0001493152-23-021263 | 10-Q | XBRL Viewer | Streamline Health Solutions INC

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	3 Months Ended
	Apr. 30, 2023	Apr. 30, 2022	Jan. 31, 2023
Interest rate	1.50%
Debt instrument carrying amount	$ 9,625,000		$ 9,750,000
Deferred revenue	3,161,000
Revenue remaining performance obligation	$ 27,668,000
Revenue, remaining performance obligation, expected timing of satisfaction, explanation	the Company expects to recognize approximately 68% over the next 12 months and the remainder thereafter
Deferred costs, net	$ 94,000		94,000
Accumulated amortization of deferred costs	194,000		176,000
Deferred costs, amortization expense	18,000	$ 19,000
Accumulated amortization	949,000		820,000
Compensation expense related to stock-based award	572,000	326,000
Acquisition related costs	35,000	$ 90,000
Forgiveness of Ppp loan and accrued interest	23,000
Allowance for doubtful accounts	96,000		132,000
Deferred financing cost	96,000		105,000
Adoption of asu	$ 36,000
Common Stock [Member]
Restricted common stock awards to employees	1,185,927	408,031
Adoption of asu
Equity Award [Member]
Compensation expense related to stock-based award	$ 572,000	$ 326,000
Equity Award [Member] \| Common Stock [Member] \| Employees [Member]
Restricted common stock awards to employees	1,085,000	330,000
Equity Award [Member] \| Share-Based Payment Arrangement, Nonemployee [Member]
Compensation expense related to stock-based award	$ 23,000
Selling, General and Administrative Expenses [Member]
Deferred sales commissions	129,000	$ 93,000
Other Noncurrent Assets [Member]
Deferred commissions costs paid and payable	$ 1,483,000		1,534,000
Second Amended and Restated Loan and Security Agreement [Member]
Variable rate, description	The term loan bears interest at a per annum rate equal to the Prime Rate (as published in The Wall Street Journal) plus 1.5%, with a Prime “floor” rate of 3.25%. The prime rate is variable and, thus accommodates changes in the market interest rate. However, the interest rate spread (the 1.5% added to the Prime Rate) is fixed. We estimated the impact of the changes in the interest rate spread by analogizing the effect of the change in the Corporate bond rates, reduced for any changes in the market interest rate
Interest rate	0.50%
Security Agreement [Member]
Interest rate	1.50%
Prime interest rate percentage	3.25%
Debt Agreement [Member]
Debt instrument carrying amount	$ 9,425,000		9,550,000
Term loan	$ 200,000		$ 200,000

SUBSEQUENT EVENTS

3 Months Ended

Apr. 30, 2023

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 10 — SUBSEQUENT EVENTS

We have evaluated subsequent events occurring after April 30, 2023, and based on our evaluation, we did not identify any events that would have required recognition or disclosure in these condensed consolidated financial statements.

RELATED PARTY TRANSACTIONS

3 Months Ended

Apr. 30, 2023

RELATED PARTY TRANSACTIONS

NOTE 9 - RELATED PARTY TRANSACTIONS

Refer to Note 3 – Business Combination and Divestiture. The Company acquired Avelead on August 16, 2021. In addition, the Company assumed a lease for corporate office space from a selling equityholder of Avelead that is now employed by the Company. This lease term ended February 2023. For the three months ended April 30, 2023 and April 30, 2022, the Company recorded rent expense of $6,000 and $19,000, respectively (refer to Note 4 – Operating Leases).

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

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+ Details

OPERATING LEASES (Details Narrative) - USD ($)			3 Months Ended
OPERATING LEASES (Details Narrative) - USD ($)	Oct. 02, 2021	Aug. 16, 2021	Apr. 30, 2023	Apr. 30, 2022	Jan. 31, 2023	Oct. 31, 2021
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Sublease income			$ 32,000
Operating lease, right of use assets					$ 32,000
Lesee discount rate			6.50%
Operating lease cost			$ 32,000	$ 48,000
Payments for rent			6,000	$ 19,000
At Inception [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Operating lease, right of use assets						$ 540,000
Sublease Agreement [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Sublease, term	18 months
Sublease income	$ 292,000
Suwanee Office Lease [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Lease expiration date		Feb. 28, 2022
Payments for rent			$ 6,000

SCHEDULE OF BASIC AND DILUTED NET LOSS PER SHARE OF COMMON STOCK (Details) - USD ($)

3 Months Ended

Apr. 30, 2023

Apr. 30, 2022

Accounting Policies [Abstract]

Net loss

$ (2,901,000)

$ (2,787,000)

Basic and diluted net loss per share of common stock from operations

$ (0.05)

$ (0.06)

Weighted average shares outstanding – Basic

^[1]

55,970,880

47,028,463

Effect of dilutive securities – Stock options and Restricted stock

^[2]

Weighted average shares outstanding – Diluted

55,970,880

47,028,463

[1]

Includes the effect of vested and excludes the effect of unvested restricted shares of common stock, which are considered non-participating securities. As of April 30, 2023 and 2022, there were 2,655,831 and 1,025,800 unvested restricted shares of common stock outstanding, respectively.

[2]

Diluted net loss per share excludes the effect of shares that are anti-dilutive. For the three months ended April 30, 2023, diluted earnings per share excludes 628,958 outstanding stock options and 2,655,831 unvested restricted shares of common stock. For the three months ended April 30, 2022, diluted earnings per share excludes 1,062,130 outstanding stock options and 1,025,800 unvested restricted shares of common stock.

- Definition

The amount of net income (loss) from continuing operations per each share of common stock or unit outstanding during the reporting period.

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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482740/230-10-45-28

Reference 36: http://www.xbrl.org/2003/role/disclosureRef
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-SubTopic 10
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-Section 45
-Paragraph 1A
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482790/220-10-45-1A

Reference 37: http://www.xbrl.org/2003/role/disclosureRef
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482790/220-10-45-1B

Reference 38: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 220
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03(20))
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-URI https://asc.fasb.org//1943274/2147483621/220-10-S99-2

Reference 39: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 942
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-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-04(22))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483589/942-220-S99-1

+ Details

SCHEDULE OF OUTSTANDING DEBT (Details) - USD ($)	Apr. 30, 2023	Jan. 31, 2023
Debt Disclosure [Abstract]
Term loan	$ 9,625,000	$ 9,750,000
Financing cost payable	88,000	69,000
Deferred financing cost	(96,000)	(105,000)
Total	9,617,000	9,714,000
Less: Current portion	(875,000)	(750,000)
Non-current portion of debt	$ 8,742,000	$ 8,964,000

- Definition

Amount, after deduction of unamortized premium (discount) and debt issuance cost, of long-term debt. Excludes lease obligation.

+ References + Details

SCHEDULE OF ACCOUNTING PRONOUNCEMENTS RECENTLY ADOPTED (Details)	3 Months Ended
	Apr. 30, 2023 USD ($)
Accounting Policies [Abstract]
Allowance for doubtful accounts	$ 132,000
Adoption of asu	36,000
Provision adjustments
Write offs and Recoveries
Allowance for doubtful accounts	$ 96,000

RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)	3 Months Ended
	Apr. 30, 2023	Apr. 30, 2022
Related Party Transactions [Abstract]
Rent expense	$ 6,000	$ 19,000

SCHEDULE OF DISAGGREGATION OF REVENUE (Details) - USD ($)	3 Months Ended
	Apr. 30, 2023	Apr. 30, 2022
Product Information [Line Items]
Total revenue	$ 5,332,000	$ 5,935,000
Overtime Time Revenue [Member]
Product Information [Line Items]
Total revenue	4,332,000	3,941,000
Point in Time Revenue [Member]
Product Information [Line Items]
Total revenue	$ 1,000,000	$ 1,994,000

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 924
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 11.L)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479941/924-10-S99-1

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
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-Name Accounting Standards Codification
-Section 50
-Paragraph 5
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-5

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-Name Accounting Standards Codification
-Section 50
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-Publisher FASB
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-42

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
-Paragraph 4
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-4

+ Details

DEBT

3 Months Ended

Apr. 30, 2023

Debt Disclosure [Abstract]

DEBT

NOTE 5 — DEBT

Outstanding principal balances consisted of the following at:

SCHEDULE OF OUTSTANDING DEBT

	April 30, 2023			January 31, 2023
Term loan	$	9,625,000		$	9,750,000
Financing cost payable		88,000			69,000
Deferred financing cost		(96,000	)		(105,000	)
Total		9,617,000			9,714,000
Less: Current portion		(875,000	)		(750,000	)
Non-current portion of debt	$	8,742,000		$	8,964,000

Term Loan

On November 29, 2022, the Company executed a Second Modification to Second Amended and Restated Loan Agreement (the “Second Modification”). The Second Modification includes an expansion of the Company’s total borrowing to include a $2,000,000 non-formula revolving line of credit. The revolving line of credit will be co-terminus with the term loan and matures on August 26, 2026. There are no requirements to draw on the line of credit. Amounts outstanding under the line of credit portion of the Second Amended and Restated Loan Agreement bear interest at a per annum rate equal to the Prime Rate (as published in The Wall Street Journal) plus 1.5%, with a Prime “floor” rate of 3.25%. The Second Modification amended certain financial covenants in the Second Amended and Restated Loan Agreement. At April 30, 2023, there was no outstanding balance on the revolving line of credit.

