# EDGAR Filing Document

**Accession Number:** 0001008586
**File Stem:** 0001437749-25-020474
**Filing Date:** 2025-6
**Character Count:** 171987
**Document Hash:** a907224a4a57886222bc162836a7c28f
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001437749-25-020474.hdr.sgml**: 20250616

**ACCESSION NUMBER**: 0001437749-25-020474

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 61

**CONFORMED PERIOD OF REPORT**: 20250430

**FILED AS OF DATE**: 20250616

**DATE AS OF CHANGE**: 20250616

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** STREAMLINE HEALTH SOLUTIONS INC.
- **CENTRAL INDEX KEY:** 0001008586
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373]
- **ORGANIZATION NAME:** 06 Technology
- **EIN:** 311455414
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 0131

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-28132
- **FILM NUMBER:** 251050125

**BUSINESS ADDRESS:**
- **STREET 1:** 2400 OLD MILTON PARKWAY
- **STREET 2:** BOX 1353
- **CITY:** ALPHARETTA
- **STATE:** GA
- **ZIP:** 30009
- **BUSINESS PHONE:** 888-997-8732

**MAIL ADDRESS:**
- **STREET 1:** 2400 OLD MILTON PARKWAY
- **STREET 2:** BOX 1353
- **CITY:** ALPHARETTA
- **STATE:** GA
- **ZIP:** 30009

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** STREEAMLINE HEALTH SOLUTIONS INC.
- **DATE OF NAME CHANGE:** 20060809

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** LANVISION SYSTEMS INC
- **DATE OF NAME CHANGE:** 19960220

?xml version='1.0' encoding='ASCII'? strm20250430_10q.htm

[**Table of Contents**](#toc)

------

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, DC 20549**

**FORM 10-Q**

(Mark One)

☒ **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

For the quarterly period ended April 30, 2025

**OR**

☐ **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

For the transition period from __________ to ____________

**Commission File Number: 000-28132**

**STREAMLINE HEALTH SOLUTIONS, INC.**

*(Exact name of registrant as specified in its charter)*

---

| | |
|:---|:---|
| **Delaware** | **31-1455414** |
| *(State or other jurisdiction of*<br> *incorporation or organization)* | *(I.R.S. Employer*<br> *Identification No.)* |

---

**2400 Old Milton Pkwy., Box 1353**

**Alpharetta, GA 30009**

*(Address of principal executive offices) (Zip Code)*

**(888) 997-8732**

*(Registrant*'*s telephone number, including area code)*

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| **Common Stock, $0.01 par value per share** | **STRM** | **Nasdaq Capital Market** |

---

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer", "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

---

| | | | |
|:---|:---|:---|:---|
| Large accelerated filer ☐ | Accelerated filer ☐ | Non-accelerated filer ☒ | Smaller reporting company ☒ |
| Emerging growth company ☐ |  |  |  |

---

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares outstanding of the Registrant's Common Stock, $0.01 par value per share, as of June 12, 2025, was 4,356,062.

------

[**Table of Contents**](#toc)

**TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
|  |  | Page |
| Part I. | [FINANCIAL INFORMATION](#partonefininfo) | [3](#partonefininfo) |
| Item 1. | [CONDENSED CONSOLIDATED FINANCIAL STATEMENTS](#finstmts) | [3](#finstmts) |
|  | [Condensed Consolidated Balance Sheets at April 30, 2025 (unaudited) and January 31, 2025](#bs) | [3](#bs) |
|  | [Unaudited Condensed Consolidated Statements of Operations for the three months ended April 30, 2025 and 2024](#ops) | [5](#ops) |
|  | [Unaudited Condensed Consolidated Statements of Stockholders' Equity for the three months ended April 30, 2025 and 2024](#se) | [6](#se) |
|  | [Unaudited Condensed Consolidated Statements of Cash Flows for the three months ended April 30, 2025 and 2024](#cf) | [7](#cf) |
|  | [Notes to Unaudited Condensed Consolidated Financial Statements](#notes) | [8](#notes) |
| Item 2. | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#mda) | [28](#mda) |
| Item 3. | [Quantitative and Qualitative Disclosures About Market Risk](#quant) | [44](#quant) |
| Item 4. | [Controls and Procedures](#controls) | [44](#controls) |
| Part II. | [OTHER INFORMATION](#parttwootherinfo) | [45](#parttwootherinfo) |
| Item 1. | [Legal Proceedings](#legal_proceedings) | [45](#legal_proceedings) |
| Item 1A. | [Risk Factors](#risk) | [45](#risk) |
| Item 2. | [Unregistered Sales of Equity Securities and Use of Proceeds](#unregistered) | [47](#unregistered) |
| Item 3. | [Defaults Upon Senior Securities](#Item_3) | [47](#Item_3) |
| Item 4. | [Mine Safety Disclosures](#Item_4) | [47](#Item_4) |
| Item 5. | [Other Information](#other_info_2) | [47](#other_info_2) |
| Item 6. | [Exhibits](#exhibits) | [48](#exhibits) |
|  | [Signatures](#sigs) | [49](#sigs) |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2

------

[**Table of Contents**](#toc)

**PART I. FINANCIAL INFORMATION**

**Item 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**STREAMLINE HEALTH SOLUTIONS, INC.**

**CONDENSED CONSOLIDATED BALANCE SHEETS**

**(rounded to the nearest thousand dollars, except share and per share information)**

---

| | | |
|:---|:---|:---|
|  | ***April 30, 2025*** | ***January 31, 2025*** |
|  | **(Unaudited)** |  |
| **ASSETS** |  |  |
| **Current assets:** |  |  |
| Cash and cash equivalents | $1449000 | $2183000 |
| Accounts receivable, net of allowance for credit losses of $59,000 and $59,000, respectively | 4184000 | 1585000 |
| Contract receivables | 637000 | 1571000 |
| Prepaid and other current assets | 310000 | 438000 |
| Total current assets | 6580000 | 5777000 |
| **Non-current assets:** |  |  |
| Property and equipment, net of accumulated amortization of $144,000 and $110,000 respectively | 45000 | 49000 |
| Capitalized software development costs, net of accumulated amortization of $7,092,000 and $6,762,000, respectively | 4778000 | 4850000 |
| Intangible assets, net of accumulated amortization of $6,064,000 and $5,655,000, respectively | 10026000 | 10435000 |
| Goodwill | 13276000 | 13276000 |
| Other | 1122000 | 1192000 |
| Total non-current assets | 29247000 | 29802000 |
| Total assets | $35827000 | $35579000 |

---

See accompanying notes to condensed consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3

------

[**Table of Contents**](#toc)

**STREAMLINE HEALTH SOLUTIONS, INC.**

**CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)**

**(rounded to the nearest thousand dollars, except share and per share information)**

---

| | | |
|:---|:---|:---|
|  | ***April 30, 2025*** | ***January 31, 2025*** |
|  | **(Unaudited)** |  |
| **LIABILITIES AND STOCKHOLDERS' EQUITY** |  |  |
| **Current liabilities:** |  |  |
| Accounts payable | $1547000 | $1541000 |
| Accrued expenses | 1626000 | 1921000 |
| Term loan, net of deferred financing costs | 7277000 | 7709000 |
| Line of credit | 2000000 | 1000000 |
| &nbsp;&nbsp;&nbsp; Notes payable, net of deferred financing costs | 4703000 | 4415000 |
| Deferred revenues | 7126000 | 6099000 |
| Acquisition earnout liability | 377000 | 377000 |
| Total current liabilities | 24656000 | 23062000 |
| **Non-current liabilities:** |  |  |
| Deferred revenues, less current portion | 116000 | 240000 |
| Total non-current liabilities | 116000 | 240000 |
| Total liabilities | 24772000 | 23302000 |
| **Commitments and contingencies – Note 8** |  |  |
| **Stockholders' equity:** |  |  |
| Common stock, $0.01 par value per share, 85,000,000 shares authorized; 4,324,091 and 4,264,482 shares issued and outstanding, respectively | 43000 | 43000 |
| Additional paid in capital | 138515000 | 138092000 |
| Accumulated deficit | (127503000) | (125858000) |
| Total stockholders' equity | 11055000 | 12277000 |
| Total liabilities and stockholders' equity | $35827000 | $35579000 |

---

See accompanying notes to condensed consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4

------

[**Table of Contents**](#toc)

**STREAMLINE HEALTH SOLUTIONS, INC.**

**UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS**

**(rounded to the nearest thousand dollars, except share and per share information)**

---

| | | |
|:---|:---|:---|
|  | ***Three Months Ended April 30,*** | ***Three Months Ended April 30,*** |
|  | ***2025*** | ***2024*** |
| **Revenues:** |  |  |
| Software as a service | $3359000 | $2723000 |
| Maintenance and support | 737000 | 890000 |
| Professional fees and licenses | 714000 | 717000 |
| Total revenues | 4810000 | 4330000 |
| **Operating expenses:** |  |  |
| Cost of software as a service | 1380000 | 1348000 |
| Cost of maintenance and support | 32000 | 42000 |
| Cost of professional fees and licenses | 808000 | 887000 |
| Selling, general and administrative expense | 2788000 | 3192000 |
| Research and development | 903000 | 1111000 |
| Total operating expenses | 5911000 | 6580000 |
| Operating loss | (1101000) | (2250000) |
| **Other (expense) income:** |  |  |
| Interest expense | (543000) | (465000) |
| Valuation adjustments |  | (24000) |
| Other | (1000) |  |
| Loss before income taxes | (1645000) | (2739000) |
| Income tax benefit |  |  |
| **Net loss** | $(1645000) | $(2739000) |
| Basic and Diluted Earnings Per Share: |  |  |
| Net loss per common share – basic and diluted | $(0.40) | $(0.71) |
| Weighted average number of common shares – basic and diluted | 4128029 | 3881606 |

---

See accompanying notes to condensed consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5

------

[**Table of Contents**](#toc)

**STREAMLINE HEALTH SOLUTIONS, INC.**

**UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS**' **EQUITY**

**(rounded to the nearest thousand dollars, except share information)**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  |  |  | ***Additional*** |  | ***Total*** |
|  | ***Common stock*** | ***Common stock*** | ***paid in*** | ***Accumulated*** | ***stockholders'*** |
|  | ***(Shares)*** | ***(Amount)*** | ***capital*** | ***deficit*** | ***equity*** |
| **Balance at January 31, 2025** | 4264482 | $43000 | $138092000 | $(125858000) | $12277000 |
| Restricted stock issued | 74928 |  |  |  |  |
| Restricted stock forfeited | (4007) |  |  |  |  |
| Surrender of shares | (11312) |  | (33000) |  | (33000) |
| Share-based compensation | *—* |  | 456000 |  | 456000 |
| Net loss | *—* |  |  | (1645000) | (1645000) |
| **Balance at April 30, 2025** | 4324091 | $43000 | $138515000 | $(127503000) | $11055000 |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  |  |  | ***Additional*** |  | ***Total*** |
|  | ***Common stock*** | ***Common stock*** | ***paid in*** | ***Accumulated*** | ***stockholders'*** |
|  | ***(Shares)*** | ***(Amount)*** | ***capital*** | ***deficit*** | ***equity*** |
| **Balance at January 31, 2024** | 3929446 | $39000 | $134474000 | $(115699000) | $18814000 |
| Restricted stock issued | 81000 | 1000 | (1000) |  |  |
| Restricted stock forfeited | (3224) |  |  |  |  |
| Surrender of shares | (9273) |  | (67000) |  | (67000) |
| Share-based compensation | *—* |  | 529000 |  | 529000 |
| Issuance of common stock | 123502 | 1000 | 769000 |  | 770000 |
| Offering expenses | *—* |  | (4000) |  | (4000) |
| Net loss | *—* |  |  | (2739000) | (2739000) |
| **Balance at April 30, 2024** | 4121451 | $41000 | $135700000 | $(118438000) | $17303000 |

---

See accompanying notes to condensed consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6

------

[**Table of Contents**](#toc)

**STREAMLINE HEALTH SOLUTIONS, INC.**

**UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(rounded to the nearest thousand dollars)**

---

| | | |
|:---|:---|:---|
|  | ***Three Months Ended April 30,*** | ***Three Months Ended April 30,*** |
|  | ***2025*** | ***2024*** |
| Net loss | $(1645000) | $(2739000) |
| Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| Depreciation and amortization | 1042000 | 1120000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accrued interest expense - notes payable | 189000 | 152000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Valuation adjustments |  | 24000 |
| Share-based compensation expense | 430000 | 499000 |
| Changes in assets and liabilities: |  |  |
| Accounts and contract receivables | (1665000) | 17000 |
| Other assets | 66000 | (100000) |
| Accounts payable | 6000 | (161000) |
| Accrued expenses and other liabilities | (295000) | (262000) |
| Deferred revenue | 903000 | 251000 |
| Net cash used in operating activities | (969000) | (1199000) |
| Cash flows from investing activities: |  |  |
| Capitalization of software development costs | (232000) | (232000) |
| Net cash used in investing activities | (232000) | (232000) |
| Cash flows from financing activities: |  |  |
| Repayment of bank term loan | (500000) | (250000) |
| Repayment of line of credit |  | (1500000) |
| Proceeds from issuance of common stock |  | 100000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Proceeds from notes payable |  | 4400000 |
| Proceeds from line of credit | 1000000 |  |
| Payments of acquisition earnout liabilities |  | (447000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Payments for deferred financing costs |  | (16000) |
| Repurchase of common shares to satisfy employee tax withholding | (33000) | (67000) |
| Net cash provided by financing activities | 467000 | 2220000 |
| Net decrease in cash and cash equivalents | (734000) | 789000 |
| Cash and cash equivalents at beginning of period | 2183000 | 3190000 |
| Cash and cash equivalents at end of period | $1449000 | $3979000 |

---

See accompanying notes to condensed consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7

------

[**Table of Contents**](#toc)

**STREAMLINE HEALTH SOLUTIONS, INC.**

**NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**April 30, 2025**

**<u>NOTE *1*</u>** <u>—</u> **<u>BASIS OF PRESENTATION</u>**

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. All intercompany balances and transactions have been eliminated in consolidation. 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 condensed 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, 2025*, are *not* necessarily indicative of the results that *may* be expected for the fiscal year ending *January 31, 2026.*

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 acute-care 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.

