Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Apr. 30, 2018 | May 30, 2018 | |
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 | Apr. 30, 2018 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --01-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 20,034,446 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Apr. 30, 2018 | Jan. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 3,745,532 | $ 4,619,834 |
Accounts receivable, net of allowance for doubtful accounts of $323,524 and $349,058, respectively | 2,819,849 | 3,001,170 |
Contract receivables | 923,274 | 223,791 |
Prepaid hardware and third-party software for future delivery | 0 | 5,858 |
Prepaid client maintenance contracts | 555,689 | 506,911 |
Other prepaid assets | 608,363 | 742,232 |
Other current assets | 545,431 | 546,885 |
Total current assets | 9,198,138 | 9,646,681 |
Property and equipment: | ||
Computer equipment | 2,831,024 | 2,852,776 |
Computer software | 730,950 | 730,950 |
Office furniture, fixtures and equipment | 683,443 | 683,443 |
Leasehold improvements | 729,348 | 729,348 |
Property and equipment, gross | 4,974,765 | 4,996,517 |
Accumulated depreciation and amortization | (3,981,311) | (3,834,153) |
Property and equipment, net | 993,454 | 1,162,364 |
Contract receivables, less current portion | 686,658 | 0 |
Capitalized software development costs, net of accumulated amortization of $18,973,594 and $18,658,183, respectively | 4,717,986 | 4,307,351 |
Intangible assets, net of accumulated amortization of $7,203,732 and $6,968,786, respectively | 5,600,204 | 5,835,151 |
Goodwill | 15,537,281 | 15,537,281 |
Other | 577,570 | 642,226 |
Total non-current assets | 28,113,153 | 27,484,373 |
Total assets | 37,311,291 | 37,131,054 |
Current liabilities: | ||
Accounts payable | 1,344,377 | 421,425 |
Accrued compensation | 829,062 | 342,351 |
Accrued other expenses | 766,353 | 609,582 |
Current portion of term loan | 596,984 | 596,984 |
Deferred revenues | 7,301,408 | 9,481,807 |
Total current liabilities | 10,838,184 | 11,452,149 |
Non-current liabilities: | ||
Term loan, net of current portion and deferred financing cost of $110,542 and $128,275, respectively | 3,769,840 | 3,901,353 |
Royalty liability | 2,518,068 | 2,469,193 |
Lease incentive liability | 254,933 | 274,128 |
Deferred revenues, less current portion | 181,877 | 332,645 |
Total non-current liabilities | 6,724,718 | 6,977,319 |
Total liabilities | 17,562,902 | 18,429,468 |
Series A 0% Convertible Redeemable Preferred Stock, $.01 par value per share, $8,849,985 redemption value, 4,000,000 shares authorized, 2,895,464 and 2,949,995 shares issued and outstanding, respectively | 8,686,392 | 8,849,985 |
Stockholders’ equity: | ||
Common stock, $.01 par value per share, 45,000,000 shares authorized; 20,034,446 and 20,005,977 shares issued and outstanding, respectively | 200,344 | 200,060 |
Additional paid in capital | 82,115,469 | 81,776,606 |
Accumulated deficit | (71,253,816) | (72,125,065) |
Total stockholders’ equity | 11,061,997 | 9,851,601 |
Total liability and stockholders' equity | $ 37,311,291 | $ 37,131,054 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | 3 Months Ended | 12 Months Ended |
Apr. 30, 2018 | Jan. 31, 2018 | |
Allowance for doubtful accounts | $ 323,524 | $ 349,058 |
Accumulated amortization of capitalized software development costs | 18,973,594 | 18,658,183 |
Accumulated amortization of intangible assets | 7,203,732 | 6,968,786 |
Deferred financing costs, accumulated amortization | $ 110,542 | $ 128,275 |
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) | 20,034,446 | 20,005,977 |
Common stock, shares outstanding (in shares) | 20,034,446 | 20,005,977 |
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) | 2,895,464 | 2,949,995 |
Convertible redeemable preferred stock, shares outstanding (in shares) | 2,895,464 | 2,949,995 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | |
Apr. 30, 2018 | Apr. 30, 2017 | |
Revenues: | ||
Systems sales | $ 1,131,674 | $ 378,723 |
Professional services | 238,314 | 420,035 |
Audit services | 359,713 | 345,019 |
Maintenance and support | 3,309,104 | 3,354,772 |
Software as a service | 1,224,368 | 1,425,132 |
Total revenues | 6,263,173 | 5,923,681 |
Operating expenses: | ||
Cost of systems sales | 249,984 | 566,051 |
