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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): April 27, 2022

 

Streamline Health Solutions, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware   0-28132   31-1455414
(State or other jurisdiction of incorporation)  

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

 

2400 Old Milton Pkwy, P.O. Box 1353

Alpharetta, GA 30009

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (888) 997-8732

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
     
  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
     
  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
     
  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol   Name of each exchange on which registered
Common Stock, $0.01 par value   STRM   Nasdaq Capital Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 

 

 

Item 2.02 Results of Operations and Financial Condition.

 

On April 27, 2022, Streamline Health Solutions, Inc. (the “Company”) issued a press release announcing fourth quarter fiscal 2021 and full year financial results for the fiscal year ended January 31, 2022. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

 

The information contained in this Item 2.02, as well as Exhibit 99.1 referenced herein, is being “furnished” and, as such, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference in any filing under the Securities Act of 1933, as amended, unless the Company expressly so incorporates such information by reference.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits.

 

EXHIBIT

NUMBER

  DESCRIPTION
     
99.1   Press release, dated April 27, 2022, regarding Fourth Quarter Fiscal 2021 and Fiscal Year End 2021 Financial Results
104   Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  STREAMLINE HEALTH SOLUTIONS, INC.
     
Date: April 27, 2022 By: /s/ Thomas J. Gibson
    Thomas J. Gibson
    Chief Financial Officer

 

 

 

 

 

Exhibit 99.1

 

 

Streamline Health® Reports Fiscal Fourth Quarter and Full Year 2021 Financial Results

 

Fourth Quarter Revenues of $6.0 Million; 155% SaaS Revenue Growth; $30,000 in Net Loss; ($0.3) Million in Adjusted EBITDA

 

Atlanta, GA – April 27, 2022 – Streamline Health Solutions, Inc. (“Streamline” or the “Company”) (Nasdaq: STRM), a leading provider of solutions that enable healthcare providers to proactively address revenue leakage and improve financial performance, today announced financial results for the fourth quarter and fiscal year 2021, which ended January 31, 2022.

 

Fiscal Fourth Quarter and Full Year 2021 Financial Results

 

The following financial results have been prepared in accordance with Generally Accepted Accounting Principles (GAAP). Fiscal fourth quarter 2021 financial results represent the consolidation of the Company with Avelead Consulting, LLC (“Avelead”), which was acquired in the fiscal third quarter 2021. Fiscal fourth quarter and full year 2020 (GAAP) financial results do not reflect results from Avelead’s operations.

 

Total revenues for the fourth quarter of fiscal 2021 were $6.0 million, a 100% increase from $3.0 million during the fourth quarter of fiscal 2020. Fiscal year 2021 revenues were $17.4 million, a 54% increase compared to $11.3 million during the fiscal year 2020. The increase in revenue for the quarter and year was the result of higher revenue from SaaS and professional services primarily as a result of the Avelead acquisition. Recurring revenue comprised 64% and 71% of total revenue for the three- and twelve-month periods ended January 31, 2022, respectively, as compared to 70% and 73% for the comparable prior year periods.

 

The Company is focused on the growth of its SaaS solutions. During the fourth quarter of 2021, SaaS revenue grew $1.7 million or 155% compared to the fourth quarter of 2020 and $4.4 million or 119% during the fiscal year ended January 31, 2022, compared to the prior fiscal year.

 

Net loss for the fourth quarter of fiscal 2021 was ($30,000) as compared to a net loss of ($1.2) million during the fourth quarter of fiscal 2020. Net loss for the fourth quarater of fiscal 2021 included $0.1 million of non-routine costs and other income of $2.3 million dollars primarily related to a valuation adjustment arising from the acquisition of Avelead. The Company’s net loss in the fourth quarter of 2021 was also impacted by higher operating cost and amortization cost from the Avelead acquisition.

 

Net loss for fiscal 2021 was ($6.5) million, as compared to net income of $0.3 million for 2020. Net loss for fiscal 2021 included $2.9 million dollars of non-routine costs and other income of $1.9 million dollars; each are primarily related to the acquisition of Avelead. The Company’s net loss in fiscal 2021 was also impacted by higher operating cost and amortization cost from the Avelead acquisition.