**Going Concern**

The Company's financial statements are prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of obligations in the normal course of business. To date, the Company has *not* generated sufficient revenues to allow it to generate cash flow from operations and the Company anticipates the need for additional liquidity in the next *twelve* months. The Company has historically accumulated losses and used cash from its financing activities to supplement its operations. The Company's current forecast projects that it is probable that the Company will *not* maintain compliance with certain of its financial covenants under its current credit agreement with the term loan lender in the next *twelve* months. Further, our recent private placement notes payables have cross-default conditions with the senior term loan debt. These conditions raise substantial doubt about the ability of the Company to continue as a going concern within *one* year after the date that the financial statements are issued.

In view of these matters, continuation as a going concern is dependent upon the Company's ability to achieve cash from operations and raise additional debt or equity capital to fund its ongoing operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *8*

------

[**Table of Contents**](#toc)

As of *April 30, 2025,* the Company had approximately $14 million of total outstanding debt associated with its term loan, line of credit and private placement notes payables, which is classified as a current liability. The Company's ability to refinance its existing debt is based upon credit markets and economic forces that are outside of its control. There can be *no* assurance that the Company will be successful in raising additional capital or that such capital, if available, will be on terms that are acceptable to the Company. As a result, management concluded that substantial doubt exists about our ability to continue as a going concern.

The financial statements do *not* include any adjustments to the amount and classification of assets and liabilities that *may* be necessary should the Company *not* continue as a going concern.

**Reverse Stock Split**

On *September 25, 2024,* the Company filed a Certificate of Amendment to the Company's Certificate of Incorporation to effect a *1*-for-15 reverse stock split pursuant to which each 15 shares of the Company's issued and outstanding common stock immediately prior to the effective time, which was *12:01* am Eastern Daylight Time on *October 4, 2024,* were combined into *one* share of the Company's common stock, without effecting a change to the par value per share of Common Stock. The Company's common stock began trading on a split-adjusted basis when the market opened on *October 4, 2024.*

The Reverse Stock Split did *not* change the Company's authorized number of shares of common stock. The Reverse Stock Split did *not* change the par value of the common stock, therefore, the Company recorded an increase to additional paid in capital of $551,000 as of *January 31, 2024* and an offsetting adjustment to the carrying value of common stock. *No* fractional shares were issued in connection with the Reverse Stock Split, and stockholders who would otherwise have been entitled to receive a fractional share instead received a cash payment equal to the fraction of a share of common stock in lieu of such fractional share. Proportionate adjustments were made to the number of shares authorized under the Company's equity incentive plans, the number of shares subject to any award or purchase right under the Company's equity incentive plans, and the exercise price or purchase price with respect to any stock option award or purchase right under the Company's equity incentive plans. All shares of the Company's common stock, stock-based instruments and per-share data included in these condensed consolidated financial statements have been retrospectively adjusted as though the Reverse Stock Split has been effected prior to all periods presented. All of the Company's equity incentive plans included existing conversion language in the event of a stock split and thus did *not* result in modification accounting or additional incremental expense as a result of this transaction.

**Agreement and Plan of Merger with Mist Holding Co.**

On *May 29, 2025,* the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") with Mist Holding Co., a Delaware corporation and the parent company of Hayes Management Consulting LLC d/b/a MDaudit ("Parent"), and MD BE Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Parent ("Merger Sub"), pursuant to which, upon the terms and subject to the conditions set forth therein, Merger Sub will merge with and into the Company, with the Company continuing as the surviving corporation and becoming a wholly owned subsidiary of Parent (the "Merger"). Refer to Note *10,* Subsequent Events for additional information about the Merger.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *9*

------

[**Table of Contents**](#toc)

**<u>NOTE *2*</u>** <u>—</u> **<u>SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</u>**

Our significant accounting policies are presented in "Note *2* – Significant Accounting Policies" in the Annual Report on Form *10*-K for fiscal year *2024.* Users of financial information for interim periods are encouraged to refer to the notes to the condensed consolidated financial statements contained in the Annual Report on Form *10*-K when reviewing interim financial results.

**Segments**

The Company operates as a single operating segment. The Company's chief operating decision maker is *one* individual and has the role of Chief Executive Officer (the "CODM"). The CODM reviews financial information including operating results and assets on a consolidated basis, accompanied by the Company's revenue consistent with the categories presented below. For information about how the Company derives revenue, as well as the Company's accounting policies, refer to Note *2—Significant* Accounting Policies. The CODM uses consolidated net income to assess performance, evaluate cost optimization, and allocate financial, capital and personnel resources. This measure is used in the annual operating plan and forecasting process as well as ongoing decisions driven by the monthly reviews of the plan versus actual results. The following table sets forth significant expense categories and other specified amounts included in consolidated net loss that are reviewed by the CODM, or are otherwise regularly provided to the CODM, for the *three* months ended *April 30, 2025* and *2024:*

---

| | | |
|:---|:---|:---|
|  | **Fiscal Year** | **Fiscal Year** |
|  | **2025** | **2024** |
| **Revenues:** |  |  |
| Software as a service | $3359000 | $2723000 |
| Maintenance and support | 737000 | 890000 |
| Professional fees and licenses | 714000 | 717000 |
| Total revenues | 4810000 | 4330000 |
| **Operating expenses:** |  |  |
| Cost of Sales(1) | 1692000 | 1633000 |
| General & Administrative(1) | 1537000 | 1727000 |
| Sales & Marketing(1) | 552000 | 720000 |
| Research & Development(1) | 803000 | 951000 |
| Stock Based Compensation | 430000 | 499000 |
| Depreciation & amortization expense | 874000 | 1018000 |
| Other operating expenses(2) | 23000 | 32000 |
| Total operating expenses | 5911000 | 6580000 |
| Operating loss | (1101000) | (2250000) |
| Other income (expense): |  |  |
| Interest expense | (543000) | (465000) |
| Valuation adjustments | —  | (24000) |
| &nbsp;&nbsp;&nbsp;Other | (1000) |  |
| Loss before income taxes | (1645000) | (2739000) |
| Income tax benefit (expense) | —  | —  |
| **Net Loss** | $(1645000) | $(2739000) |

---

---

| |
|:---|
| (*1*)Excludes share-based compensation, depreciation, and amortization. |
| (*2*)Other operating expenses primarily consists of severance related expenses. |

---

**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**

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.* The acquisition earnout liability transferred out of Level *3* as of *April 30, 2024.* 

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

---

| | | | | |
|:---|:---|:---|:---|:---|
|  |  | ***Quoted*** | ***Significant*** |  |
|  |  | ***Prices in*** | ***Other*** | ***Significant*** |
|  |  | ***Active*** | ***Observable*** | ***Unobservable*** |
|  | ***Total Fair*** | ***Markets*** | ***Inputs*** | ***Inputs*** |
|  | ***Value*** | ***(Level 1)*** | ***(Level 2)*** | ***(Level 3)*** |
| At January 31, 2024 |  |  |  |  |
| Acquisition earnout liability (1) | $1794000 | $— | $— | $1794000 |

---

(*1*) On *March 27, 2024,* the Company issued the shares of its common stock owed as part of the acquisition earnout liability related to the acquisition of Avelead Consulting, LLC ("Avelead"). The remaining obligation related to the acquisition earnout liability is to be settled in cash (refer to Note *3* – Business Combinations for more information). At that time, the acquisition earnout liability *no* longer qualified as a Level *3* fair value calculation and was transferred out. As of that date, the Company recorded a valuation adjustment of $159,000 using the value of the shares issued adjusted for a discount for lack of marketability. See the table below for the roll-forward of values including the amount transitioned out of Level *3.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *10*

------

[**Table of Contents**](#toc)

The table below provides the Level *3* roll-forward on the fair value of our acquisition earnout liability for the *three* months ended *April 30, 2024.* There was *no* Level *3* roll-forward activity for the *three* months ended *April 30, 2025.* 

---

| | |
|:---|:---|
|  | **Three-months ended** |
|  | **April 30, 2024** |
| Beginning balance | $1794000 |
| Settlement – common stock | (690000) |
| Settlement – cash | (447000) |
| Realized loss | 159000 |
| Transfer out | (817000) |
| Ending balance | $— |

---

The value of the Company's acquisition earnout liability at *April 30, 2025*, represents the remaining cash obligation of $377,000. The Company reached an agreement with the former owners of Avelead to settle the cash obligation by making periodic payments. The remaining outstanding amounts were originally contractually due by *October 31, 2024.* 

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, 2025* and *January 31, 2025*. 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 published "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 Second Amended and Restated Loan Agreement for the term loan. The fair value of the Company's term loan as of *April 30, 2025* and *January 31, 2025,* was estimated to be $6,838,000 and $7,330,000, respectively, or a discount to book value of $162,000 and $171,000, respectively. The fair value of the line of credit as of *April 30, 2025* and *January 31, 2025,* was estimated to be $1,984,000 and $991,000, respectively, or a discount to book value of $16,000 and $9,000, respectively. The fair value of the Company's term loan and line of credit represents a Level *2* measurement.

The estimated fair value of the Company's notes payable under its private placement notes payables was determined through an analysis of the interest rate spread from the date of closing of the private placement (*February 7, 2024)* to the date of the most recent balance sheet, *January 31, 2025.* The Company estimated the yield of a *30*-month treasury by interpolating the yields of the *1*-month through *10*-year treasury yields on *February 7, 2024 (*the "Issuance Date") and the measurement date. A High Yield Index Option Adjusted Spread, as published by the Federal Reserve Bank of St. Louis, for the same dates was added to the treasury yield spread to calculate a High-Yield Spread Adjusted *30*-Month Rate. This provided an estimated change to the effective interest rate spread of approximately 0.98% less than the Issuance Date. The fair value of the Company's notes payable as of *April 30, 2025* and *January 31, 2025,* was estimated to be $4,703,000 and $4,357,000, respectively, or a discount to book value of $3,700 and $58,000, respectively. The fair value of the Company's notes payable represents a Level *2* measurement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *11*

------

[**Table of Contents**](#toc)

**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 software 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. Certain contracts *may* include aspects of variable consideration as it relates to performance guarantees and service level agreements. Significant judgment is required to determine the standalone selling price ("SSP") for each performance obligation, impact of variable consideration on total contract price, the amount allocated to each performance obligation and whether it depicts the amount that the Company expects to receive in exchange for the related product and/or service.

*Disaggregation of Revenue*

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

---

| | | |
|:---|:---|:---|
|  | *Three Months Ended* | *Three Months Ended* |
|  | *April 30, 2025* | *April 30, 2024* |
| Over time revenue | $4810000 | $4195000 |
| Point in time revenue |  | 135000 |
| Total revenue | $4810000 | $4330000 |

---

The Company includes revenue categories of (i) SaaS, (ii) maintenance and support, (iii) professional services, and (iv) audit services 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 software licenses 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. During the *three* months ended *April 30, 2025*, the Company recognized approximately$2,701,000in revenue from deferred revenues outstanding as of *January 31, 2025.* Revenue allocated to remaining performance obligations was $28,988,0*00* as of *April 30, 2025,* of which the Company expects to recognize approximately 48% over the next 12 months and the remainder thereafter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *12*

------

[**Table of Contents**](#toc)

*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, 2025* and *January 31, 2025*, the Company had deferred costs of $63,000 and $65,000, respectively, net of accumulated amortization of $79,000 and $67,000, respectively. Amortization expense of these costs was $12,000 and $20,000 for the *three* months ended *April 30, 2025* and *2024*, respectively, and is included in cost of SaaS 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, 2025* and *January 31, 2025*, deferred commission costs paid and payable, which are included on the consolidated balance sheets within other non-current assets totaled $1,059,000 and $1,127,000, respectively. Amortization expense associated with deferred sales commissions, which is included in selling, general and administrative expense in the condensed consolidated statements of operations, was $119,000 and $140,000 for the *three* months ended *April 30, 2025* and *2024*, respectively.

*Allowance for Credit Losses*

The Company estimates current expected credit losses based on historical credit loss rates and applied an increase to account for future economic conditions. The changes in the Company's allowance for credit losses is as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | ***January 31, 2025*** | ***Provision adjustments*** | ***Write-offs & Recoveries*** | ***April 30, 2025*** |
| Allowance for credit losses | $59000 | – |  | $59000 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **January 31, 2024** | **Provision adjustments** | **Write-offs & Recoveries** | **April 30, 2024** |
| Allowance for credit losses | $86000 | $— | $31000 | $117000 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *13*

------

[**Table of Contents**](#toc)

**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. The Company incurred total compensation expense related to share-based awards for the *three* months ended *April 30, 2025* of $430,000, net of $26,000 of capitalized non-employee stock compensation, compared to share-based compensation expense of $499,000 net of $30,000 of capitalized non-employee stock compensation, for the *three* months ended *April 30, 2024.* 

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, 2025*, the Company issued 12,000 shares of restricted common stock, compared to 80,991 shares of restricted common stock for the *three* months ended *April 30, 2024*, respectively. The Company expenses the compensation cost of these awards as the restriction period lapses.

*Market-Based Awards*

For awards with a market condition, the Company adjusts the grant date fair value for the condition. The Company used separate Monte Carlo valuation models, as of the grant date, to determine the expected length and fair value of this particular award. Both models used the Company's historical equity volatility, current stock price, and hurdle target price for vesting. The service period model also included an assumption for the Company's *10*-year normalized risk-free rate. The associated compensation expense is recognized provided the service condition is provided regardless of whether the market condition is satisfied.

On *July 18, 2024,* the Company, as a component of the awards to the board of directors of the Company (the "Board") discussed above, executed a Restricted Stock Agreement (the "Restricted Stock Agreement") to issue 13,333 shares of restricted stock with a market vesting condition to a member of the Board. The shares will vest on the date the stock closes at a fair market value of at least $26.25 per share.

On *September 4, 2024,* the Restricted Stock Agreement was amended to rescind 6,666 shares of restricted stock. The remaining shares will vest in full upon the stock closing at a fair market value of at least $26.25 per share, but *no* earlier than *July 18, 2025.* The award modification was reevaluated using the same Monte Carlo valuation model and input as the original grant with a change to account for the minimum vesting period. The impacts of the modification were immaterial.