Cost of professional services | 706,230 | 715,215 |
Cost of audit services | 393,979 | 440,639 |
Cost of maintenance and support | 648,339 | 806,522 |
Cost of software as a service | 316,387 | 339,376 |
Selling, general and administrative | 3,249,057 | 3,373,528 |
Research and development | 1,062,319 | 1,556,938 |
Total operating expenses | 6,626,295 | 7,798,269 |
Operating loss | (363,122) | (1,874,588) |
Other expense: | ||
Interest expense | (116,218) | (127,268) |
Miscellaneous expense | (87,645) | (38,044) |
Loss before income taxes | (566,985) | (2,039,900) |
Income tax expense | (1,714) | (2,608) |
Net loss | $ (568,699) | $ (2,042,508) |
Net loss per common share - basic and diluted (in dollars per share) | $ (0.03) | $ (0.10) |
Weighted average number of common shares - basic and diluted (in shares) | 19,986,425 | 19,695,390 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | |
Apr. 30, 2018 | Apr. 30, 2017 | |
Operating activities: | ||
Net loss | $ (568,699) | $ (2,042,508) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation | 171,215 | 202,782 |
Amortization of capitalized software development costs | 315,412 | 571,428 |
Amortization of intangible assets | 234,947 | 333,057 |
Amortization of other deferred costs | 119,910 | 100,815 |
Valuation adjustment for warrants liability | 0 | (31,210) |
Share-based compensation expense | 222,458 | 267,174 |
Other valuation adjustments | 51,142 | 48,467 |
Gain on disposal of property and equipment | (1,555) | (720) |
Provision for accounts receivable | (7,851) | 187,134 |
Changes in assets and liabilities: | ||
Accounts and contract receivables | (446,246) | 618,647 |
Other assets | 43,207 | (97,889) |
Accounts payable | 922,952 | (240,403) |
Accrued expenses | 622,020 | 382,530 |
Deferred revenues | (1,641,942) | (1,754,246) |
Net cash provided by (used in) operating activities | 36,970 | (1,454,942) |
Investing activities: | ||
Purchases of property and equipment | (3,300) | (8,719) |
Proceeds from sales of property and equipment | 14,225 | 0 |
Capitalization of software development costs | (726,047) | (386,498) |
Net cash used in investing activities | (715,122) | (395,217) |
Financing activities: | ||
Principal repayments on term loan | (149,246) | (163,951) |
Principal payments on capital lease obligation | 0 | (33,811) |
Payments related to settlement of employee shared-based awards | (46,904) | (28,927) |
Net cash used in financing activities | (196,150) | (226,689) |
Net decrease in cash and cash equivalents | (874,302) | (2,076,848) |
Cash and cash equivalents at beginning of period | 4,619,834 | 5,654,093 |
Cash and cash equivalents at end of period | $ 3,745,532 | $ 3,577,245 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Apr. 30, 2018 | |
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 three months ended April 30, 2018 are not necessarily indicative of the results that may be expected for the fiscal year ending January 31, 2019 . |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Apr. 30, 2018 | |
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 2017 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 April 30, 2018 Royalty liability (1) $ 2,518,000 $ — $ — $ 2,518,000 At January 31, 2018 Royalty liability (1) $ 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. 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 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 standards 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 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 good 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 support and maintenance 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 support and maintenance 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. Annual maintenance and support agreements entitle clients to technology support, version upgrades, bug fixes and service packs. We recognize maintenance and support revenue over time. 