 

 

 

 

Adjusted EBITDA for the fourth quarter of fiscal 2021 was a loss of ($0.3) million, compared to an adjusted EBITDA loss of ($0.1) million in the fourth quarter of fiscal 2020. Adjusted EBITDA for the fiscal year ended January 31, 2022, was a loss of ($2.0) million as compared to an adjusted EBITDA loss of ($1.9) million during fiscal 2020.

 

Full Year 2021 Financial Results (Pro Forma)

 

The following financial results are pro forma and have not been prepared in accordance with GAAP. These pro forma financial results represent the consolidation of the Company with Avelead as if Avelead’s operations were fully recognized during both comparable periods.

 

Pro forma, unaudited, consolidated revenue for the fiscal year 2021 was approximately $22.6 million, a 15% increase compared to approximately $19.7 million in fiscal year 2020. SaaS revenue comprised approximately $11.3 million of this total, up 82% from approximately $6.2 million in fiscal year 2020.

 

Management Commentary

 

“Over the last twelve months, we’ve laid a foundation for the future that we believe has positioned our business for high-margin, recurring revenue growth. Between the acquisition of Avelead and the transformation of our eValuator sales and leadership teams, we believe Streamline is in a better position than ever to serve our healthcare partners and help improve their financial performance,” stated Tee Green President and Chief Executive Officer, Streamline Health. “With the operational impacts of the pandemic easing, we are confident that the investments we made in our eValuator salesforce will translate to improved bookings momentum in fiscal 2022. In recent weeks we’ve already announced several new and expanded contracts with major providers across the country, and we expect this activity to accelerate in the coming quarters.”

 

Highlights from the fourth quarter and fiscal year ended January 31, 2022, included:

 

  Revenue for the fourth quarter of fiscal 2021 was $6.0 million;
  SaaS revenue for the fourth quarter of fiscal 2021 grew 155% compared to the fourth quarter of fiscal 2020;
  Net loss for the fourth quarter of fiscal 2021 was $30,000;
  Adjusted EBITDA for the fourth quarter of fiscal 2021 was a loss of $(0.3) million;
  Total bookings (total contract value) for the fourth quarter of fiscal 2021 were $1.3 million;
  Appointed Amy Sebero as Chief Growth Officer, eValuator Solutions and promoted Ben Stilwill to President & CEO, eValuator Solutions, strategic improvements designed to accelerate growth;
  Expanded Avelead leadership team, adding Chief Technology Officer and Senior Vice President of Services.

 

Conference Call

 

The Company will conduct a conference call on Thursday, April 28, 2022 at 9:00 AM ET to review results and provide a corporate update. Interested parties can access the call by joining the live webcast: click here to register. You can also join by phone by dialing 877-407-8291.

 

A replay of the conference call will be available from Thursday, April 28, 2022, at 12:00 PM ET to Thursday, May 5, 2022 at 12:00 PM ET by dialing 877-660-6853 or 201-612-7415 with conference ID 13724715. An online replay of the presentation will also be available for six months following the presentation in the Investor Relations section of the Streamline website, www.streamlinehealth.net.

 

 

 

 

About Streamline Health

 

Streamline Health Solutions, Inc. (Nasdaq: STRM) enables healthcare organizations to proactively address revenue leakage and improve financial performance. We deliver integrated solutions, technology-enabled services and analytics that drive compliant revenue leading to improved financial performance across the enterprise. For more information, visit www.streamlinehealth.net.

Non-GAAP Financial Measures

 

Streamline reports its financial results in accordance with U.S. generally accepted accounting principles (“GAAP”). Streamline’s management also evaluates and makes operating decisions using various other measures. One such measure is adjusted EBITDA, which is a non-GAAP financial measure. Streamline’s management believes that this measure provides useful supplemental information regarding the performance of Streamline’s business operations.

 

Streamline defines “adjusted EBITDA” as net earnings (loss) plus interest expense, tax expense, depreciation and amortization expense of tangible and intangible assets, stock-based compensation expense, significant non-recurring operating expenses, and transactional related expenses including: gains and losses on debt and equity conversions, associate severances and related restructuring expenses, associate inducements, and professional and advisory fees. A table illustrating this measure and reconciling adjusted EBITDA to loss from continuing operations, the most comparable GAAP measure, is included in this press release.

