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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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31-1455414
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Large accelerated filer
¨
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Accelerated filer
¨
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Non-accelerated filer
¨
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Smaller reporting company
x
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(Do not check if a smaller reporting company)
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•
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competitive products and pricing;
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•
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product demand and market acceptance;
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•
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new product development;
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•
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key strategic alliances with vendors that resell our products;
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•
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our ability to control costs;
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•
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availability of products produced by third party vendors;
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•
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the healthcare regulatory environment;
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•
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potential changes in legislation, regulation and government funding affecting the healthcare industry;
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•
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healthcare information systems budgets;
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•
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availability of healthcare information systems trained personnel for implementation of new systems, as well as maintenance of legacy systems;
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•
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the success of our relationships with channel partners;
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•
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fluctuations in operating results;
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•
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critical accounting policies and judgments;
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•
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changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other standard-setting organization;
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•
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changes in economic, business and market conditions impacting the healthcare industry, the markets in which we operate and nationally; and
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•
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our ability to maintain compliance with the terms of our credit facilities.
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•
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the potential failure to achieve the expected benefits of the acquisition, including the inability to generate sufficient revenue to offset acquisition costs, or the inability to achieve expected synergies or cost savings;
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•
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unanticipated expenses related to acquired businesses or technologies and their integration into our existing businesses or technology;
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•
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the diversion of financial, managerial, and other resources from existing operations;
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•
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the risks of entering into new markets in which we have little or no experience or where competitors may have stronger positions;
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•
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potential write-offs or amortization of acquired assets or investments;
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•
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the potential loss of key employees, clients, or partners of an acquired business;
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•
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delays in client purchases due to uncertainty related to any acquisition;
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•
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potential unknown liabilities associated with an acquisition; and
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•
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the tax effects of any such acquisitions.
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•
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General economic and market conditions;
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•
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Actual or anticipated variations in annual or quarterly operating results;
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•
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Lack of or negative research coverage by securities analysts;
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•
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Conditions or trends in the healthcare information technology industry;
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•
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Changes in the market valuations of other companies in our industry;
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•
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Announcements by us or our competitors of significant acquisitions, strategic partnerships, divestitures, joint ventures or other strategic initiatives;
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•
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Announced or anticipated capital commitments;
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•
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Ability to maintain listing of our common stock on The Nasdaq Stock Market;
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•
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Additions or departures of key personnel; and
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•
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Sales and repurchases of our common stock by us, our officers and directors or our significant stockholders, if any.
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Location
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Area
(Sq. Feet)
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|
Principal Business
Function
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End of Term
|
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Renewal Option
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Atlanta, GA
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24,335
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Corporate Office
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November 30, 2022
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None
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New York, NY
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10,350
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Satellite Office
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November 29, 2019
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None
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Fiscal Year 2015
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High
|
|
Low
|
||||
4
th
Quarter (November 1, 2015 through January 31, 2016)
|
$
|
2.28
|
|
|
$
|
1.12
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3
rd
Quarter (August 1, 2015 through October 31, 2015)
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3.50
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|
|
1.91
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||
2
nd
Quarter (May 1, 2015 through July 31, 2015)
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2.98
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|
|
1.02
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||
1
st
Quarter (February 1, 2015 through April 30, 2015)
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4.25
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|
|
2.08
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Fiscal Year 2014
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High
|
|
Low
|
||||
4
th
Quarter (November 1, 2014 through January 31, 2015)
|
$
|
4.38
|
|
|
$
|
3.25
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|
3
rd
Quarter (August 1, 2014 through October 31, 2014)
|
5.01
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|
|
3.22
|
|
||
2
nd
Quarter (May 1, 2014 through July 31, 2014)
|
5.77
|
|
|
4.17
|
|
||
1
st
Quarter (February 1, 2014 through April 30, 2014)
|
6.75
|
|
|
4.70
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|
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
|||||||
System sales
|
$
|
2,946
|
|
|
$
|
1,215
|
|
|
$
|
1,731
|
|
|
142
|
%
|
Professional services
|
2,212
|
|
|
2,580
|
|
|
(368
|
)
|
|
(14
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)%
|
|||
Maintenance and support
|
15,145
|
|
|
16,157
|
|
|
(1,012
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)
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(6
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)%
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|||
Software as a service
|
8,011
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|
|
7,673
|
|
|
338
|
|
|
4
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%
|
|||
Total revenues
|
28,314
|
|
|
27,625
|
|
|
689
|
|
|
2
|
%
|
|||
Cost of sales
|
11,401
|
|
|
13,004
|
|
|
(1,603
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)
|
|
(12
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)%
|
|||
Selling, general and administrative
|
13,443
|
|
|
16,226
|
|
|
(2,783
|
)
|
|
(17
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)%
|
|||
Product research and development
|
9,093
|
|
|
9,756
|
|
|
(663
|
)
|
|
(7
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)%
|
|||
Impairment of intangible assets
|
—
|
|
|
1,952
|
|
|
(1,952
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)
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|
(100
|
)%
|
|||
Total operating expenses
|
33,937
|
|
|
40,938
|
|
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(7,001
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)
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|
(17
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)%
|
|||
Operating loss
|
(5,623
|
)
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|
(13,313
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)
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|
7,690
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|
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(58
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)%
|
|||
Other income (expense), net
|
1,340
|
|
|
415
|
|
|
925
|
|
|
223
|
%
|
|||
Income tax benefit
|
(8
|
)
|
|
887
|
|
|
(895
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)
|
|
(101
|
)%
|
|||
Net loss
|
$
|
(4,290
|
)
|
|
$
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(12,011
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)
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$
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7,721
|
|
|
(64
|
)%
|
Adjusted EBITDA(1)
|
$
|
2,761
|
|
|
$
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(987
|
)
|
|
$
|
3,748
|
|
|
380
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%
|
(1)
|
Non-GAAP measure meaning net earnings (loss) before net interest expense, tax expense (benefit), depreciation, amortization, stock-based compensation expense, transactional and other expenses that do not relate to our core operations. See “Use of Non-GAAP Financial Measures” below for additional information and reconciliation.
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Fiscal Year
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||||
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2015
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|
2014
|
||
System sales
|
10.4
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%
|
|
4.4
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%
|
Professional services
|
7.8
|
|
|
9.3
|
|
Maintenance and support
|
53.5
|
|
|
58.5
|
|
Software as a service
|
28.3
|
|
|
27.8
|
|
Total revenues
|
100.0
|
%
|
|
100.0
|
%
|
Cost of sales
|
40.3
|
|
|
47.1
|
|
Selling, general and administrative
|
47.5
|
|
|
58.7
|
|
Product research and development
|
32.1
|
|
|
35.3
|
|
Impairment of intangible assets
|
—
|
|
|
7.1
|
|
Total operating expenses
|
119.9
|
|
|
148.2
|
|
Operating loss
|
(19.9
|
)
|
|
(48.2
|
)
|
Other income (expense), net
|
4.7
|
|
|
1.5
|
|
Income tax benefit
|
—
|
|
|
3.2
|
|
Net loss
|
(15.2
|
)%
|
|
(43.5
|
)%
|
Cost of Sales to Revenues ratio, by revenue stream:
|
|
|
|
||
Systems sales
|
94.3
|
%
|
|
291.1
|
%
|
Services, maintenance and support
|
35.6
|
%
|
|
34.9
|
%
|
Software as a service
|
30.5
|
%
|
|
38.1
|
%
|
(1)
|
Because a significant percentage of the operating costs are incurred at levels that are not necessarily correlated with revenue levels, a variation in the timing of systems sales and installations and the resulting revenue recognition can cause significant variations in operating results. As a result, period-to-period comparisons may not be meaningful with respect to the past results nor are they necessarily indicative of the future results of the Company in the near or long-term. The data in the table is presented solely for the purpose of reflecting the relationship of various operating elements to revenues for the periods indicated.