**Warrants**

The Company reviews the specific terms for its warrants and applies the authoritative FASB guidance under ASC topics *480,* Distinguishing Liabilities from Equity ("ASC *480"*) and ASC *815,* Derivatives and Hedging ("ASC *815"*) to account for the warrants as either equity-classified or liability-classified instruments. This review identifies if the warrants are freestanding financial instruments under ASC *480,* should be defined as a liability under ASC *480,* and whether the warrants meet all requirements of ASC *815* to be classified as equity*,* including whether the warrants are indexed to the Company's own common stock, if there are conditions where warrant holders could potentially require "net cash settlement" in a circumstance that would be outside of the Company's control, among other conditions for equity classification. This assessment requires the use of professional judgment and is conducted at the time of warrant issuance plus as of each subsequent quarterly period end date while the warrants are outstanding.

For the issued or modified warrants that qualify for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do *not* meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the condensed consolidated Statements of Operations as "valuation adjustments." The fair value of the warrants is estimated using a Black-Scholes pricing model.

The warrants initially met the classification of liability as of the origination date on *February 7, 2024.* In the *second* quarter of fiscal *2024,* the warrants met the requirements of equity classification, and a final valuation of the fair value of the warrant liability was performed and recorded. The estimated fair value of the warrant liability is calculated using a Black-Scholes pricing model. The model input uses the warrant strike prices of $5.70 and $5.85, the market prices on the measurement dates ($5.10 as of *February 7, 2024,* $4.50 as of *April 30, 2024,* and $4.95 as of *May 7, 2024)* plus assumptions and model inputs for expected term, historical 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). The warrants carry a term of 48 months, and the Company assumes they are held until expiration. The risk-free rate was determined from the U.S. Treasury published daily treasury yields corresponding with the remaining expected term which ranged between 4% - 5%. The Company's common stock volatility was estimated between 91% - 92% utilizing its historical average closing price for preceding trading days equal to expected term remaining.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *14*

------

[**Table of Contents**](#toc)

**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. The Company believes it has appropriately accounted for any uncertain tax positions as of *April 30, 2025*.

**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 warrants, unvested restricted stock awards, and options are considered non-participating securities because holders are *not* entitled to non-forfeitable rights to dividends or dividend equivalents during the vesting term or while unexercised. 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, 2025* and *2024*:

---

| | | |
|:---|:---|:---|
|  | ***Three Months Ended*** | ***Three Months Ended*** |
|  | ***April 30, 2025*** | ***April 30, 2024*** |
| **Basic and diluted loss per share:** |  |  |
| Net loss | $(1645000) | $(2739000) |
| Basic and diluted net loss per share of common stock | $(0.40) | $(0.71) |
| Weighted average shares outstanding – basic and diluted (1)(2) | 4128029 | 3881606 |

---

(*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, 2025* and *2024*, there were 218,352 and 179,164 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, 2025*, diluted earnings per share excludes 3,530 outstanding stock options, 218,352 unvested restricted shares of common stock, and 237,027 shares of common stock issuable through the exercise of warrants. For the *three* months ended *April 30, 2024*, diluted earnings per share excludes 4,400 outstanding stock options, 179,164 unvested restricted shares of common stock, and 267,728 shares of common stock issuable through the exercise of warrants.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *15*

------

[**Table of Contents**](#toc)

**Restructuring**

On *October 16, 2023,* the Company announced it was executing a strategic restructuring (the "Strategic Restructuring") designed to reduce expenses while maintaining the Company's ability to expand its SaaS business. The Strategic Restructuring initiatives included a reduction in force, resulting in the termination of 26 employees, or approximately 24% of the Company's workforce. To execute the Strategic Restructuring, the Company incurred *one*-time restructuring costs associated with the workforce reduction of $759,000, and the Company has recognized all expenses associated with the Strategic Restructuring as of the end of fiscal *2023.* The costs pertain to severance and other employee termination-related costs and various professional fees the Company required to assist with execution of the Strategic Restructuring. The following is a reconciliation of the Strategic Restructuring liability reflected on the Company's consolidated balance sheet under "accrued expenses" for the *three* months ended *April 30, 2024.* The accrued balance was paid out prior to *January 31, 2025.*

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | (in thousands) | (in thousands) | (in thousands) | (in thousands) |
|  | **Accrued Balance as of** | **2024** | **2024** | **Accrued Balance as of** |
|  | **January 31, 2024** | **Expenses to Date** | **Cash Payments** | **April 30, 2024** |
| **Severance expense** |  |  |  |  |
| Cost of sales | $— | $— | $— | $— |
| Selling, general, and administrative | 74 |  | (65) | 9 |
| Research and development |  |  |  |  |
| **Total severance expense** | $74 | $— | $(65) | $9 |
| Professional fees |  |  |  |  |
| **Total** | $74 | $— | $(65) | $9 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *16*

------

[**Table of Contents**](#toc)

***Non-Cash Items***

For the *three* months ended *April 30, 2025* and *2024*, the Company recorded a change in capitalized software purchased with stock, totaling $26,000 and $30,000, respectively, as non-cash items as it relates to non-cash investing activities in the consolidated statements of cash flow.

For the *three* months ended *April 30, 2024,* the Company settled the *second* year acquisition earnout liability in connection with the Avelead acquisition with the issuance of common shares in the amount of $690,000, issued warrants in the amount of $881,000 as debt discounts, settled the warrant liability of $837,000 with an equity based warrant, respectively, as non-cash items as it relates to financing activities in the condensed consolidated statements of cash flows. The Company did *not* have any similar non-cash financing activities in the *three* months ended *April 30, 2025.* 

**Recent Accounting Pronouncements *Not* Yet Adopted**

In *December 2023,* the FASB issued ASU *2023*-*09,* Income Taxes (Topic *740*): Improvements to Income Tax Disclosures, which enhance the transparency and decision usefulness of income tax disclosures. For public entities, ASU *2023*-*09* is effective for annual periods beginning after *December 15, 2024.* The adoption of this ASU is *not* expected to have a material impact on our condensed consolidated financial statements or disclosures.

In *November 2024,* the FASB issued ASU *2024*-*03,* Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic *220*-*40*): Disaggregation of Income Statement Expenses, which improves financial reporting by requiring public entities to disclose additional information about specific expense categories in the notes of the financial statements at interim and annual reporting period. ASU *2024*-*03* is effective for all public entities for annual reporting periods beginning after *December 15, 2026,* and interim reporting periods beginning after *December 15, 2027.* The adoption of this ASU is expected to improve reporting and is *not* expected to have an overall material impact on our financial disclosures.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *17*

------

[**Table of Contents**](#toc)

**<u>NOTE *3*</u>** <u>—</u> **<u>BUSINESS COMBINATION</u>**

**Avelead Acquisition**

The Company acquired all 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 (the "Transaction"). The Transaction was completed on *August 16, 2021.*

As of *January 31, 2024,* the estimated aggregate value of the *second* year earnout consideration was $1,794,000. On *March 27, 2024,* the Company issued 105,958 unregistered securities in the form of restricted common stock, par value $0.01 per share, with respect to the *second* year earnout consideration. For the *three* months ended *April 30, 2025* and *2024,* the Company made cash payments of $0 and $447,000 respectively, related to the *second* year earnout consideration. The remaining outstanding amounts were originally contractually due by *October 31, 2024.* The remaining cash liability is reflected on the Company's consolidated balance sheet as "acquisition earnout liability" and totaled $377,000 as of *April 30, 2025.* 

**<u>NOTE *4*</u>** <u>—</u> **<u>OPERATING LEASES</u>**

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.

The Company has moved to a virtual office model and does *not* have a physical office space. Membership agreements and daily space rentals are leveraged by the Company when groups need to meet in person with the costs expensed as incurred. For the *three* months ended *April 30, 2025* and *2024*, the Company recorded $2,000 and $7,000, respectively, related to such office space rentals.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *18*

------

[**Table of Contents**](#toc)

**<u>NOTE *5*</u>** <u>—</u> **<u>DEBT</u>**

Outstanding principal balances consisted of the following at *April 30, 2025*:

---

| | | |
|:---|:---|:---|
|  | ***April 30, 2025*** | ***January 31, 2025*** |
| Term loan | $7000000 | $7500000 |
| Financing cost payable | 307000 | 245000 |
| Less: Deferred financing cost | (30000) | (36000) |
| Total | 7277000 | 7709000 |
| Less: Current portion of term loan | (7277000) | (7709000) |
| Non-current portion of term loan | $— | $— |

---

---

| | | |
|:---|:---|:---|
|  | **April 30, 2025** | **January 31, 2025** |
| Notes payable and accrued interest | $5283000 | $5095000 |
| Less: Discount on notes payable | (489000) | (573000) |
| Less: Deferred financing costs | (91000) | (107000) |
| Total | 4703000 | 4415000 |
| Less: Current portion of notes payable | (4703000) | (4415000) |
| Non-current portion of notes payable | $— | $— |

---

**Term Loan and Revolving Line of Credit**

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.* 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.

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 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *19*

------

[**Table of Contents**](#toc)

The Company executed a Third Modification and Waiver to Second Amended and Restated Loan Agreement (the "Third Modification") and a Fourth Modification to Second Amended and Restated Loan Agreement (the "Fourth Modification") on *February 7, 2024* and *April 5, 2024,* respectively (collectively, the "Third and Fourth Modifications"). The Third and Fourth Modifications reestablished the customary financial covenants for the Loan Agreement. On *November 13, 2024,* the Company executed the Fifth Modification to Second Amended and Restated Loan and Security Agreement (the "Fifth Modification") that amended, among other things, the Minimum Adjusted EBITDA and Maximum ARR Net Leverage Ratio covenants. On *March 27, 2025,* the Company and certain of its subsidiaries entered into a Sixth Modification and Waiver (the "Sixth Modification") to the Loan Agreement with Western Alliance Bank and amended certain financial covenants as follows:

● **<u>Maximum ARR Net Leverage Ratio</u>**. Commencing with the month ended *February 28, 2025,* Borrowers' ARR Net Leverage Ratio, measured on a monthly basis as of the last day of each month, shall *not* be greater than the amount set forth under the heading "Maximum ARR Net Leverage Ratio" as of, and for each of the dates appearing adjacent to such "Maximum ARR Net Leverage Ratio".

---

| | | |
|:---|:---|:---|
|  | **Maximum** | **Maximum** |
|  | **ARR Net Leverage** | **ARR Net Leverage** |
| **Month Ending** | **Ratio** | **Ratio** |
| February 28, 2025 |  | 0.67 to 1.00 |
| March 31, 2025 |  | 0.67 to 1.00 |
| April 30, 2025 |  | 0.67 to 1.00 |
| May 31, 2025 |  | 0.67 to 1.00 |
| June 30, 2025 and on the last day of each month thereafter |  | 0.50 to 1.00 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *20*

------

[**Table of Contents**](#toc)

● **<u>Maximum Debt to Adjusted EBITDA Ratio</u>**. Commencing with the quarter ending *July 31, 2025,* 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".

---

| | | |
|:---|:---|:---|
|  | **Maximum** | **Maximum** |
|  | **Debt to Adjusted** | **Debt to Adjusted** |
|  | **EBITDA** | **EBITDA** |
| **Quarter Ending** | **Ratio** | **Ratio** |
| July 31, 2025 |  | 3.50 to 1.00 |
| October 31, 2025 |  | 3.00 to 1.00 |
| January 31, 2026 |  | 2.50 to 1.00 |
| April 30, 2026 and on the last day of each quarter thereafter |  | 2.00 to 1.00 |

---

● **<u>Fixed Charge Coverage Ratio</u>**. Commencing with the quarter ending *July 31, 2025,* 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.

● **<u>Minimum Adjusted EBITDA</u>**. Commencing with the month ending *February 28, 2025,* Borrowers shall maintain Adjusted EBITDA, measured on a monthly basis as of the last day of each month, in an amount *not* less than the amounts (or, in the case of amounts set forth in parentheses, *no* worse than the amounts) set forth under the heading "Minimum Adjusted EBITDA" as of, and for each of the dates appearing adjacent to such "Minimum Adjusted EBITDA."

---

| | |
|:---|:---|
|  | **Minimum Adjusted** |
| **Month Ending** | **EBITDA** |
| February 28, 2025 | $(225000) |
| March 31, 2025 | $(460000) |
| April 30, 2025 | $(300000) |
| May 31, 2025 | $(250000) |
| June 30, 2025 | $— |

---

The 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. Substantially all the assets of the Company are collateralized by the Loan Agreement. For the period ended *April 30, 2025,* the Company was in compliance with the financial covenants under the Loan Agreement. The Company has determined that it is probable that a covenant *may not* be achieved in the next *12* months, and as such, the Company has reclassified the Term Loan and Revolving Line of Credit balances as current as of *January 31, 2025* and *April 30, 2025.*

The Company recorded $20,000 in deferred financing costs related to the Second Modification. These deferred financing costs are being amortized over the remaining term of the loan. The Company also incurred $50,000 in financing costs related to the Second Modification and $300,000 related to the Fifth Modification 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 $550,000 over the remaining term of the loan. The full value of $550,000 includes the $200,000 costs incurred in connection with the Loan Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *21*

------

[**Table of Contents**](#toc)

**Debt Private Placement**

On *February 1, 2024,* the Company entered into a securities purchase agreement (the "Securities Purchase Agreement") with certain accredited investors, including certain directors and officers of the Company (collectively, the "Investors"), pursuant to which the Company agreed to sell to the Investors unsecured subordinated promissory notes (the "Notes") in the aggregate principal amount of $4.4 million and warrants (the "Warrants") to purchase up to an aggregate of 267,728 shares of the Company's common stock in a private placement (the "Debt Private Placement"). The closing of the Debt Private Placement occurred on *February 7, 2024 (*the "Closing Date").

*Notes Payable*

The Notes bear interest at a rate of 15% per annum and mature on *August 7, 2026 (*the "Maturity Date"). All accrued and unpaid interest on the Notes will be capitalized and added to the outstanding principal balance of the Notes and will be payable in cash on the Maturity Date. The Company *may* redeem the Notes, in whole or in part, prior to the Maturity Date without any premium or penalty. In the event the Company prepays any portion of the then outstanding principal balance of the Notes on or before the *twelve* (*12*) month anniversary of the Closing Date, in addition to such prepayment of the principal balance, the Company must pay to the Investors a prepayment fee (in accordance with the each Investor's pro-rata share of the Notes) in an amount equal to the amount of interest that would have accrued but for the prepayment from the date of such prepayment through such *twelve* (*12*) month anniversary of the Closing Date.

