Cover
Cover - USD ($) | 12 Months Ended | ||
Jan. 31, 2022 | Apr. 18, 2022 | Jul. 31, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Jan. 31, 2022 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2021 | ||
Current Fiscal Year End Date | --01-31 | ||
Entity File Number | 000-28132 | ||
Entity Registrant Name | STREAMLINE HEALTH SOLUTIONS, INC. | ||
Entity Central Index Key | 0001008586 | ||
Entity Tax Identification Number | 31-1455414 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Address, Address Line One | 2400 Old Milton Pkwy. | ||
Entity Address, Address Line Two | Box 1353 | ||
Entity Address, City or Town | Alpharetta | ||
Entity Address, State or Province | GA | ||
Entity Address, Postal Zip Code | 30009 | ||
City Area Code | (888) | ||
Local Phone Number | 997-8732 | ||
Title of 12(b) Security | Common Stock, $0.01 par value per share | ||
Trading Symbol | STRM | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 47,822,381 | ||
Entity Common Stock, Shares Outstanding | 48,104,880 | ||
Documents Incorporated by Reference | Information required by Part III is incorporated by reference from the Registrant’s Proxy Statement for its 2022 annual meeting of stockholders or an amendment to this Annual Report on Form 10-K, which will be filed with the Securities and Exchange Commission within 120 days after the end of its fiscal year ended January 31, 2022. | ||
ICFR Auditor Attestation Flag | false | ||
Auditor Name | Dixon Hughes Goodman LLP | ||
Auditor Location | Atlanta, GA | ||
Auditor Firm ID | 57 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jan. 31, 2022 | Jan. 31, 2021 | ||
Current assets: | ||||
Cash and cash equivalents | $ 9,885,000 | $ 2,409,000 | ||
Accounts receivable, net of allowance for doubtful accounts of $76,000 and $65,000, respectively | 3,823,000 | 2,929,000 | ||
Contract receivables | 843,000 | 174,000 | ||
Assets held in escrow | 800,000 | |||
Prepaid and other current assets | 568,000 | 416,000 | ||
Current assets of discontinued operations | 587,000 | |||
Total current assets | 15,119,000 | 7,315,000 | ||
Non-current assets: | ||||
Property and equipment, net of accumulated amortization of $192,000 and $452,000 respectively | 123,000 | 104,000 | ||
Right-of use asset for operating lease | 218,000 | 391,000 | ||
Capitalized software development costs, net of accumulated amortization of $5,202,000 and $3,507,000, respectively | 5,555,000 | 5,945,000 | ||
Intangible assets, net of accumulated amortization of $5,121,000 and $4,773,000, respectively | 16,763,000 | 624,000 | ||
Goodwill | 23,089,000 | 10,712,000 | ||
Other | 948,000 | 873,000 | ||
Long-term assets of discontinued operations | 13,000 | |||
Total non-current assets | 46,696,000 | 18,662,000 | ||
Total assets | 61,815,000 | 25,977,000 | ||
Current liabilities: | ||||
Accounts payable | 778,000 | 272,000 | ||
Accrued expenses | 1,803,000 | 908,000 | ||
Current portion of term loan, net of deferred financing costs | 250,000 | [1] | 1,534,000 | [2] |
Deferred revenues | 5,794,000 | 3,862,000 | ||
Current portion of operating lease obligation | 204,000 | 198,000 | ||
Current portion of acquisition earnout liability | 4,672,000 | |||
Current liabilities of discontinued operations | 595,000 | |||
Total current liabilities | 13,501,000 | 7,369,000 | ||
Non-current liabilities: | ||||
Term loan, net of current portion and deferred financing costs | 9,654,000 | 767,000 | ||
Deferred revenues, less current portion | 136,000 | 130,000 | ||
Operating lease obligations, less current portion | 33,000 | 222,000 | ||
Acquisition earnout liability, less current portion | 4,161,000 | |||
Other non-current liabilities | 286,000 | |||
Total non-current liabilities | 14,270,000 | 1,119,000 | ||
Total liabilities | 27,771,000 | 8,488,000 | ||
Stockholders’ equity: | ||||
Common stock, $0.01 par value per share, 65,000,000 shares authorized; 47,840,950 and 31,597,975 shares issued and outstanding, respectively | 478,000 | 316,000 | ||
Additional paid in capital | 119,225,000 | 96,290,000 | ||
Accumulated deficit | (85,659,000) | (79,117,000) | ||
Total stockholders’ equity | 34,044,000 | 17,489,000 | ||
Total liabilities and stockholders’ equity | $ 61,815,000 | $ 25,977,000 | ||
[1] | The term loan as of January 31, 2022 is related to the new term loan agreement that the Company entered into on August 26, 2021 with Bridge Bank (see description above). | |||
[2] | The term loan as of January 21, 2021 is related to the Company’s PPP loan (see description above). The PPP loan was forgiven in June 2021. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Jan. 31, 2022 | Jan. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 76,000 | $ 65,000 |
Accumulated amortization, property and equipment | 192,000 | 452,000 |
Accumulated amortization, capitalized software development costs | 5,202,000 | 3,507,000 |
Accumulated amortization, intangible assets | $ 5,121,000 | $ 4,773,000 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 65,000,000 | 65,000,000 |
Common stock, shares issued | 47,840,950 | 31,597,975 |
Common stock, shares outstanding | 47,840,950 | 31,597,975 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | ||
Jan. 31, 2022 | Jan. 31, 2021 | ||
Revenues: | |||
Total revenues | $ 17,379,000 | $ 11,346,000 | |
Operating expenses: | |||
Cost of software licenses | 485,000 | 501,000 | |
Cost of professional services | 2,782,000 | 1,040,000 | |
Cost of audit services | 1,559,000 | 1,558,000 | |
Cost of maintenance and support | 334,000 | 684,000 | |
Cost of software as a service | 3,417,000 | 1,906,000 | |
Selling, general and administrative expense | 11,931,000 | 8,565,000 | |
Research and development | 4,782,000 | 2,933,000 | |
Non-routine costs | 2,856,000 | ||
Loss on exit of membership agreement | 105,000 | ||
Total operating expenses | 28,146,000 | 17,292,000 | |
Operating loss | (10,767,000) | (5,946,000) | |
Other expense: | |||
Interest expense | (236,000) | (51,000) | |
Loss on early extinguishment of debt | (43,000) | ||
Other | 1,911,000 | (62,000) | |
PPP Loan Forgiveness | 2,327,000 | ||
Loss from continuing operations before income taxes | (6,808,000) | (6,059,000) | |
Income tax (expense) benefit | (109,000) | 1,260,000 | |
Loss from continuing operations | (6,917,000) | (4,799,000) | |
Income from discontinued operations: | |||
Gain on sale of discontinued operations | 6,013,000 | ||
Income from discontinued operations | 401,000 | 356,000 | |
Income tax expense | (26,000) | (1,274,000) | |
Income from discontinued operations, net of tax | 375,000 | 5,095,000 | |
Net income (loss) | $ (6,542,000) | $ 296,000 | |
Basic Earnings Per Share: | |||
Continuing operations | $ (0.16) | $ (0.16) | |
Discontinued operations | 0.01 | 0.17 | |
Net income | $ (0.15) | $ 0.01 | |
Weighted average number of common shares - basic | [1] | 42,815,239 | 30,152,383 |
Diluted Earnings Per Share: | |||
Continuing operations | [1] | $ (0.16) | $ (0.16) |
Discontinued operations | 0.01 | 0.17 | |
Net income (loss) per common share - diluted | $ (0.15) | $ 0.01 | |
Weighted average number of common shares - diluted | 43,273,574 | 30,640,742 | |
Software Licenses [Member] | |||
Revenues: | |||
Total revenues | $ 1,057,000 | $ 590,000 | |
Professional Services [Member] | |||
Revenues: | |||
Total revenues | 2,026,000 | 618,000 | |
Audit Services [Member] | |||
Revenues: | |||
Total revenues | 1,896,000 | 1,891,000 | |
Maintenance and Support [Member] | |||
Revenues: | |||
Total revenues | 4,323,000 | 4,586,000 | |
Software Service [Member] | |||
Revenues: | |||
Total revenues | $ 8,077,000 | $ 3,661,000 | |
[1] | Excludes the effect of unvested restricted shares of common stock, which are considered non-participating securities. As of January 31, 2022 and 2021, there were 1,043,350 931,125 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Balance at Jan. 31, 2020 | $ 305,000 | $ 95,113,000 | $ (79,413,000) | $ 16,005,000 |
Balance, shares at Jan. 31, 2020 | 30,530,643 | |||
Restricted stock issued | $ 14,000 | (14,000) | ||
Restricted stock issued, shares | 1,395,917 | |||
Restricted stock forfeited | $ (2,000) | 2,000 | ||
Restricted stock forfeited, shares | (166,490) | |||
Surrender of stock | $ (1,000) | (255,000) | (256,000) | |
Surrender of stock, shares | (162,095) | |||
Share-based compensation expense | 1,444,000 | 1,444,000 | ||
Net income (loss) | 296,000 | 296,000 | ||
Balance at Jan. 31, 2021 | $ 316,000 | 96,290,000 | (79,117,000) | 17,489,000 |
Balance, shares at Jan. 31, 2021 | 31,597,975 | |||
Restricted stock issued | $ 14,000 | (14,000) | ||
Restricted stock issued, shares | 1,462,874 | |||
Restricted stock forfeited | ||||
Restricted stock forfeited, shares | (50,100) | |||
Surrender of stock | $ (3,000) | (461,000) | (464,000) | |
Surrender of stock, shares | (257,571) | |||
Share-based compensation expense | 2,216,000 | 2,216,000 | ||
Net income (loss) | (6,542,000) | (6,542,000) | ||
Exercise of Stock Options | 4,000 | $ 4,000 | ||
Exercise of Stock Options, shares | 3,300 | 3,300 | ||
Issuance of Common Stock | $ 151,000 | 22,503,000 | $ 22,654,000 | |
Issuance of Common Stock, shares | 15,084,472 | |||
Offering Expenses | (1,313,000) | (1,313,000) | ||
Balance at Jan. 31, 2022 | $ 478,000 | $ 119,225,000 | $ (85,659,000) | $ 34,044,000 |
Balance, shares at Jan. 31, 2022 | 47,840,950 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Jan. 31, 2022 | Jan. 31, 2021 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (6,542,000) | $ 296,000 |
LESS: Income from discontinued operations, net of tax | 375,000 | 5,095,000 |
Loss from continuing operations | (6,917,000) | (4,799,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 68,000 | 64,000 |
Amortization of capitalized software development costs | 1,848,000 | 1,662,000 |
Amortization of intangible assets | 1,281,000 | 491,000 |
Amortization of other deferred costs | 449,000 | 359,000 |
Amortization of Deferred Financing Costs | 51,000 | |
Valuation adjustments | (1,851,000) | 31,000 |
Loss on early extinguishment of debt | 43,000 | |
Provision (benefit) for income taxes | 95,000 | (1,274,000) |
Loss on exit of operating lease | 105,000 | |
Share-based compensation expense | 2,216,000 | 1,403,000 |
Provision (benefit) for accounts receivable allowance | 11,000 | (31,000) |
Forgiveness of PPP Loan | (2,327,000) | |
Changes in assets and liabilities: | ||
Accounts and contract receivables | (129,000) | (253,000) |
Other assets | (346,000) | (519,000) |
Accounts payable | 17,000 | (484,000) |
Accrued expenses and other liabilities | 533,000 | (592,000) |
Deferred revenues | 1,074,000 | 344,000 |
Net cash used in operating activities – continuing operations | (3,884,000) | (3,493,000) |
Net cash provided by (used in) operating activities – discontinued operations | 380,000 | (2,264,000) |
Cash flows from investing activities: | ||
Investment in Avelead, net of cash acquired | (12,470,000) | |
Purchases of property and equipment | (41,000) | (44,000) |
Proceeds from sale of ECM assets | 800,000 | 11,288,000 |
Capitalization of software development costs | (1,458,000) | (1,784,000) |
Net cash (used in) provided by investing activities – continuing operations | (13,169,000) | 9,460,000 |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock | 16,100,000 | |
Payments for costs directly attributable to the issuance of common stock | (1,313,000) | |
Repayment of bank term loan | (4,000,000) | |
Proceeds from term loan payable | 10,000,000 | 2,301,000 |
Payments related to settlement of employee shared-based awards | (464,000) | (256,000) |
Payment of deferred financing costs | (168,000) | |
Payment on royalty liability | (1,000,000) | |
Other | (6,000) | 12,000 |
Net cash provided by (used in) financing activities – continuing operations | 24,149,000 | (2,943,000) |
Net increase in cash and cash equivalents | 7,476,000 | 760,000 |
Cash and cash equivalents at beginning of period | 2,409,000 | 1,649,000 |
Cash and cash equivalents at end of period | 9,885,000 | 2,409,000 |
Supplemental cash flow disclosures: | ||
Interest paid, net of amounts capitalized | 153,000 | 17,000 |
Income taxes paid | $ 21,000 |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF BUSINESS | 12 Months Ended |
Jan. 31, 2022 | |
Accounting Policies [Abstract] | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | NOTE 1 — ORGANIZATION AND DESCRIPTION OF BUSINESS Streamline Health Solutions, Inc. and each of its wholly-owned subsidiaries, Streamline Health, LLC, Avelead Consulting, LLC, Streamline Consulting, LLC and Streamline Pay & Benefits, LLC, (collectively, unless the context requires otherwise, “we”, “us”, “our”, “Streamline”, or the “Company”) operates in one Fiscal Year All references to a fiscal year refer to the fiscal year commencing February 1 in that calendar year and ending on January 31 of the following calendar year. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Jan. 31, 2022 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The consolidated financial statements include the accounts of Streamline Health Solutions, Inc. and its wholly-owned subsidiaries, Streamline Health, LLC, Avelead Consulting, LLC, Streamline Consulting Solutions, LLC and Streamline Pay & Benefits, LLC. All significant intercompany transactions and balances are eliminated in consolidation. All amounts in the consolidated financial statements, notes and tables have been rounded to the nearest thousand dollars, except share and per share amounts, unless otherwise indicated. Refer to Note – 3 Business Combination and Divestiture. Under ASC 280-10-50-11, two or more operating segments may be aggregated into a single operating segment if they are considered to be similar. Operating segments are considered to be similar if they can be expected to have essentially the same economic characteristics and future prospects. Using the aggregation guidance, the Company determined that it has one operating segment due to the similar economic characteristics of the Company’s products, product development, distribution, regulatory environment and customer base as a provider of computer software-based solutions and services for acute-care healthcare providers. The Company has two reporting units for evaluation of intangible assets. These two reporting units are the legacy Streamline business and Avelead. On February 24, 2020, the Company sold a portion of its business (the ECM Assets). We applied the standard of ASC 205-20-1 to ascertain the timing of accounting for the discontinued operations. Based on ASC 205-20-1, the Company determined that upon receiving stockholder approval, which occurred February 21, 2020, it was authorized to sell the ECM assets. By the Company having the authority and ability to consummate the sale of the ECM Assets, it met the criteria to present discontinued operations as described in ASC 205-20-1. Accordingly, the Company is reporting the results of operations and cash flows, and related balance sheet items associated with the ECM Assets in discontinued operations in the accompanying consolidated statements of operations, cash flows and balance sheets for the current and comparative prior periods. Refer to Note 13 – Discontinued Operations for further details. Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, management evaluates its estimates and judgments, including those related to the recognition of revenue, stock-based compensation, capitalization of software development costs, intangible assets, the allowance for doubtful accounts, contingent consideration and income taxes. Actual results could differ from those estimates. Cash and Cash Equivalents Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash demand deposits. Cash deposits are placed in Federal Deposit Insurance Corporation (“FDIC”) insured financial institutions. Cash deposits may exceed FDIC insured levels from time to time. For purposes of the consolidated balance sheets and consolidated statements of cash flows, the Company considers all highly-liquid investments purchased with an original maturity of three months or less to be cash equivalents. Non-Cash Items The Company had the following items that were non-cash items related to the consolidated statements of cash flows: SCHEDULE OF NON-CASH ITEMS RELATED TO CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Fiscal Year 2021 2020 Forgiveness of PPP loan and accrued interest $ 2,327,000 $ — Escrowed funds from sale of ECM Assets — 800,000 Right-of Use Assets from operating lease — 540,000 Capitalized software purchased with stock (Note 12) — 41,000 Receivables Accounts and contract receivables are comprised of amounts owed to the Company for licensed software, professional services, including coding audit services, consulting services, maintenance services, and software as a service and are presented net of the allowance for doubtful accounts. The timing of revenue recognition may not coincide with the billing terms of the customer contract, resulting in unbilled receivables or deferred revenues; therefore, certain contract receivables represent revenues recognized prior to customer billings. Individual contract terms with customers or resellers determine when receivables are due. Accounts receivable represent amounts that the entity has an unconditional right to consideration. For billings where the criteria for revenue recognition have not been met, deferred revenue is recorded until the Company satisfies the respective performance obligations. Allowance for Doubtful Accounts The Company adjusts accounts receivable down to net realizable value with its allowance methodology. In determining the allowance for doubtful accounts, aged receivables are analysed periodically by management. Each identified receivable is reviewed based upon the most recent information available and the status of any open or unresolved issues with the customer preventing the payment thereof. Corrective action, if necessary, is taken by the Company to resolve open issues related to unpaid receivables. During these periodic reviews, the Company determines the required allowances for doubtful accounts for estimated losses resulting from the unwillingness of its customers or resellers to make required payments. The allowance for doubtful accounts was approximately $ 76,000 65,000 Bad debt (benefit) expense for fiscal years 2021 and 2020 was as follows: SCHEDULE OF BAD DEBT EXPENSES 2021 2020 Bad debt expense (benefit) $ 11,000 $ (31,000 ) Concessions Accrual In determining the concessions accrual, the Company evaluates historical concessions granted relative to revenue. The Company records a provision, reducing revenue, each period for the estimated amount of concessions incurred on the revenue recorded. The Company evaluates the amount of the provision and the concession accrual each period. The concession accrual included in accrued other expenses on the Company’s consolidated balance sheets was $ 152,000 99,000 Property and Equipment Property and equipment are stated at cost. Depreciation is computed using the straight-line method, over the estimated useful lives of the related assets. Estimated useful lives are as follows: SCHEDULE OF ESTIMATED USEFUL LIFE OF PROPERTY AND EQUIPMENT Computer equipment and software 3 4 Office equipment 5 Office furniture and fixtures 5 7 Leasehold improvements Term of lease or estimated useful life, whichever is shorter Depreciation expense for property and equipment in fiscal 2021 and 2020 was $ 68,000 64,000 Normal repairs and maintenance are expensed as incurred. Replacements are capitalized and the property and equipment accounts are relieved of the items being replaced or disposed of, if no longer of value. The related cost and accumulated depreciation of the disposed assets are eliminated and any gain or loss on disposition is included in the results of operations in the year of disposal. The Company wrote-off fully depreciated fixed assets during fiscal 2021 of $ 198,000 Leases We determine whether an arrangement is a lease at inception. Right-of-use assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the expected lease term. Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Since our lease arrangements do not provide an implicit rate, we use our estimated incremental borrowing rate for the expected remaining lease term at commencement date in determining the present value of future lease payments. We recognize operating lease cost on a straight-line basis by aggregating any rent abatement with the total expected rental payments and amortizing the expense ratably over the term of the lease. Sublease income is recognized as other income over the period of the lease, as the sublease is outside of the Company’s normal business operations. See Note 4 – Operating Leases for further details. Debt Issuance Costs For fiscal 2021, costs of $ 130,000 200,000 200,000 Cost related to the issuance of the Loan and Security Agreement and Second Amended and Restated Loan and Security Agreement were capitalized and amortized to interest expense on a straight-line basis, which is not materially different from the effective interest method, over the term of the related debt, and presented on the Company’s consolidated balance sheets as a direct deduction from the carrying amount of the non-current portion of our term loan. Impairment of Long-Lived Assets The Company reviews the carrying value of long-lived assets for impairment whenever facts and circumstances exist that would suggest that assets might be impaired or that the useful lives should be modified. Among the factors the Company considers in making the evaluation are changes in market position and profitability. If facts and circumstances are present which may indicate that the carrying amount of the assets may not be recoverable, the Company will prepare a projection of the undiscounted cash flows of the specific asset or asset group and determine if the long-lived assets are recoverable based on these undiscounted cash flows. If impairment is indicated, an adjustment will be made to reduce the carrying amount of these assets to their fair values. Capitalized Software Development Costs Software development costs for software to be sold, leased, or marketed are accounted for in accordance with ASC 985-20, Software — Costs of Software to be Sold, Leased or Marketed 846,000 1,103,000 Internal-use software development costs are accounted for in accordance with ASC 350-40, Internal-Use Software 4,709,000 4,842,000 The estimated useful lives of software (including software to be sold and internal-use software) are reviewed frequently and adjusted as appropriate to reflect upcoming development activities that may include significant upgrades and/or enhancements to the existing functionality. The Company reviews, on an on-going basis, the carrying value of its capitalized software development expenditures, net of accumulated amortization. Amortization expense on all capitalized software development cost was $ 2,173,000 1,662,000 84,000 164,000 154,000 The Company uses the “carry-over” method for amortizing capitalized software development costs. Under the “carry-over” method, the costs of the enhancements are added to the unamortized costs of the previous version of the product and the combined amount is amortized over the remaining useful life of the product. Including unamortized cost of the original product with the cost of the enhancement for purposes of applying the net realizable value test and amortization provisions is consistent with accounting guidance for software companies that improve their software and discontinue selling or marketing the older versions. SCHEDULE OF AMORTIZATION EXPENSE FOR INTERNALLY DEVELOPED SOFTWARE Fiscal Year 2021 2020 Amortization expense on internally-developed software included in: Cost of software licenses $ 485,000 $ 501,000 Cost of audit services 13,000 13,000 Cost of software as a service 1,675,000 1,148,000 Total amortization expense on internally-developed software $ 2,173,000 $ 1,662,000 Interest capitalized to software development cost in fiscal 2021 and 2020 was $ 27,000 13,000 Research and development expense was $ 4,782,000 2,933,000 Fair Value of Financial Instruments The FASB’s authoritative guidance on fair value measurements establishes a framework for measuring fair value, and expands disclosure about fair value measurements. This guidance enables the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. Under this guidance, assets and liabilities carried at fair value must be classified and disclosed in one of the following three categories: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs that are not corroborated by market data. The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value based on the short-term maturity of these instruments. Cash and cash equivalents are classified as Level 1. For fiscal years 2021 and 2020, there were no transfers of assets or liabilities between Levels 1, 2, or 3. The table below provides information on our liabilities that are measured at fair value on a recurring basis: SCHEDULE OF FAIR VALUE ASSETS AND LIABILITIES MEASURED ON RECURRING BASIS Quoted Prices in Significant Other Significant Total Fair Active Markets Observable Inputs Unobservable Inputs Value (Level 1) (Level 2) (Level 3) At January 31, 2022 Acquisition earnout liability (1) $ 8,833,000 $ – $ – $ 8,833,000 (1) The fair value of the acquisition earnout liability is based upon a probability-weighted discounted cash flow that was completed at the date of acquisition and updated as of January 31, 2022. The decrease in the valuation of the acquisition earnout liability was $ 1,851,000 The fair value of the Company’s term loan under its Second Amended and Restated Loan and Security Agreement was determined through an analysis of the interest rate spread from the date of closing the loan (August 2022) to the date of the most recent balance sheet, January 31, 2022. The term loan bears interest at a per annum rate equal to the Prime Rate (as published in The Wall Street Journal) plus 1.5 %, with a Prime “floor” rate of 3.25 %. The prime rate is variable and, thus accommodates changes in the market interest rate. However, the interest rate spread (the 1.5 % added to the Prime Rate) is fixed. We estimated the impact of the changes in the interest rate spread by analogizing the effect of the change in the Corporate bond rates, reduced for any changes in the market interest rate. This provided us with an estimated change to the interest rate spread of approximately 0.5 % from the date we entered the debt agreement to the end of the fiscal year, January 31, 2022. The discount to the value of the debt as of January 31, 2022 was estimated to be $ 9,798,000 , or a discount to book value $ 202,000 . Long-term debt is classified as Level 2. The fair value of the PPP loan was determined based on discounting the loan amount as of January 31, 2021. The fair value using market rates the Company believes would be available for similar types of financial instruments would have resulted in a lower fair value of $ 2,231,000 2,301,000 70,000 Revenue Recognition We derive revenue from the sale of internally-developed software, either by licensing for local installation or by a SaaS delivery model, through our direct sales force or through third-party resellers. Licensed, locally-installed customers on a perpetual model utilize our support and maintenance services for a separate fee, whereas term-based locally installed license fees and SaaS fees include support and maintenance. We also derive revenue from professional services that support the implementation, configuration, training and optimization of the applications, as well as audit services and consulting services. We recognize revenue in accordance with Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers We commence revenue recognition (Step 5 below) in accordance with that core principle after applying the following steps: ● Step 1: Identify the contract(s) with a customer ● Step 2: Identify the performance obligations in the contract ● Step 3: Determine the transaction price ● Step 4: Allocate the transaction price to the performance obligations in the contract ● Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation Often contracts contain more than one performance obligation. Performance obligations are the unit of accounting for revenue recognition and generally represent the distinct goods or services that are promised to the 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 defer recognition of the revenue until the performance obligation is satisfied. Maintenance and support and SaaS agreements are generally non-cancellable or contain significant penalties for early cancellation, although customers typically have the right to terminate their contracts for cause if we fail to perform material obligations. However, if non-standard acceptance periods, non-standard performance criteria, or cancellation or right of refund terms are required, revenue is recognized upon the satisfaction of such criteria. The determined transaction price is allocated based on the standalone selling price of the performance obligations in contract. Significant judgment is required to determine the standalone selling price (“SSP”) for each performance obligation, the amount allocated to each performance obligation and whether it depicts the amount that the Company expects to receive in exchange for the related product and/or service. The Company recognizes revenue for implementation for certain of its eValuator SaaS solution over the contract term, as it has been determined that those implementation services are not a distinct performance obligation. Services for other SaaS and Software solutions such as CDI, RevID and Compare, have been determined as a distinct performance obligation. For these agreements, the Company estimates SSP of its software licenses using the residual approach when the software license is sold with other services and observable SSPs exist for the other services. The Company estimates the SSP for maintenance, professional services, software as a service and audit services based on observable standalone sales. Contract Combination The Company may execute more than one contract or agreement with a single customer. The Company evaluates whether the agreements were negotiated as a package with a single objective, whether the amount of consideration to be paid in one agreement depends on the price and/or performance of another agreement, or whether the goods or services promised in the agreements represent a single performance obligation. The conclusions reached can impact the allocation of the transaction price to each performance obligation and the timing of revenue recognition related to those arrangements. The Company has utilized the portfolio approach as the practical expedient. We have applied the revenue model to a portfolio of contracts with similar characteristics where we expected that the financial statements would not differ materially from applying it to the individual contracts within that portfolio. Software Licenses The Company’s software license arrangements provide the customer with the right to use functional intellectual property. Implementation, support, and other services are typically considered distinct performance obligations when sold with a software license unless these services are determined to significantly modify the software. Revenue is recognized at a point in time. Typically, this is upon shipment of components or electronic download of software. Maintenance and Support Services Our maintenance and support obligations include multiple discrete performance obligations, with the two largest being unspecified product upgrades or enhancements, and technical support, which can be offered at various points during a contract period. We believe that the multiple discrete performance obligations within our overall maintenance and support obligations can be viewed as a single performance obligation since both the unspecified upgrades and technical support are activities to fulfill the maintenance performance obligation and are rendered concurrently. Maintenance and support agreements entitle customers to technology support, version upgrades, bug fixes and service packs. We recognize maintenance and support revenue over the contract term. Software-Based Solution Professional Services The Company provides various professional services to customers with software licenses. These include project management, software implementation and software modification services. Revenues from arrangements to provide professional services are generally distinct from the other promises in the contract and are recognized as the related services are performed. Consideration payable under these arrangements is either fixed fee or on a time-and-materials basis and is recognized over time as the services are performed. Software as a Service SaaS-based contracts include a right to use of the Company’s platform and support which represent a single promise to provide continuous access to its software solutions. Implementation services for the Company’s eValuator product are included as part of the single promise for its respective contracts. The Company recognizes revenue for implementation of the eValuator product over the contract term as it is determined that the implementation on eValuator is not a distinct performance obligation. Implementation services for other SaaS products are deemed to be separate performance obligations. Audit Services The Company provides technology-enabled coding audit services to help customers review and optimize their internal clinical documentation and coding functions across the applicable segment of the customer’s enterprise. Audit services are a separate performance obligation. We recognize revenue over time as the services are performed. Disaggregation of Revenue The following table provides information about disaggregated revenue by type and nature of revenue stream: SCHEDULE OF DISAGGREGATION OF REVENUE Fiscal Year 2021 2020 Recurring Revenue $ 12,400,000 $ 8,247,000 Non-Recurring Revenue 4,979,000 3,099,000 Total revenue $ 17,379,000 $ 11,346,000 The Company includes revenue categories of (i) maintenance and support and (ii) software as a service as recurring revenue for fiscal years ended January 31, 2021 and January 31, 2020. The Company includes revenue categories of (i) software licenses, (ii) professional services, and (iii) audit services as non-recurring revenue for the fiscal years ended January 31, 2021 and January 31, 2020. Avelead makes up $ 2,790,000 1,735,000 Contract Receivables and Deferred Revenues The Company receives payments from customers based upon contractual billing schedules. Contract receivables include amounts related to the Company’s contractual right to consideration for completed performance obligations not yet invoiced. Deferred revenues include payments received in advance of performance under the contract. Our contract receivables and deferred revenue are reported on an individual contract basis at the end of each reporting period. Contract receivables are classified as current or noncurrent based on the timing of when we expect to bill the customer. Deferred revenue is classified as current or noncurrent based on the timing of when we expect to recognize revenue. In the year ended January 31, 2022, we recognized approximately $ 3,702,000 19,112,000 Deferred costs (costs to fulfill a contract and contract acquisition costs) We defer the direct costs, which include salaries and benefits, for professional services related to SaaS contracts as a cost to fulfill a contract. These deferred costs will be amortized on a straight-line basis over the contractual term. As of January 31, 2022, and 2021, we had deferred costs of $ 125,000 168,000 110,000 125,000 143,000 Contract acquisition costs, which consist of sales commissions paid or payable, is considered incremental and recoverable costs of obtaining a contract with a customer. Sales commissions for initial and renewal contracts are deferred and then amortized on a straight-line basis over the contract term. As a practical expedient, we expense sales commissions as incurred when the amortization period of related deferred commission costs would have been one year or less. Deferred commissions costs paid and payable, which are included on the consolidated balance sheets within other non-current assets totalled $ 806,000 666,000 339,000 206,000 Concentrations Financial instruments, which potentially expose the Company to concentrations of credit risk, consist primarily of accounts receivable. The Company’s accounts receivable are concentrated in the healthcare industry. However, the Company’s customers typically are well-established hospitals, medical facilities or major health information systems companies with good credit histories that resell the Company’s solutions. Payments from customers have been received within normal time frames for the industry. However, some hospitals and medical facilities have experienced significant operating losses as a result of limits on third-party reimbursements from insurance companies and governmental entities and extended payment of receivables from these entities is not uncommon. To date, the Company has relied on a limited number of customers and remarketing partners for a substantial portion of its total revenues. The Company expects that a significant portion of its future revenues will continue to be generated by a limited number of customers and its remarketing partners. Goodwill and Intangible Assets Goodwill and other intangible assets were recognized in conjunction with the Avelead Consulting, Interpoint, Meta, CLG and Opportune IT acquisitions, as well as the Unibased acquisition (prior to divestiture of such assets). Identifiable intangible assets include purchased intangible assets with finite lives, which primarily consist of internally-developed software and customer relationships. Finite-lived purchased intangible assets are amortized over their expected period of benefit, which generally ranges from one to 15 years, using the straight-line method. The Company assesses the useful lives and possible impairment of intangible assets when an event occurs that may trigger such a review. Factors considered important which could trigger a review include: ● significant underperformance relative to historical or projected future operating results; ● significant changes in the manner of use of the acquired assets or the strategy for the overall business; ● identification of other impaired assets within a reporting unit; ● disposition of a significant portion of an operating segment; ● significant negative industry or economic trends; ● significant decline in the Company’s stock price for a sustained period; and ● a decline in the market capitalization relative to the net book value. Determining whether a triggering event has occurred involves significant judgment by the Company. The Company assesses goodwill annually (as of November 1), or more frequently when events and circumstances, such as the ones mentioned above, occur indicating that the recorded goodwill may be impaired. During the years ended January 31, 2022 and 2021, the Company did not note any of the above qualitative factors, which would be considered a triggering event for goodwill impairment. In assessing qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company assesses relevant events and circumstances that may impact the fair value and the carrying amount of a reporting unit. The identification of relevant events and circumstances and how these may impact a reporting unit’s fair value or carrying amount involve significant judgments by management. These judgments include the consideration of macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, events which are specific to the Company and trends in the market price of the Company’s common stock. Each factor is assessed to determine whether it impacts the impairment test positively or negatively, and the magnitude of any such impact. Reporting units are determined based on the organizational structure the entity has in place at the date of the impairment test. A reporting unit is an operating segment or component business unit with the following characteristics: (a) it has discrete financial information, (b) segment management regularly reviews its operating results (generally an operating segment has a segment manager who is directly accountable to and maintains regular contact with the chief operating decision maker to discuss operating activities, financial results, forecasts or plans for the segment), and (c) its economic characteristics are dissimilar from other units (this contemplates the nature of the products and services, the nature of the production process, the type or class of customer for the products and services and the methods used to distribute the products and services). The Company determined that it has one operating segment and two reporting units. The Company estimates the fair value of its reporting unit using the income approach, via discounted cash flow valuation models which include, but are not limited to, assumptions such as a “risk-free” rate of return on an investment, the weighted average cost of capital of a market participant and future revenue, operating margin, working capital and capital expenditure trends. Determining the fair value of reporting units and goodwill includes significant judgment by management, and different judgments could yield different results. The Company performed its annual assessment of goodwill during the fourth quarter of fiscal 2021, using the approach described above. Based on the analysis performed, the fair value of the reporting units exceeded the carrying amount of the reporting unit, including goodwill, and, therefore, a goodwill impairment loss was not recognized. Equity Awards The Company accounts for share-based payments based on the grant-date fair value of the awards with compensation cost recognized as expense over the requisite service period. For awards to non-employees, the Company recognizes compensation expense in the same manner as if the entity had paid cash for the goods or services. 2,216,000 1,444,000 41,000 The fair value of the stock options granted are estimated at the date of grant using a Black-Scholes option pricing model. Option pricing model input assumptions such as expected term, expected volatility and risk-free interest rate impact the fair value estimate. Effective fiscal 2021, the Company changed its accounting to recognize forfeitures as they occur, which was determined to be an immaterial change from its historical practice. These assumptions are subjective and are generally derived from external (such as, risk-free rate of interest) and historical data (such as, volatility factor, expected term and forfeiture rates). Future grants of equity awards accounted for as stock-based compensation could have a material impact on reported expenses depending upon the number, value and vesting period of future awards. The Company issues restricted stock awards in the form of Company common stock. The fair value of these awards is based on the market close price per share on the grant date. The Company expenses the compensation cost of these awards as the restriction period lapses, which is typically a one- to four-year service period to the Company. In fiscal 2021 and 2020, 257,571 162,095 464,000 256,000 562,500 748,245 Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and for tax credit and loss carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. In assessing n |
BUSINESS COMBINATION AND DIVEST
BUSINESS COMBINATION AND DIVESTITURE | 12 Months Ended |
Jan. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