|
|
Fiscal Year
|
|
2015 to 2014 Change
|
|||||||||||
(in thousands):
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
System Sales:
|
|
|
|
|
|
|
|
|||||||
Proprietary software
|
$
|
2,927
|
|
|
$
|
1,164
|
|
|
$
|
1,763
|
|
|
151
|
%
|
Hardware and third-party software
|
19
|
|
|
51
|
|
|
(32
|
)
|
|
(63
|
)%
|
|||
Professional services
|
2,212
|
|
|
2,580
|
|
|
(368
|
)
|
|
(14
|
)%
|
|||
Maintenance and support
|
15,145
|
|
|
16,157
|
|
|
(1,012
|
)
|
|
(6
|
)%
|
|||
Software as a service
|
8,011
|
|
|
7,673
|
|
|
338
|
|
|
4
|
%
|
|||
Total Revenues
|
$
|
28,314
|
|
|
$
|
27,625
|
|
|
$
|
689
|
|
|
2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year
|
|
2015 to 2014 Change
|
|||||||||||
(in thousands):
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
Cost of system sales
|
$
|
2,778
|
|
|
$
|
3,536
|
|
|
$
|
(758
|
)
|
|
(21
|
)%
|
Cost of professional services
|
3,144
|
|
|
3,459
|
|
|
(315
|
)
|
|
(9
|
)%
|
|||
Cost of maintenance and support
|
3,037
|
|
|
3,088
|
|
|
(51
|
)
|
|
(2
|
)%
|
|||
Cost of software as a service
|
2,442
|
|
|
2,920
|
|
|
(478
|
)
|
|
(16
|
)%
|
|||
Total cost of sales
|
$
|
11,401
|
|
|
$
|
13,003
|
|
|
$
|
(1,602
|
)
|
|
(12
|
)%
|
|
Fiscal Year
|
|
2015 to 2014 Change
|
|||||||||||
(in thousands):
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
General and administrative expenses
|
$
|
9,011
|
|
|
$
|
11,799
|
|
|
$
|
(2,788
|
)
|
|
(24
|
)%
|
Sales and marketing expenses
|
4,432
|
|
|
4,283
|
|
|
149
|
|
|
3
|
%
|
|||
Total selling, general, and administrative
|
$
|
13,443
|
|
|
$
|
16,082
|
|
|
$
|
(2,639
|
)
|
|
(16
|
)%
|
|
Fiscal Year
|
|
2015 to 2014 Change
|
|||||||||||
(in thousands):
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
Research and development expense
|
$
|
9,093
|
|
|
$
|
9,756
|
|
|
$
|
(663
|
)
|
|
(7
|
)%
|
Capitalized software development cost
|
—
|
|
|
620
|
|
|
(620
|
)
|
|
(100
|
)%
|
|||
Total research and development cost
|
$
|
9,093
|
|
|
$
|
10,376
|
|
|
$
|
(1,283
|
)
|
|
(12
|
)%
|
|
Fiscal Year
|
|
2015 to 2014 Change
|
|||||||||||
(in thousands):
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
Impairment of intangible assets
|
$
|
—
|
|
|
$
|
1,952
|
|
|
$
|
(1,952
|
)
|
|
(100
|
)%
|
|
Fiscal Year
|
|
2015 to 2014 Change
|
|||||||||||
(in thousands):
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
Interest expense
|
$
|
(884
|
)
|
|
$
|
(749
|
)
|
|
$
|
(135
|
)
|
|
18
|
%
|
Loss on early extinguishment of debt
|
—
|
|
|
(430
|
)
|
|
430
|
|
|
(100
|
)%
|
|||
Miscellaneous income
|
2,224
|
|
|
1,592
|
|
|
632
|
|
|
40
|
%
|
|||
Total other income
|
$
|
1,340
|
|
|
$
|
413
|
|
|
$
|
927
|
|
|
224
|
%
|
|
2015
|
|
2014
|
||||
Company proprietary software
|
$
|
21,586,000
|
|
|
$
|
20,888,000
|
|
Third-party hardware and software
|
200,000
|
|
|
244,000
|
|
||
Professional services
|
5,803,000
|
|
|
7,485,000
|
|
||
Maintenance and support
|
23,292,000
|
|
|
21,304,000
|
|
||
Software as a service
|
16,264,000
|
|
|
22,574,000
|
|
||
Total
|
$
|
67,145,000
|
|
|
$
|
72,495,000
|
|
(in thousands):
|
SaaS Backlog at
January 31, 2016
|
|
Average
Remaining Months
in Term
|
||
7-year term
|
$
|
1,010
|
|
|
32
|
6-year term
|
459
|
|
|
30
|
|
5-year term
|
9,943
|
|
|
22
|
|
4-year term
|
210
|
|
|
21
|
|
3-year term
|
4,269
|
|
|
18
|
|
Less than 3-year term
|
373
|
|
|
12
|
|
Total SaaS backlog
|
$
|
16,264
|
|
|
|
•
|
EBITDA does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments;
|
•
|
EBITDA does not reflect changes in, or cash requirements for, our working capital needs;
|
•
|
EBITDA does not reflect the interest expense, or the cash requirements to service interest or principal payments under our credit agreements;
|
•
|
EBITDA does not reflect income tax payments we are required to make; and
|
•
|
Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized often will have to be replaced in the future, and EBITDA does not reflect any cash requirements for such replacements.
|
|
Fiscal Year
|
||||||
Adjusted EBITDA Reconciliation
|
2015
|
|
2014
|
||||
Net loss
|
$
|
(4,290
|
)
|
|
$
|
(12,011
|
)
|
Interest expense
|
884
|
|
|
749
|
|
||
Tax expense (benefit)
|
8
|
|
|
(887
|
)
|
||
Depreciation
|
1,245
|
|
|
1,005
|
|
||
Amortization of capitalized software development costs (1)
|
3,073
|
|
|
3,678
|
|
||
Amortization of intangible assets
|
1,345
|
|
|
1,396
|
|
||
Amortization of other costs
|
136
|
|
|
166
|
|
||
EBITDA
|
2,402
|
|
|
(5,904
|
)
|
||
Stock-based compensation expense
|
2,386
|
|
|
1,934
|
|
||
Loss on impairment of intangible assets
|
—
|
|
|
1,952
|
|
||
Loss on early extinguishment of debt
|
—
|
|
|
430
|
|
||
Loss on disposal of fixed assets
|
92
|
|
|
181
|
|
||
Non-cash valuation adjustments to assets and liabilities (2)
|
(1,669
|
)
|
|
(2,154
|
)
|
||
Transaction related professional fees, advisory fees, and other internal direct costs
|
93
|
|
|
182
|
|
||
Associate severances and other costs relating to transactions or corporate restructuring
|
206
|
|
|
901
|
|
||
Other non-recurring operating expenses (income) (3)
|
(750
|
)
|
|
1,491
|
|
||
Adjusted EBITDA
|
$
|
2,761
|
|
|
$
|
(987
|
)
|
Adjusted EBITDA Margin (4)
|
10
|
%
|
|
(4
|
)%
|
||
|
|
|
|
||||
Adjusted EBITDA per diluted share
|
2015
|
|
2014
|
||||
Loss per share — diluted
|
$
|
(0.30
|
)
|
|
$
|
(0.71
|
)
|
Adjusted EBITDA per adjusted diluted share (5)
|
$
|
0.15
|
|
|
$
|
(0.05
|
)
|
Diluted weighted average shares
|
18,689,854
|
|
|
18,261,800
|
|
||
Includable incremental shares — adjusted EBITDA (6)
|
—
|
|
|
—
|
|
||
Adjusted diluted shares
|
18,689,854
|
|
|
18,261,800
|
|
(1)
|
Fiscal 2015 includes
$1,615,000
relating to internally developed legacy software,
$326,000
relating to acquired internally developed software from Interpoint,
$729,000
relating to internally developed software acquired from Meta, and
$403,000
relating to internally developed software acquired from Unibased. Fiscal 2014 includes
$2,220,000
relating to internally developed legacy software,
$326,000
relating to acquired internally developed software from Interpoint,
$729,000
relating to internally developed software acquired from Meta, and
$403,000
relating to internally developed software acquired from Unibased.
|
(2)
|
Fiscal 2015 and 2014 include valuation adjustments for warrants liability of
$(1,629,000)
and
$(2,283,000)
, respectively.
|
(3)
|
Decrease in fiscal 2015 is due to receipt from disbursement of Unibased escrow account. Increase in fiscal 2014 is primarily due to professional services fees that are deemed non-recurring.
|
(4)
|
Adjusted EBITDA as a percentage of GAAP net revenues.
|
(5)
|
Adjusted EBITDA per adjusted diluted share for the Company's common stock is computed using the more dilutive of the two-class method or the if-converted method.
|
(6)
|
The number of incremental shares that would be dilutive under profit assumption, only applicable under a GAAP net loss. If GAAP profit is earned in the current period, no additional incremental shares are assumed.
|
•
|
Persuasive evidence of an arrangement exists,
|
•
|
Delivery has occurred or services have been rendered,
|
•
|
The arrangement fees are fixed or determinable, and
|
•
|
Collection is considered probable.
|
•
|
significant under performance relative to historical or projected future operating results;
|
•
|
significant changes in the manner of use of the acquired assets or the strategy for the overall business;
|
•
|
identification of other impaired assets within a reporting unit;
|
•
|
disposition of a significant portion of an operating segment;
|
•
|
significant negative industry or economic trends;
|
•
|
significant decline in the Company's stock price for a sustained period; and
|
•
|
a decline in the market capitalization relative to the net book value.
|
|
Payments Due by Period
|
||||||||||||||||||
(in thousands)
|
Less than 1 year
|
|
1-3 Years
|
|
3-5 Years
|
|
More than 5 years
|
|
Total
|
||||||||||
Long-term debt obligations
|
$
|
674
|
|
|
$
|
1,797
|
|
|
$
|
6,064
|
|
|
$
|
—
|
|
|
$
|
8,535
|
|
Interest expense on long-term debt
|
550
|
|
|
933
|
|
|
308
|
|
|
—
|
|
|
1,791
|
|
|||||
Capital lease obligations (1)
|
618
|
|
|
93
|
|
|
—
|
|
|
—
|
|
|
711
|
|
|||||
Operating lease obligations
|
971
|
|
|
2,046
|
|
|
1,471
|
|
|
964
|
|
|
5,452
|
|
|||||
Total contractual obligations
|
$
|
2,813
|
|
|
$
|
4,869
|
|
|
$
|
7,843
|
|
|
$
|
964
|
|
|
$
|
16,489
|
|
(1)
|
Future minimum lease payments include principal plus interest.
