Form 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
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þ |
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended April 30, 2010
or
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o |
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number: 0-28132
STREAMLINE HEALTH SOLUTIONS, INC.
(Exact name of registrant as specified in its charter)
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Delaware
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31-1455414 |
(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.) |
10200 Alliance Road, Suite 200
Cincinnati, Ohio 45242-4716
(Address of principal executive offices) (Zip Code)
(513) 794-7100
(Registrants telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes þ No o
Indicate by check mark whether the registrant has submitted electronically and posted on its
corporate Web site, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period
that the registrant was required to submit and post such files). Yes o No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer or a smaller reporting company. See definitions of large
accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act. (Check one):
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Large accelerated filer o
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Accelerated filer o
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Non-accelerated filer o
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Smaller reporting company þ |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). Yes o No þ
Number of shares of Registrants Common Stock ($.01 par value per share) issued and
outstanding, as of June 9, 2010: 9,722,365.
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PART I. |
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FINANCIAL INFORMATION |
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Item 1. |
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CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
STREAMLINE HEALTH SOLUTIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
Assets
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(Unaudited) |
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(Audited) |
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April 30, |
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January 31, |
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2010 |
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2010 |
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Current assets: |
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Cash and cash equivalents |
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$ |
1,026,061 |
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$ |
1,025,173 |
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Accounts receivable, net of allowance for doubtful
accounts of $100,000 |
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1,355,148 |
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1,922,279 |
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Contract receivables |
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525,972 |
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1,182,308 |
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Prepaid hardware and third party software for future delivery |
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145,952 |
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149,281 |
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Prepaid other, including prepaid customer maintenance contracts |
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1,489,020 |
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1,363,332 |
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Deferred income taxes |
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224,000 |
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224,000 |
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Total current assets |
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4,766,153 |
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5,866,373 |
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Property and equipment: |
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Computer equipment |
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3,111,363 |
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2,987,039 |
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Computer software |
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1,845,480 |
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1,816,397 |
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Office furniture, fixtures and equipment |
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747,867 |
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747,867 |
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Leasehold improvements |
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574,257 |
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574,257 |
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6,278,967 |
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6,125,560 |
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Accumulated depreciation and amortization |
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(4,566,281 |
) |
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(4,344,432 |
) |
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1,712,686 |
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1,781,128 |
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Contract receivables, less current portion |
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146,630 |
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146,093 |
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Capitalized software development costs, net of accumulated
amortization of $11,026,998 and $10,411,828, respectively |
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8,130,122 |
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8,049,292 |
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Other, including deferred income taxes of $1,651,000 and $1,651,000, respectively |
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1,677,594 |
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1,681,661 |
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$ |
16,433,185 |
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$ |
17,524,547 |
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See Notes to Condensed Consolidated Financial Statements.
3
STREAMLINE HEALTH SOLUTIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
Liabilities and Stockholders Equity
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(Unaudited) |
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(Audited) |
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April 30, |
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January 31, |
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2010 |
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2010 |
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Current liabilities: |
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Accounts payable |
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$ |
604,390 |
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$ |
887,928 |
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Accrued compensation |
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569,046 |
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559,235 |
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Accrued other expenses |
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413,485 |
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476,504 |
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Current portion of capital lease obligation |
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188,926 |
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249,309 |
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Current portion of deferred revenues |
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4,615,863 |
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4,956,303 |
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Total current liabilities |
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6,391,710 |
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7,129,279 |
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Deferred revenues, less current portion |
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437,992 |
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602,239 |
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Line of credit |
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1,700,000 |
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900,000 |
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Capital lease, less current portion |
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183,637 |
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161,666 |
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Total Liabilities |
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8,713,339 |
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8,793,184 |
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Stockholders equity: |
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Convertible redeemable preferred stock, $.01
par value per share
5,000,000 shares authorized, no shares issued |
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Common stock, $.01 par value per share,
25,000,000 shares
authorized, 9,623,179 and 9,436,824 shares
issued, respectively |
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96,232 |
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94,368 |
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Additional paid in capital |
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36,328,750 |
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36,160,126 |
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Accumulated other comprehensive income |
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5,620 |
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Accumulated deficit |
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(28,705,136 |
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(27,528,751 |
) |
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Total stockholders equity |
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7,719,846 |
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8,731,363 |
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$ |
16,433,185 |
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$ |
17,524,547 |
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See Notes to Condensed Consolidated Financial Statements.
4
STREAMLINE HEALTH SOLUTIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended April 30,
(Unaudited)
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2010 |
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2009 |
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Revenues: |
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Systems sales |
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$ |
150,438 |
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$ |
347,044 |
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Services, maintenance and support |
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2,543,575 |
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2,716,241 |
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Application-hosting services |
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850,003 |
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687,514 |
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Total revenues |
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3,544,016 |
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3,750,799 |
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Operating expenses: |
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Cost of systems sales |
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737,889 |
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665,660 |
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Cost of services, maintenance and support |
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1,382,210 |
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1,064,130 |
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Cost of application-hosting services |
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457,028 |
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431,805 |
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Selling, general and administrative |
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1,697,577 |
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1,214,970 |
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Product research and development |
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470,171 |
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346,247 |
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Total operating expenses |
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4,744,875 |
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3,722,812 |
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Operating profit (loss) |
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(1,200,859 |
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27,987 |
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Other income (expense): |
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Interest expense |
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(22,335 |
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(7,466 |
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Other income |
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51,809 |
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2,820 |
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Earnings (loss) before taxes |
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(1,171,385 |
) |
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23,341 |
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Income taxes |
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(5,000 |
) |
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(7,000 |
) |
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Net earnings (loss) income |
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$ |
(1,176,385 |
) |
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$ |
16,341 |
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Basic net earnings (loss) per common share |
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$ |
(0.13 |
) |
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$ |
0.00 |
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Diluted net earnings (loss) per common share |
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$ |
(0.13 |
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$ |
0.00 |
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Number of shares used in per common share
computations: |
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Basic |
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9,413,367 |
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9,354,782 |
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Diluted |
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9,413,367 |
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9,404,364 |
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See Notes to Condensed Consolidated Financial Statements.
