Note 1 - Basis of Presentation, Business Plan and Liquidity	12 Months Ended
Dec. 31, 2018
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. We also previously owned a portfolio of mortgage securities which generated earnings to support on-going financial obligations through the end of 2018. The mortgage securities were sold during 2018 for a total of $13 million. 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”. Management of the Company measures financial performance based on the results of the Company as a whole and not based on the performance of the Company's investments and HCS. Liquidity and Going Concern – During 2018 , the Company earned net income of $ 6.1 million and generated negative operating cashflow of $ 5.1 million. As of December 31, 2018 the Company has an overall shareholders deficit of $ 63.0 million. As of December 31, 2018 , the Company had an aggregate of $ 9.2 million in cash and cash equivalents and total liabilities of $ 94.1 million. Of the $ 9.2 million in cash, $ 1.3 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. The Company also has a significant on-going obligation to pay interest under its senior note agreement. During the first quarter of 2018 a significant customer substantially reduced the level of staff outsourced to HCS. However, HCS replaced the majority of that lost revenue with new CSB customer agreements signed during the second and third quarters of 2018. These new customers started in September 2018 and January 2019. These events have led to substantial doubt about the ability of the Company to continue as a going concern. After engaging major investment firms to evaluate the marketplace for its mortgage securities, the Company executed trades to sell all of its mortgage securities during 2018. These sales generated $ 13.0 million in cash proceeds for the Company. For the year ended December 31, 2018, the Company recorded $ 12.9 million in gains in other income in the Statements of Operations and Comprehensive Income (Loss) related to the sale of these securities. However, the Company will no longer have any future cash flows from these securities since they were sold. In addition, through the date of this filing, HCS believes it has demonstrated that it can provide positive cash flow sufficient to support HCS operations. Management continues to work toward expanding HCS’s customer base by increasing revenue from existing customers and targeting new customers that have not previously been served by HCS. In addition, management is exploring cost cutting initiatives that will reduce overall corporate overhead and operating costs. Management continues to work toward expanding HCS’s operations by building their customer base. This includes increasing revenue from existing customers in the Community Service Boards (“CSBs”) market and also targeting new customers, which have not previously been served by HCS. In addition, management is exploring cost cutting initiatives that will reduce overall corporate overhead and operating costs. While our historical operating results and poor cash flow suggest substantial doubt exists related to the Company’s ability to continue as a going concern, management has concluded that the factors discussed above have alleviated the substantial doubt about the Company's ability to continue as a going concern within one year after the date that these consolidated financial statements are issued. The accompanying consolidated financial statements have been prepared on a basis that assumes the Company will continue as a going concern and contemplates the continuity of operations, realization of assets and the satisfaction of liabilities and commitments in the normal course of business. We cannot provide assurance that revenue generated from our businesses will be sufficient to sustain our operations in the long term. Additionally, we cannot be certain that we will be successful at raising capital, whether from divesting of mortgage securities or other assets, or from equity or debt financing, on commercially reasonable terms, if at all. Such failures would have a material adverse effect on our business, including the possible cessation of operations. 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 establishing the fair value of its mortgage securities, assessing the recoverability of goodwill 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. We also previously owned a portfolio of mortgage securities which generated earnings to support on-going financial obligations through the end of

2018.

The mortgage securities were sold during

2018

for a total of

$13

million. 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”.

Management of the Company measures financial performance based on the results of the Company as a whole and

not

based on the performance of the Company's investments and HCS.

Liquidity and Going Concern

– During

2018

, the Company earned net income of $

6.1

million and generated negative operating cashflow of $

5.1

million. As of

December 31, 2018

the Company has an overall shareholders deficit of $

63.0

million. As of

December 31, 2018

, the Company had an aggregate of $

9.2

million in cash and cash equivalents and total liabilities of $

94.1

million. Of the $

9.2

million in cash, $

1.3

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. The Company also has a significant on-going obligation to pay interest under its senior note agreement. During the

first

quarter of

2018

a significant customer substantially reduced the level of staff outsourced to HCS. However, HCS replaced the majority of that lost revenue with new CSB customer agreements signed during the

second

and

third

quarters of

2018.

These new customers started in

September 2018

and

January 2019.

These events have led to substantial doubt about the ability of the Company to continue as a going concern.

After engaging major investment firms to evaluate the marketplace for its mortgage securities, the Company executed trades to sell all of its mortgage securities during

2018.

These sales generated $

13.0

million in cash proceeds for the Company. For the year ended

December 31, 2018,

the Company recorded $

12.9

million in gains in other income in the Statements of Operations and Comprehensive Income (Loss) related to the sale of these securities. However, the Company will

longer have any future cash flows from these securities since they were sold. In addition, through the date of this filing, HCS believes it has demonstrated that it can provide positive cash flow sufficient to support HCS operations. Management continues to work toward expanding HCS’s customer base by increasing revenue from existing customers and targeting new customers that have

not

previously been served by HCS. In addition, management is exploring cost cutting initiatives that will reduce overall corporate overhead and operating costs.

Management continues to work toward expanding HCS’s operations by building their customer base. This includes increasing revenue from existing customers in the Community Service Boards (“CSBs”) market and also targeting new customers, which have

not

previously been served by HCS. In addition, management is exploring cost cutting initiatives that will reduce overall corporate overhead and operating costs. While our historical operating results and poor cash flow suggest substantial doubt exists related to the Company’s ability to continue as a going concern, management has concluded that the factors discussed above have alleviated the substantial doubt about the Company's ability to continue as a going concern within

one

year after the date that these consolidated financial statements are issued. The accompanying consolidated financial statements have been prepared on a basis that assumes the Company will continue as a going concern and contemplates the continuity of operations, realization of assets and the satisfaction of liabilities and commitments in the normal course of business.

We cannot provide assurance that revenue generated from our businesses will be sufficient to sustain our operations in the long term. Additionally, we cannot be certain that we will be successful at raising capital, whether from divesting of mortgage securities or other assets, or from equity or debt financing, on commercially reasonable terms, if at all. Such failures would have a material adverse effect on our business, including the possible cessation of operations.

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 establishing the fair value of its mortgage securities, assessing the recoverability of goodwill 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.