|
(in thousands)
|
Fiscal Year
|
||||||
2015
|
|
2014
|
|||||
Term loans
|
$
|
8,535
|
|
|
$
|
10,000
|
|
Capital lease
|
686
|
|
|
1,365
|
|
||
Royalty liability
|
2,292
|
|
|
2,386
|
|
(in thousands)
|
Fiscal Year
|
||||||
2015
|
|
2014
|
|||||
Net loss
|
$
|
(4,290
|
)
|
|
$
|
(12,011
|
)
|
Non-cash adjustments to net loss
|
6,763
|
|
|
8,499
|
|
||
Cash impact of changes in assets and liabilities
|
3,408
|
|
|
500
|
|
||
Annual operating cash flow
|
$
|
5,881
|
|
|
$
|
(3,012
|
)
|
(in thousands)
|
Fiscal Year
|
||||||
2015
|
|
2014
|
|||||
Purchases of property and equipment
|
$
|
(518
|
)
|
|
$
|
(2,125
|
)
|
Capitalized software development costs
|
—
|
|
|
(620
|
)
|
||
Payment for acquisitions, net of cash acquired
|
—
|
|
|
(6,058
|
)
|
||
Annual investing cash flow
|
$
|
(518
|
)
|
|
$
|
(8,803
|
)
|
(in thousands)
|
Fiscal Year
|
||||||
2015
|
|
2014
|
|||||
Proceeds from term loans
|
$
|
—
|
|
|
$
|
10,000
|
|
Principal repayments on term loans
|
(1,465
|
)
|
|
(8,298
|
)
|
||
Principal repayments on note payable
|
—
|
|
|
(900
|
)
|
||
Payment of deferred financing costs
|
2
|
|
|
(573
|
)
|
||
Other
|
(540
|
)
|
|
184
|
|
||
Annual financing cash flow
|
$
|
(2,003
|
)
|
|
$
|
413
|
|
|
January 31
|
||||||
|
2016
|
|
2015
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
9,882,136
|
|
|
$
|
6,522,600
|
|
Accounts receivable, net of allowance for doubtful accounts of $155,407 and $665,962, respectively
|
4,199,315
|
|
|
6,935,270
|
|
||
Contract receivables
|
119,697
|
|
|
191,465
|
|
||
Prepaid hardware and third party software for future delivery
|
5,858
|
|
|
55,173
|
|
||
Prepaid client maintenance contracts
|
956,913
|
|
|
935,858
|
|
||
Other prepaid assets
|
941,532
|
|
|
1,437,680
|
|
||
Deferred income taxes
|
—
|
|
|
220,004
|
|
||
Other current assets
|
97,986
|
|
|
207,673
|
|
||
Total current assets
|
16,203,437
|
|
|
16,505,723
|
|
||
Non-current assets:
|
|
|
|
||||
Property and equipment:
|
|
|
|
||||
Computer equipment
|
2,647,135
|
|
|
2,381,923
|
|
||
Computer software
|
801,895
|
|
|
964,857
|
|
||
Office furniture, fixtures and equipment
|
683,443
|
|
|
683,443
|
|
||
Leasehold improvements
|
729,348
|
|
|
724,015
|
|
||
|
4,861,821
|
|
|
4,754,238
|
|
||
Accumulated depreciation and amortization
|
(2,407,746
|
)
|
|
(1,617,423
|
)
|
||
Property and equipment, net
|
2,454,075
|
|
|
3,136,815
|
|
||
Contract receivables, less current portion
|
8,711
|
|
|
43,553
|
|
||
Capitalized software development costs, net of accumulated amortization of $14,919,948 and $11,846,468, respectively
|
6,123,638
|
|
|
9,197,118
|
|
||
Intangible assets, net
|
8,155,325
|
|
|
9,500,317
|
|
||
Deferred financing costs, net of accumulated amortization of $84,531 and $13,677, respectively
|
270,147
|
|
|
387,199
|
|
||
Goodwill
|
16,184,667
|
|
|
16,184,667
|
|
||
Other non-current assets
|
746,018
|
|
|
823,723
|
|
||
Total non-current assets
|
33,942,581
|
|
|
39,273,392
|
|
||
|
$
|
50,146,018
|
|
|
$
|
55,779,115
|
|
|
January 31,
|
||||||
|
2016
|
|
2015
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
1,136,779
|
|
|
$
|
2,298,851
|
|
Accrued compensation
|
935,324
|
|
|
865,865
|
|
||
Accrued other expenses
|
328,551
|
|
|
563,838
|
|
||
Current portion of term loan
|
673,807
|
|
|
500,000
|
|
||
Deferred revenues
|
10,447,280
|
|
|
9,289,076
|
|
||
Current portion of capital lease obligation
|
592,642
|
|
|
781,961
|
|
||
Total current liabilities
|
14,114,383
|
|
|
14,299,591
|
|
||
Non-current liabilities:
|
|
|
|
||||
Term loan
|
7,861,084
|
|
|
9,500,000
|
|
||
Warrants liability
|
205,113
|
|
|
1,834,380
|
|
||
Royalty liability
|
2,291,888
|
|
|
2,385,826
|
|
||
Lease incentive liability, less current portion
|
369,406
|
|
|
342,129
|
|
||
Capital lease obligation
|
93,257
|
|
|
582,911
|
|
||
Deferred revenues, less current portion
|
1,212,709
|
|
|
964,933
|
|
||
Deferred income tax liabilities
|
—
|
|
|
229,579
|
|
||
Total non-current liabilities
|
12,033,457
|
|
|
15,839,758
|
|
||
Total liabilities
|
26,147,840
|
|
|
30,139,349
|
|
||
Series A 0% Convertible Redeemable Preferred Stock, $.01 par value per share, $8,849,985 redemption and liquidation value, 4,000,000 shares authorized, 2,949,995 issued and outstanding, net of unamortized preferred stock discount of $875,935 and $2,212,007, respectively
|
7,974,050
|
|
|
6,637,978
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Common stock, $.01 par value per share, 45,000,000 shares authorized; 18,783,540 and 18,553,389 shares issued and outstanding, respectively
|
187,836
|
|
|
185,534
|
|
||
Additional paid in capital
|
79,700,577
|
|
|
78,390,424
|
|
||
Accumulated deficit
|
(63,864,285
|
)
|
|
(59,574,170
|
)
|
||
Total stockholders’ equity
|
16,024,128
|
|
|
19,001,788
|
|
||
|
$
|
50,146,018
|
|
|
$
|
55,779,115
|
|
|
Fiscal Year
|
||||||
|
2015
|
|
2014
|
||||
Revenues:
|
|
|
|
||||
Systems sales
|
$
|
2,946,304
|
|
|
$
|
1,214,879
|
|
Professional services
|
2,212,002
|
|
|
2,580,167
|
|
||
Maintenance and support
|
15,145,480
|
|
|
16,157,371
|
|
||
Software as a service
|
8,010,672
|
|
|
7,672,990
|
|
||
Total revenues
|
28,314,458
|
|
|
27,625,407
|
|
||
Operating expenses:
|
|
|
|
||||
Cost of systems sales
|
2,778,041
|
|
|
3,536,495
|
|
||
Cost of professional services
|
3,143,881
|
|
|
3,458,984
|
|
||
Cost of maintenance and support
|
3,036,550
|
|
|
3,087,842
|
|
||
Cost of software as a service
|
2,442,143
|
|
|
2,920,403
|
|
||
Selling, general and administrative
|
13,442,799
|
|
|
16,225,574
|
|
||
Research and development
|
9,093,353
|
|
|
9,756,206
|
|
||
Impairment of intangible assets
|
—
|
|
|
1,952,000
|
|
||
Total operating expenses
|
33,936,767
|
|
|
40,937,504
|
|
||
Operating loss
|
(5,622,309
|
)
|
|
(13,312,097
|
)
|
||
Other income (expense):
|
|
|
|
||||
Interest expense
|
(884,226
|
)
|
|
(748,969
|
)
|
||
Loss on early extinguishment of debt
|
—
|
|
|
(429,849
|
)
|
||
Miscellaneous income
|
2,224,423
|
|
|
1,592,449
|
|
||
Loss before income taxes
|
(4,282,112
|
)
|
|
(12,898,466
|
)
|
||
Income tax (expense) benefit
|
(8,003
|
)
|
|
887,009
|
|
||
Net loss
|
(4,290,115
|
)
|
|
(12,011,457
|
)
|
||
Less: deemed dividends on Series A Preferred Shares
|
(1,336,072
|
)
|
|
(1,038,310
|
)
|
||
Net loss attributable to common shareholders
|
$
|
(5,626,187
|
)
|
|
$
|
(13,049,767
|
)
|
Basic net loss per common share
|
$
|
(0.30
|
)
|
|
$
|
(0.71
|
)
|
Number of shares used in basic per common share computation
|
18,689,854
|
|
|
18,261,800
|
|
||
Diluted net loss per common share
|
$
|
(0.30
|
)
|
|
$
|
(0.71
|
)
|
Number of shares used in diluted per common share computation
|
18,689,854
|
|
|
18,261,800
|
|
|
Fiscal Year
|
||||||
|
2015
|
|
2014
|
||||
|
|
|
|
||||
Net loss
|
$
|
(4,290,115
|
)
|
|
$
|
(12,011,457
|
)
|
Other comprehensive gain (loss), net of tax:
|
|
|
|
||||
Fair value of interest rate swap liability
|
—
|
|
|
(3,436
|
)
|
||
Reclassification adjustment for loss on settlement of interest rate swap liability realized in net loss
|
—
|
|
|
114,522
|
|
||
Other comprehensive income
|
$
|
—
|
|
|
$
|
111,086
|
|
Comprehensive loss
|
$
|
(4,290,115
|
)
|
|
$
|
(11,900,371
|
)
|
|
Common stock shares
|
|
Common stock
|
|
Additional paid in capital
|
|
Accumulated
deficit |
|
Accumulated
other comprehensive loss |
|
Total stockholders’ equity
|
|||||||||||
Balance at January 31, 2014
|
18,175,787
|
|
|
$
|
181,758
|
|
|
$
|
76,983,088
|
|
|
$
|
(47,562,713
|
)
|
|
$
|
(111,086
|
)
|
|
$
|
29,491,047
|
|
Stock issued pursuant to Employee Stock Purchase Plan and exercise of stock options
|
257,296
|
|
|
2,573
|
|
|
512,551
|
|
|
—
|
|
|
—
|
|
|
515,124
|
|
|||||
Restricted stock issued