5
STREAMLINE HEALTH SOLUTIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended April 30,
(Unaudited)
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2010 |
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2009 |
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Operating activities: |
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Net earnings (loss) |
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$ |
(1,176,385 |
) |
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$ |
16,341 |
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Adjustments to reconcile net earnings (loss) to net cash
provided by (used in) operating activities: |
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Depreciation and amortization |
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837,019 |
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624,747 |
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Share-based compensation |
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87,446 |
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66,139 |
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Changes in assets and liabilities: |
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Accounts and contract receivables |
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1,222,930 |
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|
46,072 |
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Other current assets |
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(127,979 |
) |
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(276,835 |
) |
Accounts payable and accrued expenses |
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(336,746 |
) |
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306,358 |
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Deferred revenues |
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(504,687 |
) |
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(1,651,917 |
) |
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Net cash provided by (used in) operating activities |
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1,598 |
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(869,095 |
) |
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Investing activities: |
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Purchases of property and equipment |
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(153,407 |
) |
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(189,394 |
) |
Capitalization of software development costs |
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(696,000 |
) |
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(949,000 |
) |
Other |
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(34,344 |
) |
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(12,641 |
) |
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Net cash (used in) investing activities |
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(883,751 |
) |
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(1,151,035 |
) |
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Financing activities: |
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Proceeds from stock purchase plan and exercise of stock
options |
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83,041 |
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Net change in bank line of credit |
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800,000 |
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Net cash provided by financing activities |
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883,041 |
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Increase (decrease) in cash and cash equivalents |
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888 |
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(2,020,130 |
) |
Cash and cash equivalents at beginning of period |
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1,025,173 |
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3,128,801 |
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Cash and cash equivalents at end of period |
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$ |
1,026,061 |
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$ |
1,108,671 |
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Supplemental cash flow disclosures: |
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Interest paid |
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$ |
13,276 |
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$ |
7,444 |
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Income taxes paid |
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$ |
8,994 |
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$ |
9,686 |
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See Notes to Condensed Consolidated Financial Statements.
6
STREAMLINE HEALTH SOLUTIONS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE A BASIS OF PRESENTATION
The accompanying unaudited Condensed Consolidated Financial Statements have been prepared by
Streamline Health Solutions, Inc. (Streamline Health® or the Company), pursuant to the
rules and regulations applicable to quarterly reports on Form 10-Q of the U. S. Securities and
Exchange Commission. Certain information and note disclosures normally included in annual
financial statements prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to those rules and regulations, although the Company believes that
the disclosures made are adequate to make the information not misleading. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation of the Condensed Consolidated Financial Statements have been included. These
Condensed Consolidated Financial Statements should be read in conjunction with the financial
statements and notes thereto included in the most recent Streamline Health Solutions, Inc. Annual
Report on Form 10-K, Commission File Number 0-28132. Operating results for the three months ended
April 30, 2010, are not necessarily indicative of the results that may be expected for the fiscal
year ending January 31, 2011.
NOTE B SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A summary of the Companys significant accounting policies is presented beginning on page 45 of its
fiscal year 2010 Annual Report on Form 10-K. Users of financial information for interim periods
are encouraged to refer to the footnotes contained in the Annual Report when reviewing interim
financial results.
Useful Lives of Capitalized Software Development Costs
In the fourth quarter of fiscal 2009 the Company made its fifth generation software, accessANYware
5.0, generally available. In the first quarter of fiscal 2010, subsequent to the release, the
Company completed a review by product of the estimated useful lives of its capitalized software
development costs. After reviewing strategic plans, analyzing the historical useful life of the
software products, forecasting product life cycles and demand expectations, the Company assigned a
five year estimated useful life for costs capitalized for accessANYware 5.0, and revised the
estimated useful lives of certain other products from three years to five years.
The product life cycle for accessANYware versions prior to the latest version 5.0, have lasted
significantly longer than five years. Historical product and customer data shows that many
customers remain on the same primary version for five years or more after purchase, or product
support and development continue for five years or more. The Company expects accessANYware 5.0 to
also have a five year or longer product life cycle based on this historical data, and the estimated
product development lifecycle. In addition, the useful life of the unamortized balance of
development costs for prior accessANYware versions should also reflect
an approximate five year life from their documented general release dates. The Company intends to
actively sell and support these products for a minimum five years while version 5.0 is being rolled
out. This same policy will be applied to FolderView as it is generally a primary add-on component
to accessANYware, and has had a similar historical life cycle. Upon Company review of the revenue
projections, the estimated life cycle of accessANYware 5.0, and the remaining life cycle for prior
accessANYware and FolderView releases, a five year estimated life is reasonable and proper.
7
The Company accounted for the change in useful life as a change in accounting estimate which is
accounted for on a prospective basis effective February 1, 2010. For the three months ended April
30, 2010 the change resulted in a reduction of amortization expense of approximately $250,000, an
increase in income from continuing operations and net income of $250,000 and a decrease in basic
and diluted loss per share of $0.02. Amortization expense for capitalized software development
costs is included in cost of system sales in the consolidated statement of operations.
NOTE C EQUITY AWARDS
Compensation expense is recognized over the requisite service period for awards of equity
instruments to employees based on the grant-date fair value of those awards expected to ultimately
vest (with limited exceptions). Forfeitures are estimated on the date of the grant and revised if
actual or expected forfeiture activity differs materially from original estimates.
During the first three months of the current fiscal year, the Company granted 130,000 options with
a weighted average exercise price of $1.99 per share. During the same period 2,000 options expired
with an average exercise price of $1.50 per share and 67,000 options were exercised under all plans
at an average exercise price of $1.24 per share.
During the first three months of the current fiscal year, the Company granted restricted stock
shares subject to the 2005 Incentive Compensation Plan as amended, to certain independent members
of the Board of Directors and employees. The shares have an approximate one-year vesting period. A
total of 119,000 shares were issued with a weighted average fair value of $2.01 per share.
The fair value of each option grant during the quarter ended April 30, 2010 was estimated at the
date of the grants using a Black-Scholes option pricing model with the following weighted average
assumptions: risk-free interest rate of 2.50%, a dividend yield of zero percent; and a current
weighted average volatility factor of the expected market price of Streamline Healths Common Stock
of 0.545 in 2010. The weighted average expected life of stock options are five years and have a
forfeiture rate of zero.
NOTE D EARNINGS PER SHARE
The basic earnings (loss) per common share are calculated using the weighted average number of
common shares outstanding during the period.
The fiscal 2010 and 2009 diluted net (loss) per common share calculation, excludes the effect of
the common stock equivalents (stock options and restricted stock), as the inclusion thereof would
be antidilutive. The Company had 699,000 and 508,000 equity award shares outstanding at April 30,
2010 and April 30, 2009, respectively that were not included in the diluted net (loss) per share
calculation, as the inclusion thereof would be antidilutive.
8
NOTE E CONTRACTUAL OBLIGATIONS
The following table details the remaining obligations, by fiscal year, as of the end of the
quarter. There are no other contractual obligations beyond fiscal year 2013.
