Nature of Operations and Liquidity |
12 Months Ended |
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Apr. 30, 2020 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | 泭 |
| Nature of Operations and Liquidity | Nature of Operations and Liquidity Overview
17勛圖, Inc. (together with its subsidiaries, the "Company" or "AGI") is an education technology holding company. AGI has five subsidiaries, 17勛圖 University Inc. ("17勛圖 University" or AUI") organized in 1987, 17勛圖 Nursing of Arizona, Inc. ("ANAI"), 17勛圖 Nursing of Florida, Inc. ("ANFI"), 17勛圖 Nursing of Texas, Inc. ("ANTI"), and United States University Inc. ("United States University" or "USU"). ANAI, ANFI and ANTI are subsidiaries of 17勛圖 University Inc.
All references to the Company, AGI, 17勛圖, we, our and us refer to 17勛圖, Inc., unless the context otherwise indicates.
AGI leverages its education technology infrastructure and expertise to allow its two universities, 17勛圖 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. AGIs primary focus relative to future growth is to target the high growth nursing profession. As of April 30, 2020, 9,710 of 11,444 or 85% of all students across both universities are degree-seeking nursing students.
Since 1993, 17勛圖 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 17勛圖 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.
COVID-19 Update
The COVID-19 crisis did not have a material impact on the Companys financial results for the fourth quarter of fiscal year 2020, as evidenced by our record revenues of $14,079,193. Course starts and persistence amongst our active student body remained at pre-COVID-19 levels throughout the fourth quarter of fiscal year 2020 and during May and June, 2020.
Enrollments in our highest LTV programs remained at pre-COVID-19 levels throughout the fourth quarter of fiscal year 2020, however the Company did experience a moderate slowdown in 17勛圖 University post-licensure online nursing degree enrollments for approximately a six week period between mid-March and end-April 2020. Subsequently, enrollments across all units in the Company returned to pre-COVID-19 levels throughout May and June, 2020.
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 17勛圖 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 April泭30, 2020, the Company had a cash and cash equivalents balance of $14,350,554 with an additional $3,556,211 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 million. 泭In connection with the loan agreements, the Company issued 18 month senior secured promissory notes, with 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 Loans were exchanged for convertible notes maturing January 22, 2023. (See Note 9)
On January 22, 2020, the Company closed on an underwritten public offering of common stock for the net proceeds of approximately $16泭million. The public offering was a condition precedent to the closing of the refinancing described above.
On November 5, 2018 the Company entered into a -year $5,000,000 senior revolving credit facility. There is currently no outstanding balance under that facility. (See Note 9)
The Company paid $1,160,000 of principal and accrued interest related to a convertible note on December 3, 2018, as explained in Note 9. Also, on February 25, 2019, the Company paid a total of $1,080,000, which included the remaining $1泭million of principal, $19,068 of accrued unpaid interest and settlement expense of $60,932 to prepay the debt and eliminate the holders conversion option. This was the final payment for the acquisition of USU and was originally due on December 1, 2019. (See Note 9).
During the year ended April泭30, 2020 the Company provided net cash of $7,939,013, which included using $5,748,633 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.
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