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 includes 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 April 30, 2018 and January 31, 2018 , we had deferred costs of $406,000 and $471,000 , respectively, net of accumulated amortization of $414,000 and $312,000 , respectively. Amortization expense of these costs was $102,000 and $83,000 for the three months ended April 30, 2018 and 2017 , respectively. Audit Services 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: Three Months Ended April 30, 2018 As reported under ASC 606 Balances without adoption of ASC 606 Adjustments due to ASC 606 Revenues Systems sales $ 1,132,000 $ 1,239,000 $ (107,000 ) Maintenance and support 3,309,000 3,310,000 (1,000 ) As of April 30, 2018 As reported under ASC 606 Balances without adoption of Topic 606 Adjustments due to ASC 606 Assets Contract receivables, current $ 923,000 $ 560,000 $ 363,000 Contract receivables, noncurrent 687,000 207,000 480,000 Liabilities Deferred revenues, current 7,301,000 7,496,000 (195,000 ) Shareholders’ Equity Accumulated deficit $ (71,254,000 ) $ (72,292,000 ) $ 1,038,000 Disaggregation of Revenue The following table provides information about disaggregated revenue by revenue stream and solution: Three Months Ended April 30, 2018 Content Management Financial Management Coding & CDI Patient Care Audit Services Auditing Technology Total Systems sales $ 260,000 $ — $ 867,000 $ 5,000 $ — $ — $ 1,132,000 Professional services 87,000 42,000 107,000 — — 2,000 238,000 Audit services — — — — 360,000 — 360,000 Maintenance and support 1,605,000 — 1,505,000 199,000 — — 3,309,000 Software as a service 677,000 441,000 58,000 35,000 — 13,000 1,224,000 Total revenue: $ 2,629,000 $ 483,000 $ 2,537,000 $ 239,000 $ 360,000 $ 15,000 $ 6,263,000 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 three-month period ended April 30, 2018 , we recognized $3,924,000 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 January 31, 2018 due to ASC 606 February 1, 2018 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 $26 million as of April 30, 2018 , of which the Company expects to recognize approximately 57% over the next 12 months and the remainder thereafter. Deferred commissions costs (contract acquisition costs) Contract acquisition costs, which consists 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 condensed consolidated balance sheets within other prepaid assets and other current assets, respectively. Amortization expense associated with sales commissions is included in selling, general and administrative expenses on the condensed consolidated statements of operations. 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 April 30, 2018 and 2017 , we incurred $13,000 and $55,000 in severance expenses, respectively. At April 30, 2018 and January 31, 2018 , we had accrued severance expenses of $12,000 and zero , 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 $222,000 and $267,000 for the three months ended April 30, 2018 and 2017 , 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 - to four -year service period to the Company. In the three months ended April 30, 2018 , 26,062 shares of common stock were surrendered to the Company to satisfy tax withholding obligations totaling $47,000 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. 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 $300,000 and $286,000 in reserves for uncertain tax positions and corresponding interest and penalties as of April 30, 2018 and January 31, 2018 , 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 April 30, 2018 , there were 2,895,464 shares of preferred stock outstanding, each of which is convertible into one share of our common stock. For the three months ended April 30, 2018 and 2017 , 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 April 30, 2018 and 2017 , 661,587 and 316,158 , 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: Three Months Ended April 30, 2018 April 30, 2017 Net loss $ (568,699 ) $ (2,042,508 ) Weighted average shares outstanding - Basic 19,986,425 19,695,390 Stock options, restricted stock, Series A Convertible Preferred Stock and warrants — — Weighted average shares outstanding - Diluted 19,986,425 19,695,390 Basic net loss per share of common stock $ (0.03 ) $ (0.10 ) Diluted net loss per share of common stock $ (0.03 ) $ (0.10 ) Diluted net loss per share excludes the effect of outstanding stock options that relate to 2,178,822 and 2,292,187 shares of common stock for the three months ended April 30, 2018 and 2017 , respectively. The inclusion of these stock options would have been anti-dilutive. For the three months ended April 30, 2017 , the warrants to purchase 1,400,000 shares of common stock would have an anti-dilutive effect if included in diluted net loss per share, and therefore were not included in the calculation. The warrants expired on February 16, 2018 . 