Streamline Health(STRM) - 2026 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, stockholders' equity, and cash flows, along with detailed notes explaining the basis of presentation, significant accounting policies, business combinations, operating leases, debt, income taxes, equity, commitments, related party transactions, and subsequent events Condensed Consolidated Balance Sheets The Condensed Consolidated Balance Sheets provide a snapshot of the company's financial position at April 30, 2025, and January 31, 2025, showing a slight increase in total assets, an increase in total liabilities, and a decrease in total stockholders' equity Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | April 30, 2025 | January 31, 2025 | | :-------------------------------- | :------------- | :--------------- | | Total Assets | $35,827 | $35,579 | | Total Liabilities | $24,772 | $23,302 | | Total Stockholders' Equity | $11,055 | $12,277 | | Cash and cash equivalents | $1,449 | $2,183 | | Accounts receivable, net | $4,184 | $1,585 | | Deferred revenues (current) | $7,126 | $6,099 | | Term loan, net | $7,277 | $7,709 | | Line of credit | $2,000 | $1,000 | | Notes payable, net | $4,703 | $4,415 | Unaudited Condensed Consolidated Statements of Operations The Unaudited Condensed Consolidated Statements of Operations show a significant reduction in net loss for the three months ended April 30, 2025, compared to the prior year, driven by increased total revenues, particularly from Software as a Service (SaaS), and reduced operating expenses Unaudited Condensed Consolidated Statements of Operations Highlights (Three Months Ended April 30, in thousands) | Metric | 2025 | 2024 | Change | % Change | | :----------------------------------- | :----- | :----- | :----- | :------- | | Total Revenues | $4,810 | $4,330 | $480 | 11% | | Software as a service revenue | $3,359 | $2,723 | $636 | 23% | | Maintenance and support revenue | $737 | $890 | $(153) | (17)% | | Professional fees and licenses revenue | $714 | $717 | $(3) | (0)% | | Operating Loss | $(1,101) | $(2,250) | $1,149 | (51)% | | Net Loss | $(1,645) | $(2,739) | $1,094 | (40)% | | Basic and Diluted Net Loss Per Share | $(0.40) | $(0.71) | $0.31 | (44)% | Unaudited Condensed Consolidated Statements of Stockholders' Equity The Unaudited Condensed Consolidated Statements of Stockholders' Equity detail the changes in equity for the three months ended April 30, 2025, and 2024, primarily reflecting the impact of net loss and share-based compensation Stockholders' Equity Changes (Three Months Ended April 30, in thousands) | Metric | April 30, 2025 | January 31, 2025 | | :-------------------------- | :------------- | :--------------- | | Total Stockholders' Equity | $11,055 | $12,277 | | Net Loss | $(1,645) | $(1,645) | | Share-based compensation | $456 | $456 | | Common stock (Shares) | 4,324,091 | 4,264,482 | Unaudited Condensed Consolidated Statements of Cash Flows The Unaudited Condensed Consolidated Statements of Cash Flows indicate a net decrease in cash and cash equivalents for the three months ended April 30, 2025, primarily due to cash used in operating activities and reduced cash provided by financing activities compared to the prior year Cash Flow Summary (Three Months Ended April 30, in thousands) | Cash Flow Activity | 2025 | 2024 | | :----------------------------------- | :----- | :----- | | Net cash used in operating activities | $(969) | $(1,199) | | Net cash used in investing activities | $(232) | $(232) | | Net cash provided by financing activities | $467 | $2,220 | | Net decrease in cash and cash equivalents | $(734) | $789 | | Cash and cash equivalents at end of period | $1,449 | $3,979 | Notes to Unaudited Condensed Consolidated Financial Statements These notes provide detailed explanations and disclosures supporting the condensed consolidated financial statements, covering the company's business, accounting policies, debt, equity, and significant events, including a pending merger and ongoing going concern uncertainties NOTE 1 — BASIS OF PRESENTATION This note outlines the company's business as a healthcare information technology solutions provider, the basis for preparing the financial statements, and significant events such as a reverse stock split and a pending merger, while also highlighting a going concern uncertainty - The Company operates as a single segment, providing healthcare information technology solutions and associated services, including licensing Coding & Clinical Documentation Improvement (CDI) solutions, eValuator coding analysis platform, RevID, and other workflow software applications, as well as audit and consulting services[21][23] - The Company's financial statements are prepared on a going concern basis, but management projects probable non-compliance with certain financial covenants under its current credit agreement in the next twelve months, raising substantial doubt about its ability to continue as a going concern[25][27] - A 1-for-15 reverse stock split was effected on October 4, 2024, retrospectively adjusting all shares and per-share data without changing authorized shares or par value[29][30] - On May 29, 2025, the Company entered into a Merger Agreement with Mist Holding Co., under which the Company will become a wholly-owned subsidiary of Parent[31] NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This note details the company's key accounting policies, including its single operating segment, revenue recognition practices, fair value measurements for financial instruments, equity award accounting, and recent accounting pronouncements, emphasizing the use of estimates in financial reporting - The Company operates as a single operating segment, with the Chief Executive Officer (CODM) reviewing consolidated financial information to assess performance and allocate resources[33] Disaggregated Revenue by Type (Three Months Ended April 30, in thousands) | Revenue Type | 2025 | 2024 | | :----------------------- | :----- | :----- | | Software as a service | $3,359 | $2,723 | | Maintenance and support | $737 | $890 | | Professional fees and licenses | $714 | $717 | | Total revenues | $4,810 | $4,330 | - Cash and cash equivalents are classified as Level 1 fair value measurements. The term loan, line of credit, and notes payable are Level 2 measurements. The acquisition earnout liability transferred out of Level 3 as of April 30, 2024[39][40][43][44] - Approximately $2,701,000 in revenue was recognized from deferred revenues outstanding as of January 31, 2025, during the three months ended April 30, 2025. Remaining performance obligations were $28,988,000 as of April 30, 2025, with 48% expected to be recognized over the next 12 months[49] - Share-based compensation expense was $430,000 for the three months ended April 30, 2025, compared to $499,000 for the same period in 2024[55] - Warrants were initially classified as a liability due to a potential cash settlement feature but were reclassified to equity after the Registration Statement on Form S-3 was declared effective on June 10, 2024, eliminating the cash settlement feature[99][100] NOTE 3 — BUSINESS COMBINATION This note details the acquisition of Avelead Consulting, LLC