Under the Second Amended and Restated Loan Agreement, the Company has a term loan facility with an initial maximum principal amount of $10,000,000. Amounts outstanding under the Second Amended and Restated Loan Agreement bear interest at a per annum rate equal to the Prime Rate (as published in The Wall Street Journal) plus 1.5%, with a Prime “floor” rate of 3.25%. The Second Amended and Restated Loan Agreement has a five-year term, and the maximum principal amount was advanced in a single-cash advance on or about the original closing date (August 2021). Interest is due monthly, and the Company shall make monthly interest-only payments through the one-year anniversary of the original closing date. Under the Second Amended and Restated Loan Agreement, principal repayments are required of $500,000 in the second year, $1,000,000 in the third year, $2,000,000 in the fourth year, and $3,000,000 in the fifth year, respectively, with the remaining outstanding principal balance and all accrued but unpaid interest due in full on the maturity date. The Second Amended and Restated Loan Agreement may also require early repayments if certain conditions are met.

The Second Amended and Restated Loan Agreement includes customary financial covenants as follows:

	●	Minimum Cash. Borrowers shall, at all times, maintain unrestricted cash of Borrowers at Bank in an amount not less than Two Million Dollars ($2,000,000).

	●	Maximum Debt to ARR Ratio. Borrowers’ Maximum Debt to ARR Ratio, measured on a quarterly basis as of the last day of each fiscal quarter, shall not be greater than the amount set forth under the heading “Maximum Debt to ARR Ratio” as of, and for each of the dates appearing adjacent to such “Maximum Debt to ARR Ratio”.

SCHEDULE OF MAXIMUM DEBT TO ARR RATIO

Quarter Ending			Maximum Debt to ARR Ratio
October 31, 2022			0.80 to 1.00
January 31, 2023			0.70 to 1.00
April 30, 2023			0.65 to 1.00
July 31, 2023			0.60 to 1.00
October 31, 2023			0.55 to 1.00
January 31, 2024			0.50 to 1.00

●

Maximum Debt to Adjusted EBITDA Ratio. Commencing with the quarter ending April 30, 2024, Borrowers’ Maximum Debt to Adjusted EBITDA Ratio, measured on a quarterly basis as of the last day of each fiscal quarter for the trailing four (4) quarter period then ended, shall not be greater than the amount set forth under the heading “Maximum Debt to Adjusted EBITDA Ratio” as of, and for each of the dates appearing adjacent to such “Maximum Debt to Adjusted EBITDA Ratio”.

Quarter Ending			Maximum Debt to Adjusted EBITDA Ratio
April 30, 2024			3.50 to 1.00
July 31, 2024 and on the last day of each quarter thereafter			2.00 to 1.00

●

Fixed Charge Coverage Ratio. Commencing with the quarter ending April 30, 2024, Borrowers shall maintain a Fixed Charge Coverage Ratio of not less than 1.20 to 1.00, measured on a quarterly basis as of the last day of each fiscal quarter for the trailing four (4) quarter period then ended.

The Second Amended and Restated Loan Agreement also includes customary negative covenants, subject to exceptions, which limit transfers, capital expenditures, indebtedness, certain liens, investments, acquisitions, dispositions of assets, restricted payments, and the business activities of the Company, as well as customary representations and warranties, affirmative covenants and events of default, including cross defaults and a change of control default. The line of credit also is subject to customary prepayment requirements. For the period ended April 30, 2023, the Company was in compliance with the Second Amended and Restated Loan Agreement covenants. Substantially all the assets of the Company are collateralized by the Second Amended and Restated Loan Agreement.

Forecasting our business has certain assumptions and inputs on sales volumes, implementation timing, and estimation of expenses that inherently vary as to timing and amounts. The Company utilizes scenarios in its forecasting that include a base case, management case and best case to understand a range of possible outcomes in association with the forecasting process. Our forecast has the Company not achieving the “maximum debt to Adjusted EBITDA ratio” and “Fixed Charge Coverage Ratio” covenants, as described herein, at April 30, 2024, and for several quarters, thereafter. The Company’s inputs and assumptions underlying the forecast may change in the coming periods based on the market environment and the performance of our business. The Company has a good working relationship with its current banking partner, Western Alliance Bank. The Company has successfully modified the terms, including covenants, of the Second Amended and Restated Loan Agreement with Western Alliance Bank in the past and is currently in the process of modifying such covenants currently. The Company has received an indication of interest from Western Alliance Bank to modify all the existing covenants to be consistent with the Company’s forecasting.

The Company records costs related to the maintenance of the Second Amended and Restated Loan Agreement as deferred financing costs, net of the term loan. These deferred financing costs are being amortized over the remaining term of the loan. The Company has incurred $250,000 in financing costs which becomes payable at the earlier of the term date of the loan, or pre-payment. These costs are being accreted, through interest expense, to the full value of the $250,000 over the remaining term of the loan.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 470
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//470/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
-Paragraph 1C
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Section 50
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1E

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

+ Details

Condensed Consolidated Balance Sheets - USD ($)	Apr. 30, 2023	Jan. 31, 2023
Current assets:
Cash and cash equivalents	$ 5,987,000	$ 6,598,000
Accounts receivable, net of allowance for credit losses of $94,000 and $132,000, respectively	4,280,000	7,719,000
Contract receivables	535,000	960,000
Prepaid and other current assets	717,000	710,000
Total current assets	11,519,000	15,987,000
Non-current assets:
Property and equipment, net of accumulated amortization of $255,000 and $246,000 respectively	99,000	79,000
Right-of use asset for operating lease		32,000
Capitalized software development costs, net of accumulated amortization of $6,659,000 and $6,224,000, respectively	5,838,000	5,846,000
Intangible assets, net of accumulated amortization of $3,077,000 and $2,627,000, respectively	14,343,000	14,793,000
Goodwill	23,089,000	23,089,000
Other	1,598,000	1,695,000
Total non-current assets	44,967,000	45,534,000
Total assets	56,486,000	61,521,000
Current liabilities:
Accounts payable	299,000	626,000
Accrued expenses	2,505,000	3,265,000
Current portion of term loan	875,000	750,000
Deferred revenues	7,382,000	8,361,000
Current portion of operating lease obligation		35,000
Current portion of acquisition earnout liability	3,374,000	3,738,000
Total current liabilities	14,435,000	16,775,000
Non-current liabilities:
Term loan, net of current portion and deferred financing costs	8,742,000	8,964,000
Deferred revenues, less current portion	104,000	167,000
Other non-current liabilities	143,000	104,000
Total non-current liabilities	8,989,000	9,235,000
Total liabilities	23,424,000	26,010,000
Stockholders’ equity:
Common stock, $0.01 par value per share, 85,000,000 shares authorized; 58,636,411 and 57,567,210 shares issued and outstanding, respectively	586,000	576,000
Additional paid in capital	132,379,000	131,973,000
Accumulated deficit	(99,903,000)	(97,038,000)
Total stockholders’ equity	33,062,000	35,511,000
Total liabilities and stockholders’ equity	$ 56,486,000	$ 61,521,000

COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($)	1 Months Ended	3 Months Ended
	Apr. 30, 2023	Apr. 30, 2023	Apr. 30, 2022
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Non employee stock compensation		$ 572,000	$ 326,000
Master Services Agreement [Member] \| 180 Consulting LLC [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Stock Issued During Period, Shares, Issued for Services	1,042,303	127,099	56,070
Professional fees		$ 953,000	$ 452,000
Master Services Agreement [Member] \| 180 Consulting LLC [Member] \| Share-Based Payment Arrangement, Nonemployee [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Non employee stock compensation		23,000
SOW [Member] \| 180 Consulting LLC [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Professional fees		$ 117,000	$ 83,000