BUSINESS COMBINATION AND DIVESTITURE | NOTE 3 — BUSINESS COMBINATION AND DIVESTITURE Avelead Acquisition The Company acquired all of the equity interests of Avelead as part of the Company’s strategic expansion into the revenue cycle management, acute-care healthcare space (the “Transaction”). The Transaction was completed on August 16, 2021. The aggregate consideration for the purchase of Avelead was approximately $ 29.7 million (at fair value) consisting of (i) $ 12.4 million in cash, net of cash acquired, (ii) $ 0.1 million in holdback, which was paid to sellers during the fourth fiscal quarter of 2021 (iii) $ 6.5 million in common stock, and (iv) approximately $ 10.7 million in contingent consideration (see below). The Company issued 5,021,972 shares of its restricted common stock (the “Acquisition Restricted Common Stock”). The Acquisition Restricted Common Stock has a fair value as of the closing date of acquisition of $ 6.5 million. Additionally, the Company contracted two types of contingent consideration; the first is referred to herein as “SaaS Contingent Consideration” and the second is referred to herein as “Renewal Contingent Consideration.” The SaaS Contingent Consideration and Renewal Contingent Consideration have an aggregate value of approximately $10.7 million as of the date of closing . The owners of Avelead are also referred to herein as “Sellers” and are enumerated in the UPA (as defined below). The Company acquired all of the equity interests of Avelead, effective August 16, 2021, pursuant to a Unit Purchase Agreement (hereafter referred to as the “UPA”). The UPA stated that the purchase price for Avelead at closing included a cash payment of $ 11.9 285,000 285,000 6.5 The Company acquired Avelead on a cash-free and debt-free basis. The Transaction was structured as a purchase of units (equity), however, Avelead was taxed as a partnership. Accordingly, the Company realized a step-up in the tax basis of the assets acquired and the goodwill is tax deductible. The gross deferred tax assets and liabilities will be consolidated, and the gross deferred tax assets have a full valuation allowance. The contingent consideration is comprised of “SaaS Contingent Consideration” and “Renewal Contingent Consideration” which are described in more detail as follows: ● The SaaS Contingent Consideration is calculated based upon Avelead’s recurring SaaS revenue recognized during the first and second year. The Company will pay the SaaS Contingent Consideration as follows: (i) 50 50 ● The first year of SaaS Contingent Consideration is calculated as 75% of Avelead’s recognized SaaS revenue from September 1, 2021 to August 31, 2022. The first-year payment is subject to a deduction of $665,000 spread equally between the cash and common stock portion of the earnout consideration. The first year earnout will be paid on or about October 15, 2022, subject to a dispute and resolution period. Assuming that Avelead is within 80% of its forecasted SaaS revenue in the first year earnout, the Company agreed to a floor and ceiling on the value of the Company’s restricted common stock issued as consideration for the earnout. That collar has a floor of $3.50 per share and a ceiling of $5.50 per share for the first year earnout ● The second year of SaaS Contingent Consideration is calculated as 40% of Avelead’s recognized SaaS revenue from September 1, 2022 to August 31, 2023. The second year earnout will be paid on or about October 15, 2023, subject to a dispute and resolution period. Assuming that Avelead is within 80% of its forecasted SaaS revenue in the second year earnout, the Company agreed to a floor and ceiling on the Company’s restricted common stock issued as consideration for the earnout. That collar has a floor of $4.50 per share and a ceiling of $6.50 per share for the second year earnout 1 If Avelead does not achieve 80% of its forecasted revenue, the price per share will revert back to the Company’s market price based upon a 30-day average ● The Renewal Contingent Consideration is tied directly to a successful renewal of a specific customer of Avelead. To meet the definition of a renewal, Avelead must achieve a minimum threshold of contracted revenue in an updated, annual, renewed contract with the specified customer. The renewal occurs on or about June 1, 2022 and June 1, 2023. The Company will remit the Renewal Contingent Consideration on or about each of October 15, 2022 and 2023, respectively. The Renewal Contingent Consideration is payable in shares of Company restricted common stock valued as of the date of closing. Accordingly, upon achieving the Renewal Contingent Consideration, the Company will issue 627,747 shares of restricted common stock on or about each of October 15, 2022 and October 15, 2023, subject to a dispute and resolution period The components of the total consideration are as follows: COMPONENTS OF TOTAL CONSIDERATION (in thousands) Components of total consideration, net of cash acquired: Cash $ 11,900 Cash, seller expenses 285 Cash, working capital adjustment 285 Restricted Common Stock 6,554 Acquisition earnout liabilities 10,684 (a) Total consideration $ 29,708 (a) Acquisition earnout liabilities represent the net present value and risk adjusted probability of the required future payments underlying the Company’s SaaS Contingent Consideration and Renewal Contingent Consideration as described above. Due to the dates that the Company is required to measure, report and agree on the calculations, $ 4,672,000 4,161,000 The acquisition earnout liability is re-measured on a quarterly basis and the change to the liability is recorded as a valuation adjustment recorded through “other expenses” in the accompanying consolidated statements of operations. The valuation adjustment recorded for the period ended January 31, 2022, was $ 1,851,000 The Company is presenting the allocation of the total consideration to net tangible and intangible assets as of the date of the closing of Avelead as follows: SCHEDULE OF ALLOCATION OF THE TOTAL CONSIDERATION (in thousands) Net tangible assets: Accounts receivable $ 1,246 Unbilled revenue 200 Prepaid expenses 178 Fixed assets 37 Accounts payable (490 ) Accrued expenses (397 ) Deferred revenues (863 ) Net tangible assets (89 ) Goodwill 12,377 Customer Relationships (SaaS) 8,370 Customer Relationships (Consulting) 1,330 Internally Developed Software 6,380 Trademarks and Tradenames 1,340 Net assets acquired and liabilities assumed $ 29,708 The Company determined the fair value of the customer relationship intangible assets and the trade name and developed software technology intangible assets using the multi-period excess earning method and the relief from royalty method, respectively. The intangible assets recorded as a result of the Avelead acquisition, and their related estimated useful lives are as follows: SCHEDULE OF INTANGIBLE ASSETS ESTIMATED USEFUL LIVES Estimated Useful Lives Goodwill Indefinite Customer Relationships (SaaS) 10 Customer Relationships (Consulting) 8 Internally Developed Software 9 Trademarks and Tradenames 15 The Company’s unaudited pro forma revenues and (loss) income from continuing operations, assuming Avelead was acquired on February 1, 2020, are as follows. The unaudited pro forma information is not necessarily indicative of the results of operations that the Company would have reported had the acquisition actually occurred at the beginning of these periods nor is it necessarily indicative of future results. The unaudited pro forma financial information does not reflect the impact of future events that may occur after the acquisition, including, but not limited to, anticipated costs savings from synergies or other operational improvements. The nature and amount of any material, nonrecurring pro forma adjustments directly attributable to the business combination are included in the pro forma revenue and net earnings reflected below (unaudited): SCHEDULE OF PRO FORMA REVENUE AND NET EARNINGS 2022 2021 (UNAUDITED) Year Ended January 31, 2022 2021 Revenues $ 22,631,000 $ 19,707,000 Operating expenses (31,278,000 ) (25,164,000 ) Non-routine costs (4,284,000 ) — Loss on exit from membership agreement — (105,000 ) Operating loss (12,931,000 ) (5,562,000 ) Other expenses 1,312,000 (710,000 ) PPP loan forgiveness 3,059,000 712,000 Income tax (expense) benefit (109,000 ) 1,370,000 Loss from continuing operations $ (8,669,000 ) $ (4,190,000 ) Non-routine costs are primarily costs associated with the acquisition. Included in the pro forma schedule (above) for the fiscal year ended January 31, 2022 are $ 1,428,000 Included in the accompanying consolidated statement of operations for the year ended January 31, 2022 (since the closing of the Avelead acquisition) are $ 4,524,000 1,506,000 Refer to Note 2 – Summary of Significant Accounting Policies – Other operating costs -Non-routine costs. Costs related to the acquisition of Avelead are expensed as incurred. The Company entered into one employment agreement and one separation agreement with each of the two Sellers. Included in the transaction costs of Avelead is the cost of a two-year separation agreement with one Seller. This separation agreement was expensed at the closing of the transaction as there were no material future obligations of the Seller to the Company within non-routine costs. The employment agreement is a two-year employment agreement that entitles the Seller to a six-month separation pay in the case of termination without cause. The expense for the employment agreement is recognized ratably over the service period customary with other employment agreements within selling, general, and administrative expense. The Company granted options to purchase 583,333 shares of the Company’s common stock to the Sellers at Closing. These options have a strike price of $ 1.53 per share, the closing stock price on the trading date immediately preceding the closing. 500,000 options were awarded to one Seller that will vest, monthly, over a three ( 3 ) year service period. The remaining 83,333 options were awarded to another Seller and vested immediately upon issuance. The Company utilized the Black-Scholes method to determine the grant-date fair value of these options. The 83,333 options have a grant-date fair value of approximately $ 6,000 and are recorded in non-routine cost in the accompanying consolidated statement of operations. The 500,000 options have a grant-date fair value of approximately $ 395,000 and are expensed over the vesting period within selling, general, and administrative expense. Additionally, the Company granted 100,000 restricted stock awards (RSAs) to certain Avelead employees as of the closing date. ECM Assets Divestiture On February 24, 2020, the Company sold a portion of its business (the “ECM Assets”). Accordingly, the Company is reporting the results of operations and cash flows, and related balance sheet items associated with the ECM Assets in discontinued operations in the accompanying consolidated statements of operations, cash flows and balance sheets for the current and comparative prior periods. Refer to Note 13 – Discontinued Operations for details of the Company’s discontinued operations. |
OPERATING LEASES
OPERATING LEASES | 12 Months Ended |
Jan. 31, 2022 | |
Operating Leases | |
OPERATING LEASES | NOTE 4 — OPERATING LEASES We determine whether an arrangement is a lease at inception. Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the expected lease term. Since our lease arrangements do not provide an implicit rate, we use our incremental borrowing rate for the expected remaining lease term at commencement date for new and existing leases in determining the present value of future lease payments. Operating lease expense is recognized on a straight-line basis over the lease term. Alpharetta Office Lease On October 1, 2021, the Company entered into an agreement with a third-party to sublease its office space in Alpharetta, Georgia, (the “Sublease Agreement”). The sublease term is for 18 292,000 64,000 The Company entered into a lease for office space in Alpharetta, Georgia, on March 1, 2020. The lease terminates on March 31, 2023. At inception, the Company recorded a right-of use asset of $ 540,000 , and related current and long-term operating lease obligation in the accompanying consolidated balance sheet. As of January 31, 2022, operating lease right-of use assets totaled $ 218,000 , and the associated lease liability is included in both current and long-term liabilities of $ 204,000 and $ 33,000 , respectively. The Company used a discount rate of 6.5 % to the determine the lease liability. As of January 31, 2022 and 2021, the Company had lease operating costs of approximately $ 194,000 and $ 178,000 , respectively. The Company paid cash of approximately $ 203,000 132,000 Maturities of operating lease liabilities associated with the Company’s operating lease as of January 31, 2022 are as follows for payments due based upon the Company’s fiscal year: SCHEDULE OF MATURITIES OF OPERATING LEASE LIABILITIES 2022 $ 210,000 2023 35,000 Total Lease Payments 245,000 Less present value adjustment (8,000 ) Present value of lease liabilities $ 237,000 Upon signing the Alpharetta lease in March 2020, the Company abandoned its shared office space in Atlanta and recorded an expense and related liability of $ 105,000 Suwanee Office Lease Upon acquiring Avelead on August 16, 2021 (refer to Note 3 – Business Combination and Divestiture), the Company assumed an operating lease agreement for the corporate office space of Avelead. The 36-month term lease commenced March 1, 2019 and expires on February 28, 2022 . As of January 31, 2022, the Company recorded $ 40,000 in rent expense . The lessor is an entity controlled by one of the Sellers that is employed by the Company. In February 2022, the Company renewed the lease for twelve months. The Company will make monthly lease payments of $ 5,998.67 71,984 matically |
DEBT
DEBT | 12 Months Ended |
Jan. 31, 2022 | |
Debt Disclosure [Abstract] | |
DEBT | NOTE 5 — DEBT Term Loan Agreement and Discontinuance of Revolving Credit Facility On August 26, 2021, the Company and its subsidiaries entered into the Second Amended and Restated Loan and Security Agreement with Bridge Bank. Pursuant to the Second Amended and Restated Loan and Security Agreement, Bridge Bank agreed to provide the Company and its subsidiaries with a new term loan facility in the maximum principal amount of $ 10,000,000 1.5 3.25 3,000,000 The Second Amended and Restated Loan and Security Agreement has a five-year term, and the maximum principal amount was advanced in a single-cash advance on or about the closing date. Interest accrued under the Second Amended and Restated Loan and Security Agreement is due monthly, and the Company shall make monthly interest-only payments through the one-year anniversary of the closing date. From the first anniversary of the closing date through the maturity date, the Company shall make monthly payments of principal and interest that increase over the term of the agreement. The Second Amended and Restated Loan and Security Agreement requires principal repayments on the anniversary date of the closing of the debt agreement of $ 500,000 1,000,000 2,000,000 3,000,000 The Company recorded $ 130,000 200,000 200,000 The Second Amended and Restated Loan and Security Agreement includes customary financial covenants as follows: a. Minimum Cash. Borrowers shall, at all times, maintain unrestricted cash of Borrowers at Bank in an amount not less than (i) on the Closing Date and for the first eleven (11) months immediately following the Closing Date, Five Million Dollars ($5,000,000) and (ii) at all times thereafter, Three Million Dollars ($3,000,000) b. Maximum Debt to ARR Ratio. SCHEDULE OF MAXIMUM DEBT TO ARR RATIO Maximum Debt to Quarter Ending ARR Ratio October 31, 2021 0.80 1.00 January 31, 2022 0.75 1.00 April 30, 2022 0.65 1.00 July 31, 2022 0.55 1.00 October 31, 2022 0.50 1.00 January 31, 2023 0.45 1.00 c. Maximum Debt to Adjusted EBITDA Ratio. SCHEDULE OF MAXIMUM DEBT TO ADJUSTED EBITDA RATIO Maximum Debt to Adjusted EBITDA Quarter Ending Ratio April 30, 2023 11.30 1.00 July 31, 2023 4.15 1.00 October 31, 2023 2.50 1.00 January 31, 2024 and on the last day of each quarter thereafter 2.0 1.00 d. Fixed Charge Coverage Ratio. 1.20 1.00 The Second Amended and Restated Loan and Security Agreement also includes customary negative covenants, subject to exceptions, which limit transfers, capital expenditures, indebtedness, certain liens, investments, acquisitions, dispositions of assets, restricted payments and the business activities of the Company, as well as customary representations and warranties, affirmative covenants and events of default, including cross defaults and a change of control default. The line of credit also is subject to customary prepayment requirements. For the period ended January 31, 2022, the Company was in compliance with the Second Amended and Restated Loan and Security Agreement covenants. Term Loan and Revolving Credit Facility with Bridge Bank On March 2, 2021, the Company entered into an Amended and Restated Loan and Security Agreement, which replaced and superseded the Loan and Security Agreement, consisting of a $ 3,000,000 43,000 Additionally, the Company’s Bank EBITDA, measured on a monthly basis over a trailing three-month period then ended, could not deviate by more than 30% or $300,000. The Amended Loan and Security Agreement facility bore interest at a per annum rate equal to the higher of (a) the Prime Rate (as published in The Wall Street Journal) plus 1.00%, with a “floor” Prime Rate of 4.0% On December 11, 2019, the Company entered into a Loan and Security Agreement (the “Loan and Security Agreement”) with Bridge Bank, a division of Western Alliance Bank (“Bridge Bank”), consisting of a $ 4,000,000 2,000,000 4,000,000 The revolving credit facility had a maturity date of twenty-four months and advances bore interest at a per annum rate equal to the higher of (a) the Prime Rate (as published in The Wall Street Journal) plus 1.25% or (b) 6.25%. The revolving credit facility could be advanced based upon 80% of eligible accounts receivable, as defined in the Loan and Security Agreement Term Loan related to “The Coronavirus Aid, Relief, and Economic Security Act” The Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act, was signed into law on March 17, 2020. Among other things, the CARES Act provided for a business loan program known as the Paycheck Protection Program (“PPP”). Qualifying companies were able to borrow, through the U.S. Small Business Administration (“SBA”), up to two months of payroll expenses. On April 21, 2020, the Company received approximately $ 2,301,000 The PPP loan carried an interest rate of 1.0 In June 2021, the Company was notified that the full $ 2,301,000 26,000 Outstanding principal balances on debt consisted of the following at: SCHEDULE OF OUTSTANDING DEBT, OTHER THAN PPP LOAN January 31, 2022 (a) January 31, 2021 (b) Term loan $ 10,000,000 $ 2,301,000 Deferred financing cost (96,000 ) — Total 9,904,000 2,301,000 Less: Current portion (250,000 ) (1,534,000 ) Non-current portion of debt $ 9,654,000 $ 767,000 (a) The term loan as of January 31, 2022 is related to the new term loan agreement that the Company entered into on August 26, 2021 with Bridge Bank (see description above). (b) The term loan as of January 21, 2021 is related to the Company’s PPP loan (see description above). The PPP loan was forgiven in June 2021. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Jan. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | NOTE 6 — GOODWILL AND INTANGIBLE ASSETS The goodwill activity is summarized as follows: SCHEDULE OF GOODWILL ACTIVITY Goodwill Balance at January 31, 2021 10,712,000 Acquisition of Avelead 12,377,000 Balance at January 31, 2022 23,089,000 Intangible assets consist of the following: SCHEDULE OF INTANGIBLE ASSETS January 31, 2022 Estimated Accumulated Useful Life Gross Assets Amortization Net Assets Finite-lived assets: Customer relationships 8 10 $ 14,164,000 $ 4,755,000 $ 9,409,000 Internally Developed Software 9 6,380,000 325,000 6,055,000 Trademarks and Tradenames 15 1,340,000 41,000 1,299,000 Total 21,884,000 5,121,000 16,763,000 January 31, 2021 Estimated Accumulated Useful Life Gross Assets Amortization Net Assets Finite-lived assets: Customer relationships 5 10 $ 5,397,000 $ 4,773,000 $ 624,000 The Company recognized amortization expense on intangible assets of $ 1,281,000 491,000 Amortization over the next five fiscal years for intangible assets is estimated as follows: SCHEDULE OF FUTURE AMORTIZATION EXPENSE FOR INTANGIBLE ASSETS Annual 2022 $ 1,971,000 2023 1,801,000 2024 1,801,000 2025 1,801,000 2026 1,801,000 Thereafter 7,588,000 Total $ 16,763,000 The Company wrote-off fully amortized intangible assets during fiscal 2021 of $ 933,000 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Jan. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 7 — INCOME TAXES For fiscal 2021 and 2020, income taxes for continuing operations consist of the following: SCHEDULE OF INCOME TAXES FOR CONTINUING OPERATION Fiscal Year 2021 2020 Current tax (expense) benefit: Federal $ — $ — State (14,000 ) (14,000 ) Total current tax expense $ (14,000 ) $ (14,000 ) Deferred tax (expense) benefit: Federal $ (80,000 ) $ 1,274,000 State (15,000 ) — Total deferred tax (expense) benefit $ (95,000 ) $ 1,274,000 Total provision $ (109,000 ) $ 1,260,000 The Company adopted ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 removes the exception to the basic intraperiod model in ASC 740-20-45-7. The benefit from income taxes from continuing operations, reported for fiscal year 2020, are offset by taxes on the gain on sale and taxes from operations of discontinued operations. During fiscal year 2020, the Company had a loss from continuing operations and income from discontinued operations. The Company did not elect to early adopt ASU 2019-12 for the 2020 fiscal year; therefore, the income from discontinued operations was considered a source of taxable income to realize a partial tax benefit for the loss generated by continuing operations. As such, the financial statements for the 2020 fiscal year reflects tax expense in discontinued operations and a tax benefit in continuing operations. Applying the change on a prospective basis, this did not occur during the 2021 fiscal year and as such created a difference in the effective tax rate presentation The income tax benefit differs from the amount computed using the federal statutory income tax rates of 21 SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION Fiscal Year 2021 2020 Federal tax benefit at statutory rate $ (1,430,000 ) $ (1,272,000 ) State and local tax expense, net of federal 26,000 11,000 Increase in valuation allowance 1,950,000 419,000 Permanent items: PPP Loan (483,000 ) — Other 3,000 5,000 Reserve for uncertain tax position (24,000 ) 35,000 R&D Credit (Federal) 120,000 (174,000 ) Expiring carryforwards — 5,000 Stock-based compensation (45,000 ) (305,000 ) Other (8,000 ) 16,000 Income tax expense $ 109,000 $ (1,260,000 ) The Company provides deferred income taxes for temporary differences between assets and liabilities recognized for financial reporting and income tax purposes. The income tax effects of these temporary differences and credits are as follows: SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES January 31, 2022 2021 Deferred tax assets: Allowance for doubtful accounts $ 24,000 $ 16,000 Deferred revenue 60,000 12,000 Accruals 168,000 47,000 Net operating loss carryforwards 10,908,000 8,651,000 Stock compensation expense 510,000 367,000 Property and equipment (6,000 ) (5,000 ) R&D credit 1,334,000 1,431,000 Other 23,000 7,000 Total deferred tax assets 13,021,000 10,526,000 Valuation allowance (12,318,000 ) (9,992,000 ) Net deferred tax assets 703,000 534,000 Deferred tax liabilities: Finite-lived intangible assets (798,000 ) (534,000 ) Total deferred tax liabilities (798,000 ) (534,000 ) Net deferred tax liabilities $ (95,000 ) $ — At January 31, 2022, the Company had U.S. federal net operating loss carry forwards of $ 46,250,000 29,083,000 17,167,000 21,318,000 1,575,000 94,000 expire at various dates through fiscal 2041 In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that all or some portion of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. The Company established a valuation allowance of $ 12,318,000 9,992,000 2,326,000 The Company and its subsidiaries are subject to U.S. federal income tax as well as income taxes in multiple state and local jurisdictions. The Company has concluded all U.S. federal tax matters for years through January 31, 2018. All material state and local income tax matters have been concluded for years through January 31, 2017. The Company is no longer subject to IRS examination for periods prior to the tax year ended January 31, 2018; however, carry forward losses that were generated prior to the tax year ended January 31, 2018 may still be adjusted by the IRS if they are used in a future period The Company has recorded a reserve, including interest and penalties, for uncertain tax positions of $ 315,000 339,000 no A reconciliation of the beginning and ending amounts of gross unrecognized tax benefits (excluding interest and penalties) is as follows: SCHEDULE OF GROSS UNRECOGNIZED TAX BENEFITS 2021 2020 Beginning of fiscal year $ 339,000 $ 304,000 Additions for tax positions for the current year 4,000 33,000 Additions for tax positions of prior years — 2,000 Subtractions for tax positions of prior years (28,000 ) — End of fiscal year $ 315,000 $ 339,000 |
EQUITY
EQUITY | 12 Months Ended |
Jan. 31, 2022 | |
Equity [Abstract] | |