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 have decided to adopt the standard effective February 1, 2018 using the modified retrospective method. We have completed our assessment of our systems, available data and processes that will be 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 increase retained earnings 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. We expect revenue related to SaaS-based offerings, hardware sales, maintenance and support, and audit services to 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 have 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 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 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. Early adoption of this update is permitted. 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. |
Acquisitions and Divestitures
Acquisitions and Divestitures | 3 Months Ended |
Apr. 30, 2018 | |
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 April 30, 2018 and January 31, 2018 , the present value of this royalty liability was $2,518,000 and $2,469,000 , respectively. 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. |
Leases
Leases | 3 Months Ended |
Apr. 30, 2018 | |
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 2018 (nine months remaining) $ 783,000 $ 9,000 $ 792,000 2019 967,000 11,000 978,000 2020 504,000 11,000 515,000 2021 519,000 2,000 521,000 2022 445,000 — 445,000 Total $ 3,218,000 $ 33,000 $ 3,251,000 Rent and leasing expense for facilities and equipment was $317,000 and $313,000 for the three months ended April 30, 2018 and 2017 , 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 April 30, 2018 , the Company had no capital lease obligations outstanding. |
Debt
Debt | 3 Months Ended |
Apr. 30, 2018 | |
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 financial loan covenants at April 30, 2018 . As of April 30, 2018 , the Company had no outstanding borrowings under the revolving line of credit, and had accrued $25,000 in unused line fees. Based upon the borrowing base formula set forth in the Credit Agreement, as of April 30, 2018 , 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: April 30, 2018 January 31, 2018 Senior term loan $ 4,478,000 $ 4,626,000 Deferred financing cost (111,000 ) (128,000 ) Total 4,367,000 4,498,000 Less: Current portion (597,000 ) (597,000 ) Non-current portion of debt $ 3,770,000 $ 3,901,000 Future principal repayments of debt consisted of the following at April 30, 2018 : Fiscal year Senior Term Loan (1) 2018 448,000 2019 4,030,000 Total repayments $ 4,478,000 _______________ (1) Term loan balance on the condensed consolidated balance sheet is reported net of deferred financing costs of $111,000 . |
Convertible Preferred Stock
Convertible Preferred Stock | 3 Months Ended |
Apr. 30, 2018 | |
Equity [Abstract] | |
CONVERTIBLE PREFERRED STOCK | CONVERTIBLE PREFERRED STOCK Series A Convertible Preferred Stock At April 30, 2018 , we had 2,895,464 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 | 3 Months Ended |
Apr. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Income tax expense consists of federal, state and local tax provisions. For the three months ended April 30, 2018 and 2017 , we recorded federal tax expense of zero . For the three months ended April 30, 2018 and 2017 , we recorded state and local tax expense of $2,000 and $3,000 , respectively. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Apr. 30, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS We have evaluated subsequent events occurring after April 30, 2018 , 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) | 3 Months Ended |
Apr. 30, 2018 | |