The Notes also include customary negative covenants, subject to exceptions, which limit dispositions of assets and the business activities of the Company, as well as customary representations and warranties, affirmative covenants and events of default, including a cross default provision with the Second Amended and Restated Loan Agreement and a change of control default provision.

The rights of each Investor to receive payments under the Notes are subordinate to the rights of Western Alliance Bank ("WAB"), pursuant to a subordination agreement which the Investors entered into with WAB concurrently with the Debt Private Placement.

The Company allocated the original total proceeds at inception from the Debt Private Placement and Common Stock Private Placement (refer to Note *7* – Equity) across the securities issued in connection with the offerings. The Company has recorded the Notes at a relevant residual fair value of $3,538,000, consisting of the $4,400,000 face value of the notes and $862,000 discount. The Company allocated $183,000 in issuance costs. The discount is being accreted and the financing costs amortized as interest expense over the term of the Notes using the effective interest method.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *22*

------

[**Table of Contents**](#toc)

*Warrants*

The Warrants have an exercise price of $5.70 (except for Warrants issued to the Company's directors and officers which have an exercise price of $5.85), are immediately exercisable, and will expire on the *fourth* anniversary of the Closing Date. The Warrants are subject to customary adjustments for certain transactions affecting the Company's capitalization. The terms of the Warrants preclude a holder thereof from exercising such holder's Warrants, and the Company from giving effect to such exercise, if after giving effect to the issuance of common stock upon such exercise, the holder (together with the holder's affiliates and any other persons acting as a group together with the holder or any of the holder's affiliates) would beneficially own in excess of 9.99% of the number of shares of common stock outstanding immediately after giving effect to the issuance of common stock upon such exercise.

The Notes and the Warrants described above were offered in a private placement under Section *4*(a)(*2*) of the Securities Act of *1933,* as amended (the "Securities Act"), and/or Regulation D promulgated thereunder and, along with the common stock underlying the Warrants, were "restricted securities" under the Securities Act or applicable state securities laws. Accordingly, the Notes, the Warrants and the common stock underlying the Warrants *may not* be offered or sold in the United States absent registration with the SEC or an applicable exemption from such registration requirements and in accordance with applicable state securities laws. The securities were offered and sold to "accredited investors" as that term is defined in Rule *501*(a) under the Securities Act.

The Warrants contain a registration rights provision for the Company to provide the Warrant holder with registered common stock upon their exercise of a Warrant. If the Company is *not* able to deliver registered common stock for exercised Warrants that results in the Warrant holder acquiring registered common stock, then the Warrant holder has the discretion to request the Company remit cash compensation up to the corresponding purchase price. Accordingly, the Company determined the feature required liability accounting treatment upon issuance. On *May 7, 2024,* the Company filed a Registration Statement on Form S-*3* (Registration *No. 333*-*279190*), as amended by that certain Pre-Effective Amendment *No. 1* to Form S-*3* filed on *May 24, 2024 (*collectively, the "Registration Statement"), for purpose of registering for resale 267,728 shares of common stock underlying the Warrants. The Registration Statement was declared effective by the SEC on *June 10, 2024.* The filing of the Registration Statement eliminated the potential cash settlement feature that caused liability accounting ensuring the Warrants will be settled with shares, and accordingly, the Warrants met the criteria for equity classification and reclassified them to paid in capital after a final re-measurement.

The Company allocated the total proceeds from the Debt Private Placement and Common Stock Private Placement (refer to Note *7* – Equity) across the securities issued in connection with offerings. The Company recorded an initial liability of $881,000 for the Warrants at fair value using a Black-Scholes model. The Company immediately recognized $46,000 in issuance costs as expense related to the agreements for the Warrants. During the *second* quarter of fiscal *2024,* the Company reclassified the $837,000 remeasured value of the Warrants as additional paid in capital on the consolidated Balance Sheet.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *23*

------

[**Table of Contents**](#toc)

**<u>NOTE *6*</u>** <u>—</u> **<u>INCOME TAXES</u>**

Income tax expense was $0 for the *three* months ended *April 30, 2025* and *2024,* respectively. The effective income tax rate on continuing operations of approximately 0% differs from our combined federal and state statutory rate of 24% primarily due to the full valuation allowance the Company currently maintains on its net deferred tax asset.

The Company has recorded $331,000 in reserves for uncertain tax positions as of *April 30, 2025* and *January 31, 2025,* 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, 2021.* All material state and local income tax matters have been concluded for years through *January 31, 2020.* The Company is *no* longer subject to IRS examination for periods prior to the tax year ended *January 31, 2021;* however, carryforward losses that were generated prior to the tax year ended *January 31, 2021, may* still be adjusted by the IRS if they are used in a future period.

**<u>NOTE *7*</u>** <u>—</u> **<u>EQUITY</u>**

**Common Stock Private Placement**

On *February 6, 2024,* the Company completed the sale of 17,543 shares of the Company's common stock to Matthew W. Etheridge at a purchase price of $5.70 per share for an aggregate purchase price of $100,000 (the "Common Stock Private Placement"). Mr. Etheridge became a director of the Company subsequent to the closing of the Debt Private Placement.

The common stock described above was offered in a private placement under Section *4*(a)(*2*) of the Securities Act and/or Regulation D promulgated thereunder and has *not* been registered under the Securities Act or applicable state securities laws. Accordingly, such common stock *may not* be offered or sold in the United States absent registration with the SEC or an applicable exemption from such registration requirements and in accordance with applicable state securities laws. The common stock was offered and sold to an "accredited investor" as that term is defined in Rule *501*(a) under the Securities Act.

The Company allocated the total proceeds of the Common Stock Private Placement across the underlying components. As a result, $77,000 of net proceeds, comprised of $81,000 of the proceeds less $4,000 of issuance costs, were recorded for the Common Stock Private Placement as equity.

**Registration of Shares Issued to *180* Consulting**

On *May 7, 2024,* the Company filed a Registration Statement on Form S-*3* (Registration *No. 333*-*279190*), as amended by that certain Pre-Effective Amendment *No. 1* to Form S-*3* filed on *May 24, 2024,* for purpose of registering for resale 37,647 shares of common stock issued to *180* Consulting, Inc. (*"180* Consulting"). The Registration Statement was declared effective by the SEC on *June 10, 2024.*

***2024* Omnibus Incentive Compensation Plan**

At the *2024* Annual Meeting of Stockholders held on *June 13, 2024,* the Company's stockholders approved the Streamline Health Solutions, Inc. *2024* Omnibus Incentive Compensation Plan (the *"2024* Plan"). The *2024* Plan replaced the Streamline Health Solutions, Inc. Third Amended and Restated *2013* Stock Incentive Plan (as amended, the *"2013* Plan"). The Compensation Committee of the Board of Directors administers the *2024* Plan and approves the grant and terms of awards (consistent with the terms of the *2024* Plan).

The *2024* Plan permits the grant of any or all of the following types of awards to grantees: stock options, including non-qualified options and incentive stock options ("ISOs"); stock appreciation rights ("SARs"); restricted stock; deferred stock and restricted stock units; performance units and performance shares; dividend equivalents; and other stock-based awards. Eligible grantees include employees, officers, non-employee consultants and non-employee directors of the Company and its affiliates. A total of 449,260 shares of common stock were initially available for issuance under the *2024* Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *24*

------

[**Table of Contents**](#toc)

**<u>NOTE *8*</u>** <u>—</u> **<u>COMMITMENTS AND CONTINGENCIES</u>**

**Consulting Agreement with *180* Consulting, LLC**

On *March 19, 2020,* the Company entered into that certain Master Services Agreement and Non-Disclosure Agreement with *180* Consulting, as amended by that certain First Amendment to Master Services and Non-Disclosure Agreement, dated as of *February 1, 2021 (*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. As of *December 2023,* all outstanding SOWs under both MSAs were effectively replaced by *two* new SOWs. As of *April 30, 2025*, there were *two* active SOWs under the eValuator MSA. One of the active SOWs included, as of *April 30, 2025,* the ability to earn stock at a conversion rate to be calculated *20* days after the execution of the related SOW. As of *April 30, 2025,* the MSA included 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"*). Mr. Green is a "member" of *121G,* and, accordingly, has a financial interest in that entity. *180* Consulting earned 30,774 and 27,910 shares for the *three* months ended *April 30, 2025* and *2024*, respectively, and has earned an aggregate of 249,355 shares of the Company's common stock through *April 30, 2025*. For services rendered by *180* Consulting during the *three* months ended *April 30, 2025* and *2024,* the Company incurred fees of $554,000 and $539,000, respectively. For the *three* months ended *April 30, 2025* and *2024,* the Company recorded capitalized non-employee stock compensation of $26,000 and $30,000, respectively. The Company paid fees of $600,000 and $376,000 for services rendered by *180* Consulting during the *three* months ended *April 30, 2025* and *2024,* respectively.

Inclusive of the MSA executed with *180* Consulting are SOWs that provide for the Company to sublicense 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 $257,000 and $141,000 for the SOWs that include the sublicense agreement for the *three* months ended *April 30, 2025* and *2024*, respectively, which are included in the aforementioned totals above.

**Litigation**

We are, from time to time, a party to various legal proceedings and claims, which arise in the ordinary course of business. We are *not* aware of any legal matters that are reasonably possible to have a material adverse effect on the Company's consolidated results of operations, financial position or cash flows.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *25*

------

[**Table of Contents**](#toc)

**<u>NOTE *9* - RELATED PARTY TRANSACTIONS</u>**

**Debt Private Placement**

The following related parties participated in the Debt Private Placement (Refer to Note *5* – Debt for additional information):

---

| | | |
|:---|:---|:---|
| **Name of Investor** | **Investment Amount** | **Warrants Granted** |
| 121G, LLC (1) | $1000000 | 59829 |
| Matthew W. Etheridge (2) | 1000000 | 61403 |
| Jonathan R. Phillips (3) | 50000 | 2991 |
| The Ferayorni Family Trust (4) | 500000 | 29914 |

---

(*1*) The securities held in the account of *121G,* LLC (*"121G"*) *may* be deemed to be beneficially owned by Wyche "Tee" Green, III, the managing member of *121G.* Mr. Green serves as Executive Chairman of the Company and is a member of the Board.

(*2*) Mr. Etheridge became a member of the Board subsequent to the closing of the Debt Private Placement.

(*3*) Mr. Phillips is a member of the Board.

(*4*) The securities held in the account of The Ferayorni Family Trust *may* be deemed to be beneficially owned by Justin J. Ferayorni as co-trustee of The Ferayorni Family Trust. Mr. Ferayorni is a member of the Board.

**Common Stock Private Placement**

On *February 6, 2024,* the Company completed the sale of 17,543 shares of the Company's common stock to Matthew Etheridge at a purchase price of $5.70 per share for an aggregate purchase price of $100,000. Mr. Etheridge became a director of the Company subsequent to the closing of the Debt Private Placement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *26*

------

[**Table of Contents**](#toc)

<u>**NOTE *10*- SUBSEQUENT EVENTS**</u>

***Agreement and Plan of Merger with Mist Holding Co.***

On *May 29, 2025,* the Company entered into the Merger Agreement with Parent and Merger Sub, pursuant to which, upon the terms and subject to the conditions set forth therein, Merger Sub will merge with and into the Company, with the Company continuing as the surviving corporation and becoming a wholly owned subsidiary of Parent.

At the effective time of the Merger, each share of common stock of the Company issued and outstanding as of immediately prior to the effective time of the Merger (other than (i) any shares held by the Company as treasury stock and *not* held on behalf of *third* parties, any shares owned by Parent or Merger Sub and any shares owned by any direct or indirect wholly owned subsidiary of Parent or Merger Sub, and (ii) any shares held by holders who have *not* voted in favor of the adoption of the Merger Agreement (or consented thereto in writing and who are entitled to demand, and who have perfected a demand, for appraisal rights of such shares in accordance with Section *262* of the General Corporation Law of the State of Delaware, as *may* be amended from time to time), will automatically be cancelled and converted into the right to receive the Merger Consideration.

The Merger is subject to certain customary conditions, including, among others: (i) the receipt of the vote in favor of the adoption of the Merger Agreement by the holders of *two*-thirds of the outstanding shares of common stock of the Company entitled to vote thereon (the "Requisite Company Stockholder Approval") at a meeting of the Company's stockholders (the "Company Stockholders Meeting"); (ii) *no* court or governmental authority having enacted any law or order that restrains, enjoins, renders illegal or otherwise prevents the consummation of the Merger; (iii) each parties' representations and warranties are accurate, subject to customary materiality standards; and (iv) each party shall have performed in all material respects its obligations under the Merger Agreement. Additionally, Parent's obligation to close the Merger is subject to the condition that there has *not* occurred a material adverse effect (as defined in the Merger Agreement) with respect to the Company since the date of the Merger Agreement.

The Merger Agreement provides for certain termination rights, including, among others, the right of the parties to terminate the Merger Agreement (i) by mutual written consent; (ii) if the Merger has not been consummated as of *December 31, 2025 (*the "Outside Date"); (iii) if the Requisite Company Stockholder Approval is not obtained; (iv) if there is any final and non-appealable law or order that permanently restrains, enjoins, renders illegal or otherwise permanently prevents the consummation of the Merger; and (v) if the other party breaches its representations, warranties, covenants or agreements and such breach would result in the failure of a closing condition in favor of the other party, in each case, subject to a cure period set forth in the Merger Agreement. In addition, the Company *may* terminate the Merger Agreement in order for the Board to cause or permit the Company to enter into an Alternative Acquisition Agreement (as defined in the Merger Agreement) with respect to a Superior Proposal (as defined in the Merger Agreement), and Parent *may* terminate the Merger Agreement if the Board changes its recommendation in favor of the Merger Agreement.

The Merger Agreement further provides that, upon termination of the Merger Agreement under certain specified circumstances, the Company will be required to pay Parent a termination fee of $950,000, including if the Company terminates the Merger Agreement to enter into an Alternative Acquisition Agreement with respect to a Superior Proposal, Parent terminates the Merger Agreement because the Board changes its recommendation in favor of the Merger Agreement, or either party terminates the Merger Agreement because the Merger has not been consummated as of the Outside Date or the Requisite Company Stockholder Approval is not obtained, in each case, at a time that Parent also had a right to terminate the Merger Agreement for the Board changing its recommendation in favor of the Merger Agreement. This termination fee will also be payable by the Company if the Merger Agreement is terminated under certain circumstances and, prior to such termination, an alternative acquisition proposal has been made public (or otherwise become publicly known) or announced to the Company or the Board and has *not* been withdrawn publicly without qualification at least five business days prior to the Company Stockholders Meeting or prior to the date of termination, and within twelve (12) months after such termination, the Company consummates a transaction contemplated by an alternative acquisition proposal or enters into an Alternative Acquisition Agreement.