|
120,306
|
|
|
1,203
|
|
|
(1,203
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Interest rate swap
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
111,086
|
|
|
111,086
|
|
|||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
1,934,298
|
|
|
—
|
|
|
—
|
|
|
1,934,298
|
|
|||||
Deemed dividends on Series A Preferred Stock
|
—
|
|
|
—
|
|
|
(1,038,310
|
)
|
|
—
|
|
|
—
|
|
|
(1,038,310
|
)
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,011,457
|
)
|
|
—
|
|
|
(12,011,457
|
)
|
|||||
Balance at January 31, 2015
|
18,553,389
|
|
|
$
|
185,534
|
|
|
$
|
78,390,424
|
|
|
$
|
(59,574,170
|
)
|
|
$
|
—
|
|
|
$
|
19,001,788
|
|
Stock issued pursuant to Employee Stock Purchase Plan and exercise of stock options
|
111,971
|
|
|
1,120
|
|
|
260,918
|
|
|
—
|
|
|
—
|
|
|
262,038
|
|
|||||
Restricted stock issued
|
118,180
|
|
|
1,182
|
|
|
(1,182
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
2,386,489
|
|
|
—
|
|
|
—
|
|
|
2,386,489
|
|
|||||
Deemed dividends on Series A Preferred Stock
|
—
|
|
|
—
|
|
|
(1,336,072
|
)
|
|
—
|
|
|
—
|
|
|
(1,336,072
|
)
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,290,115
|
)
|
|
—
|
|
|
(4,290,115
|
)
|
|||||
Balance at January 31, 2016
|
18,783,540
|
|
|
$
|
187,836
|
|
|
$
|
79,700,577
|
|
|
$
|
(63,864,285
|
)
|
|
$
|
—
|
|
|
$
|
16,024,128
|
|
|
Fiscal Year
|
||||||
|
2015
|
|
2014
|
||||
Operating activities:
|
|
|
|
||||
Net loss
|
$
|
(4,290,115
|
)
|
|
$
|
(12,011,457
|
)
|
Adjustments to reconcile net loss to net cash provided by (used in) operating activities, net of effect of acquisitions:
|
|
|
|
||||
Depreciation
|
1,245,400
|
|
|
1,005,283
|
|
||
Amortization of capitalized software development costs
|
3,073,479
|
|
|
3,677,991
|
|
||
Amortization of intangible assets
|
1,344,992
|
|
|
1,396,317
|
|
||
Amortization of other deferred costs
|
206,881
|
|
|
189,107
|
|
||
Amortization of debt discount
|
—
|
|
|
47,552
|
|
||
Valuation adjustment for warrants liability
|
(1,629,267
|
)
|
|
(2,283,345
|
)
|
||
Deferred tax expense (benefit)
|
(9,575
|
)
|
|
(720,582
|
)
|
||
Other valuation adjustments
|
(39,299
|
)
|
|
128,855
|
|
||
Gain from early extinguishment of lease liability
|
(33,059
|
)
|
|
—
|
|
||
Loss on impairment of intangible assets
|
—
|
|
|
1,952,000
|
|
||
Loss from early extinguishment of debt
|
—
|
|
|
315,327
|
|
||
Loss on disposal of fixed assets
|
92,448
|
|
|
180,793
|
|
||
Loss on exit of operating lease
|
—
|
|
|
234,823
|
|
||
Share-based compensation expense
|
2,386,490
|
|
|
1,934,298
|
|
||
Provision for accounts receivable
|
124,235
|
|
|
440,771
|
|
||
Changes in assets and liabilities, net of assets acquired:
|
|
|
|
||||
Accounts and contract receivables
|
2,718,330
|
|
|
2,157,977
|
|
||
Other assets
|
575,774
|
|
|
(637,348
|
)
|
||
Accounts payable
|
(1,117,986
|
)
|
|
600,263
|
|
||
Accrued expenses
|
(174,133
|
)
|
|
(1,422,571
|
)
|
||
Deferred revenues
|
1,405,980
|
|
|
(197,698
|
)
|
||
Net cash provided by (used in) operating activities
|
5,880,575
|
|
|
(3,011,644
|
)
|
||
Investing activities:
|
|
|
|
||||
Purchases of property and equipment
|
(518,254
|
)
|
|
(2,125,240
|
)
|
||
Capitalization of software development costs
|
—
|
|
|
(619,752
|
)
|
||
Payment for acquisition, net of cash acquired
|
—
|
|
|
(6,058,225
|
)
|
||
Net cash used in investing activities
|
(518,254
|
)
|
|
(8,803,217
|
)
|
||
Financing activities:
|
|
|
|
||||
Proceeds from term loan
|
—
|
|
|
10,000,000
|
|
||
Principal repayments on term loans
|
(1,465,109
|
)
|
|
(8,297,620
|
)
|
||
Principal repayments on note payable
|
—
|
|
|
(900,000
|
)
|
||
Principal payments on capital lease obligation
|
(815,826
|
)
|
|
(368,386
|
)
|
||
Recovery (payment) of deferred financing costs
|
2,111
|
|
|
(573,002
|
)
|
||
Proceeds from exercise of stock options and stock purchase plan
|
276,039
|
|
|
551,583
|
|
||
Net cash (used in) provided by financing activities
|
(2,002,785
|
)
|
|
412,575
|
|
||
Increase (decrease) in cash and cash equivalents
|
3,359,536
|
|
|
(11,402,286
|
)
|
||
Cash and cash equivalents at beginning of year
|
6,522,600
|
|
|
17,924,886
|
|
||
Cash and cash equivalents at end of year
|
$
|
9,882,136
|
|
|
$
|
6,522,600
|
|
|
Fiscal Year
|
||||||
|
2015
|
|
2014
|
||||
Supplemental cash flow disclosures:
|
|
|
|
||||
Interest paid
|
$
|
917,212
|
|
|
$
|
518,919
|
|
Income taxes paid (received)
|
$
|
(35,861
|
)
|
|
$
|
(80,467
|
)
|
Supplemental disclosure of non-cash financing activities:
|
|
|
|
||||
Deemed dividends on Series A Preferred Stock
|
$
|
1,336,072
|
|
|
$
|
1,038,310
|
|
|
2015
|
|
2014
|
||||
Bad debt expense
|
$
|
124,000
|
|
|
$
|
441,000
|
|
Computer equipment and software
|
3-4 years
|
Office equipment
|
5 years
|
Office furniture and fixtures
|
7 years
|
Leasehold improvements
|
Term of lease
|
|
Fiscal Year
|
||||||
Amortization expense on internally developed software included in:
|
2015
|
|
2014
|
||||
Cost of systems sales
|
$
|
2,747,000
|
|
|
$
|
3,352,000
|
|
Cost of software as a service
|
326,000
|
|
|
326,000
|
|
||
Total amortization expense on internally developed software
|
$
|
3,073,000
|
|
|
$
|
3,678,000
|
|
|
Total Fair Value
|
|
Quoted Prices in Active Markets
(Level 1)
|
|
Significant Other Observable Inputs
(Level 2)
|
|
Significant Unobservable Inputs
(Level 3)
|
||||||||
At January 31, 2016
|
|
|
|
|
|
|
|
||||||||
Warrants liability (1)
|
$
|
205,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
205,000
|
|
Royalty liability (2)
|
2,292,000
|
|
|
—
|
|
|
—
|
|
|
2,292,000
|
|
||||
|
|
|
|
|
|
|
|
||||||||
At January 31, 2015
|
|
|
|
|
|
|
|
||||||||
Warrants liability (3)
|
$
|
1,834,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,834,000
|
|
Royalty liability (2)
|
2,386,000
|
|
|
—
|
|
|
—
|
|
|
2,386,000
|
|
(1)
|
The initial fair value of warrants liability was determined by management with the assistance of an independent third-party valuation specialist, and by management thereafter. See Note 4 - Derivative Liabilities, and Note 14 - Private Placement Investment for further details. Changes in fair value of the warrants are recognized within miscellaneous income in the consolidated statements of operations.
|
(2)
|
The initial fair value of royalty liability was determined by management with the assistance of an independent third-party valuation specialist, and by management thereafter. The fair value of the royalty liability is determined based on the probability-weighted revenue scenarios for the Looking Glass® Clinical Analytics solution licensed from Montefiore Medical Center (discussed in Note 3 - Acquisitions). Fair value adjustments are included within miscellaneous income in the consolidated statements of operations.
|
(3)
|
The fair value of warrants liability as of January 31, 2015 was determined by management with the assistance of an independent third-party valuation specialist using Monte-Carlo simulations. See Note 4 - Derivative Liabilities for further details.
|
•
|
Persuasive evidence of an arrangement exists,
|
•
|
Delivery has occurred or services have been rendered,
|
•
|
The arrangement fees are fixed or determinable, and
|
•
|
Collection is considered probable.
|
•
|
Provide updated guidance on how deliverables of an arrangement are separated, and how consideration is allocated;
|
•
|
Eliminate the residual method and require entities to allocate revenue using the relative selling price method and;
|
•
|
Require entities to allocate revenue to an arrangement using the estimated selling price (“ESP”) of deliverables if it does not have vendor specific objective evidence (“VSOE”) or third party evidence (“TPE”) of selling price.