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)	Apr. 30, 2023	Jan. 31, 2023
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 94,000	$ 132,000
Accumulated amortization, property and equipment	255,000	246,000
Accumulated amortization, capitalized software development costs	6,659,000	6,224,000
Accumulated amortization, intangible assets	$ 3,077,000	$ 2,627,000
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	85,000,000	85,000,000
Common stock, shares issued	58,636,411	57,567,210
Common stock, shares outstanding	58,636,411	57,567,210

SCHEDULE OF BASIC AND DILUTED NET LOSS PER SHARE OF COMMON STOCK (Details) (Parenthetical) - shares	3 Months Ended
	Apr. 30, 2023	Apr. 30, 2022
Unvested Restricted Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Diluted earnings per share	2,655,831	1,025,800
Share-Based Payment Arrangement, Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Diluted earnings per share	628,958	1,062,130
Unvested Restricted Shares [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Diluted earnings per share	2,655,831	1,025,800

EQUITY

3 Months Ended

Apr. 30, 2023

Equity [Abstract]

EQUITY

NOTE 7 — EQUITY

Capital Raise

On October 24, 2022, the Company entered into purchase agreements with certain investors pursuant to which the Company agreed to issue and sell in a registered direct offering (the “2022 Offering”) an aggregate of 6,299,989 shares of common stock, par value $0.01 per share, at a purchase price of $1.32 per share. The gross proceeds to the Company from the 2022 Offering were approximately $8,316,000. The Company intends to use the proceeds of the 2022 Offering for general corporate purposes. The 2022 Offering closed on October 26, 2022.

Registration of Shares Issued to 180 Consulting

On June 22, 2022, the Company filed a Registration Statement on Form S-3 (Registration No. 333-265773) for purposes of registering for resale 272,653 shares of common stock issued to 180 Consulting, LLC (“180 Consulting”). The Registration Statement was declared effective by the SEC on July 1, 2022.

Authorized Shares Increase

At the Annual Meeting of Stockholders held on June 7, 2022, the Company’s stockholders approved an amendment to the Streamline Health Solutions, Inc. Third Amended and Restated 2013 Stock Incentive Plan to increase the number of shares of the Company’s common stock authorized for issuance thereunder by 2,000,000 shares, from 8,223,246 shares to 10,223,246 shares. The Company’s stockholders also approved an amendment to the Company’s Certificate of Incorporation, as amended, to increase the total number of authorized shares of the Company’s common stock from 65,000,000 shares to 85,000,000 shares.

- Definition

The entire disclosure for equity.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

DEBT (Tables)

3 Months Ended

Apr. 30, 2023

Debt Disclosure [Abstract]

SCHEDULE OF OUTSTANDING DEBT

Outstanding principal balances consisted of the following at:

SCHEDULE OF OUTSTANDING DEBT

	April 30, 2023			January 31, 2023
Term loan	$	9,625,000		$	9,750,000
Financing cost payable		88,000			69,000
Deferred financing cost		(96,000	)		(105,000	)
Total		9,617,000			9,714,000
Less: Current portion		(875,000	)		(750,000	)
Non-current portion of debt	$	8,742,000		$	8,964,000

SCHEDULE OF MAXIMUM DEBT TO ARR RATIO

Quarter Ending			Maximum Debt to ARR Ratio
October 31, 2022			0.80 to 1.00
January 31, 2023			0.70 to 1.00
April 30, 2023			0.65 to 1.00
July 31, 2023			0.60 to 1.00
October 31, 2023			0.55 to 1.00
January 31, 2024			0.50 to 1.00

SCHEDULE OF MAXIMUM DEBT TO ADJUSTED EBITDA RATIO

Quarter Ending			Maximum Debt to Adjusted EBITDA Ratio
April 30, 2024			3.50 to 1.00
July 31, 2024 and on the last day of each quarter thereafter			2.00 to 1.00

SCHEDULE OF FAIR VALUE ASSETS AND LIABILITIES MEASURED ON RECURRING BASIS (Details) (Parenthetical)	3 Months Ended
	Apr. 30, 2023 USD ($)
Accounting Policies [Abstract]
Acquisition earnout liability, change in valuation	$ 364,000

BUSINESS COMBINATION AND DIVESTITURE

3 Months Ended

Apr. 30, 2023

Business Combination and Asset Acquisition [Abstract]

BUSINESS COMBINATION AND DIVESTITURE

NOTE 3 — BUSINESS COMBINATION AND DIVESTITURE

Avelead Acquisition

The Company acquired all of the equity interests of Avelead Consulting, LLC (“Avelead”) as part of the Company’s strategic expansion into the acute-care health care revenue cycle management industry on August 16, 2021 (the “Transaction”). The acquisition was completed on August 16, 2021.

On November 21, 2022, the Company made cash payments of $2,012,000 and issued 1,871,037 unregistered securities in the form of restricted common stock, par value $0.01 per share, with respect to the first year earnout consideration. The estimated aggregate value of the first year earnout payment is $5,000,000. The second (and final) year earnout payment, if any, will be payable on or about October 15,2023. These liabilities are reflected at the estimated fair value of the future commitment on the Company’s condensed consolidated balance sheet as Acquisition Earnout Liability.

INCOME TAXES (Details Narrative) - USD ($)	3 Months Ended
INCOME TAXES (Details Narrative) - USD ($)	Apr. 30, 2023	Jan. 31, 2023
Operating Loss Carryforwards [Line Items]
Income tax expense increased	$ 53,000
Income tax expense, prior year	$ 11,000
Effective income tax rate, continuing operations	2.00%
Federal and state statutory rate percentage	25.00%
Operating loss carry forwards		$ 49,884,000
Uncertain tax positions	$ 344,000	333,000
Income tax description	The Company and its subsidiaries are subject to U.S. federal income tax as well as income taxes in multiple state and local jurisdictions. The Company has concluded all U.S. federal tax matters for years through January 31, 2019. All material state and local income tax matters have been concluded for years through January 31, 2018. The Company is no longer subject to IRS examination for periods prior to the tax year ended January 31, 2019; however, carryforward losses that were generated prior to the tax year ended January 31, 2019 may still be adjusted by the IRS if they are used in a future period
State [Member]
Operating Loss Carryforwards [Line Items]
Operating loss carry forwards		24,095,000
Federal RD [Member]
Operating Loss Carryforwards [Line Items]
Operating loss carry forwards		1,666,000
Georgia RD [Member]
Operating Loss Carryforwards [Line Items]
Operating loss carry forwards		$ 94,000

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Apr. 30, 2023

Accounting Policies [Abstract]

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, management evaluates its estimates and judgments, including those related to the recognition of revenue, share-based compensation, capitalization of software development costs, intangible assets, the allowance for credit losses, contingent consideration, and income taxes. Actual results could differ from those estimates.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The Financial Accounting Standards Board’s (“FASB”) authoritative guidance on fair value measurements establishes a framework for measuring fair value. This guidance enables the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. Under this guidance, assets and liabilities carried at fair value must be classified and disclosed in one of the following three categories:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs that are not corroborated by market data.

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value based on the short-term maturity of these instruments. Cash and cash equivalents are classified as Level 1. There were no transfers of assets or liabilities between Levels 1, 2, or 3 during the three months ended April 30, 2023 and 2022.

The table below provides information on the fair value of our liabilities:

	Total Fair		Quoted Prices in Active Markets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Value		(Level 1)		(Level 2)		(Level 3)
At January 31, 2023
Acquisition earnout liability (1)	$	3,738,000	$	—	$	—	$	3,738,000
At April 30, 2023
Acquisition earnout liability (1)	$	3,374,000	$	—	$	—	$	3,374,000

(1)

The fair value of the acquisition earnout liability is based upon a probability-weighted discounted cash flow that was completed at the date of acquisition and updated as of April 30, 2023. The change in the fair value of the acquisition earnout liability decreased $364,000 for the three months ended April 30, 2023. The change in the fair value is recognized in “Acquisition earnout valuation adjustments” in the accompanying condensed consolidated statement of operations.

The fair value of the Company’s term loan under its Second Amended and Restated Loan and Security Agreement (as amended and modified, the “Second Amended and Restated Loan Agreement”) was determined through an analysis of the interest rate spread from the date of closing the loan (August 2021) to the date of the most recent balance sheets, April 30, 2023 and January 31, 2023. The term loan bears interest at a per annum rate equal to the Prime Rate (as published in The Wall Street Journal) plus 1.5%, with a Prime “floor” rate of 3.25%. The prime rate is variable and, thus accommodates changes in the market interest rate. However, the interest rate spread (the 1.5% added to the Prime Rate) is fixed. We estimated the impact of the changes in the interest rate spread by analogizing the effect of the change in the Corporate bond rates, reduced for any changes in the market interest rate. This provided us with an estimated change to the interest rate spread of approximately 0.5% from the date we entered the debt agreement to the end of the first quarter, April 30, 2023 and end of the fiscal year, January 31, 2023. The fair value of the debt as of April 30, 2023 and January 31, 2023 was estimated to be $9,425,000 and $9,550,000, respectively, or a discount to book value of $200,000, respectively. Long-term debt is classified as Level 2.