EQUITY | NOTE 8 — EQUITY Capital Raise On February 25, 2021, the Company entered into an underwriting agreement with Craig-Hallum Capital Group LLC, as the sole managing underwriter, relating to the underwritten public offering of an aggregate of 10,062,500 0.01 1,312,500 1.60 16.1 Registration of Shares Issued to 180 Consulting On May 3, 2021, the Company filed a Registration Statement on Form S-3 (Registration No. 333-255723), which was subsequently amended on June 23, 2021, for purposes of registering for resale 248,424 Authorized Shares Increase On May 24, 2021, the Company amended its Certificate of Incorporation to increase the total number of authorized shares of the Company’s common stock from 45,000,000 65,000,000 At the Annual Meeting, the Company’s stockholders approved an amendment to the Streamline Health Solutions, Inc. Third Amended and Restated 2013 Stock Incentive Plan to increase the number of shares of the Company’s common stock authorized for issuance thereunder by 2,000,000 6,223,246 8,223,246 As described in the Company’s definitive proxy statement on Schedule 14A filed with the SEC on July 6, 2021, because there may have been uncertainty regarding the validity or effectiveness of the prior approval of the Charter Amendment, the authorized shares increase effected thereby and the Third Amended 2013 Plan Amendment at the Annual Meeting, the board of directors of the Company asked the Company’s stockholders to ratify the approval, filing and effectiveness of the Charter Amendment and the approval and effectiveness of the Third Amended 2013 Plan Amendment at a special meeting of the stockholders held on July 29, 2021 in order to eliminate such uncertainty (the “Special Meeting”). At the Special Meeting, the Company’s stockholders ratified the approval, filing and effectiveness of the Charter Amendment and the approval and effectiveness of the Third Amended 2013 Plan Amendment. |
MAJOR CUSTOMERS
MAJOR CUSTOMERS | 12 Months Ended |
Jan. 31, 2022 | |
Risks and Uncertainties [Abstract] | |
MAJOR CUSTOMERS | NOTE 9 — MAJOR CUSTOMERS During fiscal 2021, one individual customer accounted for 10% or more of our continuing operations revenue. This customer accounted for 15 % of total continuing operations revenue for fiscal 2021. During fiscal 2020, no one individual customer accounted for 10% or more of our continuing operations revenue. 24% , 16% , and 15% , respectively, of continuing operations accounts receivable as of January 31, 2022 and 4 customers represented 31% 16% 14% 13% . |
EMPLOYEE RETIREMENT PLAN
EMPLOYEE RETIREMENT PLAN | 12 Months Ended |
Jan. 31, 2022 | |
Retirement Benefits [Abstract] | |
EMPLOYEE RETIREMENT PLAN | NOTE 10 — EMPLOYEE RETIREMENT PLAN The Company has established a 401(k) retirement plan that covers all associates. Company contributions to the plan may be made at the discretion of the board of directors. The Company’s matched amount is 50% up to the first 4% of compensation deferred by each associate. The total compensation expense for this matching contribution was $ 188,000 164,000 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Jan. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | NOTE 11 — STOCK-BASED COMPENSATION Stock Option Plans The Company’s Third Amended and Restated 2013 Stock Incentive Plan (the “2013 Plan”) replaced the 2005 Incentive Compensation Plan (the “2005 Plan”). The 2005 Plan expired based upon its terms. Accordingly, all the outstanding awards and any unallocated pool of un-issued options under the 2005 Plan were re-characterized to the 2013 Plan. Under these plans, the Company is authorized to issue equity awards (stock options, stock appreciation rights or “SARs”, and restricted stock) to directors and associates of the Company. Under the 2013 Plan, as amended, the Company is authorized to issue a number of shares not to exceed 8,223,246 937,130 500,830 Inducement grants are approved by the Company’s compensation committee pursuant to NASDAQ Marketplace Rule 5635(c)(4). The terms of the grants were nearly identical to the terms and conditions of the Company’s stock incentive plans in effect at the time of each inducement grant. For the year ended January 31, 2021 and 2020, with regard to inducement grants, no stock options were issued, no options expired, no options were forfeited, and no stock options were exercised. As of January 31, 2022 and 2021, there were 125,000 A summary of stock option activity follows: SCHEDULE OF STOCK OPTION ACTIVITY Weighted Average Remaining Aggregate Options Exercise Life in intrinsic Outstanding as of January 31, 2021 625,830 $ 3.45 Granted 583,333 1.53 Exercised (3,300 ) 1.35 Expired (137,033 ) 1.65 Forfeited (6,700 ) 1.35 Outstanding as of January 31, 2022 1,062,130 $ 2.65 6.11 $ 21,000 Exercisable as of January 31, 2022 628,854 $ 3.42 3.75 $ 20,000 Vested or expected to vest as of January 31, 2022 1,061,307 $ 2.65 6.11 $ 21,000 583,333 1.53 The fiscal 2021 and 2020 stock-based compensation was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted average assumptions for each fiscal year: SCHEDULE OF WEIGHTED AVERAGE ASSUMPTIONS 2021 2020 Expected life 5.01 — Risk-free interest rate 0.75 % — Weighted average volatility factor 0.72 — Dividend yield — — Forfeiture rate — — At January 31, 2022, there was $ 335,000 2.54 69,000 22,000 5,000 The 2013 Plan contains change in control provisions whereby any outstanding equity awards under the plans subject to vesting, which have not fully vested as of the date of the change in control, shall automatically vest and become immediately exercisable. One of the change in control provisions is deemed to occur if there is a change in beneficial ownership, or authority to vote, directly or indirectly, of securities representing 20 Restricted Stock The Company is authorized to grant restricted stock awards to associates and directors under the 2013 Plan. The Company has also issued restricted stock as inducement grants to certain new employees. The restrictions on the shares granted generally lapse over a one- to four-year term of continuous employment from the date of grant. On March 4, 2021, our CEO was awarded 150,000 150,000 250,000 50,000 100,000 SCHEDULE OF RESTRICTED STOCK AWARD ACTIVITY Weighted Non-vested Average Number of Grant Date Shares Fair Value Non-vested balance at January 31, 2020 803,498 $ 1.22 Granted 1,158,245 1.07 Vested (864,128 ) 1.18 Forfeited (166,490 ) 1.16 Non-vested balance at January 31, 2021 931,125 $ 1.09 Granted 1,257,000 1.71 Vested (1,095,175 ) 1.33 Forfeited (50,100 ) 1.48 Non-vested balance at January 31, 2022 1,043,000 $ 1.57 At January 31, 2022, there was $ 1,024,000 2.03 The expense associated with restricted stock awards for associates and directors was $ 1,667,000 1,075,000 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Jan. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 12— COMMITMENTS AND CONTINGENCIES Royalty Liability On October 25, 2013, we entered into a Software License and Royalty Agreement (the “Royalty Agreement”) with Montefiore Medical Center (“Montefiore”) pursuant to which Montefiore granted us an exclusive, worldwide 15 3,000,000 3,000,000 nine and one-half years 24 1,000,000 On October 1, 2020, the Company agreed with Montefiore that it would pay, in cash, (i) $ 500,000 490,000 990,000 1,000,000 Consulting Agreement with 180 Consulting On March 19, 2020 the Company entered into a Master Services Agreement (the “MSA”) with 180 Consulting, pursuant to which 180 Consulting has provided and will continue to provide a variety of consulting services including product management, operational consulting, staff augmentation, internal systems platform integration and software engineering services, among others, through separate executed statements of work (“SOWs”). The Company has entered into ten SOWs under the MSA. Some of the SOWs include the ability to earn stock at a conversion rate to be calculated 20 days after the execution of the related SOW. 180 Consulting earned a cumulative number of shares through January 31, 2022 totaling 521,077 272,653 1,439,000 78,031 78,031 701,000 75,000 On September 20, 2021, the Company entered into an additional Master Services Agreement with 180 Consulting to provide a variety of consulting services including product management, operational consulting, staff augmentation, internal systems platform integration and software engineering services, among others, to the Company in support of the Avelead products acquired through separate executed SOW’s. As of January 31, 2022, the Company has entered into one SOW under the Avelead MSA. For services rendered by 180 Consulting during fiscal 2021, the Company incurred fees totaling $ 288,000 Litigation We are, from time to time, a party to various legal proceedings and claims, which arise in the ordinary course of business. We are not aware of any legal matters that could have a material adverse effect on the Company’s consolidated results of operations, financial position or cash flows. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 12 Months Ended |
Jan. 31, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | NOTE 13 – DISCONTINUED OPERATIONS On February 24, 2020, the Company consummated the previously announced sale of the Company’s legacy Enterprise Content Management business (the “ECM Assets”) pursuant to that certain Asset Purchase Agreement, dated December 17, 2019, as amended (the “Asset Purchase Agreement”), to Hyland Software, Inc. (the “Purchaser”), Pursuant to the Asset Purchase Agreement, the Purchaser acquired the ECM Assets and assumed certain liabilities of the Company for a purchase price of $ 16.0 At closing, the Company received approximately $ 5.4 million in net proceeds after (i) repaying the Company’s $ 4.0 million term loan with Bridge Bank, (ii) adjusting for certain customer prepayments, (iii) recording the escrow funds of $ 800,000 and (iv) incurring certain transaction costs. The gain on the sale of assets is summarized as follows: SCHEDULE OF GAIN ON SALE OF ASSETS Net Proceeds, including escrowed funds $ 12,088,000 Net tangible assets sold: Accounts Receivable (1,130,000 ) Prepaid Expenses (576,000 ) Deferred Revenues 4,010,000 Net tangible assets sold 2,304,000 Capitalized software development costs (1,772,000 ) Goodwill (4,825,000 ) Transaction cost (1,782,000 ) Gain on sale of discontinued operations $ 6,013,000 The transaction costs were primarily broker costs and costs of legal and accounting to effect the transaction. The Company allocated $ 4,825,000 The Company reclassified the following assets and liabilities for discontinued operations in the accompanying consolidated balance sheets: SCHEDULE OF DISCONTINUED OPERATIONS OF CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS January 31, 2022 January 31, 2021 As of January 31, 2022 January 31, 2021 Current assets of discontinued operations: Accounts receivable $ — $ 587,000 Current assets of discontinued operations $ — $ 587,000 Long-term assets of discontinued operations: Property and equipment, net $ — $ 13,000 Long-term assets of discontinued operations $ — $ 13,000 Current liabilities of discontinued operations: Accrued expenses $ — $ 8,000 Deferred revenues — 587,000 Current liabilities of discontinued operations $ — $ 595,000 For fiscal 2021 and 2020, the Company recorded the following into discontinued operations in the accompanying consolidated statements of operations: Fiscal Year 2021 2020 Revenues: Maintenance and support $ — $ 412,000 Software as a service — 138,000 Transition service fees 498,000 394,000 Total revenues $ 498,000 $ 944,000 Expenses: Cost of Sales 5,000 294,000 Transition service cost 92,000 166,000 Deferred financing cost — 128,000 Total expenses $ 97,000 $ 588,000 Income from discontinued operations $ 401,000 $ 356,000 The Company entered into an agreement with the Purchaser of the ECM Assets to maintain the current data center through a transition period. The transition services did not have a finite ending date at the signing of the agreement. However, the transition services were completed in the third quarter of fiscal 2021. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Jan. 31, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 14 - RELATED PARTY TRANSACTIONS In the second quarter of fiscal year 2019, in connection with the appointment of Wyche T. “Tee” Green, III, Chairman of the Board of the Company and Managing Member of 121G, LLC (“121G”), as interim President and Chief Executive Officer of the Company, we entered into a consulting agreement with 121G Consulting, LLC (“121G Consulting”), to provide an assessment of the Company’s innovation and growth teams and strategies and to develop a set of prioritized recommendations to be consolidated into a strategic plan for the Company’s leadership team. Mr. Green is a member of 121G Consulting, and, accordingly, has a financial interest in that entity. In October 2019, Mr. Green was appointed as President and Chief Executive Officer of the Company on a full-time basis. Subsequent to Mr. Green joining the Company on a full-time basis, the Company’s relationship with 121G Consulting was terminated. No fees were incurred from 121G for fiscal 2021. For fiscal 2020, 121G Consulting fees totaled $ 107,000 Refer to Note 3 – Business Combination and Divestiture. The Company acquired Avelead on August 16, 2021. In addition, the Company assumed a consulting agreement with AscendTek, LLC (“AscendTek”), a software development and system design company. AscendTek is owned by one of the Sellers of Avelead. The Company entered into a separation agreement with this Seller of Avelead on closing of the Avelead acquisition. From the acquisition date to the year ended January 31, 2022, the Company incurred approximately $ 64,000 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Jan. 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 15 — SUBSEQUENT EVENTS We have evaluated subsequent events occurring after January 31, 2021, and based on our evaluation we did not identify any events that would have required recognition or disclosure in these consolidated financial statements, except for the following: Departure and Appointment of Certain Officers We have previously disclosed by way of current reports on Form 8-K filed with the SEC that on February 14, 2022, William G. Garvis, the Company’s Senior Vice President and Chief Operating Officer, departed effective February 14, 2022. The Company also announced effective March 22, 2022, Randolph “Randy” Salisbury will depart effective April 15, 2022. Mr. Salisbury previously served as the Company’s Senior Vice President and Chief Sales and Marketing Officer. Mr. Salisbury is entitled to receive the severance accorded to him in his employment agreement for a separation without cause. |
Valuation and Qualifying Accoun
Valuation and Qualifying Accounts and Reserves | 12 Months Ended |
Jan. 31, 2022 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Valuation and Qualifying Accounts and Reserves | Valuation and Qualifying Accounts and Reserves Streamline Health Solutions, Inc and Subsidiaries. For the two years ended January 31, 2022 Balance at Beginning Charged to Costs and (1) Balance at End of Description of Period Expenses Deductions Period Year ended January 31, 2022: Allowance for doubtful accounts $ 65 $ 11 $ — $ 76 Year ended January 31, 2021: Allowance for doubtful accounts $ 96 $ (31 ) $ — $ 65 (1) Uncollectible accounts written off, net of recoveries. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Jan. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial statements include the accounts of Streamline Health Solutions, Inc. and its wholly-owned subsidiaries, Streamline Health, LLC, Avelead Consulting, LLC, Streamline Consulting Solutions, LLC and Streamline Pay & Benefits, LLC. All significant intercompany transactions and balances are eliminated in consolidation. All amounts in the consolidated financial statements, notes and tables have been rounded to the nearest thousand dollars, except share and per share amounts, unless otherwise indicated. Refer to Note – 3 Business Combination and Divestiture. Under ASC 280-10-50-11, two or more operating segments may be aggregated into a single operating segment if they are considered to be similar. Operating segments are considered to be similar if they can be expected to have essentially the same economic characteristics and future prospects. Using the aggregation guidance, the Company determined that it has one operating segment due to the similar economic characteristics of the Company’s products, product development, distribution, regulatory environment and customer base as a provider of computer software-based solutions and services for acute-care healthcare providers. The Company has two reporting units for evaluation of intangible assets. These two reporting units are the legacy Streamline business and Avelead. On February 24, 2020, the Company sold a portion of its business (the ECM Assets). We applied the standard of ASC 205-20-1 to ascertain the timing of accounting for the discontinued operations. Based on ASC 205-20-1, the Company determined that upon receiving stockholder approval, which occurred February 21, 2020, it was authorized to sell the ECM assets. By the Company having the authority and ability to consummate the sale of the ECM Assets, it met the criteria to present discontinued operations as described in ASC 205-20-1. Accordingly, the Company is reporting the results of operations and cash flows, and related balance sheet items associated with the ECM Assets in discontinued operations in the accompanying consolidated statements of operations, cash flows and balance sheets for the current and comparative prior periods. Refer to Note 13 – Discontinued Operations for further details. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, management evaluates its estimates and judgments, including those related to the recognition of revenue, stock-based compensation, capitalization of software development costs, intangible assets, the allowance for doubtful accounts, contingent consideration and income taxes. Actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash demand deposits. Cash deposits are placed in Federal Deposit Insurance Corporation (“FDIC”) insured financial institutions. Cash deposits may exceed FDIC insured levels from time to time. For purposes of the consolidated balance sheets and consolidated statements of cash flows, the Company considers all highly-liquid investments purchased with an original maturity of three months or less to be cash equivalents. Non-Cash Items The Company had the following items that were non-cash items related to the consolidated statements of cash flows: SCHEDULE OF NON-CASH ITEMS RELATED TO CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Fiscal Year 2021 2020 Forgiveness of PPP loan and accrued interest $ 2,327,000 $ — Escrowed funds from sale of ECM Assets — 800,000 Right-of Use Assets from operating lease — 540,000 Capitalized software purchased with stock (Note 12) — 41,000 |
Receivables | Receivables Accounts and contract receivables are comprised of amounts owed to the Company for licensed software, professional services, including coding audit services, consulting services, maintenance services, and software as a service and are presented net of the allowance for doubtful accounts. The timing of revenue recognition may not coincide with the billing terms of the customer contract, resulting in unbilled receivables or deferred revenues; therefore, certain contract receivables represent revenues recognized prior to customer billings. Individual contract terms with customers or resellers determine when receivables are due. Accounts receivable represent amounts that the entity has an unconditional right to consideration. For billings where the criteria for revenue recognition have not been met, deferred revenue is recorded until the Company satisfies the respective performance obligations. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The Company adjusts accounts receivable down to net realizable value with its allowance methodology. In determining the allowance for doubtful accounts, aged receivables are analysed periodically by management. Each identified receivable is reviewed based upon the most recent information available and the status of any open or unresolved issues with the customer preventing the payment thereof. Corrective action, if necessary, is taken by the Company to resolve open issues related to unpaid receivables. During these periodic reviews, the Company determines the required allowances for doubtful accounts for estimated losses resulting from the unwillingness of its customers or resellers to make required payments. The allowance for doubtful accounts was approximately $ 76,000 65,000 Bad debt (benefit) expense for fiscal years 2021 and 2020 was as follows: SCHEDULE OF BAD DEBT EXPENSES 2021 2020 Bad debt expense (benefit) $ 11,000 $ (31,000 ) |
Concessions Accrual | Concessions Accrual In determining the concessions accrual, the Company evaluates historical concessions granted relative to revenue. The Company records a provision, reducing revenue, each period for the estimated amount of concessions incurred on the revenue recorded. The Company evaluates the amount of the provision and the concession accrual each period. The concession accrual included in accrued other expenses on the Company’s consolidated balance sheets was $ 152,000 99,000 |
Property and Equipment | Property and Equipment Property and equipment are stated at cost. Depreciation is computed using the straight-line method, over the estimated useful lives of the related assets. Estimated useful lives are as follows: SCHEDULE OF ESTIMATED USEFUL LIFE OF PROPERTY AND EQUIPMENT Computer equipment and software 3 4 Office equipment 5 Office furniture and fixtures 5 7 Leasehold improvements Term of lease or estimated useful life, whichever is shorter Depreciation expense for property and equipment in fiscal 2021 and 2020 was $ 68,000 64,000 Normal repairs and maintenance are expensed as incurred. Replacements are capitalized and the property and equipment accounts are relieved of the items being replaced or disposed of, if no longer of value. The related cost and accumulated depreciation of the disposed assets are eliminated and any gain or loss on disposition is included in the results of operations in the year of disposal. The Company wrote-off fully depreciated fixed assets during fiscal 2021 of $ 198,000 |
Leases | Leases We determine whether an arrangement is a lease at inception. Right-of-use assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the expected lease term. Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Since our lease arrangements do not provide an implicit rate, we use our estimated incremental borrowing rate for the expected remaining lease term at commencement date in determining the present value of future lease payments. We recognize operating lease cost on a straight-line basis by aggregating any rent abatement with the total expected rental payments and amortizing the expense ratably over the term of the lease. Sublease income is recognized as other income over the period of the lease, as the sublease is outside of the Company’s normal business operations. See Note 4 – Operating Leases for further details. |