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Total |
|
|
2010 |
|
|
2011 |
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2012 |
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2013 |
|
Line of credit |
|
$ |
1,700,000 |
|
|
|
|
|
|
|
|
|
|
|
1,700,000 |
|
|
|
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|
Operating leases |
|
|
294,692 |
|
|
|
227,777 |
|
|
|
43,125 |
|
|
|
19,032 |
|
|
|
4,758 |
|
Capital leases |
|
|
422,532 |
|
|
|
172,854 |
|
|
|
249,678 |
|
|
|
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Total |
|
$ |
2,417,224 |
|
|
|
400,631 |
|
|
|
292,803 |
|
|
|
1,719,032 |
|
|
|
4,758 |
|
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NOTE F DEBT
On October 21, 2009, the Company entered into an amended and restated revolving note with Fifth
Third Bank, Cincinnati, OH. The terms of the loan remain the same as set forth in the revolving
note entered into on July 31, 2008, as amended on January 6, 2009, except as follows: (i) the
maximum principal amount that can be borrowed was increased to $2,750,000 from the prior maximum
amount of $2,000,000; (ii) the maturity date of the loan has been extended to October 1, 2011 from
August 1, 2010; and (iii) the interest rate on the outstanding principal balance will accrue at an
annual floating rate of interest equal to the Adjusted Libor Rate (as defined in the revolving
note) plus 3.25%. The interest rate on the note was 3.50% at April 30, 2010.
In connection with the entering into of the revised revolving note, the Company also entered into
an amended and restated continuing guaranty agreement. The terms of the continuing guaranty
agreement remain the same as set forth in the guaranty agreement entered into on July 31, 2008, as
amended on January 6, 2009, except that the covenant that formerly required the Company to maintain
certain levels of minimum tangible net worth has been eliminated.
The note also continues to be secured by a first lien on all of the assets of the Company pursuant
to security agreements entered into by the Company.
The Company was in compliance with all of the covenants at April 30, 2010. The Company pays a
commitment fee on the unused portion of the facility of .06%. The Company had outstanding
borrowings of $1,700,000 under this revolving loan as of April 30, 2010.
9
NOTE G FOREIGN CURRENCY
Foreign currency hedge instruments are from time to time used to partially offset its business
exposure to foreign exchange risk of the Canadian dollar for the Companys transactions with a
current Canadian customer. The Company may enter into foreign currency forward and option contracts
to offset some of the foreign exchange risk of expected future cash flows on certain forecasted
revenue and cost of sales, and on certain existing accounts receivable and payable. However, the
Company may choose not to hedge certain foreign exchange exposures for a variety of reasons,
including but not limited to immateriality. There were no outstanding foreign currency forward
contracts at April 30, 2010.
10
|
|
|
Item 2. |
|
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS |
In addition to historical information contained herein, this Report on Form 10-Q contains
forward-looking statements relating to the Companys plans, strategies, expectations, intentions,
etc. and are made pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. The forward-looking statements contained herein are no guarantee of future
performance and are subject to certain risks and uncertainties that are difficult to predict and
actual results could differ materially from those reflected in the forward-looking statements.
These risks and uncertainties include, but are not limited to, the timing of contract negotiations
and executions 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 products and pricing, product demand and market acceptance, new product
development, key strategic alliances with vendors that resell Streamline Health solutions, the
ability of Streamline Health to control costs, availability of products obtained from third-party
vendors, the healthcare regulatory environment, potential changes in legislation, regulatory and
government funding affecting the healthcare industry, healthcare information system budgets,
availability of healthcare information systems trained personnel for implementation of new systems,
as well as maintenance of legacy systems, fluctuations in operating results and other risk factors
that might cause such differences including those discussed herein, and including, 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, the markets in which
the Company operates and nationally, and the Companys ability to maintain compliance with the
terms of its credit facilities, but not limited to, discussions in the most recent Form 10-K, Part
I, Item 1 Business, Item 1A Risk Factors, Part II, Item 7 Managements Discussion and Analysis
of Financial Condition and Results of Operations and Item 8 Financial Statements and Supplemental
Data. In addition, other written or oral statements that constitute forward-looking statements
may be made by or on behalf of the Company. Readers are cautioned not to place undue reliance on
these forward-looking statements, which reflect managements analysis only as of the date thereof.
The Registrant undertakes no obligation to publicly revise these forward-looking statements, to
reflect events or circumstances that arise after the date hereof. Readers should carefully review
the risk factors described in this and other documents Streamline Health Solutions, Inc. files from
time to time with the Securities and Exchange Commission, including future Quarterly Reports on
Form 10-Q and any Current Reports on Form 8-K.
Streamline Healths discussion and analysis of its financial condition and results of operations
are based upon its consolidated financial statements, which have been prepared in accordance with
accounting principles generally accepted in the United States. The preparation of these financial
statements requires Streamline Health to make estimates and judgments that affect the reported
amounts of assets, liabilities, revenues, and expenses, and related disclosure of contingent
liabilities. On an ongoing basis, Streamline Health evaluates its estimates, including those
related to product revenues, bad debts, capitalized software development costs, income taxes,
support contracts, contingencies, and litigation. Streamline Health bases its estimates on
historical experience and on various other assumptions that Streamline Health believes are
reasonable under the circumstances, the results of which form the basis for making judgments about
the carrying values of assets and liabilities and revenue and expense recognition. Actual results
may differ from these estimates under different assumptions or conditions.
11
General
Founded in 1989, Streamline Health Solutions, Inc. (Streamline Health® or the Company) is a
healthcare information technology company, which is focused on developing and licensing proprietary
software solutions that improve document-centric information flows and complement and enhance
existing transaction-centric hospital healthcare information systems. The Company sells its
products in North America through its direct sales force, and its reseller partnerships. The
Company also sells to direct remarketers, hospitals, clinical and ambulatory services.
Document imaging and workflow management technologies like those provided by Streamline Health are
essential elements of a complete Electronic Health Record (EHR) because they allow for the storage
of unstructured data. Unstructured data may consist of patient record elements other than discrete
data, such as hand written physician or nursing notes and physician orders, photographs, audio,
video, and outside correspondence. The Companys systems and services allow critical information to
be accessed, and eventually delivered to the caregiver at the point of patient care. The Companys
systems and services can also help a providers existing system to achieve meaningful use under
the HITECH provisions of the American Recovery and Reinvestment Act of 2009 (ARRA). These benefits
encourage physicians to adopt the Companys solutions because of convenient access to documents not
typically available in data-centric clinical information systems.