***Voting Agreements***

On *May 29, 2025,* concurrently with the execution and delivery of the Merger Agreement, certain officers and directors of the Company and their respective affiliates entered into Voting and Support Agreements with Parent (each, a "Voting Agreement"). Pursuant to the Voting Agreements, each of such officers and directors of the Company and their respective affiliates have agreed, among other things, to vote all shares owned by them (i) in favor of the approval and adoption of the Merger Agreement and the transactions contemplated thereby, any other matters necessary for the consummation of the Merger, and any other matters necessary for the consummation of the Merger and any adjournment or postponement of the Company Stockholders Meeting if there are not sufficient votes for there to be a quorum or for the approval and adoption of the Merger Agreement, and (ii) against any alternative acquisition proposal from a *third* party, any action or proposal in furtherance of such an acquisition proposal, and any other actions that are intended to, or would reasonably be expected to, result in the conditions to the closing of the Merger *not* being satisfied or a breach by the Company of the Merger Agreement, change in the capitalization of the Company or the voting rights of the Company's securities, or otherwise impede, interfere with, delay, discourage, adversely affect or inhibit the timely consummation of the Merger; provided, however, that nothing in the Voting Agreements shall affect any actions taken by such stockholder or any of such stockholder's affiliates (or any officer, director or employee thereof) solely in his or her capacity as a director or officer of the Company or from complying with his or her fiduciary obligations solely to the extent acting in such Person's capacity as a director or officer of the Company.

The Voting Agreements terminate upon the earliest of the effective time of the Merger, the valid termination of the Merger Agreement in accordance with its terms, the mutual written agreement of Parent and the applicable stockholder to terminate the Voting Agreement, and the date on which, subject to the terms of the Voting Agreements, the applicable stockholder delivers written notice to Parent of such stockholder's election, in its sole discretion, to terminate the Voting Agreement following any amendment or modification to the Merger Agreement that reduces the amount of the Merger Consideration, changes the form of any of the Merger Consideration or otherwise modifies the terms of the Merger Agreement in a manner that is materially adverse to the Company's stockholders as a whole.

***Amended and Restated Master Services and Non-Disclosure Agreement with *180* Consulting***

In connection with the Merger and the delisting of the Shares from the Nasdaq Capital Market that is anticipated to occur in connection therewith, on *May 29, 2025,* the Company entered into an Amended and Restated Master Services and Non-Disclosure Agreement (including the related amended and restated statements of work, the "A&R Consulting Agreement") with *180* Consulting. The A&R Consulting Agreement amends and restates the MSA, under which *180* Consulting has provided and is providing certain software development services and licensing certain software to the Company, as set forth in the related statements of work, in exchange for both cash and equity compensation.

The A&R Consulting Agreement amends and restates the MSA and the related statements of work in their entirety to, among other things, (i) provide for certain compensation to *180* Consulting to be paid in cash in lieu of the issuance of shares of Company common stock, (ii) modify the term of *180* Consulting's services thereunder and (iii) provide certain other rights for each of the parties thereto. The initial term of the A&R Consulting Agreement is through *March 31, 2026,* after which the A&R Consulting Agreement will automatically renew for successive *twelve*-month periods unless terminated by the parties thereto. Either party thereto *may* terminate the services under the A&R Consulting Agreement for any reason upon *ninety* days to *six* months advance notice (depending on the service), except that *180* Consulting will *not* be permitted to terminate any such services prior to the end of the initial term.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *27*

------

[**Table of Contents**](#toc)

**Item 2. MANAGEMENT**'**S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

**FORWARD-LOOKING STATEMENTS**

We make forward-looking statements in this Quarterly Report on Form 10-Q (this "Report") and in other materials we file with the SEC or otherwise make public. This Report, therefore, contains statements about future events and expectations which are forward-looking statements within the meaning of Sections 27A of the Securities Act of 1933, as amended (the "Securities Act"), and 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). In addition, our senior management makes forward-looking statements to analysts, investors, the media and others. Statements with respect to expected revenue, income, receivables, backlog, client attrition, acquisitions and other growth opportunities, sources of funding operations and acquisitions, the integration of our solutions, the performance of our channel partner relationships, the sufficiency of available liquidity, research and development, and other statements of our plans, beliefs or expectations are forward-looking statements. These and other statements using words such as "anticipate," "believe," "estimate," "expect," "intend," "plan," "project," "target," "can," "could," "may," "should," "will," "would" and similar expressions also are forward-looking statements. Each forward-looking statement speaks only as of the date of the particular statement. The forward-looking statements we make are not guarantees of future performance, and we have based these statements on our assumptions and analyses in light of our experience and perception of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances. Forward-looking statements by their nature involve substantial risks and uncertainties that could significantly affect expected results, and actual future results could differ materially from those described in such statements. Management cautions against putting undue reliance on forward-looking statements or projecting any future results based on such statements or present or historical earnings levels.

Among the factors that could cause actual future results to differ materially from our expectations are the risks and uncertainties described under "Risk Factors" and elsewhere in our Annual Report on Form 10-K for the fiscal year ended January 31, 2025 and in our subsequent filings with the SEC, and include among others, the following:

● our proposed acquisition by Mist Holding Co. including our expectations regarding the anticipated occurrence, manner, timing and completion thereof and its effects on our relationships with employees, customers, vendors, and other business partners;

● competitive products and pricing;

● product demand and market acceptance;

● entry into new markets;

● new product and services development and commercialization;

● key strategic alliances with vendors and channel partners that resell our products;

● uncertainty in continued relationships with customers due to termination rights;

● our ability to control costs;

● availability, quality and security of products produced, and services provided by third-party vendors;

● the healthcare regulatory environment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 28

------

[**Table of Contents**](#toc)

● potential changes in legislation, regulation and government funding affecting the healthcare industry;

● healthcare information systems budgets;

● availability of healthcare information systems trained personnel for implementation of new systems, as well as maintenance of legacy systems;

● the success of our relationships with channel partners;

● fluctuations in operating results;

● our ability to continue as a going concern;

● our future cash needs and, if and when required, our ability to obtain additional debt and/or equity financing on terms acceptable to us;

● the consummation of resources in researching acquisitions, business opportunities or financings and capital market transactions;

● the failure to adequately integrate past and future acquisitions into our business;

● critical accounting policies and judgments;

● changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other standard-setting organizations;

● changes in economic, business and market conditions impacting the healthcare industry and the markets in which we operate;

● impairment of our goodwill and other intangible assets;

● the extent to which health epidemics and other outbreaks of communicable diseases could disrupt our operations and/or materially and adversely affect our business and financial conditions;

● our ability to maintain compliance with the terms of our credit facilities; and

● our ability to maintain compliance with the continued listing standards of Nasdaq.

Most of these risk factors are beyond our ability to predict or control. Any of these factors, or a combination of these factors, could materially affect our future financial condition or results of operations and the ultimate accuracy of our forward-looking statements. There also are other factors that we may not describe (generally because we currently do not perceive them to be material) that could cause actual results to differ materially from our expectations. We expressly disclaim any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 29

------

[**Table of Contents**](#toc)

**Overview**

Streamline Health Solutions, Inc. is a provider of solutions and services in the middle of the revenue cycle for healthcare providers throughout the United States and Canada. Streamline Health's technology helps hospitals improve their financial performance by optimizing data and coding for every patient encounter prior to bill submission. By performing these activities before billing, providers can drive net revenue through reduced revenue leakage, overbilling, and days in accounts receivable. This enables providers to achieve more predictable revenue streams using technology rather than manual intervention.

The Company provides software solutions, professional consulting, and auditing services, which capture, aggregate, and translate structured and unstructured data to deliver intelligently organized, easily-accessible predictive insights to its clients. Hospitals and certain hospital-owned-and operated physician groups use the knowledge generated by Streamline Health to help them improve their financial performance.

The Company's software solutions are delivered to clients either by access to the Company's hosted web applications in the cloud through a secure connection, commonly referred to as a software as a service delivery method, or by a fixed-term or perpetual license, where such software is installed locally in the client's data center.

The Company operates exclusively in one segment as a provider of health information technology solutions and associated services that improve healthcare processes and information flows within a healthcare facility. The Company sells its solutions and services in North America to hospitals and health systems through its direct sales force and its reseller partnerships.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 30

------

[**Table of Contents**](#toc)

**Recent Developments**

***Pending Transaction with Mist Holding Co.***

On May 29, 2025, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") with Mist Holding Co., a Delaware corporation and the parent company of Hayes Management Consulting LLC d/b/a MDaudit ("Parent"), and MD BE Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Parent ("Merger Sub"), pursuant to which upon the terms and subject to the conditions set forth therein, Merger Sub will merge with and into the Company, with the Company continuing as the surviving corporation and becoming a wholly owned subsidiary of Parent (the "Merger").

At the effective time of the Merger, each share of common stock of the Company issued and outstanding as of immediately prior to the effective time of the Merger (other than (i) any shares held by the Company as treasury stock and not held on behalf of third parties, any shares owned by Parent or Merger Sub and any shares owned by any direct or indirect wholly owned subsidiary of Parent or Merger Sub, and (ii) any shares held by holders who have not voted in favor of the adoption of the Merger Agreement (or consented thereto in writing and who are entitled to demand, and who have perfected a demand, for appraisal rights of such shares in accordance with Section 262 of the General Corporation Law of the State of Delaware, as may be amended from time to time), will automatically be cancelled and converted into the right to receive $5.34 per share in cash, without interest (the "Merger Consideration").

The Merger is subject to certain customary conditions, including, among others: (i) the receipt of the vote in favor of the adoption of the Merger Agreement by the holders of two-thirds of the outstanding shares of common stock of the Company entitled to vote thereon at a meeting of the Company's stockholders; (ii) no court or governmental authority having enacted any law or order that restrains, enjoins, renders illegal or otherwise prevents the consummation of the Merger; (iii) each parties' representations and warranties are accurate, subject to customary materiality standards; and (iv) each party shall have performed in all material respects its obligations under the Merger Agreement. Additionally, Parent's obligation to close the Merger is subject to the condition that there has not occurred a material adverse effect (as defined in the Merger Agreement) with respect to the Company since the date of the Merger Agreement.

The Merger Agreement provides for certain termination rights, including, among others, the right of the parties to terminate the Merger Agreement (i) by mutual written consent; (ii) if the Merger has not been consummated as of December 31, 2025 (the "Outside Date"); (iii) if the Company does not receive votes in favor of the adoption of the Merger Agreement by the holders of two-thirds of the outstanding shares of common stock of the Company entitled to vote thereon (the "Requisite Company Stockholder Approval") at a meeting of the Company's stockholders (the "Company Stockholders Meeting"); (iv) if there is any final and non-appealable law or order that permanently restrains, enjoins, renders illegal or otherwise permanently prevents the consummation of the Merger; and (v) if the other party breaches its representations, warranties, covenants or agreements and such breach would result in the failure of a closing condition in favor of the other party, in each case, subject to a cure period set forth in the Merger Agreement. In addition, the Company may terminate the Merger Agreement in order for the board of directors of the Company (the "Board") to cause or permit the Company to enter into an Alternative Acquisition Agreement (as defined in the Merger Agreement) with respect to a Superior Proposal (as defined in the Merger Agreement), and Parent may terminate the Merger Agreement if the Board changes its recommendation in favor of the Merger Agreement.

The Merger Agreement further provides that, upon termination of the Merger Agreement under certain specified circumstances, the Company will be required to pay Parent a termination fee of $950,000, including if the Company terminates the Merger Agreement to enter into an Alternative Acquisition Agreement with respect to a Superior Proposal, Parent terminates the Merger Agreement because the Board changes its recommendation in favor of the Merger Agreement, or either party terminates the Merger Agreement because the Merger has not been consummated as of the Outside Date or the Requisite Company Stockholder Approval is not obtained, in each case, at a time that Parent also had a right to terminate the Merger Agreement for the Board changing its recommendation in favor of the Merger Agreement. This termination fee will also be payable by the Company if the Merger Agreement is terminated under certain circumstances and, prior to such termination, an alternative acquisition proposal has been made public (or otherwise become publicly known) or announced to the Company or the Board and has not been withdrawn publicly without qualification at least five business days prior to the Company Stockholders Meeting or prior to the date of termination, and within twelve (12) months after such termination, the Company consummates a transaction contemplated by an alternative acquisition proposal or enters into an Alternative Acquisition Agreement. Refer to Note 10, Subsequent Events for additional information about the Merger.

***Loan Modification***

On March 27, 2025, the Company executed the Sixth Modification and Waiver (the "Sixth Modification") to the Loan Agreement. Refer to Note 5 – Debt for additional information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 31

------

[**Table of Contents**](#toc)

**Results of Operations**

***Revenues***

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** |  |  |
| **($ in thousands):** | **April 30, 2025** | **April 30, 2024** | **Change** | **% Change** |
| Software as a service | $3359 | $2723 | $636 | 23% |
| Maintenance and support | $737 | 890 | (153) | (17)% |
| Professional fees and licenses | $714 | 717 | (3) | (0)% |
| Total Revenues | $4810 | $4330 | $480 | 11% |

---

*<u>Software as a Service (SaaS)</u>* — Revenue from SaaS for the three months ended April 30, 2025 increased $636,000 compared to the prior year period. The growth of SaaS revenue was primarily the result of successful implementations of the Company's eValuator and RevID products, partially offset by the net amount of $452,000 in customer non-renewalst. The Company expects quarterly SaaS revenue to remain relatively flat during fiscal 2025 as it continues to execute and deliver on signed agreements.