Debt Issuance Costs | Debt Issuance Costs For fiscal 2021, costs of $ 130,000 200,000 200,000 Cost related to the issuance of the Loan and Security Agreement and Second Amended and Restated Loan and Security Agreement were capitalized and amortized to interest expense on a straight-line basis, which is not materially different from the effective interest method, over the term of the related debt, and presented on the Company’s consolidated balance sheets as a direct deduction from the carrying amount of the non-current portion of our term loan. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company reviews the carrying value of long-lived assets for impairment whenever facts and circumstances exist that would suggest that assets might be impaired or that the useful lives should be modified. Among the factors the Company considers in making the evaluation are changes in market position and profitability. If facts and circumstances are present which may indicate that the carrying amount of the assets may not be recoverable, the Company will prepare a projection of the undiscounted cash flows of the specific asset or asset group and determine if the long-lived assets are recoverable based on these undiscounted cash flows. If impairment is indicated, an adjustment will be made to reduce the carrying amount of these assets to their fair values. |
Capitalized Software Development Costs | Capitalized Software Development Costs Software development costs for software to be sold, leased, or marketed are accounted for in accordance with ASC 985-20, Software — Costs of Software to be Sold, Leased or Marketed 846,000 1,103,000 Internal-use software development costs are accounted for in accordance with ASC 350-40, Internal-Use Software 4,709,000 4,842,000 The estimated useful lives of software (including software to be sold and internal-use software) are reviewed frequently and adjusted as appropriate to reflect upcoming development activities that may include significant upgrades and/or enhancements to the existing functionality. The Company reviews, on an on-going basis, the carrying value of its capitalized software development expenditures, net of accumulated amortization. Amortization expense on all capitalized software development cost was $ 2,173,000 1,662,000 84,000 164,000 154,000 The Company uses the “carry-over” method for amortizing capitalized software development costs. Under the “carry-over” method, the costs of the enhancements are added to the unamortized costs of the previous version of the product and the combined amount is amortized over the remaining useful life of the product. Including unamortized cost of the original product with the cost of the enhancement for purposes of applying the net realizable value test and amortization provisions is consistent with accounting guidance for software companies that improve their software and discontinue selling or marketing the older versions. SCHEDULE OF AMORTIZATION EXPENSE FOR INTERNALLY DEVELOPED SOFTWARE Fiscal Year 2021 2020 Amortization expense on internally-developed software included in: Cost of software licenses $ 485,000 $ 501,000 Cost of audit services 13,000 13,000 Cost of software as a service 1,675,000 1,148,000 Total amortization expense on internally-developed software $ 2,173,000 $ 1,662,000 Interest capitalized to software development cost in fiscal 2021 and 2020 was $ 27,000 13,000 Research and development expense was $ 4,782,000 2,933,000 |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The FASB’s authoritative guidance on fair value measurements establishes a framework for measuring fair value, and expands disclosure about fair value measurements. This guidance enables the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. Under this guidance, assets and liabilities carried at fair value must be classified and disclosed in one of the following three categories: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs that are not corroborated by market data. The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value based on the short-term maturity of these instruments. Cash and cash equivalents are classified as Level 1. For fiscal years 2021 and 2020, there were no transfers of assets or liabilities between Levels 1, 2, or 3. The table below provides information on our liabilities that are measured at fair value on a recurring basis: SCHEDULE OF FAIR VALUE ASSETS AND LIABILITIES MEASURED ON RECURRING BASIS Quoted Prices in Significant Other Significant Total Fair Active Markets Observable Inputs Unobservable Inputs Value (Level 1) (Level 2) (Level 3) At January 31, 2022 Acquisition earnout liability (1) $ 8,833,000 $ – $ – $ 8,833,000 (1) The fair value of the acquisition earnout liability is based upon a probability-weighted discounted cash flow that was completed at the date of acquisition and updated as of January 31, 2022. The decrease in the valuation of the acquisition earnout liability was $ 1,851,000 The fair value of the Company’s term loan under its Second Amended and Restated Loan and Security Agreement was determined through an analysis of the interest rate spread from the date of closing the loan (August 2022) to the date of the most recent balance sheet, January 31, 2022. The term loan bears interest at a per annum rate equal to the Prime Rate (as published in The Wall Street Journal) plus 1.5 %, with a Prime “floor” rate of 3.25 %. The prime rate is variable and, thus accommodates changes in the market interest rate. However, the interest rate spread (the 1.5 % added to the Prime Rate) is fixed. We estimated the impact of the changes in the interest rate spread by analogizing the effect of the change in the Corporate bond rates, reduced for any changes in the market interest rate. This provided us with an estimated change to the interest rate spread of approximately 0.5 % from the date we entered the debt agreement to the end of the fiscal year, January 31, 2022. The discount to the value of the debt as of January 31, 2022 was estimated to be $ 9,798,000 , or a discount to book value $ 202,000 . Long-term debt is classified as Level 2. The fair value of the PPP loan was determined based on discounting the loan amount as of January 31, 2021. The fair value using market rates the Company believes would be available for similar types of financial instruments would have resulted in a lower fair value of $ 2,231,000 2,301,000 70,000 |
Revenue Recognition | Revenue Recognition We derive revenue from the sale of internally-developed software, either by licensing for local installation or by a SaaS delivery model, through our direct sales force or through third-party resellers. Licensed, locally-installed customers on a perpetual model utilize our support and maintenance services for a separate fee, whereas term-based locally installed license fees and SaaS fees include support and maintenance. We also derive revenue from professional services that support the implementation, configuration, training and optimization of the applications, as well as audit services and consulting services. We recognize revenue in accordance with Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers We commence revenue recognition (Step 5 below) in accordance with that core principle after applying the following steps: ● Step 1: Identify the contract(s) with a customer ● Step 2: Identify the performance obligations in the contract ● Step 3: Determine the transaction price ● Step 4: Allocate the transaction price to the performance obligations in the contract ● Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation Often contracts contain more than one performance obligation. Performance obligations are the unit of accounting for revenue recognition and generally represent the distinct goods or services that are promised to the 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 defer recognition of the revenue until the performance obligation is satisfied. Maintenance and support and SaaS agreements are generally non-cancellable or contain significant penalties for early cancellation, although customers typically have the right to terminate their contracts for cause if we fail to perform material obligations. However, if non-standard acceptance periods, non-standard performance criteria, or cancellation or right of refund terms are required, revenue is recognized upon the satisfaction of such criteria. The determined transaction price is allocated based on the standalone selling price of the performance obligations in contract. Significant judgment is required to determine the standalone selling price (“SSP”) for each performance obligation, the amount allocated to each performance obligation and whether it depicts the amount that the Company expects to receive in exchange for the related product and/or service. The Company recognizes revenue for implementation for certain of its eValuator SaaS solution over the contract term, as it has been determined that those implementation services are not a distinct performance obligation. Services for other SaaS and Software solutions such as CDI, RevID and Compare, have been determined as a distinct performance obligation. For these agreements, the Company estimates SSP of its software licenses using the residual approach when the software license is sold with other services and observable SSPs exist for the other services. The Company estimates the SSP for maintenance, professional services, software as a service and audit services based on observable standalone sales. Contract Combination The Company may execute more than one contract or agreement with a single customer. The Company evaluates whether the agreements were negotiated as a package with a single objective, whether the amount of consideration to be paid in one agreement depends on the price and/or performance of another agreement, or whether the goods or services promised in the agreements represent a single performance obligation. The conclusions reached can impact the allocation of the transaction price to each performance obligation and the timing of revenue recognition related to those arrangements. The Company has utilized the portfolio approach as the practical expedient. We have applied the revenue model to a portfolio of contracts with similar characteristics where we expected that the financial statements would not differ materially from applying it to the individual contracts within that portfolio. Software Licenses The Company’s software license arrangements provide the customer with the right to use functional intellectual property. Implementation, support, and other services are typically considered distinct performance obligations when sold with a software license unless these services are determined to significantly modify the software. Revenue is recognized at a point in time. Typically, this is upon shipment of components or electronic download of software. Maintenance and Support Services Our maintenance and support obligations include multiple discrete performance obligations, with the two largest being unspecified product upgrades or enhancements, and technical support, which can be offered at various points during a contract period. We believe that the multiple discrete performance obligations within our overall maintenance and support obligations can be viewed as a single performance obligation since both the unspecified upgrades and technical support are activities to fulfill the maintenance performance obligation and are rendered concurrently. Maintenance and support agreements entitle customers to technology support, version upgrades, bug fixes and service packs. We recognize maintenance and support revenue over the contract term. Software-Based Solution Professional Services The Company provides various professional services to customers with software licenses. These include project management, software implementation and software modification services. Revenues from arrangements to provide professional services are generally distinct from the other promises in the contract and are recognized as the related services are performed. Consideration payable under these arrangements is either fixed fee or on a time-and-materials basis and is recognized over time as the services are performed. Software as a Service SaaS-based contracts include a right to use of the Company’s platform and support which represent a single promise to provide continuous access to its software solutions. Implementation services for the Company’s eValuator product are included as part of the single promise for its respective contracts. The Company recognizes revenue for implementation of the eValuator product over the contract term as it is determined that the implementation on eValuator is not a distinct performance obligation. Implementation services for other SaaS products are deemed to be separate performance obligations. Audit Services The Company provides technology-enabled coding audit services to help customers review and optimize their internal clinical documentation and coding functions across the applicable segment of the customer’s enterprise. Audit services are a separate performance obligation. We recognize revenue over time as the services are performed. Disaggregation of Revenue The following table provides information about disaggregated revenue by type and nature of revenue stream: SCHEDULE OF DISAGGREGATION OF REVENUE Fiscal Year 2021 2020 Recurring Revenue $ 12,400,000 $ 8,247,000 Non-Recurring Revenue 4,979,000 3,099,000 Total revenue $ 17,379,000 $ 11,346,000 The Company includes revenue categories of (i) maintenance and support and (ii) software as a service as recurring revenue for fiscal years ended January 31, 2021 and January 31, 2020. The Company includes revenue categories of (i) software licenses, (ii) professional services, and (iii) audit services as non-recurring revenue for the fiscal years ended January 31, 2021 and January 31, 2020. Avelead makes up $ 2,790,000 1,735,000 Contract Receivables and Deferred Revenues The Company receives payments from customers based upon contractual billing schedules. Contract receivables include amounts related to the Company’s contractual right to consideration for completed performance obligations not yet invoiced. Deferred revenues include payments received in advance of performance under the contract. Our contract receivables and deferred revenue are reported on an individual contract basis at the end of each reporting period. Contract receivables are classified as current or noncurrent based on the timing of when we expect to bill the customer. Deferred revenue is classified as current or noncurrent based on the timing of when we expect to recognize revenue. In the year ended January 31, 2022, we recognized approximately $ 3,702,000 19,112,000 Deferred costs (costs to fulfill a contract and contract acquisition costs) We defer the direct costs, which include salaries and benefits, for professional services related to SaaS contracts as a cost to fulfill a contract. These deferred costs will be amortized on a straight-line basis over the contractual term. As of January 31, 2022, and 2021, we had deferred costs of $ 125,000 168,000 110,000 125,000 143,000 Contract acquisition costs, which consist of sales commissions paid or payable, is considered incremental and recoverable costs of obtaining a contract with a customer. Sales commissions for initial and renewal contracts are deferred and then amortized on a straight-line basis over the contract term. As a practical expedient, we expense sales commissions as incurred when the amortization period of related deferred commission costs would have been one year or less. Deferred commissions costs paid and payable, which are included on the consolidated balance sheets within other non-current assets totalled $ 806,000 666,000 339,000 206,000 |
Concentrations | Concentrations Financial instruments, which potentially expose the Company to concentrations of credit risk, consist primarily of accounts receivable. The Company’s accounts receivable are concentrated in the healthcare industry. However, the Company’s customers typically are well-established hospitals, medical facilities or major health information systems companies with good credit histories that resell the Company’s solutions. Payments from customers have been received within normal time frames for the industry. However, some hospitals and medical facilities have experienced significant operating losses as a result of limits on third-party reimbursements from insurance companies and governmental entities and extended payment of receivables from these entities is not uncommon. To date, the Company has relied on a limited number of customers and remarketing partners for a substantial portion of its total revenues. The Company expects that a significant portion of its future revenues will continue to be generated by a limited number of customers and its remarketing partners. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill and other intangible assets were recognized in conjunction with the Avelead Consulting, Interpoint, Meta, CLG and Opportune IT acquisitions, as well as the Unibased acquisition (prior to divestiture of such assets). Identifiable intangible assets include purchased intangible assets with finite lives, which primarily consist of internally-developed software and customer relationships. Finite-lived purchased intangible assets are amortized over their expected period of benefit, which generally ranges from one to 15 years, using the straight-line method. The Company assesses the useful lives and possible impairment of intangible assets when an event occurs that may trigger such a review. Factors considered important which could trigger a review include: ● significant underperformance relative to historical or projected future operating results; ● significant changes in the manner of use of the acquired assets or the strategy for the overall business; ● identification of other impaired assets within a reporting unit; ● disposition of a significant portion of an operating segment; ● significant negative industry or economic trends; ● significant decline in the Company’s stock price for a sustained period; and ● a decline in the market capitalization relative to the net book value. Determining whether a triggering event has occurred involves significant judgment by the Company. The Company assesses goodwill annually (as of November 1), or more frequently when events and circumstances, such as the ones mentioned above, occur indicating that the recorded goodwill may be impaired. During the years ended January 31, 2022 and 2021, the Company did not note any of the above qualitative factors, which would be considered a triggering event for goodwill impairment. In assessing qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company assesses relevant events and circumstances that may impact the fair value and the carrying amount of a reporting unit. The identification of relevant events and circumstances and how these may impact a reporting unit’s fair value or carrying amount involve significant judgments by management. These judgments include the consideration of macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, events which are specific to the Company and trends in the market price of the Company’s common stock. Each factor is assessed to determine whether it impacts the impairment test positively or negatively, and the magnitude of any such impact. Reporting units are determined based on the organizational structure the entity has in place at the date of the impairment test. A reporting unit is an operating segment or component business unit with the following characteristics: (a) it has discrete financial information, (b) segment management regularly reviews its operating results (generally an operating segment has a segment manager who is directly accountable to and maintains regular contact with the chief operating decision maker to discuss operating activities, financial results, forecasts or plans for the segment), and (c) its economic characteristics are dissimilar from other units (this contemplates the nature of the products and services, the nature of the production process, the type or class of customer for the products and services and the methods used to distribute the products and services). The Company determined that it has one operating segment and two reporting units. The Company estimates the fair value of its reporting unit using the income approach, via discounted cash flow valuation models which include, but are not limited to, assumptions such as a “risk-free” rate of return on an investment, the weighted average cost of capital of a market participant and future revenue, operating margin, working capital and capital expenditure trends. Determining the fair value of reporting units and goodwill includes significant judgment by management, and different judgments could yield different results. The Company performed its annual assessment of goodwill during the fourth quarter of fiscal 2021, using the approach described above. Based on the analysis performed, the fair value of the reporting units exceeded the carrying amount of the reporting unit, including goodwill, and, therefore, a goodwill impairment loss was not recognized. |
Equity Awards | Equity Awards The Company accounts for share-based payments based on the grant-date fair value of the awards with compensation cost recognized as expense over the requisite service period. For awards to non-employees, the Company recognizes compensation expense in the same manner as if the entity had paid cash for the goods or services. 2,216,000 1,444,000 41,000 The fair value of the stock options granted are estimated at the date of grant using a Black-Scholes option pricing model. Option pricing model input assumptions such as expected term, expected volatility and risk-free interest rate impact the fair value estimate. Effective fiscal 2021, the Company changed its accounting to recognize forfeitures as they occur, which was determined to be an immaterial change from its historical practice. These assumptions are subjective and are generally derived from external (such as, risk-free rate of interest) and historical data (such as, volatility factor, expected term and forfeiture rates). Future grants of equity awards accounted for as stock-based compensation could have a material impact on reported expenses depending upon the number, value and vesting period of future awards. The Company issues restricted stock awards in the form of Company common stock. The fair value of these awards is based on the market close price per share on the grant date. The Company expenses the compensation cost of these awards as the restriction period lapses, which is typically a one- to four-year service period to the Company. In fiscal 2021 and 2020, 257,571 162,095 464,000 256,000 562,500 748,245 |
Income Taxes | Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and for tax credit and loss carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. In assessing net deferred tax assets, the Company considers whether it is more likely than not that some or all of the deferred tax assets will not be realized. The Company establishes a valuation allowance when it is more likely than not that all or a portion of deferred tax assets will not be realized. See Note 7 - Income Taxes for further details. The Company provides for uncertain tax positions and the related interest and penalties based upon management’s assessment of whether certain tax positions are more likely than not to be sustained upon examination by tax authorities. At January 31, 2022, the Company believes it has appropriately accounted for any uncertain tax positions. |