|
•
|
VSOE — the price at which an element is sold as a separate stand-alone transaction
|
•
|
TPE — the price of an element, charged by another company that is largely interchangeable in any particular transaction
|
•
|
ESP — the Company’s best estimate of the selling price of an element of the transaction
|
•
|
significant under performance relative to historical or projected future operating results;
|
•
|
significant changes in the manner of use of the acquired assets or the strategy for the overall business;
|
•
|
identification of other impaired assets within a reporting unit;
|
•
|
disposition of a significant portion of an operating segment;
|
•
|
significant negative industry or economic trends;
|
•
|
significant decline in the Company's stock price for a sustained period; and
|
•
|
a decline in the market capitalization relative to the net book value.
|
|
Fiscal Year
|
||||||
|
2015
|
|
2014
|
||||
Net loss
|
$
|
(4,290,115
|
)
|
|
$
|
(12,011,457
|
)
|
Less: deemed dividends on Series A Preferred Stock
|
(1,336,072
|
)
|
|
(1,038,310
|
)
|
||
Net loss attributable to common shareholders
|
$
|
(5,626,187
|
)
|
|
$
|
(13,049,767
|
)
|
Weighted average shares outstanding used in basic per common share computations
|
18,689,854
|
|
|
18,261,800
|
|
||
Stock options and restricted stock
|
—
|
|
|
—
|
|
||
Number of average shares used in diluted per common share computation
|
18,689,854
|
|
|
18,261,800
|
|
||
Basic net loss per share of common stock
|
$
|
(0.30
|
)
|
|
$
|
(0.71
|
)
|
Diluted net loss per share of common stock
|
$
|
(0.30
|
)
|
|
$
|
(0.71
|
)
|
|
Balance at February 3, 2014
|
||
Assets purchased:
|
|
||
Cash
|
$
|
59,000
|
|
Accounts receivable
|
221,000
|
|
|
Other assets
|
61,000
|
|
|
Internally-developed software
|
2,017,000
|
|
|
Client relationships
|
647,000
|
|
|
Trade name
|
26,000
|
|
|
Goodwill (1)
|
4,251,000
|
|
|
Total assets purchased
|
7,282,000
|
|
|
Liabilities assumed:
|
|
||
Accounts payable and accrued liabilities
|
362,000
|
|
|
Deferred revenue obligation, net
|
793,000
|
|
|
Deferred income taxes
|
9,000
|
|
|
Net assets acquired
|
$
|
6,118,000
|
|
Cash paid
|
$
|
6,118,000
|
|
(1)
|
Goodwill represents the excess of purchase price over the estimated fair value of net tangible and intangible assets acquired, which is not deductible for tax purposes.
|
|
Facilities
|
|
Equipment
|
|
Fiscal Year Totals
|
||||||
2016
|
$
|
969,000
|
|
|
$
|
2,000
|
|
|
$
|
971,000
|
|
2017
|
1,007,000
|
|
|
—
|
|
|
1,007,000
|
|
|||
2018
|
1,039,000
|
|
|
—
|
|
|
1,039,000
|
|
|||
2019
|
967,000
|
|
|
—
|
|
|
967,000
|
|
|||
2020
|
504,000
|
|
|
—
|
|
|
504,000
|
|
|||
Thereafter
|
964,000
|
|
|
—
|
|
|
964,000
|
|
|||
Total
|
$
|
5,450,000
|
|
|
$
|
2,000
|
|
|
$
|
5,452,000
|
|
For the four-quarter period ended
|
|
Minimum EBITDA
|
||
April 30, 2015
|
|
$
|
(2,500,000
|
)
|
July 31, 2015
|
|
(1,750,000
|
)
|
|
October 31, 2015
|
|
(750,000
|
)
|
|
January 31, 2016
|
|
500,000
|
|
|
|
January 31, 2016
|
|
January 31, 2015
|
||||
Senior term loan
|
|
$
|
8,535,000
|
|
|
$
|
10,000,000
|
|
Capital lease
|
|
686,000
|
|
|
1,365,000
|
|
||
Total
|
|
9,221,000
|
|
|
11,365,000
|
|
||
Less: Current portion
|
|
1,266,000
|
|
|
1,282,000
|
|
||
Non-current portion of long-term debt
|
|
$
|
7,955,000
|
|
|
$
|
10,083,000
|
|
|
|
Senior Term Loan
|
|
Capital Lease (1)
|
|
Total
|
||||||
2016
|
|
$
|
674,000
|
|
|
$
|
618,000
|
|
|
$
|
1,292,000
|
|
2017
|
|
898,000
|
|
|
93,000
|
|
|
991,000
|
|
|||
2018
|
|
898,000
|
|
|
—
|
|
|
898,000
|
|
|||
2019
|
|
6,064,000
|
|
|
—
|
|
|
6,064,000
|
|
|||
Total repayments
|
|
$
|
8,534,000
|
|
|
$
|
711,000
|
|
|
$
|
9,245,000
|
|
(1)
|
Future minimum lease payments include principal plus interest.
|
|
Goodwill
|
||
Balance January 31, 2014
|
$
|
11,934,000
|
|
Goodwill acquired during fiscal 2014
|
4,251,000
|
|
|
Balance January 31, 2015 and January 31, 2016
|
$
|
16,185,000
|
|
|
January 31, 2016
|
||||||||||||
Estimated
Useful Life
|
|
Gross Assets
|
|
Accumulated
Amortization
|
|
Net Assets
|
|||||||
Definite-lived assets:
|
|
|
|
|
|
|
|
||||||
Trade name
|
1 year
|
|
$
|
26,000
|
|
|
$
|
26,000
|
|
|
$
|
—
|
|
Client relationships
|
10-15 years
|
|
5,932,000
|
|
|
2,220,000
|
|
|
3,712,000
|
|
|||
Covenants not to compete
|
0.5-15 years
|
|
856,000
|
|
|
667,000
|
|
|
189,000
|
|
|||
Supplier agreements
|
5 years
|
|
1,582,000
|
|
|
1,094,000
|
|
|
488,000
|
|
|||
License agreement
|
15 years
|
|
4,431,000
|
|
|
665,000
|
|
|
3,766,000
|
|
|||
Total
|
|
|
$
|
12,827,000
|
|
|
$
|
4,672,000
|
|
|
$
|
8,155,000
|
|
|
January 31, 2015
|
||||||||||||
Estimated
Useful Life
|
|
Gross Assets
|
|
Accumulated
Amortization
|
|
Net Assets
|
|||||||
Definite-lived assets:
|
|
|
|
|
|
|
|
||||||
Trade name
|
1 year
|
|
$
|
26,000
|
|
|
$
|
26,000
|
|
|
$
|
—
|
|
Client relationships
|
10-15 years
|
|
5,932,000
|
|
|
1,548,000
|
|
|
4,384,000
|
|
|||
Covenants not to compete
|
0.5-15 years
|
|
856,000
|
|
|
606,000
|
|
|
250,000
|
|
|||
Supplier agreements
|
5 years
|
|
1,582,000
|
|
|
778,000
|
|
|
804,000
|
|
|||
License agreement
|
15 years
|
|
4,431,000
|
|
|
369,000
|
|
|
4,062,000
|
|
|||
Total
|
|
|
$
|
12,827,000
|
|
|
$
|
3,327,000
|
|
|
$
|
9,500,000
|
|
|
Annual Amortization Expense
|
||
2016
|
$
|
1,298,000
|
|
2017
|
1,088,000
|
|
|
2018
|
863,000
|
|
|
2019
|
826,000
|
|
|
2020
|
791,000
|
|
|
Thereafter
|
3,289,000
|
|
|
Total
|
$
|
8,155,000
|
|
|
Fiscal Year
|
||||||
|
2015
|
|
2014
|
||||
Current tax (expense) benefit:
|
|
|
|
||||
Federal
|
$
|
—
|
|
|
$
|
131,816
|
|
State
|
(17,578
|
)
|
|
34,611
|
|
||
|
(17,578
|
)
|
|
166,427
|
|
||
Deferred tax benefit:
|
|
|
|
||||
Federal
|
8,838
|
|
|
663,681
|
|
||
State
|
737
|
|
|
56,901
|
|
||
|
9,575
|
|
|
720,582
|
|
||
Current and deferred tax (expense) benefit
|
$
|
(8,003
|
)
|
|
$
|
887,009
|
|
|
Fiscal Year
|
||||||
|
2015
|
|
2014
|
||||
Federal tax benefit at statutory rate
|
$
|
1,455,816
|
|
|
$
|
4,385,479
|
|
State and local taxes, net of federal benefit (expense)
|
(267,997
|
)
|
|
325,966
|
|
||
Change in valuation allowance
|
(1,629,786
|
)
|
|
(4,030,864
|
)
|
||
Permanent items:
|
|
|
|
||||
Incentive stock options
|
(513,708
|
)
|
|
(421,366
|
)
|
||
Transaction costs
|
—
|
|
|
(5,291
|
)
|
||
Escrow refund
|
255,000
|
|
|
—
|
|
||
Change in fair value of warrants liability
|
553,951
|
|
|
776,337
|
|
||
Other
|
(28,914
|
)
|
|
(44,719
|
)
|
||
Reserve for uncertain tax position
|
—
|
|
|
164,127
|
|
||
Other
|
167,635
|
|
|
(262,660
|
)
|
||
Income tax (expense) benefit
|
$
|
(8,003
|
)
|
|
$
|
887,009
|
|
|
January 31,
|
||||||
|
2016
|
|
2015
|
||||
Deferred tax assets:
|
|
|
|
||||
Allowance for doubtful accounts
|
$
|
58,379
|
|
|
$
|
245,252
|
|
Deferred revenue
|
244,163
|
|
|
372,275
|
|
||
Accruals
|
203,291
|
|
|
174,658
|
|
||
Net operating loss carryforwards
|
15,179,685
|
|
|
14,905,174
|
|
||
