Note 1 - Basis of Presentation, Business Plan and Liquidity	12 Months Ended
Dec. 31, 2019
Notes to Financial Statements
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]	Note 1. Basis of Presentation, Business Plan and Liquidity Description of Operations – Novation Companies, Inc. and its subsidiaries (the “Company,” “Novation,” “we,” or “us”), through Healthcare Staffing, Inc. ("HCS"), our wholly-owned subsidiary acquired on July 27, 2017, provides outsourced health care staffing and related services in the State of Georgia. Our common stock, par value $0.01 per share, is traded on the OTC Pink marketplace of the OTC Markets Group, Inc. under the symbol “NOVC”. Liquidity and Going Concern – During 2019 , the Company incurred a net loss of $ 10.2 million and generated negative operating cash flow of $ 5.2 million. As of December 31, 2019 , the Company has an overall shareholders deficit of $ 72.1 million, an aggregate of $ 2.0 million in cash and cash equivalents and total liabilities of $ 91.5 million. Of the $ 2.0 million in cash, $ 0.7 million is held by the Company's subsidiary NovaStar Mortgage LLC ("NMLLC") . This cash is available only to pay only general creditors and expenses of NMLLC. From January 2019 through August 2019, the Company had a significant on-going obligation to pay interest under its senior note agreements at LIBOR plus 3.5% per annum, payable quarterly in arrears until maturity on March 30, 2033, leading to a significant annual cash outflow. In addition, HCS has experienced lower than anticipated cash flows due to increased costs and changes in customers. These items have led to substantial doubt about the Company's ability to continue as a going concern. Management continues to work toward expanding HCS’s customer base by increasing revenue from existing customers, looking at methods to reduce overall operating costs, both at HCS and the corporate level, and targeting new customers that have not previously been served by HCS. As disclosed in Note 8 to the consolidated financial statements, the Company was successful in amending the senior note agreements to lower the interest rate and receive future credit for cash interest payments made in 2019 in exchange for the issuance of common stock and warrants. Based on the terms of the amendment, the Company is not required to make cash interest payments on the senior notes from August 2019 through March 2022, leading to significant cash savings for the Company. As discussed, the Amendment to the Note Purchase Agreement and waiver of interest payments through April 2022, has significantly improved our forecasted cash position over the next year. However, our historical operating results and poor cash flow suggest substantial doubt exists related to the Company's ability to continue as a going concern. In addition, based on the recent global developments regarding the coronavirus (COVID- 19 ) situation, there is significant uncertainty regarding the potential impact to our business. Based on these uncertainties, there is no guarantee the Company's cash position will cover current obligations. As a result, we have not been able to alleviate the substantial doubt about the Company's ability to continue as a going concern for at least one year after the date that these consolidated financial statements are issued. Financial Statement Presentation. The Company’s consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of income and expense during the period. The Company uses estimates and judgments in assessing the recoverability of goodwill and other intangible assets and accounting for income taxes, including the determination of the timing of the establishment or release of the valuation allowance related to the deferred tax asset balances and reserves for uncertain tax positions. While the consolidated financial statements and footnotes reflect the best estimates and judgments of management at the time, actual results could differ significantly from those estimates.

Note

Basis of Presentation, Business Plan and Liquidity

Description of Operations

– Novation Companies, Inc. and its subsidiaries (the “Company,” “Novation,” “we,” or “us”), through Healthcare Staffing, Inc. ("HCS"), our wholly-owned subsidiary acquired on

July 27, 2017,

provides outsourced health care staffing and related services in the State of Georgia. Our common stock, par value

$0.01

per share, is traded on the OTC Pink marketplace of the OTC Markets Group, Inc. under the symbol “NOVC”.

Liquidity and Going Concern

– During

2019

, the Company incurred a net loss of $

10.2

million and generated negative operating cash flow of $

5.2

million. As of

December 31, 2019

, the Company has an overall shareholders deficit of $

72.1

million, an aggregate of $

2.0

million in cash and cash equivalents and total liabilities of $

91.5

million. Of the $

2.0

million in cash, $

0.7

million is held by the Company's subsidiary NovaStar Mortgage LLC ("NMLLC")

This cash is available only to pay only general creditors and expenses of NMLLC.

From

January 2019

through

August 2019,

the Company had a significant on-going obligation to pay interest under its senior note agreements at LIBOR plus

3.5%

per annum, payable quarterly in arrears until maturity on

March 30, 2033,

leading to a significant annual cash outflow. In addition, HCS has experienced lower than anticipated cash flows due to increased costs and changes in customers. These items have led to substantial doubt about the Company's ability to continue as a going concern.

Management continues to work toward expanding HCS’s customer base by increasing revenue from existing customers, looking at methods to reduce overall operating costs, both at HCS and the corporate level, and targeting new customers that have

not

previously been served by HCS. As disclosed in Note

to the consolidated financial statements, the Company was successful in amending the senior note agreements to lower the interest rate and receive future credit for cash interest payments made in

2019

in exchange for the issuance of common stock and warrants. Based on the terms of the amendment, the Company is

not

required to make cash interest payments on the senior notes from

August 2019

through

March 2022,

leading to significant cash savings for the Company.

As discussed, the Amendment to the Note Purchase Agreement and waiver of interest payments through

April 2022,

has significantly improved our forecasted cash position over the next year. However, our historical operating results and poor cash flow suggest substantial doubt exists related to the Company's ability to continue as a going concern. In addition, based on the recent global developments regarding the coronavirus (COVID-

) situation, there is significant uncertainty regarding the potential impact to our business. Based on these uncertainties, there is

guarantee the Company's cash position will cover current obligations. As a result, we have

not

been able to alleviate the substantial doubt about the Company's ability to continue as a going concern for at least

one

year after the date that these consolidated financial statements are issued.

Financial Statement Presentation.

The Company’s consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of income and expense during the period. The Company uses estimates and judgments in assessing the recoverability of goodwill and other intangible assets and accounting for income taxes, including the determination of the timing of the establishment or release of the valuation allowance related to the deferred tax asset balances and reserves for uncertain tax positions. While the consolidated financial statements and footnotes reflect the best estimates and judgments of management at the time, actual results could differ significantly from those estimates.