Net Earnings (Loss) Per Common Share | Net Earnings (Loss) Per Common Share The Company presents basic and diluted earnings per share (“EPS”) data for our common stock. Our unvested restricted stock awards are considered non-participating securities because holders are not entitled to non-forfeitable rights to dividends or dividend equivalents during the vesting term. In accordance with ASC 260, securities are deemed not to be participating in losses if there is no obligation to fund such losses. Diluted EPS for our common stock is computed using the treasury stock method. The following is the calculation of the basic and diluted net loss per share of common stock: SCHEDULE OF BASIC AND DILUTED NET LOSS PER SHARE OF COMMON STOCK 2021 2020 Fiscal Year 2021 2020 Basic earnings (loss) per share: Continuing operations Loss from continuing operations, net of tax $ (6,917,000 ) $ (4,799,000 ) Basic net loss per share of common stock from continuing operations $ (0.16 ) $ (0.16 ) Discontinued operations Income available to common stockholders from discontinued operations $ 375,000 $ 5,095,000 Basic net earnings per share of common stock from discontinued operations $ 0.01 $ 0.17 Diluted earnings (loss) per share (1): Continuing operations Loss available to common stockholders from continuing operations (1) $ (6,917,000 ) $ (4,799,000 ) Diluted net loss per share of common stock from continuing operations (1) $ (0.16 ) $ (0.16 ) Discontinued operations Income available to common stockholders from discontinued operations $ 375,000 $ 5,095,000 Diluted net earnings per share of common stock from discontinued operations $ 0.01 $ 0.17 Net (loss) income $ (6,542,000 ) $ 296,000 Weighted average shares outstanding - Basic (1) (1) 42,815,239 30,152,383 Effect of dilutive securities - Stock options and Restricted stock (2) (2) 458,335 488,359 Weighted average shares outstanding – Diluted 43,273,574 30,640,742 Basic net (loss) income per share of common stock $ (0.15 ) $ 0.01 Diluted net (loss) income per share of common stock $ (0.15 ) $ 0.01 (1) Excludes the effect of unvested restricted shares of common stock, which are considered non-participating securities. As of January 31, 2022 and 2021, there were 1,043,350 931,125 (2) Diluted net loss per share excludes the effect of shares that are anti-dilutive. As of January 31, 2022, there were 1,062,130 1,043,350 625,830 931,125 |
Other Operating Costs | Other Operating Costs Non-routine Costs SCHEDULE OF NON ROUTINE COSTS Fiscal Year 2021 Separation agreement expense $ 706,000 Broker Fees 553,000 Professional Fees 850,000 Executive Bonuses 705,000 Loss on exit from operating lease 42,000 Total $ 2,856,000 For fiscal 2021, the Company incurred certain non-routine costs totalling $ 2,856,000 Loss on Exit of Membership Agreement For fiscal 2020, minimum fees due under the Company’s former shared office arrangement totaled approximately $ 105,000 |
Loss Contingencies | Loss Contingencies We are subject to the possibility of various loss contingencies arising in the normal course of business. We consider the likelihood of the loss or impairment of an asset or the incurrence of a liability as well as our ability to reasonably estimate the amount of loss in determining loss contingencies. An estimated loss contingency is accrued when it is probable that a liability has been incurred or an asset has been impaired, and the amount of loss can be reasonably estimated. We regularly evaluate current information available to us to determine whether to accrue for a loss contingency and adjust any previous accrual. |
Accounting Pronouncements Recently Adopted | Accounting Pronouncements Recently Adopted In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes In October 2021, the FASB issued ASU No. 2021-08, Accounting for Contract Assets and Contract Liabilities From Contracts With Customers 236,000 |
Recent Accounting Pronouncements Not Yet Adopted | Recent Accounting Pronouncements Not Yet Adopted In November 2019, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which improves guidance around accounting for financial losses on accounts receivable. For smaller reporting entities, ASU 2016-13 is effective for annual periods beginning after December 15, 2022, including interim periods within those fiscal years. In July 2021, the FASB issued ASU 2021-05, Lessors - Certain Leases with Variable Lease Payments Leases In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832):Disclosures by Business Entities about Government Assistance |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Jan. 31, 2022 | |
Accounting Policies [Abstract] | |
SCHEDULE OF NON-CASH ITEMS RELATED TO CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | The Company had the following items that were non-cash items related to the consolidated statements of cash flows: SCHEDULE OF NON-CASH ITEMS RELATED TO CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Fiscal Year 2021 2020 Forgiveness of PPP loan and accrued interest $ 2,327,000 $ — Escrowed funds from sale of ECM Assets — 800,000 Right-of Use Assets from operating lease — 540,000 Capitalized software purchased with stock (Note 12) — 41,000 |
SCHEDULE OF BAD DEBT EXPENSES | Bad debt (benefit) expense for fiscal years 2021 and 2020 was as follows: SCHEDULE OF BAD DEBT EXPENSES 2021 2020 Bad debt expense (benefit) $ 11,000 $ (31,000 ) |
SCHEDULE OF ESTIMATED USEFUL LIFE OF PROPERTY AND EQUIPMENT | Property and equipment are stated at cost. Depreciation is computed using the straight-line method, over the estimated useful lives of the related assets. Estimated useful lives are as follows: SCHEDULE OF ESTIMATED USEFUL LIFE OF PROPERTY AND EQUIPMENT Computer equipment and software 3 4 Office equipment 5 Office furniture and fixtures 5 7 Leasehold improvements Term of lease or estimated useful life, whichever is shorter |
SCHEDULE OF AMORTIZATION EXPENSE FOR INTERNALLY DEVELOPED SOFTWARE | SCHEDULE OF AMORTIZATION EXPENSE FOR INTERNALLY DEVELOPED SOFTWARE Fiscal Year 2021 2020 Amortization expense on internally-developed software included in: Cost of software licenses $ 485,000 $ 501,000 Cost of audit services 13,000 13,000 Cost of software as a service 1,675,000 1,148,000 Total amortization expense on internally-developed software $ 2,173,000 $ 1,662,000 |
SCHEDULE OF FAIR VALUE ASSETS AND LIABILITIES MEASURED ON RECURRING BASIS | The table below provides information on our liabilities that are measured at fair value on a recurring basis: SCHEDULE OF FAIR VALUE ASSETS AND LIABILITIES MEASURED ON RECURRING BASIS Quoted Prices in Significant Other Significant Total Fair Active Markets Observable Inputs Unobservable Inputs Value (Level 1) (Level 2) (Level 3) At January 31, 2022 Acquisition earnout liability (1) $ 8,833,000 $ – $ – $ 8,833,000 (1) The fair value of the acquisition earnout liability is based upon a probability-weighted discounted cash flow that was completed at the date of acquisition and updated as of January 31, 2022. The decrease in the valuation of the acquisition earnout liability was $ 1,851,000 |
SCHEDULE OF DISAGGREGATION OF REVENUE | The following table provides information about disaggregated revenue by type and nature of revenue stream: SCHEDULE OF DISAGGREGATION OF REVENUE Fiscal Year 2021 2020 Recurring Revenue $ 12,400,000 $ 8,247,000 Non-Recurring Revenue 4,979,000 3,099,000 Total revenue $ 17,379,000 $ 11,346,000 |
SCHEDULE OF BASIC AND DILUTED NET LOSS PER SHARE OF COMMON STOCK | The following is the calculation of the basic and diluted net loss per share of common stock: SCHEDULE OF BASIC AND DILUTED NET LOSS PER SHARE OF COMMON STOCK 2021 2020 Fiscal Year 2021 2020 Basic earnings (loss) per share: Continuing operations Loss from continuing operations, net of tax $ (6,917,000 ) $ (4,799,000 ) Basic net loss per share of common stock from continuing operations $ (0.16 ) $ (0.16 ) Discontinued operations Income available to common stockholders from discontinued operations $ 375,000 $ 5,095,000 Basic net earnings per share of common stock from discontinued operations $ 0.01 $ 0.17 Diluted earnings (loss) per share (1): Continuing operations Loss available to common stockholders from continuing operations (1) $ (6,917,000 ) $ (4,799,000 ) Diluted net loss per share of common stock from continuing operations (1) $ (0.16 ) $ (0.16 ) Discontinued operations Income available to common stockholders from discontinued operations $ 375,000 $ 5,095,000 Diluted net earnings per share of common stock from discontinued operations $ 0.01 $ 0.17 Net (loss) income $ (6,542,000 ) $ 296,000 Weighted average shares outstanding - Basic (1) (1) 42,815,239 30,152,383 Effect of dilutive securities - Stock options and Restricted stock (2) (2) 458,335 488,359 Weighted average shares outstanding – Diluted 43,273,574 30,640,742 Basic net (loss) income per share of common stock $ (0.15 ) $ 0.01 Diluted net (loss) income per share of common stock $ (0.15 ) $ 0.01 (1) Excludes the effect of unvested restricted shares of common stock, which are considered non-participating securities. As of January 31, 2022 and 2021, there were 1,043,350 931,125 (2) Diluted net loss per share excludes the effect of shares that are anti-dilutive. As of January 31, 2022, there were 1,062,130 1,043,350 625,830 931,125 |
SCHEDULE OF NON ROUTINE COSTS | SCHEDULE OF NON ROUTINE COSTS Fiscal Year 2021 Separation agreement expense $ 706,000 Broker Fees 553,000 Professional Fees 850,000 Executive Bonuses 705,000 Loss on exit from operating lease 42,000 Total $ 2,856,000 |
BUSINESS COMBINATION AND DIVE_2
BUSINESS COMBINATION AND DIVESTITURE (Tables) | 12 Months Ended |
Jan. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
COMPONENTS OF TOTAL CONSIDERATION | The components of the total consideration are as follows: COMPONENTS OF TOTAL CONSIDERATION (in thousands) Components of total consideration, net of cash acquired: Cash $ 11,900 Cash, seller expenses 285 Cash, working capital adjustment 285 Restricted Common Stock 6,554 Acquisition earnout liabilities 10,684 (a) Total consideration $ 29,708 (a) Acquisition earnout liabilities represent the net present value and risk adjusted probability of the required future payments underlying the Company’s SaaS Contingent Consideration and Renewal Contingent Consideration as described above. Due to the dates that the Company is required to measure, report and agree on the calculations, $ 4,672,000 4,161,000 The acquisition earnout liability is re-measured on a quarterly basis and the change to the liability is recorded as a valuation adjustment recorded through “other expenses” in the accompanying consolidated statements of operations. The valuation adjustment recorded for the period ended January 31, 2022, was $ 1,851,000 |
SCHEDULE OF ALLOCATION OF THE TOTAL CONSIDERATION | The Company is presenting the allocation of the total consideration to net tangible and intangible assets as of the date of the closing of Avelead as follows: SCHEDULE OF ALLOCATION OF THE TOTAL CONSIDERATION (in thousands) Net tangible assets: Accounts receivable $ 1,246 Unbilled revenue 200 Prepaid expenses 178 Fixed assets 37 Accounts payable (490 ) Accrued expenses (397 ) Deferred revenues (863 ) Net tangible assets (89 ) Goodwill 12,377 Customer Relationships (SaaS) 8,370 Customer Relationships (Consulting) 1,330 Internally Developed Software 6,380 Trademarks and Tradenames 1,340 Net assets acquired and liabilities assumed $ 29,708 |
SCHEDULE OF INTANGIBLE ASSETS ESTIMATED USEFUL LIVES | SCHEDULE OF INTANGIBLE ASSETS ESTIMATED USEFUL LIVES Estimated Useful Lives Goodwill Indefinite Customer Relationships (SaaS) 10 Customer Relationships (Consulting) 8 Internally Developed Software 9 Trademarks and Tradenames 15 |
SCHEDULE OF PRO FORMA REVENUE AND NET EARNINGS | SCHEDULE OF PRO FORMA REVENUE AND NET EARNINGS 2022 2021 (UNAUDITED) Year Ended January 31, 2022 2021 Revenues $ 22,631,000 $ 19,707,000 Operating expenses (31,278,000 ) (25,164,000 ) Non-routine costs (4,284,000 ) — Loss on exit from membership agreement — (105,000 ) Operating loss (12,931,000 ) (5,562,000 ) Other expenses 1,312,000 (710,000 ) PPP loan forgiveness 3,059,000 712,000 Income tax (expense) benefit (109,000 ) 1,370,000 Loss from continuing operations $ (8,669,000 ) $ (4,190,000 ) |
OPERATING LEASES (Tables)
OPERATING LEASES (Tables) | 12 Months Ended |
Jan. 31, 2022 | |
Operating Leases | |
SCHEDULE OF MATURITIES OF OPERATING LEASE LIABILITIES | Maturities of operating lease liabilities associated with the Company’s operating lease as of January 31, 2022 are as follows for payments due based upon the Company’s fiscal year: SCHEDULE OF MATURITIES OF OPERATING LEASE LIABILITIES 2022 $ 210,000 2023 35,000 Total Lease Payments 245,000 Less present value adjustment (8,000 ) Present value of lease liabilities $ 237,000 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Jan. 31, 2022 | |
Debt Disclosure [Abstract] | |
SCHEDULE OF MAXIMUM DEBT TO ARR RATIO | SCHEDULE OF MAXIMUM DEBT TO ARR RATIO Maximum Debt to Quarter Ending ARR Ratio October 31, 2021 0.80 1.00 January 31, 2022 0.75 1.00 April 30, 2022 0.65 1.00 July 31, 2022 0.55 1.00 October 31, 2022 0.50 1.00 January 31, 2023 0.45 1.00 |
SCHEDULE OF MAXIMUM DEBT TO ADJUSTED EBITDA RATIO | SCHEDULE OF MAXIMUM DEBT TO ADJUSTED EBITDA RATIO Maximum Debt to Adjusted EBITDA Quarter Ending Ratio April 30, 2023 11.30 1.00 July 31, 2023 4.15 1.00 October 31, 2023 2.50 1.00 January 31, 2024 and on the last day of each quarter thereafter 2.0 1.00 |
SCHEDULE OF OUTSTANDING DEBT, OTHER THAN PPP LOAN | Outstanding principal balances on debt consisted of the following at: SCHEDULE OF OUTSTANDING DEBT, OTHER THAN PPP LOAN January 31, 2022 (a) January 31, 2021 (b) Term loan $ 10,000,000 $ 2,301,000 Deferred financing cost (96,000 ) — Total 9,904,000 2,301,000 Less: Current portion (250,000 ) (1,534,000 ) Non-current portion of debt $ 9,654,000 $ 767,000 (a) The term loan as of January 31, 2022 is related to the new term loan agreement that the Company entered into on August 26, 2021 with Bridge Bank (see description above). (b) The term loan as of January 21, 2021 is related to the Company’s PPP loan (see description above). The PPP loan was forgiven in June 2021. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Jan. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
SCHEDULE OF GOODWILL ACTIVITY | The goodwill activity is summarized as follows: SCHEDULE OF GOODWILL ACTIVITY Goodwill Balance at January 31, 2021 10,712,000 Acquisition of Avelead 12,377,000 Balance at January 31, 2022 23,089,000 |
SCHEDULE OF INTANGIBLE ASSETS | Intangible assets consist of the following: SCHEDULE OF INTANGIBLE ASSETS January 31, 2022 Estimated Accumulated Useful Life Gross Assets Amortization Net Assets Finite-lived assets: Customer relationships 8 10 $ 14,164,000 $ 4,755,000 $ 9,409,000 Internally Developed Software 9 6,380,000 325,000 6,055,000 Trademarks and Tradenames 15 1,340,000 41,000 1,299,000 Total 21,884,000 5,121,000 16,763,000 January 31, 2021 Estimated Accumulated Useful Life Gross Assets Amortization Net Assets Finite-lived assets: Customer relationships 5 10 $ 5,397,000 $ 4,773,000 $ 624,000 |
SCHEDULE OF FUTURE AMORTIZATION EXPENSE FOR INTANGIBLE ASSETS | Amortization over the next five fiscal years for intangible assets is estimated as follows: SCHEDULE OF FUTURE AMORTIZATION EXPENSE FOR INTANGIBLE ASSETS Annual 2022 $ 1,971,000 2023 1,801,000 2024 1,801,000 2025 1,801,000 2026 1,801,000 Thereafter 7,588,000 Total $ 16,763,000 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Jan. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
SCHEDULE OF INCOME TAXES FOR CONTINUING OPERATION | For fiscal 2021 and 2020, income taxes for continuing operations consist of the following: SCHEDULE OF INCOME TAXES FOR CONTINUING OPERATION Fiscal Year 2021 2020 Current tax (expense) benefit: Federal $ — $ — State (14,000 ) (14,000 ) Total current tax expense $ (14,000 ) $ (14,000 ) Deferred tax (expense) benefit: Federal $ (80,000 ) $ 1,274,000 State (15,000 ) — Total deferred tax (expense) benefit $ (95,000 ) $ 1,274,000 Total provision $ (109,000 ) $ 1,260,000 |
SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION | The income tax benefit differs from the amount computed using the federal statutory income tax rates of 21 SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION Fiscal Year 2021 2020 Federal tax benefit at statutory rate $ (1,430,000 ) $ (1,272,000 ) State and local tax expense, net of federal 26,000 11,000 Increase in valuation allowance 1,950,000 419,000 Permanent items: PPP Loan (483,000 ) — Other 3,000 5,000 Reserve for uncertain tax position (24,000 ) 35,000 R&D Credit (Federal) 120,000 (174,000 ) Expiring carryforwards — 5,000 Stock-based compensation (45,000 ) (305,000 ) Other (8,000 ) 16,000 Income tax expense $ 109,000 $ (1,260,000 ) |
SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES | The Company provides deferred income taxes for temporary differences between assets and liabilities recognized for financial reporting and income tax purposes. The income tax effects of these temporary differences and credits are as follows: SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES January 31, 2022 2021 Deferred tax assets: Allowance for doubtful accounts $ 24,000 $ 16,000 Deferred revenue 60,000 12,000 Accruals 168,000 47,000 Net operating loss carryforwards 10,908,000 8,651,000 Stock compensation expense 510,000 367,000 Property and equipment (6,000 ) (5,000 ) R&D credit 1,334,000 1,431,000 Other 23,000 7,000 Total deferred tax assets 13,021,000 10,526,000 Valuation allowance (12,318,000 ) (9,992,000 ) Net deferred tax assets 703,000 534,000 Deferred tax liabilities: Finite-lived intangible assets (798,000 ) (534,000 ) Total deferred tax liabilities (798,000 ) (534,000 ) Net deferred tax liabilities $ (95,000 ) $ — |
SCHEDULE OF GROSS UNRECOGNIZED TAX BENEFITS | A reconciliation of the beginning and ending amounts of gross unrecognized tax benefits (excluding interest and penalties) is as follows: SCHEDULE OF GROSS UNRECOGNIZED TAX BENEFITS 2021 2020 Beginning of fiscal year $ 339,000 $ 304,000 Additions for tax positions for the current year 4,000 33,000 Additions for tax positions of prior years — 2,000 Subtractions for tax positions of prior years (28,000 ) — End of fiscal year $ 315,000 $ 339,000 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Jan. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
SCHEDULE OF STOCK OPTION ACTIVITY | A summary of stock option activity follows: SCHEDULE OF STOCK OPTION ACTIVITY Weighted Average Remaining Aggregate Options Exercise Life in intrinsic Outstanding as of January 31, 2021 625,830 $ 3.45 Granted 583,333 1.53 Exercised (3,300 ) 1.35 Expired (137,033 ) 1.65 Forfeited (6,700 ) 1.35 Outstanding as of January 31, 2022 1,062,130 $ 2.65 6.11 $ 21,000 Exercisable as of January 31, 2022 628,854 $ 3.42 3.75 $ 20,000 Vested or expected to vest as of January 31, 2022 1,061,307 $ 2.65 6.11 $ 21,000 |
SCHEDULE OF WEIGHTED AVERAGE ASSUMPTIONS | The fiscal 2021 and 2020 stock-based compensation was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted average assumptions for each fiscal year: SCHEDULE OF WEIGHTED AVERAGE ASSUMPTIONS 2021 2020 Expected life 5.01 — Risk-free interest rate 0.75 % — Weighted average volatility factor 0.72 — Dividend yield — — Forfeiture rate — — |
SCHEDULE OF RESTRICTED STOCK AWARD ACTIVITY | SCHEDULE OF RESTRICTED STOCK AWARD ACTIVITY Weighted Non-vested Average Number of Grant Date Shares Fair Value Non-vested balance at January 31, 2020 803,498 $ 1.22 Granted 1,158,245 1.07 Vested (864,128 ) 1.18 Forfeited (166,490 ) 1.16 Non-vested balance at January 31, 2021 931,125 $ 1.09 Granted 1,257,000 1.71 Vested (1,095,175 ) 1.33 Forfeited (50,100 ) 1.48 Non-vested balance at January 31, 2022 1,043,000 $ 1.57 |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 12 Months Ended |
Jan. 31, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
SCHEDULE OF GAIN ON SALE OF ASSETS | SCHEDULE OF GAIN ON SALE OF ASSETS Net Proceeds, including escrowed funds $ 12,088,000 Net tangible assets sold: Accounts Receivable (1,130,000 ) Prepaid Expenses (576,000 ) Deferred Revenues 4,010,000 Net tangible assets sold 2,304,000 Capitalized software development costs (1,772,000 ) Goodwill (4,825,000 ) Transaction cost (1,782,000 ) Gain on sale of discontinued operations $ 6,013,000 |
SCHEDULE OF DISCONTINUED OPERATIONS OF CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS | The Company reclassified the following assets and liabilities for discontinued operations in the accompanying consolidated balance sheets: SCHEDULE OF DISCONTINUED OPERATIONS OF CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS January 31, 2022 January 31, 2021 As of January 31, 2022 January 31, 2021 Current assets of discontinued operations: Accounts receivable $ — $ 587,000 Current assets of discontinued operations $ — $ 587,000 Long-term assets of discontinued operations: Property and equipment, net $ — $ 13,000 Long-term assets of discontinued operations $ — $ 13,000 Current liabilities of discontinued operations: Accrued expenses $ — $ 8,000 Deferred revenues — 587,000 Current liabilities of discontinued operations $ — $ 595,000 For fiscal 2021 and 2020, the Company recorded the following into discontinued operations in the accompanying consolidated statements of operations: Fiscal Year 2021 2020 Revenues: Maintenance and support $ — $ 412,000 Software as a service — 138,000 Transition service fees 498,000 394,000 Total revenues $ 498,000 $ 944,000 Expenses: Cost of Sales 5,000 294,000 Transition service cost 92,000 166,000 Deferred financing cost — 128,000 Total expenses $ 97,000 $ 588,000 Income from discontinued operations $ 401,000 $ 356,000 |
SCHEDULE OF NON-CASH ITEMS RELA
SCHEDULE OF NON-CASH ITEMS RELATED TO CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2022 | Jan. 31, 2021 | |
Accounting Policies [Abstract] | ||
Forgiveness of PPP loan and accrued interest | $ 2,327,000 | |
Escrowed funds from sale of ECM Assets | 800,000 | |
Right-of Use Assets from operating lease | 540,000 | |
Capitalized software purchased with stock (Note 12) | $ 41,000 |
ORGANIZATION AND DESCRIPTION _2
ORGANIZATION AND DESCRIPTION OF BUSINESS (Details Narrative) | 12 Months Ended |
Jan. 31, 2022Integer | |
Accounting Policies [Abstract] | |
Number of operating segments | 1 |
SCHEDULE OF BAD DEBT EXPENSES (
SCHEDULE OF BAD DEBT EXPENSES (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2022 | Jan. 31, 2020 | |
Accounting Policies [Abstract] | ||
Bad debt expense (benefit) | $ 11,000 | $ (31,000) |
SCHEDULE OF ESTIMATED USEFUL LI
SCHEDULE OF ESTIMATED USEFUL LIFE OF PROPERTY AND EQUIPMENT (Details) | 12 Months Ended |
Jan. 31, 2022 | |
Computer Equipment and Software [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful lives | 3 years |
Computer Equipment and Software [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful lives | 4 years |
Office Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful lives | 5 years |
Office Furniture and Fixtures [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful lives | 5 years |