Revenue Recognition

Revenue Recognition

We derive revenue from the sale of internally-developed software, either by licensing for local installation or by a SaaS delivery model, through the Company’s direct sales force or through third-party resellers. Licensed, locally-installed customers on a perpetual model utilize the Company’s support and maintenance services for a separate fee, whereas term-based locally installed license fees and SaaS fees include support and maintenance. We also derive revenue from professional services that support the implementation, configuration, training and optimization of the applications, as well as audit services and consulting services.

We recognize revenue in accordance with Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers, under the core principle of recognizing revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

Disaggregation of Revenue

The following table provides information about disaggregated revenue by type and nature of revenue stream:

SCHEDULE OF DISAGGREGATION OF REVENUE

	April 30, 2023		April 30, 2022
	Three Months Ended
	April 30, 2023		April 30, 2022
Over time revenue	$	4,332,000	$	3,941,000
Point in time revenue		1,000,000		1,994,000
Total revenue	$	5,332,000	$	5,935,000

The Company includes revenue categories of (i) over time and (ii) point in time revenue. The Company includes revenue categories of (i) SaaS and (ii) maintenance and support as over time revenue. For point in time revenue, the performance obligation is recognized as the point in time when the obligation is fully satisfied. The Company includes (i) software licenses, (ii) professional services, and (iii) audit services as point in time revenue.

Contract Receivables and Deferred Revenues

The Company receives payments from customers based upon contractual billing schedules. Contract receivables include amounts related to the Company’s contractual right to consideration for completed performance obligations not yet invoiced. Deferred revenue includes payments received in advance of performance under the contract. The Company’s contract receivables and deferred revenue are reported on an individual contract basis at the end of each reporting period. Contract receivables are classified as current or noncurrent based on the timing of when we expect to bill the customer. Deferred revenue is classified as current or noncurrent based on the timing of when we expect to recognize revenue. In the three months ended April 30, 2023, the Company recognized approximately $3,161,000 in revenue from deferred revenues outstanding as of January 31, 2023. Revenue allocated to remaining performance obligations was $27,668,000 as of April 30, 2023, of which the Company expects to recognize approximately 68% over the next 12 months and the remainder thereafter.

Deferred costs (costs to fulfill a contract and contract acquisition costs)

The Company defers the direct costs, which include salaries and benefits, for professional services related to SaaS contracts as a cost to fulfill a contract. These deferred costs will be amortized on a straight-line basis over the period of expected benefit which is the contractual term. As of April 30, 2023 and January 31, 2023, the Company had deferred costs of $94,000 and $94,000, respectively, net of accumulated amortization of $194,000 and $176,000, respectively. Amortization expense of these costs was $18,000 and $19,000 for the three months ended Apri1 30, 2023 and 2022, respectively, and is included in various costs of revenue in the condensed consolidated statements of operations.

Contract acquisition costs, which consist of sales commissions paid or payable, are considered incremental and recoverable costs of obtaining a contract with a customer. Sales commissions for initial and renewal contracts are deferred and then amortized on a straight-line basis over the contract term. As a practical expedient, the Company expenses sales commissions as incurred when the amortization period of related deferred commission costs is expected to be one year or less.

As of April 30, 2023 and January 31, 2023, deferred commission costs paid and payable, which are included on the consolidated balance sheets within other non-current assets totaled $1,483,000 and $1,534,000, respectively, net of accumulated amortization of $949,000 and $820,000, respectively. For the three months ended April 30, 2023 and 2022, $129,000 and $93,000, respectively, in amortization expense associated with deferred sales commissions was included in selling, general and administrative expenses in the condensed consolidated statements of operations. There were no impairment losses for these capitalized costs for these periods.

Equity Awards

Equity Awards

The Company accounts for share-based payments based on the grant-date fair value of the awards with compensation cost recognized as expense over the requisite service period, and forfeitures are recognized as incurred. For awards to non-employees, the Company recognizes compensation expense in the same manner as if the entity had paid cash for the goods or services. For the three months ended April 30, 2023, the Company incurred total compensation expense related to share-based awards of $572,000, which includes $23,000 of capitalized non-employee stock compensation, compared to $326,000 for the three months ended April 30, 2022.

The fair value of stock options granted are estimated at the date of grant using a Black-Scholes option pricing model. Option pricing model input assumptions such as expected term, expected volatility and risk-free interest rate impact the fair value estimate. These assumptions are subjective and are generally derived from external (such as, risk-free rate of interest) and historical data (such as, volatility factor and expected term). Future grants of equity awards accounted for as share-based compensation could have a material impact on reported expenses depending upon the number, value and vesting period of future awards.

The Company issues restricted stock awards in the form of Company common stock. The fair value of these awards is based on the market closing price per share on the grant date. For the three months ended April 30, 2023, the Company issued 1,085,000 shares of restricted common stock to employees, compared to 330,000 shares of restricted common stock for the three months ended April 30, 2022.The Company expenses the compensation cost of these awards as the restriction period lapses, which is typically a one- to four-year service period.

Income Taxes

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and for tax credit and loss carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. In assessing net deferred tax assets, the Company considers whether it is more likely than not that some or all of the deferred tax assets will not be realized. The Company establishes a valuation allowance when it is more likely than not that all or a portion of deferred tax assets will not be realized. Refer to Note 6 – Income Taxes for further details.

The Company provides for uncertain tax positions and the related interest and penalties based upon management’s assessment of whether certain tax positions are more likely than not to be sustained upon examination by tax authorities. At April 30, 2023, the Company believes it has appropriately accounted for any uncertain tax positions.

Net Loss Per Common Share

Net Loss Per Common Share

The Company presents basic and diluted earnings per share (“EPS”) data for the Company’s common stock.

The Company’s unvested restricted stock awards are considered non-participating securities because holders are not entitled to non-forfeitable rights to dividends or dividend equivalents during the vesting term. Diluted EPS for the Company’s common stock is computed using the treasury stock method.

The following is the calculation of the basic and diluted net loss per share of common stock for the three months ended April 30, 2023 and 2022:

	April 30, 2023			April 30, 2022
	Three Months Ended
	April 30, 2023			April 30, 2022
Basic and diluted loss per share:
Net loss	$	(2,901,000	)	$	(2,787,000	)
Basic and diluted net loss per share of common stock from operations	$	(0.05	)	$	(0.06	)
Weighted average shares outstanding – Basic (1)		55,970,880			47,028,463
Effect of dilutive securities – Stock options and Restricted stock (2)		—			—
Weighted average shares outstanding – Diluted		55,970,880			47,028,463

(1)	Includes the effect of vested and excludes the effect of unvested restricted shares of common stock, which are considered non-participating securities. As of April 30, 2023 and 2022, there were 2,655,831 and 1,025,800 unvested restricted shares of common stock outstanding, respectively.

(2)	Diluted net loss per share excludes the effect of shares that are anti-dilutive. For the three months ended April 30, 2023, diluted earnings per share excludes 628,958 outstanding stock options and 2,655,831 unvested restricted shares of common stock. For the three months ended April 30, 2022, diluted earnings per share excludes 1,062,130 outstanding stock options and 1,025,800 unvested restricted shares of common stock.

Other Operating Costs

Other Operating Costs

Acquisition-related Costs

For the three months ended April 30, 2023 and 2022, the Company incurred certain acquisition-related costs related to the acquisition of Avelead totaling $35,000 and $90,000, respectively, consisting primarily of professional service fees.

Non-Cash Items

Non-Cash Items

For the three months ended April 30, 2023, the Company recorded capitalized software purchased with stock, totaling $23,000, as non-cash items related to the condensed consolidated statements of cash flow.

Accounting Pronouncements Recently Adopted

Accounting Pronouncements Recently Adopted

On February 1, 2023, the Company adopted ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), as amended. ASU 2016-13 requires an allowance for expected credit losses to be applied to financial assets at inception and reflect the risk of credit loss over the life of the asset. The Company estimated current expected credit losses based on historical credit loss rates and applied an increase to account for future economic conditions. The Company’s allowance for doubtful accounts as of January 31, 2023, prior to the adoption of ASU 216-13, was $132,000. The Company estimated the current expected credit loss related to accounts receivable as of the adoption date of February 1, 2023 to be $96,000. The Company recorded the adjustment in accounting policy change of $36,000 to the opening retained earnings balance for the year of adoption.