Stock compensation expense
|
592,654
|
|
|
438,659
|
|
||
Property and equipment
|
78,295
|
|
|
—
|
|
||
AMT credit
|
102,144
|
|
|
102,144
|
|
||
Other
|
17,794
|
|
|
8,912
|
|
||
Total deferred tax assets
|
16,476,405
|
|
|
16,247,074
|
|
||
Valuation allowance
|
(14,184,030
|
)
|
|
(12,554,242
|
)
|
||
Net deferred tax assets
|
2,292,375
|
|
|
3,692,832
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Property and Equipment
|
—
|
|
|
(21,755
|
)
|
||
Definite-lived intangible assets
|
(2,292,375
|
)
|
|
(3,671,077
|
)
|
||
Indefinite-lived intangibles
|
—
|
|
|
(9,575
|
)
|
||
Total deferred tax liabilities
|
(2,292,375
|
)
|
|
(3,702,407
|
)
|
||
Net deferred tax liabilities
|
$
|
—
|
|
|
$
|
(9,575
|
)
|
|
2015
|
|
2014
|
||||
Beginning of fiscal year
|
$
|
—
|
|
|
$
|
121,000
|
|
Additions for tax positions of prior years
|
—
|
|
|
—
|
|
||
Reductions for tax positions of prior years
|
—
|
|
|
—
|
|
||
Reductions attributable to lapse of statute of limitations
|
—
|
|
|
(121,000
|
)
|
||
End of fiscal year
|
$
|
—
|
|
|
$
|
—
|
|
|
Options
|
|
Weighted Average Exercise Price
|
|
Remaining Life in Years
|
|
Aggregate intrinsic value
|
|||||
Outstanding as of February 1, 2015
|
2,437,323
|
|
|
$
|
4.52
|
|
|
|
|
|
||
Granted
|
1,011,828
|
|
|
3.02
|
|
|
|
|
|
|||
Exercised
|
(75,000
|
)
|
|
2.15
|
|
|
|
|
|
|||
Expired
|
(704,326
|
)
|
|
3.67
|
|
|
|
|
|
|||
Forfeited
|
(257,946
|
)
|
|
4.97
|
|
|
|
|
|
|||
Outstanding as of January 31, 2016
|
2,411,879
|
|
|
$
|
4.16
|
|
(1)
|
8.09
|
|
$
|
4,003,719
|
|
Exercisable as of January 31, 2016
|
1,000,037
|
|
|
$
|
4.75
|
|
(2)
|
6.82
|
|
$
|
1,660,061
|
|
Vested or expected to vest as of January 31, 2016
|
1,990,872
|
|
|
$
|
4.25
|
|
|
7.90
|
|
$
|
3,304,848
|
|
(1)
|
The exercise prices range from
$1.53
to
$8.17
, of which
207,924
shares are between
$1.53
and
$2.00
per share,
862,938
shares are between
$2.08
and
$4.00
per share, and
1,341,017
shares are between
$4.02
and
$8.17
per share.
|
(2)
|
The exercise prices range from
$1.53
to
$8.17
, of which
97,924
shares are between
$1.53
and
$2.00
per share,
268,356
shares are between
$2.08
and
$4.00
per share, and
633,757
shares are between
$4.02
and
$8.17
per share.
|
|
2015
|
|
2014
|
||
Expected life
|
6 years
|
|
|
6 years
|
|
Risk-free interest rate
|
1.51
|
%
|
|
1.35
|
%
|
Weighted average volatility factor
|
0.59
|
|
|
0.60
|
|
Dividend yield
|
—
|
|
|
—
|
|
Forfeiture rate
|
30
|
%
|
|
22
|
%
|
|
Non-vested Number of Shares
|
|
Weighted Average Grant Date Fair Value
|
|||
Non-vested balance at January 31, 2014
|
29,698
|
|
|
$
|
6.01
|
|
Granted
|
120,306
|
|
|
4.31
|
|
|
Vested
|
(29,698
|
)
|
|
6.65
|
|
|
Forfeited/expired
|
—
|
|
|
—
|
|
|
Non-vested balance at January 31, 2015
|
120,306
|
|
|
$
|
4.31
|
|
Granted
|
118,180
|
|
|
2.62
|
|
|
Vested
|
(120,306
|
)
|
|
4.31
|
|
|
Forfeited/expired
|
(5,800
|
)
|
|
4.31
|
|
|
Non-vested balance at January 31, 2016
|
112,380
|
|
|
$
|
2.62
|
|
|
|
Adjusted Fair Value at August 16, 2012
|
|
Proceeds Allocation at August 16, 2012
|
|||||
Instruments:
|
|
|
|
|
|
||||
Series A Preferred Stock
|
|
$
|
9,907,820
|
|
|
$
|
6,546,146
|
|
(1)
|
Convertible subordinated notes payable
|
|
5,699,577
|
|
|
3,765,738
|
|
(2)
|
||
Warrants
|
|
2,856,000
|
|
|
1,688,116
|
|
(3)
|
||
Total investment
|
|
$
|
18,463,397
|
|
|
$
|
12,000,000
|
|
|
(1)
|
The Series A Preferred Stock convert on a
1
:1 basis into common stock, but differ in value from common stock due to the downside protection relative to common stock in the event the Company liquidates, and the downside protection, if, after
four
years, the holder has not converted and the stock is below
$3.00
. The fair value of Series A Preferred Stock was determined using a Monte-Carlo simulation following a Geometric Brownian Motion, using the following assumptions: annual volatility of
75%
, risk-free rate of
0.9%
and dividend yield of
0.0%
. The model also utilized the following assumptions to account for the conditions within the agreement: after
four
years, if the simulated common stock price fell below a price of
$3.00
per share, the convertible preferred stock would automatically convert to common stock on a
1
:1 basis moving forward at a price of exactly
$3.00
per share and a forced conversion if the simulated stock price exceeded
$8.00
per share.
|
(2)
|
The fair value of convertible subordinated notes payable was determined based on its current yield as compared to that of those currently outstanding in the marketplace. Management reviewed the convertible note agreement and determined that the note's interest rate is a reasonable representative of a market rate; therefore the face or principal amount of the loan is a reasonable estimate of its fair value.
|
(3)
|
The fair value of the common stock warrants was determined using a Monte-Carlo simulation following a Geometric Brownian motion, using the following assumptions: annual volatility of
75%
, risk-free rate of
0.9%
, dividend yield of
0.0%
and expected life of
5
years. Because the dilutive down-round financing was subject to stockholder approval, which had not happened at the time of the valuation, the model utilized the assumption that the down-round financing would not occur within the simulation.
|
|
Number of Shares
|
|
Series A Preferred Stock
|
|||
Series A Preferred Stock, January 31, 2014
|
2,949,995
|
|
|
$
|
5,599,668
|
|
Accretion of Preferred Stock discount
|
—
|
|
|
1,038,310
|
|
|
Series A Preferred Stock, January 31, 2015
|
2,949,995
|
|
|
6,637,978
|
|
|
Accretion of Preferred Stock discount
|
—
|
|
|
1,336,072
|
|
|
Series A Preferred Stock, January 31, 2016
|
2,949,995
|
|
|
$
|
7,974,050
|
|
|
Number of Shares Issuable
|
|
Weighted Average Exercise Price
|
|||
Warrants - private placement
|
1,200,000
|
|
|
$
|
3.99
|
|
Warrants - placement agent
|
200,000
|
|
|
4.06
|
|
|
Total
|
1,400,000
|
|
|
$
|
4.00
|
|
|
|
|
Additions
|
|
|
|
|
||||||||||||
Description
|
Balance at Beginning of Period
|
|
Charged to Costs and Expenses
|
|
Charged to Other Accounts
|
|
Deductions
|
|
Balance at End of Period
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Year ended January 31, 2016:
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful accounts
|
$
|
666
|
|
|
$
|
48
|
|
|
$
|
—
|
|
|
$
|
(559
|
)
|
|
$
|
155
|
|
Year ended January 31, 2015:
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful accounts
|
$
|
267
|
|
|
$
|
441
|
|
|
$
|
1
|
|
|
$
|
(43
|
)
|
|
$
|
666
|
|
•
|
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets of the Company.
|
•
|
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP and that receipts and expenditures of the Company are being made in accordance with authorization of our management and our Board of Directors.
|
•
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on our consolidated financial statements.
|
|
|
STREAMLINE HEALTH SOLUTIONS, INC.