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 | 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 three-month period ended April 30, 2018 , we recognized $3,924,000 in revenue from deferred revenues outstanding as of January 31, 2018 . 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 standards 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 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 good 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 support and maintenance 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 support and maintenance 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. Annual maintenance and support agreements entitle clients to technology support, version upgrades, bug fixes and service packs. We recognize maintenance and support revenue over time. 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 includes 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 April 30, 2018 and January 31, 2018 , we had deferred costs of $406,000 and $471,000 , respectively, net of accumulated amortization of $414,000 and $312,000 , respectively. Amortization expense of these costs was $102,000 and $83,000 for the three months ended April 30, 2018 and 2017 , respectively. Audit Services Audit services are a separate performance obligation. We recognize revenue over time as the services are performed. |
Deferred commissions costs (contract acquisition costs) | 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 $26 million as of April 30, 2018 , of which the Company expects to recognize approximately 57% over the next 12 months and the remainder thereafter. Deferred commissions costs (contract acquisition costs) Contract acquisition costs, which consists 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 condensed consolidated balance sheets within other prepaid assets and other current assets, respectively. Amortization expense associated with sales commissions is included in selling, general and administrative expenses on the condensed consolidated statements of operations. |
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 $222,000 and $267,000 for the three months ended April 30, 2018 and 2017 , 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 - to four -year service period to the Company. In the three months ended April 30, 2018 , 26,062 shares of common stock were surrendered to the Company to satisfy tax withholding obligations totaling $47,000 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. |
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 (“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 have decided to adopt the standard effective February 1, 2018 using the modified retrospective method. We have completed our assessment of our systems, available data and processes that will be 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 increase retained earnings 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. We expect revenue related to SaaS-based offerings, hardware sales, maintenance and support, and audit services to 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 have 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 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 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. Early adoption of this update is permitted. 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. |
Summary of Significant Accoun15
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Apr. 30, 2018 | |
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 April 30, 2018 Royalty liability (1) $ 2,518,000 $ — $ — $ 2,518,000 At January 31, 2018 Royalty liability (1) $ 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. 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 Adoption of New Accounting Standard | 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 January 31, 2018 due to ASC 606 February 1, 2018 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 ) The adoption of the new standard has the following impact to the Company’s condensed consolidated statements of operations: Three Months Ended April 30, 2018 As reported under ASC 606 Balances without adoption of ASC 606 Adjustments due to ASC 606 Revenues Systems sales $ 1,132,000 $ 1,239,000 $ (107,000 ) Maintenance and support 3,309,000 3,310,000 (1,000 ) As of April 30, 2018 As reported under ASC 606 Balances without adoption of Topic 606 Adjustments due to ASC 606 Assets Contract receivables, current $ 923,000 $ 560,000 $ 363,000 Contract receivables, noncurrent 687,000 207,000 480,000 Liabilities Deferred revenues, current 7,301,000 7,496,000 (195,000 ) Shareholders’ Equity Accumulated deficit $ (71,254,000 ) $ (72,292,000 ) $ 1,038,000 |