Office Furniture and Fixtures [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful lives | 7 years |
Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, extimated useful lives | Term of lease or estimated useful life, whichever is shorter |
SCHEDULE OF AMORTIZATION EXPENS
SCHEDULE OF AMORTIZATION EXPENSE FOR INTERNALLY DEVELOPED SOFTWARE (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2022 | Jan. 31, 2021 | |
Property, Plant and Equipment [Line Items] | ||
Total amortization expense on internally-developed software | $ 2,173,000 | $ 1,662,000 |
Cost of Software Licenses [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total amortization expense on internally-developed software | 485,000 | 501,000 |
Cost of Audit Services [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total amortization expense on internally-developed software | 13,000 | 13,000 |
Cost of Software as a Service [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total amortization expense on internally-developed software | $ 1,675,000 | $ 1,148,000 |
SCHEDULE OF FAIR VALUE ASSETS A
SCHEDULE OF FAIR VALUE ASSETS AND LIABILITIES MEASURED ON RECURRING BASIS (Details) | Jan. 31, 2022USD ($) | [1] |
Defined Benefit Plan Disclosure [Line Items] | ||
Acquisition earn out liability fair value, observable inputs | $ 8,833,000 | |
Fair Value, Inputs, Level 1 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Acquisition earn out liability fair value, observable inputs | ||
Fair Value, Inputs, Level 2 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Acquisition earn out liability fair value, observable inputs | ||
Fair Value, Inputs, Level 3 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Acquisition earn out liability fair value, observable inputs | $ 8,833,000 | |
[1] | The fair value of the acquisition earnout liability is based upon a probability-weighted discounted cash flow that was completed at the date of acquisition and updated as of January 31, 2022. The decrease in the valuation of the acquisition earnout liability was $ 1,851,000 |
SCHEDULE OF FAIR VALUE ASSETS_2
SCHEDULE OF FAIR VALUE ASSETS AND LIABILITIES MEASURED ON RECURRING BASIS (Details) (Parenthetical) | 12 Months Ended |
Jan. 31, 2022USD ($) | |
Accounting Policies [Abstract] | |
Acquisition earnout liability, change in valuation | $ 1,851,000 |
SCHEDULE OF DISAGGREGATION OF R
SCHEDULE OF DISAGGREGATION OF REVENUE (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2022 | Jan. 31, 2021 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total revenue | $ 17,379,000 | $ 11,346,000 |
Fair Value, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total revenue | 12,400,000 | 8,247,000 |
Fair Value, Nonrecurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total revenue | $ 4,979,000 | $ 3,099,000 |
SCHEDULE OF BASIC AND DILUTED N
SCHEDULE OF BASIC AND DILUTED NET LOSS PER SHARE OF COMMON STOCK (Details) - USD ($) | 12 Months Ended | ||
Jan. 31, 2022 | Jan. 31, 2021 | ||
Accounting Policies [Abstract] | |||
Loss from continuing operations, net of tax | $ (6,917,000) | $ (4,799,000) | |
Basic net loss per share of common stock from continuing operations | $ (0.16) | $ (0.16) | |
Income available to common stockholders from discontinued operations | $ 375,000 | $ 5,095,000 | |
Basic net earnings per share of common stock from discontinued operations | $ 0.01 | $ 0.17 | |
Loss available to common stockholders from continuing operations | [1] | $ (6,917,000) | $ (4,799,000) |
Diluted net loss per share of common stock from continuing operations | [1] | $ (0.16) | $ (0.16) |
Income available to common stockholders from discontinued operations | $ 375,000 | $ 5,095,000 | |
Diluted net earnings per share of common stock from discontinued operations | $ 0.01 | $ 0.17 | |
Net (loss) income | $ (6,542,000) | $ 296,000 | |
Weighted average shares outstanding - Basic (1) | [1] | 42,815,239 | 30,152,383 |
Effect of dilutive securities - Stock options and Restricted stock (2) | [2] | 458,335 | 488,359 |
Weighted average shares outstanding – Diluted | 43,273,574 | 30,640,742 | |
Basic net (loss) income per share of common stock | $ (0.15) | $ 0.01 | |
Diluted net (loss) income per share of common stock | $ (0.15) | $ 0.01 | |
[1] | Excludes the effect of unvested restricted shares of common stock, which are considered non-participating securities. As of January 31, 2022 and 2021, there were 1,043,350 931,125 | ||
[2] | Diluted net loss per share excludes the effect of shares that are anti-dilutive. As of January 31, 2022, there were 1,062,130 1,043,350 625,830 931,125 |
SCHEDULE OF BASIC AND DILUTED_2
SCHEDULE OF BASIC AND DILUTED NET LOSS PER SHARE OF COMMON STOCK (Details) (Parenthetical) - shares | 12 Months Ended | |
Jan. 31, 2022 | Jan. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Unvested restricted shares of common stock outstanding | 1,043,350 | 931,125 |
Outstanding stock options, shares | 1,062,130 | 625,830 |
Restricted Stock [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Non vested outstanding stock options | 1,043,350 | 931,125 |
SCHEDULE OF NON ROUTINE COSTS (
SCHEDULE OF NON ROUTINE COSTS (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2022 | Jan. 31, 2021 | |
Restructuring Cost and Reserve [Line Items] | ||
Total | $ 2,856,000 | |
Avelead Consulting LLC [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Separation agreement expense | 706,000 | |
Broker Fees | 553,000 | |
Professional Fees | 850,000 | |
Executive Bonuses | 705,000 | |
Loss on exit from operating lease | 42,000 | |
Total | $ 2,856,000 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | ||||
Jan. 31, 2022 | Jan. 31, 2021 | Jan. 31, 2020 | |||
Property, Plant and Equipment [Line Items] | |||||
Allowance for doubtful accounts | $ 76,000 | $ 65,000 | $ 96,000 | ||
Concession accrual amount | 152,000 | 99,000 | |||
Depreciation expense | 68,000 | 64,000 | |||
Depreciation fixed asset | 198,000 | ||||
Financing costs | 96,000 | [1] | [2] | ||
Amortization expense | 2,173,000 | 1,662,000 | |||
Impairment charge | 84,000 | 164,000 | |||
Amortized and abandoned assets | 154,000 | ||||
Interest expense | 236,000 | 51,000 | |||
Research and development expense | 4,782,000 | 2,933,000 | |||
Term loan | 10,000,000 | [1] | 2,301,000 | [2] | |
Debt instrument fair value | 2,231,000 | ||||
Term loan reduction amount | 70,000 | ||||
Non-recurring revenue | 17,379,000 | 11,346,000 | |||
Deferred revenue | 19,112,000 | 3,702,000 | |||
Deferred costs, net | 125,000 | 168,000 | |||
Deferred costs, amortization expense | 110,000 | $ 125,000 | |||
Netted between capitalized cost and accumulated amortization | $ 143,000 | ||||
Compensation expense related to stock-based award | 1,062,130 | 625,830 | |||
Compensation expense | $ 2,216,000 | $ 1,403,000 | |||
Cost of shares for tax withholding | 464,000 | 256,000 | |||
Acquisition, non routine costs | 2,856,000 | ||||
Minimum fees under shared office arrangement | $ 105,000 | ||||
Avelead Consulting LLC [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Non-recurring revenue | 4,524,000 | ||||
Acquisition, non routine costs | 2,856,000 | ||||
Discount on deferred revenue eliminated | $ 236,000 | ||||
Common Stock [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Surrender of stock, shares | 257,571 | 162,095 | |||
Number shares of restricted stock | 1,462,874 | 1,395,917 | |||
Officers and Directors [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Number shares of restricted stock | 562,500 | 748,245 | |||
Equity Award [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Compensation expense related to stock-based award | 2,216,000 | 1,444,000 | |||
Equity Award [Member] | Non-Employee [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Compensation expense | $ 41,000 | ||||
Selling, General and Administrative Expenses [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Amortization expense with deferred sales commissions | 339,000 | $ 206,000 | |||
Other Noncurrent Assets [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Deferred commissions costs paid and payable | 806,000 | 666,000 | |||
Services [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Non-recurring revenue | 2,790,000 | $ 1,735,000 | |||
Software [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Capitalized software development costs, net of accumulated amortization | 846,000 | 1,103,000 | |||
Internal-Use Software [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Capitalized software development costs, net of accumulated amortization | 4,709,000 | 4,842,000 | |||
Software and Software Development Costs [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Amortization expense | 2,173,000 | 1,662,000 | |||
Interest expense | 27,000 | $ 13,000 | |||
Second Amended and Restated Loan and Security Agreement [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Restated loan amount | 130,000 | ||||
Financing costs | 200,000 | ||||
Debt instrument loan amount | $ 200,000 | ||||
Security Agreement [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Debt Instrument, Interest Rate, Stated Percentage | 1.50% | ||||
[custom:PrimeInterestRatePercentage] | 3.25% | ||||
Debt Agreement [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Debt Instrument, Interest Rate During Period | 50.00% | ||||
Term loan | $ 9,798,000 | ||||
Debt Instrument, Face Amount | $ 202,000 | ||||
[1] | The term loan as of January 31, 2022 is related to the new term loan agreement that the Company entered into on August 26, 2021 with Bridge Bank (see description above). | ||||
[2] | The term loan as of January 21, 2021 is related to the Company’s PPP loan (see description above). The PPP loan was forgiven in June 2021. |
COMPONENTS OF TOTAL CONSIDERATI
COMPONENTS OF TOTAL CONSIDERATION (Details) - Avelead Consulting LLC [Member] | Aug. 16, 2021USD ($) |
Business Acquisition [Line Items] | |
Cash | $ 12,400,000 |
Total consideration | 29,700,000 |
Unit Purchase Agreement [Member] | |
Business Acquisition [Line Items] | |
Cash | 11,900,000 |
Cash, seller expenses | 285,000 |
Cash, working capital adjustment | 285,000 |
Restricted Common Stock | 6,554,000 |
Acquisition earnout liabilities | 10,684,000 |
Total consideration | $ 29,708,000 |
COMPONENTS OF TOTAL CONSIDERA_2
COMPONENTS OF TOTAL CONSIDERATION (Details) (Parenthetical) - USD ($) | 12 Months Ended | |
Jan. 31, 2022 | Jan. 31, 2021 | |
Business Acquisition [Line Items] | ||
Asset acquisition contingent consideration | $ 4,672,000 | |
Asset acquisition contingent consideration | 4,161,000 | |
Acquisition earnout liability change in valuation | 1,851,000 | |
Avelead Consulting LLC [Member] | ||
Business Acquisition [Line Items] | ||
Acquisition earnout liability change in valuation | $ 1,851,000 |
SCHEDULE OF ALLOCATION OF THE T
SCHEDULE OF ALLOCATION OF THE TOTAL CONSIDERATION (Details) - USD ($) | Jan. 31, 2022 | Aug. 16, 2021 | Jan. 31, 2021 | Feb. 24, 2020 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 23,089,000 | $ 10,712,000 | $ 4,825,000 | |
Avelead Consulting LLC [Member] | ||||
Business Acquisition [Line Items] | ||||
Accounts receivable | $ 1,246,000 | |||
Unbilled revenue | 200,000 | |||
Prepaid expenses | 178,000 | |||
Fixed assets | 37,000 | |||
Accounts payable | (490,000) | |||
Accrued expenses | (397,000) | |||
Deferred revenues | (863,000) | |||
Net tangible assets | (89,000) | |||
Goodwill | 12,377,000 | |||
Customer Relationships (SaaS) | 8,370,000 | |||
Customer Relationships (Consulting) | 1,330,000 | |||
Internally Developed Software | 6,380,000 | |||
Trademarks and Tradenames | 1,340,000 | |||
Net assets acquired and liabilities assumed | $ 29,708,000 |
SCHEDULE OF INTANGIBLE ASSETS E
SCHEDULE OF INTANGIBLE ASSETS ESTIMATED USEFUL LIVES (Details) | Aug. 16, 2021 |
Customer Relationships [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Estimated useful lives | Indefinite |
Estimated useful life, intangible assets | 10 years |
Customer Relationships Consulting [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life, intangible assets | 8 years |
Computer Software, Intangible Asset [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life, intangible assets | 9 years |
Trademarks and Trade Names [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life, intangible assets | 15 years |
SCHEDULE OF PRO FORMA REVENUE A
SCHEDULE OF PRO FORMA REVENUE AND NET EARNINGS (Details) - Avelead Consulting LLC [Member] - USD ($) | 12 Months Ended | |
Jan. 31, 2022 | Jan. 31, 2021 | |
Business Acquisition [Line Items] | ||
Revenues | $ 22,631,000 | $ 19,707,000 |
Operating expenses | (31,278,000) | (25,164,000) |
Non-routine costs | (4,284,000) | |
Loss on exit from membership agreement | (105,000) | |
Operating loss | (12,931,000) | (5,562,000) |
Other expenses | 1,312,000 | (710,000) |
PPP loan forgiveness | 3,059,000 | 712,000 |
Income tax (expense) benefit | (109,000) | 1,370,000 |
Loss from continuing operations | $ (8,669,000) | $ (4,190,000) |
BUSINESS COMBINATION AND DIVE_3
BUSINESS COMBINATION AND DIVESTITURE (Details Narrative) - USD ($) | Aug. 16, 2021 | Jan. 31, 2022 | Jan. 31, 2022 | Jan. 31, 2021 |
Business Acquisition [Line Items] | ||||
Total revenues | $ 17,379,000 | $ 11,346,000 | ||
Income loss from continuing operations | $ 6,917,000 | $ 4,799,000 | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross | 583,333 | 583,333 | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ 2.65 | $ 2.65 | $ 3.45 | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Intrinsic Value | $ 21,000 | $ 21,000 | ||
Avelead Consulting LLC [Member] | ||||
Business Acquisition [Line Items] | ||||
Business Combination, Consideration Transferred | $ 29,700,000 | |||
Payments to Acquire Businesses, Net of Cash Acquired | 12,400,000 | |||
Business combination holdback | $ 100,000 | |||
Business Acquisition, Equity Interest Issued or Issuable, Value Assigned | 6,500,000 | |||
Business Combination, Contingent Consideration, Liability | $ 10,700,000 | |||
Business Combination, Contingent Consideration Arrangements, Description | Additionally, the Company contracted two types of contingent consideration; the first is referred to herein as “SaaS Contingent Consideration” and the second is referred to herein as “Renewal Contingent Consideration.” The SaaS Contingent Consideration and Renewal Contingent Consideration have an aggregate value of approximately $10.7 million as of the date of closing | |||
Nonroutine costs paid by sellers | 1,428,000 | |||
Total revenues | 4,524,000 | |||
Income loss from continuing operations | $ 1,506,000 | |||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross | 583,333 | |||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ 1.53 | |||
Avelead Consulting LLC [Member] | Share-Based Payment Arrangement, Tranche One [Member] | ||||
Business Acquisition [Line Items] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross | 500,000 | |||
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period | 3 years | |||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Intrinsic Value | $ 395,000 | |||
Avelead Consulting LLC [Member] | Share-Based Payment Arrangement, Tranche Two [Member] | ||||
Business Acquisition [Line Items] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross | 83,333 | |||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Intrinsic Value | $ 6,000 | |||
Avelead Consulting LLC [Member] | Unit Purchase Agreement [Member] | ||||
Business Acquisition [Line Items] | ||||
Business Combination, Consideration Transferred | 29,708,000 | |||
Payments to Acquire Businesses, Net of Cash Acquired | 11,900,000 | |||
Closing costs | 285,000 | |||
Payment for estimated working capital adjustment | $ 285,000 | |||
Payment of SaaS contingent consideration in cash, percentage | 50.00% | |||
Payment of SaaS contingent consideration in cash, percentage | 50.00% | |||
First year payemnt of SaaS contingent consideration, description | The first year of SaaS Contingent Consideration is calculated as 75% of Avelead’s recognized SaaS revenue from September 1, 2021 to August 31, 2022. The first-year payment is subject to a deduction of $665,000 spread equally between the cash and common stock portion of the earnout consideration. The first year earnout will be paid on or about October 15, 2022, subject to a dispute and resolution period. Assuming that Avelead is within 80% of its forecasted SaaS revenue in the first year earnout, the Company agreed to a floor and ceiling on the value of the Company’s restricted common stock issued as consideration for the earnout. That collar has a floor of $3.50 per share and a ceiling of $5.50 per share for the first year earnout | |||
Second year payemnt of SaaS contingent consideration, description | The second year of SaaS Contingent Consideration is calculated as 40% of Avelead’s recognized SaaS revenue from September 1, 2022 to August 31, 2023. The second year earnout will be paid on or about October 15, 2023, subject to a dispute and resolution period. Assuming that Avelead is within 80% of its forecasted SaaS revenue in the second year earnout, the Company agreed to a floor and ceiling on the Company’s restricted common stock issued as consideration for the earnout. That collar has a floor of $4.50 per share and a ceiling of $6.50 per share for the second year earnout | |||
Forecasted revenue description | If Avelead does not achieve 80% of its forecasted revenue, the price per share will revert back to the Company’s market price based upon a 30-day average | |||
Renewal contingent consideration, description | The renewal occurs on or about June 1, 2022 and June 1, 2023. The Company will remit the Renewal Contingent Consideration on or about each of October 15, 2022 and 2023, respectively. The Renewal Contingent Consideration is payable in shares of Company restricted common stock valued as of the date of closing. Accordingly, upon achieving the Renewal Contingent Consideration, the Company will issue 627,747 shares of restricted common stock on or about each of October 15, 2022 and October 15, 2023, subject to a dispute and resolution period | |||
Avelead Consulting LLC [Member] | Acquisition Restricted Common Stock [Member] | ||||
Business Acquisition [Line Items] | ||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | 5,021,972 | |||
Acquisition restricted common stock with a fair value | $ 6,500,000 | |||
Avelead Consulting LLC [Member] | Acquisition Restricted Common Stock [Member] | Unit Purchase Agreement [Member] | ||||
Business Acquisition [Line Items] | ||||
Acquisition restricted common stock with a fair value | $ 6,500,000 |
SCHEDULE OF MATURITIES OF OPERA
SCHEDULE OF MATURITIES OF OPERATING LEASE LIABILITIES (Details) | Jan. 31, 2022USD ($) |
Operating Leases | |
2022 | $ 210,000 |
2023 | 35,000 |
Total Lease Payments | 245,000 |
Less present value adjustment | (8,000) |
Present value of lease liabilities | $ 237,000 |
OPERATING LEASES (Details Narra
OPERATING LEASES (Details Narrative) - USD ($) | Oct. 02, 2021 | Aug. 16, 2021 | Feb. 28, 2022 | Jan. 31, 2022 | Jan. 31, 2021 | Oct. 31, 2021 | Mar. 31, 2020 |
Sublease income | $ 64,000 | ||||||
Operating Lease, Right-of-Use Asset | 218,000 | $ 391,000 | |||||
[custom:CurrentPortionOfOperatingLeaseObligation-0] | 204,000 | ||||||
Operating Lease, Cost | 194,000 | 178,000 | |||||
Operating lease | 237,000 | ||||||
Office Space [Member] | |||||||
Total minimum rentals due amount | $ 105,000 | ||||||
Right of Use Asset [Member] | |||||||
Operating Lease, Right-of-Use Asset | 218,000 | ||||||
[custom:NoncurrentPortionOfOperatingLeaseObligation-0] | $ 33,000 | ||||||
Lessee, Operating Lease, Discount Rate | 6.50% | ||||||
At inception [Member] | |||||||
Operating Lease, Right-of-Use Asset | $ 540,000 | ||||||
Sublease Agreement [Member] | |||||||
Sublease, term | 18 months | ||||||
Sublease income | $ 292,000 | ||||||
Alpharetta Office Lease [Member] | |||||||
Operating lease, payments | $ 203,000 | $ 132,000 | |||||
Suwanee Office Lease [Member] | |||||||
Operating lease, payments | $ 5,998.67 | ||||||
Lease Expiration Date | Feb. 28, 2022 | ||||||
Payments for Rent | $ 40,000 | ||||||
Operating lease | $ 71,984 |
SCHEDULE OF MAXIMUM DEBT TO ARR
SCHEDULE OF MAXIMUM DEBT TO ARR RATIO (Details) | Jan. 31, 2022 |
October 31, 2021 [Member] | Minimum [Member] | |
Debt Instrument [Line Items] | |
Maximum Debt to ARR Ratio | 0.80% |
October 31, 2021 [Member] | Maximum [Member] | |
Debt Instrument [Line Items] | |
Maximum Debt to ARR Ratio | 1.00% |
January 31, 2022 [Member] | Minimum [Member] | |
Debt Instrument [Line Items] | |
Maximum Debt to ARR Ratio | 0.75% |
January 31, 2022 [Member] | Maximum [Member] | |
Debt Instrument [Line Items] | |
Maximum Debt to ARR Ratio | 1.00% |
April 30, 2022 [Member] | Minimum [Member] | |
Debt Instrument [Line Items] | |
Maximum Debt to ARR Ratio | 0.65% |
April 30, 2022 [Member] | Maximum [Member] | |
Debt Instrument [Line Items] | |
Maximum Debt to ARR Ratio | 1.00% |
July 31, 2022 [Member] | Minimum [Member] | |
Debt Instrument [Line Items] | |
Maximum Debt to ARR Ratio | 0.55% |
July 31, 2022 [Member] | Maximum [Member] | |
Debt Instrument [Line Items] | |
Maximum Debt to ARR Ratio | 1.00% |
October 31, 2022 [Member] | Minimum [Member] | |
Debt Instrument [Line Items] | |
Maximum Debt to ARR Ratio | 0.50% |
October 31, 2022 [Member] | Maximum [Member] | |
Debt Instrument [Line Items] | |
Maximum Debt to ARR Ratio | 1.00% |
January 31, 2023 [Member] | Minimum [Member] | |
Debt Instrument [Line Items] | |
Maximum Debt to ARR Ratio | 0.45% |
January 31, 2023 [Member] | Maximum [Member] | |
Debt Instrument [Line Items] | |
Maximum Debt to ARR Ratio | 1.00% |
SCHEDULE OF MAXIMUM DEBT TO ADJ
SCHEDULE OF MAXIMUM DEBT TO ADJUSTED EBITDA RATIO (Details) | Jan. 31, 2022 |
April 30, 2023 [Member] | Minimum [Member] | |
Debt Instrument [Line Items] | |
Maximum Debt to Adjusted EBITDA Ratio | 11.30% |
April 30, 2023 [Member] | Maximum [Member] | |
Debt Instrument [Line Items] | |
Maximum Debt to Adjusted EBITDA Ratio | 1.00% |
July 31, 2023 [Member] | Minimum [Member] | |
Debt Instrument [Line Items] | |
Maximum Debt to Adjusted EBITDA Ratio | 4.15% |
July 31, 2023 [Member] | Maximum [Member] | |
Debt Instrument [Line Items] | |
Maximum Debt to Adjusted EBITDA Ratio | 1.00% |
October 31, 2023 [Member] | Minimum [Member] | |
Debt Instrument [Line Items] | |
Maximum Debt to Adjusted EBITDA Ratio | 2.50% |
October 31, 2023 [Member] | Maximum [Member] | |
Debt Instrument [Line Items] | |
Maximum Debt to Adjusted EBITDA Ratio | 1.00% |
January 31, 2024 and on the last day of each quarter thereafter [Member] | Minimum [Member] | |
Debt Instrument [Line Items] | |
Maximum Debt to Adjusted EBITDA Ratio | 2.00% |
January 31, 2024 and on the last day of each quarter thereafter [Member] | Maximum [Member] | |
Debt Instrument [Line Items] | |
Maximum Debt to Adjusted EBITDA Ratio | 1.00% |
SCHEDULE OF OUTSTANDING DEBT, O
SCHEDULE OF OUTSTANDING DEBT, OTHER THAN PPP LOAN (Details) - USD ($) | Jan. 31, 2022 | [1] | Jan. 31, 2021 | [2] |
Debt Disclosure [Abstract] | ||||
Term loan | $ 10,000,000 | $ 2,301,000 | ||
Deferred financing cost | (96,000) | |||
Total | 9,904,000 | 2,301,000 | ||
Current portion | (250,000) | (1,534,000) | ||
Non-current portion of debt | $ 9,654,000 | $ 767,000 | ||