 

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

 

Statements made by Streamline Health Solutions, Inc. that are not historical facts are forward-looking statements that are subject to certain risks, uncertainties and important factors that could cause actual results to differ materially from those reflected in the forward-looking statements included herein. Forward-looking statements contained in this press release include, without limitation, statements regarding the Company’s growth prospects, estimates of backlog, industry trends and market growth, results of investments in sales and marketing, adjusted EBITDA, pro forma financial information, success of future products and related expectations and assumptions. These risks and uncertainties include, but are not limited to, the timing of contract negotiations and execution of contracts and the related timing of the revenue recognition related thereto, the potential cancellation of existing contracts or clients not completing projects included in the backlog, the impact of competitive solutions and pricing, solution demand and market acceptance, new solution development and enhancement of current solutions, key strategic alliances with vendors and channel partners that resell the Company’s solutions, the ability of the Company to control costs, the effects of cost-containment measures implemented by the Company, availability of solutions from third party vendors, the healthcare regulatory environment, potential changes in legislation, regulation and government funding affecting the healthcare industry, healthcare information systems budgets, availability of healthcare information systems trained personnel for implementation of new systems, as well as maintenance of legacy systems, fluctuations in operating results, effects of critical accounting policies and judgments, changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other similar entities, changes in economic, business and market conditions impacting the healthcare industry generally and the markets in which the Company operates and nationally, the Company’s ability to maintain compliance with the terms of its credit facilities, and other risks detailed from time to time in the Streamline Health Solutions, Inc. filings with the U. S. Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s analysis only as of the date hereof. The Company undertakes no obligation to publicly release the results of any revision to these forward-looking statements, which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as required by law.

 

Company Contact

 

Jacob Goldberger

Director, Investor Relations and FP&A

303-887-9625

Jacob.goldberger@streamlinehealth.net

 

 

 

 

STREAMLINE HEALTH SOLUTIONS, INC. AND SUBSIDIARIES

CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS

(rounded to the nearest thousand dollars, except share and per share information)

 

   Three Months Ended   Twelve Months Ended 
   January 31   January 31 
   2022   2021   2022   2021 
Total Revenue  $6,046,000   $2,974,000   $17,379,000   $11,346,000 
Operating expenses:                    
Cost of sales   3,081,000    1,589,000    8,577,000    5,689,000 
Selling, general and administrative expense   3,424,000    1,706,000    11,931,000    8,565,000 
Research and development   1,502,000    987,000    4,782,000    2,933,000 
Non-routine costs   146,000    -    2,856,000    - 
Loss on exit from membership agreement   -    -    -    105,000 
Total operating expenses   8,153,000    4,282,000    28,146,000    17,292,000 
Operating loss   (2,107,000)   (1,308,000)   (10,767,000)   (5,946,000)
Other income (expense):                    
Interest income (expense)   (129,000)   (12,000)   (236,000)   (51,000)
Loss on Extinguishment of Debt   -    -    (43,000)   - 
Other   2,332,000    6,000    1,911,000    (62,000)
PPP Loan Forgiveness   -    -    2,327,000    - 
Loss from continuing operations before income taxes   96,000    (1,314,000)   (6,808,000)   (6,059,000)
Income tax (expense) benefit   (100,000)   (276,000)   (109,000)   1,260,000 
Loss from continuing operations   (4,000)   (1,590,000)   (6,917,000)   (4,799,000)
Income from discontinued operations:                    
Gain on sale of discontinued operations   -    -    -    6,013,000 
Income from discontinued operations   -    51,000    401,000    356,000 
Income tax (expense) benefit from discontinued operations   (26,000)   352,000    (26,000)   (1,274,000)
(Loss) Income from discontinued operations, net of tax   (26,000)   403,000    375,000    5,095,000 
Net (loss) income  $(30,000)  $(1,187,000)  $(6,542,000)  $296,000 
                     
Basic Earnings Per Share:                    
Continuing operations  $-   $(0.05)  $(0.16)  $(0.16)
Discontinued operations   -    0.01    0.01    0.17 
Net (loss) income  $-   $(0.04)  $(0.15)  $0.01 
                     
Weighted average number of common shares - basic   46,764,335    30,528,863    42,815,239    30,152,383 
                     