Schedule of Disaggregated Revenue | The following table provides information about disaggregated revenue by revenue stream and solution: Three Months Ended April 30, 2018 Content Management Financial Management Coding & CDI Patient Care Audit Services Auditing Technology Total Systems sales $ 260,000 $ — $ 867,000 $ 5,000 $ — $ — $ 1,132,000 Professional services 87,000 42,000 107,000 — — 2,000 238,000 Audit services — — — — 360,000 — 360,000 Maintenance and support 1,605,000 — 1,505,000 199,000 — — 3,309,000 Software as a service 677,000 441,000 58,000 35,000 — 13,000 1,224,000 Total revenue: $ 2,629,000 $ 483,000 $ 2,537,000 $ 239,000 $ 360,000 $ 15,000 $ 6,263,000 |
Schedule of Earnings Per Share, Basic and Diluted | The following is the calculation of the basic and diluted net loss per share of common stock: Three Months Ended April 30, 2018 April 30, 2017 Net loss $ (568,699 ) $ (2,042,508 ) Weighted average shares outstanding - Basic 19,986,425 19,695,390 Stock options, restricted stock, Series A Convertible Preferred Stock and warrants — — Weighted average shares outstanding - Diluted 19,986,425 19,695,390 Basic net loss per share of common stock $ (0.03 ) $ (0.10 ) Diluted net loss per share of common stock $ (0.03 ) $ (0.10 ) |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Apr. 30, 2018 | |
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 2018 (nine months remaining) $ 783,000 $ 9,000 $ 792,000 2019 967,000 11,000 978,000 2020 504,000 11,000 515,000 2021 519,000 2,000 521,000 2022 445,000 — 445,000 Total $ 3,218,000 $ 33,000 $ 3,251,000 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Apr. 30, 2018 | |
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: April 30, 2018 January 31, 2018 Senior term loan $ 4,478,000 $ 4,626,000 Deferred financing cost (111,000 ) (128,000 ) Total 4,367,000 4,498,000 Less: Current portion (597,000 ) (597,000 ) Non-current portion of debt $ 3,770,000 $ 3,901,000 |
Schedule of Future Minimum Lease Payments for Debt and Capital Leases | Future principal repayments of debt consisted of the following at April 30, 2018 : Fiscal year Senior Term Loan (1) 2018 448,000 2019 4,030,000 Total repayments $ 4,478,000 _______________ (1) Term loan balance on the condensed consolidated balance sheet is reported net of deferred financing costs of $111,000 . |
Summary of Significant Accoun18
Summary of Significant Accounting Policies - Fair Value of Liabilities (Details) - USD ($) $ in Thousands | Apr. 30, 2018 | Jan. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Royalty liability | $ 2,518 | $ 2,469 |
Quoted Prices in Active Markets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Royalty liability | 0 | 0 |
Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Royalty liability | 0 | 0 |
Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Royalty liability | $ 2,518 | $ 2,469 |
Summary of Significant Accoun19
Summary of Significant Accounting Policies - Narrative (Details) - USD ($) | 3 Months Ended | |||
Apr. 30, 2018 | Apr. 30, 2017 | Feb. 01, 2018 | Jan. 31, 2018 | |
Class of Stock [Line Items] | ||||
Deferred professional costs | $ 406,000 | $ 471,000 | ||
Accumulated amortization of deferred costs | 414,000 | 312,000 | ||
Amortization of deferred costs | 102,000 | $ 83,000 | ||
Revenue recognized | 3,924,000 | |||
Severance expenses | 13,000 | 55,000 | ||
Accrued severances | 12,000 | 0 | ||
Share-based compensation expense | 222,458 | 267,174 | ||
Cost of shares for tax withholding | 46,904 | $ 28,927 | ||
Reserves for uncertain tax positions and corresponding interest and penalties | $ 300,000 | $ 286,000 | ||
ASU 2014-09 | Retained Earnings | ||||
Class of Stock [Line Items] | ||||
Cumulative effect of new accounting principle in period of adoption | $ 1,400,000 | |||
Restricted Stock | ||||
Class of Stock [Line Items] | ||||
Antidilutive securities (in shares) | 661,587 | 316,158 | ||
Stock Option | ||||
Class of Stock [Line Items] | ||||
Antidilutive securities (in shares) | 2,178,822 | 2,292,187 | ||
Warrant | ||||
Class of Stock [Line Items] | ||||
Antidilutive securities (in shares) | 1,400,000 | |||
Series A Preferred Stock | ||||
Class of Stock [Line Items] | ||||
Convertible redeemable preferred stock, shares outstanding (in shares) | 2,895,464 | 2,949,995 | ||
Number of common shares for each convertible preferred share (in shares) | 1 | |||
Restricted Stock | ||||