Streamline Healths solutions create a permanent document-based repository of historical health information that is
complementary and can be seamlessly integrated with existing disparate clinical, financial and administrative
information systems, providing convenient electronic access to all forms of patient information from any location,
including secure web-based access. These integrated solutions allow providers and administrators to link existing
systems with documents, which can dramatically improve the availability of patient information while decreasing direct
costs associated with document retrieval, work-in-process, chart processing, document retention, and archiving.
Healthcare providers have significant need to simultaneously reduce costs and enhance the level of
patient care in the current healthcare environment. Hospitals and other healthcare providers are
requiring comprehensive, cost-effective information systems that deliver rapid access to fully
updated and complete patient information. Streamline Healths strategy is to remain a leader in
document management and workflow technologies that supplement the existing Clinical Information
System, and provide cost savings and enhanced safety through improved access to critical patient
data.
The Company operates primarily in one segment as a provider of health information technology
solutions that streamline healthcare information flows within a healthcare facility. The financial
information required by Item 101(b) of Regulation S-K is contained in Item 6 Selected Financial
Information of the Companys January 31, 2010 Form 10-K.
12
Executive Overview
In 2009, the Company successfully made its fifth-generation accessANYware architecture
generally-available. This development effort included the consolidation of technology platforms
onto the Microsoft.NET platform, and also the internationalization of the software to reach
international markets. This internationalization specifically included French Canadian language
capabilities as part of Streamline Healths agreements with the Centre hospitalier de lUniversité
de Montréal (CHUM), the McGill University Health Centre (MUHC), and LAgence de la santé et des
sociaux de Montreal (lAgence) via our distribution partner Telus Health. Prior versions of
accessANYware are still available for sale, and the Company continues to provide full product
support for prior versions, as we anticipate several years before all existing accessANYware
customers complete a transition to accessANYware 5.0. The Company will roll out accessANYware 5.0
over the next several years. We have had positive reception to the product at the installed
locations in Canada, and the Companys sales team is actively informing new and existing customers
of its benefits.
In 2009, the Company established a BPM consulting services division to take advantage of what the
Company believes is a significant growth opportunity to provide customized document workflow
solutions and Business Process Management. Many industry consultants, including Gartner Research,
believe healthcare organizations face an ever increasing demand to improve business processes and
reduce costs, especially in the current economic climate. Business Process Management is a proven
discipline which allows organizations to improve their business operations by identifying,
automating and optimizing existing labor-intensive business processes that cause bottlenecks and
inefficiencies. In February of 2010, the company entered into an agreement with the Childrens
National Medical Center to provide BPM services. In addition to this strategic customer, the
Company has had a positive response from other customers on this line of product. The Company
views this product offering as a potential driver of significant growth.
Streamline Health experienced a growth in hosting services contracts over the past two fiscal
years. Many organizations in the current health information technology (HIT) marketplace are
shifting from licensed local software to hosted software solutions. ARRA has provisions which
increase the financial benefits to the hospitals who achieve meaningful use of HIT in the near
term. As capital markets have been tight, it is often advantageous for healthcare providers to
explore hosted solutions which have limited initial capital outlays. Coinciding with
the release of accessANYware 5.0, and market climates observed, the Company has made a dramatic
shift in strategy away from its traditional model of licensed, locally installed software, towards
our hosted delivery model. A desirable byproduct of this dramatic shift to the hosted model is much
better visibility for future revenue streams based on backlog fulfillment from hosted contracts
over typical five year or more contract periods; as well as a high percentage of contract renewals
after the initial term. The Company believes this is a key to our long term success and return on
investment for the Companys stockholders. In the near term, managements intention is to measure
its success by revenue and revenue backlog, and level of EBITDA, rather than net profits.
13
Signed Agreements Backlog
At April 30, 2010 Streamline Health has master agreements and purchase orders from customers and
remarketing partners for systems and related services (excluding support and maintenance, and
transaction-based application-hosting revenues), which have not been delivered or installed and if
fully performed, would generate future revenues of approximately $4,240,000 compared with
$6,854,000 at April 30, 2009. The related systems and services are expected to be delivered over
the next two to three years. The decrease in the backlog is the result of fewer contracts entered
into during the last three quarters of fiscal 2009, continuing into the first quarter of 2010. The
$188,000 Streamline Health software component of this backlog declined from the prior year of
$2,022,000 primarily due to the recognition of the revenue in the fourth quarter of fiscal 2009,
for the delivery of accessANYware 5.0 to a Canadian customer. At April 30, 2010, Streamline Health
had maintenance agreements or purchase orders, from customers and remarketing partners, which if
fully performed, will generate future revenues of approximately $5,078,000 compared with $5,561,000
at April 30, 2009, through their respective renewal dates in fiscal year 2010 and 2011. The
decrease results primarily from the recognition in fiscal 2009 of maintenance revenue from one long
term maintenance contract for one large customer. At April 30, 2010, Streamline Health has entered
into hosting agreements, which are expected to generate revenues in excess of $9,310,000 through
their respective renewal dates in fiscal years 2010 through 2015. The application-hosting backlog
decreased from the $11,890,000 at April 30, 2009, due to the decreased volume of new hosting
business, and continued recognition of revenues from contracts signed in fiscal 2008.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April 30, |
|
|
January 31, |
|
|
April 30, |
|
|
|
2010 |
|
|
2010 |
|
|
2009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Streamline Health Software Licenses |
|
$ |
188,000 |
|
|
$ |
201,000 |
|
|
$ |
2,022,000 |
|
Custom Software |
|
|
107,000 |
|
|
|
105,000 |
|
|
|
138,000 |
|
Hardware and Third Party Software |
|
|
145,000 |
|
|
|
171,000 |
|
|
|
524,000 |
|
Professional Services |
|
|
3,800,000 |
|
|
|
3,977,000 |
|
|
|
4,170,000 |
|
Application Hosting Services |
|
|
9,310,000 |
|
|
|
9,414,000 |
|
|
|
11,890,000 |
|
Recurring Maintenance |
|
|
5,078,000 |
|
|
|
5,987,000 |
|
|
|
5,561,000 |
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
18,628,000 |
|
|
$ |
19,855,000 |
|
|
$ |
24,305,000 |
|
|
|
|
|
|
|
|
|
|
|
Streamline Health believes a large percentage of its future revenues will come from remarketing
agreements with GE Healthcare, and other HIS related vendors, such as the Telus Health agreement
that was entered into in December 2007. Streamline Health continues to actively pursue remarketing
agreements with other companies.
For descriptions of contracts signed in prior years, please see the Contracts Overview in the
Item 1. Business section of the January 31, 2010 form 10-K. All contracts listed in the 10-K
remain in effect at April 30, 2010.