		January 31, 2023				CECL Adoption				Provision adjustments				Write-offs & Recoveries				April 30, 2023
Allowance for credit losses		$	(132,000	)		$	36,000				-				-			$	(96,000	)

For the period ended April 30, 2023, the Company estimated the current expected credit loss related to accounts receivable using historical credit loss rates and applied an increase to account for future economic conditions in accordance with ASU 2016-13. The Company had no further impact on the allowance for credit losses during the three month period ended April 30, 2023.

Recent Accounting Pronouncements Not Yet Adopted

Recent Accounting Pronouncements Not Yet Adopted

The Company does not believe there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Apr. 30, 2023	Apr. 30, 2022
Statement of Cash Flows [Abstract]
Net loss	$ (2,901,000)	$ (2,787,000)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	1,059,000	1,103,000
Acquisition earnout valuation adjustments	(364,000)	(500,000)
Provision for deferred income taxes	39,000
Share-based compensation expense	572,000	326,000
Provision for credit losses		13,000
Changes in assets and liabilities:
Accounts and contract receivables	3,900,000	(678,000)
Other assets	(15,000)	8,000
Accounts payable	(327,000)	235,000
Accrued expenses and other liabilities	(795,000)	739,000
Deferred revenue	(1,042,000)	271,000
Net cash provided by (used in) operating activities	126,000	(1,270,000)
Cash flows from investing activities:
Purchases of property and equipment	(29,000)
Capitalization of software development costs	(404,000)	(519,000)
Net cash used in investing activities	(433,000)	(519,000)
Cash flows from financing activities:
Repayment of bank term loan	(125,000)
Payments related to settlement of employee share-based awards	(179,000)	(141,000)
Net cash used in financing activities	(304,000)	(141,000)
Net decrease in cash and cash equivalents	(611,000)	(1,930,000)
Cash and cash equivalents at beginning of period	6,598,000	9,885,000
Cash and cash equivalents at end of period	$ 5,987,000	$ 7,955,000

SCHEDULE OF MAXIMUM DEBT TO ADJUSTED EBITDA RATIO (Details)	Apr. 30, 2023
April 30, 2024 [Member] \| Maximum [Member]
Debt Instrument [Line Items]
Maximum Debt to Adjusted EBITDA Ratio	3.50%
April 30, 2024 [Member] \| Minimum [Member]
Debt Instrument [Line Items]
Maximum Debt to Adjusted EBITDA Ratio	1.00%
July 30, 2024 and Thereafter [Member] \| Maximum [Member]
Debt Instrument [Line Items]
Maximum Debt to Adjusted EBITDA Ratio	2.00%
July 30, 2024 and Thereafter [Member] \| Minimum [Member]
Debt Instrument [Line Items]
Maximum Debt to Adjusted EBITDA Ratio	1.00%

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

BASIS OF PRESENTATION

3 Months Ended

Apr. 30, 2023

Accounting Policies [Abstract]

BASIS OF PRESENTATION

NOTE 1 — BASIS OF PRESENTATION

Streamline Health Solutions, Inc. and each of its wholly-owned subsidiaries, Streamline Health, LLC, Avelead Consulting, LLC, Streamline Consulting Solutions, LLC and Streamline Pay & Benefits, LLC, (collectively, unless the context requires otherwise, “we,” “us,” “our,” “Streamline,” or the “Company”), operate in one segment as a provider of healthcare information technology solutions and associated services. The Company provides these capabilities through the licensing of its Coding & Clinical Documentation Improvement (CDI) solutions, eValuator coding analysis platform, RevID, and other workflow software applications and the use of such applications by software as a service (“SaaS”). The Company also provides audit services to help clients optimize their internal clinical documentation and coding functions, as well as implementation and consulting services to complement its software solutions. The Company’s software and services enable hospitals and integrated healthcare delivery systems in the United States and Canada to capture, store, manage, route, retrieve and process patient clinical, financial and other healthcare provider information related to the patient revenue cycle.

The accompanying unaudited condensed consolidated financial statements have been prepared by us pursuant to the rules and regulations applicable to quarterly reports on Form 10-Q of the U.S. Securities and Exchange Commission (the “SEC”). Certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to those rules and regulations, although we believe that the disclosures made are adequate to make the information not misleading. The condensed consolidated financial statements include the accounts of Streamline Health Solutions, Inc. and each of its wholly-owned subsidiaries. In the opinion of the Company’s management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the condensed consolidated financial statements have been included. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s most recent annual report on Form 10-K. Operating results for the three months ended April 30, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending January 31, 2024.

The Company has one operating segment and one reporting unit due to the singular nature of our products, product development and distribution process, and client base as a provider of computer software-based solutions and services for healthcare providers.

All amounts in the condensed consolidated financial statements, notes and tables have been rounded to the nearest thousand dollars, except share and per share amounts, unless otherwise indicated. All references to a fiscal year refer to the fiscal year commencing February 1 in that calendar year and ending on January 31 of the following calendar year.

OPERATING LEASES

3 Months Ended

Apr. 30, 2023

Operating Leases

OPERATING LEASES

NOTE 4 — OPERATING LEASES

We determine whether an arrangement is a lease at inception. Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the expected lease term. Since our lease arrangements do not provide an implicit rate, we use our incremental borrowing rate for the expected remaining lease term at commencement date for new and existing leases in determining the present value of future lease payments. Operating lease expense is recognized on a straight-line basis over the lease term.

Alpharetta Office Lease

On October 1, 2021, the Company entered into an agreement with a third-party to sublease its office space in Alpharetta, Georgia. The sublease term was for 18 months, which coincided with the Company’s underlying lease (see below). The Company received $292,000 from the sublessee over the term of the sublease. The sublease did not relieve the Company of its original obligation under the lease, and therefore the Company did not adjust the operating lease right-of-use asset and related liability. The sublease terminated on March 31, 2023. For the three months ended April 30, 2023, the Company recorded $32,000 as other income related to the sublease.

The Company entered into a lease for office space in Alpharetta, Georgia, on March 1, 2020. The lease terminated on March 31, 2023. At inception, the Company recorded a right-of use asset of $540,000, and related current and long-term operating lease obligation in the accompanying consolidated balance sheet. The Company used a discount rate of 6.5% to determine the lease liability. For the three months ended April 30, 2023 and 2022, the Company had lease operating costs of approximately $32,000 and $48,000, respectively.

Suwanee Office Lease

Upon acquiring Avelead on August 16, 2021 (refer to Note 3 – Business Combination and Divestiture), the Company assumed an operating lease agreement for the corporate office space of Avelead. The lessor is an entity controlled by one of the Sellers of Avelead and that Seller is employed by the Company. The initial 36-month term lease commenced March 1, 2019 and expired on February 28, 2022. The Company previously renewed the lease for an additional 12-month term which expired February 28, 2023 and was not renewed. For the three months ended April 30, 2023, the Company recorded rent expense of $6,000.

SCHEDULE OF MAXIMUM DEBT TO ARR RATIO (Details)	Apr. 30, 2023
October 31, 2022 [Member] \| Minimum [Member]
Debt Instrument [Line Items]
Maximum Debt to ARR Ratio	0.80%
October 31, 2022 [Member] \| Maximum [Member]
Debt Instrument [Line Items]
Maximum Debt to ARR Ratio	1.00%
January 31, 2023 [Member] \| Minimum [Member]
Debt Instrument [Line Items]
Maximum Debt to ARR Ratio	0.70%
January 31, 2023 [Member] \| Maximum [Member]
Debt Instrument [Line Items]
Maximum Debt to ARR Ratio	1.00%
April 30, 2023 [Member] \| Minimum [Member]
Debt Instrument [Line Items]
Maximum Debt to ARR Ratio	0.65%
April 30, 2023 [Member] \| Maximum [Member]
Debt Instrument [Line Items]
Maximum Debt to ARR Ratio	1.00%
July 30, 2023 [Member] \| Minimum [Member]
Debt Instrument [Line Items]
Maximum Debt to ARR Ratio	0.60%
July 30, 2023 [Member] \| Maximum [Member]
Debt Instrument [Line Items]
Maximum Debt to ARR Ratio	1.00%
October 31, 2023 [Member] \| Minimum [Member]
Debt Instrument [Line Items]
Maximum Debt to ARR Ratio	0.55%
October 31, 2023 [Member] \| Maximum [Member]
Debt Instrument [Line Items]
Maximum Debt to ARR Ratio	1.00%
January 31, 2024 [Member] \| Minimum [Member]
Debt Instrument [Line Items]
Maximum Debt to ARR Ratio	0.50%
January 31, 2024 [Member] \| Maximum [Member]
Debt Instrument [Line Items]
Maximum Debt to ARR Ratio	1.00%

Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Beginning balance, value at Jan. 31, 2022	$ 478,000	$ 119,225,000	$ (86,659,000)	$ 34,044,000
Beginning balance, shares at Jan. 31, 2022	47,840,950
Restricted stock issued	$ 4,000	(4,000)
Restricted stock issued, shares	408,031
Restricted stock forfeited
Restricted stock forfeited, shares	(63,900)
Surrender of shares	$ (1,000)	(140,000)		(141,000)
Surrender of shares, shares	(95,701)
Share-based compensation		326,000		326,000
Net loss			(2,787,000)	(2,787,000)
Ending balance, value at Apr. 30, 2022	$ 481,000	119,407,000	(89,446,000)	31,442,000
Ending balance, shares at Apr. 30, 2022	48,089,380
Beginning balance, value at Jan. 31, 2023	$ 576,000	131,973,000	(97,038,000)	35,511,000
Beginning balance, shares at Jan. 31, 2023	57,567,210
Restricted stock issued	$ 12,000	(12,000)
Restricted stock issued, shares	1,185,927
Restricted stock forfeited	$ (1,000)	1,000
Restricted stock forfeited, shares	(28,400)
Surrender of shares	$ (1,000)	(178,000)		(179,000)
Surrender of shares, shares	(88,326)
Share-based compensation		595,000		595,000
Adoption of ASU 2016-13			36,000	36,000
Net loss			(2,901,000)	(2,901,000)
Ending balance, value at Apr. 30, 2023	$ 586,000	$ 132,379,000	$ (99,903,000)	$ 33,062,000
Ending balance, shares at Apr. 30, 2023	58,636,411

Cover - shares	3 Months Ended
Cover - shares	Apr. 30, 2023	Jun. 12, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Apr. 30, 2023
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2023
Current Fiscal Year End Date	--01-31
Entity File Number	000-28132
Entity Registrant Name	STREAMLINE HEALTH SOLUTIONS, INC.
Entity Central Index Key	0001008586
Entity Tax Identification Number	31-1455414
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	2400 Old Milton Pkwy.
Entity Address, Address Line Two	Box 1353
Entity Address, City or Town	Alpharetta
Entity Address, State or Province	GA
Entity Address, Postal Zip Code	30009
City Area Code	(888)
Local Phone Number	997-8732
Title of 12(b) Security	Common Stock, $0.01 par value per share
Trading Symbol	STRM
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		58,641,313

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

3 Months Ended

Apr. 30, 2023

Accounting Policies [Abstract]

SCHEDULE OF FAIR VALUE ASSETS AND LIABILITIES MEASURED ON RECURRING BASIS

The table below provides information on the fair value of our liabilities:

	Total Fair		Quoted Prices in Active Markets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Value		(Level 1)		(Level 2)		(Level 3)
At January 31, 2023
Acquisition earnout liability (1)	$	3,738,000	$	—	$	—	$	3,738,000
At April 30, 2023
Acquisition earnout liability (1)	$	3,374,000	$	—	$	—	$	3,374,000

(1)

SCHEDULE OF DISAGGREGATION OF REVENUE

The following table provides information about disaggregated revenue by type and nature of revenue stream:

SCHEDULE OF DISAGGREGATION OF REVENUE

	April 30, 2023		April 30, 2022
	Three Months Ended
	April 30, 2023		April 30, 2022
Over time revenue	$	4,332,000	$	3,941,000
Point in time revenue		1,000,000		1,994,000
Total revenue	$	5,332,000	$	5,935,000

SCHEDULE OF BASIC AND DILUTED NET LOSS PER SHARE OF COMMON STOCK

The following is the calculation of the basic and diluted net loss per share of common stock for the three months ended April 30, 2023 and 2022:

	April 30, 2023			April 30, 2022
	Three Months Ended
	April 30, 2023			April 30, 2022
Basic and diluted loss per share:
Net loss	$	(2,901,000	)	$	(2,787,000	)
Basic and diluted net loss per share of common stock from operations	$	(0.05	)	$	(0.06	)
Weighted average shares outstanding – Basic (1)		55,970,880			47,028,463
Effect of dilutive securities – Stock options and Restricted stock (2)		—			—
Weighted average shares outstanding – Diluted		55,970,880			47,028,463

(1)	Includes the effect of vested and excludes the effect of unvested restricted shares of common stock, which are considered non-participating securities. As of April 30, 2023 and 2022, there were 2,655,831 and 1,025,800 unvested restricted shares of common stock outstanding, respectively.

(2)	Diluted net loss per share excludes the effect of shares that are anti-dilutive. For the three months ended April 30, 2023, diluted earnings per share excludes 628,958 outstanding stock options and 2,655,831 unvested restricted shares of common stock. For the three months ended April 30, 2022, diluted earnings per share excludes 1,062,130 outstanding stock options and 1,025,800 unvested restricted shares of common stock.

SCHEDULE OF ACCOUNTING PRONOUNCEMENTS RECENTLY ADOPTED

		January 31, 2023				CECL Adoption				Provision adjustments				Write-offs & Recoveries				April 30, 2023
Allowance for credit losses		$	(132,000	)		$	36,000				-				-			$	(96,000	)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Apr. 30, 2023

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Our significant accounting policies are presented in “Note 2 – Significant Accounting Policies” in the fiscal year 2022 Annual Report on Form 10-K. Users of financial information for interim periods are encouraged to refer to the notes to the consolidated financial statements contained in the Annual Report on Form 10-K when reviewing interim financial results.

Use of Estimates

Fair Value of Financial Instruments

The Financial Accounting Standards Board’s (“FASB”) authoritative guidance on fair value measurements establishes a framework for measuring fair value. This guidance enables the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. Under this guidance, assets and liabilities carried at fair value must be classified and disclosed in one of the following three categories:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs that are not corroborated by market data.

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value based on the short-term maturity of these instruments. Cash and cash equivalents are classified as Level 1. There were no transfers of assets or liabilities between Levels 1, 2, or 3 during the three months ended April 30, 2023 and 2022.

The table below provides information on the fair value of our liabilities:

Total Fair
Quoted

Prices in

Active

Markets

Significant

Other

Observable

Inputs

Significant
Unobservable Inputs

Value (Level 1) (Level 2) (Level 3)

At January 31, 2023

Acquisition earnout liability (1) $ 3,738,000 $ — $ — $ 3,738,000

At April 30, 2023

Acquisition earnout liability (1) $ 3,374,000 $ — $ — $ 3,374,000

(1) The fair value of the acquisition earnout liability is based upon a probability-weighted discounted cash flow that was completed at the date of acquisition and updated as of April 30, 2023. The change in the fair value of the acquisition earnout liability decreased $364,000 for the three months ended April 30, 2023. The change in the fair value is recognized in “Acquisition earnout valuation adjustments” in the accompanying condensed consolidated statement of operations.

The fair value of the Company’s term loan under its Second Amended and Restated Loan and Security Agreement (as amended and modified, the “Second Amended and Restated Loan Agreement”) was determined through an analysis of the interest rate spread from the date of closing the loan (August 2021) to the date of the most recent balance sheets, April 30, 2023 and January 31, 2023. The term loan bears interest at a per annum rate equal to the Prime Rate (as published in The Wall Street Journal) plus 1.5%, with a Prime “floor” rate of 3.25%. The prime rate is variable and, thus accommodates changes in the market interest rate. However, the interest rate spread (the 1.5% added to the Prime Rate) is fixed. We estimated the impact of the changes in the interest rate spread by analogizing the effect of the change in the Corporate bond rates, reduced for any changes in the market interest rate. This provided us with an estimated change to the interest rate spread of approximately 0.5% from the date we entered the debt agreement to the end of the first quarter, April 30, 2023 and end of the fiscal year, January 31, 2023. The fair value of the debt as of April 30, 2023 and January 31, 2023 was estimated to be $9,425,000 and $9,550,000, respectively, or a discount to book value of $200,000, respectively. Long-term debt is classified as Level 2.

Revenue Recognition

We derive revenue from the sale of internally-developed software, either by licensing for local installation or by a SaaS delivery model, through the Company’s direct sales force or through third-party resellers. Licensed, locally-installed customers on a perpetual model utilize the Company’s support and maintenance services for a separate fee, whereas term-based locally installed license fees and SaaS fees include support and maintenance. We also derive revenue from professional services that support the implementation, configuration, training and optimization of the applications, as well as audit services and consulting services.