Class of Stock [Line Items] | ||||
Shares surrendered for tax withholding (in shares) | 26,062 | |||
Cost of shares for tax withholding | $ 47,000 | |||
Minimum | Restricted Stock | ||||
Class of Stock [Line Items] | ||||
Service period (in years) | 1 year | |||
Maximum | Restricted Stock | ||||
Class of Stock [Line Items] | ||||
Service period (in years) | 4 years |
Summary of Significant Accoun20
Summary of Significant Accounting Policies - Impact on Statements of Operations From Adoption of New Accounting Standard (Details) - USD ($) | 3 Months Ended | |
Apr. 30, 2018 | Apr. 30, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Systems sales | $ 1,131,674 | $ 378,723 |
Maintenance and support | 3,309,104 | $ 3,354,772 |
Balances without adoption of ASC 606 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Systems sales | 1,239,000 | |
Maintenance and support | 3,310,000 | |
ASU 2014-09 | Adjustments due to ASC 606 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Systems sales | (107,000) | |
Maintenance and support | $ (1,000) |
Summary of Significant Accoun21
Summary of Significant Accounting Policies - Disaggregation of Revenue (Details) - USD ($) | 3 Months Ended | |
Apr. 30, 2018 | Apr. 30, 2017 | |
Disaggregation of Revenue [Line Items] | ||
Systems sales | $ 1,131,674 | $ 378,723 |
Professional services | 238,314 | 420,035 |
Audit services | 359,713 | 345,019 |
Maintenance and support | 3,309,104 | 3,354,772 |
Software as a service | 1,224,368 | 1,425,132 |
Total revenues | 6,263,173 | $ 5,923,681 |
Content Management | ||
Disaggregation of Revenue [Line Items] | ||
Systems sales | 260,000 | |
Professional services | 87,000 | |
Audit services | 0 | |
Maintenance and support | 1,605,000 | |
Software as a service | 677,000 | |
Total revenues | 2,629,000 | |
Financial Management | ||
Disaggregation of Revenue [Line Items] | ||
Systems sales | 0 | |
Professional services | 42,000 | |
Audit services | 0 | |
Maintenance and support | 0 | |
Software as a service | 441,000 | |
Total revenues | 483,000 | |
Coding & CDI | ||
Disaggregation of Revenue [Line Items] | ||
Systems sales | 867,000 | |
Professional services | 107,000 | |
Audit services | 0 | |
Maintenance and support | 1,505,000 | |
Software as a service | 58,000 | |
Total revenues | 2,537,000 | |
Patient Care | ||
Disaggregation of Revenue [Line Items] | ||
Systems sales | 5,000 | |
Professional services | 0 | |
Audit services | 0 | |
Maintenance and support | 199,000 | |
Software as a service | 35,000 | |
Total revenues | 239,000 | |
Audit Services | ||
Disaggregation of Revenue [Line Items] | ||
Systems sales | 0 | |
Professional services | 0 | |
Audit services | 360,000 | |
Maintenance and support | 0 | |
Software as a service | 0 | |
Total revenues | 360,000 | |
Auditing Technology | ||
Disaggregation of Revenue [Line Items] | ||
Systems sales | 0 | |
Professional services | 2,000 | |
Audit services | 0 | |
Maintenance and support | 0 | |
Software as a service | 13,000 | |
Total revenues | $ 15,000 |
Summary of Significant Accoun22
Summary of Significant Accounting Policies - Impact on the Balance Sheets From Adoption of New Accounting Standard (Details) - USD ($) | Apr. 30, 2018 | Feb. 01, 2018 | Jan. 31, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Contract receivables, current | $ 923,274 | $ 507,000 | $ 223,791 |
Contract receivables, noncurrent | 686,658 | 468,000 | 0 |
Deferred revenues | 7,301,408 | 8,793,000 | 9,481,807 |
Accumulated deficit | (71,253,816) | (70,685,000) | (72,125,065) |
Balances without adoption of ASC 606 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Contract receivables, current | 560,000 | 224,000 | |
Contract receivables, noncurrent | 207,000 | 0 | |
Deferred revenues | 7,496,000 | 9,482,000 | |
Accumulated deficit | (72,292,000) | $ (72,125,000) | |
Adjustments due to ASC 606 | ASU 2014-09 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Contract receivables, current | 363,000 | 283,000 | |
Contract receivables, noncurrent | 480,000 | 468,000 | |
Deferred revenues | (195,000) | (689,000) | |
Accumulated deficit | $ 1,038,000 | $ 1,440,000 |
Summary of Significant Accoun23
Summary of Significant Accounting Policies - Revenue Performance Obligations (Details) $ in Millions | 3 Months Ended |
Apr. 30, 2018USD ($) | |
Accounting Policies [Abstract] | |