|
|
By:
|
/
S
/ DAVID W. SIDES
|
|
|
David W. Sides
Chief Executive Officer
|
/
S
/ DAVID W. SIDES
|
Chief Executive Officer
and Director
(Principal Executive Officer)
|
April 20, 2016
|
David W. Sides
|
|
|
/s/ JONATHAN R. PHILLIPS
|
Director
|
April 20, 2016
|
Jonathan R. Phillips
|
|
|
/s/ MICHAEL K. KAPLAN
|
Director
|
April 20, 2016
|
Michael K. Kaplan
|
|
|
/s/ ALLEN S. MOSELEY
|
Director
|
April 20, 2016
|
Allen S. Moseley
|
|
|
/s/ MICHAEL G. VALENTINE
|
Director
|
April 20, 2016
|
Michael G. Valentine
|
|
|
/s/ JUDITH E. STARKEY
|
Director
|
April 20, 2016
|
Judith E. Starkey
|
|
|
/s/ NICHOLAS A. MEEKS
|
Chief Financial Officer (Principal Financial Officer)
|
April 20, 2016
|
Nicholas A. Meeks
|
|
|
/s/ MICHAEL W. HALLORAN
|
Controller
(Principal Accounting Officer)
|
April 20, 2016
|
Michael W. Halloran
|
|
3.1
|
Certificate of Incorporation of Streamline Health Solutions, Inc. f/k/a/ LanVision Systems, Inc., as amended through August 19, 2014 (Incorporated by reference from Exhibit 3.1 of the Form 10-Q, as filed with the SEC on September 15, 2014).
|
3.2
|
Bylaws of Streamline Health Solutions, Inc., as amended and restated through March 28, 2014, (Incorporated by reference from Exhibit 3.1 of Form 8-K, as filed with the Commission on April 3, 2014).
|
3.3
|
Certificate of Designation of Preferences, Rights and Limitations of Series A 0% Convertible Preferred Stock of Streamline Health Solutions, Inc. (Incorporated by reference from Exhibit 10.1 of the Form 8-K, as filed with the Commission on November 1, 2012).
|
4.1
|
Specimen Common Stock Certificate of Streamline Health Solutions, Inc. (Incorporated by reference from the Registration Statement on Form S-1, File Number 333-01494, as filed with the Commission on April 15, 1996).
|
10.1#
|
Streamline Health Solutions, Inc. 1996 Employee Stock Purchase Plan, as amended and restated effective July 1, 2013 (Incorporated by reference from the Registration Statement on Form S-8, File Number 333-188763, as filed with the Commission on May 22, 2013).
|
10.2(a)#
|
2005 Incentive Compensation Plan of Streamline Health Solutions, Inc. (Incorporated by reference from Exhibit 10.1 of the Form 8-K, as filed with the Commission on May 26, 2005).
|
10.2(b)#
|
Amendment No. 1 to 2005 Incentive Compensation Plan of Streamline Health Solutions, Inc.(Incorporated by reference to Annex 1 of Definitive Proxy Statement on Schedule 14A, as filed with the Commission on April 13, 2011).
|
10.2(c)#
|
Amendment No. 2 to 2005 Incentive Compensation Plan of Streamline Health Solutions, Inc. (Incorporated by reference to Exhibit 4.3 of Registration Statement on Form S-8, as filed with the Commission on November 15, 2012).
|
10.3#
|
Streamline Health Solutions, Inc. Amended and Restated 2013 Stock Incentive Plan (Incorporated by reference from Appendix A to the Definitive Proxy Statement on Schedule 14A, as filed with the Commission on July 21, 2014).
|
10.3(a)#
|
Form of Restricted Stock Award Agreement for Non-Employee Directors (Incorporated by reference from Exhibit 10.2 of the Form 8-K, as filed with the Commission August 25, 2014).
|
10.3(b)#
|
Form of Restricted Stock Award Agreement for Executives (Incorporated by reference from Exhibit 10.3 of the Form 8-K, as filed with the Commission August 25, 2014).
|
10.3(c)#
|
Form of Stock Option Agreement for Executives (Incorporated by reference from Exhibit 10.4 of the Form 8-K, as filed with the Commission August 25, 2014).
|
10.4#
|
Employment Agreement dated September 10, 2014 by and between Streamline Health Solutions, Inc. and David W. Sides (Incorporated by reference from Exhibit 10.1 of the Form 10-Q, as filed with the Commission on December 9, 2014).
|
10.4(a)#
|
Amendment to Employment Agreement dated January 8, 2015 by and between Streamline Health Solutions, Inc. and David W. Sides (Incorporated by reference from Exhibit 10.2 of the Form 8-K, as filed with the Commission on January 9, 2015).
|
10.4(b)#*
|
Amendment No. 2 to Employment Agreement dated April 19, 2016 by and between Streamline Health Solutions, Inc. and David W. Sides.
|
10.5#
|
Employment Agreement among Streamline Health Solutions, Inc., Streamline Health, Inc. and Nicholas A. Meeks effective May 22, 2013 (Incorporated by reference from Exhibit 10.2 of the Form 8-K, as filed with the Commission on May 20, 2013).
|
10.5(a)#
|
Amendment No. 1 to Employment Agreement dated June 4, 2015 between Streamline Health Solutions, Inc. and Nicholas A. Meeks (Incorporated by reference from Exhibit 10.1 of the Form 10-Q, as filed with the Commission on June 9, 2015).
|
10.5(b)#*
|
Amendment No. 2 to Employment Agreement dated April 19, 2016 between Streamline Health Solutions, Inc. and Nicholas A. Meeks.
|
10.6#
|
Employment Agreement dated September 8, 2013 between Streamline Health Solutions, Inc. and Jack W. Kennedy Jr. (Incorporated by reference from Exhibit 10.1 of the Form 10-Q, as filed with the Commission on December 16, 2013).
|
10.6(a)#
|
Amendment No. 1 to Employment Agreement dated March 6, 2014 between Streamline Health Solutions, Inc. and Jack W. Kennedy Jr. (Incorporated by reference from Exhibit 10.14(b) of the Form 10-K, as filed with the Commission on June 13, 2014).
|
10.6(b)#
|
Amendment No. 2 to Employment Agreement dated June 4, 2015 between Streamline Health Solutions, Inc. and Jack W. Kennedy Jr. (Incorporated by reference from Exhibit 10.3 of the Form 10-Q, as filed with the Commission on June 9, 2015).
|
10.6(c)#
|
Amendment No. 3 to Employment Agreement dated December 4, 2015 between Streamline Health Solutions, Inc. and Jack W. Kennedy Jr. (Incorporated by reference from Exhibit 10.1 of the Form 10-Q, as filed with the Commission on December 10, 2015).
|
10.7#
|
Employment Agreement dated February 3, 2014 by and between Streamline Health Solutions, Inc. and Randolph W. Salisbury (Incorporated by reference from Exhibit 10.24 of the Form 10-K, as filed with the Commission on June 13, 2014).
|
10.7(a)#
|
Amendment No. 1 to Employment Agreement dated June 4, 2015 between Streamline Health Solutions, Inc. and Randolph W. Salisbury (Incorporated by reference from Exhibit 10.2 of the Form 10-Q, as filed with the Commission on June 9, 2015).
|
10.8#*
|
Employment Agreement dated March 15, 2016 between Streamline Health Solutions, Inc. and Shaun L. Priest.
|
10.9#
|
Form of Indemnification Agreement for all directors and officers of Streamline Health Solutions, Inc. (Incorporated by reference from Exhibit 10.1 of the Form 8-K, as filed with the Commission on June 7, 2006).
|
10.10
|
Reseller Agreement between IDX Information Systems Corporation and Streamline Health Solutions, Inc. entered into on January 30, 2002 (Incorporated by reference from Exhibit 10.11 of the Form 10-K for the fiscal year ended January 31, 2002, as filed with the Commission on April 29, 2002).
|
10.10(a)
|
First Amendment to the Reseller Agreement between IDX Information Systems Corporation and Streamline Health Solutions, Inc. entered into on May 3, 2002 (Incorporated by reference from Exhibit 10 of the Form 10-Q for the quarter ended April 30, 2002, as filed with the Commission on June 4, 2002).
|
10.11
|
Software License and Royalty Agreement dated October 25, 2013 between Streamline Health, Inc. and Montefiore Medical Center (Incorporated by reference from Exhibit 10.2 of the Form 10-Q, as filed with the Commission on December 16, 2013).
|
10.12
|
Credit Agreement dated as of November 21, 2014 by and among Wells Fargo Bank, N.A., the lenders party thereto, Streamline Health Solutions, Inc. and Streamline Health, Inc. (Incorporated by reference from Exhibit 10.2 of the Form 10-Q, as filed with the Commission on December 9, 2014).
|
10.12(a)*
|
Subordination and Intercreditor Agreement dated as of November 21, 2014 by and among each subordinated creditor signatory thereto, Streamline Health Solutions, Inc. and Wells Fargo Bank, N.A.
|
10.12(b)
|
Waiver and First Amendment to Credit Agreement dated as of April 15, 2015 by and among Wells Fargo Bank, N.A., the lenders party thereto, Streamline Health Solutions, Inc. and Streamline Health, Inc. (Incorporated by reference from Exhibit 10.13(a) of the Form 10-K, as filed with the Commission on April 16, 2015).
|
10.13
|
Settlement Agreement and Mutual Release dated as of November 20, 2013 by and among Streamline Health Solutions, Inc., IPP Acquisition, LLC, IPP Holding Company, LLC, W. Ray Cross, as seller representative, and each of the members of IPP Holding Company, LLC named therein (Incorporated by reference from Exhibit 10.3 of the Form 10-Q, as filed with the Commission on December 16, 2013).
|
10.14
|
Subordinated Promissory Note dated November 20, 2013 made by IPP Acquisition, LLC and Streamline Health Solutions, Inc. (Incorporated by reference from Exhibit 10.4 of the Form 10-Q, as filed with the Commission on December 16, 2013).