We recognize revenue in accordance with Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers, under the core principle of recognizing revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

Disaggregation of Revenue

The following table provides information about disaggregated revenue by type and nature of revenue stream:

SCHEDULE OF DISAGGREGATION OF REVENUE

April 30, 2023 April 30, 2022

Three Months Ended

April 30, 2023 April 30, 2022

Over time revenue $ 4,332,000 $ 3,941,000

Point in time revenue 1,000,000 1,994,000

Total revenue $ 5,332,000 $ 5,935,000

The Company includes revenue categories of (i) over time and (ii) point in time revenue. The Company includes revenue categories of (i) SaaS and (ii) maintenance and support as over time revenue. For point in time revenue, the performance obligation is recognized as the point in time when the obligation is fully satisfied. The Company includes (i) software licenses, (ii) professional services, and (iii) audit services as point in time revenue.

Contract Receivables and Deferred Revenues

The Company receives payments from customers based upon contractual billing schedules. Contract receivables include amounts related to the Company’s contractual right to consideration for completed performance obligations not yet invoiced. Deferred revenue includes payments received in advance of performance under the contract. The Company’s contract receivables and deferred revenue are reported on an individual contract basis at the end of each reporting period. Contract receivables are classified as current or noncurrent based on the timing of when we expect to bill the customer. Deferred revenue is classified as current or noncurrent based on the timing of when we expect to recognize revenue. In the three months ended April 30, 2023, the Company recognized approximately $3,161,000 in revenue from deferred revenues outstanding as of January 31, 2023. Revenue allocated to remaining performance obligations was $27,668,000 as of April 30, 2023, of which the Company expects to recognize approximately 68% over the next 12 months and the remainder thereafter.

Deferred costs (costs to fulfill a contract and contract acquisition costs)

The Company defers the direct costs, which include salaries and benefits, for professional services related to SaaS contracts as a cost to fulfill a contract. These deferred costs will be amortized on a straight-line basis over the period of expected benefit which is the contractual term. As of April 30, 2023 and January 31, 2023, the Company had deferred costs of $94,000 and $94,000, respectively, net of accumulated amortization of $194,000 and $176,000, respectively. Amortization expense of these costs was $18,000 and $19,000 for the three months ended Apri1 30, 2023 and 2022, respectively, and is included in various costs of revenue in the condensed consolidated statements of operations.

Contract acquisition costs, which consist of sales commissions paid or payable, are considered incremental and recoverable costs of obtaining a contract with a customer. Sales commissions for initial and renewal contracts are deferred and then amortized on a straight-line basis over the contract term. As a practical expedient, the Company expenses sales commissions as incurred when the amortization period of related deferred commission costs is expected to be one year or less.

As of April 30, 2023 and January 31, 2023, deferred commission costs paid and payable, which are included on the consolidated balance sheets within other non-current assets totaled $1,483,000 and $1,534,000, respectively, net of accumulated amortization of $949,000 and $820,000, respectively. For the three months ended April 30, 2023 and 2022, $129,000 and $93,000, respectively, in amortization expense associated with deferred sales commissions was included in selling, general and administrative expenses in the condensed consolidated statements of operations. There were no impairment losses for these capitalized costs for these periods.

Equity Awards

The Company accounts for share-based payments based on the grant-date fair value of the awards with compensation cost recognized as expense over the requisite service period, and forfeitures are recognized as incurred. For awards to non-employees, the Company recognizes compensation expense in the same manner as if the entity had paid cash for the goods or services. For the three months ended April 30, 2023, the Company incurred total compensation expense related to share-based awards of $572,000, which includes $23,000 of capitalized non-employee stock compensation, compared to $326,000 for the three months ended April 30, 2022.

The fair value of stock options granted are estimated at the date of grant using a Black-Scholes option pricing model. Option pricing model input assumptions such as expected term, expected volatility and risk-free interest rate impact the fair value estimate. These assumptions are subjective and are generally derived from external (such as, risk-free rate of interest) and historical data (such as, volatility factor and expected term). Future grants of equity awards accounted for as share-based compensation could have a material impact on reported expenses depending upon the number, value and vesting period of future awards.

The Company issues restricted stock awards in the form of Company common stock. The fair value of these awards is based on the market closing price per share on the grant date. For the three months ended April 30, 2023, the Company issued 1,085,000 shares of restricted common stock to employees, compared to 330,000 shares of restricted common stock for the three months ended April 30, 2022.The Company expenses the compensation cost of these awards as the restriction period lapses, which is typically a one- to four-year service period.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and for tax credit and loss carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. In assessing net deferred tax assets, the Company considers whether it is more likely than not that some or all of the deferred tax assets will not be realized. The Company establishes a valuation allowance when it is more likely than not that all or a portion of deferred tax assets will not be realized. Refer to Note 6 – Income Taxes for further details.

The Company provides for uncertain tax positions and the related interest and penalties based upon management’s assessment of whether certain tax positions are more likely than not to be sustained upon examination by tax authorities. At April 30, 2023, the Company believes it has appropriately accounted for any uncertain tax positions.

Net Loss Per Common Share

The Company presents basic and diluted earnings per share (“EPS”) data for the Company’s common stock.

The Company’s unvested restricted stock awards are considered non-participating securities because holders are not entitled to non-forfeitable rights to dividends or dividend equivalents during the vesting term. Diluted EPS for the Company’s common stock is computed using the treasury stock method.

The following is the calculation of the basic and diluted net loss per share of common stock for the three months ended April 30, 2023 and 2022:

April 30, 2023 April 30, 2022

Three Months Ended

April 30, 2023 April 30, 2022

Basic and diluted loss per share:

Net loss $ (2,901,000 ) $ (2,787,000 )

Basic and diluted net loss per share of common stock from operations $ (0.05 ) $ (0.06 )

Weighted average shares outstanding – Basic (1) 55,970,880 47,028,463

Effect of dilutive securities – Stock options and Restricted stock (2) — —

Weighted average shares outstanding – Diluted 55,970,880 47,028,463

(1) Includes the effect of vested and excludes the effect of unvested restricted shares of common stock, which are considered non-participating securities. As of April 30, 2023 and 2022, there were 2,655,831 and 1,025,800 unvested restricted shares of common stock outstanding, respectively.

(2) Diluted net loss per share excludes the effect of shares that are anti-dilutive. For the three months ended April 30, 2023, diluted earnings per share excludes 628,958 outstanding stock options and 2,655,831 unvested restricted shares of common stock. For the three months ended April 30, 2022, diluted earnings per share excludes 1,062,130 outstanding stock options and 1,025,800 unvested restricted shares of common stock.

Other Operating Costs

Acquisition-related Costs

For the three months ended April 30, 2023 and 2022, the Company incurred certain acquisition-related costs related to the acquisition of Avelead totaling $35,000 and $90,000, respectively, consisting primarily of professional service fees.

Non-Cash Items

For the three months ended April 30, 2023, the Company recorded capitalized software purchased with stock, totaling $23,000, as non-cash items related to the condensed consolidated statements of cash flow.

Accounting Pronouncements Recently Adopted

On February 1, 2023, the Company adopted ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), as amended. ASU 2016-13 requires an allowance for expected credit losses to be applied to financial assets at inception and reflect the risk of credit loss over the life of the asset. The Company estimated current expected credit losses based on historical credit loss rates and applied an increase to account for future economic conditions. The Company’s allowance for doubtful accounts as of January 31, 2023, prior to the adoption of ASU 216-13, was $132,000. The Company estimated the current expected credit loss related to accounts receivable as of the adoption date of February 1, 2023 to be $96,000. The Company recorded the adjustment in accounting policy change of $36,000 to the opening retained earnings balance for the year of adoption.

January 31, 2023 CECL Adoption Provision adjustments Write-offs & Recoveries April 30, 2023

Allowance for credit losses $ (132,000 ) $ 36,000 - - $ (96,000 )

For the period ended April 30, 2023, the Company estimated the current expected credit loss related to accounts receivable using historical credit loss rates and applied an increase to account for future economic conditions in accordance with ASU 2016-13. The Company had no further impact on the allowance for credit losses during the three month period ended April 30, 2023.