*<u>Maintenance and support</u>* — For the three months ended April 30, 2025, revenue from maintenance and support decreased $153,000 compared to the prior year period. The Company continues to prioritize SaaS products, and anticipates maintenance and support revenue will continue to decline for the remainder of fiscal 2025 due to expected contract non-renewals and limited new sales.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 32

------

[**Table of Contents**](#toc)

*<u>Professional fees and licenses</u>* — Revenues from professional fees and licenses include proprietary software, term license, professional services and audit and coding services revenue. Total professional fees and license revenues for the three months ended April 30, 2025, decreased $3,000 compared to the prior year period. The Company has primarily shifted the business from perpetual software licenses to a SaaS model. Software license sales come solely from our channel partners; therefore, the periodic amounts are less predictable and consistent than recurring revenues.

For the three months ended April 30, 2025, revenue from professional services decreased $16,000 compared to the prior year period. Professional services for a subset of the Company's solutions are recognized as the services are performed. The Company expects professional services revenue to fluctuate based on the timing and combination of products currently being implemented. For the three months ended April 30, 2025, the Company saw a decrease in license revenue of $135,000 compared to the prior year period. The Company is primarily focused on growth of its SaaS products, and, accordingly, is not expecting growth in license revenue for the remainder of fiscal 2025.

For the three months ended April 30, 2025, revenue from audit services increased $148,000 compared to the prior year period. The increase was driven primarily from existing and new clients utilizing the Company's with audit services. Certain existing clients shifted their demand for audit services which resulted in a net increase of audit service revenue of $131,000 for the three months ended April 30, 2025. New clients resulted in a $17,000 increase for the three months ended April 30, 2025, compared to the prior year period. The Company believes demand for its onshore, technically proficient coders and auditors in the marketplace is strong and that it has a competitive edge in providing audit and coding services as an offering independently or in conjunction with the eValuator solution as a technology-enabled service. As a result of shifting demand among clients, the Company anticipates the audit and coding services to remain relatively flat throughout the remainder of fiscal 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 33

------

[**Table of Contents**](#toc)

***Cost of Sales***

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** |  |  |
| **(in thousands):** | **April 30, 2025** | **April 30, 2024** | **Change** | **% Change** |
| Cost of software as a service | $1380 | $1348 | $32 | 2% |
| Cost of maintenance and support | 32 | 42 | (10) | (24)% |
| Cost of professional fees and licenses | 808 | 887 | (79) | (9)% |
| Total cost of sales | $2220 | $2277 | $(57) | (3)% |

---

*<u>Cost of software as a service (SaaS)</u>* – The cost of SaaS consists of expenses associated with (i) amortization of capitalized software, (ii) royalties payable to third-parties for use of their coding related content, and (iii) personnel and network infrastructure required to deploy and support applications for each client. For the three months ended April 30, 2025, the cost of SaaS solutions increased $32,000 compared to the prior year period. The increase was primarily driven by higher royalty expenses, salaries and outside contracting fees totaling to $95,000, offset by lower infrastructure costs and reduced amortization of capitalized software expenses totaling $73,000. Certain expenses included in our cost of SaaS are tied to volumes. These expenses include coding tools supporting eValuator and a third-party system that translates data from the hospital system to the Company's systems. The Company expects these costs of SaaS solutions to increase as revenue increases.

For the three months ended April 30, 2025, the cost of SaaS solutions includes non-cash charges of $507,000 related to the amortization of capitalized software expenses. The Company expects margins related to SaaS solutions to increase in the future from clients currently in the process of implementation. Certain costs included in cost of SaaS, such as labor and third-party content providers, negatively impact gross margin before a client is fully implemented and revenue is recognized.

*<u>Cost of maintenance and support</u>* – The cost of maintenance and support includes compensation and benefits for client support personnel required to provide product support for clients on our CDI and Abstracting software licenses. For the three months ended April 30, 2025, the cost of maintenance and support decreased $10,000 compared to the prior year period.

*<u>Cost of professional fees and licenses</u>* – The cost of professional fees and licenses includes the cost of software licenses, the cost of professional services and the cost of audit and coding services. The aggregate cost of professional fees and licenses decreased $79,000 for the three months ended April 30, 2025 compared to the prior year period.

The cost of professional fees includes compensation and benefits for personnel and related expenses. For the three months ended April 30, 2025, professional services costs decreased approximately $46,000 compared to the prior year period. This decrease was driven by a reduction in staff resulting in lower personnel and third-party contractor costs. The costs of professional fees are expected to remain relatively flat throughout the remainder of fiscal year 2025.

The cost of audit services includes compensation and benefits for internal audit services personnel, and related expenses. During the three months ended April 30, 2025, the cost of audit services increased $35,000 compared to the prior year period. The increased expense was the result of higher personnel and related expenses driven by shifting demand for the Company's audit services.

The cost of software licenses for the three months ended April 30, 2025, decreased $68,000 compared to the prior year period due to lower amortization of development costs related to the Company's coding/CDI product. The Company fully amortized the Coding and CDI software license cost at the end of fiscal year 2024.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 34

------

[**Table of Contents**](#toc)

***Selling, General and Administrative Expense***

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** |  |  |
| **($ in thousands):** | **April 30, 2025** | **April 30, 2024** | **Change** | **% Change** |
| General and administrative expenses | $2065 | $2246 | $(181) | (8)% |
| Sales and marketing expenses | 723 | 946 | (223) | (24)% |
| Total selling, general, and administrative expense | $2788 | $3192 | $(404) | (13)% |

---

General and administrative expenses comprise various costs including compensation and associated benefits, reimbursable travel and entertainment expenses related to our executive and administrative staff, general corporate expenditures, amortization of intangible assets, and occupancy costs. For the three months ended April 30, 2025, general and administrative expenses decreased $181,000 compared to the prior year period. The decrease was primarily driven by lower employee and director compensation and benefits of $143,000, compared to the prior year period.

Sales and marketing expenses primarily encompass compensation, associated benefits, travel and entertainment costs for our sales and marketing personnel. Additionally, sales and marketing expenses include costs from third parties related to advertising, marketing and trade show attendance. For the three months ended April 30, 2025, sales and marketing expenses decreased $223,000 compared to the prior year period. This decrease is primarily the result of reduced headcount related expenses in the amount of $271,000, offset by increased professional services.

***Research and Development***

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** |  |  |
| **($ in thousands):** | **April 30, 2025** | **April 30, 2024** | **Change** | **% Change** |
| Research and development expenses | $903 | $1111 | $(208) | (19)% |
| Capitalized research and development cost | 228 | 247 | (19) | (8)% |

---

Research and development expenses consist primarily of compensation and related benefits and the use of independent contractors for specific near-term development projects. Research and development expenses for the three months ended April 30, 2025 decreased $208,000 compared to the prior year period as a result of reduced headcount related expenses totaling $203,000. The Company continues to focus research and development activities and strategically invest to improve eValuator and RevID, its flagship SaaS solutions.

Capitalized research and development costs for the three months ended April 30, 2025, decreased $19,000 compared to the prior year period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 35

------

[**Table of Contents**](#toc)

***Other Income (Expense)***

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** |  |  |
| **($ in thousands):** | **April 30, 2025** | **April 30, 2024** | **Change** | **% Change** |
| Interest expense | $(543) | $(465) | $(78) | 17% |
| Valuation adjustments |  | (24) | 24 | (100)% |
| Miscellaneous income (expense) | (1) |  | (1) | 100% |
| Total other (expense) income | $(544) | $(489) | $(55) | 11% |

---

Interest expense consists of interest associated with the term loan, notes payable, and their respective deferred financing costs, less interest related to capitalization of software. For the three months ended April 30, 2025, interest expense increased by $78,000. The increase was primarily attributable to non-cash interest accrued for the notes payable (Refer to Note 5 – Debt).

Valuation adjustments are related to the liabilities associated with the Avelead acquisition (Refer to Note 3 – Business Combination of the unaudited condensed consolidated financial statements included in Part I, Item I, "Financial Statements"), and the common stock underlying the Warrants (Refer to Note 5 – Debt). For the three months ended April 30, 2025 and 2024, the Company recorded valuation adjustments of $0 and $24,000, respectively. The valuation adjustments are caused by the decrease in the value of the stock to be transferred and that decrease effects the Black Scholes model used for valuing the Warrants.

There was no material miscellaneous income for the three months ended April 30, 2025 and 2024.

***Provision for Income Taxes***

We recorded an income tax expense of $0 for the three months ended April 30, 2025 and 2024, which is comprised of estimated federal, state and local income tax provisions. The Company has a substantial amount of net operating losses for federal and state income tax purposes. The effective income tax rate on continuing operations of approximately 0% differs from our combined federal and state statutory rate of 24% primarily due to the full valuation allowance the Company currently maintains on its net deferred tax asset.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 36

------

[**Table of Contents**](#toc)

**Use of Non-GAAP Financial Measures**

In order to provide investors with greater insight and allow for a more comprehensive understanding of the information used by management and the Board in its financial and operational decision-making, the Company has supplemented the condensed consolidated financial statements presented on a GAAP basis in this Report with the following non-GAAP financial measures: EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin.

These non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of Company results as reported under GAAP. The Company compensates for such limitations by relying primarily on our GAAP results and using non-GAAP financial measures only as supplemental data. We also provide a reconciliation of non-GAAP to GAAP measures used. Investors are encouraged to carefully review this reconciliation. In addition, because these non-GAAP measures are not measures of financial performance under GAAP and are susceptible to varying calculations, these measures, as defined by us, may differ from and may not be comparable to similarly titled measures used by other companies.

***<u>EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin</u>***

We define: (i) EBITDA as net earnings (loss) before net interest expense, income tax expense (benefit), depreciation and amortization; (ii) Adjusted EBITDA as net earnings (loss) before net interest expense, income tax expense (benefit), depreciation, amortization, share-based compensation expense, valuation adjustments, restructuring charges, transaction related expenses and other expenses that do not relate to our core operations such as severances and impairment charges; and (iii) Adjusted EBITDA Margin as Adjusted EBITDA as a percentage of GAAP net revenue. EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin are used to facilitate a comparison of our operating performance on a consistent basis from period to period and provide for a supplemental understanding of factors and trends affecting our business than GAAP measures alone. These measures assist management and the Board, and may be useful to investors in comparing our operating performance consistently over time as they remove the impact of our capital structure (primarily interest charges), asset base (primarily depreciation and amortization), items outside the control of the management team (taxes) and expenses that do not relate to our core operations including: transaction-related expenses (such as professional and advisory services), corporate restructuring expenses (such as severances) and other operating costs that are expected to be non-recurring. Adjusted EBITDA removes the impact of share-based compensation expense, which is another non-cash item.

The Board and management also use these measures (i) as one of the primary methods for planning and forecasting overall expectations and for evaluating, on at least a quarterly and annual basis, actual results against such expectations; and (ii) as a performance evaluation metric in determining achievement of certain executive and associate incentive compensation programs.

Our lender uses a measurement that is similar to the Adjusted EBITDA measurement described herein to assess our operating performance. The lender under our Second Amended and Restated Loan Agreement requires delivery of compliance reports certifying compliance with financial covenants, certain of which are based on a measurement that is similar to the Adjusted EBITDA measurement reviewed by our management and Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 37

------

[**Table of Contents**](#toc)

EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin are not measures of liquidity under GAAP or otherwise and are not alternatives to cash flow from continuing operating activities, despite the supplemental information provided by these measures regarding the use and analysis of these measures as mentioned above. EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin, as disclosed in this Report have limitations as analytical tools, and you should not consider these measures in isolation or as a substitute for analysis of our results as reported under GAAP; nor are these measures intended to be measures of liquidity or free cash flow for our discretionary use. Some of the limitations of EBITDA and its variations are:

● 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 Second Amended and Restated Loan Agreement;

● EBITDA does not reflect income tax payments that we may be 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.

Adjusted EBITDA has all the inherent limitations of EBITDA. To properly and prudently evaluate our business, the Company encourages readers to review the GAAP financial statements included elsewhere in this Report, and not rely on any single financial measure to evaluate our business. We also strongly urge readers to review the reconciliation of these non-GAAP financial measures to the most comparable GAAP measure in this section, along with the condensed consolidated financial statements included above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 38

------

[**Table of Contents**](#toc)

The following table reconciles EBITDA and Adjusted EBITDA to net loss for the three months ended April 30, 2025 and 2024 (amounts in thousands). All of the items included in the reconciliation from EBITDA and Adjusted EBITDA to net loss are either recurring non-cash items, or items that management does not consider in assessing our on-going operating performance. In the case of the non-cash items, management believes that investors may find it useful to assess the Company's comparative operating performance because the measures without such items are less susceptible to variances in actual performance resulting from depreciation, amortization and other expenses that do not relate to our core operations and are more reflective of other factors that affect operating performance. In the case of items that do not relate to our core operations, management believes that investors may find it useful to assess our operating performance if the measures are presented without these items because their financial impact does not reflect ongoing operating performance.

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** |
| **In thousands, except per share data** | **April 30, 2025** | **April 30, 2024** |
| **Adjusted EBITDA Reconciliation** |  |  |
| Net Loss | $(1645) | $(2739) |
| Interest expense | 543 | 465 |
| Depreciation and amortization | 875 | 1017 |
| EBITDA | $(227) | $(1257) |
| Share-based compensation expense | 430 | 499 |
| Non-cash valuation adjustments |  | 24 |
| Acquisition-related costs, severance, and transaction-related bonuses | 23 | 31 |
| Adjusted EBITDA | $226 | $(703) |
| Adjusted EBITDA margin (1) | 5% | (16)% |

---

(1) Adjusted EBITDA as a percentage of GAAP net revenue.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 39

------

[**Table of Contents**](#toc)

**Application of Critical Accounting Policies**

The preparation of financial statements in conformity with GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenue and expenses during the reporting period. Management considers an accounting policy to be critical if the accounting policy requires management to make particularly difficult, subjective, or complex judgments about matters that are inherently uncertain. A summary of our critical accounting policies is included in Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended January 31, 2025. There have been no material changes to the critical accounting policies disclosed in our Annual Report on Form 10-K for the fiscal year ended January 31, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 40

------

[**Table of Contents**](#toc)

**Liquidity, Capital Resources and Going Concern**

On May 29, 2025, the Company entered into the Merger Agreement with Parent and Merger Sub, pursuant to which, upon the terms and subject to the conditions set forth therein, Merger Sub will merge with and into the Company, with the Company continuing as the surviving corporation and becoming a wholly owned subsidiary of Parent.