In February 2010, Streamline Health entered into a hosted services agreement to provide its Audit
Integrity Manager Workflow solution, along with the option to buy additional custom workflows as
needed, to Childrens National Medical Center in Washington D.C. The solution
will expedite the clients third-party reimbursement and cash flow processes, and aid the clients
compliance processes.
14
In March 2010, Streamline Health entered into a purchase agreement to provide its integrated
document management and workflow solution to East Orange General Hospital, located in East Orange,
New Jersey. Streamline Health will implement its enterprise document workflow solution integrated
into the hospitals GE Centricity electronic medical records solution. The total value of the
contract is in excess of $850,000. The solution allows for a single electronic view to the entire
patient record, help improve physician satisfaction and enhance efficiency, and achieve meaningful
adoption throughout the enterprise.
The
commencement of revenue recognition varies depending on the size and
complexity of the system,
the implementation schedule requested by the customer, and usage by customers of the
application-hosting services. Therefore, it is difficult for the Company to accurately predict the
revenue it expects to achieve in any particular period. Streamline Healths master agreements
generally provide that the customer may terminate its agreement upon a material breach by
Streamline Health, or may delay certain aspects of the installation. There can be no assurance
that a customer will not cancel all or any portion of a master agreement or delay installations. A
termination or installation delay of one or more phases of an agreement, or the failure of
Streamline Health to procure additional agreements, could have a material adverse effect on
Streamline Healths business, financial condition, and results of operations.
Quarterly Operating Results
The Company
recognized revenues in the first quarter of fiscal 2010 of approximately $3.5 million, compared to $3.8 million in the comparable prior
quarter. The revenues recognized are derived primarily from recurring revenues recognized from
hosted and maintenance contracts. The Company incurred an operating loss of approximately $1.2
million in the first quarter 2010, compared to operating profit of $28,000 in the first quarter
fiscal 2009. Operating expenses were $4.7 million, compared to $3.7 million in the comparable
prior quarter. The increase in operating expenses was due to several factors including an increase
in amortization of capitalized software development costs. This increase in amortization expense
is primarily due to the general release of accessANYware 5.0. In addition to amortization expense,
the company increased investments made in professional services
staffing, sales initiatives, professional fees, and increased compensation expenses.
The Companys revenues from proprietary systems sales have varied, and may continue to vary,
significantly from quarter-to-quarter because of the volume and timing of systems sales and
delivery. Professional services revenues also fluctuate from quarter-to-quarter because of the
timing of the implementation services, project management, and
timing of the recognition of revenues under generally accepted accounting principles. Conversely,
revenues from hosted systems sales, and maintenance services do not fluctuate significantly from
quarter-to-quarter, but have been increasing, on an annual basis, as the number of customers
increase. Substantial portions of the operating expenses are fixed; therefore operating profits are
expected to vary depending on the factors that drive fluctuations in revenues and the mix of
proprietary versus hosted contracts sold.
15
Quarterly Statement of Operations(1)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended April 30, |
|
|
|
2010 |
|
|
2009 |
|
Systems sales |
|
|
4.2 |
% |
|
|
9.3 |
% |
Services, maintenance and support |
|
|
71.8 |
|
|
|
72.4 |
|
Application-hosting services |
|
|
24.0 |
|
|
|
18.3 |
|
|
|
|
|
|
|
|
Total revenues |
|
|
100.0 |
|
|
|
100.0 |
|
Cost of sales |
|
|
72.7 |
|
|
|
57.6 |
|
Selling, general and administrative |
|
|
47.9 |
|
|
|
32.4 |
|
Product research and development |
|
|
13.3 |
|
|
|
9.2 |
|
|
|
|
|
|
|
|
Total operating expenses |
|
|
133.9 |
|
|
|
99.2 |
|
|
|
|
|
|
|
|
Operating profit (loss) |
|
|
(33.9 |
) |
|
|
0.8 |
|
Other income (expense), net |
|
|
0.8 |
|
|
|
(0.4 |
) |
Income tax net benefit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings(loss) |
|
|
(33.1 |
)% |
|
|
0.4 |
% |
|
|
|
|
|
|
|
Cost of systems sales |
|
|
490.5 |
% |
|
|
191.8 |
% |
|
|
|
|
|
|
|
Cost of services, maintenance and
support |
|
|
54.3 |
% |
|
|
39.2 |
% |
|
|
|
|
|
|
|
Cost of application-hosting services |
|
|
53.8 |
% |
|
|
62.8 |
% |
|
|
|
|
|
|
|
|
|
|
(1) |
|
Because a significant percentage of the operating costs are incurred at levels that are
not necessarily correlated with revenue levels, a variation in the timing of systems sales
and installations and the resulting revenue recognition can cause significant variations in
operating results. As a result, period-to-period comparisons may not be meaningful with
respect to the past operations nor are they necessarily indicative of the future operations
of Streamline Health in the near or long-term. The data in the table is presented solely
for the purpose of reflecting the relationship of various operating elements to revenues
for the periods indicated. |
Revenues
Revenues consisted of the following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended |
|
|
|
|
|
|
|
|
|
April 30, |
|
|
Dollars |
|
|
Percent |
|
|
|
2010 |
|
|
2009 |
|
|
Change |
|
|
Change |
|
Proprietary software (1) |
|
$ |
28 |
|
|
$ |
43 |
|
|
$ |
(15 |
) |
|
|
(35 |
%) |
Hardware & third party software (1) |
|
|
122 |
|
|
|
304 |
|
|
|
(182 |
) |
|
|
(60 |
%) |
Professional services (2) |
|
|
659 |
|
|
|
802 |
|
|
|
(143 |
) |
|
|
(18 |
%) |
Maintenance & support (2) |
|
|
1,885 |
|
|
|
1,914 |
|
|
|
(29 |
) |
|
|
(2 |
%) |
Application hosting services |
|
|
850 |
|
|
|
688 |
|
|
|
162 |
|
|
|
24 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenues |
|
$ |
3,544 |
|
|
$ |
3,751 |
|
|
$ |
(207 |
) |
|
|
(6 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Proprietary software and hardware are the components of the system sales line item |
|
(2) |
|
Professional services and maintenance & support are the components of the service,
maintenance and support line item. BPM consulting
services are included in professional services. |
Revenues for the three months ended April 30, 2010, were $3,544,000 compared with $3,751,000
in the comparable quarter of fiscal 2009. The quarter-over-quarter decrease was a result of a
decrease in professional services and hardware and third-party software sales. These decreases are
primarily attributable to fewer new proprietary and hosted contract sales during fiscal 2009 and
the first quarter of fiscal 2010 that would generate professional services, hardware, and
third-party software revenues in the implementation phases, as well
as project delays by clients. The decrease in system sales was offset
by an approximate $162,000 increase in application hosting revenues due to the continued
recognition of backlog revenues from hosted contracts.
