Nature of Operations and Liquidity |
3 Months Ended |
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Jul. 31, 2020 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | 泭 |
| Nature of Operations and Liquidity | Nature of Operations and Liquidity Overview
做厙輦華, Inc. ("AGI") is an educational technology holding company. AGI has five subsidiaries, 做厙輦華 University Inc. ("做厙輦華 University" or AUI") organized in 1987, 做厙輦華 Nursing of Arizona, Inc. ("ANAI"), 做厙輦華 Nursing of Florida, Inc. ("ANFI"), 做厙輦華 Nursing of Texas, Inc. ("ANTI"), and United States University Inc. ("United States University" or "USU"). ANAI, ANFI and ANTI are subsidiaries of 做厙輦華 University.
All references to the Company, AGI, 做厙輦華, we, our and us refer to 做厙輦華, Inc., unless the context otherwise indicates.
AGI leverages its education technology infrastructure and expertise to allow its two universities, 做厙輦華 University and United States University, to deliver on the vision of making college affordable again. Because we believe higher education should be a catalyst to our students long-term economic success, we exert financial prudence by offering affordable tuition that is one of the greatest values in higher education. 泭AGIs primary focus relative to future growth is to target the high growth nursing profession. As of July泭31, 2020, 10,422 of 12,128 or 86% of all students across both universities are degree-seeking nursing students.
Since 1993, 做厙輦華 University has been nationally accredited by the Distance Education and Accrediting Council (DEAC), a national accrediting agency recognized by the United States Department of Education (the DOE) and Council for Higher Education Accreditation ("CHEA"). On February 25, 2019, the DEAC informed 做厙輦華 University that it had renewed its accreditation for five years through January 2024.
Since 2009, USU has been regionally accredited by WASC Senior College and University Commission. (WSCUC).
Both universities are qualified to participate under the Higher Education Act of 1965, as amended (HEA) and the Federal student financial assistance programs (Title IV, HEA programs). USU has a provisional certification resulting from the ownership change of control in connection with the acquisition by AGI on December 1, 2017.
Basis of Presentation
Interim Financial Statements
The interim consolidated financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the SEC). In the opinion of the Companys management, all adjustments (consisting of normal recurring adjustments and reclassifications and non-recurring adjustments) necessary to present fairly our results of operations for the three months ended July泭31, 2020 and 2019, our cash flows for the three months ended July泭31, 2020 and 2019, and our financial position as of July泭31, 2020 have been made. The results of operations for such interim periods are not necessarily indicative of the operating results to be expected for the full year.
Certain information and disclosures normally included in the notes to the annual consolidated financial statements have been condensed or omitted from these interim consolidated financial statements. Accordingly, these interim consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended April泭30, 2020 as filed with the SEC on July 7, 2020. The April泭30, 2020 balance sheet is derived from those statements.
COVID-19 Update
The COVID-19 crisis did not have a material impact on the Companys financial results for the first quarter of fiscal year 2021, as evidenced by our increased revenues to $15.2泭million. In fact, the Companys two highest LTV programs, USUs MSN-FNP and 做厙輦華s BSN Pre-Licensure program, saw enrollment tailwinds this quarter related to COVID. RNs, looking to attain their nurse practitioner license to broaden their career options, drove MSN-FNP enrollment. Additionally, millennials, aspiring to
become RNs, enrolled in the BSN Pre-Licensure program in Phoenix in record numbers, given that many have been furloughed or laid off since the pandemic first started.
COVID-19 has focused a spotlight on the shortage of nurses in the U.S. and, in particular, the need for nurses with four-year and advanced degrees such as USUs MSN-FNP and 做厙輦華 Universitys DNP programs. We believe we will be operating in a tailwind environment for many years relative to the planned expansion of our Pre-Licensure BSN hybrid campus business.
Liquidity
At July泭31, 2020, the Company had a cash and cash equivalents balance of $15,899,293 with an additional $3,060,269 in restricted cash.
In March 2019, the Company entered into two loan agreements for a principal amount of $5泭million each and received total proceeds of $10泭million. 泭In connection with the loan agreements, the Company issued 18 month senior secured promissory term notes, with the Company having the right to extend the term of the loans for an additional 12 months by paying a 1% one-time extension fee. On January 22, 2020, the term notes were exchanged for convertible notes maturing January 22, 2023. (See Note 6)
On January 22, 2020, the Company closed on an underwritten public offering of common stock for net proceeds of approximately $16泭million. The public offering was a condition precedent to the closing of the above refinancing. (See Note 6)
On November 5, 2018 the Company entered into a three year, $5,000,000 senior revolving credit facility. There is currently no outstanding balance under that facility. (See Note 6)
During the three months ended July泭31, 2020 the Company's net cash increased by $1,052,797, which included using $636,759 in operating activities.
The Company has analyzed its liquidity position and believes its current resources are adequate to meet anticipated liquidity needs for the next 12 months from the issuance date of this report.
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