While the Merger Agreement is in effect, we are subject to restrictions on our business activities, generally requiring us to conduct our business in the ordinary course of business, consistent with past practice. Further, outside of certain limited exceptions, we may not take certain actions without Parent's consent prior to the closing of the Merger, including, among other things, (i) acquiring other businesses and assets in excess of a specified limit, (ii) disposing of our assets, (iii) making investments, (iv) entering into certain contracts, (v) paying dividends, (vi) incurring capital expenditures in excess of a specified limit, (vii) incurring debt, (viii) taking certain actions relating to intellectual property, (ix) amending our organizational documents, (x) issuing additional securities or (xi) repurchasing shares of Company's common stock. We do not believe these restrictions will prevent us from meeting our ongoing costs of operations, working capital needs or capital expenditure requirements. Under the terms of the Merger Agreement, we may be required to pay Parent a termination fee of $950,000 if the Merger Agreement is terminated under certain circumstances specified in the Merger Agreement. Moreover, we have incurred, and will continue to incur, significant costs and expenses in connection with the pending transaction. We must pay a material portion of these costs and expenses whether or not the transaction is completed. Payment of any such fees, costs or expenses may require us to use available cash that would have otherwise been available for general corporate purposes or other uses.

The Company's liquidity is dependent upon numerous factors including: (i) the timing and amount of revenue and collection of contractual amounts from customers, (ii) amounts invested in research and development and capital expenditures, and (iii) the level of operating expenses, all of which can vary significantly from quarter to quarter. The Company's primary cash requirements include regular payment of payroll and other business expenses, principal and interest payments on debt and capital expenditures, which generally include computer hardware. Operations are funded with cash generated by operations and borrowings under credit facilities. Information concerning the Company's assessment as a going concern is included in Note 1 – Basis of Presentation in our unaudited condensed consolidated financial statements included in Part I, Item I, "Financial Statements." Cash and cash equivalent balances at April 30, 2025 and January 31, 2025, were approximately $1,449,000 and $2,183,000, respectively.

The Company has liquidity through its Second Amended and Restated Loan Agreement (as amended and modified, the "Second Amended and Restated Loan Agreement") described in more detail in Note 5 – Debt in our unaudited condensed consolidated financial statements included in Part I, Item I, "Financial Statements." 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 Company executed a Second Modification to Second Amended and Restated Loan Agreement (the "Second Modification") on November 29, 2022, which amended the covenants under the Second Amended and Restated Loan Agreement expanded 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. The Company executed the Third Modification and Fourth Modification on February 7, 2024 and April 5, 2024, respectively (collectively, the "Third and Fourth Modifications"). The Third Modification and Fourth Modification reestablished certain customary financial covenants for the Second Amended and Restated Loan Agreement. On November 13, 2024, the Company executed the Fifth Modification (the "Fifth Modification") to the Loan Agreement which amended certain financial covenants under the Loan Agreement. On March 27, 2025, the Company and certain of its subsidiaries entered into a Sixth Modification and Waiver (the "Sixth Modification") to the Loan Agreement with Western Alliance Bank. The Sixth Modification waived the Company's non-compliance with the Maximum Debt to ARR Ratio under the Loan Agreement and amended certain financial covenants. Refer to Note 5 – Debt for information regarding the Second Amended and Restated Loan Agreement, Second Modification, Third Modification and Fourth Modification, Fifth Modification, and Sixth Modification.

The Second Amended and Restated Loan Agreement includes customary financial covenants, including the requirements that the Company achieve certain EBITDA levels and ratios, ARR net leverage ratios, and fixed charge coverage ratios. 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 a cross default provision with the Second Amended and Restated Loan Agreement and a change of control default provision. For the period ended April 30, 2025, the Company was in compliance with the covenants under the Second Amended and Restated Loan and Security Agreement. However, the Company's current forecast projects the Company may not be able to maintain compliance with certain of its financial covenants under the Second Amended and Restated Loan Agreement in the future. We have been dependent on sales of our equity securities and debt financing to meet our ongoing cash requirements. There can be no assurances that we would be able to obtain debt or equity financing when needed, on terms acceptable to the Company, or at all, and our failure to raise additional capital in amounts and on terms sufficient to fund our operations could limit our ability to continue operations. Refer to Note 1 – Basis of Presentation for detail regarding the Company's assessment as a going concern.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 41

------

[**Table of Contents**](#toc)

***<u>Significant cash obligations</u>***

---

| | | |
|:---|:---|:---|
| **(in thousands)** | **April 30, 2025** | **January 31, 2025** |
| Term loan (1) | $7277 | $7709 |
| Notes payable (2) | 4703 | 4415 |
| Acquisition earnout liability (3) | 377 | 377 |
| Line of credit (4) | 2000 | 1000 |

---

(1) Term loan balance is reported net of unamortized deferred financing costs of $30,000 and $36,000 as of April 30, 2025 and January 31, 2025, respectively, and accrued financing costs payable of $307,000 and $245,000 as of April 30, 2025 and January 31, 2025, respectively. Refer to Note 5 – Debt for additional information. The term loan balance as of April 30, 2025 and January 31, 2025 was bank term debt under the Second Amended and Restated Loan Agreement.

(2) Refer to Note 5 – Debt for additional information. As of April 30, 2025, the cash obligation is net of discounts on notes payable of $489,000 and deferred financing costs of $91,000. As of January 31, 2025, the cash obligation is net of discounts on notes payable of $573,000 and deferred financing costs of $107,000. 

(3) As of April 30, 2025 and January 31, 2025, the acquisition earnout liability reflects the remaining cash balance. Refer to Note 3 – Business Combination for additional information. 

(4) Refer to Note 5 – Debt for additional information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 42

------

[**Table of Contents**](#toc)

***<u>Operating cash flow activities</u>***

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** |
| **(in thousands)** | **April 30, 2025** | **April 30, 2024** |
| Net loss | $(1645) | $(2739) |
| Non-cash adjustments to net loss | 1661 | 1795 |
| Cash impact of changes in assets and liabilities | (985) | (255) |
| Net cash (used in) provided by operating activities | $(969) | $(1199) |

---

The net cash used in operating activities slightly decreased during the three months ended April 30, 2025, compared to the prior year period. The decrease was primarily due to the timing of invoices, which resulted in higher accounts receivable, as well as a reduction in operating expenses driven by cost-saving measures.

***<u>Investing cash flow activities</u>***

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** |
| **(in thousands)** | **April 30, 2025** | **April 30, 2024** |
| Purchases of property and equipment | $— | $— |
| Capitalized software development costs | (232) | (232) |
| Net cash (used in) provided by investing activities | $(232) | $(232) |

---

The cash used in investing activities for the three months ended April 30, 2025 and April 30, 2024, includes capitalized software development costs. The Company expects continued capitalizable projects associated with the Company's flagship products, and we expect it to remain constant at this rate.

***<u>Financing cash flow activities</u>***

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** |
| **(in thousands)** | **April 30, 2025** | **April 30, 2024** |
| Proceeds from notes payable |  | $4400 |
| Proceeds from issuance of common stock |  | 100 |
| Proceeds from line of credit | 1000 |  |
| Payments for deferred financing costs |  | (16) |
| Repurchase of common shares to satisfy employee tax withholding | (33) | (67) |
| Repayment of bank term loan | (500) | (250) |
| Payments of acquisition earnout liabilities |  | (447) |
| Repayment of line of credit |  | (1500) |
| Net cash (used in) provided by financing activities | $467 | $2220 |

---

The cash used in financing activities for the three months ended April 30, 2025 and April 30, 2024, includes principal payments on the term loan related to the Second Amended and Restated Loan Agreement, repayment on the line of credit, payments of acquisition earnout liabilities, and the repurchase of common shares to satisfy employee tax withholding. The cash provided by financing activities for the three months ended April 30, 2025 and April 30, 2024, includes proceeds received in connection with the issuance of the Notes in the Debt Private Placement, which closed in February 2024, and proceeds from a draw on the line of the credit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 43

------

[**Table of Contents**](#toc)

**Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

As a "smaller reporting company," as defined by Item 10 of Regulation S-K, we are not required to provide this information.

**Item 4. CONTROLS AND PROCEDURES**

**Evaluation of Disclosure Controls and Procedures**

Our President and Chief Executive Officer (who serves as our principal executive officer) and our Chief Financial Officer (who serves as our principal financial officer) have evaluated the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(c)) as of April 30, 2025. Based on that evaluation, our President and Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures were not effective as of April 30, 2025, due to the material weaknesses described below.

● As of October 31, 2024, the Company has concluded that its internal controls over financial reporting were, and continue to be ineffective as of April 30, 2025, due to separate material weaknesses arising each from a lack of sufficient segregation of duties in preparing and reviewing certain entries and the precise review of schedules not being performed. The initiation of transactions, the custody of assets, the recording of transactions, and the maintenance of schedules should be performed and reviewed by separate individuals with a level of precision sufficient to detect a material misstatement

● As of April 30, 2024, the Company concluded our internal control over financial reporting related to our accounting and classification for the warrants issued in connection with the debt private placement in February 2024 was, and continues to be, ineffective as of April 30, 2025. Our internal control over financial reporting did not detect the proper accounting classification of the warrants issued in connection with the debt private placement. The change in the classification impacted initial allocation of proceeds for the transaction, the presentation and recognition of the warrants between equity and liability and the recognition of expenses originally allocated to the warrants

***Management's Remediation Measures***

While the Company has improved its organizational capabilities, the Company's remediation efforts are ongoing. Management is committed to maintaining a strong internal control environment. In response to the identified material weaknesses in the overall control environment, management is currently implementing additional measures which include:

● Use of additional consulting firms to assist with significant and complex accounting transactions, provide staffing resources to establish segregation of duties and create a more structured financial statement reporting environment. Through this combination of actions, the Company will establish more effective controls and available resources to ensure both adequate segregation of duties and perform precise reviews of the supplemental schedules. The Company is evaluating the need for additional resources and intends to expand the available personnel and third party professionals for complex accounting applications and to ensure appropriate segregation of duties as soon as practicable. In addition, management continues to utilize mitigating controls with regards to cash disbursements and vendor authorization processes to ensure segregation of duties in those areas.

● Our remediation plan includes ensuring appropriate segregation of duties regarding the initiation of transactions, custody of assets, the recording of transactions and the review of supplemental schedules, and, expanding and improving our review process throughout, particularly in the context of complex financial instruments and related accounting standards, as well as internal communications in connection therewith.

The Company will consider the material weaknesses remediated after the applicable controls operate for a sufficient period of time and are tested. We can provide no assurance that our remediation efforts described herein will be successful and that we will not have material weaknesses in the future. However, we believe that the financial statements included in this report fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented.

**Changes in Internal Control over Financial Reporting**

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended April 30, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 44

------

[**Table of Contents**](#toc)

**PART II. OTHER INFORMATION**

**Item 1. LEGAL PROCEEDINGS**

We are, from time to time, a party to various legal proceedings and claims, which arise in the ordinary course of business. We are not aware of any legal matters that could have a material adverse effect on our consolidated results of operations, financial position, or cash flows.

**Item 1A. RISK FACTORS**

An investment in our common stock or other securities involves a number of risks. You should carefully consider each of the risks described in our Annual Report on Form 10-K for the fiscal year ended January 31, 2025 which includes a detailed discussion of the Company's risk factors. If any of the risks develop into actual events, our business, financial condition, or results of operations could be negatively affected, the market price of our common stock or other securities could decline, and you may lose all or part of your investment.

Except as described below, there have been no material changes to the risk factors disclosed in Item 1A of our Annual Report on Form 10-K for the fiscal year ended January 31, 2025.

***Risks Related to the Pending Transaction with Mist Holding Co.***

***We may not complete the pending transaction with Mist Holding Co. within the time frame we anticipate, or at all, which could have a material adverse effect on our business, financial condition, results of operations, and/or stock price.***

On May 29, 2025, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") with Mist Holding Co., a Delaware corporation and the parent company of Hayes Management Consulting LLC d/b/a MDaudit ("Parent"), and MD BE Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Parent ("Merger Sub"), pursuant to which, upon the terms and subject to the conditions set forth therein, Merger Sub will merge with and into the Company, with the Company continuing as the surviving corporation and becoming a wholly owned subsidiary of Parent (the "Merger").

Consummation of the Merger is subject to certain customary conditions, including, among others: (i) the receipt of the vote in favor of the adoption of the Merger Agreement by the holders of two-thirds of the outstanding Shares entitled to vote thereon at the Company Stockholders Meeting (the "Requisite Company Stockholder Approval"); (ii) no court or governmental authority having enacted any law or order that restrains, enjoins, renders illegal or otherwise prevents the consummation of the Merger; (iii) each parties' representations and warranties are accurate, subject to customary materiality standards; and (iv) each party shall have performed in all material respects its obligations under the Merger Agreement. Additionally, Parent's obligation to close is subject to the condition that there has not occurred a Material Adverse Effect (as defined in the Merger Agreement) with respect to the Company since the date of the Merger Agreement.

The Merger Agreement provides for certain termination rights, including, among others, the right of the parties to terminate the Merger Agreement (i) by mutual written consent; (ii) if the Merger has not been consummated as of December 31, 2025 (the "Outside Date"); (iii) if the Requisite Company Stockholder Approval is not obtained; (iv) if there is any final and non-appealable law or order that permanently restrains, enjoins, renders illegal or otherwise permanently prevents the consummation of the Merger; and (v) if the other party breaches its representations, warranties, covenants or agreements and such breach would result in the failure of a closing condition in favor of the other party, in each case, subject to a cure period set forth in the Merger Agreement. In addition, the Company may terminate the Merger Agreement in order for the board of directors of the Company (the "Board") to cause or permit the Company to enter into an Alternative Acquisition Agreement (as defined in the Merger Agreement) with respect to a Superior Proposal (as defined in the Merger Agreement), and Parent may terminate the Merger Agreement if the Board changes its recommendation in favor of the Merger Agreement.

The Merger Agreement further provides that, upon termination of the Merger Agreement under certain specified circumstances, the Company will be required to pay Parent a termination fee of $950,000, including if the Company terminates the Merger Agreement to enter into an Alternative Acquisition Agreement with respect to a Superior Proposal, Parent terminates the Merger Agreement because the Board changes its recommendation in favor of the Merger Agreement, or either party terminates the Merger Agreement because the Merger has not been consummated as of the Outside Date or the Requisite Company Stockholder Approval is not obtained, in each case, at a time that Parent also had a right to terminate the Merger Agreement for the Board changing its recommendation in favor of the Merger Agreement. This termination fee will also be payable by the Company if the Merger Agreement is terminated under certain circumstances and, prior to such termination, an alternative acquisition proposal has been made public (or otherwise become publicly known) or announced to the Company or the Board and has not been withdrawn publicly without qualification at least five business days prior to the Company Stockholders Meeting or prior to the date of termination, and within twelve (12) months after such termination, the Company consummates a transaction contemplated by an alternative acquisition proposal or enters into an Alternative Acquisition Agreement.