16
Operating Expenses
Operating expenses consisted of the following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended |
|
|
|
|
|
|
|
|
|
April 30, |
|
|
Dollars |
|
|
Percent |
|
|
|
2010 |
|
|
2009 |
|
|
Change |
|
|
Change |
|
Cost of system sales |
|
$ |
738 |
|
|
$ |
666 |
|
|
$ |
72 |
|
|
|
11 |
% |
Cost of services, maintenance and
support |
|
|
1,382 |
|
|
|
1,064 |
|
|
|
318 |
|
|
|
30 |
% |
Cost of application hosting |
|
|
457 |
|
|
|
432 |
|
|
|
25 |
|
|
|
6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cost of sales |
|
$ |
2,577 |
|
|
$ |
2,162 |
|
|
$ |
415 |
|
|
|
19 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general, and administrative |
|
|
1,698 |
|
|
|
1,215 |
|
|
|
483 |
|
|
|
40 |
% |
Research and development |
|
|
470 |
|
|
|
346 |
|
|
|
124 |
|
|
|
36 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses |
|
$ |
4,745 |
|
|
$ |
3,723 |
|
|
$ |
1,022 |
|
|
|
28 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of systems sales includes amortization of capitalized software expenditures, royalties,
and the cost of third-party hardware and software. The increase in the cost of systems sales is
primarily the result of the increases in amortization due to the general release of accessANYware
5.0, and is partially offset by the change in accounting estimate relative to the amortization of
capitalized software development costs. Additionally, this was offset by reduced hardware and third party
software sales and the associated direct costs.
Cost of services, maintenance and support includes compensation and benefits for support and
professional services personnel and the cost of third party maintenance contracts. The increase is
primarily due to the increased investment in professional services staff and support for continued
growth of the BPM services.
The cost of application-hosting services operations is relatively fixed, but subject to annual
increases for the goods and services it requires. The increase is primarily attributable to
increased depreciation and third party license and maintenance expenses as a result of the growing
hosting center operations, and typical annual cost increases.
Selling, General and Administrative Expense
Selling, General and Administrative expenses consist primarily of compensation and related benefits
and reimbursable travel and living expenses related to the Companys sales, marketing and
administrative personnel; advertising and marketing expenses, including trade shows and similar
type sales and marketing expenses; and general corporate expenses, including occupancy costs. This
increase over the respective comparable prior periods is due to the investment in sales
initiatives; increases in salary, commissions, and other compensation expenses; and professional
fees relating to increased compliance and administration costs.
17
Product Research and Development Expense
Product research and development expenses consist primarily of compensation and related benefits;
the use of independent contractors for specific near-term development projects; and an allocated
portion of general overhead costs, including occupancy. Research and development expenses
increased to $470,000 from $346,000 from the prior comparable quarter, primarily due
to a decrease in costs eligible for capitalization. The Company capitalized $696,000 and $949,000.
Therefore, total research and development expenditures were
$1,166,000 and $1,295,000 in the first
quarter of fiscal 2010 and 2009, respectively when considering both capitalized software
development costs and non-capitalizable research and development expense. This decrease of $129,000
is the result of the reduced resources necessary for research and development efforts, subsequent
to the release of accessANYware 5.0 in the fourth quarter of fiscal 2009.
Operating Profit (loss)
The Company incurred an operating loss of $1,201,000 in the first quarter of fiscal 2010, compared
to an operating profit of $28,000 in the first quarter of fiscal 2009. Decreased revenues from
professional service fees, and increased investment in sales initiatives, increased compensation,
and increased expense relating to amortization of capitalized software development costs,
contributed to the loss for the quarter.
Other Income (Expense)
Interest expense in first quarter of fiscal 2010 was $22,000 compared to $7,000 in the comparable
prior quarter. Interest expense was related to the working capital facility interest and fees,
along with imputed interest for the capital lease. Interest expense from the working capital
facility was $11,000 in the first quarter of fiscal 2010 compared with $7,000 in the comparable
prior quarter. The increase in the interest expense results primarily from a larger average
balance outstanding than in the prior comparable quarter. Interest expense from the capital lease
was $12,000 in the first quarter of fiscal 2010 compared with $0 in the comparable quarter. The
capital lease was entered into in January 2010.
Provision for Income Taxes
The tax provision in the first quarter of fiscal 2010 and 2009 is comprised of primarily state and
local provisions.
Net Earnings (loss)
The Company incurred a net loss of $1,176,000 in the first quarter of fiscal 2010, compared to net
earnings of $16,000 in the first quarter of fiscal 2009. Decreased revenues from professional
service fees, and increased investment in sales initiatives, compensation, and increased expense
relating to amortization of capitalized software development costs contributed to the loss for the quarter.
18
Liquidity and Capital Resources
Traditionally, Streamline Health has funded its operations, working capital needs, and capital
expenditures primarily from a combination of cash generated by operations, bank loans, and
revolving lines of credit. Streamline Healths liquidity is dependent upon numerous factors
including: (i) the timing and amount of revenues and collection of contractual amounts from
customers, (ii) amounts invested in research and development, capital expenditures, and (iii) the
level of operating expenses, all of which can vary significantly from quarter-to-quarter.
Streamline Health has no significant obligations for capital resources, other than the $1,700,000
borrowed under its bank line of credit at April 30, 2010, and the non-cancelable operating leases
of approximately $295,000 payable over the next four years, and $423,000 for capital leases.
Capital expenditures for property and equipment in 2010 are not expected to exceed $1,000,000.
Net cash provided by operations in fiscal 2009 was $1,600, an increase of approximately $872,000
from the prior comparable quarter. The increase was primarily due to a decrease in accounts and
contracts receivable, including current and long-term portions, as a result of the decrease in the
sales of customer contracts where revenue was recorded prior to the associated contractual customer
invoicing milestones, and significant cash collections during the quarter. This is coupled with a
decrease in hardware and third party software sales, and the decrease in deferred revenues which
reflects the revenue recognition of prepaid maintenance contracts during fiscal 2010, net of any
additional payments received in 2010, along with the timing of any payments received.
Net cash used in investing activities was $884,000, a decrease of $267,000 from the prior
comparable quarter. This decrease was primarily due to the decrease in capitalized software
development costs, net, which is the result of certain projects reaching technological feasibility
for which development cost began being capitalized relating to the development of the Companys
core solutions and the expanded work flow module development.