|
10.15
|
Securities Purchase Agreement, among Streamline Health Solutions, Inc, and each purchaser identified on the signature pages thereto, dated August 16, 2012 (Incorporated by reference from Exhibit 10.4 of the Form 8-K, as filed with the Commission on August 21, 2012).
|
14.1
|
Code of Business Conduct and Ethics (Incorporated by reference from Exhibit 14.1 of the Form 10-K, as filed with the Commission on April 16, 2015).
|
21.1*
|
Subsidiaries of Streamline Health Solutions, Inc.
|
23.1*
|
Consent of Independent Registered Public Accounting Firm - RSM US LLP
|
23.2*
|
Consent of Independent Registered Public Accounting Firm - KPMG LLP
|
31.1*
|
Certification by Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2*
|
Certification by Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1*
|
Certification by Chief Executive Officer pursuant to U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2*
|
Certification by Chief Financial Officer pursuant to U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101
|
The following financial information from Streamline Health Solutions, Inc.'s Annual Report on Form 10- K for the fiscal year ended January 31, 2016 filed with the SEC on April 20, 2016, formatted in XBRL includes: (i) Consolidated Balance Sheets at January 31, 2016 and 2015, (ii) Consolidated Statements of Operations for the two years ended January 31, 2016, (iii) Consolidated Statements of Changes in Stockholders' Equity for the two years ended January 31, 2016, (iv) Consolidated Statements of Cash Flows for the two years ended January 31, 2016, and (v) the Notes to Consolidated Financial Statements.
|
*
|
Filed herewith.
|
#
|
Management Contracts and Compensatory Arrangements.
|
1.
|
EMPLOYMENT
|
2.
|
POSITION AND DUTIES
|
3.
|
COMPENSATION AND BENEFITS
|
4.
|
EXPENSES
|
5.
|
BINDING AGREEMENT
|
6.
|
OUTSIDE EMPLOYMENT
|
7.
|
CONFIDENTIAL INFORMATION AND TRADE SECRETS
|
8.
|
PROPERTY OF THE COMPANY
|
9.
|
PROTECTIVE COVENANTS
|
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut Delaware
Florida
Georgia
Hawaii
Idaho
Illinois
|
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
|
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
|
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming
|
10.
|
TERM
|
11.
|
TERMINATION
|
12.
|
ADVICE TO PROSPECTIVE EMPLOYERS
|
13.
|
CHANGE IN CONTROL
|
(b)
|
For purposes of this Agreement, “Change in Control” means any of the following events:
|
(iii)
|
The Company sells all or substantially all of the assets of the Company; or
|
14.
|
ACKNOWLEDGEMENTS
|
15.
|
NOTICES
|
(a)
|
In the case of the Company, if addressed to it as follows: Streamline Health Solutions, Inc.
|
16.
|
ASSIGNMENT, SUCCESSORS AND ASSIGNS
|
17.
|
MODIFICATION
|
18.
|
SEVERABILITY
|
19.
|
COUNTERPARTS
|
20.
|
ENTIRE AGREEMENT
|
21.
|
DISPUTE RESOLUTION
|
22.
|
GOVERNING LAW; FORUM SELECTION
|
23.
|
CODE SECTION 409A
|
24.
|
WITHHOLDING
.
|
By:
|
/s/ DAVID W. SIDES
|
1.
|
Start Date
. Executive’s start date will be April 6, 2016.
|
2.
|
Base Salary
. Base Salary will be paid at an annualized rate of $200,000, which will be subject to annual review and adjustment by the Committee or the Board but will not be reduced below $200,000. Such amounts will be payable to Executive in accordance with the normal payroll practices of the Company.
|
3.
|
Annual Bonus
. Target annual bonus and target goals will be set by the Committee annually and based on a combination of individual and Company performance. Target annual bonus (prorated for any partial period) will be $220,000. The annual bonus will be paid pursuant to such conditions as are established by the Committee and, to the extent payable under a bonus plan, subject to such terms and conditions as may be set out in such plan. The annual bonus will, if payable, be paid in cash no later than March 14 of the fiscal year following the fiscal year during which Executive’s right to the annual bonus vests.
|
4.
|
Benefits
. Executive will be eligible to participate in the Company’s benefit plans on the same terms and conditions as provided for other Company executives, subject to all terms and conditions of such plans as they may be amended from time to time, and will accrue vacation days and personal days totaling an aggregate of 20 days per annum.
|
5.
|
Grant of Stock Option and Restricted Stock
. Executive will receive the following grants of equity incentives:
|
(a)
|
a grant of a stock option for 75,000 shares of common stock of the Company, as of the start date referred to in paragraph 1 above, with an option exercise price equal to the closing price on the date of grant of such stock as reported by NASDAQ CM. Such option will have a 10-year term, will vest monthly in 36 substantially equal installments commencing on the first month after the grant date (such vesting to be subject to the continued employment of Executive). Such option will be considered an “inducement grant” under Nasdaq listed company rules, but will otherwise be subject to the terms and conditions of the Company’s Amended and Restated 2013 Stock Incentive Plan and the related option agreement.
|
(b)
|
a grant of 50,000 shares of restricted stock that will vest in four equal annual installments beginning on the one-year anniversary of the start date referred to in paragraph 1 above. Such grant will be made pursuant to and otherwise subject to the terms and conditions of the Company’s Amended and Restated 2013 Stock Incentive Plan and the related restricted stock grant agreement.
|
SUBORDINATED CREDITORS
:
BIOMEDICAL VALUE FUND, L.P. By: Great Point Partners, LLC, its investment manager
By:
/s/ David Kroin
Name: David Kroin
Title: Managing Director |
BIOMEDICAL INSTITUTIONAL VALUE FUND, L.P.
By: Great Point Partners, LLC, its investment manager
By:
/s/ David Kroin
Name: David Kroin
Title: Managing Director |
BIOMEDICAL OFFSHORE VALUE FUND, LTD.
By: Great Point Partners, LLC, its investment manager
By:
/s/ David Kroin
Name: David Kroin
Title: Managing Director |
WS INVESTMENTS II, LLC
By: Great Point Partners, LLC, its investment manager
By:
/s/ David Kroin
Name: David Kroin
Title: Managing Director |
DAVID J. MORRISON
By: Great Point Partners, LLC, its investment manager
By:
/s/ David Kroin
Name: David Kroin
Title: Managing Director |
CLASS D SERIES OF GEF-PS, L.P.
By: Great Point Partners, LLC, its investment manager
By:
/s/ David Kroin
Name: David Kroin
Title: Managing Director |
LYRICAL MULTI-MANAGER FUND, L.P.
By: Great Point Partners, LLC, its investment manager
By:
/s/ David Kroin
Name: David Kroin
Title: Managing Director |
LYRICAL MULTI-MANAGER OFFSHORE FUND, L.P.
By: Great Point Partners, LLC, its investment manager
By:
/s/ David Kroin
Name: David Kroin
Title: Managing Director |
NORO-MOSELEY PARTNERS VI, L.P.
By:
/s/ Allen Moseley
Name: Allen Moseley
Title: Member |
CHARLES D. MOSELEY
By:
/s/ Charles D. Moseley
|
COMPANY
:
STREAMLINE HEALTH SOLUTIONS, INC., a Delaware corporation By: /s/ Nicholas Meeks
Name: Nicholas Meeks
Title: Senior Vice President / Chief Financial Officer |
AGENT
:
WELLS FARGO BANK, NATIONAL ASSOCIATION, as Agent By: /s/ Stephen Carll
Name: Stephen Carll
Title: Authorized Signatory |
Subordinated Creditors
|
Jurisdiction of Formation
|
Biomedical Value Fund, L.P.
|
Delaware
|
Biomedical Offshore Value Fund, Ltd.
|
Cayman Islands
|
Biomedical Institutional Value Fund, L.P.
|
Delaware
|
Class D Series of GEF-PS, L.P.
|
Delaware
|
Lyrical Multi-Manager Fund, L.P.
|
Delaware
|
Lyrical Multi-Manager Offshore Fund, L.P.
|
Cayman Islands
|
WS Investments II, LLC
|
Delaware
|
Charles Moseley
|
N/A
|
Noro-Moseley Partners VI, L.P.
|
Delaware
|
Subordinated Creditors
|
Jurisdiction of Formation
|
Biomedical Value Fund, L.P.
|
$1,245,456.00
|
Biomedical Offshore Value Fund, Ltd.
|
$763,293.00
|
Biomedical Institutional Value Fund, L.P.
|
$468,510.00
|
Class D Series of GEF-PS, L.P.
|
$713,292.00
|
Lyrical Multi-Manager Fund, L.P.
|
$381,720.00
|
Lyrical Multi-Manager Offshore Fund, L.P.
|
$163,593.00
|
WS Investments II, LLC
|
$114,123.00
|
Charles Moseley
|
$60,420.00
|
Noro-Moseley Partners VI, L.P.
|
$2,960,562.00
|
By:
|
Jack W. Kennedy Jr.
|
Title:
|
Senior VP, Administration & Chief Legal Counsel
|
a.
|
Paragraph 1 of such Exhibit A is hereby deleted in its entirety and replaced with the following:
|
b.
|
Paragraph 2 of such Exhibit A is hereby deleted in its entirety and replaced with the following:
|
Name
|
Jurisdiction of Incorporation
|
|
% Owned
|
Streamline Health, Inc.
|
Ohio
|
|
100%
|
April 20, 2016
|
/s/ David W. Sides
|
|
Chief Executive Officer and
President
|
April 20, 2016
|
/s/ Nicholas A. Meeks
|
|
Chief Financial Officer
|