Streamline Health(STRM)2024-12-20 21:18Goodwill and Impairment - The company recorded a goodwill impairment of 13,276,000[37]. - The company identified indicators of possible impairment due to a legacy client not renewing its contract and initiated a strategic restructuring to reduce costs[34]. - The impairment tests were conducted under ASC 360 and ASC 350, resulting in a calculated fair value lower than the equity carrying value[37]. - The company concluded that its goodwill was not impaired as of October 31, 2024, based on subsequent impairment testing[37]. Financial Performance - Total revenues for the three months ended October 31, 2024, were 6,133,000 for the same period in 2023[67]. - The net loss for the nine months ended October 31, 2024, was 17,327,000 for the same period in 2023, representing a 53% improvement[72]. - Operating expenses for the three months ended October 31, 2024, totaled 19,080,000 in the same period last year, indicating a significant reduction in costs[67]. - The company reported a basic and diluted net loss per share of 3.15 per share for the same period in 2023[67]. - For the nine months ended October 31, 2024, total revenue was 17,235,000 in the prior year[107]. Cash and Liquidity - Cash and cash equivalents at the end of the period were 2,557,000 at the end of the same period last year, reflecting a decrease of 70%[72]. - The company anticipates the need for additional liquidity in the next twelve months due to insufficient revenue generation[95]. - The company’s cash and cash equivalents decreased to 3.19 million[83]. Strategic Restructuring - The company executed a strategic restructuring, resulting in a reduction of 26 employees, or approximately 24% of its workforce, incurring one-time restructuring costs of 731,000 related to the strategic restructuring[160]. - The company incurred 1,253,000 and 30,068,000, with an expectation to recognize approximately 46% over the next 12 months[108]. - For the three and nine months ended October 31, 2024, revenue from Software as a Service (SaaS) decreased by 1,896,000, respectively, compared to the prior year periods[235]. - A client non-renewal contributed to a revenue decrease of 3,053,000 for the three and nine months ended October 31, 2024, respectively[235]. Debt and Liabilities - The company has total outstanding debt of approximately 2.3 million classified as a current liability[78]. - The company has a term loan facility with an outstanding amount of 9,000,000 as of January 31, 2024[149]. - The fair value of the company's term loan as of October 31, 2024, was estimated to be 179,000[104]. Shareholder and Stock Information - The weighted average number of common shares outstanding for the nine months ended October 31, 2024, was 3,981,406, compared to 3,756,420 for the same period in 2023, indicating an increase in shares[67]. - The Company issued 333 shares of restricted common stock for the three months ended October 31, 2024, compared to 2,999 shares for the same period in 2023[112]. - The Company recorded an increase to additional paid-in capital of $551,000 due to a reverse stock split[97]. Tax and Compliance - The effective income tax rate on continuing operations was approximately 0% for the nine months ended October 31, 2024, due to a full valuation allowance on net deferred tax assets[179]. - The Company was not in compliance with certain covenants under the Second Amended and Restated Loan Agreement for the period ended October 31, 2024, but entered into a Fifth Modification to address this[190]. Future Outlook - The Company expects relatively flat quarterly revenue through the fourth quarter of fiscal 2024 as it delivers on executed agreements to replenish lost revenue related to the non-renewal of the client contract[235]. - The Company anticipates audit and coding services to remain relatively flat throughout the remainder of fiscal 2024[237].