The net cash provided by financing activities is primarily the net change shown for the line of
credit, which represents total borrowings under the line.
At January 31, 2010, Streamline Health had cash on hand of $1,026,000. Streamline Health believes
that its present cash position, combined with cash generation currently anticipated from
operations, the availability of the revolving credit facility, and possible access to new funding
sources will be sufficient to meet anticipated cash requirements for the next twelve months.
However, continued expansion of the Company will require additional resources. The Company may need
to incur debt, obtain an additional infusion of capital, or a combination of both, depending on the
extent of the expansion of the Company and future revenues and expenses. However, there can be no
assurance Streamline Health will be able to do so. The Company is evaluating financing options
available to the Company.
19
Notwithstanding the current levels of revenues and expenses, for the foreseeable future, Streamline
Health will need to continually assess its revenue prospects compared to its then current
expenditure levels. If it does not appear likely that revenues will increase, it may be necessary
to reduce operating expenses or raise cash through additional borrowings, the sale of assets, or
other equity financing. Certain of these actions will require current lender approval.
However, there can be no assurance Streamline Health will be successful in any of these efforts.
If it is necessary to significantly reduce operating expenses, this could have an adverse effect on
future operating performance.
To date, inflation has not had a material impact on Streamline Healths revenues or expenses.
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Item 3. |
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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
For quantitative and qualitative disclosures about market risk, see Item 7A, Quantitative and
Qualitative Disclosures About Market Risk, of the annual report on Form 10-K for the fiscal year
ended January 31, 2010. The Companys exposures to market risk have not changed materially since
January 31, 2010.
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Item 4T. |
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CONTROLS AND PROCEDURES |
Streamline Health maintains disclosure controls and procedures that are designed to ensure that
there is reasonable assurance that the information required to be disclosed in Streamline Healths
Exchange Act reports is recorded, processed, summarized and reported within the time periods
specified in the SECs rules and forms, and that such information is accumulated and communicated
to Streamline Healths management, including its Chief Executive Officer and Chief Financial
Officer, as appropriate, to allow timely decisions regarding required disclosure based on the
definition of disclosure controls and procedures in Exchange Act Rules 13a-15(e) and 15d-15(e).
In designing and evaluating the disclosure controls and procedures, management recognizes that any
controls and procedures, no matter how well designed and operated, can provide only reasonable
assurance of achieving the desired control objectives, and management necessarily was required to
apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
As of the end of the period covered by this report, an evaluation was performed under the
supervision and with the participation of Streamline Healths senior management, including the
Chief Executive Officer and Interim Chief Financial Officer, of the effectiveness of the design and
operation of Streamline Healths disclosure controls and procedures to provide reasonable assurance
of achieving the desired objectives of the disclosure controls and procedures. Based on that
evaluation, Streamline Healths management, including the Chief Executive and Interim Chief
Financial Officer, concluded that there is reasonable assurance that Streamline Healths disclosure
controls and procedures were effective as of the end of the period covered by this report and there
have been no changes in Streamline Healths internal control or in the other controls during the
quarter ended April 30, 2010 that could materially affect, or is reasonably likely to materially
affect, internal controls over financial reporting.
20
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Part II. |
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OTHER INFORMATION |
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Item 1. |
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LEGAL PROCEEDINGS |
Streamline Health is, from time to time, a party to various legal proceedings and claims, which
arise, in the ordinary course of business. Streamline Health is not aware of any legal matters
that
will have a material adverse effect on Streamline Healths consolidated results of operations or
consolidated financial position.
In addition to the other information set forth in this report and the risk factors set forth below,
you should carefully consider the risk factors discussed in Part I, Item 1A, Risk Factors in the
Annual Report on Form 10-K for the fiscal year ended January 31, 2010. The risk factors in the
Annual Report have not materially changed since January 31, 2010, but are not the only risks facing
the Company. In addition, risks and uncertainties not currently known to the Company or that the
Company currently deems to be immaterial also may materially adversely affect the Company, its
financial condition and/or operating results.
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Item 3. |
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DEFAULTS UPON SENIOR SECURITIES |
The Company was not in default of its existing credit facility at April 30, 2010.
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3.1 |
(a) |
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Certificate of Incorporation of Streamline Health Solutions, Inc. (*) |
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3.1 |
(b) |
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Certificate of Incorporation of Streamline Health Solutions, Inc., amendment No. 1 (*) |
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3.2 |
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Bylaws of Streamline Health Solutions, Inc. (*) |
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11 |
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Computation of earnings (loss) per common share |
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31.1 |
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Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and
Rule 15d-14(a) of the Securities Exchange Act, as Amended |
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31.2 |
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Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and
Rule 15d-14(a) of the Securities Exchange Act, as Amended |
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32.1 |
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Certification of the Chief Executive Officer Pursuant to
18 U.S.C. 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002 |
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32.2 |
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Certification of the Chief Financial Officer Pursuant to
18 U.S.C. 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002 |
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(*) |
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Incorporated herein by reference from, the Registrants SEC filings. |
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(See INDEX TO EXHIBITS) |
21
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 thereunto duly authorized.
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STREAMLINE HEALTH SOLUTIONS, INC. |
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DATE: June 9, 2010
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By:
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/s/ J. Brian Patsy
J. Brian Patsy
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Chief Executive Officer |
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DATE: June 9, 2010
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By:
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/s/ Donald E. Vick, Jr.
Donald E. Vick, Jr.
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Interim Chief Financial Officer |
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22
INDEX TO EXHIBITS
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Exhibit No. |
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Exhibit |
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3.1 |
(a) |
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Certificate of Incorporation of Streamline Health Solutions,
Inc. f/k/a/ LanVision Systems, Inc. Previously filed with the
Commission and incorporated herein by reference from, the
Registrants (LanVision System, Inc.) Registration Statement
on Form S-1, File Number 333-01494, as filed with the
Commission on April 15, 1996 |
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3.1 |
(b) |
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Certificate of Incorporation of Streamline Health Solutions,
Inc. f/k/a LanVision Systems, Inc., amendment No. 1 Previously
filed with the Commission and incorporated herein by reference
from the Registrants Form 10-Q, as filed with the Commission
on September 8, 2006 |
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3.2 |
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Bylaws of Streamline Health Solutions, Inc. Previously filed
with the Commission and incorporated herein by reference from
the Registrants Form 10-Q, as filed with the Commission on
June 5, 2007 |
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11 |
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Computation of Earnings (Loss) Per Common Share |
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31.1 |
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Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and
Rule 15d-14(a) of the Securities Exchange Act, as Amended |
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31.2 |
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Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and
Rule 15d-14(a) of the Securities Exchange Act, as Amended |
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32.1 |
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Certification of the Chief Executive Officer Pursuant to
18 U.S.C. 1350, as adopted pursuant to section 906 of the
Sarbanes-Oxley Act of 2002 |
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32.2 |
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Certification of the Chief Financial Officer Pursuant to
18 U.S.C. 1350, as adopted pursuant to section 906 of the
Sarbanes-Oxley Act of 2002 |
23
Exhibit 11
EXHIBIT 11
STREAMLINE HEALTH SOLUTIONS, INC.