Diluted Earnings Per Share:                    
Continuing operations  $-   $(0.05)  $(0.16)  $(0.16)
Discontinued operations   -    0.01    0.01    0.17 
Net income  $-   $(0.04)  $(0.15)  $0.01 
                     
Weighted average number of common shares - diluted   47,108,495    31,211,252    43,273,574    30,640,742 

 

 

 

 

STREAMLINE HEALTH SOLUTIONS, INC. AND SUBSIDIARIES

CONSOLIDATED AND CONDENSED BALANCE SHEETS

 

(rounded to the nearest thousand dollars, except share and per share information)

 

   January 31, 
   2022   2021 
ASSETS        
Current assets:          
Cash and cash equivalents  $9,885,000   $2,409,000 
Accounts receivable, net   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   123,000    104,000 
Right-of use asset for operating lease   218,000    391,000 
Capitalized software development costs, net   5,555,000    5,945,000 
Intangible assets, net   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 

 

   January 31, 
   2022   2021 
LIABILITIES AND STOCKHOLDERS’ EQUITY          
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    1,534,000 
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   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 

 

 

 

 

STREAMLINE HEALTH SOLUTIONS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

(rounded to the nearest thousand dollars, except share information)

 

   Fiscal Year 
   2021   2020 
Cash flows from operating activities:          
Net (loss) income  $(6,542,000)  $296,000 
LESS: Income from discontinued operations, net of tax   375,000    5,095,000 
Loss from continuing operations, net of tax   (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 

 

 

 

 

STREAMLINE HEALTH SOLUTIONS, INC. AND SUBSIDIARIES

New Bookings

(Unaudited)

 

   January 31, 2022 
   Three Months Ended   Twelve Months Ended 
Software Licenses   296,000    574,000 
Professional Services   4,352,000    5,362,000 
Audit Services   255,000    890,000 
Maintenance and Support   486,000    929,000 
Software as a Service   2,199,000    6,129,000 
Total 2021 Bookings  $7,588,000   $13,884,000 
           
Total 2020 Bookings  $1,818,000   $7,392,000 

 

 

 

 

STREAMLINE HEALTH SOLUTIONS, INC. AND SUBSIDIARIES

Reconciliation of Loss from Continuing Operations to Non-GAAP Adjusted EBITDA

(rounded to nearest thousand dollars, except share and per shares information)

 

  

Three Months Ended

January 31

  

Twelve Months Ended

January 31

 
   2022   2021   2022   2021 
Loss from continuing operations  $(4,000)  $(1,590,000)  $(6,917,000)  $(4,799,000)
Interest expense   129,000    12,000    236,000    51,000 
Income tax expense   100,000    276,000    109,000    (1,260,000)
Depreciation   15,000    17,000    68,000    64,000 
Amortization of capitalized software development costs   418,000    534,000    1,848,000    1,662,000 
Amortization of intangible assets   560,000    121,000    1,281,000    491,000 
Amortization of other costs   111,000    117,000    449,000    359,000 
EBITDA   1,329,000    (513,000)   (2,926,000)   (3,432,000)
Share-based compensation expense   557,000    400,000    2,216,000    1,403,000 
Non-cash valuation adjustments   (2,268,000)   (9,000)   (1,851,000)   31,000 
Loss on exit of operating lease   -    -    -    105,000 
Non-Routine Costs   146,000    -    2,856,000    - 
Forgiveness of PPP loan and accrued interest   -    -    (2,327,000)   - 
Other Non-Recurring Chargees   (64,000)   -    (48,000)   - 
Loss on early extinguishment of debt   -    -    43,000    - 
Adjusted EBITDA  $(300,000)  $(122,000)  $(2,037,000)  $(1,893,000)
Adjusted EBITDA margin   -5%   -4%   -12%   -17%
                     
Adjusted EBITDA per Diluted Share Reconciliation                    
Loss from continuing operations per common share — diluted  $-   $(0.05)  $(0.16)  $(0.16)
Adjusted EBITDA per adjusted diluted share  $(0.01)  $-   $(0.05)  $(0.06)
                     
                     
Diluted weighted average shares   46,764,335    30,528,863    42,815,239    30,152,383 
Effect of dilutive securities - Stock options, Restricted stock   344,160    682,389    458,335    488,359 
Weighted average shares outstanding - Diluted   47,108,495    31,211,252    43,273,574    30,640,742