Remaining performance obligations | $ 26 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-05-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Percentage of remaining performance obligation to be recognized over the next 12 months | 57.00% |
Period in which remaining performance obligation is expected to be satisfied | 1 year |
Summary of Significant Accoun24
Summary of Significant Accounting Policies - Loss Per Share (Details) - USD ($) | 3 Months Ended | |
Apr. 30, 2018 | Apr. 30, 2017 | |
Accounting Policies [Abstract] | ||
Net loss | $ (568,699) | $ (2,042,508) |
Weighted average number of common shares - basic and diluted (in shares) | 19,986,425 | 19,695,390 |
Stock options, restricted stock, Series A Convertible Preferred Stock and warrants (in shares) | 0 | 0 |
Weighted average shares outstanding - Diluted (in shares) | 19,986,425 | 19,695,390 |
Basic net loss per common stock (in dollars per share) | $ (0.03) | $ (0.10) |
Diluted net loss per common stock (in dollars per share) | $ (0.03) | $ (0.10) |
Acquisitions and Divestitures -
Acquisitions and Divestitures - Narrative (Details) - USD ($) | Sep. 08, 2016 | Oct. 25, 2013 | Apr. 30, 2018 | Jan. 31, 2018 |
Business Acquisition [Line Items] | ||||
Royalty liability | $ 2,518,068 | $ 2,469,193 | ||
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 | |||
Opportune IT Healthcare Solutions, Inc. | ||||
Business Acquisition [Line Items] | ||||
Total purchase price | $ 1,400,000 |
Leases (Details)
Leases (Details) - USD ($) | 3 Months Ended | |
Apr. 30, 2018 | Apr. 30, 2017 | |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||
2018 (nine months remaining) | $ 792,000 | |
2,019 | 978,000 | |
2,020 | 515,000 | |
2,021 | 521,000 | |
2,022 | 445,000 | |
Total | 3,251,000 | |
Rent expense | 317,000 | $ 313,000 |
Capital lease obligations | 0 | |
Facilities | ||
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||
2018 (nine months remaining) | 783,000 | |
2,019 | 967,000 | |
2,020 | 504,000 | |
2,021 | 519,000 | |
2,022 | 445,000 | |
Total | 3,218,000 | |
Equipment | ||
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||
2018 (nine months remaining) | 9,000 | |
2,019 | 11,000 | |
2,020 | 11,000 | |
2,021 | 2,000 | |
2,022 | 0 | |
Total | $ 33,000 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | Apr. 15, 2015 | Nov. 21, 2014 | Nov. 30, 2014 | Apr. 30, 2018 |
Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Line of credit amount outstanding | $ 0 | |||
Commitment fee in connection with the term loan | 25,000 | |||
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 | |||
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 | 5,000,000 | |||
February 1, 2018 through January 31, 2019 | Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Minimum liquidity | 4,000,000 | |||
February 1, 2019 through maturity | Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Minimum liquidity | $ 3,000,000 |
Debt - EBITDA Covenant Threshol
Debt - EBITDA Covenant Thresholds (Details) - Credit Agreement | 3 Months Ended |
Apr. 30, 2018USD ($) | |
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 ($) | Apr. 30, 2018 | Jan. 31, 2018 |
Debt Instrument [Line Items] | ||
Less: Current portion | $ (596,984) | $ (596,984) |
Senior Notes | ||
Debt Instrument [Line Items] | ||
Long-term debt | 4,478,000 | 4,626,000 |
Deferred financing cost | (111,000) | (128,000) |
Total | 4,367,000 | 4,498,000 |
Less: Current portion | (597,000) | (597,000) |
Non-current portion of debt | $ 3,770,000 | $ 3,901,000 |
Debt - Schedule of Future Princ
Debt - Schedule of Future Principal Repayments of Long-Term Debt (Details) - Senior Notes - USD ($) $ in Thousands | Apr. 30, 2018 | Jan. 31, 2018 |
Senior Term Loan | ||
2,018 | $ 448 | |
2,019 | 4,030 | |
Total | 4,478 | $ 4,626 |
Deferred finance costs | $ 111 | $ 128 |
Convertible Preferred Stock (De
Convertible Preferred Stock (Details) - Series A Preferred Stock | 3 Months Ended |
Apr. 30, 2018$ / sharesshares | |
Class of Stock [Line Items] | |
Preferred stock, shares issued (in shares) | shares | 2,895,464 |
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 ($) | 3 Months Ended | |
Apr. 30, 2018 | Apr. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||
Federal tax expense | $ 0 | $ 0 |
State and local tax provisions | $ 2,000 | $ 3,000 |