Summary of Significant Accounting Policies (Tables)

9 Months Ended

Oct. 31, 2019

Summary of Significant Accounting Policies


		Overstatement /
		(Understatement) of
Period		Amortization Expense
Prior to fiscal year ended January 31, 2019	$	532,000
Three months ended April 30, 2019	$	(153,000)
Three months ended July 31, 2019	$	(165,000)

Fair Value of Liabilities on a Recurring Basis


			Quoted Prices in		Significant Other		Significant
	Total Fair		Active Markets		Observable Inputs		Unobservable Inputs
	Value		(Level 1)		(Level 2)		(Level 3)
At October 31, 2019
Royalty liability (1)	$	953,000	$	—	$	—	$	953,000

At January 31, 2019
Royalty liability (1)	$	905,000	$	—	$	—	$	905,000

(1)

The fair value of the royalty liability was determined based on discounting the portion of the modified royalty commitment payable in cash (refer to Note 7 – Commitments and Contingencies for additional information on our royalty liability). Fair value adjustments are included within miscellaneous expense in the condensed consolidated statements of operations.

Schedule of Disaggregated Revenue


	Nine Months Ended October 31, 2019
	Recurring Revenue		Non-recurring Revenue		Total
Systems sales	$	27,000	$	1,019,000	$	1,046,000
Professional services		—		1,615,000		1,615,000
Audit services		—		1,266,000		1,266,000
Maintenance and support		8,537,000		—		8,537,000
Software as a service		3,474,000		—		3,474,000
Total revenue:	$	12,038,000	$	3,900,000	$	15,938,000

Schedule of Earnings Per Share, Basic and Diluted


	Three Months Ended
	October 31, 2019		October 31, 2018
Net loss	$	(164,000)	$	(678,000)
Add: redemption of Series A Convertible Preferred Stock		4,894,000		—
Net income (loss) attributable to common shareholders		4,730,000		(678,000)
Weighted average shares outstanding - Basic (1)		21,598,146		19,655,882
Effect of dilutive securities - Stock options, Restricted stock and Series A Convertible Preferred Stock (2)		—		—
Weighted average shares outstanding - Diluted		21,598,146		19,655,882
Basic net income (loss) per share of common stock	$	0.22	$	(0.03)
Diluted net loss per share of common stock	$	(0.01)	$	(0.03)


	Nine Months Ended
	October 31, 2019		October 31, 2018
Net loss	$	(459,000)	$	(2,768,000)
Add: redemption of Series A Convertible Preferred Stock		4,894,000		—
Net income (loss) attributable to common shareholders		4,435,000		(2,768,000)
Weighted average shares outstanding - Basic (1)		20,435,055		19,495,745
Effect of dilutive securities - Stock options, Restricted stock and Series A Convertible Preferred Stock (2)		—		—
Weighted average shares outstanding - Diluted		20,435,055		19,495,745
Basic net income (loss) per share of common stock	$	0.22	$	(0.14)
Diluted net loss per share of common stock	$	(0.02)	$	(0.14)

(1)

Excludes 1,185,918 unvested restricted shares of common stock as of October 31, 2019, which are considered non-participating securities.

Diluted net loss per share excludes the effect of shares that are anti-dilutive. For the three and nine months ended October 31, 2019, diluted EPS excludes 2,895,464 shares of Series A Convertible Preferred Stock, 938,671 outstanding stock options and 1,185,918 unvested restricted shares of common stock. For the three and nine months ended October 31, 2018, diluted EPS excludes 2,895,464 shares of Series A Convertible Preferred Stock, 1,612,990 outstanding stock options and 2,239,047 unvested restricted shares of common stock.