Recent Accounting Pronouncements Not Yet Adopted

The Company does not believe there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

EQUITY (Details Narrative) - USD ($)		3 Months Ended
EQUITY (Details Narrative) - USD ($)	Oct. 24, 2022	Apr. 30, 2023	Apr. 29, 2023	Jan. 31, 2023	Jun. 22, 2022
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Common stock par value		$ 0.01		$ 0.01
Number of additional shares authorized to issue		2,000,000
Common stock, shares authorized		85,000,000	65,000,000	85,000,000
180 Consulting LLC [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Common stock issued for resale					272,653
2013 Incentive Compensation Plan [Member] \| Stock Options [Member] \| Minimum [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of shares authorized to issue		8,223,246
2013 Incentive Compensation Plan [Member] \| Stock Options [Member] \| Maximum [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of shares authorized to issue		10,223,246
Purchase Agreement [Member]. \| 2022 Offering [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of shares issued	6,299,989
Common stock par value	$ 0.01
Shares issued, price per share	$ 1.32
Proceeds from issuance of common stock	$ 8,316,000

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)

3 Months Ended

Apr. 30, 2023

Apr. 30, 2022

Revenues:

Total revenues

$ 5,332,000

$ 5,935,000

Operating expenses:

Cost of software as a service

1,589,000

1,497,000

Cost of maintenance and support

89,000

46,000

Cost of professional fees and licenses

1,108,000

1,666,000

Selling, general and administrative expense

3,806,000

4,501,000

Research and development

1,701,000

1,312,000

Acquisition-related costs

35,000

90,000

Total operating expenses

8,328,000

9,112,000

Operating loss

(2,996,000)

(3,177,000)

Other (expense) income:

Interest expense

(248,000)

(132,000)

Acquisition earnout valuation adjustments

364,000

500,000

Other

32,000

33,000

Loss before income taxes

(2,848,000)

(2,776,000)

Income tax expense

(53,000)

(11,000)

Net loss

$ (2,901,000)

$ (2,787,000)

Basic and Diluted Earnings Per Share:

Net loss per common share – basic and diluted

$ (0.05)

$ (0.06)

Weighted average number of common shares – basic and diluted

^[1]

55,970,880

47,028,463

Software As a Service [Member]

Revenues:

Total revenues

$ 3,175,000

$ 2,831,000

Maintenance and Support [Member]

Revenues:

Total revenues

1,157,000

1,110,000

Professional Fees and Licenses [Member]

Revenues:

Total revenues

$ 1,000,000

$ 1,994,000

[1]	Includes the effect of vested and excludes the effect of unvested restricted shares of common stock, which are considered non-participating securities. As of April 30, 2023 and 2022, there were 2,655,831 and 1,025,800 unvested restricted shares of common stock outstanding, respectively.

INCOME TAXES

3 Months Ended

Apr. 30, 2023

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE 6 — INCOME TAXES

Income tax expense increased to $53,000 for the three months ended April 31, 2023 compared to $11,000 in the prior year comparable period. The effective income tax rate on continuing operations of approximately (2)% differs from our combined federal and state statutory rate of 25% primarily due to the full valuation allowance the Company currently maintains on its net deferred tax asset.

At January 31, 2023, the Company had U.S. federal net operating loss carry forwards of $49,884,000. The Company also had state net operating loss carry forwards of $24,095,000, Federal R&D tax credit carry forwards of $1,666,000 and Georgia R&D tax credit carry forwards of $94,000, all of which expire through fiscal 2042.

The Company has recorded $344,000 and $333,000 in reserves for uncertain tax positions as of April 30, 2023 and January 31, 2023, respectively.

The Company and its subsidiaries are subject to U.S. federal income tax as well as income taxes in multiple state and local jurisdictions. The Company has concluded all U.S. federal tax matters for years through January 31, 2019. All material state and local income tax matters have been concluded for years through January 31, 2018. The Company is no longer subject to IRS examination for periods prior to the tax year ended January 31, 2019; however, carryforward losses that were generated prior to the tax year ended January 31, 2019 may still be adjusted by the IRS if they are used in a future period.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//740/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-14

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-21

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 270
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482526/740-270-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 17
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-17

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482603/740-30-50-2

+ Details

DEBT (Details Narrative) - USD ($)	Nov. 29, 2022	Aug. 26, 2021	Apr. 30, 2023
Debt Instrument [Line Items]
Debt instrument, interest rate, stated percentage			1.50%
Second Modification Agreement [Member]
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	$ 2,000,000
Principal amount	$ 10,000,000
Debt financial covenants, description	Borrowers shall, at all times, maintain unrestricted cash of Borrowers at Bank in an amount not less than Two Million Dollars ($2,000,000).
Second Modification Agreement [Member] \| Maximum [Member]
Debt Instrument [Line Items]
Fixed charge coverage ratio			1.20%
Second Modification Agreement [Member] \| Minimum [Member]
Debt Instrument [Line Items]
Fixed charge coverage ratio			1.00%
Second Modification Agreement [Member] \| Base Rate [Member]
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate	1.50%
Debt instrument, interest rate, stated percentage	3.25%
Security Agreement [Member]
Debt Instrument [Line Items]
Debt instrument, interest rate, stated percentage			1.50%
Security Agreement [Member] \| Bridge Bank [Member]
Debt Instrument [Line Items]
Long term debt, maturity, year two		$ 500,000
Long term debt, maturity, year three		1,000,000
Long term debt, maturity, year four		2,000,000
Long term debt, maturity, year five		3,000,000
Loan and Security Agreement [Member]
Debt Instrument [Line Items]
Amortization of debt issuance costs		250,000
Accretion expense		$ 250,000

SCHEDULE OF FAIR VALUE ASSETS AND LIABILITIES MEASURED ON RECURRING BASIS (Details) - USD ($)

Apr. 30, 2023

Jan. 31, 2023

Platform Operator, Crypto-Asset [Line Items]

Acquisition earn out liability fair value, observable inputs

^[1]

$ 3,374,000

$ 3,738,000

Fair Value, Inputs, Level 1 [Member]

Platform Operator, Crypto-Asset [Line Items]

Acquisition earn out liability fair value, observable inputs

^[1]

Fair Value, Inputs, Level 2 [Member]

Platform Operator, Crypto-Asset [Line Items]

Acquisition earn out liability fair value, observable inputs

^[1]

Fair Value, Inputs, Level 3 [Member]

Platform Operator, Crypto-Asset [Line Items]

Acquisition earn out liability fair value, observable inputs

^[1]

$ 3,374,000

$ 3,738,000

[1]

COMMITMENTS AND CONTINGENCIES

3 Months Ended

Apr. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 8 — COMMITMENTS AND CONTINGENCIES

Consulting Agreement with 180 Consulting, LLC

On March 19, 2020, the Company entered into a Master Services Agreement (the “MSA”) with 180 Consulting, pursuant to which 180 Consulting has provided and will continue to provide a variety of consulting services in support of eValuator products including product management, operational consulting, staff augmentation, internal systems platform integration and software engineering services, among others, through separate executed statements of work (“SOWs”). On September 20, 2021, the Company entered into a separate MSA in support of Avelead products. Certain of the SOWs include the ability of 180 Consulting to earn stock at a conversion rate to be calculated 20 days after the execution of the related SOW. The MSA includes a termination clause upon a 90-day written notice. While no related party has a direct or indirect material interest in this MSA or the related SOWs, individuals providing services to the Company under the MSA and the SOWs may share workspace and administrative costs with 121G Consulting, LLC (“121G”). 180 Consulting earned 127,099 and 56,070 shares for the three months ended April 30, 2023 and April 30, 2022, respectively, and has earned an aggregate of 1,042,303 shares through April 30, 2023. For services rendered by 180 Consulting during the three months ended April 30, 2023, the Company incurred fees of $953,000, and capitalized non-employee stock compensation of $23,000. The Company paid fees of $452,000 for services rendered by 180 Consulting during the three months ended April 30, 2022.

Inclusive of the MSA executed with 180 Consulting are SOWs that provide for the Company to sublicense a software through 180 Consulting that is owned by 121G. This is a services agreement for access to software that assists the Company in implementing and integrating with our clients’ technology. The license agreement is designed such that there is no material financial benefit that accrues to 121G. 180 Consulting licenses the software from 121G at cost. The Company paid approximately $117,000 and $83,000 for the SOWs that include the sublicense agreement in for the three months ended April 30, 2023 and 2022, respectively, which are included in the aforementioned totals above.

BUSINESS COMBINATION AND DIVESTITURE (Details Narrative) - USD ($)	Nov. 21, 2022	Apr. 30, 2023	Jan. 31, 2023
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Common Stock, Par or Stated Value Per Share		$ 0.01	$ 0.01
Unit Purchase Agreement [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Payments to Acquire Businesses, Net of Cash Acquired	$ 2,012,000
Sale of Stock, Number of Shares Issued in Transaction	1,871,037
Common Stock, Par or Stated Value Per Share	$ 0.01
Unit Purchase Agreement [Member] \| First Year Earnout [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Sale of Stock, Consideration Received on Transaction	$ 5,000,000