Computation of (loss) per share
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Three Months Ended April 30, |
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2010 |
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2009 |
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Net (loss) |
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$ |
(1,176,385 |
) |
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$ |
16,341 |
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Average shares outstanding |
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9,413,367 |
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9,354,782 |
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Stock options & purchase plan: |
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Total options & purchase plan shares |
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163,718 |
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Assumed treasury stock buyback |
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(114,136 |
) |
Convertible redeemable preferred stock assumed converted |
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Number of shares used in per
common share computation |
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9,413,367 |
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9,404,364 |
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Basic net ( loss ) per share of common stock |
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$ |
(0.13 |
) |
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$ |
0.00 |
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Diluted net ( loss ) per share of common stock |
|
$ |
(0.13 |
) |
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$ |
0.00 |
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Exhibit 31.1
EXHIBIT 31.1
STREAMLINE HEALTH SOLUTIONS, INC.
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and
Rule 15d-14(a) of the Securities Exchange Act, as Amended
I, J. Brian Patsy, certify that:
I have reviewed this quarterly report on Form 10-Q of Streamline Health Solutions, Inc.;
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period covered by this report;
Based on my knowledge, the financial statements, and other financial information included in this
report, fairly present in all material respects the financial condition, results of operations and
cash flows of the Registrant as of, and for, the periods presented in this report;
The registrants other certifying officer and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) for the Registrant and have:
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures
to be designed under our supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being prepared;
Designed such internal control over financial reporting, or caused such internal control over
financial reporting to be designed under our supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in
this report our conclusions about the effectiveness of the disclosure controls and procedures, as
of the end of the period covered by this report based on such evaluation; and
Disclosed in this report any change in the registrants internal control over financial reporting
that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal
quarter in the case of an annual report) that has materially affected, or is reasonably likely to
materially affect, the registrants internal control over financial reporting; and
The registrants other certifying officer and I have disclosed, based on our most recent evaluation
of internal control over financial reporting, to the registrants auditors and the audit committee
of the registrants board of directors (or persons performing the equivalent functions):
All significant deficiencies and material weaknesses in the design or operation of internal control
over financial reporting which are reasonably likely to adversely affect the registrants ability
to record, process, summarize and report financial information; and
Any fraud, whether or not material, that involves management or other employees who have a
significant role in the registrants internal control over financial reporting.
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June 9, 2010
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/s/ J. Brian Patsy
Chief Executive Officer and President
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Exhibit 31.2
EXHIBIT 31.2
STREAMLINE HEALTH SOLUTIONS, INC.
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and
Rule 15d-14(a) of the Securities Exchange Act, as Amended
I, Donald E. Vick, Jr., certify that:
I have reviewed this quarterly report on Form 10-Q of Streamline Health Solutions, Inc.;
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period covered by this report;
Based on my knowledge, the financial statements, and other financial information included in this
report, fairly present in all material respects the financial condition, results of operations and
cash flows of the Registrant as of, and for, the periods presented in this report;
The registrants other certifying officer and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) for the Registrant and have:
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures
to be designed under our supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being prepared;
Designed such internal control over financial reporting, or caused such internal control over
financial reporting to be designed under our supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in
this report our conclusions about the effectiveness of the disclosure controls and procedures, as
of the end of the period covered by this report based on such evaluation; and
Disclosed in this report any change in the registrants internal control over financial reporting
that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal
quarter in the case of an annual report) that has materially affected, or is reasonably likely to
materially affect, the registrants internal control over financial reporting; and
The registrants other certifying officer and I have disclosed, based on our most recent evaluation
of internal control over financial reporting, to the registrants auditors and the audit committee
of the registrants board of directors (or persons performing the equivalent functions):
All significant deficiencies and material weaknesses in the design or operation of internal control
over financial reporting which are reasonably likely to adversely affect the registrants ability
to record, process, summarize and report financial information; and
Any fraud, whether or not material, that involves management or other employees who have a
significant role in the registrants internal control over financial reporting.
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June 9, 2010
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/s/ Donald E. Vick, Jr.
Interim Chief Financial Officer
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Exhibit 32.1
EXHIBIT 32.1
STREAMLINE HEALTH SOLUTIONS, INC.
Certification of the Chief Executive Officer Pursuant to
18 U.S.C. 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002
I, J. Brian Patsy, Chief Executive Officer and President of Streamline Health Solutions, Inc. (the
Company), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section
1350, that:
|
(1) |
|
The Quarterly Report on Form 10-Q of the Company for the quarter ended April 30, 2010
(the Report) fully complies with the requirements of section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (15 U.S.C. 78m); and |
|
(2) |
|
The information contained in the Report fairly presents, in all material respects, the
financial condition, and results of operations of the Company. |
June 9, 2010
|
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|
/s/ J. Brian Patsy
Chief Executive Officer and President
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|
A signed original of this written statement required by Section 906 has been provided to the
Company and will be retained by the Company and furnished to the Securities and Exchange Commission
or its staff upon request.
Exhibit 32.2
EXHIBIT 32.2
STREAMLINE HEALTH SOLUTIONS, INC.
Certification of the Chief Financial Officer Pursuant to
18 U.S.C. 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002
I, Donald E. Vick, Jr., Interim Chief Financial Officer of Streamline Health Solutions, Inc. (the
Company), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section
1350, that:
|
(3) |
|
The Quarterly Report on Form 10-Q of the Company for the quarter ended April 30, 2010
(the Report) fully complies with the requirements of section 13(a) or 15 (d) of the
Securities Exchange Act of 1934 (15 U.S.C. 78m); and |
|
(4) |
|
The information contained in the Report fairly presents, in all material respects, the
financial condition, and results of operations of the Company. |
June 9, 2010
|
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/s/ Donald E. Vick, Jr.
Interim Chief Financial Officer
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|
A signed original of this written statement required by Section 906 has been provided to the
Company and will be retained by the Company and furnished to the Securities and Exchange Commission
or its staff upon request.