000 | ||||||||
Credit Agreement | Senior Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Revolving line of credit | $ 10,000,000 | ||||||||
Repayments of debt | $ 500,000 | $ 500,000 | $ 500,000 | $ 500,000 | |||||
Payment of principal | $ 1,738,000 | ||||||||
Credit Agreement | Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Revolving line of credit | $ 5,000,000 | ||||||||
LIBOR | Credit Agreement | Minimum | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on interest rate (as a percent) | 4.25% | 4.25% | |||||||
LIBOR | Credit Agreement | Maximum | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on interest rate (as a percent) | 6.25% | 5.25% | |||||||
Base Rate | Credit Agreement | Minimum | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on interest rate (as a percent) | 3.25% | 3.25% | |||||||
Base Rate | Credit Agreement | Maximum | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on interest rate (as a percent) | 5.25% | 4.25% | |||||||
Current to January 31, 2018 | Credit Agreement | |||||||||
Debt Instrument [Line Items] | |||||||||
Minimum liquidity (at least) | 5,000,000 | ||||||||
February 1, 2018 through January 31, 2019 | Credit Agreement | |||||||||
Debt Instrument [Line Items] | |||||||||
Minimum liquidity (at least) | 4,000,000 | ||||||||
February 1, 2019 through maturity | Credit Agreement | |||||||||
Debt Instrument [Line Items] | |||||||||
Minimum liquidity (at least) | $ 3,000,000 |
Debt - EBITDA Covenant Threshol
Debt - EBITDA Covenant Thresholds (Details) - Credit Agreement | 9 Months Ended |
Oct. 31, 2017USD ($) | |
July 31, 2017 | |
Debt Instrument [Line Items] | |
Debt covenant, minimum EBITDA | $ (1,250,000) |
October 31, 2017 | |
Debt Instrument [Line Items] | |
Debt covenant, minimum EBITDA | (1,000,000) |
January 31, 2018 | |
Debt Instrument [Line Items] | |
Debt covenant, minimum EBITDA | (700,000) |
April 30, 2018 | |
Debt Instrument [Line Items] | |
Debt covenant, minimum EBITDA | (35,869) |
July 31, 2018 | |
Debt Instrument [Line Items] | |
Debt covenant, minimum EBITDA | 414,953 |
October 31, 2018 | |
Debt Instrument [Line Items] | |
Debt covenant, minimum EBITDA | 1,080,126 |
January 31, 2019 | |
Debt Instrument [Line Items] | |
Debt covenant, minimum EBITDA | 1,634,130 |
April 30, 2019 | |
Debt Instrument [Line Items] | |
Debt covenant, minimum EBITDA | 1,842,610 |
July 31, 2019 | |
Debt Instrument [Line Items] | |
Debt covenant, minimum EBITDA | 2,657,362 |
October 31, 2019 and each fiscal quarter thereafter | |
Debt Instrument [Line Items] | |
Debt covenant, minimum EBITDA | $ 3,613,810 |
Debt - Summary of Term Loan and
Debt - Summary of Term Loan and Line of Credit (Details) - USD ($) | Oct. 31, 2017 | Jan. 31, 2017 |
Debt Instrument [Line Items] | ||
Capital lease | $ 0 | |
Total | 4,630,000 | $ 5,630,000 |
Less: Current portion | (597,000) | (747,000) |
Non-current portion of debt | 4,033,000 | 4,883,000 |
Senior Notes | ||
Debt Instrument [Line Items] | ||
Long-term debt | 4,630,000 | 5,539,000 |
Capital Lease | ||
Debt Instrument [Line Items] | ||
Capital lease | $ 0 | $ 91,000 |
Debt - Schedule of Future Princ
Debt - Schedule of Future Principal Repayments of Long-Term Debt (Details) $ in Thousands | Oct. 31, 2017USD ($) |
Senior Notes | |
Senior Term Loan | |
2,017 | $ 149 |
2,018 | 597 |
2,019 | 4,030 |
Total repayments, senior term loan | 4,776 |
Credit Agreement | Senior Term Loan | |
Senior Term Loan | |
Deferred finance costs | $ 146 |
Convertible Preferred Stock (De
Convertible Preferred Stock (Details) - Series A Preferred Stock | 9 Months Ended |
Oct. 31, 2017$ / sharesshares | |
Class of Stock [Line Items] | |
Preferred stock, shares issued (in shares) | shares | 2,949,995 |
Number of common shares for each convertible preferred share (in shares) | shares | 1 |
Maximum period of conversion (in days) | 10 days |
Minimum share price (in dollars per share) (greater than) | $ / shares | $ 8 |
Average daily trading volume period prior to measurement date (in days) | 60 days |
Average daily trading volume minimum shares (in shares) | shares | 100,000 |
Price per share at time of conversion (in dollars per share) | $ / shares | $ 3 |
Shares issued, price per share (in dollars per share) | $ / shares | $ 3 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 9 Months Ended | |
Oct. 31, 2017 | Oct. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||
Federal tax expense | $ 0 | $ 0 |
State and local tax provisions | $ 8,000 | $ 5,000 |