[1] | The term loan as of January 31, 2022 is related to the new term loan agreement that the Company entered into on August 26, 2021 with Bridge Bank (see description above). | |||
[2] | The term loan as of January 21, 2021 is related to the Company’s PPP loan (see description above). The PPP loan was forgiven in June 2021. |
DEBT (Details Narrative)
DEBT (Details Narrative) - USD ($) | Aug. 26, 2021 | Mar. 02, 2021 | Apr. 21, 2020 | Feb. 29, 2020 | Dec. 11, 2019 | Jun. 30, 2021 | Jan. 31, 2022 | Jan. 31, 2021 | ||
Line of Credit Facility [Line Items] | ||||||||||
Loss on Extinguishment of Debt | $ 43,000 | $ 43,000 | ||||||||
Term loan | $ 10,000,000 | [1] | $ 2,301,000 | [2] | ||||||
PPP Loan forgiven | $ 2,301,000 | |||||||||
Accrued interest forgiveness | $ 26,000 | |||||||||
Base Rate [Member] | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Debt Instrument, Basis Spread on Variable Rate | 1.50% | |||||||||
Debt interest rate | 3.25% | |||||||||
Bridge Bank [Member] | Revolving Credit Facility [Member] | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Discontinued extinguishment of debt | $ 3,000,000 | |||||||||
Security Agreement [Member] | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Debt interest rate | 1.50% | |||||||||
Security Agreement [Member] | Bridge Bank [Member] | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Revolving line of credit | 10,000,000 | |||||||||
Principal repayment in second year | 500,000 | |||||||||
Principal repayment in third year | 1,000,000 | |||||||||
Principal repayment in fourth year | 2,000,000 | |||||||||
Principal repayment in fifth year | 3,000,000 | |||||||||
Loan and Security Agreement [Member] | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Revolving line of credit | $ 2,000,000 | |||||||||
Deferred financing costs | $ 130,000 | |||||||||
Amortization of financing cost | $ 200,000 | |||||||||
Accretion of interest expense | $ 200,000 | |||||||||
Debt financial covenants, description | Borrowers shall, at all times, maintain unrestricted cash of Borrowers at Bank in an amount not less than (i) on the Closing Date and for the first eleven (11) months immediately following the Closing Date, Five Million Dollars ($5,000,000) and (ii) at all times thereafter, Three Million Dollars ($3,000,000) | |||||||||
Line of credit facility description | The revolving credit facility had a maturity date of twenty-four months and advances bore interest at a per annum rate equal to the higher of (a) the Prime Rate (as published in The Wall Street Journal) plus 1.25% or (b) 6.25%. The revolving credit facility could be advanced based upon 80% of eligible accounts receivable, as defined in the Loan and Security Agreement | |||||||||
Term loan | $ 4,000,000 | |||||||||
Repayment of term loan | $ 4,000,000 | |||||||||
Loan and Security Agreement [Member] | Maximum [Member] | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Fixed charge coverage ratio | 120.00% | |||||||||
Loan and Security Agreement [Member] | Minimum [Member] | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Fixed charge coverage ratio | 100.00% | |||||||||
Amended and Restated Loan and Security Agreement [Member] | Revolving Credit Facility [Member] | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Revolving line of credit | $ 3,000,000 | |||||||||
Line of credit facility description | Additionally, the Company’s Bank EBITDA, measured on a monthly basis over a trailing three-month period then ended, could not deviate by more than 30% or $300,000. The Amended Loan and Security Agreement facility bore interest at a per annum rate equal to the higher of (a) the Prime Rate (as published in The Wall Street Journal) plus 1.00%, with a “floor” Prime Rate of 4.0% | |||||||||
Paycheck Protection Program [Member] | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Debt interest rate | 1.00% | |||||||||
Term loan | $ 2,301,000 | |||||||||
[1] | The term loan as of January 31, 2022 is related to the new term loan agreement that the Company entered into on August 26, 2021 with Bridge Bank (see description above). | |||||||||
[2] | The term loan as of January 21, 2021 is related to the Company’s PPP loan (see description above). The PPP loan was forgiven in June 2021. |
SCHEDULE OF GOODWILL ACTIVITY (
SCHEDULE OF GOODWILL ACTIVITY (Details) | 12 Months Ended |
Jan. 31, 2022USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill, Beginning Balance | $ 10,712,000 |
Acquisition of avelead | 12,377,000 |
Goodwill, Ending Balance | $ 23,089,000 |
SCHEDULE OF INTANGIBLE ASSETS (
SCHEDULE OF INTANGIBLE ASSETS (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2022 | Jan. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Assets | $ 21,884,000 | |
Accumulated Amortization | 5,121,000 | $ 4,773,000 |
Net Assets | 16,763,000 | |
Client Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Assets | 14,164,000 | 5,397,000 |
Accumulated Amortization | 4,755,000 | 4,773,000 |
Net Assets | $ 9,409,000 | $ 624,000 |
Client Relationships [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 8 years | 5 years |
Client Relationships [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 10 years | 10 years |
Internally Developed Software [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 9 years | |
Gross Assets | $ 6,380,000 | |
Accumulated Amortization | 325,000 | |
Net Assets | $ 6,055,000 | |
Trademarks and Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 15 years | |
Gross Assets | $ 1,340,000 | |
Accumulated Amortization | 41,000 | |
Net Assets | $ 1,299,000 |
SCHEDULE OF FUTURE AMORTIZATION
SCHEDULE OF FUTURE AMORTIZATION EXPENSE FOR INTANGIBLE ASSETS (Details) | Jan. 31, 2022USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2022 | $ 1,971,000 |
2023 | 1,801,000 |
2024 | 1,801,000 |
2025 | 1,801,000 |
2026 | 1,801,000 |
Thereafter | 7,588,000 |
Total | $ 16,763,000 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS (Details Narrative) - USD ($) | 12 Months Ended | |
Jan. 31, 2022 | Jan. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense on intangible assets | $ 1,281,000 | $ 491,000 |
Amortization of intangible assets Written-off | $ 933,000 |
SCHEDULE OF INCOME TAXES FOR CO
SCHEDULE OF INCOME TAXES FOR CONTINUING OPERATION (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2022 | Jan. 31, 2021 | |
Current tax (expense) benefit: | ||
Federal | ||
State | (14,000) | (14,000) |
Total current tax expense | (14,000) | (14,000) |
Deferred tax (expense) benefit: | ||
Federal | (80,000) | 1,274,000 |
State | (15,000) | |
Total deferred tax (expense) benefit | (95,000) | 1,274,000 |
Total provision | $ (109,000) | $ 1,260,000 |
SCHEDULE OF EFFECTIVE INCOME TA
SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2022 | Jan. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Federal tax benefit at statutory rate | $ (1,430,000) | $ (1,272,000) |
State and local tax expense, net of federal | 26,000 | 11,000 |
Increase in valuation allowance | 1,950,000 | 419,000 |
PPP Loan | (483,000) | |
Other | 3,000 | 5,000 |
Reserve for uncertain tax position | (24,000) | 35,000 |
R&D Credit (Federal) | 120,000 | (174,000) |
Expiring carryforwards | 5,000 | |
Stock-based compensation | (45,000) | (305,000) |
Other | (8,000) | 16,000 |
Income tax expense | $ 109,000 | $ (1,260,000) |
SCHEDULE OF DEFERRED TAX ASSETS
SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES (Details) - USD ($) | Jan. 31, 2022 | Jan. 31, 2021 |
Income Tax Disclosure [Abstract] | ||
Allowance for doubtful accounts | $ 24,000 | $ 16,000 |
Deferred revenue | 60,000 | 12,000 |
Accruals | 168,000 | 47,000 |
Net operating loss carryforwards | 10,908,000 | 8,651,000 |
Stock compensation expense | 510,000 | 367,000 |
Property and equipment | (6,000) | (5,000) |
R&D credit | 1,334,000 | 1,431,000 |
Other | 23,000 | 7,000 |
Total deferred tax assets | 13,021,000 | 10,526,000 |
Valuation allowance | (12,318,000) | (9,992,000) |
Net deferred tax assets | 703,000 | 534,000 |
Finite-lived intangible assets | (798,000) | (534,000) |
Total deferred tax liabilities | (798,000) | (534,000) |
Net deferred tax liabilities | $ (95,000) |
SCHEDULE OF GROSS UNRECOGNIZED
SCHEDULE OF GROSS UNRECOGNIZED TAX BENEFITS (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2022 | Jan. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Beginning of fiscal year | $ 339,000 | $ 304,000 |
Additions for tax positions for the current year | 4,000 | 33,000 |
Additions for tax positions of prior years | 2,000 | |
Subtractions for tax positions of prior years | (28,000) | |
End of fiscal year | $ 315,000 | $ 339,000 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | ||
Jan. 31, 2022 | Jan. 31, 2021 | Jan. 31, 2020 | |
Operating Loss Carryforwards [Line Items] | |||
Operating loss carry forwards | $ 46,250,000 | ||
Expire date description | expire at various dates through fiscal 2041 | ||
Valuation allowance | $ 12,318,000 | $ 9,992,000 | |
Decrease in the valuation allowance | $ 2,326,000 | ||
Income tax description | The Company and its subsidiaries are subject to U.S. federal income tax as well as income taxes in multiple state and local jurisdictions. The Company has concluded all U.S. federal tax matters for years through January 31, 2018. All material state and local income tax matters have been concluded for years through January 31, 2017. The Company is no longer subject to IRS examination for periods prior to the tax year ended January 31, 2018; however, carry forward losses that were generated prior to the tax year ended January 31, 2018 may still be adjusted by the IRS if they are used in a future period | ||
Uncertain tax positions | $ 315,000 | 339,000 | $ 304,000 |
Accrued interest and penalties | 0 | $ 0 | |
Tax Cuts and Jobs Act [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carry forwards | 17,167,000 | ||
State [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carry forwards | 21,318,000 | ||
Federal RD [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carry forwards | 1,575,000 | ||
Georgia RD [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carry forwards | 94,000 | ||
Through Fiscal 2037 [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carry forwards | $ 29,083,000 |
EQUITY (Details Narrative)
EQUITY (Details Narrative) - USD ($) | Feb. 25, 2021 | Jan. 31, 2022 | Jan. 31, 2021 | May 23, 2021 | May 03, 2021 |
Subsidiary, Sale of Stock [Line Items] | |||||
Common stock, par value | $ 0.01 | $ 0.01 | |||
Proceeds from issuance of common stock | $ 16,100,000 | ||||
Common stock, shares authorized | 65,000,000 | 65,000,000 | 45,000,000 | ||
Number of additional shares authorized to issue | 2,000,000 | ||||
2013 Incentive Compensation Plan [Member] | Stock Options [Member] | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Number of shares authorized to issue | 8,223,246 | 6,223,246 | |||
180 Consulting LLC [Member] | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Common stock issued for resale | 248,424 | ||||
Underwriting Agreement [Member] | Craig-Hallum Capital Group LLC [Member] | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Number of shares issued | 10,062,500 | ||||
Common stock, par value | $ 0.01 | ||||
Price per share | $ 1.60 | ||||
Proceeds from issuance of common stock | $ 16,100,000 | ||||
Underwriting Agreement [Member] | Craig-Hallum Capital Group LLC [Member] | Over-Allotment Option [Member] | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Number of shares of common stock sold | 1,312,500 |
MAJOR CUSTOMERS (Details Narrat
MAJOR CUSTOMERS (Details Narrative) | 12 Months Ended | |
Jan. 31, 2022 | Jan. 31, 2021 | |
Concentration Risk [Line Items] | ||
Concentration Risk, Customer | one individual customer accounted for 10% or more of our continuing operations revenue. | no one individual customer accounted for 10% or more of our continuing operations revenue. |
Two Customer [Member] | Customer Concentration Risk [Member] | Revenue Benchmark [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 15.00% | |
Customer One [Member] | Customer Concentration Risk [Member] | Accounts Receivable [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 24.00% | 31.00% |
Customer Two [Member] | Customer Concentration Risk [Member] | Accounts Receivable [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 16.00% | 16.00% |
Customer Three [Member] | Customer Concentration Risk [Member] | Accounts Receivable [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 15.00% | 14.00% |
Customer Four [Member] | Customer Concentration Risk [Member] | Accounts Receivable [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 13.00% |
EMPLOYEE RETIREMENT PLAN (Detai
EMPLOYEE RETIREMENT PLAN (Details Narrative) - USD ($) | 12 Months Ended | |
Jan. 31, 2022 | Jan. 31, 2021 | |
Retirement Benefits [Abstract] | ||
Defined contribution plan, cost recognized | $ 188,000 | $ 164,000 |
SCHEDULE OF STOCK OPTION ACTIVI
SCHEDULE OF STOCK OPTION ACTIVITY (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2022 | Jan. 31, 2021 | |
Share-Based Payment Arrangement [Abstract] | ||
Number of options, Outstanding as of January 31, 2020 | 625,830 | |
Weighted average exercise price, Outstanding as of January 31, 2020 | $ 3.45 | |
Number of options, Granted | 583,333 | 583,333 |
Weighted average exercise price, Granted | $ 1.53 | |
Number of options, Exercised | (3,300) | |
Weighted average exercise price, Exercised | $ 1.35 | |
Number of options, Expired | (137,033) | |
Weighted average exercise price, Expired | $ 1.65 | |
Number of options, Forfeited | (6,700) | |
Weighted average exercise price, Forfeited | $ 1.35 | |
Number of options, Outstanding as of January 31, 2021 | 1,062,130 | 625,830 |
Weighted average exercise price, Outstanding as of January 31, 2021 | $ 2.65 | $ 3.45 |
Remaining Life in Years, Outstanding as of January 31, 2020 | 6 years 1 month 9 days | |
Aggregate intrinsic value, Outstanding as of January 31, 2021 | $ 21,000 | |
Number of options, Exercisable as of January 31, 2020 | 628,854 | |
Weighted average exercise price, Exercisable as of January 31, 2021 | $ 3.42 | |
Remaining Life in Years, Exercisable as of January 31, 2021 | 3 years 9 months | |
Aggregate intrinsic value, Exercisable as of January 31, 2021 | $ 20,000 | |
Number of options, Vested or expected to vest as of January 31, 2021 | 1,061,307 | |
Weighted average exercise price, Vested or expected to vest as of January 31, 2021 | $ 2.65 | |
Remaining Life in Years, Vested or expected to vest as of January 31, 2021 | 6 years 1 month 9 days | |
Aggregate intrinsic value, Vested or expected to vest as of January 31, 2021 | $ 21,000 |
SCHEDULE OF WEIGHTED AVERAGE AS
SCHEDULE OF WEIGHTED AVERAGE ASSUMPTIONS (Details) - Stock Options [Member] | 12 Months Ended | |
Jan. 31, 2022 | Jan. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Expected life | 5 years 3 days | |
Risk-free interest rate | 0.75% | |
Weighted average volatility factor | 0.72% | |
Dividend yield | ||
Forfeiture rate |
SCHEDULE OF RESTRICTED STOCK AW
SCHEDULE OF RESTRICTED STOCK AWARD ACTIVITY (Details) - $ / shares | 12 Months Ended | |
Jan. 31, 2022 | Jan. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Number of RSUs, Non vested, Outstanding, Beginning balance | 931,125 | 803,498 |
Weighted Average Grant Date Fair Value, Beginning balance | $ 0.0109 | $ 0.0122 |
Number of RSUs, Non vested, Outstanding, Ending balance | 1,043,000 | 931,125 |
Weighted Average Grant Date Fair Value, Ending balance | $ 0.0157 | $ 0.0109 |
Restricted Stock [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Number of RSUs, granted | 1,257,000 | 1,158,245 |
Weighted Average Grant Date Fair Value, RSUs granted | $ 0.0171 | $ 0.0107 |
Number of RSUs, vested | (1,095,175) | (864,128) |
Weighted Average Grant Date Fair Value, RSUs vested | $ 0.0133 | $ 0.0118 |
Number RSUs, forfeited | (50,100) | (166,490) |
Weighted Average Grant Date Fair Value, RSUs forfeited | $ 0.0148 | $ 0.0116 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details Narrative) - USD ($) | Mar. 04, 2021 | Jun. 17, 2020 | Oct. 17, 2019 | Jan. 31, 2022 | Jan. 31, 2021 | Jan. 31, 2020 |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Number of options outstanding | 1,062,130 | 625,830 | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross | 583,333 | 583,333 | ||||
Weighted average grant date fair value of options granted | $ 153 | |||||
Ownership Percentage | 20.00% | |||||
Restricted Stock [Member] | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Cost unrecognized, remaining weighted average period | 2 years 10 days | |||||
Number of restricted stocks awarded, shares | 1,257,000 | 1,158,245 | ||||
Number of restricted stocks, vested on grant | 1,095,175 | 864,128 | ||||
2013 Incentive Compensation Plan [Member] | Stock Options [Member] | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Stock options plan, description | Under these plans, the Company is authorized to issue equity awards (stock options, stock appreciation rights or “SARs”, and restricted stock) to directors and associates of the Company. Under the 2013 Plan, as amended, the Company is authorized to issue a number of shares not to exceed 8,223,246. The options granted under the 2013 Plan have terms of ten years or less, and typically vest and become fully exercisable ratably over three years of continuous service to the Company from the date of grant | |||||
Number of shares authorized to issue | 8,223,246 | |||||
Number of options to purchase common stock | 937,130 | 500,830 | ||||
Number of options outstanding | 125,000 | 125,000 | ||||
Unrecognized Compensation cost, stock options | $ 335,000 | |||||
Stock option expense | $ 69,000 | $ 22,000 | ||||
Cash received from exercise options | 5,000 | |||||
2013 Incentive Compensation Plan [Member] | Restricted Stock [Member] | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Cost unrecognized, remaining weighted average period | 2 years 6 months 14 days | |||||
Stock option expense | $ 1,667,000 | $ 1,075,000 | ||||
Number of restricted stocks awarded, shares | 250,000 | |||||
Number of restricted stocks, vested on grant | 50,000 | |||||
Unrecognized compensation cost, restricted stock | $ 1,024,000 | |||||
2013 Incentive Compensation Plan [Member] | Restricted Stock [Member] | Vest in Four Equal Quarterly Installments [Member] | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Number of restricted stocks awarded, shares | 150,000 | 150,000 | ||||
Number of restricted stocks, vested on grant | 100,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | Nov. 02, 2020 | Oct. 02, 2020 | Jul. 01, 2018 | Oct. 25, 2013 | Jan. 31, 2022 | Apr. 30, 2021 | Jan. 31, 2022 | Jan. 31, 2021 | Jan. 31, 2020 | Oct. 31, 2020 |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Payments to Develop Software | $ 1,458,000 | $ 1,784,000 | ||||||||
Software License and Royalty Agreement [Member] | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Term of licensing agreement | 15 years | |||||||||
One-time initial base royalty fee | $ 3,000,000 | |||||||||
Minimum commitment for additional royalty payments | $ 3,000,000 | |||||||||
Royalty Agreement [Member] | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Period of time over which additional royalty payments are to be made description | nine and one-half years | |||||||||
Term of maintenance and service | 24 months | |||||||||
Cash payment due per royalty agreement | $ 1,000,000 | |||||||||
Settlement And Release Agreement [Member] | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Payments for cash | $ 490,000 | $ 500,000 | $ 990,000 | |||||||
Payments obligations | $ 1,000,000 | |||||||||
Master Services Agreement [Member] | 180 Consulting LLC [Member] | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Stock Issued During Period, Shares, Issued for Services | 78,031 | 521,077 | 272,653 | |||||||
Professional Fees | $ 1,439,000 | $ 288,000 | $ 701,000 | |||||||
Payments to Develop Software | $ 75,000 | |||||||||
Master Services Agreement [Member] | 180 Consulting LLC [Member] | Private Placement [Member] | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Stock Issued During Period, Shares, Issued for Services | 78,031 |
SCHEDULE OF GAIN ON SALE OF ASS
SCHEDULE OF GAIN ON SALE OF ASSETS (Details) - USD ($) | Feb. 24, 2020 | Jan. 31, 2022 | Jan. 31, 2021 |
Discontinued Operations and Disposal Groups [Abstract] | |||
Net Proceeds, including escrowed funds | $ 12,088,000 | ||
Accounts Receivable | (1,130,000) | $ (587,000) | |
Prepaid Expenses | (576,000) | ||
Deferred Revenues | 4,010,000 | ||
Net tangible assets sold | 2,304,000 | ||
Capitalized software development costs | (1,772,000) | (5,202,000) | (3,507,000) |
Goodwill | (4,825,000) | $ (23,089,000) | $ (10,712,000) |
Transaction cost | (1,782,000) | ||
Gain on sale of discontinued operations | $ 6,013,000 |
SCHEDULE OF DISCONTINUED OPERAT
SCHEDULE OF DISCONTINUED OPERATIONS OF CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS (Details) - USD ($) | 12 Months Ended | ||
Jan. 31, 2022 | Jan. 31, 2021 | Feb. 24, 2020 | |
Accounts receivable | $ 587,000 | $ 1,130,000 | |
Current assets of discontinued operations | 587,000 | ||
Property and equipment, net | 13,000 | ||
Long-term assets of discontinued operations | 13,000 | ||
Accrued expenses | 8,000 | ||
Deferred revenues | 587,000 | ||
Current liabilities of discontinued operations | 595,000 | ||
Total revenues | 498,000 | 944,000 | |
Expenses: Cost of sales | 5,000 | 294,000 | |
Expenses: Transition service cost | 92,000 | 166,000 | |
Expenses: Deferred financing cost | 128,000 | ||
Total expenses | 97,000 | 588,000 | |
Income from discontinued operations | 401,000 | 356,000 | |
Maintenance and Support [Member] | |||
Total revenues | 412,000 | ||
Software Service [Member] | |||
Total revenues | 138,000 | ||
Transition Service Fees [Member] | |||
Total revenues | $ 498,000 | $ 394,000 |
DISCONTINUED OPERATIONS (Detail
DISCONTINUED OPERATIONS (Details Narrative) - USD ($) | Feb. 24, 2020 | Jan. 31, 2022 | Jan. 31, 2021 |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Escrow Deposit | $ 800,000 | ||
Goodwill | $ 4,825,000 | $ 23,089,000 | $ 10,712,000 |
Asset Purchase Agreement [Member] | Enterprise Content Management Business [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Purchase price | 16,000,000 | ||
Proceed from sale of asset | 5,400,000 | ||
Repayment of bank debt | 4,000,000 | ||
Escrow Deposit | 800,000 | ||
Goodwill | $ 4,825,000 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 12 Months Ended | ||
Jan. 31, 2022 | Jan. 31, 2021 | Jan. 31, 2020 | |
Related Party Transaction [Line Items] | |||
Research and development services | $ 4,782,000 | $ 2,933,000 | |
AscendTek, LLC [Member] | |||
Related Party Transaction [Line Items] | |||
Research and development services | $ 64,000 | ||
121G Consulting, LLC [Member] | |||
Related Party Transaction [Line Items] | |||
Consulting fees | $ 107,000 |
Valuation and Qualifying Acco_2
Valuation and Qualifying Accounts and Reserves (Details) - USD ($) | 12 Months Ended | ||
Jan. 31, 2022 | Jan. 31, 2021 | ||
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |||
Balance at Beginning of Period | $ 65,000 | $ 96,000 | |
Charged to Costs and Expenses | 11,000 | (31,000) | |
Deductions | [1] | ||
Balance at End of Period | $ 76,000 | $ 65,000 | |
[1] | Uncollectible accounts written off, net of recoveries. |