If the pending Merger is not completed within the expected time frame or at all, we may be subject to a number of material risks, including to the extent that the current market price of our common stock is positively affected by a market assumption that the Merger will be completed. We could be required to pay Parent a termination fee of $950,000 if the Merger Agreement is terminated under specific circumstances described in the Merger Agreement. The failure to complete the Merger also may result in negative publicity and negatively affect our relationship with our stockholders, employees, customers, vendors, and other business partners. We may also be required to devote significant time and resources to litigation related to any failure to complete the Merger or related to any enforcement proceeding commenced against us to perform our obligations under the Merger Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 45

------

[**Table of Contents**](#toc)

***The announcement and pendency of the transaction with Parent could adversely affect our business, financial condition, and/or operating results.***

Our efforts to complete the Merger could cause substantial disruptions in, and create uncertainty surrounding, our business, which may materially adversely affect our business, financial condition and results of operation. Uncertainty as to whether the Merger will be completed may affect our ability to recruit prospective employees or to retain and motivate existing employees and, while the Merger is pending, such existing or prospective employees could experience uncertainty about their future with the Company. A substantial amount of our management's and employees' attention is being directed toward the completion of the Merger and thus is being diverted from our day-to-day operations. Uncertainty as to our future could adversely affect our business and our relationship with customers, vendors, and other business partners. For example, customers, vendors, and other counterparties may react unfavorably, including by delaying or deferring decisions concerning their business relationships or transactions with us, or seeking to change or terminate their existing business relationships with us. Changes to or termination of existing business relationships could adversely affect our results of operations and financial condition, as well as the market price of our common stock. The adverse effects of the pendency of the Merger could be exacerbated by any delays in completion of the Merger or termination of the Merger Agreement.

***While the Merger Agreement is in effect, we are subject to restrictions on our business activities.***

While the Merger Agreement is in effect, we are subject to restrictions on our business activities, generally requiring us to conduct our business in the ordinary course of business, consistent with past practice, and subjecting us to a variety of specified limitations absent Parent's prior consent. Outside certain limited exceptions, these limitations include, among other things, restrictions on our ability to (i) acquire other businesses and assets in excess of a specified limit, (ii) dispose of our assets, (iii) make investments, (iv) enter into certain contracts, (v) pay dividends, (vi) incur capital expenditures in excess of a specified limit, (vii) incur debt, (viii) take certain actions relating to intellectual property, (ix) amend our organizational documents, (x) issue additional securities or (xi) repurchase shares of Company's common stock. These restrictions could prevent us from pursuing strategic business opportunities, taking actions with respect to our business that we may consider advantageous and responding effectively and/or timely to competitive pressures and industry developments, and we may have to forgo certain opportunities we might otherwise pursue, and may as a result materially and adversely affect our business, results of operations and financial condition.

***In certain instances, the Merger Agreement requires us to pay a termination fee to Parent, which could require us to use available cash that would have otherwise been available for general corporate purposes.***

Under the terms of the Merger Agreement, we may be required to pay Parent a termination fee of $950,000 if the Merger Agreement is terminated under specific circumstances described in the Merger Agreement. If the Merger Agreement is terminated under such circumstances, the termination fee we may be required to pay under the Merger Agreement may require us to use available cash that would have otherwise been available for general corporate purposes and other uses. For these and other reasons, termination of the Merger Agreement could materially and adversely affect our business operations and financial condition, which in turn would materially and adversely affect the price of our common stock.

***We have incurred, and will continue to incur, direct and indirect costs as a result of the pending Merger.***

We have incurred, and will continue to incur, significant costs and expenses, including fees for professional services and other transaction costs, in connection with the pending Merger. We must pay a substantial portion of these costs and expenses whether or not the Merger is completed. There are a number of factors beyond our control that could affect the total amount or the timing of these costs and expenses, any of which could materially and adversely affect our business, prospects, financial condition, and results of operations.

***Lawsuits may be filed against us and the members of our board of directors arising out of the proposed Merger, which may delay or prevent the proposed Merger.***

Lawsuits are often brought against public companies that have entered into merger agreements. Complaints may in the future be filed against us, our board of directors, Parent, Parent's boards of directors and/or others in connection with the transactions contemplated by the Merger Agreement. The outcome of litigation is uncertain, including the amount of costs associated with defending these claims or any other liabilities that may be incurred in connection with the litigation of these claims, and we may not be successful in defending against any such future claims. Regardless of the outcome, lawsuits that may be filed against us, our board of directors, Parent, or Parent's boards of directors could delay or prevent the consummation of the Merger, result in significant costs, and divert the attention of our management and employees from our day-to-day business which could affect our operations and otherwise adversely affect us financially. Additionally, if a plaintiff is successful in obtaining an injunction prohibiting completion of the Merger, that injunction may delay or prevent the Merger from being completed, or from being completed within the anticipated timeframe, which may adversely affect our business, financial condition or results of operations.

***If the Merger occurs, our stockholders will not be able to participate in any further upside to our business.***

If the Merger is consummated, our stockholders will receive the right to receive an amount in cash equal to $5.34 per share of common stock of the Company, without interest, and will not receive any equity interests of Parent. As a result, if our business following the Merger performs well, our current stockholders will not receive any additional consideration and will therefore not receive any benefit from any such future performance of our business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 46

------

[**Table of Contents**](#toc)

**ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS**

**Share Repurchases**

The following table sets forth information with respect to our repurchases of common stock during the three months ended April 30, 2025:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  |  |  | **Total** | **Maximum** |
|  |  |  | **Number of** | **Number of** |
|  |  |  | **Shares** | **Shares** |
|  |  |  | **Purchased** | **that May** |
|  | **Total** |  | **as Part of** | **Yet Be** |
|  | **Number of** |  | **Publicly** | **Purchased** |
|  | **Shares** | **Average** | **Announced** | **under the** |
|  | **Purchased** | **Price Paid** | **Plans or** | **Plans or** |
|  | **(1)** | **per Share** | **Programs** | **Programs** |
| February 1 - February 28 | 766 | $3.67 |  |  |
| March 1 - March 30 | 238 | 3.24 |  |  |
| April 1 - April 30 | 9923 | 2.73 |  |  |
| Total | 10927 | $2.81 |  |  |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (1) Amount represents shares surrendered by employees to satisfy tax withholding obligations resulting from restricted stock that vested during the three months ended April 30, 2025.

 **ITEM 3. DEFAULTS UPON SENIOR SECURITIES**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; None.

 **ITEM 4. MINE SAFETY DISCLOSURES**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Not applicable.

**ITEM *5.* OTHER INFORMATION**

During the *three* months ended *April 30, 2025*, none of our directors or officers (as defined in Rule *16a*-*1*(f) of the Securities Exchange Act of *1934,* as amended) adopted or terminated a Rule *10b5*-*1* trading arrangement or non-Rule *10b5*-*1* trading arrangement (as such terms are defined in Item *408* of Regulation S-K of the Securities Act of *1933*).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *47*

------

[**Table of Contents**](#toc)

**Item 6. EXHIBITS**

See Index to Exhibits.

**INDEX TO EXHIBITS**

---

| | |
|:---|:---|
| **Exhibit No.** | **Description of Exhibit** |
| 2.1 | [Agreement and Plan of Merger, dated as of May 29, 2025, by and among Streamline Health Solutions, Inc., Mist Holding Co., and MD BE Merger Sub, Inc. (Incorporated by reference from Exhibit 2.1 of the Current Report on Form 8-K, filed May 29, 2025).](http://www.sec.gov/Archives/edgar/data/1008586/000143774925018850/ex_824907.htm) |
| 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 Quarterly Report on Form 10-Q, filed September 15, 2014).](http://www.sec.gov/Archives/edgar/data/1008586/000100858614000008/strm20140731ex31.htm) |
| 3.2 | [Certificate of Amendment of Certificate of Incorporation of Streamline Health Solutions, Inc. (Incorporated by reference from Exhibit 3.1 of the Current Report on Form 8-K, filed May 24, 2021).](http://www.sec.gov/Archives/edgar/data/1008586/000149315221012713/ex3-1.htm) |
| 3.3 | [Certificate of Amendment of Certificate of Incorporation of Streamline Health Solutions, Inc. (Incorporated by reference from Exhibit 3.1 of the Current Report on Form 8-K, filed June 8, 2022).](http://www.sec.gov/Archives/edgar/data/1008586/000149315222016177/ex3-1.htm) |
| 3.4 | [Certificate of Amendment of Certificate of Incorporation of Streamline Health Solutions, Inc. (Incorporated by reference from Exhibit 3.1 of the Current Report on Form 8-K, filed September 26, 2024).](http://www.sec.gov/Archives/edgar/data/1008586/000143774924030089/ex_727784.htm) |
| 3.5 | [Bylaws of Streamline Health Solutions, Inc., as amended and restated through March 28, 2014 (Incorporated by reference from Exhibit 3.1 of the Current Report on Form 8-K, filed April 3, 2014).](http://www.sec.gov/Archives/edgar/data/1008586/000110465914025620/a14-9976_1ex3d1.htm) |
| 10.1 | [Sixth Modification to Second Amended and Restated Loan and Security Agreement, dated March 27, 2025, by and between Streamline Health Solutions, Inc. and certain of its subsidiaries party thereto, and Western Alliance Bank (Incorporated by reference from Exhibit 10.1 of the Current Report on Form 8-K, filed March 28, 2025).](http://www.sec.gov/Archives/edgar/data/1008586/000143774925009908/ex_796240.htm) |
| 10.2 | [Form of Voting and Support Agreement, dated as of May 29, 2025, by and among Mist Holding Co. and each of the persons set forth on the signature pages thereto (Incorporated by reference from Exhibit 10.1 of the Current Report on Form 8-K, filed May 29, 2025).](http://www.sec.gov/Archives/edgar/data/1008586/000143774925018850/ex_824851.htm) |
| 10.3 | [Amended and Restated Master Services and Non-Disclosure Agreement, dated as of May 29, 2025, by and between Streamline Health Solutions, Inc. and 180 Consulting, Inc. (Incorporated by reference from Exhibit 10.2 of the Current Report on Form 8-K, filed May 29, 2025).](http://www.sec.gov/Archives/edgar/data/1008586/000143774925018850/ex_824906.htm) |
| 31.1\* | [Certification by President and Chief Executive Officer pursuant to Rule 13a-14(a) of the Exchange Act.](ex_787677.htm) |
| 31.2\* | [Certification by Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act.](ex_787678.htm) |
| 32.1\* | [Certification by President and Chief Executive Officer pursuant to 18 U.S.C. Section 1350.](ex_787679.htm) |
| 32.2\* | [Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350.](ex_787680.htm) |
| 101.INS\* | INLINE XBRL INSTANCE DOCUMENT |
| 101.SCH\* | INLINE XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT |
| 101.CAL\* | INLINE XBRL TAXONOMY EXTENSION CALCULATION LINKBASE |
| 101.DEF\* | INLINE XBRL TAXONOMY EXTENSION DEFINITION LINKBASE |
| 101.LAB\* | INLINE XBRL TAXONOMY EXTENSION LABELS LINKBASE |
| 101.PRE\* | INLINE XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE |
| 104\* | COVER PAGE INTERACTIVE DATA FILE (FORMATTED AS INLINE XBRL AND CONTAINED IN EXHIBIT 101) |

---

\* Filed herewith.

Our SEC file number reference for documents filed with the SEC pursuant to the Securities Exchange Act of 1934, as amended, is 000-28132.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 48

------

[**Table of Contents**](#toc)

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | STREAMLINE HEALTH SOLUTIONS, INC. | STREAMLINE HEALTH SOLUTIONS, INC. |
| DATE: June 16, 2025 | By: | */s/ Benjamin L. Stilwill* |
|  |  | Benjamin L. Stilwill<br> *President and Chief Executive Officer* |
| DATE: June 16, 2025 | By: | */s/ Bryant J. Reeves III* |
|  |  | Bryant J. Reeves III |
|  |  | *Chief Financial Officer* |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 49

## Exhibit 31.1

**Exhibit 31.1**

CERTIFICATION PURSUANT TO

SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Benjamin Louis Stilwill, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this quarterly report on Form 10-Q of Streamline Health Solutions, Inc.;

&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | |
|:---|:---|
| Date: June 16, 2025 | */s/ Benjamin L. Stilwill*  |
|  | President and Chief Executive Officer |

---

## Exhibit 31.2

**Exhibit 31.2**

CERTIFICATION PURSUANT TO

SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Bryant J. Reeves III, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this quarterly report on Form 10-Q of Streamline Health Solutions, Inc.;

&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | |
|:---|:---|
| Date: June 16, 2025 | */s/ Bryant J. Reeves III* |
|  | Chief Financial Officer |

---

## Exhibit 32.1

**Exhibit 32.1**

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Benjamin Louis Stilwill, President and Chief Executive Officer of Streamline Health Solutions, Inc. (the "Company"), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C Section 1350, that to my knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The quarterly report on Form 10-Q of the Company for the quarter ended April 30, 2025 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The information contained in the Report fairly presents, in all material respects, the financial condition, and results of operations of the Company.

---

| |
|:---|
| */s/ Benjamin L. Stilwill*  |
| Benjamin L. Stilwill |
| President and Chief Executive Officer |
| June 16, 2025 |

---

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

## Exhibit 32.2

**Exhibit 32.2**

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Bryant J. Reeves III, Chief Financial Officer of Streamline Health Solutions, Inc. (the "Company"), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C Section 1350, that to my knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The quarterly report on Form 10-Q of the Company for the quarter ended April 30, 2025 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The information contained in the Report fairly presents, in all material respects, the financial condition, and results of operations of the Company.

---

| |
|:---|
| */s/ Bryant J. Reeves III* |
| Bryant J. Reeves III |
| Chief Financial Officer |
| June 16, 2025 |

---

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.